Group 6, Section C

Faiz Shamsul Haque - 12P134

Rahul Kr. Gupta - 12P157 Vikas Jain - 12P178 Vishal Agarwal - 12P179

Manav Gupta - 12P146Kshitij Agrawal - 12P142

Submitted By -

Mainstreaming CSR:

Developing Markets for Virtue

Introduction• As of early 2007, more than 2900 of the best- known

brands have signed the UN Global Compact pledging to follow its 10 CSR principles

• Many business leaders claim to have taken CSR to heart and have set the mandate to “mainstream” it into their companies

• But when certain leading companies were investigated against mainstreaming of CSR activities into their daily activities, they revealed distinct orientations or profiles

Defining CSR• CSR refers to the “the obligations of the firm to

society” • But there is little consensus regarding the nature or

scope of these obligations• A broad definition of CSR encompasses three elements:

Internal initiatives and policies and processes that ensures company is responsible and ethical

External initiatives to contribute to and improve the community in which a company operates such as corporate philanthropy

Impact of both the company’s internal and external initiatives on society

Defining CSR (contd.)• CSR typically includes “beyond law” commitments and activities pertaining to a

wide range of programs

• CSR encompasses a diverse range of programs that includes corporate governance and ethics programs; health, safety, and environment programs; attention to human and labour rights; human resource management policies; community involvement; respect for indigenous groups and minorities; corporate philanthropy and employee volunteering; adherence to principles of fair competition, anti-bribery, and anti-corruption

measures; accountability, transparency and performance reporting; and responsible supplier relations

Mainstreaming CSR• The notion of “mainstreaming” is a somewhat

ambiguous construct• If something is mainstream, it must be– clearly seen on the company’s agenda in a legitimate,

credible and ongoing manner– incorporated into company’s day-to-day activities in

appropriate and relevant ways– included in the policy development, technical tools,

performance measures and political agenda – integrated or ‘coupled’ in a way that affects everyday

activities and actions of the company

Mainstreaming CSR (contd.)

Coupled CSR Activity

Typically integrated into marketing , philanthropy, and employee volunteer efforts on a continuing basis

Is well funded, has high visibility on the corporate agenda, and often becomes a part of the firm’s identity

Decoupled CSR Activity

Typically takes the form of a tactical cause related marketing campaign that is short termed in nature and easily terminated

Is not diffused through the other aspects and activities of the company

CSR Literature• The CSR literature has largely considered the management of

CSR initiatives from two perspectives:

Research emanating from marketing and focusing on how consumers respond to CSR at the individual level

• It has been found that CSR initiatives can have a positive effect on consumers’ attitudes toward a firm, its identity and its brands, their intentions to purchase, and their purchase behaviour

Research emanating from the management literature

• It has been found that there is a positive relationship between CSR and the financial bottom line, i.e. profitability

CSR Literature (contd.) Vogel’s Conceptualization CSR activity is a function of an external “market for virtue” Markets vary in their demand for CSR:

‘Socially Conscious’ Market: Markets in which a firm competes demand as well as handsomely reward CSR initiatives

‘Standard Economic’ Market: Markets (i.e., customers, key intermediaries, stakeholders, etc.) have little appetite for CSR and are sensitive to only standard economic factors like quality, service, price, etc.

Firms may vary in their motivation, ability, aptitude, or opportunity for CSR performance

CSR Literature (contd.) Vogel’s Conceptualization

MethodologyElite Interviews Apt when research objective is to understand complex interactions, perceptions, beliefs and values When one cannot be sure what interpretation, code, norm, affect or rule is guiding the actors

Elite Interviews Semi structured

Designed to ascertain decision makers’ understanding of the phenomenon

Broad questions, informants determined what kind of questions were the focus of discussion

The Two Stages . . . .

Stage 1•One type of corporate Social Responsibility Initiative – Social Alliance•26 Organisations – 10 companies, 11 nonprofits and 5 consulting firms•Companies – $800 million to $100 million, Nonprofits - $6 million to $900 million•How partnership started, goals, problems and challenges, day to day activities, etc

Stage 2•Assess conclusions drawn from stage 1 and extend to markets beyond North America•29 interviews, 8 countries•Both large and small companies - $600,000 to $74.7 billion•How CSR was mainstreamed, evolution over time, factors leading to success or failure, projections about future growth within firm, etc

97 elite interviews with managers and consultants involved in CSR initiatives

Business Case Model

Syncretic Stewardship

Model

Social values led Model

Findings

The Business Case ModelAll of the outcomes that really mattered to the firm and its management were economic

CSR was only relevant when it translated unambiguously to a competitive advantage for the firm

CSR did not raise consumer’s price dramatically

CSR expands market for narrow socially conscious niche market

Mainstreaming CSR meant aggressively pursuing viable business opportunities with a CSR dimension

Identify and evaluate CSR opportunities and then argue their business cases as appropriate

Social Values Led ModelCSR is defined around a particular social issue

Non economic criteria and stakeholders associated with them are considered important

Corporate social policy entrepreneurs place emphasis on social and environmental bottom-lines

The primary challenge is to establish the authenticity of its business purpose and goals

SYNCRETIC STEWARDSHIP CASEFeature Syncretic Stewardship Case

Role of the external virtue Market Important, integrated influencer of CSR

Role of the Internal virtue Market Important, integrated influencer of CSR

Objective Economic and Non-Economic

Bottom Line Multiple, Balanced, Mixed Economic and Non Economic Criteria

Key Challenge Balancing and integrating economic and non economic criteria

Prevalence and role of social entrepreneurs Common, Visible and Integral

CSR Leadership Philosophy Servant of Diverse Stakeholders

Narrative Interdependence between social and economic

Desirability Of Diffusion Of CSR support among competitors

Yes, heighten Salience of noneconomic imperative, create level playing field to share costs create primary demand

INTERNAL MARKET FOR VIRTUE

Standard Self Interest

Syncretic Stewards

Business Oriented

Value Led

Socially Conscious

Social Entrepreneurs

Cultures of CSRRelation between dimensions of organizational culture and firm’s CSR orientation

Six dimensions of organizational culture related to CSR orientation– Performance Orientation– Power Distance– Uncertainty Avoidance– Humane Orientation– Assertiveness– Future Orientation

Performance Orientation• The degree to which performance

improvement or excellence is rewardedBusiness Case Social values-led Syncretic stewards

Rewarded primarily on economic goals

Rewarded primarily on non-economic goals

Triple bottom line focus i.e. economic, social and environmental

Power distance• Degree to which members of collective expect

power is distributed unequallyBusiness Case Social values-led Syncretic stewards

Power distance is high

Power Distance is mixed

Power distance low

Considerable power distance between the organization and non-profit partner

Founder wields decision-making within organization especially in issues surrounding core mission

Participation of internal and external stakeholders important.

Uncertainty Avoidance• Degree to which rules and norms are used to

avoid unpredictabilityBusiness Case Social values-led Syncretic stewards

Uncertainty Avoidance is highest

Uncertainty Avoidance is lowest of the three orientations

Uncertanty Avoidance low but not as low as Social-values led orientation

Extensive planning and well-established routines

Strong sense of mission but little understanding of how to accomplish them

Forgo normal planning in face of emergency

Humane Orientation• Degree to which the organization rewards

individuals for being fair, altruistic and kind to others

Business Case Social values-led Syncretic stewards

Humane orientation is low

Humane orientation is high

Humane orientation is high

Assertiveness• Degree to which individuals are

confrontational and aggressive in their relationship with others both inside and outside the firm

Business Case Social values-led Syncretic stewards

Highly assertive Highly assertive on focal issues but less aggressive than business case

Mixed and sophisticated in their approach. Depends on who they deal with.

ConclusionDemands for external market alone, esp financial

market, are insufficient to explain the variance in 3 orientations

CSR cultures & orientations are stable, yet a firm could migrate

No ‘best normative CSR approach’, however Syncretic Stewardship approach seems sustainable over long term