European Management Journal (2010) 28, 68–79

journal homepage: www.elsevier .com/ locate /emj

Corporate social responsibility in the wake of theAsian tsunami: Effect of time on the genuinenessof CSR initiatives

Mario Fernando *

School of Management and Marketing, University of Wollongong, Northfields Avenue, NSW 2522, Australia

02do

KEYWORDSOrganizationalvirtuousness;Genuineness;Corporate socialresponsibility;Unilever (Sri Lanka);Brandix;Asian tsunami;Sri Lanka

63-2373/$ - see front mattei:10.1016/j.emj.2009.08.00

* Tel.: +612 42214053; fax:E-mail address: mariof@uo

r ª 2002

+612 422w.edu.a

Summary This paper reports the findings of a study examining the influences if any, pas-sage of time has on the three attributes of organizational virtuousness; human impact,moral goodness and unconditionality of social benefit. Interview data collected at 11and 35 months after the Boxing Day Asian tsunami reveal how two leading Sri Lankan pri-vate sector organizations, Unilever (Sri Lanka) and Brandix engaged in corporate socialresponsibility initiatives. This paper explains how genuine intentions of engaging in CSRactivities could generate outcomes such as enhanced reputation that improve the profit-ability of the firms, and consequently, how these are likely to raise doubts about the moralintent of the tsunami related CSR initiatives. This paper concludes by discussing implica-tions and areas for further research.ª 2009 Elsevier Ltd. All rights reserved.

Introduction

Based on a follow-up study to Fernando (2007), this paperseeks to examine, what influences if any, passage of timehas on the three attributes of organizational virtuousness;human impact, moral goodness and unconditional societalbetterment. As societies� needs evolve over time, it is likelythat the social expectations of corporations� social responsi-bilities also evolve. By comparing interview data collectedafter 11 months (see Fernando, 2007), and 35 months sincethe Boxing Day Asian tsunami, this paper provides input ontwo leading Sri Lankan private sector organizations, Unile-

9 Elsevier Ltd. All rights reserved.

72785.u

ver (Sri Lanka) and Brandix�s corporate social responsibility(CSR) initiatives. The data collected from 28 interviews re-veal how the passage of time influences the three attributesof organizational virtuousness; human impact, moral good-ness and unconditionality of social benefit. Based on thefindings, this paper raises doubts about placing too muchemphasis on the genuineness of CSR initiatives. It explainshow firms with genuine intentions of engaging in CSR activ-ities could yet generate outcomes such as enhanced reputa-tion that improve the profitability of the firms, and howthese are likely to raise doubts about the moral intent ofthe CSR initiatives. This paper concludes by discussing impli-cations and areas for further research.

The last three decades have witnessed a lively debateover the role of corporations in society (Basu and Palazzo,2008; Godfrey and Hatch, 2007; McWilliams et al., 2006).

Corporate social responsibility in the wake of the Asian tsunami 69

More influential CSR theories such as the stakeholder theory(Donaldson and Preston, 1995), stewardship theory(Donaldson and Davis, 1991) and the philosophical perspec-tive (Windsor, 2006) of CSR focus on the obligation arisingfrom an implicit social contract between society and busi-ness at a given point in time. Carroll proposed �the socialresponsibility of business encompasses the economic, legal,ethical, and discretionary expectations that society has oforganisations at a given point in time� (1979, p. 500). Thus,organizations are expected to be responsive to societies�needs and wants at a given point in time, and optimizingthe positive effects and minimizing the negative impact ofits actions on society (Lantos, 2001).

Conceptually, Windsor (2001) notes that there are signifi-cant difficulties in distinguishingwhether business behavior istruly moral conduct or instrumental adoption of an appear-ance of moral conduct as useful reputational strategy. He ar-gues that voluntary acceptance of material loss may serve toidentifymoral conduct, butmaterial gain cannot serve to iso-late reputational strategy. Empirically, despite considerableeffort in the academic literature to discover a reliable rela-tionship between responsible conduct and financial perfor-mance, the evidence remains mixed at best (Windsor,2001). Increasingly, management researchers are turning topsychology literature to enrich the management, organiza-tion and understanding of CSR (for example, Jones, 1991;Cameron et al., 2004; Godfrey, 2005; Bright et al., 2006;Bright, 2006). This paper relates to an emerging and under-researched area of CSR mainly influenced by psychology,the genuineness in CSR activities (Bright, 2006; Godfrey,2005).

Genuineness can be explained as the �perception that anorganization�s philanthropic activities are well intentionedand not merely for instrumental gains� (Bright, 2006, p.752). The idea of genuineness is particularly relevant toCSR activities because consistent CSR activities could gener-ate moral capital by promoting corporate reputation (Brightet al., 2006; Cameron et al., 2004). Moral capital can act asa social license, a form of insurance against unforeseen risksto corporate image, reputation or profits (Godfrey, 2006).One way to examine the genuineness of CSR initiatives isthrough organizational virtuousness.

Organizational virtuousness is necessary for genuinenessin CSR initiatives (Bright, 2006), and is characterized bythree attributes; human impact, moral goodness, andunconditional societal betterment (Bright et al., 2006). It�broadens the orientation to include fostering the moralgood, not just redressing the bad, and producing human ef-fects and social betterment, all without expectation of per-sonal return� (Cameron et al., 2004, p. 770). Highlighting thedearth of scholarship on positive organizing, Cameron et al.(2004) identify the effect of time on positive organizationalvariables such as organizational virtuousness as an area withscant empirical investigation.

The rest of this paper develops as follows. In the nextsection, I introduce organizational virtuousness and thestate of CSR in Sri Lanka before and after the Asian tsu-nami. Thereafter, I continue with the methodology andcase descriptions. The subsequent section includes findingsand then, a discussion relating to organizational virtuous-ness. Finally, I turn to implications and concludingthoughts.

Organizational virtuousness

Cameron et al. (2003) comment that positive organizationalscholarship brings together �new variables, processes, andrelationships that have been seldom uncovered and ex-plained� (p. 365). One such variable is organizational virtu-ousness. Virtuousness is the �pursuit of the highestaspirations in the human condition. It is characterized byhuman impact, moral goodness, and unconditional societalbetterment� (Bright et al., 2006, p. 249). As these research-ers have pointed out, several writers have called for corpo-rations to emphasize an �ethos of virtuousness in corporateaction� (p. 249). Virtuousness demands organizations to gobeyond the �do no harm� assumption. Cameron (2003) illus-trates this well in terms of negative, normal and positivedeviance in organizations. For example, the negative, nor-mal and positive deviances of �ethics� are unethical, ethicaland virtuousness (p. 53).

Organizational virtuousness could refer to virtue in orga-nizations and virtue through organizations (Bright et al.,2006). Virtuousness in organizations relates to the behaviorof individuals in organizational settings that helps peopleblossom as human beings. Typical manifestations and conse-quences of individual virtues are hope, gratitude, wisdom,forgiveness, courage and other similar virtues (Emmonsand Crumpler, 2000; McCullough et al., 2000; Seligman,2002; Snyder, 2000). Virtuousness through organizations re-lates to the enablers in organizations that foster virtuous-ness. When it occurs in organizations, groups of peopleact in ways that demonstrate virtuousness, which may in-clude actions that would not be possible for individuals toachieve by acting alone (Bright et al., 2006). The effect ofcollective virtuousness may support a condition where theimpulse to seek human excellence becomes a part of theorganization�s culture (Cameron et al., 2004; Gunther,2004). Although organizational virtuousness is not moti-vated by instrumental outcomes, there is reason to expectthat virtuousness produces, as a byproduct, many positiveorganizational outcomes.

Psychology literature as well as recent empirical re-search assessing the relationship between virtuousnessand organizational performance show a positive and sig-nificant relationship (see Cameron et al., 2004). Theirstudy reveals amplifying and buffering effects of organiza-tional virtuousness. Organizational virtuousness generatesmore virtuousness and tends to uplift the moral and socialrelationships with the organization (amplifying effect). Onthe other hand, when bad events such as downsizing takesplace, the performance of an organization high in virtu-ousness is likely to have little negative impact (bufferingeffect). Virtuousness in organizations extends notions suchas corporate social responsibility, citizenship and ethics.

According to Park and Peterson (2003), virtues can be to-nic or phasic. Tonic virtuousness is a generalized condition,whereas phasic virtuousness is dependent on an externalevent. Tonic virtuousness such as integrity, kindness, hopeand virtuous purpose are constantly present. Phasic virtuous-ness such as forgiveness occurs only when an event like theAsian tsunami creates a need for it (Bright et al., 2006).Thus, in this paper, we will be limiting our attention tophasic virtuousness.

70 M. Fernando

Bright et al. (2006) identify three key definitional attri-butes of organizational virtuousness; human impact, moralgoodness and unconditional societal benefit (p. 251). Humanimpact is the effect CSR activities have on improving the liv-ing conditions, well-being and the resilience of beneficia-ries. The moral goodness is based on the conception of�character traits in people and organizations that are seenas desirable� (Bright, 2006, p. 753). The last attribute,unconditional societal benefit is the �intention to creategoods of first intent and to prudently use goods of second in-tent to instrumentally bring benefit to society� (Bright,2006). Organizations demonstrating this attribute would ini-tiate CSR activities because it was the �right thing to do�. Be-fore we turn to the events that unfolded in these two SriLankan organizations at 11 and 35 months after the tsunami,it would be useful to briefly visit the state of CSR in Sri Lan-ka before and after the tsunami.

Pre- and post-tsunami CSR in Sri Lanka

As highlighted in Fernando (2007), in 2004, a comprehensivesurvey was undertaken by an international NGO, Interna-tional Alert, on the CSR perceptions and attitudes of theSri Lankan public and business organizations. The surveyfound that while a slight majority of people feel that busi-ness should do more for the social good, they mistrust cor-porations and express fears that the private sector exploitsconsumers and destroys cultural values (International Alert,2005).

In the business community, most respondents felt thatthey have a strong role to play in addressing social needsbut, while there is a long history of charitable giving in SriLanka, few companies had a strategy or policy for doingso. Only 73.2% of companies surveyed had a CSR policy.When those with a CSR policy were asked whether it wasformal or informal, only 17% had formal, written policies.The majority of organizations engage in CSR activities relat-ing to education (54.9%), employee welfare (51.2%), unem-ployment issues (48.8%), religious activities (36.6%),environmental concerns (31.7%), health (30.5%) and theprovision of infrastructure facilities (28%).

International Alert�s (2005) study reveals that the major-ity of businesses regard the main reason for their CSR poli-cies is genuine concern for society, but a minority citespublicity as the primary purpose. The majority public view,by contrast, is that businesses practise CSR policies for mo-tives of publicity and only a minority believe that they havea genuine concern for society.

Given this backdrop, and before International Alert�sstudy was published in January 2005, the Asian tsunamistruck Sri Lanka on December 26, 2004. The tsunami deathtoll is estimated at 173,906 across 14 nations. It devastated1000 km of Sri Lanka�s coastline leaving 48,677 Sri Lan-kans dead, second only to Indonesia�s 104,055 dead(www.nationamaster.com). The total economic impact ofthe tsunami is estimated at 1% of Sri Lanka�s annual GDPgrowth. Out of a total world aid package of US$13.6 billionto the affected countries, Indonesia and Sri Lanka have re-ceived more than 60% of the funds committed (OECD, 2005).

The colossal damage to lives and property has ironicallybrought in a new chapter in the CSR practices of Sri Lankan

business organizations. In established multinational organi-zations like Unilever (Sri Lanka), and fast growing and lo-cally owned Brandix, the pioneering tsunami relief workhas further reinforced their commitment to CSR with along-term and sustainable strategic CSR focus. We turn tothese post-tsunami CSR practices after the methodologysection.

Methodology

This study seeks to examine, what influences if any, passageof time has on the three attributes of organizational virtu-ousness; human impact, moral goodness and unconditional-ity of social benefit. Case Studies are defined by Yin �as anempirical inquiry that investigates a contemporary phenom-enon within its real life context, when the boundaries be-tween phenomenon and context are not clearly evident,and in which multiple sources are used� (1989, p. 23). Casestudies of Unilever and Brandix are used as the primarymeans of gathering and analysis of data. The case studymethod was used over other qualitative methods firstly, be-cause of several factors. It is an empirical study of a con-temporary phenomenon and an investigation in a real lifecontext. Multiple sources for the study were used in theform of in-depth personal interviews, public documentsand observations. Secondly, in this study, I looked at mean-ings rather than events, answering the �whys� and the �hows�rather than the �whats�. Therefore, I did not want a largenumber of responses with little detail, but several in-depthaccounts from �elite� interviewees contextualized and trian-gulated by other stakeholder interview data. Thirdly, thisapproach allowed me to compare and contrast Unilever SriLanka and Brandix cases to draw conclusions about emerg-ing themes. This study, therefore, used a multiple or multi-site case study method as opposed to a single case study. Amultiple case study design was useful to generate more ro-bust and compelling data.

Triangulation was a key tactic used to ensure the qualityof the data. To ensure the accuracy of data, I used diversesources of data (data triangulation) (Seale, 2000). With re-spect to data triangulation, to strengthen and verify theuse of the �elite� interview data, additional informationwas sought through the other interviewees, and review ofrelevant company and public documents. These consistedof company reports on CSR initiatives, as well as electronicand print media reports on business leaders� and organiza-tions� tsunami related CSR activities. It was envisaged thatthis individual and cross-case analysis and the subsequenttriangulation process would generate a more reliable under-standing of the time effects on the tsunami related CSR ini-tiatives of Unilever Sri Lanka and Brandix with implicationsfor practice, theory and further research.

Data collection

In November 2005 and October 2007, I conducted a total of28 interviews with formal and informal donors (2), civil soci-ety leaders (1), business leaders (23) and victims (2) of theAsian tsunami. Participant selection involved several steps.First, based on media reports, I selected several key organi-zations, including Unilever and Brandix as potential organi-

Corporate social responsibility in the wake of the Asian tsunami 71

zations to conduct �elite� interviews for the project. Eliteinterviewing is where the interviewee is in �a position ofauthority, or especially expert or authoritative, peoplewho are capable of giving answers with insight and a com-prehensive grasp of what it is you are researching� (Gillham,2000, pp. 63–64). As such, the use of participants from Uni-lever and Brandix was very useful to achieving the aims ofthis study as these participants had �hands on� experiencewith regard to the tsunami related CSR initiatives. At thisstage, participant selection was purposive because I wantedto learn about typical organizations that engaged in tsunamirelief efforts (Patton, 1980, p. 107). Second, during these�elite� interviews, several other organizations� and individu-als� names were recommended, who were later inter-viewed. At this stage, I was using the snowballingtechnique for data collection. These �non-elite� intervieweedata helped to build context for the two case studies. Forexample, one prominent internationally acclaimed civilsociety leader criticized the role of the Sri Lankan privatesector in their tsunami relief efforts alleging ulterior mo-tives of most firms. Later, these non-business interview datawere used to triangulate the data for the �elite� interviewsat Unilever Sri Lanka and Brandix. This paper focuses onthe interviews conducted at Unilever (7) and Brandix (3)for several reasons.

First, these �elite� interview organizations are consideredpioneers of Sri Lanka�s corporate tsunami relief efforts bytheir peers, Sri Lanka government and international agen-cies such as the United Nations. Other organizations lookedup to these organizations for leadership before committingresources to relief efforts. In many instances such as whenproviding assistance to the Eastern areas of the countrywhere there was some risk to life and property due to theongoing civil war, several organizations operated in groupsled by Unilever and Brandix. Second, while Unilever is a sub-sidiary of Unilever Plc., Brandix is a family owned business.Third, based on the first round of interviews at 11 months, Ihad to decide which of the business leader interviews wouldcontribute most towards meeting the purposes of this long-term study, and finally, access issues at 11, 35 and thereaf-ter were also a key factor for selecting Unilever andBrandix.

The two timelines were selected to reflect the first andthird anniversaries of the Asian tsunami. None of the inter-viewees were involved at both timelines. While it wouldhave been ideal if the same interviewees were availableat 11 and 35 months, the reality of long-term research sug-gest otherwise. Several senior management personnelchanges occurred at both Unilever Sri Lanka and Brandixduring the 11–35 months period. These included significantpersonnel changes to the Unilever Sri Lanka board of direc-tors including the change of chairperson, and changes dueto the newly formed CSR departments at both firms. How-ever, as the study is about tracking the time effect on thegenuineness of CSR initiatives of Unilever and Brandix attwo distinct points in time, it was important to conductthe interviews with available personnel at the two pointsin time. The comparison of the CSR initiatives at thesetwo time lines should reveal the influence passage of timehas on the virtuousness of CSR initiatives. That is how muchof the initial CSR initiatives were a spontaneous response toa human tragedy and the effect of time on the moral intent

of these initiatives. The primary method of data collectionwas in-depth, face-to-face interviews. A semi-structuredinterview guide was used. The average participant interviewwas about 60 min. All interviews were audio taped. To seekthe participants� perspectives on the phenomenon understudy, the interview guide was based on an open-ended for-mat. This format was used to encourage participants toshare information in a style that they were comfortablewith.

Data analysis

The audio interviews were transcribed and later analyzed byme. I compared and contrasted key themes from each of theinterviews. These themes were used to form categoriesassociated with the three attributes of organizational virtu-ousness; human impact, moral goodness and unconditionalsocial benefit. I used data triangulation to strengthen andverify the use of the interview data. Additional informationwas sought through visits to company tsunami related CSRproject sites and the review of relevant company and publicdocuments. Company documents included annual reports,photographs, newsletters, newspaper cuttings, certificatesand web sites.

Case descriptions

Unilever (Sri Lanka)Unilever (Sri Lanka)�s parent company, Unilever Plc, is oneof the world�s leading suppliers of fast-moving consumergoods. Employing 174,000 across 100 countries (Unilever,2009), Unilever�s �products are present in half the house-holds on the planet, 160 million times a day, someone some-where will purchase a Unilever brand� (Cescau, 2007). Its$50 billion turnover is spread across 400 brands in foods,home and personal care categories. In September 2007, Uni-lever Plc was ranked first in the Dow Jones Sustainability In-dex and a month later, its Group Chief Executive PatrickCescau was awarded the prestigious Columbia BusinessSchool�s Botwinick Prize in Business Ethics. The Sri Lankansubsidiary is among the largest and oldest multinationalcompanies in Sri Lanka. It has operated in Sri Lanka for over70 years and employs over 1100. The Unilever Sri Lankainterviews were conducted at 11 months with two directorsand one manager. At 35 months, one director and threemanagers participated in the interviews.

BrandixBrandix is the single largest apparel exporter in Sri Lankawith an annual turnover exceeding US$320 million (Brandix,2007). It directly employs 20,000 and generates indirectemployment to an equivalent number. Recently awardedthe �Business Superbrand� status in the apparel industry,and the International Green Apple Environmental GoldAward, Brandix is a preferred solutions provider for GAP,Marks and Spencer, Victoria�s Secret and NEXT. The new30-acre Brandix Apparel City in India, when completed inJune 2008 will have a 1000 machine capacity (BrandixAnnual Report, 2007). The company�s commitment to pre-serving the environment is demonstrated by many nationaland international accolades including the Sri Lankan Presi-dential Environmental Excellence Award (2005) and the

72 M. Fernando

American Apparel and Footwear Association�s Excellence inSocial Responsibility Award (2006). The pioneering post-tsu-nami social and environmental rehabilitation relief effortsof these two organizations had a significant impact on theSri Lankan community, donor agencies such as United Na-tions, the Sri Lankan government and other leading localand overseas businesses. The interviews were conductedat 11 months with the CEO and at 35 months, with two mem-bers of the top management team.

Findings and analysis

At 11-months (t0–t1 period)

All interviewees described the post-tsunami experienceusing the phrase �CSR�. Both companies had formal CSR ini-tiatives in place. For Unilever (Sri Lanka), it revolved aroundthe 3G mantra, our brands, our people and our community.Reflecting the worldwide corporate mission of Unilever Plc,adding vitality to life, Unilever (Sri Lanka) attempted to de-liver positive results to the community when pursuing itsbrand and people goals. Both organizations admitted thatthey �played to their strengths�, meaning shaping thetsunami CSR response in terms of proven organizationalresources and techniques (see Table 1).

For Unilever (Sri Lanka), it was the strong and deep islandwide distribution network. In the immediate aftermath ofthe tsunami, Unilever (Sri Lanka) moved quickly to makedistribution networks available to emergency relief opera-tions, working alongside local agencies to distribute essen-tial food and hygiene products, and matched employeedonations to a central fund. Initial relief work was followedby rehabilitation and reconstruction projects. These includethe construction of 150 houses in Sri Lanka. During theaftermath of the tsunami, Brandix found that most of thewater wells in the affected areas were contaminated withsea water. With the help of a government agency and in-house environmental engineers, Brandix targeted to clean4000 water wells along the whole of the tsunami affectedcoastal belt.

Interviewees at Unilever and Brandix admitted that interms of decision-making, a Brandix senior executive ex-plained: �Leadership was the key, nobody wanted to takedecisions. Emotions were raw and I had to be more empa-thetic and tolerant of their spontaneity�. For example,when he decided to organize and send one convoy to allthe affected areas, �the heads of different SBUs reacted.They wanted to send their people to where they had fac-tories so their presence was felt in those communities. Ihad to give in�. In terms of the emotion and spontaneitythat was involved in the CSR initiatives of the organiza-tions, Brandix CEO said he experiences similar outpouringof emotion and spontaneity �in small pockets� duringday-to-day business operations. However, when �all18,000 followers were thinking of achieving the same goal,the intense emotions and spontaneity has to be managed,to say the least�.

These sentiments were echoed by the Unilever seniorteam as well. According to a senior Unilever (Sri Lanka)director, �we in Sri Lanka decided that all our activities di-rected to achieve successes in our brands and people should

also have a positive impact on our communities�. The 3Gmantra at Unilever and the parent company�s mission ofadding vitality to life played a foundational role in the shap-ing of tsunami initiatives. So, in terms of leadership chal-lenges, one senior director said, �the tsunami related CSRinitiatives nicely fitted in with the G3 mantra already inplace�. However, he said that the emotions and the sponta-neity had to be clearly directed:

The spontaneity in which people responded to the disas-ter was overwhelming. It came from the heart; non-rationalized outpouring of action. No overtime wasclaimed by anyone of the employees for the massivenumber of hours put in for the relief work.

He admitted that he had not �led something like this be-fore, ever. It was a far more emotional experience�. Con-trasting �normal� company events as �a job to be donewhere tasks are more rational and structured�, this seniorUnilever director said, �here it was all heart, came fromwithin.� Whilst curtailing spontaneity, he said;

. . .the unique leadership challenge in this disasterrelated CSR was to how to get the best out of the over-whelming desire to help. Guidance, structure and a clin-ical management approach was needed. Clear directionand clarity to the purpose at hand had to be providedimmediately.

Thus, in the immediate aftermath of the tsunami (t0–t1period, up to 11 months), faced with a high magnitude hu-man tragedy created by nature, organizations� CSR initia-tives were shaped by CSR strategies that generated a highlevel of genuineness. However, with passage of time, thisassertion was likely to change. Although decision-makingwas mostly based on instinct during the first 11 months afterthe disaster, in the long-term, ingratiation was likely to re-duce the organizations� level of genuineness.

At 35 months (t1–t2 period)

At 35 months, Unilever (Sri Lanka)�s tsunami relief andreconstruction programme has evolved into two distinctphases, comprising of five stages. Phase A covers tsunamirelief activities in the immediate aftermath (t0–t1 peri-od, up to 11 months) and Phase B (beyond t1 period,after 11 months), reconstruction of the affected areas(see Table 1). Unilever (Sri Lanka) pledged US$1 millionof which US$25,000 was contributed to Sri Lanka Presi-dent�s Tsunami Relief Fund. In the t0–t1 period (at 11months), Unilever (Sri Lanka)�s relief efforts included pro-vision of food, dry rations and logistical support in theform of truck days. Beyond the 11 month, the CSR initia-tives focused on construction by targeting the provisionof 150 houses. According to a Unilever (Sri Lanka)manager:

We were given a model by the government. All housedonors had to comply with a standard model. It had tobe 1500 square feet with three rooms, one toilet and akitchen. The committed 50 houses in the South of theisland have been completed without many problems.However in the east, out of the 100, only 40 have beencompleted.

Table 1 Tsunami related CSR initiatives.

Initiative Unilever (Sri Lanka) Brandix

0–11 months (t0–t1) 12–35 months (t1–t2) 0–11 months (t0–t1) 12–35 months (t1–t2)

Relief Cooked food packets for28,000 people

45 truck days for UNICEF and theMinistry of Health

Tents

Dry rations for 120,000 140 truck days and three freighttrains (equal to 150 truck loads) tothe World Food Programme

Water via mobiledelivery unit

Rice and water for100,000

Emergency hotlinesfor maroonedemployees

Refugee campmanagement

�Housing� 6000 people; 600 tents, 60toilets, drinking water, electricity, ahut for maternity purposes andkindergarten

Construction 75 houses 4375 water wells intsunami affectedareas

Rehabilitation of fishing community Two cost shareagreements withUNDP on water andsanitation projects(US$23, 810)

School and displaced universitystudent hostel

Traderehabilitation andlivelihood

3000 Unilever outlets destroyed:seminars and workshops for retailersin order to motivate them torecommence activities

Capacity buildinginitiatives

Support for shop rebuilding/displayunit replacementStock replacement

Internal CSRoutcomes

Long-term and sustainable strategicCSR focus, strengthening the CSRdivision with skilled, experienced andspecialized personnel, CSR pressreleases

Brandix CSR Center,allocation of anannual budget of LKR25 million (1.5–2% ofannual turnover), CSRnewsletter

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74 M. Fernando

One major challenge has been the escalation of thearmed conflict in the east. This has directly resulted in thewithdrawal of Unilever staff as well as difficulties in securingwilling building contractors to undertake work in the east ofthe country. Adding to this, a Unilever (Sri Lanka) managerrevealed that there has been �several escalations in buildingmaterials costs as well and already, LKR 136 million havebeen spent on these 90 houses�. Another challenge has beenthe tsunami victims� reluctance to occupy inland houses and,�these victims are mostly from fishing communities but apost-tsunami government rule permits building houses only5 km away from the coast�. Unilever CSR team is howeverconfident that another 34 houses can be built bringing the to-tal to 124 houses out of the targeted 150. According to a Uni-lever (Sri Lanka) manager, the company has gone beyond themere construction and handing over of the houses to individ-ually meeting each of the families to ensure that only �theright families received the houses�. In an effort to buildingrelations with the new house owners, �we even helped thebeneficiaries settle in by providing them furniture, beds,gas cookers, table and chairs and even landscaping�.

Up to the 11 month, relief efforts of Brandix were pri-marily related to the provision of tents and water. After11 months, Brandix has exceeded its original target ofcleaning 4000 contaminated water wells by 700. Collaborat-ing with the Water Resources Board of Sri Lanka, this pro-ject costing around LKR 9 million has been highlysuccessful and to date, no requests for cleaning or repairsof these wells have been received by Brandix. Accordingto a senior executive of Brandix, �once a month, BrandixCSR co-coordinators carry out spot checks to ensure theproper functioning of the wells�. Brandix has developedcommunity involvement in all their CSR projects. The localcommunity is granted ownership and responsibility of thesehouses. However, Brandix is committed to maintaining thewater systems of these houses for its life time. Brandixhas also provided the complete water service for housesbuilt by Sri Lanka Green Movement and AAR, a Japanese do-nor agency.

Unilever (Sri Lanka)�s policy has been to undertake long-term tsunami related CSR projects without any third partyinvolvement. An exception to this has been the micro-fi-nance scheme. In this two year project, Unilever and SriLanka Business Development Centre collaborated to providecapital to the female member of tsunami victim families todevelop small businesses. Unilever (Sri Lanka) channeledLKR 2 million received from Unilever Singapore to train fe-males of the tsunami victim families to engage in small busi-ness enterprises. Each female of the family was given LKR35,000 and at 35 months, this project is into its first yearand �running well�. Unlike Unilever (Sri Lanka), Brandix hastripartite involvements in almost every CSR initiative. Theirpartners include local and international NGOs, businesspartners such as GAP International, Marks and Spencer,and MAST Care, government institutions and more recently,the United Nations Development Programme. According tothe Brandix CSR team, this helps them to �tag yourself tosomebody who can reach further�.

Beyond the resources that were committed already at 35months, both organizations do not envisage undertaking anynew tsunami related projects. However, the tsunami CSRexperience has generated several new long-term CSR

projects. While for Unilever it revolves around hygiene,health and nutrition, and the rural upliftment through wo-men empowerment, for Brandix, �Care for our Own� hasbeen a significant initiative. Ninety percent of Brandix�s20,000 employees are women. According to an senior exec-utive at Brandix:

we realized that some of our women employees in ruralareas walk up to two hours after work to collect a pot ofwater from the village well.

This prompted the �Care for our Own programme� wherethe Brandix CSR coordinators identify hardship areas and in-stall water wells. The Brandix CSR team�s target is to install950 of these wells around the country. At 35 months, 500 ofthese were already completed.

Differences in CSR initiatives between the two timelines

Compared to the CSR initiatives of Unilever (Sri Lanka) andBrandix 11 months after the disaster, at 35 months, inter-views revealed several significant differences. First is thedevelopment of a focused strategic CSR programme.According to the Unilever (Sri Lanka) CSR team, prior to2007, there have been ad hoc policies on CSR based on pro-jects that had a fit with Unilever Plc.�s water, agricultureand fisheries related CSR theme. These initiatives were rec-ognized by numerous accolades including the Ceylon Cham-ber of Commerce top 10 CSR awards for five consecutiveyears and climbing the popular Lanka Monthly Digest�sRespectability Index from 11 to 8.

With the strengthening of the CSR division in 2007, thefirm adopted a strategic CSR focus targeting three areas:health and hygiene, nutrition and women empowerment.A cross functional CSR steering committee was formed andaccording to the CSR team at Unilever (Sri Lanka), �wenow believe in strategic CSR which is about strategicallyinvesting in CSR activities that achieve our business goalsand vision because that is more sustainable�.

At Brandix too, a structured and organized strategic CSRfocus is evident. Compared to Unilever (Sri Lanka), even be-fore the tsunami, Brandix�s CSR focus has been water. Butthere was no dedicated CSR division and a visible CSR orga-nizational structure. Between 11 and 35 months since thedisaster, Brandix has formed a dedicated CSR team consist-ing of 3 head office personnel, 17 CSR coordinators in 25strategic business units (SBUs) spread around the country.All the coordinators are volunteers and are mostly counsel-ors from the human resource divisions of its SBUs.

Another significant development in the 11–35 monthsperiod in both companies is their approach towards publicityof tsunami related CSR initiatives. In fact, Unilever (Sri Lan-ka)�s CSR team believes that the image of Unilever (Sri Lan-ka) is harmed by not publicizing their CSR initiatives. Theybelieve that one reason for a relatively lower ranking inthe CSR initiatives in the Lanka Monthly Digest survey wasdue to its reluctance to report and publicize the progresson tsunami related CSR initiatives. As in the period up to11 months, at 35 months too, the publicity of CSR initiativescontinues to shape the moral intent of the top managementof Unilever (Sri Lanka).

CSR Initiatives Model I - Genuineness over Time

to=0 months

t1=11 months

t2=35 months

Time

Natural disaster (CSR event)

Com

pan

ex

ecta

tions

Drivers

Internal tools

Emergency

Short-term

Long-term

Regulators CSR outcomes

High

Genuineness

t3=to be

determined

py

Low

Figure 1 CSR initiatives Model I – genuineness over time.

Corporate social responsibility in the wake of the Asian tsunami 75

Similarly at Brandix, the CSR team believes that they en-gaged in tsunami related CSR initiatives �from our hearts andwe didn�t think of publicity�. The new Head of CSR who wasappointed 11 months after the tsunami was surprised torealize the extent of tsunami related initiatives that werenot publicized. Now the Brandix CSR team publicizes theirCSR activities in an internal newsletter and a monthly mediarelease. According to the Brandix CSR team, the newsletterwas not due to the pressure from stakeholders as much butbecause �we wanted to publicize our work maybe in thehope of showcasing the hardships of the people and hopingto inspire others to help�. However, they acknowledge thatpublicity issues proves to be �very difficult, [if there is] notenough publicity, because other companies are doing it, thePR division is pushing us to publicize�. The CSR team at Bran-dix said there is �no pressure from external stakeholderssuch as GAP and MAST�.

Discussion: company expectations andvirtuousness

Since the Asian tsunami struck Sri Lanka on Sunday, 26December 2004, each of the two organizations initiatedCSR programmes in the t0–t1 period (0–11 months) and ex-tended these in the t1–t2 period (12–35 months). However,each organization�s CSR response and outcomes were differ-ent. For example, while Unilever (Sri Lanka)�s focus on CSRwas community based projects, Brandix�s focus was on envi-ronmental CSR. It can be expected that firms will attempt to

Natural disaster (CSR event)

Com

pany

exp

ecta

tions

Internal tools

S

L

Regulators CSR

Drivers

CSR Initiatives Model II -

Figure 2 CSR initiatives Model

balance economic, legal and ethical considerations situa-tion by situation and therefore, will react differently. Itseems that Unilever (Sri Lanka) and Brandix presumablydeveloped their post-tsunami CSR initiatives based on theaggregation of firms� differing resources and capabilities (aresource based interpretation). This is more evident 35months after the event.

A corporate social responsibility event related to a natu-ral disaster passes through two �regulators� which influencethe significance of the episode (Figure 1).

The CSR drivers and internal tools constitute regulators,which may reduce or amplify the effects of the CSR re-sponse. CSR drivers lead to increased emphasis on CSR. In-creased awareness among stakeholders, public mediainterest and more integration/higher interdependencies be-tween companies are some examples. Stakeholders� pres-sure for more publicity became a major driver during thefirst 11 months after the tsunami. It was hard to deny thateven after 35 months, it is still a driver. Both organizationshave attempted to overcome the sensitivity created by thediffering stakeholder demands for publicity relating totsunami related CSR initiatives by integrating the long-termtsunami initiatives into the overall strategy making processof the organization. Thus both organizations now have a sig-nificant and long-term strategic focus to their CSR activities.

The CSR activities are closely related to their long-termoperational goals, and therefore, as Unilever (Sri Lanka) be-lieves �are more sustainable�. For Unilever (Sri Lanka), thedifficulties and delays in obtaining land and authority to

Emergency

to=0 months

t1=11 months

t2=35 months

t3=to be

determined

Virtuousness Time

hort-term

ong-term

Outcomes

Human impact

Moral goodness

Uncondinal. social benefits

Virtuousness over Time

II – virtuousness over time.

76 M. Fernando

build houses has had a negative effect on the number ofhouses they could complete. Of the targeted 150, the CSRteam is confident of completing only 134. In addition, theescalation of building material prices and armed conflictin the East of the country had contributed to this reducedtarget. On the positive side of the ledger, Unilever�s mi-cro-finance scheme demonstrates the amplifying effect ofanother driver of the tsunami related CSR initiatives, inter-dependency between organizations. The tripartite relation-ship between Unilever Singapore, Sri Lanka BusinessDevelopment Centre and Unilever (Sri Lanka) has workedwell to deliver medium-term financial relief to tsunami af-fected families. Similarly Brandix has thrived on collaborat-ing with its international buyers and suppliers to furtherextend the tsunami related CSR initiatives. By integratingwith GAP International, Marks and Spencer, it has nowlaunched new programmes aimed at women employeesand the disabled.

CSR internal tools refer to the firm�s own rules, processesand structures that safeguard a �socially responsible� com-pany. Both organizations had established formal CSR plat-forms. For example, at Brandix, the CSR activities are allrelated to their focus on water and its CSR division under-takes only water related CSR initiatives. Unilever (Sri Lan-ka)�s new strategic CSR focus is a platform built onhygiene and nutrition, and rural upliftment through womenempowerment. These internal �rules�, �regulate� the CSRactivities of the organization. Based on company expecta-tions, the outcomes from the tsunami related CSR initiativestaken during the first 35 months could be classified intoemergency (up to 11 months), short-term (12–35 months)and long-term (beyond 36 months) oriented outcomes (seeFigure 2). Apart from the emergency relief during the firstfew weeks, almost all of the CSR initiatives of the two orga-nizations were directed at improving the social develop-ment and the livelihood of those affected by the tsunami.These included construction/rebuilding of houses, hospi-tals, schools and water wells.

The difference in Figures 1 and 2 is shown in the fifth(right-hand side) box. Figure 1 illustrates relationshipsfound from data collected at 11 months. It shows that dur-ing this time period, genuineness is high and is likely to re-duce over time. Figure 2 is based on the assertion thatvirtuousness is necessary for genuineness (Bright, 2006). Itshows how the moral intentions of organizations� CSR initia-tives related to a natural disaster can be examined using thethree attributes of virtuousness.

As Bright (2006) points out, if organizational virtuousnessis necessary for the genuineness of Unilever (Sri Lanka) andBrandix�s CSR initiatives, we can examine the place of hu-man impact, moral goodness and unconditional social bene-fit—the three definitional attributes of organizationalvirtuousness—in the two organizations� post-tsunami CSR ini-tiatives. In an episode such as the Asian tsunami tragedywhich caused severe loss to property and lives, the placeof human impact in the CSR initiatives is relatively easierto assess. There is little doubt that the CSR activities of Uni-lever (Sri Lanka) and Brandix had a significant impact onimproving the living conditions, well-being and the resil-ience of the tsunami affected people. The collective CSRoutcomes of these two organizations during the first 11month period and beyond 12 months are clear from Table 1.

Their reputation, both nationally and internationallyhave grown in the leading role played in the tsunami relatedCSR initiatives. These two organizations are in demand bynational and international NGOs and United Nations to usetheir now acclaimed CSR programmes to further continuetheir tsunami related CSR initiatives. For example, Brandixhas forged a strong collaboration with the United NationDevelopment Programme, Green Movement of Sri Lankaand the Japanese NGO, AAR. However, the extent of humanimpact of the tsunami related CSR initiatives at 35 monthsseems to be less than at 11 months. It could be due to theabsence of a continuing threat to life and property. Forexample, the provision of a plastic bucket would have amuch higher level of human impact in terms of the levelof relief it brought to a displaced tsunami victim in theimmediate aftermath of the tsunami, than at 35 months.On the other hand, the provision of a house of long-termpsychological trauma treatment could have a higher levelof relief to the tsunami victim at 35 months. So clearly, tomaintain a continuously high human impact, the type of re-lief needs to vary with the passage of time. The housing andmicro-finance related CSR initiatives reflect this need tovary the type and form of relief with time.

Considering the role of the second attribute of organiza-tional virtuousness, assessing the moral goodness of the twocompanies� CSR initiatives is subject to difficulty (Park andPeterson, 2003). But organizations demonstrating this attri-bute would initiate CSR activities because it was the �rightthing to do� (Bright, 2006). Several interviewees spoke ofdoing the right thing—right in terms of the affected individ-ual�s perspective and from one�s own conscience. The find-ings reveal the significant role a human tragedy plays inshaping top management�s desire to make �right� decisions.After interviewing the CSR teams of the two organizationsat 35 months, I had no reason to believe there is any changein this position. For example, at Unilever (Sri Lanka), theCSR team said that

The tsunami was the worst disaster I can think of in SriLanka and everybody was totally devastated about thenumber of deaths and how it totally ravaged Sri Lanka.I don�t think any company was out there to get any mile-age out of this. . . I don�t think any one can point fingersand say that we tried to gain publicity from it.

Next, we take a closer look at the final attribute oforganizational virtuousness, unconditionality of social ben-efits. According to Bright (2006), it refers to the �intentionto create goods of first intent and to prudently use goodsof second intent to instrumentally bring benefit to society�(p. 753). The key task of assessing the genuineness ofcompany expectations seems to rest on whether an orga-nization�s CSR activities are intended to create goods offirst intent (a virtuous pursuit) or to create goods of sec-ond intent (an instrumental pursuit) (Bright, 2006, p. 752).Using Aristotelian explanation on ethics, Bright (2006)elaborates that �goods of first intent�; a chief good whichis in itself is worthy of pursuit, such as concern for othersand common good, refer to virtuousness (p. 752). On theother hand, the pursuit of goods of second intent refers tothose that are good for the �sake of obtaining somethingelse such as profit, prestige and power� (Bright, 2006),and is amoral.

Corporate social responsibility in the wake of the Asian tsunami 77

The findings from the 11 months study do not reveal thatat any stage the two organizations� expectations wereexclusively based on the pursuit of goods of second intentas an end in itself. However, it was noted that at least inthe immediate aftermath of an unexpected and high magni-tude human tragedy caused by nature, driven by the need tospontaneously react to the outpouring of emotion largely re-duced the likelihood for generating purely second intentgoods. Spontaneous action, specially in the immediateaftermath of a catastrophe like the Asian tsunami leaves lit-tle room for firms to exploit the event by strategic maneu-vering. The interviewees at 11 months spoke aboutcommitting company resources and engaging in CSR initia-tives with passion and as a call of duty towards humanity.However, this was absent in the interviews conducted at35 months. The link between spontaneity and genuineness(or authenticity) has been well documented in the psychol-ogy literature (see Sheldon et al., 1997; Kahn, 2002; Win-sted, 1999). Also according to Jones (1991), due to thetemporal proximity between the Asian tsunami and thetwo data collection points at 11 and 35 months, the pres-ence of high moral intensity is likely to be associated moreat 11 months than at 35 months. Although the findings donot reveal that even at 35 months, either of the companiesintended to generate only second order goods, the organiza-tional virtuousness generated by the tsunami related CSRinitiatives have several byproducts to Unilever (Sri Lanka)and Brandix.

One is enhanced reputation as a socially responsibleorganization. Even if we assume that both these organiza-tions had only pure moral intentions of engaging in tsunamirelated CSR initiatives, it would be hard to deny that theresulting enhanced reputation would help the bottom-line.When considering culture�s role in the practice of ethics(Weaver, 2001), this argument will be further accentuatedwith Sri Lanka�s predominantly religious character promot-ing a giving culture. Unilever (Sri Lanka) caters primarily tothe Sri Lankan market. Although Brandix could argue thatit operates in international markets, others could arguethat internationally, Brandix� reputation as Sri Lanka�s larg-est apparel exporter could be further enhanced with thevalue creation generated by the tsunami related CSR initia-tives. Similarly, one could argue that Unilever (Sri Lanka)could also increase their visibility with its internationalstakeholders by engaging in the tsunami related CSRinitiatives.

Thus, in this context, these organizations are unfortu-nately exposed to a no-win situation. Even if their goodintentions to produce only first order goods did result inbyproducts such as increased reputation and loyalty of cus-tomers, that is no reason to accuse these organizations ofexploiting the tsunami to gain mileage in their profitabilitygoals, i.e. intending to produce only second order goods.It is expected that virtuousness produces, as a byproduct,positive organizational outcomes which help achieve overallorganizational goals such as profitability. This is because ofintervening variables such as responsibility and compassionthat positively impact organizational performance (Brightet al., 2006).

Considering responsibility, it is a phasic virtue in whichemployees acknowledge awareness of and accountabilityfor the difficulty or harm caused to others (Bright et al.,

2006). It focuses on acting in the best interest of the com-mon good rather than self-preservation (Peterson and Selig-man, 2004). Taking responsibility in the aftermath of theAsian tsunami can be expressed through remorse whereawareness of the linkage between one�s actions and the con-sequences of those actions is demonstrated. Taking respon-sibility is not necessarily an acknowledgement that one hasacted wrongfully or incorrectly, but rather that one �owns�the full range of consequences that are related to a partic-ular occurrence. Employees who take responsibility gener-ally feel a sense of identity with others (Brewer andGardner, 1996; Dawes et al., 1990).

In summary, compared with the period leading up to the11 month, during 12–35 months, the findings reveal thatwith the passage of time, stakeholder and other pressuresto improve the bottom-line of the organization, governmentbureaucracy and escalation of the armed conflict in the Easthave somewhat dampened the progress of the two firmstsunami related CSR initiatives. On the other hand, a long-term strategic approach is evident in these organizations�CSR activities. At 35 months, the two organizations havefurther reinforced their commitment to CSR by strengthen-ing the CSR divisions with skilled, experienced and special-ized personnel supported by clear organization structuresand a long-term and sustainable strategic CSR focus. Forexample, both CSR divisions are now allocated an annualbudget and have a voice in the day-to-day management ofthe organization.

Implications and concluding thoughts

The findings reveal that at both timelines, neither of thecompanies expected any second order goods from thetsunami relief initiatives. However, these initiatives gener-ated outcomes such as enhanced reputation that help im-prove the profitability of the firms. Thus, even if the twofirms engaged in tsunami related CSR initiatives with genu-ine moral intent, increased reputation and profitability arelikely to raise doubts over the moral intent of the tsunamirelated CSR initiatives. Therefore, these organizations areunfortunately caught up in a difficult situation. However,at least theoretically, I suggest that the genuineness of mor-al intent of the firms can be defended due to the byproductsof organizational virtuousness. The comparative analysis ofthe post-tsunami CSR activities of Unilever (Sri Lanka) andBrandix has several implications for CSR theory andpractice.

One is the evolution of CSR practices over time. As inNike�s evolution of CSR practices (Zadek, 2004), comparedwith the predominantly altruistic based CSR initiatives inthe first 11 months, both firms shifted to a more sustain-able, strategic CSR platform in the 12–35 months period.Until recently, not much attention has been given to strate-gic CSR. It can be viewed as a combination of Carroll�s(1979) four part definition of CSR. Firms contribute to theirstakeholders not only because it is a kind and generous thingto do but also because they believe it will be in their bestfinancial interest to do so. Thus, strategic CSR may appearto be of a lesser virtuous pursuit than altruistic CSR.However, Lantos and Cooke (2003) argue that strategicCSR is more ethical and moral than altruistic CSR because

78 M. Fernando

it benefits stockholders while also helping other stakehold-ers. From a stakeholder theory perspective, it is a justifiableapproach for firms to allocate resources to internal andexternal stakeholders (Sethi, 1994). It also clearly supportsthe social contracts perspective of CSR. �Doing good bydoing well� theme of strategic CSR offers opportunities forfirms to acknowledge the firm�s position in society and its re-ciprocal obligations to its communities. From a legitimacyperspective, strategic CSR allows firms to engage in the dis-semination of its CSR activities without feeling morallyguilty. More importantly, strategic CSR overcomes difficultsituations many firms run into when defending its moralintentions associated with CSR programmes. Operating ona strategic CSR platform, even with the creation of secondorder goods such as enhanced reputation through publicityof its CSR activities, at least in theory, firms can still right-fully claim virtuousness of its actions.

Another implication of the findings of this study relatesto the well-being of the employees who are associated withCSR activities. We noted earlier that virtuousness in organi-zations relates to the behavior of individuals in organiza-tional settings that helps people blossom as human beings.Typical manifestations and consequences of individual vir-tues are hope, gratitude, wisdom, forgiveness and courage.These were amply displayed by the Unilever (Sri Lanka) andBrandix�s tsunami relief initiative team members during thefirst 11 month period. Several interviewees spoke of a feel-ing of elation and fulfillment that �cannot be expressed inwords�. It could be related to virtuousness operating in orga-nizations by helping employees to actualize their full poten-tial. However, with the gradual completion and de-scalingof the tsunami related activities in the 12–35 months peri-od, interviewees who took prominent roles in the tsunamirelief initiatives revealed a sense of emptiness (see Weaverand Trevino, 1999). At Brandix, for example, this void hascreated a need for �Caring for Our Own� water well installa-tion programme, where rural employees from hardshipareas are provided water wells. An extension of the waterproject initiatives associated with the tsunami, this newproject provides an opportunity for volunteering employeesto engage in virtuous actions of the firm, and continue toblossom as human beings.

The context of this research was limited to the views ofthe top management of two prominent Sri Lankan organiza-tions and other tsunami related stakeholders. However, thisstudy raises important questions for future research on vir-tuousness and CSR. The conceptual model was captured at11 and 35 months after the tragedy. A longer term researchstudy at around 60 months since the disaster should furtherhighlight how virtuousness of CSR initiatives changes in re-sponse to time, particularly the finding that at both time-lines, neither of the companies expected any second ordergoods from the tsunami relief initiatives. Further, a study60 months out from the disaster would be able to examinethe amplifying and buffering effects of virtuousness in playin the two companies during hard times such as downsizingor labor unrest. Some studies could also examine the cross-cultural application of the findings with the post-tsunami re-lated CSR initiatives of organizations operating in the West.Lastly, studies could focus on the decision-making processconcerning the exclusive pursuit of goods of second intent,

and its effect on organizational reputation, integrity, virtu-ousness and long-term profits.

Acknowledgment

An earlier version of this paper was presented at the 24thEuropean Group for Organizational Studies Colloquium,Amsterdam, 2008.

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MARIO FERNANDO holds a PhD and is aSenior Lecturer at the School of Managementand Marketing, University of Wollongong,Australia. His current teaching and researchfocus is on responsible leadership, strategiccorporate social responsibility and ethicalideologies of Australian managers. His workhas appeared in the Journal of BusinessEthics, and Leadership & OrganizationDevelopment Journal. His most recent workwas published in a book titled Spiritual

Leadership in the Entrepreneurial Business: A Multifaith Study

(2007, Edward Elgar).