BP: From Beyond Petroleum to Beyond Integrity
A Case Study in BP’s “Green Narratives”
Tobias Gössling is Professor in Organisation Studies at the Tilburg Sutstainability Center, Tilburg University, Netherlands,. whilst Sabine Matejek works and researches at the International Business department at the Baden-Württemberg Cooperative State University, Mannheim, Germany.
Her research interests focus on the interface between corporate responsibility and communication strategies, whilst Tobias’ main research focus is on the consequences of institutions, particularly in relation with collaboration and responsibility issues. Tobias is also a Board member of EBEN and was extraordinarily helpful and supportive prior to the event including reviewing almost 100 proposals for talks at the Dublin event. He was also a great help during the event when chairing a number of sessions and generally providing highly enthusiastic support.
Anyone fortunate enough to be present for Tobias and Sabine’s talk would not only have experienced a highly interesting and graphical presentation which resulted in a fascinating discussion, but perhaps the best ‘command of English’ displayed at the event. Two Germans travelled to Ireland to speak English better than many English! Only afterwards did we notice Sabine’s primary degree was in Business and English studies from the University of Mannheim, Germany!
Their choice of case study – BP – could not have been more topical nor relevant at a gathering discussing integrity and corporate social responsibility (CSR).
They opened by suggesting that organisations are under increasing institutional pressure to show greater commitment to CSR, but the resulting higher visibility also places greater demands for significant evidence that their commitment is genuine and legitimate. Compliance can be highly ceremonial or symbolic if it is not accompanied by genuine ‘corporate responsibility’.
The evidence they presented indicated that whilst BP was an example of a firm increasingly appreciated as a highly responsible organisation in an industry with an ‘extreme need for legitimacy’, a diversity of pressures can lead to symbolic rather than genuine CSR.
The main question they posed was whether it was possible for organisations to gain credibility for their ‘commitment’ to CSR, when their actual compliance was perceived as merely symbolic.
During 2010 BP plc experienced first hand the proverbial warning that corporate integrity is a privilege which can takes years to build, but only moments to lose.
With the catastrophic explosion of the Deepwater Horizon oil platform in the Gulf of Mexico, its tragic fatalities and the subsequent environmental fallout, they asserted that BP found itself in a two-fold integrity crisis:
- not only did BP fail at fulfilling its corporate responsibilities towards the environment, its stakeholders, and – last but certainly not least – its shareholders,
- but BP was exposed as a corporation willing to don a green image for mere pretension’s sake, without backing it up with the necessary strategic and operational change which would give it substance.
They then presented the timeline of the Deepwater Horizon crisis from the instance of the April 20th 2010 explosion to the eventual capping of the ruptured well on July 15th. They then presented an analysis of the range of BPs crisis response efforts and the cost of each of the steps, including 48,000 people, 6,500 vessels and 125 aircraft fighting the oil spill involving over 1,000 kilometres of oil barriers as part of $20bn+ clean-up costs, separate from potential damages and fines estimated to be in the region of $17bn.
Some of the positives to arise from the tragedy were noted including the establishment of a $500m research institute and $90m grants to promote tourism in the affected states.
Investigations, though, found that BP was ill-prepared for preventing or responding to a blowout and oil spill in deepwater drilling, its supposed area of expertise.
The disaster drew attention to greenwashing - the considerable gap between BP’s corporate environmental responsibility (CER) communications and its substantial business and strategies.
Greenlashing (Bansal & Clelland 2004) was another term used to describe the impact of BP’s prior efforts to differentiate itself through corporate greening when they “came back to haunt the company”.
After the merger with Amocco in 1999, the then British Petroleum engaged in a $200 million dollar rebranding campaign, as CEO Lord John Browne turned the company into “bp”. The new sunburst logo Helios, “symbolizing dynamic energy in all its forms”, replaced the old martial shield whilst the slogan beyond petroleum was added, initially with the tag “It’s a start.”
BP cut carbon emissions beyond the requirements of the Kyoto protocol, first in production, then products, then diversified its product portfolio towards cleaner fuels, mainly natural gas, as well as positioning BP in renewable energy sources, notably solar, wind and hydrogen.
The beyond petroleum campaign repositioned BP as the first oil giant to accept the reality and threat of man-made climate change and react to it by going “beyond petroleum”, swimming against the currents of its industry
Headlines from it’s advertising campaign included:
- It’s time to think outside the barrel
- Investing in America’s most diverse energy portfolio
- It’s time to go on a low-carbon diet.
The beyond petroleum campaign set BP apart from its industry competitors in a number of respects:
- it gave BP an “emotional selling proposition”, differentiating it particularly from market leader ExxonMobil resulting in favourable visibility
- it also put BP on the radar as the focal point of NGO watchdogs, heightening attention and placing it under increased scrutiny, resulting in the firm being measured against different standards.
The beyond petroleum campaign was met with ridicule by some of its critics from the outset, noting the inherent contradiction of a “green” extractor, refiner and marketer of crude oil products.
The dilemma for stakeholders is that they can only assess a company’s ‘corporate environmental responsibility’ activities by proxy of their symbolic representations. Ideally, in terms of transparent, accountable business practice, symbolic actions will represent underlying substantive actions of CER. However they may also take any degree of divergence from substantive actions. Corporate scandals of “faux CSR” or false advertisement suggest that symbolic actions often eclipse or replace substantive actions.
In moving from discussing ‘beyond petroleum’ to ‘beyond integrity’ and ‘beyond virtue’, Tobias and Sabine discussed the Congressional Enquiry which involved ‘mutual finger-pointing in quarrels over responsibility and liability’. BP CEO Tony Hayward, who according to the Financial Times headline was ‘Grilled by Congress’ did not come out well from the crisis with some of the ‘Haywardisms’ including:
- “The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.”
- “What the hell did we do to deserve this?”
- “Apollo 13 did not stop the space race … It’s the same for the oil industry.”
- “There’s no one who wants this over more than I do. I’d like my life back.”
A day after his congressional hearing, amid the crisis, Hayward took time off to participate in a yacht race off the British coast, although his critics failed to identify that this was a long standing invitation to join his son, who he had seen less of during the crisis on the yacht.
The Economist declared Hayward “a walking public relations disaster”. BP was facing a brand identity crisis. Critics queried whether 93% of its 2008 investments being in oil and gas with wind accounting for 2.8%, solar 1.4% and biofuels 2.8% was an energy mix or PR fix? Admittedly the sums were substantial which would distort the proportions, but the low numbers of green investment compared with oil and gas exploration ‘fuelled’ suspicions of BPs critics that its commitment to green energy was not as significant as their ‘beyond petroleum’ campaign implied.
Greenpeace called for a competition to “Redesign BP’s Logo Again!” with one of the entries being “What we did in the Gulf of Mexico will last forever – That’s what we call sustainability!”
BP’s share price fell from $62 in April 2010 to below $30 in July 2010 before recovering to between $40 and $50 during Q4 2010, a value maintained during the first half of 2011. The volume of trading in BP shares increased dramatically during the crisis, particularly between April and August 2010, before settling back to pre-crisis levels.
$110bn or over 50% was wiped off BPs market capitalisation from the end of April to the end of June 2010.
With Toyota’s safety recalls and BP’s Gulf of Mexico response, Sabine and Tobias explained that 2010 saw the birth of the term Crisis Marketing.
Bush (2010) noted that BP “has raised the bar for themselves and any other company in terms of throwing the weight of communications resources at a crisis.” Utilising print and television advertising as well as twitter, Facebook, YouTube and Flickr, BP’s “Making this Right’ campaign included spending more than $5m weekly on advertising in local and national print media, triple their norm, a $50m television campaign, $1m monthly on Google advertising and sponsored search results.
BP managed to build up legitimacy and create an image of being a responsible company in a sector with a high need for legitimacy.
The media on either side of the Atlantic also portrayed the situation differently. Whilst President Obama, with mid-term elections looming, regularly referred to “British Petroleum”, it took the BBC in Britain to report that BP was only a co-owner of the oil-field. something that does not appear to have been adequately reported by the international media.
One of its communication failings included how the crisis was referred to, then and now. The BP Crisis failed to recognise that its two co-owners of the oil-field were both American corporations.
Whether the substantial costs associated with the disaster remain to be shared between the three corporations remains unclear.
Despite this, Sabina and Tobias suggested that given “the lack of integrity that BP subsequently displayed … their communication strategy eventually ruined the reputation and legitimacy more than would have been the case without greenwashing”.
In discussing Starkey & Crane (2003) distinguishing between ‘familiarizing’ and ‘de-familiarizing’ narratives, Sabine and Tobias contrasted the narrative used in Beyond Petroleum with Beyond Integrity.
Beyond Petroleum involved moving “beyond” by taking the higher ground, observing the bigger picture and availing of a frontier spirit. The environment was viewed as a hostile counterpart, raising a challenge to be mastered, controlled and efficiently managed, using ’techno-rationalist’ language.
The campaign involved a degree of hubris as technological superiority made the environmental impact of operations apparently more predictable. They suggested the associated root metaphor was Social Darwinism – survival of the (economically) fittest.
In contrast, the Beyond Integrity narrative referred to “the incident” as an act of fate compared to Hurricane Katrina’s act of nature, with BP explicitly assuming responsibility for the clean-up, but not for the spill by differentiating between “BP as lease operator” and “Transocean’s drilling rig”. BP’s ambition was to portray itself as stepping up to master yet another challenge, using the phraseology of “vessels of opportunity”.
They suggested Beyond Petroleum involved a progress narrative of exuberant growth through the exploitation of nature, a familiarization narrative with a high “sensemaking currency”, evoking prevalent corporate values, which ultimately ’proved to be insufficient to create substantial corporate change’.
The ‘Making This Right’ campaign, issued in response to the Gulf of Mexico disaster, was predicated by caution that “anything you say can and will be used against you in a court of law“ resulting in the cure taking precedent over the cause. BP wanted to be seen as coming to the rescue but with the aim of ensureng that “the incident” was detached from its record, however unlikely that aspiration may have been.
This narrative analysis of the “Making this right” campaign demonstrates how the communicated narrative patterns represent a symptom of the very understanding of corporate responsibility which has to be counted among the causes for both sides to BP’s integrity crisis. The BP experience offers a better understanding of when green narratives do (not) constitute substantive corporate greening, and when they might even prevent it.
Questions remain why BP’s initial green image endeavours were so widely “bought” by internal and external stakeholders, only to find themselves unveiled as a textbook example of corporate greenwashing when the crisis struck. Sabine and Tobias suggested that the concept of a “willing suspension of disbelief” (S.T. Coleridge 1817) may have accounted for the (apparent) legitimacy of BP’s going beyond petroleum campaign.
Whilst prior studies in strategic corporate responsibility management suggested that a green narrative’s integrity depends on the degree to which recipients can identify with its values, Sabine and Tobias asserted that the more a corporation’s green narrative evokes established narrative patterns of the environmental paradigm, the more willing its addressees will be to suspend their disbelief in the fictionality of its nature.
Hence, the narrative will be more willingly accepted as speaking for the issuing company’s environmental integrity, irrespective of whether it reflects substantive greening or not.
Tobais and Sabine’s observations of a variety of ‘green’ phrases proved incisive. BP was seen as a Greenhorn when investigations found it was ill-prepared for preventing or responding to a blowout and oil spill in deepwater drilling, its supposed area of expertise. Greenwashing became evident when the disaster drew attention to the considerable gap between BP’s corporate environmental responsibility communications and its substantial business and strategies, with Greenlashing raising ist head when BP’s prior efforts to differentiate itself through corporate greening came back to haunt the firm.
The BP corporate greening experience, contrasting symbolic and substantive actions of corporate responsibility, confirms the belief that corporate responsibility remains a concept easily claimed but increasingly hard to validate in practice. Like observing the effectiveness of a firm’s corporate code, when words convey values which are not subsequently employed during times of key decision making, many see through the façade.
Hence Tobias and Sabine’s interpretation of integrity as referring to honesty, sincerity, intactness and inviolacy appeared particularly relevant to the situation they discussed.
When corporate responsibility is seen as genuine and substantive, corporate reputation is enhanced. But when corporate responsibility is seen as symbolic, with mere lip-service adherence to expressed values, the old adage that ‘action speaks louder than words’ has perhaps never been more apt.
Corporate Social Responsibility against Child Sex Tourism: a study of the Child Protection Code and tour operators
Lilian Wanderley, Thessa van Liempdt, Celine Verheijen
Lilian Wanderley teaches Corporate Social Responsibility at NHTV-Breda University of Applied Sciences, the Netherlands. She presented four times at the Dublin conference, this time concerning CSR attempts of the travel industry to deal with Child Sex Tourism.
Before she discussed child sex tourism, she defined CSR as “the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life” (Holme and Watts, 2004).
Lilian suggested the main branches of CSR in tourism are:
- Climate change
- Corporate communication – CSR reports and code of ethics
- Sex Tourism and Child Sex Tourism involving the Child Protection Code
She discussed the results of an in-depth six-month study dedicated to better understanding the CSR policies and practices of Dutch tour operators which, in collaboration with ANVR (the Netherlands Federation of Travel Agencies) and ECPAT Netherlands, the Dutch branch of the global child rights network ECPAT.
‘End Child Prostitution, Child Pornography And Trafficking’ (of children for sexual purposes) or ECPAT is the world’s leading organization in the protection of children against sexual exploitation. The strength of ECPAT is based on its activities at local, national and international levels. Having started in 1990 in Thailand, where it is now headquartered, as a three-year campaign focusing on ending the sexual exploitation of children in Asia, in 1996 ECPAT ceased to be a regional campaign and became a global non-governmental organization – NGO - and network. Today, the ECPAT network consists of more than 80 members in 75 countries.
Around twenty years after its initial report into child prostitution in Asia (O’Grady, 1992), then considered more of a local issue, ECPAT has taken a more global perspective requiring collaboration with civil society, governments and the business sector (van Liempdt, 2010).
ECPAT has been the pioneer in involving the tourism industry in combatting child prostitution.
The most developed example of the tourism industry response to the phenomenon of child sex tourism is a voluntary sustainability standard, namely The Code of Conduct for the Protection of Children from Sexual Exploitation in Travel and Tourism (www.thecode.org).
The Code was initiated by ECPAT in cooperation with the World Tourism Organization (UNWTO) and Scandinavian tour operators. It was first introduced in 1997 by ECPAT Sweden and over the last decade has developed into a global initiative funded by the European Commission and UNICEF.
In 2004 “TheCode.org” was launched in the USA and registered in Sweden as a coordinating body for the Code of Conduct signatories in all countries, with a Secretariat Office currently operating at ECPAT USA in New York and as of late 2010, a membership of 989 companies in 34 countries.”
Suppliers of tourism services adopting The Code commit themselves to implement the following six criteria:
1. To establish an ethical policy commercial sexual exploitation of children
2. To train personnel in the country of origin and travel destinations
3. To introduce a clause in contracts with suppliers, stating a common repudiation of commercial sexual exploitation of children
4. To provide information to travellers by means of catalogues, in-flight films, ticket-slips, home pages etc.
5. To provide information to local “ key persons” at the destinations
6. To report annually
Their research was undertaken in a partnership between ECPAT-Netherlands and the Centre for Sustainable Transport and Tourism (CSTT) – a research group at NHTV led by Associate Professor Paul Peeters – and had two objectives:
1. better understand the relevance of training and education for sustainability or CSR in the tourism and management curricula; and
2. discuss the challenges for international multi-institutional collaboration for a common social goal such as the reduction of child prostitution or more specifically child sex tourism.
ECPAT’s 2010 research reported that around 1.8 million children annually are affected by commercial sexual exploitation in tourism, with this exploitation consisting of child prostitution, child pornography, child trade and child sex tourism.
Similar research in 2009 suggested that children affected by, or involved in, sexual exploitation will be emotionally damaged for the rest of their lives. “In addition to the direct harm inflicted on children, child sex tourism has damaging implications for all fabrics of society: global health, economy, education, and security”.
In January 2010 a campaign was launched by the Ministry of Justice, Military police, ANVR and ECPAT to raise awareness about the online reporting system (Meldkindersekstoerisme, 2010). In the first three months of the campaign the hotline received seventeen reports, of which eight were send to the police. After the campaign stopped, the reports declined as well. These statistics show that constant campaigning is crucial for receiving reports.
The business association of Dutch tour operators, ANVR, reinforces a soft-regulation named the Travelife Sustainability System (TSS), a Dutch initiative resultant from the tourism and leisure database Tourlink, in which its guidelines includes the Code of Conduct for the Protection of Children from Sexual Exploitation in Travel and Tourism (Travelife, 2006).
ECPAT Netherlands aims to encompass all ANVR (Dutch) tour operators involved in activities against child sex tourism and preferably have them as Code signatories as well.
Part of her discussion concerned the apparent dichotomy between compulsory and voluntary initiatives in CSR which does not seem to be very different in the tourism industry when compared with other industries.
Lilian outlined one of the recent positive factors was an initiative taken in partnership by tourism business organizations, international and local NGOs, together with governmental agencies to help victims of sexual exploitation in Brazil and to increase the commitment of the Dutch and Brazilian tourism industry in the protection of children against sex tourism.
She suggested that Dutch tour operators could play a vital role in raising awareness about child sex tourism and reporting mechanisms, but initiatives are failing.
Consequently the main questions Lilian posed and which remain for discussion include:
- which initiatives developed in common agreement committed to reduce child prostitution in the tourism sector could guarantee better opportunities to protect children in the near future?
- how could the Code be better implemented?
- and is a reduction in child sex tourism more likely to result from a voluntary or obligatory Corporate Social responsibility approach?
Sustainability in Tourism Destination Image on the Web: An Analysis of Tourism Destination Websites
Lilian Wanderley & Rob Bongaerts (Netherlands); Prof Salomão Alencar de Farias, Prof Carla Pasa Gomez & Prof Maria de Lourdes Barbosa (Brasil)
Lilian Wanderley teaches Corporate Social Responsibility at NHTV-Breda University of Applied Sciences, the Netherlands. She presented four times at the Dublin conference, this time analysing the influence of tourism destination websites as a virtual place where the potential tourist can experience some attributes of the tourism service, search for information and better get to know a place online.
Lilian and her research team based in Brasil and the Netherlands chose tourism destination websites in both countries –focusing on six key areas: economic, social, environmental, territorial, cultural and political – while also bearing in mind the controversial issues of sustainability in tourism.
Lilian suggested that Sustainability in Tourism is a contemporary discussion which also addresses some common controversial issues regarding the gap between individual attitudes and tourism business activities.
Sustainable tourism itself could be summarized as ‘staycation’, an expression published in British magazines regarding a greener way to enjoy holidays by avoiding transportation carbon emission when staying at home during vacation time.
Brasil and the Netherlands share few similarities in size, history and even in issues such as tourism governance as the Netherlands is one of very few countries without a specific Tourism Ministry. The Netherlands Board of Tourism & Conventions presents itself as “the premier Holland marketing organisation”.
The official Brasilian destination website shows nautical sports, football – the World Cup 2014 – and golf with ‘Ecotourism and Adventure’ in its menu bar
The Dutch website highlighted bikes, tulips, arts and ‘green events’ in its menu bar.
The team conducted an online survey using SurveyMonkey with 106 respondents considering four websites using fifteen main website areas and functionality and a multitude of more detailed areas.
Lilian presented detail;ed findings from the survey.
Their analysis of Sustainability Image in Tourism on the Web was based on six dimensions:
- Social sustainability resting on the precepts of primary equity and democracy so that they can ensure the effective appropriation of all human rights (Sachs 2007).
- environmental analysis dealing with aspects related to environmental education, conservation and tourism product protection and management of the environment.
- the cultural dimension needs to be valued and known as the strengthening of cultural identity (BARTHOLO, 2009; Vecchiato, 2004), the balance between innovation and respect for traditions, since these issues are essential for regular maintenance and compliance local beliefs (Sachs 2007) and culture viability as a tourist attraction.
- the political-institutional dimension has been the articulation between the public institutions, private and society (local actors), following criteria of representation, participation and cohesion.
- the territorial dimension of sustainability from the perspective of how tourism affects the spaces surrounding it.
- the economic dimension including indicators relating to the site’s potential for generating decent jobs for the community and other alternatives such as fostering entrepreneurship.
From Corporate Bourgeois to Corporate Citoyen – Re-Thinking the Citizenship Understanding of Corporations
Michael Aßländer is professor for business ethics at the International Graduate School in Zittau, Germany, a member of the EBEN Board and very informative at the previous years event in Finland. His co-author and co-presenter Dr. Janina Curbach works as a ‘free consultant’ (surely that does not describe her fee structure?!), academic author and professional trainer in the field of CSR/Social Sustainability. She also teaches at a variety of German universities.
The extension of the Corporate Social Responsibility concept to that of Corporate Citizenship (CC) by Matten and Crane describes a corporate duty to contribute to societal welfare and environmental improvements by providing services and goods for the community that go beyond their regular economic activities. More recently they contended that corporations could be further described as quasi-governmental actors, arguing that corporations have started to voluntarily administer civic rights in cases where national governments fail or are unable to do so.
Criticizing the concept as outlined by Matten and Crane, Michael and Janina argued that the status of corporations as citizens is not solely defined by their factual engagement for the provision of citizenship rights to others, but that it is also necessary to further clarify the social status of corporate citizens. Although they agreed that corporations in a globalizing world play a different role in society, they saw this as an indicator for an evolving understanding of CC.
Michael and Janina described the (self) conceptions of corporations as moving from “corporate bourgeois” to “corporate citoyen”. Where the bourgeois is acting mainly for private business purposes, the citoyen engages in society, performing his civil and political rights and duties.
They argued that the understanding of corporations as citizens refers to both corporate roles as bourgeois and citoyen: The corporate bourgeois’ citizenship status is legally defined by an external governmental authority and reduced to private business purposes. Any additional engagement for society is seen under the aspect of enlightened self-interest of the bourgeois. So as a bourgeois the corporation concentrates on the business case and on technical aspects of corporate responsibility, philanthropy and CSR which become strategic management tools used to stabilize the bourgeois’ social environment for business purposes.
Michael and Janina contrast this with the role as corporate citoyen, whereby the corporation is part of a community and plays an active role in shaping the political and social order. The self-conception of the citoyen is that of a political actor who is sovereign and a subject of the established order at the same time. Thus, a corporate citoyen actively takes part in the political and social life of the community and contributes to the common good.
They suggested that, as an intermediate actor in society, the corporate citoyen undertakes co-responsibility for social and civic affairs and actively collaborates with his fellow-citizens beyond governmental regulation. Therefore, they proposed that the CSR-CC discussion should be completed by a new aspect, defining and discussing corporate duties in society that go beyond their economic activities and that derive from a new social status of corporations as full citizens, bourgeois as well as citoyen.
Michael – who with his EBEN Board colleagues, kindly chaired a number of sessions – and Janina gave an interesting and engaging presentation which was not reliant on Michael’s ubiquitous bow tie for a touch of colour!
CSR and Strategic Positioning: Building Societies and Trust
Prof David Campbell, who will host the 2012 EBEN research conference at Newcastle University, England, is director of the AGES (Accountability, Governance, Ethics and Sustainability) research group which has undertaken considerable research into charitable giving and CSR strategy.
He reported in Dublin on interviews with 12 people who were chief executives of building societies in the late 1990s, the main period of demutualization in the UK.
He also recognized that the various motives for CSR and corporate benevolence included strategic, philanthropic/altruistic, political and managerial utility.
He used graphical slides to illustrate the level of charitable giving of four building societies from 1990 to 2002, generally very low until around 1997 when they consistently became far more generous. Seven British building societies all demutualised or converted to banks around that time.
Many societies however wanted to remain mutual and had to find a way of persuading members not to apply pressure to convert, despite the attraction of free shares to members arising from conversion to a bank. Hence they stressed the higher borrowing rates and higher lending rates (which were true) and the benevolent role of building societies in their communities…which was only partly true.
The interviews produced some amusing quotes with then CEOs being quite honest in their explanation for the sudden interest in benevolence. David’s research found that carefully targeted charitable giving was seen as a strategic way of maintaining trust in management and fending off the threat of a vote among members for conversion to public company status at those building societies that wished to remain mutual.
David queried whether this might have something to do with trust and accumulated reputational capital. He cited Mayer et al (1995) who identified three components in interpersonal trust – competence, benevolence and integrity. Taking economic competence as a given with many displaying a century of quality provision of services, David suggested issues of competence and integrity were decisive in maintaining the quiescence of members in not agitating for conversion in some building societies.
This situation suggested that philanthropy can be employed strategically, to maintain and cultivate trust in management thereby supporting the general will of management rather than the short term gains to be made by demutualisations.
David concluded that a reinterpretation of ‘strategic’ may be needed in the context of philanthropy when the strategic purpose is other than the maximisation of returns. In the case of thses building societies, management sought to maintain the mutual legal status which, paradoxically, meant lower personal incomes for themselves that would have been the case were their societies to convert to banks.
Critics of the bonus culture now prevalent in the banking sector would do well to consider Prof Campbell’s research, albeit of a situation a decade earlier.
Implementing an integrative CSR learning process in two SMEs
Heidi von Weltzien Hoivik presented research into the CSR policies and practices of two Norwegian Small to Medium sized firm, a sector she said were not typically known for involvement with CSR, as part of a larger research project investigating SMEs’ internationalization strategies and processes.
Heidi, a German living in Norway, was very kind to the rookies in Finland the previous year and was responsible for the conference title. Over a cup of coffee at Tampere we played around with variations on the theme of integrity, starting with ‘Building Integrity in Business’ and ultimately concluded with the far simpler and yet more challenging ‘Does Integrity Matter?’
She is a former EBEN President and was extremely supportive of our efforts in getting EBEN off the ground in Ireland particularly as we faced a variety of unexpected challenges, for which we will be eternally grateful.
Despite not generally being associated with CSR, Heidi’s research with SMEs in the ‘subsea sector’ suggested by way of responding to potential customers’ demands, often coming from the larger oil companies, they are now seeking a way to resolve this by starting a process within their own organisations, using the new process standard ISO 26000.
For this reason, the central element of their research focus was on describing such processes which embed CSR knowledge in the respective companies as part of an organisational learning and change process. They viewed the embedding process of CSR/ CR as part of a strategic implementation process which is capable of interlinking and interlocking business objectives with human, social and environmental objectives in order to foster a financially and socially responsible business.
They also sought to answer the question whether by making CSR knowledge first explicit within each company, whether it will be possible to make it available for nowledge sharing within the entire cluster without necessarily risking competitive advantages?
She said Corporate Social Responsibility (CSR) is now often abbreviated to CR or SR and outlined seven principles of social responsibility:
- Accountability: an organisation should be accountable for its impacts on society and the environment
- Transparency: an organisation should be transparent in its decisions and activities that impact on society and the environment
- Ethical behaviour: an organisation should behave ethically at all times
- Respect for stakeholder interests: an organisation should respect, consider and respond to the interests of its stakeholders
- Respect for the rule of law: an organisation should accept that respect for the rule of law is mandatory
- Respect for international norms of behaviour: an organisation should respect international norms of behaviour, while adhering to the principle of respect for the rule of law
- Respect for human rights: an organisation should respect human rights and recognize both their importance and their universality
Heidi observed that this was an “unchartered areas” of research which require observation, evaluation and creativity in order to understand how companies can acquire a new way of thinking about CSR issues as a knowledge creating process going beyond what previously has been achieved with other management tools.
They adopted a research method known as appreciative Inquiry (AI) developed by David Cooperider in the 1980s in order to capture change processes in organisations. The underlying philosophy is that organisations are human systems which consist of a range of positive elements that energize and empower the system. Instead of focusing on problem solving, the researchers engage in asking questions about moments of success, stories of innovation, courage and positive change. When Cooperrider and Srivastva presented their work in 1987 it was a paradigm shift for the field of action research into organisational change. AI is important because it works to bring the whole organisation together to build upon its positive core. AI encourages people to work together to promote a better understanding of the human system, the heartbeat of the organisation (Cooperrider, Whitney et al. 2003).
Since ISO 26000 is a process standards which mainly provides guidance towards creating greater awareness of corporate social responsibility in the company and guiding them to steer the actions towards implementation of a set of principles, it is well suited to be observed by researchers applying AI.
Integrity is reflected in the “ethos” of the organisation’s actual (not only espoused) values. CR and ethical practice is at the heart of an organisation’s activities and ‘ways of working’ or ‘walking the talk’.
Heidi said one of the findings from the research was that employees realized, often for the first time, the normative dimensions of decision making and the link between responsible and accountable behaviour and economic outcomes. The process involved employees in a participative dialogue, thus enhancing understanding of CR and linking it to personal moral capabilities since in this process all stakeholders´ interests, rights and aspects of justice are made explicit.
For the participants in both companies it became apparent to the management how much power and influence a company can have with regard to various stakeholders (customers, suppliers, shareholders, communities).
Heidi mentioned her own earlier research which noted that knowledge sharing and knowledge creating is easier in an environment where dialogue is practiced as part of a strategy design and implementation process. For both companies Heidi observed this was a natural way to proceed as the culture of dialogue and knowledge sharing is quite common in Norwegian companies and typical for SMEs.
The implicit assumption that responsible managers and employees are holders of public trust beyond what is stipulated by law also became apparent. A clearer and deeper understanding of the inter‐relationship of business and society evolved including the realization that both internal and external expectations have to be taken seriously in order to build a sustainable organisational culture and remain a successful business.
Heidi concluded saying the next phase of their research was to see how a transfer of know-how could take place to other SMEs in their ‘cluster’.
Transitions Between CSR Engagement Stages – Proposing the SST-Framework
Clemens Drechsler presented a CSR paper on behalf of three students at the Breda University of Applied Sciences, Breda, Netherlands. It was his first time to present at an international ethics event and no-one would have noticed – he was confident and his talk was interesting, engaging and thought-provoking.
Their preferred definition of CSR was from Van Marreweijk & Werre: Corporate social responsibility refers to a company‘s activities demonstrating the inclusion of social and environmental concerns in business operations and in interactions with stakeholders.
He explained the background using quotes to explain the problem being addressed which was a lack of universal guidelines regarding a company‘s transition between possible stages of CSR engagement:
- “Organisations increasingly support social and environmental programmes, initiative ethical codes of conduct, collaborate within CSR networks and attempt to position values and ethical considerations at the heart of their business model” (Maon et al, 2010)
- ”The time has come to address how, rather than whether, to commit to CSR“ (Smith, 2003)
- ”There is no definitive framework of how corporate social responsibility should be applied“ (Wood, 1991; Clarkson, 1995; Carroll, 1979)
The research objective was the development of a theoretical framework of a change process to meet a company‘s desired level of CSR engagement. Also consideration of what aspects of organisational change are relevant regarding the desired stages of CSR engagement in order to develop this theoretical framework
He used a series of highly graphical slides to illustrate stages of CSR development, often accompanied by portrayals of corresponding characteristics followed tables comparing by five leading CSR frameworks. Five models describing CSR stages have been considered in the creation of three holistic postures to be used in the Successive Stage Transition or SST – framework. Firstly, Carroll (1979, in Maon et al., 2010) proposed four levels, Zadek (2004) and later Mirvis & Googins (2006) extended these initial four levels to a total of five, which to some extent were also the subject of Van Marrewijk & Were’s (2002) six stages. Based also on the three “postures” by Castelló & Lozano (2009) Clemens suggested three stages as a general basis for CSR.
Clemens then outlined four change management models from Lewin, Kotter, Nadler & Tushman and McKinsey before proposing the Successive Stage Transition Framework of CSR, which divides Carroll’s (2004) Social Responsiveness Continuum into three stages: Defensive, Engaged, Proactive.
Switching between stages requires a basic understanding of the extent of changes to be made in the company’s transition process between stages. Therefore the SST-framework provides an overview of the three stages’ characteristics and captures the main aspects of the transition processes from a holistic point of view. The latter are designed according to Lewin’s (1951, in Cameron & Green, 2009) three‐step approach of unfreeze, move and refreeze, which is complemented by theories of various other authors.
HE observed that transition processes increase in complexity once the Proactive stage is aimed at. A transition between the stages of Defensive and Engaged is mainly subject to the business elements of structure, strategy, systems and skills.
Under Lewin’s (1951, in Cameron & Green, 2009) move phase, a careful adjustment of methods and internal processes are an inevitable prerequisite of reaching another CSR level. Taking the theory to practice means, for instance, the acquirement of skills in order to handle innovative processes in current systems.
Clemens suggested that Kotter’s (1995) eight steps of change applied to Lewin (1951, in Cameron & Green, 2009) facilitates the transition by functioning as a guideline. Taking the change process to the next level (Engaged towards Proactive) involves further supplemental elements, such as staff and style that center around shared values. Consequently, CSR penetrates every element of a business and the highest standards of the Proactive stage can be institutionalised.
His case was well argued. Definite professor potential!
University Social Responsibility (USR): A Review of Literature
Amber Wigmore Álvarez is a doctoral Candidate at the School of Economics and Management Science, Universidad de Córdoba, Spain, and Director of Career Advising at IE Business School (Instituto de Empresa) in Madrid.
She and her colleague Mercedes Ruiz Lozano (Professor of Financial Economics and Accounting at ETEA- Universidad de Córdoba) undertook a literature review of the concept of University Social Responsibility (USR) and sustainability programs worldwide.
Higher education institutions worldwide have begun to embrace sustainability issues and engage their campuses and communities in such efforts, which have led to the development of integrity and ethical values in these organisations and their relationships with stakeholders.
Amber explained their research was grouped into eight research streams, all of which quoted from the respective authors of the literature:
1 – Conceptual Framework
This stream sets the stage for the current state of the concept of USR. A deeper analysis of laws and documentation being developed in this area, such as the reports on the progress of educational institutions which adhere to the Principles for Responsible Management Education (PRME), will provide insight on the aspects of the different sustainability management systems that are being developed for higher education institutions. A 4 step USR Conceptual Framework (Vallaeys, 2009) consisted of commitment, self-diagnosis, compliance and accountability.
2 – Strategic Planning and USR
Amber discussed the social dimension of the ‘Bologna Process’ and how it should be considered from a strategic perspective, discussing how the mission of University is defined in many cases by USR, yet the tools for internal control do not evidence the connection between the key factors for Social Responsibility and the degree of accomplishment of the University’s mission.
3 – Educating on USR
Given the current condition of the world and the ever increasing needs of society, it is now essential that USR becomes a permanent part of the university teaching structure. This stream evaluated interdisciplinary approaches to student learning and sustainability.
4 – Spreading USR
Here the university is showcased as a learning organisation for sustainable thinking and practices., which has contributed to spreading a campus sustainability movement towards reducing waste, preserving ecology, contributing to economic stability and demonstrating overall social responsibility on campus and in the community.
5 – Reporting and USR
This stream included Amber and Merecedes’ own literature, assessing STARS (AASHE), the College Sustainability Report Card (SEI) and the Global Reporting Initiative (GRI) framework as strategic tools for implementation and focuses on how higher education institutions are using them to measure and evaluate institutional sustainability programs.
6– Evaluation of USR
This stream offers reflections on how the University’s role in regards to sustainability is not limited solely to educating and researching on the concept, but rather on the ability to implement it. Individual/Group evaluation of university activity provides solutions to evaluation requirements of the teaching-research group
A sustainability report should be part of SR plan, a first step in carrying out successful management of SR. This stream also covers the management and evaluation of commitment to SR, taking into account economic, social and environmental dimensions.
7 – Barriers and Accelerators
This stream analyses barriers to sustainability in relation to the resources, responsibilities and potential of higher education, assessing different models from within various disciplines and integrating them to construct a framework, as well as presenting guidelines for designing curricula, particularly from the academic, social and economic perspectives. Amber mentioned that Clugston (1999) cites tremendous disincentives to sustainability built into the economy.
8 – Case Studies
Relevant and applicable case studies were outlined in an effort to determine higher education institutions’ understanding of USR. Case Study #1- 2 US universities (Davis et al., 2003) suggested efforts require a strong institutional commitment, leaders showed personal belief and the faculty used a variety of teaching approaches
Case Study # 2- Proyecto IPSO (Pomeroy et al., 2009) UPC proposes measures that will be a incentive to sustainability criteria amongst academic area, notably motivating employees and promoting dialogue.
Case Study #3- SR in Spanish universities (Ruiz & Soria, 2009) identified USR initiatives and presence, USR being a new concept.
The conclusions were that the research streams served as a context to explore the sustainability practices in each case study and to provide a basis on which to evaluate best practices in sustainability, in an effort to replicate and implement them in higher education institutions globally.
The research streams also allow for the formation of a theoretical framework and a suggested implementation model for institutions of higher education that strive to initiate a sustainability initiative.
She concluded by saying she believed there was overlap between the 8 streams & University Strategy 2015. Insight into USR attributes suggested accomplishment required a long-term commitment which should be echoed in mission and goal statements, procedures and processes.