PRESENTATION OF RESEARCH THESIS

ILLUSTRATE PORTRAYALS OF CORPORATE SOCIAL RESPONSIBILITY:

A COMPARATIVE ANALYSIS
OF THE CORPORATE PLANET

Swati Bhatia
 THESIS STRUCTURE

What is it?
CSR on its way to Europe,America & India
CSR in comparative perspective
Implicit CSR and explicit CSR as complimentary
elements of CSR
Implications for a research agenda in CSR
a. Implicit CSR and „National Business Systems“
b. Explicit CSR and the global diffusion of management
concepts

Conclusions
 WHAT IS IT?

Good question. As the „Gaia‟ of business, corporate social

responsibility (CSR) seems to have attained all the holistic
mystery of a Hollywood new-age religion. And since there are
almost as many definitions of CSR as there are companies who
say they‟re doing it, the European Commission‟s take seems as
good as any. Brussels bureaucrats define CSR as “a concept
whereby companies decide voluntarily to contribute to a better
society and a cleaner environment”.
CSR has also been described as business‟ contribution to
sustainable development (meeting the needs of today without
compromising the needs of future generations). The idea is the
business has a duty to its wider community – beyond staying
within the law and satisfying stakeholders
 CORPORATE SOCIAL RESPONSIBILITY
as an european concept

The evolution of the concept of CSR and the related issues of

social and environmental accountability can be seen as the
result of two parallel paths; one encompasses the efforts of
policy makers and organizations to spread the idea of socially
responsible behaviour and CSR practices through initiatives,
formal definitions and so on. The other path includes academics
research, which has progressed from an initial, vague
awareness of the relationship between companies and social /
environmental issues to the identification of a more defined set
of management tools and rules of conduct
 CORPORATE SOCIAL RESPONSIBILITY
as an american concept

The American concept of corporate social responsibility means

that organizations have moral, ethical, and philanthropic
responsibilities in addition to their responsibilities to earn a fair
return for investors and comply with the law. A traditional view of
the corporation suggests that its primary, if not sole,
responsibility is to its owners, or stockholders. However, CSR
requires organizations to adopt a broader view of its
responsibilities that includes not only stockholders, but many
other constituencies as well, including employees, suppliers,
customers, the local community, local, state, and federal
governments, environmental groups, and other special interest
groups. Collectively, the various groups affected by the actions
of an organization are called "stakeholders." The stakeholder
concept is discussed more fully in a later section.
 CORPORATE SOCIAL RESPONSIBILITY
as an indian concept

Gandhi was a person who in several respects was ahead of his

time. His view of the ownership of capital was one of trusteeship,
motivated by the belief that essentially society was providing
capitalists with an opportunity to manage resources that should
really be seen as a form of trusteeship on behalf of society in
general. Today, we are perhaps coming round full circle in
emphasizing this concept through an articulation of the principle
of social responsibility of business and industry.
 CSR in comparative perspective:
rights and status of employees

Working conditions, working time or benefits are dominant

topics in the area of CSR in the American context
US example: since 2004 Starbucks Coffee provides a basic
health insurance for all franchisees working more than 20
days/month
• Social security of employees in Europe is typically subject to
numerous laws and regulations and embedded in a welfare
state approach
• UK: default health insurance through National Health
Service (NHS)
• Germany: membership in health insurance is mandatory
(„gesetzliche“ Krankenversicherung); employer„s contribution
to the monthly premium is defined in the law
 CSR in comparative perspective:
genetic engineering

Laisser faire approach of Federal Drug Agency and US

Department of Agriculture; EU-Commission is rather
conservative (Vogel 2002)
Until 2002: 58 GMOs were released in the US; only 18 in EU;
1999: 60% of food in US contains GMOs
Significant differences in the risk percepton of GMOs (1998):
14% anti in US, 65% in Sweden, 50% in Germany, 39% in
UK

2000: as part of the CSR policies, McDonalds, Gerber and

McCain issue voluntary self-commitment not to use GMOs
 CSR in comparative perspective:
education

Second most important CSR issue for US companies; no

significance for companies NL or F (Maignan & Ralston 2002)

Corporate donations to education in US in 1998: $ 3.25bill (+

3.8bill from foundations such as Ford, Carnegie etc.)

Most European education systems rely heavily or even

exclusively on state money
CSR AS AGGREGATE OF IMPLICIT AND
EXPLICIT ELEMENTS

Social salience
of a CSR issue
CSR as implicit element of the
institutional framework
of corporations

CSR as an explicit Intensity of the institutional

element of corporate policies framework

USA European Countries

 IMPLICIT AND EXPLICIT CSR:
THE EXAMPLE OF HEALTH CARE

Social salience
of a CSR issue
Health insurance courtesy Implicit CSR
of Starbucks Coffee

Health insurance
in the NHS
Intensity of the institutional
Explicit CSR framework

USA European Countries

 IMPLICIT AND EXPLICIT CSR:
THE EXAMPLE OF GMOs

Social salience
of a CSR issue
Implicit CSR

Risk averse
McDonalds voluntarily regulatory approach
refrains from GMOs of EU Commission

Intensity of the institutional

Explicit CSR framework

USA European Countries


Explicit CSR
Describes all corporate activities to
assume responsibility in society
Consists of voluntary corporate policies,
programs and strategies
Motivated by the perceived expectations
of all stakeholders of the corporation
DEFINITION OF CSR
AS A DUAL CONSTRUCT
Implicit CSR
Describes all formal and informal
institutions of a society which assign and
define the extent of corporate
responsibility for the interests of an entire
society
Consists of values, norms and rules
which result in (chiefly codified and
mandatory) requirements for corporations
Motivated by the societal consensus on
the legitimate expectations towards the
role and contribution of all major groups
in society, including corporations
 Implicit CSR and the National Business
Systems-approach (Whitley)

Historically grown institutional framework of a country

Financial Education and
Political system Cultural system
system Labour system

“National Business System”

Authoritative
Organization of market
Nature of the firm coordination and
processes
control systems
 NBS approach as a framework for research
into implicit CSR

30 years of established research tradition in comparative

research in Europe (e.g. Sorge, Maurice, Whitley, Kristensen,
Clark, Child, Kieser, Lane)
Conceptualization of divergent models of capitalism in Europe
Anglo-saxon (GB, IRL)
Nordic (SF, S, N, DK)
Rhenish (D, F, CH, A, NL, LUX, B, I, ES, P)
Eastern European (PL, H, CZ, SK, SLO etc.)
Key finding that NBS only change slowly over time – if at all
Allows for research into national systems of CSR
 Implicit CSR and European National Business
Systems

Stronger role of the state in risk sharing and coordination of the

economy

Relatively minor role of capital markets.

Highly regulated markets for labour

Powerful position of trade unions and industry associations

Trust and authority relations in the model of the ‚rhenish

capitalism„ (Albert 1991)
 Explicit CSR and
Neo-Institutionalism

„Organizational fields‟ as „those organizations that, in the

aggregate, constitute a recognized area of institutional life: key
suppliers, resource and product consumers, regulatory agencies,
and other organizations that produce similar services and
products” (DiMaggio and Powell 1983).
New, „rational‟ organizational practice occurs because it is
regarded as legitimate within the „organizational field‟ (Meyer
and Rowan 1977, Scott 2001).
Neo-Institutionalism explains the global diffusion of management
concepts and practices beyond national or industry borders
(„Business Re-engineering“, ISO 9000, Lean Management, TQM
etc.; Meyer 2000).
 Ligitimacy of management
practice through ...

„Coercive Isomorphisms“
external rules, demands, expectations, norms, laws which have
to be respected to avoid sanctions of loss of trust

„Mimetic Processes“
increasingly complex technologies, goal ambiguities and
uncertainty causes managers to just imitate „best practices“

„Normative Pressures“
professionalization of the management craft by way of an
increase in formal degrees and global networks, especially in the
context of professional and ecucational associations and industry
associations.
 Peculiarities of European explicit CSR

Pivotal role of regulating/governmental bodies

Multistakeholder-approach (government, industry associations,

trade unions, NGOs)

Corporate involvement in regulatory processes (z.B. Polder-

model, self-commitments)

Dominant role of ecological/environmental issues

Philanthropy only of marginal importance

Secular approach
 CONCLUSIONS......
Implications of the proposed framework

Descriptive implications: CSR has different contents, meanings

and connotations depending on the institutional and national
context
Instrumental implications: corporate CSR has to be adapted to
and contextualized in a specific institutional and national
environment
Normative implications: revisiting the core assumptions of CSR
in the Anglo-Saxon debate, which sees CSR (that is: explicit
CSR) as an approach to locate social responsibilities of
corporations which is better and more appropriate than
collective, regulatory solutions to the problem (that is: implicit
CSR)
 CSR in worldwide:
Back to the research questions
Why was CSR not discussed in Europe before?
 European companies have ever been socially responsible;
however, they
 did not use the label of CSR for this;
 practiced CSR as a natural/self-evident response to the
institutional framework of business.
What are the reasons that CSR is becoming an issue now?
 CSR gets on the agenda in India now because
 Globalisation confronts Indian and other MNCs with contexts
which institutionalize social responsibility in a different way
from their respective home countries;
 Changes in the „organizational field‟ of companies popularise
CSR as a management idea.
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