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CSR Credibility

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I. Nemes

on 6 March 2014

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Transcript of CSR Credibility

Some Theory
CSR: A Contested Concept
The Evolution of CSR
CSR born in the 1930s (Berle vs. Dodd)
Modern era of CSR started in the 1950s with Bowen (1953)
Critics of CSR: Friedman (1970) and Karnani (2010)
Freeman (1984): CSR is about stakeholders
Brundtland Commission (1987): CSR is also about future generations
Elkington (1994): The Triple Bottom Line, or the 3Ps
Porter and Kramer (2006, 2011): "strategic CSR" and "shared value"
CSR theories
Garriga and Melé (2004): Useful classification of CSR theories in 4 categories containing 14 types
Dahlsrud (2008) found no less than 37 definitions of CSR
Rahman (2011): identified 10 dimensions of the CSR concept
Okoye (2009): CSR is an ECC ("essentially contested concept")
Visser (2010): CSR has failed due to:
failure to integrate it in the business
failure to scale up CSR to the urgency of the issues
short term-focus
CSR Credibility
Limited research available on this topic
Often associated with reputation management
Available research treats "credibility" on its own, ignoring the context and the inherent relational aspects that it implies
Stakeholder theory: a useful framework and related concepts
isomorphism, (etc.)
However: limited stakeholder management research from the perspective of the stakeholder
Stakeholder Management and Communication
Morsing and Schultz (2006): "Giving sense" and "Making sense"
Connelly et al. (2011): Signalling
Maon et al. (2009): integrating CSR communications in the business
Minor and Morgan (2011): Companies should communicate about their CSR
King and Mc Donnell (2012): Communicating about CSR is dangerous for companies(!)
Furlow (2010), Laufer (2003): The dangers of greenwashing
More authors: CSR communications perceived as greenwashing lead to stakeholder scepticism
Non-governmental organisations (NGOs)
NGOs Defined and Classified
UN definition: "non-profit, voluntary citizen’s groups which are organised on a local, national or international level"
Kourula & Laasonen (2010): "social, cultural, legal, and environmental advocacy and/or operational groups that have goals that are primarily non-commercial"
Yaziji and Doh (2009): classification of NGOs into:
NGO - business collaboration
NGO-business partnerships is a more recent trend
Selsky and Parker (2010): How do NGOs and businesses collaborate?
Austin and Seitanidi (2012): Why do NGOs and businesses collaborate? How do these partnerships evolve?
Le Ber and Branzei (2012): Partnership success is dependent on personal relationships
Schilke and Cook (2013): organisational trust rests on individual trust
NGO-Business Confrontations
Hendry (2006): Why do some NGOs attack businesses?
Spar and La Mure (2003): How do advocacy NGOs attack businesses?
Eesley and Lenox (2006): When are advocacy NGO attacks against business successful?
King and McDonnell (2012): CSR is not an insurance against NGO action
Conceptual model
Problem Statement
What makes companies' CSR commitments credible to moderate advocacy NGOs?
Design and Methodology
Qualitative research in a multiple case study format
Documents available in the public domain
3 participating NGOs:
Greenpeace Netherlands
Oxfam Novib
Wereld Natuur Fonds
5 respondents per organisation (15 in total)

Research Findings
A few quotes
Type of engagement and funding
“G3: […] we don't want any money from companies or governments [...]. It makes us independent in our judgments [...] and for us that is really a core value of Greenpeace.”

"O2: […] the multifaceted approach is more effective in creating transformational changes, but it is also more difficult in explaining to a larger audience."

"W1: […] I mean, our interaction with the private sector [...] is also very risky and Greenpeace and others are very, very sceptical of what we are doing. And we are being accused, of course, of greenwashing."
"G5: [...] The shareholders demands are still by far the most powerful. So, the gap between the promises and the reality is too big, and that’s a very, very, very common problem. I don’t know any business where that doesn’t play a role."

"O4: [...] Companies… They produce a product… A product that we need, stuff that we buy, provide jobs for people."
Interpersonal Relations
"G2: [...] It is also about personal relations and if I trust the people that I am in touch with, and if that relationship is not good, I am less inclined to think that they are credible as a company."

"W3: [...] It is all about the people! You can have a contract… Very, very nice! But it is so hard, if people who are responsible for that contract don’t really feel: “Yeah, we have to do this!” or “It is part of our strategy!”... Yeah, then it is a hassle… Don’t go there! Stop it, and start again."
Company Ownership
"O3: [...] I have little worries about the average family company, particularly the small and medium scale sector [...], and I have a distrust against the big companies that work with shareholders… [Company F] accepting money and power from people that have absolutely no inkling what butter is all about, that kind of thing."

"W2: [...] The capitalist model works, perhaps the shareholder model does not work. […] Because your incentives are going to be different. […]. The shareholder business model, by definition, is: I lend you my money because I want you to pay me back within three months, within six months or a year, and I want a set level of return […] So how can you carry two identical deals with two completely different timeframes as a company, and still remain coherent and consistent? In a sense, you’re set up to fail.”"
The CSR Manager
“G5: If the sustainability manager [...] is a communicator, then it’s not about the primary production[…]. I know that a communication department, in whichever organisation, is not the place where the power lies. The power lies in the primary production, and that’s where the change has to be. So I am immediately cynical if I get a sustainability person from the communications department. And I always ask the question, and they nearly always are from the communication department.”

"O3: It quite often starts with appointing a CSR officer, and then the board sits together and says: let’s listen to this NGO, let’s appoint a CSR officer. So they appoint a CSR officer, and the CSR officer gets a budget to make a nice project, but the real challenge is to influence the Human Resource department to go into a different hiring and firing mode. To influence the operational manager in adding additional indicators of performance next to the one that talks about volume and profit. And that is seriously the type of things that CSR officers do not have the mandate for.
For Businesses
Know whom do you communicate your CSR commitments to
Find out how sceptical your audience is
Transparently show your commitment to integrate CSR in your business
What signal do you (want to) give by hiring a CSR manager?
Match your CSR commitments to your company's size and type of ownership
Carefully choose your contact persons with NGOs. Are they likely to get along?
Some NGO folks will simply be too sceptical to change
For NGOs
The success of your work with companies depends on the relationships that your staff can build with companies
Diversify the skills of your staff so that they can communicate with businesses effectively
Clearly define and communicate what "CSR credibility" means for your own organisation.
Any insights that you think may be helpful for Fairfood?
What is Fairfood's definition of credibility? What do you think that definition should be?
Does anything that I presented today surprise or confuse you?

Summary Findings
The companies' CSR commitments credibility is affected by at least 6 categories of factors:

1) The type of engagement between the NGO and the business
2) The individual's formulations of CSR credibility
3) Interpersonal relations
4) Company attributes (size and ownership)
5) The company's CSR track record
6) The company's CSR implementation
Adjusted Conceptual Model
Full transcript