FOM-EditionFOM Hochschule für Oekonomie & Management

Linda O’RiordanPiotr ZmudaStefan Heinemann(Editors)

New Perspectives on Corporate Social ResponsibilityLocating the Missing Link

ISBN 978-3-658-06793-9 ISBN 978-3-658-06794-6 (eBook)DOI 10.1007/978-3-658-06794-6

Library of Congress Control Number: 2015933661

The Deutsche Nationalbibliothek lists this publication in the Deutsche National bibliografie; detailed biblio-graphic data are available in the Internet at http://dnb.d-nb.de.

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EditorsLinda O’RiordanPiotr ZmudaStefan Heinemann

FOM Hochschule für Oekonomie & ManagementEssenGermany

This work appears in the FOM-Edition, published by the FOM Hochschule für Oekonomie & Management

V

Foreword

This book examines new perspectives on corporate social responsibility (CSR) by locat-ing the missing link in the theoretical, practical, and educational spheres of economic and managerial research. Many of the contributions in this book evolved from the papers presented during a series of international research conferences at the FOM University of Applied Sciences, Essen, Germany such as the Implementing Sustainable CSR Manage-ment Solutions conference which was held at the FOM in 2013 in Cologne, Germany. Furthermore, the theme for this book was previously addressed in two earlier publications by the FOM Competence Centre for CSR.

Based on 29 chapters and years of research, written by 39 authors from eight countries, this book is positioned at the intersection of economics, business, and the humanities. By highlighting the missing links in the current approach to sustainable economic develop-ment and management over a wide range of themes, it focuses on the creativity which can occur when innovation is connected with the mechanisms of integrated networks within and between these various disciplines. The premise for this book is based on the rationale that firms will engage in sustainable practices if the economic logic is clear. The CSR approach proposed for sustainable business is therefore strategically driven by organisa-tional purpose, structures, processes, and people, as well as determined in particular by economic, social, political, legal, and technical systems, and their mechanisms. Accord-ingly, in this approach, CSR is not about how organisations spend money but about how they make it. The ultimate implication suggested is that CSR, instead of being a “reality distortion” or a “cost” to the business, is rationally its essential route to economic oppor-tunity and long-term sustainable competitive value, innovation, and growth.

Today, from a management perspective, CSR is stuck in the middle between being per-ceived either as the “holy grail” of a new form of “altruistic” management, or on the opposite realm, of being understood in the format of “green glamour”. The inherent management chal-lenge is that the former category of thinking is of a moral, subjective nature and therefore impractical to direct into business terms, while the latter often merely reflects empty promo-tional actions (i.e., lacking substantial sustainable strategic impact on the business model or for society). Regrettably, the exclusive practice of “window-dressing” and arguably non-strategic giving in the name of CSR, have led to one of the few areas of consensus across the entire spec-trum construct. This however emerges as the common belief that CSR ultimately represents

VI Foreword

a cost to the business. The ensuing management mind-set underlines why adopting a broader stakeholder approach is often viewed as a drain on profits. As a result, rather than recognising the potential opportunities which CSR could deliver in benefits to the business, managers often focus their CSR activities more narrowly on risk and cost minimisation. Disappointingly, cur-rent CSR practice consequently often culminates in Public Relations (PR) campaigns and iso-lated projects, while the unique opportunity to strategically leverage CSR to create “authentic” long-term sustainable business and societal value is fundamentally overlooked.

This book provides a timely contribution to these ongoing challenges as more and more companies continue to place CSR and sustainability on their management agendas. By addressing the “missing link” between theoretical CSR concepts both at the macro- and micro-level of the firm (i.e., with respect to everyday management practice in the various business functions), it is designed to inspire awareness on the advantages of adopting a CSR “mind-set” when developing sustainable business strategies in a field which is by definition subject to varying stakeholder interpretations. Accordingly, this book could help to cultivate a new management understanding to ultimately foster an improved ap-proach to sustainable CSR practice. This involves advancing the theoretical concepts, as well as identifying practical solutions for firms in order to help them to identify how to invest their resources in their areas of key competence. The ultimate impact of this new approach is the optimal creation of sustainable competitive advantage for the firm driven by a fairer distribution of the wealth created for society. In the search to achieve this new CSR attitude, the book highlights innovative principles which recognise alternative ways to generate concrete return on investment for both business and society.

The book is targeted at industry experts and policy-makers who strive to apply CSR concepts to economic and management practice. Specifically, it should help to guide busi-ness managers to make a more reliable and tangible sustainable impact in their field of competence for both their organisation and society. It should additionally be of interest to academic researchers who take a critical perspective on the underpinning theoretical ap-proaches in the study of responsible economic policy and management.

We leave the reader to assess whether this book or indeed any text can succeed in realis-ing our underlying objective which is to inspire awareness about why and understanding of how to adopt an inclusive mind-set towards society. Because of system inter-connectivity, companies depend on healthy communities, institutions, and people through which to function. This requires regarding as they would their own home and family, the resources from the countries and communities in which they operate. Scientific reflection based on the concept of praxeology widens the horizon and extends the field of economic and management study by suggesting that all business activity is embedded in a more general science. Consequently, if all human action is purposeful, all behaviour commences with choices which can be guided in the direction of multiple shared value generation.

FOM University of Applied Sciences, Prof. Dr. Linda O’RiordanEssen, Germany Prof. Dr. Piotr ZmudaEssen, autumn 2014 Prof. Dr. Stefan Heinemann

VII

Contents

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Linda O’Riordan, Piotr Zmuda and Stefan Heinemann

Part I Theoretical Realm

2 The Future of Corporate Sustainability: Towards an Ecology of Organisations Focused on Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Jan Jonker

3 Corporate Social Responsibility: An Integrated Development Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Michał Gabriel Woźniak

4 Managing Stakeholders for the Sake of Business and Society . . . . . . . . . . . 71Matthias Fifka and Cristian R. Loza Adaui

5 Creating Sustainable Enterprise Using the Substantive Innovativeness Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Teresa Bal-Woźniak

6 Innovations and Their Diffusion Versus CSR Practices . . . . . . . . . . . . . . . . 109Dariusz Firszt

7 Altruism as a Missing Concept in Economic Rationality: The Need for Multi-Disciplinary Perspective . . . . . . . . . . . . . . . . . . . . . . . . . 127Tomasz Potocki

8 Economic Development and the Implementation of CSR Initiatives in National Economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147Marek Ćwiklicki and Łukasz Jabłoński

VIII Contents

9 Income Inequality and Public Debt in OECD-Countries from a CSR Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169Łukasz Jabłoński, Piotr Zmuda and Linda O’Riordan

10 Vroom’s Participation Model as a Foundation of Organisation Audit: A New Approach to CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191Ryszard Stocki and Agnieszka Łapot

11 Corporate Social Performance, the Meaning of Work, and Applicant Attraction: A Cognitive Perspective . . . . . . . . . . . . . . . . . . . . 213Piotr Prokopowicz and Grzegorz Żmuda

12 The Art of Balancing: Enabling the Realisation of Multiple and Shared Values Through a New Generation of Business Models . . . . . . . . . . 229Jan Jonker, Linda O’Riordan and Nina Marsh

Part II Practical Realm

13 The Un-balanced Sheet: A Call for Integrated Bottom Line Reporting . . . 249Robert Sroufe and Diane Ramos

14 Finding the Value in Environmental, Social and Governance Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275Viola Möller, Dinah A. Koehler and Ina Stubenrauch

15 Corporate Social Responsibility (CSR) Reporting—Administrative Burden or Competitive Advantage? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285Matthias Fifka and Cristian R. Loza Adaui

16 Social Management Accounting: Development of an Integrative Framework for Environmental and Social Costing . . . . . . . . . . . . . . . . . . . . 301Thomas Heupel

17 Socially Responsible Supply Chain Management for a Competitive Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321Matthew J. Drake and Donald Rhodes

18 How Does it Pay to be Green and Good? The Impact of Environmental and Social Supply Chain Practices on Operational and Competitive Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341Lucy McCarthy and Donna Marshall

IXContents

19 Employee Competence Development from the CSR Perspective . . . . . . . . . 371Łukasz Jabłoński and Marek Jabłoński

20 The Role of Employees in Implementing CSR Strategies . . . . . . . . . . . . . . . 383Lara Johannsdottir and Snjolfur Olafsson

21 The Sustainable Gamer: Developing Corporate Social Responsibility Through Games . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411Grzegorz Żmuda, Piotr Prokopowicz and Marianna Król

22 From Charity to Mutual Benefit: A New and Sustainable Look at CSR in Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427David Abdulai

23 CSR Project: Cotton Made in Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443Ortrud Kamps

24 Conceptual Framework for Corporate Responsibility Management: A Critical Review of Sustainable Business Practice Based on a Case Study of a Leading Transnational Corporation . . . . . . . . . . . . . . . . . . . . . . . 473Linda O’Riordan and Piotr Zmuda

Part III Educational Realm

25 CSR—A New Challenge for Universities? A Theoretical and Empirical Analysis of German Universities . . . . . . . . . . . . . . . . . . . . . . . . . . 507Karl-Heinz Gerholz and Stefan Heinemann

26 Linking “Doing,” “Doing Right,” and “Doing Right With Others”—Empirical Indications of the Relationship Between Ethical Competency, Diversity Competency, and Other Parts of the Competency Construct . . . 527Frank P. Schulte, Karl-Heinz Gerholz and Stefan Heinemann

27 Fostering Ethical Competence in Business Education . . . . . . . . . . . . . . . . . 547Karl-Heinz Gerholz

28 Transdisciplinary Teaching of CSR by Systemic Constellations . . . . . . . . . 563Georg Müller-Christ and Anna Katharina Liebscher

29 Shopping in the (Business) Ethics Supermarket? On the Relationship Between Value Pluralism and Management . . . . . . . . . . . . . . 585Stefan Heinemann and Ralf Miggelbrink

X Contents

30 Can Service Learning Foster a Social Responsibility Among Students?—A Didactical Analysis and Empirical Case-Study in Business Education at a German University . . . . . . . . . . . . . . . . . . . . . . . 603Karl-Heinz Gerholz and Simone Losch

About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623

XI

Contributors

David Abdulai PMB CT428 Cantonments ACCRA-Ghana, Kanda, ACCRA, Ghana

Teresa Bal-Woźniak Department of Enterprise, Management and Eco-Innovation, Rzeszów University of Technology, Rzeszów, Poland

Marek Ćwiklicki Department of Management and Organisation Methods, Cracow University of Economics, Krakow, Poland

Matthew J. Drake Palumbo-Donahue School of Business, Duquesne University, Pittsburgh, PA, USA

Matthias Fifka Universität Erlangen-Nürnberg, Erlangen, Germany

Dariusz Firszt Department of Applied Economics, Cracow University of Economics, Krakow, Poland

Karl-Heinz Gerholz Wirtschaftspädagogik, Universität Paderborn, Paderborn, Germany

Stefan Heinemann FOM University of Applied Sciences, Essen, Germany

Thomas Heupel FOM University of Applied Sciences, Essen, Germany

Łukasz Jabłoński Department of Applied Economics, Cracow University of Economics, Krakow, Poland

Marek Jabłoński Department of Organizational Behaviours, Cracow University of Economics, Krakow, Poland

Lara Johannsdottir School of Business, University of Iceland, Reykjavik, Iceland

XII Contributors

Jan Jonker Nijmegen School of Management (NSM) at the Radboud University Nijmegen (RU – Holland)

Ortrud Kamps FOM University of Applied Sciences, Essen, Germany

Dinah A. Koehler Larchmont, NY, USA

Marianna Król 313 Consulting, Krakow, Poland

Agnieszka Łapot Wojtyla Institute, Krakow, Poland

Anna Katharina Liebscher Universität Bremen, Bremen, Germany

Simone Losch Fakultät für Wirtschaftswissenschaften, Universität Paderborn, Paderborn, Germany

Cristian R. Loza Adaui Universität Erlangen-Nürnberg, Erlangen, Germany

Nina Marsh PO Box 9108, 6500 Nijmegen, HK, The Netherlands

Donna Marshall UCD Business School, Belfield Campus, Dublin 4, Ireland

Lucy McCarthy UCD Business School, Belfield Campus, Dublin 4, Ireland

Ralf Miggelbrink Institut für katholische Theologie, Universität Duisburg-Essen, Essen, Germany

Viola Möller Deloitte & Touch GmbH, Düsseldorf, Germany

Georg Müller-Christ Universität Bremen, Bremen, Germany

Linda O’Riordan FOM University of Applied Sciences, Essen, Germany

Snjolfur Olafsson School of Business, University of Iceland, Reykjavik, Iceland

Tomasz Potocki Department of Economic Policy, University of Rzeszów, Rzeszów, Poland

Piotr Prokopowicz Institute of Sociology, Jagiellonian University, Krakow, Poland

Diane Ramos Palumbo-Donahue School of Business, Duquesne University, Pittsburgh, PA, USA

XIIIContributors

Donald Rhodes Palumbo-Donahue School of Business, Duquesne University, Pittsburgh, PA, USA

Frank P. Schulte FOM University of Applied Sciences, Essen, Germany

Robert Sroufe Palumbo-Donahue School of Business, Duquesne University, Pittsburgh, PA, USA

Ryszard Stocki University of Social Sciences and Humanities (SWPS), Katowice, Poland

Ina Stubenrauch Deloitte & Touch GmbH, Berlin, Germany

Michał Gabriel Woźniak Department of Applied Economics, Cracow University of Economics, Krakow, Poland

Piotr Zmuda FOM University of Applied Sciences, Essen, Germany

Grzegorz Żmuda Institute of Psychology, Jagiellonian University, Krakow, Poland

XV

About the Editors

Linda O’Riordan is a Professor of Business Studies and International Management and Director of the FOM Compe-tence Centre for CSR at the FOM University of Applied Sci-ences, Essen, Germany. She researches, writes and lectures on responsible management and sustainable entrepreneurship with a focus on an inclusive approach to organising business in society. Her work has been published in internationally re-nowned peer-reviewed journals such as the Journal of Busi-ness Ethics. In her educational role, Linda O’Riordan lectures mainly to MBA and also Bachelor students in the subjects: Business Strategy, Sustainability, CSR and Corporate Gover-nance, International Management, Management Consulting and Problem-Solving, Intercultural Competence, as well as

Marketing, Sales and Customer Relationship Management. Additionally, she is a guest lecturer at various Universities including the University of Applied Sciences (Fachhoch-schule) and Heinrich-Heine University in Düsseldorf. Linda O’Riordan is a general man-ager by background with a Ph.D. from the University of Bradford in the UK. Previous to her academic role, she gained business and consultancy experience from working in in-dustry. Some of her former employers include Accenture, UCB-Schwarz Pharma, and the Government of Ireland (Bord Bia) marketing Irish food and drinks products in Northern Europe, as well as apprenticeship positions during her studies in Ireland at the Irish Tele-com Company, Dublin (now Eircom), and the Bank of Ireland, Cork. Her qualifications include a Bachelor’s degree in Business Studies from the University of Limerick, Ireland, as well as an MBA and a Masters in Research from the University of Bradford in the UK.

XVI About the Editors

Piotr Zmuda is a Professor of Business Studies and Inter-national Management and a Research Associate of the FOM Competence Centre for CSR at the FOM University of Ap-plied Sciences, Essen, Germany. He teaches Master’s and Bachelor’s students in Corporate Governance and Corporate Social Responsibility (CSR), International Management, Strategic Management, and Management Consulting. His research interests focus on the analysis and development of strategies based on the resource and market-based view as well as the formulation and implementation of internationali-sation strategies. Piotr Zmuda studied Business Administra-tion at the University of Cologne and received his doctoral

degree at the Heinrich-Heine-University, Düsseldorf. He was appointed as a Professor of International Business and Management Consulting at the Cologne Business School (CBS) in 2010. He further participated as a visiting professor in the Sustainability MBA program at the Duquesne University School of Business, Pittsburgh, PA, USA. Piotr Zmuda gained his first practical experience as a management consultant while working for an international consulting company specialised in delivering consulting services in the fi-nancial services sector. He has assisted a large number of well-known Financial Service Companies in the efficient execution of projects and optimisation of their in-house pro-cesses. After leaving this sector, he switched to the role of in-house consultant for a multi-national industrial company. Piotr Zmuda is a certified Project Manager (PRINCE2) and a member of the Academy of Management (AoM).

Stefan Heinemann is a Professor and Vice-Rector for Co-operations and Sustainability Representative at the FOM University of Applied Sciences, Essen, Germany. In addi-tion, he is the director of the FOM Open Business School and the Representative of the Foundation BildungsCentrum der Wirtschaft within the zdi-Zentrum MINT-Netzwerk Essen. He is also a committed member of the workgroup “tertiary institutions” of the UNESCO World Director of Business Ethics for Sustainable Development, Director Busi-ness Ethics at the FOM Competence Centre for CSR and a Member of the Board of Trustees of sneep—student network for ethics in economics and practice. Furthermore, he is Co-

Director within the FOM KCP KompetenzCentrum für Public Management and a mem-ber of several research boards. He is also a Member of the Strategy Board of the BDA/BDI-Bundesinitiative “MINT Zukunft schaffen”, board Member of the Kölner Wissen-schaftsrunde and Member of the scientific board of the HKR NRW Hochschulkompe-tenzzentrums Rechnungswesen at the University of Duisburg-Essen. Stefan Heinemann’s teaching and research is focused on Business Ethics and Public Management/University Management (Finance and Strategy).