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Frame of Reference
In this chapter, the theoretical groundwork is established by summarizing the existing knowledge in the relevant fields. Topics such as Triple bottom line, Stakeholder Theory, CSR practices and Motivation is brought up. After reading this chapter, the reader should have gained enough basic knowledge to thoroughly comprehend and assimilate the findings of the study.
The frame of reference for this study has been selected in order to stay on point and keep the relevance based on our research questions. There have been plenty of earlier studies within this topic and we have shifted through the current literature to become familiar with key concepts and ideas of previous studies. The websites used when searching for articles were ‘Web of Science’, ‘Google Scholar’, JU library and some governmental websites for definitions of key terms.
Analysis and Findings
A Snapshot of Today’s Business Environment – Introduction to The Key Concepts
The concept of CSR has evolved throughout the years, and according to the World Business Council for Sustainable Development, WBCSD, “Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” (World Business Council for Sustainable Development, 1998). This sentence emerged already in 1998, but it still holds today as WBCSDs formal definition. As mentioned, this study builds on the definition of Dahlsrud (2008), but the WBCSD definition is closely linked and might be the definition used by some of the scholars referenced in this chapter.
CSR is a concept that can be said emerged during the 20th century, starting in the early 1950s, even though it took its roots already during the industrial revolution in the 19th century (Crane, 2008). The early concepts of CSR during the 19th century began when organizations started to be concerned about their employees’ performance and how to increase this. They figured out that they could increase the performance of the workers through increasing the worker’s conditions, so, to do this, the organizations built for example lunch-rooms, bathhouses and hospital clinics (Wren, 2004).
Generally speaking, in today’s business environment, managers are not only expected to maximize profits and ensure a high, steady growth, but they are also scrutinized for the good they do in the world by contributing to societies where they engage in business activities (McWilliams, Parhankangas, Coupet, Welch & Barnum, 2014; Reuter, Goebel & Foerstl, 2012). This is known as managing the Triple Bottom Line, 3BL, which is the ground pillars of sustainability (Elkington, 1998) and is often used to classify different CSR initiatives (Shnayder, van Rijnsoever and Hekkert,
2016), where the three components involved constitutes of Profit, People and the Planet (Environment) (McWilliams et al. 2014). In connection to the 3BL, there is the Stakeholder Theory, which was presented by R. Edward Freeman in the mid-1980’s. Freeman widened the traditional economic focus of organizations to a focus on all stakeholders, which he explained as “any group or individual who is affected by or can affect the achievement of an organization’s objectives” (Freeman & McVea, 2001, p. 5).
The Triple Bottom Line (3BL)
Profit has always been part of most organizations’ objectives but has been joined by the consideration for human rights and the welfare, and wellbeing, of people, both internally within the organization and externally in the societies where they conduct business (McWilliams et al. 2014). The planet is just as equally important in this context as societies are looking to sustainable solutions to their everyday living. Sustainability is in this study defined as “… development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, 1987, p. 41). In environmental sustainability, this refers to minimizing the environmental footprint, for example by using fewer resources or reducing emissions (McWilliams et al. 2014). Social sustainability is about doing no harm and make a positive difference, to people (Hitchcock, & Willard, 2011), while economic sustainability is about being profitable (McWilliams et al. 2014).
Business Sustainability in Contrast to CSR
Bansal & DesJardine (2014) talks about sustainability and particularly about business sustainability, which they define as manager’s ability to meet short-term goals without compromising their ability to make a profit and meet other objectives in the future. They introduce the micro-to-macro perspective on a business level to societal level for economic welfare which Beal & Neesham (2016), two years later, would come to make a more particularized argumentation on. They also suggest that sustainability poses as a trade-off where managers need to make strategic decisions on whether to invest less for short-term returns and instead allocate more to investments for future payoffs. However, CSR is not (necessarily) subject to any trade-offs, according to these scholars. Arguments suggesting the opposite will be presented further down. Terms such as “win-win” and “shared value” are frequently found in the CSR literature, suggesting that good business is about creating revenue for organizations while at the same time creating a better world (Beal & Neesham, 2016). Another important aspect that distinguishes sustainability from CSR is the time in connection to the trade off, which managers along with the stakeholders need to be willing to sacrifice today to reap the benefits tomorrow.
Bansal & DesJardine (2014) argues that organizations need to make strategic decisions that will prove to be sustainable even in the future. This is in contrast to the now reigning notion of short-termism which by the scholars is defined as our preference for short-term payoffs in favor of waiting for something good to happen in the future. This is, according to Bansal and DesJardine, in our human nature. They also state in their article that the current research on strategic management favors short-termism and are encouraging managers to make decisions that will quickly yield payoffs. Managers who do consider long-term goals are often finding themselves with their hands tied under the pressure to meet financial goals and shareholders demands. These scholars strongly argue for a business environment reformation where sustainability becomes incorporated into something mainstream in strategic decision making. According to Thomas, Schermerhorn and Dienhart (2004), profit maximizing, shareholder value and return on investment always have been and always will be natural drivers in an organization.
Stakeholder Theory
In the European Union, The European Commission oppose governmental involvement in CSR through regulations, but instead, they favor self-regulation through direct interactions between organizations and stakeholders. This means that the organizations cannot just apply to government rules and serve their shareholders, they have responsibilities towards all stakeholders in some way connected to the organization, which aligns with the stakeholder theory (Nijhof & Jeurissen, 2010).
Since, of course, a manager’s job is to manage, the managers now have to manage all of these stakeholders and see to all of their individual needs, wants and preferences. This is what the literature refers to as the Stakeholder Theory, which was developed by Freeman in the early 1980s. But there are, of course, opposing arguments, even today. Beal & Neesham (2016) argues that the theory of shareholder value might actually be beneficial for the society as a whole. They take their argumentation to a micro-to-macro level where, if an organization’s primary objectives are economic welfare for their entity, it would, in turn, generate economic welfare on an even larger scale. This is through a notion that societal economic efficiency stems from high functioning organizations that show great return on assets, ROA. These scholars are, however, in their article, careful not to defend Friedman’s ideas, nor the corporate capitalism as a phenomenon, but are merely pointing out the paradoxes that could be uncovered should one contemplate CSR in a different light than has been done in the common literature.
1. Introduction
1.1 Background
1.2 Identified Research Gap
1.3 Purpose
1.4 Research Question
1.5 Delimitation
2. Frame of Reference
2.1 Analysis and Findings
2.2 Conclusion
3. Methodology
3.1 Research Design
3.2 Research Strategy
3.3 Data Collection
3.4 Analysis
3.5 Trustworthiness and Limitations
3.6 Ethical Considerations
4. Empirical Findings
4.1 Overview of Case Companies
4.2 Summary of In-Depth Interviews
5. Analysis
5.1 Research Question 1
5.2 Research Question 2
5.3 Research Question 3
6. Conclusion
6.1 What Reasons do SMEs Give for Engaging in CSR?
6.2 What Kind of CSR Activities Does SMEs Engage in?
6.3 Are There Any Industry-Related Differences in why SMEs Engage in CSR?
6.4 Theoretical Contribution
6.5 Practical Implications
6.6 Social and Ethical Implications
6.7 Discussion
6.8 Limitations and Further Research
Reference list
Appendix
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Why Bother? A Multiple Case Study of SMEs’ Engagement in CSR
