Business Leader Strategies that Fulfill Corporate
Social Responsibility
Section 1: Foundation of the Study
Business leaders leverage strategies over decades to improve performance. Griffin
and Molloy (2015) noted that the largest corporations in the United States can grow at a
faster pace than the general economy. The growth coupled with general competition
among firms may benefit the economic sector but may not always benefit society as a
whole. A historic example of the adverse effects of business growth was the global great
recession of 2008. The economic meltdown mainly blamed on corporate greed and
ethical problems affected not only corporations, but communities and the environment,
and started a debate on the need for corporate ethics and responsibility (Griffin &
Molloy, 2015).
The corporate social responsibility (CSR) versus profitability debate leads to a
general question: What strategies do business leaders use to achieve CSR activities that
result in increased profitability? To answer the question, I explored the strategies that
several business leaders employed to achieve CSR activities profitably. The elements of
Section 1 include the background of the problem, problem statement, purpose statement,
nature of the study, and research and interview questions. I review the conceptual
framework, operational definitions, assumptions, limitations, delimitations, and
significance of the study. I then present a review of the professional and academic
literature and the foundation of the study. I conclude with a summary and transition to
Chapter 2.
Background of the Problem
Business leaders historically used CSR models to become socially accountable to
stakeholders and the community in the absence of regulatory oversight or intervention
from external bodies. CSR was once a voluntary moral business obligation that became
an integral part of strategic planning resulting from increased demands from consumers
and governmental regulators (Miller, 2016). According to Boulouta and Pitelas (2014),
successful CSR strategies increase a company’s competitiveness. Agan, Kuzey, Acar, and
Açıkgöz (2016) and Rhou, Singal, and Koh (2016) also concluded that CSR has a
positive influence on the profitability and competitive advantage of responsible firms.
Karim, SangHyun, Carter, and Mo (2015) characterized CSR practices as having a net
positive impact on business. Šontaitė-Petkevičienė (2015) further suggested that business
leaders who failed to engage in CSR compromise organizational profitability. However,
many of the largest companies worldwide that reported CSR activities in 2015 lacked
strategies to achieve CSR promises, resulting in lower corporate profits (Thorne,
Mahoney, Gregory, & Convery, 2015). There is a need for CSR strategies that business
leaders can implement to increase profitability because the lack of strategies creates a
void.
According to Euchner (2016), business leaders constantly explore tools and seek
ways to align corporate initiatives with profitability goals. Leaders may find strategic
business decisions especially challenging when CSR and financial measures point in
opposing directions (Bento, Mertins, & White, 2017). Given the findings of value in
engaging in CSR, leaders need strategies to justify and implement CSR in business. CSR
research and resources are primarily focused on large organizations. The concentration of
available research resources to large organizations versus to small organizations is a
justification for further discussion of small business leader strategies to engage in CSR
(Byron & Thatcher, 2015; Mostafa & Ahsan, 2017). I critically analyzed recent concepts
and strategies that small organization leaders employed to navigate CSR and profitability
challenges. The background of the business problem has been summarized here and the
focus now shifts to the business problem.
Problem Statement
Business leaders who fail to engage in CSR compromise organizational
profitability (Šontaitė-Petkevičienė, 2015). Over 76% of American consumers reported
they would not purchase a product or service from a company without a CSR culture, yet
small businesses in the United States lack strategies to achieve CSR promises, risking
profitability (Thorne et al., 2015). The general business problem was that some leaders
fail to achieve CSR promises risk business profitability. The specific business problem
was that some small business leaders lack strategies to achieve CSR activities that can
result in increased profitability.
Purpose Statement
The purpose of the qualitative multiple case study was to explore the strategies
small business leaders use to achieve CSR activities that can result in increased
profitability. The targeted population consisted of four small business leaders located in
Maryland and Virginia who successfully implemented strategies to achieve CSR
activities that resulted in increased profitability. The findings of the study may contribute
to positive social change by increasing corporate philanthropic donations to communities.
These philanthropic activities could improve the living conditions for citizens through
local community growth and development, increased benefits for the least advantaged,
and increased collaboration between society and industry.
Nature of the Study
I chose the qualitative method for the study. Researchers use the qualitative
method to gain an understanding of underlying motivations and insights into a problem
(Clark, 2017). The qualitative method was appropriate to gain an understanding of
underlying reasons, experiences, and inspirations of participants. The quantitative method
involves testing a hypothesis using statistical methods (Clark, 2017). The quantitative
method was not appropriate for this study as hypothesis testing and analysis of variables’
relationships or differences was not necessary to address the purpose of the study.
Researchers use mixed methods, a combination of both qualitative and quantitative
methods, to explore and examine data of human experiences (Kong, Yaacob, & Ariffin,
2016). The mixed methods approach was not appropriate as I did not test a hypothesis or
analyze variables’ relationships or differences.
I selected a qualitative multiple case study design for the study. Researchers use
the case study design to explore real-life, contemporary, bounded systems over time
through detailed multiple source data collection (Yin, 2018). I selected a multiple case
study design over a single case study to explore strategies that business leaders of
different organizations use to implement successful CSR activities. Researchers use the
phenomenology design to explore a phenomenon in human nature through the meanings
of the lived experiences of a small number of participants (Moustakas, 1994). The
phenomenology design was not appropriate for this study because the intent was not to
understand the lived experiences of the participants. Researchers use the ethnography
design to study people and their behavior within a group’s cultural setting (Edberg et al.,
2015). The ethnography design was not appropriate because I did not explore a group’s
culture.
Research Question
RQ: What strategies do small business leaders use to achieve CSR activities that
result in increased profitability?
Interview Questions
1. What strategies did you use to achieve CSR activities that resulted in
increased profitability?
2. What strategy did you find worked best to achieve CSR activities that
contributed to increased profitability?
3. How did employees contribute to different strategies to achieve CSR activities
that resulted in increased profitability?
4. What strategies were least effective in achieving CSR activities resulting in
increased profitability?
5. What modifications did you apply to any strategy to improve CSR
achievement and increased profitability?
6. What else would you like to discuss that you did not address about achieving
CSR activities that resulted in increased profitability?
Conceptual Framework
I chose the stakeholder theory as the conceptual framework for the proposed
study. Freeman developed the stakeholder theory in 1982 and argued that organizations
can be sustainable and create long-term competitive advantage when leaders align the
interests of all stakeholders with business goals. (Freeman, 2010; Sama-Lang & Zesung,
2016). Freeman (2010) also identified key constructs underlying the stakeholder theory
including management, ethics, and firm performance. Because CSR may contribute
towards a balance among stakeholders’ interests, I chose the stakeholder theory to serve
as an appropriate foundation to understand strategies small business leaders use to
achieve CSR activities that result in profitability.
Operational Definitions
Corporate financial performance (CFP): A subjective measure of a firm’s
management’s ability to generate revenue from the primary business activity (Garcia,
Sousa-Filho, & Boaventura, 2018).
Corporate social performance: The principles and deliberate or unintended
outcomes of interaction between businesses and society (Arnaud & Wasieleski, 2014).
Environmental supplier development: The purposeful development of
manufacturing suppliers to meet green environmental performance targets (Agan et al.,
2016).
Organizational citizenship behavior: Employee discretionary effort beyond what
is required or described in the work function (Garcia et al., 2018).
Socioemotional wealth: A term used to refer to nonfinancial value of a firm such
as family influence and family identity or dynasty (Piotr, 2017).
Assumptions, Limitations, and Delimitations
Assumptions
Assumptions are beliefs accepted as certain or true without question or proof
(Nkwake & Morrow, 2016). The first assumption was that participants in the study would
provide honest personal and knowledgeable answers to the research questions. The
second assumption was that data gathered would be analyzed and reported without any
bias. The third assumption was that the measurement instruments such as ROA would be
adequate and represent a company’s profitability. The fourth assumption was that the
population would be a representative sample of typical small and medium-sized
enterprises (SMEs) in the United States, and study results can translate to other dissimilar
firms. I triangulated data to mitigate any risk from assumptions made.
Limitations
Limitations are instances of restrictions or boundaries, a cap or restricting ceiling
(Byron & Thatcher, 2015). The first limitation was that the study findings may not be
generalized to include CSR delivery strategies useful to all organizations because some
data collected may be unique to SMEs. Overly limiting the breadth of concepts in a study
may skew the results (Byron & Thatcher, 2015). I included data common to all company
sizes when practical to mitigate the limitation. The second limitation was that the small
targeted population and number of participants for the study may limit transferability. I
elaborated on and thoroughly analyzed the sample and context of the study to allow other
researchers to be well informed of the content. Future researchers could address the
weaknesses identified in this section by including larger organizations and an increased
number of participants.
Delimitations
Delimitations are a description of the bounds of a subject, a declaration of what is
in or out of scope (Berdychevsky & Gibson, 2015). The first delimitation was that I
conducted the study with a population of leaders from four organizations from Maryland
and Virginia. The second delimitation was the population included a diverse set of
companies that had no more than 500 employees to represent SMEs. Organizations
considered as large, having over 500 employees, were not included in the study. The
results of the study could also be of interest to the entire business community and future
researchers could expand the scope of the research by focusing on different organizations
and populations.
Significance of the Study
The study could be of value to business because the findings from the study could
contribute to corporate strategies to achieve CSR activities that result in increased
profitability. CSR activities have the potential to generate a positive impact on corporate
financial performance in the long-term (Lankoski, Smith, & Van Wassenhove, 2016).
Some other benefits of the study could be contributions to business practice and effecting
positive social change.
Contribution to Business Practice
The study could be a contribution to the understanding and effective business
practices of responsible leaders and also a set of strategic guides and responsible
standards that improve business practice. Wang and Sarkis (2017) noted that multiple
company leaders consider social and environmental factors when formulating business
standards and strategy, a key approach to increase and sustain profitability. Responsible
business practice could translate into other business benefits that include increased
stakeholder trust, an enhanced corporate reputation, investor confidence, and a more
respected brand (Del Brío & Lizarzaburu, 2017; Shah, 2017; Šontaitė-Petkevičienė, 2015;
Singh, 2017).
Implications for Social Change
The implications for positive social change included increased corporate
philanthropic donations. According to Glavas and Mish (2015), business and community
collaboration could result in improved community development and business practices
that enhance efforts to preserve local environments. Philanthropic initiatives could
improve the living conditions of local societies through increased community growth and
development, increased benefits for the needy and less advantaged, and increased
collaboration between local societies and industry. Specific examples of benefits to local
communities could be the creation of more jobs, larger welfare budgets, and new
businesses.
A Review of the Professional and Academic Literature The literature
review was a critical analysis of current and previous research pertaining to strategies
small business leaders use to deliver CSR profitably. According to Tencati (2007), CSR
in small businesses is increasingly impacting society, but is often considered a
prerogative of large organizations, and most research addresses large firms rather SMEs. I
used the following research question as a guide to provide a foundation for the topic of
profitable CSR delivery:
RQ: What strategies do small business leaders use to achieve CSR activities that
result in increased profitability?
I expanded on the research question and organized the literature into four topical sections,
(a) the conceptual framework, (b) themes, (c) CSR, and (d) CSR and corporate financial
performance.
I compiled the information in the review from peer-reviewed journals, books,
government agency databases, and from Walden DBA dissertations published after 2014.
I retrieved articles from the Elton B. Stephens Co (EBSCO), Emerald, ERIC, ProQuest,
and Sage Premier databases. I further confined the review to themes related directly to the
stakeholder theory, which was my conceptual framework, ideas presented in the problem
and purpose statements, and the research question of the doctoral study.
Search terms and themes used for database searches included: corporate social
responsibility, CSR evaluation methods, CSR strategies, primary and secondary
stakeholders, ethics, qualitative research, CSR and financial results, stakeholder’s
theory, and corporate strategy. To comply with the DBA doctoral study rubric
requirements, I ensured that 85% of the total sources of my completed study had a
publication date less than 5 years from the expected year of CAO approval. I also
exceeded the minimum peer-reviewed source requirement of 60 sources. Table 1 is a
summary of the types of sources used in the literature review.
Table 1
Literature Review Source Content
Reference type Total < 5 Years > 5 Years %Total < 5 Year
Peer-reviewed journals 153 131 22 86%
Dissertations 3 3 0 2%
Books 4 3 1 2%
Non-peer-reviewed journals 2 2 0 1%
Total 162 139 23 86%
Conceptual Framework
The purpose of my case study was to explore strategies small business leaders in
Maryland and Virginia used to achieve CSR activities that result in increased
profitability. I chose the stakeholder theory as the conceptual framework for my study
because similar key constructs underlie both the notion of CSR and the stakeholder
theory. The stakeholder theory is a notable normative theory among many that pertain to
business ethics and CSR (Sonenshein, 2016). Freeman (2010) introduced the stakeholder
theory in 1982 and argued that all stakeholders provide critical support to businesses and
share in risks, so they should also share in benefits. Looking through a relativistic and
conditionality lens, Freeman argued that business profits come at the expense of other
parties; that corporations only exist because of society, so owe all society some form of
restitution. Freeman also posited that value creation is an entitlement, and organizations
must consider all stakeholders that interact with the firm when creating value.
Stakeholder theorists also focus activity in corporate governance on all identifiable
stakeholders of the organization (Agudo-Valiente, Garces-Ayerbe, & Salvador-Figueras,
2015; Persic, Markic, & Persic, 2016;).
There are many classifications of stakeholders. Freeman (2010) identified
stakeholders of an organization beyond just shareholders and classified them according to
the effect the stakeholders had on the organization. Freeman’s classification of
stakeholders included employees, suppliers, customers, and the community (Persic et al.,
2016). Stakeholders were further classified as direct or indirect, primary or secondary,
and internal or external (Arnaud & Wasieleski, 2014; Vracheva & Mason, 2015).
Employees, suppliers, customers, and shareholders were considered direct stakeholders
because of their primary interactions with the organization. The press, special interest
groups, the government, and the community were considered as indirect stakeholders
because such entities may only have secondary transactions with the firm (Chabrak,
2015; Freeman, 2010; Vracheva & Mason, 2015). Direct stakeholders were considered
critical to business operations and so more powerful than indirect stakeholders who only
have secondary influence on the firm`s strategy and management’s decision making. The
categorization of stakeholders helped business leaders strategize on stakeholder
engagement (Du, Swaen, Lindgreen, & Sen, 2013). With many different categories and
groups come an interconnected and sometimes conflicting set of interests, goals, and
demands.
Leaders need to carefully manage groups to avoid conflict. Interconnects between
groups can make actions taken by an organization towards one stakeholder within a
network adversely affect another (Joslin & Müller, 2016). The concept of shared value
and equity is a main premise of CSR that has been captioned over its historic evolution
under many names, including corporate citizenship and strategic philanthropy (Barsky &
Dvorak, 2015; Joslin & Müller, 2016). Major management philosophies of the
stakeholder theory regard maximizing the interests of all stakeholders (Van Der Linden &
Freeman, 2017) as well as balancing the conflicting demands of an organization’s various
stakeholders by not having the interests of one group overshadow another (Cho, Laine,
Roberts, & Rodrigue, 2015; Walliser, De Visser, & Shaw, 2016). For an organization to
conform to the stakeholder’s theory, all stakeholders are to receive the same attention
from management, but according to Gregory, Tharyan, and Whittaker (2014),
maximizing value for every stakeholder could be difficult, and a careful balance is
needed. With many conflicting groups and interests, value distribution can be a major
task for leaders to carefully navigate and implement for collective benefit.
The value, importance, worth, or usefulness of a thing or service may mean
something different to different parties. Participants in an open market determine what is
of value, what will be offered for such value, and what terms would be expected from an
organization (Gregory et al., 2014). The interests of stakeholders are usually measured in
perceived value received. To explain the concept, Lankoski et al. (2016) referenced the
prospect theory showing that there are several alternative reference states examined over
time with when and how stakeholders judge value. There is a broad range of reference
state possibilities that may also be dependent on stakeholders’ or leaders’ perceptions.
Justice, fair treatment of stakeholders, and ethics, all concepts well engrained in
the stakeholder theory, have been incorporated into the concept of CSR over time.
Scholars and business practitioners have studied inclusion and fairness in CSR since the
1950s; in the United States, most Fortune 500 companies have engaged in recurring CSR
activities (Sonenshein, 2016; Sony, Ferguson, & Beise-Zee, 2015). For instance, a sense
of inclusion in a firm’s affairs is also a direct result of fairness (Faldetta, 2016; Ko & Hur,
2014). Hemmati, Feiz, Jalilvand, and Kholghi (2016) and Marques-Mendes and
Santos (2016) acknowledged that corporate leaders, especially those who subscribe to
CSR, are encouraged to manage affairs fairly to enhance competitive advantage and also
achieve superior long-term CFP. Some organizations have figured out how to both be
responsible and to increase profitability with growing CSR popularity.
Critics of the stakeholder approach could argue that the effects of stakeholder
equity will add cost to organizations. Advocates of the stakeholder’s approach have
argued, however, that treating all stakeholders fairly can boost a firm’s performance and
sustainability (Ali Koseoglu, Ross, & Okumus, 2016). In doing so, fairness is
demonstrated as a concept of organizational justice that is characterized as distributive,
procedural, and interactional justice (Faldetta, 2016). Stakeholders perceive distributive
justice when the outcome of organizational justice is seen to be fair to each stakeholder.
Fairness of procedures regardless of outcome constitutes procedural justice, and treatment
among stakeholders is referred to as interactional justice. CSR actions focusing on
employee welfare also enhance perceived respect in addition to fair treatment (Farooq,
Farooq, & Rupp, 2017). Bridoux and Stoelhorst (2016) also noted that stakeholders who
perceive a sense of justice and fairness in interacting with a firm may accept receiving
less value, an advantage for the firm. Furthermore, some stakeholders will forego some of
their interests if there is a perception of future value for all stakeholders. Management is
encouraged to approach stakeholders consistently in order to send a unifying message
(Fish & Wood, 2017). Fairness and respect in a business setting may foster an
environment that helps leaders approach goals of higher performance.
There can be drawbacks or counter arguments to distributing fair treatment to all
stakeholders evenly. For instance, stakeholders who expect to receive value proportional
to their bargaining power will feel shortchanged if all parties are treated equally (Bridoux
& Stoelhorst, 2016). Stakeholders who feel cheated will not be concerned with
distributive justice. Freidman’s shareholder theory is another contrasting view of the fair
distribution of value. The Freidman doctrine emphasized priority on shareholder interests
and contrasted with the stakeholder approach (Friedman, 1970). According to Mullins
and Schoar (2016), the shareholder view is regarded as the classical view on CSR.
Friedman’s doctrine also focused on corporate leaders’ dealings in the business
environment (Qiu, Shaukat, & Tharyan, 2016). Mullins and Schoar (2016) agreed with a
critical argument by Friedman that a company's only social responsibility is to increase
profits for shareholders without breaching socially acceptable norms or engaging in
deception or fraud. Huang and Watson (2015) concurred with Friedman that corporate
executives are considered employees of the business owner and should choose to engage
in philanthropic activities at their own expense as free individuals. The common theme in
the contrasting theories is the stakeholder.
The Friedman doctrine, which is also referred to as the shareholders theory,
indicated that the state is responsible for social issues. The theory also states that
diverting resources towards any other activity including CSR would be a misuse of
resources that could be unprofitable for the firm (Mullins & Schoar, 2016; Qiu et al.,
2016). Freeman had a different argument from that introduced by Friedman. Freeman
stating that not only did all stakeholder’s interests need to be addressed, but that taking
care of every stakeholder was actually more beneficial to the organization (Adams, Font,
& Stanford, 2017). Freeman also noted that the stakeholder approach does not mean that
the organizations ignore pursuing business profits and wealth. Rather businesses should
strike a balance between business profit and stakeholder interests (Chan, Watson, &
Woodliff, 2014). According to Chan et al. (2014) and Kalargyrou and Costen (2017),
management can help promote sustainability and the company’s survival as well as create
value for stakeholders by adopting the stakeholder’s theory. The notion was that both
goals are not exclusive and can be achieved concurrently.
One main challenge to businesses is how to align various goals. Researchers
argued that organizations can be sustainable and create long-term competitive advantage
when company leaders align business goals with stakeholders’ interests (Freeman, 2010;
Głodziński & Marciniak, 2016; Sama-Lang & Zesung, 2016). Hildebrand, DeMotta, Sen,
and Valenzuela (2017) further warned that leaders of for-profit companies depend on
their communities to succeed and thus could face demise for failing to engage with the
entire community as companies have influence on the lives of stakeholders. Hildebrand et
al. (2017) agreed that communities in which businesses operate are integral parts of the
businesses. The interdependence of communities and businesses means separating the
interests of businesses from those of employees, regulators, customers, and other
stakeholders will be difficult.
There are several overlaps and similarities between the stakeholder theory and
CSR approaches to business. Hildebrand et al. (2017) noted that business and
organizational engagement in communities is seen as an obligation to society in both
doctrines and included stakeholder engagement and CSR obligations as necessary for an
organization’s success. The stakeholder theory is well defined and guided by a clear set
of principles (Petro & Gardiner, 2015), while CSR on the other hand may be a broad
concept with no clear embracing definition (Hildebrand et al., 2017). There may be
several reasons for the lack of consensus on the definition of CSR, but over its history,
scholars have attempted to approach CSR concepts by focusing on the goals and purpose
of CSR and how it affects society (Diemont, Moore, & Soppe, 2016). For instance,
Diemont et al. (2016) suggested that business leaders focus on the ultimate result of
varying actions that produce a responsible result rather than focusing on a strict narrow
definition of CSR. Further research may be needed to better define the concept of CSR.
Themes and Phenomena
Literature pertaining to CSR was the foundation of the study, so I provided
supporting literature for the literature review from previous studies that included
corporate ethics, responsibility, and accountability to society. The themes researched and
presented were (a) CSR standards, (b) business financial impact, (c) delivery strategies,
(d) ethical impact, and (e) benefits to society.
History of corporate social responsibility. CSR has a long history and has
evolved over time. Murkherjee and Ghosh (2015) traced the evolution of CSR over 80
years and noted that from initial popularity in the early 1950s, CSR practice and research
have transformed into many forms of general business practice. The definition and
quantifying of CSR have also been challenging exercises over time. CSR, is a broad term
that can cover social activities ranging from donating money to nonprofit groups to
implementing environmentally-friendly workplace policies and is used to describe
organizational efforts to improve society in some manner (Kim, Lee, & Fairhurst, 2017;
Hildebrand et al., 2017). Many have attempted to define the concept of CSR over time,
and others simply focused on some aspects of corporate responsibility.
Definitions of CSR cover a broad range of topics. The initial focus of CSR was on
a public expectation that business leaders had a responsibility to do good deeds that
benefit the communities in which the corporations operate (Dabic, Colovic, Lamotte,
Painter-Morland, & Brozovic, 2016). Subsequently by applying the stakeholder’s theory
as well as environmental and social issues to organizational strategy, some leaders made
positive contributions to global sustainability (Hörisch, Freeman, & Schaltegger, 2014;
Sama-Lang & Zesung, 2016). Ultimately, business is about stakeholder value creation,
and leaders needed to ensure the survival of their organizations while still creating value
for stakeholders (Chan et al., 2014; Hardy & Pearson, 2017; Hörisch et al., 2014;
Lankoski et al., 2016). Leaders needed to carefully apply the stakeholder approach
considering the varied needs and associations of third parties with firms.
The actual direct relationships between firms and stakeholders needed to be
analyzed. There was a tendency for firms and their stakeholders to focus on transactional
relationships and social welfare issues, although there was still debate on the existence of
created joint value (Bridoux & Stoelhorst, (2016). Paillé, Mejía-Morelos, Marché-Paillé,
Chen and Chen (2016) also posited that company leaders ought to be responsible for their
actions and need to have a genuine concern for the health, engagement, and safety of both
employees and local communities. However, many organizational leaders voluntarily
assumed social and political responsibilities beyond legal requirements (Kim, Park, &
Wen, 2015). Santhosh and Baral (2015) advocated for the voluntary approach to business
by arguing that enhancing positive attitudes among employees and promoting CSR are
necessary for the success of an organization. Organizational citizenship behavior, job
engagement, and other nonfinancial measures were seen to bring positive attitudes and
positive corporate results (Santhosh & Baral, 2015). Other sustainability approaches
beyond profit such as environmental and social benefits consequently contributed to the
well-being of society (Becchetti, Solferino, & Tessitorey, 2016; Santhosh & Baral, 2015).
The link between responsible corporate behavior and increased profitability begun to
manifest in the late 1950s (Santhosh & Baral, 2015). The link between doing good and
making money seemed in its infancy by the end of the 50s and may have been better
defined in latter decades.
Changes in society may also influence attitudes towards CSR. In the 1960s, key
social changes affected how people characterized CSR. New technology, more advanced
business models, and stakeholder pressure for CSR compliance helped shape business
leaders’ strategies (Griffin, Bryant, & Koerber, 2015). Business leaders became more
innovative in order to remain competitive in the market. Furthermore, firms also took
advantage of their CSR commitment while achieving corporate financial goals
(Bhattacharya, 2016). The new perception that a company could have both responsible
and profitable goals created a need for more strategies for leading responsibly.
Business leaders had long standing strategies and methods that had worked over
time that could not be abandoned completely. Leaders started integrating traditional
management functions and corporate culture such as the triple bottom line and the
balanced scorecard (BSC) into CSR during the 1970s (Bento et al., 2017). Because
measurement promotes action, CSR measures in the BSC and other measurement tools
were promising steps towards promoting CSR. BSC became the corporation’s tool of
choice for evaluating managers’ performance and for motivation in pursuit of CSR goals
(Bento et al., 2017). Despite BSC being an adequate tool for measuring performance,
further research into cost-benefit analyses of the BSC is needed to understand the impacts
of management skills, politics, culture, and public discourse (Lueg & Vu, 2015). Because
business leaders usually deliver on CSR promises arbitrarily, Lueg and Vu (2015) noted
that clear communication among leaders was also needed to help develop better CSR
strategies. Business leaders and stakeholders were responsible for determining how much
and to what extent CSR dialogue should take place.
Business and social interest groups became even more responsive to stakeholders’
involvement with the advent of social media in the 1980s. Issues such as climate change,
pollution, globalization, energy, and ethics were introduced into the debate (Becchetti et
al., 2016). For example, ethics in CSR have profound implications for value generation;
business leaders need processes that align with society's standards and norms to be able to
deliver value (Horng, Hsu, & Tsai, 2017; Sonenshein, 2016). Horng et al. (2017) cited
studies on media coverage of CFP that showed a correlation between such coverage and
corporations’ financial performance. Other studies showed that the number of news
articles about organizational social activities were positively correlated with financial
performance, showing that “doing good” translates to “doing well” (Becchetti et al.,
2016). Public media raised awareness and further interest in how company leaders
created stakeholder value responsibly.
The quest for legitimacy can also not be discounted as the reason for the spread of
the CSR phenomenon. Institutional pressures explained by institutional theory could
explain the actions of some corporate leaders because institutional pressures can
significantly influence product-level CSR (Cruz, Boehe, & Ogasavara, 2015). Agan et al.
(2016) suggested that business leaders often imitate or benchmark other leaders in their
respective fields and succumb to peer pressures while also jostling for market share.
Battling for market share coupled with public awareness helped advance CSR into the
future according to Cruz et al. (2015). Sometimes surrendering to CSR is also a result of
community expectations and pressure.
There were further changes to CSR in the 1990s. The visibility of CSR ushered in
activists, civil society, and government regulations that played pivotal roles in shaping the
CSR trend (Carroll, 2015). For instance, Japanese communities demanded that
corporations become more responsible after social expenditures were cut during budget
shortfalls (Eweje & Sakaki, 2015). The idea of CSR had become almost universally
accepted by the 2000s; subsequently, CSR became a very important strategic component
in corporate strategy and CSR strategy literature (Carroll, 2015; Moura‐Leite & Padgett,
2011). The acceptance of CSR by most citizens meant that not participating in
responsible business could be detrimental to a corporation.
Though there is a general consensus that CSR is generally good for business,
scholars and practitioners may still have different approaches to CSR. Differing
definitions and interpretations of CSR may make strategic planning challenging (Hörisch
et al., 2014). Taghian, D'Souza, and Polonsky (2015) stated that companies need to
understand attitudes towards CSR in order to embrace and integrate CSR into their
strategies. Currently, as a result of regulations and public scrutiny, business practitioners
who see value in CSR and wish to effectively deliver on CSR promises also have the
challenge of employing models, standards, and evaluation methods to measure and
evaluate CSR (Hörisch et al., 2014). Ocasio and Radoynovska (2016) encouraged
organizations to concentrate on business models that measure how stakeholders view the
organization. The many angles and lenses through which CSR is seen warrants a carefully
measured approach by leaders to help execute CSR properly.
CSR concepts and standards. Many company leaders are eager to show their
organizations’ commitment to CSR because there is apparent value in doing so.
The perception of good stewardship may positively influence the public
perception and the reputation of a company (Del Brío, & Lizarzaburu, 2017; Kim,
Song, Lee, & Lee, 2017). There is arguably inherent value to organizations that
successfully claim and communicate CSR delivery (Carroll, 2015; Chabrak,
2015). Companies that are seen to be responsible may also be rewarded with an
increased market share and improved stakeholder relations (Lars, 2017). With an
increase in CSR awareness and public demand, an increasing number of
corporations are developing CSR initiatives, but lack consistent accepted methods
of measuring the contribution of CSR to corporate sustainability (Venturelli,
Caputo, Leopizzi, Mastroleo, & Mio, 2017). Persic, et al. (2016) argued though
that the perception of acting responsibly even in the absence of responsibility
measuring tools can still give companies some benefit. Company leaders can gain
the benefits of CSR by simply appearing responsible.
Organizational leaders can make CSR promises, substantiate CSR claims, and
have a public perception that CSR promises are being kept. Not supporting claims
however in a credible manner creates a risk of public skepticism (Chan & Hsu, 2016).
Corporate leaders can choose from a range of global management standards varying in
scope and nature to enhance the credibility of CSR delivery claims (Cheng, Ioannou, &
Serafeim, 2014). Leaders can use universally recognized standards to demonstrated CSR
commitment and aspirations and show a structured approach towards CSR delivery
(Cheng et al., 2014). According to Chan and Hsu (2016), Adopting international CSR
standards is one way to promote support and CSR credibility in a society. Public trust of
an institution can be key to the institution’s survival in a community. Leaders should
strive to maintain community trust or risk their business’ survival.
The standards that guide CSR provide business leaders with credibility but also
tools and guides to effectively address social responsibilities that are relevant to their
mission and vision. CSR rating agencies collaborated with governments and other
stakeholders to develop trustworthy international guidelines and standards in an attempt
to evaluate the value of utility provided to both leaders and stakeholders (Elbasha &
Avetisyan, 2017). These standards may also include high-level overviews of key legal
risk areas and mitigation strategies that leaders need to achieve overall anticipated
business success (Fabricius & Büttgen, 2015; Stimson, Todesco, & Maginley, 2015). One
such relevant global CSR standard based on quality management frameworks is (ISO)
26000 by the International Organization for Standardization (IOS).
Regulators coined international frameworks to assist and encourage organizations
to contribute to sustainable development. Framers also designed ISO 26000 to go beyond
legal compliance and duty (Lars, 2017). The ISO 2600 framework is intended as a
supplement for social responsibility instruments, not a replacement (Lars, 2017).
Standardization is also not completely void of challenges. Sama-Lang and Zesung (2016)
noted that the many competing stakeholder’s interests that companies need to address
raise challenges to standardize or define CSR in the corporate arena. Different groups
relate to corporations with varying needs, demands, and expectation (Goel, Sanghvi, &
Dahiya, 2013; Sama-Lang & Zesung, 2016). Agreed upon measures to quantify the social
or environmental return on investments on CSR are in line with corporate ethos.
To avoid confusion, standards need to be uniform. In an attempt to set universal
standards to define CSR performance, the ISO creators encountered the same diverse
interest groups and so lacked a homogenous base to choose from; ISO creators
subsequently considered the interests of a small subset of stakeholders (Balzarova &
Castka, 2016). Despite varying standards, organizations can mitigate consistency issues
by employing multiple standards to attempt to gain legitimacy (Goel et al., 2013).
Different needs may exist within subgroups. For instance, employees of a company may
have varying medical, dietary, religious, or even entertainment needs that need to be
addressed differently. Balzarova and Castka (2016) and Goel et al., (2013) do agree that
standards are an attempt to provide some semblance of order and rules. Clear rules are
good for business and are more sustainable.
Transparency is another important CSR requirement. Bellantuono, Pontrandolfo,
and Scozzi (2016) suggested that a way to create transparency through sustainability
reporting is to invite both skeptical and supportive stakeholders into the strategic CSR
formulation process through dialogue. Engaging with multiple stakeholders and including
them into corporate affairs such as standards formulation and assessing projects during
the selection phase may lend further credibility to organizations (Balzarova & Castka,
2016; Bellantuono et al., 2016; Costantino, Di Gravio, & Nonino, 2015). Company
leaders even take stakeholder engagement a step further and seamlessly integrate social
and economic performance with standardized accounting reporting (Elkington & Zeitz,
2014; Nath & Ramanathan, 2016). Corporate books and reporting are excellent sources to
judge corporate responsibility.
The net positive model is another measure that takes a holistic lens to CSR. Both
positive and negative contributions are considered when measuring the impacts of CSR
initiatives to society (Elkington & Zeitz, 2014). Elkington and Zeitz (2014) pointed out
that measurements are made in multiple dimensions. For instance, a company that
produces a clean carbon footprint will also be judged on the pollution intensive process
imported to fuel its fleet. CSR is also no longer simply judged by how much money
business’ leaders give away, but also by how leaders earn (Gregory et al., 2014). The link
between the financial performance of firms and the social impact are closely related to the
premise of CSR (Elkington & Zeitz, 2014). The many facets that are used to measure
CSR makes it difficult to forge or hide actual responsibility.
CSR and financial performance. Business leaders need to strategize with the
main mandate of business in mind. Arguments outside the concept of stakeholder theory
stipulate that the legal mandate of business leaders is to relentlessly create value for
shareholders regardless of the harm caused to others in the process (Clifton & Friedman,
2016; Friedman, 1970). The doctrine of maximizing shareholder value has also been
largely viewed as the definitive tool for measuring the performance of executives (Clifton
& Friedman, 2016). These popular mantras can be hurdles in the paths of advocates for
CSR. Further complications are introduced into the effort to justify CSR initiatives
because researchers have failed to establish consistent results in attempts to examine the
contribution of CSR to a firm’s financial performance (Elkington & Zeitz, 2014; Gregory
et al., 2014). Attempts at developing clear evidence of the benefits of CSR to a firm’s
competitive advantage have sometimes also been inconsistent (Skilton & Purdy, 2017).
Leaders need to carefully balance all aspects of business expectations even when there is
no definitive evidence of one approach over another.
The many approaches to business practice do not have to be mutually exclusive.
Scholars have made the argument that corporations that score high on CSR metrics
enhance CFP by attracting resources through good will and thus also build competitive
advantage (Gregory et al., 2014). Barsky and Dvorak (2015) suggested that CSR can
actually be cost efficient to companies if implemented with well-formed strategies. Hee
Sub, Ji Hye, and Kyung Suh (2015) also confirmed that CSR practices affect the
profitability of companies whose leaders do not correctly implement CSR. Clifton and
Friedman (2016) argued that maximizing corporate profits and CSR are not incompatible
goals and also suggested that management performance not be measures of shareholder
value. Mao, Pearce, and Wasson (2015) provided a similar economic rational to that of
Clifton and Friedman (2016) concluding that hybrid firms that aimed at producing both
private and philanthropic good can have higher profit margins than similar firms that are
based solely on value creation. These higher margins could arise from complementary
economies of scope because of shared inputs (Mao et al., 2015). Business leaders should
aggressively pursue all avenues of business that may benefit the organization.
Some researchers have reached a different conclusion from the advantages of a
dual mission firm. A minority have concluded that there is either no significant
relationship (Aras, Aybars, & Kutlu, 2010), or that a negative relationship between CSR
and CFP actually exists (Pecorino, 2016). Duran and Bajo (2014) predicted the financial
impact of CSR based on a sample of 336 companies from 24 countries included in the
Dow Jones and FTSE4Good Emerging Indexes. FTSE4Good applies to the FTSE
Emerging Indexes and covers over 20 emerging economies. The authors found that the
CSR strategy among large multinational corporations is determined primarily by the
degree of institutional development of the organization, the political makeup of the host
country, or the industrial sector in which the corporations operate (Duran & Bajo, 2014).
Financial and nonfinancial aspects of business contribute to different uncertainties and
ambiguities (Ajagunna, Pinnock, & Amode, 2017; Laine, Korhonen, & Martinsuo, 2016).
In light of unclear consensus on CSR CFP relations, further research is warranted in order
to give corporate leaders adequate guides for developing strategy (Lueg & Vu, 2015).
These researchers make the argument that the many variables associated with CSR CFP
relations make absolutely conclusive predictions of outcomes unwise.
CSR from a leader’s perspective. Company cultures can be influenced from the
top of an organization. CSR delivery can be greatly influenced by the leaders an
organization has (Zwikael & Smyrk, 2015). Corporate leaders are responsible for
strategizing and setting goals for their companies, so can encourage, sustain or impede
CSR delivery (Christensen, Mackey, & Whetten, 2014; Soltani, Syed, Liao, & Iqbal,
2015; Zwikael & Smyrk, 2015). A leader’s personal affiliations, educational attainment,
or even religious beliefs can mold the path that he or she leads a company on. Soltani et
al. (2015) describe many incentives that can also influence the CSR decisions of leaders,
these could include both financial and nonfinancial motivations. The ultimate CSR path
of a company may be influenced more from within than from external pressures
according to Zwikael and Smyrk (2015). Because leaders have a large influence on the
direction of a company’s CSR, it is prudent to focus CSR strategies on leader actions.
The traditional main purpose of business leaders is to create value for stakeholders
whether there is deliver on CSR or not. The value creation mandate may be a heavy
influence on the CSR decisions leaders make (Kopmann, Kock, Killen, &
Gemünden, 2015). CSR actions that improve a company’s economic standing will be
more likely implemented over others. Attig and Cleary (2015) and Bhattacharya (2016)
argued that CSR delivery that is seen as differentiating the company and thus giving a
competitive advantage for instance will be an attractive proposition for leaders.
Hildebrand et al. (2017) also concluded that even when actual value was similar, public
reactions to CSR differ depending on the type of benefit. Reactions from the immediate
community can also be a strong influence on leader’s CSR delivery, especially in the
absence of regulation. An executive will have an easier path to advocating for a
responsible company culture if there is community support (Soltani et al., 2015).
Decisions to be responsible stewards are easier for leaders when all stakeholders agree.
Leadership style can also influence CSR delivery. Transactional leaders for
instance may not be open to CSR initiatives that may extend over long periods. These
leaders could opt for short-term relationships compared to a transformational leader who
may opt for longer more sustainable plans (McCleskey, 2014). Attig and Cleary (2015)
also show that superior management quality practices can be a better explanation of CSR
dimensions related directly to a firm’s primary stakeholders. In 2012, over 3,500
companies issued more than 8000 CSR reports as part of a global reporting initiative, and
the number has increased over time (Olsen, 2017). Although there was an increase in
awareness and reporting, many organizational leaders did not have a strategic or
commonly shared approach to CSR CFP delivery. Leaders instead practiced an ad-hog
strategy that evolved over time with no concerted organized planning (Olsen, 2017). In
spite of the many leadership styles and organizational structures, Balabanov, Balabanova,
and Dudin (2015) referenced evidence that CSR is set to be a permanent fixture in
modern culture. IF CSR is the future, leaders need effective strategies to guide consistent
and reliable strategic planning.
CSR CFP delivery strategies. Executives oversee a variety of programs and
social causes that may not directly align with or contribute to business goals, so
delivering on CSR initiatives to stakeholders and the general public may be more difficult
than anticipated. Voegtlin (2015) advocated for collective problem solving and shared
responsibility instead of isolation of stakeholders. The challenge of reconciling,
quantifying, and then gathering support for various CSR programs could be a daunting set
of tasks according to Jones, Hillier, and Comfort (2017). Although challenges exist,
meticulous initial planning is vital to developing a successful CSR strategy for companies
(Gregory et al., 2014). Leaders need to carefully plan and strategize to meet or exceed
CSR commitments made to society (Gregory et al., 2014). The reality of CSR under a
shared value framework may be manifest differently for a majority of businesses. The
CSR delivery effort would most likely be a combination of various scattered strategies
that need to be coalesced into a coherent strategy.
Next to challenges to aligning CSR with varying business goals, leaders also face
challenges of aligning programs that reflect a company’s business values with social and
environmental challenges. According to Bhattacharya (2016), business and social values
can coexist. Companies can actively promote business value and also profit through such
initiatives. The two are themes not necessarily incompatible (Bhattacharya, 2016; Clifton
& Friedman, 2016). CSR can also be a source of competitive advantage through
differentiation. Companies that focus on CSR have CSR initiatives close to the core
businesses and align CSR with company values and principles (Mao et al., 2015). The
CSR business alignment can leverage the company’s core competencies and increase
profitability, meaning CSR and CFP can actually promote each other (Bhattacharya,
2016; Krause, 2015; Mao et al., 2015; Rhou et al., 2016; Taghian et al., 2015). The
complimentary effect of both CSR and CFP shows that companies can be profitable while
being responsible.
A CSR strategy is not worth much if not sustainable. In the process of attempting
to align CSR with business goals and values, and also deliver on CSR promises
efficiently, strategies should foremost be acceptable to stakeholders in order to be
sustainable (Taghian et al., 2015). Third party reporting and industry standards can be
employed to help increase CSR acceptability and sustainability. The international
standard ISO 26000 for instance has key principles advocating the roots of sustainable
socially responsible behavior (Lars, 2017). The ISO 26000 standard contains several
delivery suggestions to enhance CSR sustainability. ISO 26000 contains a set of tutorials
on concepts and terms of CSR to encourage organizations to go beyond legal compliance,
but notably has a listing of what ISO 26000 is not. ISO 26000 is not intended for
certification, regulation, or contractual use (Balzarova & Castka, 2016; Lars, 2017). ISO
26000 is also not intended as a basis for legal actions in global proceeding especially in
the World Trade Organization (WTO) (Lars, 2017). ISO 26000 should be regarded as a
set of guides and should not be mischaracterized as a management system standard
(Balzarova & Castka, 2016; Lars, 2017). The effort to implement CSR will be worthless
to all stakeholders if not accepted by company leaders.
Next to being credible, acceptable, and sustainable, leaders need to ensure that
CSR delivery needs are well structured. With careful analysis of the dizzying plurality of
strategies presented to business leaders three theatres of CSR can be identified (a)
activities primarily motivated by charity, (b) symbiotic activities that benefit both society
and the company’s bottom line, and (c) long term initiatives that fundamentally change
the business’s ecosystem but create societal value (Jones, Hillier, & Comfort, 2016;
Olsen, 2017). The third stage of CSR delivery, the logical path to a sustainable change in
the eco-system with an emphasis on a projected path to profitability is well represented in
the case of the Indian firm Ambuja Cements Limited. The organization’s leaders set a
goal to put more back into society, the environment and the global economy than the
company takes out, a “net positive” approach to doing business. To achieve the net
positive goal, the company launched a community water resource management program
beyond what was mandated by law. As a result of the efforts of Ambuja’s management,
surrounding villages have potable water, plastic consumption has decreased significantly,
and there has been a transformative ecosystem change (Smith, 2016). The Ambuja
exercise is a good example of CSR implemented well and could be emulated in other
areas.
It may neither be practical nor logical for all organizations to implement all
theaters of CSR and thus practice the same exact brand of CSR. Maximizing
effectiveness in whichever realm or stage is practical would be more prudent (King,
2017). For instance, market share can be affected by simple indirect factors such as the
nature of the firm’s sources or affiliations (Chen & Slotnick, 2015; Lin, 2016). These
initiatives should be chosen based on the core competencies of the entity and the impact
the activities may have on society at large (Bhattacharya, 2016). CSR delivery strategy is
usually implemented in stages. These stages are critical because this is when
opportunities are realized and ideas either utilized or missed all together (Bento et al.,
2017). Lars (2017) described the typical initial auditing stage as when leaders classify and
categorize any current initiatives or seek new opportunities. These opportunities are
costed and then the likely benefits noted. The next stage is an editing stage when
executives quantify the impacts of CSR efforts. These impacts may be reported as proof
of results in annual sustainability reporting aimed at stakeholders and the general public
(Lars, 2017). An example of proof of results is United Parcel Service (UPS) using a
thirdparty auditor to analyze and report progress annually on carbon emission reduction
goals
(Bento et al., 2017). The transparent approach adds credibility to UPS’s sustainability
accounting and reporting.
Despite the new business requirements needed to meet CSR standards, business
leaders have not abandoned traditional tools. On the contrary, leaders have found ways to
incorporate CSR delivery methods into traditional frameworks such as the BSC
methodology, agile, and the stage-gate procedure (Bento et al., 2017). Alpenberg, Alku,
Rashiti, and Scarbrough (2016) describe how traditional simple budgets do not take
enough business factors into consideration to affect long term goals. Tools which can be
useful in harnessing a majority of business concerns sustainably are thus preferred (Lars,
2017). The growth of CSR has forced leaders to rethink daily operating methods while
still considering long term implications for sustainability.
The BSC is a widely established management tool positioned to assist managers
realize their values and visions. The Harvard Business Review editors selected the BSC
as one of the most influential business ideas of the past 75 years, and over 50% of large
United States firms have adopted BSC (Bento et al., 2017). BSC methodologies also have
some overlaps with CSR. All of the four BSC points of view, financial, customer or
stakeholder, internal process, and organizational capacity overlap with CSR and CFP
initiatives. The BSC has actually emerged as the tool of choice for evaluating managers’
CSR performance according to Bento et al. (2017). Motivation is also measured using the
BSC tool. The tool seems to be used successfully to measure major facets of a business.
Over several years company leaders have been pressured to deliver increasingly higher
financial returns to shareholders which may have resulted in breaches in social
responsibility. The pressure to constantly increase value according to Huang and Coelho
(2017) led to the 2008 financial crisis in the United States and the world at large.
Stakeholders ignored many warning signs, and in the midst of company friendly
regulations, little oversight, ambition, and greed, the financial system collapsed. With
some obstacles in the way of migrating to a CSR environment removed, more company
leaders are increasingly including CSR in their financial reports and also adopting
international CSR standards (Casey & Grenier, 2015; Christensen et al., 2014). The
business industry trend is arguably in the direction of adopting CSR. So, the question for
business leaders is not if, but when and how to incorporate CSR into financial strategy
while also considering the company’s business values, legal, social, humanitarian,
environmental challenges, and financial growth targets (Huang & Coelho, 2017). The
subsequent shift of public sentiment towards more oversight and regulation of
corporations resulting from lessons learned from the 2008 financial crisis may have been
a positive development for CSR advocacy.
Pressure to enact CSR or not comes from various facets of society. One common
misconception is that CSR delivery initiatives are only in response to pressure from
shareholders advocating that CSR should be treated as an expense and is of little financial
value to the corporation (Casey & Grenier, 2015). Bhattacharya (2016) differs with the
shareholder’s sentiment, positing that CSR is not necessarily detrimental to a company’s
financial health. Bhattacharya also argued that many organizational leaders voluntarily
implement CSR efforts beyond what is required. Clifton and Friedman (2016) also
reiterated that increased CFP and increased CSR are not mutually exclusive concepts. For
instance, Wal-Mart reduced the amount of packaging used in products by 5% and also
managed to cut 100 million miles off delivery routes, saving the company $200m in costs
and simultaneously lowering carbon emissions (Smith, 2016). Garcia-Castro and
Francoeur (2016) explored some of the theoretically and empirical costs and
contingencies that were likely to arise in stakeholder management and concluded that
more is not necessarily better. Sometimes doing less can be a good strategy for
management to pursue.
The leaders of UPS, a global logistics company that is dependent on fuel to
deliver almost 17 million packages daily led by example and showed that it is possible for
business to do more for the environment, serve more customers, and add more value
simultaneously. In the 2014 UPS12th annual sustainability report UPS (NYSE: UPS), the
company met its 2016 goal of reducing its fleet's carbon intensity by 10 %, 3 years early.
Thus, set a new 2020 goal of 20% carbon intensity reduction from transportation (Smith,
2016). These examples show a growing trend towards responsible corporate behavior that
still results in increased profits. There is also increased research pertaining to CSR in the
context of business ethics and insights into managerial decision making and the balance
between profit making and corporate responsibility (Sonenshein, 2016). The UPS strategy
is an example of implementing the right strategies to be socially responsible and still
profitable.
CSR and ethics. CSR in business today is practiced as a subset of business ethics.
The concept of business ethics covers morality, corporate governance, and codes of
conduct (Goel et al., 2013). The stakeholder theory in CSR also draws its philosophy
from ethics and states that the internal actions of organizations affect stakeholders thus
need to be based on ethical and moral tenets separate from financial gain
(AminChaudhry, 2016; Hörisch et al., 2014). Judging business in the realm of what is
morally acceptable or defensible may however deviate from the concept of business as
efficient and effective, a notion that is held historically. On the other hand, Goel et al.
point at the changing concept of ethics in an ever-changing globalized world. Dwindling
resources, public awareness, big data, are contributing factors to the growing debate on
the ethical duties of corporations (Del Brío & Lizarzaburu, 2017; Kim, Lee, & Fairhurst,
2017). The many stakeholders may sometimes make the CSR debate difficult.
Corporate social responsibility is seen as a requirement that businesses and their
leaders be good corporate citizens. Organizations are seen as an integral part of the
systems the entities operate in and which support their existence, thus leaders are
expected to go beyond what is required by law to protect the environment and to
contribute to social welfare (Goel et al., 2013; Kolk, & Perego, 2014). Unlike those that
believe that the only duty to society is providing as much value as possible within the
law, Euchner (2016), most in society believe that leaders should exhibit a deeper purpose
beyond simple value creation (Kolk, & Perego, 2014). In a competitive environment
though, adhering to ethical behavior may be a challenge for business leaders.
Ethics can be a very touchy subject and should be approached carefully because it
is not always clearly defined. Demographic, cultural, generational, and other factors need
to be considered when quantifying ethics. Business ethics and CSR especially can be
relative, and be quantified differently depending on context (Ahen & Zettinig, 2015;
Islam, Ahmed, Ali, & Sadiq, 2016). Di Norcia (1997) and McLeod, Payne, and Evert
(2016) argued that ethical relativism should be factored into business ethics and research.
Di Norcia posited that respecting another group’s culture or understanding it before
passing premature judgement is a moral duty. Di Norcia further pointed out that ethical
and cultural diversity in business should be the norm as opposed to universal morality and
homogeneity that stifles evolution. For instance, in one country, getting rich at almost all
costs may be ethical and celebrated as success while in another selflessness may be
admired. Erecting one culture as superior over another violates fundamental ethical
values, and the exchange and sharing of values enriches and strengthens the business
experience. Di Norcia (1997) and Joslin and Müller (2016) concurred on the notion of
diversity in business and ethics. Being ethical in one locale may not necessarily be the
case in another culture or geographic region.
The regulatory approach to CSR ethics is one arm of a multifaceted effort to have
companies deliver on CSR promises. A data driven approach spearheaded by groups such
as the Corporate Responsibility Officers Association (CROA) who publish case studies in
a magazine is also a viable means to normalizing CSR in society (Di Norcia, 1997).
Making information of which companies deliver on CSR available to the general public
can be a strong incentive to leaders to employ responsible initiatives (Eisenbeiss, Van
Knippenberg, & Fahrbach, 2015). Business leaders who act unethically may generally be
aware of their unsavory actions but may also act accordingly depending on the
communities’ acceptance of such behavior. Di Norcia (1997) noted that unethical
business actions may not necessarily also be unlawful. Introducing regulations and
deterring punishment may help encourage better ethics in business, but may be
challenging in an environment of competition, fear, and greed. The deterrent approach
can be akin to the war on drugs; where drug traffickers though facing the stiffest penalties
and perils, are not deterred. The rewards in their opinion may far outweigh the risk or fear
of punishment.
Ethical standards just as CSR initiatives are set from the top of an organization.
Executives greatly influence the ethical culture of their organizations by the examples set.
Wu, Kwan, Yim, Chiu, and He (2015) noted though that influence of executives on the
ethical culture of a corporation is more prevalent in the SME sector where top
management may be the founders with more discretion and influence. According to
Sunghee and Heungjun (2016), personal philanthropic beliefs of company founders tend
to be the focus of the organizations. The beliefs and influence of founders may also
motivate more CSR acceptance and engagement among employees (Sunghee &
Heungjun, 2016). SMEs are more imbedded in communities, and so the direct connection
to stakeholders makes it more difficult for SME leaders to violate ethical expectations as
compared to larger entities (Goel et al., 2013). Wu et al. (2015) noted that larger
corporations may be less accessible to stakeholders thus may enjoy less scrutiny, but may
also suffer more expectations. Some companies though may be classified as large
corporations but the leaders may not exhibit expected behaviors. Chic fill-a is an example
of a large company that has policies coined off its owners’ religious beliefs by not
opening for business on Sunday the Christian Sabbath.
Companies do not get any benefit from good deeds that are not known, so leaders
strive to communicate these deeds with the public. Transparency and ethical CSR
reporting go a long way to solidify the reputation and credibility of an organization
(Christensen et al., 2014). An honor system also exists where omitting expected pertinent
information can mar the trust society has in an organization (Devin, 2016; Pires, Pereira,
& Moura-Leite, 2015). An example of CSR gone wrong was the case of Enron, once the
seventh largest company in the United States. Enron was considered a major CSR
proponent, so completely violated the public trust when regulators found public reports to
be falsified in 2001. The shock of the Enron debacle and that of other companies such as
the CSR award winning Indian company Satyam triggered a sense of skepticism and
ushered in an enhanced CSR delivery verification culture (Goel et al., 2013). Some
oversight movements include the Dodd–Frank Wall Street Reform and Consumer
Protection Act (Dodd–Frank) legislation in the United States in 2010, the CORE
coalition, and the international right to know campaign in the United Kingdom
(Eisenbeiss et al., 2015). Such organizations helped shift the culture of voluntary CSR
reporting purely based on trust to a more structured compulsory CSR delivery reporting
system with the intent of providing benefits to society.
CSR benefits to society. The mention of CSR is usually in the context of
organizations being better stewards of the environment, but CSR is a broad topic that
ranges from philanthropic activities to workplace diversity, fair and equal pay, and
workplace harassment. The concept of CSR rests on the ability of corporations to create
private value for stakeholders and in turn create public value for society (Kalkan, 2017;
Mao et al., 2015). Some of the major benefits of CSR to society also include the general
wellbeing of citizens that can manifest in various ways (Hildebrand et al., 2017). The
observed increase in the temperature of the earth's atmosphere has been attributed to the
greenhouse effect. Also termed climate change or global warming, the warming effect has
been a topic discussed in media in recent years and also been a main focus of CSR
advocates (Mackay & Spencer, 2017). The adverse effect is believed to be caused by
increased levels of carbon dioxide and other pollutants mainly from irresponsible
corporate and general human behavior (Rockwood, 2009). A better world through a
cleaner environment may be the benefit that most environmentalists tout.
Although some human activities are believed to cause damage either directly or
indirectly to the environment including population growth, overconsumption,
overexploitation, and pollution, corporate irresponsible behavior is believed to contribute
a larger share of the damage. Pollutants from industry are known to greatly affect the
health of society (Rockwood, 2009). Balanced ecosystems resulting from responsible
corporate waste management would result in clean environments and a healthier global
society. Benefits to the local community that a business operates in could manifest in
many ways. Members of communities may benefit from the behaviors and standards
exhibited by the local employers who as a result of peer relations engage in
proenvironmental behaviors (Paillé et al., 2016). Corporate cultures may influence and
shape the behaviors of not only employees, but those people that employees interact with
(Sunghee & Heungjun, 2016). A company that promotes cleanliness for instance would
more likely share similar values with both stakeholders and casual observers. Improved
habits should improve the quality of life for residents.
Increased wealth and employment could be another positive contribution to a
community. Employee value is another way business leaders can realize CSR value by
focusing on the ability to attract and retain good talent (Goel et al., 2013). Capacity
building creates employment that tends to increase wealth. For example, a Net Impact
survey found that 53% of workers said that a job where employees can make an impact
was important (Pecorino, 2016). Research has shown that engaging in meaning work
increases personal motivation, engagement, empowerment, and personal achievement
(Kolk & Perego, 2014). There is evidence of benefits to corporations and societies, but
also empirical evidence on a link between CSR and competitiveness at the national level
(Boulouta & Pitelas, 2014; Line & Wang, 2017). Boulouta and Pitelas (2014) suggested
that CSR adoption can make a significantly positive contribution to a nation’s
competitiveness. Boulouta and Pitelas found that when using a measure of national living
standards and implementing CSR-based strategies nationally, countries with a relatively
low innovation record can benefit more than highly innovative countries. Preuss,
Barkemeyer, and Glavas (2016) also noted that different country’s leaders adopt CSR
practices at different rates. Meaning corporations that invest in their communities as a
gesture of responsibility would increase public well-being, but at varying rates and
impacts.
Corporate Social Responsibility in the United States
Residents of the United States have increasingly been exposed to the concept of
CSR, but attitudes towards the CSR concept differ depending on the views of individual
Americans. Many demographic factors including age, religion, politics, and culture
influence American’s approach to CSR (Bridoux & Stoelhorst, 2016). The demographic
makeup of the United States population tends to be a fair predictive vessel for the beliefs
and attitudes towards CSR initiatives. Both sides of the political and ideological spectrum
for instance have debated the merits of CSR. The politically liberal population of the
United States may see CSR more as a necessary evil while their conservative
counterparts may tend to see CSR as a burden on business and as anti-capitalist (Goel et
al., 2013; Kilic & Kalkan, 2017). Other factors that contribute to CSR awareness in the
United States could be general corporate strategy, the tools available, profitability goals,
company size, and stakeholder pressure.
The United States government also plays a role in the rate of CSR adoption in
companies. Regulation can force company leaders to deliver on CSR activity when
leaders otherwise may not be inclined to. The United States governmental involvement in
CSR is generally industry specific, and not targeted at the financial makeup of companies
(Sinha, 2017). In India for instance, in an attempt to bridge the gap between rich
corporations and the general population, the government passed an amendment to force
CSR compliance tied to earnings. The Companies Bill 2011 passed in 2012 mandated that
companies exceeding a set profit target were to spend 2% of profits on CSR initiatives
(Sinha, 2017). Different countries the world over have varying approaches to CSR
adoption and implementation.
CSR regulations in the United States are not tied to the earnings of corporations.
Regulations are influenced by a mix of federal and state regulations and money indirectly
through lobbying efforts (Kilic & Kalkan, 2017). For instance, the United States
government in collaboration with the National Indian Gaming Commission (NIGC) to
regulate Native American commerce, depriving local governments of direct oversight
into CSR in the gaming industry (National Indian Gaming Commission, 2015). However,
the United States congress representatives included CSR mandates into laws pertaining to
the construction and maintenance of tribal gaming facilities. CSR adoption in the United
States has increased and affects the average citizen, so further research is needed to
supplement current CSR knowledge.
Additional Corporate Social Responsibility and Corporate Financial Performance
Literature
Scholars have studied CSR in its entirety for decades, but have paid minimal
attention to some sections for varied reasons. For instance, the notion of corporate
credibility, though increasingly important has not attracted much attention from
researchers and scholars (Lars, 2017). Researchers also mainly focus on the value
companies create from CSR as the justification for implementing it in strategy, few
researchers focus on the gain to society (Księżak, 2016). Measurement and reporting of
CSR is also a topic that will benefit from more research. For instance, a wrong choice of
accounting methods or auditing firms could skew any CSR survey or report if business
leaders do not have the data to help make CSR decisions.
Additional research is needed especially in the SME sector where there is limited
information on CSR delivery theory and strategy. Lin-Hi, Horisch, and Blumberg (2015)
noted in a study that very little CSR information is available outside the corporate world
of big business. Business regulators categorize SMEs by size, number of employees, and
several other factors. In the United States, regulators set SME criteria based on industry,
ownership structure, revenue, and the number of paid employees (Okpara, Ezirim, &
Mohammed, 2017). Okpara et al. (2017) identified an SME as an organization that
employs less than 500 employees, a typical global threshold. For the purpose of this study
I adopted the SME definition of organizations with fewer than 500 employees.
There are several factors that contribute to a lack of information and
understanding in the SME arena. First, there is a greater focus on CSR research for large
scale organizations, thus starving SMEs of needed research resources (Byron & Thatcher,
2015). Second, there is the belief that SMEs do not have enough resources and influence
to significantly affect social issues. Third, the CSR effort over the years has been to
simply encouraged SMEs to avoid irresponsible behavior and social activism (Bridoux &
Stoelhorst, 2016). Data however shows that research resources would be better spent on
SMEs because over 60% of United States employees are employed by SMEs that make
up 95.3% of all United States businesses (United States Department of Commerce, 2018).
A relatively small percentage 0.08% of companies employ over 1000 or more people
(United States Department of Commerce, 2018). Consequently, research done on fewer
larger companies may not translate well to SMEs where the majority of the population
work, depriving SME managers of proven CSR delivery strategies (Bridoux & Stoelhorst,
2016). Additional research findings concerning CSR delivery strategy and theory
especially in SMEs can enhance the quest to promote successful CSR strategies to
business leaders.
Transition
In Section 1 I included a description of the background of the business problem,
the purpose statement, the nature of the study, research questions, the conceptual
framework, and a literature review. The general business problem identified was that
leaders who fail to achieve CSR activities risk business profitability, and so there is a
need for further research on profitable CSR strategies. In the literature review, I examined
strategies leaders use to deliver on CSR while increasing profitability. The major review
sections were the conceptual framework, CSR themes and phenomena, CSR in the United
States, and current scholarly debates on CSR and CFP. In Section 2 I provided a
comprehensive analysis of the process involved in conducting the study and include an
explanation of data collection and analysis techniques.
Section 2: The Project
In Section 2, I present an overview of the methodology and describe the processes
involved in conducting the study. I state the purpose of the study and describe my role as
a researcher, participants of the study, the research method, and research design. I further
describe population and sampling, ethical research, data collection techniques, data
organization techniques, data analysis, and reliability and validity of the study.
Purpose Statement
The purpose of the qualitative multiple case study was to explore strategies small
business leaders use to achieve CSR activities that can result in increased profitability.
The targeted population was four small business leaders located in Maryland and Virginia
who successfully implemented strategies to achieve CSR activities that resulted in
increased profitability. The findings of the study may contribute to positive social change
by increasing corporate philanthropic donations to communities. These philanthropic
activities could improve the living conditions for citizens through local community
growth and development, increased benefits for the needy and least advantaged, and
increased collaboration between society and industry.
Role of the Researcher
I was the primary data collection instrument for this study and served in the role
of researcher. The role of a researcher is to gain an understanding of underlying opinions
and motivations of participants and to conduct in depth analysis based on a single case or
multiple cases (Kavoura & Bitsani, 2014). Takyi (2015) described the research process
primarily as (a) organizing data, (b) analyzing, (c) evaluating, (d) reviewing, and then (e)
presenting the study findings. My role as a researcher was to explore literature from
reliable academic sources, conduct interviews, and identify themes and meaning to
answer the overarching research question.
I am familiar with the topic of CSR, a major concept of this study. I researched
CSR to write papers for class projects. According to Mackay and Spencer (2017),
members of public media outlets have increasingly exposed society to CSR over the last
few decades. Increased media coverage of aspects of CSR including clean water goals,
clean air initiatives, and fair employee treatment rules have increased the public’s
awareness as well as my familiarity with CSR (Bridoux & Stoelhorst, 2016). I am further
exposed to CSR at work in my role as a project engineer where I am tasked with making
business decisions that are responsible and support CSR initiatives.
As the researcher, I used standards to ensure that the research process was
transparent, ethical, and guided by the Belmont Report protocol and Walden University’s
Institutional Review Board (IRB). The Belmont Report is a set of ethical guidelines
aimed at protecting human subjects in research (Cugini, 2015). Foundational principles
for ethical research with human subjects are identified in the Belmont Report as respect
for persons, beneficence, and justice (Schrems, 2014). Metcalf (2016) suggested that
researchers meet core principles outlined in the Belmont Report prior to involving
participants in studies. I followed ethical guidelines outlined in the Belmont Report and
by the IRB prior to contact with participants and collection of data.
I selected potential organizations to participate in the study that rank well in
publicly available online social ranking lists. Example websites included CSRHub.com,
BBB.org, and Corp-research.org. I then selected a contact from the organization’s online
contact information, for instance a human resource representative. I e-mailed or called
each contact person and requested they provide an e-mail contact list of potential
participants that met the inclusion criteria. I then forwarded an e-mail invitation to all
personnel in the organization who met the inclusion criteria. Interested participants were
asked in the invitation letter to call or send me their intent to participate by personal
email. Interested participants were also asked to review a consent request and respond
with the words “I consent” to indicate their consent.
It is important to mitigate bias and avoid viewing data through a personal lens in a
qualitative study. Familiarity with the concept of CSR may be a source of personal bias
and threaten the reliability, validity, and transferability of the study (Baille, 2015;
Marshall & Rossman, 2016; Sutton & Austin, 2015). I took measures to mitigate any
personal biases by (a) journaling my thoughts on CSR to minimizing my personal
opinions, (b) checking for alternate explanations to be open to evidence contrary to my
personal beliefs, and (c) using multiple sources to triangulate data. Fusch and Ness (2015)
stressed the need for member checking to help improve the accuracy, credibility, validity,
and transferability of a study. I allowed participants to analyze my interpretations of
interviews by using member checking.
I used an interview protocol (see Appendix) for data collection to ensure structure
and consistency of interviews. The interview protocol is a systematic guide for the
interview that can ensure a structured procedure to the interview process (Chen &
Mykletun, 2015; Fusch & Ness, 2015). Vitak, Shilton, and Ashktorab (2016) also posited
that using an interview protocol can increase data collection detail, consistency, and
adherence to research standards. Key aspects of the interview protocol were to ensure
consistency and validity of the data collection process.
Participants
Small business leaders in Maryland and Virginia who have successful used
strategies to achieve CSR activities that resulted in increased profitability participated in
this study. Business leaders are often directly involved with strategic decisions for the
organization and influence corporate culture and employee behavior (Sunghee &
Heungjun, 2016). I chose small business leaders because small businesses make up
95.3% of all U.S businesses (U.S. Department of Commerce, 2018), and so the findings
will impact most business leaders’ strategies. I chose participants who successfully
implemented CSR strategies to achieve CSR activities that resulted in increased
profitability. I ensured that each participant met the following eligibility criteria to
participate in this study: (a) at least 18 years old, (b) an executive or strategy leader in the
organization, (c) managed a small business in Maryland or Virginia, and (d) had
experience implementing successful strategies to achieve CSR activities that resulted in
increased profitability.
I first gained site authorization from potential organizations. I followed the
Walden University IRB guidelines to recruit participants for the study. I began recruiting
eligible participants for my study only after I received Walden University IRB approval. I
initially compiled a list of local SMEs, companies with fewer than 500 employees as
defined by Okpara et al. (2017). I placed initial calls explaining the goal of the study and
arranged a personal meeting with eligible leaders of the business. I also made in-person
visits to local small businesses and requested to speak with managers about participating
in the study.
I followed the initial contact in the recruiting process with an e-mail providing (a)
a formal introduction and invitation, (b) the purpose of the study, (c) the eligibility
criteria, (d) an explanation of voluntary participation, and (d) sample questions. I also
included a copy of an informed consent form that detailed (a) background information of
the study, (b) study procedures, (c) the nature of the study, (d) risks and benefits in the
study, (e) privacy details, and (f) contact information.
I elaborated on the purpose and objectives of the study and answered any
questions from participants in order to establish a working relationship with participants
throughout the research process. Clearly defining study goals and objectives is a way to
encourage information sharing (Marshall & Rossman, 2016). I scheduled follow-up
meetings with participants as needed to ensure interviewees had a clear understanding of
the process and to also further develop rapport. A good working relationship is essential
for the success of the research process (Wells, Gordon, Su, Plosker, & Quinn, 2015). I
also communicated with participants by phone and follow up e-mails to build a
relationship.
Research Method and Design
In the following subsections, I justify the choice of the method and design for the
study in the research method and design section. I selected the qualitative method and a
case study design for the study. I also elaborate on the process and reasons for selecting
the method and design over other methods and designs.
Research Method
I considered three research methods for this study; qualitative, quantitative, and
mixed methods. I chose the qualitative method over the quantitative and mixed methods
because researchers use the qualitative method to gain an understanding of underlying
motivations and insights into a problem (Clark, 2017). The qualitative method is
appropriate to gain an understanding of human behaviors and inspirations of study
participants through interviews, transcribing, and data analysis (Gray & Milne, 2015;
Yin, 2018). The qualitative method is suitable for understanding strategies that business
leaders use to deliver CSR promises that increase profitability. Researchers use the
quantitative method to test hypotheses using statistical analyses (Clark, 2017). The
quantitative method includes analysis of potential mathematical relationships through
tests of hypotheses with numerical data (McCusker & Gunaydin, 2015; Mertens et al.,
2016). The quantitative method was appropriate for this study because the study involved
exploring and understanding successful CSR strategies and not hypotheses testing and
analysis of variables’ relationships or differences. Researchers use the mixed method,
which is a combination of both qualitative and quantitative methods, to explore and
examine data (Kong et al., 2016; Mertens et al., 2016; Moreno-Poyato et al., 2017). I did
not test a hypothesis or analyze variables’ relationships or differences. Yin (2018) also
described the mixed methods as potentially more complicated and time consuming than
other methods. Neither quantitative nor mixed methods were appropriate for the study
because I was not testing a hypothesis.
Research Design
I selected the multiple case study design for the study. Researchers use the case
study design to explore real-world contemporary bounded systems over time through
varied and detailed sources of data collection (Yin, 2018). I selected a multiple case study
design over a single case to explore strategies that business leaders use to achieve CSR
activities because using multiple sources strengthens the quality and validity of a study
(Fusch & Ness, 2015; Tran, 2016). Researchers use the phenomenology design to explore
and understand a phenomenon in human nature through the lived experiences of
participants (Moustakas, 1994). The phenomenology design was not appropriate for this
study because I did not seek to understand the lived experiences of the participants.
Researchers use the ethnography design to study people and their behavior within a
group’s cultural setting (Edberg et al., 2015). The ethnography design was not
appropriate because I did not explore a group’s culture, and ethnographic studies tend to
be immersive and lengthy (Morse, 2015).
The depth of the data in qualitative research is often critical, thus quality data are
needed for a study. According to Oberoi, Jiwa, McManus, and Hodder (2015), the point
of saturation, which is when enough information relevant to the research has been
gathered, can be difficult to define. Saturation in qualitative research is associated with
the point when there is enough data to ensure the research questions can be answered
(Fusch & Ness, 2015). Oberoi et al. (2015) and Orri, Revah-Levy, and Farges (2015) also
described data saturation as when additional information becomes repetitive, so I
continually checked for duplicate data throughout data collection and analysis. I
continued interviews until I reached data saturation in order to ensure that adequate and
quality data were collected to support the study.
Population and Sampling
Researchers may seldom have the luxury of time, money, or the logistics to access
a total population, so may have to make compromises when choosing a sampling method.
Fusch and Ness (2015) stressed that it is important to identify an adequate sampling
method and also justify the number of participants during a sampling process. The study
participants selected were able to provide insight into the research question. According to
Imran and Yusoff (2015), data saturation is necessary to ensure there is enough data to
continue the analyzation process. I continued interviewing and analyzing data until there
were no new findings and reached data saturation after 4 interviews. The target
population consisted of small business leaders in Maryland and Virginia who successfully
implemented strategies to achieve CSR activities that result in increased profitability.
I used purposeful sampling to screen and select participants who have insight into
CSR strategies that increase profitability to answer the overarching research question.
Bryman and Bell (2015) described purposeful sampling as a technique used to give in
depth insight into qualitative research; a method where cases are identified and selected
that relate to the phenomenon of interest and not randomly sampled. According to
Englander (2016), the population under study should also be well represented by the
sample size. The sample consisted of one leader from each of four SMEs in Maryland and
Virginia. A large population size may bring credibility to a study; however, a small
population size can be good for conducting in depth interviews, finding detail, and for
data depth (Bryman, & Bell, 2015). Yin (2018) recommended that researchers use a two
to three case sample in a multiple case study, and Harf et al. (2015) suggested a three to
six case sample size. I added additional SMEs to the population as needed until I
achieved data saturation.
Fehr, Solberg, and Bruun (2016) posited that a researcher may be approaching
data saturation at the moment where no new insights are realized by analyzing additional
data sources and the same themes recur. Another consideration of saturation is when there
is no new information discovered in data analysis to answer the research question
(Bryman, & Bell, 2015). The researcher should continue data collection until no new
information is collected and the responses become repetitive (Orri et al., 2015). I sent out
40 invitations by e-mail to recruit new participants and interviewed participants in the
order in which I received consent. I followed data saturation guidelines and continued the
interview process. I achieved data saturation after 4 interviews when there were no new
information or themes during data analysis.
The criteria I used to select study participants were (a) at least 18 years old, (b) an
executive or strategy leader in the organization, (c) a manager of a small business in
Maryland or Virginia, and (d) experienced in successfully implementing strategies to
achieve CSR activities that result in increased profitability. To compile a list of possible
small businesses to include in the study, I used online databases such as CSRHub and
Datastream that have ratings for corporate governance and responsibility. These data
were helpful in identifying leaders who have successfully implemented profitable CSR
strategies. I then sent an e-mail invitation explaining the study to each prospective
participating SME leader. Imran and Yusoff (2015) suggested that the interview is
conducted in a comfortable quiet secure location of the participant’s choosing. After
receiving consent from willing SME leaders, I had each leader select a comfortable
convenient interview setting with minimal distractions that was also quiet enough for
audio recording.
Ethical Research
The purpose of ethical guidelines in research is to protect the dignity, rights, and
welfare of participants (Bowser & Wiggins, 2015). Prior to participating in the study, the
Walden University IRB requires all willing participants to sign an informed consent form
that outlines the purpose, procedures, nature, and privacy structure of the study. I began
the interview process only after receiving Walden University IRB approval and site
authorization from the participating SME owners. The Walden University IRB approval
number for this study is 08-15-19-0676305. To be compliant with ethical research
standards outlined by Walden University, I e-mailed the consent form to each participant
to review and return a signed copy by e-mail. I provided participants with a copy of the
signed form at the interview site before starting the interview.
I reminded study participants prior to the interview that participation in the study
was voluntary and each may withdraw from the study at any point in the process as
stipulated in the informed consent agreement. Patton (2015) and Obenchain and Ives
(2015) stressed that it is important that participants are explicitly informed of voluntary
participation in a study. I informed participants that withdrawal could be by the most
convenient method to include in person, by phone, via e-mail, or by postal mail.
However, no participant chose to withdraw from the study. I did not offer any incentives
to participate in the study.
I took measures to ensure that the ethical protection of participants was adequate
by keeping all data on password protected personal storage media and worked on a
personal computer that was not shared. I assigned each participant a unique numeric
identifier to ensure confidentiality, for instance P1 represented the first participant, P2 the
second, and so forth. I took these steps to protect data in order to maintain privacy.
Cairney and St Denny (2015) stressed the need to protect research data. I will securely
store data collected from all participants in a locked safe at my home for 5 years and then
have all data destroyed to protect the confidentiality of participants and their
organization. I will destroy data by cross shredding all hardcopies and permanently delete
all softcopies. I started data collection for my study after receiving approval from the
Walden University IRB (Approval Number 08-15-19-0676305) to protect the rights of
participants.
Data Collection Instruments
As the primary data collection instrument for this qualitative case study, I
gathered, collected, analyzed, and interpreted data using a semistructured interview
protocol available in the appendix. According to Marshall and Rossman (2016), valuable
feedback can be translated through body language and the participant’s tone in face-
toface interviews. Sutton and Austin (2015) also noted an advantage of first-hand
interviews as a means for researchers to focus on information specific to the study. In
addition to collecting data from interviewing, I also used secondary data with permission
that pertained to the research topic. Secondary sources may be beneficial for further
research because the data may have been analyzed in previous research (Marshall &
Rossman, 2016). I collected secondary data pertaining to the companies’ CSR initiatives
from the company’s human resource handbooks and employee handbook.
A guide, formal structure, or protocol is essential to complete a qualitative
research project successfully. An interview is an introduction of the study, the interview
process, and questions that can be used to facilitate and guide semistructured open-ended
interviews (Sutton & Austin, 2015). In order to ensure adherence to the methods and
study boundaries, I used a protocol available in the appendix to outline the interview
procedures and methods. The interview protocol is an outline of the interview process, it
includes a sequential list of what was completed and a script of what questions I asked.
I outlined the interview process and clarified the purpose and structure of the
interview with each participant before the interview begun. I followed the interview
protocol and asked each participant the same set of questions to ensure research
consistency. I shared with participants that their identities will be protected by using a
unique identifier such as P01, P02, etc. I also informed participants that data received will
be confidential, that participation was voluntarily, and that the interview would be audio
recorded. There are numerous measures to assess the validity of research instruments
including using an expert panel (Oates, 2015). I did not conduct a pilot test because I
used an expert panel of Walden faculty to validate my interview protocol and research
questions for the semistructured interviews. Baille (2015) argued that data credibility can
be enhanced through member checking. I visited each participant after transcribing each
interview and provided a copy of my interpretations. Each participant verified the
accuracy of the information.
Data Collection Technique
I chose onsite audio recorded semistructured interviews as the technique to collect
data for this study. I recorded interviews with a Pixnor audio device and a Microsoft
Surface Pro tablet. I saved the audio recorded data on a password protected flash drive
and detachable hard disk drive. I used the same interview protocol (see Appendix)
throughout each interview to ensure consistency as advocated by McCusker and
Gunaydin (2015). Initial contact with participants occurred only after IRB approval. For
the purpose of my study, the interview protocol consisted of 6 initial open-ended
questions pertaining to profitable CSR strategies and follow up probing questions to gain
more in-depth data.
Semistructured interviews may have some advantages over other techniques.
Moonaghi, Ranjbar, Heydari, and Scurlock-Evans (2015) noted the advantages of
semistructured interviews as (a) allowing the interviewer time for adequate preparation,
(b) portraying competence because the interview will be structured, (c) allowing
participants to express views in their own terms via open-ended questioning, and (d)
providing reliable qualitative data. In semistructured interviews researchers also gain an
in depth understanding of the participant’s views (Bryman & Bell, 2015). Oates (2015)
also posited that semistructured interviewing may enhance triangulation especially when
multiple interviews are conducted. I used interview questions to capture participants’
perspectives on strategies used to successfully implement CSR profitably.
Semistructured interviews may have some disadvantages. For instance, the
researcher could exert personal influence into the process thus lead to biased analysis.
Baille (2015) noted that in social interactions such as interviews, unconscious biases may
be introduced into the equation and thus negatively influencing a final evaluation. I
journaled interview observations and my thoughts on the topic of CSR to mitigate any
bias. I established rapport with participants to encourage a natural interview experience
by engaging in natural conversation during my observation. I wrote down my
understanding of CSR as a voluntary business model that leaders use to be socially
accountable to stakeholders and to be good corporate citizens. I verified with participants
that they understood the concept of CSR and how it pertained to their industry. I used an
expert panel to validate my 3 data collection instruments, the interview, observational,
and document analysis protocols, because poorly formulated instruments can be a source
of poor data collection. To ensure rich thick data collection, I formulated interview
questions after a thorough comprehensive review of the literature on CSR strategies and
profitability.
After I gained IRB approval, I sought site authorization from the owners of the
SMEs who also opted to be the participants. I arranged to conduct face-to-face interviews
at convenient locations chosen by the participants. Researchers can use face-to-face
interviews to interact, ask questions, and build a rapport with participants (Miller, 2016).
I audio recorded each interview with two suitable recording devices, a Pixnor audio
recording device as a primary device and the Surface tablet as a backup in case of any
mishaps. I also kept a reflective journal to document observations from the interview. I
requested secondary data relevant to the study that participants were willing to provide;
all four participants opted to provide a copy of company CSR guides and allowed me to
visually examine the profit and loss from business section of their 2018 tax statements.
Baille (2015) noted that member checking enhances accuracy, credibility, validity, and
transferability of a study. I arranged for a follow up meeting to allow participants to
review and verify my interpretation of the data. By using member checking I also ensured
that I represented participants’ perspectives accurately.
Data Organization Technique
Planning the organization of data before research begins avoids confusion during
research and data analysis. Data organization and documentation should ensure the
replicability, integrity and accessibility of data files and also prevent loss or
misplacement (Brandt et al., 2014). I used audio recording, research logs, reflective
journals, and a labeling system for keeping track of data. I recorded each interview with a
Pixnor audio recording device as well as a Surface laptop as a backup system. Express
Scribe is an audio player software designed to help transcribe audio recordings. Hard
copy data were cataloged and stored in a locked file cabinet and electronic data in an
encrypted Excel virtual filing system for ease of access. I used Express Scribe to
transcribe the recordings from all interviews, then cross checked recordings with my
written notes for accuracy.
I used Microsoft Excel to organize and Microsoft Word to code and analyze data
collected from the interviews. I used a reflective journal to take notes of time, date,
location, and any observations during the interviews. Reflective journals and research
logs can be helpful tools in a qualitative study to help reduce bias (Young & MacPhail,
2015). Cairney and St Denny (2015) suggested that qualitative researchers use coding
procedures to identify and categorize raw data and interpret interview responses. The use
of identifiers as opposed to individual names conceals participant’s identities and
safeguard confidentiality (Rashid, Caine, & Goetz, 2015; Morse, 2015). Participant’s
privacy was essential to this study. I used the following alpha-numeric coding system in
all journals to identify each participant: P1, P2, P3, and P4 represented a leader from each
of four SMEs. These participants were sufficient to reach data saturation.
Obenchain and Ives (2015) and Rashid et al. (2015) stressed the need to keep
participant data confidential and secure during the research process. I used a personal
laptop backed up to an external hard drive throughout the research process. All original
recordings, journals, and transcriptions were stored on the external hard drive. The laptop
and drive were password protected and the drive secured in a locked safe. Organization
software can be useful to researchers to identify themes in data (Woods, Paulus, Atkins,
& Macklin, 2015). All raw data collected during the study will be stored securely for 5
years in a safe at my home, then afterwards disposed of permanently per the Walden
University requirement.
Data Analysis
I used a thematic analysis sequence for data analysis. I used an analysis sequence
suggested by Yin (2018). After all data were collected, I (a) critically reviewed all data to
understand context by listening to audio answers, reading my notes, and reviewing all
documents, (b) organized data by grouping, (c) organized data by theme, (d) evaluated
the data to identify any emerging themes, and (e) repeated the process to identify further
emerging patterns or repetitive themes. I aimed to identify themes that relate to strategies
business leaders use to achieve CSR activities profitably.
I used methodological triangulation in this case study by combining three data
collection methods, interviews, observations, and document examination. Tran (2016)
found that using multiple sources of data increases the transferability of research findings
because this method reveals rich thick data and themes across cases. I collected data that
included interview responses and requested other data participants had that pertained to
CSR and the organization’s leader’s profitability strategies.
I used Microsoft Excel to code, map, and identify themes. Microsoft Excel is a
spreadsheet software tool that also features calculation and graphing tools and a macro
programming language that were helpful in detecting word frequencies and themes.
Adopting a coding system for semistructured interviews enhances validity and reliability
of the findings (Morse, 2015; Rashid et al., 2015). After examining participants’
responses to interview questions, interview notes, and document review, I coded by
categorizing text segments to include keywords that signaled specific information. The
main codes for this study included small business, strategies, leaders, CSR, profitable,
responsible, and performance. I used Excel to identify word and phrase frequency which
signaled emerging themes in the data. I then organized the data by grouping thematic
findings and repeated the process to identify further emerging patterns or repetitive
themes.
I focused on the key themes pertaining to CSR and corporate profitability that
emerged from data analysis and correlated the themes with established literature. I also
compared the data from the study participants to new studies published since writing my
proposal and conceptual framework. A key objective of qualitative analysis is to identify
patterns that lead to an answer to the research question (Beekhuyzen, Nielsen, & Von
Hellens, 2010). I compared data during my analysis and identified and grouped important
constructs into themes.
Reliability and Validity
Reliability
It is important for a study to be reliable and valid. A measure of research
reliability is how well a study can be replicated or successfully repeated rigorously
(Morse, 2015; Pocock, 2015). Qualitative researchers can gain research rigor and validity
by using trustworthy designs and strategies (Pocock, 2015). Allowing participants to
review, give feedback, and validate findings by member checking lends trust and
credibility to the process. (Marshall & Rossman, 2016). Documentation and member
checking are essential to minimizing errors in research (Yin, 2018). I asked participants
to review, give feedback, and validate my findings by member checking which should
ensure reliability and credibility to the results. I used my chosen research strategies and
protocol consistently throughout the study to minimize bias and errors as noted by Oberoi
et al. (2015). Morse (2015) suggested using a detailed documentation process to ensure
the quality of the collected data. I documented the data collection process to ensure that
other researchers can replicate my findings.
I used methodological triangulation to improve the reliability of the results from
this research study. The methods included interviews, observations, and document
searches to gather data. Researchers who use multiple sources of data or evidence in a
case study improve reliability (Archibald, 2015). I also used member checking to enhance
the reliability and accuracy of the study results. After reviewing and analyzing
transcribed data, I returned data to participants for review and feedback on accuracy.
Participants had a chance to review my interpretations from the reviews and also make
corrections. Sharing my interpretations of the data with each participant allowed for
transparency and feedback that enhanced the dependability of the study results.
Before starting the study, I meticulously documented all the research procedures.
Preplanning research procedures is critical (Morse, 2015). I conducted and organized the
study in a Microsoft Excel spreadsheet with macros to track participants and themes.
Field notes and other documents were also organized in a database using Excel Visual
Basic scripts. I used an interview protocol that outlined the process and a list of relevant
questions as a guide during the interview. The interview protocol was also used
consistently across all interviews as suggested by Oberoi et al. (2015). Advantages of
using a protocol are ensuring dependability by allowing the researcher to focus and
giving future researchers a guide to replicate the study (Noble & Smith, 2015). I did not
use pilot tests; I extensively rehearse the interview process with a stand in before
attempting the first interview after IRB approval.
Validity
Research validity refers to how well a researcher represents what was intended in
a study. Research validity is also how accurately the researcher reflects the reality of a
social phenomenon the researcher claims to represent (Harvey, 2015). Validity in
research represents the credibility, transferability, and confirmability of the findings of a
study (Archibald, 2015; Harvey, 2015). Data saturation and avoiding bias are critical for a
study to be valid (Oberoi et al., 2015; Tindall, MacDonald, Carrol, & Moody, 2015)
Marshall and Rossman (2016) posited that credibility, transferability and confirmability
cannot be measured in qualitative research. However, qualitative methods and strategies
can be employed to established credibility, transferability, and confirmability criteria that
are necessary for a study to be valid. Well employed strategies can be used to ensure that
participant’s views are accurately recorded, assessed and represented.
Credibility of qualitative research involves establishing that the results and
conclusions of the study are believable from the participant’s perspective. The credibility
of the results should be judged through the participants lens because qualitative research
involves understanding phenomena from the participant's perspective (Baille, 2015). I
adhered to guidance by Marshall and Rossman (2016) to address credibility of the
research by member checking of the data interpretation. I gave a detailed description of
the interview process to participants and arranged a follow up to check and ensure data
accuracy. Morse (2015) stressed the need for respondent validation to help improve the
accuracy and credibility of a study. Study participants review, verify, and validate the
researcher’s interpretations of the study during member checking (Marshall & Rossman,
2016). I also employed methodological triangulation by using multiple methods including
interviews, observations, and document searches to gather data.
Transferability of qualitative research is the degree to which the study can be
represented in other contexts. The qualitative researcher can enhance transferability of the
research by thoroughly describing the research context and the assumptions that were
central to the research (Baille, 2015; Marshall & Rossman, 2016). I carefully and
precisely documented each step of the research and data collection process to ensure
replicability. I added additional notes to the interview protocol during each step of the
process to document actual occurrences. Notes included clarifications of steps,
observations, and ideas to improve the process. I ensured that procedures used for my
research are easily understood and consistent so that future researchers can easily
replicate the study.
Confirmability of research is the extent to which the study results could be
confirmed or corroborated by other researchers (Noble & Smith, 2015). I addressed
confirmability of the research by maintaining detailed documentation of the procedures
and also audited and rechecked often as advocated by Kihn and Ihantola (2015). Baille
(2015) advised researchers to take clear concise notes to facilitate future replication of the
study. Fusch and Ness (2015) noted that a researcher reaches data saturation when there
is sufficient data to replicate the study and further coding may no longer be feasible. Data
saturation in research is reached when no new themes or information emerge from data
collection (Oberoi et al., 2015). I continued interviewing new participants and collecting
data while checking for duplicate data until I reached data saturation.
Transition and Summary
In Section 2, I thoroughly described my role as the researcher, the study
participants, the research method, the design utilized, the study population and sample,
ethical research standards, the data collection instruments, collection, and analysis
technique, and finally the reliability and validity of the research. In Section 3, I presented
the findings of the research and conclusions resulting from analysis of the collected data.
I further discussed the application of my findings to professional business practice, the
implications for social change, and recommendations for action and further research. I
concluded section 3 with reflections of the study.
Section 3: Application to Professional Practice and Implications for Change
Introduction
The purpose of this qualitative multiple case study was to explore strategies four
small business leaders used to achieve CSR activities that resulted in increased
profitability. I conducted four semistructured interviews with business leaders from
SMEs in Maryland and Virginia. I also gathered data from participants to gain further
insight and an in-depth understanding of the study subject. I used an interview protocol
(see Appendix) for each participant as a guide to ensure consistency. I recorded,
transcribed, and analyzed each interview thematically with the stakeholder theory as a
conceptual framework. I analyzed the recorded interviews and transcripts using macros in
Microsoft’s Excel software. The findings of the study showed strategies that leaders used
to plan and implement CSR activities while also achieving and increasing financial goals.
Three themes and subthemes emerged from the study. The themes were responsible
employee engagement improved profitability, responsible governance improved
profitability, and increased transparency enhanced profitability.
In Section 3, I present the findings of the study to explore strategies leaders of
SMEs use to achieve CSR profitably. I present applications to professional practice,
implications for social change, and recommendations for action. I also make
recommendations for further research and reflections and provide a conclusion.
Presentation of the Findings
The overarching research question for this study was:
RQ: What strategies do small business leaders use to fulfill CSR activities that
result in increased profitability?
I conducted a multiple case study to answer the research question. I recorded and
transcribed interview data, reviewed human resource employee handbooks for CSR
strategies and examined profit and loss statements from each of the four participants. I
used MS Excel macros to organize and review the collected data. After analyzing the
data, three major themes and subthemes emerged (Table 2).
Table 2
Major Emergent Themes and Subthemes
Theme 1: Responsible employee engagement improved profitability
•Positive work environment.
•Effective communication.
•Employee inclusion.
•Fair employee compensation.
Theme 2: Responsible governance improved profitability.
•Good leadership.
•Ethical culture.
Theme 3: Increased transparency enhanced profitability.
•Word of mouth.
•Stakeholder engagement.
•Customer loyalty.
I describe the sample, reviewed documents, collected data, and analyzed thematic
findings in the following subsections. I describe ways my findings confirm, disconfirm,
or extend knowledge in CSR strategies by comparing the findings with other
peerreviewed studies from the literature review. I include literature added since writing
the proposal that are tied the findings to the stakeholder theory and to existing literature
on responsible and profitable business practice.
Description of the Sample
The participants in my study were business leaders from small businesses in
Maryland and Virginia. There were four participants, one from each of the four small
businesses who have delivered on CSR promises profitably. All four SMEs were selected
from a listing of top sustainable companies in Virginia by L'Autre Couleur, a
sustainability marketing company (Claude-Lamoureux, 2017). This listing was an
indication that all four companies were responsible and still competitive. Interviews were
conducted in person at convenient premises selected by the participants. I used mnemonic
codes instead of personal identifiers to conceal the participants’ identities and to maintain
confidentiality. P1, P2, P3, and P4 represented the first through fourth participants in the
order of interviews. All participants voluntarily participated in the interviews and
discussed strategies used to deliver CSR profitably. All participants in the study met each
eligibility criteria: (a) at least 18 years old, (b) an executive or strategy leader in the
organization, (c) managed a small business in Maryland or Virginia, and (d) had
experience implementing successful strategies to fulfill CSR activities that resulted in
increasing profitability. The number of combined years of participants in each eligibility
criteria was important to establish credibility of data. Each participant indicated the
numbers of years in each category (Table 3).
Table 3
Participant Years in Eligibility Criteria
Participant
Strategy leader
(years)
Managed SME
(years)
CSR
experience
(years)
P1 10 4 4
P2 5 5 5
P3 7 15 6
P4 7 7 7
Documents Received
Each of the four study participants provided company documents helpful for
analyzing the organizations’ existing CSR strategies and profitability. I reviewed
employee handbooks from all four companies to analyze operational strategies. The
employee handbooks all clearly had outlines of benefits available to employees and codes
of conduct. P1 indicated that “a hard copy of the employee handbook is provided to each
employee on the first day of onboarding orientation.” P2 said, “Reference to an electronic
copy of the handbook is available to employees before the first day of work.” P3 and P4
made similar assertions. The handbook from P2 had an outline of the eligibility for and
availability of employee training and development. All employee handbooks had outlines
of ethics and employee conduct expectations. The handbook from P4 included further
guidance on expectations for company equipment use, privacy, and corporate security.
The availability of these documents to employees showed a desire by all leaders to inform
employees of adequate compensation and benefits provided to them, diversity sensitivity,
labor rights, training, and safety protocols.
All participants were private SME owners who do not report earnings publicly.
All four opted not to provide a hard copy of financial information; however, they allowed
a visual examination of the profit or loss from each business (Schedule C), a part of the
individual income tax return IRS Form 1040 that shows income from business (Internal
Revenue Service, 2019). I visually examined the Schedule C section of all participants’
tax year 2018 statements and used notes from the financial documents to triangulate with
verbal statements from participants to determine profitability. I subtracted total expenses
from revenue to calculate profit margins and to determine the net income of participant’s
businesses. All four SMEs were profitable in 2018. P3 anticipated a “significantly” more
profitable 2019 income statement and the other participants expected at least a moderate
increase in profitability in 2019.
Thematic Findings
The major subcategories of CSR include (a) community citizenship, development,
and relations between organizations and their operating communities; (b) employee
relations that include fair compensation, labor rights, and safety; (c) environmental
stewardship including efficient energy use and climate change mitigation strategies; and
(d) good governance, the ability of leaders to adopt best business strategies and practices.
Wu et al. (2015) posited that most large company leaders focus more CSR resources on
community citizenship and environmental stewardship while smaller corporate leaders
concentrate scarce resources on employee relations and good governance. A strategic
focus on employee relations and good governance was evident in the study thematic
findings. All four participants reported doing their fair share for their communities and
the environment, but concentrated CSR strategies and resources on employees and good
governance. Themes that emerged from the interviews were self-evident; responsible
employee engagement improved profitability, responsible governance improved
profitability, and increased transparency and reporting enhanced profitability.
Theme 1: Responsible Employee Engagement Improved Profitability.
Responsible employee engagement emerged as the first recurring theme from the
data analysis. All four participants stressed the need to engage with employees
responsibly and to provide a positive work environment, which is an effective strategy
that increases profitability by motivating employees to be more productive. P1 said,
“Treating my workforce well certainly has its benefits.” P2 mentioned “a welcoming
work environment leads to increased productivity.” Sankar (2015) and Gartenberg and
Serafeim (2019) stated that employees who perceived they were treated responsibly were
motivated, more energized and productive, satisfied with their jobs, and inclined to stay
with the company. Productivity and profitability are enhanced by high employee retention
rates resulting from satisfied workers, according to Terera and Ngirande (2014).
Employee departures can incur losses for a company that include severances paid and
retraining costs, but they also affect team morale that can also cause unnecessary burnout
(Prince, Nagar, & Chacko, 2017). Business leaders who ignore stakeholder engagement
risk compromising profitability.
Three study participants expressed similar sentiments of the adverse effects of
employee turnover to profitability. P1 noted, “Turnover happens to be the costliest aspect
of our business.” P3 stated, “Constant turnover can really affect the bottom line,” and P4
concluded that “I sometimes keep average employees because retraining new staff can get
expensive.” Organizations that lose trained employees to competitors may risk
compromising profitability (Zhao & Zhou, 2019). Organizational leaders who lack
effective employee motivational and retention strategies may lose employees and
institutional knowledge, negatively impacting the reputation and ultimately the financial
standing of the company.
In order to quantify the effects of CSR to business profitability, leaders need
proven effective tools and strategies. Leaders use the BSC strategic planning and
management tool to articulate what they plan to accomplish, align day-to-day work,
prioritize projects, and deliver services (Pecorino, 2016). According to Bento et al.
(2017), BSC is one of the most influential business ideas used by over half of large U.S.
firms. Bento et al. (2017) showed that the BSC methodologies, CSR, and the stakeholder
theory have several overlaps that include financial, stakeholder, and internal processes.
The ability to adequately measure results is important for an organization to quantify the
effects of strategy implementation.
Business leaders can use the BSC tool to measure employee motivation. P3 said,
“I actually cannot exactly measure it per se, but I can tell that my happier employees
certainly are more productive, and that goes directly to our bottom line.” P1, P2, and P4
used some aspects of the BSC to document the effects of CSR on profitability. The vision
to be responsible companies was evident in the description of inclusive business
processes, profit sharing schemes, and a focus on customer needs. The four main
perspectives of BSC are business process, financial, customer, and learning and growth
(Bento et al., 2017). Business leaders who understand the many facets of responsible
engagement could potentially assess the results of CSR efforts.
Leader actions that foster a sense of employee appreciation are an example of
responsible employee engagement. P1 described responsible employee engagement as
multi-faceted and included “effective communication with staff, employee inclusion in
decision making, and fair employee compensation.” Over 200 leading CEOs joined
together in 2019 to argue that prioritizing all stakeholders instead of just shareholders will
lead to better business and a healthier economy, consistent with the stakeholder theory
(Morgan, 2019). Mishra, Boynton, and Mishra (2014) defined communication in a
workplace as a way to share information to work efficiently. Previously published
findings found communication critical in improving employee retention, which is
consistent with the employee engagement thematic finding (Osman, Noordin, Daud, &
Othman, 2016; Reynolds, 2019). Leaders who include and appreciate employees and
other stakeholders in a company’s affairs may likely gain and retain loyalty.
All four participants mentioned effective communication as an effective strategy
for achieving CSR and also thought good communication made the entire team more
profitable. Reynolds (2019) found clear communication among leaders was needed to
help develop better CSR strategies. P1 engages employees in “a daily communications
session that is not structured and is open to any relevant topic.” P1 said, “I do this to
increase rapport, but also to assess the state of mind and wellbeing of my employees … I
get good feedback this way”. Open-door policies are good for businesses because the
entire company benefits when employees are comfortable and able to communicate
without fear of reprimand (Soltani et al., 2015). The open-door policy strategy aligned
with responses from P2, P3, and P4. Good frequent and free communication in an
organization is an effective CSR strategy that could create a productive work
environment.
Employee inclusion was the next subtheme that emerged from data analysis.
Inclusion helps boost employee awareness and understanding, and also inspires
employees to have deeper commitments to positive change and work attitudes (Tan, Loi,
Lam, & Zhang, 2019). This inclusion thematic finding is consistent with previously
published research that found that including employees in decision making and company
activities attracts loyal productive employees (Prince et al., 2017). P1 indicated, “We
always see attitudes improve when everyone is part of the process of creating the big
picture.” P3 further elaborated, “Employees that feel a part of the team are more willing
to give their best effort to achieve the company vision and goals.” P4 also added,
“Management needs to take employees’ needs and wants into account.” P4 further
recognized “a need to build very strong leader employee professional relationships.” P1
specified, “It’s as simple as this, any employee in my opinion would want to give her best
to a company that interacts and engages daily, and best of all makes her feels like an
owner.” Employees that are happy and feel like family are more likely to stay with and
work harder for the organization (Hakanen, Peeters, & Schaufeli, 2017). P1 holds daily
company meeting and believes “meetings are critical opportunities to deliver meaningful
content that inform, engage, motivate, and inspire employees.” A basic tenet of the
stakeholder theory is the need for interconnected relationships between a business and its
stakeholders which includes employees. Employee inclusion can have a direct effect on a
company’s financial stability by either increasing or hindering employees’ sense of
belonging to the company as a whole.
Marginalized disengaged employees may have a negative influence over other
workers and the entire organization. Harshitha (2016) found that the disruptive attitudes
of a single alienated or excluded employee can easily begin to be manifested in others in
the same organization if not addressed promptly. According to P3, “An unhappy
employee is likely to be disruptive.” P3 further stated, “It is management’s responsibility
to support and empower employees else they will become disengaged and likely
disruptive to the organization.” All participants stressed the need to continually
communicate to determine which staff may be overly unhappy with work in order to
address the situation as early as possible. Addressing employee discontent early may save
on the cost of work wide disengaged employees that negatively affect the entire
organization.
A report by Gallup, a global analytics and advice organization that helps leaders
solve pressing problems, provides insights into strategies that leaders can adopt to
improve employee engagement and performance. Gallup (2017) reports that disengaged
employees can be costly to the average organization; they are absent 37% more times,
produce 18% less, and are 15% less profitable. Translating this cost to dollars is about a
third of a disengaged employee's annual salary, $3,400 for every $10,000 made. The
consensus of all interview participants was that it may not be worth the effort and cost to
attempt to please repeatedly disgruntled employees regardless of their skillset; the better
course of action would be to replace them. Freeman (2010) published a principle
reflecting a new trend in stakeholder theory in which in his opinion the stakeholders’
perspectives should be considered and are important in the management of companies.
Freeman states “The principle of stakeholder recourse. Stakeholders may bring an action
against the directors for failure to perform the required duty of care”. Employees who are
not empowered may be resentful towards the organization, disrupt processes, affect other
employees’ attitudes and productivity, and eventually negatively affect company
profitability.
Ensuring fair employee compensation was the final subtheme to responsible
employee engagement. Employee compensation for this study refers to cash benefits,
vacation, and other incentives that employees receive in exchange for services to their
employer. P1 pointed out that “employee compensation is one of the largest costs for an
organization.” Fair compensation was cited by all participants as the primary strategy that
motivates employees and increases productivity. Prince et al. (2017) found a positive
correlation between compensation and employee work output, aligning with responses
from P2 and P4. P3 believes that “work output and employee attitudes are not negatively
affected when employees are compensated well.” P3 further posited, “Inadequate
compensation will increase employee turnover which in turn is costly to the
organization”. P1 indicated, “Of course! More money always makes them happier”. P1
further cautioned that “in industries like mine where wages are low, there should be a
careful benefit balance and less emphasis on wages.” P1 said, “I offer a comparatively
flexible schedule as an incentive to prevent workers from defecting to Home depot.”
Other research supports P1’s strategy, Del Brío and Lizarzaburu (2017) found that 65%
of people may prefer a good boss to a better pay package, and money was not always the
primary employee motivating factor. Although a paycheck immediately comes to mind
when compensation is mentioned, other incentives should be factored into compensation
strategy because many employees are incentivized differently.
Employees find value differently in different forms of compensation. A retail
sector study conducted by De Mesquita and De Aquino Almeida (2015) concluded that
other human resource practices other than cash compensation such as employee training,
recognition, and rewards affect employee loyalty and turnover. P4 is a strong advocate
for fair monetary compensation; however, believes money alone cannot guarantee a
productive workforce. Reynolds (2019) and P2 said that “monetary compensation has a
positive impact on job satisfaction and profitability.” Whereas, P4 indicated, “Monetary
compensation may actually be the least effective CSR profitability strategy.” P4
explained that “Employees in my industry who mostly have young families prefer a good
work-life balance and good healthcare to just a larger paycheck... employees have
different priorities.” Despite the demand for good healthcare, the percentage of people
without health insurance rose from 7.9% to 8.5% in the United States from 2017 to 2018
(Census.gov, 2019). P4 concurred with P1, P2, and P3 who weighed the cost of large
paychecks against less costly benefits like flexible time and working remotely. P4 stated,
“Large paychecks may be costly to the firm, but may sometimes be worth it in the long
run to attract and retain certain critical talent.” Jadon and Upadhyay (2018) noted that
competitive labor markets are a reason for a talent shortage making top talent difficult to
attract and retain. CSR is a broad field, so leaders need to explore and include many
facets into strategy in order to realize the most benefit for their institutions.
According to CSR principles and stakeholder theory it is important to build
relationships and create value for all stakeholders including every individual in each
stakeholder group. P2 agreed with P3 who stated that “many employees opted out of pay
increases in order to keep other benefits.” This thematic finding is consistent with
previously published findings that found compensation is relative, and different people
perceive value differently (Kim, Song et al., 2017). According to Bennett and Levinthal
(2017), incentives beyond a base salary encourage employees to work harder, and unique
benefits may serve as a competitive advantage. “Employees sometimes see salary as
earned but other bonusses as extra additions that need to be earned” according to P2 and
echoed by P4. The positive correlation between an effective rewards system and
employee retention leads to profitability. All employee handbooks received from
participants outlined alternate benefit schemes that align with the strategy of broad
responsible compensation. Employees are a major resource of companies and taking good
care of a major resource should give a good return on investment. Although regular
employees are a major contributor to the wellbeing and profitability of an organization,
leaders also play a critical role.
Theme 2: Responsible Governance Improved Profitability.
Responsible governance was the second theme that emerged from the data
analysis. Because leaders set corporate initiatives, it is important for business leaders to
set an example of responsible ethical leadership. P4 said, “I don’t expect much more from
my employees than I am prepared to do myself”. An example of responsible corporate
leadership was from the leaders of UPS who led by example and showed that it is
possible for business to do more for the environment while serving more customers and
adding value simultaneously (Smith, 2016). UPS met its 2016 goal of reducing its fleet's
carbon intensity by 10 %, 3 years early and so set a new 2020 goal of 20% carbon
intensity reduction (Smith, 2016). In August of 2019 Jeff Bezos of Amazon and Tim
Cook of Apple joined an assembly of 181 CEOs of top U.S. corporations to sign and
issue this statement “Americans deserve an economy that allows each person to succeed
through hard work and creativity and to lead a life of meaning and dignity.” the leaders
asserting that CSR should be prioritized at or above shareholder value when making
corporate decisions (Gartenberg & Serafeim, 2019, p. 1). As P3 stated, “large company
leaders may have the resources to implement ambitious CSR targets, however, these
lessons translate to SMEs on a smaller scale, so SME leaders need to mimic good
stewardship”. Šontaitė-Petkevičienė (2015) posited that business leaders who fail to
engage in CSR also compromise organizational profitability. Employees follow the lead
of top management, so leaders need to set an example of being responsible in order to
maintain a profitable CSR strategy, and not forfeit the benefits of responsible leadership.
Leaders set the path in organizations and greatly effect culture, so it is important
to have responsible leaders in order to achieve CSR. Ethical standards and CSR initiatives
come from the top of an organization, and leaders influence the ethical culture of their
organizations by examples (Lo & Fu, 2016). P1 stated that “employees are always
following the leader’s example, and many will also copy irresponsible actions.” P2 also
added that because leaders set policy in organizations, “an irresponsible leader would
likely not introduce responsible policies.” Influence of leaders on the ethical culture of a
corporation is more prevalent in SMEs where leaders may also be founders with more
discretion and influence (Wu et al., 2015). P1 founded the organization with their spouse
and they make major final CSR decisions. Sunghee and Heungjun (2016) stated that
personal philanthropic beliefs of company founders tend to be the focus of organizations
and motivate CSR acceptance and engagement among employees. All participants
indicated that they drive the CSR strategy in their companies. The leaders of SMEs have
great influence on the structure and culture of the organization so needs to set responsible
processes in order to achieve CSR goals that lead to profitability.
An ethical culture is important for any organization. Freeman (2010) identified
ethics as one of the key constructs underlying the stakeholder theory. The stakeholder
theory also serves as the foundation of this study to understand strategies small business
leaders use to fulfill CSR activities that result in profitability. The concept of business
ethics covers morality, corporate governance, and business codes of conduct (Goel et al.,
2013). Ethics in CSR has implications for value generation because leaders need to
employ processes that align with society's standards to deliver value (Dhanpat, Madou,
Lugisani, Mabojane, & Phiri, 2018); Horng et al., 2017). P3 and P4 stressed the need to
set ethical guidelines for their organizations. P4 further added that “In a small company,
everyone knows everyone, so it is very important for managers to put their best foot
forward”. It is important for leaders to include ethics as a key component in planning a
CSR strategy.
In pursuing ethical guidelines, leaders need to also be conscious of diversity. Ahen
and Zettinig (2015) cautioned that business ethics and CSR can be relative and quantified
differently depending on context, so leaders should be careful when approaching ethics
strategy. Di Norcia (1997) pointed out that it is a moral duty to respect another group’s
culture before passing premature judgement. P1 voiced a similar cautious sentiment,
“with a diverse workforce of 70 plus people, I am careful when setting ethical standards
and rules in order not to fringe on anyone’s core beliefs”. P2 and P3 also both mentioned
diversity in the workplace as an “important consideration” during CSR strategy sessions.
Employees follow the lead of top management, so leaders need to set an ethical example
in order to maintain a CSR culture while pursuing profitability, however the need to be
cautious should not intrude on individual beliefs and rights. These efforts though laudable
will yield little value if kept secret. A transparent system should help highlight the good
deeds of an organization.
Theme 3: Increased Transparency Enhanced Profitability.
Increased transparency was the third theme that emerged from the data analysis.
CSR practices need to be transparent to all stakeholders. Garcia et al. (2018) found
corporate social disclosure is consistent with the stakeholder theory and is also expected
by certification boards and reporting agencies. Large corporations advertise their
responsible behavior in order to reap the benefits of greater patronage, brand loyalty, and
to gain a competitive advantage (Del Brío & Lizarzaburu, 2017; Guo, Xu, & Chen,
2019). SMEs on the other hand may not have the resources to gain certifications such as
leadership in energy and environmental design (LEED) so may use other more
costeffective methods to advertise good deeds. All participants relied heavily on word of
mouth to advertise their good deeds. P3 had also participated in an interview that listed
the company in a publication as one of the top 20 sustainable small businesses in
Virginia. P1 said, “I don’t exactly measure the results of word of mouth, however most
new customers who call mention being referred to us because of another customer’s good
experience. A company that implements a CSR strategy needs to get the word out to reap
the financial rewards.
Executive compensation has become a topic in CSR discussions. Executives of
large organizations have been receiving larger and larger compensation packages with the
stated purpose of aligning the goals of executives and stakeholders. Stakeholders have
begun to criticize excessive compensation especially when it is perceived that leaders are
taking advantage of their positions to increase personal wealth while other workers’
salaries stay stagnant (Prince et al., 2017). Medium household incomes and supplemental
poverty in the United States remained the same from 2017 to 2018 while the percentage
of people without health insurance rose (Census.gov, 2019). Transparency in the
compensation process is paramount to gaining public trust. SMEs are generally private
entities that do not report to listing bodies so do not face this issue of compensation
scrutiny. All participants are leaders of private companies and have not needed to disclose
their compensation publicly. Transparency is essential to portraying a sense of
responsibility.
The main tenet of the stakeholder theory is to engage and provide value to all
stakeholders. Freeman argued that organizations can be sustainable and also create
longterm competitive advantage when their leaders align the interests of all stakeholders
with business goals (Freeman, 2010). All study participants stressed the importance of
treating every stakeholder well by including them in company affairs and maintaining a
transparent culture. P2 stated that “the goodwill generated by the feeling of belonging
among all entities that interact with the organization results in a welcoming work
environment which then leads to increased productivity.” Persic et al. (2016) included
shareholders, employees, suppliers, customers, and the community as stakeholders of an
organization. The first theme identified in the study, responsible employee engagement
improved profitability, related to three stakeholders; management, employees, and
shareholders. The first theme finding highlighted strategies to engage all three
stakeholders to satisfy organizational goals.
The second theme, responsible governance improved profitability, interconnected
managers, employees, and shareholders, three major stakeholders identified in the
stakeholder theory. The third theme, increased transparency and reporting enhanced
profitability, tied managerial strategies to value created for customers and the community.
Christensen et al. (2014) stated that leaders who are transparent and engage stakeholders
by reporting CSR activities enhance the reputation and credibility of their organizations.
Customer loyalty is also maintained when a company is perceived as being transparent
and honest (Bento et al., 2017; Guo et al., 2019). There is a tendency of consumers to
continuously purchase one brand from a company that has fostered a trusting open
relationship over buying from others (Prince et al., 2017). P4 said, “I have an open door,
and so they walk in…”. Great products or services may not be enough, transparency is
needed to create trust by helping to eliminate any suspicions or anxieties customers might
have about the value of an offering.
Ties Between Study Findings, Literature Review, and Theory.
The findings of this study show that leaders can increase profitability by adopting
CSR strategies adequate for their company’s sector. For SMEs, responsible employee
engagement, responsible governance, and increased transparency help increase
profitability. Du et al. (2013), Gartenberg and Serafeim (2019), and Sankar (2015) agreed
that employees are more productive and profitable when engaged with the organization
and treated well. Tan et al. (2019) added that engaging employees responsibly improved
employee loyalty and retention. Previously published findings by Osman et al. (2016) are
in agreement with Reynolds (2019) who found that employee engagement was necessary
to help develop better CSR strategies that help retain productive employees. Gartenberg
and Serafeim (2019), Reynolds (2019), and Sankar (2015) stated that employees are
motivated and productive when they perceive responsible governance. Dhanpat et al.
(2018) and Horng et al. (2017) stressed on the need for leader ethics and responsible
governance for increased productivity. Guo et al. (2019) agreed with Del Brío and
Lizarzaburu (2017) that company leaders that are transparent and advertise responsible
behavior attract brand loyalty, gain a competitive advantage, and increase profitability.
Customer loyalty is maintained when a company is perceived as being transparent and
honest (Bento et al., 2017; Eisenbeiss et al., 2015; Guo et al., 2019). Previous and current
research findings concur on the need for responsible strategies that lead to profitability.
The main tenet of the stakeholder theory ties into all three study themes. A recent
push by 200 leading CEOs to prioritize all stakeholders in the pursuit of business goals
shows a trend to sustainability in business (Morgan, 2019). Previous and current research
findings are in agreement with the need for strategies that align with the themes that
emerged from this study. Companies need to implement these strategies profitably.
Increased profitability was difficult to quantify. SMEs are generally private entities that
do not report to listing bodies so financial records would need to be voluntarily supplied
to a researcher. All participants opted not to share financial documents but described how
they quantified increased profitability. P1 cited an increase in business and thus
profitability resulting from increased transparency by positing that, “… most new
customers who call mention being referred to us because of another customer’s good
experience. P2 cited increased productivity and consequently profitability by stating that
“the goodwill generated by the feeling of belonging … leads to increased productivity.”
Zhao and Zhou (2019) stressed how employee turnover risks profitability and P1 agreed
by saying, “turnover happens to be the costliest aspect of our business.” P3 stated,
“constant turnover can really affect the bottom line”, and P4 concluded that “I sometimes
keep average employees because retraining new staff can get expensive.” These
statements show alternate methods participants use to estimate changes in profitability
resulting from strategies.
The success of an organization can be estimated from third party reports. All four
SMEs were featured in a publication of the top sustainable companies in Virginia by
L'autre couleur, a sustainability marketing company (Claude-Lamoureux, 2017) showing
that the strategies implemented by leaders of the participating SMEs result in increased
profitability. According to Reynolds (2019), effective best practice strategy can help
business leaders to become more competitive, develop new markets, reduce costs, and
become more efficient. Other benefits of effective best practice strategy include improved
workforce skills, reduced waste, and improved quality (Bento et al., 2017). These
findings on strategies for profitable CSR extend knowledge in effective business
administration by availing SME leaders of targeted strategies that help leaders achieve
both CSR and increased profitability goals.
Applications to Professional Practice
Society defines CSR broadly. CSR is associated in popular media with an
organization’s effect on the environment; to include energy use and climate change,
environmental and policy reporting, and resource management (Tian & Robertson, 2019).
Jones et al. (2016) included many more often overlooked categories into the CSR
definition. Apart from the environmental impact of corporations, CSR also includes
organizational leaders’ relations with the community, employees, and responsibly
governance (Griffin et al., 2015; Hee Sub et al., 2015; & Jones et al., 2016). Two CSR
categories that apply to professional practice are employee relations and corporate
governance (Prince et al., 2017). Employee relations may include compensation and
benefits, diversity and labor rights, and health training and safety (Prince et al., 2017).
Jones et al. (2016) described governance to include the choice of board members,
leadership ethics, and transparency and reporting. CSR relates to many sectors of society.
The findings of the study may be applicable to the professional practice of
business by providing organizational leaders with effective insights and references to
profitable CSR strategies that cover all aspects of corporate responsibility. According to
Balzarova and Castka (2016), certification agencies stated that businesses can gain the
trust and patronage of consumers when leaders follow accepted CSR practices necessary
for third party certification. Until the early 2000s, business leaders spent a considerable
amount of time and money attempting to become more environmentally responsible only
to receive a minimal return on investment (Huang & Coelho, 2017). The availability of
profitable CSR strategies could help corporate leaders plan and make more informed
decisions on their CSR initiatives as well as save on internal CSR research funding.
Corporate social responsibility practices have traditionally been pursued and
promoted by the largest and most profitable companies in every industry. Some SMEs
may still think that CSR is only relevant to larger organizations because of their higher
profiles, media attention and a need to protect or enhance their reputations (Christensen et
al., 2014). Large companies also often have more resourced and are able to invest in
CSR. SMEs account for 99 % of all businesses in the United States, create most
employment, and are responsible for most private sector gross domestic product in the
United States economy so can affect socially responsible change (United States
Department of Commerce, 2018). SMEs could arguably have a larger impact on CSR
than larger companies by having a larger presence in society.
Study participants described strategies that were mainly tailored to and available
to larger organizations that were modified for SMEs to use to deliver on CSR profitably.
SME leaders who have struggled to find or fund effective CSR initiatives can refer to the
identified themes to enhance their CSR performance while also increasing profitability.
According to participants in this study, (a) responsible employee engagement improved
profitability, (b) responsible governance improved profitability, and (c) increased
transparency enhanced profitability. The findings in this study could result in SME
leaders understanding and implementing appropriate and proven profitable CSR
strategies. Valuable resources needed for CSR research could be used elsewhere in the
organizations to also improve on profitability.
Implications for Social Change
Although 2 CSR categories, employee relations and corporate governance
especially apply to small business professional practice, all CSR including community
and environmental relations have implications for social change. Improved employee
relations could include better compensation and benefits that attract loyal productive
employees (Prince et al., 2017). P1 said, “treating my workforce well certainly has its
benefits”. Employee relations also translate to better diversity and labor rights and a
healthy and safe work environment (Markey, Ravenswood, & Webber, 2015). Improved
corporate governance could improve leader ethics that affect all stakeholders including
investors, customers, regulators, and communities. Better community engagement could
improve development, better products, and respect for human rights. Environmental
stewardship, the most widely known CSR trait could improve air and water quality for all
society and preserve communal resources. The results of the study could contribute to
positive social change in SMEs and create awareness of factors that affect corporate
responsibility and profitability. The themes identified, responsible employee engagement
improved profitability, responsible governance improved profitability, and increased
transparency enhanced profitability could foster tangible improvements to individuals,
communities, organizations, institutions, or societies.
The findings from this study could potentially help SMEs in Maryland and
Virginia improve on CSR initiatives, however, benefits could translate to a broader
audience to include nongovernmental organizations and even large companies. SME
leaders may be able to adopt and implement effective CSR strategies that potentially
contribute to positive social change by increasing corporate philanthropic activities in
communities. Philanthropic activities such as charitable donations and increased
collaboration between society and industry could improve the living conditions for
citizens through increasing local community growth and development. Collaborations
could increase benefits for the needy and less advantaged. Better corporate governance
could also improve employee relations, retention, and wellbeing.
Recommendations for Action
The results of this study could help organizational leaders develop and implement
strategic CSR strategies that are profitable and serve their business goals. P2 stated, “I
take CSR cues from many varying sources and fit them to my organization’s needs”.
Existing strategies have mainly been modeled for and available to large organizations, so
this research can provide strategies tailored for SMEs to deliver on CSR profitably. Using
strategies meant for structurally different organizations may have a negative effect on
profitability. Organizational leaders need to assess their CSR goals and choose strategies
that best fit their organizational structure. I have determined four recommendations for
action for profitable CSR in SMEs based on the answers from participants’ responses and
literature pertaining to CSR strategies,
The first recommendation, business leaders should first seek strategies specifically
modeled for their industry and corporate structure. CSR strategy can be ported across
different industries; however, leaders should be careful and selective because some
strategies may not be suited for their organization and may rather be harmful. The second
recommendation is to ensure that all stakeholders are included in or at a minimum
informed of planning and implementing a CSR strategy. Create a sense of inclusion to
gain support for the strategy. The third recommendation is to develop a way to quantify
or measure results of the CSR strategies. Use or develop a management system to focus
on the big-picture strategic goals. A focus on both high-level strategy and low-level
measures will help achieve better results and select best practices.
The fourth recommendation is to ensure good deeds are known. Increased
profitability resulting from corporate responsibility mainly depends on stakeholders being
informed of the organizations efforts. SMEs can get the word out in cost effective ways
like volunteering for CSR interviews and encouraging word of mouth promotions through
feedback surveys. Organizational leaders, especially SME managers, need all or a
combination of the four strategy recommendations to achieve CSR goals profitably.
Although the recommendations are aimed at SMEs, carful study and implementation of
the four tailored strategies should help leaders of all company sizes achieve CSR goals.
I will provide a short summary of this report to all participants, and a copy of the
entire final publication if requested. I will seek to publish this study in the ProQuest/UMI
dissertations database to be available to other researchers and attempt to publish in other
scholarly journals. I will also seek to present the findings of this study to leaders of SMEs
and all other stakeholders.
Recommendations for Further Research
The limitations of this study may result in boundaries or a restricting cap or
ceiling on the study. I restricted study participation to four leaders from SMEs that have
successfully implemented CSR strategies in Maryland and Virginia. Because this study
focused on CSR delivery strategies for SMEs, future researchers could expand the
breadth of their research by increasing the population to include large organizations. To
address the small targeted population and number of participants, I would recommend
that future researchers build on the findings of the research pertaining to profitable CSR
by selecting different industries and different geographic locations. For future research I
will also recommend that researchers consider factors beyond profitability to include
sustainability of CSR strategies and CSR in nongovernmental organizations.
Reflections
I started my DBA journey with the sole goal of simply attaining a Doctorate. My
background is in engineering, so I assumed a degree in project management would
complement my position as a project engineer. I had expected the DBA program to be an
application of business, particularly where business management tools and practices
would be taught. I realized that the program was less practical and more theory and
application. After completing my required courses, I started to research on the topic of
corporate responsibility for my dissertation. I quickly realized how narrow my knowledge
of the breadth of the topics and nuances of CSR were. I realized that CSR included
known issues like pollution and accountability but also included fewer known issues like
pay equity and religious tolerance. Because I conducted thorough research and used an
interview protocol, I am confident my initial biases had little effect on the participants of
the study. I am glad I took this journey of attaining the highest form of scholarship. I
always felt I had a goal I had not accomplished. The next chapter after my Doctorate will
be to apply what I learned through this journey. I will look at business problems from a
different perspective, and in the spirit of a DBA will concentrate on applied solutions.
Conclusion
The purpose of this study was to explore strategies that small business leaders use
to achieve CSR activities that increase profitability. Boulouta and Pitelas (2014) posited
that successful CSR strategies increase a company’s competitiveness and have a positive
influence on the profitability and competitive advantage of firms. Furthermore, business
leaders who lacked strategies to engage in CSR compromise organizational profitability
(Šontaitė-Petkevičienė, 2015). I used the qualitative method and conducted
semistructured interviews with one business leader from each of four SMEs in Maryland
and Virginia. I asked open-ended questions to gain an in-depth understanding of the
strategy’s leaders used to achieve CSR activities that increase profitability. Three themes
emerged from the study, (a) responsible employee engagement improved profitability, (b)
responsible governance improved profitability, and (c) increased transparency enhanced
profitability. The findings from the study can be applied by business leaders both within
and outside the study population that need strategies to achieve CSR activities that result
in increased profitability. Business leaders of large organizations as well as SMEs can
incorporate the findings of this study into their portfolios to achieve CSR and increased
profitability goals.
