Corporate Social Responsibility in a Globalizing World begins with the observation that “the global expansion of corporate social responsibility (CSR) in recent decades has been spectacular.” The editors, sociologists Alwin Lim and Kiyonteru Tsutsui, point to the emergence of a plethora of CSR initiatives, like the UN Global Compact, and a large body of scholarly work in response to so-called “governance gaps.” Such gaps arise when states are unable or unwilling to enforce citizens’ basic rights against corporations. In the face of these governance gaps, corporations are expected to take responsibility for aligning business activity with social and environmental objectives. On one view, then, CSR developed and operates as a stopgap measure.
The contributors to this volume broadly agree on this stopgap premise of CSR. Thus, they look at the concept of CSR as a potential tool for regulation of a globalizing economy. Instead of focusing on internal firm characteristics to explain why corporations engage with CSR, they analyze institutional and economic contexts that shape CSR at both national and global levels. The objective of the edited volume is to take stock of the global CSR movement and explain its rise and its consequences for corporations.
The volume is comprised of twelve chapters in four parts, in addition to an introduction by the editors and an excellent conclusion by Aseem Prakash. Applying the social regulation perspective to the study of CSR, the editors identify two core themes that provide the backbone of the book’s structure. The first theme, comprising Parts I and II, focuses on the broad external contexts that encourage or hinder the emergence and impact of global CSR. The second theme, comprising Parts III and IV, highlights the global and national dynamics that shape CSR ideas and practices in different ways.
Part I examines the historical context in which CSR evolved and the legitimation problems that multinational corporations (MNCs) seek to address by committing to CSR. The first chapter in Part I, by John W. Meyer, Shawn M. Pope, and Andrew Isaacson, highlights how legitimacy problems were created for MNCs by their growing economic power in an expanding global capitalist order; in the absence of a supranational authority, CSR became a response to external pressures by non-governmental organizations and other societal actors that sought to hold MNCs accountable for their actions. The authors trace the growing number of CSR initiatives and argue that initiatives that, at first, had very low entry barriers, like the UN Global Compact or the Carbon Disclosure Project, advanced in accordance with growing public expectations of corporate accountability. Their detailed, largely descriptive and favourable account of the development of the CSR movement is, unfortunately, not strictly linked to the volume’s premise, namely assessing the CSR movement over time in light of the concept’s ability to effectively and legitimately address governance gaps. The expansion and diversification of CSR alone does not legitimize the growing power of MNCs.
Also in Part I, Peter Utting traces the development of Multi-Stakeholder Initiatives (MSIs) as new regulatory entities. He provides an impressive overview of the various MSIs that have emerged in the past decade. Utting correctly points to the large number of variables that can explain critical differences among these initiatives. The chapter, however, leaves unaddressed the issue of which MSI characteristics are beneficial for addressing governance gaps. Daniel Kinderman concludes Part I by examining how global CSR frameworks shape national-level CSR organizations. He finds that the influence is not one-directional and that the interplay between national and global CSR initiatives is an influential but understudied area in an otherwise crowded research field.
Part II builds on the macro-analysis of the first part and examines the formation of specific subfields of global CSR in the areas of conflict minerals (Virginia Haufler), supply chain CSR (Jennifer Bair and Florence Palpacuer), and sustainability (Klaus Weber and Sara B. Soderstrom). The chapters by Haufler, Bair and Palpacuer define different phases in the development of their respective fields and then point to different factors that were critical in each phase.
Haufler’s review of conflict mineral initiatives shows that the formation of the Kimberley process (1998-2006) was strongly influenced by industry structure and consensus, leading to a single institution regulating the diamond industry. More recently (2006-2012), state power and institutional competition have been salient features in the formation of initiatives for other conflict minerals.
Like Haufler, Bair and Palpacuer divide the development of supply chain CSR into two phases. In the field formation phase (1989-1999) supply chain CSR was shaped by national contexts and resulted in the establishment of MSIs. The authors argue that public criticism and activist pressure regarding supply chain conditions were interpreted differently in the United States and Europe and hence resulted in different institutional outcomes. In the following phase (1999-present) business-led CSR initiatives respond to civil society’s growing concern over the private governance model and now dominate the field. The authors note that skepticism over this form of regulation is growing. The exposé of poor working conditions in Apple’s supplier Foxconn in China, and the collapse of Rana Plaza, a building complex in Dhaka that was hosting several garment factories producing for Western brands, raise questions about the approach led by MNCs; consequently, the authors perceive the emergence of a new phase that moves away from voluntary codes of conduct towards narrower, more concrete and arguably enforceable agreements, like the Accord on Building and Fire Safety in Bangladesh. However, the authors do not acknowledge that it is not yet clear whether agreements like the Accord are an improved model for ensuring workers rights in supply chains since, as some commentators have noted, the Accord has yet to prove that it is the vehicle that can drive a comprehensive remediation process in Bangladesh’s garment industry (Labowitz Reference Labowitz2014).
The longitudinal perspective that these two pieces assume in order to explain the development of the conflict minerals and supply chain subfields of CSR is beneficial for understanding their institutional shapes. The insights from this retrospective analysis could inform a discussion about the elements that would drive improved processes in the future. In the industry contexts of precious stones and apparel, it seems particularly relevant to assess whether the multiplicity of CSR programs has led to a “race to the bottom,” in which companies shop for the least demanding CSR initiative, or a “race to the top” with continuously improving initiatives.
The next chapter by Weber and Soderstrom engages with the critical idea that “sustainability” concepts differ depending on cultural contexts. From an organizational management perspective, the authors highlight that there is no consensus over what kind of role “sustainability” plays in corporate strategy. Definitions as well as the practice of sustainability vary considerably. As a result, attempts to define common themes, let alone to measure the concept’s impact, have been difficult.
Part III considers the responses of firms to the CSR movement, in particular whether the adoption of the concept has in fact altered corporate behavior. Two chapters, the first by Shawn M. Pope and the second by Satoshi Miura and Kaoru Kurusu, specifically study the motivations and drivers for corporations’ engagement in CSR. Pope suggests that MNCs adopt CSR primarily to address legitimacy concerns. Miura and Kurusu, in contrast, differentiate between inward and outward motivations and conclude that external, reactive factors drive firms in Japan to join the UN Global Compact. Understanding these motivations in different contexts is important for framing CSR. Beyond the motives behind CSR initiatives, Edward Walker sheds light on the darker side of corporate attempts to shape the CSR discourse by influencing civil society actors. His chapter shows that CSR is politically expedient and is also instrumentalized to advance corporate interests.
Part IV looks at the promise and limitations of CSR. Ion Bogdan Vasi examines how engagement in CSR affects the perception of firms. He shows that financial analysts are now looking to assess firms based on the actual implementation of CSR initiatives. Tim Bartley and Doug Kincaid provide the most skeptical view of CSR in the volume. Their chapter assesses CSR in the context of establishing labor rights in global supply chains in the textile, apparel and footwear sector. The authors show that CSR programs in this industry did not deliver what they promised. They highlight that in order to effectively establish labor rights throughout supply chains, purchasing companies in this sector need to reflect on how their business models cause systemic pressures on CSR upstream. This finding is consistent with other work on this subject (see, e.g., Labowitz & Baumann Reference Labowitz and Baumann-Pauly2014) and shows that CSR, when it is not part of core business processes, is not effective.
In terms of managing corporate legitimacy, the engagement of CSR may also not be the best strategy. The final contribution by Brayden G. King and Mary-Hunter McDonnell provides empirical evidence that CSR does not neutralize activist criticism but can in fact make firms more vulnerable to consumer boycotts. Future research should further distinguish between the types of CSR that lead to greater scrutiny and criticism from activists.
Overall, this volume is a useful assessment of CSR to date, provided by some of the most distinguished scholars in the field. It convincingly explains the institutional phases and variations of CSR on a global and national level. The volume’s interdisciplinary perspective sheds light on the status of CSR from different theoretical and methodological perspectives, which increases the richness of the account. As such, it is an invaluable resource for researchers who want to tackle the central future challenges in this research field.
What the volume lacks, though, is a vision for social regulation of the economy in the future. This omission is perhaps explicable on the basis that it goes beyond merely taking stock. Nevertheless, while the institutional perspectives of the contributions explain variations of CSR, they do not rigorously assess the concept’s achievements in relation to the governance gaps it was meant to address; nor do they make concrete suggestions for a future course of action.
The theoretical framing of the volume puts governance gaps and legitimacy questions front and center. I share the view of the editors that the most relevant and urgent question in the global CSR context is how private actors can address governance gaps effectively and legitimately. However, the volume explicitly shies away from addressing what I would call the elephant in the room, namely the fact that its meaning is imprecise and there are, therefore, large variations in what actually constitutes CSR. This, in turn, affects the implementation of CSR and threatens its credibility. The ceremonial adoption of the concept alone does not regulate governance gaps and the laissez-faire attitude concerning its implementation neither enables accountability nor provides the basis for corporations to effectively manage their legitimacy when addressing operations that impact the fundamental rights of consumers, workers, and communities.
A prime example of the limited effectiveness of CSR as a basis for assessing performance and progress concerns Volkswagen and its recent emissions scandal. In September 2015, just days before the scandal broke, the Dow Jones Sustainability Index, which measures what is commonly termed “CSR,” announced that Volkswagen was the world’s most sustainable automotive company. While Volkswagen has since been removed from the index, we can explain this initial misjudgment either by questioning the methodology of the Dow Jones Sustainability index or by asking the more radical question: Is it possible to define meaningful indicators for a concept that has not significantly sharpened its contours?
It could, of course, be argued that these are just terminological issues and CSR can eventually become a substantive concept. I agree in principle, but in practice CSR continues to serve as a catch-all term to cover everything from philanthropy to marketing and only sporadically affects a company’s core business. Attempts to define narrower CSR concepts, such as political CSR or corporate citizenship (Scherer and Palazzo Reference Scherer and Palazzo2011; Matten and Crane Reference Matten and Crane2005), which are focused on redefining the role of corporations in global governance processes, have made waves in academic journals but are unheard of in practice.
To assess the impact of CSR in practice, corporate commitments need to be based on a common set of standards, defined through hard or soft law, that outline what is expected from corporations that are confronted with governance gaps in their specific industry context. By defining industry standards, compliance and progress can be monitored and the results can be made public. Some MSIs, like the Fair Labor Association, have developed such an approach. Further differentiating CSR institutions according to their actual capacity to address governance gaps, and examining the model that more effective institutions employ, seems to me a promising research agenda, one that is prompted by the present volume but not directly addressed.
