implementation is consistent with those principles. Second, Adler and Kwon stress that managers should be aware of the different returns from and impli- cations of social capital investment in ‘bonding’ (internal investment in employee welfare) and ‘bridging’ (external investments in stakeholder relations). Third, their suggestion that managers map their social capital ties also applies to the implementation of CSR policies. This should include iden- tification of the social networks into which CSR impinges and the location of these in relation to the organization’s goals, to the values that character- ize their social context and to the social capital resources that are expected to follow.
enterprises may wish to build social capital only in their own region or with vital stakeholder groups (Habisch, 2004). All these best practices have enough additional utility to invest in social capital, thus creating positive external effects for other groups and firms. Therefore, we assume that social capital need not be undermined by the differing incentives of corporations to invest in it through CSR.
Another possible threat to social capital is that corporations may proclaim CSR policies but not implement them with any sincerity, coherence or credibility. A cynical investment in social capital would undermine social capital as confidence in it would decline. However, some take that view that the penalties for being found out can act as a disincentive: ‘The villains and masqueraders are usually pretty transparent and when consumers discover their insincerity, they clobber them, so from that point of view they can end up in a worse position than if they had not done anything.’5
There is a view that ‘getting one’s homework done’ – in the sense of sound internal organization and human resource management – is a prerequisite for eligibility as a CSR partner. A major constraint on masqueraders lies in the fact that companies that engage in CSR activities and invest in social capital will find it problematic to provide an explanation to their partners if they harm the environment, violate human rights or pursue corrupt business practices at home or abroad.
We conclude that CSR can be viewed as an investment in social capital and that there are social, firm-specific and general business advantages to be had from doing so. Acts of social responsibility can contribute to the develop- ment of a norm of generosity within networks of civic engagement, and this will be regarded positively by representatives of the social institutions in which the investment is made. Multiplier effects will be evident in an increase in the number of business participants and partnerships with social actors.
When business leaders recognize that their business fortunes are socially contingent and that social capital underpins trust and cooperative relations with society they will also recognize the centrality of CSR to their operations and the importance of living up to their policy claims.
The greatest challenge lies in CSR investment in social capital in societies that are not closely connected to the home society of the corporation and where there are few social institutions and networks in which to invest (Habisch, 1998). The danger here is that if CSR is regarded as tokenistic, no social capital will be yielded. Conversely, if the societal actors perceive CSR as grounded in associative norms and trust, the benefits of social capital in the form of information, knowledge, innovation, capacity and solidarity may be realized for the business as well as its stakeholders. However, this will depend on CSR as an investment in social capital forms a common interpre- tative device for the investing company as well as the host society.6 This chapter is an attempt to pave that common conceptual ground in order to strengthen trust in today’s globalizing world.
Notes
1. There is increased membership of new social movements but these tend to entail less ongoing engagement than is the case with traditional political parties and pressure groups.
2. Adler and Kwon (2002, p. 19) make a useful distinction between external and internal orientations of social capital.
3. For a more detailed analysis of these findings in the context of social capital see Moon (2001).
4. See McWilliams and Siegel (2002) for an investigation of the business case for CSR.
5. Richard Steckel, quoted in The Australian, 23 May 1996.
6. See the results of a large empirical study on German SMEs investing is the Czech Republic in Krizek and Habisch (2005).
References
Adler, P. S. and S. W. Kwon (2002) ‘Social Capital: Prospects for a new concept’, Academy of Management Review, 27, pp. 17–40.
Arrow, K. (1972), ‘Gifts and Exchanges’, Philosophy and Public Affairs, 1, p. 357.
Blowfield, M. (2004) ‘Implementation Deficits of Ethical Trade Systems’, Journal of Corporate Social Responsibility, 13, pp. 77–90.
Coleman, J. (1990) Foundations of Social Theory(Cambridge, Mass.: Harvard University Press).
Fitzgerald, N (2003) CSR: Rebuilding Trust in Business(London: Unilever and London Business School).
Fukuyama, F. (1995) Trust: The Social Virtues and the Creation of Prosperity(London:
Hamish Hamilton).
Habisch, A. (1998) ‘Social Capital Investment, Property Rights and the Ethics of Win- Win. Why Multinational Enterprise Management should Engage in Institution Building of their Host Countries’, in H. Steinmann and B. Kumar (eds), Ethics in International Management(Berlin and New York: De Gruyter), pp. 109–27.
Habisch, A. (2002) Corporate Citizenship: Gesellschaftliches Engagement von Unternehmen in Deutschland(Heidelberg and Berlin: Springer Verlag).
Habisch, A. (2004) ‘Social Capital, Corporate Citizenship and SMEs’, in L. Spence, A. Habisch and R. Schmidpeter (eds), Corporate Citizenship in Small and Medium Companies(London: Palgrave).
Hardin, R. (1991) ‘Trusting persons, trusting institutions’, in R. Zeckhauser (ed.), Strategy and Choice(Cambridge, Mass.: MIT Press), pp. 185–209.
Johnston, D. J. (2003) ‘Building Trust’, OECD Observer, 9. December 2003.
Krizek, P. and A. Habisch (2005) Gesellschaftliches Engagement Deutscher Untemehmen in der Tschechischer Republik, Vorstellung and Ergebnisse einer Studie (Prague:
Publisher).
McWilliams, A. and D. Siegel (2002). ‘Corporate Social Responsibility: A Theory of the Firm Perspective’, Academy of Management Review, 26(1), pp. 117–27.
Moon, J. (1995) ‘The Firm as Citizen?’, Australian Journal of Political Science, 30(1), pp. 1–17.
Moon, J. (2001) ‘Business Social Responsibility as a Source of Social Capital’, Reason and Practice: the journal of philosophy and management, 1(3), pp. 35–45.
Moon, J. (2002) ‘Business Social Responsibility and New Governance’, Government and Opposition, 37 (3), pp. 305–408.
Moon, J. (2004) ‘Government as a Driver of Corporate Social Responsibility: The UK in Comparative Perspective’, International Centre for Corporate Social Responsibility, 20.
Moon, J., A. Crane and D. Matten (2004) ‘Can Corporations be Citizens?: Corporate citizenship as a metaphor for business participation in society’, Business Ethics Quarterly, 15(3), pp. 429–53.
Moon, J. and R. Sochacki (1996) ‘The Social Responsibility of Business in Job and Enterprise Creation: Motives, Means and Implications’, Australian Quarterly, 68(1), pp. 11–30.
Moon, J. and R. Sochacki (1998) ‘New Governance in Australian Schools: A place for business social responsibility?’, Australian Journal of Public Administration, 55(1), pp. 55–67.
Ostrom, E. and T. K. Ahn (2001) ‘A Social Science Perspective on Social Capital: Social Capital and Collective Action. Gutachten für die Enquete-Kommission ‘Zukunft des Bürgerschaftlichen Engagements’, Bloomington, Indiana University.
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6
An Anatomy of Corporate Social Responsibility: Causal Factors in CSR as a Social Movement and Business Practice
Nigel Roome, Robert-Paul Doove and Marcel Postema
Introduction
An increasing number of businesses are applying the concept of corporate social responsibility (CSR) to the organization of their activities. While the idea that companies should have an explicitly stated approach to CSR is relatively new in continental Europe, examples of responsible business practice can be traced back nearly two centuries in many European countries. These earlier examples often focused on the provision of good working and/or living con- ditions for employees or, as in the case of the cooperative movement, sought to ensure that consumers’ demand for products of reliable quality was met.
In contrast the practices that contribute to contemporary CSR are found in a wider constituency of companies and CSR has gathered support in the form of policy commitments by national governments and the European Commission.
Thus CSR is no longer the realm of isolated companies but has become part of a broader social and business movement that includes companies, policy makers, advocates, knowledge institutes (universities and consulting companies), business associations and sections of the investment community.
In the eyes of many managers the rationale for CSR is complex, the phenom- enon is multifaceted and the managerial and organizational responses seem to run counter to traditional business logic. In fact the modern CSR movement, with its many actors, interests, statements and guidelines, while fostering a climate that supports CSR is also contributing to its growing complexity.
This chapter examines the factors, or drivers, that have given rise to the movement that supports this new style of CSR in Europe and shape the processes of learning and change that constitute the practice of CSR in contemporary business. The perspective we adopt focuses on the interaction
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between business and society. We take the view that CSR is emerging simultaneously as a social and a business phenomenon. It is emerging as an aspect of business practice and in the fabric of ideas and experience of the society in which businesses are embedded. This open-complex systems per- spective is made more complicated by the fact that CSR does not deal simply with business and its interface with the economic system or the political economy. The interface for CSR is between business and many other actors in society who represent an array of economic, social and environmental concerns. Indeed, we contend that the present attention to CSR is symbolic of a broader critique of the role and responsibilities of business in modern society. While business will remain true to its core purpose of generating value for shareholders, that purpose is increasingly conditioned by the need to take account of social and environmental as well as economic concerns and responsibilities. This constitutes a move towards a ‘reformed capitalist model’ that is more in concert with the demands of the present and the chal- lenges of the future than the models of business that have dominated during past century.
Some commentators might suggest that CSR is a management fad or a question of image management. However, we argue that the emergence of CSR is part of a broader process of reform taking place in the light of changes in the nature of business and the way in which business interacts with its many contexts. Against this background the key purpose of this chapter is to analyze the trends and events that have contributed to the emergence of CSR in its present form. These are examined in two stages. In the next section we take a macro view of the CSR movement in Europe and portray its wider adoption as the outcome of numerous causal factors. The analytic framework used to discuss the phenomena that contribute to globalization is provided by the notion of meta-problems. An introduction of this concept is followed by a discussion of the phenomena that are contributing to globalization. The section closes with a discussion of the instabilities in the global business system that we contend provide the basis for the modern CSR movement.
The subsequent section provides a meso-level analysis by considering the factors that combine with one another to foster CSR policies and practices in specific business organizations. These factors derive from the core issues of globalization, which open up and reveal gaps in corporate governance that require a response through CSR. The first set of factors relates to the processes of innovation that contribute to CSR. The second concerns the changing ideas and practices in business organizations that foster the move towards CSR. The third involves the emergence of institutions that shape the context in which businesses increasingly operate with CSR in mind. The final set includes the stimuli that provoke institutional attention or the allocation of time and resources to CSR. These individual and structural, formal and informal elements of institutions and organizations are informed by, and in turn inform, the trends that make up the broader global context. The last
section discusses the main implications of our analysis of the routes and pathways for CSR.