A Comparative Study of CSR in a Croatian and a UK Company

7/31/2019 A Comparative Study of CSR in a Croatian and a UK Company

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Corporate Social Responsibility: new context,

new approaches and new applications

A comparative study of CSR in a Croatian and a

UK company

By

Anne Gregory and Majda Tafra

Anne Gregory Majda Tafra

Professor of Public Relations Public Affairs &

Centre for Public Relations Studies Communication Manager

Leeds Business School Coca-Cola Beverages Hrvatska.d.d

Leeds Metropolitan University Milana Sachsa

Headingley Campus HR-10000 Zagreb

Leeds Hrvatska/Croatia

LS6 3QS

Tel: +44 (o) 113 2837520 Tel: +385 1 2480 167

Email: [email protected] Email:[email protected]

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Biographies

Anne Gregory is the UKs only full-time Professor of Public Relations and Director

of the Centre for Public Relations Studies at Leeds Metropolitan University, the

largest department of public relations in the UK.

Before moving into academic life ten years ago, Anne was a full-time public relations

practitioner, holding senior appointments both in-house and in consultancy. Anne is

still involved in practice being a non-executive director of the South West Yorkshire

Mental Health Trust with special responsibility for finance and communication. She

is editor of the Journal of Communication Management and of the UK Institute of

Public RelationsPublic Relations in Practice series.

Majda Tafra, MIPR, is Public Affairs and Communication Manager for the Coca-Cola

Hellenic Bottling Company in Croatia (Coca-Cola Beverages Hrvatska). She has held

this role for five years. Before joining Coca-Cola, Majda Tafra worked as a

programme and communication officer for UNICEF and a journalist and media

studies teacher.

She has been publishing on sustainable development and the role of communication in

stakeholder relationships and corporate responsibility advocating the competitive

advantage of corporate philanthropy and the need for transparency.

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Abstract

There is a growing body of literature on Corporate Social Responsibility (CSR) and

numerous case studies illustrating a variety of approaches by different companies and

organisations.

This paper takes a broad overview of the literature to draw out some of the main

developments and current perspectives on CSR and reaches the conclusion that

stakeholder expectations can be defined in terms of two variables depending on their

perception of their relationship with the organisation: relationship intensity and

content expectation.

In the light of those variables, two cases, one based in Croatia and one in the United

Kingdom are analysed, using published CSR Reports as the basis for comparisonsupplemented by information from the Reports authors. Comparisons are made

based on this analysis and the overall conclusion is drawn that in Croatia, and by

imputation in all developing economies, CSR can and is used as a Societal driver. In

the UK and by imputation in all developed economies CSR is the result of societal

accountability.

To the authors knowledge this is the first such comparative analysis and as such

brings new insights into how CSR can be made more relevant to the local

communities of global organisations.

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Corporate Social Responsibility: a new context, new

approaches and new applications

A comparative study of CSR in a Croatian and UKCompany

By Anne Gregory and Majda Tafra

1. Introduction

There is a growing body of literature and an increasing number of published examples

and Reports of Corporate Social Responsibility (CSR) programmes. However, to the

authors knowledge there has been no specific comparison between how a company inan emerging economy and how a company based in a mature economy approach this

issue.

This paper looks at Coca-Cola Beverages Hrvatska (CCBH), based in Croatia and

Cadbury Schweppes based in the UK to make this comparison. To do this the

literature is briefly surveyed to set the context and then the most recent CSR Reports

of both organisations(1) are examined in depth. From this conclusion are drawn about

how CSR should be conducted in emerging and mature economies.

It is recognised that these conclusions require further testing given this is an initial

study, but they are put forward as reasonable propositions based on the Reports and

their authors input.

2. Background and history

CSR has its origins in the social activism of the 1960s and 1970s. Awareness of

issues such as equal opportunities, racial equality and workplace safety and health

first galvanised the public into scrutinising business practices more closely than

before, then led to these obligations being enshrined in law (Carroll 1991; Reed 1999;

Dougherty 2001; Heath 2001; Le Jeune 2004). Businesses could no longer justify

their existence by their economic success alone, neither could their responsibility be

regarded as being only to their shareholders as espoused by Friedman (1970). Now

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perceived as social agents, their social responsibilities required a new kind of

responsiveness to a wider range of publics if their reputation was to be protected

(Bowie, 1991). Indeed Andriof and Waddock (2002) see the progress of CSR

thinking as travelling from being understood as just part of businesss social contract

to now being embedded as part of business practice at a strategic level.

Business practices in most developed democracies now conform to a set of normative

standards equal opportunities, equitable remuneration, healthy work environments

and safe, fairly-priced products and services (Heath 1997). Penalties for non-

conformity include legislative or regulatory measures and lost sales (Heath 1997;

Reich 1998). However, social values and expectations are dynamic; even as

businesses try to meet these and other matter of course obligations - such as the

elimination of child labour and minimising environmental impact - stakeholders bring

new issues to their attention. Dougherty (2001) highlights the danger of a significant

legitimacy gap emerging from the disparity between public expectations and

business performance which can result in damaging stakeholder challenges to

company reputation.

Bodies such as Business in the Community (BitC), CSR Europe, the Institute for

Business Ethics (IBE), Business for Social Responsibility (BSR) and the Prince of

Wales International Business Leaders Forum (IBLF) have emerged in recent years,

aiming to guide managers through the complexities of balancing stakeholder demands

with business interests, towards well-managed CSR policies and processes(2). Indeed,

the concept of CSR is now so established as a business consideration following the

European Summit in Lisbon in March 2000, business leaders launched the European

Business Campaign 2005 on CSR (CSR Europe and IBLF, 2002).

In similar vein, academic research has focused on understanding stakeholders,

defining what types of CSR might be undertaken, and how to reconcile CSR with

more traditional business priorities. CSR has been found to make a positive

contribution to the bottom line (Little and Little 2000; Moore 2003), to be a

significant element in reputation management, and particularly reputation risk

management (Lewis 2003; Sagar and Singla 2004), to improve operating efficiencies

(Heath 1997), and to generate positive morale among employees (Lines 2004).

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2.Current perspectives

Definitions of CSR have evolved and the term is used interchangeably with corporate

responsibility and more recently sustainable development (Buchholz 1991; LeJeune 2004). In addition, the concept has been linked to the related area of corporate

reputation, where poor CSR presents a major risk to reputation, while good CSR

represents an insurance policy against damage to reputation and demonstrates best

practice corporate governance, reflected in triple bottom line reporting where the

economic, environmental and social aspects (sometimes called the three Ps, profit,

plant and people) of a business are covered (Harrison 1997; Genasi 1999; Laurence

and Blakstad 2001; Wheeler 2001). More recently, academics have criticised existing

models and suggested that social responsibilities, rather than business obligations or

public-driven motives, should lie at the heart of CSR programmes (Moore 2003).

Others argue for more comprehensive incorporation of the dialogue inherent in CSR

programmes between an organisation and its stakeholders (Haas 2003; Roberts 2003).

These discussions reflect the acknowledged status of CSR as a core business issue.

Commonly accepted definitions of CSR reflect this. For example, BitC defines CSR

as follows:

Companies have an impact on society and the environment through their operations,

products or services and through their interaction with key stakeholders such as

employees, customers, investors, local communities, suppliers and others. Corporate

responsibility means managing this impact so as to add value to the company and

increase wider economic and social well-being now and over the longer term.

(http://www.bitc.org.uk/programmes/key_initiatives/corporate_responsibility_index/a

bout.html)

BSR says CSR conduct helps companies:

achieve success in ways that respect ethical values, people, communities and the

environment.

(http://www.bsr.org/Meta/About/index.cfm)

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The IBLF defines CSR as follows:

CSR or Corporate Social Responsibility means open and transparent business

practices that are based on ethical values and respect for employees, communities

and the environment. It is designed to deliver sustainable value to society at large, as

well as to shareholders.(http://www.iblf.org/csr/csrwebassist.nsf/content/a1.html )

Definitions such as this acknowledge that CSR activity takes place as a managed

programme of activities in the context of ongoing relationships about which the

business has no choice with diverse stakeholders including government, non profit

organisations, customers, employees and others (Bowie 1991; Sutton 1997; Haas

2003; Hatcher 2003). Indeed the requirement for multi-stakeholder dialogues where a

negotiated solution between the stakeholding partners who together seek mutually

acceptable solutions to messy problems is seen as the best way for ward (Payne and

Calton, 2002). They also accept that CSR must be part of the core business strategy,

planned and executed so that it is in line with those business interests (Saiia, Carroll et

al. 2003).

Because of the breadth of interests involved and therefore the variety of

expectations to be managed - formulating a CSR programme is a complex process

(Dalton and Daily 1991). Key areas to be considered in any CSR programme include:

ethics the degree to which business activities can be considered ethical

governance the role of CSR in good corporate governance

human rights the rights of employees, customers, outsourced workers and others

affected by the activities of the business

environment the impact of the business activities on the immediate and remote

environment

social duty the obligations of the organisation as a social partner.

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Research has found that these areas will carry different weight in different societies.

Expectations of organisations are, to a certain extent, culture- and society-bound

(Adams and Kuasirikun 2000; Maignan and Ferrell 2003; Sagar and Singla 2004).

For example, consumers in mature democracies are able to consider global issues

such as ethics and human rights, since businesses already meet normative

expectations about their immediate environment. However, in countries where

democratic government is emerging, expectations of business may include

requirements to support and even enhance the democratic process (CSR Europe and

IBLF 2002; Molleda 2000).

The Global Reporting Initiative (GRI), which is used by many organisations as their

benchmark for CSR reporting has produced content guidelines(3) for the production of

comparable CSR reports (see Figure 1).

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In addition to content, the actual process of management and evaluation has been

subject to much debate over the past decade (Pavla and Krauscz 1997; Little and

Little 2000; Jackson and Bundgard 2002). The quality of these processes depends on

the strategy behind the program and the outcomes associated with it. These, in turn,

vary according to stakeholder expectations of the business in a particular social

environment.

Therefore a new insight that can be drawn from the literature is that stakeholder

expectation can be defined in terms of two variables which may or may not be

independent depending on the stakeholders perception of their relationship with the

organisation.

a. Relationship Intensity

CSR is embedded in relationships that require levels of dialogue that vary in intensity.

Charities, for example, may argue that financial support is most helpful. Government

may ask for intermittent engagement in the policymaking process. The local

community might require physical engagement of employees in community

initiatives. Employees may argue for genuine two-way discussions about their

working conditions and, as instrumental in the delivery of CSR in practice, want

involvement in the development of the companys policies and processes. Activist

groups may want both involvement from the business and involvement in the

business, to ensure their interests are considered. One extreme of this continuum may

be called contact engagement the other, comprehensive engagement.

Contact engagement requires no action from the company other than a single or

regular transaction whether, for example, for information or a donation. It may be

regarded as a tick the box activity, and there is, effectively, no dialogue other than

the initial discussion required to understand the stakeholder expectation.

Comprehensive engagement, on the other hand, requires the company to demonstrate

tangible actions or change as a result of its relationship with the stakeholder, and

further, to involve that stakeholder in the longer term and in evaluation and reporting.

Dialogue in this case is intensive, continuous and extended. Employee engagement is

a good example of this.

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The continuum between these two extremes tracks the level of dialogue between

stakeholders and the organisation, based on the degree to which each must take into

account the needs of the other. The further apart are the parties, the less the need to

accommodate the others view in discussions, the lower the level of engagement. The

closer together they are, the more the dialogue is characterised by mutual

accommodation, respect, understanding and consideration.

b. Content Expectation

Content expectation of CSR programmes will vary according to the social and cultural

context. In line with previous case study findings, it can be argued that obligations

relating to the immediate business environment are paramount in countries where

democratic government is evolving or unstable. These may include, for example:

wellbeing of employees, suppliers and their communities;

protection of the immediate physical environment;

national or regional regulatory issues relating to business and employee rights

and obligations

In these countries, supranational considerations are unlikely to be of high importance

in a CSR programme.

Further, we suggest that supranational considerations are likely to be considered only

in countries where normative obligations about business practice have been enshrined

in law - and are therefore virtually guaranteed to be met. Supranational

considerations may include:

human rights of workers in supplier companies based in developing countries

environmental impact of business practices on an international scale

fairness of trade practices between trading bocks or regions

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The following case studies are analysed in light of these suggestions.

3. Coca-Cola Beverages Hrvatska (Croatia) a case study

3.1 Context

Croatia is situated on the crossroads between Central Europe and the Mediterranean,

along the eastern coast of the Adriatic Sea and its hinterland. It stretches from the

Alps on the north-west to the Panonnian plain on the East.

According to official data(4)

the total country population is 4,437,460. GDP per capita,

in 2002 was 5,569.1 USD. The unemployment rate is 22.5% and the average monthly

gross wage 682.4 USD. Total number of employees was estimated at 1,043,871.

The countrys economy is in a transition period from a state-dominated economy to a

free market economy. The period is marked by turbulence, both political and

economic. The beginning of the new democratic independent state emerging from the

former Yugoslavia was marked by four years of war (1991-1995). The war ruinedmany industrial, civilian and cultural assets and left a number of unsolved problems

with hundreds of thousands of refugees, human rights abuses and political conflicts.

The results of the Global Competitiveness Report for 2002/2003 published by the

World Economic Forum(5), in which Croatia was included for the first time, placed

Croatia in the 58th place out of 80 countries in the Growth Competitiveness Index, far

behind other transition countries (those which joined EU in 2004) at the time and with

only Romania and Bulgaria placed behind Croatia. It was 67 out of 80 countries in the

Global Information Technology Report(5).

High levels of political corruption and some other factors indicated that in most areas

in connection with the government and the public sector, Croatia was ranked as

poorly as other countries in transition, with the only exception of the tax system which

was seen as better and more transparent than the world and EU average.

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Regarding public institutions, the benchmarking analysis showed parity with the other

transition countries (with the exception of Slovenia and Hungary). Only Bulgaria was

ranked lower in media censorship. Croatia also earned a very low general mark on

infrastructure. Relations between employees and employers are the worst of all the

countries in transition, and the ratio between salaries and productivity is the lowest

compared with other countries in transition. The other transition countries (with the

exceptions of Bulgaria and Romania) also ranked better in the implementation of the

environmental regulation.

Croatia aspires to join EU in 2007 or beyond.

3.2 CSR in Croatia

What differentiates Croatia from other transition states is its immediate past history: a

very special type of socialist rule, so called workers self-management, a more

flexible open model of socialism, not found in any other country at the time. It was a

combination of certain elements of the market economy and western democratic

liberties, with state protection of labour rights and core labour and social standards.

Although, from a historical distance of more than ten years, this social system is

sometimes considered to have been less efficient and rather tokenistic, it has been

acknowledged that it had introduced employee participation and a culture of dialogue

in social and political life, and into managerial practices. This led the authors of recent

research on CSR in Croatia (Bagic, Skrabalo and Narancic, 2004) to the conclusion

that the current endorsement of team work and stakeholder consultations in the

Croatian business community seems to be a combination of contemporary western

approaches to quality management and former types of corporate governance. While

this particular feature could be further debated, there is no doubt that the culture of

dialogue, self- management as corporate governance and heightened awareness of

human and employee rights did make fertile soil for the development of positive

attitudes to CSR, first of all in the business community. In the research this was

reinforced by suggesting that the country had ethical business, community relations

and product quality and environmental commitment, long before foreign companies

introduced basic CSR ideas.

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An enabling legislative and policy environment for CSR currently does not really

exist in Croatia, although progress has been made. At the moment there are no

government measures to stimulate companies, and the government appears to shrink

from a CSR debate which includes the business community and civil society. The

government appears to be determined to over-regulate various sectors and here,

consultation with the business sector is often regarded as being of a formal nature, and

tokenistic rather than a genuine engagement in substantial policy development.

According to the research (the only research on CSR done so far in Croatia), CSR has

been seen by some of the managers who were interviewed, as a driving force behind

the commitment to human resources and investment in the community. Thus, it is

contended, companies and their ownership structure have been designed to facilitate

CSR achievements. In the context of the competitiveness indicators with other

countries, companies commitment to strive for leading positions in the

democratisation process by relating it to CSR development, could be considered a

logical deduction. The other driver that emerges is the leadership of committed

individuals. Finally, it is the big companies that have been shown to be the leaders,

driving visible CSR policies and practices while SMEs lack knowledge and capacity

in this respect.

The report identified the key areas of CSR in Croatia as being community investment

and philanthropy, policy dialogue, advocacy and institution building and core

business activities including employment and wealth creation, training and human

resources development, equal opportunity and diversity, supply/value chain

development, knowledge and technology transfer, cause-related marketing, business

standards and governance, relations with consumers and product integrity.

The examples of best practice in this area illustrate strong positive core-value drivers

behind CSR development, particularly in environmental protection, business

governance and ethical business. One of the main conclusions of this report is the

crucial role of leadership in driving CSR in Croatia. Leadership, in general, is high on

the agenda in Croatia, and this particular category of leadership, considered a must in

the ever changing, demanding business environment, ranks high on public lists.

Politicians get more media coverage when promising European standards to the

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inhabitants, but it is the business leaders, particularly those with CSR achievements

and charisma, that are considered to be the main drivers in pushing the country to EU.

Within this context, Coca-Cola, one of the largest companies in Croatia, is a major

exemplar of CSR in practice and it is quoted in the research as a leader in the area. Its

first Social Report was published in November 2003. The following describes the

reporting framework used, the process for collating the Report, content of the Report

and how it was communicated. Conclusions are then drawn.

3.3 Coca-Cola Beverages Hrvatska.d.d. Social Report, Nov 2003

a) Framework used and rationale

Coca-Cola Beverages Hrvatskas (CCBHs) Social Report is a stand-alone

document whose aim is to set out the social impact of its core business

behaviour on a number of stakeholders, including its own employees, customers,

suppliers, and the wider community. It is a triple bottom line Report covering

profit and loss; environmental protection; and social obligations. The Report

states it wishes to be seen as a means of verifying how far the company has met

standards of ethical and social behaviour.

CCBC has opted for a mixed model of authorship in which the social Report

was produced jointly by a CCBC employee and an independent external

consultant. Whilst free to explore issues at will, the consultant was dependent on

CCBC for co-operation, access to information and stakeholders, and for the final

publication of the Report. In addition, the Report contains an external review bythe IBLF.

The narrative is based on the Social Performance Reporting Guidelines issued

by the Global Reporting Initiative (see Figure 1), with a degree of adaptation to

fit the Croatian context.

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b) Process

The External Consultant used various methods for gathering information: in-

depth scrutiny of a range of internal documents relating to all aspects of

CCBHs social performance, individual interviews with key CCBH staff

including representatives of trade unions, individual interviews with external

stakeholders including representatives of community groups and two focus

group discussions with a cross-section of stakeholders who were able to give

their responses to a draft Report.

Additionally, internal documents were scrutinised by the internal team and

outcomes were shared with the consultant. There was ongoing discussion on

the content of the Report.

The Report covers the Financial Year 1 January 31 December 2002. For

comparative purposes, wherever possible, two previous years 2001 and 2000

were used. As this was the first Social Report by CCBH a baseline for reporting

has been established which will allow for comparisons in subsequent reporting

years.

The GRI Guidelines were chosen from the many global reporting frameworks

available since they were regarded as the most rigorous. Annex 1 to the Report

includes a GRI Content Index so that the reader can easily locate each GRI

reporting element and performance indicator in the text. The main gap in the

Report is on CCBHs performance in relation to the environment because in

May 2002, CCBH published a separate Environmental Report. However,

wherever possible, the Social Report addresses social aspects of CCBHs

commitment to the environment. CCBH will produce a fully integrated

Sustainability Report in 2005, the European Year of CSR, which will

incorporate the Environmental Report.

An interesting aspect of the Report is a statement of the methodology used. This

is unusual in CSR Reports and the company justifies its inclusion not only to

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demonstrate transparency, but also in the hope of stimulating others in Croatia to

produce similar reports in the future.

To generate content for the Report, indicators in the GRI Guidelines and others

relevant to CCBH were framed into questions and responsibility for answering

each question was given to a named person in a named department.

Publicly available documents on social reporting, a range of internal documents

and copies of external standards, codes of practice, and relevant rule-books were

also consulted.

The Consultants held interviews and discussions. The interviews providing an

opportunity to explain the Social Report more fully, clarified issues regarding

the questions, and explored in greater depth wider contextual and organisational

issues.

Following a draft Report, feedback sessions were held with a small group of

senior mangers to explore further issues in the Report, to clarify some

information, and to discuss next steps.

c) Content

The content of the Report is structured as follows. In line with the GRI

Guidelines the Report has included a General Managers statement; external

review and executive summary.

The main body of the Report contains an overview including the company and

its partners; vision and strategy; organisational profile and governance structure,

policies and management systems. This is followed by information on

performance containing data on economic impacts and performance,

employment and labour practices, promoting and guaranteeing human rights,

product responsibility and community programmes and partnerships.

Recommendations and a commitment to future actions are also included.

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Contained in the Annex, are the GRI content index; the methodology of the

Social Report and contact addresses.

A fuller summary of the Report is given in Appendix 1, however, a briefoverview is provided here.

CCBH operates under franchise from The Coca-Cola Company and is largely

owned by The Coca-Cola Hellenic Bottling Company S.A (CCHBC), Europes

largest soft drinks company operating in 26 countries.

It has six main departments: operations, sales, finance, administration,

marketing and public affairs and communicators, net sales revenue in 2002 was

109,404,000 Euros, earnings before interest and tax were 14,844,000 Euros and

total employees numbered 758.

The parent company, CCHBCs mission is to refresh our consumers, partner

with our customers, reward our stakeholders and enrich the lives of our local

communities (p 13). CCBH shares that mission. The company states its wish

to be a world class selling organisation, emphasising the 4As of availability,

affordability, acceptability and activation. Alongside this the companys

mission embraces a commitment to enrich and support the lives of the

community it lives in, to honesty and integrity in business practices, to respect

the diversity and dignity of people, and to protect the environment (p 14).

Its specific CSR commitment is to local communities and their social, health-

related and environment concerns and issues. CCHBC is striving to be a

valuable partner in community relationships, a neighbour of choice and a good

corporate citizen. Again, CCBH takes its cue from the parent company.

The Report itself lists all the key stakeholders of CCBC and summarises the

nature and frequency of consultations with them. Out of those listed, contact is

most often and intense with (in priority order) workforce, trades unions,

customers, consumers/communities.

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Quality standards are clearly important and signified with its achievement of

international production standards and its quest for ISO 14000 an

environmental standard. In addition, there are clear statements about

commitments to a Code of Business Conduct and modern risk management

practices.

Consideration of the internal stakeholding community takes up most room in the

Report. A key issue has been a reduction in salaries which, although still

considerably above the Croatian average, has clearly brought tensions in the

workforce. The rights of workers to belong to trade unions and the Workers

Council are emphasised as is the commitment to training and development, but

flexibility is also a concern as the requirement for a more profitable

organisation takes on new importance in the move to an open market economy.

Diversity, inclusivity and equal opportunities are also recognised issues.

The separate section of the Report on Human Rights also focuses on employees

to a large extent, emphasising non-discrimination and fair disciplinary

procedures. It also touches on fair and open business practices.

Customer and consumer implementation focuses on the complaints procedure,

quality assurance, product labelling and a commitment to uphold high standards

in marketing. Here comparative advertising, marketing to children and

consumer privacy are specifically covered.

d) Communication

The Report was published in the Croatian language with a summary in English

and distributed after a public launch to 300 recipients in government, business

and civil society. The copies were supplied with a questionnaire asking for

feedback in an attempt to launch an ongoing stakeholder dialogue. The Report

has also been put on the company web-site. The first results of the survey,

informal feedback and feedback from focus groups are being analysed and a

second round of stakeholder dialogue will be initiated in September 2004.

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b) Content expectation

Obligation to the immediate business environment is paramount and focuses

on

the well-being and human rights of employees.

supporting and developing local communities which is a central

tenet of the CSR programme.

protection of the environment surrounding the plant and in local

communities.

conformity to national and where applicable, international

regulations and protocols.

Community involvement also features prominently in the Report. 0.15% of

net sales revenue in 2002 was given in cash and kind. Donations are in line

with the policy outline earlier, but the emphasis is on community building and

ameliorating the effects of the war which ended in 1995. All giving is within

Croatia and is a combination of national and local projects. Dialogue with

local communities, both formal and informal and across a broad range of

stakeholders is regarded as vital.

Environmental concerns are handled at a local level, but also with Government

and NGOs and pressure groups.

The Report finishes with a restatement to CCBHs CSR responsibilities and a

commitment to ten themes which have been identified as areas for special

attention.

4. Cadbury Schweppes a case study

4.1 Context

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The United Kingdom (UK) is located just off the North West of the European

Continent and has been a full member of the EU since 1973. Total population is

59.2(6) million and GDP per capita in 2002 was 28,000(7) USD. The current

unemployment rate is 4.8% and average monthly earnings approximately 1750. The

total number of people in employment is 28 million.

The country has a free-market economy and the parliamentary system of democracy is

the oldest in the world with its origins in the 1600s. The 2002/3 World Economic

Forum Global Competitiveness Report(5) placed the UK 11th out of 80 countries in the

Growth Competitiveness Index. Technologically the country is advanced (ranked 7 th

in the Global Information Technology Report) and it is politically stable.

The Global Competitiveness Report also shows that political corruption is minimal,

political institutions are sound and infrastructure is advanced.

4.2 CSR in the UK

There are two main sets of drivers for the move toward CSR in the UK. The first set

is external and require companies to respond in a reactive way to defend their market

and legal position. External stakeholders including customers and activist groups are

increasingly looking at the organisation behind the brand and making purchasing or

hostile-action decisions based on social responsibility judgements (MORI, 2003).

Because these groups impact on the business growth and reputation of organisations,

shareholders too are interested in CSR. A notable recent example of this was the

removal of Piers Morgan as editor of the Daily Mirror, one of the largest circulation

newspapers in the UK. The Mirror had published photographs of alleged prisoner

abuse in Iraq which subsequently were revealed to be fakes. In the resultant furore, it

was two leading shareholders, Isis Asset Management and Deutsche Asset

Management speaking out publicly about their concern for the integrity of the

Mirrors editorial process and the damage to the newspapers reputation that led to the

editors removal (Burrell et al, 2004).

The second principal external driver is potential regulatory change. Largely in

response to corporate scandals in the US including Enron and WorldCom, but also in

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sympathy with the public mood, the UK government is proposing changes to the

Company Law Act. This will require companies to provide a much more holistic

valuation of their performance rather than just the financial one currently obligatory in

the Annual Accounts. Proposals being considered demand reporting on factors such

as stakeholder relationships, environmental impacts and risk assessment and

management.

In response to these external drivers numerous organisations have been very publicly

promoting their CSR credentials. There has been an increase in corporate giving,

volunteering and environmental initiatives. However, for many this activity has been

mainly for marketing purposes (Le Jeune, 2004). The CSR philosophy has not been

embedded in the organisational culture nor is it seen as the driver of fundamental

policies on, for example, employment in developing nations, supplier relationships

and corporate governance. Marketing-driven tokenism has led to accusations,

especially from NGOs of green washing in the environmental area, where

publicised activities are seen as an attempt to mask environmentally unfriendly

actions elsewhere in the organisation or as an effort to bolster relatively minor

improvements, or even standard practice as major achievements.

More positively and proactively there are a growing number of companies whose

ethos and business practices reflect a deeply embedded CSR culture. While it is fair

to say that the majority of companies would ultimately conform to a narrow definition

of CSR as being part of businesss social contract when maximising stakeholder

return, for the leaders in the field it is clear that the wider notion of CSR as being part

of business practice as a whole, is entirely applicable. These leading companies

embed CSR because they regard it as morally right to act in this way - it also makes

business sense. They do not do it primarily to drive profits.

Principal CSR activities in the UK are cause-related marketing, volunteering, equal

opportunity and diversity, business standards and governance, community investment

(including sponsorship of the arts, sport and education) and philanthropy.

4.3 Cadbury Schweppes Corporate and Social Responsibility Report, May

2004

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Cadbury Schweppes CSR Report is the second such report produced by the company,

the first being issued in 2002.

The first report was considerably less detailed than the second and acted as an initial

benchmark. It did not include a full environment, health and safety report, which the

second one does. The first report sought to give an overview of the values of the

company, what the company was currently doing in CSR, and an indication of the

direction of travel. The second report, which is much more comprehensive, details of

performance against key performance indicators, stakeholders analysis against

external and sectoral standards and presents a much more holistic approach as

indicated below.

a) Framework used and rationale

The CSR Report is a stand alone document produced by the company. It sets

out the impact Cadbury Schweppes has on all its core stakeholders including

suppliers, consumers, business partners, employees, government and

shareholders.

The Group CSR Manager, who gathered information and data from all business

units, operating regions and corporate headquarters, coordinated the writing of

the Report. The CSR Board Committee was also involved in the reporting

process. The Committee is chaired by a non-Executive Director and comprises

the company Chairman, CEO, Chief HR and legal officers and two other non-

executive Board members. At present there is no external verification or

auditing of the Report, but the CEO makes a clear commitment to progress that

in the next two years. The company recognises this as an issue.

The company has some external assessment of its CSR performance in that it is

included in the FTSE4Good Index, the Dow Jones Sustainability Index (DJSI)

(since 2001), the DJ STOXX Index in 2003 which recognises progress in CSR

and in the BitC Corporate Responsibility Index. Cadbury Schweppes publicly

committed to the United Nations Global Compact in 2003.

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While not specifically stating that it conforms to the Reporting Guidelines of

the GRI (see Figure 1) the Report draws on these and from guidelines provided

by the UKs Food and Drink Federation to put together its 33 Key Performance

Indicators under the headings of employment practices; environment, health

and safety; human rights and ethical trading community and economic. It is

apparent on reading, however, that the Report covers all the areas outlined in

the GRI guidelines.

Before embarking on the second Report the company held three separate

stakeholder focus groups consisting of NGOs, customers, interest groups such

as CSR specialists, socially responsible investors and employees, specifically

to obtain feedback on the 2002 Report and to gauge their expectations of the

second Report. Email and telephone surveys with employees and key

customers in the UK were also conducted. Whilst there was general

satisfaction with the first Report as a starting point, the Company learned that:

there was a requirement for more input on content from the Business

Units a bottom-up approach

the framework for CSR needed explaining in greater detail and its

relevance for all members of the company for many employees this

was purely a requirement to explain the terminology since they were

already engaged in CSR. Its relationship to the companys values and

principles needed clarifying.

there was a need for more hard facts and figures in the Report. The

cameo examples in the first Report were appreciated, but the overall

tone needed to be more heavyweight to be persuasive.

there were a number of key challenges that the company had to

address more thoroughly principally obesity, diet and nutrition,

ethical trading and managing company change especially plant

closure and reorganisation

the design of the Report, although in keeping with the corporate style,

was regarded by some as too playful and served to trivialise the

content. The second Report retained a similar design for the

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Overview, but had a much more traditional approach to the detailed

sections on each topic.

The company accepts that it will be necessary to continue to engage at a deeper level

with a broader group of stakeholders before producing the next Report (2006).

Besides these focus groups, the company has regular contact with

stakeholders, for example it holds investor seminars, undertakes consumer

surveys, employee team briefings, business partner and supplier dialogues and

engages with government on food and agricultural policy, business issues and

social and education policy and this also informed content.

The Report covers the period from January 2002 to December 2003 and

therefore substantially overlaps with CCBHs Report. It does not

systematically use data outside the reporting period for comparative purposes

or to show trends, but in some areas, for example in the environment, health

and safety section and the resources section, data is supplied from 1997

onwards on topics such as time lost through injury, energy use, CO2 omissions,

use of water, solid waste generation and recycling/reuse rates.

b) Content

The content of the Report is structured as follows. It is presented in two

formats. One gives an overview for each chapter. And the other is a series of

booklets, expanding on the overview, providing details on specific issues,

policies, performance indicators and case studies.

Following the spirit of the GRI reporting guidelines the Overview includes a

statement of commitment from the CEO and the Chair of the Corporate and

Social Responsibility Committee. Next follows a profile of the company and

its value chain and a statement about what CSR means to the company. The

management structure, along with the location and composition of the CSR

Committee precedes an explanation on the Companys approach to CSR.

There are then brief statements and core data concerning employees,

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consumers, working with suppliers, working with communities and the

environment. The overview finishes with a series of future commitments and

aspirations under the companys five CSR pillars.

A fuller summary of the Report is given in Appendix 2, however a brief outline

is provided here.

Cadbury Schweppes is a global company which manufactures and

distributes a range of confectionary and non-alcoholic beverages. It is joint

number one in chocolate, sugar and functional confectionary, second in gum

and the worlds third largest soft drinks company. It operates from five

regional units in: Americas Beverages, Americas Confectionary, Europe,

Middle East and Africa Confectionary, Europe Beverages and Asia Pacific.

There are six global functions: Human Resources, Supply Chain, Commercial

Strategy, Finance, Legal and Science and Technology. Total turnover in 2003

was 6,441 million, pre-tax profit was 564 million and total employees

numbered 55,799.

The company enshrines its overall philosophy for business in its Business

Principles. These are headed by its core purpose We work together to

create brands people love (p 12). Its declared core values are integrity,

openness and responsibility and the three key behaviours are accountability,

adaptability and aggressiveness. The Business Principles cover corporate

governance, ethical business practices, treatment of employees, consumer

issues, community activities, government relations and environment issues.

CSR is regarded as fundamental to the company, stemming from the

philanthropic beliefs of its founders 200 year ago. CSR, it is stated, is not only

the right thing to do, but good for business because it engenders trust and

minimises risk. CSR is explicit in the organisations fifth strategic goal and

the company is past half way on a five year programme, begun in 2001, to

embed it in the business. To achieve this it has devised its sustainability KPIs

and five pillars around which its CSR is built human rights and

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employment standards; ethical sourcing and procurement; marketing; food and

consumer issues; environment; health and safety and community investment.

The Report lists the companys major stakeholders: consumers, customers,

employees, suppliers and communities. Out of those listed, more information

is given in the Report on employees, suppliers, communities and the

environment.

The section of internal stakeholders stresses commitment to a set of company

minimum standards combined with compliance with local country standards.

Significant emphasis is placed on equal employment opportunities and

diversity with many examples being given from overseas operations.

Individual, local and global learning and development programmes are

explained as are remuneration and rewards, health and safety and

wellbeing/work-life balance initiatives. The Report does give examples from

the UK, but the orientation of the Report is on demonstrating fairness and

progress in developing economies. The Report also covers plant

rationalisation and point outs the efforts of the company to ameliorate the

impact of this on employees and communities.

This is reinforced by describing in detail the developing Human Rights and

Ethical Trading Policy (HRET) first introduced in 2000 and which seeks to

ensure ethical standards throughout the supply chain, particularly for those

supplying primary ingredients such as cocoa, sugar and fruit. It also seeks to

ensure labour rights and good working conditions in its plant. Again, the

emphasis is on its operation in developing countries. The company has good

ratings in the FTSE4Good, Dow Jones Sustainability and BitC Indices.

In the section on consumers there is reference to quality assurance and to

conformance to international standards, but the main focus is on issues,

principally food and diet. The Report mentions policy on genetically modified

ingredients, but focuses on the growing problem of obesity.

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Community involvement is a main plank of the companys CSR programme.

It has a target of investing 1% of pre-tax profits globally it was 1.09%

globally and 3% in the UK in 2003. Preferred areas for investment are in

education and enterprise, health and welfare and the environment and there are

company guidelines to measure and manage community investment, although

there is local discretion. The company is involved in major initiatives at

national and local levels and cites numerous external awards and recognition

for its work.

There is a major section in the Report on resources and the environment. The

company has had an environmental policy for several years which commits it

and its suppliers to improving environmental impact, using resources

responsibly and protecting the ecosystems from which it draws its raw

materials. A whole series of indicators are used to demonstrate performance

and examples are given from both the developed and developing world.

c) Communication

The Cadbury Schweppes Report is published in English and was launched on the

corporate website at the companys AGM in May 2004. Printed copies will be

distributed in July. Copies will be made available to employees as well as other

external stakeholders. It will be discussed with members of the focus groups with

whom the company engaged prior to the production of the Report.

4.4 Observations on this case

In terms of the literature review and specifically the two variables, relationship

intensity and content expectations, the following observations can be made on this

case.

a) Relationship intensity

Again it is important to guard against simplistic links between the amount of

discussion devoted to a particular stakeholding group concern and its

importance, but it can be an indicator of current priorities

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the weighing of the Report and the level of detail indicates that there is

most requirement for dialogue and engagement with, in priority order,

suppliers, employees, local communities. There is at least observable

dialogue with customers and consumers, NGOs central and local

government. This could well be because there are already established

dialogues with these groups.

there are efforts to engage a variety of stakeholders via a spectrum of

issues of interest rather than by addressing their specific needs. Emphasis

on the environment and ethical trading is clearly aimed at a range of

stakeholders, customers, NGOs, activists, employees and shareholders.

These are activities commensurate with a comprehensive engagement

strategy.

the interests of indirect stakeholders, those who do not necessarily have

direct contact with the company, for example primarily ingredient growers

and potential activist groups are accommodated even though they may be

at the contact engagement end of the scale. This could be part of a risk-

management strategy.

b) Content expectation

Obligations go far beyond the immediate business environment. Indeed, there

is an implicit assumption that the company will obey the legal framework for

business in their spheres of operation and go beyond it. Hence these issues do

not receive major prominence apart from to confirm this is the case. Effort is

concentrated on demonstrating how the company exceeds these norms in the

following areas:

human rights and employment conditions of employees in developing

countries

human rights and ethical trading down the supply chain

fairness in trading between nations and with other companies

willingness to address broader food, diet and health issues beyond those

concerning quality

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contribution to communities beyond those immediately impacted by the

business

not only protection of the environment, but leadership in environmental

good practice promotion, resource conservation and ecosystemprotection.

5. Comparisons between the two cases

While clearly there are differences between the two cases, principally that one

operates and reports globally, and the other is a country-specific Report for a global

concern, there are a number of similarities and differences that provide usefulinsights. First the similarities.

5.1 Similarities

Both find the GRI Guidelines appropriate with a level of customisation to suit their

particular sector and company needs.

The embedding of CSR within the organisational infrastructure is signalled as a key

factor for both organisations. Given Cadbury Schweppes history and its earlier start

in demonstrating a public commitment to CSR, it is apparent that they are further

ahead in the process. The non-executive Director led CSR Committee and the

Committees composition is a clear indication of this. However, given that the CCBH

Report was the first country report of its kind for Coca-Cola (CCBHs parent

company CCHBC published its first Social Report in June 2004), the level of

commitment to date is impressive. In particular, the use of external consultants to

obtain data, interpret result and write the Report provides a level of transparency and

assurance not yet achieved by Cadbury Schweppes. For both organisations,

systematic training on CSR for buyers and sellers is seen as vital.

Both place major emphasis on the employee. Not only are the indications that their

remuneration packages are at least as good as competitors, but they are usually better.

Similarly with training, both in terms of its formal structure and in the amount

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provided for each employee. Equal opportunities and diversity are a central concern

and although the CCBH case presents difficulties in the diversity context because of

the countrys recent history, it is clear diversity is an aspiration. Both organisations

respect employees rights to trade union or other types of representation.

Community commitment as an expression of CSR is apparent for both organisations.

Although direct comparisons are not possible because Cadbury Schweppes quote a

proportion of pre-tax figures and CCBH a proportion of net sales revenues, it is clear

both companies donate substantial amounts of money and merchandise. As part of

their commitment to the end-consumer and the community, both organisations express

concern about marketing to children, with Cadbury Schweppes not targeting

advertising to children under 8 and encouraging support for parental control. CCBHs

rules are not so well developed because Croatia has no specific standards on

advertising to children in Croatia. However, the company does use The Coca-Cola

Companys Global policy on advertising and promotion to children

5.2 Differences

In many respects the key differences between the Reports are in emphasis, style and

their point in company history rather than differences in principle.

The most notable difference is in physical presentation. The CCBH document is

simple, even stark in design and layout. It gives the impression of being a serious

document where content is very much more important than presentation. Full colour

materials are minimal. Single or two colour tables, pie charts and simple line graphics

punctuate the body text. However, it is important to stress that this is not a cheap

publication.

The Cadbury Schweppes Overview booklet is full colour throughout with each page

having a full colour montage as background to the text. The text itself is laid-out in a

variety of ways. This style is in keeping with the corporate style. The detailed

supporting booklets are much more subdued. Each has a full colour front, but inside

text dominates with most illustrative materials been kept to colour panels,

photographs and simple graphics.

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It is difficult to explain this difference as just being a result of the different cultures of

each company. Both have colourful, bold marketing presences. It can be interpreted

as a statement of confidence. For CCBH this is the first step in a new political and

economic environment. For Cadbury Schweppes this is an evolution of 200 years of

socially business practice.

This view is re-enforced by the level of reference to regulation and law. The CCBH

Report makes many references to Croatian and International Law, protocols,

conventions and frameworks and stresses conformity. While the Cadbury Schweppes

Report makes reference too by ensuring compliance to international standards like the

Universal Declaration of Human Rights, the ILO Conventions and local laws, it is

also confident of its own processes and ways of doing things (which go beyond the

law). The CCBH Report stresses its use of the GRI Guidelines, the Cadbury

Schweppes Report refers to and uses some them, but structures the Report around its

own CSR Pillars and company policies, for example, its HRET policy which is central

to the Report.

However, there are other style and tone differences that merit mention. The CCBH

Report includes a section on methodology. The Report author is clear that this is not

only to aid transparency, but as an encouragement to other companies in Croatia to

produce a CSR Report. The notion of the company being part of a wider community

with responsibilities not only to its own stakeholders, but to the new society that is

being built in Croatia, is inescapable.

While value judgements on the levels of honesty and/or defensiveness are dangerous,

it would make this paper incomplete if this were not included. There is no reason for

the authors to believe there is dishonesty in either report, but the question has to be

asked about how much of the whole truth is being revealed. The CCBH Report

appears to admit to more shortcomings, and that may well be the case. However, its

size of operation, the size of the community in which it operates and its greater

emphasis on internal stakeholders would make it highly likely that any over-emphasis

of the case would be quickly uncovered. The Cadbury Schweppes Report is targeted

at a much wider audience and to a greater number of stakeholders. Its orientation

appears to be much more externally focused and this may partially explain why the

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company is keen to demonstrate its CSR credentials in a more positive way. The

danger is that absolute transparency lays a company open to attack even if it is, by all

objective measures, doing far more then most other companies.

The CCBH Report places more emphasis on human rights and opportunities for and in

the workforce. Cadbury Schweppes emphasises this aspect too, but the major focus is

on human rights and opportunity for those in the supply chain, particularly at primary

source level. Again, history is the main explanation for this Cadbury Schweppes are a

long established company operating in a free market and have had time to evolve their

employee policies and practices over many years. For CCBH the environment is in

transition and the company is playing a significant role in bringing together a

workforce that is drawn from communities where war and politically related problems

combined with nepotism and, sometimes, ethnic preferences were commonplace.

Approaches to the consumer sections of the Reports are also different in emphasis.

CCBH lays great weight on the safety and quality control aspects of its products. The

weighting of the Report toward quality issues reflect concerns in the former

communist nations over poor quality and safety. Again while quality control and

assurance is highlighted in the Cadbury Schweppes Report, it is treated almost as a

given. More space is devoted to the Companys response to consumer issues such as

health and diet, including the growing problem of obesity. The Report recognises the

link between the nature of the products the company manufactures and health issues.

This is not so evident in the CCBH Report.

There are also differences in emphasis in the community involvement section of the

Reports. While the areas for support are broadly the same, education, lifestyle and the

environment, CCBH has now included one other social inclusion obviously a key

concern in the locality. While the Cadbury Schweppes covers this under health and

welfare, it is interesting to note its prominent mention as a specific area for support in

the CCBH Report. Volunteering and donations of staff time also play a major part in

Cadbury Schweppess community programmes. This does not feature in the CCBH

Report where the focus is on donations and gifts of merchandise or products.

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The environmental section of the CCBH Report is brief because a separate document

was prepared on this. However, what material there is focuses on factory processes

and ensuring these conform to ISO standards. The Cadbury Schweppes Report

reports comprehensively on a range of factors. However, it goes beyond factory

processes to look at sustainability issues down the supply chain, taking as a basic

assumption the responsibility to ensure the manufacturing process is environmentally

enlightened.

Again, ethical trading does not feature at all prominently in the CCBH Report because

most basic products come from the global company. However, the company does

make a commitment to open competition and to meeting all contractual obligations.

The Cadbury Schweppes Report lays great store on the ethical trading issue,

emphasising its historical commitment and responding to current consumer concerns

in a comprehensive manner.

6. Discussion and Conclusions

From the foregoing a number of observations and conclusions about the approaches of

the two companies can be drawn which are presented in tabulated form to aid

comparison.

Topic Area Cadbury Schweppes CCBH Comment

Reporting protocol GRI, industry andproprietary GRI

Embedding CSR 5 year programme

building on traditionalcompany values. Boardlevel representation

3 years into new

programme. No Boardlevel representation

After a merger in 2002,

CCBH became amember of CCHBC.In 2003 the companycelebrated its 35anniversary in Croatia

Employee rights EEO and Diversity

Policies. ComprehensiveRemuneration package.Plant mergers can lead toredundancies.Shareholderaccountability given

priority

Implementing EEO and

Diversity. Developingremuneration package.Salary reductions.Employeeaccountability appearsthe priority

Redundancies and

salary reductions wereto drive greaterefficiency, but theperceivedaccountabilities aredifferent in orientation

for each company.

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Communitycommitment

Money, merchandise andtime. Investment areas:1) education and

enterprise2) health & welfare3) environment

Money andmerchandise.Investment areas:1) Education2) Environment3) Health

4) Sport & leisure5) Social inclusion

CCBH focuses oncommunity-building tomitigate the effects ofthe recent war and tobring communitiestogether.

Human Rights Focus on the supply chain Focus on employees

Consumer affairs Focus on food/diet issues Focus of productquality

Tone and style Confident, on expositionof CSR in action as a

progressive journey

Aspirational,benchmarking with

points to futurerequirements

Presentation Colourful, bold, KPIs, fullof case studies

Sparing use of colour,formal, serious, full offacts and figures

These indicators of similarity and difference lead the authors to propose a model of

CSR reporting that is very much driven by the context in which the organisation

operates and which is supported by the literature. It can be seen as a continuum

summarised in the phrase CSR to build democracy, CSR because of democracy. In

other words, in developing nations and economies, companies have a critical role to

play in developing democratic accountabilities and building communities. Indeed,

that is their principal CSR. In developed, democratic economies companies are

already held accountable and their CSR has to be developed to demonstrate that

accountability.

The model below, illustrates the progression from one situation to the other.

ORGANISATION IN ORGANISATION IN

DEVELOPING DEVELOPED

DEMOCRACY DEMOCRACY

CSR as Societal Driver CSR as Societal Accountability

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This has a number of practical implications therefore for organisations who wish to

operate effective CSR in developing and developed economies.

DEVELOPING ECONOMIES DEVELOPED ECONOMIES

Demonstrate compliance withregulatory framework to gain trust

Demonstrate compliance plus to maintaintrust

Explain and demonstrate principles of

CSR (reframe old community

philosophy)

Demonstrate embedded CSR (regain old

community philosophy)

Focus on internal stakeholders to found

the reality

Focus on external stakeholders to

demonstrate the reality

Focus of product quality to demonstrate

integrity

Focus on product issues to demonstrate

leadership

Community engagement for social

cohesion

Community engagement for social

concern

Human rights of employees Human rights in supply chain

Environmental impact in the locality Environmental impact in a global context

Ethical trading practices with consumers Ethical trading practices in the supply

chain.

Business initiates dialogue with civil

society underdeveloped civil society,

weak or no pressure

Civil society exerts pressure on business,

demanding accountability and

responsibility civil society demands

dialogue

Ethical consumerism not developed and

consumers not socially organised/

represented/legally protected

Ethical consumerism developed and

consumers well organised/

represented/legally protected

Volunteering in the community not

socially recognised or rewarded

Volunteering in the community well

recognised and stimulated

Of course the above table simplifies the complex issues and situations facing

organisations as they operate in a global context and the two positions would be better

seen as a continuum, with the declared case on both sides being more or less true.

In terms of the insights that come from the literature it can be seen that relationship

intensity and content expectation are reflected in the balance of the Reports. In

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developing economies the focus is on employees and consumers. New relationships

with the workforce develop driven by new market realities. At the same time, CSR

can be used as a means of embedding democratic change and an acceptance of the

implications of an open market economy in the wider society. Hence the orientation

on the CCBH Report is on employees and consumers, where these relationships are

more critical at this stage. The content expectation reflects these priorities. In

developed economies, the focus is on the wider relationship with society with

accountabilities reaching beyond the immediate operation of the company. Thus

although employees and consumers are regarded as important, more broadly based

stakeholder groups are addressed. Hence the orientation of the Cadbury Schweppes

Report is to external accountabilities and relate to the supply chain, environmental

issues and broader issues of governance.

To the authors knowledge no such comparative study has been undertaken before.

Global organisations tend to take a stance from the point of view of the country in

which they are headquartered. This present study has sought to bring further insights

into how CSR may be made more relevant to all the communities of global

organisations. Further research is needed to explore these concepts and proposals.

Fruitful lines of enquiry may include

further testing of the notion of relationship intensity and content expectation

development of theorising on stakeholder relationships, stakeholder

dialogue/engagement in the CSR context

testing the limits of organisational responsibilities for CSR

exploration of the role of the public relations function in this context,

especially relations to the boundary- spanning, mediation and dialogue-

facilitation areas

developing an understanding of what changes and opportunities CSR activities

bring to the public relations function

increasing understanding of how nations with a tradition of public information

and propaganda models of communication can use CSR to develop new

models of communication

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Acknowledgement: The authors would like to acknowledge the assistance of Lee

Edwards of Leeds Metropolitan University in the preparation of this paper.

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NOTES:

1. The full Report for Coca-Cola Beverages Hrvatska (CCBH) can be found on

www.coca-colahbc.hr. The CSR Report for Cadbury Schweppes is at

www.CadburySchweppes.com

2. See the following websites for further information (www.ibe.org.uk;

www.bsr.org.uk; www.csreurope.org; www.bitc.org.uk)

3. Full details of the Guidelines and background to them can be found on

www.globalreporting.org

4. Data in this paragraph is drawn from the website of the Croatian Chamber of the

Economy (Hrvatska Gospodarska komora www.hgk.hr)

5. The Global Competitiveness and Global Information Technology Reports for all

participating countries are available in an individual and collated form at

www.weforum.org

6. All data in this paragraph is drawn from www.statistics.gov.ukexcept where stated

otherwise. This site gives a full profile of the UK economy.

7. Data drawn from www.oecd.org where full comparisons of GDP per capita for all

participating nations can be found.

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Appendix 1

Summary taken from CCBH Social Report Pages 8 - 11

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APPENDIX 1

Summary taken from CCBH Social Report Pages 8 - 11

1. In the main Report, figures are provided which outline the main economic

impacts of the company. These include: Sales Figures; Market Share; Exports;Supplier Breakdown; Costs of Goods and Services; Operating Expenses; Payroll

Costs; Capital Expenditures; Dividends and Retained Earnings; Return on

Tangible Assets; Earnings Before Interest and Tax; Taxes; and Financial

Obligations and Contract Compliance. In a period marked by global, regional

and national uncertainty, CCBH has sought to ensure a degree of stability in

terms of its economic impacts on a range of stakeholders, taking steps necessary

to correct negative trends at an early stage. Above all, the steady increase in the

rate of return on tangible assets and on earnings bode well for the future.

Investments made to modernise the production process continue to ensure that

CCBH stays at the very top of technological development in the industry. In the

reporting period, CCBH has increased sales by volume and reduced its costs.

2. In the reporting period, there was little change in overall employment and,

notwithstanding a decision to reduce wages and salaries overall, average salaries

remain well above those for Croatia as a whole and for the food and drinks

production industry. There is one recognised Trades Union*, and 51.7% of the

workforce are members, with all employees covered by collective bargaining

agreements. A Workers Council functions according to the requirements of the

Croatian Labour Law. A good record of health and safety continues to be

improved upon. In the reporting period, increases in the amount of training, and

improvements in quality, have been noted, with the introduction of People

Development Forums (PDFs), creating a clear link between skills development

and training. The proportion of women in management positions is above the

figure for general female employment in the company.

3. An employee satisfaction survey found high levels of satisfaction for issues

rated as important such as: Company Image; Responsibility; Dedication; and

Quality but lower levels regarding: Salary; Integrity; and Managers/Supervisors.

In the context of an increasingly competitive environment, there is a need for

flexibility in the workforce and an intensive commitment to building new skills

and competencies. In the process, new relationships between management and

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workers develop, built around core labour standards and the importance of

safeguarding workers rights and interests, amongst those of other stakeholders.

Inevitably, processes of restructuring can result in a decline in some aspects of

workers satisfaction, and CCBH is committed to responding to real and

perceived gaps between rhetoric and performance, in order to maintain its

position as one of the most desired employers in Croatia.

4. CCBH adheres to international standards of the protection of human rights, as

enshrined within the Croatian constitution and relevant laws. In a country in

transition emerging from conflict, adherence to the rule of law, supplemented by

clear codes of ethics and statements of principle, are key guarantors of human

rights. As a company involved in relationships with communities, customers,

consumers, employees, and suppliers, the company seeks to model high

standards of behaviour and, through constant awareness and monitoring, ensure

that any issues in performance are addressed and remedied as quickly as

possible. CCBHs disciplinary and appeals procedures go beyond the

requirements of Croatian law. 2 employees were dismissed in 2002, and 18 were

subject to formal disciplinary procedures, compared with 4 dismissals and 15

disciplinary procedures in 2001. Every effort is made to provide a confidential

employee grievance mechanism and to ensure non-retaliation against any

employee who brings a grievance or who reports a practice which violates

principles of human rights and the highest ethical standards. In accordance with

the Code of Business Conduct, no political contributions are made. Lobbying

takes place through industry interest groups.

5. Coca-Cola Beverages Hrvatska has established procedures guaranteeing a high

level of responsiveness to consumers, with a free-phone telephone line, and

quick responses to any complaints and concerns. A total of 114 consumer

complaints were received in 2002. Supply chain evaluations are rigorous and

focus on quality, delivery, customer service standards, and price. A Customer

Documents

A Comparative Study of CSR in a Croatian and a UK Company