Social Responsibility Strategies to Improve Firm
Performance
Section 1: Foundation of the Study
Corporate social responsibility (CSR), in a broad perspective, means a firm should
provide social and environmental benefits for their stakeholders in addition to delivering
profit for shareholders (Schmeltz, 2014). However, findings that correlated investments
in CSR to improved financial performance or market value were contradictory (Cheng,
Ioannou, & Serafeim, 2014; Chin, Hambrick, & Treviño, 2013; Fontaine, 2013; Orlitzky,
2013; Wang & Sarkis, 2017) leaving managers in a quandary on whether to invest in CSR
activities. With this study, I sought to explore CSR managers’ strategies to evaluate CSR
effectiveness in the economic, environmental, and social dimensions.
Background of the Problem
Scholars and practitioners have studied CSR for the last decades, particularly in
the United States, where most Fortune 500 firms are involved in recurring CSR activities
(Sony, Ferguson, & Beise-Zee, 2015). Up to 72% of Fortune 500 firms published specific
annual CSR reports in 2013 (Sethi, Martell, & Demir, 2015), and the majority of these
firms have senior CSR managers (Homburg, Stierl, & Bornemann, 2013). Research
findings revealed an inconsistent relationship between CSR and firm economic outcomes
and financial performance (Orlitzky, 2013; Servaes & Tamayo, 2013; Wang & Sarkis,
2017). Despite these inconclusive findings, the IPEA Instituto de Pesquisa Econômica
Aplicada (2006) conducted research that revealed 69% of privately owned companies in
Brazil carried out social activities on behalf of the community, and the number of
companies was increasing steadily, demonstrating that managers understood a
responsibility towards society (Oliveira & Giroletti, 2016). Given the contradictory
findings of CSR value, further discussion on strategies to evaluate CSR effectiveness is
warranted to guide managers’ CSR investment decisions.
Problem Statement
Historical empirical research on CSR and its impact on corporate financial and
social results arrived at contradictory findings (Cheng et al., 2014; Chin et al., 2013;
Fontaine, 2013; Orlitzky, 2013; Wang & Sarkis, 2017). Notwithstanding contradictory
results, 95% of the world’s 250 largest corporations reported investing in CSR activities
in 2011 (Sony et al., 2015). The general business problem is despite encouragement for
corporations to engage in CSR activities, little empirical support exists that such
engagement leads to improved value creation for stakeholders. The specific business
problem is some managers lack strategies to evaluate CSR effectiveness.
Purpose Statement
The purpose of this qualitative multiple case study was to explore CSR managers’
strategies for evaluating CSR effectiveness. The population for this study consisted of
managers with CSR responsibility of large for-profit, privately owned companies in
southeast Brazil that have invested in CSR programs. Findings from this study may
influence managers’ internal and external CSR efforts that can contribute to positive
social change. Within the internal CSR dimension, efforts may affect employee (a)
working conditions, (b) health, (c) training, and (d) work-life balance. Within the external
dimension, CSR efforts include (a) addressing stakeholders’ needs in ways that create
vibrant communities, contributing to social cohesion; (b) respect for human rights; (c)
social commitment; and (d) sustainable practices.
Nature of the Study
Qualitative research methodology allows the researcher to understand, gain insight
into, and explore participants’ experiences and perceptions in detail and in greater depth
in their natural settings (Birchall, 2014; Khan, 2014; Yilmaz, 2013). A qualitative
approach enables the identification of particular thematic patterns (Yap & Webber,
2015), and also allows unexpected discoveries and new insights (Lyons, Goodwin,
McCreanor, & Griffin, 2015). A qualitative approach was appropriate for the purpose of
exploring CSR managerial practices in greater depth. Quantitative research methodology
usually involves the methodical collection of data about a phenomenon, using
standardized measures and statistical analysis to examine the relationship or correlation
between variables (Hammarberg, Kirkman, & De Lacey, 2016). A quantitative research
methodology was not appropriate for this study because the focus of this research was not
to examine the relationship between variables. A mixed method approach was not
necessary as the research question was answered using a qualitative method alone.
I used a multiple case study design to explore CSR managers’ practices and
evaluation strategies. Other common alternatives for qualitative approach designs include
phenomenological, grounded theory, and ethnographic approaches. A phenomenological
approach is appropriate when addressing several individuals who have had similar
experiences; however, the phenomenological design was not the most effective option
given my intent to obtain an in-depth understanding of CSR decisions taken by managers.
A grounded theory approach is suited for creating theories (Tavakol & Sandars, 2014),
which was not my objective for exploring CSR business practices and strategies to
evaluate CSR effectiveness. An ethnographic approach is fit for a study when a
researcher seeks to describe and interpret the shared patterns of the culture of an intact
group over a prolonged period of time. An ethnographic approach was not appropriate as
I sought to obtain data about actual CSR practices and strategies to evaluate CSR
effectiveness from managers with no specific cultural background. A case study was
preferred because my research objective was to explore business practices related to
managers’ decisions.
Research Question
The primary research question guiding this study was:
RQ: What are the strategies CSR managers apply to evaluate CSR effectiveness?
Interview Questions
1. What are the current CSR practices of your firm?
2. What are the corporate goals for CSR investments?
3. What values and beliefs influence your CSR investment decisions?
4. How are CSR practices organized and managed at your firm?
5. What strategies do you use to evaluate CSR effectiveness?
6. How does firm leadership influence CSR decisions?
7. How do employees, neighboring communities, and other stakeholders
influence CSR investments?
8. How do you measure the financial impact of CSR investment?
9. How do you measure the social impact of CSR investment?
10. How do you measure the sustainability value of CSR investment?
11. What would you like to add regarding CSR investment decisions?
Conceptual Framework
The stakeholder theory is the conceptual framework I used to explore how
managers make their decisions regarding the enactment of CSR in their companies.
Freeman developed the stakeholder theory in 1982 and defended the need to give equal
treatment to all stakeholders of the firm (Freeman, 2010). Freeman’s 1982 treatise,
Strategic Management: A Stakeholder Approach, became relevant to business scholars
and practitioners as the stakeholder theory (Freeman, 2010). According to the stakeholder
theory, the interest of companies, customers, employees, communities, suppliers,
financiers, NGOs, unions, governments, and other groups that are part of the stakeholders
in a company should receive the same attention from management (Chabowski, Mena, &
Gonzalez-Padron, 2011; Freeman, 2010). In essence, the satisfaction of the interests of
one stakeholder group should not have priority over other groups. Hardy and Pearson
(2017) conducted a study that indicated individual stakeholders’ attitudes were not
always aligned with their traditional stakeholder groups. Conflictive stakeholders’
interests offer opportunities for value creation by companies’ managers who understand
the need for a sustainable stakeholder management (Matos & Silvestre, 2013; Tantalo &
Priem, 2014). Thus, finding the intersection of interests of all stakeholders in a company
is fundamental to effective stakeholder management.
CSR has diverse concepts and definitions that vary according to political, social,
and cultural elements, and authorship (Freeman & Hasnaoui, 2011; Hahn & Kühnen,
2013; Orlitzky, 2013). However, CSR in a broad perspective means a company may do
more than just increase wealth for their shareholders; they may provide social and
environmental benefits for their stakeholders as well (Chan, Watson, & Woodliff, 2014).
CSR practices contribute towards this balance among stakeholders’ interests (Freeman,
2010).
Operational Definitions
Corporate social responsibility (CSR): CSR is a general term for activities that
corporate leaders conduct beyond complying with governmental rules or impositions, to
provide social and environmental benefits for stakeholders while delivering profit for
their shareholders (Freeman & Hasnaoui, 2011; Lankoski, Smith, & Van Wassenhove,
2016).
Corporate social performance (CSP): CSP is an outcome measure of the different
CSR policies and programs a firm has implemented (Brower & Mahajan, 2013).
Green company: A company is green when the company satisfies consumers’
needs and expectations, causing little or no harm to the environment (Cronin, Smith,
Gleim, Ramirez, & Martinez, 2011; Fernando, Suganthi, & Sivakumaran, 2014).
Greenwashing: Greenwashing occurs when a company not genuinely concerned
with sustainability matters performs green activities with the aim of profiting from the
increased consumer awareness of ecological problems (Zaharia & Zaharia, 2012).
Social cohesion: Social cohesion is a state of well-being for members of a society
that is free from exclusion and marginalization and affords members a sense of being part
of society, enhances trust, and offers upward social mobility opportunities (Organization
for Economic Co-operation and Development [OECD], 2011).
Stakeholder theory (ST): The proposition of ST is that corporations have a moral
responsibility to their stakeholders (Sama-Lang & Zesung, 2016; Freeman, 2010).
Triple bottom line (TBL): In TBL, corporations can visualize their obligations in
three dimensions: environmental (reducing damage to natural resources), social (social
impact in communities), and economic (value creation and financial prosperity;
Chabowski et al., 2011; Nobre & Moura Ribeiro, 2013).
Assumptions, Limitations, and Delimitations
Assumptions
When available data may be insufficient for determining the veracity of a concept
or situation it may be necessary to formulate assumptions based on beliefs, expectations,
or considerations accepted as true (Foss & Hallberg, 2013; Nkwake & Morrow, 2016).
The first assumption for this study was that CSR managers were capable of providing an
accurate description of the CSR activities of their companies. I also assumed the
managers were cognizant of the reasons or motivations for engaging in CSR initiatives.
Another assumption was that CSR managers would reveal truthful opinions and
observations, including any sensitive company information. To mitigate any perceived
risk in this assumption, three steps were taken: (a) CSR managers’ participation in this
research was voluntary, (b) I reviewed the confidentiality feature contained in the
informed consent form with each CSR manager, and (c) I insured that research disclosure
did not particularize any company or individual.
Limitations
A limitation is any constraint that might affect the internal and external validity of
a research (Connelly, 2013). A limitation of this study was the lack of consensus on a
CSR definition. Scholars and practitioners involved in CSR practices may have different
interpretations of this term (Freeman & Hasnaoui, 2011; Hahn & Kühnen, 2013). The use
of a comprehensive interview approach reinforced consistency in defining CSR. Given
the more competitive market environment in the Southeast region of Brazil (Cassiolato &
Szapiro, 2015), managers might not represent a typical Brazilian manager from a less
competitive market outisde the region. This selection process may reduce the
transferability of results to other populations (Ody-Braisier & Vermeulen, 2014).
Delimitations
A delimitation is a controlled and self-imposed limitation to the study, reducing its
scope by setting boundaries and focusing the study in particular areas of interest
(OdyBraisier & Vermeulen, 2014). This study involved six managers with CSR
responsibilities from companies located in Brazil’s Southeast region. Another
delimitation was that this study excluded the social or not for profit sector. In addition,
the population involved firms that had managers formally responsible for CSR. Excluding
firms in the social or not for profit sector and organizations that do not have formal
positions dedicated to CSR activities may limit the depth of understanding related to CSR
activities.
Significance of the Study
Contribution to Business Practice
The contribution of this research to business practice is to promote a deeper
understanding of CSR managers’ strategies for evaluating CSR effectiveness on meeting
expectations of different stakeholders. CSR activities have the potential to generate a
positive impact on the corporate performance in the long-term (Lankoski et al., 2016).
Findings identified the value that managers place on applying CSR for the community.
Managers may have a better understanding of the impact of their decisions related to
CSR, particularly the positive impact on the corporate performance that may result from a
better organizational image as a company engaged with sustainability. Findings of this
study revealed organizations could benefit from their investments in CSR if they
communicatted their CSR actions and expenditures to the general public. The research
may support business practices through better budgeting processes, a more effective
evaluation of CSR effectiveness, and secondary stakeholder communication and needs
management.
Implications for Social Change
The positive social impact of the findings of this study may be the development of
CSR actions capable of fulfilling stakeholders´ particular needs, including those needs
from secondary stakeholders, which were often neglected. These CSR actions include
promoting business-community relationships that create vibrant social units and
enhancing social and economic partnering reputations, contributing to social cohesion
(OECD, 2011).
A Review of the Professional and Academic Literature
The purpose of this qualitative multiple case study was to explore CSR managers’
strategies for evaluating CRS effectiveness. The literature review served to establish a
theoretical and academic foundation for the development of this doctoral study. The
purpose of this literature review was to identify significant literature about the impact of
CSR on corporate financial, environmental, and social results and the influence of
communication of CSR on the image and reputation of a firm.
The literature review organization followed a broad-to-specific approach,
providing generic information regarding CSR, including the diversity of concepts,
communication, and the increasing importance of CSR to stakeholders, practitioners, and
scholars. Following this generic overview of CSR, the literature review had an emphasis
on stakeholder theory and the specifics of the research topics. The literature review
consisted of eight sections covering (a) CSR concepts and definitions, (b) stakeholder
theory, (c) CSR standards and evaluation methods, (d) triple bottom line concept, (e) the
relationship between CSR and corporate financial results, (f) executives` inner values and
beliefs, (g) communication and green marketing, and (h) CSR in Brazil.
The compiled information emerged from academic peer-reviewed articles,
seminal books, Brazilian federal and state agencies, Brazilian foundations, and Walden
DBA dissertations, mostly published in 2013 and later. The majority of the peer-reviewed
articles came from ABI/INFORM, EBSCO, Emerald, ERIC, ProQuest, and Sage Premier
databases. Keywords for this search included the following: communication, corporate
social responsibility, CSR evaluation methods, green marketing, leadership, marketing,
primary and secondary stakeholders, qualitative research, the relationship between CSR
and financial results, reputation, stakeholder, stakeholders’ theory, sustainability, and
triple bottom line.
The literature of this doctoral study consists of 200 references of which 170 had a
publication date between 2013 and 2017, corresponding to 85% of the total references.
The number of references used in each category was: 190 journals and articles, five
books, three government reports, and one other source. The literature review includes 110
peer reviewed sources with a publication date between 2013 and 2017.
Corporate Social Responsibility
CSR is a subject practiced and discussed for over 70 years. CSR first appeared in
the academy in 1926 with Clark’s discussion of business responsibilities towards society
(Freeman & Hasnaoui, 2011). Clark stated that business had responsibilities towards
society. The academy became progressively interested in the subject in 1953 after the
publication of Bowen’s seminal work (republished in 2013) Social Responsibilities of the
Businessman (Carroll, 1999). The high importance of CSR in business practice and the
number of studies conducted in consumer markets demonstrate the current relevance of
the CSR subject (Homburg et al., 2013). Moreover, up to 90% of Fortune 500 companies
have specific CSR practices, more than 50% issue reports on their CSR activities, and
most have senior managers in charge of CSR (Homburg et al., 2013).
The historical evolution of the concepts and definitions of CSR from 1926
through 2009 led to diverse CSR concepts and definitions (Freeman & Hasnaoui, 2011).
CSR is a term that encompasses various meanings and overlapping areas according to
political, social, and cultural elements, and authorship (Carroll, 1999). Scholars and
practitioners commonly have different concepts of CSR (Hörisch, Freeman, &
Schaltegger, 2014; Lin-Hi & Müller, 2013; Wendlandt Amezaga, He Haisame, & Valdés
Cuervo, 2013). Furthermore, CSR concepts and definitions are not equivalent because
each interested party has different interests and agenda.
In this regard, CSR is far from a solution to all social problems because of the
limited resources available, but CSR contains important guidelines for firms to follow in
their future strategies. The limitation of resources prevents organizations from coping
with social obligations that are under the responsibility of the government (Bowen, 2013;
Carrol, 1999). Conversely, in Japan, the tight governments budgets and the reduction in
social expenditures led the local community to demand more from the corporations to
become more socially responsible (Eweje & Sakaki, 2015).
Social responsibility and sustainability captured the attention of practitioners and
researchers in premier marketing journals from 1958 through 2008 (Chabowski et al.,
2011). Companies’ focus on social and environmental issues represented a shift on how
companies approached the market. Organizations may positively contribute to a
sustainable world by adopting the stakeholder theory to organizational management, with
a concentratoin on social and environmental issues (Sama-Lang & Zesung, 2016; Hörisch
et al., 2014; Sen & Cowley, 2013).
The stakeholder approach presents inconsistencies with the idea of a sustainable
world. Stakeholder management does not imply that all stakeholders who could benefit
from the CSR effort should be treated equally, regardless of the particular circumstances
involving their relationship with the firm (Hardy & Pearson, 2017). The challenge is to
create synergies and reciprocity between firm and stakeholders considering their different
interests (Homburg et al., 2013; Hörisch et al., 2014). The adoption of the stakeholder
theory to organizational management has the objective of ensuring the survival of the
company while creating value for stakeholders (Chan et al., 2014; Homburg et al., 2013;
Hörisch et al., 2014). Many companies voluntarily adopt CSR governance as a control
system for the integration of the social and environmental dimensions in their business
strategies (Wang & Sarkis, 2017).
Management trends impact strategies and methods for managing business mainly
because firms must adapt themselves to changing environments, which includes new
technology and business models and stakeholder pressure for CSR compliance
(Nwagbara & Reid, 2013). Firms must change their business strategies and be innovative
to remain competitive in the market. Furthermore, firms can take advantage of their CSR
commitment while achieving the triple bottom line results (Bhattacharya, 2016;
Nwagbara & Reid, 2013).
In recent years, stakeholders urged corporations to engage in CSR activities and to
become more active in meeting social needs (Servaes & Tamayo, 2013; Torugsa,
O'Donohue, & Hecker, 2013; Wilburn & Wilburn, 2014). CSR involves three processes:
(a) assessment of the environment, (b) social issues management, and (c) stakeholder
management. Effective stakeholder management requires a strong relationship between
the company and its stakeholders. A legitimate concern for the health and safety of both
the local community and employees may lead to such relationship (Chow & Chen, 2012).
Organizations adopt their concepts of CSR, which encompass different
components such as volunteer work, support for local communities, sustainable practices,
and ethics (Korschun, Bhattacharya, & Swain, 2014). One of the aims of the OECD is
social cohesion, which is a state of well-being for members of a society that is free from
exclusion and marginalization, and affords members a sense of societal inclusion,
enhances trust, and offers upward social mobility opportunities (De Vries et al., 2013;
Hollenbaugh & Ferris, 2013; OECD, 2011). The social cohesion concept aligns with the
stakeholder theory.
The existence of many different concepts of CSR makes it difficult to compare the
CSR performance of different companies. At most, it is possible to compare single
practices when they have a certain similarity, indicating the need for a common
framework to define CSR. Establishing common and normative standards could then be
adopted by institutions throughout the world (Freeman & Hanaoui, 2011).
Corporate Social Responsibility Standards and Evaluation Methods
The establishment of normative standards to define CSR seems improbable, as
standardization might be detrimental to different social groups and entities that have
unique needs and objectives (Freeman & Hanaoui, 2011). For instance, CSP standards
developed by standard-setting organizations, such as the International Organization for
Standardization (ISO), usually considered the interests of a small number of stakeholders
(Balzarova & Castka, 2012). The influence of many different stakeholder groups in
setting standards led ISO to introduce multistakeholder standards development. An
example of this multistakeholder development was the ISO 26000 standard for social
responsibility, which involved six main stakeholder groups: (a) consumer; (b)
government; (c) industry; (d) labor; (e) NGOs; and (f) service, support, research, and
others (SSRO) representatives (Balzarova & Castka, 2012). Conversely, the lack of
development of environmental and social standardization indicated the inability of ISO
developers to include a wider base of stakeholders in the development of standards
(Balzarova & Castka, 2012). Standard-setting organizations find it difficult to establish
normative standards to define CSR performance because stakeholders vie for their
specific interests.
Bearing in mind CSR, community members may measure several dimensions of a
company (Harrison & Wicks, 2013). Measurable company dimensions are not limited to
the variables set by the balanced scorecard nor the triple bottom line concept as the
economic focus is still predominant (Harrison & Wicks, 2013). An increasing number of
firms are developing CSR activities; however, these firms lack an accepted method of
measuring sustainability. Existing methods lack consistency (Venturelli, Caputo,
Leopizzi, Mastroleo, & Mio, 2017). It is impractical to evaluate the value of the utility
provided to each stakeholder. However, over the last 3 decades, CSR rating agencies
participated in several discussions and assessments that contributed to the development of
international standards and guidelines. Corporations, government, and other primary
stakeholders developed reliable and trustworthy evaluation criteria and methodologies to
assist CSR rating agencies (Elbasha & Avetisyan, 2017). Additionally, it is possible to
measure the amount of happiness these utilities bring to individual stakeholders (Harrison
& Wicks, 2013). Therefore, happiness is a common factor that can serve as a measure to
compare different CSR actions (Harrison & Wicks, 2013).
Managers tend to concentrate their efforts on initiatives that lead to higher
performance, which is how shareholders measure them, predominantly regarding
economic returns. While companies should seek to add value for their core stakeholders
(Crane, Palazzo, Spencer, & Matten, 2014), the notion of value has been wrongly
narrowed to focus on economic returns (Harrison & Wicks, 2013). Performance in each
stakeholder dimension affects the value-creation ability of a firm differently, suggesting
the need for an individual examination of each stakeholder (Vracheva & Mason, 2015).
Value creation for stakeholders and how to measure it has received little attention
from researchers because of the belief that good treatment of stakeholders is reflected in
the economic value of a firm (Harrison & Wicks, 2013). However, not every benefit a
stakeholder gets by working with stakeholder-friendly companies is captured in economic
measures (Harrison & Wicks, 2013). The concept of value is much broader, as each
stakeholder seeks different values from their interaction with a firm and with other
stakeholders.
Independently of its social responsible activities, CSR and CSP bring benefits to a
firm, including, for example, intangible marketing assets and customer identification with
a firm. Despite the positive outcomes, many firms did not develop strategies involving
CSP (Brower & Mahajan, 2013). Stakeholders influence a firm’s CSP breadth, such as
the number of different CSR activities conducted by a firm. A data set from Kinder,
Lydenburg, and Domini (named KLD) may serve to measure firm CSP (Brower &
Mahajan, 2013). Sensitivity to stakeholder demands, diversity of stakeholder demands,
and exposure to stakeholder scrutiny may contribute towards a positive CSP breadth
(Brower & Mahajan, 2013). The KLD dataset is the most frequently used in CSP studies
when compared to any other single set of CSP indicators (Chin et al., 2013; Vracheva &
Mason, 2015). The KLD dataset measures more than 35 dimensions of a firm’s socially
responsible behavior (Brower & Mahajan, 2013) grouped in seven main indicators: (a)
community, (b) corporate governance, (c) diversity, (d) employee relations, (e)
environment, (f) human rights, and (g) product (Vracheva & Mason, 2015). KLD is the
most respected source of stakeholder performance data available (Dowling, 2014). Firms’
executives place different emphasis in each indicator according to stakeholders’
characteristics and expectations, economic environment, location, and culture. Therefore
the evaluation of each indicator and its contribution to overall corporate performance is a
challenge for CSR managers.
Stakeholder Theory
Freeman developed the stakeholder theory in 1982 (Freeman, 2010). In
conformance to the stakeholder theory, stakeholders in an organization should receive the
same attention from management (Sama-Lang & Zesung, 2016; Freeman, 2010).
Corporations can help to promote a sustainable world. To this end, the stakeholder
approach postulates management aims to ensure the survival of the company while
creating value for stakeholders (Chan et al., 2014; Homburg et al., 2013). Fundamentally,
the satisfaction of the interests of one stakeholder group should not overshadow the
interest of other stakeholder groups. According to stakeholder theory, one of the major
objectives of the leadership of a firm is to balance the conflicting demands of its various
stakeholders (Chan et al., 2014; Cho, Laine, Roberts, & Rodrigue, 2015). Under this
conflicting demands’ perspective, an organization encompasses an interconnected
structure of relationships. Therefore, an organization’s actions towards one stakeholder´s
group can resonate within the network, affecting other stakeholders, who may feel
undervalued (Korschun et al., 2014).
Within existing forms to classify stakeholders, the following classifications are
known to scholars and practitioners: (a) direct or indirect, (b) primary and secondary, and
(c) internal and external (Arnaud & Wasieleski, 2014; Vracheva & Mason, 2015).
Primary or direct stakeholders interact directly with the firm, such as employees,
customers, suppliers, and shareholders. Secondary stakeholders are the ones who might
affect, but usually do not transact directly with the firm, such as special interest groups,
the press, the community, and the government (Freeman et al., 2010; Vracheva & Mason,
2015).
Fairness towards stakeholders usually promotes a positive firm performance. In
this regard, firms that treat their employees during their performance appraisal with
fairness demonstrate organizational justice. This concept can be extendable to the way
firms treat stakeholders (Mason & Simmons, 2014). Organizational justice encompasses
(a) distributive justice, (b) procedural justice, and (c) interactional justice (Faldetta,
2016). Stakeholders perceive distributive justice when the outcomes seem to be fair to
each stakeholder. Procedural justice refers to the fairness of the procedures and
mechanisms to allocate outcomes, regardless of the nature of the outcomes (Faldetta,
2016). Fairness gives a sense of inclusion (Ko & Hur, 2014). The interactional justice
refers to how one party treats the other one, which has a component of informational
justice and interpersonal justice (Faldetta, 2016).
Everyone in a healthy market has the freedom to determine what is of value
following Adam Smith`s ideas about value, including the freedom to select the company
for whom one wants to work, and how much one wants to pay for a certain value
(Harrison & Wicks, 2013). The value comes from the utility received for the value given
up to receive such utility. It is almost impossible to maximize the utility for all
stakeholders (Harrison & Wicks, 2013). Each stakeholder is likely to expect a different
utility from a company (Garriga, 2014). Stakeholders may accept to receive less utility if
they perceive a sense of justice and fairness in this distribution (Bridoux & Stoelhorst,
2014). Furthermore, stakeholders may sacrifice part of their interests if they perceive that
their sacrifice will result in a higher value for all stakeholders in the future (Bridoux &
Stoelhorst, 2014).
Conversely, some self-regarding stakeholders prefer firms treat them according to
their bargaining power; therefore, if a firm is fair with all stakeholders, the self-regarding
stakeholders understand they are not getting the best out of the company for themselves
(Bridoux & Stoelhorst, 2014). The self-regarding stakeholders are not concerned with
distributive justice. A firm must be consistent with its approach to stakeholders, such as
fairness towards stakeholders or an arms-length approach. Otherwise, it will be sending
mixed messages to stakeholders (Bridoux & Stoelhorst, 2014).
A firm`s technical CSR addresses the needs of primary stakeholders identified as
shareholders, employees, and customers, while institutional CSR addresses secondary
stakeholders identified as community needs. Primary stakeholders are fundamental to the
business operation. Therefore, they have more power than secondary stakeholders who
can only influence indirectly in the firm`s decision making (Du et al., 2013).
Responsiveness to stakeholder`s concerns is dependent on the importance
management give to certain issues that involve stakeholders. Under this perspective, a
strategic cognition view of issue salience may provide an understanding of how firms
prioritize stakeholders’ concerns in their corporate strategies. The level of salience is
greater when conflicting, or consistent relations exist in both dimensions (Bundy,
Shropshire, & Buchholtz, 2013). Regardless of the stakeholder’s salience, the company
has no moral obligations to derivative stakeholders. A terrorist, for example, should not
be considered a stakeholder, despite of his or her salience (Miles, 2017).
Effective stakeholder management requires a strong relationship between the
company and its stakeholders. Thus, a company ought to have a legitimate concern for
the health and safety of both the local community and employees (Chow & Chen, 2012).
Under the stakeholder’s theory perspective, companies are responsible for their actions.
Many companies assume social and political responsibilities that are additional to legal
requirements contributing to the well-being of society (Lin-Hi & Müller, 2013).
Corporate executives who understand their aims have adopted sustainability approaches
that deliver attributes for their stakeholders beyond profit such as environmental and
social benefits (Chabowski et al., 2011). Corporate objectives associated to
environmental, economic, and social attributes are often named TBL (Maignan,
Gonzalez-Padron, Hult, & Ferrell, 2011). The balance between conflicting demands of
different stakeholders is likely to be achieved by corporations that adopt the TBL
approach.
Triple Bottom Line
Elkington developed the TBL model in 1994 (Wise, 2016). Many scholars and
practitioners accepted the triple bottom line approach, which encompasses a firm’s
environmental, economic, and social dimensions (Garcia, Cintra, Torres, & Lima, 2016).
The motivation behind the TBL approach is to enhance the breadth of organizational and
societal performance accountability based on the environmental, economic, and social
dimensions (Mitchell, Van Buren III, Greenwood, & Freeman, 2015). Some trade-offs
among these three dimensions are common; to improve one dimension can be at the
expense of another dimension (Garcia, Cintra, Torres, & Lima, 2016). The environmental
dimension converges on firm activities that do not compromise natural resources. The
economic dimension is focused on the value creation and financial prosperity of firms.
The social dimension has its focus on the social impact firms can have in the community
related to education and charitable activities (Chabowsky et al., 2011). Stakeholders
expect that companies be accountable not only for the economic results of their activities,
but also for the environmental, and social results. Adherence to the TBL approach to
firms and the business practices derived from the stakeholder theory is a strategy that can
help firms to maintain or improve their market presence (Cronin et al. 2011).
Furthermore, the TBL approach prevents disputes with local communities regarding
environmental and social considerations (Pesmatzoglou, Nikolaou, Evangelinos, & Allan,
2014). The TBL approach is capable of balancing different stakeholders’ objectives.
TBL in the supply chain. Corporations performing sustainable supply chain
management have an obligation to satisfy stakeholders’ multiple and conflicting interests
such as minimizing environmental damage, maximizing profits, and maximizing the
social welfare (Taticchi, Tonelli, & Pasqualino, 2013). The concepts of CSR and TBL in
the global supply chain are changing with the continuous transformation and
development of international trade. In essence, corporations are responsible for their
operation in countries where they are present, and also for their global suppliers and
intermediaries (Soundararajan & Brown, 2014). Any company genuinely engaged with
the TBL must work with its suppliers to reduce the footprint of the entire supply chain.
Reducing product toxicity, selecting environmentally friendly vehicle routing, and
packaging choices may reduce such footprint (Ortas, Moneva, & Álvarez, 2014). An
integrated view of the TBL is essential as each factor may influence the other two. For
instance, a higher economic growth might increase the carbon footprint of a company.
Conversely, it can lead to a social benefit represented by the creation of jobs for the
community (Meehan & Bryde, 2011). Stakeholder management deals with the trade-offs
among the TBL components. A firm must evaluate any decision that involves suppliers
that affects the TBL (Li, Zhao, Shi, & Li, 2014; Meehan & Bryde, 2011). A sustainable
supply chain management is a fundamental competitive factor that improves TBL and
operational performance (Meehan & Bryde, 2011). A supply chain management focused
on the reduction of material, energy, and water waste, together with the development of
eco-efficient solutions for the supply chain, leads to an improvement of corporate image
(Ortas et al., 2014).
Firms that engage in the TBL process are not only transparent but also
collaborative with companies in their value chain and sector (Glavas & Mish, 2015). The
focus is on collaborative advantage rather than competitive advantage. This collaboration
has the potential to create new markets from which other firms can benefit. Rather than
focusing on competitive advantage, firms that engage in the TBL process aim at
developing a collaborative advantage (Glavas & Mish, 2015).
Multinational firms and the supply chain. To achieve TBL objectives,
multinationals need to manage their supply chains in a way that minimizes the
environmental impact while increases social welfare. In this direction, as a result of
stakeholders’ pressure, multinational companies are adopting supplier codes of conduct to
avoid inadequate working conditions in global supply chain factories (Knudsen, 2013).
CSR is an important interface between levels of globalization and business innovation as
it is with economic development and social change (Carrasco & Buendía-Martínez,
2016).
The Business for Social Compliance Initiative (BSCI) is a business-driven code of
conduct aimed at improving working conditions in the global supply chain. Multinational
companies usually require small and medium enterprises to follow the BSCI rules in
global supply chains. Following BSCI rules to adopt private regulatory initiatives is
unfeasible for some small firms because of the lack of resources (Knudsen, 2013). The
BSCI has a pivotal role in establishing a common base for the several European codes of
conduct. Such common base is gradually becoming more important as many companies
moved their production overseas to less developed countries (Knudsen, 2013). Managers
should understand the importance of CSR outcomes for their corporations since managers
are becoming more involved on the creation of CSR policies and code of conduct for
their companies and for the supply chain (Ağan, Kuzey, Acar, & Açıkgöz, 2016).
Executives from multinational companies have been encouraged to conduct business in a
responsible way following the TBL approach.
TBL reporting. Organizations may benefit from reporting TBL results in a
transparent manner revealing their desire to comply with obligations to people, planet,
and shareholders (Cho, Laine, Roberts, & Rodrigue, 2015; Hossain, Alam, Islam, &
Hecimovic, 2015). Organizations that follow Global Reporting Initiative (GRI) reporting
standards are more likely to disclose balanced, comparable, and precise CSR performance
data (Michelon, Pilonato, & Ricceri, 2015). GRI developed guidelines for a systematic
approach for corporations to report their TBL performance on sustainability (Yadava &
Sinha, 2016). The transparent disclosure of TBL results may improve the firm’s image
and reputation.
CSR and Corporate Financial Results
Empirical studies that correlated investments in CSR to improved financial
performance or market value have revealed contradictory findings such as nonsignificant,
positive, and negative relationships between CSR and financial outcomes (Cheng et al.,
2014; Fontaine, 2013; Husted, Allen, & Kok, 2015; Orlitzky, 2013). Socially responsible
activities can contribute to corporate financial performance, and this positive relationship
is enhanced when the firm invests in competitive activities on a regular basis (Kim, Kim,
& Qian, 2015). Wang and Sarkis (2017) reported finding in several studies positive,
negative, and inconclusive relationships between CSR and financial results. The
contradictory results are likely to come from variations of methodology, model
misspecification, control variables, limited data, problems of measurement of CSR, and
the diversity of methods for the determination of the financial performance of a firm
(Wang & Sarkis, 2017).
Results from several studies where researchers examined the relationship between
CFP and CSP, along with many meta-analyses, suggest a positive link between CFP and
CSP (Christensen, Mackey, & Whetten, 2014). Conversely, in Nigeria, a strong positive
relationship existed between social responsibility expenditures and CFP indicating that
expenses incurred by Nigerian firms on their host communities and the environment led
to consumer preference, enhanced sales, and corporate profits (Nwidobie, 2014).
Results of a study to examine the CSR – CFP relationship in South Korea using
the KEJI Index for the period 2004-2010 revealed CSR had a positive effect on CFP.
Such effect varied depending on each industry’s characteristics. For this study, CFP was
split in three dependent variables by industry: (a) return on assets (ROA), return on
invested capital (ROIC), and (c) sales growth (Oh & Park, 2015).
Corporate Sustainability Index (ISE) in the Sao Paulo Stock Exchange was
created in 2005. The ISE index indicates the commitment to social and environmental
responsibility by the companies listed in the capital market. Variations on the economic
and financial indicators of companies listed on the ISE revealed that the participation in
the ISE did not impact the financial indexes, thus a positive correlation between
becoming a member of the ISE and the valuation of share prices was meaningless (Orsato
et al. 2015), implying that investments in CSR are a long-term strategy. Moreover,
empirical research results indicated the reasons Brazilian companies sought to be
included in the ISE index. Among them, improved reputation among primary
stakeholders, easiness to raise funds and capital, competitive differentiation, alignment to
worldly trends, and the sharing of knowledge about CRS (Orsato et al. 2015). CSR has
potential benefits for the competitiveness and performance of firms; however, CSR
benefits are long-term and uncertain (Filatotchev & Nakajima, 2014). In periods of low
profitability, firms tend to prioritize economic demands over CSR expenditures,
particularly when such expenditures are discretionary (Chan et al., 2014). Furthermore,
firms undergoing financial constraints are likely to not engage in CSR activities (Chan,
Chou, & Lo, 2016). Improving CSR activities, in the short-term, may increase costs
(Ding, Ferreira, & Wongchoti, 2016). Firms that prioritize short-term profit tend to
neglect efforts in CSR.
The 2008 global financial crisis triggered saving strategies as firms prioritized
liquidity aiming at overcoming financial difficulties (Yelkikalan & Köse, 2012). After the
global financial crisis of 2008, many institutions reduced costs and enhanced savings to
survive. The 2008 crisis influenced CSR activities of corporations: firms that reduced
their CSR, and firms that continued CSR without any interruption and even enhanced
their CSR program. The extra costs imposed by CSR activities suggested a negative
effect on business as this additional cost reduced short-term profitability for some firms,
thus reducing the profit to shareholders (Yelkikalan & Köse, 2012).
CSR contributes to businesses and their stakeholders. Stakeholder-oriented
behaviors may result in positive ethical, financial, improved reputation, internal
commitment, market performance, and social contributions (Maignan et al., 2011). CSR
improves the reputation of the business, increases recognition and prestige, adds value to
brands, affects the business’s image positively, and increases the intangible capital of the
business; thus, contributing to profitability (Yelkikalan & Köse, 2012). The benefits to a
firm because of its engagement in CSR activities extends beyond any financial
consideration.
A firm`s orientation to stakeholder issues leads to the disclosure of correct product
information, including the potential environmental impact of products, transparent
company reports, and the development of solutions to address stakeholder issues
(Maignan et al., 2011). Stakeholders’ awareness of CSR activities may affect a
company’s financial gains (Rhou, Singal, & Koh, 2016). Corporations with superior CSR
performance usually disclose their CSR activities to the public, leading to more
transparent and trustful identities (Maignan et al., 2011). However, most consumers do
not fully understand the overarching concept of CSR because of its complexity
(Öberseder, Schlegelmilch, Murphy, & Gruber, 2013). Adding to the misunderstanding is
firm communication. Grimmer and Bingham (2013), in their research in Hobart,
Australia, found that firms are not appropriately communicating environmental and social
related activities to consumers.
It is not unusual to have third party companies audit and ensure the correctness of
firms’ CSR information, increasing the credibility of the social and sustainable practices.
Furthermore, stakeholders value such firm transparency resulting in lower capital costs as
corporations with better CSR performance are subject to fewer capital constraints (Cheng
et al., 2014). A superior CSR performance demonstrates the good relationship of the
corporation with its stakeholders (Cheng et al., 2014). An open relationship with
customers, employees, and business partners reveal to investors that the corporation
maintains a long-term orientation, which entails less risk suggesting a higher profit
generating potential (Cheng et al., 2014).
Executives’ Inner Values and Beliefs
The concepts of CSR usually underlie to corporate activities. However, the
individuals that lead firms are the ones who develop, support, sustain, or impede such
programs and actions (Christensen et al., 2014). Senior executives’ views regarding the
purpose of a corporation and the understanding of CSR is not identical across institutional
and cultural contexts. Differing executives’ views affect perceptions of the legitimacy
from stakeholder groups, thus having important implications for the selection of CSR
strategies (Witt & Redding, 2012). Based on the agency theory, managers can impose
their personal preferences in corporate policy matters (Chin et al., 2013). The educational
and professional background of managers engaged in CSR influences how they manage
CSR values in their organizations (Schmeltz, 2014). Ethical ideas, beliefs, and personal
values of managers in charge of CSR play an important role in their decisions and in the
development of a CSR culture in their companies (Witt & Redding, 2012).
Financial and non-financial benefits serve as incentives for managers to engage in
CSR. Non-financial benefits include human resources management, aversion to risk, and
competitive brand differentiation (Soltani, Syed, Liao, & Iqbal, 2015). Voluntary
initiatives for promoting positive social impacts are commonly subject to the discretion of
an individual manager (Arnaud & Wasieleski, 2014). Managers normally have a
humanistic background that makes him or her concerned with the welfare of internal and
external stakeholders (Arnaud & Wasieleski, 2014). Engagement of a firm on CSR
activities is highly dependent on its leadership (Christensen et al., 2014). Depending on
the leaders` values, personality, worldview, and distinctive characteristics, more support
is placed on CSR.
Good management quality practices lead to enhanced social activities and are
positively related to the firm’s CSR ratings. The implementation and recognition of good
management practices involves: (a) development of effective manufacturing processes,
(b) conduction of structured performance reviews, (c) effective internal communication,
and (d) successful development of human resources strategies to attract and retain talent
(Attig & Cleary, 2015). Furthermore, management quality practices are likely to enhance
a firm’s CSR strengths while reducing CSR concerns. Such practices are relevant for
CSR dimensions related to primary stakeholders. CSR actions that contribute to
stakeholders’ satisfaction can become sustainable competitive differentials (Attig &
Cleary, 2015).
CSR activities, when not enforced by institutional rules, stakeholder’s
requirements, or mandatory regulation, depend on the support provided by companies’
leadership. Managers have a sustainable business as their main objective, thus leading
their firms to engage in social activities aimed at benefiting the surrounding community
(Lankoski et al., 2016). Many firms continue to invest in CSR, despite the studies on the
impact of CSR on corporate financial results that reveal conflicting results (Chin et al.,
2013). In this regard, management orientation and mindsets are driving forces towards
socially responsible targets (Soltani et al., 2015).
Leadership concepts. Several definitions and conceptions of leadership exist in
the literature; some definitions are broader while others have a narrower conception. The
selection of a leadership definition depends on the interest and objectives of an individual
(McCleskey, 2014). The following leadership conceptions may explain leaders’ behaviors
in relation to CSR: (a) situational leadership, (b) transformational leadership, and (c)
transactional leadership.
Situational leadership. The proposition of the situational leadership theory is that
effective leadership demands the rational understanding of the situation and the
appropriate action to address it (McCleskey, 2014). No single leadership style is adequate
to all situations (Ghasabeh, Reaiche, & Soosay, 2015). In addition, situational leadership
does not require a charismatic leader (McCleskey, 2014) as charisma power is a means to
exert influence over followers through the strength of a leader’s character (Goncalves,
2013). Situational leadership implies the use of different leadership styles according to
the situation. A situational leader selects the appropriate leadership style that must be
adopted to deal with the circumstances. A situational leader is flexible, characteristic that
he or she transfers to followers, enhancing their motivation and engagement. The
situational leadership provides direction and guidance to his or her team and develops his
or her followers, contributing to their maturity and enhancing their skills (DuBois et al.,
2015).
Transformational leadership. Scholars have studied transformational leadership
for the past 30 years. Four factors emerged over time associated with transformational
leadership: (a) inspirational motivation; (b) idealized influence of the leader over his or
her followers; (c) intellectual stimulation promoting knowledge sharing in the company,
which requires openness from the leader; and (d) individualized considerations that
involve the leader’s role as a coach or mentor with the aim of helping followers to
achieve their full potential (Ghasabeh et al., 2015; McCleskey, 2014). Transformational
leaders influence their followers through their behaviors and examples and motivate
followers to overcome their self-interest to achieve organizational objectives
(McCleskey, 2014).
Transactional leadership. Transactional leadership concentrates on the exchanges
common on the relationship between leaders and followers designed to provide benefits
to both. Such exchanges help leaders accomplish their corporate objectives while
followers work towards the achievement of their goals such as improved productivity,
cost reduction, and increased customer service (McCleskey, 2014). Transactional leaders
possess emotional intelligence, which contributes to leadership effectiveness, as leaders
are able to manage emotions helping them to develop a stronger relationship with
followers (Dey & Carvalho, 2014). Transactional leadership practices create short-term
relationships of exchange between followers and leader. These relationships are mostly
superficial, which might lead to resentments between followers and leaders (McCleskey,
2014).
Contrasting leadership styles. The situational leadership theory has a common
characteristic with transactional leadership, which is the exclusion of leadership traits or
individual differences. Conversely, the transformational leadership theory considers
leadership behaviors and individual differences as important factors, particularly
charisma (McCleskey, 2014). Transformational leaders in stakeholder-oriented marketing
firms develop more institutional CSR than firms where leadership is predominantly
transactional (Du, Swaen, Lindgreen, & Sen, 2013). Transactional leadership focuses on
exchanges between leadership and followers. Leaders seek through these exchanges the
accomplishment of required corporate tasks, achievement of corporate and personal
goals, maintenance of the organizational stability, avoidance of unnecessary risks, and
concentration on the improvement of organizational efficiency rather than focusing on the
satisfaction of external or internal stakeholders through CSR activities (Du et al., 2013;
McCleskey, 2014).
Ethical CEO leadership. An examination of the relationship between CSR and
CEO ethical leadership particularly in his or her role as a mediator of the corporation
ethical culture revealed that management discretion influences how employees follow the
CEO’s ethical standards. An ethical CEO influences the ethical culture of his or her
corporation which may contribute positively on the organization´s performance
(Eisenbeiss, van Knippenberg, & Fahrbach, 2015). Management discretion is higher
when the CEO is the company founder, or the company is small. Management discretion
is lower when the CEO is not the company founder or when the company is big (Wu et
al., 2015). Despite prior research that has established a relationship between CEO
transformational leadership and CSR, leaders who reveal ethical qualities are more likely
to engage in CSR as it improves the corporation image and employees` moral (Wu et al.,
2015). A leader’s beliefs regarding CSR may motivate employees’ engagement in the
firm’s CSR activities.
Communication and Green Marketing
Scholars and managers have dedicated increased attention to CSR communication
worldwide with the aim of effectively communicating CSR practices with stakeholders
(Christensen et al., 2014). Expenses in CSR communication are the third-largest item in
the marketing budget of large organizations, revealing the growing importance of the
investment in a firm’s corporate identity (Sima, 2013). Business executives have directed
corporate resources to both the development of CSR initiatives and the associated
marketing communication efforts to inform stakeholders of such initiatives (Green &
Peloza, 2015). A growing number of corporations are issuing CSR reports and are
adopting international standards for CSR certification (Christensen et al., 2014). An
adequate reporting of the activities conducted by a company is necessary to reduce the
negative impacts of business practice on the stakeholders` perspective (Soltani et al.
2015). Stakeholders are concerned with corporation ethics, quality certifications, and the
publication of CSR reports (Pires, Pereira, & Moura-Leite, 2015). Most of the companies
have low-quality reports because they do not disclose all the information stakeholders
require (Hubbard, 2011). Omissions in CSR communication may undermine a firm’s
credibility (Devin, 2016).
It is a challenge to manage and plan CSR communication with multiple media for
different stakeholders (Nielsen & Thomsen, 2012). Sustainability reporting is a method to
increase transparency, enhance brand value, reputation, and legitimacy among
stakeholders (Hahn & Kühnen, 2013; Odriozola, & Baraibar-Diez, 2017). Researchers
found different communication patterns in various countries, for instance, in Denmark
over-communicating CSR was not effective (Nielsen & Thomsen, 2012; Takano, 2013).
Furthermore, Danish managers prefer to communicate CSR activities through third party
experts to enhance credibility (Takano, 2013). Credibility is a key objective for
companies issuing CSR reports.
According to stakeholder theory, consumers were neglected as stakeholders until
companies perceived their importance, particularly consumers’ preference to purchase
products from socially responsible companies. Stakeholders tend to reward companies
engaged in social responsibility, which may influence consumer`s loyalty and
commitment (Korschun et al., 2014; Smith & Alexander, 2013). A green marketing
approach can provide a competitive edge to a company (Fernando et al., 2014; Sima,
2013), particularly, when green benefits are the only difference between the offerings
(Sima, 2013).
Corporations are more likely to invest in green initiatives when they believe that
such investments enhance stockholders’ wealth. The opposite happens when corporations
do not perceive a positive relationship between green performance and financial
performance (Cordeiro & Tewari, 2015). Public disclosure of CSR activities may also
generate consumer distrust on corporate behavior (Scharf & Fernandes, 2013). While
some corporations seriously engage in CSR, others use it for public relations or marketing
purposes as a rhetorical device to persuade stakeholders about their CSR engagement,
which may have no tangibility (Öberseder, Schlegelmilch, & Murphy, 2013). A socially
responsible image allows companies to differentiate themselves from competitors. Such
image can positively affect customer’s purchasing decision-making and strengthen
customer loyalty (Lin-Hi & Müller, 2013).
Institutional forces are often responsible for symbolic CSR activities and policies
by which corporations engage in CSR. However, these actions more likely are designed
to meet minimum requirements or to mitigate stakeholders` demands (Cho, Laine,
Roberts, & Rodrigue, 2015). Consumers have positive attitudes and higher purchase
intent from companies that demonstrate more socially responsible actions ((Hwang &
Kandampully, 2015; Öberseder, Schlegelmilch, Murphy, & Gruber, 2013). Conversely,
consumers reveal a lack of trust toward green companies (Zaharia & Zaharia, 2012).
Consumers sometimes cannot detect if the well-being of society is the genuine interest of
companies, or if they seek an opportunistic advantage of the CSR trend (Öberseder,
Schlegelmilch, Murphy, & Gruber, 2013). This undefined perception by consumers may
turn them against companies truly engaged with CSR practices (Mazutis & Slawinski,
2015).
Sentiment analysis is a technique developed to gather the opinion of individuals
about entities. This technique, also known as opinion mining, is appropriate to identify
the positive and negative opinion of individuals that post opinions on the Internet
(Feldman, 2013). These opinions affect the reputation of organizations; furthermore, they
affect the decision-making of individuals who search for reviews and opinions written
about these products before acquiring such products online.
Companies find the effective communication of their social involvement an
increasingly difficult task, particularly when CSR is not present in the corporate identity
of a company (Schmeltz, 2014). Corporations with the greenwashing mindset may
attempt to gain advantages from disclosing their CSR efforts while investing minimally to
address CSR issues (Wang & Sarkis, 2017). To avoid the creation of a greenwashing
image by stakeholders, managers should proactively insert CSR issues in their corporate
strategies, undertake a continuous CSR program, and transparently inform their CSR
initiatives to stakeholders (Homburg et al., 2013). When CSR becomes part of the
company’s corporate identity, corporate communication may become a challenge as CSR
values may not always align with existing corporate core values and identity (Schmeltz,
2014).
The relatively low level of CSR communication via traditional forms of mass
communication (e.g., television, radio, and newspapers) partially explains the low
consumer awareness of CSR activities by any one firm. Furthermore, many firms
communicate their CSR initiatives through websites and brochures, whereas most
consumers do not have access to such media (Green & Peloza, 2015). Conversely,
corporations’ communication of CSR initiatives through online interactive media has
been an effective channel of communication with stakeholders that use the Internet. This
communication channel leads to a stronger identification with these companies
contributing to the enhancement of corporate reputation and credibility (Eberle, Berens,
& Li, 2013). Many firms that invest in CSR are not getting the full benefit from these
initiatives because of poor CSR communication to external stakeholders (Green &
Peloza, 2015). The satisfactory communication of CSR is a challenge for most
companies.
The report of a corporation CSR program has an impact on its stock price. The
stock market reaction to the report of corporate news related to the environment for all
American publicly traded companies for 30 years (from 1980 to 2009) revealed that firms
that reported environmentally responsible activities experienced a stock price increase
over the period (Flammer, 2013). The improvement in the public disclosure of CSR
activities conducted by a company brings transparency to the process (Chow & Chen,
2012). A company, acting in a socially and environmentally responsible way may
improve its corporate image, strengthen the relationship with stakeholders, attract and
retain talent, improve decision-making skills, and obtain cost-savings and enhanced
financial results (Chan et al., 2014).
External stakeholders increased the pressure for firms to act in an environmentally
responsible way (Cordeiro & Tewari, 2015). However, stakeholders view such firm
behavior as an obligation. Any event that harms the environment impacts negatively in
the stock market price of a firm; however, the opposite does not happen in the same
proportion as eco-friendly initiatives do not get the same positive reaction in the stock
market price as they did in the past (Flammer, 2013). Conversely, firms with higher
levels of environmental CSR are less vulnerable to negative market reaction to harmful
events (Flammer, 2013). The development of CSR programs that enhance stakeholders’
wellness, as well as reduce negative impacts on the environment, contribute to adding
value to a corporation, which may include a stock price increase.
Furthermore, reputation mediates the relationship between CSR and financial
performance of a firm (Flammer, 2013). Most companies from a global perspective issue
sustainability reports to their shareholders (Hubbard, 2011). In this regard, corporate
management must decide what values they want to communicate to external stakeholders,
who increasingly demand more openness and transparency from corporations (Schmeltz,
2014). Furthermore, CSR reports may contribute to the development of better internal
control systems and may enhance company decision-making processes (Chan et al.,
2014). Hubbard (2011) analyzed the quality of the reporting of 30 of the world’s largest
companies regarding corporate strategies and performance in certain areas, including the
economic, the environmental, and the stakeholder area. Hubbard posited that these reports
had low quality because they did not disclose all the information, which would be
required by the interested parties. Furthermore, the information reported was not always
important to most stakeholders (Hubbard, 2011). Additionally, within these assessed
reports, many were examples of greenwashing (Öberseder, Schlegelmilch, Murphy, &
Gruber, 2013). The greenwashing approach enhances the cynical nature of much CSR
discourse (Fleming, Roberts, & Garsten, 2013).
Some corporate responsibility reports center on a few stakeholders, while such
reports should have a wider focus and include relevant information to each stakeholder
(Öberseder, Schlegelmilch, Murphy, & Gruber, 2013). Sustainability reporting must
provide relevant, reliable, and useful information, which could be comparable across all
companies. A company`s sustainability reporting, therefore, must inform important issues
related to each company`s reality (Hubbard, 2011). Adequate reporting of sustainability
issues is key for stakeholders, who want to understand how the operation of a company
affects, positively or negatively, the community and the environment.
The belief that consumers are always skeptical of green claims in advertising may
not apply to all situations. This skepticism depends on the type of consumer, and not all
consumers are skeptical to green ads. Advertisers target a segment of the market.
Therefore, they need to understand how this segment reacts to green claims (Matthes &
Wonneberger, 2014). The green claim in the marketing strategy of firms, particularly as
green marketing, contributes to its acceptance by customers (Cronin et al., 2011). In
addition, CSR managers must communicate the firm’s CSR activities without passing the
idea of greenwashing (Homburg et al., 2013). Firms understand the benefits they might
have by developing environmentally friendly marketing strategies in line with
stakeholder’s needs.
Firms can pursue three green strategies to address needs from different
stakeholder groups (Cronin et al., 2011). These strategies are: (a) green innovation, (b)
greening the organization, and (c) developing green alliances. Although 75% of
consumers declare they are green, sales of green products in 2005 were less than 4% of
the total product sales worldwide. Thus, legitimating the need for further investigation of
the reason consumer purchasing behavior is not by what consumers declare about green
or environmentally friendly products (Cronin et al., 2011).
Some firms try to engage consumers in their social activities. These firms
implement corporate social marketing initiatives with the aim of influencing consumers
to adopt a prosocial behavior. The effectiveness of corporate social marketing initiatives
is highly dependent on the credibility of a firm in its efforts to support a social cause
(Inoue & Kent, 2014). Marketing activity attributes, firm’s attributes, and attributes of the
cause are groups of antecedents for the credibility of corporate social marketing
initiatives. Findings indicate corporate social marketing activities credibility affects
prosocial consumer behavior and loyalty while CSR activities do not (Inoue & Kent,
2014). Firms use CSR with the aim of improving the goodwill, financial gains and cause
recognition. Furthermore, corporate social responsibility influences consumers`
purchasing decisions. CSR also plays an important role in the creation of a positive
corporate image. A strong corporate image is an important differentiator in the
marketplace. It can create a competitive advantage that leads to business success
(Cordeiro & Tewari, 2015; Yong Seok, Jin, & Sung-Hack, 2012).
In conflictive situations where stakeholders have different views among them and
also about the firm’s view, it is essential to inform the public about the firm’s corporate
responsibility initiatives and actions, particularly given the growing public demand for
such information (Schmeltz, 2014). This communication of CSR contributes to the gain
of public acceptance for business. Conversely, management has to focus on satisfying
shareholders and firm owners’ expectations (Yong Seok et al., 2012).
The voluntary disclosure of CSR information has a positive association with good
corporate governance (Chan et al., 2014). Furthermore, the improvement in the public
disclosure of CSR activities conducted by a company brings transparency to the process
(Chow & Chen, 2012). In this regard, larger companies’ management more likely use
formal communication channels to disclose their CSR results to stakeholders, such as
annual reports (Chan et al., 2014). Firms that issue stand-alone CSR reports to disclose
nonfinancial information tend to improve analyst forecast accuracy, which in turn
influences these firms’ market value (Dhaliwa,l Radhakrishnan, Tsang, & Yong George
2012; Orlitzky, 2013). Furthermore, stand-alone CSR reports complement the firm’s
financial disclosure to the market, improving transparency to stakeholders and positively
influencing the firm`s reputation and image (Dhaliwal et al., 2012).
In an attempt to comply with increasing demands for information by stakeholders,
firms are investing in the communication of their CSR programs. CSR communication to
stakeholders improves the firm’s reputation and leads to positive consumer perceptions.
However, companies that provide extensive messages about their CSR activities risk
creating an adverse effect when stakeholders view such messages as extremely
selfpromotional (Nielsen & Thomsen, 2012).
The stakeholder base extends across countries and different cultures. As a result,
stakeholder norms and behavior tend to vary across the globe, resulting in stakeholders’
non-homogeneous expectations from companies taking a stand on social issues (Taylor,
2014). Firms respond differently to the same institutional pressures. Many firms decouple
policy from practice, and this is done depending if firm policies are local or global
(Crilly, Zolo, & Hansen, 2012). Strong CEOs might respond differently to stakeholder
pressures when they go against their interests. Information asymmetry exists between
management and stakeholders, where managers know more about their companies’
practices than what other stakeholders know (Chan et al., 2014; Crilly et al., 2012). Such
asymmetry can hide firm practices that could be considered inadequate by stakeholders;
however, is not uncommon to stakeholders have restricted access to information
pertaining internal practices of firms. This information asymmetry also exists between
management and shareholders, as ownership dispersion in a firm may increase conflicts
of interest (Chan et al., 2014). Voluntary disclosure of information that involves
sustainability and CSR practices can reduce the information asymmetry that exists
between management and stakeholders, including shareholders (Chan et al., 2014).
Another problem occurs when different stakeholders press for mutually exclusive
policies; therefore, decoupling allows executives to deal with different stakeholders’
expectations (Crilly et al., 2012). Each stakeholder group endeavors for their interests;
therefore, company executives are encouraged to manage stakeholders’ interest conflicts
to avoid compromising their companies’ financial and social performance.
Corporate Social Responsibility in Brazil
The Brazilian society has had extensive experience with social responsibility
programs as a result of their continued efforts towards the reduction of inequities the poor
Brazilian population has historically suffered (Bohn, Veiga, Dalt, Brandão, & Gouvêa,
2014; Leubolt, 2015). In a census carried out by DISOC (2006), 69% of privately owned
companies in Brazil did some social activities on behalf of the community. From the
871,000 formal companies in Brazil, 600,000 conducted voluntary activities during 2006.
Therefore, most Brazilian companies, recognizing their responsibility towards society,
invested in CSR initiatives (Oliveira & Giroletti, 2016). These figures might not reflect
the current situation in Brazil as studies and statistics on CSR investments in this country,
when not confidential, are outdated or limited in scope.
Brazilian consumers tend to react more emotionally to CSR initiative from a
company than consumers in countries like the U.S. and Europe; therefore, Brazilian
consumers are willing to pay more for a product when they know that the company is
CSR-oriented (Carvalho, Oliveira, & Lima, 2010). However, not all consumers have the
same understanding. Consumers with higher purchasing power tend to accept better the
idea of benefiting companies that invest in CSR. Therefore, companies` executives
should inform consumers about their CSR initiatives (Carvalho et al., 2010).
Many companies are expanding and becoming more international; therefore,
stakeholder groups of both local and international communities expect companies to be
accountable for any impact they cause on the ecological and social environments (Chan et
al., 2014). Headquarters of multinational companies and subsidiaries may exchange
information to improve their CSR practices, provided such practices are in accordance
with cultural and institutional aspects of each country. Both headquarters and subsidiaries
may adopt successful CSR strategies from each other. This knowledge transfer is an
advantage that multinational enterprises have over companies located in one country only
(Pereira & Amatucci, 2014). Another advantage of shared CSR knowledge is that there is
no need for duplication of efforts to develop CSR programs in more than one country.
Most methods used to manage and measure corporate social responsibility are
based on Western scholars, and the ones they survey, mostly white North American
middle-class managers (Khan & Lund-Thomsen, 2011). Therefore, perspectives from
developing countries should be considered, particularly when referring to suppliers
perceptions of the difficulties that arise when Western corporations try to impose their
ethical standards in global supply chains, which is a functionalist perspective.
Conversely, suppliers from developing countries seldom have the size and power to fight
against buyers’ purchasing practices. Furthermore, Western Europe and North American
companies are not concerned with the reality of developing countries. What seems
unacceptable in developed countries as, for instance, child labor, might be a way of
giving a better life to families in developing countries (Khan & Lund-Thomsen, 2011).
Postcolonial and dependency theory may explain historical patterns of Western
imperialism and exploitation reflected in the way Western firms deal with suppliers from
developing countries. Therefore, Western firms impose rules to suppliers in developing
countries without the reciprocity that could improve workers’ working conditions.
Moreover, Western firms demand a bigger share of the value chain leading to additional
burden on such suppliers (Khan & Lund-Thomsen, 2011).
Subsidiaries of multinational enterprises quite often have a risk for liability of
foreigners. Such multinational companies can overcome this liability by demonstrating
through CSR activities a social commitment to the countries where they do business.
CSR activities that satisfy host-country stakeholder’s demands can strengthen the market
position of the multinational subsidiary, particularly in an emerging economy
circumstance (Park & Ghauri, 2015). A different perspective is multinational enterprises
from developing countries that have to comply with local and the host country exigencies.
These developing country multinationals use enhanced CSR or CSP to signal to
stakeholders that they are legitimate players in the host countries (Doh, Husted, & Yang,
2016). Host-country stakeholders compel multinational enterprises to develop CSR
programs that benefit local communities.
Stakeholders expect multinational companies adopt supplier codes of conduct to
avoid inadequate working conditions in global supply chain factories (Knudsen, 2013).
Compliance with such codes may negatively affect the multinational firm`s profitability;
therefore, public policy in sustainable practices should rule buyer-supplier relationships,
particularly when the supplier is a small foreign firm (Khan & Lund-Thomsen, 2011;
Knudsen, 2013; Mezzadri, 2014). Public policy in sustainable practices ruling the
relationship between multinational companies and their foreign suppliers could avoid
opportunistic competitive advantages for companies that do not follow CSR principles for
the foreign suppliers.
Summary
Inconclusive empirical evidence about the relation between CSR and corporate
financial outcomes (Orlitzky, 2013) leave managers in a state of uncertainty to implement
and maintain CSR programs (Chin et al., 2013). Managers, therefore, must cope with
increasing and contrasting demands from different stakeholders. At one side are
shareholders who seek continuously growing profits. On the other side, employees,
suppliers, unions, customers, government, and the community, vie for attention for their
particular needs and expectations.
The diversity of concepts and definitions of CSR, which vary according to
political, social, cultural elements, and authorship (Carroll, 1999; Freeman & Hasnaoui,
2011), makes it difficult to measure the CSP of firms. Despite this difficulty, the KDL
dataset enables the comparison of firms in over 35 dimensions of CSR behavior (Brower
& Mahajan, 2013). A lack of consensus about the best method to measure CSP is
commonplace among scholars and practitioners. The stakeholder theory underpins and
provides the conceptual framework for contrasting the aspects that may influence
managers’ decision in relation to CSR investments. Among these elements are (a)
communication and green marketing, (b) managers’ inner values and beliefs, (c) triple
bottom line concept, and (d) the relationship between CSR and corporate financial results.
This proposed study is intended to provide a better understanding of the reasons
managers engage in CSR, either when a direct relation between CSR and the firm`s
financial results exists or when this relation is not evident. In case such relation is not
positive nor evident, reasons to engage in CSR tend to be different. These reasons may
arise from the benefits that come with a better overall reputation and a positive corporate
image (Yong Seok et al., 2012). Another reason for managers to engage in CSR may arise
from (a) the need to satisfy stakeholders` increasing demands, (b) managers` personal
beliefs, values, personality, world view, and (c) idiosyncratic characteristics
(Christensen et al., 2014).
Transition
Section 1 was designed to provide the background and specify the research
foundation of the study, aiming at understanding CSR managers’ strategies to evaluate
CSR effectiveness in creating value for different stakeholders. In the review of the
literature, I covered several themes that have the potential to influence manager`s
decision-making regarding CSR investments. In Section 2, I focused on the research
methodology that invites rigor. In Section 3, I discussed the findings of the study, the
value to the business practice, and the effects on social change. Furthermore, I made
recommendations for action and new research on CSR.
Section 2: The Project
Section 2 includes the following subsections on research method and design: a
description and justification of the methodology, my role as a researcher, a description of
the population and participant selection, data collection tools, data analysis, and steps
taken to assure the reliability and validity of the study.
Purpose Statement
The purpose of this qualitative multiple case study was to explore CSR managers’
strategies for evaluating CSR effectiveness. The population for this study consisted of
managers with CSR responsibility of large for-profit, privately owned companies in
southeast Brazil that have invested in CSR programs. Findings from this study may
influence managers’ internal and external CSR efforts. With the internal CSR dimension,
it could lead to improved employee (a) working conditions, (b) health, (c) training, and
(d) work-life balance. For the external CSR dimension, the findings could help in (a)
addressing stakeholders’ needs in ways that create vibrant communities, contributing to
social cohesion; (b) promoting respect for human rights; (c) strengthening social
commitment; and (d) furthering sustainable practices. These internal and external CSR
efforts can contribute to positive social change.
Role of the Researcher
In conducting qualitative research, researchers are the primary instrument for data
collection (Teherani, Martimianakis, Stenfors-Hayes, Wadhwa, & Varpio, 2015) and their
role is to understand the processes, attitudes, experiences, and behaviors of the
participants about a specific topic (Rowley, 2012). Furthermore, the role of the researcher
is critical for conducting a case study, which requires interview sessions with respondents
(Yin, 2014). My role as the researcher for this study was to collect, analyze, and interpret
data in an ethical manner, obeying the Belmont Report protocol regarding respect for
persons, beneficence, and justice. The Belmont Report includes guidelines about how to
protect vulnerable research participants (Rogers & Lange, 2013). I completed the NIH
Web-based training course “Protecting Human Research Participants” provided by The
National Institutes of Health (NIH) Office of Extramural Research (certification number
1141742). The role of a researcher includes the obligation to protect participants by
ensuring confidentiality of their narratives (Lancaster, 2016). As the data collection
instrument, I protected the identity of the respondents as well as their corporations. I have
had no previous experience with CSR over the course of my career.
Researcher bias can influence the outcome of a research (Greene, 2014; Ioannidis
et al., 2014). Through reflexivity, researchers may bring their thoughts, assumptions,
emotions, and expectations to a conscious level. The employment of reflexivity enables
researchers to understand their potential bias on the research process and findings
(Darawsheh, 2014; Gentles, Jack, Nicholas, & McKibbon , 2014 ). Bracketing (epoché) is
used to help reduce this bias by helping researchers sort out their feelings,
preconceptions, biases, and previous experiences with the phenomenon (Chan, Fung, &
Chien, 2013; Kidd, Davis, & Larke, 2016; Tuohy, Cooney, Dowling, Murphy, &
Sixsmith, 2013). I mitigated bias by bracketing my worldview in order to facilitate an
objective interpretation of the responses, and I followed an interview protocol to insure
uniformity (see Appendix E).
An interview protocol ensures that the same interview procedures are followed
with all the participants, including the questions that guide the interview. The interview
protocol includes a script of what the researcher will say before and at the conclusion of
the interview (Castillo-Montoya, 2016). The interview protocol must be comprehensive
and focus on the research question(s), which should not lead the participants to particular
answers (Gioia, Corley, & Hamilton, 2013). D’Adderio (2014) used an interview protocol
to grant uniformity in a qualitative case study conducted with 36 respondents in a leading
electronics organization dealing with competing pressures to enact multiple objectives in
routine transfers.
Participants
The population for this study consisted of managers with CSR responsibilities
who have been managing CSR for at least 1 year. These CSR managers have worked for
companies in the southeast region of Brazil that have been investing in CSR programs for
2 years or more. Companies with multiyear experience in CSR provide more rich
documentary data and unique perspectives on CSR in comparison with companies that
have had CSR programs for less than 2 years.
To gain access to participants, I contacted the G3 group, a professional association
whose members are human resources executives and consultants from large public and
private Brazilian companies. Since 1974, G3 members have met regularly on a monthly
basis to discuss important human resources themes. G3’s mission is to be a forum for HR
professionals to debate management practices and to anticipate trends for the valuation of
human beings in firms and the society.
My relationship with the G3 group started when the G3 leadership invited a few
universities in São Paulo to participate in a program developed to give support to
undergrad students in their capstone projects. The idea behind the program was HR
executives from the G3 group would provide guidance to students who were developing
their capstone projects related to human resources. I was one of the faculty members that
accompanied the students when presenting findings of their studies during the G3
monthly meetings. From this successful relationship between the G3 group and the
university in 2014, the members of the group posited that their companies would be open
to participate in future research. As the G3 group secretary was aware I was writing my
doctoral study, he said the G3 group would be open in case I needed to conduct research
related to business in their companies. No prior relationship existed between the G3
group members and me. The members of the G3 group know each other because of the
group’s monthly meetings.
In my initial communications, I contacted the G3 representative. I explained the
aim of the research and requested a list of contact names who worked for for-profit
privately owned companies involved in CSR. Upon the G3 introduction to contacts, I
provided a brief explanation of the aim of the research. Following Walden´s Institutional
Review Board (IRB) direction, I requested a Letter of Cooperation from a Research
Partner from the executive with power to authorize the research with the CSR manager of
each company. Two of the six executives requested their legal departments to evaluate
the letter of cooperation, and one requested a minor change, which was submitted to the
IRB and approved.
A brief explanation of the research may capture the interest of the participant and
help to establish trust between the researcher and the respondent, increasing the quality of
the data collected and improving the working relationship (Rowley, 2012). During the
interview, the researcher needs to establish a rapport with the respondent, maintaining eye
contact and actively listening without losing the perspective of the research objective
(Doody & Noonan, 2013). An increase in the fidelity of responses may result from a
better rapport between the researcher and the participant (Prowse & Camfield, 2013). To
establish this working relationship after receiving approval from the IRB for each letter of
cooperation, I sent an introductory e-mail to each CSR manager describing the nature and
importance of the research study involving the evaluation of CSR effectiveness. In this e-
mail, I provided details of the research, including the expected length of time of the
interview, the voluntary nature of the participation, the withdrawal policy that allowed a
participant to withdraw from the study at any time, and the assurance of confidentiality. I
attached the mandatory consent form. I made phone calls to three participants who
answered my initial e-mail, but who had doubts about the letter of cooperation. My aim
with these phone calls was to provide clarification about the research process and to
increase engagement.
Research Method and Design
After evaluating the three main research methods (i.e., qualitative, quantitative,
and mixed-methods), I decided to conduct this research as a qualitative study using an
exploratory, multiple-case study design. The method and design met the need for in-depth
exploration of managers` investment practices in CSR programs. A qualitative approach
is appropriate for exploring a subject in greater depth (Yap & Webber, 2015). The
selected method and design provided the data needed to answer the research question.
Research Method
Qualitative research is a broad term for a range of research methodologies
encompassing political, theoretical, and philosophical backgrounds to social research.
The methodology is a strategy of inquiry that directs the course of a set of procedures.
Methods refer to techniques used to gather and analyze data with the aim of creating
knowledge (Petty, Thomson, & Stew, 2012; Pietkiewicz & Smith, 2014). A qualitative
research method allows the researcher to understand, gain insight, and explore
participants’ experiences and perceptions in detail and greater depth in their natural
settings (Birchall, 2014; Yilmaz, 2013). A qualitative research method is appropriate to
explore in-depth participants’ understanding of a theme and enables the identification of
particular thematic patterns (Yap & Webber, 2015), allowing for unexpected discoveries
and new insights (Lyons et al., 2015). Interviews with managers responsible for CSR
unveiled the reasons underlying CSR decision-making in for-profit companies. In-depth
interviews provided a unique perspective on CSR practices not usually covered in
quantitative or mixed method research.
Quantitative research is an empirical research method that involves the collection
of data about a phenomenon and uses standardized measures and statistical analysis to
examine the relationship or correlation between variables (Hammarberg et al., 2016;
Yilmaz, 2013). The use of quantitative research was not appropriate for this study
because the focus of this research was not to examine the relationship or correlation
between variables, nor was it to identify the magnitude of a problem or issue.
A mixed method approach combines different methods addressing the same topic
to confront and enrich the data to a greater degree than with a single research method
(Camfield & Roelen, 2013). A mixed method approach combines qualitative and
quantitative methods. A mixed method approach was not necessary as the research
question of my study could be answered using a single qualitative method.
Research Design
I used a multiple-case design to explore practices and understanding related to
CSR practices and the strategies to measure CSR effectiveness. I selected the case study
design approach after evaluating and reviewing five common qualitative design approach
alternatives: (a) case study, (b) narrative, (c) phenomenology, (d) grounded theory, and
(e) ethnography. A narrative approach is best suited for studies that are investigations or
stories of an individual or small group of individuals on an attempt to understand the way
they create meaning in their lives (Gill, 2014). According to Petty et al., (2012) narratives
focus on the detailed stories or life experiences of one or more events. To answer my
research question, I needed an in-depth understanding of managers’ CSR practices and
strategies for determining CRS effectiveness in creating value for different stakeholders;
therefore, a narrative design would not be appropriate.
A phenomenological design may provide an in-depth understanding of the unique
lived experience of individuals by exploring their personal perspectives and insights on a
particular phenomenon (Tavakol & Sandars, 2014). Such approach is appropriate when
addressing several individuals who have had similar experiences. However, the
phenomenological design was not the most effective option given my intent to obtain an
in-depth understanding of CSR decisions not only by interviewing managers but also by
analyzing archival data.
A grounded theory approach serves for creating theories for the phenomenon
under investigation (Tavakol & Sandars, 2014). The grounded theory design focuses on
the creation of a theory that explains a social action, interaction, or process (Petty et al.,
2012), which was not my objective as I was exploring a usual business practice. My aim,
therefore, was to contrast the existing stakeholder theory with managers’ practices of
CSR, and strategies for evaluating CRS effectiveness in creating value for different
stakeholders.
An ethnographic approach is fit for a study that describes and interprets the shared
patterns of behavior and beliefs within a culture-sharing group (Jerolmack & Khan, 2014;
Petty et al., 2012). The conduction of an ethnographic research requires extended periods
of participant observation by the researcher. Ethnography would not be the most effective
research design to address my research question.
A case study design was appropriate because it focuses on understanding what is
distinctive about a case, whether it is a corporation, a process, a program, a system, or an
individual. A case study relies on the collection of a variety of data, which often comes
from interviews, document analysis, and observation (Petty et al., 2012). Within the range
of different types of case studies, I selected an exploratory multiple-case design to
respond to my research question. A qualitative multiple-case study may include two or
more observations of the same phenomenon. Multiple cases strengthen the results by
replicating the patterns and increasing the robustness and external validity of the findings
(Vohra, 2014; Yin, 2014). Furthermore, the use of multiple cases enhances external
validity and reduces the bias that might occur from a single case study (Rao, 2013).
Data saturation is the criteria for determining a sample size in qualitative research
(Moon et al., 2013). Data saturation occurs when additional data do not improve
understanding or meaning, and the study may be easily replicated (Finfgeld-Connett,
2014; O’Reilly & Parker, 2012). I analyzed the data at the end of the sixth interview,
including the correspondent member checking, to recognize the achievement of
saturation. With the achievement of data saturation, there is no need for additional data
collection (O’Reilly & Parker, 2012). I interviewed six participants expecting that data
saturation occurred by the sixth interview. However, I was prepared to extend interviews
should it have not occurred.
Population and Sampling
Sampling in qualitative research depends on the diversity of data. Therefore, the
number of respondents required for a qualitative research has to be sufficient to answer
the research question (O’Reilly & Parker, 2012). The sample size needs to be large
enough to capture a wide perspective of the topic but not so large as to gather repetitive
information (O’Reilly & Parker, 2012). Following these guiding principles, I purposively
selectedt six managers from the defined population.
There is no optimal sample size for qualitative studies as it depends on the
purpose of the study, research questions, richness of the data, and the expected
heterogeneity of the participants (Elo et al., 2014). Too many interviews may be
counterproductive as the researcher may not devote sufficient attention to analyzing and
reporting in-depth, rich content. Therefore, the maximum number of interviews should be
where additional interviews do not produce substantial new insight (Marshall et al.,
2013). The research sample must comprise participants who are representative of the
population and that have the best knowledge concerning the research topic (Elo et al.,
2014). In this regard, a researcher purposively selects the sample that is relevant to the
study (Petty et al., 2012). The sample encompasses individuals who have the expertise to
answer the research question given their unique characteristics as recommended by Lucas
(2014).
Rao (2013) conducted a multiple-case research study encompassing three cases to
explore the role of national cultural dimensions on the best practices for human resource
management in India. Houghton, Casey, Shaw, and Murphy (2013) used five case studies
sites for their multiple case study research to explore the role of a clinical skills
laboratory in the process of preparation of nursing students for the world of practice.
During the last Houghton et al. case study, no new concepts emerged, indicating the
achievement of saturation with the four previous cases. Based on Houghton et al. (2013),
I purposively selected six large for-profit privately owned companies in the southeast
region of Brazil that have invested in CSR programs for 2 or more years. The researcher
recognizes the achievement of data saturation when there is sufficient information for
replication of the study, and no additional information or themes emerge from the data.
Furthermore, data saturation enhances content validity (Finfgeld-Connett, 2014; Fusch &
Ness, 2015). Data saturation occurred within the six interviews.
The criteria for selecting participants within the defined population were their
experience as CSR manager of their firms. The eligibility criteria for participants
included (a) 1 year experience as the manager responsible for CSR of his or her company,
(b) the companies they work for must have invested in CSR for at least 2 years, and (c)
willing to share experience as CSR managers. Furthermore, participants agreed to
participate in interviews, which took 25 to 50 minutes, and participate in one follow-up
member-checking interview.
Ethical Research
Doing human research requires the researcher to act in an ethical way, usually
guided by an ethical code of practice, which establishes the responsibilities researchers
follow to safeguard their participants. Johnson et al. (2014) conducted an ethical research
with correctional populations. Findings from an ethical research with correctional
populations demonstrated a lack of knowledge of federal regulations aimed at protecting
the correctional population, demonstrating the need for improving the communication of
ethical standards specific for this population (Johnson et al., 2014).
I conducted the research process following high ethical standards. Approval from
Walden´s IRB (approval number 01-23-17-0334157) occurred before the collection of
data. The IRB is responsible for ensuring compliance with the university´s ethical
standards as well as U.S. federal regulations (Walden University, 2015). For this aim, I
underwent the IRB application process, which included the (a) description of the
proposed procedures, (b) community research stakeholders, and partners, (c) potential
risks and benefits for participants, (d) data integrity and confidentiality, (e) potential
conflicts of interest, (f) data collection tools, (g) description of the research participants,
and (h) obtaining informed consent (Walden University, 2015).
Participation in this research was on a voluntary basis. Participants did not receive
any payment or any other incentive to participate in the study. I requested a letter of
cooperation from the executives that had the power to authorize the realization of the
interview in their companies. I sent the letters of cooperation to the IRB for approval
before I conducted the individual interviews. I provided a mandatory consent form to
each respondent prior to his or her participation in the study. The purpose of the informed
consent is to provide protection to subjects participating in research. For this aim,
researchers ought to provide sufficient information about the research to allow prospect
participants to understand and decide whether they will voluntarily participate in the
research (Tamariz et al., 2013). The consent form informed the purpose of the study, the
procedures of the study, and my contact information in case a participant wanted to
communicate with me during the research process. I discussed the role of the participant
by reviewing the informed consent form with each participant, ensuring confidentiality
and that research results disclosure would not particularize any company or individual.
Arias and Karlawish’s (2014) study in preclinical Alzheimer disease and Kelly et al.’s
(2013) research on wearable cameras revealed the importance of assuring confidentiality.
Participants could withdraw from the study at any time by giving verbal or written
notice. In the case of withdrawal, I would have returned immediately any material
provided by the participant as well as would erase any taped participation. No participant
withdrew from the research. I kept confidential any information provided by the
participant, and did not use his or her personal information for any purposes outside of
this research project. I did not include the participant´s name or anything else that could
identify him or her in the study reports. Thus I assigned an alphanumeric code to each
participant to assure adequate ethical protection, which is stored separately from the data
in a password protected file. I will keep the data secured in a password-protected file on
an external, password-protected drive. I created a separate file for each participant to
store his or her informed consent form, audio files from the interviews, interview
transcriptions, and documental materials provided by the participant. These external
drives are stored at my home, inside a wardrobe that will be kept locked and the key will
be in my possession. Data will be kept for at least 5 years, as required by the university.
After 5 years, I will destroy all confidential data and materials.
Data Collection Instruments
I was the primary data collection instrument and the only interviewer. The
researcher is the primary data collection instrument in qualitative research (Teherani et
al., 2015). The researcher as instrument enhances the depth and quality of the collected
data (Xu & Storr, 2012).
I used open-ended semistructured interview questions as the primary instrument to
gather data from participants. Data quality in qualitative research is enhanced through the
use of field notes, transcripts, and audio recordings (Rowley, 2012). The use of multiple
data collection methods, such as observation, audio recordings, archival documentation,
and interviews, enhances research validity and reliability (Fusch & Ness, 2015; Rowley,
2012). Tuncay, Zayer, and Coleman (2015) used semistructured interviews to investigate
how advertising professionals perceived the impact of advertising on male and female
audiences. Interviews are commonly used as a method of data collection in qualitative
research to gain insights or understanding of a particular subject (Birchall, 2014; Rowley,
2012).
I used the same set of initial questions for each participant and after initial
questioning I let each interview evolve freely without losing the main research question
perspective. Open-ended questions allow participants to furnish thorough answers and
offer the opportunity for follow-up questions and interaction (Xu & Storr, 2012). To
enhance reliability and validity, I conducted member checking sessions with participants.
Member checking sessions allow participants to check the research findings to make sure
the researcher’s interpretation of the data reflects their true experiences, thus assuring
data validity (Elo et al., 2014). I checked my analysis and interpretation of the data and
enabled participants to clarify and provide additional data. To further enhance credibility,
I used triangulation to compare and confirm data from the interviews and company’s
annual report. If data gathered from different sources are consistent, this may increase the
credibility of findings (Houghton et al., 2013).
According to my interview protocol (see Appendix E), after receiving the letter of
cooperation from the executive that had the power to authorize the realization of the
interview, I sent an introductory e-mail (see Appendices C and D) to each CSR manager
describing the nature and importance of the research study involving CSR practices, and
strategies to measure CSR effectiveness. In this e-mail, I provided details of the research,
including the expected time length of the interview, the member checking process, the
voluntary nature of the participation, the withdrawal policy that allowed a participant to
withdraw from the study at any time, and the assurance of confidentiality. I attached the
mandatory consent form for participants’ knowledge.
Following the interview protocol (See Appendix E), before each interview
session, I asked permission to record the session. I used an alphanumeric code for each
participant to ensure anonymity. I used an alphanumeric code for each company (i.e., C1,
C2, …) corresponding to the number of each participant (i.e., P1, P2, …). Researchers
normally assign codes to participants to preserve their identities (Allen, Griffith, &
Gaines, 2013). I interviewed one CSR manager per company.
Data Collection Technique
I relied on the answers from CSR managers to an open-ended semistructured
interview questionnaire, and annual reports on CSR activities. A semistructured interview
allows respondents to provide thorough answers and creates opportunities for probing
questions and answers. Interviewing using open-ended questions is a widely used and
effective method of generating data in qualitative research (Birchall, 2014; Xu & Storr,
2012). Some of the advantages of using interviews are (a) they help to gain insight and
context, (b) they facilitate a working relationship with participant, (c) participants may
ask questions, (d) they permit probing questions from the researcher, (e) allows the
researcher to observe while listening, and (f) is appropriate for in-depth questioning
(Doody & Noonan, 2013). Conversely, some of the disadvantages of using interviews are
(a) they are time-consuming, (b) they are somewhat intrusive, (c) in case the researcher is
unable to create rapport, the respondent may become less interested in providing rich
data, and (d) interviews are more susceptible to research bias (Doody & Noonan, 2013).
Nonetheless, the advantages of using interviews offset the disadvantages when compared
to other methods to obtain in-depth data.
The most common way to record interviews is to audio record them – ensuring the
preservation of all the dialogues between the researcher and the participant for subsequent
analysis (Merriam & Tisdell, 2016). Often, participants are less spontaneous when the
researcher records the interview; therefore it is essential to minimize the effect of
recording that might affect the quality of data. To this end, the researcher should explain
the research objectives and procedures before the main interview (Doody & Noonan,
2013). Witty et al. (2014) recorded and transcribed verbatim the interviews of a study
with men about a sensitive medical matter, which proved to be effective to collect data. I
used a digital device to record the interviews and transcribed them verbatim to understand
the interview data. Concomitantly, I took notes to register initial impressions, emotions,
and contextual details. To increase familiarity with the data, I personally transcribed the
interviews.
Methodological triangulation is the use of multiple data collection techniques to
generate a greater confidence and understanding in the findings (Turner, Cardinal, &
Burton, 2015). The use of multiple data collection methods will enhance research validity
and reliability (Fusch & Ness, 2015). The transcript of a verbatim record of an interview
captures the discursive answer from the participant. However, the transcript does not
reveal nuances of the speech, nor contextual details. To sustain the richness of an
interview, the researcher takes notes of details (i.e., body posture, gestures, gaze, and
other aspects of utterances) during the interview (Gibson, Webb, & Lehn, 2014). I took
notes during the interviews because they could add extra meaning to the participant’s
answers.
A discussion with respondents assists in determining if findings reflect their
views, adding to face validity and reliability (Raja et al., 2013). I transcribed each
interview and discussed my interpretation of key points with each participant. I conducted
this member checking by e-mail and by phone. After finishing their interviews, four
respondents requested the interview transcript, which I sent together with my
interpretation of the data. Providing interview transcripts gave respondents the
opportunity to review their responses to ensure data accuracy. Reviews allow a researcher
to make any necessary amendments contributing to data credibility (Faseleh-Jahromi,
Moattari, & Peyrovi, 2014).
Despite the existence of many types of triangulation available for researchers
(Gorissen, Bruggen, & Jochems, 2013; Modall, 2015), I selected the methodological
triangulation with the use of two methods of data-collection; therefore, in addition to the
six semistructured interviews with CSR managers, I reviewed their companies´ reports
regarding CSR activities. Such reports were my secondary source of data collection. All
reports were available from the Internet, and the participants were informed that such
reports had the data I requested. I interviewed six participants expecting that data
saturation would occur by the sixth interview; however, I was prepared to extend
interviews should this not have occurred. Achievement of data saturation occurs when
additional data do not improve understanding or meaning, do not bring relevant new
information or themes, and the study may be easily replicated (Finfgeld-Connett, 2014;
O’Reilly & Parker, 2012). After the sixth interview, I realized that the themes were
repetitive. The differences I detected were basically on the CSR initiatives of each
company, which were aligned with each firm’s priorities and stakeholders’ demands.
Data Organization Technique
Yin (2014) posited that organizing and documenting data for a case study requires
a database. Such database may include electronic files, documents, and other materials
obtained in the field. Archival boxes or a file drawer are adequate to preserve documents
and other tangible materials from the case study. An important aspect of a well-organized
database is that it should allow easy data retrieval (Yin, 2014). The researcher needs to
organize and label the dataset according to some organizing structure or organization
scheme, provided it facilitates quick access to any part of the data at any moment
(Merriam & Tisdell, 2016). To organize the data, the researcher may use any data
wordprocessing tool (e.g., Microsoft Excel or Word files) or computer-assisted
qualitative data analysis software (QDAS) (Yin, 2014). The data organization enables the
researcher to analyze the data and to answer the research question (Doody & Noonan,
2013). Researchers use QDAS to support analyses of data collected through interviews,
field notes, and archival documents. Two well-known QDAS to researchers are ATLAS.ti
and
NVivo because they are the longest used software tools (Woods et al., 2015). I used
NVivo 9.0 software, a Microsoft Excel spreadsheet, and Microsoft Word for data
management. I created a separate file for each participant where I stored the informed
consent form, audio files from the interviews, and interview transcriptions. I will store the
data for 5 years after my graduation date. After 5 years, I will destroy all confidential
data, documents, and materials obtained in the field.
Data Analysis
Data analysis and interpretation are key elements of the qualitative research
process (Barsuto & Speer, 2012). The data analysis process refers to a profound
evaluation of themes and patterns that emerge during the interviews. The data analysis
process involves investigating, categorizing, tabulating, critically evaluating, or otherwise
rearranging evidence of data collected to produce relevant findings (Yin, 2014).
In alignment with the conceptual framework, I focused on the stakeholders’
theory, particularly the social and environmental benefits of CSR while maximizing profit
for shareholders, and on the strategies CSR managers use to measure the effectiveness of
CSR. Communication of CSR is a transversal theme as it influences how stakeholders
view companies, including firms’ green marketing attempts. Inconclusive data relating
CSR efforts to profit achievement is a theme that may affect the decisionmaking from
CSR management; which involves managers` inner beliefs, leadership style, and
stakeholders influences.
Data coding is a framework used to compare and identify themes and patterns that
emerge from the data collection process (Gale et al., 2013). The content analysis makes
possible data streamlining and to search for patterns and themes, enabling the
quantification of data by measuring the frequency of occurrence of different categories
and themes. The higher the frequency the most likely a category or theme will be
significant (Vaismoradi, Turunen, & Bondas, 2013). The data collected from each
respondent must be analyzed individually and after analyzing the data from all
respondents, the researcher synthesizes themes and repeating patterns (Percy, Kostere, &
Kostere, 2015). I appled a coding process for categorizing data from each qualitative
source of data collection to identify emerging themes and for methodological
triangulation purposes. I read peer-reviewed articles from 2016 and 2017 to look for new
themes that may have emerged in the literature after proposal acceptance. My
understanding is that no significant new theme emerged that could change radically the
findings from this research.
The interviews for this exploratory qualitative case study were in Portuguese,
which is the spoken language in Brazil. To avoid translation bias at the interviewing stage
of the research, I made an initial data analysis of the data in Portuguese using NVivo.
After that, I translated the interviews into English to use the narratives from the
respondents on the findings of this research. Schmeltz (2014) used NVivo qualitative data
analysis software in a multiple case study focused on the effective communication of
CSR. I used NVivo, to analyze data from interview transcripts. I transformed codes into
broader concepts and categories. A careful reading of the coded texts provides the
framework for assessing the relative importance of the values expressed in the research
data (Schmeltz, 2014). After the coding process and conceptual abstraction in Portuguese,
I finalized the data analysis and translate it into English. I translated the interviews into
English to support my findings.
Reliability and Validity
Reliability
Reliability and validity are evaluative measures that strengthen research rigor and
enhance data credibility (Rao, 2013). The usual criteria for evaluating research rigor are
(a) construct validity, (b) external validity, (c) internal validity, and (d) reliability.
However, Guba and Lincoln consider that (a) confirmability, (b) credibility, (c)
dependability, and (d) transferability are better criteria for evaluating qualitative research
(Houghton, Casey, Shaw, |& Murphy, 2013).
Dependability refers to the constancy of the data over time and under different
conditions (Elo et al., 2014) or similar conditions (Cope, 2015). A study is likely
dependable if the research findings may be replicable under the same conditions,
including the researcher’s process (Cope, 2015). The description of the researcher’s
process, outlining the decisions made during the process, enhances dependability of
findings (Houghton et al., 2013). To reinforce dependability, I made notes of the
contextual background of the data, including a comprehensive description of the
decisions made during the research.
Validity
To strengthen the internal validity of a research study, it is necessary to
demonstrate that the conduction of the inquiry was in a way that enhances credibility. In
this regard, is necessary to evaluate if the descriptions are rich and meaningful, findings
are internally coherent, and if the findings relate to the research concepts (Boesch,
Schwaninger, Weber, & Scholz, 2013). In addition, to enhance validity, the research
findings should reflect the participant’s perspective of the phenomenon, without any
researcher’s bias that could compromise the integrity of the data (Morse, 2015).
Member checking of the data interpretation serves both to address dependability
and creditability (Raja et al., 2013). The researcher may enhance credibility by verifying
the research findings with the participants (Cope, 2015). To enhance creditability, I
conducted member checking sessions with participants. I checked my analysis and
interpretation of the data, enabling participants to clarify and provide additional data.
Transferability refers to findings that can be used or applied to other related
situations (Cope, 2015). A thick description of the context of the research allows readers
to judge if data is transferable to other settings or groups, and enhances credibility
(Houghton et al., 2013; Yilmaz, 2013). To address transferability, I provided a thick
description of the research process.
Confirmability refers to the accuracy and neutrality of the data. The
comprehensive description of the researcher’s process during the study can enhance
confirmability (Houghton et al., 2013). Such description of the process, including the
rationale for the decisions made, addresses not only confirmability, but dependability, and
transferability. To ensure confirmability, I audio recorded the interviews and took notes,
reviewed the transcripts, used a reflexive journal as an audit trail, and discussed findings
with participants during member checking sessions.
Data saturation is critical for ensuring data validity (O’Reilly & Parker, 2012).
Data saturation occurs when additional data do not improve understanding or meaning of
the research topic (Finfgeld-Connett, 2014; Fusch, 2015). The absence of new data
themes reveals that the researcher captured a thorough understanding of the research
topic, hence enhancing data validity (O’Reilly & Parker, 2012). Additional data
collection is not necessary after the occurrence of data saturation (Morse, 2015). Once the
achievement of data saturation occurs, the researcher obtains the same results when the
study is replicated (O’Reilly & Parker, 2012). I interviewed the participants until no new
information was presented to ensure saturation.
Transition and Summary
The purpose of this qualitative, exploratory, multiple case study was to explore
managers’ CSR investment strategies that lead to improved economic and financial
results. Section 2 contains a description and justification of the method and research
procedures that support the use of a qualitative multiple case study to address the research
question. Section 2 includes the restatement of the purpose statement, my role as a
researcher, the specifics of the research project encompassing population and sampling,
ethical research, data collection tools, data analysis, and the concern for the assurance of
reliability and validity of the study. In Section 3, I present the results of the research
study, addressing the research questions and relating the findings to the literature on the
topic. Furthermore, I provide recommendations for the application of findings to
professional practice and social change, and suggestions for future research.
Section 3: Application to Professional Practice and Implications for Change
In Section 3, I present findings of the research study on CSR managers’ strategies
for evaluating CSR effectiveness. The section contains (a) the research findings, (b)
application of findings to professional practice, (c) social change implications, (d)
recommendations for action, (e) recommendations for further research, (f) my reflections
regarding the research study, and (g) conclusion.
Introduction
The purpose of this qualitative multiple case study was to explore CSR managers’
strategies for evaluating CSR effectiveness. The research data were collected using
semistructured interviews with CSR managers in the southeast region of Brazil. I
addressed the research question with open-ended interview questions, which enabled an
in-depth investigation of the respondent´s experiences and visions. I reviewed the annual
reports on CSR activities, which served as a secondary data source. The findings revealed
different strategies that CSR managers used to conduct and evaluate their companies’
CSR activities.
Data from the annual CSR reports and data from the transcribed interviews were
coded to identify themes. Member checking sessions helped to validate the data. Seven
themes emerged from the findings, which are listed in the presentation of the findings.
Table 1 provides the frequency of agreement of respondents to the statement of the
themes.
Presentation of the Findings
Findings revealed the following themes:
1. Leadership proactively communicate their CSR activities.
2. Economic and social returns are difficult to measure.
3. Managers adhere to the CSR concept.
4. Corporate strategy guides CSR activities.
5. Personal values and beliefs of CSR managers influence decisions.
6. CSR managers attempt to create partnerships.
7. Education is the focus for CSR managers’ outreach efforts.
Table 1
Adherence to the study themes
Themes n Frequency of
occurrence
Leadership proactively communicate their CSR activities. 6 100%
Economic and social CSR returns are difficult to measure 6 100%
Managers adhere to the CSR concept 6 100%
Corporate strategy guides CSR activities 6 100%
Stakeholders’ influence on CSR decisions 3 50%
Personal values and beliefs influence decisions 5 83%
CSR managers attempt to create partnerships 5 83%
Education is the focus for CSR managers’ outreach efforts 6 100%
Theme 1: Leadership Proactively Communicate Their Corporate Social
Responsibility Activities
As informed in the literature review, business executives have directed corporate
resources to both the development of CSR initiatives and the associated marketing
communication efforts to inform stakeholders of such initiatives (Green & Peloza, 2015).
As indicated by Christensen et al. (2014), a growing number of corporations are issuing
CSR reports and are adopting international standards for CSR certification. According to
Hahn and Kühnen, (2013) and Odriozola and Baraibar-Diez (2017), sustainability
reporting is a method to increase transparency and enhance brand value, reputation, and
legitimacy among stakeholders. As indicated by Pires et al. (2015), stakeholders are
concerned with corporation ethics, quality certifications, and the publication of CSR
reports.
The structuring of the reports may follow many recognized and accepted data sets,
KDL, GRI, United Nations Principles of Responsible Investment, ISO 26000, Ethos,
LGB, Bloomberg ESG, barometer, and B Lab standards. The B Lab offers an assessment
program for evaluation of benefit corporations (Wilburn & Wilburn, 2014). The KLD
dataset is the most used in CSP studies when compared to any other single set of CSP
indicators (Chin et al., 2013; Vracheva & Mason, 2015). KLD is the most respected
source of stakeholder performance data available (Dowling, 2014). The KLD dataset was
not used by any company in the sample.
Whichever standard or data set used to report CSR activities, they cover many
environmental and social sustainability issues. CSR reporting under these accepted
standards will increase leadership awareness about these sustainability issues, as well as
increase stakeholders demand for corporations to engage in CSR activities and to become
more active in meeting environmental and social needs.
Table 2 provides the basis for the standards that companies follow for reporting
CSR activities to stakeholders. The six companies have certifications that illustrate they
follow specific sustainability guidelines from different standard-setting institutes. The
complete list of certifications is not provided as this information might compromise
company anonymity.
Table 2
CSR Reporting System
Company
Reporting Basis
Alignments/ Certifications
C1 Global performance B Corp
C2 GRI SDG Compass
C3 GRI ETHOS
C4 GRI TBL
C5 Barometer TBL
C6 Company’s KPIs LBG
Note. B Corp = for-profit companies certified to meet rigorous standards of social and environmental
performance, accountability, and transparency; GRI = Global Reporting Initiative; SDG = Sustainable
Development Goals; SDG Compass = reporting standard created by the GRI, the UN (United Nations)
Global Compact, and WBCSD (World Business Council for Sustainable Development); ETHOS =
Brazilian Ethical Standards Institute; TBL = Triple bottom line; LBG = London Benchmarking Group.
Management from all researched companies emphasized the importance of
communication of CSR to stakeholders. These corporations release information about
their CSR activities as part of their corporate annual reports to stakeholders. In this
respect, company C3 issues a well detailed stand-alone CSR report apart from the
corporate annual report, which also has a section dedicated to CSR. As posited by
Dhaliwal et al. (2012), and Orlitzky (2013), firms that issue stand-alone CSR reports to
disclose nonfinancial information tend to improve analyst forecast accuracy, which in
turn influences these firms’ market value.
C3´s report aligns to GRI and ETHOS standards. Corporations C4 and C5 are in
the industrial business, and therefore, their management had a greater concern with
sustainability issues. The CSR reports from C4 and C5 reflected this sustainability
concern. Furthermore, the respondent P5 declared her company (C5) management shares
sustainability information when attending events with customers. All companies of the
sample provided substantive information about their CSR initiatives. This is not a usual
practice according to Hubbard (2011), who declared most of the companies have
lowquality reports because they do not disclose all the information stakeholders require. I
did not interview stakeholders to know their level of satisfaction with the data about CSR
because this was not the objective of the study. According to Öberseder, Schlegelmilch,
Murphy, and Gruber (2013), most consumers do not fully understand the overarching
concept of CSR because of its complexity. When asked about the importance C5`s
management gave to the communication of CSR to stakeholders, P5 answered it was
fundamental:
In every opportunity we have . . . we talk about sustainability. If the president
gives a press interview, he will probably talk about sustainability, so the theme is
very embedded in the events that already exist in the company.
P4 mentioned that C4 management adopts the triple bottom line concept because it is
more effective and more evident in communicating their CSR to stakeholders and
because it contributes to the GRI model, which her company uses. When asked if she
evaluated the effectiveness of CSR on the impact it had on the media regarding the space
they got for free, P1 answered they did not report such gains but admitted it could be
relevant because it represented spontaneous, unpaid media. In P1´s company, the local
marketing department had a focus other than reporting CSR achievements. Whenever
information about a CSR activity was published, it was as a result of a request from P1.
P2 communicated CSR actions to investors on a quarterly basis. Investors,
according to P2, are very focused on economic returns: “It is natural, the company still
has a duty to deliver economic results, so investors are still very focused on the economic
aspect.” P2 noted the annual sustainability report was where C2 leadership attempted to
generate more quality information for all stakeholders. As posited by Maignan et al.
(2011), corporations with superior CSR performance usually disclose their CSR activities
to the public, leading to more transparent and trustful identities. P2 admitted some
communication weaknesses from her company:
A lot is done, many institutions are benefited, we do a very great job, but good
communication is missing . . . not that it is not transparent, anyone can see the
company´s balance sheet, how much it spends, but lacks better communication.
P6, when questioned about how her company communicated all the CSR activities
to stakeholders, said it was through a global report that is audited by
PricewaterhouseCoopers and The London Benchmarking Group (LGB), which is an
institution in London that audits the social work of social responsibility companies. This
information is captured monthly from a system. P6 stated that her company in Brazil
could benefit from a better communication of its CSR activities; however, a company
guideline prevents the regional companies of doing such communication. The parent
company in the U.K. is responsible for reporting CSR. P6 stated,
They have to deal with it. At the time of meeting with their shareholders there,
they put this and this is also computed in the Dow Jones index, they account for
that, yes . . . The LGB report attempts to make a comparison, the balance of social
investment, but is very focused on private social investment.
Findings revealed the companies from the sample always informed interested
stakeholders about CSR activities. However, most of the companies did not invest in
communication to the public, indicating these companies were not taking full advantage
of their expenditures in CSR. As informed by Green and Peloza (2015), many firms that
invest in CSR are not getting the full benefit from these initiatives because of poor CSR
communication to external stakeholders. Furthermore, it is a challenge to manage and
plan CSR communication with multiple media for different stakeholders (Nielsen &
Thomsen, 2012). CSR communication from the six companies was passive; the interested
party needed to search for such information at the corporations’ sites.
Theme 2: Economic and Social Corporate Social Responsibility Returns Are
Difficult to Measure
As informed above, CSR results are presented to stakeholders according to the
GRI or by any other similar standard. Firms´ leadership do not demand from CSR
managers an evaluation of the effectiveness of CSR activities provided the reporting on
CSR demonstrates the firm achieves established CSR targets based on standard-setting
evaluation firms. CSR managers can measure social actions by, for instance, the number
of families benefited, the number of hours of volunteer work, the number of individuals
who went through education programs, dollars spent, the number of hours of training, and
the gender distribution in management positions.
CSR managers are comfortable with the reporting system as stakeholders evaluate
CSR by the reporting system´s standards. However, CSR managers have difficulties
evaluating the economic and social returns of their CSR activities. The difficult task is to
evaluate the effectiveness of different social actions regarding benefits for the company
and to stakeholders. Management may know how much an action costs but can only
guess how much the company receives in return. The return for a company may come
from an enhanced reputation or the satisfaction of determined stakeholders (not
shareholders), but this would require market research. Any criteria used to monetize these
returns, however, would have to be tailored for each company, as the impact would be
different for different companies as they are immersed in different contexts.
Venturelli et al. (2017) stated a firm may evaluate its CSR practices both
qualitatively and quantitatively. However, existing measuring methods reveal certain
weaknesses. As indicated by Harrison and Wicks (2013), measurable company
dimensions are not limited to the variables set by the balanced scorecard nor to the triple
bottom line concept as the predominant focus is on the economic dimension. As informed
by Wang and Sarkis (2017), research findings revealed an inconsistent relationship
between CSR activities and firm economic outcomes.
The findings of this study reveal that CSR managers choose among social actions
based, initially, on their alignment with the corporate strategy, and secondly on their
experience, subjective evaluation, or personal preference. Company leadership is
primarily concerned with the achievement of the performance indicators presented in the
company’s sustainability report. Therefore, CSR managers are not evaluated by the
effectiveness of a CSR action. Despite the difficulty to measure the effectiveness of social
initiatives, this does not prevent managers from investing on the maintenance or
development of social activities directed to their stakeholders.
CSR managers from the researched sample stated they normally have difficulty
evaluating CSR effectiveness, particularly the effectiveness of social activities.
Participants sometimes evaluate the effectiveness of social activities in qualitative terms.
CSR managers have data to compare the results of initiatives that are held more than
once, or for when they establish a goal for each activity. In support of this statement, P6
said that one of their CSR activities showed an increase over the previous year in terms of
volunteer participation, but she was not able to determine the impact of such activity on
the business. Some social initiatives may be measured quantitatively in relation to
industry averages, for instance, the percentage of volunteers that engage in a CSR action,
but the measurement of the impact in economic terms is not feasible.
Regarding strategies to measure the effectiveness of CSR, P4 said that it is very
difficult to make because it deals with reputation and with people´s perception of
goodness. This understanding is aligned with Harrison and Wicks (2013) statement that it
is impractical to evaluate the value of the utility provided to each stakeholder.
Furthermore, P4 stated she has some indicators that are qualitative, and she is attempting
to turn them into quantitative. She is trying to improve her knowledge of social ROI,
because she believes it is something that speaks the language of the business:
So, I have 'X' reais of social return, which can come through different themes, for
every real invested in this program . . . I think it is a measurement that is not so
simple to do - I am still learning - but it is something that is very close to a
business language because it has to keep up with the evolution of the social
responsibility theme, it does not have to be essentially philanthropic.
Respondent P5 did not have specific strategies to evaluate CSR effectiveness, but
her company has an instrument called barometer, based on the triple bottom line concept,
to measure the achievement of corporate goals. The barometer is a tool in her company in
the format of a sustainability dashboard, where the board communicates economic,
environmental, and social goals, which are valid for all countries. Each country
contributes on a smaller or larger scale to global goals that need to be accomplished. P5
provided an example of a global goal: equality between men and women. P5 explained
that Brazil has its own barometer as do one of the countries that is more advanced in this
subject. P5 mentioned that the barometer covered corporate goals with different forms of
scoring. Each goal has a measure and it has a variation ranging from 1 to 10 and a greater
weight within that dashboard so that compliance with all social, economic, and
environmental goals reaches a maximum score of 10. Furthermore, respondent P5
explained that the results they get in sustainability are not necessarily financial, but they
might result in indirect financial gains. P5 revealed “Knowing that it is not the end
business activity, we do not have an obligation to generate revenue.” P5 understands CRS
generates new business opportunities, which converts into a larger customer base, and
more loyal customers because they find meaning in this business relationship. The
adherence of C5 to the TBL approach is aligned with Cronin et al. (2011) that business
practices derived from the stakeholder theory is a strategy that can help firms to maintain
or improve their market presence.
P1’s understanding is similar to P5 regarding CSR evaluation. P1 stated it is
difficult for her to monetize all the CRS initiatives her company carries out. The
evaluation of CSR effectiveness is different for each initiative, and the social ones are the
most difficult. In this regard, P1 declared that a social action can be measured depending
of its nature, as for instance, by the number of people impacted, the number of volunteers
involved, and hours worked. P1 said:
Then again, it is not monetary. Sometimes I can even turn people's hours into an
indexer, and then I have a reflection of how much it would be worth if it were
paid, depending on the instrument I am being evaluated by.
When asked if customers felt more motivated to buy from the company because of
CSR initiatives, P5 answered she only had some clues. She was not able to determine the
exact influence of CSR on the motivation of customers to buy from her company as other
intervening variables could influence the results. In this regard, P5 stated “At least we
become better known, become an option for the consumer . . . But, I cannot tell you that
sales in that location came specifically from this project.”
P3 pondered that to measure the effectiveness and impact of CSR is a big
challenge, especially when this action is in education. This challenge comes from the
many variables that impact the process. P6 stated they currently do not have a formal
measure of the impact because the studies that they have done so far with impact
measures were studies that demanded a very high investment. P6 understood that to
conduct a formal evaluation she would have to create reference groups, and observe these
groups for a certain number of years. Therefore, the return on the investment of a
complementary education program would be very low. P6 said the indicators they
consider for evaluation of education actions are indicators of impacts, without the
scientific rigor. She shared a series of appreciative testimonials from students and
teachers, and attitudes of these students: "After I did the program, I decided to continue
studying because I saw that it is very important," and "Oh, I changed my attitude in the
classroom, I came to help my father build his business.”
When asked about the strategies to measure the financial impact on the investment
on CSR, P2 informed it is not done. It is a task they are trying to do, but it is very
complex. P2 stated it was difficult to isolate each dollar invested on a social responsible
action that was not influenced by other corporate variables. Regarding the measurement
of social impact, P2 informed he had, for instance, the number of farmers impacted by the
supply chain process. Likewise, the number of children treated in their institute. P2
declared knowing how much was invested on each child. When asked about the concern
the company had with landfills and packaging that might not be recyclable, P2 stated all
their packaging is recyclable. His company management is concerned with the
environment, from whom they purchase, to prevent them from degrading the biodiversity
from where they are produced. C2 factories undergo audits so C2 management is aware
of the impacts generated in their operation - which are waste, gaseous emissions, etc. – so
management has control and quantification of these aspects.
Theme 3: Managers Adhere to the Corporate Social Responsibility Concept
Participants understand that CSR is an initiative from corporations to give back to
society part of their wealth. This understanding is aligned with the stakeholder theory
(Freeman, 2010) and with Schmeltz (2014) and Chan et al. (2014), who stated a company
more than just increasing wealth for their shareholders may provide benefits to its
stakeholders. Furthermore, in recent years, stakeholders urged corporations to engage in
CSR activities and to become more active in meeting social needs (Servaes & Tamayo,
2013; Torugsa et al., 2013). All participants demonstrated adherence to the stakeholder
theory. In this regard, participant P6 stated “I believe in the responsibility of the company
in returning to society … because we generate profit.” P2 had a similar positioning,
“there is a fairly high awareness of the company regarding the need to return to society
benefits.”
Participants understand that CSR has both a business drive and a philanthropic
one. Philanthropy is a mark of the Brazilian society towards the reduction of inequities
the high social vulnerability population has historically suffered (Bohn et al. 2014;
Leubolt, 2015; Saad-Filho, 2015). In this regard, participants understand their firm´s
social efforts depend to a certain degree on the financial dimension of the business. This
understanding is in accordance with Harrison and Wicks (2013), who stated that despite a
firm´s efforts toward the social and environmental dimensions, the economic focus is still
predominant. Aligned to this idea, participant P2 stated:
I believe companies can do their business looking at the triple bottom line, that is,
where social, economic, and environmental have weights but different weights,
because the economic will always come in the forefront as there is no social and
environmental if there are no economic returns to shareholders. Except that this
return should not be abusive and unnecessary.
When asked about the current corporate social responsibility practices of their
firms, respondents informed they conducted many CSR activities. Some of the CSR
activities, particularly the ones directed to external stakeholders, varied from one
company to another. As indicated by Korschun et al. (2014), organizations adopt CSR
concepts that may encompass different components such as volunteer work, support for
local communities, sustainable practices, and ethics. Participant P2 distinguished two
aspects of corporate social responsibility, one focused on society without having a link or
a direct or indirect benefit to the business and the other, with social responsibility actions
that he defined as corporate social responsibility. P2 practices these values and beliefs in
his company, and shares them with his business partners. In this regard, respondent P2
informed that his company has philanthropic activities totally dependent on donations and
not sustainable by itself, which is the C2 Institute. The C2 Institute is an entity apart from
the company, and aims to assist children who are in treatment for cancer, and encourage
cancer research for children.
Regarding the current practices of CSR in company C1, participant P1 stated their
current CSR practices were both social and environmental. As C1 is a university, P1
explained that it was obvious that when an institution deals with students and the
provision of educational services, the social impact is much more easily perceived. The
respondent P3, in agreement with the respondent P2, cited an example of the
philanthropic approach, which is the donation made to an institution that cares for
individuals with brain, motor, and severe disability. The respondent P4 stated her
company CRS strategy encompassed three subjects: education, diversity of inclusion, and
food security in the fight against hunger.
The conceptual framework for this qualitative multiple case study was the
stakeholder theory. Freeman (2010) posited the need to give equal treatment to all
stakeholders, and that CSR practices contributed towards the balance among
stakeholders’ interests. Findings indicated that companies from the researched sample
align to the stakeholder theory. It was not possible, however, to determine the influence
of each stakeholder on the adoption of CSR by the corporations. Effective stakeholder
management requires a strong relationship between the company and its stakeholders
(Chow & Chen, 2012). Sensitivity to stakeholder demands, diversity of stakeholder
demands, and exposure to stakeholder scrutiny may contribute towards a positive
corporate social performance breadth (Brower & Mahajan, 2013). P6 stated, decisions
about CSR goal setting comes from the opinion of the leadership, the employees, the
government, the union, the NGOs, and the universities. In two companies, the
participation of external stakeholders on the determination of CSR activities was not the
norm.
Theme 4: Corporate Strategy Guides Corporate Social Responsibility Activities
As posited by Wang and Sarkis (2017), many companies integrate their social and
environmental dimensions in their business strategies. Participants agree that the CSR
efforts from their companies, whenever possible, should be aligned with their business.
For most of the respondents, CSR activities, should benefit the company businesswise,
either in reputation among stakeholders, brand recognition, client loyalty, increase of the
number of clients, easing up fundraising, and other benefits, despite the difficulty to
associate individual CSR actions to economic returns. Benefits resulting from CSR
activities are somewhat similar to benefits identified by Yelkikalan and Köse (2012), who
stated CSR improves the reputation of the business, increases recognition and prestige,
adds value to brands, affects the business’s image positively, and increases the intangible
capital of the business; thus, contributing to profitability. In this regard, P5 stated: We no
longer treat our initiatives as corporate social responsibility. For us it is a new way of
doing business. . . . It is true that companies are not NGOs, it is not their core business, so
they have to make money, and they take the opportunity to do something good for the
world.
P2 agrees with P5 concerning the alignment of the CSR efforts to business. In this
direction, P2 stated his company has development projects for marginalized small farmers
in the economy, where they are educated and trained to become suppliers of lettuce and
tomato for his company, “We purchase 5% of our vegetables from small farmers. With all
that I was telling you, and we will do so, we will really have a very positive social impact
through our business.”
Respondent P6 defended the importance of the alignment of CSR with corporate
strategy. P6 said decisions need to align with the business, “the CSR strategy needs to
align, have adherence to the strategy of diversity and inclusion.” With this alignment, she
believes her company has greater strength to demonstrate the value of social
responsibility in the community.
Furthermore, respondent P6 mentioned their global corporate social responsibility
strategy for innovation encourages internal development of products that may have a
positive impact on society. P6 noted “But, it is not without profit, since it is a product of
social innovation and not a pure social investment.” Respondent P3 also understands the
need for the alignment of CSR with the corporate strategy: “And this is because we had,
as a premise to structure the actions and projects of corporate social responsibility, an
adherence to the values and strategies of our group.”
Respondent P6 informed that her company incorporates the company´s global
social corporate responsibility strategy, with some adequacies for the Brazilian reality and
some additional initiatives. As indicated by Pereira and Amatucci (2014), the adoption of
global strategies is a common practice, therefore headquarters of multinational companies
and subsidiaries may exchange information to improve their CSR practices, provided
such practices do not confront cultural and institutional aspects of each country.
Participant P6 revealed the global CRS strategy of C6 had two main axes. One axis is that
leadership from the parent company encourages countries to work on social funds, and
from volunteering it works to provide donation products and services to social
institutions. Another axis is of social innovation that fosters the creation of internal
products from initiatives that have a positive impact on society. The creation of internal
products is clearly associated with profit generation, which reveals the alignment of this
CSR strategy with the corporate strategy of C6.
Stakeholders’ influence on CSR decisions. According to stakeholder theory, one
of the major objectives of the leadership of a firm is to balance the conflicting demands of
its various stakeholders (Chan et al., 2014; Cho, Laine, Roberts, & Rodrigue, 2015). As
indicated by Christensen et al. (2014), engagement of a firm on CSR activities is highly
dependent on its leadership. Such understanding is also shared by Lankoski et al. (2016)
when they stated CSR activities, when not enforced by institutional rules, stakeholder’s
requirements, or mandatory regulation, depend on the support provided by companies’
leadership. The companies from the selected sample that have their headquarters in
Europe or in the U.S. have global goals that their subsidiaries in Brazil need to
accomplish. However, headquarters’ leadership gives autonomy to, and even stimulates,
local management to develop their own CSR initiatives. In this regard, when asked if the
company leadership influenced decisions regarding CSR initiatives, P5 replied “yes and
no.” Their local leadership is committed to meeting several corporate goals, including
business, revenue, cost, and the sustainability goals.
Answering the same question, P2 stated headquarter leadership influences CSR,
and P2 tries to do is to organize this CSR vocation and a clear direction of the board of
the company. P2 said, “This is how it turns into policies, procedures, that pervades the
strategies of the departments.” P1 emphasized the strong influence from the leadership as
the company in the U.S. has obtained the 'B' certification. Such certification increases the
leadership responsibility in terms of social responsibility as it becomes more visible. In
this respect, P1 said, “Some CSR actions are defined by headquarters, I would say. Then,
as a member of the network, we engage, but several CSR activities are created right
here.”
P3 said the company´s leadership supports the yearly social plan. Leadership may
make suggestions for a CSR activity, but the main strategy is investments in education,
which has been the same for the last 11 years. P3 said she prepares the actions and
projects that she intends to implement for the next 3 years, presents them to the council,
and the council approves or modifies these proposals. In relation to CSR projects, P3
revealed: “Our goals are much more related to the volume of actions that we are able to
implement, and that we are prepared to implement, than with the volume of resources
itself.”
P4 said she reports directly to the head of human resources, and the area of social
responsibility is within the HR board. The chairman of the Brazilian operation is a person
who is always involved in social responsibility. In this respect, P4 attended meetings to
discuss projects, to include performance, planning, and new developments. Moreover, P4
stated she has a strong role in influencing and directing new CSR projects. When asked
about the support from the leadership, and if the leadership had people who believed in
social projects, P4 said: “Yes. Yes. Thinking about my leadership, yes. In general
leadership, I believe that as in most companies, there is still a process of catechesis to be
carried out.”
P6 stated they receive directives from the global parent company regarding social
responsibility policies. There is a local policy of social investment and of donation, and
there is a policy of non-discrimination. Conversely, in many things P6 influences the
parent company. In this regard, Pereira and Amatucci (2014) stated: Both headquarters
and subsidiaries may adopt successful CSR strategies from each other. This knowledge
transfer is an advantage that multinational enterprises have over companies located in one
country only (Pereira & Amatucci, 2014). P6 stated “the advantage of shared CSR
knowledge is that there is no need for duplication of efforts to develop CSR programs in
more than one country.” Conversely, firms must be cautious about these directives.
Regarding CRS knowledge sharing, P6 said: “For example, diversity: they
(headquarter) only work the woman axis. We are working the axis of gender, women, but
also LGBTI and Afro.” P6 informed her company has a governance manager, an
executive for whom she can submit projects for the global. Furthermore, P6 said her
company has a global corporate responsibility board in social innovation, and also an
executive committee focused on social innovation with global representatives to decide
which project to go forward and which will not.
According to Taylor (2014), the stakeholder base extends across countries and
different cultures. As a result, stakeholder norms and behavior tend to vary across the
globe, resulting in stakeholders’ non-homogeneous expectations from companies taking a
stand on social issues.
Theme 5: Personal Values and Beliefs of Corporate Social Responsibility Managers
Influence Decisions
Findings revealed the values and beliefs of CSR manager influenced development
of CSR initiatives, independently of corporate policies and directives, or support from the
leadership. As indicated by Arnaud and Wasieleski (2014), CSR managers normally have
a humanistic background that makes him or her concerned with the welfare of internal
and external stakeholders. Moreover, one reason for managers to engage in CSR may
arise from managers` personal beliefs, values, personality, and world view (Christensen et
al., 2014). This worldview was shared by five out of six respondents. P1, when asked if
her values and beliefs influenced her CSR decisions, said: “Certainly. There is no way to
separate one thing from the other.”
P3’s enthusiasm during the interview revealed her personal engagement and belief
on the social responsibility theme. Much of what she pursued in CSR came from her
values and beliefs, which influenced her decisions about investments in corporate social
responsibility. P4, when asked about her personal beliefs and values and the influence it
had in her decisions, said:
Wow, I would do my job even for free. . . . I am too suspicious to talk about my
work. I really like what I do, I believe this is something that companies took time
to understand even to look at because the company is not an isolated body. The
company is embedded in society, society is within the company, its internal public
is a reflection of society, and one cannot think of sustainable development without
looking at everything that is involved.
When asked about what personal values and beliefs influenced investment
decisions, P6 demonstrated a strong commitment to CSR, but had a critical view in
relation to placing someone in the CSR area without the necessary characteristics: Ethics,
always. Social justice, fairness of rights, transparency, passion, and commitment. . . . I
have to believe in order to direct and work with it. If I do not believe, I cannot…If I am
here, let us do serious work, if not, I do not even have to have my chair. The company
can hire an analyst, anyone and have an area of responsibility just to have . . . But know
that the area of social responsibility is always a challenge. Resilience, patience…so, it is
not anyone who will perform . .
. because some people do not have the minimum social sensitivity and
understanding of this universe.
Despite the influence of personal values and beliefs on the determination of CSR
activities, all respondents stated the alignment with corporate strategy is the most
important factor on the selection of a CSR action. One respondent did not express the
need for a CSR manager to have a humanistic background to conduct the CSR of a firm.
All other respondents agreed with the importance of having a humanistic profile to
manage CSR.
Theme 6: Corporate Social Responsibility Managers Attempt to Create
Partnerships
As indicated by Bowen (2013) and Carrol (1999), resource limitation prevents
organizations from coping with social obligations that are under the responsibility of the
government. Filatotchev and Nakajima (2014) stated CSR has potential benefits for the
competitiveness and performance of firms; however, CSR benefits are long-term and
uncertain. As indicated by Chan et al. (2014), in periods of low profitability, firms tend to
prioritize economic demands over CSR expenditures, particularly when such
expenditures are discretionary.
The interviewed CSR managers understand that any organization, regardless of
being a social or business organization, has limited resources and usually have unlimited
demands. Regarding the responsibility of the government in relation to the responsibility
of corporations, P2 said he believed the private initiative will make the changes that the
world needs as money is not based on governments, and when it is based on governments
it is very poorly used, independently even from corruption. Furthermore, P2 stated the
government usually has no productivity and efficiency in the use of resources; therefore,
the private initiative has much to contribute with its pragmatism. For P2, those who
survive in this competitive market have the ability to survive and use resources.
Regarding the restriction of funds allocated to CSR initiatives due to the weak
economic situation in Brazil, P6 stated having some restrictions: “Particularly because in
a context of survival of the company, an area of social responsibility is not a core area, it
does not give immediate return, and the vision is always medium and long term.”
I found indications that CSR managers seek partnerships with other organizations,
the governments, and NGOs, because these partnerships may give more visibility, reduce
the necessity of funds, and help on the achievement of CSR goals. In this regard, P1
stated many actions that she had carried out did not result in a contribution of direct
resources from her company: “The idea is to do something jointly…. For other initiatives
we sometimes have partnerships with NGOs and private companies.”
P2 stated that to fund the C2 Institute, management develops fundraising actions,
as well as donations from suppliers, charity dinners, and events such as golf tournaments.
P3 informed her company has partnerships with big NGOs, and frequently develop joint
actions with suppliers. P4 stated they have a partnership with a local company to offer
food security. C4 management developed actions with the local Chicago-based Global
Food Banking Network (GFBN) partner in food collection campaigns. According to P4,
in the United States, this issue of food bank volunteering is very strong, so “we kind of
tropicalized the activity.”
P5 carried out campaigns with some of their clients. P5 gave an example of how
joint efforts with clients functioned. She said she runs a campaign once a year where,
when buying certain products, the client and her company makes a donation to a social
project that has to do with the professionalization of young people. P6 said her company
has partnerships with public financial entities in search of an indicator that brings the
issue of financial health to society, the development of an index of financial education in
Brazil. Her company is involved in social projects focused on financial education, income
generation, and micro-entrepreneurship. P6 stated they have a volunteer program focused
on training the community on the financial issues.
Theme 7: Education is the Focus for Corporate Social Responsibility Managers’
Outreach Efforts
As indicated by Chabowsky et al. (2011), education is part of the social dimension
firms can provide to the community. CSR managers from the six companies stated their
companies invest in education as this is a weak area in Brazil. Participants stated
education is provided for different publics with different education needs. Sometimes,
courses are specific to a target group that lacks a determined knowledge. In this case, the
company that offers the course might have a business interest in the development of such
knowledge. P6 defined their education approach, “Our social investment, our projects are
much linked to the core business of the company. So, we work on social projects focused
on financial education, income generation, and microentrepreneurship.” Respondent P3
stated that the focus on education was defined not only by the understanding of the
importance of education for the development of Brazil, but also by the coherence with the
strategies and values that the group has always practiced. P5 recognized the need for CSR
related to education in the community, “we focus our donations on social projects that
have to do with the professionalization of young people.” C1 is a university that provides
full or partial scholarships for eligible employees and community members. C2 is large
restaurant chain that provides training and qualification for their employees. In this
regard, P2 stated his company was concerned with education. His company provides
formal education for their leaders, specific education to small farmers to become their
suppliers, and training and development for new employees. P2 stated he wants to
improve the skills of young people, most first-time employees, so that they become better
qualified for a second job. P2 declared his company has been a labor force qualifier, but
now they are improving their processes and counting on the support of banks and other
institutions, so that his company and himself can be educators.
P4 explained her company has education as one of their three axes for CSR. Much
of what they do is linked to education, which was designed to be a complement to formal
education for the nearby communities. C4 has a few industrial plants in Brazil, where the
local communities have different education needs. P4 believes that art is something that
can complement the study and the conventional curriculum of the students of public
schools, who belong to communities of high social vulnerability. In this regard, P4 has
been developing art courses for such communities.
Applications to Professional Practice
This study is relevant for understanding CSR is an important activity when
aligned with the firm’s corporate strategy. In view of the difficulty to evaluate the
effectiveness of CSR activities, companies rely on CSR standards to present their CSR
results. Reports based on CSR standards set by recognized institutions satisfy
stakeholders’ needs for information. This study confirms the difficulties CSR managers
find to evaluate the effectiveness of CSR activities in terms of economic returns derived
from gains in reputation, recognition, prestige, brand value, positive image, and
intangible capital of the business. Findings of this study reveal the need for companies to
publish CSR reports that follow international standards. A growing number of
corporations are issuing CSR reports and are adopting international standards for CSR
certification (Christensen et al., 2014). Currently, the communication of CSR is passive,
mostly limited to information that one may search on the corporation’s site. Findings of
this study reveal that CSR managers understand their companies may benefit from a more
active use of communication to the general public.
Findings of this study reveal the importance to develop partnerships with other
companies, NGOs, and government. Partnerships may give more visibility to CSR
activities and, consequently, to the firms involved, while sharing costs, and helping on the
achievement of CSR goals, thus, increasing tangible and intangible returns to the
companies. Findings of this study support the stakeholder theory (Freeman &Hasnaoui,
2011), which in essence is to provide social and environmental benefits for stakeholders
while delivering profit for shareholders. Findings of this study support Lankoski et al.’s
(2016) statement that CSR activities have the potential to generate a positive impact on
the corporate performance in the long-term. Despite the difficulty to measure the
effectiveness of CSR, corporations fully engaged in CSR may consider developing their
own set of indicators to maximize their returns.
Implications for Social Change
Findings of this study may contribute to social change because of the increased
understanding executives may get about the growing importance of CSR to stakeholders
that may lead to enhanced CSR efforts directed to different stakeholders. As stated by De
Vries et al. (2013), Hollenbaugh and Ferris (2013), and the OECD (2011), one of the
aims of CSR is social cohesion, which encompasses the effort placed towards the
wellbeing of members of a society, preventing exclusion and marginalization, developing
a sense of societal inclusion, enhancing trust, and offering upward social mobility
opportunities for its members.
Findings of this study demonstrated the need for clear communication to
stakeholders of CSR activities through corporate reports and other communication tools.
As posited by Schmeltz (2014), it is essential to inform the public about the firm’s
corporate responsibility initiatives and actions, particularly given the growing public
demand for such information. Currently, several ways of reporting sustainability issues
exist. Some primary stakeholders rely on reports based on accepted standards, which are
quite similar and bring comprehensive details on the firm’s operations. Such standards
may not capture all the outcomes and benefits resulting from a CSR action. Findings of
this study may convince the leadership of a company to interact more with stakeholders
on an attempt to satisfy stakeholders’ needs, despite the unclear financial return CSR
actions might provide. Focusing on stakeholders’needs may prevent attempts of
greenwashing by companies. As posited by Wang and Sarkis (2017), corporations with
the greenwashing mindset may attempt to gain advantages from disclosing their CSR
efforts while investing minimally to address CSR issues.
Recommendations for Action
I identified three recommendations from this study to benefit organizations that
follow the stakeholder theory with the objective of ensuring the survival of the company
while creating value for stakeholders. CSR activities have the potential to generate a
positive impact on the corporate performance in the long-term (Lankoski, Smith, & Van
Wassenhove, 2016). Findings of this study may help business leaders to understand the
increasing demand from different stakeholders for companies to engage in sustainability
actions. To this aim, an effective stakeholder management and CSR governance is
necessary. As stated by Hardy and Pearson (2017), stakeholder management does not
imply that all stakeholders should be treated equally.
The first recommendation is for business leaders of organizations that currently do
not have someone in charge of CSR is to hire such person. He or she should be someone
who can dedicate his or her time to develop activities to improve environmental and
social responsibility performance. Findings of this study revealed the importance of
having CSR managers with a humanistic background, strongly committed to CSR
principles. As informed by Arnaud and Wasieleski (2014), CSR managers usually have a
humanistic background that makes him or her concerned with the welfare of internal and
external stakeholders.
The second recommendation is to communicate CSR achievements to
stakeholders and the public. Sustainability reporting is an effective way to communicate
with primary stakeholders. As stated by Hahn and Kühnen (2013), and Odriozola and
Baraibar-Diez (2017), sustainability reporting is a method to increase transparency,
enhance brand value, reputation, and legitimacy among stakeholders. However,
sustainability reports published at corporation’s sites on the Internet barely reach the
public. Companies may benefit from actively communicating their CSR activities.
The findings of this study are important to business leaders, CSR managers,
stakeholders, and scholars. I intend to disseminate the results of this study through
scholarly journals, business journals and magazines, presentations, including a specific
presentation for the G3 group that encompasses HR executives.
Recommendations for Further Research
This study involved managers with CSR responsibilities from companies located
in Brazil’s southeast region. As stated by Cassiolato and Szapiro (2015), the southeast
region has a more competitive market environment than other regions in Brazil.
Interviewed CSR managers might not represent a typical Brazilian manager from a less
competitive market outisde the region. Future reseach could target CSR managers from
other regions in Brazil, or other world locations because CSR is a global theme. The
interviewed CSR managers worked for companies from different sectors of the economy.
Future research could target a specific business sector as the relevance given to certain
CSR dimensions might be different among sectors of the industry.
Findings of this study revealed the influence of leadership on CSR goal setting.
The participant CRS managers had different degrees of authority on the determination of
CSR strategies and policies. Future research could target the ultimate decision maker of
an organization, whether the CEO, governance board, or the business owner, to verify the
motivations for CSR engagement. The main difficulty to conduct research with high
ranking management is the lack of agenda, low priority given for such process, or the
absence of interest in participating.
The conceptual framework of this study was the stakeholder theory. Findings of
this study revealed the limited influence of different stakeholders in the CSR goal setting.
Future research could investigate stakeholders’ perceptions on how they influence, or
would like to influence CSR activities of firms.
The study excluded the social or not for profit sector. Furthermore, this study
involved firms that had managers formally responsible for CSR. Future research could
include firms on the social or not profit sector and organizations that do not have a formal
position dedicated to CSR.
Reflections
My DBA journey started 6 years ago. I decided to enroll in a DBA program that
presented an extra challenge related to language as English was not my first language.
One of the challenges was that the scholarly writing rules were different. As an example,
in Brazil, the use of the passive voice is normal, as it seems to be less aggressive than the
direct voice.
As I reflected on my decision of pursuing a DBA degree in the U.S., my
professional experience as a marketing executive together with my humanistic
background led me to select the CSR theme for my doctoral study. To conduct this study,
I used reflexibility to bring my thoughts, assumptions, emotions, and expectations to a
conscious level. The employment of reflexivity enables researchers to understand their
potential bias on the research process and findings (Darawsheh, 2014; Gentles et al. ,
2014 ). My view about CSR was that organizations should satisfy stakeholders’ needs and
expectations, provided they had an economic return that enabled the organizations’
survival on the long run while receiving a compensation for their efforts and risk. I
reflected that my view about CSR had the potential to create a bias on the research
process and results. I mitigated such bias by bracketing my worldview in order to
facilitate an objective interpretation of the responses, and I followed an interview
protocol to insure uniformity.
The data collection process took longer than I expected because I had to comply
with Walden IRB rules, which included obtaining authorization from the Brazilian IRB to
conduct the research in Brazil. Another time-consuming process was to explain to the
executive responsible for authorizing the conduct of the research in his or her company,
the need for the letter of cooperation. The interviewing process went smoothly as CSR
managers were excited to talk about CSR as they were fully engaged with the subject.
The volume of information collected surprised me. I got much more information than I
could use to answer my overall research question.
Conclusion
The purpose of this qualitative multiple case study was to explore CSR managers’
strategies for evaluating CSR effectiveness. Historical empirical research on corporate
social responsibility (CRS) and its impact on corporate financial and social results arrived
at contradictory findings. I found that most managers evaluate CSR on the dimensions
proposed by standard setting organizations as such satisfies primary stakeholders’ needs
for information. CSR managers feel comfortable with existing CSR measuring standards.
However, CSR managers would like to have a proven method to economically evaluate
their CSR activities as this could help them to enhance CSR efforts in case of a positive
financial return for the company. CSR managers know intuitively, or by experience,
which CSR actions are better to satisfy the social needs of specific groups of
stakeholders. In this regard, CSR managers may influence the selection of CSR actions,
provided the CSR actions align with the main selection condition, corporate strategy.
The data were collected through semistructured interviews, which were
triangulated with CRS reports and validated through member checking sessions. The
stakeholder theory was the conceptual framework appropriate for this study because CSR
managers and corporate executives use the constructs of the theory to provide social and
environmental benefits for their stakeholders in addition to delivering profit for
shareholders.
The contribution of this research to business practice is to promote a deeper
understanding of CSR managers’ strategies for evaluating CSR effectiveness on meeting
expectations of different stakeholders. This study revealed the importance of a clear
communication of sustainable activities to all stakeholders. In addition, findings of this
study may provide managers a better understanding of the impact of their decisions
related to CSR, particularly the positive impact on the corporate performance that may
result from a better organizational image as a company engaged with sustainability.
