Molding and Practicing CSR--Amy O'Connor and Michelle Shumate on a View from the Corporation Out

In Amy O’Connor and Michelle Shumate, “An Economic Industry and Institutional Level of Analysis of Corporate Social Responsibility Communication,” Management Communication Quarterly, 24(4):529-551 (2010), the authors explore how companies communicate about corporate social responsibility and what that means for the values premises, claims of legitimacy and the  use of communication about CSR to develop better relationships with targeted stakeholders.  This post considers some of the insights from that article. 

Amy O'Connor

Michelle Shumate

Amy O'Connor  is an Associate Professor and Director of Graduate Studies at North Dakotah State University.  Her program of research examines how the corporate form shapes and is shaped by our understandings of social issues, work, and community. Michelle Shumate is an Assocaite Professor in the Department of Communication at the University of Illinois at Urbana-Champaign. She is the director of Interorganizational Networks (ITO) research group at the University of Illinois and writes a useful blog, The Sector Blender, a blog about the growing relationships and blurring boundaries among nonprofit, for profit, and government sectors.

What makes this article particularly interesting is its focus on one of the key areas of corporate social responsibility that is generally discounted--the engagement by corporations, competing at times with the great global civil society actors, in the discourses that shape popular opinion (and in this way also shapes the political activity of states where popular can become political opinion), a critical point in the construction of autonomous governance systems with corporations at the center and CSR as its regulatory object.  (Backer, Larry Catá, Multinational Corporations as Objects and Sources of Transnational Regulation. ILSA Journal of International & Comparative Law, Vol. 14, No. 2, 2008.  This is a starting point to their analysis.

Running concurrent with scholarly research is the communicative practice of CSR. Through public communication, corporations “attempt to shape the grounds for discussing social and political issues of the day”, including the corporation’s responsibility to society. CSR has been described as a value-laden concept wherein “corporate social responsibility and value representation concerns are not about whether values, but whose and what values, are represented in business decisions” (Deetz, 2007, p. 269). (O'Connor and Shumate, supra, citing Cheney, G., & Christensen, L. T., "Organizational identity: Linkages between Internal and External Communication," in F. M. Jablin & L. L. Putnam (Eds.), The new handbook of organizational communication (pp. 231-269); Thousand Oaks, CA: Sage, 2001, at 233; and Deetz, S., "Corporate governance, corporate social responsibility, and communication, " in S. May, G. Cheney, & J. Roper (Eds.), The debate over corporate social responsibility (pp. 267-278); New York: Oxford University Press, 2007, at 269).

With this as framework, O'Connor and Shumate seek to "unpack what values are presented in CSR communication by asking the following question: How do corporations collectively define the scope of CSR?" (Ibid.). To answer this question, they examined the CSR statements of the U.S. Fortune 500 companies in eleven economic industries.  (Ibid.).  Focusing on communication patterns and practices, they show the shape of the boundaries companies seek to impose on the meaning and practice of CSR, and the way these efforts differ in form or function among the industries considered.  The examination yields an interesting set of conclusions, one that should concern civil society and international organization leaders who are seeking broader scope and application of CSR. Their first conclusion is that companies continue to seek to reduce the scope of CSR to its traditional components--charity and ethical conduct.  (Ibid, 530).  This is in line with the legal framework within which CSR can be understood.  (See, Larry Catá Backer,   Multinational Corporations, Transnational Law: The United Nation's Norms on the Responsibilities of Transnational Corporations as Harbinger of Corporate Responsibility in International Law. Columbia Human Rights Law Review, Vol. 37, 2006).  The result, O'Connor and Shumate's fourth conclusion, is a strong focus on what they call welfare capitalism, taking care of employees and local communities, as the framing concept for CSR.  (O'Connor and Shumate, 530-531).   

(Pix (c) Larry Catá Backer 2012)

O'Connor and Shumate begin with a sound discussion of CSR, focusing on CSR an institutional communication.  (Ibid., 531-533).  They note, like many others, that this refocuses the discussion of CSR from its effects projected outwards, to its value on the construction of the corporate institution itself in its self-conception and as recognized within the networks of stakeholders among whom it operates. 

 Institutional communication “serves to reproduce understanding and acceptance of the institution within society” (Lammers & Barbour, 2006, p. 364), thereby, creating institutional order (Phillips, Lawrence, & Hardy, 2004). Through communication, institutional order is made meaningful, a framework for internal and external behavior is provided, and the costs of nonconformity are understood. (Ibid., 532).

Thus understood, it can be reduced to a small set of  normative responsibilities to society. These are grounded not so much in legal compliance as in notions of citizenship tied to the expectations of critical stakeholders.  (Ibid., 532-533). It is within this conceptual structure that O'Connor and Shumate pose their three questions:

Research Question 1: How do corporations across economic industries collectively describe their CSR activities?

Research Question 2: How do corporations within the same economic industry describe their CSR activities?

Research Question 3: What are the similarities and differences in CSR communication across economic industries?(Ibid., 533-34).

The object is to extract not just idiosyncratic expressions off CSR but to fins the "normal" within these expressions as well.  (Ibid., 534).

In their  method and data analysis discussion (ibid., 534-536), O'Connor and Shumate, suggested that the focus of analysis was the corporate rationale for CSR activities in web sites from the 2005 online version of U.S. Fortune 500.  Included in the analysis were those entities that provided such a statement, defined as "public introductory statements corporations use to describe what they consider to be their socially responsible activities and the justification for those activities." (Ibid., 534). This choice was justified because  "the selected texts are (a) produced by authoritative actors, (b) are recognizable and usable by other organizations, (c) are highly structured, much like mission statements, and (d) are statements about the corporation’s legitimacy." (Ibid., 235). 

The results of the study were both to some extent not surprising, though in some ways troubling.  On the other hand, in this very dynamic area, it is possible that data is better at suggesting past experience than in predicting future behavior or approaches, especially as the governance world around CSR changes dramatically. (Backer, Larry Catá, From Institutional Misalignment to Socially Sustainable Governance: The Guiding Principles for the Implementation of the United Nation’s 'Protect, Respect and Remedy' and the Construction of Inter-Systemic Global Governance (September 5, 2011). Pacific McGeorge Global Business & Development Law Journal, 2011. 

(Pix (c) Larry Catá Backer 2012)

The principal finding of O'Connor and Shumate was cultivated ambiguity.  "CSR communication embraces strategic ambiguity at both the institutional and economic-industry level of analysis."  (Ibid., 542).  The object of this ambiguity was to develop a sense of principle without committing to specific actions. "Corporations in this study did not provide evidence of CSR (e.g., amount of money contributed, number of people served); rather they framed their CSR in corporate creeds and responsibilities that served to limit the role of business in society." (Ibid.).  The "credo" form of CSR statement was used in about of third of the enterprises.  (Ibid.).  The credo form is important was setting out the values framework within which specific instances of CSR can be discussed.  More importantly, as a frame of judgment of appropriate conduct, credos can also tend to omit the scope of CSR. To say what on believes, after all, also suggests the limits of belief; it suggests the presumptions and values structures that provide a basis for action and contain within them an understanding of what lies beyond belief.  Written ambiguously enough, "I believe" can be interpreted to suit the tastes of a wide variety of listeners who might be induced to hear what they want.  "corporations in this study did not provide evidence of CSR (e.g., amount of money contributed, number of people served); rather they framed their CSR in corporate creeds and responsibilities that served to limit the role of business in society." (Ibid., 543). 

Beyond the credo, O'Connor and Shumate reveal that corporations continue to view CSR in very traditional ways--focusing on philanthropy and ethical responsibilities. More importantly, O'Connor and Shumate suggest that corporation seek to veer away from CSR as a legal duty, and by recasting it as an ethical obligation voluntarily undertaken, appear to assume a greater social role.

Rather than a set of expectations placed on the corporations by society, the corporations in this study communicated CSR as being initiated by the corporation based on benevolence and paternalism. For example, corporations identified worker health and safety as being an ethical responsibility rather than a legal responsibility. This was surprising since worker health and safety is governed by federal and state regulation in the United States. Such a move suggests that corporations are recasting their legal responsibilities as discretionary to enhance public perception of CSR practices. (Ibid., 543).

The argument is intriguing.  If corporations view CSR as a means of recasting their legal obligations as "value added" and voluntary to enhance their standing, then it also suggests that markets, especially markets for consumer and investor preferences, may have a strong an effect on corporate communication and positioning within CSR structures, as the traditional systems of CSR via command under the domestic legal orders of states.Backer, Larry Catá, From Moral Obligation to International Law: Disclosure Systems, Markets and the Regulation of Multinational Corporations. Georgetown Journal of International Law, Vol. 39, 2008. Yet, in conventional thinking, especially, for example of global civil society actors, the opposite approach is considered more likely to induce corporate changes in behavior, and soft law approaches remain suspect. (See, e.g., essays in Governance, International Law & Corporate Social Responsibility, International Labour Organization Research Series No. 116 (2008), pp. 7-37).  Yet it also suggests the possibilities of "CSR whitewashing."  By investing in the communication of CSR, and by using that communication to both shape and narrow CSR as a concept, corporations appear to use CSR strategically, to appear to be more aggressively ethical beyond obligation that they are, and to use that stance to also narrow the reach of CSR.  It also suggests the stakes in the current battles between civil society and corporate actors for control of the rhetoric and scope of CSR as a concept within communities of stakeholders,  consumers and investors. The organizations that can control the meaning of CSR can also control the extent of corporate obligation.   

As a consequence, O'Connor and Shumate  argue that the literature about corporate citizenship and the public role of corporate citizens is overboard and perhaps naive.  

The CSR rationale statements in this study limit the scope of CSR to people, places, and practices directly tied to corporate endeavors as opposed to society as a whole. As such, at the institutional level, CSR rationale statements suggest a more limited role for corporations than the business citizenship perspective. In the current research, more than half of the corporations suggest that their responsibility was limited to their local communities. In addition, employees were the most commonly mentioned beneficiaries of CSR activities. Corporations in this study offered general employee quality-of-life benefits as evidence of social responsibility. Some of the benefits were not regulated by law, such as child care programs (Citigroup), whereas others noted their compliance with federal laws as evidence of their social responsibilities (e g., Burlington’s safe working environment). CSR statements, therefore, suggest that the responsibilities of the corporation more closely resemble that of welfare capitalism. (O'Connor and Shumate, supra, at 544).

Corporate citizenship, then, like those of natural persons, may be better understood as a normative concept applied strategically.  O'Connor and Shumate combine notions of strategic citizenship with the philanthropic and ethical thrust of CSR to posit that corporate CSR remains infused with notions (and the limitations) of welfare capitalism.

Welfare capitalism suggests that corporate responsibility extends to employ- ees and communities in which operations are located . . . . Corporate communication emphasizing welfare capitalism can be traced back to the 1920s. . . . [First,] although the Web sites may have replaced glossy corporate magazines of the 1920s, scholars should be cautious in interpreting CSR communication as equivalent to increased CSR expenditures or activities. . . .  Second, scholars have suggested one of the reasons for the increased communication of welfare capitalism, especially concerning benefits to workers in the 1920s, was to undermine organized labor . . . Similarly, rationale statements suggesting employees as beneficiaries of CSR may have additional goals beyond fulfilling the ethical and discretionary responsibilities . . . of the corporation. Finally, adherence to the welfare capitalism view of CSR suggests that corporations have a responsibility only to communities that support their business operations. (O'Connor and Shumate, supra, 545).

 Beyond the macro level findings, O'Connor and Shumate suggest industry specific approaches.  These are tied to the strength of the connection between the corporation and consumer and investor markets. 

Industries that were further up the value-chain and that relied on the exploitation of natural resources and/or had the potential to do significant community harm (e.g., chemical, mining and crude oil production, petroleum refining and utilities, gas and electric industries) focused more on environmental responsibility. notes that these industries are more likely to be targeted by activists, and such communication may be an effort to appease or redirect these activists. . . . .  In contrast, industries that had more direct contact with customers (e.g., commercial banking, general merchandisers, hotels, casinos, and resorts, specialty retailers, and the telecommunication industries) were more likely to define CSR in terms of philanthropy and focus on education. (Ibid., 546). 

Beyond suggesting weakness in the theory that CSR is used strategically to gain competitive advantage, the incentives of enterprises in the same business to copy each other also suggests the importance of the development of normative framework as against third parties.  In effect, marginal advantage through strategic management of individual approaches to CSR may be less valuable than industry convergence of standards of CSR principles and behaviors that would in the aggregate reduce risk and permit companies to compete in more traditional areas of price and service.  The authors conclude:

We suggest that CSR communication spins a translucent web of community by invoking images of neighbors, employee volunteerism, and the ability of the corporation to enhance quality of life. CSR communication presents values we all seemingly agree with, including improving education, protecting the environment, safe workplaces, and volunteerism. On closer examination, however, the results of this study suggest CSR communication presents universal values that are accessible only to those people and places fortunate enough to have munificent corporations in their communities. (Ibid., 548).

Ironically, the authors suggest that despite clothed in the more sophisticated language of modern CSR, most companies continue to view corporate responsibility in traditional and conventional terms.  That approach, certainly, is much in evidence in Japan, Korea and China in the development of CSR.  Larry Catá  Backer, Japanese Approaches to Corporate Social Responsibility (企業の社会的責任) and Global Human Rights--Between the Law-State and Corporate Culture, Law at the End of the Day, Sept. 14, 2010; Corporate Social Responsibility in KoreaLaw at the End of the Day, Dec. 1, 2011.

Yet international soft law approaches is moving in another direction.Both civil society actors and international organizations are embracing an "impacts-assessment" model.  These posit a set of specific normative principles that serve as the touchstone for measuring adverse impacts of corporate activity.  Thus, for example, the U.N. Guiding Principles of Business and Human Rights is based on the adherence of corporations to comply with the International Bill of Rights through constant and transparent human rights due diligence.  That is an approach substantially at variance form the soft law philanthropic credo structures described in O'Connor and Shumate. Transparency and impact analysis is at the heart of the ISO 26000 Standard and the GRI reporting principles. What O'Connor and Shumate expose is what may be a growing split between traditional approaches to CSR in which the corporation determines the scope and extent of its social responsibility within its fundamental obligation to security holders, and modern approaches in which the corporation is a participant in the construction of systems of CSR governance grounded in obligations to others as developed outside the state by international and civil society organizations.    The former is grounded in doing good for those around corporate activity, an approach in which the corporation remains distinct from and remains wholly in control of its interventions for the social good.  The latter is grounded in impacts analysis grounded in normative systems which corporations may influence but which they do not control.