Corporate Social Responsibility (CSR) research has over the past 15 years been transformed from an “embryonic concept” (McWilliam, Siegel & Wright, 2006, p. 15) into a mainstream topic of interest by management and organization scholars, and it is firmly embedded in conversations taking place in most of the general management journals. While there is no such thing as a “theory of CSR”, CSR has been addressed by management researchers based on a wide variety of methodological and theoretical lenses, zooming in on all levels of analysis, and drawing on a diverse set of research contexts and paradigmatic approaches. Despite decades of research into CSR, there is also no consensus about how to define CSR, but most would probably concur that we talking about CSR, we refer to in one way or another the debate on the role of business in society, and how this relationship informs the treatment by businesses of the social, ecological and ethical challenges that society is facing.
From business-centric to society-centric CSR
Beyond the proliferation of CSR as a mainstream topic for management researchers, an important transformation in how CSR is understood has occurred. In essence, over the last 15 years, the dominant mode of analysis in CSR research has transformed from what I call a “business-centric” mode to a “society-centric” mode. A business-centric mode implies that the primary question driving much research activity is: “How to do CSR such that it delivers the best possible benefit for a business firm?”. This is best exemplified by research about the business case for CSR that dominated the scholarly agenda in the earlier days of CSR, and where some measure of organizational performance was the main dependent variable of interest.
A society-centric mode, in contrast, flips the previous question driving research around and asks: “How can the way a firm engages in CSR best help solve a certain societal problem?” In this mode, the societal implications of CSR were no longer just a secondary concern. A broader set of questions is asked about the appropriate role and location of business in society and its political and institutional contexts and there is typically no monodirectional orientation on a single dependent variable of interest. However, while making an analytical distinction between these two opposing modes of analysis is useful for pushing the conversation forward, these modes are rather be seen as two ends of a continuum, and studies be located along this continuum. Where exactly an author will position her own work or that of others will remain subject to contestation.
In an introduction to the “thematic collection” on Corporate Social Responsibility that has recently been published in the Journal of Management Studies, I will illustrate this transformation of CSR research from the former to the latter mode of analysis based on a synthesis of highly influential studies published since 2006 in the Journal of Management Studies. My intention is not to offer a systematic and exhaustive review of the literature that is able to cover the richness and variety of existing research under the umbrella of CSR as well as related concepts such as corporate sustainability or business ethics. This would be hardly possible. Rather, my objective is to take stock of what we can learn from the “highlights” of previous debates on CSR, and how to move our research forward into meaningful directions. I portray particularly influential (i.e., most cited) research that has shaped the way we think about CSR. This allowed me to identify several important trends in the debate which marked important changes in how management researchers have approached CSR.
Shall we forget about the business case for CSR?
Early (i.e., around the year 2006) CSR research is “business centric” because it had a decisively strategic orientation where CSR moved from a side-line philanthropic exercise to a core business activity with strategic relevance to business firms, exemplified by a JMS special issue on the strategic implications of CSR (McWilliams et al., 2006). Then, some 10 years later around 2016, influential CSR research became society-centric, because it had what is best characterized as a relational orientation, exemplified by another special issue on political CSR (Scherer et al., 2016), and a high number of well-cited publications in JMS taking an institutional theory or related perspective that focused more explicitly on business in relation to societal stakeholders (e.g., Marano & Kostova, 2016; Schneider et al., 2017).
This broader trend is also reflected by research that shows diminishing financial returns of CSR engagement the more CSR becomes mainstream (Brower & Dacin, 2020), and in doing so questions the explanatory value of resource-based-view-approaches to CSR (do business firms really engage in CSR because they expect superior payoffs?) in favour of relational explanations (or do they engage in CSR because they need to meet the expectations of their stakeholders?). Consistent with this is research showing that the mainstreaming of CSR has also caused a shift in shareholder reactions to CSR, where stock markets are less likely to reward “good” CSR, but more likely to punish “bad” CSR. In other words, CSR has become a widely expected business practice with little gain if done well, but much punishment if done poorly (Flammer, 2013).
Based on these developments, there are three emergent trends in the CSR debate that mark important avenues for future research taking the society-centric mode of CSR analysis forward, and are further detailed in the full study: the reintegration of governments as important actors shaping CSR, the need to reorient the dependent variables used in CSR research toward tangible social and ecological outcomes, and the importance of CSR research tackling interrelated societal crises such as the COVID-19 pandemic and the climate crisis.
In conclusion, both the political and relational orientations consolidate the society-centric mode of CSR analysis, and I argue that this mode continues to prevail in present-day CSR research. To recall, an important change that contrasts the business-centric from the society-centric mode of analysis is that while the former attributed a relatively high degree of agency to business firms to act strategically vis-à-vis their stakeholders, this agency became more distributed among stakeholders in the society-centric mode, with the pendulum swing towards seeing CSR rather as a reaction than action of business firms to stakeholder expectations and institutional pressures. Cost-benefit calculations thus are less important than the strive for legitimacy, and “society” has a bigger say in determining corporate CSR agendas.
In conclusion, there is not one best way to examine CSR, neither methodologically nor theoretically. However, we need to make CSR research a scholarly enterprise that is about the big questions worth asking. In the 21st century and in light of the vast challenges we face, this is not to ask how CSR can benefit business, but how business can benefit society through CSR. Companies need to take more care of the negative social and environmental impacts that they generate through their business conduct, and mitigate the negative externalities, while amplifying the positive ones. It will be up to discussion whether the business-centric mode of analysis was overly obsessed with the latter, while the society-centric mode might similarly have been too obsessed with the former at the expense of the innovativeness that certainly characterizes business activity. We are still to find good answers as to what the role of business firms vis-à-vis the world’s most pressing societal grand challenges like climate change and inequality is and should be.
The complete Thematic Collection on Corporate Social Responsibility can be accessed here.
References:
Brower, J. and Dacin, P.A. (2020). ‘An institutional theory approach to the evolution of the corporate social performance – corporate financial performance relationship’. Journal of Management Studies,57, 805–836.
Flammer, C. (2013). ‘Corporate social responsibility and shareholder reaction: the environmental awareness of investors’. Academy of Management Journal, 56, 758–81.
McWilliams, A., Siegel, D.S. and Wright, P.M. (2006). ‘Corporate social responsibility: strategic implications’. Journal of Management Studies, 43, 1–18.
Marano, V. and Kostova, T. (2016). ‘Unpacking the institutional complexity in adoption of CSR practices in multinational enterprises’. Journal of Management Studies, 53, 28–54.
Scherer, A.G., Rasche, A., Palazzo, G. and Spicer, A. (2016). ‘Managing for political corporate social responsibility: new challenges and directions for PCSR 2.0’. Journal of Management Studies, 53, 273–298.
Schneider, A., Wickert, C. and Marti, E. (2017). ‘Reducing complexity by creating complexity: a systems theory perspective on how organizations respond to their environments’. Journal of Management Studies, 54, 182–208.
On the last paragraph, I’d say there’s a fair body of expectations on what companies should be doing in terms of both climate change and inequality: Alignment with Paris, respecting human rights (a la UNGPs) and paying fair taxes for a start.