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HEC MONTRAL

A Brazilian model of Corporate Social Responsibility: The case of Ethos Institute

By

Alam Aguilar Platas

Thesis submitted in the view of obtaining the grade of Master of Science (M.Sc.)

August 2008 Alam Aguilar Platas

Summary
This masters thesis focuses on the expansion of the Ethos Institute, a Brazilian nonprofit organization that has contributed to building an infrastructure for corporate social responsibility (CSR) in Brazil. Between 1998 and 2008, the Ethos Institute convened more than 1,200 small, medium, and large companies to help them manage their businesses in socially responsible ways and to make them partners in building a better society in Brazil. These companies account for approximately 35% of Brazils GDP and employ some 2 million people. The findings of this study suggest that Ethoss success in disseminating CSR was realized using a model based on positive deviance with the guidance of a leader. The positive deviance leader possesses five psychological characteristics (Spreitzer and Sonenshein, 2003): (1) a sense of meaning; (2) other-focus perspective; (3) selfdetermination; (4) personal efficacy; and (5) the courage to risk breaking out of rigid norms. Positive deviance is a concept originating in sociology to describe behaviors that do not follow dominant beliefs and values and that are intended to increase the well-being of a community. The application of this concept evolved into practices designed to promote community development (M. Sternin et al., 1998; Cameron, 2005) by systematically replicating voluntary behaviors already in place in a community or organization. This new area of positive deviance proposes that the replication of positive deviant behaviors by both individuals and organizations has the potential for successful and innovative outcomes to address management and social issues. This thesis has five chapters. Chapter one outlines the paradigm of wealth and scarcity that defines our globalized society. Chapter two reviews the literature on corporate social responsibility and positive deviance, and outlines the conceptual framework used in the study. Chapter three explains the research design methods used. Chapter four describes the Brazilian context prior to the founding of the Ethos Institute, the process used in the founding of the Institute, and the strategies that Ethos has developed to disseminate CSR. Chapter five analyzes the empirical data within the conceptual framework chosen. Chapter

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six presents the conclusions, describes the research limitations, and suggests avenues for further research. Thus far, the literature on corporate social responsibility has addressed the different motivations that firms have for adopting CSR. Most of the literature focuses on internal processes, interactions between firms, and their location within social boundaries it is orgo-centered. Very little has been written on the external conditions that stimulate the adoption of CSR in a specific country or industry a population of organizations. This study will contribute to an increased understanding of the ways in which a broad social context can be created to encourage companies to adopt CSR. In addition, it will contribute to the development of new strategies to extend the reach of CSR, stemming from positive deviance.

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Sommaire
Ce mmoire de matrise examine le processus d'expansion de l'Institute Ethos, une organisation brsilienne sans buts lucratifs ayant contribu la cration dune infrastructure pour la responsabilit sociale corporative (RSC). Entre 1998 et 2008, Ethos a rassembl plus de 1 200 petites, moyennes et grandes entreprises afin de les aider grer leurs affaires de manire socialement responsable et crer des partenariats pour la construction dune meilleure socit au Brsil. Ces entreprises reprsentent approximativement du 35 % du PIB brsilien et emploient environ 2 millions de personnes. Les rsultats de cette tude suggrent que le succs obtenu par Ethos dans la diffusion de la RSC au Brsil provient d'un modle fond sur la dviance positive d'un leader. Le leader de la dviance positive possde cinq caractristiques psychologiques (Spreitzer and Sonenshein, 2003): il possde (1) un objectif personnel ; (2) la capacit sintresser autrui ; (3) la dtermination pour raliser ses propres objectifs ; (4) une efficacit personnelle ; (5) et du courage pour changer la rigidit des rgles. La dviance positive, un concept du domaine de la sociologie faisant rfrence aux comportements ne suivant pas les croyances et valeurs dominantes, a pour but daugmenter le bien-tre dune communaut. Lapplication de cette thorie a volu dans les pratiques afin de promouvoir le dveloppement communautaire (M. Sternin et al., 1998; Cameron, 2005) en rpliquant systmatiquement et volontairement des comportements qui existent dj dans une communaut ou une organisation. Ce nouveau champ dapplication de la dviance positive propose que la duplication des comportements dviants positifs par des individus et des organisations a le potentiel de produire des solutions fructueuses et innovatrices pour aborder des enjeux managriaux et sociaux. Ce mmoire contient cinq chapitres. Le premier chapitre fait la lumire sur le paradigme de bien-tre et de pnurie qui caractrise notre socit mondialise. Le deuxime chapitre fait un survol de la littrature sur la responsabilit sociale corporative et la dviance positive et prsente le cadre conceptuel utilis pour cette tude. Le troisime chapitre explique les mthodes de recherche utilises. Le quatrime chapitre dcrit le contexte brsilien prcdant la fondation dEthos, le processus de fondation de l'Institut, et les stratgies quEthos a utilises pour dissminer la RSC. Le cinquime chapitre analyse

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les donnes empiriques rcoltes l'aide du cadre conceptuel dvelopp. Le sixime chapitre prsente les conclusions, les limites de cette recherche et suggre certaines alternatives pour de futures recherches. Jusqu prsent, la littrature entourant le concept de responsabilit sociale corporative explique les diverses motivations pour lesquelles des compagnies ladoptent. Une grande part de la littrature se concentre sur les processus internes, les interactions entre firmes et leur situation l'intrieur des limites sociales. La littrature est organocentriste . Trs peu a t crit propos des conditions externes qui stimulent ladoption de la RSC dans un pays spcifique ou dans une industrie ; une population d'organisations . Cette tude contribuera amliorer la comprhension des mcanismes de cration d'un contexte social pour encourager les entreprises internaliser la RSC. De plus, ce mmoire contribuera crer de nouvelles stratgies bases sur la dviance positive permettant d'largir lenvergure du concept de RSC.

Sumario
La presente tesis de maestra analiza la fundacin y el desarrollo del Instituto Ethos, una organizacin sin fines de lucro que ha contribuido a desarrollar la infraestructura necesaria para fomentar la responsabilidad social corporativa (RSC) en Brasil. De 1998 a 2008, el Instituto Ethos ha reunido a ms de 1 200 pequeas, medianas y grandes empresas con el fin de ayudarles a administrar sus negocios de una manera socialmente responsable y as contribuir al progreso y a la construccin de una sociedad equitativa y justa en Brasil. Estas empresas actualmente representan aproximadamente un 35% del PIB en Brasil y emplean alrededor de 2 millones de personas. Los resultados de esta investigacin sugieren que Ethos ha logrado diseminar la RSC gracias dos factores, la utilizacin de un modelo fundamentado en la desviacin positiva, y la gua de un lder. El lder de un modelo de desviacin positiva posee cinco caractersticas psicolgicas (Spreitzer y Sonenshein, 2003): (1) un objetivo personal, (2) empata y vocacin de trabajo hacia sus semejantes, (3) eficacia a nivel personal, (4) autodeterminacin, y (5) valor para afrontar el riesgo inherente de romper la rigidez de normas establecidas. La desviacin positiva es un concepto usado en el campo de la sociologa para describir comportamientos que buscan incrementar el bien comn de una comunidad y que no estn alineados a valores y creencias predominantes. La aplicacin de este concepto evolucion en la creacin de prcticas para promover desarrollo comunitario (M. Sternin et al. 1998; Cameron, 2005), al replicar de manera sistemtica y voluntaria comportamientos ya existentes en una comunidad o en una organizacin. Esta nueva rea propone que la replicacin de comportamientos de individuos y de organizaciones que se han desviado positivamente de una norma, tienen el potencial de producir soluciones innovadoras y exitosas tanto a problemas en la administracin como en la sociedad misma. Este trabajo de investigacin comprende cinco captulos. El captulo primero subraya el paradigma de bonanza y miseria que enfrenta nuestra sociedad globalizada. El captulo segundo presenta una revisin en la literatura de la responsabilidad social

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corporativa y la desviacin positiva, as mismo se presenta el cuadro conceptual utilizado en este estudio. El tercer captulo explica los mtodos de investigacin empleados. El cuarto captulo describe el contexto histrico brasileo y el proceso de fundacin del Instituto Ethos. El captulo quinto parte compara los datos recabados con el cuadro conceptual de nuestra eleccin. Captulo seis presenta nuestras conclusiones, las limitaciones de esta investigacin y sugiere posibles temas para investigaciones futuras. La mayor parte de la literatura en responsabilidad social corporativa analiza las razones de una empresa en adoptar prcticas socialmente responsables. Mucha atencin se ha dedicado a estudiar los procesos internos, interacciones entre empresas, y el establecimiento de sus fronteras hacia temas sociales. La literatura es organocentrista. Muy poco se ha escrito sobre las condiciones externas que estimulan la adopcin de RSC en un pas o en un sector industrial en especfico; es decir sobre un grupo de organizaciones. El presente estudio contribuir a mejorar el entendimiento sobre como un modelo basado en la desviacin positiva puede contribuir a crear un contexto que motive a las empresas a adoptar la RSC.

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Table of Contents
HEC MONTRAL.......................................................................................................I SUMMARY..................................................................................................................I SOMMAIRE .............................................................................................................III SUMARIO..................................................................................................................V TABLE OF CONTENTS .........................................................................................VII LIST OF TABLES.....................................................................................................X FIGURE LIST...........................................................................................................XI ACKNOWLEDGEMENTS- AGRADECIMIENTOS.................................................XII 1. INTRODUCTION.................................................................................................14 2. LITERATURE REVIEW: CORPORATE SOCIAL RESPONSIBILITY AND POSITIVE DEVIANCE ............................................................................................18 2.1. Corporate Social Responsibility (CSR) literature review...............................18 2.1.1. Corporate Social Responsibility - Definition................................................18 2.1.2. CSR Review...............................................................................................21 Table 2. Pasqueros CSR Stages..............................................................................21 (Adapted from Pasquero, 2005, p. 86)....................................................................21 2.1.2.1. Market (1880-1929) and Associative (1930-1959) Stages........................22 2.1.2.2. The Societal Stage (1960-1980)................................................................22 2.1.2.3. The Efficiency Stage (1980-2010)............................................................24 Table 3. Principles of CSR......................................................................................26 Table 4. CSR- Literature Review Summary ...........................................................28 2.1.3. The New Institutional Infrastructure for CSR...............................................29 2.1.3.1. Civil Society Initiatives ............................................................................30 2.1.3.2. State/ Government Sector Initiatives.........................................................31 2.1.3.3. Market/ Business Sector Initiatives...........................................................31 2.2. Positive Deviance................................................................................................33 2.2.1 Deviance ........................................................................................................33 2.2.2. Positive deviance in Sociology .....................................................................34 2.2.3. Positive deviance in Management ................................................................35

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2.2.3.1. The positive deviance approach in community development practice......36 2.2.3.2. The figure of the leader in the PD approach..............................................40 2.2.3.3. Moral imagination in Positive deviance ...................................................40 2.2.3.4. The psychological conditions for Positive Deviance................................42 Table 5. Psychological conditions for Positive Deviance......................................42 2.2.3.5. Positive Deviance and the Abundance Approach......................................43 Figure 1. Adapted from Cameron et al. (2003, p. 53).............................................44 Table 6. The Abundance Approach.........................................................................45 2.3. Recapitulation ....................................................................................................46 Table 7. Sternins PD models..................................................................................46 Table 8. Positive Deviance Literature Review Summary .......................................48 2.4. CONCEPTUAL FRAMEWORK - PROPOSAL ...............................................48 Table 9. Conceptual Framework- Elements............................................................49 Figure 2 Conceptual Framework.............................................................................51 .................................................................................................................................51 Table 10. Theoretical Framework Summary ..........................................................52 3. RESEARCH DESIGN AND METHODS..............................................................53 Table 11. Research methods Summary................................................................54 3.1. Exploratory Research Questions.......................................................................54 3.2. Research Interest................................................................................................55 3.3. Research Strategy...............................................................................................55 3.4. Research Methodology ......................................................................................56 3.5. Data Analysis.......................................................................................................57 Table 12. Theory question and data sources............................................................58 3.6. Focus and theoretical concerns of the research...............................................58 3.7. Case Validity.......................................................................................................59 3.8. Conducting Interviews.......................................................................................60 3.8.1. Questionnaire to conduct interviews.............................................................60 3.8.2. Secondary Sources.........................................................................................61 4. A BRAZILIAN MODEL OF CORPORATE SOCIAL RESPONSIBILITY: THE CASE OF THE ETHOS INSTITUTE ......................................................................61 4.1. The context in Brazil prior to the founding of Ethos .....................................62

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4.2. 1998- The founding of the Ethos Institute........................................................65 4.3. 1999-2001 CSR- Raising awareness .................................................................68 4.3.1. Ethoss CSR media campaign ......................................................................69 4.3.2. Ethoss CSR publications .............................................................................70 4.3.3. Ethoss Indicators .........................................................................................70 4.3.4. Ethoss awards...............................................................................................71 4.3.5. InternEthos.....................................................................................................71 4.4. 2002-2003 Increasing strategic alliances ..........................................................72 4.4.1. New Alliances for media and communication strategy.................................73 4.4.2. Updating Resources ......................................................................................75 4.4.3. Grajew becomes Lulas counselor ................................................................75 4.5. 2004-2006 CSR Promoting social change.......................................................76 4.5.1. Social Impacts................................................................................................77 4.5.2. UniEthos........................................................................................................77 4.5.3. ISO 26000......................................................................................................79 4.5.4. Working with International Organizations....................................................80 4.6. Conclusions .........................................................................................................81 Table 13. Ethoss Stages..........................................................................................83 Table 14. Brazils historical events and Ethos Institutes Chronology.................86 5. ANALYSIS CSR, POSITIVE DEVIANCE AND THE ETHOS INSTITUTE.......88 5.1. Positive Deviance in Ethos Analysis................................................................88 Figure 3 Conceptual Framework ............................................................................89 5.1.1. Grajew- Psychological Conditions for Positive Deviance............................90 5.1.1.1. Possessing a meaning to acting to change current establishment .............90 Table 15. Possessing a sense of meaning OR a reason to act .................................91 5.1.1.2. Exercising an other-focus perspective rather than just achieving personal goals .................................................................................................................................93 5.1.1.3. Experience self-determination to transform ideas into facts.....................94 5.1.1.4. Exert personal efficacy to outweigh the possibility of failure ..................96 Table 16. Grajews personal efficacy .....................................................................97 5.1.1.5. Possessing the courage to overcome the risk of breaking out of the rigidity of norms .....................................................................................................................98 5.2. The six Ds Positive Deviance Model in Ethos Analysis..........................100 Table 17. The Six Ds........................................................................................100 5.2.1. Defining the problem to solve and define what a successful outcome would look like.........................................................................................................................101 Table 18. Defining the problem.............................................................................101 5.2.2. Determining individuals/entities with the desired behavior........................101

5.2.3. Discovering uncommon practices/behaviors among the business community in Brazil that enable PD ............................................................................................102 5.2.4. Designing and implementing activities that enable others to access new behaviors ...............................................................................................................................103 Figure 4. Enabling others to access new behaviors...............................................105 5.2.5. Discerning the effectiveness of activities through ongoing monitoring and evaluation...............................................................................................................106 5.2.6. Disseminating successful process to appropriate others..........................108 5.2.7. Non-sequential Six Ds Model ................................................................108 Figure 5. The Six Ds model in Ethos ...............................................................109 6. CONCLUSIONS................................................................................................111 REFERENCES......................................................................................................114 Appendix...................................................................................................................120 Table 1. Definitions of Corporate Social Responsibility (CSR)...........................120 Table 19. Interview Summaries.............................................................................123 3.9.2. Questionnaire...............................................................................................123

List of Tables
Table 1. Definitions of Corporate Social Responsibility (CSR)...........................117 Table 2. Pasqueros CSR Stages...........................Error: Reference source not found Table 3. Principles of CSR....................................Error: Reference source not found Table 4. CSR- Literature Review Summary.........Error: Reference source not found Table 5. Psychological conditions for Positive DevianceError: Reference source not found Table 6. The Abundance Approach......................Error: Reference source not found Table 7. Sternins PD models...............................Error: Reference source not found Table 8. Positive Deviance Literature Review SummaryError: Reference source not found Table 9. Conceptual Framework- Elements..........Error: Reference source not found Table 10. Theoretical Framework Summary........Error: Reference source not found Table 11. Research methods Summary..............Error: Reference source not found Table 12. Theory question and data sources.........Error: Reference source not found Table 13. Ethoss Stages.......................................Error: Reference source not found Table 14. Brazils historical events and Ethos Institutes Chronology...................84 Table 15. Possessing a sense of meaning OR a reason to actError: Reference source not found Table 16. Grajews personal efficacy...................Error: Reference source not found

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Table 17. The Six Ds........................................Error: Reference source not found Table 18. Defining the problem............................Error: Reference source not found Table 19. Interview Summaries............................Error: Reference source not found

Figure List
Figure 1. Adapted from Cameron et al. (2003, p. 53)Error: Reference source not found Figure 2 Conceptual Framework..........................Error: Reference source not found Figure 3 Conceptual Framework..........................Error: Reference source not found Figure 4. Enabling others to access new behaviorsError: Reference source not found Figure 5. The Six Ds model in Ethos...............Error: Reference source not found

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Acknowledgements- Agradecimientos
Esta tesis de maestra va dedicada con mucho cario a la memoria de Catherine Leroy-Beltrn. Le agradezco infinitamente a Cathy, mi gran mentora y madre acadmica por inspirarme, motivarme, apoyarme, orientarme, y recomendarme para poder realizar mis estudios de post-grado en HEC Montreal. Descansa en paz mi querida mentora y amiga. Muchas gracias tambin a mis dems profesores que me recomendaron para entrar a HEC, danke shoen Ingo Bobel, merci beaucoup Eric Trochon, muchas gracias Oscar Jimnez. Es importante tambin mencionar mi gratitud a la Secretara de Relaciones Exteriores de Mxico por la beca que me fue concedida. Gracias en especial a la licenciada Ana Rosa Guzmn de servicios acadmicos en la ciudad de Mxico y al licenciado Remigio Valds del consulado mexicano en Montreal por darle seguimiento e importancia a mi expediente como becario. Je remercie chaleureusement le Fonds leadership, volet initiatives

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pdagogiques tudiantes (FLIPE), de mavoir attribu une subvention pour crire un cas pdagogique pour HEC. De la misma manera quiero agradecer a mis padres Enrique y Lucy por todo el apoyo y amor sin condiciones que me dieron para emprender y concretar este gran desafo lejos de ustedes, el cual hoy ya no es mas un sueo si no una realidad. Gracias tambin a ti Enrique hermano mo por tu apoyo tras bambalinas. Gracias Melita por tu paciencia, amor, comprensin, y apoyo en este proyecto y en los que nos esperan. Igualmente gracias a mis otros hermanos, Flix, Humberto, Ivn, Erwing, Fede, y Alberto por animarme en los momentos ms duros y complicados de este viaje. Doy gracias a Daniel, Gaby y toda su familia por ayudarme tanto y sin condiciones, por darme aliento cuando mas lo necesitaba y hacerme sentir parte de su familia. Merci David mon grand ami et colloc pour ton support, aide, tolrance et appui pendent tout mon sjour Montral et merci aussi tes parents pour madopter et partager avec moi son amour familial. A todos mis amigos y amigas que contribuyeron a mejorar la calidad de mis textos, les digo gracias por leerme. De igual forma agradezco la apertura y hospitalidad de la gente del Instituto Ethos y todas las facilidades otorgadas para la realizacin de esta investigacin. Muito obrigado Oded Grajew, Ricardo Young, Paulo Itacarambi, Luciana Aguiar, Gustavo Ferreira, Solange Rubio, Emilio Martos e Ladislau Dowbor. En especial quiero agradecer la hospitalidad y candidez que toda la familia Ferraz me otorg durante mi estancia en Sao Paulo. Finalmente quisiera agradecer a mi director de tesis Emmanuel Raufflet por su apoyo acadmico, conocimientos, por su increble paciencia y generosidad, por ayudarme a ser mejor no solo en lo acadmico si no tambin como persona al mostrarme que las habilidades de negocios pueden ser usadas con fines sociales y no solo para enriquecimiento y provecho individual. Gracias Emmanuel por invitarme a escribir contigo, por ayudarme a obtener los medios necesarios para realizar esta investigacin, gracias por tu amistad sincera. Gracias Emmanuel por creer en m y apoyarme tanto.

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1. Introduction
Humanity is living today in a world of wealth that would have been unimaginable centuries ago (Sen,1999). People live much longer on the average than in all human history thanks to the incredible advances in science and medicine of our era. Thanks to the progress of information and communication technologies, the different regions of the planet are closer than ever. Nevertheless, we also live in a world where people are living with oppression, famine and privation of their basic liberties (Sen, 1999; Smucker, 2006; Zadek, 2004). The World Banks statistics (2006) tell us that around the globe there are 3,000 million people who are living on less than two dollars a day, and there are 1,000 to 2,000 million people struggling for access to the 50 liters of water they need to cover basic needs. According to the Food and Agriculture Organization of the United Nations (FAOSTAT, 2007), of the 6 billion people on the planet, half live in poverty and at least one-fifth are severely undernourished. The rest live out their lives in comparative comfort and health. Industrialized countries produce most of the worlds pollution and consuming 80% of the worlds resources (Earthtrends, 2007). Unprecedented opulence and progressive scarcity is the paradigm of our century. World leaders, managers, and common people are aware of these facts but the panorama is not improving. On the contrary, the worlds problems are becoming more complex and harder to overcome. Most of us remain passive, silent, deaf, and wilfully blind to our global problems, an attitude Bird has described as a general muted conscience (1996). Politicians, executives and citizens find it problematic to change their behaviors to follow their moral convictions, because they are afraid of losing their status quo, or because they think no one will listen to new ideas. This silence has served to aggravate our common troubles and we have become less proactive to find solutions. Moreover, we tolerate failure and we begin to believe that someone else will find a solution, or even worse, we think that real problems do not exist.

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In order to find solutions to global and local issues it is necessary to build bridges, which engage interaction, collaboration and empathy with others (Raufflet and Gurgel, 2007). The purpose of this thesis is to examine the Ethos Institute, a Brazilian non-profit organization founded by the business sector. This organization has contributed to building bridges between the government, the business sector and civil society for creating an infrastructure (Waddock, 2006) for Corporate Social Responsibility (CSR) in Brazil. The Ethos Institute has served as a forum for good conversations. Good conversation may include many kinds of communication, from friendly discussions among colleagues to negotiations between organizations and their stakeholders, from executive strategy meetings to hard bargaining sessions, from special visioning exercises to thoughtful deliberations, from private encounters to private debates (Bird, 1996, p. 208). Between 1998 and 2008, the Ethos Institute convened more than 1,200 small, medium, and large companies to join in conversations about ways to manage their businesses in socially responsible ways. These companies account for approximately 35% of Brazils GDP and employ some 2 million people. This Institute serves as a round table for disseminating CSR among the business sector, the government and civil society. Ethos has contributed to creating a context to involve the business community in finding solutions to local and global issues such as child illiteracy and environmental degradation, and has helped in building strategies for accomplishing the United Nations millennium goals. My aim in this masters thesis is to examine how Ethos has achieved this wide dissemination of CSR ideas in Brazil that has led to the adoption by the business sector of socially responsible practices, programs and strategies for addressing social issues. This increased interest of society and governments in socially responsible firms has heightened the need for the study of CSR. Recent studies explain that corporate social responsibility has become voluntary for firms (Pasquero, 2005). The idea of a new institutional infrastructure for CSR (Waddock, 2006) has been proposed to explain the mechanisms by which a firm decides to enhance voluntarily socially responsible practices. However, little research has been done on concrete strategies for encouraging businesses to adopt CSR. Creating a context and designing strategies that motivate firms to perceive CSR as a tool for creating a competitive advantage (Porter and Kramer, 2006) would contribute to good

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conversations around innovative solutions for alleviating issues such as extreme poverty and hunger, gender inequality and discrimination, child mortality, the spread of mortal diseases, loss and contamination of environmental resources. This thesis focuses on examining the case of Ethos, serving as an example of such good conversations context for finding alternative solutions to social issues in Brazil. The findings of this research suggest that the wide dissemination of CSR among Brazilian companies was possible by use of positive deviance, which was enabled by the leadership of Ethoss founder, Oded Grajew. Positive deviance is a concept that emerged within sociology for describing behaviors that go against established norms and serve as a source of innovation for creating positive outcomes for society. The application of positive deviance eventually evolved for creating strategies for community development (M. Sternin et al.,1998) by identifying and replicating the practices of people who had discovered better solutions to problems than other people who had access to the same resources. It would thus be of interest to learn how to apply positive deviance as a vehicle to foster CSR. This dissertation comprises five chapters. The first chapter is the present introduction. Chapter two reviews the literature on the central concepts of this research, which include CSR and positive deviance. The historical review of corporate social responsibility is based on Pasqueros (2005) research. I will examine Pasqueros four stages to describe the CSR evolution from 1880 to our era. Additionally, I will review the work of authors who have researched and expanded the thinking around CSR, such as Friedman, (1979), Wood (1991), Carroll (1999), Waddock (2006), Smucker (2006), Porter and Kramer (2006), and Reich (2007). The CSR literature suggests that firms are in an era in which being socially responsible has become voluntary due to most governments correlating strict regulatory laws with economic stagnation. For this reason, in the second part of the literature review I will focus on analyzing positive deviance as a model to create the context for the private sector to engage in corporate social responsibility activities. Specifically, I analyze the origins of positive deviance. I also review the positive deviance theories that have emerged in the management field, such as theories of leadership (Quinn et al, 2000), moral imagination (Arnold and Hartman, 2003; 2005a; 2005b), and models for

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community and organizational development (M. Sternin et al., 1998; Cameron, 2003). Finally, I will propose a conceptual framework based on positive deviance, which will allow me to examine the model behind the CSR dissemination by Ethos. The third chapter presents the research design methods used for in situ research in Sao Paulo in June 2007. This third chapter explains the research strategy, the focus and the theoretical concerns of this study. Chapter four describes the evolution of the infrastructure of the Ethos Institute and the story of its founder, Oded Grajew; both stories are intertwined. The first section of this chapter summarizes Grajews background and the historical climate before the founding of the Ethos Institute. A second section describes the four stages of the development of the Ethos Institute from 1998 to 2006 : (1) the foundation of the Ethos Institute in 1998; (2) the creation of resources for raising awareness on CSR from 1999 to 2001 such as self evaluation tools and the Ethos awards; (3) increasing alliances to disseminating CSR from 2002 to 2003, and (4) CSR Promoting social projects within the Brazilian business community to address specific social issues, such as poverty, hunger, and mortal diseases in order to build a sustainable and just society. Chapter five analyzes the data collected using the conceptual framework presented in the theory chapter. It examines Ethoss strategies between 1998 and 2007 for enabling the context (Pascale, 2005; Waddock, 2006; Porter and Kramer, 2006) to diffuse CSR with a conceptual framework based on positive deviance (M. Sternin et al.,1998; J. Sternin and Choo, 2000, 2003, 2005; Quinn , 2001; Hartman and Arnold, 2003, 2005a, 2005b; Spreitzer and Sonenshein, 2003; Cameron et al., 2003). Chapter six presents the research results, conclusions, and the contributions of this thesis to the management field. Chapter six concludes by describing the limitations of this study and suggesting avenues for future research.

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2. Literature Review: Corporate Social Responsibility and Positive Deviance


This chapter presents a review of the literature on Corporate Social Responsibility and Positive Deviance (PD). This CSR literature review is divided into three parts. The first part introduces an analysis of CSR definitions through time, an historical examination of four different stages of CSR between 1900 and 2010 based on Pasqueros (2005) historical analysis and a description of a new institutional infrastructure of CSR (Waddock, 2006), and reviews the research of other authors on CSR such as Friedman (1979), Wood (1991), Carroll (1999), Waddock (2006), Porter and Kramer (2006), Smucker (2006), and Reich (2007). The second part analyzes the main theories and authors on positive deviance, including a review of the sociology origins of positive deviance (Heckert, 1989; BenYehuda, 1990) that eventually evolved into practices to promote community development (M. Sternin et al, 1998; Cameron, 2005). I focus on the positive deviance theories that have emerged in the management field, such as leadership (Quinn et al, 2000), moral imagination (Arnold and Hartman, 2003, 2005a, and 2005b), and models for community and organizational development (M. Sternin et al, 1998; Cameron, 2003). Theory on positive deviance is limited and strongly oriented to practice. The third part presents a positive deviance conceptual framework, in order to examine the model behind Ethoss dissemination of CSR.

2.1. Corporate Social Responsibility (CSR) literature review


2.1.1. Corporate Social Responsibility - Definition The concept of CSR has been assigned different ideas and definitions through time. By 1950, the first CSR definitions were focusing on managerial levels (Wood, 1991). The main argument was that business executives had obligations beyond the economic interests of a firm. Business executives had to consider how their decisions would affect a societys values1, stockholders, employees, suppliers and local communities2. Nevertheless, in 1973,

1 2

Please consult definition number one, Table 1 in the appendix. Please consult definition number six, table 1 in the appendix.

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Elibert and Parket3 changed the focus by referring to CSR as good neighborliness, meaning that companies have to respect the rules of the neighborhood and must contribute to solving local problems such as unemployment, pollution and urban decay. According to Carroll (1999), these authors suggested that firms have to collaborate by following the rules of society and help solving societys problems voluntarily. An opposite perspective was proposed by Friedman who, in 1970, wrote that the only social responsibility that businesses have is to increase their own profits. Friedman affirmed that managers have a responsibility to their shareholders and not to society; thus managers should not use companys resources for social means. The stockholders or the customers or the employees could separately spend their own money on the particular action [social responsibility] if they wished (Friedman, 1970, p. 225). Friedman stated that by increasing profits, a firms social contribution is already accomplished and any other social objectives are the responsibility of the state. Friedman claimed that if society and the state pushed enterprises to adopt social behaviors, free markets would be in danger, which is a risk for the economy, and therefore markets need to be free from any regulation and then find their own balance. In the 1990s Carroll (1999) argues that there was little academic interest and efforts to define CSR. Nevertheless, Garriga and Mel (2004) point out that a new landscape of concepts and theories surrounding the CSR field have arisen. This proliferation of new approaches and terms such as corporate responsiveness, corporate citizenship, stakeholder management, corporate social performance, issues management, and corporate sustainable development, has enlarged the scope of CSR but has also created confusion. In an effort to clarify this situation, Garriga and Mel mapped the main CSR theories and concepts in four main dimensions: (1) instrumental theories, in which the main focus is achieving economic objectives and wealth creation through social activities (Friedman, 1970; Porter and Kramer, 2006; Prahalad and Hammond, 2002); (2) political theories, which central feature is aiming a responsible use of business power in the political arena (Davis, 1960; Wood and Lodgson, 2002, Andriof and McIntosh, 2001); (3) integrative theories, which focus is on the integration of social demands and the balance of the interests of stakeholders of the firm
3

Please consult definition number eight, table 1 in the appendix.

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(Preston and Post, 1975; Sethi, 1975; Wartick and Mahon, 1994; Wood, 1991; Wartick and Cochran, 1985); and (4) ethical theories, based on universal rights, sustainable development and the common good (Freeman, 1984; The Global Sullivan Principles, UN Global Compact, 1999; World Commission on Environment and Development, 1987; Mel, 2002). Garriga and Mels (2004) research suggests that the aforementioned categories should be manifested within the interactions between businesses and society. In other words, a firms objective should not only be restrained to produce economic wealth but also to respect the environment, universal rights, as well as, the interest of the firms stakeholders with a responsible use of its business power in political arenas. It is not my aim for this chapter to review all concepts and approaches surrounding CSR, but will describe the main ones throughout the following chapter. For the purposes of this dissertation, I take Corporate Social Responsibility to mean the entirety of obligations legal and voluntary that a company must assume in order to be perceived as a model of good citizenship in a given environment (Pasquero, 2005, p.81). In other words, I argue that it is not longer enough for a company to respect only its legal obligations in order to be considered a socially responsible firm. Nowadays, society is demanding firms to fulfill both legal and voluntary obligations. Companies that decide to embrace their obligations can become a model of good citizenship not only for society but also a model for firms. In a model of corporate citizenship (Matten et al, 2003), firms assume a more active role in society than individual citizens, thus firms have larger resources for improving social, political, and civil rights. This approach arises from two main statements: (1) that large corporations have become more powerful than governments, and (2) some corporations have gradually replaced government initiatives to solve societys issues. The concept citizenship intends to capture the idea that firms have a place in society next to other citizens in matters of rights, responsibilities and possible partners of business in society (Garriga and Mle, 2004, p57). Corporations have the potential of improving societys rights where governments have shown failure. One example is the improvement of labour conditions in developing countries. Some corporations (i.e. Nike) have stopped sweatshop practices in developing countries even if it is accepted by local laws.

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Eventually a socially responsible firm is rewarded by consumers preference and brand loyalty. In doing so, a positive context for CSR is created, which contributes to the adoption and multiplication of this theory by other firms. Throughout this chapter I will explain how CSR has become a voluntary and strategic choice for firms. 2.1.2. CSR Review The following section reviews the evolution of CSR as an object of study from 1880 to 2006 using a model proposed by Pasquero (2005). According to Pasquero (2005) the format of CSR needs to be understood in the social context in which is generated. For analyzing the evolution of CSR, Pasquero proposes four institutional periods in the economy of the United States of America, where this concept has its modern origins. The author identified four stages linked to four types of CSR. Table 2 summarizes Pasqueros analysis on the evolution of CSR:

Table 2. Pasqueros CSR Stages


Stage Market Associative Societal Efficiency Period 1880-1920 1930s 1960-1980 1980-Today Target Exorbitant prices Economic coordination Quality of life Structural rigidity (Adapted from Pasquero, 2005, p. 86) The Stage names a form of CSR at a point in time that is determined by the column Period. The Target identifies the problem that society was facing due to the businesses corporate performance (Wood, 1991). The column Solution points out by which means society was solving the problems caused by the businesses corporate performance. Finally, the column Type of CSR, describes the sort of CSR that arose at that time. In this Solution Anti-trust laws Industry self regulation Regulatory agencies De-regulation Type of CSR Induced Framed Obligatory Voluntary

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Table, Pasquero outlined four stages in the evolution of CSR and the methods by which CSR has facilitated the interaction between firms and society at different times in its history. 2.1.2.1. Market (1880-1929) and Associative (1930-1959) Stages Pasquero (2005) states that during the market stage, American society was concerned about avoiding monopolies and their exorbitant prices for products and services. Therefore, the government, to protect consumers, created regulations and anti-trust laws. Companies responded to societys demands with induced CSR practices. The stock market crash of 1929 profoundly affected the American economy. After this enormous crash, changes were needed in order to prevent future crisis. Therefore, during the associative stage the goal was to coordinate the economy with regulatory systems for avoiding any Depression like the one in 1929. Industries began to self-regulate and governmental legislation favored unions. The corporate social responsibility of this time was considered framed by this economic legislation. According to Carroll (1999), during the 1950s, scholars stated that businesses were vital centers of power. Hence, the lives of many citizens depended on a companys decision process. Consequently, literature from that time was focused on questioning (Wood, 1991) the ethical responsibility of managers decisions. Managers were considered responsible for the positive or negative outcomes of companies. Power was related with responsibility, and was the business responsibility to avoid negative outcomes to society. 2.1.2.2. The Societal Stage (1960-1980) Pasquero (2005) states that during the societal stage (1960-1980) the governments target was to protect consumers from large-scale manufacturing companies to improve societys quality of life. Firms were limited by state legislation and not by unions as in the market stage. Companies behaviors were controlled through regulatory agencies; therefore, the type of CSR in this era is termed obligatory. Furthermore, the literature from the 1960s was characterized by expanding definitions of CSR as scholars focused on

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analyzing at managerial levels. In fact, Carrolls (1999) research shows that during the 1960s authors began to state that corporations have obligations beyond their legal and economic responsibilities, for instance, managers decisions should be focused also on the social world and the happiness of their employees. Moreover, Carroll (1999) suggests businesses during the 1960s became aware of the importance of providing society with better explanations of firms social performance; as a result, CSR became a subject of interest for business executives. Society was demanding to firms to act in ways that commensurate with their social power. Wood (1991) claims that the main idea of CSR at this time was that businesses were recognized as important actors in society; therefore, society expected firms to respond to social pressures and demands. According to Smucker (2006), a period of near fusion of firms and government arose in response to social demands. During the sixties and seventies in most western economies, governments tended to control the economy. Consequently, firms were forced by government agencies to become more socially oriented. Social welfare programmes and regulated industries, established in the past to serve the public good, had been based on the assumption of a self-sufficient nation-state that could maintain rates of economic growth in excess of increased costs of social welfare (Smucker, 2006, p.89). Government was controlling firms with strict regulations in the name of society for improving citizens quality of life. Carroll (1999) explains that during the 1970s, firms actions for responding to social demands, drove businesss interest in corporate philanthropy and community relations. In fact, during the seventies the firms concern for clarifying the way a company should respond to social pressures promoted the creation of policies, such as corporate social programs, socio-cultural goals and codes of conduct. Another perspective at this stage stated that companies priorities were not to respond to social demands; on the contrary, once firms achieved their profit goals, it might be of interest to respond to social demands (i.e., Johnson, 1971). In short, the business priority was profits and CSR was considered a tool to solve and even prevent social problems caused by corporations.

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2.1.2.3. The Efficiency Stage (1980-2010) Carroll (1999) concludes that during the 1980s, fewer attempts to define CSR as a concept existed. During the 1980s disillusionment with strict government policies began and the state was not able to sustain excessive welfare for society in the midst of slower economic growth (Smucker, 2006). Eventually the state began to deregulate its strict economic policies once considered beneficial for society. However, by 1984, Drucker proposed that business could keep contributing to social welfare. He proposed to transform social responsibilities into profitable businesses, in other words he stated to turn social problems into economic opportunities. In doing so, firms would be more motivated about solving social problems and eventually social problems would be solved more efficiently due to the profit implications. CSR research at this time was focused on expanding the CSR theoretical framework and venturing into three main themes: corporate social responsiveness4; business ethics; and stakeholder theories. According to Carroll, CSR was then perceived as a process, not as a set of outcomes. Tuzzolino and Armandi (1981) extended this statement by proposing that CSR had a hierarchy similar to Maslows pyramid in which organizations have different needs and priorities to satisfy; therefore, not every business will have the same CSR outcomes. CSR scholars during the eighties focused their efforts on understanding the interconnections between businesses and society; as a result, literature on social issues in management expanded. However, Wood (1991) claims that authors in an effort to conceptualize CSR created too many ideas and models around this concept, making it vague and diffuse. In 1991, Donna Wood proposed a conceptual model, which summarized previous CSR theories of authors such as Wartick and Cochran (1985), Davis (1973), Preston and Post (1975), and Carroll (1979). Woods model integrated three principles of corporate
4

Capability of businesses to anticipate actions and respond to social pressures (Frederick, 1978).

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social responsibility and was an attempt to organize and clarify previous theories and ideas around this concept. Woods model encompassed three principles of CSR with three different fields of applications. The first principle is the principle of legitimacy. This principle states that society allows businesses to exist and therefore businesses are expected not to abuse their power. If so they will tend to lose their privileges. The application of this principle defines the obligations and sanctions of businesses at an institutional level and defines societys expectations of any business. The second principle, the principle of public responsibility, states that businesses are responsible for their stakeholders and the problems related to their activities on the social, economic, political, economical, environmental and technological levels. Finally, the third principle is the principle of managerial discretion, which is focused on the individual responsibilities that business managers have for society. This third principle considers the ethical concern that business managers face when they make decisions. According to this principle, society expects managers to focus not only on the companies interests but also on the implications that their decisions have for society. In short, Wood (1991) proposed that CSR is a concept that attempts to place responsibilities on firms at three levels: institutional, organizational, and individual. The firms that assume their responsibilities on these three levels will contribute to environmental improvement and sustainable development and will enjoy consumer loyalty, as well as improved human resources management. Firms that ignore societys demands on the other hand will tend to lose their power (Davis, 1973). The three principles proposed by Wood (1991) gave an organized and multi-faceted framework to the field of social issues in management. Woods model integrated previous theories, which help to conciliate and organize concepts and models surrounding CSR. The question as to why firms would be motivated to internalize CSR into its policies at the three levels proposed by Wood still remained unanswered.

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Table 3. Principles of CSR.


The principle of legitimacy Level: Institutional Value: Society allows businesses to exist and therefore businesses are not expected to abuse their power. If so they will tend to lose their privileges. The application of this principle defines the obligations and sanctions of businesses at an institutional level and defines societys expectations for any business The principle of Public Responsibility Level: Organizational Value: Businesses are responsible for their stakeholders and the problems related to their activities on the social, economic, political, economical, environmental and technological levels. The principle of Managerial discretion Level: Managerial Value: Society expects managers to focus not only on the companies interests but also on the implications that their decisions have for society.

Adapted from Wood (1991, p. 696) During the efficiency stage (Table 2), the American government began to exempt companies from strict regulations that were implemented during the societal stage. Companies blamed the government for their inability to compete in international markets arguing that government policies reduced their operational efficiency. Therefore, the government, by reducing strict regulations on companies, expected to see the economy grow and leave behind economic stagnation. Smucker (2006) explains that social programs once perceived by the state as a social investment, were eventually perceived as synonymous with cost. According to Reich (2007), it was at this moment that western economies adopted the idea that well-being and democracy for society would increase if governments embraced market freedom and capitalism. This new idea created new tensions among firms, civil society, and government. Businesses are interested in profits and being more efficient. Firms claim that new rules are necessarily to facilitate a context for reducing their transaction costs to produce general well-being. On the other hand, civil society is unwilling to accept business practices that reduce their well-being. According to Smucker (2006), the dilemma is that governments have reduced their regulations on firms. Therefore, civil society has developed social movements and interest groups for demanding socially responsible practices.

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Pasquero (2005) argues that the context surrounding CSR dramatically changed after 1980 and that CSR has become voluntary for firms. In other words, firms are no longer strictly regulated as at previous stages to adopt social practices; strict regulations at this stage are considered by the state as a factor causing economic stagnation. For this reason, CSR in the efficiency stage remains an important model for firms because societies are still demanding firms to be socially responsible. On the other hand, little information exists to explain the mechanisms by which firms are stimulated to internalize CSR in an era where strict regulations no longer exist. Porter and Kramer (2006) propose to connect business and CSR by mapping social opportunities and selecting issues that overlap with business opportunities. Efforts to find shared value in operating practices and in the social dimensions of competitive context have the potential not only to foster economic and social development but to change the way companies and society think about each other (Porter and Kramer, 2006, p. 13). The authors suggest an approach for involving social issues in the companys CSR strategy. The approach includes three dimensions: (1) Addressing generic social issues not related to the core competencies of a company, such as environmental problems or community development; (2) value chain social impacts for finding solutions directly related to the companys activities; and (3) a social dimension for the competitive context defined as factors in the companys external environment that can affect the fundamental drivers of competitiveness in the places where the company operates. The strategic framework suggested by Porter and Kramer (2006) is designed to situate CSR not as a set of obligations for the business sector (Carroll, 1999), but as a set of opportunities for creating a competitive advantage. According to Zadek (2004), companies, before deciding to perceiving CSR not as an obligation but rather as a strategic resource, have to go, through five stages of a learning curve: (1) Defensive stage, its no our job to fix that. The company will deny and resist to social criticism from direct stakeholders. (2) Compliance stage, Well do just as much as we have to. Visible policies and conduct codes will be established in order to reduce critics and to protect the firms reputation. However, civil society will demand a greater

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commitment from companies and they will not just accept fake pledges. (3) Managerial stage, Its the business, stupid. During this stage, companies realize they are facing a long-term issue that will not be solved with public relations strategy or just new policies and conduct codes. The company will have to analyze its core business and involve their managers to create real solutions. (4) The strategic stage, It gives us a competitive edge. A company during this stage learns to intersect its business strategy with responsible business practices as a method to compete and success within its industry. (5) The civil stage, We need to make sure everybody does it. Companies realize that if their industry does not become socially responsible, eventually the state could set up strict regulations. For this reason, firms prefer to involve more companies in responsible practices. Furthermore, some organizations have a further vision and understand that if more businesses embrace CSR, it will help to provide global stability to society.

Table 4. CSR- Literature Review Summary


Author Pasquero, Jean (2005) Main Contribution CSR history analysis: Market stage (1889-1920) Associative stage (1930s) Societal stage (1960-1980) Efficiency stage (1980-) CSR definitions review Definition model for CSR in three levels: Institutional Organizational Managerial The authors related competitive advantage and CSR Proposed a learning curve with 5 different implication levels in CSR for firms New Institutional Infrastructure for Corporate Social Responsibility that comprehends three classifications: Civil Society/ Societally Based Institutions. State/ Government Sector Initiatives. Market/ Business Sector Initiatives. Type of CSR Induced Framed Obligatory Voluntary -----Voluntary in the three levels Strategic Strategic

Carroll, Archie B. (1999) Wood, Donna J. (1991a, 1991b).

Porter and Kramer (2006) Zadek (2004) Waddock, Sandra (2006)

Voluntary in the three classifications

Table 4 summarizes the classic CSR approaches (Pasquero, 2005; Carroll, 1999; Wood 1991a, 1991b) and the new strategic CSR vision represented mainly by Porter, Kramer (2006) and Zadek (2004). The new strategic CSR trend comes from a vision of perceiving societies demands not as a set of obligations but as a set of opportunities.

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According to Zadek (2006) businesses have five choices, (1) to deny and resist social criticism, (2) elaborate visible policies in order to reduce critics and to protect the firms image, (3) to create real solutions and analyze its core business, (4) to intersect its business strategy with responsible business practices, and (5) to share its socially responsible vision with the industry and involve other companies in order to avoid strict regulations from the government. Visionary companies are choosing both to intersect its business strategy with CSR and to voluntarily share its social vision. In doing so, firms have both the opportunity to develop a competitive advantage (Porter and Kramer, 2006) and to positively impact its external environment. As explained before, CSR has moved from a stage in which the state forced companies to involve itself in socially responsible practices to a stage in which CSR is only a choice for firms. CSR activities may be voluntary; however, these can be facilitated by what Waddock (2006) names infrastructure for CSR. Behind voluntary social practices, new pressure mechanisms have arisen for regulating companies behaviors. The following section examines this proposition.

2.1.3. The New Institutional Infrastructure for CSR The options for a company are transforming social pressures into business opportunities to differentiate themselves from their competitors and then contributing to societys wealth, or ignoring social pressures and hoping that their competitors do not respond to societys demands. The internalization of CSR practices has become voluntary and companies must realize the utility of being socially responsible. According to Pasquero (2005), Zadek (2004), and Porter & Kramer (2006) firms are voluntarily developing strategies to respond to the social pressures from consumers, stakeholders, the state, and society in general. Behind a firms voluntary decision to adopt CSR, new mechanisms have arisen to pressure companies to be socially responsible, according to Waddock (2006):

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In the absence of a global governance structure that could hold companies to account, many companies, particularly highly visible transnational corporations, have voluntarily stepped into this fray in various forms of self-regulation, promoting their corporate responsibilities, engaging in partnerships with nongovernmental organizations (NGOs), arguing that economic development depends on the jobs and other opportunities that they provide, developing explicit social programs, and generally highlighting their more progressive practices and good citizenship, in efforts to counteract critiques. [. . .] This infrastructure attempts to advance and support corporate responsibility through a variety of approaches that rely predominantly on the still-voluntary mechanisms of the market and of civil society in an attempt to provide a countervailing force to the pressures in the firm for wealth maximization for shareholders fostered by still-dominant economic thinking.(pp. 3-4.) These new mechanisms are based on social pressures and global dialogues among stakeholders. Dialogues which are founded on the willingness to solve social issues as varied as protection of the natural environment, reduction of the economic gap between the poor and the wealthy, elimination of corruption, improvements to the quality of life, and elimination of businesss predatory practices in developing countries. Waddock (2006) claims that behind the new pressure mechanisms, a new voluntary institutional infrastructure of CSR has arisen to regulate firms behaviors. Waddock proposes three categories of mechanism: (1) market/business; (2) civil society; and (3) state/government.

2.1.3.1. Civil Society Initiatives


Waddock (2006) claims that society has come together to create multi-sector initiatives to encourage firms to be socially responsible. Among the most important initiatives, for instance, are the UN Millennium goals that represent an international agreement on eight social issues. Dialogue among different stakeholders on specific problems is a common issue among the organizations created by civil society. In order to

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spread their effects, first-person accounts and rankings of companies performance are published in journals and magazines (e.g., Business Ethics Quarterly) as a way to encourage the internalization of CSR. Broad-based journals and magazines, academic programs, and research institutes are expanding the theory and research; in doing so, new managers with a consciousness of CSR are motivating firms from the inside to shift towards CSR policies. In another approach, activists and citizen watchdog groups are demanding, in some cases with violence, a halt to sweatshop practices, polluting facilities, and predatory corporate behavior. Activism has proved to be one effective way for society to get the attention of large firms when other actions have had no results.

2.1.3.2. State/ Government Sector Initiatives


Waddock (2005) states that governments have enacted laws to protect the environment, such as the Kyoto Protocol, or to prohibit the kind of corporate corruption exhibited by Enron. These initiatives are considered by Waddock (2006) as part of government reactions to regulate firms behaviors. 2.1.3.3. Market/ Business Sector Initiatives Waddock (2006) claims that the business community has created initiatives to regulate itself and to follow market pressures. Businesses have developed CSR initiatives such as policies, and partnerships with non-governmental organizations, that take into account a broader range of stakeholders, society and the environment. In an effort to earn trust and credibility within society, firms are venturing organizations to certify, verify, and conduct research on national and international corporate standards (e.g., the International Organization for Standardization). In addition, companies are developing principles of transparency by reporting their annual activities on their websites. Furthermore, the need for responding to the new social pressures has fuelled the creation of for-profit firms specializing in CSR consulting. On the other hand, non-for profit organizations ventured by the business sector have also arisen to diffuse CSR (i.e., The Ethos Institute and Business for Social Responsibility). Accompanying the aforementioned initiatives, a responsible investment movement has created several indices (e.g., the Dow Jones Sustainability Index

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and the FTSE4Good) to highlight CSR performance. The responsible investment movement is supported by firms that encourage investing in companies and projects that are socially responsible. To summarize, in this section we have reviewed two main aspects of the CSR infrastructure question: (1) definitions of CSR highlighting the evolution of business addressing social issues which can be adopted as way of creating a competitive advantage (Porter and Kramer, 2006); (2) a new infrastructure for CSR that comes from societal levels (Waddock, 2006). However, we have a limited understanding of how to foster CSR among a population of business organizations using this infrastructure. The following section examines the literature on positive deviance, a new approach that is limited in theory, strongly oriented to practice, and that induces social groups to modify behaviors voluntarily. The positive deviance approach has been used to solve problems as varied as malnutrition in children (M. Sternin et al, 1998), and labour disputes (Arnold and Hartman; 2003, 2005a, 2005b), to environmental pollution (Cameron, 2003). Despite positive deviance is a new approach in management; it has proven to be useful in inducing groups to adopt new behaviors, which are contrary to a certain establishment. By adopting positive deviant behaviors an organization or a community- can do both solve a certain problem and increase its own well-being. Therefore, I propose the positive deviance theory as an approach to be used in the new institutional infrastructure for fostering corporate responsibility (Waddock, 2006) at a stage in which adopting CSR has become both a voluntary (Pasquero, 2005) and strategic choice ( Porter and Kramer, 2006; Zadeck, 2004) for firms. Positive deviance is a new approach which can be used as a mechanism for fostering CSR among the private sector. This model serves to enhance firms into the last stage of Zadecks (2004) CSR learning curve: to share its socially responsible vision with the industry and other companies.

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2.2. Positive Deviance


This section reviews the new theory of positive deviance, an approach that is strongly practice orientated. It will first define the concepts of deviance, positive deviance, and negative deviance. Subsequently, it will look at positive deviance as an approach to managing projects or ideas that have trouble being implemented because their innovative methods or revolutionary concepts are disqualified in some way, or because of some other barrier to their achieving their final goals. Difficulties surrounding positive deviant organizations or individuals can be as diverse as finding financial resources, motivating participation, and facing social stigma.

2.2.1 Deviance
The Cambridge Advanced Learner's Dictionary (2007), the adjective deviant describes a person or behavior that is not usual and is generally considered to be unacceptable. The Cambridge Dictionary of Sociology (2006) says deviance [. . .] can be defined as (purported) non-normative behavior that, if detected can be subject to informal or formal sanctions. Deviant behavior is norm-violating conduct that is subject to social control []. The deviant concept is used to define unusual behaviors, which can be subject to sanctions, and it has a negative connotation. For instance, criminals, child molesters, alcoholics, delinquents and drug addicts are considered deviants because they violate a norm, which serves to regulate social order. Definitions of the word deviant in the Cambridge Dictionary of Sociology (2006), the Blackwell Encyclopedia of Social Psychology (1995) and Websters have universally negative connotations; the dictionaries do not list any examples of positive deviance. Several social scientists, however, have argued that there are two classes of deviance: (1) positive; and (2) negative. The following section examines the debate surrounding the sociological concept of positive deviance.

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2.2.2. Positive deviance in Sociology


Negative deviance denotes negative, deplorable, devalued, disvalued, disreputable, undesirable, disgusting, frightening behaviors, such as murder, alcoholism and rape. Positive deviance (Ben-Yehuda, 1990; Heckert, 1989) is a concept originating in sociology to describe behaviors that do not follow dominant beliefs and values, and that are intended to increase the well-being of a community or an organization (Spreitzer et al., 2004). Deviant behaviors that are positive are made by entrepreneurs, visionaries, social leaders and geniuses. Social scientists who defend the existence of two classes of deviance both positive and negative (Merton, 1938; Wilkins, 1964; Heckert, 1989; Ben-Yehuda, 1990), argue that the concept of deviance should not be limited to a negative context. Hence, actions and behaviors that violate social norms can produce either negative or positive effects, which may eventually become new norms. Heckert (1989) argues that breaking the norms can be considered an undesirable behavior in one era or a certain context, but in another era, the same behavior can be perceived as a positive behavior. One example given by Heckert (1989) is the work of the French Impressionists. French Impressionist art was devalued and undesirable when it first appeared. Over time, its vision and techniques became recognized and admired. Heckert suggests there are several ways in which deviance can be manifested. He does not restrict the term positive deviance with a concrete definition. Instead, he widens the spectrum for this term by claiming positive deviance is multi-faceted, from the French Impressionists to geeky adolescents and Nobel Prize winners. He explains positive deviance as being a social innovator or an individual who differs from that average, for example, beautiful women or movie stars. Ben-Yehuda (1990) argues that to understand positive deviance it is necessary to comprehend that deviance is a mutation or creative adaptation to a rule that could eventually create new rules or new life situations. In other words, norms do change over time; a behavior seen as deviant at one moment in time may not be seen in the same way later, and vice versa. Ben-Yehuda (1990) argued that positive deviance should be

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recognized as a valid concept and encouraged other sociologists to study and research this concept in order to understand it better. Two social scientists, Sagarin (1985) and Goode (1991), have opposed using the term deviance in this way. ) . Sagarin (1985) states that the concept of deviation concerns only negative behaviors, and hence positive deviance is an oxymoron5. Goode (1991) reviewed the debate around positive deviance and claimed the concept is sloppy and inconsistent. Goode agrees with Sagarin (1985) that positive deviance is not a viable concept and is contradictory; hence, this concept should not exist. Goode explained that he does not oppose studying behaviors that fall outside the norm; however, he disagrees on using the term positive deviance to refer to them. Goode claimed that an outstanding student, successful person, or rebel leader transformed into a hero or a criminal are deviants because they all present abnormal behaviors. Even if a person could be a source of creativity to produce social change, a deviant still presents abnormal behaviors and should be considered simply deviant, not a positive deviant. For Goode (1991), promoting positive change is not a valid argument for accepting the notion of positive deviance. He goes further, describing the looseness of current definitions of positive deviance and calling it a sponge word (p. 307). In 2003, West reviewed the positive deviance debate and tried to reconcile the differences by accepting the contradictions inherent in the term positive deviance. West recognized that this term could be used to refer to and to analyze forms of social life where constructive or innovative behaviors change accepted norms in revolutionary ways, such as Gandhi. West proposed that new research should create boundaries for the definition of positive deviance.

2.2.3. Positive deviance in Management


Positive and negative deviance are not exclusive to individuals. These sociological terms are also applied in theories of organizational change. An organization can act in ways
5

Two words used together which have, or seem to have, opposite meanings.

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that are viewed positively and negatively in relation to a standard in an industry, or a country. For example, if a company decided without any external pressure to stop sweatshop practices, even when those are legal and accepted in certain countries, this behavior would be termed positive deviance, since its decision to go against current industry and national practices is intended to bring improvements to a social ill. A company would be said to display negative deviance if it decided to use child labor even though it is both illegal and frowned upon in most societies. Positive deviance is a behavior that leads to changes, not only for individuals but also for organizations. In fact, organizations can exercise a multiplier effect. A successful organization that demonstrates a particular positive deviant behavior has the potential to influence not only individuals but also other companies to follow new practices and make revolutionary decisions. The following section reviews the literature on positive deviance in the field of management. The purpose is to understand the characteristics of organizations that are positively deviant and the model behind them. The reason to find the characteristics and the model behind positive deviant organizations is to be able to conceptually explain the Ethos Institutes strategies in disseminating CSR in Brazil. This section will expand the understanding of how positive deviance can be used as a vehicle to diffuse CSR and to encourage the private sector to create new strategies based in this approach.

2.2.3.1. The positive deviance approach in community development practice The origins of the idea of positive deviance in management change theories stems from the community development work of Monique Sternin and Jerry Sternin in Vietnam. In 1990, the Sternins were working for Save the Children6, a non-profit organization. Their mission was to create a program to solve the problem of childhood malnutrition in Vietnam. Before the Sternins began working on their aid program, other attempts to solve this issue had been put in place but were unsustainable. Childhood malnutrition always
6

For further information about this organization please consult http://www.savethechildren.org + http://www.savethechildren.org/publications/programs/health/FNB-v23n4-supplement.pdf

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returned after the programs ended. They decided to find a sustainable solution, and decided to focus their efforts on finding a solution that was already in the community. In other words, they wanted to discover well-nourished children in poor families and then help the rest of the community replicate the behaviors that led to that outcome. Eventually, the Sternins found families that had well-nourished children despite the fact that these families had access to the same resources as other families whose children were malnourished. They considered the families that had healthy children as positive deviants. Positive deviants fed children with more frequency and gave them food like crabs and shrimp, which the local culture believed was inappropriate for young children. According to J. Sternin (2003), positive deviants are those persons whose practices or behaviors allow them to perform better or to discover better solutions to issues than other people who have access to the same resources. Sternins positive deviance (PD) approach consists in replicating these practices or behaviors. Over a twelve-year period, the approach enabled communities of more than 2.2 million to reduce childhood malnutrition (J. Sternin, 2003). In 1998, Monique Sternin et al. published a field guide to designing a communitybased nutrition program using the Hearth model7 and the positive deviance approach. This 85-page guide used a model with five main steps, which can be summarized as follows: 1. Identification of local resources. This refers to acknowledging available alliances, volunteers, experts, and tools which could be useful in applying the PD model. 2. Conducting a situation analysis with the community which has the problem. This step intends to understand the problem with the help of local people and the use of surveys. 3. Positive deviance inquiry. The process of identifying positive deviant behaviors which had enabled certain individuals to discover better solutions to issues than other individuals who have access to same resources. During this process, they compared PD behaviors with non-PD behaviors in order to
7

The Hearth model (M. Sternin et al., 1998, p. 11) details nutrition and implementation techniques and is grounded in the PD approach.

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find differences and also harmful practices which had contributed to cause certain problems. 4. Design of a program based on the results of PD inquiries. Once the positive deviants were identified a plan to diffuse this knowledge is enabled. This plan includes deadlines, rehabilitation periods, educational workshops and strategies to promote behavior change. 5. Monitoring and promotion program. This final phase is focused to maintain the skills developed during the previous step. Behavior is monitored by observing, as well as, with the use of surveys. Workshops to reinforce and promote PD behaviors are part of this final phase. These five steps have been applied in solving different social issues, mainly in the health domain and in developing countries8. For example: pregnancy problems, ending female genital cutting, nutritional interventions, newborn care practices, and HIV infection. Jerry Sternin, a co-author of the 1998 Field Guide, claims to be the father of applied Positive Deviance (2003, p. 20). He took the model described in the 1998 Field Guide for community activists and adapted it for a corporate audience. In 2000, Sternin was interviewed in the business magazine Fast Company9 (Dorsey, 2000). He explained in eight steps how businesses can adopt the positive deviance approach to catalyze change. This publication intended to inform readers in a style that was non-academic. Dorsey was writing for a general audience, while M. Sternin et al. (1998) were writing for a specialized audience. In 2000, J. Sternin and Choo co-wrote a two-page article in the Harvard Business Review in an effort to communicate his ideas to the business community and management scholars. In this article, the authors the ongoing health issue of malnutrition in Vietnam and the role of the PD approach in solving this. The authors showed the scope of positive deviance and its ability to assist with solving problems in management and in
8 9

For further information please consult http://www.positivedeviance.org For further information please consult http://www.fastcompany.com/

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organizations. J. Sternin claims that an organization can invest in looking for positive deviants in their own organization rather than investing great amounts of money and time in finding solutions from outside sources that will not necessarily work for a corporation because these solutions might not correspond to an organizations specific needs. J. Sternins framework was complemented with a second publication in the Harvard Business Review in 2005. The article, co-written with Tanner Pascale, gave practical applications in business settings, with examples from companies using the PD approach, such as Hewlett-Packard, Merck and Novartis. Recurrent health cases used in previous publications by J. Sternin were considered by the authors to propose a series of steps for their PD model, a model that included six steps10. For each step, the authors provided practical cases about how community and management issues were solved in order to prove the utility of their model. The work of M. Sternin and J. Sternin has contributed to promoting the replication of PD practices and the model they developed has proved to be useful especially in social issues. In 2001, they founded The Positive Deviance Initiative11 at Tufts Universitys Friedman School of Nutrition Science and Policy, with funding from the Ford Foundation. The purpose of this organization is to train practitioners and to advance research in PD. The organization has documents, guides and free material on their website that describes previous cases in which the PD model has been applied. Among the documents available on the website, is a presentation that summarizes the positive deviance approach used by The Positive Deviance Initiative. The model in this presentation is called The 6 Ds12.This model is user friendly by framing problems into facts. The steps in this model are geared towards facilitating the augmentation of new practices within a given community.

10 11

See Table 7. For further information about this organization please consult http://www.positivedeviance.org/ 12 See Table 7.

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2.2.3.2. The figure of the leader in the PD approach Robert Quinn writes about leadership and organizational change, and in an article published in 2000 (Quinn, Spreitzer and Brown, 2000), he proposed an Advanced Change Theory (ACT). The model for organizational change included ten steps. The writing style, similar to that of the Sternins, illustrated each step with a story, mostly managerial but in some cases Martin Luther King, Gandhi and even Jesus were cited as examples. The authors model included the figure of a leader. This leader helps to guide through change and inspire others to act. The leader must be able to change at a personal level and to experience personal sacrifices because of the natural resistance of a system to experience change. In this article, Quinn et al referred to leaders of social movement acting as insurgents to transform societies . . . Often placing themselves in jeopardy, they do what is right rather than what is prescribed by existing laws, rules, or authority [. . .](Quinn et al., 2000, p153 and 156). The leaders description was similar to the given definitions of positive deviants. In fact, in 2001 Quinn during an interview used the term PD: Deviance is generally viewed as a bad thing. But on one end of the curve, we find deviance in the form of excellence. . . Systems dont like either positive or negative deviance, though, and are designed to crush both (Sparks, 2001, p. 49). Quinn during this interview explained that the PD approach could be used in the scholar system to improve education and to lead organizational change. However, he did not provide a model or theoretical framework, but he expanded the PD theory by introducing the leader figure.

2.2.3.3. Moral imagination in Positive deviance


Arnold and Hartman explored a new field for the PD concept. The authors applied PD to sweatshop issues. In doing so, they highlighted the potential of replicating PDs behaviors for developing, or discovering better solutions to sweatshop practices. Hartman and Arnold linked the concept of moral imagination to positive deviants. The authors define moral imagination as following:

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Moral imagination is the subset of imagination that has as its subject explicitly moral constructions. It is moral imagination that permits us to create possible worlds that are either morally better or worse than the world as we find it (Arnold and Hartman, 2003, p. 427). In other terms, moral imagination allows individuals to go beyond established limits, to question economic, political, social, cultural structures or even an entire system. These special individuals or deviants have the ability to compare and contrast systems and structures, increasing the number of possibilities of decision and choice. The authors state that multinational companies (MNC) can also be positive deviants. . . . [MNCs] that deviate from specific norms in praiseworthy ways . . . deviance can occur in reference to both strategic and legal norms [. . .] (Arnold and Hartman, 2005a, p. 206). According to the authors, certain firms under pressure or for reasons imposed on them make uncommon choices to solve radical issues, which distinguish them from other firms in the same industry. Decisions can deviate a MNC positively or negatively from an industry, and it is the firms moral imagination that acts as the mechanism by which a firm would decide to perform a moral leap towards positive deviance. positive deviants have used creative approaches to global labour practices in order to move beyond sweatshops and to provide workers with wages and working conditions that respect their basic human dignity. (Arnold and Hartman, 2005a, p. 206). To explain how these PD companies had taken positive deviant decisions, the authors examined sweatshop issues in the apparel and footwear sectors in developing countries. Arnold and Hartman (2003, 2005a, 2005b) explained that PD firms which respected the rights of workers remain competitive in an industry where sweatshops are a relatively common and a legal practice in certain countries. PD firms increase their

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employees loyalty and productivity by avoiding sweatshop practices, and at the same time, consumers prefer to buy products from socially responsible firms. The relevance of Arnold and Hartman in the positive deviance approach is their explanation of how the moral imagination serves as a mechanism to trigger PD in individuals and organizations. Nevertheless, these authors did not describe a model or a process about how to repeat the PD approach, or about how companies specifically addressed sweatshop issues. 2.2.3.4. The psychological conditions for Positive Deviance Spreitzer and Sonenshein (2003) provided a theoretical foundation for PD in the book Positive Organizational Scholarship: Foundations of a new discipline. These authors provided a new definition of PD and described the psychological conditions that contribute to the gestation of positive deviant behaviors. The authors stated that at one extreme of the curve [behavior curve] are negative behaviors such as sabotage or theft that depart from norms. . . the positive extreme of the curve. . . focuses on the best of the human condition, the honorable and the extraordinary(Spreitzer and Sonenshein, 2003, p. 208). According to them, a deviant behavior must be intentional, voluntary, done on purpose and not as an accident, and secondly, it must be contrary to the norms of the deviants referent group. Furthermore, Spreitzer and Sonenshein proposed five psychological conditions that facilitate positive deviance:

Table 5. Psychological conditions for Positive Deviance


1. Meaning. [It] gives individuals a reason to risk departing the norms of a
referent behavior. 2. group. . . people that feel vital feel more likely to initiate new

Other-Focus. In taking the perspective of others, positive deviants are compelled by a desire to serve others rather than by a chance to achieve personal glory.

3. Self-determination When people experience self-determination, they see


4. themselves in control of their own destiny their reasons for taking action are internalized rather than coerced by external forces. Personal Efficacy. When individuals feel efficacious, they believe that the potential for success outweighs the possibility of failure.

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5. Courage. Positive deviance often involves significant risk as individuals break


out of the rigidity of norms and patterns of expected behavior. . . courage provides individuals with the backbone to engage in positively deviant behaviors.

Source: Spreitzer and Sonenshein (2003) Their theories contributed to clarifying the profile of an individual who voluntary chooses to deviate positively from certain norms and standards. As positive deviants create positive impacts, more individuals, or organizations, will tend to imitate PD behaviors and over time, they can change norms and transform an entire system.

2.2.3.5. Positive Deviance and the Abundance Approach


Kim Cameron co-wrote Positive Organizational Scholarship in 2003. Cameron, along with fellow authors Quinn, Dutton and Spreitzer, was interested in studying successful outcomes in organizations, meaning the results of organizational performance that go beyond the average. Cameron suggested a way to represent successful outcomes using a normal distribution curve. If the performance of an organization would be a curve of normal distribution, see Figure 1, the left extreme would represent the ineffective, inefficient and harmful practices in an organization. In the middle the effective, efficient and healthy practices would be located. On the right extreme the extraordinary, excellence, and flawless practices would be represented; it is on this last extreme of the curve that positive deviance practices are located.

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Illustrating Positive Deviance Population of individuals or organizations

Performance

Negative Deviance Individual: Physiological Psychological Organizational Effectiveness Efficiency Quality Ethics Relationships Adaptation Revenues Orientation: Illness Illness Ineffective Inefficient Error-prone Unethical Harmful Threat-rigidity Losses Problem solving

Normal Health Health Effective Efficient Reliable Ethical Helpful Coping Profits

Positive Deviance Wellness Flow Excellence Extraordinary Flawless Benevolence Honoring Flourishing Generosity Virtuousness

Figure 1. Adapted from Cameron et al. (2003, p. 53)


Cameron et al. (2003) participated in research on the Positive Organizational Scholarship (POS), a movement which studies and researches the right extreme of the curve (see figure 1) on the organizational level. The PD approach is one method proposed to achieve the excellence of the right side of the curve. By 2006, Cameron and Lavine had examined an actual case from the positive side of the performance line. In other words, they examined an organization with successful outcomes and published the case in a book titled Making the Impossible Possible: Leading extraordinary performance: The Rocky Flats story. The book describes a case in which a company conducted the first clean-up in the world of a nuclear weapons facility. This case examines the solutions to numerous challenges. The cleaning company had to deal with an

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antagonistic relationship with the workforce of a nuclear facility, high levels of pollution on an area over 6,000 acres, and difficulty in accessing files and information due to the fact that activities in this nuclear plant were considered a matter of national security. The label of national security on the nuclear facilities caused a lack of inspections, which led to a violation of rules and secret pollution. According to Cameron and Lavine, the cleaning company had to adopt an abundance approach in order to complete its duty. The abundance approach refers to replicating the best performance of PD organizations and individuals (Cameron and Lavine, 2006). The positive deviance approach focuses on replicating the conditions which in the past had generated the highest potential and performance, rather than just focusing on overcoming a major problem or challenge. The authors argue that by adopting the positive and abundance approach, the cleaning company was able to clean the facility in ten years at a budget just over $6 billion when the estimate was 70 years with a budget of $36 billion. The positive deviance and the abundance approach include five components:

Table 6. The Abundance Approach


Identify Extraordinary Success Describe peak experiences Conduct an Analysis of Enablers Identify enabler of the highest past performance Identify How to Create Sustainability Identify what could be continued and replicated in the future Designing a Positive Future Design interventions that create an ideal future with extraordinary performance Basic Assumption Our job is to embrace and enable our highest potential

Source: Cameron and Levin (2006, p. 29) The abundance approach has close similarities with the models proposed by J. Sternin. Both models intend to identify and replicate PD behaviors developed within a certain organization that succeeded in solving a particular problem. The abundance

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approach was used to help solve a concrete problem: the clean-up of a nuclear facility. Sternins model was developed initially for community development, later he suggested his PD model could solve issues in management. Sternin states that an organization could better invest in looking for positive deviants in its own organization, rather than investing great amounts of money and time in finding solutions from outside sources. An outsiders proposed solutions and best practices might not necessarily work for a corporation, because they might not correspond to an organizations specific needs.

2.3. Recapitulation
The positive deviance and abundance approach includes a framework grounded in a management case with successful results. The theory behind the Cameron and Levin (2006) model is complemented by the work of other authors. The work of M. Sternin et al. opened up a new field of application to PD in solving social issues. Before J. Sternins work, PD was a concept used in the sociology field to define behaviors outside the norm that produced outstanding results. The Table 7 summarizes and compares the different models proposed by the Sternins.

Table 7. Sternins PD models


M. Sternin et al., 1998. 1. Identification of local resources 2. Conducting a situation analysis with the community which has the problem 3. Positive deviance inquiry. J. Sternin, in Dorsey, 2000. 1. Do not presume that you have the answer 2. Do not think of it as a dinner party J. Sternin et al., 2003 DEFINE the problem and the outcome of a successful program. DETERMINE if there are individuals with the community who already exhibit the desired behavior DISCOVER the uncommon practices or strategies that enable the Positive Deviants to succeed when J. Sternin and Pascale (2005) 1. Make the group the guru 2.Reframe problems through facts The Six Ds .Retrieved February 20, 2008 from www.positivedeviance.org 1. Define the problem and define what a successful solution/outcome would look like 2. Determine if there are any individuals/entities in the community who already exhibit desired behavior

3. Let them do it themselves.

3. Make it safe to learn

3. Discover uncommon practices/behaviors enabling the PDs to outperform/find better solution to the problem than others in their community.

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4. Design of a program based on PD inquiry results.

4. Identify conventional wisdom.

5. Monitoring and promotion program. -

5. Identify and analyze the deviants. 6. Let the deviants adopt deviations on their own. 7. Track results and publicize them. 8. Repeat steps one through seven.

their neighbors do not. DESIGN an intervention enabling others in the community to access and practice the PD behaviors. -

4. Make the problem concrete.

4. Design, implement activities enabling others in community to access and practice new behaviors.

5. Leverage social proof 6. Confound resistance to change -

5. Discern the effectiveness of activities or project through ongoing monitoring an evaluation. 6. Disseminate successful process to appropriate other. -

The five different models proposed by the Sternins maintain a common premise. The basis of his models remains in (1) identifying PD behaviors that solve an issue inside a community, (2) encouraging the rest of the community to voluntary embrace new behaviors, (3) setting up a monitoring program, and (4) disseminating new behaviors to outside communities. In addition, Sternins various models are linearly developed, meaning that each step in a certain model can only be taken when the previous step has been completed. In other words, step two in Sternins framework will start only when step one is accomplished. However, I argue here that it is possible to undertake multiple steps at the same time once the cycle of PD has to be repeated in the same community for solving a different issue or for reinforcing new practices. I further propose that the PD approach, in order to be effective, needs the leader figure mentioned by Quinn (2001) ; a group of people will be more willing to experiment outlying behaviors if a leader is there to motivate and organize them. Hartman and Arnold (2003, 2005a, 2005b) linked the concept of moral imagination with positive deviance. In doing so, they provided an explanation of how positive deviance is geared to individuals and organizations. They also presented examples of how PD can

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solve management issues and serve as a tool for firms to distinguish themselves from their competitors and remain profitable at the same time. Spreitzer et al. (2000, 2003, and 2004) proposed five psychological conditions that an individual requires to develop positive deviant behaviors for breaking away from norms. Finally, Cameron et al. (2003, 2005, 2006) developed a model capable of generating outstanding performance for solving a problem. Positive deviance can be used to encourage organizational change; however, researchers still have not set firm boundaries on when and where PD can be used. Neither do they mention the organizational structures and culture that facilitate the application of a PD approach (Cameron, 2005). Nor are there any indicators to measure positive deviant behaviors. Positive deviance is an approach that has been used only recently in management issues; therefore, its limits have not yet been completely examined. Table 8 summarizes the contributions of the major authors on positive deviance.

Table 8. Positive Deviance Literature Review Summary


Author Ben-Yehuda, Nachman(1990) Heckert, Druann Maria (1989) M. Sternin et al. (1998) , J. Sternin et al (2000, 2002, 2003, 2005) Quinn, Robert in Sparks (2001) Hartman, Laura et al. (2005a, 2005b) Main Contribution Definition. Pioneers of PD in the sociology field. Proposed a PD model to solve health and management issues. Introduced the leader figure in the PD model as a key element to disseminate positive deviant behaviors in a group of individuals or organizations. Explained the mechanism that allows positive deviants to develop, to perform better or to discover better solutions to issues than other people who have access to same resources. The authors state that moral imagination allows individuals to go beyond established limits, to question economical, political, social, cultural structures or even an entire system. Provided examples of PD on sweatshop issues. Contributed to illustrate PD can be used to solve management issues. Proposed five psychological conditions that facilitate positive deviance in individuals. The authors contributed to add conceptual clarity to PD. Conceived a PD approach that focuses to replicate the conditions, which in the past had generated the highest potential, rather than just focusing in overcoming a major problem or challenge.

Warren, Danielle E (2003) Spreitzer et al. (2003) Cameron et al. (2005, 2006)

2.4. Conceptual Framework - Proposal


I believe that PD can be used as a mechanism to encourage firms to voluntarily embrace CSR practices on the basis that this approach is capable of tracking, replicating,

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and disseminating solutions that were created within a community of firms addressing a common issue. The conceptual PD framework I put forward for disseminating CSR is sustained in the last of Sternins frameworks. The Six Ds model (see Table 7) summarizes preceding versions of Sternins approaches and has proven to succeed in solving social issues for the positive deviant organization. Moreover, I consider the leader figure proposed by Quinn (2001) an essential agent to catalyze and guide creative solutions which violate certain norms or taboos within a community. This leader with his moral imagination (Hartman and Arnold, 2003, 2005a, and 2005b) must be cable of encouraging other people to go beyond established limits and to discover new creative solutions within a community or an organization. Positive deviants in order to succeed in changing the norms of a system need the following psychological conditions, as proposed by Spreitzer and Sonenshein (2003): meaning; other-focus; self-determination; personal efficacy; and courage. The conceptual framework I propose contains the following elements:

Table 9. Conceptual Framework- Elements

The Six Ds. Retrieved February 20, 2008 from www.positivedeviance.org

o Define the problem (situation analysis) and define what a successful


solution/outcome would look like. o o o o o Determine if there are any individuals/entities in the community who already exhibit desired behavior. Discover uncommon practices/behaviors enabling the PDs to outperform/find better solution to the problem than others in their community. Design, implement activities enabling others in community to access and practice new behaviors. Discern the effectiveness of activities or project through ongoing monitoring an evaluation. Disseminate successful process to appropriate other. Share deviant behaviors with community outsiders.

Leadership (Quinn, 2001). PD process can be facilitated through a leader. The five psychological conditions proposed by Spreitzer and Sonenshein (2003): meaning; other-focus; self-determination; personal efficacy; and courage. Positive Ethical Deviance inspired by Moral imagination (Hartman and Arnold, 2003, 2005a,

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and 2005b)

Using the elements in Table 9, I propose the following conceptual framework as a method to promote, enhance, and foster voluntary engagement with corporate social responsibility.

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Figure 2 Conceptual Framework


WHO ENABLES CHANGE? A leader (Quinn, 2001) with five psychological conditions (Spreitzer and Sonenshein, 2003): Possesses a meaning to change current establishment. Exercises an other-focus perspective, rather than just on personal goals. Experiences self-determination in transforming ideas into facts. Exerts personal efficacy to outweigh failure possibilities. Possesses courage to overcome the risk of breaking norms rigidity. Moral Imagination (Hartman & Arnold; 2003, 2005a, and 2005b) Innovation that challenges current models and ideas

To promote, enhance, foster, voluntary engagement with CSR HOW?


Positive Deviance (J. Sternin, The Six Ds. Retrieved February 20, 2008 from www.positivedeviance.org) Define the problem (situation analysis) and define what a successful solution/outcome would look like. Determine if there are any individuals/entities in the community who already exhibit desired behavior. Discover uncommon practices/behaviors enabling the PDs to outperform/find better solution to the problem than others in their community. Design, implement activities enabling others in community to access and practice new behaviors. Discern the effectiveness of activities or project through ongoing monitoring and evaluation. Disseminate successful process to appropriate other. Share deviant behaviors with community outsiders.

I propose to use the practice-oriented 6 Ds model that is used by the Positive Deviance Organization (see table 7). This model includes six main steps that are supposed to be sequential; nevertheless, I suggest that the steps can be undertaken simultaneously for

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strategic reasons. A leader with all five of the five psychological conditions proposed by Spreitzer and Sonenshein (2003) meaning, other-focus, self-determination, personal efficacy, and courage is capable with his or her moral imagination of developing innovations that challenge current models and ideas. I suggest that the innovative idea of fostering voluntary engagement among the business community is possible through positive deviance. The main theoretical frameworks dealt with in this chapter are presented in Table 10. The following chapter explains the research design methods used for this study.

Table 10. Theoretical Framework Summary


Theory Corporate Social Responsibility Main Thesis Firms can strategically manage their legal and voluntary responsibilities for contributing to building a sustainable society. A new voluntary institutional infrastructure of CSR has arisen; its pressure mechanisms (market/business, civil society, and state/government) are encouraging firms to be socially responsible. Conceptual boundary CSR does not explain by which means firms will voluntary go beyond their legal responsibilities. The new institutional infrastructure is a recent approach which describes new pressure mechanisms to encourage firms to be socially responsible; however, this approach does not go further in explaining concrete action strategies or models for voluntary change.

The New Institutional Infrastructure

Positive Deviance

Extraordinary outcomes produced by behaviors outside the norm can be replicated and adopted voluntarily by individuals and organizations to solve management and social issues.

Firm limits on PD application have not yet been set. There is no mention of the organizational structures or cultures that facilitate the application of PD. There are no indicators to measure PD behaviors.

Although, positive deviance is a new approach recently used in management it has been proven in practice to be useful by encouraging both individuals (M. Sternin et al, 1998) and organizations (Arnold and Harman, 2003, 2005a, and 2005b) to adopt new

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voluntary behaviors that do not follow mainstream. In doing so, organizations and individuals can involve others in creating innovative solutions to address a certain problem (i.e. sweatshop practices, health issues). It is this specific characteristic the link between the CSR theory and positive deviance, thus CSR has become a voluntary (Pasquero, 2005) and strategic choice (Porter and Kramer, 2006). Furthermore, Zadeks (2004) states that during the last stage of a firms learning curve of CSR, a company has first to fulfil an individual change by realizing that CSR assists in creating a competitive advantage. In will be just after accomplishing a change at an individual level that a firm then will be able to move forward to what Zadek (2004) denominates the fifth implication level of CSR, which is to encourage more companies to voluntarily adopt CSR for strategic reasons. However, neither Zadek (2004), nor Pasquero (2005) did not explain the mechanisms by which a company will involve more companies into responsible practices. Positive deviance is the model I put forward for explaining how to foster voluntary engagement among the business community. Theories such as social entrepreneurship and leadership were considered for explaining by which means an individual or a firm can involve others in unconventional projects that do not follow dominant practices or beliefs. Social entrepreneurship is a recent approach that attacks almost any social problem and that is used by many authors with different meanings, thus creating ambiguous concepts and raising questions of validity and reliability (Raufflet, Berranger and Aguilar-Platas, 2008). Leadership theories were interesting for explaining how a group of individuals and organizations can both be gathered and mobilized toward creating an innovative solution for a problem. However, since Quinn (2001) integrated the leader figure in positive deviance and Spreitzer and Sonenshein (2003) described psychological conditions that contribute to the gestation of PD behaviors, I decided to relate positive deviance with CSR. Yet, PD has limitations and its frontiers have not been established yet. Nevertheless, I believe that by developing this innovative approach, I can encourage other researchers in studying and broadening the positive deviances conceptual boundaries.

3. Research Design and Methods

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In this chapter, I introduce the research and design methods used in this research for collecting empirical data and information and for conducting semi-structured interviews in Sao Paulo, Brazil. According to Yin (2003), the research design has to be a connected logical sequence of the empirical data collected and then the original research question will allow the researcher to establish research conclusions. In this chapter, I will present (1) the research question, (2) the research interest, (3) the research strategy, (4) the research methodology, (5) the data analysis strategy, (6) the focus and theoretical concerns, (7) the case validity, and (8) the interview protocol. Table 11 summarizes the research methods used for this research.

Table 11. Research methods Summary.


1. Exploratory research questions -Empirical question: How to explain Ethoss wide CSR dissemination within the business sector in Brazil? -Theory question: Does a conceptual framework based on positive deviance contribute to creating a context for disseminating CSR within the business community in Brazil? Inductive research Yin (2005) case study 18 semi-structured interviews, from 15 to 90 minutes long each. Secondary Sources. Narrative analysis through interviews, stories and anecdotes (Yannis and Griffths, 2004).

2. Research interest 3. Research Strategy 4. Qualitative Method 5. Data analysis

3.1. Exploratory Research Questions

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The central objective of this thesis is to answer the following question: How to explain Ethoss wide CSR dissemination in Brazil within the business sector in Brazil? To answer this question we decided to do an inductive study of the positive deviance literature. In this way, an additional theory question emerged: Does a conceptual framework based on positive deviance contribute to creating a context for disseminating CSR within the business community in Brazil? From a theory perspective, this research attempts to illustrate how the concept of positive deviance can be used to create a context to engage companies in corporate social responsibility. In fact, the concept of positive deviance has been used mainly to promote community development. However, I will attempt to determine the circumstances and the key persons at Ethos involved in creating a context for CSR in Brazil using a positive deviance model. Empirically, the interest of this research is to present a detailed case in which the focus is on how to understand the mechanisms of involving a business community with CSR. The significance of the case is that this business community accounts for 35 % of Brazils GNP. The results of this research are thus aimed at encouraging other researchers in studying more cases that contribute to encouraging companies to adopt CSR. Moreover, this research will help in creating new alternative solutions created by private sector stemming from positive deviance to extend the reach of CSR.

3.2. Research Interest


As mentioned above, this empiric case will not serve to deductively validate a theory. First, a research question was articulated, and then interviews and data were collected before reviewing the literature. This research is thus inductive; and the literature was reviewed a posteriori in order to understand the collected data.

3.3. Research Strategy

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Empiric question: How to explain Ethoss wide CSR dissemination in Brazil within the business sector in Brazil? Theory question: Does a conceptual framework based on positive deviance contribute to creating a context for disseminating CSR within the business community in Brazil? In order to know which investigation strategy was the best for this study, I identified the category for the research question. According to Yin (2003), the proposed research question is presented in the form of a How question. How and why questions are more explanatory and likely to lead to the use of case studies, histories, and experiments as the preferred research strategies (Yin, 2003, p. 6). Yin proposes different research strategies based on three central conditions: The type of research question posed; The extent of control an investigator has over actual behavior events; The degree of focus on contemporary as opposed to historical events.

In the case of this thesis, the research question is explanatory and asks about links over time in the historical evolution of the Ethos Institute. Secondly, I do not exert any control over the actual or past history of this non-profit organization. Finally, I had access to key people who played a key role in the foundation and evolution of Ethos. In addition, I consulted secondary sources such as historical data, files, books, articles from 1998 to 2007 about the Ethos Institute. The case study as a research strategy was appropriate to cover the contextual situations of Ethos. For these reasons, I decided to adopt the case study as the research strategy for this study.

3.4. Research Methodology

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Qualitative methods were used in this study. To answer the research question, it was necessary to explore the organizational dimensions of the Ethos Institute that sustained its growth and success. This research explored Ethoss internal structure by interviewing employees at different levels, external sources, such as expert scholars in Brazilian Corporate Social Responsibility and executives from enterprises registered as Ethos members. Moreover, we had the opportunity to attend the International CSR conference that Ethos organizes every year, the biggest of its kind in Latin America. The questions research dimension was committed to exploring the description of specific phenomena (Usinier et al., 2000). The research methods needed to reveal inductively different views of the studied phenomena. The research methodology assisted me in collecting data and information from different individuals and situations related to the social phenomena. In doing so, an inductive analysis enabled me to understand the social phenomena and answer the research question. Before conducting research in situ in Sao Paulo, the research methods, questionnaire and all the documents demanded by the Research and Ethics Committee (Comit d'thique de la recherche, CER) were submitted and approved . This research assured the confidentiality of all opinions from the people involved. No information that could reveal the identity of any participant will be disclosed by the people involved in this research.

3.5. Data Analysis


To analyze the collected information it was necessary to make a chronology of the evolution of Ethos Institute from 1984 to 2006. The information collected in interviews and documents was mapped for constructing a detailed narrative of the events surrounding the foundation and evolution of Ethos Institute. This strategy applies to case studies (Yannis and Griffiths, 2004). A narrative strategy allows us to understand the general context in which Ethos was founded, and to identify patterns among data to be tracked, analyzed and integrated. When the narrative was completed, it was necessarily to match events and dates

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with secondary sources such as the available material in the Ethos website, Ethos publications, CSR academic articles and internet articles. The data collected from primary sources was then matched with the secondary data, which made it possible to identify patterns and to answer the research question. In doing so, I had the elements to write a narrative, which is chapter four. In order to guarantee this researchs reliability, I wrote a data protocol, a synthesis of each article consulted, and notes for every interview. Afterwards, the information and results were discussed with the director of this thesis, and I wrote notes about those discussions.

Table 12. Theory question and data sources


Research question Data sources Historical data How to explain Ethoss wide CSR dissemination within the business sector in Brazil? Archival data about the Ethos Institute evolution and foundation. Semi-structured interviews Interview with Ethos s collaborators or any person closely related with the evolution and foundation of the Ethos Institute.

3.6. Focus and theoretical concerns of the research


The Ethos Institute since 1998 has served to promote socially responsible business practices in Brazil; even though those practices deviate from the standard business practices in Brazil, the business community has gradually adopted them. This study focused on the proposition that the Ethos Institute has been encouraging national, multinational and small enterprises to enhance their CSR practices using a positive deviancy approach. The research focus was on understanding how the Ethos Institute has spread the concept of and commitment to CSR practices to more than 1,200 Brazilian companies. Therefore, I not only collected relevant historical information about the evolution and founding of the Ethos

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Institute, I also collected information on and conducted interviews with the various stakeholders who participated in or influenced the Institute.

3.7. Case Validity


In order to establish validity, I accessed multiple data sources such as historical files, and interviewed Ethos Institute workers, members and different stakeholders. By accessing multiple data sources, I triangulated evidence from different perspectives. Different patterns from the collected evidence allowed me to better understand the model behind the Ethos Institutes success and to validate the case data. Accessing multiple data sources helped to understand different organizational dimensions, organizational values, and an outsiders and an insiders vision of Ethos as an organization. Semi-structured interviews were conducted with former employees and persons closely related with the evolution and founding of the Ethos Institute. Interviews were part of the primary material for this research. Eighteen interviews were conducted. Eight interviews with people working in the Ethos Institute, one ex-Ethos employee, and three executives from enterprises registered as Ethos members, five expert scholars in Brazilian Corporate Social Responsibility from the Brazilian Business University Fundao Getulio Vargas (FGV), and one person working for a non-profit organization similar to Ethos, PNBE, the Pensamento Nacional das Bases Empresariais (National Thinking on the Business Community). (See Table 19 in Appendix for the summary of interviews.) Awareness about the collection of data during the interview is highly recommended in order to construct validity and to develop a broader context. Yannis and Griffiths (2004) agree that narratives collected in organizational research are tools that can contribute to enrich the storytelling process and the research itself. Nevertheless, if the research is conducted using only this technique, the results will be risky and limited in terms of scientific validation. Researchers who use only narratives from interviews must use alternative tools such as secondary or primary sources to sustain their research arguments; otherwise, they run the risk of finding ambiguous results, thus raising questions of validity

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and reliability. To avoid this risk, the information collected during the interviews was revised with secondary sources.

3.8. Conducting Interviews


Access to conduct interviews was facilitated by an insider from the Ethos Institute and personal contacts from a confidential source. The interviews were conducted face to face in Sao Paulo. Eighteen interviews were conducted in total. Seventeen interviews were conducted in Brazilian Portuguese, and one interview was conducted in English because the interviewee felt more at ease in English. The interviews were tape-recorded and none of the participants objected to this procedure. The collected information was then rated in a confidential manner. All persons who had access to this information, including the thesis director, signed a confidentiality agreement to this effect. The tape recording and transcriptions are kept in a secure place. No information that could reveal the identity of any participant will be disclosed. The purpose of the interviews was to document aspects of the Ethos Institute that will not be available in written documents. A second purpose was to study the experience of the participants and to map patterns in the founding and evolution of the Ethos Institute. The criteria by which interviewees were chosen included whether the persons were or had been a key element in the Ethos Institutes founding and evolution. Another important factor was being referred by a stakeholder. The expertise of the participants in regards to the research subject was considered as an important factor. 3.8.1. Questionnaire to conduct interviews An open protocol of questions was used to obtain the information and data to map different collaborations in the foundation and evolution of the Ethos Institute. The interviews were semi-structured. To establish trust among the participants a previous informal chat was necessary. Information related to our trip and impression about Brazil was first discussed, then we explained the confidentiality protocol; after that we asked permission to tape record the interview, and no participants objected. The questionnaire used during this research can be consulted in the Appendix of this study.

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3.8.2. Secondary Sources Research was conducted using the keywords Ethos, Oded Grajew, Corporate Social Responsibility, Positive Deviance, in the following sources: Brazilian business magazine Exame from 2000 to May 2007. Academic Brazilian publication RAE (Revista de Administrao de Empresas) from 2000 to 2007. Academic Brazilian publication from the ANPAD (Associao nacional de ps-graduao e pesquisa em administrao National Postgraduate Association for Management Research) from 2000 to May 2007. Documents and articles found using the web search engine Google, two videos on YouTube about Oded Grajew. Books, archival data, pamphlets and contextual data were provided by the Ethos Institute specifically for this research13. Electronic data bases JSTOR, Proquest, Elsevier were consulted to obtain academic articles for the literature review. Books and documents from the libraries of HEC Montreal, University of Montreal, McGill, and the Brazilian Business University Fundao Getulio Vargas (FGV) were consulted. This chapter presented the research methods and research questions of this study. The next chapter describes the Brazilian context prior to the founding of the Ethos Institute, the process used in the founding of the Institute, and the strategies that Ethos has developed to disseminate CSR.

4. A Brazilian model of Corporate Social Responsibility: The case of the Ethos Institute

13

This material does not contain private or confidential information from the Ethos Institute or its members.

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While most theories and models of corporate social responsibility have been gestated in developed countries, one model was created in a developing country, Brazil. In Brazil, the Ethos Institute model was developed by Oded Grajew, a person who has used business skills to help solve social problems as varied as childrens lack of rights, and environmental degradation. In 1998, Grajew founded an organization to promote Corporate Social Responsibility (CSR) practices among more than 1,200 small business and multinational companies. These companies account for approximately 35% of Brazils GDP and employ some 2 million people. The present chapter describes the model of the Ethos Institute and the story of Grajew; both stories are intertwined. Grajews journey, based largely on his own vision, in putting a CSR theory into practice, needs to be illustrated in order to understand his purpose in venturing to set up the Ethos Institute. The first section describes Grajews background and the historical climate prior to the founding of the Ethos Institute. The second section outlines the four stages of the Institutes development: (1) The first stage describes both the founding of the Ethos Institute in 1998 and the establishment of its mission and organizational values. (2) From 1999 to 2001, Ethos created the context for raising awareness on CSR in Brazil. (3) From 2002 to 2003 the organization widened its alliances for better disseminating CSR practices. (4) From 2004 to 2006, Ethos challenged its members to address social issues, such as poverty, hunger, and mortal diseases in order to build a sustainable and just society.

4.1. The context in Brazil prior to the founding of Ethos


In 1958, Oded Grajew arrived in Sao Paulo, Brazil from Israel, with his family at the age of twelve. Three years later, his father died and he had to become the head of his family. Despite the familys financial problems, he obtained a diploma in Electrical Engineering at the Polytechnic University of Sao Paulo. Subsequently, Grajew and three friends, in the midst of a dictatorship (1964-1984) decided to start a toy company in 1972, Grow Jogos e Brinquedos S.A. (Grow Toys and Games) which soon became a success.

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Brazilian society was ruled by a military dictatorship that limited political and economic freedom, creating huge social disparities between the rich and the poor. Brazil is the fifth-largest country in the world by area (8.5 million km) and the fifth most populous with 183 million people. It also has one of the ten largest economies in the world. Yet the income distribution among the richest 20 percent and the poorest 20 percent of people in Brazil reveals one of the highest levels of social inequality in the world. Since 1981, according to the United Nations research institute for social development, 20 percent of the poorest people have only 2.6 percent of the total income, while the top ten percent of the wealthiest Brazilian people have 47.6 percent. When the dictatorship came to an end in 1984, people had to face these distressing conditions of inequality in a climate of violence, racism, and severe poverty. People were desperate for access to basic freedoms and hoping that democratic processes would slowly come back. By 1987, in an improved economic climate, Grajew with other businessmen founded a non-profit organization called Pensamento Nacional das Bases Empresariais (PNBE, translated roughly as The thinking of the National Business Community) as a way of contributing to Brazils development. PNBEs business entrepreneurs realized that the State was too inefficient, bureaucratic and corrupt to handle the issues Brazil was facing. The PNBE, acting as a think tank14, became one of the first forums for the business community to debate issues like business ethics, corruption in government, democratic reforms and sustainable development. An academic close to the events and to Grajew himself, talked about the situation prior to the founding of the PNBE,

Brazil has a history of military revolutions and businessmen were all aligned with this model. The PNBE was [] a new businessmen generation, with a new perspective: democracy [] and with a progressive vision. (Interview, June 5, 2007). [All translations are mine unless otherwise stated.]
14

Merriam-Webster (2007).Think tank: an institute, corporation, or group organized for interdisciplinary research (as in technological and social problems) called also think factory.

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During another interview, a scholar also close to the events and the people involved, commented: PNBE was born with [. . .] a vision from certain businessmen who wanted to rebel and began to rebel against the military dictatorship. [. . .] (Interview, June 5, 2007) By 1990, Pensamento Nacional das Bases Empresariais (PNBE) proposed and signed a Social Pact aimed at controlling inflation, reducing economic instability and promoting national development15 between the CNI (Confederao Nacional de Industria, National Confederation of Industry), CNA (Confederao Nacional de Agricultura, National Confederation of Agriculture), CNC (Confederao Nacional de Comrcio), CUT (Central nica dos Trabalhadores, Unified Trade Union Federation of Brazil), and FEBRABAN (Federao Brasileira dos Bancos, Brazilian Federation of Banks). PNBE negotiated with the Brazilian government to validate the Social Pact16; nevertheless, President Fernando Collor did not recognize it and eventually it failed. Although the pact failed, this initiative to provoke changes in government and companies set up an important precedent. Business entrepreneurs and leaders realized they had the resources to address social, economical and environmental issues. In addition, they realized that the government was lacking the resources and sometimes the influence they had. People participating in PNBE understood the potential role they had for solving social issues in their country. The originality of PNBE stemmed from the consensus of its members to act as a force to find solutions rather than waiting passively for an answer from Brazils government.

15

Falconer, Andres (2004). Oded Grajew: A new type of Business Leadership is possible. Synergos Institute in Cooperation with the Brazilian Association of Leadership Development. New York, Synergos Institute. 11p. Retrieved 11 January, 2008 from http://www.synergos.org/bridgingleadership/casestudies/oded_grajew_B.pdf . 16 Ibid.

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In 1990, Grajew founded the Abrinq Foundation17 with the collaboration of the toy manufacturing industry18 to promote defense of the rights and the exercise of citizenship for children and adolescents19. He called on the business community to defend the rights and improve the education of children and adolescents in Brazil. The programs of the Abrinq Foundation included a Child-friendly certification for companies which helped in promoting the engagement of society on the issues surrounding children in Brazil, such as child labor and illiteracy. Political factors changed the climate in Brazil. In May 1991, President Collor was accused by Pedro Collor, his brother, of corruption20. In 1992, Collor resigned as president and his vice-president, Itamar Franco, replaced him for the remainder of Collors term. Franco could not control the economic crisis and the inflation rate in 1992 was 1,000%. The following year, the annual inflation rate was 2,700%21. In the midst of this crisis, in 1993, Grajew decided to leave Grow to dedicate himself full-time to the Abrinq Foundation. During this period, the NGO became more active in Brazil. In 1994, Cardosos government proposed the creation of the program Mos Obra Brasil (Set to Work Brazil) designed to enlarge the participation of society and the state for reducing social inequality. This state policy contributed to the establishment of the so-called tercero sector (third sector) which is in fact a term to describe Brazilian organized society (Cappellin and Giuliani, 2004).

4.2. 1998- The founding of the Ethos Institute


In the following years, Grajew worked in the Abrinq Foundation and continued his activities with the PNBE. However, in 1997 Grajew decided with his wife to take a sabbatical year to travel in Europe and the United States. During this trip, Grajew met both
17

In 2007 the Abrinq Foundation included 5,461 individuals and companies. http://www.fundabrinq.org.br, consulted September 26, 2007. 18 Gurgel, Cecilia; Raufflet, Emmanuel (2007), Bridging Business and Society: The Abrinq Foundation in Brazil. Journal of Business Ethics, Vol. 73, N. 1, 2007 , pags. 119-128. 19 http://www.fundabrinq.org.br, consulted September 26, 2007. 20 http://veja.abril.com.br/arquivo_veja/capa_17031993.shtml, consulted September 26, 2007. 21 Ferreira, Denise Alves (2003). Brazilian exchange rate policies in the nineties. The Minerva Program, George Washington University, Institute of Brazilian Issues. Washington, DC. 40p.

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with people from organizations who were primarily addressing social issues and with people from the business community concerned with social issues. The experience inspired him to create at the end of 1997 the Ethos22 Institute in Brazil, devoted to disseminating Corporate Social Responsibility (CSR) practices throughout the business community. In 1997, at an event of the American Association for Business Social Responsibility23 (BSR) in Miami, Grajew proposed the idea of creating in Brazil the Ethos Institute to a number of business entrepreneurs most of whom used to be involved with PNBE-, such as Helio Mattar, Antoninho Marmo Trevisan24 and Guilherme Leal25, whom Grajew26 considered to have an advanced social consciousness (Grajew, personal communication, June 2007). The result of this meeting was the creation of the Ethos Institute, a non-profit organization founded to spread corporate social responsibility and encourage the private sector to internalize it. Grajew became the president of Ethos Institute and the other business entrepreneurs with influence and contacts in the Brazilian business community became the Ethoss board members. A middle manager, who has worked with Ethos since 2002, recalls the historical importance of this meeting: It was born [Ethos] with the interest from these people [called by Grajew for a meeting] to modify the social and environmental situation of the country. It consisted of people who understood that enterprises are entities that mobilize great quantities of resources, financial resources, [. . .] that have an important place in media and power with government. They [Ethoss founders] understood that companies hold a lot of power in society [. . .] (Interview, June 6, 2007)
22

Merriam-Webster (2007).Ethos, from Greek thos. The root is the Greek ethikos (), meaning moral, showing moral character. In rhetoric, the character or emotions of a speaker or writer that are expressed in the attempt to persuade an audience. It is distinguished from pathos, which is the emotion the speaker or writer hopes to induce in the audience. 23 Since 1992 Business for Social Responsibility (BSR) provides socially responsible business solutions to many of the world's leading corporations. Headquartered in San Francisco and with offices in Europe and China, BSR is a nonprofit business association that serves its 250 member companies and other Global 1000 enterprises. http://www.bsr.org/ consulted October 12, 2007. 24 Helio Mattar and Antoninho Marmo Trevisan mentioned as Ethos founders in http://www.ethos.org.br/DesktopDefault.aspx?TabID=3393&Alias=Ethos&Lang=en-US, consulted October 13, 2007. 25 Presented as an Ethos founder in the document http://www.ces.fgvsp.br/arquivos/PALESTRANTES.pdf from the FGV sustainability research center, consulted October 13, 2007. 26 Ibid.

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Grajew decided to mobilize the business sector because, in his own words, he believed the business sector is the most powerful sector in society. Of the hundred greatest economies in the world, fifty-one are businesses.27. Grajew understood that companies had the potential and influence for contributing to solving social issues in Brazil. The next step for Grajew and the directors of Ethos was to develop know-how in CSR in order to establish strategies, which would enable this organization to function. In 1998, Ethos made a strategic alliance with Business Social Responsibility (BSR), which helped in setting the organizational basis to start operations. With these new ideas, in 1998, Ethoss fifteen board members discussed for approximately three months in order to determine the vision, goals and a mission for this new organization. The result was the following mission: "To mobilize, encourage and help companies manage their business in a socially responsible way, making them partners in building a sustainable and just society28". This statement is used as a directive and is utilized in the decision making process within the institution. An Ethoss middle manager commented during an interview: Oded maybe will say to you: Word by word of Ethoss mission was carefully thought and discussed. It is a mission that is clear and explains itself by its objectives (Interview, June 6, 2007). In Brazil, philanthropic programs had been common in companies and CSR risked being perceived as a synonym of philanthropy. Therefore, Ethos decided to provide information to Brazilian society and to companies about CSR and its benefits, such as consumer loyalty, better human resource management, and contributions to environmental improvement and sustainable development. To accomplishing this mission, Ethos encouraged companies to adopt CSR while improving their corporate image and competitive advantages. In other words, Ethos decided to use CSR to fulfill its mission
27

Oded Grajew. Beyond Corporate Social Responsibility. (2006). http://www.youtube.com/watch?v=0apAgZJWYI consulted May 22, 2007. 28 http://www.ethos.org.br/DesktopDefault.aspx?TabID=3890&Alias=ethosEnglish&Lang=pt-BR consulted September 22, 2007.

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while encouraging the creation of a competitive advantage based on socially responsible actions. The definition of corporate social responsibility provided by Ethos can be translated as follows: The Ethical and transparent relationship of companies with their stakeholders for the establishment of common goals on the basis of: sustainable development, natural and cultural resources preservation for future generations, while respecting diversity and promoting reduction of social inequalities29. This definition encompasses three main axes, which denote the type of CSR disseminated by Ethos: (1) The concern for promoting ethics and transparency among companies; (2) the proposal for establishing common goals between companies and society towards shared issues; and (3) on the commitment to sustainable development. The following section describes some of Ethoss strategies for raising CSR awareness. Becoming a member of Ethos is relatively easy. A company has to fulfill easy requirements: pay a small fee; commit to participating in some of the organizations activities; and not use the organizations logos or image as publicity or as socially responsible certification. Ethos decided not to give any certification to avoid lobbying and any association with industry or politics. The non-profit organizations activities remain focused on addressing societys issues without expressing a political opinion. Being part of Ethos means having access to CSR knowledge and tools. A company that has an Ethos membership has access to updated CSR knowledge, the opportunity to take part in innovative business approaches to alleviate social issues, and a forum for good conversations with stakeholders.

4.3. 1999-2001 CSR- Raising awareness

29

Relao tica e transparente da empresa com todos os pblicos com os quais ela se relaciona e pelo estabelecimento de metas empresariais compatveis com o desenvolvimento sustentvel da sociedade, preservando recursos ambientais e culturais para as geraes futuras, respeitando a diversidade e promovendo a reduo das desigualdades sociais. Retrieved May 5, 2008 from www.ethos.org.br

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This section describes how Ethos raised awareness around CSR in Brazilian society from 1999 to 2001 and explains how Ethos through a media campaign started to build communication among civil society, government and firms for promoting a better understanding of each sectors role in the construction of a sustainable society. It also highlight the importance of a quantitative and qualitative tool that Ethos developed to measure the quality and degree of CSR internalization in companies and stakeholders. Finally, this section outlines the value of the virtual knowledge community Ethos created in order to enlarge CSR in Brazil.

4.3.1. Ethoss CSR media campaign


To raise awareness of CSR, Ethos convened the participation of Brazilian society; therefore, communication efforts focused on radio, television, publications, and newspapers. The media campaign focused on three main features: (1) to create both visibility and a positive context for Ethos and its corporate members, (2) to inform Brazilian society and to raise awareness on CSR, and (3) to attract new corporate members. The media strategy aimed at civil society, universities, banks, insurance companies, shareholders, consumers, labor, corporations, and its value chain. For Ethos, informing universities about CSR was a key element to create opinion leaders. Informing students and professors CSR was intended to create a culture of social awareness for future business generations. Ethos attracted the attention of the students, who are the future managers and have the potential of encouraging current managers in adopting socially responsible practices. Interested students would risk doing research on CSR, which would contribute to improving the literature on corporate social responsibility. In doing so, students eventually would demand more CSR knowledge from professors and universities, encouraging the development of new courses and research in this field. On the other hand, students and professors are also consumers, which would eventually reward socially responsible businesses. Ethos educated stakeholders and consumers as part of its media campaign. The media campaign set a goal of spreading information about the benefits of investing and

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buying products from socially responsible businesses. An informed financial community would eventually privilege loans to socially responsible firms. Moreover, informed consumers could then reward socially responsible businesses by preferring their products and services. Ethoss 2001 marketing campaign spots were carried by six radio stations, nine television stations, eighteen cinemas, thirty magazines and five newspapers. Interest in Ethoss activities on the part of the business community in Brazil increased. The number of corporate members that Ethos assembled rose from 11 at its founding to 326 in 2000. Ethoss efforts to spread vision to companies was displaying results.

4.3.2. Ethoss CSR publications


Supplementary to the media campaign, the organization launched a series of publications about CSR. For example, in 1999 with CENPEC Centro de Estudos e Pesquisas em Educao, Cultura e Ao (the Research and Studies Center on Cultural and Education actions) Ethos published the manual What Business can do for Education. This manual invited companies to work with the government in order to increase government accountability for the education of children between seven and fourteen years old. In this manual, the experiences of Brazilian children were used to show companies the benefits of adopting CSR and to send the message that businesses can get involved in social projects and be profitable at the same time. Some of the companies included in this manual were: Motorola, Compaq, Intel, Microsoft, Kodak, Ach Laboratorios, and Globoaves Agropecuaria. This manual was one of Ethoss first publications. Ethos has published 27 manuals and 26 guides as of 2007.

4.3.3. Ethoss Indicators


In 2000, Ethos created the Ethos Indicators, a quantitative tool, which allowed companies to measure the degree of internalization of CSR in the company or business organization. This tool gave companies a way to self-evaluate their organization, without having the commitment of publishing results. In this way, companies could internalize CSR into their policies according to their own schedule and priorities. The Ethos Indicators gave companies a list of social responsibility practices and at the same time, companies could

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visualize and measure the effects of internalizing social practices. Ethos indicators comprise seven main themes: (1) Values, transparency, and governance, (2) workforce, (3) environment, (4) suppliers, (5) consumers and customers, (6) community, and (7) government and society. Since 2000, this CSR tool has been reviewed each year, and has been used continuously by Ethoss members. This tool is free online to anyone who has internet access.

4.3.4. Ethoss awards


The following year, in 2001, Ethos launched the Databank of Corporate Social Responsibility Practices with the purpose of storing references and documentation about social responsibility actions taken by companies. Companies were encouraged to share their experiences, and if a company agreed to do it, Ethos published those experiences, intended to encourage other companies to follow their example. This Databank of Corporate Social Responsibility Practices gave Ethos new cases to publish, and began to encourage more companies in sharing their experiences and attracting new members to Ethos. To encourage more companies in sharing their experiences, in 2001, and to recognize openly the outstanding CSR practices of various companies, three different awards were created: (1) the Prmio Ethos de journalismo, an award given to journalists who have done outstanding work on CSR matters, (2) the Prmio Ethos Valor, an award given for exceptional academic work by university students from Brazil, and (3) the Prmio Balano Social, an award given to enterprises who during the year have shown exceptional corporate social responsibility practices. By recognizing positive actions from students, journalists and the private sector in public, an open and positive image was created around CSR practices.

4.3.5. InternEthos

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Ethoss corporate members were increasing fast but most of the participating companies were from Sao Paulo. In 2001, 82%30 of its members were businesses located in Sao Paulo and only 18% in the rest of Brazil. To include more companies, a program was created called Programa de Regionalizao (Regional Program), which in 2005 was renamed InternEthos when Alcoa31 became its new sponsor. Internethos is a virtual online community linking journalists, universities, business, unions and trade associations. This website allows its members to share knowledge. Accompanying this virtual knowledge community, Ethoss staff organized reunions among InternEthoss members and business organizations to promote dialog and encourage alliances. Ethoss staff helped to articulate and diffuse Ethos knowledge outside Sao Paulo, where Ethoss headquarters are located. As a result, Ethoss members and knowledge began expanding across Brazilian States. An Ethoss manager commented on the effectiveness of InternEthos: Today in 2007 we [Ethos] have 54% [members] in Sao Paulo and 46% [members] in other States. From 2001 to 2007, you can see how much we have progressed, this means, that from 18% we changed to 46% in other States. (Interview, June 8, 2007) Ethoss communication strategies succeeded in educating Brazilian society about the benefits of CSR, and Ethoss members increased from 11 companies in 1998 to 507 at the end of 200132.

4.4. 2002-2003 Increasing strategic alliances

30 31

Information retrieved from an interview in June 8, 2007 with an Ethos manager. Alcoa is a company that produces and manages primary aluminum. Please consult http://www.alcoa.com/ for further information. 32 http://www.ethos.org.br/DesktopDefault.aspx?TabID=3345&Lang=pt-B&Alias=ethos&itemNotID=115 , consulted September 22, 2007.

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In 2001, only three years after its founding, Ethos was compared positively with organizations like Business for Social Responsibility33, Social Venture Network34, World Business Academy35, and Prince of Wales Business Leaders Forum (IBLF)36 in an article in Brazils management journal37. Ethos not only was recognized in Brazil but also at international levels, increasing the organizations standing among the business community. Ethoss reputation and performance were registered in Brazils management review journal and in the Brazilian Academy of Management where it is mentioned that Ethos has participated in taking CSR from philanthropic actions to concrete efforts on sustainable social development38. By 2002, more than 430 enterprises were registered, which accounted for annual revenues of approximately 20% of the Brazilian GDP39. The next section illustrates the maintenance of incorporating large alliances to focus in communicating concrete examples of business actions for CSR. In addition, it will describe the benefits of improving its website model. Finally, it will describe Grajews experience as a presidential advisor.

4.4.1. New Alliances for media and communication strategy


Ethos, during 2002 and 2003, widened its media scope and strategic partnerships with alliances with:

33 34

Please consult footnote number nine. Non-profit organization founded in 1987 with headquarters in San Francisco, integrated by a community of leaders company founders, private investors, social entrepreneurs and key influencers for Ethosto build sustainable world through business. http://www.svn.org/ consulted October 12, 2007. 35 Non-profit organization The World Business Academy was founded in 1987 as a result of discussions conducted at the Stanford Research Institute (SRI) International in Menlo Park, California USA. Discussions centered upon the role and responsibility of business in relation to today's critical moral, environmental, and social dilemmas. http://www.worldbusiness.org consulted October 12, 2007. 36 International not-for-profit organization which was founded in 1990 to promote socially responsible business practices that benefit business and society, and which help achieve socially, economically and environmentally sustainable development. http://www.iblf.org consulted October 12, 2007. 37 Constant Vergara, Sylvia; Durval Branco, Paulo (2001). EMPRESA HUMANIZADA: a organizao necessria e possvel. RAE - Revista de Administrao de Empresas Abr./Jun. 2001 V.41, n.2, p20-30. Page 22. 38 C. de Mendona, J. Ricardo; de Santana Gonalves, Julio Csar (2002). Responsabilidade Social nas Empresas: uma questo de imagem ou de substncia? ANPAD, Salvador / BA September, 2002, 22 to 25.p. 39 Augusto Trevisan, Fernando (2002). Balano Social como instrumento de marketing. RAE-eletrnica, Volume 1, Nmero 2, jul-dez/2002. 12p. Page 3.

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CSR.

News Center of Sao Paulo (Central de Notcias, CDN) for daily clippings on Radio CBN, promoting voting during elections and a radio program La Fabbrica, an enterprise whose activity is to promote and to communicate Journal Valor, a newspaper from Sao Paolo that gave Ethos a CSR column Exame, a business magazine, committed to involving Ethos in the The Business school Getulio Vargas Foundation (FGV) to publish CSR

promoting CSR. educational projects, to promote action on CSR in Italian firms. in a monthly brochure. production of its special issue Guide to good citizenship. practices in Paran State. Ethos created marketing campaigns through new alliances. For instance in 2002, they produced a two-minute film. The film illustrated how an important shoe factory, Fbrica de calados do Seu Ferretti, using a social management approach, was able to integrate disabled persons, and to recognize all its employees not only as workers but also as people with rights. The film was broadcast on twelve TV programs, and in four cinema chains40. Ethos focused on enlarging alliances with universities and journalists to facilitate good conversations. For instance, in 2002 Ethos organized a national conference, which included 51 academic institutions, fourteen enterprises, six non-profit organizations and roughly 110 attendees. Ethos also created a course with the business school Getulio Vargas Foundation (FGV). For promoting interest in CSR among journalists, Ethos published ten cases based on journalists research on CSR. In addition, Ethos created 25 workshops for disseminating information about socially responsible business practices.

40

Video available on http://www.ethos.org.br/_Ethos/documents/campanha_offline/2002_2003/Ethos-Fabrica %20de%20Sapatos2003.mpg, consulted October 6, 2007.

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4.4.2. Updating Resources


Ethoss communication resources were crucial at this stage to communicate concrete examples of how companies had internalized CSR. In 2002 its website changed. Its new internet portal aimed to provide constant communication concerning Ethoss projects and the day by day activities by using a dynamic interface. The new web manager and his colleagues restructured the website as they were asked to. The following year, the new website received a Brazilian award. The iBest prize named it the best website in the non-profit organizations category41. With its new website the organization expanded its communication linking public campaigns, projects, and partnerships in a more effective way than in previous years. The website was not the only tool to be improved; during this stage the Ethos Indicators and some publications were improved and translated to English and Spanish in order increase awareness in other regions. Also during this period, Ethoss Indicators were adapted to measure CSR internalization in the bread industry, restaurants, bars, and gambling sector.

4.4.3. Grajew becomes Lulas counselor


During this stage, Grajew co-founded with Francisco (Chico) Whitaker, a Brazilian social activist, the World Social Forum (WSF) in 2001. The WSF was founded as an alternative to the World Economic Forum for seeking and build alternatives to global neoliberal policies and to discuss global social problems. In 2002, he participated in organizing the second World Social Forum (WSF). In fact this same year, the Ethos Institute and Brazilian society were about to face important changes. In 2002, Luiz Incio Lula da Silva, a former union leader from the metallurgic industry, for the fourth time42 ran as the Workers Party ( Partido dos Trabalhadores, PT) presidential candidate. On October 27, 2002, Luiz Incio Lula da Silva (better known as Lula) was elected President of Brazil43.
41

http://www.premioibest.com.br/ibest2006/img/ResultadosTodosPremios_PDF.pdf consulted September 22, 2007. 42 Lula first ran for the presidency in 1989, and again in 1994 and in 1998. 43 http://www.presidencia.gov.br/ingles/president/, consulted October 14, 2007.

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This political change represented an opportunity given Grajews close relationship with Lula. In 2003, as a result of this close relation, Lula appointed Grajew assessor especial da Presidncia (Special Advisor to the President) and Grajew down as Ethoss president, staying on as the president of its deliberative council. In November 2003, however, Grajew resigned as a Presidential Advisor and returned to Ethos stating his mission as counselor was accomplished44.

4.5. 2004-2006 CSR Promoting social change


During this third stage (2002-2003), Ethos was using concrete examples to demonstrate how CSR practices benefit companies, society and the environment. Regarding this process, an Ethos manager stated: We [Ethos employees] had, in Ethos, a stage from 1998 to 2004 where efforts were geared towards sensitizing [people about CSR]. In our mission to increase awareness and mobilization, I now realize that the sensitization stage has been accomplished. Today [2007] we are in the mobilization stage. (Interview, June 13, 2007) Previous stages were extremely important for Ethos to be consolidated as an organization, the communication strategies set up the bases for this stage. In 2004, Ethos focused on mobilizing its members and their production chains to impact society. Regarding this process Grajew during an interview commented: Now, little by little we [Ethos] are focusing [on promoting] social changes [through business organizations]. Thus, we want to influence the production chain, we want to influence the quality of life, to influence society, to impact ethics in business relations and government, I mean, to impact governments. And now we are little by little a step ahead in creating models; rather than just creating an impact. (Interview, June 13, 2007)
44

Article published by Paraguass, Lisandra on September 20, 2007, http://www.estadao.com.br/nacional/not_nac55089,0.htm consulted September 23, 2007.

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This last stage describes the impacts mentioned by Grajew. The following stage is divided in two parts. The first part describes three main features: (1) Ethoss involvement in the Millennium goals;, (2) the creation of UniEthos a separate organization committed to the educational process of CSR with training programs and workshops;, and (3) Grajews resignation from the Ethos Institute. The second part details Ethoss participation in the process of creating an international guidance tool for CSR, the ISO 26000, and a description of Ethoss collaboration with international organizations.

4.5.1. Social Impacts


To make their presence known in Brazil, Ethos advised its members to participate in and to sponsor certain events, for instance, seminars, workshops, dialogues, publications, and projects on the subject of specific CSR issues. For example, in 2004, Ethos organized a conference45 about competitiveness and social responsibility where the Brazilian secretary of Environment was involved. During this conference, companies were also included; they were able to engage the secretary in a dialogue on the topic of responsible business practices and the environment. In 2004, Ethos organized a seminar to discuss and plan how to achieve the eight millennium goals that the United Nations targeted in 2000 with a deadline set for the year 2015. As part of the strategies to accomplish the Millennium Development Goals, Ethos involved the government and business sector and launched programs46 focused to achieve these goals, such as: Zero hunger to reduce hunger and poverty; Cisterns program to give safe drinking water; Zero Illiteracy Program to promote education; and Promotion of equity to eliminate discrimination and empower women. Furthermore, in 2004 the manual Business Commitment to the Millennium Goals was published online47 where it is available at no cost.

4.5.2. UniEthos

45

http://www.ethos.org.br/DesktopDefault.aspx?TabID=3340&Lang=pt-BR&Alias=Ethos&itemEvenID=1 consulted October 18, 2007. 46 www.iadb.org/csramericas/doc/presentationyoung.pdf consulted October 19, 2007. 47 http://www.ethos.org.br/_UniEthos/Documents/metas_do_milenio.pdf, consulted October 19, 2007.

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As of February 2004, Ethos had 79248 corporate members, who began asking for specific consulting services. As a result, in March 2004 Ethos created UniEthos. UniEthos, a non-profit organization, serves to accompany Ethos in its educational process and to finance Ethoss activities by giving companies CSR and sustainable development customized services, such as courses and research, but not consulting services. In 2004, Grajew invited Ricardo Young, a businessman with experience in franchises and in the government to work in Ethos. Young shared Grajews vision of mobilizing the private sector towards social projects. In fact, Young was PNBEs general coordinator in 1996 and 199849. However, in 2003 he resigned from PNBE and in 2004 he joined UniEthos as its chairman and in Ethos he became the chairman of the board. Young became a key person for Ethos. In fact, at the end of 2004, Grajew decided to step down as president of Ethos. Young took Grajews position and Grajew remained as the chair of the board. There are around 50 people working in Ethos, whose average age is around 30. Grajews leadership and dynamism created a vibrant and independent organizational environment. The organization continued operating with Young as its new president. Some Ethoss employees expressed how they felt about working in Ethos: [. . .] In my opinion I believe [Ethoss dream] is to be a fairer [Brazilian] society, and to have companies which can participate [in building a fairer society] with the government, the people, with and organizations. We [people working in Ethos] want to have a just society and this is why we work in doing extravagant projects. [. . . ] I feel I am working for a cause. I would be unsatisfied working for a company. I feel it is a great privilege to work here. I feel a privileged person of being close from Ethoss leaders. (Interview, June 6, 2007) [. . .] I began working in Ethos as a volunteer, then I was hiredI feel here there is a good [work] environment, at least comparing with companies I have the

48

http://www.ethos.org.br/DesktopDefault.aspx?TabID=3345&Lang=pt-B&Alias=ethos&itemNotID=5819 , consulted September 22, 2007. 49 http://www.pnbe.org.br/website/artigo.asp?id=3972&cod=1861&idi=1, consulted October 18, 2007.

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impression it is better [working] here [Ethos] because the people are working for a cause [. . .] (Interview, June 6, 2007) [. . .] It is challenging [working in Ethos] for the amount of work and limited time [available to accomplish their tasks] [. . .]. But I feel my principles will remain preserved. I am not doing anything to offend my values and my principles, which are the [same as Ethos] organization principles. (Interview, June 8, 2007) [. . .] I decided that I wanted another personal experience I was [working] for an enterprise and now I am [working] for an NGO which promotes changes for enterprises I have this opportunity, which I think is a privilege I am really excited to work [for Ethos] and informing and spreading values that I believe personally and that I believe companies need to have. (Interview, June 8, 2007) Grajew remained as the chair of the board and he is still an important figure for the organization despite no longer acting as its president. Grajew has also continued as part of the World Social Forums organization committee. By its fifth year, in Porto Alegre, more than 200,000 people from 135 countries took part. In 2006, the sixth WSF was held in Caracas (Venezuela) and Bamako (Mali), and Karachi (Pakistan). In addition to its social innovations, Grajew created in 2006 the Nossa Sao Paulo (Our Sao Paulo) movement50. This new movement involves Brazilian government, civil society and the business community to transform the city of Sao Paulo to a more sustainable city. Approximately 500 civil organizations are involved in this project to create proposals to improve the quality of life, reduce crime and pollution, and to set up a development agenda, creating employment for Sao Paulo.

4.5.3. ISO 26000


In 2004, The International Organization for Standardization (ISO) approved the creation of a guide on Corporate Social Responsibility, the ISO 26000, which is expected to
50

Please visit http://www.nossasaopaulo.org.br for further information.

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be published in 200951. It will be a guide for companies. It is not, however, a norm and compliance will be voluntary. In 2005, Ethos created the GT (Working Group or Grupo de Trabalho) Ethos-ISO 26000. The projects objective was to serve as a forum to discuss and learn about global trends in CSR, which helped Ethos and its participants to better understand the new standard and to disseminate this theme along their value chain52. The GT Ethos- ISO 26000 organized workshops to inform and debate the upcoming guide on CSR, which then allowed Ethos to contribute to the process of creating the ISO 26000.

4.5.4. Working with International Organizations


In 2005 and 2006, Ethos encouraged companies to be involved in social projects. During these years, it worked with international organizations, such as the United Nations (UN), the Inter-American Development Bank (IDB) and the Organization for Economic Co-operation and Development (OECD). The following section describes these projects. By 2005, Ethos assisted, with other organizations such as the International Chamber of Commerce, the United Nations Conference on Trade and Development and Transparency International, in creating a document for the OECD. The document served to improve the OECD Risk Awareness Tool for Multinational Enterprises in Weak Governance Zones a tool that helps companies to invest in countries that have governance issues. Another important project involving an international organization was the program that Ethos and the Inter-American Development Bank (IDB) developed in 2005 to expand CSR among Brazils small and medium sized companies and their value chains. Ethos and the IDB wanted to increase competitiveness in six economic sectors: metallurgic, civil construction, sugar and alcohol, electrical energy, oil and gas, and mining. These sectors were chosen for their importance to the Brazilian economy. The following year Grajew as the Ethoss decision board chair, was invited by Kofi Annan, the Secretary-General of the
51

Please visit http://isotc.iso.org/livelink/livelink/fetch/2000/2122/830949/3934883/3935096/home.html? nodeid=4451259&vernum=0 consulted October 19, 2007. 52 Brochure: A contribution to ISO 26000:GT Ethos- 26000. May 2006. 29p.

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United Nations, to be part of the Global Compact53 deliberation board. Grajew was part of the Global Compact council and had the opportunity to recommend policies and strategies on solving global issues. By participating in international forums, Ethoss credibility increased and its network widened out to international levels. International alliances represented for Ethos new learning opportunities due to the interaction with other world organizations, which have developed innovative solutions on social issues. Ethoss expertise had contributed to enabling an infrastructure for disseminating CSR while facilitating the business communitys access to the conditions for participating in creating solutions for social issues in Brazil.

4.6. Conclusions
How to explain both, Ethoss achievements and fast growth54 from only eleven members in 1998 to 1377 members55 in 2008. This fast growth and mobilization of people from the business community, government, media and citizens can be explained by three factors. (1) Ethoss leadership style succeeded in gathering economic resources thus, creating commitment from people to follow revolutionary projects and to implement innovative ideas. In addition, its social network facilitated strategic alliances with the following groups: the government, the business sector and the media. Moreover, the social network served to create a positive reputation, which helped to position Ethos as both an objective and credible organization. (2) Ethoss management approach was also a fundamental aspect in creating a dynamic and organizational structure. With only 50 employees it was able to diffuse CSR to its 1,261 corporate members, create publications, develop media campaigns and create multiple social projects. In fact, the organizational culture centres on the idea that Ethos is working for a major cause: to build a sustainable
53

The Global Compact is a framework for businesses that are committed to aligning their operations and strategies in the areas of human rights, labour, the environment and anti-corruption. http://www.unglobalcompact.org/ consulted November 5, 2007. 54 Please consult table 13 and table 14 for further details about Ethoss achievements and historical chronology. 55 Information retrieved May 3rd 2008 from its website

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and just society. Hence, Ethoss workers are highly motivated and committed and can manage multiple tasks and are thus able to better manage stress. (3) The Ethoss marketing and communication strategy allowed a dialogue to form between different stakeholders from society, which eventually provoked involvement and action on social issues. The media campaign aimed to raise awareness in Brazil about CSR practices, which served to attract new members. The creation of CSR indicators allowed companies to quantify the CSR internalization progress and the Ethos awards served as a qualitative tool to highlight positive efforts from newspapers, universities and companies, encouraging additional participation in CSR. Ethoss leadership, management approach and strategy in disseminating CSR, have been the success factors identified in this case. These success factors explain how it could, in less than ten years, mobilize businesses and multinational companies that account for annual revenues of approximately 35% of the Brazilian GDP. For Ethos, accomplishing part of its mission has taken several years. Ten years ago in Brazil corporate social responsibility, was a concept far from the minds of Brazilian companies. In the following chapter, I analyze the empirical data using the conceptual framework proposed in chapter two. The goal of the chapter is to provide a more detailed analysis of Ethoss strategies, seen through the lens of positive deviance.

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Table 13. Ethoss Stages


1998 Founding of Ethos 1999-2001 CSRRaising awareness To raise awareness on CSR in Brazilian through a media campaign 2002-2003 Increasing strategic alliances Increasing alliances by disseminating CSR examples for illustrating the benefits for companies of adopting CSR. 2004-2006 CSRPromoting Social Change Mobilizing its members and its production chains to impact society by solving social problems, such as collaborating to achieve the millennium goals. Collaboration with international organizations, participation in elaborating the ISO 26000 guide, the creation of UniEthos to accompany Ethos in its educational process, giving companies CSR and sustainable development tailored services. Involvement of the government and business sector to launch programs focused to achieve the millennium goals. The organization motivated its members to act for social changes in Brazil, moreover it served as a forum to discuss and learn the

Objective

Creating the Ethos Institute, a non-profit organization to diffuse corporate social responsibility and encourage the private sector to internalize it.

Achievements

Founding of the Ethoss Institute and the construction of its theoretical framework (i.e., mission, vision, objectives).

Involvement of civil society, universities, banks and insurance companies, shareholders, consumers, labor force, enterprises in CSR activities with a media campaign, publications, Ethos awards and the creation of Ethos Indicators and the InternEthos Program.

By 2002, more than 430 enterprises were registered, which account for annual revenues of approximately 20% of the Brazilian GDP. Ethoss alliances largely enlarged and its reputation and performance were registered in Brazils management review journal organization. Grajew became Lulas counselor.

Ethoss leadership

Grajew mobilized a number of business people for creating the Ethos Institute.

The organization motivated stakeholders to be involved in CSR practices facilitated by its social network.

The enlargement of its alliances was possible by its social network which responded to Ethoss positive reputation as an organization.

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Ethoss management approach

Making this stage part of Ethoss organizational culture to motivate its employees.

The organization directed its employees, a group of professionals, by its organizational values to commit in raising awareness locally and regionally.

The organization managed to update its resources despite its limited budget. Motivated and committed employees maximized the organization resources giving outstanding results (i.e., iBest prize for Ethos website). Demonstrating to companies CSR is useful to create consumer loyalty, to enable better human resources management and to contribute for environmental improvement by giving concrete examples of previous experiences.

Ethoss Organizational Strategy

Establishment of an alliance with BSR, which help Ethos to create its theoretical framework.

To raise awareness, Ethos mobilized stakeholders throughout a media campaign, publications, awards and a regionalization program. Its strategy was to aim its dissemination efforts to different stakeholders of Brazilian society.

world trends of CSR, which helped to better understand the new standard and to disseminate this theme along the Brazilian business sector. Ethos remains as a united organization despite Grajew resigned from its presidency. The organization is stable and independent, thus it can continue with a Ricardo Young as its new leader. Ethoss alliances with international organizations increased its credibility and, as a result, widened its social network. Moreover, international alliances represented new learning opportunities due to the interaction with other world organizations.

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Table 14. Brazils historical events and Ethos Institutes Chronology56

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This chronology is not exhaustive

198 4 198 5

Public demonstrations were held in Brazilian cities against the military regime. Brazilians demanded change in the electoral system for electing their president. Tancredo Neves was elected president by majority vote in the January 15, 1985. Tancredo collapsed the night before his inauguration, and the presidency passed to Vice President Jos Sarney (president, 198590), long-time supporter of the military regime. Grajew with other business people founded a non-profit organization called Pensamento Nacional das Bases Empresariais (PNBE, translated roughly as The thinking of the National Business Community). President Sarney called a National Assembly to write a new democratic constitution. It was presided over by Ulysses Guimares, who led the civilian resistance to the military rule. The new constitution was proclaimed in October 1988 and restored civil and public rights, such as free speech, lifting of censorship, economic freedom, direct and free elections and universal health system. During Sarneys's presidency, Brazil had three currency units: Cruzeiro, Cruzado and Cruzado Novo. Economic domestic troubles led to canceling payments of Brazilian International Debt in 1988. This closed international financial markets for Brazil and economic situation got worse. The first direct presidential election after 29 years was held on October 15, 1989 (first round) and November 15, 1989 (second round). Fernando Collor de Mello ran against Luis Inacio Lula da Silva. Collor was elected with 53% of the vote for a five-year term. Grajew established the ABRINQ Foundation for Children's Rights in 1990 and served as the president of its administrative council. Today, about 5,461 individuals and companies from various economic sectors and geographic regions in Brazil participate in the ABRINQ Foundation. PNBE proposed and signed a Social Pact aimed at controlling inflation, reducing economic instability and to promoting national development between the National Confederation of Industry, Commerce and Agriculture, the United Workers Union, and the Brazilian Federation of Banks. President Fernando Collor did not recognize the pact and eventually it failed In May 1991 President Collor was accused by his brother, Pedro Collor, of corruption. On August 26, 1992, the final congressional inquiry report was released, where it was proven Collors culpability. September 29 , 1992. Collor was impeached, and subsequently removed from office. Collor resigned his term in office just before the Brazilian Senate was to vote for his impeachment. His vice-president, Itamar Franco, assumed the presidency for the remainder of Collor's term. President Franco appointed Fernando Henrique Cardoso as Minister of Treasury and gave him the responsibility to control inflation - the average annual inflation rate from 1990 to 1995 was 764%. Grajew decided to leave his toy company to dedicate himself full-time to the Abrinq Foundation. In October 3, 1994 Fernando Henrique Cardoso, was elected with 54% of the votes. Grajew participated in founding the Brazilian Association of Businessmen for Citizenship (CIVES) an organization that supported the Brazilian Worker's Party (PT). Grajew decided he needed time to reformulate his ideas; with his wife he took a sabbatical year to travel. He resigned to the Abrinq Foundation presidency and to the PNBE movement. In this trip he conceived the idea of founding the Ethos Institute. Grajew founded the Ethos Institute. The organization convened 11 enterprises as members. Ethos made a strategic alliance with Business Social Responsibility (BSR) Fernando Henrique Cardoso was re-elected President in Brazil. Divulgation of Ethos's Mission and Vision to different sectors through a media campaign. With the Research and Studies Center on Cultural and Education actions CENPEC Centro de Estudos e Pesquisas em Educao, Cultura e AoEthos published the manual What Business can do for Education.

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198 7 198 8

198 9

199 0

199 1 199 2

199 3

199 4

199 7

199 8

199 9

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5. Analysis CSR, Positive Deviance and the Ethos Institute


This chapter presents an analysis of the collected data on the Ethos Institute in light of our conceptual model. This analysis is based on the conceptual framework from chapter one. The analysis will answer my research question: How do we explain Ethoss wide CSR dissemination in Brazil within the business sector in Brazil? My main argument is that Grajew led a group of business entrepreneurs to create the Ethos Institute to disseminate CSR using positive deviance in order to contribute to building a sustainable and just Brazilian society. The present analysis comprises two parts. The first section focuses on examining the Ethoss CSR dissemination strategy with the positive deviance conceptual framework developed in chapter two. In doing so, I will review how Oded Grajew, Ethoss founder, fulfills the five psychological conditions proposed by Spreitzer and Sonenshein (2003) for a positive deviant leader (Quinn, 2001). In addition, I will explain the role of Grajews moral imagination (Hartman & Arnold, 2003, 2005a, 2005b) in the founding of the Ethos Institute and I will compare Sternins Six Ds positive deviance model with Ethoss activities from 1998 to 2006.The second part of the chapter presents the conclusions of this thesis.

5.1. Positive Deviance in Ethos Analysis


In the theory chapter, I proposed the following conceptual framework based on the literature review on positive deviance:

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Figure 3 Conceptual Framework


WHO ENABLES CHANGE? A leader (Quinn, 2001) with five psychological conditions (Spreitzer and Sonenshein, 2003): Possesses a meaning to change current establishment. Exercises an other-focus perspective, rather than just on personal goals. Experiences self-determination in transforming ideas into facts. Exerts personal efficacy to outweigh failure possibilities. Possesses courage to overcome the risk of breaking norms rigidity.

Moral Imagination (Hartman & Arnold; 2003, 2005a, and 2005b)

Innovation that challenges current models and ideas

To promote, enhance, foster, voluntary engagement with CSR HOW?


Positive Deviance (J. Sternin, The Six Ds. Retrieved February 20, 2008 from www.positivedeviance.org) Define the problem (situation analysis) and define what a successful solution/outcome would look like. Determine if there are any individuals/entities in the community who already exhibit desired behavior. Discover uncommon practices/behaviors enabling the PDs to outperform/find better solution to the problem than others in their community. Design, implement activities enabling others in community to access and practice new behaviors. Discern the effectiveness of activities or project through ongoing monitoring and evaluation. Disseminate successful process to appropriate other. Share deviant behaviors with community outsiders.

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Our conceptual framework is composed of three elements: (1) Five psychological conditions (Spreitzer and Sonenshein, 2003) of a leader (Quinn, 2001); (2) who through his or her moral imagination (Hartman & Arnold; 2003, 2005a, and 2005b) innovates in fostering CSR among a business community (in this case, through the founding of the Ethos Institute for contributing in building a sustainable and just Brazilian society). The third proposition is that Ethos has based its strategies on positive deviance (PD) in order to diffuse and foster CSR among companies. The PD model, which I propose, is based on the practice experience of M. Sternin and J. Sternin, who used this approach for promoting community development. The following section describes the aforementioned three elements of the conceptual framework vis--vis Ethoss actions. I will illustrate how Ethos used PD to foster CSR among the business community.

5.1.1. Grajew- Psychological Conditions for Positive Deviance Spreitzer and Sonenshein (2003) proposed five psychological conditions that facilitate individuals deviating from norms and which enable positive deviance. In the case of Ethos, its founder led a group of entrepreneurs to use their business skills to address social issues. The following section examines the five psychological conditions of Grajews leadership proposed by Spreitzer and Sonenshein (2003): (1) possessing a meaning to acting to change current, (2) exercising an other-focus perspective rather than just achieving personal goals, (3) experience self-determination to transforming ideas into facts, (4) exert personal efficacy to outweigh failure possibilities, and (5) possessing courage to overcome the risk of breaking out norms rigidity.

5.1.1.1. Possessing a meaning to acting to change current establishment Meaning gives individuals a reason to risk departing the norms of a referent group. . . When individuals are intrinsically motivated, they have a tendency to seek out novelty and challenges, and to extend and exercise their capabilities. . . people that

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feel vital feel more likely to initiate new behavior (Spreitzer and Sonenshein, 2003, p. 212). Grajew was driven by a sense of meaning he wanted to organize the business community towards creating sustainable development for a world of peace, solidarity, and environmental preservation (Ashoka, 2006). The calling to act and change the establishment was formed in his early youth. Grajew since he was young faced many challenges as we saw in chapter four. Table 15 summarizes the relation of Grajews personal experiences and the creation of his personal meaning for acting to build a better Brazilian society.

Table 15. Possessing a sense of meaning OR a reason to act


Challenge Action to change current establishment Grajew learned a new language and had to adapt to his new host country. He became the head of his family Sold club memberships Participated in founding a toy company 1972 Became the Brazilian manufacturers industry chairman in 1989 Founded the Abrinq Foundation in 1990 Active participation in PNBE, 1990 The founding of Ethos Institute in 1998 The founding of World Social Forum in 2001 Became the presidents advisor in Sense of meaning Level of action

Grajews family emigrated from Israel to Brazil in 1958 when he was twelve years old. Three years after his arrival, his father died. Study electrical engineering To work Represent the Brazilian manufacturers industry Defend childrens rights Change current relations between the private sector, state and civil society in Brazil Organize the Brazilian business community to address social issues Set up a forum to discuss worlds social issues Share his vision with Brazils president

To adapt to a new society

Personal

To support his family To complete his education and support his family To employ himself and his group of his friends To lead with his vision the Brazilian manufacturers industry To eradicate child labor in Brazil To contribute to bringing back democratic processes in Brazil To participate in building a sustainable and just society in Brazil To seek and build alternatives to neo-liberal policies. To advise president Lula on social issues

Personal Personal Group Group Societal Societal

Societal Societal Societal

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2003 Involve civil society The creation of the To improve the quality of and government for social movement life of people living in transforming Sao Paulo Nossa So Paulo in Sao Paulo Brazil into a sustainable city 2007 *This Table is not exhaustive but intends to illustrate Grajews trajectory.

Societal

Grajew faced his first challenges of survival at a personal level when his family emigrated from Israel to Brazil and his father died. By experiencing a purpose of selfawareness he was capable of acting to change his family situation. To support his family and pay for his education he sold club memberships57. When he graduated as an electrical engineer in 1972, his sense of meaning merged in a group with four of his friends to venture a toy company. By this time, Brazil was ruled by a dictatorship with many social issues such as poverty and limited freedoms. Grajew, aware of this situation, decided to participate in bringing back democratic processes in Brazil when the dictatorship was over. An analyst describes Grajews sense of meaning: He is a doer. He dares to import revolutionary ideas, ideas that would fit in the mind of a lets say, Che Guevara and bring ideas to his world, which is a world of business entrepreneurs and leaders. This is the innovation: he brings new, challenging ideas to the arenas of business entrepreneurs and leaders. (Interview, June 6, 2007) In 1989, when he mobilized the toy manufactures industry and founded the Abrinq Foundation in order to eradicate child labor in Brazil, his meaning was above his personal interests and his purpose stemmed from defending childrens rights. Since then, Grajews projects have lined up with a societal meaning with a social entrepreneurship core. The prime purpose of his following projects has been to change the current established relations between the Brazilian business community, state and civil society. By participating in 1990 in the foundation of PNBE he set up the basis for involving the Brazilian business community in participating in reconstructing democracy in Brazil. By 1998, Ethos Institute was pursuing this purpose by disseminating CSR for building a better society in Brazil. By
57

Gilberto Nascimento, A Elite mudou, Revista Isto, No. 1635 (December 20, 2000), n.p.

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2001, Grajews sense of meaning engendered further goals than just the Brazilian society and he ventured the World Social Forum for seeking global alternatives to neo-liberal policies. Departing from his personal sense on social issues the foundation in 2007 of the movement called Nossa Sao Paulo (Our Sao Paulo) has also a societal meaning for improving the quality of life of the city where Grajew lives. Grajews social initiatives possess a common sense of meaning at a societal level: to building a better and more sustainable society in Brazil. This sense of meaning has given to Grajew a reason to risk and seek out novelty and new challenges in his life for mobilizing and encouraging others to adopt new behaviors and change the current establishment. With his sense of meaning, he has been able to build bridges between the private sector, civil society and the state. 5.1.1.2. Exercising an other-focus perspective rather than just achieving personal goals In taking the perspective of others, positive deviants are compelled by a desire to serve others rather than by a chance to achieve personal glory Being otherfocused enhances interpersonal facilitation, including cooperative helping behavior and human capacity. Other-focused relationships are life giving than life depleting [] (Spreitzer and Sonenshein, 2003, p213). Grajew began exercising his personal skills for his family and personal survival (Table 15). As a business entrepreneur he used his abilities while working in GROW which contributed to this a toy company for selling with only of its two best puzzle games more than 200, 000 units a year (Raufflet and Gurgel, 2007) in Brazil compared to the worlds most successful game, Monopoly, which sells about 150,000 units a year in Brazil. In 1989, while working for his toy company, Grajew became aware that of 41 million children aged 17 and younger in Brazil, 25 million had no access to education, potable water, housing, or nutrition, and that they were subjects of violence. Moreover, about 1,000 children under five died every day in Brazil58. Grajew, concerned about, this major issue decided to exercise an other-focus perspective by launching a national
58

1989 UNICEFs report about the state of children in the world.

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campaign to end child labor and to address childrens issues by establishing the Abrinq Foundation in 1990. As mentioned early the Abrinq Foundation then became one of Grajews other-focus projects. His career from this moment became devoted not to his personal benefits but focused towards a societal level despite the success of his toy company. In parallel to setting up the Abrinq Foundation, Grajew focused on contributing PNBE as a way of contributing to Brazils democratization process. By 1998, with the foundation of Ethos Institute, Grajew involved the business community in a context of CSR for creating a better society with the collaboration of civil society and the state. The idea of creating the World Social Forum was based on its being socially active at a global level, thus able to mobilize people and organization from different nations. The social movement Nossa Sao Paulo is also focused not on Grajews personal benefit, but on improving the quality of life of the citizens of this metropolis. Overall, Grajew has committed to solving societys issues rather than using his personal skills for his personal financial benefits. His projects have served to create new boundaries of commitment and spaces of collaboration between state, civil society and the business community in Brazil. 5.1.1.3. Experience self-determination to transform ideas into facts When people experience self-determination, they see themselves in control of their own destiny their reasons for taking action are internalized rather than coerced by external forces having more autonomy will create additional space for positive deviance when individuals experience a sense of autonomy, they were more likely to engage in extra-role behavior . . . the amount of control provided?? in ones job is a strong predictor of initiative-taking. (Spreitzer and Sonenshein, 2003, p214). Grajew faced an avoidable autonomy since he was a teenager when his father died and he had become the head of his family. Henceforth, he extended his personal limits for overcoming to the absence of his father. Grajew by becoming the head of his family had to develop a sense of autonomy and self-determination. Over time, this sense of selfdetermination and autonomy would help him to finish his studies in electrical engineering. Grajews autonomy set the conditions for transforming his ideas into facts with three of his

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friends by venturing a toy company. Grajew transformed himself into a vehicle for venturing innovative social projects when he founded Abrinq. In an interview he defined himself as following: I am a former businessman. I had a toy business. I was a toy manufacturer. I was president of the Toy Manufacturers Association of Brazil. I was always trying to have some social impact and was very interested in political issues and social issues in my business and then as a business leader. In the Brazilian Association of Toy Manufacturers I created a foundation for childrens rights that today has the participation of about 2,500 companies working for childrens rights and having an impact on more than one million children. I participated, was leader, in some political movement in Brazil of business. I was making the links, the bridges, between the Workers Party in Brazil and the business sector. I was always looking for what is happening and how we can change the social and environmental situation of the world. Trying to mobilize the business sector of the base. (Interview conducted by Nic Paget-Clarke for In Motion Magazine on September 1, 2004 in So Paulo, Brazil) Grajew, driven by a sense of self-determination, has served as a boundary spanner to mobilize the Brazilian business community, the state, and civil society. The idea for the Ethos Institute was born during Grajews vacations, driven by the willingness to change the social and environmental situation of the world as he defined it himself-. A Brazilian academic describes Grajews self-determination and autonomy during an interview in Sao Paulo: Oded is someone special. He is someone who has been a businessman, business leader, leader of a specific NGO, and he was already in government Oded is a really perseverant guy who before saying, It is over and we failed, failure would really have to go to the bottom (Interview, June 6, 2007)

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To transform his ideas into facts, Grajew uses his personal skills, willpower and social network for spanning boundaries between society and business. By involving the media in his projects, he creates positive visibility which attracts the attention of other business leaders which helps to involve them in realizing social projects with just a phone call. A member of Ethos describes Grajews leadership and self-determination for founding Ethos: I think that the key success factor of Ethos stems from the fact that Oded Grajew is a business leader with other business leaders who are friends of his. They founded the Ethos Institute together. These relations already existed before Ethos. Business leaders were talking with business leaders. This made it easy to start the first conference. []. This is a movement that started from business president to business president. []. When we started and needed a sponsoring company, Oded would call and ask: -Listen, we are organizing this event, and need this sponsoring, could you help us?-. And he would obtain it. This movement started from the top, among business leaders, and spread among business organizations. (Interview, June 6, 2007) In short, Grajews self-determination stems from experiences of his childhood and projects of his youth. This personal perseverance has allowed him to control his career and projects. His sense of personal independence created the additional space necessary for positive deviance while he took a sabbatical year. This sense of autonomy then was deliberately used to engage other business leaders to change the social and environmental situation in Brazil. Without this psychological condition, the creation of Ethos and his other personal projects would not have been possible. 5.1.1.4. Exert personal efficacy to outweigh the possibility of failure When individuals feel efficacious, they believe that the potential for success outweighs the possibility of failure. . . Efficacy beliefs influence a persons level of motivation, as reflected in how much effort she or he will exert in an endeavor and

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how long she or he will persevere in the face of obstacles (Spreitzer and Sonenshein, 2003, p. 216). According to the authors, confidence comes from personal efficacy and contributes to creating confidence to develop personal potential while expanding choice behavior for positive deviants. As mentioned earlier, since his youth Grajew began accumulating personal efficacy first by leading and supporting his family then by venturing a toy company and selling the initial production of 5,000 units store-to-store. Once the company became a success, he mobilized the toy industry for addressing childrens issues. Succeeding first at a personal level by supporting his family, and then finishing his studies in electrical engineering, and becoming a successful business entrepreneur, Grajew became interested in developing more complex projects to impact society. Table 16 illustrates how Grajews projects over time became more ambitious and with a wider social scope.

Table 16. Grajews personal efficacy


Project 1958 Adapting to Brazil 1961 Becoming the head of his family Study electrical engineering 1972 GROW Purpose To adapt to a new society To support his family To complete his education and support his family To sell toys to employ himself and his group of his friends Action Level Personal Personal Personal Group Social scope Grajew Grajews family Grajew Benefits for him, his partners, employees and suppliers. Brazilian toy Manufactures industry Brazils children Brazil Brazil Impact on Global economies Brazil Sao Paulo

1989 Chairman of Brazilian Toy Manufacturers Association 1990 Abrinq 1990 PNBE 1998 Ethos Institute 2001 World Social Forum 2003 Presidential advisor 2007 Nossa So Paulo

To represent and lead the Brazilian toy Manufactures industry To defend childrens rights To contribute to bring back democratic processes in Brazil Mobilize the Brazilian business community to build a sustainable and just society. To seek and build alternatives to neo-liberal policies

Group

Societal Societal Societal Societal

Advise President Lula on social issues Societal To improve the quality of living of people Societal living in Sao Paulo Brazil *This Table is not exhaustive but intends to illustrate Grajews trajectory.

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By 1998, with a previous experience from participating in PNBE that discussed national issues such as economic democracy, social justice, and the role of the business community in the democratization process of Brazil, he founded Ethos Institute to mobilize the Brazilian business community through the adoption of CSR for building a better society. Grajew over time increased his personal efficacy to outweigh failure. Moreover, he has innovated with projects not only aimed at solving Brazils issues, but also projects at a global scale such as the Ethoss participation in such world arenas as the United Nations to discuss the millennium goals. Since then, Grajew has been continuously creating revolutionary ideas and challenging business and society standards. The progressive success of Grajews projects has contributed to outweighing the possibility of failure encouraging him to venture into new projects. During his life he has learned that it is possible to succeed in his innovative projects overcoming the risk of failure.

5.1.1.5. Possessing the courage to overcome the risk of breaking out of the rigidity of norms
Positive deviance often involves significant risk as individuals break out of the rigidity of norms and patterns of expected behavior . . . courage provides individuals with the backbone to engage in positively deviant behaviors (Spreitzer and Sonenshein, 2003, p217). Spreitzer and Sonenshein state that courage is the willingness to confront risk and do what you believe is right regardless of the consequences. Regarding the risks that Grajew has faced for confronting companies that employ children, pollute the environment, discriminate its labor force, and are involved in corruption scandals, a senior scholar commented:

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I would say that he is really brave. I have never seen him hesitate for one moment. This is something incredible. He told me himself the other day that sometimes his life is in danger. . . However, I believe that he has a good sense to know well which are the limits of fear and the limits of a transformation per se. (Interview, June 6, 2007) Another important specialist of the Brazilian transformations described during an interview Grajews courage to confront risks and adversity: Grajew is like a Swiss Banker. In Brazil, we see Swiss bankers as always financially successful. If a Swiss banker decides to jump from the tenth floor, this would mean that there is money to be made by doing this. Grajew is the same he has already jumped so many times into new innovations that have ended up been ground-breaking and successful that every time he jumps and launches a new idea, everyone pays attention. (Interview, June 12, 2007). On every project in which Grajew has been involved, the possibility of failure has always existed. Ethoss success was possible due to the participation of different sectors of society. If Grajew would not have convinced the business community to participate, Ethos would have not been created in the first place. Grajew can control his personal performance and knows his own limits; however knowing how far others will be willing to sacrifice is something out of anyones control. Grajews revolutionary ideas face a double challenge; they go against the establishment. However, Grajew reduces the risk of failure with his leadership and courage. In doing so, he is able to break out of the norms and standards of the business community in Brazil and take risks on social projects to address issues that might go against the business establishment, namely corruption, and child and slave labor. Overall, the results indicate that Grajew fulfills the five psychological conditions proposed by Spreitzer and Sonenshein (2003) for a positive deviant leader to undertake actions against existing laws, rules, norms, social standards, and authorities while assuming risks in order to create extraordinary outcomes. The aforementioned psychological

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conditions helped Grajew to use his moral imagination in undertaking innovative projects towards creating a better Brazilian society. First, he focused on an individual level by starting up a toy company and then he focused to an organizational action by mobilizing the toy industry towards defending children rights, participating in PNBE and aforementioned social projects. By creating Ethos, Grajew has been motivating the Brazilian business community to enhance CSR for creating a better society. The following part describes the strategy that enabled the adoption of new behaviors among the business community.

5.2. The six Ds Positive Deviance Model in Ethos Analysis


As mentioned earlier, Grajew fulfills the five psychological conditions proposed by Spreitzer and Sonenshein (2003) for positive deviance. He has a strong sense of meaning to act to change the establishment by exercising an other-focus perspective with selfdetermination to transform his ideas into facts with courage for overcoming the risk of breaking out of rigid norms. This section illustrates Ethoss organizational strategy to foster CSR among the Brazilian business community. The PD model I propose compares Ethos strategies with the six Ds positive deviance model of J. Sternin. This analysis is composed of six parts. Each part describes one D vis--vis Ethoss actions to foster CSR. The six Ds of Sternins model can be summarized in Table 17:

Table 17. The Six Ds


Positive Deviance (J. Sternin, The Six Ds .Retrieved February 20, 2008 from www.positivedeviance.org)

Define the problem (situation analysis) and define what a successful solution/outcome would look like. Determine if there are any individuals/entities in the community who already exhibit desired behavior. Discover uncommon practices/behaviors enabling the PDs to outperform/find better solution to the problem than others in their community. Design, implement activities enabling others in community to access and practice new behaviors. Discern the effectiveness of activities or project through ongoing monitoring an evaluation. Disseminate successful process to appropriate other. Share deviant behaviors with community outsiders.

The steps can be performed on non-sequential basis

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5.2.1. Defining the problem to solve and define what a successful outcome would look like The problem identified by Grajew referred to how to build a just society in Brazil. The ideal result for Ethos is to have a sustainable and just society with the participation of socially responsible companies.

Table 18. Defining the problem


Defining the Problem in Ethos Who can contribute in building a better society in Brazil Why address enterprises How to engage companies to contribute in sustainable development in Brazil What kind of positive deviant behaviors does Ethos track and diffuse Why would a company adopt corporate social responsibility To build contribute in building a better society in Brazil. Business organizations collaborating with the Brazilian state and civil society Companies have economical resources and the influence to influence state and civil society. Through positive deviance. Ethos is committed to track and diffuse corporate social responsible practices in Brazil. If necessarily Ethos also would recourse to examples outside Brazil. (1) As a strategic option to create a competitive advantage. (2) To contribute in building a better Brazilian society.

Table 18 defines the problem identified by Ethos and the inquiries linked to disseminating CSR to companies as a mean to contribute in participating in the Brazilian democratic process. The next step on positive deviance is to identify companies that already displayed behaviors directed towards solving the problems identified by Ethos. 5.2.2. Determining individuals/entities with the desired behavior Grajew and the members of Ethoss deliberative council mostly had experience on social entrepreneur projects, which involved the business community (i.e., Abrinq and PNBE). Hence, they were aware that companies exercising socially responsible practices did exist. The challenge was to track them and encourage them to share their experiences and knowledge with the rest of the community. To identify existing socially responsible firms, Ethos has run a continuous media campaign on the press, television, universities, radio since its foundation, to encourage those companies to share their experiences and to provide free information and notions on CSR. Within, socially responsible firms were

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tracked and also broadcasted as a positive example. Moreover, in order to locate companies with CSR practices and motivate them to share their experiences, Ethos created three different awards as mentioned on chapter four: (1) Prmio Ethos de journalismo for journalists, (2) Prmio Ethos Valor an award given to graduate students, scholars who are interested in research or to study CSR, and (3) Prmio Balano Social an award given to companies which had outstanding CSR practices. With its communication efforts and awards, Ethos is continuously identifying firms with socially responsible behaviors. Moreover, Ethos with the creation of the program InternEthos, helps track socially responsible companies in the rest of Brazil by organizing meetings among InternEthos members to promote dialog and encourage alliances. In short, in order to discover socially responsible practices Ethos: (1) promotes a media campaign for creating visibility towards CSR; (2) encourages a context for sharing through different awards, conferences, and thematic debates involving academia, journalists, and companies; and (3) creates a social network outside of Sao Paulo through InternEthos. 5.2.3. Discovering uncommon practices/behaviors among the business community in Brazil that enable PD To uncover socially responsible practices in Brazil, Ethos uses its social network which is comprised by academics, journalists, people from the business community, the program InternEthos and international alliances. Journalists, academics, graduate and undergraduate students are invited to research and study socially responsible practices through the awards Prmio Ethos de journalismo and Prmio Ethos Valor. In doing so, these publicos indutores or opinion leaders widen the understanding of positive deviant practices that have enabled them to outperform. As a result of this positive context for socially responsible behaviors, companies are willing to share voluntary their methods and experiences. The discovering of uncommon practices is described by one Ethos member as an enriching forum for exploration of new ideas in a non-hierarchical, friendly and safe context.

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The program InternEthos promotes dialogue, encourage alliances and helps to discover and understand the uncommon practices of the companies that were determined to be positive deviants. This process is performed by Ethos staff who help to articulate companies knowledge through conferences and Ethoss self-diagnosis tool. As a result, Ethoss members and knowledge have expanded across Brazil as we saw chapter four. For discovering and understanding socially responsible practices Ethos uses mostly examples in Brazil. However, for expanding and updating its knowledge every year Ethos organizes an international CSR conference that has become the largest in Latin America. During this event, companies mostly from Latin America share their experiences, which enriches the knowledge convened in Ethos. Moreover, to expand its knowledge boundaries outside of Brazil, this non-profit organization maintains international alliances with organizations such as Business for Social Responsibility (BSR). In doing so, Ethos holds access to discover uncommon and innovative practices, enriching the scope of CSR knowledge for its members to international levels, enabling visibility in other countries to socially responsible companies in Brazil. This serves as a complementary motivator for a company to share their experiences and to be part of Ethos. Moreover, Ethos has recourse to international institutions such as the United Nations and the Organization for Economic Development for discovering successful social practices used at international levels. On the whole, the discovering of uncommon social practices is realized through four main fronts: (1) Ethoss social network which includes academia and journalists, (2) InternEthos, (3) Ethoss activities namely conferences and debates, and (4) international alliances.

5.2.4. Designing and implementing activities that enable others to access new behaviors

In order to foster CSR among its members and the rest of the business community, Ethos designed a series of activities and tools. For companies, it designed indicators to selfevaluate, national and international conferences to share and enrich their CSR knowledge, debates to discuss different solutions for specific issues, programs as InternEthos to

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facilitate regional alliances, free information on the internet to facilitate inclusion of new members, the creation of UniEthos to support Ethos in its educational process to provide companies with tailored sustainable development services. For Brazilian civil society, Ethos publishes the results of the convened social programs, and as aforementioned it created links with media and universities for realizing research and publishing information about socially responsible firms. In doing so, Ethos enables others to access new behaviors and consumers, civil society, and companies have more information available about CSR. Ethos has grown from only eleven members in 1998 to 1,377 members59 in 2008 by enabling new behaviors through civil society, involving universities and media, and the business community through its corporate members. Figure 3 describes the process of mobilizing the companies. Ethos has convened civil society, the business community and Brazilian government to interact with each other, through its activities, tools, and free information. Civil society, influenced by universities and the media, demands that government and the business community introduce socially responsible practices. The government then participates in social projects and public debates which encourage companies to be involved in socially responsible practices; therefore companies have access to dialogue and ask for better conditions and support from the government for certain projects (i.e., Zero hunger to reduce hunger and poverty; the Cisterns program to give safe drinking water; the Zero Illiteracy Program to promote education; and Promotion of equity to eliminate discrimination and empower women). Finally, Figure 4 shows the multiplier effect that Ethos members have to attract new corporate members. Socially responsible firms attract more companies; in fact, when the rest of a community realizes that positive deviants are displaying success and positive results, they become curious and open to experiencing new behaviors (Cameron, 2006).

59

Information retrieved from Ethos website dated May 3, 2008

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Figure 4. Enabling others to access new behaviors

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In short, Ethos convenes activities for the business sector, civil society and attempts to involve the state whenever possible. With a series of activities such as conferences to promote interaction, publications for promoting visibility and broadcast for positive cases, research programs with academia for widening comprehension on CSR, and free tools for eliminating transaction costs. Moreover, Ethos sensitizes civil society, which helps in enabling the business community to access and adopt new behaviors. 5.2.5. Discerning the effectiveness of activities through ongoing monitoring and evaluation As mentioned earlier, Ethos is an organization that is grounded on providing a forum for good conversations60 (Bird, 1996). Therefore, the analysis and evaluation of the effectiveness of Ethoss activities is based on dialogue around two different axes: (1) the
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Teleologically-oriented communicative exchanges that seek to reach, interpret, or maintain normative agreement (Bird, 1996, p208).

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deliberative council evaluates the effectiveness of Ethoss activities and performance of its projects; (2) corporate members self-evaluate through incentives and positive broadcasting and through interaction with other members for sharing experiences on debates, forums and conferences. The Ethoss deliberative council continuously dialogues and examines projects and ideas from members of its board who represent a business organization or a particular industry. The expertise and experience of each member of the deliberative council gives the organization a self-critical point of view about the effectiveness of their activities and strategies to foster CSR among their corporate members. During meetings, the council revises and updates its resources, namely, website, self-evaluation tools, publications, social projects, and communication and marketing strategies. Ethoss corporate members possess the means to discern the effectiveness of the CSR activities they are adopting through self-evaluation tools provided by Ethos. As explained in chapter four, the self-evaluation covers seven areas: (1) Values, transparency, and governance; (2) the workforce; (3) the natural environment; (4) suppliers, (5) consumers and customers, (6) community, (7) and government and society. On these seven features companies can directly monitor the effectiveness of their social practices. In addition, Ethoss members have the access to the services of UniEthos. Through UniEthos, companies have the option to participate in CSR training programs and educational services in order to monitor, evaluate, or update their organization policies on corporate social responsibility. Over the years, corporate members will be invited to share their experiences in debates, workshops and they will have the opportunity to participate in the largest annual conference on corporate social responsibility in Latin America which assembles companies, academics, and key people from different countries. In doing so, companies have access to knowledge that is at the forefront of CSR, allowing them to compare and discern the effectiveness of their own policies and activities.

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5.2.6. Disseminating successful process to appropriate others

The dissemination of successful CSR practices along the business community is realized by Ethos by different means, as we saw above. The dissemination of successful cases and best practices on CSR is done on three main fronts: (1) Media campaigns which includes radio, television, press, and specialized reviews; (2) academia through publications and academic journals; and (3) Ethos and UniEthos activities, namely, thematic debates, deliberative council meetings, workshops, InternEthos, Ethos awards, manuals, conferences, and a newsletter to its corporate members. The information is mainly about successful CSR cases in Brazil and also about international experiences. Moreover, it is disseminates information about other publications, such as manuals (e.g., What Business can do for Education, Business Commitment to the Millennium Goals) and academic research on CSR.

5.2.7. Non-sequential Six Ds Model

The original model proposed by J. Sternin implied that the steps had to be performed sequentially. In other words, step two can start only when step one has been accomplished, and so on through step six. However, I propose that Ethos Institute has grounded its strategy in a non-sequential positive deviance model for strategic reasons. This means that Steps two, three, four, five, and six can be undertaken simultaneously in order to increase the effectiveness of the model. The advantage of performing simultaneous action on the positive deviance model is that a program or activity can serve multiple purposes within the positive deviance model thus increasing the effectiveness of the model. In adopting this simultaneous approach, it is possible for instance to discover new positive deviant practices while designing activities to enable others to access previously discovered practices. Moreover, using a non-sequential six Ds model allows the monitoring of current activities and the dissemination of new information from previous experiences through different means, such as conferences, media, internet, or publications.

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The simultaneous D model in Ethos can be described as follows. The activities and projects are defined, managed, and discussed by deliberative council. Parallel activities such as academic and journalistic research, thematic debates and conferences are conducted to determine and attract positive deviants. At the same time, socially responsible practices are analyzed and discovered with the collaboration of universities and journalists that are assisted by UniEthos with training and educational services. The design and implementation of activities namely, debates, conferences, workshops, and publications are also coordinated by the deliberative council. Through this process, there is a continuous evaluation of the effectiveness of each activity or program by the council. Self-monitoring tools are available on Ethoss website for companies. Concerning the dissemination of information, information is made available continuously about successful cases and about academic research and information on CSR. Figure 5 illustrates the systematic interrelationship between the six Ds model and Ethoss activities for fostering CSR among the business community towards building a better Brazilian society.

Figure 5. The Six Ds model in Ethos

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This chapter analyzed the empirical data of this research. We reviewed the importance of Grajews psychological characteristics as a leader for creating a context of CSR in Brazil. Moreover, we used a positive deviance framework for understanding Ethoss model for disseminating notions on corporate responsibility since 1998. The next chapter presents the conclusions, describes the research limitations, and suggests avenues for further research.

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6. Conclusions
Most of the academic literature focuses on understanding firms and the entire business system, just as if companies and business practitioners were subject of different rules and cut off from nature and all of its myriad effects (Frederick, 1998, p41).Many studies are centered in understanding firms behaviors - the literature is orgo-centered. Many academics focus only in understanding the internal processes of firms in order to guide businesses towards a social path. Very little has been written on strategies for both assisting and to encouraging companies in the adoption of social practices stemming from external actors of a firm such as civil society, non-for-profit organizations, the media, and the academic community. If academic communities move towards novel approaches which are not necessarily orgo-centered they could contribute to solve problems with a more holistic model. This study has proposed an innovative model originated in sociology to describe behaviors that do not follow dominant beliefs and values, which have the potential to transform an entire system. In doing so, we expect to expand the theoretical framework of firms by including other fields of study. An integrative analysis between social science and management would provide new tools to encounter the orgo-centered paradigm we are facing. Organisations can no longer remain sealed within a glass sphere (Frederick, 1998). A management approach is no longer enough. In order to widen business-andsocietal relations a multidisciplinary vision is needed, thus firms are affecting not only our society but also our natural environment (Pauchant and Mitroff, 2001). This masters thesis has focused on understanding how the Ethos Institute has created a context for corporate social responsibility and disseminated this notion into the media, among the business sector and in civil society in Brazil. The findings suggest that this wide dissemination was made possible by the application of a model of positive deviance. The literature on that concept is reviewed in Chapter 2 on theory. We explained in chapter two that PD is a concept initially developed in sociology for describing behaviors distinct from a groups dominant beliefs and values, which intend to increase the well-being of a community. The application of this theory evolved into practices that promote community development (M. Sternin, 1998; Cameron, 2005) by systematically replicating

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voluntary behaviors already in place in a community or organization. Moreover, we described five psychological characteristics (Spreitzer and Sonenshein, 2003) of a leader to enable positive deviance in a community or in an organization. In addition, in the theory chapter we proposed a conceptual framework to explain the data collected in situ in Sao Paulo Brazil. Chapter four, presented a narrative of Ethos Institutes evolution describing the trajectory of Oded Grajew, its founder, in five main stages (1) The Brazilian context prior Ethoss foundation, (2) the foundation of Ethos Institute in 1998, (3) Raising awareness on CSR (1999-2001), (4) Increasing strategic alliances (2002-2003), and (5) Promoting social change (2004-2006). This narrative chapter allowed us to display an analysis in chapter five using the conceptual framework described previously. The results of this research indicate that two central features facilitated Ethoss success in disseminating CSR: (1) Grajews leadership and (2) Ethoss organizational approach. Grajews leadership allowed a social network to extend the reach of Ethos to mobilize. Moreover, the interplay of the psychological characteristics of its founder facilitated a model of positive deviance. The positive deviance model assisted Ethos in identifying companies that display behaviors distinct from standard beliefs and values from the Brazilian business community for increasing their competitive advantage and the wellbeing of their community. Additionally, Ethos designed and implemented activities between the Brazilian civil society, the state and the business community. In doing so, it created an infrastructure for the systematic and voluntary replication and dissemination of socially responsible practices already existing in the private sector to address social issues in Brazil. The second main feature, Ethoss strategy been for creating a forum for good conversations (Bird, 1996) in Brazil among civil society, the state, and companies. The inclusive nature of Ethos for welcoming, encouraging and advising companies to adopt social practices for developing a competitive advantage and to contributing for social

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development rather than just exercising critics has been also a central feature for its success. This research has intended to contribute to the understanding of how to encourage companies to undertake corporate social responsibility and to create new strategies stemming from positive deviance to extend the reach of CSR. This research has certain limitations. We have analyzed an empiric case and therefore results cannot be easily generalized to other contexts or organizations. Yin (2003) replies to this limitation: [] However, case studies, like experiments are generalizable to theoretical propositions and not to populations or universes. (Yin, 2003, p10). Concerning the conceptual frameworks limitations, positive deviance is a newly developed framework strongly practice oriented mainly towards community development. Conscious of this limitations, we encourage future researchers to contribute to extending the literature on positive deviance for use as a means to encourage companies in adopting corporate social responsibility. This Brazilian model of corporate social responsibility proposes interesting elements for future researchers interested in applying social innovations to business contexts. Furthermore, it would be of interest to understand what is needed for exporting this model to both other countries and different cultural environments. Little research exists about other corporate social responsibility models in Latin America. Therefore, it would be of interest to explore the limits on the exportability of this Brazilian model or other models created by developing countries that could better fit to local context on these countries. Moreover, it would be of interest to conduct further research to understand the boundaries and meaning of an Ethoss membership. In other words, to know more about both the internal and external changes that a firm experiences by joining Ethos. Does a firm develop a competitive advantage based on CSR?

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Appendix
Table 1. Definitions of Corporate Social Responsibility (CSR)
Author, Reference Bowen, H.R. (1953) in Carroll A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Davis, K (1960) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Frederick, W. (1960) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. McGuire, Joseph (1963) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Friedman, Milton (1970). The Social Responsibility of Business is to Increase its Profits. Corporate Social Responsibility Definition [. . .] It refers to the obligations of businessmen to pursue those policies, to make those decisions, or the objectives and values of our society [. . .]

[. . .] businessmens decisions and actions taken for reasons at least partially beyond the firms direct economic or technical interest [. . .]

[Social responsibilities] mean that the businessmen should oversee the operation of an economic system that fulfills the expectations of the public. And this means in turn that the economys means of production should be employed in such way that production and distribution should enhance total socio-economic welfare. [. . .] [. . . ] The idea of social responsibilities supposes that the corporation has not only economic and legal obligations but also certain responsibilities to society, which extend beyond these obligations [. . .]

[. . . ] Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but business as a whole cannot be said to have responsibilities [. . .] there is one and only one social responsibility of business to use its resources to increase its profits so long as it stays within the rules of the game [. . .]

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10

11

Johnson, Harold (1971) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Manne and Wallich (1972) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Elibert and Parket (1973) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Davis (1973) as a reference in Wood, D. (1991). Social Issues in Management: Theory and Research in Corporate Social Performance. Preston and Post (1975) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Carroll (1979) as a reference in Wood, D. (1991). Social Issues in Management: Theory and Research in Corporate Social Performance.

[. . . ] A socially responsible firm is one whose managerial staff balances a multiplicity of interests. Instead of striving only for larger profits for its stockholders, a responsible firm also takes into account employees, suppliers, dealers, local communities, and the nation.[. . . ]

[. . . ] I take responsibility to mean a condition in which the corporation is at least in some measure a free agent. To the extent that any of the foregoing social objectives are imposed on the corporation by law, the corporation exercises no responsibility when implements them [. . .]

[. . .] the best way to understand social responsibility is to think of as it good neighborliness. The concept involves two phases. On one hand, it means not doing things that spoil the neighborhood. On the other, it may be expressed as the voluntary assumption of the obligation to help solve neighborhood problems [. . .] [. . .] consideration of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firm[to] accomplish social benefits along with the traditional economic gains which the firm seeks [. . .]

[. . .] In the face of large number of different, and not always consistent, usages, we [the authors] restrict our own use of social responsibility to refer only to a vague and highly generalized sense of social concern that appears to underline a wide variety of ad hoc managerial policies and practices [. . .] [. . .] the social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time [. . .]

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12

Jones, M. (1980) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Carroll, A. (1983) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Drucker, P. (1984) in Carroll, A. (1999). Corporate Social Responsibility, evolution of a Definitional construct. Wartick and Cochran (1985: 758) in Wood, D. (1991). Social Issues in Management: Theory and Research in Corporate Social Performance. Wood, D. (1991). Social Issues in Management: Theory and Research in Corporate Social Performance. Pasquero, Jean (2005). The social responsibility of the firm as a subject of management studies: An historical overview.

13

[. . .] CSR is the notion that corporations have obligations to constituent groups in society other than stockholders and beyond that prescribed by law and union contract . . . the obligation must be voluntary adopted; behavior influenced by the coercive forces of law or union contract is not voluntary . . . the obligation is a broad one, extending beyond the traditional duty to shareholders to other societal groups such as costumers, employees, suppliers, and neighboring communities. [. . .] CSR involves the conduct of a business so that is economically profitable, law abiding, ethical and socially supportive. To be socially responsible . . . then means that profitability and obedience to the law are foremost conditions to discussing the firms ethics and the extent to which it supports the society in which exists with contributions of money, time and talent [. . .] [. . . ] the proper social responsibility is to tame the dragon, that is to turn a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth. [. . .]

14

15

[. . .] the integration of the principles of social responsibility, the processes of social responsiveness, and the policies developed to address social issues [. . .]

16

17

[. . .] we [scholars] need levels to distinguish principles of social responsibilities at: (a) an institutional level, to understand what is expected of any business; (b) an organizational level, to understand what is expected of any and every business; and (c) and individual level to understand the responsibilities of managers and other corporate actors [. . .] [. . . ] By the term corporate social responsibility we [the authors] mean the entirely of obligations legal and voluntary- that a company must assume in order to be perceived as a model of good citizenship in a given environment [. . .]

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Table 19. Interview Summaries


Interviewees position CSR scholar, Fundao Getulio Vargas (FGV) CSR scholar, Fundao Getulio Vargas (FGV) CSR scholar, Fundao Getulio Vargas (FGV) Ethoss Academic Relations Ethoss Academic Relations Ethoss Public Relations Ethoss ex-employee Ethoss Manager InternEthoss Manager CSR scholar, Fundao Getulio Vargas (FGV) Specialist of Brazilian business and society from Pontfica Universidade Catlica de So Paulo Executives from enterprises registered as Ethos member Executives from enterprises registered as Ethos member Ethoss director Executives from enterprises registered as Ethos member Ethoss director Ethos director PNBE executive Total Interview length 50 min 16 min 75 min 57 min 10 min 90 min 90 min 35 min 42 min 30 min 30 min 15 min 17 min 30 min 35 min 30 min 30 min 85 min 767 min Date 05/06/2007 05/06/2007 05/06/2007 06/06/2007 06/06/2007 06/06/2007 07/06/2007 08/06/2007 08/06/2007 11/06/2007 12/06/2007 13/06/2007 13/06/2007 13/06/2007 14/06/2007 15/06/2007 15/06/2007 20/06/2007

3.9.2. Questionnaire -What is your direct relation with the Ethos Institute? -When and how did this relationship begin? -Which have been your contributions to the Ethos Institute? -How would you explain the Ethos Institutes success? -Could you mention some of the Ethos Institutes success factors? -Could you mention some important persons from the Ethos Institutes human capital? -How would you describe Oded Grajews personality?

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-What is your vision for the Ethos Institute in 5 years and 10 years? -Do you perceive that the Ethos Institute has changed since its foundation? If the answer is positive: Who promoted those changes? How do those changes have been possible? When those changes have taken place? Could you describe the nature of those changes?

If the answer is negative: Do you think the Ethos Institute should change? Why should it change? In what way(s) should it change? Who should change?

- If the person was an outsider to Ethos Could you mention one important moment for the Ethos Institute? -If the person was an insider to Ethos Could you mention the most important moment youve experienced at the Ethos Institute? -If the person was an outsider to Ethos Could you mention the roughest moment for the Ethos Institute? -If the person was an insider to Ethos Could you mention the roughest moment you have experienced at the Ethos Institute? -Could you suggest someone to interview in order to obtain further information and a different point of view on the situation?

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Thank you very much for your time.