Learning Objectives

Introduction

Much CSR literature seems to assume that CSR communication is inferior to action and decoupled from influence, obligations and impact. CSR action is about ‘doing’ and CSR communication is ‘just talking’, it is said. This chapter challenges such assumptions. It argues that CSR communication matters strategically and importantly for business as well as for society. In CSR communication, CSR issues are raised, debated and challenged, and it is also in this communication that external and internal stakeholders develop their understandings of a company's contribution to society and hereby set a scene for directing future CSR action. CSR communication can be defined as a company's communication to internal and external stakeholders about its efforts to contribute to social, environmental and economic development of society. However, increasingly stakeholders participate and influence the conversation, and the definition of CSR communication accordingly comes to include how these stakeholders contribute to define a company's social and environmental responsibilities to society. In particular social media has given rise to conversations about companies’ CSR communication without the respective companies being part of the conversation. Thus conventional ideas of CSR communication are challenged and the managerial role for engaging in CSR communication is changing.

The chapter builds on the notion that businesses operate in an environment where CSR is not defined once and for all but is rather a produce of ongoing change, dialogue and contestation, i.e. communication. Companies engage in CSR for a variety of reasons but the way they engage in communication about CSR is absolutely central for how they are perceived by others to contribute to society. CSR is generally seen as a desirable feature of a corporate strategy and as such it has become influential for achieving a high score in many business ranking systems (see Chapter 13), and many companies integrate CSR strategically into their brand communications.

The final part of this textbook looks at the underlying issues that corporations manage when addressing corporate social responsibility (CSR). Unlike other textbooks, which often focus mostly on CSR as a concept and its link to different stakeholder groups, we believe that emphasising real-life issues such as labour rights and corruption is critical. Without knowledge about such issue areas, it is hard to understand how CSR looks like in practice and how it is ‘lived’ in corporations.

Chapter 15 outlines the debate around business and human rights. Karin Buhmann and Florian Wettstein look at what human rights mean, both in general and in the particular context of corporations. Their chapter shows why non-state actors need to take human rights concerns seriously and how this debate relates to CSR. Most of all, they revisit a number of regulatory and policy frameworks that businesses need to be familiar with when managing for business and human rights, such as the United Nations Guiding Principles on Human Rights. Putting such a policy framework into action is still a challenge for many companies, as they often lack the capacity and the knowledge. The chapter shows how such challenges can be overcome.

The next chapter (16) by Hans Krause Hansen on corruption looks at one of the most neglected CSR topics. While much has been written about social and environmental problems, few people have made the link between CSR and corruption. Hansen starts by clarifying what corruption is and why it constitutes a problem for corporations and nation states. He then looks into different ways to fight corruption, ranging from state-based efforts (e.g. through extraterritorial law) to voluntary CSR-based initiatives (e.g. the Extractive Industries Transparency Initiative (EITI)). This chapter shows how widespread corruption still is and what companies can do to prevent it.

Chapter 17 by Stefano Ponte, René Toudal Poulsen and Jane Lister focuses on environmental problems. It shows the various challenges that businesses face when addressing the environmental impact of their activities (e.g. the global nature of value and supply chains). Ponte et al. discuss how far firms’ environmental strategies may align with and/or clash with emerging environmental regulations on the national and international level.

Part I focused on how business organisations themselves engage in CSR, including how their approaches have long reflected societal, governmental and stakeholder expectations and institutionalising pressures. But CSR is also regulated by actors and mechanisms outside the company. This is the focus of Part II. The chapters examine more specific forms of regulation shaping contemporary CSR, reflecting CSR's shift from ‘complete to partial organisation’, and its internationalisation which brings new forms of institutionalisation beyond its national configurations. These forms of regulation vary in nature: from NGO threats to corporate reputation and legitimacy; through forms of partnerships that businesses enter with other businesses, NGOs and governments (including for standards and non-financial reporting systems); to incentives and rules devised by governments to encourage and shape CSR.

Andreas Rasche and Sandra Waddock (Chapter 7) introduce CSR standards which are designed to specify particular principles, enable certification, require some form of reporting and evaluate processes of CSR. Rasche and Waddock indicate how CSR standards have proliferated and strengthened, including through interaction with governmental regulation. They consider their legitimacy and wider impact on firms, consumers and the issues the CSR standards address. Finally, Rasche and Waddock weigh up some of the criticisms of CSR standards as a form of business regulation.

In Chapter 8 Christian Herzig and Anna-Lena Kühn present an overview of the development and main forms of non-financial reporting. They detail how companies have shown a great interest in this form of reporting, and the different national and sector approaches that have emerged. Herzig and Kühn investigate the underlying involvement with stakeholders, the significance of the Internet as the medium for reporting, the implications of the limited assurance and wider critiques of non-financial reporting.

Frank G. A. de Bakker and Frank den Hond present what is often a more unwelcome form of regulation than detailed in Chapters 7 and 8, namely NGO activism (Chapter 9). They introduce different forms of NGO activism, its impacts on corporations and how corporations respond. De Bakker and den Hond also reveal how NGOs can adopt less hostile strategies to regulate firms through partnerships, and how other NGOs develop their own business models to advance their social objectives.

Learning Objectives

The Corporation in Society: Shifting Perspectives

Consider the following three facts: The revenue of the largest corporation in the world, Wal-mart Stores ($482 billion in 2014), is worth more than the gross domestic product (GDP) of all but twenty-seven of the world's economies. The world's largest asset management firm, a New York-based company called Black Rock, currently manages $4.5 trillion of assets and thus invests more money than the total monetary reserves of any country in the world (China having the largest reserves with $3.9 trillion in 2015). The Bill and Melinda Gates Foundation, a private philanthropic organisation, spends about $3.9 billion annually on healthcare and development work, about the same amount as is spent by the World Health Organization (see also Rothkopf, 2012). What do these three facts suggest? They show that the relationship between public and private authority has taken an interesting turn in recent years. Globalisation together with an emerging privatisation of public goods/services has given rise to a situation where the state has withdrawn from many areas where it traditionally exercised a regulatory monopoly, such as in many Western countries. Nowadays corporations provide goods such as water, transport, education and healthcare. Private firms even run prisons, provide security and have become important actors in the conduct of war. In short, corporations are increasingly critical to a number of aspects of society, including many which are fundamental to security and welfare. As a result, they have become more powerful actors and often assume a political role, either directly or indirectly. This shift in power has important implications for how we understand and manage firms’ responsibilities towards society.

Due to their increased size and reach, corporations contribute significantly to some of the world's most vital social and environmental problems, such as overfishing of the oceans, water scarcity, violation of human rights, corruption and deforestation.

The significance of corporate social responsibility (CSR) for business, society and governance is now undisputed. It is even discussed at length by its traditional critics, ranging from neo-liberal economists to anti-corporate campaigners and scholars. Yet, it is also a contested concept, not only by its critics, but also by those who claim to work for it. Our aim is to clarify understanding of CSR and the nature of and reasons for the contestation.

This textbook joins a growing number of texts and other resources on CSR. It is designed for advanced undergraduate and postgraduate students, although no prerequisite knowledge is assumed. But, what you are holding in your hands (or viewing on your hard-drive) differs in many ways from other textbooks on CSR and such related concepts as business and society and corporate sustainability. This is for five main reasons: its conceptual ambition; its focus on issues; its critical awareness; its integration of expertise; and its attention to how you learn from it, or pedagogy.

First, this book is unique in bringing together three indispensable conceptual perspectives on CSR: strategy, governance (including regulation) and communication. Like most other CSR textbooks, we address strategic approaches to CSR in our book (Part I). However, we bring new perspectives on these, including critical and developing country viewpoints. We also examine the role of governance in CSR because so much of CSR now pertains to socio-economic governance and the political nature of corporations’ responsibilities. This book helps students to explore how CSR itself is regulated (Part II), and the role that corporations play in new governance arrangements (e.g. multi-stakeholder initiatives (MSIs) or public–private partnerships – Part IV). As much of CSR is about communicating firms’ social and environmental responsibilities, we invite students to think about how communication is formative of CSR actions (Part III). We explore the significance of CSR communication in different contexts, such as crises, transparency and reputation management.

Second, while other CSR texts are structured around stakeholders or management issues, they often give rather selective attention to the issues that CSR practitioners are concerned with.

The third part of the book discusses corporate social responsibility (CSR) communication as a new area, reflecting the emerging CSR literature's responses to the increased demand on companies to be more explicit and transparent about their CSR activities. This selection of chapters introduces key concepts to understand the opportunities for business engagement in CSR communication, while it also unfolds the complexity and approaches to manoeuvre this complexity in the context of social media. CSR communication is most often linked to the way that companies present their CSR activities to external audiences in advertising, marketing campaigns or CSR reports. The basic idea is that the positive association of CSR will lend itself to improve the corporate image. However, in practice many companies have experienced such communication attracting attention from sceptical stakeholders who criticise the company for not doing enough or for doing the wrong things. All chapters in this part point to this ‘double edge’: CSR communication is necessary, yet it has reputational risks. CSR communication must be managed, yet it is often beyond the corporate control to do so. With the rise of social media, many different stakeholders take part in the conversation about companies’ CSR. As such, the corporate messages from managers are only one among many other voices that come to influence the CSR communication and present managers with new challenges.

Mette Morsing (Chapter 11) introduces some of the key approaches to CSR communication. The discussion points out how CSR communication not only includes the strategically planned communication from managers but also the less planned and informal forms of communication. The chapter presents an overview of three CSR communication strategies and provides students with an insight into the main phases of the development of CSR communication. Tim Coombs (Chapter 12) builds on this overview by showing how crisis communication is centrally linked to CSR and reputation. Coombs takes the reader through the central modes of crisis communication exemplified by cases that illustrate the importance for companies in knowing how to respond when crises hit. Finally, Coombs recommends how to engage with CSR crisis communication.

The first part of the book discusses the link between corporate strategy and CSR. This link has been subject to much debate among academics and practitioners. Some believe that CSR should always be well aligned with a firm's strategic direction, which means that responsibility needs to pay off for corporations, and that it has to support firms’ long-term objectives and strategic positioning on the market. Others do not necessarily fully reject the importance of such a strategic alignment, but they emphasise that firms’ engagement in CSR should not be limited to such a strategic understanding. After all, CSR is often needed in precisely those situations where strategic fit is missing.

The chapters in this section show that CSR and strategy can be related in different ways. Business strategy can be used as a justification for CSR (‘You only do CSR because it serves your business.’); it can be seen as part of the rationale for CSR (‘You do CSR and it serves your business, but it is not the only reason to engage in it.’); and it can be seen as one way to conduct CSR (‘You do CSR and you do it in a strategic way.’).

Jeremy Moon, Luisa Murphy and Jean-Pascal Gond (Chapter 2) start us off with a journey back in time to explore how CSR has changed throughout history. This discussion shows that the ‘strategic’ nature of CSR is by no means a given. The chapter frames business–society–government relations as a context for understanding different CSR issues, norms and rationales. If we want to understand how firms have linked strategy and responsible business, we have to appreciate the meaning of CSR in different contexts and at different points in time. Steen Vallentin and Laura Spence build on these remarks in Chapter 3, introducing different arguments that can be made for and against a strategic understanding of CSR. They show how strategic CSR itself went through different phases of development, from early discussions of a strategic view on philanthropy to more recent discussions on creating shared value (CSV). They also debate the limits and inherent contradictions of a strategic view on CSR.