Intrinsic CSR and Competition

Doing well amongst European SMEs

Walter Wehrmeyer, Stéphanie Looser, Mara Del Baldo, Walter Wehrmeyer, Stéphanie Looser, Mara Del Baldo

• Publisher: Palgrave Macmillan
• Year: 2019
• ISBN:
  9783030210373
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

This edited book is at the intersection of the discussion on family-owned business, the CSR agenda and company competition in Europe. The authors contribute to the debates on corporate social responsibility by arguing that formal management systems are not the one-size-fits-all solution they are typically presented to be. Exploring alternative interpretations of the profile environmental management activities have in SMEs, the bookevaluates the way in which cultural and ethical values are embedded in European SMEs in order to drive and orientate CSR successfully without following the mainstream 'systems' approach. It addresses several values of thought within the CSR debate such as intrinsic CSR, the role of virtue ethics and moral theory in corporate culture, environmental sustainability and vision-driven CSR. Focusing on a European perspective, the book heuristically explores an alternative model for the integration of CSR, innovation dynamics and economic success driven by intrinsic values rather than extrinsic post-decision rationalisations.

Part IIntroduction: CSR Beyond Formal System

The definition of Corporate Social responsibility (CSR) seems to be unsettled and some argue that it has been diluted from its original aims as numerous definitions can lead to confusion and misperception. Dahlsrud (2008) analysed 37 definitions of CSR and identified five overarching dimensions:

• the environmental,

• the social,

• the economic,

• the stakeholder and

• the voluntariness dimensions.

In light of this diversity, which led to CSR seen as “a jungle” and to criticism of the concept in general, this section adopts the European Commission’s (2011) definition of CSR as “the responsibility of enterprises for their impacts on society”.

Thus, this introduction’s aim is—despite the term has been used very frequently and across all sorts of domains and areas and applications and sectors—to start with a fresh look of what might be meant by CSR today. This is coercive since the book looks then at a specific difference that seems to be identified having a closer look at CSR as a concept itself:

To start with, as already mentioned, loads of definitions exist, most seem to focus on CSR being a structured approach to discharge an organisation’s social effects. Therefore, this introduction started with the most detailed analyses of CSR known till today. Its focus was not on ranking companies or the 37 expressions of CSR it was just a situation analysis comparable to this book’s approach:

Firstly, by discussing companies and organisations and whether the social aspect is of any interest for them. More generally, this book comes up with facts whether CSR indeed plays a role in companies and to which extent.

As responsibility, as a concept, seems to be, beyond any doubt, the book scrutinises the reasons why. Further it takes the opportunity to have a closer look at the origin of “responsibility”; further, why this part seems to be established and/or how it is justified.

Not to go too deep into trailblazing arguments discussed later, CSR as an enactment of the founder’s ethics, or as an enactment of personal (ethical or religious) beliefs may work as well as CSR as an enactment of cultural values—companies “giving back” to societies or their specific neighbourhoods. (although whenever we talk about “giving back”, the question of what companies have “taken away” in the first place remains as unanswered as the question whether “giving back” is driven by guilt or the perceived value of what has been taken in the first place—likewise: What would Friedman (1970) say about “giving back”…? Or, CSR is just seen as a duty to act, given specific health or safety standards that an organisation needs to follow, be this Health and Safety standards for workers, unionisation, pay and conditions, etc.

This is the point, where the book starts to focus on the dichotomy of CSR regarding intrinsic and extrinsic motivation. As the next section, many company cases, as well as Section 6 keep very close looks at all facets of this potential duality the Introduction Section keeps this part short and simple. Aspects regarding owner-leaders of Small and Medium-Sized Companies, in particular their (often close and strong) ties to their employees, their role as community members, etc.

This has implications regarding their relationship to all the other stakeholder groups as they could be distorted by legal standards or by the “ugly” or even ”bad” part of social capital (i.e., the expectations of the counterpart regarding “service in return”, obligations, etc.). Further, they are influenced by markets, trade bodies, competitors and any fraud that might be combined with such tied relationships.

Thus, the book completely accepts stakeholder theory as an inherent contributor to CSR—stakeholders provide the inputs to that agenda, be this government (legal standards), local residents (neighbourhood influence), the whole range of stakeholders. Interestingly, it is frequently convenient but often misleading to attribute specific social concerns with specific stakeholders, yet this representativeness hides a more multifaceted and multilayered agenda).

In sum the book also doubts the implication companies pursue extrinsic CSR primarily in support of the wider organisational objectives CSR becomes less an overarching design feature but an operational tool in support of the wider economic and strategic success of an organisation. In other words, the intrinsic–extrinsic dichotomy CSR comes from only slightly different understandings of “responsibility”, but lead to very different day-to-day practices.

To research or find a generally accepted proof or definition of intrinsic CSR is on the one hand less challenging if you are an employee of a company that is intrinsically motivated, however follows an implicit approach, which means that the company does not proclaim their daily business set-up (following CSR rules). This is exactly the point where it is sometimes impossible to identify intrinsic CSR—why should CEOs talk about something they do because it’s the right thing to do—that argument does not promote its product, does not gain new customers, does not profile itself as beneficial or special. It simply is one of the things companies do.

However, CSR needs also be looked at in terms of what are its targets, what are its purposes and what it does. In terms of its purpose or scope, we can imagine CSR to operate on three concentric circles:

• Own staff

• Local community

• Society at large

It is also crucial to explore what CSR actually does, indicating the different dimensions of CSR in an organisation:

Firstly, CSR can be a set of Principles that aid decision-making, support strategy implementation, provide an overall long-term (or strategic) compass. Intrinsic CSR is dominant here. Secondly, CSR can be a set of Policies, a formalised agenda

Thirdly, to talk about what CSR does not reveal, which part the company fills by which reason.

• Obviously, CSR needs a clear-cut definition, in beforehand of any discussion about the conceptualisation.

• Thus, this book defines CSR as Principles, Policies and/or Practices of organisations to define, manage and finally discharge their defined social impact. The implications of this are:

• CSR has a huge range of applications and implications, and can differ by scope, purpose, shape and anticipated impact (for society as well as the business)

• The majority of CSR is invisible, unreported, often opaque to the outside owners, making it difficult to research the scale and motivations.

• The role of corporate culture in understanding CSR inside an organisation is central

• Chronologically, CSR starts with the owners’ beliefs, so it seems intrinsic CSR precedes extrinsic CSR in the vast majority of cases

• The interaction between CSR and corporate success can be in these permutations

• Therefore, the interdependence between innovation, strategy, intrinsic dynamics and success needs to be looked at—hence this book.

• Lastly, this book gives voice to the CSR engagement that is not being advertised, not just to correct the picture that most CSR is about a set of prescribed practices by predominantly large companies, but also to develop a more apt understanding of how the role of corporations is within their societies (and from their own perspectives).

References

Dahlsrud, A. (2008). How corporate social responsibility is defined: An analysis of 37 definitions. Corporate Social Responsibility and Env...