and economic instabilities created by the system as a whole, as these mostly lay outside the market. These require different capacities in governance.
For the cynical, CSR is an attempt to conceal the knots and tears in modern business practice, while for advocates of CSR it is a means of repairing these flaws so that the economic system can continue to provide the many benefits we have secured. In that sense CSR, in common with all human activities, has the capacity to be both a mask and part of the search for a more authentic form of capitalism that will fit the demands of the modern world.
individual actors in business organizations as agents of change and innova- tion, as successful CSR is essentially an innovation process. Set two relates to changing ideas and practices in business organizations that facilitate or enable CSR to take root. The third set involves the emergence of institutions that provide the context within which business is embedded. The final set consists of stimuli that prompt organizations to pay attention to CSR. We use these to identify the different ways in which CSR practice is formulated and implemented in business organizations.
Individual actors: change and innovation
In organizations committed to CSR the roles played by individual actors are similar to the roles identified in learning and change or innovation processes by authors such as Tushman and Nadler (1996) and Roome (2001). This similarity is not surprising given that in most companies CSR involves inno- vation in the relationships between the firm and others in its social and environmental context. These roles include visioning, sponsorship, idea generation and connecting, and in combination they provide the basis for
‘change agents’ in organizations (Roome and Bergin, 2000). Rarely is one individual responsible for all roles. Rather they are normally performed by different actors working in concert. In large organizations the roles tend to be performed recursively; that is, they are repeated in different business units or at different levels in the organization (ibid.). In this situation connecting roles are essential to communication and the ultimate coherence of CSR.
Visioning is the means to construct an image of a future desired state. In the case of CSR this image includes changes in the relationships the firm has with other organizational actors or the environment. A CSR vision includes some notion of what a new set of relationships might involve. This may orig- inate from recognition by organizational leaders that there is a need to oper- ate according to principles that are different from those in conventionally run firms, a conviction about the importance of particular qualities in rela- tionships, or realization that environmental processes and resources are being undervalued or poorly managed. The source of this concern may be per- sonal experience, the necessity of responding to crises or events or turning constraints into opportunities, or simply a conviction that there are better ways of doing business.
When individuals with a vision of the need for changed relationships have formal authority in the organization, such as a CEO, some of the other roles are less important. When there is a separation between visionary managers and those who provide capital or the organizational ‘space’ to develop these ideas, then sponsorship roles become important. Sponsors provide organizational space and resources for those with vision so that the vision can be developed and implemented.
Visionary leaders may identify the need for and the direction of change, or determine the principles required to govern the process of change, but they
are rarely equipped with all the necessary ideas and/or competences to trans- late the vision into practice. Ideas to support or fill out visions can be drawn from many sources: technological, organizational and cultural. These can be used alone or in combination. Ideas can be generated internally or through the injection of new resources into the company, for example by hiring new staff, engaging consultants or conferring with NGOs. Ideas are neces- sary in the formulation and implementation of an original vision or to overcome obstacles to the attainment of the vision. Over time a combina- tion of ideas can be transformed into a single concept, providing a basis for strategy and organizational development, and serving as a strong symbol for communication.
Whether the CSR approach and its content are directed from the top, sup- ported by ideas from outside or facilitated and coached inside the organization, it is necessary to communicate the content and instill an understanding of the approach throughout the organization. The larger the organization, the more likely it is that the development and diffusion of the content of the CSR innovation will have to be communicated through networks or via recursive processes that affect all departments and functions, formal structures and systems. Irrespective of whether these networks are informal or institu- tionalized, as in the case of formal knowledge management systems, they require managers with network skills or the ability to design information and communications systems to link others.
The visioning, idea generation and connecting roles are part of the process of formulating and implementing a CSR approach. Clearly, if the vision and ideas that provide the content of the CSR vision are facilitated or coached within the organization, then this process, if handled well, will support the development of commitment and shared understanding and begin to develop a network of CSR champions within the organization. Participation is also a source of ideas and a basis for employees to begin collectively to test the meaning of the concept and practice of CSR so that it becomes a theory in practice. A participative approach of this kind is also consistent with the view that CSR is founded on and leads to strong ties of engagement and trust within an organization and with other organizations in its business context.
Organizational enabling factors
A number of contemporary ideas and practices in business enable innova- tion and change in general, and through that facilitate the move towards CSR in particular. These include management systems that emphasize missions, goals, targets, resource allocations, performance measurement and reviews. They also include quality management tools, techniques and processes, learning organization practices based on visioning, creative tension and the identification of key points of leverage, cross-functional teams, flat and open organizational structures, knowledge management systems and an organizational culture based on explicit principles or values.
Prior experience of these concepts and systems fosters the formulation and implementation of CSR. It provides the ducts across organizations along which information and ideas flow, it guides individual and organizational knowledge and choice and offers accumulated experience upon which to draw. These ideas and practices, with their emphasis on learning and change, can be seen as building blocks for processes that support the formulation and implementation of CSR policy and practice.
Other ideas or concepts that have gained currency in management are supporting the move towards CSR. There is a tendency how to speak of stakeholders rather than shareholders (Freeman, 1984), including the identi- fication and determination of stakeholder salience (Mitchell et al., 1997), stakeholder mapping (Wartick and Wood, 1998) and processes of stakeholder engagement (Sharma and Vredenburg, 1998). Similarly, the wide spread of the notion of ‘product stewardship’ has shifted the focus of companies away from strictly limited responsibility for the functionality of products to joint responsibility with others in the supply and value chain, including consumers.
This has in turn led to the development and use of a raft of techniques that capture the environmental profile of products and services throughout their life cycle (Roome, 1999). These ideas have all contributed to a management language and approach that has improved understanding of the relationships between firms and others in society and equipped managers with the concepts and tools required to deal with those relationships.
The capacity to identify CSR as an opportunity and to build on this to shape a new context for the organization and its CSR practices is also impor- tant. By so doing the organization’s CSR approach is recognized and can flourish; attracting customers, suppliers and employees is important in building success and aligning relationships between the business, its context, supply-chains and markets (for capital, customers and labour). Indeed it is consistent with CSR as a vision-led activity and this vision can be as powerful in shaping the external context as it is in shaping the internal context and processes.
Institutional contexts and embedding
Institutions are defined here as (1) sets of organizational actors and (2) the rules and belief systems that guide the behaviour of organizations and indi- viduals. Institutions provide the context in which individual organizations are embedded (Granovetter, 1985). That embedding can have a number of dimensions (Zukin and DiMaggio, 1991); structural, for example when eco- nomic exchange is contextualized in patterns of interpersonal relationships;
cultural, when shared collective understandings develop to shape economic strategies and roles (Spender, 1989; Phillips, 1994); cognitive, when structured regularities of mental processes limit the exercise of economic reasoning; and political, where economic institutions and decisions are shaped by a struggle for power that involves economic actors and non-market institutions.
Our earlier observation that the rise of CSR is a governance response to the fault lines of globalization, and particularly the role and position of business in contemporary society, suggests that CSR has the character of a social movement. In this regard it has influenced thinking and practice in business.
In other words CSR has structural, cultural, cognitive and political significance as a social movement. The structural and cultural aspects find expression in, for example, business leaders’ and managers’ forums when greater attention is given to the notion of CSR (Holliday et al., 2002). Cognitive processes are shaped by the claims and arguments of CSR advocates and the tools, tech- niques and rationality they propound. These include the claim that CSR contributes to or at least does not detract from performance in terms of prof- itability and shareholder returns (Burke and Logsdon, 1996; Epstein and Roy, 2001; SustainAbility/ENEP, 2001; Johnson, 2003). Politically there is growing support for CSR as a way to curb the perceived excesses of corporate behaviour and as part of a wider movement to reorder the joint governance of social, economic and environmental systems based on voluntarism by business (Holliday et al., 2002). In continental Europe this social movement only began to take shape in late 1990s, whereas it emerged in the UK in the early 1980s.
The movement lends support to companies and managers that are pioneering new approaches to CSR, success is recognized and rewarded by awards and publicity, and new participants in CSR are brought onto the bandwagon.
After an initial period of experimentation the tendency of all social move- ments is to move towards standardized practice and the professionalization of management by developing codes and guidelines. The development of CSR as a social movement is no different, although it involves a complex develop- ment of institutions and individual organizations. In this sense organiza- tions are embedded in these institutions and the institutions are composed and derivative of the CSR practices and commitments of individual organiza- tions. It is this synergistic embedding that qualifies CSR as a social move- ment that is shaping or attempting to shape mainstream business institutions and is in turn being shaped by them. An example of this the responsible investment community, which began as a fringe activity but has become institutionalized and incorporated into mainstream investment funds and banks. It has the power to influence the mainstream but is also influenced by it.
Stimuli for CSR
The final elements in our discussion of the drivers of CSR are the ideas, events and experiences that draw the attention of change agents to CSR and stimulate the development of new visions based on CSR ideas. There are many sources of stimuli, including a daughter who asked her father what his company was doing to protect the environment, a textile company that faced increasingly stringent environment controls, a CEO who chose to see this as an opportunity to reconfigure his business on environmental principles,
CEOs who respond to ideas from their employees and then oversee the emergence of a new vision for the company, and a managing director with many years of experience in pharmaceuticals with a new vision of a way of doing business that valued employees as people rather than numbers.
The development of CSR as a social movement means that ideas, codes, books and consultants are increasingly available to inject ideas to be taken forward by business leaders. Important, too, have been the repercussions of catastrophic accidents such as Bhopal and Exxon Valdez, and the revelation of child labour and poor working conditions in Far Eastern factories, which not only propelled individual companies to consider their own CSR position but also contributed to the growth of CSR as a social movement.
Pioneers emerge in response to different combinations of events, ideas and experiences. Follower companies are then attracted to CSR because it has become fashionable or they wish to be seen as leaders in their industry. Yet even in follower companies there are passionate advocates of CSR, just as there are in pioneering companies.