Corporate Social Responsibility - CSR som fenomen och bra för vem? Karlstadskonferensen 7- 8 februari 2006

1. Corporate Social Responsibility- CSR som fenomen och bra för vem?Karlstadskonferensen 7- 8 februari 2006 Docent Bo Enquist Service Research Center Karlstad University Sweden

2. Disposition • Fenomenet CSR • Kritiken (från olika håll) • Företagsperspektivet/ Marknaden (Kotler and Lee, 2005) • CSR and Government regulation (Vogel, 2005) • Aktiv röst inom praktiken ( Zadek, 2004) • Akademiska röster om CSR • Bra för vem ? Skapa värde för vem? • Värde och värderingar • Exemplet IKEA • Exemplet: Swedbank – CFS • Värdeskapande för vem? B.Enquist Service Research Center – Karlstad University, Sweden

3. Kritiken • Nobel Prize winner Milton Friedman argues that the only purpose of CSR in business is to increase profit (Friedman, 1970). • Roberts (2001) has talked about “corporate governance and the ethics of Narcissus” when arguing that CSR provides a new form of ‘visibility’—i.e. environmental, social, and ethical visibility as a supplement to financial visibility. He argued that the “ethics of Narcissus” are not so much a concern for others as a preoccupation with being seen to be ethical (Roberts2001, p. 125). B.Enquist Service Research Center – Karlstad University, Sweden

4. Företagsperspektivet/ Marknaden • Philip Kotler and Nancy Lee (2005) Corporate Social Responsibility- Doing the Most Good for Your Company and Your Cause • The case for Doing at Least Some Good • Corporate Social Initiatives • Corporate Cause Promotions • Cause-Related Marketing • Corporate Social Marketing • Corporate Philanthropy • Corporate Community Volunteering • Socially Responsible Business Practice • Twenty-five Best Practices for Doing the Most Good for the Company and the Cause • A Marketing Approach to Winning Corporate Funding and Support for Social Initiatives: Ten Recommendations B.Enquist Service Research Center – Karlstad University, Sweden

5. CSR and Government regulation • David Vogel (2005) The Market for Virtue – The Potential and Limits of Corporate Social Responsibility • Corporate Responsibility for Working Conditions in Developing Countries • Corporate Responsibility for the Environment • Corporate Responsibility for Human Rights and Global Corporate Citizenship • Beyond the Market for Virtue • “CSR may frequently be a second-best alternative, but second-best is still better than nothing at all.” • Working together: CSR and Regulation B.Enquist Service Research Center – Karlstad University, Sweden

6. Aktiv röst från praktiken service culture service strategy (Simon Zadek, 2004) The Path to Corporate Responsibility HBR article The Five Stages of Organizational Learning Defensive: To defend against attacks to their reputation Compliance: To mitigate the erosion of economic value Managerial: Embed the societal issue in their core management processes by integrating responsibility business practices into their daily operations Strategic: Integrate the societal issue into their core business strategies to gain first-mover advantage by aligning strategy and process innovations with the societal issue Civil: Promote broad industry participation in corporate responsibility by overcoming any first-mover disadvantages and to realize gains through collective action B. Enquist & B. Edvardsson Service Research Center – Karlstad University, Sweden

7. Akademiska röster om CSR • The shareholder strategy is based on neoclassic economics. According to this view, socially responsible conduct is an issue for government; it does not belong among the objectives of a company because, in simple terms, making a profit is the only relevant objective (Friedman 1970). • Carroll(1991) argued for a ‘pyramid’ of four kinds of social responsibilities—economic, legal, ethical, and philanthropic—and thus integrated CSR with a stakeholder perspective. • Andriof et al. (2002) have argued that the prevailing business imperatives were originally profitability, compliance, and philanthropy; however, from the end of the 1970s and onwards, the prevailing business imperative has been responsiveness. • Smith (2003) make a reflections about CSR “not whether, but how?”. He shows that CSR is not a new idea but today with an increased corporate attention to CSR you have to differentiate between business case for CSR and the normative case. B.Enquist Service Research Center – Karlstad University, Sweden

8. Värde och värderingar • I våra forskningsprojekt där de sociala processerna speciellt uppmärksammas studeras även organisationers grundläggande värderingar som får etiska och miljömässiga konsekvenserpå de värdeskapande processerna (”values based thinking”). • Pruzan (1998) argues that it is time to move from control to values-based management and accountability. In a more complex business environment, it can be counter-productive to only have a financial control perspective on the business. Values-based management is built on a stakeholder perspective on leadership, responsibility, and ethics (ibid. p 384) with a triple bottom line thinking (Elkington, 1998). The triple bottom line seeks to encapsulate, for the business community, what is traditionally seen as the three spheres of sustainability: the economic, the social, and the environmental (Zadek, 2001). B.Enquist Service Research Center – Karlstad University, Sweden

9. Combining the value-creation logic with the logic of values service culture The value logic The logic of values Homo economicus Homo sociologicus Economic calculations Ethical and social calculations service strategy Focus on economic utility Focus on ethical and social benefits Commercial and financial focus Social and human focus Quality, t ime and price Ideals and trust Focus on structural and process Focus on values and meanings as culture expressions aspects of the formal organization Focus on business and service Focus on cultural processes and production processes sense-making Figure 1. The value creation logic and the logic of values. B. Edvardsson & B.Enquist (2002) Service Research Center – Karlstad University, Sweden

10. “Service logic”, Kvalitet och Hållbarhet Enquist, Camén and Johnson (in progress) Service Research Center – Karlstad University, Sweden

11. Values-based Service Brands – Narratives from IKEA (MSQ forthcoming) B. Edvardsson, B.Enquist and M. Hay Service Research Center – Karlstad University, Sweden

12. Corporate Social Responsibility as a Driving Force for Service Brand Cultivating • Swedbank is not a player in Dow Jones Sustainable Index any longer. That doesn’t mean that Swedbank has lost its good reputation in its brand. It is more an indication on that the CSR activities have reduced in importance for Swedbank. • CFS is a leading player regarding CSR. It has a world leading reputation regarding Sustainability Reporting. That doesn’t mean that CFS has generated its good reputation in its brand only through CSR and SD. CFS has more to prove in the market as a merged company between a bank and an insurance company. CFS has to work with its cost cost-efficiency of the company as a high profiled service provider to strengthen its brands. • The big challenge four both companies are to work with all three perspectives at the same time economic, environmental and social but from different angles. B.Enquist and B. Edvardsson Service Research Center – Karlstad University, Sweden

13. Värdeskapande för vem? • Government (Regulation) • Transnational companies, Firms (business case; normative case) “soft regulation” • Corporate Governance (shareholder value; stakeholder value?) • Consultancies: Their guidelines are rather normative but have to be contextualised/adapted. (Elkington, 1998, 2001; Zadek, 2001, 2004; Laszlo, 2003). • Customers/ Consumers/ Citizens/ Users “Value in use” • NGOs (ideal based, values driven) Norms (Attack or Cooperation?) WWF, GRI, Amnesty, Fair Trade, Miljöcentrum etc • UN Global Compact B.Enquist Service Research Center – Karlstad University, Sweden

14. Några slutreflektioner • If we look at CSR as a tool for value creation in a service logic view, the CSR adoption process has to be responsive and proactive (Enquist et al, 2006) • CSR including “Stakeholder thinking”: Freeman, 1984 (stakeholder strategies); Freeman, 1994 (not separate ethics from business ); “Stakeholder view”: rests on a commitment to core values that are constantly renewed and sustained through organizational learning” (Post et al. 2002) • CSR is not cosmetic it should reflect the individual company's mission and values (Smith, 2003) • The CSR initiative is about building trust in the stakeholder network. Kristensson Uggla (2002, p. 415)talks about‘trust capital’: “Trust capital is a sharing capital and can only coexist in a shared reality, as something that lodges relations in a communicative relationship.” This capital can only be developed via a relationship with ‘the other’ (Roberts, 2003). In the stakeholder perspective, the ethical dimension must always be considered (Freeman, 1994) (Enquist et al, 2006) B.Enquist Service Research Center – Karlstad University, Sweden