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Corporate Social Responsibility: HRD As A Mediator Of Organizational Ethical Behavior

Refereed Paper

MacKenzie, Clíodhna; Garavan, Thomas; Carbery, Ronan

Abstract

A substantial body of research on Corporate Social Responsibility (CSR) has emerged over the last decade highlighting the need for organizations to address the triple bottom line CSR philosophy of economic, social and environmental goals and objectives. This paper reviews some of the current HRD literature that examines the theme of corporate social responsibility (CSR) and addresses how HRD professionals can clarify ambiguity around CSR practices through a better understanding of the sensemaking processes of the organizational actors. Understanding the sensemaking processes will illuminate how HRD professionals can contribute to the achievement of the triple bottom line CSR philosophy and ensure CSR goals and objectives are realistic and not rhetoric. We propose a conceptual model that elucidates the potential positive impact of HRD interventions when linked to a balanced scorecard measurement instrument.

Key words: Ethics, Organisational Behaviour, HRD, Corporate Social Responsibility

Advancing the Role of HRD as a Mediator of Organizational Ethical Behavior

The role of HRD in today’s contemporary organizational setting may be shifting beyond purveyor of learning, training & development and human & organizational development to now include the role of gatekeeper of corporate social responsibility (CSR) and ethical behavior. The tenuous surface level process and structure analysis of CSR appears deficient when one examines the failure of many organizations that claimed to be paragons of ethical behavior (see Ashforth and Anand, 2003; Balthazard et al., 2006; Ely, 2009; Kish-Gepart et al., 2010; Lange, 2008; Lehman and Ramanujam, 2009; Levine, 2005; Stein, 2003; Van Fleet and Griffin, 2006; Weyhrauch and Culbertson, 2009). Whilst these examples of corporate social irresponsibility have been shown to include forms of unethical behavior and in some cases illegal and corrupt behavior, they highlight the difficult and often compromised positions HRD professionals can find themselves in when the organizational rhetoric conveys one message and the reality is somewhat different. The dichotomy of serving two masters, the organizations management and leadership on the one hand and the employees on the other hand often results in what Bierema (2009) notes is a return to a stockholder orientation that favours managerial and organizational welfare above all else. This internal stakeholder dichotomy is complicated further by the competing demands of external stakeholders and institutional pressures (DiMaggio and Powell, 1983; Meyer and Rowan, 1977; Oliver, 1991). Mintzberg et al (2002) have cogently argued that the organization can engage in a series of half-truth’s solely focused on profit maximization and increasing shareholder wealth - CSR practices appearing little more than rhetorical lip service (Campbell, 2007). It is this degree of ambiguity and doublespeak that poses the greatest difficulty for HRD professionals to pursue a triple bottom line (Cornelius et al., 2008; Garavan and McGuire, 2010) philosophy.

It is possible however, for HRD professionals to clarify any ambiguity around CSR policies and practices, provide an ethical frame of reference for all organizational stakeholders (SHRM, 2008) and at the same time, become instrumental in the development of an ethical climate and culture (Ardichvili and Jondle, 2009; Foote and Ruona, 2008). Through continued development and implementation of its own policies and procedure around CSR objectives, it can contribute to the facilitation of a positive triple bottom line culture. HRD professionals are in a central position to ensure that the organization’s CSR orientation is realistically achievable and not rhetorically vacuous.

Methodology

The literature on CSR illustrates that is a broad meta-construct incorporating economic, social, environmental and reputational dimensions; it is multi-perspective, contextual, temporal and organizationally diverse capturing the shift away from a purely financial bottom line philosophy to one that reflects a more diverse set of goals and objectives aimed at addressing environmental and societal goals (Cornelius et al., 2008; Gioia, 2003; Laufer, 2003; Siegel, 2009) as well as economic

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goals. Given the accepted position that CSR has an applied management focus, the initial search criteria included the top tier management journals along with the wider social science journals that captured the focus of Human Resource Development (HRD), Ethics and Sensemaking central to this paper.

Selection of Journals

The selection of top tier management journals was the initial first step in this literature review process and was conducted using the following Grade 4 (*ABS Rankings) general management journals: Academy of Management Review, Academy of Management Journal, Administrative Science Quarterly, Journal of Management and Harvard Business Review. As the focus of the paper is on the Human Resource Development (HRD) role in the development/implementation/communication of CSR initiatives, a search of HR (HRM/HRD) and organizational studies journals was appropriate and covered the topics of sensemaking and cognition in the searches, these journals included but were not limited to: Human Resource Management (HRM), Human Resource Development Review (HRDR), Human Resource Development Quarterly (HRDQ), and Human Resource Development International (HRDI), Organization Science, Organization Studies, Human Relations, Organization. Finally, as Ethics is a central focus of this paper, a search of Grade 4 (*ABS Rankings) Ethics focused journals included but was not limited to: Journal of Business Ethics, Corporate Governance: An International Review, Business Ethics Quarterly, and Business Ethics: A European Review

Selection of Articles

It was necessary to delineate the search criterion for this paper given the broad meta-construct of CSR, to that end, a number of theme’s were used as general search area’s which provided a narrower search criteria for each theme. The search criterion included but was not limited to: Human Resource Development (HRD and CSR, HR and CSR, Leadership and Ethical Behavior, CSR and Leadership, Corporate Social Irresponsibility); Ethics (Corporate Governance and CSR, Corporate Social Responsibility and Ethical Organizational Behavior, Ethical Behavior and Corporate Governance, CSR and Financial Performance, CSR and Unethical Behavior, Corporate Social Irresponsibility); Sensemaking (CSR and Sensemaking, Corporate Social Irresponsibility, Corporate Governance and CSR, Culture and Sensemaking, Culture and Cognition, Culture and Ethics, Ethics and Sensemaking). The search term Corporate Social Irresponsibility was included in all the themes illustrating the boundary spanning concept of CSR. The literature search used standard academic databases such as: Business Source Premier, Academic Source Premier, Econlit, Web of Science and Web of Knowledge. As this literature review is not an exhaustive literature review, many of the results of the search on CSR were outside the scope of this paper.

Defining Corporate Social Responsibility

As a broad meta-construct, Corporate Social Responsibility (CSR) and its various synonyms reflect a clearly articulated set of organizational goals and objectives beyond those of the purely economic bottom-line (Friedman, 1970) that address the wider social and economic reach of the organization (Chih et al., 2010; Dunne, 2008; Matten and Moon, 2008).

Although there are many definitions of corporate social responsibility (see Basu and Palazzo, 2008; Benz and Frey, 2007; McWilliams and Siegel, 2000; McWilliams and Siegel, 2001; Ryan et al., 2010) the definition offered by McWilliams et al. (2006) and Basu and Palazzo (2008) seem most appropriate for the focus of this paper in addressing whether HRD can act as a Mediator of organizational ethical behavior.

McWilliams et al. (2006: 1) provide a succinct definition of CSR amid the many conceptualizations and definitions, they defined CSR as “…situations where the firm goes beyond compliance and engages in actions that appear to further some social good, beyond the interests of the firm and that which is required by law”. Similarly, Basu and Palazzo (2008) propose a definition of CSR based on their sensemaking perspective which is applicable from a HRD perspective. They noted it is a “…process by which managers within an organization think about and discuss relationships with stakeholders as well as their role in the greater good…and behavioral disposition” (p. 124). Basu and Palazzo’s (2008)definition is particularly noteworthy given it addresses the strategic multi-stakeholder orientation of HRD (see Garavan, 2007; Peterson, 2008; Ulrich and Brockbank, 2005; Wright, 2008).

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Basu and Palazzo (2008: 122) have noted that prevalent academic enquiry of CSR falls into three general themes: stakeholder driven, performance driven and motivation driven (see Campbell, 2007; Matten and Moon, 2008; McWilliams et al., 2006) with some of the broader literature focused on the ethics dimension central to CSR practices (e.g. Foote and Ruona, 2008; Kulik, 2005; Levine, 2005). These general themes are integral to HRD interventions. In their examination of CSR, Basu and Palazzo (2008) argued there had been little by way or research that focused on institutional variables; specifically internal variables such as mental models and sensemaking processes. Given the central role of HRD in the development of human capital in the pursuit of sustained competitive advantage (Garavan, 2007; Peterson, 2008) it seems appropriate that HRD have a central role to play in any conceptualizations of CSR seen through a sensemaking perspective.

Corporate Social Responsibility – The Financial Imperative

The concept of corporate social responsibility (CSR) has emerged as a critical dimension of many organization’s strategic goals and objectives. Today’s organization actively promotes CSR practices and achievements in their mission, vision and financial statements along with public articulation of those efforts by senior management (Scalet and Kelly, 2010). It is however, unclear whether these statements reflect the reality of their true CSR position or the rhetoric of what makes the organization appear like a good citizen. Over the past decade, CSR objectives have become quite prominent in organizational vision, mission and financial statements following incidents of corporate social irresponsibility (see Dhir, 2009; Giroux, 2008; Jensen et al., 2009; Kulik, 2005; Levine, 2005; Werther, 2003). The question of whether this reflects an overriding organizational philosophy that addresses the triple bottom line (Cornelius et al., 2008; Garavan and McGuire, 2010) of economic, social and environmental accountability remains ambiguous at best.

The economic importance of a CSR mandate is evident in the literature on CSR and Corporate Financial Performance (see Brammer and Millington, 2008; Orlitzky et al., 2003; Surroca et al., 2010). Orlitzky et al (2003) noted there was a positive association between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP) and argued that market forces have a positive outlook on organizations that engage in socially responsible behavior, a departure from the hard line economic position of Friedman (1970) who noted that the raison d’être of business was to make as much money as possible without breaking the law. Similarly, Surroca et al (2010: 464) found that Corporate Responsibility Performance (CRP) which they defined as “…a broad array of strategies and practices that a company develops to deal with and create relationships to deal with its multiple stakeholders and natural environment” is positively linked to Corporate Financial Performance through the organization’s intangible assets. They found that CFP stimulates the development of intangibles such as human capital, culture and reputation which have a positive knock-on effect on CFP, thus highlighting implications for HRD interventions at the organizational level (Foote and Ruona, 2008; Garavan et al., 2010; Garavan and McGuire, 2010). However, in the research carried out by Hine and Preuss (2009) they provide a counter argument highlighting that empirical evidence that CSR/CRP increases or impacts positively or negatively on CFP is lacking either way.

CSR and Human Resource Development

There is a growing body of research on HRD’s contribution to Corporate Social Responsibility with Garavan and McGuire (2010) arguing that HRD is viewed as central to the pursuit of financial (economic) and non-financial (social and environmental) organizational goals. Fenwick and Bierema (2008) similarly note that HRD, given its commitment to individual and organizational development, seems well positioned to contribute the any conceptualizations of CSR. There is however, much debate about whether HR professionals see CSR as central to their role in the organization other than acting as a compliance based gatekeeper of organizational ethical violations. This point was highlighted by the Society for Human Resource Management report “The Ethics Landscape of American Business” (SHRM, 2008: 17) which found that 58% of respondents in their study believed they were not “part of the ethics infrastructure” but were primarily there to enforce ethics violations. This was in contrast to the 72% of respondents who argued that they had a “moderate or large” role in the formulation of ethics polices and procedure, noting a degree of ambiguity around corporate ethics, central to any CSR mandate. The question of whether HRD can translate the triple bottom line philosophy into tangible results will be the challenge which has been highlighted by Bierema (2009: 75) who trenchantly argued that the conflicted position of HRD generally tends to give way to a “stockholder orientation” which is focused on the financial bottom line and ignores the social orientation unless mandated by law. The recent global economic crisis has pushed CSR, ethical

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behavior and corporate governance front and centre of the business agenda in today’s contemporary organization and this provides an ideal time to examine whether CSR policies and practices are genuine and socially focused or merely window dressing for the doublespeak and half-truth’s that Mintzberg et al (2002) noted. More crucially, the ability of HRD professionals to move beyond the historical performative role highlighted by Peterson (2008) and Wright (2008) may prove to be a difficult task unless they can bring something credible and sustainable to the table.

HRD professionals will need to challenge their traditional role within the organization without alienating the powerful internal stakeholders whose primary objective may be more aligned with the financial and not environmental or social goals. Moreover, HRD professionals will need to be cognizant of the institutional variables highlighted by Matten and Moon (2008) that have the capacity to influence the CSR orientation and behavior of various organizational actors. The impact of these institutional pressures can result in questionable ethical behavior with adverse social and environmental outcomes (MacKenzie et al., 2010).

CSR and Ethics

Incidents of corporate social irresponsibility over the past decade have prompted organizations to become more critical of their ethical orientation and CSR standing within the wider business and social community. The importance of the ethics / CSR relationship has also contributed to the diverse literature relating to research on ethical and unethical organizational behavior (see Biron, 2010; Brass et al., 1998; De Cremer et al., 2010; Gino and Bazerman, 2009; Kane, 2009; Kulik, 2005; Poff, 2010; Trevino et al., 2006) as well as the growing body of HRD related research (e.g. Ardichvili and Jondle, 2009; Foote and Ruona, 2008; Hatcher, 2002). The development of ethics programs is to ensure a degree of conformity among organizational members through adherence to ethical policies and procedure (Weaver et al., 1999). Indeed as the SHRM (2008: 17) noted, HR professionals play a central role in the administration of various ethics related activities. The research carried out by the SHRD found that 83% of respondents believed that HR was the primary organizational resource for ethics related issues, although, there was some ambivalence among HR professionals about their involvement in the ethics infrastructure and policy formulation. This research highlighted the important role of HR professionals in the development of ethics related activities in US companies but also shed some light on the complexity of developing the infrastructure, policies and procedures associated with an organization’s ethical orientation. Following a comprehensive and insightful review of the literature on ethical behavior in organizations, Trevino et al (2006) illustrated some of individual and contextual variables that can contribute to ethical behavior. From an individual perspective, cognitive and affective variable had some bearing on an individual’s predisposition to ethical / unethical actions with contextual organizational variables such as reward/punishment, ethical infrastructure, ethical culture and leadership also determinants in the ethical organizational behavior. Trevino et al (2006: 970) also noted that although external pressures (normative, coercive and mimetic) had the capacity to affect how an organization adopted an ethical stance, the ethical predisposition of the mangers and leadership played a central role in “propagating and modelling” ethical values that might then become internalized by organizational members to become part of the corporate culture (Ardichvili and Jondle, 2009; Martynov, 2009). This point will play a central role in how HRD professionals can moderate ethical organizational behavior.

Foote and Ruona’s (2008: 301) conceptualization of the institutionalization of ethics and its implications for HRD provided a comprehensive review of the literature on ethics over a 15 year period and revealed that “infrastructure, leadership and involved stakeholders” were paramount in the formulation of a culture that fosters ethical behavior. In their synthesis of the literature, Foote and Ruona (2008) noted that the organization’s culture was central to promoting and sustaining an ethical orientation with HRD acting as a facilitating interconnect that contributed to the “building of infrastructure, developing the stakeholders and working with the leadership” (p.301). A general theme that has emerged in the research on ethics and CSR is that of corporate culture. Ardichvili and Jondle (2009: 226) argued corporate culture was one of the “main determinants of ethical or unethical organizational behavior” and given the centrality of ethics in any conceptualization of CSR, it could have a major impact on the development of ethics / CSR policies, procedures and practices.

CSR and Sensemaking

The extant literature notes that most CSR decisions are primarily mandated by the organization’s managers and leadership (e.g. Berrone and Gomez-Mejia, 2009; Hemingway and Maclagan, 2004;

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Waldman et al., 2006). CSR practices reflect how managers and leaders frame their mental models, how they perceive who they are in the world, influences how they interact with their stakeholders. Other contextual institutional variables noted by Matten and Moon (2008) can also impact and influence the CSR orientation of organizational members, from top leadership to non-management staff (Angus-Leppan et al., 2010; Basu and Palazzo, 2008; Foote and Ruona, 2008). Ambiguity around the organization’s CSR policies and procedures may result in internal stakeholders taking their cues from the organization’s management and leadership resulting in behavior that is divergent from how the organization is promoted in terms of CSR practices (Pinto et al., 2008; Premeaux, 2009; Tett, 2009). Foote and Ruona (2008: 303) argued that leaders often underestimate their “role in the ethical tone of the organization”, furthermore, they noted that moral management and leadership were considered to be at the “crux” of an ethical climate and culture. This cogently argued point has resonance when one examines instances of corporate social irresponsibility over the past decade. Duchon and Drake (2009: 301) noted how questionable practices can become socialized in organizational assumptions and identity, they contend questionable behavior within an organization may transcend the individual, it can be a “consequence of a corporation’s self-concept; a consequence of how it defines itself”. This is consistent with how individual’s schema-driven cognition is heavily influenced through “normative pressures arising from behavior of others” (Harris, 1994: 316).

The reality of how internal stakeholders perceive or understand CSR policies and practices is often driven more by the cues they interpret from management, leadership and how they perceive the organizational identity of which they are members. Brickson (2007) argued that an organizational identity orientation consisted of organizational members shared perceptions of what the organization is and who they are within that construct, ultimately driving behavior and motivation. This is consistent with Hatch and Schultz (2002) notable paper on The Dynamics of Organizational Identity in which they posited that the development of organizational identity is in a constant state of flux embedded in a recursive cycle internal and external reflection. What matters most is not so much what is overtly articulated in terms of CSR policies and practices, but how organizational members make sense of how they perceive the world and their interactions and relationships with the various stakeholder demands both internally and externally (Basu and Palazzo, 2008). The role of management and leadership in providing cues to other organizational members is crucial (Foote and Ruona, 2008) in that they set the ethical and moral tone of the organization which becomes socialized within the culture and climate.

Foote and Ruona (2008) illustrated how organizational culture was fundamental “in promoting and sustaining ethics” (p.301), although they note that the other variables: infrastructure, leadership and stakeholders were systemically important as they interoperated with each other constantly. A point that Ardichvili and Jondle (2009) further advanced when they argued that corporate culture was a conduit for conveying moral principles that may be congruent with a triple bottom line CSR philosophy. In recognition of this fact, Angus-Leppan et al (2010) examined how the sensemaking of institutional drivers (normative, coercive and mimetic) influenced the organizational interpretation of CSR and leadership behavior in the practice of CSR. They found in their study of an Australian bank that both explicit and implicit CSR (Matten and Moon, 2008) existed simultaneously. They also noted that institutional drivers existed on 4 levels: individual drivers, organizational drivers, organizational field drivers (industry) and the National Business System (NBS). Their research on the Australian bank highlighted some “general confusion” (p. 205) around the explicit and implicit CSR practices, illustrating that explicitly stated CSR policies were at times in contrast to the implicit policies and where ambiguity existed the referent point became the management and senior leadership. Consistent with Basu and Palazzo’s (2008: 192) contention, sensemaking was potentially seen as an “internal institutional determinant” that provided a frame of reference for decision relating to CSR practices, a position that has been echoed throughout the literature review.

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Table 1: A Review of Some Literature on Corporate Social Responsibility

Author Journal Level of Analysis Dependent Variable Independent Variable/s Core ThemesAngus-Leppan et al (2010) Journal of Business

EthicsMultiple Levels of Analysis

Interpretation of CSR Sensemaking of institutional Drivers & Leadership Behaviors

Individual: Organizational Organizational Field NBS

Basu and Palazzo (2008) Journal of Business Ethics

CSR Behaviors Sensemaking & Mental Frames

Cognitive Linguistic Conative

Foote and Ruona (2008) Human Resource Development Review

Multiple Levels of Analysis

- - Infrastructure Leadership Stakeholders Organizational Culture

Garavan and McGuire (2010) Advances in Developing Human Resources

Multiple Levels of Analysis

- - Global HRD Strategic HRD HRD Policies & Practices HRD Systems HRD Practitioner

Becker et al. (2010) Human Resource Development Review

Multiple Levels of Analysis

- - CSR Supply Chain Management

(SCM) HRD

Garavan et al. (2010) Advances in Developing Human Resources

Multiple Levels of Analysis

CSR and CS Behavioral Barriers Typology of HRD Interventions Depth of HRD Intervention

o Surface / Deep Focus of HRD Intervention

o Individual / Organizational

Ardichvili and Jondle (2009) Human Resource Development Review

Multiple Levels of Analysis

Ethical Business Culture

Formal and Informal Structures and Procedures

Mission & Vision Statements Codes of Conduct Socialization Process Decision-Making Process Behavioral Standards Organizational Culture &

ClimateMatten and Moon (2008) Academy of

Management ReviewMultiple Levels of Analysis

Practice of CSR Institutional Variables Normative / Coercive / Mimetic

NBS / Financial / Educational / Cultural Systems

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Synthesizing the Literature and Conceptual Model

Stakeholder Theory and Institutional Theory are important in elucidating the impact of organizational interventions on CSR practices (Angus-Leppan et al., 2010; Basu and Palazzo, 2008; Foote and Ruona, 2008). In recognizing this, we propose a multi-level conceptual model to illustrate how HRD interventions can act as a Mediator in ensuring ethical adoption of CSR practices. At the micro-level, the focus is on individual CSR and HRD policies and procedures, ethical awareness programs (boundary-spanning) and leadership development programs. At the meso-level, the focus is on cognitive and sensemaking processes, CSR communications and performance measurements, mission/vision statements and creating and sustaining an ethical culture and organizational identity. At the macro-level, the focus is on institutional variables that can impact and influence the adoption of CSR policies and practices.

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Understanding Organizational Culture and Sense Making

HRD Policies & Procedures

CSR Policies

Communications on CSR Commitments & Performance

Insti

tutio

nal P

ress

ures

Normative

Coercive

Mimetic

NBSMac

ro-L

evel

Mic

ro-L

evel

Leadership Style

Mes

o-Le

vel

Ethical CSR

Culture

Organizational Identity

Ethical Awareness Programs

Vision/Mission Statement

Cognitive

Linguistic

Conative

Infrastructural Sensemaking Outcome

Figure 1: Conceptual Model of HRD Interventions from a Sensemaking Perspective

Source: Developed from ideas developed by Foote and Ruona (2008), Garavan et al (2010), Angus-Leppan et al (2010) and Basu and Palazzo (2008).

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Micro-Level: CSR/HRD Policies & Procedures

HRD policies and practice can contribute to the development of an ethically aware and socially responsible organizational culture (Ardichvili and Jondle, 2009; Garavan and McGuire, 2010). Ardichvili and Jondle (2009) noted that clear communications and codes of practice can contribute to the development of an ethical corporate culture, furthermore, they argued that incentives linked to codes of conduct send out a clear message that behavior should be linked to social goals as well as economic ones. On a similar note, Foote and Ruona (2008) argued that systems can be built to incorporate ethical programs that can be fundamental to learning and development interventions, performance reviews and career development, more crucially, they can be incorporated into the organizational culture that recognizes the CSR triple bottom line philosophy. These systems allow for whistle-blowing without fear of retribution in the event of ethical violation (SHRM, 2008) but also serve as a measurable outcome in that they can be linked into the organizations’ balanced scorecard (Kaplan and Norton, 2007).

Lubatkin et al. (2007: 59) argued that a “firm’s governance” is in a constant state of flux as “managers and owners engage in recursive cycle of individual and collective sensemaking” in the incentives and monitoring relationship. Moreover, they noted that the dependence of the firm on multiple stakeholders has shifted the power dynamic away from solely senior managers and directors. The literature on CSR and HRD offers a significant degree of analysis and offers possible solutions on how the HRD profession can contribute to the triple bottom line; however, HRD’s management role and close alignment with management peers and top leadership has the potential to influence the ethical disposition of HRD professionals which may see a return to a stakeholder orientation and financial bottom line when faced with a more challenging operating environment (Bierema, 2009).

In our conceptual model, HRD interventions can positively impact development of CSR and ethics policies. Communication and accountability can positively affect cognitive and sensemaking process and contribute to an ethically oriented organizational identity. HRD may need to incorporate “responsibility and sustainability into is repertoire” (Bierema, 2009: 88) if it is to engage successfully in ensuring CSR results in the triple bottom line philosophy.

By aligning the micro level HRD interventions such as generic HRD/CSR policies & practices and ethical awareness programs (which we characterize as a boundary-spanning intervention in that it operates at both micro and meso levels) with the balanced scorecard as measureable dimension, HRD has the potential to positively impact how organizational actors perceive or understand CSR practices by tapping into how organizational members engage in their cognitive processes. By doing so, it may allow HRD professionals to become part of the sensemaking processes at both individual and organizational levels. This addresses Bierema’s (2009) critique regarding integrating responsibility and sustainability into HRD’s character and at the same time, addresses any ambiguity around CSR practices. Moreover, if organizations incorporate these measureable interventions into the balanced scorecard it is possible for HRD professionals to “tap the trenches” (Trevino et al., 1999: 145) and ensure consistency among internal and external stakeholders. Mere compliance with the legal requirements of CSR practices ignores the critically important role of an ethical culture (Ardichvili and Jondle, 2009; Foote and Ruona, 2008) as cultural values can become embedded or “baked” (Trevino et al., 1999) into the corporate identity. In our conceptualization, we argue that multi-focused CSR practices and ethical awareness programs can positively affect organizational culture, organizational identity and ethical leadership development through accountability, responsibility and sustainability when integrated into the balanced scorecard approach. Furthermore, it is possible that by applying a balanced scorecard methodology as a means to measure the impact of HRD interventions at the micro/meso level, the possibility for HRD professionals to become genuine change agents (Garavan, 2007; Ulrich and Brockbank, 2005) has a credible exchange currency with senior management and top leadership, in effect, affecting change from the grass roots up.

Meso-Level: Sensemaking, CSR Commitment & Performance

Strategic HRD is premised on the notion of HRD professionals becoming partners with the business (e.g. Garavan, 2007; Peterson, 2008; Wright, 2008) however, as Wright (2008: 1066) noted, managerial professions “compete for status and control” in a constant battle to prove how their “expertise is linked to resolution of business problems” and historically these have addressed primarily

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economic and performance problems. Considering this – how does HRD as a profession tasked with the learning, training and development functions along with its individual, management/leadership and organizational development repertoire balance power relations in an ethically professional and altruistic manner? How do HRD professionals, who are part of the managerial profession detach themselves from competing for status in the organization and act ethically and altruistically? Becker et al. (2010) make a compelling argument, they noted, there must be a shift away from viewing human capital as mere economic factors of production in the market-based business models. The role of HRD must shift away from short-term incentive structures in line with economic organizational goals. Moreover, the sole focus on economic based objectives and a market-driven business model diminishes the value of the organizations human capital and social networks and justifies questionable ethical practices that negatively impact multiple stakeholders.

Ardichvili and Jondle (2009), Becker et al (2010) and Garavan and McGuire (2010) note the importance of infrastructural interventions such as performing a governance role within the organization, engaging in the socialization process, relationship building with multiple stakeholders and development of a functional organizational culture in pursuit of corporate social responsibility and corporate sustainability. Each of these infrastructural interventions interoperates at multiple levels within our model.

Basu and Palazzo (2008) analysis of CSR through a sensemaking lens has significant currency in terms of how HRD professionals can contribute to the CSR triple bottom line of economic, social and environmental goals. In their conceptualization, Basu and Palazzo (2008) put forward the notion that understanding the processes that contributed to making sense of CSR policies might provide greater insight into how organizational actors view their relationships with multiple stakeholders. Central to the sensemaking conceptualization is the “tripartite view” of essential process: cognitive, linguistic and conative. These sensemaking concepts integrate into the typology offered by Garavan et al (2010: 599), the conceptual model posited by (Foote and Ruona, 2008) and reflects the various institutional drivers that have been shown to contribute to ethical behavior and CSR orientation (see Angus-Leppan et al., 2010; Basu and Palazzo, 2008; Campbell, 2007; Matten and Moon, 2008).

Basu and Palazzo (2008) defined cognitive as relating to how actors “think about their relationship with their multiple stakeholders and views about the broader world”, linguistic involved ways of explaining organizational decision and how these decisions were shared with other organizational actors and conative related to the behavioral position, consistency and commitment shown when engaging in activities that impact its stakeholders (p.124). Taken as independent variables they have the potential to influence positive or negative CSR outcomes; however, we note that these variables do not operate in a vacuum and operate both contextually and temporally.

The cognitive disposition of organizational actors is the most critical and important sensemaking dimension as it reflects how organizational members think and act and is heavily influenced by cultural factors (Ardichvili and Jondle, 2009). This has implications for how HRD professionals manage the organizational culture development. Cognition is often expressed as a set of thought processes that precede behavior or action (Eden and Spender, 1998; Gibson and Earley, 2007) and at an aggregrate level, collective cognition resides in the interralations and actions of the group or organization, this is an important distinction when exploring sensemaking processess from a cultural perspective. Brickson (2007: 865) argued that profit-taking organizations have three distinct “identity orientations vis-à-vis stakeholders” (individualistic / relational / collectivistic) that elucidate the motivational assumptions that can contribute to the triple bottom line CSR philosophy. Similarly, Angus-Leppan et al (2010) whose research on leadership styles and CSR practice illustrated that different leadership styles (autocratic /authentic / emergent) were predisposed to either explicit or implicit CSR practices (Matten and Moon, 2008) and had the capacity to produce some ambiguity around CSR engagement. This is important from a HRD perspective as understanding the leadership style can help moderate ambiguity around CSR policies, practices and procedures.

Collective identities create “social representations that produce schemata” that then acts as a referent “consistent with organizational member’s ideal or material interest” (Dimaggio, 1997: 275). Langfield-Smith (1992: 353) defined collective cognitions as “a transitory phenomenon, changing in response to circumstance”, this transitory phenomenon is centred around the cultural belief system. On this point Langfield-Smith (1992) clearly illustrates the contextual and temporal variables that can impact cognition both at an individual and organizational level. Langfield-Smith (1992) further argues “…in order for an organizational group to function, they must share a set of domain-specific beliefs, that is,

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a collective map” (p.353). Collective patterns emerge from individual cognitive interactions before propagating across that social construct. It is these individual cognitive interactions that become part of the system, the greater the individuals’ connectivity to the system the higher the cognitive processing priority and the more reliant on schema/scripts in the decision-making process (Schneider and Angelmar, 1993). Any break in the system may result in organizational actors referring to their direct supervisors or management/leadership to aid in the decision-making process.

In our conceptual model, we position cognitive processes and organizational identity as boundary-spanning illustrating that cognitive and identity orientations are both individual and organizational. Any communication on CSR commitments and performance must be more than surface level, it will need “sincere commitment from leadership at all levels” (Trevino et al., 1999: 149) which includes HRD professionals. A notion also advanced by Basu and Palazzo (2008) who argued that how organizations justify their actions signals their stakeholder orientation. The organization’s linguistic process conceptualizes how organizations engage in defending their CSR position by using legal, scientific and economic rationale to justify their CSR actions. The use of these linguistic dimensions can illuminate a surface-level CSR orientation aimed at addressing only the economic and not social or environmental goals.

The moderating role of HRD professionals here will be to manage how CSR justifications are communicated. This will be a challenging dimension for HRD professionsals as they will need to moderate inward pressure from mangement and leadership that may not be congruent with the the core ethics and CSR orientation of the organization. HRD professionals can also play an important role in ensuring transparency around CSR practices and achievements, not rhetoric that masks deception aimed at glossing over unethical practices. Sims and Brinkmann (2003: 249) highlighted this point when they noted that Enron’s value statements and Codes of Ethics included in their annual reports maintained communications about commitments to “respect, integrity and excellence” yet following the collapse of Enron, there was “little evidence that mangement modellling those behaviors”.

In our conceptual model, HRD professionals can aid the senior management and leadership in choosing a “balanced approach” (Basu and Palazzo, 2008: 128) to CSR measurement that not only reflects positively in terms of external monitoring but can also help develop and sustain an ethical culture and organizational identity that over time will become embedded in a recursive cycle of internal and external reflection that solidifies a deeper commitment to CSR practices but also has the capacity to influence the ethical orientation of the organizational leadership as shown in our model. If HRD interventions can ensure strategic consistancy in terms of the organization’s CSR practices and these practices can be measured through a balanced scorecard methodology they will reflect tangible and measurable CSR impact that will positivley affect internal stakeholders in terms of morale and commitment but equally has the capacity to positively impact the external stakeholders who can measure CSR performance by referring to external CSR rating agencies (Scalet and Kelly, 2010).

Macro-Level: Institutional Pressures, Mission/Vision Statements

Many of the HRD interventions so far reflect an individual and organizational orientation; however, as Angus-Leppan et al (2010) and Matten and Moon (2008) have illustrated, macro-level variables can impact the organization in a more influential (positive / negative) way than many of the micro / meso variables. Matten and Moon’s (2008) adoption of Institutional Theory (DiMaggio and Powell, 1983) to illustrates the influence of external variables such as coercive, normative and mimetic pressures to conform to a particular behavior highlighting the challenges facing HRD in contributing to the organization’s CSR mandate. They noted that “institutions” referred not only to the “formal organizations of government and other corporations, it also referred to rules, norms and incentives” (p.406). The creation of an ethical business culture is contingent upon alignment of micro-level policies and practices (HRD/CSR), ethical value based leadership behavior (Ardichvili and Jondle, 2009) but more importantly reflects the “practice-based interaction among multiple organizational actors as well as internal and external stakeholders” (p.237). The institutional level of analysis has become a critical dimension of analysis when examining CSR practices (Garavan et al., 2010) and reflects the influence external institutional actors can place on both the leadership and the organization.

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These institutional level pressures were evident during the lead up to the global economic crisis when banks engaged in business practices that were predatory and were based on business models that were adopted in response to mimetic pressures. The challenge for HRD professionals in dealing with ethical behavior and CSR practices at the macro level two fold. They will need to be cognizant of what types of institutional pressures exist so that appropriate interventions can be put in place to ensure these pressures do not result in unethical organizational behavior (Fahlenbrach and Stulz, 2011). An example of this reflects how incentives and bonuses were paid to professionals in the banking and financial institutions, these monetary performance based rewards reflected short-term business objectives that ignored the social impact (see Hannon, 2010; Shleifer and Vishny, 2010; Tett, 2009). Bierema (2009) trenchantly remarked that the HR profession had escaped unscathed following incidents of corporate social irresponsibility and more recently in the financial crisis, she noted HRD “trained, promoted and monitored” (p.88) these individuals highlighting that during the recent economic crisis HR/HRD professionals were not actively engaged in moderating short-term economic objectives that had such a detrimental impact at a societal level. Our model allows for HRD interventions to moderate any sustained and potentially negatively affecting institutional pressures through the development of an ethically oriented culture and organizational identity. In our model, we illustrate the how normative and mimetic pressures are likely to impact on the organization’s culture and its leadership. These institutional pressures reflect professional affiliation (e.g. accountancy, engineering, banking), other firm specific institutions (e.g. banking / finance) and the wider societal culture. These pressures have been shown to influence cognition, behavior and action so it is important for HRD professionals to understand the forces these institutional pressures can place on the actions and behavior of organizational members in the absence of explicit CSR policies or ambiguous CSR polices.

As we have previously elucidated, HRD interventions at the micro-level and meso-level have the potential to ensure the CSR mandate achieves the triple bottom line philosophy in reality.

Discussion, Conclusion and Implications for HRD

Understanding sensemaking from the perspective of organizational actors, specifically managers and leaders will allow for a greater understanding of the decision-making process they engage in. This is crucial for future conceptualizations CSR through a HRD lens. The pursuit of CSR through HRD interventions need not be a zero-sum game (Pandey and Chermack, 2008), it is possible to balance the demands of multiple stakeholders and integrate CSR into the fabric of organizational life – but it will not be easy. It is questionable whether corporate social responsibility can be delineated in any simplistic mathematical way with the argument that the “ideal level of CSR can be determined by a cost benefit analysis” (McWilliams and Siegel, 2001: 125) a moot argument. The capacity of human nature to act ethically, socially and altruistically is contingent upon social, environmental and specific organizational factors. As noted by Pfeffer (2005) “what we do comes from what and how we think”. HRD can act as a Mediator to ensure CSR is seen to be genuinely integrated into the social fabric of the organization without compromising the demands of multiple stakeholders. Our conceptual model provides a sensemaking perspective that offers an approach to CSR that may be possible to measure. If it can be measured it may be possible for HRD professionals to become positive change agents that move beyond the strategic partners to the business but strategic partners to society.

Implications for Theory

The growing body of research on CSR illustrates the importance of socially responsible behavior in business. Understanding how organizational actors interact with multiple stakeholders, both internally and externally is critical if HRD professionals are to enact interventions aimed at achieving a realistic triple bottom line philosophy. The notable research on CSR to date has illuminated some of the areas worthy of further research and attention (see Angus-Leppan et al., 2010; Basu and Palazzo, 2008; Campbell, 2007; Foote and Ruona, 2008; Matten and Moon, 2008). We would argue that HRD interventions in the absence of clearly articulated CSR practices provides a degree of ambiguity among organizational actors that can have a detrimental effect on both organization and society. We would see the greatest benefit from future HRD research focused on the sensemaking and cognitive processes of organizational actors, with particular reference to the management and leadership processes and interaction with multiple stakeholders. Given the significant focus of HRD research on leadership development over the past decade it seem appropriate that future research on HRD and CSR might tap into this extensive body of research in better understanding how managers and leaders make sense of their corporate social responsibility.

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Implications for Practice

We argue that the approach HRD professionals take in pursuit of a CSR mandate will ensure its application is neither an ethical panacea nor organizational rhetoric but sustainable and realistic that aligns with organizational goals without compromising the organization or society. The ability of HRD to integrated interventions into a balanced scorecard that reflects tangible results will give HRD professionals the opportunity to become an integral dimension in positive and realistic CSR practices; however, it will also mean that HRD professionals will need to become responsible and accountable. The ability of HRD professionals to illustrate CSR performance in a measureable way may provide them with a degree of credibility not just among their management peers but among organizational members who look to them for ethical guidance (SHRM, 2008) in matters that relate to CSR practices. Moreover, if HRD professionals can integrate CSR commitments and performance into all aspects of the balanced scorecard: Financial, Learning & Growth, Customer and Internal Business Processes, it may provide refutable evidence that HRD professionals are both strategic in vision and change agents in practice.

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