Executive function and CSR

6.3.1 Setting the standard for social responsibility

The CEO in the NHS suggested an ‘ethical framework or framework of values’ would dissuade ‘senior managers’ from seeing CSR ‘as a bit of a luxury’ [PU1]. In addition he hoped that his executive board would ‘describe responsibilities in a slightly broader way so that it was more strategic, that it related to communities and also…to governance’ [PU1]. His suggestion for putting this into practice was for ‘senior people in the organization, CEO and so on to be clear about exactly’ what they wanted from CSR. Senior executives should say to ‘managers who put the time aside…we’re really pleased with what you’re doing, you’re playing your part here’ [PU1]. This sentiment was shared by other respondents who expressed hope that attitudes were changing. Six respondents said that they could see varying degrees of acceptability in the idea if sufficient incentives were put in place [PR11; PR12; PR13; PR14; PR17; PR18].

An ideal that corresponded with Follett’s work was described by the management trainee as an ‘etiquette [of] responsible citizenship…I don’t know why we can’t just expand that to… a much wider level on how people’s actions impact everyone else in society’ [PR23]. The role of the employer in this ‘etiquette of responsibility’ was to be aware of the impact of their organization through the behaviour of ‘managers [who] can be tremendously powerful individuals and affect a lot of people’s lives’ [PR23]. This sentiment echoed PR11 insofar as he suggested that heads of organizations should be subject to ‘a vicarious liability clause’ to ensure that the whole organization adhered to standards of CSR. He elaborated by saying that vicarious liability would ‘nudge them [towards] a CSR…framework’ in the same way that had been achieved by the ‘Equality Act’ [PR11]. Drawing on his experiences in the voluntary sector, the manager of a charity suggested adopting a framework of ‘ethical, or moral’ standards and ‘tap into those

qualities…have a common base line that everyone understood and it would be clearly wrong if you crossed it’ [NP6]. The likelihood of this course of action being taken is remote, given the ‘Red Tape Challenge’ pledges by the UK government to

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reduce legislation for business even to the point of repealing sections of the Equality Act, 2010 (www.equalityhumanrights.com/). Conversely, a European precedent has been set by the Dutch government ruling that senior bankers must formally agree to adhere to ethical standards (de Bruin & Dolfsma, 2013).

Notwithstanding legislation five of the respondents concurred with the manager in the financial company believing that their employer regarded CSR ‘as a starting point’ [PR13] to their contribution for the betterment of society [PR12; PR14; PR17; PR18]. These managers considered that, if all companies ‘behaved like’ theirs [PR13], business management would be ‘doing it from the heart, pure CSR’ [PR11]. The experience of the owner/manager of a manufacturer was that to run a successful business the starting point was to be clear about ‘a standard of fairness that everybody understood’ [PR21]. Contradicting this view and echoing respondents who believed that CSR was ‘for marketing purposes’ [PU3; NP6; PR23] PR22 went further and considered that CSR ‘had no benefit to the

company other than garnering goodwill’. His employer’s endeavours in CSR had a neutral impact on him and did not make him ‘feel like a better person,’ whether or not the company was ‘doing something useful’ [PR22]. The consensus was that in principle the employer organization - public, private or non-profit - had first call on an employee’s commitment. That means that if, as PR8 suggested, the employer were to have CSR, or MSR and building community relationships as management objectives it may be a way to ensure that managers take it on as their responsibility. The challenge, therefore, concerns motivating employers and the executive to fulfil Follett's hope and embrace their role in making business management central to the advancement of society and finding incentives for their engagement in a relationship with wider society. However, revisiting the point about whether companies have a conscience that can be tweaked one senior management consultant said that ‘you don’t persuade companies, you persuade people’ [PR9].

Again this brings into the equation the importance of ‘champions’ [PR11] in key organizations where people ‘admire the ethics of a company’ [PR21] and those that ‘set a good example’ [PR14]. One way forward echoes Follett and is cited in reference to business successes emanating from building relationships with society and described by Rosabeth Moss Kanter (1989, 2011). Kanter gives

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current examples of businesses benefiting by connecting with society and doing as Follett advised and reversing conflicts between capital and labour (Kanter, 2011:69). Furthermore, Martin (2009), identified a method similar to Follett’s concept of integrating interests and, like Kanter, (2011) gave examples of unifying experiences working in practice. These benefits were evident in PR10’s shop in the form of sales ‘up by six points’ and ‘100% customer satisfaction’ that increased from ‘inconsistent levels’ as a result of applying the principles of Follett and

Kanter.

6.3.2 Collaborations

Another method employed by PR10, PR16 and PR17’s companies was to collaborate with charities and other organizations to act as conduits to form

relationships and run CSR in partnerships. A major part of PR16 and PR17’s CSR was operated through such partnerships with the advantage that it offered

employees a range of options for participating. These included providing

expertise to organize ‘many events’ and ‘after about 18 months I think it is safe to say that everyone bought into’ the idea of community relationships to implement CSR [PR17]. Examples included ‘housing associations’, ‘local schools’ [PR18], community entertainment ‘shows’ to raise funds and professional support for ‘the leading and the largest homeless charity in’ the area [PR16]. In carrying out some of these activities PR17 and his HR manager, PR18, believed that within the broad range of CSR, certain aspects would resonate with managers and CSR would ‘become instilled in them’ [PR18]. These examples are in keeping with Follett’s ideas that ‘the true social interest’ is where employers in all sectors engage with society to unify interests (1924:48). Another way was suggested by PR11 who said that professional institutions and management organizations ought to be more proactive in building beneficial and mutually supportive relationships between business and society.

6.3.3 Professional organizations and CSR

Follett’s optimistic vision of management as a profession using its skills in society to advance human welfare was regarded by one respondent sceptically and

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peripherals company who had over 25 years of management experience in large organizations expressed his reservations about a standard model of CSR,

‘It would have to be spelt out and reiterated to the workforce, public, shareholders, everyone for it to work. It would have to be really well thought out and explained as to what was expected, and it would need reviewing on a regular basis, given a chance to fail, devise strategies to help achieve it. There would be a lot involved to make it work and work fairly. I’m not sure if business is ready for it’ [PR8]

Other respondents agreed with Follett and believed that they were in businesses that did make a positive contribution to society. Some discussed business and society cooperating in a mutually beneficial relationship being inherent in a number of frameworks. These include those devised by ‘professional bodies where…there is ‘accountability to the public in a social, moral way’ [NP7]. Examples of frameworks of collaboration and standards explored with

respondents included the UN Global Compact, WEF code, EU guide for CSR, as well as national sector guidelines, such as the Institute of Directors (IoD), the Chartered Institute of Personnel and Development (CIPD), and the General

Medical Council (GMC). However, all four CIPD qualified managers [PR11; PR12; PR18; PR19] considered that their training had ‘only touched on’ CSR and was limited to how it was implemented in their ‘own firm’ [PR18]. They agreed that the way in which CSR was implemented was down to the culture and ethos of the organization [PR11; PR12; PR18; PR19]. Whilst these respondents held positive views about CSR and considered it to be ‘a good thing’ [PR11], they gave differing accounts of what CSR meant to them as managers. These different

interpretations were despite being members of the CIPD which had a definition of CSR (para 1.1.7). Thus, whilst established management organizations such as CIPD and IoD offer training in CSR, the interpretation of the manager’s role in implementing it was influenced ‘from the top’ and experiences in their place of work [PU3; PR10; PR18].

6.3.4 Gaps in knowledge

Regardless of levels of information emanating from professional bodies, respondents gave evidence that such organizations do not drive CSR. A cautionary comment from one member of the CIPD referred to it being

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for it to be higher on the CIPD agenda [PR11]. Another respondent suggested that the CIPD ‘should involve different elements of social responsibility’ so that what is taught goes beyond environmental matters and to a more proactive approach that would be needed if MSR is to be implemented [PR18]. Further examples were cited by those managers with formal management qualifications who concurred with PR10 who told how in his business degree ‘sustainability and things…weren’t even touched upon.’ Other respondents agreed that they had been taught ‘nothing’ [PR16] in the way of CSR [PR10; PR11; PR12; PR16] when studying management. In addition, the two local authorities in the research each with over 30,000 employees ‘had not given [staff] any training with regards to CSR’ [PU2; PU3]. Also in the public sector the GMC was looked to as having a responsibility for promulgating CSR.

‘If the GMC were…to write something that as a medical director, these are the things that…the public expect from you…we should all have the same picture in our minds of…how people work well together’ [PU1].

This quote from a CEO with considerable autonomy and influence appealed to his hierarchy for a lead. Whilst PU1, as the most senior executive in charge of 5,500 employees, felt unconfident about promoting CSR without guidance, the power and role of professional bodies in operationalising the concept is an important point to address.

The MD, PR17, who was an advocate of CSR, considered that the IoD had covered CSR in his director training by teaching about corporate misconduct and what constituted an ‘immoral act or an unethical act’ [PR17]. His recollection of the guidance on the responsibility of directors when facing ethical dilemmas fell into the category generally regarded as corporate governance (Johnson,

Whittington and Scholes, 2011:123). From PR17’s description, therefore, conventional CSR – such as Carroll’s 1979 model para 1.1.7 - was not covered insofar as account was not taken of corporate social responsibilities that went beyond legal obligations. Like Follett, PR17 sought to ‘measure the value’ and to develop the value of his potential contribution to society as part of a process and not towards one specific goal (Follett, 1924:50). PR17’s aim was to ‘strengthen society and try and increase the worth of it’. In fact PR17 set up his CSR

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programme prior to his IoD training, which was based on the contribution he wanted to make to society. The interpretation of what PR17 was taught by IoD was viewed through the lens of his moral stance and his prior experience of CSR. Thus the methodology used in the research is highlighted in that CSR was

interpreted by this respondent as a social construct that depended on experience and communication (Burrell and Morgan, 2003). The interpretation of CSR is relevant to setting up systems to enable managers to take on responsibility for MSR. This is because how managers have interpreted and operationalised CSR was subject to their innate attitudes and values and, as in any management training, factors of prior knowledge and biases need to be taken into account (Kolb,1984). Any MSR awareness framework for managers, therefore, ought to heed this factor, along with the previously noted matters of individual and

organizational values.

6.3.5 Training, skills, and capabilities for CSR and MSR

The values, biases and approach of PR17 initiated his desire to strengthen society and help ‘people who are less fortunate’ [PR17]. During the 10 years since taking over as managing director, PR17 had instituted a programme of training and development incorporating CSR so ‘that everyone takes responsibility’ [PR17]. Thus this particular exemplar of CSR supported the idea that CSR could be taught to managers in the context of relationships, leadership, incentive, and

responsibility. These are elements that concur with both Follett (1918;1924;1941) and Argyris (1977) about the growth of individuals through building areas of

responsibility.

The majority of respondents learnt about CSR from the media and from reading the information sent to them prior to taking part in the research for this thesis. Here the research methodology is highlighted in that the actual process of research altered the perception of individuals taking part, thereby broadening horizons and advancing knowledge (Gadamer, 1979:356). Furthermore, no respondents had identified a gap in their management training until it was

broached during interview; again this resonates with the methodology in that being involved in research can alter behaviours of participants (Alvesson and Sandberg, 2013).