Corporate Social Responsibility Research in the Journal of Management Studies: A Shift from a Business-Centric to a Society-Centric Focus

The Relational Orientation in CSR Research

Research that explores ‘relational’ dimensions of CSR has been dominated by an institutional theory perspective. Yet, I label this stream of research relational rather than institutional because several influential studies drawing on alternative theoretical repertoires emerged simultaneously. They shared a view on other non-business actors in the CSR arena and how relationships between businesses and these actors inform CSR. Furthermore, the relational perspective shares an acknowledgement of the erosion of business firms’ capability to act strategically regarding CSR, in favour of more influence granted to actors in a company’s social-institutional context, such as NGOs, civil society, governments, and other stakeholders. This implied not viewing CSR above all as the (pro)active decision of a firm to engage in some sort of social responsibility under the condition that it would contribute to profits; rather, it implied considering CSR to be a necessary reaction of businesses to the expectations of various stakeholders and concomitant institutional pressures.

For instance, Scherer et al. (2013) suggested that CSR is not primarily a (voluntary) quest for competitive advantage, but one that business firms are pressured to pursue to safeguard their legitimacy. To survive, businesses require societal acceptance so that they can maintain their license to operate. Based on this assumption, Scherer et al. (2013) reviewed three strategies that corporations commonly use to respond to legitimacy challenges: adapting to external expectations, manipulating stakeholder perceptions, and engaging in discourse with stakeholders who question the firm’s legitimacy.

With a similar focus on the heterogeneous institutional environments with conflicting demands towards businesses, Marano and Kostova (2016) unpacked the institutional complexity surrounding CSR and demonstrated how it affects multinational enterprises’ adoption of CSR practices. They situated these firms in complex transnational organisational fields with multiple, diverse, and possibly conflicting institutional forces within which CSR has been globally diffused. The authors identified various factors that explain the salience of different types of institutional pressures related to CSR, and also how CSR is determined by these pressures exerted by various stakeholders that reside outside a business, rather than it being an internal choice.

Schneider et al. (2017) also located businesses as deeply embedded in a web of relationships with their stakeholders, and considered CSR primarily as a response to concomitant expectations. Drawing on social systems theory, the authors zoomed in on how organisations collectively engage with their stakeholders – competitors, suppliers, customers, and civil society organisations – in the development of common CSR standards, and on how such collaborations create additional pressure on firms that are not yet participating. Similar to the institutional theory-based perspectives such as that of Marano and Kostova (2016), CSR was primarily seen as a reaction of businesses to different types of pressure stemming from their external environment.

Crane and Glozer (2016) reviewed the CSR communication literature and echoed the previous assumption that firms are embedded in a web of relationships with stakeholders who influence why and how they should engage in CSR, and that this in turn affects the need to communicate with these stakeholders. The authors demonstrated that how firms communicate with their stakeholders shapes the design, implementation, and success of CSR activities. The authors sought to overcome the fragmentation of the CSR communication literature and offer a new conceptual framework for such research.

The link between CSR communication and its internal organisational implementation was also emphasised by Wickert et al. (2016), who examined when firms are ‘walking the talk’ of CSR. They viewed CSR as a response to institutional pressures that urge firms to match communication about CSR with corresponding internal practices. Given recurring accusations that particularly large firms fail to live up to their CSR commitments, Wickert et al. (2016) argued that CSR research suffers from a lack of understanding of the differences between ‘CSR talk’ (i.e., impression management and symbolic practices) and ‘CSR walk’ (i.e., substantive implementation of CSR policies, structures, and procedures), as well as limited knowledge about the influence of firm size on these different patterns. Based on the organisational cost of engaging in CSR, the authors explained the large-firm implementation gap, where large firms communicate CSR symbolically but do less to implement it into their core structures and procedures; this is in contrast to the small-firm communication gap, where small firms less actively communicate while placing greater emphasis on CSR implementation. A critical implication of this work was that it also called for more attention to small and medium-sized enterprises in CSR research.

De Roeck et al. (2016) examined CSR in relation to organisational identification of a company’s employees. Their research demonstrated that how CSR is perceived by employees interacts with organisational identification and is mediated by a company’s external prestige and internal pride. De Roeck et al. (2016) argued that while CSR has become a mainstream practice for businesses, too many companies continue to create CSR initiatives that have ambiguous impacts on the wellbeing of key stakeholders, such as employees. The framework they developed can assist managers in better understanding how their CSR engagement can positively affect employees.

The Political Orientation in CSR Research

The political orientation is best exemplified by the highly cited publication by Scherer and Palazzo (2011) in JMS, titled ‘The New Political Role of Business in a Globalized World: A Review of a New Perspective on CSR and its Implications for the Firm, Governance, and Democracy’. The authors challenged the then-dominant assumption in management and economics that business firms focus on profits, while governments provide public goods such as health care, clean water, and human rights. In that view, business firms are economic actors, whereas governments are political actors. However, under the conditions of globalisation, business firms turn into political actors, and the previously upheld division of labour between governments and the private sector erodes. Scherer and Palazzo (2011) indicated that many business firms have begun to assume social and political responsibilities beyond legal requirements and in doing so fill gaps in global governance, such as the private self-regulation by businesses of labour norms in global supply chains. This new mode of operating politically marks a crucial shift away from the political involvement of businesses in a more traditional sense, which mainly concerns businesses interacting with governmental decision-makers, for instance through lobbying, to influence political outcomes (den Hond et al., 2014).^[2]

Therefore, the involvement of business firms in matters of public concern induced researchers to examine the conditions under which business decision making could become democratised and gain the necessary legitimacy through multistakeholder involvement, deliberations, and collective decision making. As Scherer and Palazzo (2011) summarised, the aim of political CSR is to aid the formulation of the conditions of legitimate political will-formation and rule enforcement in contexts where government authorities are absent, corrupt, or repressive, and where private regulation might be the only viable alternative.

The 2016 special issue on ‘Managing political CSR’ edited by Scherer, Rasche, Palazzo, and Spicer further consolidated the political orientation in CSR research, as five of the 10 most-cited CSR papers published in JMS since 2016 are from this issue. The second most-cited paper was by Reinecke and Ansari (2016), who examined collective responses for solving a critical governance problem, namely the mining of conflict minerals in the Democratic Republic of Congo. This work exemplified that whether CSR benefits businesses financially is not at the centre of attention. Instead, the solution to a societal issue is the key research problem. Reinecke and Ansari (2016) tracked the shift in thinking of companies about conflict minerals as an insoluble issue occurring at a distance to an issue they are socially connected to and should assume responsibility for. Crucially, these reframing strategies involved changes in legislation about conflict minerals, and hence, turned attention to the role of governments that had previously been underemphasised in political CSR research.

Levy et al. (2016) similarly located businesses in a web of stakeholder relationships and zoomed in on NGO–industry interactions around the political dynamics of sustainable coffee. Their research demonstrated that constructing legitimacy around important CSR issues can help to establish new business models underlying entire industries – which in this case was fairly traded coffee. This change in international standards linked to the trade of coffee was greatly driven by activist groups – rather than strategic considerations of coffee companies – who contributed to expanding fairly traded coffee from a niche to a mainstream product accommodated by firms such as Nestlé and Starbucks. The research of Levy et al. (2016) was vital in demonstrating how industry–NGO interactions can enable new international regulations and even entirely new business models.

Castelló et al. (2016) explored the legitimation strategies of companies and thus also turned their attention to the societal acceptance of business activities rather than their strategic value. Given the rise of social media instruments such as Twitter at the time of the analysis, the authors demonstrated how digital technologies are used to engage with stakeholders as well as how this impacts the ways in which businesses can build legitimacy for their actions. Crucially, their research indicated how the studied company changed from a one-way communication to stakeholders to a more discursive and conversation-oriented mode of communication with stakeholders.

Finally, Maak et al. (2016) examined the relationship between responsible leadership and political CSR. Their research explored the leadership traits of those who are more likely to engage in the type of CSR that is reflected in the society-centric focus in contrast to pursuing narrower financial objectives. They demonstrated that responsible leaders who focus on social welfare can process higher degrees of cognitive and social complexity paired with a business governance system oriented at stakeholder concerns and lower power distance.

In conclusion, both the relational and political views contributed to the evolution of the society-centric focus in CSR research, which prevails in present-day scholarship. To recall, an important change that expanded the business-centric focus to the society-centric focus was that the former attributed a relatively high degree of agency to business firms to act strategically vis-à-vis their stakeholders. This agency, however, became more distributed among stakeholders in the society-centric focus, with the pendulum swinging towards viewing CSR as a reaction rather than action of business firms to stakeholder expectations and institutional pressures. Next, I take the society-centric focus further and outline three central avenues for future research, which CSR scholars have just begun to examine.

The Revival of Governments in CSR

The revival of governments in CSR research challenges the assumption that business firms vis-à-vis governments are voluntarily able to provide public goods and close governance gaps, as suggested by research on political CSR. This coincides with a return of the state in the CSR arena and a proliferation of legislation driven by national, regional (e.g., the European Union), and transnational governing bodies (e.g., the United Nations, OECD, and G20 initiatives). Governments have never been absent in CSR. However, while earlier research called attention to the potential benefits of ‘soft’ law, such as industry self-regulation and voluntary agreements, there is an increasing recognition that these initiatives have been insufficient for solving the world’s most pressing social and ecological challenges (e.g., Kourula et al., 2019; Maher et al., 2021; Reinecke and Donaghey, 2021).

Even proponents of political CSR admit that ‘the debate on PCSR might have been too sceptical with regards to governmental regulation both on a national and international level and too much focused on soft-law initiatives and the significance of private authority’ (Scherer et al., 2016, p. 283). Prior work might thus have been somewhat naïve about the capacity and willingness of business firms to engage in forms of soft law that level the typically much more stringent hard law. In fact, there are increasing attempts by governments to reclaim control over the activities of businesses in relation to CSR that used to be ‘outsourced’ to private regulation, both nationally and globally. For instance, Reinecke and Ansari (2016, p. 323) suggested that ‘political CSR is not simply about a shift from “government” to “governance” or from “hard regulation” to “soft regulation”’, but involves ‘both public and private actors with a shifting rather than a shrinking role of the government’.

Next to the US regulation on conflict minerals that Reinecke and Ansari (2016) studied, there are ongoing attempts by governments worldwide to legislate global supply chains in relation to human rights, modern forms of slavery, and child labour, such as the German ‘Lieferkettengesetz’ (supply chain law), the French ‘Loi de Vigilance’ (vigilance law), and the ‘Modern Slavery Act’ of the UK. Likewise, the new European Union Directive on non-financial disclosure mandates large firms to report on how they deal with critical social and environmental issues. Whether this return of hard law is, however, more effective at solving what soft law left unresolved remains an important empirical question.

Recent evidence suggests that the COVID-19 pandemic has pushed governments back into the CSR arena even further. Crane and Matten (2021, p. 283), for instance, argued that ‘COVID-19 has re-centred governments as the key actors in tackling grand challenges rather than being seen as increasingly ineffective in this space, as they are often portrayed in the CSR literature’. These developments also call for future research to challenge another important assumption underlying political CSR scholarship, namely the existence of a ‘postnational constellation’ in which nation states play a less pronounced role in the governance of global issues. As evidence of resurging government authority at national levels suggests, this assumption might be weaker than previously thought, as already acknowledged by Scherer et al. (2016). Research should scrutinise the consequences of this rise of government authority, and consider for instance how national CSR agendas impact transnational CSR initiatives such as the United Nations Global Compact and the Sustainable Development Goals (SDGs).

Furthermore, crucial research questions surface regarding the transformation of once emerging markets into globally dominant economic superpowers that increasingly influence how we think about CSR. Future interpretations of CSR will most likely be neither decisively ‘Anglo-Saxon’ nor ‘Continental European’ (see e.g., Matten and Moon, 2008). Given the economic and political influence of China and other emerging economies, future research needs to investigate how businesses in these contexts approach matters of social and ecological responsibility, where national governments have an even more decisive – sometimes authoritarian – role (e.g., Li and Lu, 2020; Zhang et al., 2020). Different regulatory environments might be in harmony or clash, and relatively little remains known about how a ‘Chinese’ understanding of CSR, for instance, accords with a ‘Continental European’ and ‘Anglo-Saxon’ one, let alone understandings of CSR from the Global South. These questions are critical not only for globally operating companies that aim to introduce their home-country understanding of CSR in foreign markets, but also for NGOs that require a reference point for what socially responsible behaviour entails when they exert pressure on business firms to act accordingly.

Reorienting the Dependent Variables in CSR

The expansion from a business-centric to a society-centric focus has crucial implications for future research investigating cause–effect relationships that involve CSR, and also for studies linking different types of CSR strategies and practices to actual improvements in certain social and environmental conditions. This specifically concerns quantitatively oriented research, which in the past has been dominated by the key dependent variable of interest of financial performance or a derivative, such as profitability or shareholder value. Thus, future CSR research interested in the ‘outcomes’ of CSR should leave firm-level analysis behind and turn its attention to other dependent variables that more explicitly consider the social and ecological impact of CSR.

The problem is that while the literature offers much information about how CSR can impact financial performance, surprisingly little is known about whether and how CSR creates outcomes that profit beneficiaries other than shareholders (Barnett et al., 2020); such beneficiaries include workers and their health and well-being, smallholder farmers and their working conditions in global supply chains, and the natural environment and its resilience, sustainability, and biodiversity (de Bakker et al., 2020; Whiteman et al., 2013). This is because the focus has typically been on outputs (e.g., commitments made to CSR; the production of CSR reports; data collected on CSR indicators; the existence of CSR policies/programmes and dollars spent on them; and membership in various CSR initiatives). However, outputs are not necessarily indicative of the outcomes for different beneficiaries, nor of whether some aggregate social or ecological conditions have actually been improved. In fact, companies often produce excellent CSR outputs without producing significant CSR outcomes, and in doing so, they disguise their true impact on society (Wickert and Risi, 2019).

Further, outcomes are often long-term, nonlinear (i.e., drawing a straight line of sight from outputs to outcomes is challenging), and often cannot be counted. Therefore, the ambiguous impact that CSR, as currently practiced by many businesses, has on concrete social and environmental conditions requires a shift in our understanding of CSR from ‘a (never ending) journey’ to one that better captures its concrete societal outcomes and effects (Wickert and Risi, 2019, p. 73). However, the challenge for researchers and practitioners remains to replace the predominant business case logic of CSR with an ecological case (or social and ethical case) for business (Ergene et al., 2020) that is tightly anchored to the world’s planetary boundaries (Whiteman et al., 2013); for instance, the achievement of the 17 SDGs.

While research has already suggested some alternative measures of CSR outputs, such as ‘net zero’ emissions or different forms of ecological ‘footprint’ (e.g., carbon, water, and waste), our understanding of how these measures – specifically in their absolute (e.g., total emissions caused by a firm or industry) rather than relative (e.g., emissions per dollar spent or earned) manifestation – are linked to business activity is only in its nascent stage. We still know very little about how these measures can be achieved most effectively, what the associated trade-offs are, how they are interrelated, and whether and how they result from particular CSR practices and procedures. In summary, we need to know more about how to effectively capture the impact of CSR beyond financial performance, as well as how different social and ecological outcomes are linked to what businesses do in the name of CSR.

The Importance of CSR Research for Tackling Interrelated Societal Crises

While hardly any aspect of life has not been affected by COVID-19, the pandemic has also created new challenges in how we research the role of business in society and what companies do in terms of CSR. Scholars (e.g., Crane and Matten, 2021) have demonstrated that COVID-19 has posed multiple challenges to CSR. These challenges include the following: (1) the reconsideration of previously marginalised but systemically relevant stakeholders such as health care and retail/service workers; (2) the role of business as a source of societal risk and as an actor that is increasingly exposed to new risks and thus needs to determine how to address them, such as considering whether to retain or lay off employees and to serve customers with essential services; (3) the responsibility to safeguard global supply chains, for instance, for medical products and vaccines; and (4) the political economy of CSR, regarding which Crane and Matten (2021, p. 283) called for research that explores ‘how different systems of capitalism across the globe have prepared for and dealt with the challenges of the pandemic, and what role for business responsibility is allocated in these systems to address social demands and the needs of wider society’.

Moreover, the pandemic has underscored the interdependency of multiple crises, many of which are still ongoing or have even been accelerated due to COVID-19. They include the climate crisis, the displacement crisis, the economic crisis, and the crisis of critical consciousness (e.g., the #MeToo and Black Lives Matter movements; Wickert et al., 2021). While it is no surprise that these crises are interrelated, an urgent need exists for future research to investigate the actual mechanisms and driving forces that either contribute to their further intertwinement or allow their disentanglement, as well as the role of business in mitigating or accelerating one crisis at the expense of another. For example, responses to COVID-19 might have both positive (e.g., less air travel) and negative (e.g., more medical waste) repercussions on how firms deal with other crises, such as the climate crisis, as part of their broader CSR strategies. In the long term, these repercussions are also likely to land on the CSR agendas of businesses and governments and might lead to important shifts in priorities, to name just a few of the critical issues that future research should address.

Some scholars have begun to think about how to tackle the interrelatedness of multiple crises. Bansal et al. (2021), for instance, suggested that management research should adopt a systems perspective that emphasises the recursive, dynamic, and cross-scale nature of social, ecological, and economic systems. Such views would substantially expand the scope of issues that are currently subsumed under CSR, and shift attention even more to those ‘big questions’, such as the role of individual business decisions in tackling societal grand challenges like global inequality and its relation to climate change (see Gümüsay et al., 2021). Researchers should investigate contexts in which actors – managers, employees, workers, and civil society participants – are simultaneously confronted with multiple crises, and examine what this means for how business firms and their stakeholders negotiate the scope of CSR.