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Varieties of Capitalism and Small Business CSR A Comparative Overview

ICCSSR 2015 17th International Conference on Corporate Strategy and Social Responsibility, Zurich29-30 July 2015

Stéphanie Looser & Walter Wehrmeyer Centre for Environmental Strategy, University of Surrey

30.07.2015

…I have a profound interest in small businesses!

2 Stéphanie Looser

Approach: Theory & Methodology

Results: A comparative Overview Over Small Business CSR

Outlook: Implications & Further Research

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3 Stéphanie Looser

Corporate Social Responsibility (CSR) outlines positive behaviour…

Evolving:• Codes of Conduct• ISO 14001• ISO 26000• Global Reporting Initiative

(GRI)

Aligned with:• Sustainability• Corporate Governance• Corporate Citizenship• Corporate Ethics

Approach Results Outlook

• The social contract [1] Rousseau, 2003

• The obligations of businessmen [2] Bowen, 1953

• Has the power to evolve “social goods” [3] Osuji, 2011

• “For its own sake” [4] Mintzberg, 1983

• Companies are agents that enact, perpetuate, and somewhat reinforce wider societal values [5] Looser and Wehrmeyer, 2015

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4 Stéphanie Looser

Approach Results Outlook

…and can be analysed by intent, codification, motives, and language…

Intent

Codification

Motives

Language

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[6] Matten and Moon, 2008

Explicit CSR

Corporate activities to assume responsibility for the interest of society

Consists of corporate policies, programmes, strategies, and formalised instruments (certificates, standards, code of conducts), results in CSR as “business case”

Motivated by incentives and opportunities perceived from stakeholder expectations

Advertising of CSR by an extensive use of CSR language

Implicit CSR

Company has a role within wider formal and informal institutions for society’s interests and concerns Driven by values, norms, and rules, which results in embedded, internal and codified rules and CSR seen as a “moral activity”

Motivated by societal consensus and expectations on company contributions to society Do not communicate their policies, activities using CSR language

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Explicit CSR

Explicit CSR management systems of large companies often failed to prevent illegal and anti-social behaviour

Implicit CSRCSR in SMEs

This study’s aim

..while there is growing interest in cultural embedding of CSR values.

Growing interest in implicit processes and organisational cultures that exemplify and embed CSR

Small and Medium-sized Enterprises (SMEs) with implicit, non-systematic CSR can shed light on cultural embedding of CSR values

Identifying intent, codification, motives, and language of CSR in SMEs from Switzerland and 15 other countries

23.06.2015

Approach Results Outlook

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Approach Results Outlook

According to theory CSR should vary based on market economies…

Varieties of capitalism

Mechanism

Inter-firm relations

Mode of production

Training and

education

Income distribution

Innovation

Comparative

advantage

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Evolves explicit CSR

Evolves implicit CSR

[6] Matten and Moon, 2008

[7] Hall and Soskice, 2001

Liberal economy

Competitive market

Competitive

Direct product

competition

Formal education

Unequal (high Gini

index)

Radical

High-tech and services

Coordinated economy

Non-market relations

Collaborative

Niche products

Apprenticeship system

Equal (low Gini index)

Incremental

Manufacturing

40 interviewsQualitative

content analysis using MAXQDA

36 studies from 15

countries

Secondary data

analysis using

MAXQDA

…which is matter of discussion by primary and secondary data analysis.

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Is there a global approach to CSR that can be found in SMEs from different cultural backgrounds and independent from their market economies, language regions, religion, and legal/political systems?

Stéphanie Looser

Approach Results Outlook

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Selection based on maximum variation strategy

Selection based on journal rank and citation index

Based on in-vivo coding

code tree

Based on code tree from Swiss SMEs

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By 40 interviews with Swiss SMEs CSR is identified to be implicit as...

Stéphanie Looser

Approach Results Outlook

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Implicit intent

Implicit codificati

on

Implicit motives

Implicit language

Handshake instead of formal contracts

High social capital Democratic

decisions traditional

values Philanthropy and

altruism Pursuit for

societal consensus

Company contribution to society

Quality aims the

expectations on company contribution to society

Visons instead of profit goals

Transparency in all respects

Communication is about values

…14 of the analysed countries regardless their market economies.

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Approach Results Outlook

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Country Market economy Implicit / Explicit Italy Hybrid Implicit CSR

Cameroon Coordinated Implicit CSR

Netherlands Coordinated Implicit CSR

UK Liberal Implicit CSR

Australia Liberal Implicit CSR

Finland Hybrid Implicit CSRGermany Coordinated Implicit CSRHong Kong Liberal Explicit CSRChina Coordinated Implicit CSRTaiwan Coordinated Implicit CSRSingapore Coordinated Implicit CSR

Austria Coordinated Implicit CSR

US Liberal Implicit CSRSpain Hybrid Implicit CSRChile Hybrid Implicit CSR

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The reasons for this worldwide monolithic, implicit CSR approach…

Approach Results Outlook

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Non-market

relations

Concen-trated

ownership

Reluctance

Low visibility

Wide-spread

presence

information sharing and collaboration resembling a coordinated market

low/no dependence on capital markets

to adopt the ideas and terminology of explicit CSR

rarely a target of comprehensive media campaigns

close association to communities less interest

and need for explicit CSR

regardless of political system, market economy, or culture

…in SMEs are various, which has a number of implications while some…

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Approach Results Outlook

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Explicit CSR in SMEs depends on the strengths of traditional institutions

There is good reason to reject a shift to more explicit CSR for SMEs

Classification of CSR by market systems do not match CSR practices in SMEs

This raises questions on the universality and generalisability of explicit

management concepts

The study concludes a monolithic, supra-national SME approach that resembles implicit CSR

…limitations and further research steps should not rest unmentioned!

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Further research steps should look at…• The intersection between different implicit CSR systems (e.g.,

when it comes to international corporations of SMEs)• The power struggle between explicit and implicit CSR (in the

case of mergers and acquisitions or when a SME grows into a MNE)

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Limitations…• Secondary data analysis suffers from a lack of information

about the primary research quality

• Although the studies were chosen upon journal rank and citation report the selection of the studies might be biased by the choice of the authors

• Based on a quantitative definition of SMEs violating qualitative aspects

Approach Results Outlook

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Q & A

«Thank you for your attention!»

Stéphanie Looser

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Appendix 1: Sample distribution

Stéphanie Looser

Appendix References

Attribute Characteristic Absolut %

GenderMaleFemale

382

955

Number of years in business

Less than 33-56-10More than 10

09

1516

0223840

Position or title in company OwnerOwner and managerEmployed manager

139

-

2.597.5

0

Level of educationNational level certificateBachelor’s degreeMaster’s degree or higher

3433

857.57.5

Legal form

Limited companyIncorporated company SocietyCooperative

533

11

12.582.5

2.52.5

Sector

FinanceManufacturingServiceTradeAgricultureConstructionFood

211

53982

527.512.5

7.522.5

25

Language region

GermanFrenchItalianRomansh

2596-

62.522.5

150

Number of employees (full-time equivalents)

Less than 1011-5051-100101-200More than 200

11121

25

2.527.552.5

512.5

Annual turnover in CHF Mio.

Less than 1011-2021-5051-100More than 100Missing system

344

1928

7.51010

47.55

20

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Appendix 2: Secondary data analysis

Stéphanie Looser

Appendix References

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Country / reference Subject: methodology Market economy Implicit / explicit

Italy[8][12]

 19 SMEs: interviews105 SMEs: survey

Hybrid Implicit CSR

Cameroon[13][14]

 18 SMEs: interviews1 SME: case study

Coordinated Implicit CSR

Netherlands[15][16][17][18]

 111 SMEs: survey1662 SMEs: survey689 SMEs: survey20 SMEs: interviews

Coordinated Implicit CSR

UK[18][9][10][9]

 20 SMEs: interviews65 SMEs: survey9 SMEs: interviews32 SMEs: interviews

Liberal Implicit CSR

Australia[19][20][21]

 12 SMEs: interviewsContextual paper171 SMEs: survey

Liberal Implicit CSR

Finland[22]

 25 SMEs: interviews Hybrid Implicit CSR

Germany[11]

 15 SMEs: interviews Coordinated Implicit CSR

Hong Kong[23]

 59 NGOs: interviews Liberal Explicit CSR

China[24]

 1500 SMEs: survey Coordinated Implicit CSR

Taiwan[25]

 1000 SMEs: survey Coordinated Implicit CSR

Singapore[26]

 15 SMEs: interviews Coordinated Implicit CSR

Austria[27][28][29]

 1 SME: case study1 SME: case study259 annual reports

Coordinated Implicit CSR

US[30][31][32][33], [34]

 168 SMEs: survey180 SMEs: survey217 SMEs: survey700 articles

Liberal Implicit CSR

Spain[35]

 112 SMEs: survey Hybrid Implicit CSR

Chile & Catalonia[36]

 465 SMEs (Chile)394 SME (Catalonia)

 Coordinated Hybrid

Implicit CSR

References I

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[1] Rousseau, J. J., The New Encyclopaedia Britannica, Chicago, Vol. 26. 2003, pp. 938-942.[2] Bowen, H. P., Social Responsibility of the Businessmen, 1953, Harper, New York.[3] Osuji, O., “Fluidity of Regulation-CSR Nexus: The Multinational Corporate Corruption Example”, Journal of Business Ethics, Vol. 103, 2011, pp. 31-57. [4] Mintzberg, H. “The Case for Social Responsibility”, Journal of Business Strategy, Vol. 4 No. 2, 1983, pp. 3-15. [5] Looser, S. and Wehrmeyer, W., “An emerging template of CSR in Switzerland,“ Corporate Ownership and Control Journal. Vol. 12(3), 2015, pp. 541-560.[6] Matten, D. and Moon, J., “‘Implicit’ and ‘Explicit’ CSR: A Conceptual Framework for a Comparative Understanding of Corporate Social Responsibility,” Academy of Management Review. Vol. 33(2), 2008, pp. 404-424.[7] Hall, P. A. and Soskice, D., “Varieties of Capitalism – The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press. 2001, pp. 1-78.[8] Campopiano, G., De Massis, A. and Cassia, L., “Corporate Social Responsibility: A Survey among SMEs in Bergamo,” Procedia - Social and Behavioral Sciences. Vol. 62, 2012, pp. 325-341.[9] Worthington, I. and Patton, D. , “Strategic intent in the management of the green environment within SMEs: An analysis of the UK screen-printing sector,” Long Range Planning. Vol. 38(2), 2005, pp. 197-212.[10] Williams, S. and Schaefer, A., “Small and medium sized Enterprises and Sustainability: Managers’ Values and Engagement With Environmental and Climate Change Issues,” Business Strategy and the Environment. Vol. 22(3), 2013, pp. 173-186.[11] Spence, L. J., Schmidpeter, R. and Habisch, A., “Assessing Social Capital: Small and Medium Sized Enterprises in Germany and the U.K,” Journal of Business Ethics. Vol. 47, 2003, pp. 17-29.[12] Coppa, M. and Sriramesh, K., “Corporate social responsibility among SMEs in Italy,” Public Relation Review. Vol. 39, 2013, pp. 30-39.[13] Demuijnck, G. and Ngnodjom, H., “Responsibility and Informal CSR in Formal Cameroonian SMEs,” Journal of Business Ethics. Vol. 112, 2013, pp. 653-665.Stéphanie

Looser

Appendix References

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References II

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Appendix References

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References III

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Appendix References

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