Summary

A lot of attention has focused on the authenticity of CSR practices. However, a focus on the experienced authenticity of the stakeholders involved in CSR is likely to have a significant impact on their wellbeing – and therefore on the societal impacts of CSR. In our recently published paper in the Journal of Management Studies, we look at how CSR participation can lead to stakeholder authenticity, and what this means for stakeholder wellbeing.

“Authentic” was Merriam-Webster’s word of the year in 2023. It’s not hard to see why. From deepfake videos to airbrushed ads, and artfully composed social media posts to counterfeit goods, concerns about authenticity are everywhere.

Corporate social responsibility (CSR), where companies address social and environmental issues, is one area of business where debates about authenticity are especially prominent. Questions such as, are companies genuine in their commitment to social causes, or are they trying to dupe consumers with “greenwashing” regularly get raised in relation to CSR. In fact, research has consistently shown that companies perceived as inauthentic in their CSR activities fail to reap the expected benefits, and may ultimately do their reputations more harm than good.

From authentic CSR to stakeholder authenticity

These are all important authenticity considerations with respect to CSR. However, focusing on the perceived authenticity of companies only tells half the story. For many people, concerns about one’s own authenticity are often top of mind. This is because whether we feel authentic or not has a huge impact on our overall wellbeing. Researchers have repeatedly shown that a sense of personal authenticity can lead to more happiness, stronger relationships, and better mental health.

What has all this got to do with CSR? Well, consider all the people or “stakeholders” that are involved in a CSR project. There are the employees of the company, the members of the local communities that might benefit, perhaps some NGO members who partner with the company to make it happen, as well as the consumers who will buy the company’s products. Given the tensions around CSR, any of these individuals may worry about whether their participation is going to make them feel authentic or not. Will getting involved in CSR reflect who they really are? Will it reflect their true self and what they believe in?

These types of considerations are just as important as questions about authentic CSR, but they focus on what we call “stakeholder authenticity”. Stakeholder authenticity is the experience stakeholders have of their own authenticity when engaging in companies’ pro-social initiatives. In our article we explore how participation in CSR can lead to stakeholder authenticity and how this in turn can lead to greater stakeholder wellbeing.

Turning to existentialism

We develop a particular way of thinking about stakeholder authenticity, which we label stakeholder existential authenticity. By this, we mean a stakeholder’s experience or sense of being true to their self. Existentialist thinkers such as de Beauvoir, Kierkegaard, and Sartre have long been wrestling with the question of what it means to be true to oneself and such debates even stretch back as far as the teachings of the ancient Greek philosopher, Aristotle. 

For many existentialist philosophers, there is no such thing as a single, “real” self that we need to achieve in order to be authentic. Instead, we strive for authenticity by constantly challenging ourselves about who we are and what we want to become. Existential authenticity is therefore to be found in reconciling the various tensions about who we are and the choices we need to make rather than in finding our one true self and then sticking to it.

Designing CSR for stakeholder authenticity

In the context of CSR, these tensions are particularly pronounced because of the question of whether one is selling out by getting involved in such seemingly inauthentic CSR initiatives. Therefore, it is important for companies to know how to design CSR initiatives to help their stakeholders overcome these problems and experience existential authenticity in a meaningful way.

Our research suggests that there are three main ways to do this. First, companies need to give stakeholders opportunities for self-reflection and expression during CSR projects to enable them to wrestle with such questions of the self. Second, they need to facilitate stakeholder ownership and direction over CSR initiatives so that they have freedom to make meaningful choices. Third, companies need to communicate honestly about the dual goals involved in CSR (benefits for participants as well as broader society) to help legitimate the mixed motives of stakeholders themselves. These types of practices help raise the existential tensions involved and provide a means for stakeholders to reconcile them as route to achieving some degree of authenticity.

How authenticity leads to happiness

This is not to say that stakeholders that get to experience existential authenticity because of their participation in CSR will necessarily be better-off. As anyone with a passing knowledge of existential philosophy will know, existential concerns have frequently been associated with anxiety, angst, and despair.

However, these negative emotions are often necessary to bring on a deeper sense of happiness. Going back to Aristotle, he argued that a good life was one characterised by eudaimonia. This is a form of happiness or sense of personal meaning derived from self-discovery and achieving our potential. We show that a stakeholder’s quest for existential authenticity in CSR can be an important pathway for achieving this deeper sense of happiness in the longer term. As long as we focus on the achievement of this eudaimonic happiness rather than hedonic happiness that comes though more short-term, pleasure-seeking, there can be a direct path from CSR participation to improved stakeholder wellbeing.

Two key takeaways from our research

Our research offers an important new way of thinking about authenticity with respect to CSR. First, it focuses on the outcomes for the people involved rather than on outcomes for the company. This is essential for realizing the potential of CSR for making a real difference in society. Second, companies may find it easier to help stakeholders feel authentic about themselves rather than convincing them that the company is being authentic. Scepticism about CSR is now so high that refocusing on the authenticity of stakeholders is long overdue.