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Corporate Approaches to CSR Stakeholder Engagement in the Pharmaceutical Industry

Corporate Approaches to CSR Stakeholder Engagement in the Pharmaceutical Industry. University of Applied Sciences. Professor Dr. Linda O‘Riordan. Agenda. Introduction The Research Gap Research Design Research Findings 4.1 CSR Practices 4.2 Anglo-German Comparison

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Corporate Approaches to CSR Stakeholder Engagement in the Pharmaceutical Industry

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  1. Corporate Approaches to CSR Stakeholder Engagement in the Pharmaceutical Industry University of Applied Sciences Professor Dr. Linda O‘Riordan

  2. Agenda • Introduction • The Research Gap • Research Design • Research Findings • 4.1 CSR Practices • 4.2 Anglo-German Comparison • 4.3 InfluencingFactors • Summary of Research Contribution

  3. IntroductionThe Management Challenge (Re)consideringtheRelationship and Impact between Business andSociety… “… the responsibility of an organisation for its decisions and activities, and state of being answerable to its governing bodies, legal authorities, and more broadly its other stakeholders regarding these decisions and activities” (ISO 26000, 2010:2) Definition of Accountability … This thou must always bear in mind, what is the nature of the whole… (Marcus Aurelius 180) (Source: Deresky, 2000; Zadek et al, 2001; Donaldson and O’Toole, 2007:21-36).

  4. IntroductionThe Management Challenge VariousVaryingPerspectives… 1970: Milton Friedman 1984: Edward Freeman Stakeholder Theory: … a stakeholder view of strategy which suggests combining business management and ethics (i.e. morals & values in managing an organisation) … • Business objective • “…to make as much money • as possible while conforming • to basic rules of the society, • both those embodied in law • and those embodied in ethical custom…” 1776: Adam Smith in “The Wealth of Nations” = > PracticalChallenge for CSR Decision-Makers: WhatisResponsible Management? Concept of the invisible hand: … unintentional promotion of public interest by business pursuing its own interests….

  5. IntroductionCSR Stakeholder Engagement in thePharmaceuticalIndustry Managing in ChallengingOperating Environments increasesthecomplexity… • Whatis“theright”thingto do? • HowtobalancecompetingStakeholderInterests? • The issueofGlobalisationand Cultural factors? • Who isresponsiblewhenGovernmentsarecorruptand/or do not protecttheircitizens?

  6. Introduction Problem Definition Who isresponsbletowhomandforwhat ? • The CSR debate is triggering • broad questions regarding: • Who in society controls corporations…? • To whom are corporations accountable for their actions…? • => Howto balance the triple bottom-line goals sustainably?

  7. Introduction Problem Definition Who isresponsbletowhomandforwhat ? • The CSR debate is triggering • broad questions regarding: • Who in society controls corporations…? • To whom are corporations accountable for their actions…? Significant lack oftheoryandempiricaldata on CSR Stakeholder Management… • => Howto balance the triple bottom-line goals sustainably?

  8. Agenda • Introduction • The Research Gap • Research Design • Research Findings • 4.1 CSR Practices • 4.2 Anglo-German Comparison • 4.3 InfluencingFactors • Summary of Research Contribution

  9. The Research Gap CSR Practices • … Stakeholder engagement and its associated contextual factors have been under-researched for the pharmaceutical sector.... • CSR Practices: • Terminology • StakeholderPioritisation • Communication • Projects/Themes • Organisation • Expectations • Anglo-German Comparison • InfluencingFactors • => Research Questions…

  10. Agenda • Introduction • The Research Gap • Research Design • Research Findings • 4.1 CSR Practices • 4.2 Anglo-German Comparison • 4.3 InfluencingFactors • Summary of Research Contribution

  11. Research Design Introduction PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY Corporate Approaches to Stakeholder Engagement in the Pharmaceutical Industry in the UK and Germany LINDA O’RIORDAN PhD School of Management, Bradford University, UK 2010

  12. Research Design Research Questions • Research Objective: Exploratory research to identify and describe CSR stakeholder engagement practices, to explain the factors that influence them, and to disclose whether differences exist between the approaches in the UK and Germany • Research Question 1: What CSR stakeholder engagement practices do pharmaceutical companies undertake? • Research Question 2: What similarities and differences exist in pharmaceutical companies’ stakeholder engagement practices in the UK and Germany? • Research Question 3: What factors influence the practices and what factors explain the differences in the CSR stakeholder engagement practices of pharmaceutical companies targeting stakeholders in the UK and Germany?

  13. Research Design Methodology • Examines the CSR practices and perceptions of senior executives within major pharmaceutical companies in the UK and Germany • Employs a case-study strategy using mixed methodologies • Qualitative, exploratory research obtained via multiple research methods • Data collected between 2005 and 2010 via four methods: • Documentary analysis • Telephone survey • Observation • In-depth interviews

  14. Research Design Data Collection • Data collection and analysis via six codes: • Terminology • Stakeholders • Communication • Organisation/Governance • Projects • Expectations • Data employed to examine and revise a previously published explanatory framework which conceptualises the management steps involved in CSR stakeholder engagement • The resultant revised explanatory framework is the main contribution of this paper

  15. Research Design Conceptualising CSR Practice The Original Explanatory Framework Source: O’Riordan, 2006; O’Riordan and Fairbrass, 2008)

  16. Research Design Conceptualising CSR Practice The RevisedExplanatory Framework Source: O‘Riordan, 2010:352

  17. Agenda • Introduction • The Research Gap • Research Design • Research Findings • 4.1 CSR Practices • 4.2 Anglo-German Comparison • 4.3 InfluencingFactors • Summary of Research Contribution

  18. Research Findings CSR Practices RQ 1: Characterise CSR Stakeholder Engagement via 6 Codes (I) • Terminology • Multiple & diverse use of labels • CSR most often utilised • Employment of individualised terms • Stakeholders • Top Rankings: Customers (Physicians/Patients) & Employees • Lowest Ranking: NGOs • Task-Specific approach • Stakeholder theory approach confirmed in CSR conceptualisation • Communication • Stakeholder concept not always explicitly communicated • Highly visible & explicit communication of CSR activities

  19. Research Findings CSR Practices Terminology

  20. Research Findings CSR Practices RQ 1: Characterise CSR Stakeholder Engagement via 6 Codes (I) • Organisation/Governance • CSR concept spans a broad range of business functions • Rarely the responsibility of one dedicated department • Multi-functional networks of designated individuals & ad-hoc project groups • Centralised & Decentralised management appraoch • Projects • Philanthropic Projects • Integrative CSR principles • Diverse range of themes & Activities • Expectations • CSR perceivedas a costtothebusiness • Measurement challenges

  21. Agenda • Introduction • The Research Gap • Research Design • Research Findings • 4.1 CSR Practices • 4.2 Anglo-German Comparison • 4.3 InfluencingFactors • Summary of Research Contribution

  22. Research Findings Anglo-German Comparison RQ 2: Stakeholder Engagement in the UK and Germany • Broadsimilarity in practices due tocentralisedcompanyprinciplesand international guidelines • Some national differencesrevealed: • De-centralised national practicesataffiliatelevel • More environmental regulation & CEO involvement in Germany • More use of theterms ‚CSR‘ and ‚Sustainability‘ in Germany • Higher standardisation in terminology in the UK • Differences in perceptions on themeaining of ‚value‘

  23. Agenda • Introduction • The Research Gap • Research Design • Research Findings • 4.1 CSR Practices • 4.2 Anglo-German Comparison • 4.3 InfluencingFactors • Summary of Research Contribution

  24. Research Findings InfluencingFactors RQ 3: FactorsInfluencingStakeholder Engagement = > Company Culture => Vision & Mission => CSR Approach External (Contextual) Factors • PEST Factors • StakeholderPressure • Media • Industry/CompetitorBehaviour • Business Role/Activity • Internal (Company) Factors • LeadershipMindset / Personal (moral ) Interest • Company Profile (Size, origin, type, scope of activity, success) • Business Aims • Internal Stage of CSR Development

  25. Research Findings Summary (I) Evidence from the Data : • The CSR concepts and the resulting CSR stakeholder engagement practices with respect to the six codes adopted by the selected sample are diverse, inter-active, and dynamic. Inference : • As stakeholders’ expectations increase, CSR practice is influenced by internal and external contextual factors. As a result, CSR stakeholder engagement responses are still evolving.

  26. Research Findings Summary (II) Evidence from the Data : • Pharmaceutical industry Stakeholders’ negative perceptions • Mindset Misalignment • Personal (agent) and company (principle) interests/goals • Stated company values and actual CSR policies • Management uncertainty due to: • Operational complexity • Stakeholder (negative) stance/ unpredictable reaction • Unclear: • CSR scope/definition • Cost/benefits measurement • Management process Inference : • Key aspects of the current CSR stakeholder management approach (mindset) could be improved...

  27. Agenda • Introduction • The Research Gap • Research Design • Research Findings • 4.1 CSR Practices • 4.2 Anglo-German Comparison • 4.3 InfluencingFactors • Summary of Research Contribution

  28. Summary of Research Contribution • Fresh empirical data collected over 5 years which illuminates how the pharmaceutical sector in the UK and Germany manages CSR • Advances past scholarship by filling many of the identified previous gaps • Explores similarities and differences amongst firms in two operating environments • Provides some explanation for the patterns observed by indicating the likely determining factors • Identifies where alteration is required to the existing framework • This research may help to advance this industry’s overall accountability in society

  29. Research ContributionNext Steps Proposal for Further Research: • This evidence will be employed to test and improve a conceptual framework which was developed in separate research

  30. Agenda • Introduction • The Research Gap • Research Design • Research Findings on CSR Practices • 4.1 CSR Practices • 4.2 Anglo-German Comparison • 4.3 InfluencingFactors • Summary of Research Contribution

  31. Thanksforlistening! …QUESTIONS…

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