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Corporate Social Responsibility - a Case Study on Private and Public Corporations in Sweden

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Corporate Social Responsibility - a Case Study on Private and Public Corporations in Sweden South Stockholm University- Södertörn School of Economics and Business Studies (EcoBus) Institution for Business Administration and Economics Bachelor thesis, Autumn 06 Tutors: Karl Gratzer Besrat Tesfaye Corporate Social Responsibility - A Case study on Private and Public Corporations in Sweden Authors: Setareh Korkchi, 830525 [email protected] Azalee Rombaut, 850705 [email protected] 1 Abstract Corporate Social responsibility (CSR) has become a key issue for today’s corporations. This type of responsibility refers to the continuing commitment of businesses to voluntarily behave ethically and contribute to economic development while simultaneously improving the quality of life of the workforce, families, local community and society at large. While traditional business models primarily emphasize the economic aspects of a company’s activities (e.g. profitability and growth), the modern one stresses the social and environmental impacts. Recent scandals have put customers’ trust on the frontline, leading to an exponential growth in the interest of corporate social responsibility. Today, unethical behavior can no longer hide in the dark waiting around for an investigation to ensue. Wrongdoings are in an instant communicated to the world via computers and broadcasted by media. Consequently, it is no longer about what corporations say they will do but rather when and how they will do it. Findings and resulting conclusions show that although there is a lack of definitional clarity of the notion of CSR, the concept is embodied by and refers to the triple bottom line: Profit, People and Planet. CSR can be implemented through codes of conduct, contracts, education, training, guidelines and principles. The benefits of having a CSR engagement program are numerous and include strengthening profits, enhancing brand recognition and reputation, risk management and boosting employment relations. Motives behind having good CSR include social betterment and sustainable change. It is about building up a well-functioning corporation that possesses strong values and can manage risks and become a more competitive brand. The brands that will succeed in the future will be those that tap into the social changes that are taking place today. Keywords: Globalization, CSR, implementation & monitoring, motives, benefits and challenges. 2 Table of contents 1. INTRODUCTION_________________________________________________________________________10 GLOBALIZATION & THE INCREASED NUMBER OF MNC’S AND TNC’S __________________________________10 PROBLEMS WITH ETHICS AND CORPORATE SCANDALS ______________________________________________11 PROBLEM WORDING ________________________________________________________________________13 RESEARCH QUESTIONS ______________________________________________________________________13 RESEARCH AIMS ___________________________________________________________________________13 RESEARCH FOCUS __________________________________________________________________________14 2. METHODOLOGY ________________________________________________________________________15 SCIENTIFIC APPROACH ______________________________________________________________________15 QUALITATIVE RESEARCH DESIGN ______________________________________________________________16 INVESTIGATION APPROACH ___________________________________________________________________17 DATA COLLECTIVE _________________________________________________________________________18 Interviews _____________________________________________________________________________18 The Body Shop ________________________________________________________________________________ 19 Hennes & Mauritz ______________________________________________________________________________ 19 Green Cargo __________________________________________________________________________________ 19 CRITICISM OF SOURCES ______________________________________________________________________20 Primary sources- Interview effects __________________________________________________________21 Secondary sources_______________________________________________________________________22 Validity and reliability in qualitative research _________________________________________________22 3. THEORY ________________________________________________________________________________23 AGAINST CSR_____________________________________________________________________________23 DEFINITION OF CSR ________________________________________________________________________25 CSR PYRAMID ____________________________________________________________________________27 Economic Responsibility __________________________________________________________________28 Legal Responsibility _____________________________________________________________________29 Ethical Responsibility ____________________________________________________________________29 Philanthropic Responsibility _______________________________________________________________30 IMAGE/ REPUTATION ________________________________________________________________________31 Improve sales___________________________________________________________________________31 Strengthen financial relations ______________________________________________________________32 Harmonize employee relations and boost recruitment ___________________________________________32 Manage crises __________________________________________________________________________33 MOTIVES_________________________________________________________________________________33 4. EMPIRICAL STUDIES ____________________________________________________________________37 THE BODY SHOP ___________________________________________________________________________37 History and company profile _______________________________________________________________37 The Body Shop’s Business Philosophy _______________________________________________________38 The Body Shop and CSR __________________________________________________________________39 The Body Shops responsibilities according to The CSR pyramid ___________________________________40 Economic responsibility _________________________________________________________________________ 40 Legal responsibility _____________________________________________________________________________ 40 Ethical responsibility____________________________________________________________________________ 41 Philanthropic responsibility_______________________________________________________________________ 43 Implementation and monitoring of CSR ______________________________________________________44 CSR motives____________________________________________________________________________45 Image & reputation ______________________________________________________________________46 Challenges with CSR _____________________________________________________________________47 HENNES & MAURITZ________________________________________________________________________48 History and company profile _______________________________________________________________48 H&M’s Business Philosophy_______________________________________________________________49 H&M and CSR__________________________________________________________________________50 H&M’s responsibilities according to The CSR pyramid __________________________________________51 Economic responsibility _________________________________________________________________________ 51 3 Legal responsibility _____________________________________________________________________________ 52 Ethical responsibility____________________________________________________________________________ 52 Philanthropic responsibility_______________________________________________________________________ 53 Implementation and monitoring of CSR ______________________________________________________54 CSR Motives ___________________________________________________________________________57 Image & reputation ______________________________________________________________________57 Challenges with CSR _____________________________________________________________________58 GREEN CARGO ____________________________________________________________________________58 History and Company profile ______________________________________________________________58 Green Cargo’s Business Philosophy _________________________________________________________59 Green Cargo and CSR____________________________________________________________________59 Green Cargo’s responsibility according to The CSR pyramid _____________________________________62 Economic responsibility _________________________________________________________________________ 62 Legal responsibility _____________________________________________________________________________ 62 Ethical responsibility____________________________________________________________________________ 63 Philanthropic responsibility_______________________________________________________________________ 65 Implementation and monitoring of CSR ______________________________________________________66 CSR Motives ___________________________________________________________________________68 Image & Reputation _____________________________________________________________________70 Challenges with CSR _____________________________________________________________________70 SUMMARY OF EMPIRICAL STUDIES _____________________________________________________________71 5. ANALYSIS ______________________________________________________________________________75 CORPORATE SOCIAL RESPONSIBILITY ___________________________________________________________75
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