Understanding what drives Corporate Social Responsibility

Companies and businesses generally exist to create wealth. Yet, increasingly over the past three decades, companies have come to regard Corporate Social Responsibility programmes as an important bottom-line measure.

Associate Professor Alwyn Lim from Singapore Management University and Shawn Pope from Léonard de Vinci Pôle Universitaire dig into the underlying motivators that propel businesses to design and roll-out these programmes, and their impacts.

Read the original article: https://doi.org/10.1002/csr.2199

Transcript:

Hello and welcome to Research Pod! Thank you for listening and joining us today.

In this episode, we will be looking at the work of Associate Professor Alwyn Lim from Singapore Management University and Shawn Pope from Léonard de Vinci Pôle Universitaire. The research we will be discussing pertains to Corporate Social Responsibility (CSR) programmes and the underlying motivators that propel businesses to design and roll-out these programmes.

CSR motivation research has drawn a very wide interest over the past three decades, not only from academics but also from international research and consultancy firms, as well as intergovernmental groups. Understanding the motives behind CSR programmes means a greater insight into how businesses can be influenced to make a positive impact, and contribute to solving broad ranging socio-economic and environmental problems.

CSR motivational research often takes the form of a survey asking business leaders and owners to choose from a lengthy list of survey options, which reasons they consider to be important motivational drivers behind their CSR programme. Historically, the analyses of these surveys have grouped the motivational drivers of CSR programmes into a tripartite schema with three main legs, which we’ll look in more depth over the next few minutes: normative motivations, instrumental motivations, and political motivations.

First of all, what is Corporate Responsibility?

Before diving into the research to understand how Professor Lim and Dr Pope conducted their analysis, it is interesting to think about the fact that companies and businesses generally exist to create wealth. Yet, increasingly over the past three decades, companies have come to regard CSR programmes as an important bottom-line measure. Entire departments with dedicated people work on these programmes, often with a direct link through to senior business leaders. These social responsibility programmes can include a wide range of projects and initiatives, all with the stated intent of doing social good, using the financial resources of the business. Professor Alwyn Lim and Shawn Pope say that CSR implies a recognition that businesses have obligations not only to behave ethically and legally while conducting their business but also to contribute voluntarily to the wider social and environmental good. The term CSR thus refers to prosocial behaviour and good corporate citizenship.

Many reasons have been proposed for why businesses would undertake these programmes, ranging from motivations to present a certain company image that enhances the brand of the business, to positioning the company in the eyes of the wider community in a positive light that enhances stakeholder relationships. CSR programmes can create a ‘halo’ effect for businesses.

One of the main CSR motivations in the tripartite schema has been named as normative motivations. These motivations often align with current expectations in the broader society regarding ethical and moral behaviour. Some businesses may depict their CSR as being fundamentally linked to and aligned with the values and culture of the company, and the ethics regarding how the business conducts itself. Normative motivations can be described as internally driven motivations that make the company feel virtuous and good.

While many companies emphasise the alignment of their CSR programmes with their company values, companies frequently benefit from their CSR programmes. Companies may even expect to obtain these benefits when implementing CSR programmes. This brings us to the second motivation - instrumental motivations, where CSR programmes are instrumental in helping a company to achieve its strategic goals. One such benefit may be that consumers could make conscious choices to purchase from companies whose values they identify with. A well branded CSR programme can thus change the image of the company in the eyes of consumers.

Previous research has shown that companies who are perceived as being virtuous and of good character in their way of conducting business, also tend to be perceived as more competent. Consumers tend to be more forgiving when these businesses experience negative events. Consumers also tend to show more loyalty and commitment to purchasing from businesses with a strong virtuous brand. Customer satisfaction is often higher for these brands. From an internal company perspective, CSR programmes benefit employee morale and productivity. Additionally, companies with well publicised and visible CSR programmes have also been shown to be more trusted which brings benefits by impacting positively on business dealings with broader stakeholders, from financiers, to investors, suppliers, and regulators. This in turn can bring potential financial benefit to the business.

The third motivating driver behind CSR programmes can be an attempt to manage relationships with powerful stakeholders. These CSR motivators are classified as “political motivations”, which can yield less regulatory pressure, as well as less pressure from social activists.

Professor Lim’s research refines the tripartite schema, aiming to address some of its challenges. He offers motivators a place in rank ordering, describing which yields the greatest motivational influence in driving CSR programmes. The research conducted by Professor Lim and Dr Pope took the form of a meta-analysis of 120 academic surveys on CSR motivation. These surveys were sourced from Google Scholar, Web of Science, Google, and Bing.

The authors highlight a number of compelling reasons that motivated their decision to conduct this extensive meta-analysis of existing research surveys. This included the fact that the survey data in its reported format often does not get analysed with reference to theoretical models regarding CSR motivations. The way in which survey questions are presented is often divorced from the theoretical schemas and this results in a lack of clarity regarding which of the three proposed motivators for CSR are ranked by business leaders, as being most important. The surveys also analyse the many CSR motivations surveyed, at a lower level of analysis than the tripartite schema. Professor Lim and Shawn Pope sought to reformulate and advance theory regarding CSR motivation.

One of the benefits of a meta-analysis is that it allows patterns to emerge from research which might not be apparent or evident in single surveys. The meta-analysis undertaken by Professor Lim and Shawn Pope included survey responses from 27,000 respondents across 52 countries.

This meta-analysis unveiled what the researchers describe as a universal ordering of the CSR motivations that matter most to businesses. Normative motivations were cited as the more predominant motive over other motives. In other words, businesses most frequently said that what drives their CSR programme is the intent to do good and contribute positively to society and the world, through their programmes, thus ascribing an altruistic element to these programmes.

This ordering appeared across geographies and countries, company size, and time, and question formats. The importance of revealing this ordering is that it indicates an underlying stable CSR movement that applies globally to many different businesses with CSR programmes. While the meta-analysis supports the validity of the tripartite schema, there were clear patterns emergent through the statistical modelling using Bradley-Terry modelling to provide a ranked comparative analyses of survey item responses. This analysis indicated that businesses ranked normative motivations as higher than instrumental motivations in driving their CSR programmes. Interestingly, political motivations were ranked lowest. Within this though, there were variations in each category. For example, within the category instrumental motivations, enhancing corporate reputation ranked higher than accessing government incentives or benefits.

According to the results of the meta analyses performed by Dr Lim and Dr Pope, the tripartite schema can in fact be reformulated using an empirical rank ordering of how companies present their CSR motivations. The consensus finding from the data was that most businesses present their CSR programmes as having their roots in a drive to do good and more practically, as being socially appropriate. The results of the meta-analysis were also able to confirm the empirical validity of the tripartite schema. It also revealed nuances within each of these categories indicating that different factors within each of the schemas may matter more in motivating CSR programmes, which is a prime candidate for future research to explore. Professor Lim concludes by saying that:  

Understanding how normative motivations are important to CSR can allow us to design incentives for more businesses to engage with sustainability concerns. By appealing to CSR as the socially appropriate thing to do, we can encourage companies to view sustainability as a core part of their business models, not just an optional practice.

That’s all for this episode, thanks for listening. You can find the papers on corporate social responsibility linked in notes for this episode and, as ever, be sure to subscribe to ResearchPod to hear more of the latest science news. See you again soon. 

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