J Bus Ethics DOI 10.1007/s10551-013-1791-2
From Implicit to Explicit CSR in a Scandinavian ˚ G and Hydro Context: The Cases of HA Siri Granum Carson • Øivind Hagen S. Prakash Sethi
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Received: 12 June 2012 / Accepted: 26 June 2013 Ó Springer Science+Business Media Dordrecht 2013
Abstract The aim of this article is to explain the transition from implicit CSR to explicit CSR that has taken place in Scandinavia over the last two decades. Matten and Moon’s (Academy of Management Review, 33:404–424, 2008) distinction between implicit and explicit CSR is the point of departure for the analysis, which is based on case ˚ G and Hydro. On studies of two Norwegian companies: HA the basis of these case studies, we identify two forces that are pushing the transition from implicit to explicit CSR in Scandinavia: (1) Organizational expressiveness and (2) Relegitimizing. Both of these measures are adjustments to the globalization of the economy, altering the competitive situation even in highly institutionalized, Scandinavian ˚ G, a midsized Norwegian manufacturer of economies. HA office chairs, made CSR and environmental values an integral part of their expressive strategy in the early 1990s. Hydro, a big Norwegian aluminium producer, made CSR an explicit issue around the turn of the millennium, in an attempt to re-legitimize their business operations in a new market situation where plants in local communities in Norway were shut down and relocated to less regulated regimes in low-cost regions abroad. S. G. Carson (&) Department of Philosophy, NTNU Norwegian University of Science and Technology, 7491 Trondheim, Norway e-mail:
[email protected] Ø. Hagen Department of Leadership and Organizational Behaviour, BI Norwegian Business School, Oslo, Norway e-mail:
[email protected] S. P. Sethi Zicklin School of Business, Baruch College, City University of New York, New York, NY, USA e-mail:
[email protected]
Keywords Implicit CSR Explicit CSR Organizational expressiveness Legitimacy Re-legitimizing ˚G Globalization Scandinavia Hydro HA
Introduction The way Scandinavian companies assume and communicate corporate social responsibility (CSR) has developed over the past couple of decades.1 While it used to be about adapting to a tight regulatory system and clear institutional demands, CSR today is to a larger extent something companies are expected to define and articulate themselves. Matten and Moon (2008) describe this development as a transition from implicit to explicit CSR. They introduce this distinction in order to capture differences in the approach to CSR within a European and an American business context. Traditionally, Scandinavia has represented the paradigm of implicit CSR, among other things due to its high level of regulation. Offering safe working conditions and security in the form of social benefits has primarily been framed as compliance with laws and tripartite agreements rather than as business-driven initiatives. The same is arguably the case for environmental issues. However, Scandinavian companies have gradually become more expressive regarding social and environmental issues (cf. e.g. Strand 2013; Tengblad and Ohlsson 2010; Vallentin and Murillo 2010; Hagen 2009; Røvik 2007). The purpose of this article is to describe and analyse this development. The main question of the article is: How do we explain the transition from implicit to explicit CSR that we have seen for the past two decades in Norway and, more generally, in Scandinavia? 1
Cf. Ihlen and Høivik (2013).
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Our analysis is based on a case study of two Norwegian ˚ G and Hydro. HA ˚ G, a midsized Norwegian companies, HA manufacturer of office chairs, made CSR and environmental values an integral part of their expressive strategy in the early 1990s. Hydro, a Norwegian aluminium producer employing nearly 23,000 people in 40 different countries, made CSR an explicit issue around the turn of the millennium, in an attempt to meet the challenges of globalization. On the basis of these two case studies, we identify two forces that are pushing the transition from implicit to explicit CSR in Scandinavia: (1) Organizational expressiveness and (2) Re-legitimizing. Both of these measures are adjustments to the globalization of the economy changing the competitive situation even in highly institutionalized, Scandinavian economies. In a high-cost region like Scandinavia, there are two strategic moves that companies can make to increase their competitive ability. They can project a high economic-social value and thereby enhance legitimacy and corporate reputation. Alternatively, they can create more efficiency through improvements in ˚ G, CSR is productivity and thus lower unit cost. In HA explicated as part of an expressive strategy—a move to promote additional values of brand and products. In Hydro, CSR is explicated in order to re-legitimize business operations in light of relocations from Norwegian industrial locations to low-cost regions abroad.
American companies have typically operated with company-specific and explicitly formulated policies on social and environmental responsibility, European companies have rather implicitly assumed certain collective social and environmental values and norms. Explicit CSR is, however, increasingly being adopted by European companies, and this ‘‘explication of CSR’’ seems to be taking place in the Scandinavian context as well (cf. Strand 2013; Tengblad and Ohlsson 2010; Vallentin and Murillo 2010; Hagen 2009; Røvik 2007). Corporate responsibility has typically not been explicitly stated by European companies, but rather implied in the overall structures of business–society relations. These structures can be specified using Richard Whitley’s comparative business system framework, identifying four key elements underlying national business systems (NBSs) (cf. Whitley 1997; 1998). This framework can be used to characterize the distinctive features of CSR respectively in the American and in the European context: (1)
(2) Theory From Implicit to Explicit CSR CSR as a concept emerged in the American business context, becoming a popular concept both in management practice and in academic inquiry from the 1970s (Carroll 1999). In Europe, the concept has traditionally not been as widely used by companies (Maignan and Ralston 2002). Matten and Moon (2008) introduce a distinction in order to address this difference. Depending on the nature of the overall business– society relations, CSR tends to be either explicit, i.e. codified as corporate policies explicitly formulated by the companies, or implicit, i.e. codified as institutional frameworks implicitly assumed by the companies. Matten and Moon start out with the assumption that, although European companies have traditionally kept a lower profile on the topic of CSR than their American siblings, there is no evidence suggesting that these companies in general have acted in a less socially responsible way. The apparently significant discrepancies between American and European companies, they argue, is not necessarily a matter of more or less socially responsible business, but should rather be described as a difference between explicit and implicit forms of CSR. While
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(3)
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Political systems: A central distinction between the American and the European political system is the power of the state, which has generally tended to be greater in Europe than in the United States, opening a relatively greater scope for corporate discretion for American companies when it comes to expressing responsibility in the economic and social area. Financial systems: There are differences in corporate ownership and the way the stock market is organized, in particular capital markets play a more modest role in the European NBSs compared to the U.S. capital market. Education and labour systems: More hierarchical structures of business and labour interests and more powerful trade unions and industry associations are characteristic of European, as opposed to American, forms of capitalism. Cultural systems: Differences in the broad assumptions about society, business and government explain different attitudes in Europe and the U.S. towards philanthropic duties and the moral worth of capitalism.
Matten and Moon apply this framework in order to understand the historic differences in American and European forms of CSR: U.S.-style CSR has been embedded in a system that leaves more incentive and opportunity for corporations to take comparatively explicit responsibility. European CSR has been implied in systems of wider organizational responsibility that have yielded comparatively narrow incentives and opportunities for corporations to take explicit responsibility (Matten and Moon 2008, p. 409).
From Implicit to Explicit CSR in a Scandinavian Context
Historically speaking, the development of the Scandinavian welfare states from World War II up until the 1990s conditioned implicit CSR. The state is the major caretaker of some of the social responsibilities which in the U.S., and other Western European societies, to a larger extent have been imposed on private companies. This is specifically the case for labour rights such as workers’ pay, benefits and safe working conditions. These issues have been negotiated and institutionalized through political compromises and tripartite agreements, a model typical of the Scandinavian countries. Against this background it makes sense to talk
about a specific ‘‘Scandinavian’’ or ‘‘Nordic’’3 model of CSR, based on a consensual political culture, a strong social-democratic welfare state, and well-functioning partnerships between business, government and labour organizations (cf. e.g. Carson et al. 2011; Vallentin and Murillo 2010; Gjølberg 2010; Midttun et al. 2006). In this context, offering safe working conditions and security in the form of social benefits is primarily framed as compliance with laws and agreements rather than as businessdriven initiatives. The same is arguably the case for environmental issues. Midttun et al. (2006) argue that Nordic countries have certain historic advantages when it comes to institutionalizing CSR, in the sense that they have strong traditions of regulation and social embeddedness of business behaviour. It has been pointed out that Scandinavian companies have strong traditions for stakeholder engagement beyond what the law requires (cf. Rhenman 1964, 1968; Na¨si 1995). This can be seen in relation to what Strand (2009) calls the ‘‘cooperative advantage’’ of Scandinavian companies, referring to a high level of trust and well-developed ability to form successful, long-term partnerships. Gjølberg (2010) argues that the socio-political model underlying CSR in its original, American form is in conflict with the ‘‘Nordic model’’ of state–market–society relations. CSR must therefore be significantly transformed in order to fit this model. As a result, the ‘‘Nordic model’’ of CSR is government-driven to a much larger extent than the American, primarily business-driven, model. This is in line with Matten and Moon’s claim that explicit CSR ‘‘still reflects respective national institutional frameworks’’ (Matten and Moon 2008, p. 416), and that European explicit CSR is ‘‘comparatively government-driven’’ (ibid.). Although Gjølberg points to significant discrepancies between CSR initiatives in the respective Nordic countries, specifically in the way CSR is expressed in different policy formulations, she argues that there is a common denominator, namely the way CSR is conceptualized in the Nordic countries. She connects this to several attributes having to do with how society is organized, as well as to a certain ‘‘Nordic normative legacy’’, according to which norms like solidarity, decency and respect are fundamental to the Nordic model (Gjølberg 2010, p. 221). These common assumptions lead to a Nordic consensus in
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While Whitley’s theory of NBSs is used to explain distinctiveness between American and European forms of CSR, Matten and Moon employ neo-institutionalism (e.g. DiMaggio and Powell 1983; Meyer and Rowan 1977) in order to explain why these distinctions are gradually dissolving. According to the neo-institutionalist thesis of homogenization, organizations become increasingly similar. Popular recipes for organization and management— such as CSR—are gradually incorporated and institutionalized all over the world and become criteria for the legitimacy of an organization (Røvik 2007). CSR takes different forms in different NBSs, but at the same time these systems become increasingly similar. The European transition towards more explicit forms of CSR can against this background be explained as resulting from globalization-driven changes within the political, financial, labour and education, and cultural systems of the European countries. Conventionally, European companies have implicitly assumed the expectations from their societies that they should contribute to the enhancement of the ‘‘common good’’, so these activities were not necessarily articulated as unique corporate contributions. The transformation from ‘‘local’’ to ‘‘global’’ has increasingly led European companies to adopt explicit CSR, and this tendency is also taking hold in the Scandinavian context (cf. Strand 2013; Tengblad and Ohlsson 2010; Vallentin and Murillo 2010; Røvik 2007). Thus, explicit CSR is increasingly becoming a strategic tool for enhancing corporate reputation and public trust in the corporation in the Scandinavian context as well.2 CSR in the Scandinavian Context
At the same time, pointing beyond the frame of this article and to further research, CSR seems to be evolving in a more profound direction whose implications are yet to fully develop. Arguably, the conventional notion of CSR, emphasizing philanthropy, is less relevant in the context of globalization. Instead, what comes into focus is the idea that companies are responsible for the negative externalities emanating from the core business activities (cf. Sethi 2003, 2008; Visser 2011).
Scandinavia is a geographic region consisting of the three countries: Denmark, Norway and Sweden. The term ‘‘Scandinavian’’ refers to the cultural and linguistic similarities of these countries, and the strong historic and socio-political bonds between them. The term ‘‘Nordic’’ is sometimes used synonymously with ‘‘Scandinavian’’, but is actually a broader term incorporating Iceland and Finland (cf. Britannica Online: http://www.britannica.com/EBchecked/topic/ 526461/Scandinavia (retrieved 20th November 2012).
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the perception of CSR as more or less superfluous in a domestic context, pertaining primarily to the situation abroad and the absence of a global, multilateral framework. The tendency to view CSR as a matter of foreign affairs is arguably especially strong in the Norwegian business context, as we will take a closer look at in the next section.
CSR in the Norwegian Context Among the Nordic countries, the specific Norwegian approach to CSR is not least marked by the substantial ownership by the state in large companies, notably in the extractive industries operating in high-risk markets like Nigeria, Angola and Azerbaijan (Statoil), as well as in the telecommunications sector in Bangladesh and Pakistan (Telenor) (cf. e.g. Trygstad and Lismoen 2008; Willums 2005; Gjølberg 2010). Through this ownership, the Norwegian government has perceived a rising need to be explicit about questions of business and human rights, corruption, etc., and to develop an official policy on CSR. This is expressed through several government-driven initiatives, notably the network KOMpakt (an acronym for ‘‘Consultative Body for Human Rights and Norwegian Economic Involvement Abroad’’). The governmental ‘‘White Paper’’ on CSR (Norwegian Ministry of Foreign Affairs 2008/2009) focuses primarily on Norwegian companies involved in activities abroad and on how these companies can contribute to improving the situation in the countries where they operate. To an even greater extent than in the other Scandinavian countries, official Norwegian CSR policy has been almost exclusively directed at business operations abroad, illustrated by the fact that the CSR initiatives of the Norwegian government from the beginning were coordinated from the Ministry of Foreign Affairs. This policy has been supported by the employers’ association the Confederation of Norwegian Enterprise (NHO), as well as by the Norwegian Labour Organization (LO) who are set on keeping national questions of labour rights within the framework of binding tripartite agreements, and outside of the framework of (more or less voluntary and charity-based) CSR. According to Trygstad and Lismoen (2008), the Norwegian labour situation represents the paradigm of implicit CSR: largely institutionalized through laws and agreements, with a strong social safety net to catch those who fall outside of the working life. This constitutes a rather strong congruence between the business community and society, and is probably a reason why the CSR debate in Norway has been so centred on Norwegian companies’ activities abroad (cf. Trygstad and Lismoen 2008, p. 51f). As Gjølberg points out, an important driver behind the explication of CSR in the Norwegian context has been the perceived governance
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gap in the global economy, thus ‘‘the Norwegian approach to CSR remains decidedly global, and even explicitly nondomestic, in its orientation’’ (Gjølberg 2010, p. 213). But globalization affects the socio-cultural and political environment of business domestically as well, and these changes contribute to the explication of CSR in Norway. An example is the traditional ideal of labour rights as negotiated through tripartite agreements and secured at a national level. A competing ideal of industry’s self-regulation of labour standards has gained momentum, visible among other things in the 1997 reform of the safety, health and environment (SHE) systems in Norway. The reform, named ‘‘internal control’’, implied a delegation of the direct control of SHE conditions from the government to the enterprises (cf. Hovden 1998; Saksvik and Quinlan 2003). Delegating SHE work to the individual companies promotes explicit statements from Norwegian companies on issues that used to be a matter of adapting to externally imposed and institutionalized standards. The Norwegian CSR agenda has been dominated by big, partly state-owned corporations such as Hydro, Statoil and Telenor. But not only big companies ‘‘go global’’—many smaller Norwegian manufacturers move their production to low-cost regions as well. As an example, due to its climate, Norway has a tradition for producing high-quality winter sportswear. Today, however, more or less all production of sportswear has been moved to low-cost countries, though the brand names stay Norwegian. Low transport costs make it challenging to succeed as a small or medium-sized company with production units in Norway. However, some ‘‘exceptional’’ companies, such as furniture company ˚ G, manage to keep Ekornes and our case company HA labour-intensive production in Norway and stay competitive. The answer to how these companies succeed is a complex one, involving more capital-intensive production and automation of industrial processes, as well as defending a higher price level through niche marketing and add˚ G’s part, the solution has ing of value to products. For HA been a distinctively expressive strategy, emphasizing ‘‘extra value’’ in the form of ergonomically sound solutions as well as a socially and environmentally responsible business conduct. CSR, Organizational Expressiveness and Legitimacy Two decades ago, Vogel argued that the American approach to business ethics is unique in the sense that it is ‘‘more individualistic, more legalistic, and more universalistic than in other capitalist societies’’ (Vogel 1992, p. 30). However, he added that globalization makes markets increasingly similar, thus companies all over the world are likely to become more like the American ones. This prediction seems to have come true. Chapple and Moon (2005)
From Implicit to Explicit CSR in a Scandinavian Context
argue that globalization enhances the adoption of CSR in Asia. And while a study from 2002 found that American companies communicate more on CSR than European companies (Maignan and Ralston 2002), some recent studies indicate that the gap might be closing—specifically interesting for this context are studies from a Scandinavian context (cf. Tengblad and Ohlsson 2010; Vallentin and Murillo 2010; Strand 2013). The question is whether the ongoing explication of CSR in Scandinavia means that the ethical values of Scandinavian companies are becoming more like the American ones, or whether the values more or less stay the same, but are expressed in ways more similar to those of American companies. Neo-institutionalism targets how and why different organizations tend towards the same organizational structure. According to the homogenization thesis, organizations all over the world become increasingly similar by incorporating the same popular formal elements (isomorphism). According to the decoupling thesis, however, institutional formal elements function as symbols in order to satisfy the surrounding environments, but are decoupled from the organization’s actual activities (cf. e.g. Meyer and Rowan 1977; Brunsson 1989). From the decoupling perspective it follows that while the language of CSR is becoming increasingly similar in Scandinavia and the U.S., the views and practices regarding socially responsible business conduct do not necessarily become accordingly similar. Thus, the transition from implicit to explicit CSR in Scandinavia does not necessarily represent a change in the ethical values in business, but rather that the values are expressed in new ways. The explication of CSR in Scandinavia might be seen as a rise in ‘‘organizational expressiveness’’ (Schultz et al. 2000), with increasing attention to the image, reputation, identity and values of products and organizations. This tendency is especially striking when it comes to social and environmental issues (Røvik 2007). Globalization and the resulting increased competition lead to more focus on the expanded product concept in order to differentiate products, brands and companies. Organizations seek to be associated with positive values, and environmental and social performance becomes strategically important for branding and image building (Hagen 2009). CSR as a popular management concept (Røvik 2007), and even a corporate megatrend (Midttun 2013), is the ultimate expression of this expressiveness. With CSR the borders between marketing and public relations are blurred, making it difficult to see whether an organization speaks as a worried corporate citizen or as a profit-seeking commercial actor. CSR can even be seen as a brand in itself, through which all issues related to a company’s social challenges are communicated (Hagen 2009; Center and Jackson 2003). As an expressive project, CSR can be
considered ‘‘a strategic approach to legitimacy’’ (Suchman 1995), whereby managers influence and manipulate the reputation of the organization through the use of social and environmental values in brand-building. A strong reputation is considered ‘‘an operational resource’’ (Suchman 1995, p. 576) and a symbolic capital that can be transformed into other forms of capital when needed (Bourdieu 1984). Legitimacy can be defined as ‘‘a generalized perception or assumption that organizational activities are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions’’ (Suchman 1995, p. 577). According to the neo-institutional perspective of Matten and Moon, legitimacy is of vital importance since ‘‘organizational practices change and become institutionalized because they are considered legitimate’’ (Matten and Moon 2008, p. 411). On this background they explain the development from implicit to explicit CSR in the UK: ‘‘[C]oncerns about business’s own legitimacy pushed corporations toward explicit CSR’’ (ibid., p. 415). Becoming more expressive about social and environmental values, thus explicating CSR, is a strategic move by which an organization can gain, maintain, or repair legitimacy. In the analysis below, we look at how these processes ˚ G, social and influence two Norwegian companies. At HA environmental values are explicated in a proactive and selfreflective manner as part of an expressive strategy. At Hydro, the explication of social and environmental values happens more gradually. The difference reflects the com˚ G is a petitive situation of the respective companies. HA midsized, privately owned and marketing-driven company. Its expressive strategy matches a proactive fronting of social and environmental values. Hydro, on the other hand, is a big, partly state-owned and technology- and innovation-driven company. The relocation of the business operation in an attempt to stay competitive in a global market gives rise to external pressure, and explicating CSR is part of a re-legitimizing strategy for the company. Before moving deeper into the analysis of these two companies, we look at some methodological issues.
Methodology Design We have chosen a case study approach to shed light on the issue of how Norwegian and Scandinavian companies define and describe CSR, and how this conceptualization has developed. The strength of a case study approach is that it provides opportunities to study a phenomenon in depth, and it potentially gives a context-rich analysis
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(Hagen 2009; Yin 2003). We decided to use two cases so that we could compare and contrast the two, since comparing and contrasting are key instruments in qualitatively oriented research analysis (Tesch 1990). And, as we argue ˚ G and Hydro are both similar and different in below, HA characteristics that are important for understanding how companies grasp CSR, which makes the two cases suitable for comparing and contrasting. The study has a longitudinal and historic dimension in the sense that we focus on how the companies’ ways of comprehending and communicating CSR have developed over time. As we elaborate in the description of the data, ˚ G was in itself longitudinal in the sense that the study of HA data were generated over a long period of time. The data from Hydro were generated at a fixed time, but we used other researchers’ historical analysis of the company, and analyzed annual reports over a long time span, to grasp the longitudinal development in the company (Forgues and Vandangeon-Derumez 2001). A standard criticism of a case study design based on few cases is that it does not allow for generalizing (Nielsen and Kvale 2008; Eisenhardt and Graebner 2007). We acknowledge this and do not claim to have produced results that are generalizable in strict statistical terms. However, the development of companies’ comprehension of CSR within a cultural context is a complex issue, and should be understood in its natural setting and in depth. This calls for case study designs based on methods like qualitative indepth interviews, participating observation, and text analysis—all approaches that produce knowledge hard to generalize (Lincoln and Guba 1985). However, the underlying issue of generalizability—relevance—is as important for ethnographically oriented studies as experimental- or survey-based studies (Cassell and Symon 2004; Gummesson 2000). To make our findings accessible, relevant and open to critique, we have therefore tried to give a context-rich description of both cases and findings to give the reader an insight into our choices and line of arguments. ˚ G and Hydro? Why HA While representativeness would have been strengthened by picking cases from the three different Scandinavian countries, this was beyond the time and resource frame of this study. However, picking cases from only one country seems legitimate as the business contexts of the three countries constituting Scandinavia are described as relatively similar (Gjølberg 2010; Hofstede and Hofstede 2005). We would contend that Norwegian companies in general are representative of Scandinavian companies, even if there are certain distinguishing factors: Norway stands outside of the EU, and is a raw material-based economy, specifically with
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regards to the dominating oil sector, to a larger extent than the other Scandinavian countries. Hydro might be seen as ˚ G as a mantypical of Norway in this respect, whereas HA ufacturer of furniture is atypical and forms part of a Scandinavian business network. ˚ G and Hydro have a long history of doing Both HA business in Norway, and openly declare their Norwegian identity and roots. Both are influenced by the unique Scandinavian work life characterized by workers’ participation, low power distance between managers and workers, and organizational egalitarianism (Rhenman 1964, 1968; Gustavsen 2007). And both have had to deal with the intensive globalization processes in Scandinavia over the ˚ G maintained manufacturing in Norlast two decades: HA way, but was bought by Swedish owners and became part of a Scandinavian company; Hydro moved out and became a multinational player through an intensive acquisition strategy. ˚ G and Hydro are interesting cases in light of each HA ˚ G had other and their mutual differences as well. While HA to adapt to new owners and two fellow brands under the international umbrella Scandinavian Business Seating, Hydro’s challenge has been to integrate new companies ˚ G is a marketing-driinto its corporate culture. While HA ven company, Hydro is a technology- and innovation-dri˚ G has ven company. And, as we argue in this article, HA faced globalization with an expressive CSR strategy in order to maintain domestic production. Hydro, on the other hand, has restructured and globalized the value chain in order to become a leading international actor, and this led to a need to re-legitimize their business operations. Data In order to grasp how companies conceptualize CSR, we have primarily focused on text and written declarations from the companies. Annual reports, web pages and other text containing CSR-related statements are the primary sources of data. We have also used other sources of data in order to understand the longitudinal and historic development of the companies and to interpret the CSR statements within the organizational ˚ G case we have several sources of secondary context. In the HA data, while in Hydro the secondary data basically consist of other researchers’ analysis of the company. The two cases are, in other words, asymmetric in the sense that more secondary data have been generated on the ˚ G case than the Hydro case. HA ˚ G was the subject case HA of the PhD project of one of this article’s authors (Hagen). The PhD project focused on the dynamic interplay between external CSR communication and organizational change, ˚ G was studied from a multi-method, longitudinal and HA case study approach. The company was followed from 1999 until early 2006 and data were generated from
From Implicit to Explicit CSR in a Scandinavian Context
sources like participative observation, running company contacts and action research, text and document analysis, and two rounds of qualitative in-depth interviews.4 In ˚ G had addition, annual reports from the time after HA entered the new group, Scandinavian Business Seating, from 2007 until 2011, were analyzed. The analysis of Hydro is primarily based on annual reports, two company publications on CSR issues, specifications of ‘‘The Hydro way’’ on the company website, and a formal speech by the CEO of Hydro at the Norwegian School of Economics in 2007.5 Hydro is a much investigated company,6 so we also rely on other researchers’ analysis of the company as secondary data, to contextualize the CSR statements. These secondary data sources are not listed explicitly, but reported to consecutively in the article. Even though the cases are asymmetric when it comes to the scope of data, we argue that the Hydro case stands on its own feet. The company’s own publications on CSR, combined with other researchers’ analysis of the company, have given us a good foundation for understanding how CSR has been conceptualized by the company over time. Moreover, and as argued, having two cases has also sharpened the analysis. Having the opportunity to compare and contrast the cases with each other has made it easier to see the uniqueness of each company and their approach to CSR. And using Hydro as a case has provided an opportunity to reanalyse and get a deeper understanding of the ˚ G case. As a result, the two cases have comprehensive HA benefitted from each other, and provided us with solid material on which to base our analysis of the transition from implicit to explicit CSR in the Scandinavian context.
Analysis ˚ G7 ‘‘Different and Better’’: Explicating CSR in HA ˚ G is a Norwegian manufacturer of office chairs. The HA company was established in 1943, and re-established in 1973 with the entrance of the charismatic Torgeir Mjør
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See Hagen (2009) for more on the methodology and data materials of the PhD project. 5 The primary data sources of the Hydro case are: Hydro Annual Reports (1997–2011), Hydro (2000, 2004, 2007), Reiten (2007). 6 BIBSYS ASK, the search engine of the Norwegian university and college library, generated 719 references for ‘‘Norsk Hydro’’ (Norsk Hydro has been the name used in Norway, while internationally and after selling out fertilizing and oil and gas, Hydro is the name being used. Moreover, hydro is a concept that may refer to many issues and searching merely on ‘‘Hydro’’ would have given many irrelevant hits)—searched for 23.03.2013. 7 Part of the analysis and quotes in this paragraph is based on Hagen (2009), as accounted for in the methodology section.
Grimsrud who has influenced the company strongly through positions as owner, CEO and chairman of the board. The company has its headquarters in Oslo and production unit at pristine Røros, 400 km north of the capital Oslo. Before being sold to Swedish owners in 2007, ˚ G, making it a altogether 377 people were employed at HA ˚ G Annual midsized company in Norwegian terms (HA Report 2006). Upon his arrival, Grimsrud introduced the idea of an ˚G extended product concept, saying that a chair from HA should consist of different layers of qualities or identities. The innermost layer is the physical quality of the product— ˚ G should resist wear and tear for ages. The a chair from HA ˚ G should have an next layer is aesthetics—a chair from HA aesthetically appealing design. Grimsrud’s first move in the new company was to ally with physiotherapists to find a chair that would prevent strain injuries. They came up with a chair that forces the user to move while at the same time sitting, making ergonomics the third layer of the product (Hagen 2009). After a few turbulent years following the turnaround, the company experienced steady growth for decades. In 2006 the turnover was 623 million NOK. In the same year 70 % of the products were exported, and altogether 270,000 ˚ G Annual Report 2006). In chairs were produced (HA ˚ G has been considered Norway and Scandinavia HA something of an industrial wonder, succeeding in manufacturing a seemingly commonplace and labour-intensive product like office chairs in a high-cost economy like Norway (Hagen 2002). ˚ G was sold by Grimsrud and the Norwegian In 2007 HA industrial group Orkla to the Swedish equity conglomerate Ratos AB. Ratos AB had already bought two other Scandinavian office furniture companies, Swedish RH Form and Danish RBM, and in 2008 the three companies became the industrial group Scandinavian Business Seating. Four hundred and eighty people are employed in the group. The three trademarks are kept separately and continue under the umbrella Scandinavian Business Seating. The group is the largest manufacturer of office chairs in Western Europe (Scandinavian Business Seating Annual Report 2008, ˚ G is the locomotive of the new group. In 2011 2011). HA ˚ G, 31 % from RH 59 % of the group’s sales came from HA and 10 % from RBM. The headquarters of the new group is ˚ G’s headquarters; HA ˚ G’s CEO, Lars Røri, is in Oslo at HA the CEO of the group; and the group’s vision—‘‘To make ˚ G slogan the world a better place to sit’’—is an old HA (Scandinavian Business Seating Annual Report 2011). ˚ G, CSR was explicated in the mid 1990s as part At HA of the expressive strategy that had lifted the company out of its trouble in the early 1970s and proven its success in the following years of steady growth and expansion. The immediate background for the CSR strategy was that the
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important German market started requesting environmental data of the products. Being a marketing-driven company, ˚ G decided not to passively adjust to the development, HA but to take a lead on environmentally friendly manufacturing. Socially acclaimed values, particularly related to ˚G environmental issues, were incorporated into the HA brand (Hagen 2002). ˚ G started to define its In the annual report of 1993, HA role as a leading environmental manufacturing company: Our aim is to be in front environmentally – in the way we design, manufacture and distribute our products. We realized long ago that we have a responsibility for ˚ G chair after its working life (HA ˚ G Annual every HA Report 1993, p. 1, our translation into English). The process of defining the social and environmental responsibility of the company continued over the following years. Slogans like ‘‘Design for reincarnation’’ and ‘‘From cradle to cradle’’ were introduced to remind internal and external stakeholders of the emphasis on environmental performance. In the annual report of 1995, the very foun˚ G—manufacturing chairs—was questioned in dation of HA an unfamiliar tone by a business actor: Access to clean water and sufficient food for a rapidly increasing population are fundamental requirements which need to be met. From this perspective, can ˚ G justify manufacturing chairs? (HA ˚ G Annual HA Report 1995, p. 20) The inquiring and bold new language of the company was followed up by several initiatives reflecting the expressiveness on CSR through the 1990s. Among other things a green purchasing policy was introduced, a take-back warranty for old chairs was organized, and use of virgin plastics in components of the chairs was replaced by use of recycled plastics from old ketchup bottles, bottle tops and bumpers of trashed Volvo cars. As they were implemented in the organization, these measures were heavily exposed externally as well. For ˚ G is example, in the annual report of 1998 a chair from HA pictured on a pile of bottle tops with text saying how recycled ˚ G Annual Report 1998, p. plastics are used in the chairs (HA ˚ 25). In 1996 HAG had external credential for the environ˚ G was then certified through the EMAS mental work. HA scheme as the first company in Scandinavia to receive this ˚ G was certified through the ISO approval. Soon after, HA 14000 scheme as well. The new and high-profile focus on the environment was from the very beginning carefully assimilated into the ˚ G was, had been and was existing narrative of who HA about to become. The charismatic Grimsrud played a key ˚ G’s environrole in telling and managing this story. HA mental sensitivity was portrayed as a natural next chapter or logical move following ergonomics, aesthetics and
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˚ G’s business idea and brand physical quality. As such, HA rested on four cornerstones: physical quality, aesthetics, ergonomics and environment (CSR), each representing ˚ G identity. different layers of the apparently unique HA ˚ Moreover, HAG’s layers of identity were also connected with the vision of being a ‘‘different and better’’ company, making the vision and the strategic moves a coherent whole (Hagen 2008b). Through the 1990s and until the early 2000s the high profile on environmental issues went hand in hand with internal initiatives that reflected the environmentally friendly brand. The use of environmental values in the brand building even worked as a driver for environmental innovations in the organization, in processes of self-fulfilling prophecies (Hagen 2008b). A middle manager interviewed in 2001 described how this expressiveness made them strive: The high media profile is positive. Things are usually portrayed as greater than they are, though. But then we need to stretch ourselves. He [Grimsrud] constantly overbids. However, the positive dynamic interplay between branding and environmental performance changed in the early 2000s. In the annual reports during this period many of the catchphrases and much of the rhetoric from former years were repeated and some of the enthusiasm seemed to fade away. This development culminated in the discovery of a waste and spill treatment not in accordance with routines and regulations in 2004. The self-fulfilling prophecies had turned to self-seduction, in the sense that leaders in charge did not pick up the internal signals that there was not enough attention on environmental issues internally—they were blinded by the shining from their own brand (Hagen 2008a). ˚ G’s way of dealing with the incident prevented a HA brand crisis for the self-portrayed environmental pioneer. The company discovered the malpractice itself, it reported the faults to the environmental authorities and it evaluated all organizational routines on environmental issues after the incident. Surprisingly, the company had more acclaim for the thorough way it dealt with the incident than critique for allowing it to happen. However, the episode led to a more humble communi˚ G member working with PR and cation approach. A HA branding said it like this when interviewed in 2006: We didn’t present ourselves as ‘‘the environmentally ˚ G’’ right after the incident, only friendly company HA ˚ ‘‘HAG’’, to say it like that. This lower profile is reflected in the annual reports of the new group, Scandinavian Business Seating, from 2008 and on. Now the talk about being a leading environmental actor—different to and better than other companies—
From Implicit to Explicit CSR in a Scandinavian Context
seems to be replaced by a message saying that Scandinavian Business Seating should simply be responsible, like any other company: The group’s ambitions and goals are clear. We want to be an environmentally aware and socially responsible player (Scandinavian Business Seating Annual Report 2008, p. 71). And in 2011: We want to contribute to preserving our common environment and to display social accountability (Scandinavian Business Seating Annual Report 2011, p. 90). Thus, the expressiveness seems to continue fading with the entrance into the new group. The commitments to CSR and the environment remain explicit values in the communication strategy of the company, but with less of an ‘‘edge’’ compared to the bold and expressive language of the 1990s. ‘‘The Hydro Way’’: Explicating CSR in Hydro Hydro is a Norwegian aluminium producer employing nearly 23,000 people in 40 different countries. The headquarters of the company is in Oslo. Nearly two-thirds of the shares of the company are in Norwegian hands. The Norwegian government is the major shareholder with 38 % of the shares, and the remaining shares are privately owned (Hydro Annual Report 2011). Hydro was established in 1905 as a producer of fertilizer based on Norwegian hydropower. The founder was engineer Sam Eyde, who in cooperation with physics Professor Kristian Birkeland— and with the help of Swedish and French capital—developed a new technique used to produce artificial fertilizers by fixing nitrogen from the air (Andersen 2005). The company later developed into a conglomerate with three main activities: fertilizers, aluminium, and oil and gas. The common denominator in this development is energy. The production of fertilizer was first established at the one-sided industrial location Rjukan, known for its waterfalls that were used for electric power production. Later the plant was moved to Herøya when the production method for fertilizer changed (Sagafoss 2005). In the 1960s, Hydro started exploring for oil and gas on the Norwegian section of the Continental shelf. In 1969 it made finds at the Ekofisk field, and Hydro became established as one of three Norwegian petroleum companies together with Saga and Statoil (Lie 2005). In the 1960s Hydro moved into aluminium production as well. This is a very energy-demanding activity, and Norway, with its abundance of hydropower, had favourable natural preconditions for this kind of industrial production.
Hydro first established aluminium works at Karmøy in 1967, and later bought several works in Norway, among ˚ rdal og Sunndal Verk (A ˚ SV), with factories in others A ˚ rdal, Sunndalsøra and Høyanger—industrial locations A where the aluminium works were the cornerstones of the respective local communities (Frøland and Karlsen 2008). After the turn of the millennium, Hydro abandoned the diversification strategy and decided to cultivate aluminium as its core activity. The fertilizer production was spun off as a separate business under the name of Yara in 2004, while the oil and gas activity was sold and merged with Statoil in 2007. Hydro became a pure aluminium company with an ambition to be a global leader in the field. Moves to achieve this included wholesale purchase of a German and a French aluminium works, building of a large aluminium factory in Qatar, and buying up smelting works and raw material producers in Brazil (Røyrvik 2008). Historically the idea of social responsibility in Hydro was synonymous with its role as a cornerstone company in vulnerable local communities. This form of ‘‘CSR’’ was implicit, and for the most part there was a consistency between the needs of the company and those of the local community. What was beneficial for the company was also beneficial for the local community. The initiatives arose out of self-interest, but constituted a win–win situation for company and local community. Former CEO at Hydro, Eivind Reiten, explains: Social responsibility is part of the heritage from the cradle of Hydro. Sam Eyde’s industrial construction included more than just power plants and factories. There was a shortage of infrastructure. Roads, railways, schools and houses had to be built. By Hydro. It was necessary in order to provide a workforce, and as such in the self-interest of the company. But it created a standard – a high standard – for how Hydro participated in the development of local societies (Reiten 2007, p. 12, our translation). However, in the 1960s and 1970s the debate around Hydro’s obligations towards society became more noisy and antagonistic. One controversial issue was the relocation of business operations domestically, specifically the move of the nitrate production from Rjukan to Herøya in the 1960s (Sagafoss 2005). In this case the economically motivated decision went against the benefit of the local community, challenging the established assumption that what was good for Hydro was good for the community as well. Another controversy that caught public attention was the environmental profile of the company. Particularly in the ˚ rdal, fluoride narrow fjord arms such as Høyanger and A emissions from the electrolysis generated large environmental problems (Andersen and Yttri 1997). Investments in
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new technology did, however, improve the situation, and since the end of the 1980s the emissions have decreased considerably. But in spite of the technological solution to the fluoride emissions, the environmental challenges of Hydro stayed on the agenda. Throughout the 1980s and 1990s there was continuing external pressure on the company, bringing up several issues that Hydro was forced to deal with. The environmental organization Bellona launched a number of demonstrations in which they pointed out major shortcomings in the environmental policy of Hydro, receiving plenty of media attention and reflecting poorly on the company. Through all of these controversies the Hydro management showed a propensity to deal with CSR issues reactively and only after considerable external pressure. However, the top management of Hydro eventually took action, aiming to become more proactive by releasing information before the environmental organizations or the media did—even when the message was negative. From 1989 the company published a separate environmental report in addition to the annual report, which was at the time seen as pioneering work setting the standard for all other companies (cf. Brun and Thornam 2013, p. 91). During the 1990s, Hydro managers were also central in the establishment of the World Business Council for Sustainable Development (Sagafoss 2005). Nevertheless, it might be argued that Hydro’s move from implicit to explicit CSR did not occur until around the turn of the millennium. Throughout the 1980s and 1990s, social and environmental issues were addressed by the company as a response to external pressure. Towards the end of the 1990s, however, CSR was put on the agenda in a new way, as a matter of self-driven, strategic initiatives. In 1999 Hydro hosted an international seminar focusing on the emerging issue of CSR. This resulted in the publication of ‘‘Invitation to Dialogue’’ in 2000, which was the first Hydro publication on CSR. The background for this strategic move was the increasing competition the company had to face due to globalization processes. The aluminium industry is highly exposed, and Hydro met the challenges by shutting down business operations in Norway while similar operations were established elsewhere in the world. Hydro closed down several of their operations along the coastline of Norway. These plants were the cornerstones of their respective communities, and the social and economic impacts of these decisions were accordingly significant. At the beginning of the 2000s, Hydro decided to close down ˚ rdal and Høyanger. The technology at the operations in A the two works was outdated, and large investments were needed in order to adapt to the emission limitations of today, particularly regarding climate gases. The smelting works of Sunndalsøra was the only one of the Norwegian
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factories receiving considerable new investments (Sagafoss 2005). Meanwhile, the large, new investments abroad generated new challenges for the company regarding social and environmental responsibility. These challenges are particularly striking in relation to projects affecting vulnerable groups whose interests are only to a limited degree attended to by official political and administrative organs. One example is Hydro’s decision to establish a gigantic new smelting works in Qatar, based on the favourable location in relation to the emerging economies of the East and the low cost of labour. The factory opened in 2011, and the project has been criticized for jeopardizing Norwegian jobs, for accepting CO2 emissions way above Norwegian standards, and for disregarding basic human rights. Unionizing is against the law in Qatar, which means that Hydro is forced to accept this condition for a large majority of the workers on the project. In November 2011 a Norwegian newspaper reported that Hydro had to accept considerable differences in salaries based on the worker’s nationality in their aluminium factory in Qatar, due to the emir’s order to raise salaries for Qatari citizens by 60 %.8 This example illustrates the cross pressure under which Hydro is developing its CSR policy. The communication strategy chosen by the company seems to have been consistent in the meeting of challenges at home and abroad, namely to frame CSR as an explication of the already existing core values of the company; in other words, as a natural continuation of their original social role in the local communities where they operate: Hydro has always taken special pride in doing things that help build a better society. When Hydro was founded 100 years ago, we helped build a country, not just a company. That sense of responsibility remains with us today. We have developed our businesses in ways that contribute more over time, not just to customers and shareholders, but also to society in general (Hydro 2004, p. 5). The implicit values of the company are explicated in order to regain legitimacy as a ‘‘community builder’’. In order to express its values, Hydro points back to its history as a builder of local communities, and of the country Norway, as well as forward to its take on global challenges. Hydro’s former CEO Eivind Reiten argues that CSR changes as a result of globalization: [T]he standard of social responsibility is renewed. The industry should be measured on how much value we manage to create by occupying less of the scarce resources of society – energy, clean environment and 8
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From Implicit to Explicit CSR in a Scandinavian Context
labour – rather than how many it manages to employ (Reiten 2007, p. 14, our translation). From seeing social responsibility as a commitment towards small, vulnerable local communities in Norway, Hydro today frames social responsibility more in terms of global challenges such as sustainable development and energy efficiency. Comparing the Cases Through the case study approach of this article, we have ˚ G both exemplify the demonstrated how Hydro and HA transition from implicit to explicit CSR in Scandinavia. In other words, these companies have moved from implicitly assuming social and environmental responsibility as a matter of adapting to the values, norms and institutional framework of society, to explicitly formulating a CSR policy (cf. Matten and Moon 2008). The explicitly formulated CSR policy consists of company-specific value statements and codes of conduct as well as the adaptation to external certifications such as the ISO 14000 and the endorsement of initiatives like the WBCSD and the Global Compact. These are different ways to draw attention to the social and environmental values of the companies. Common for the two cases is that the companies present their CSR policy as an explication of the already existing core ˚ G as a natural continuation of values of the company: at HA the focus on human well-being through ergonomics, and at Hydro as a continuing participation in the development of (local, national and global) communities. ˚ G and Hydro are representative of As argued above, HA Scandinavian companies. In different ways the companies illustrate the challenges arising from globalization, which significantly alters the competitive situation, even for companies in highly institutionalized economies such as the Scandinavian one. The companies are different when it comes to size, ownership and market situation, which accounts for some of the differences in their approach to CSR. The explication of CSR can in both cases be seen as adaptation to a new market situation created by globalization processes; however, the companies have different challenges and choose different communicative strategies in order to deal with these challenges. Although Hydro is a business leader in the area of social and environmental responsibility, it has arguably chosen a less bold, more ˚ G. To a reactive approach in its explication of CSR than HA certain extent this can be explained by pointing to the differences in their market situation. However, the strategic choices also reflect the corporate culture, and the personal ideas and values of core persons involved in the process (cf. Sethi 2003). This is particularly clear in the case of ˚ G, where the will to be expressive and build the brand HA
might have been more prominent than the genuine environmental commitment (cf. Hagen 2008a).
Discussion CSR as Expressiveness ˚ G showed that social and environmental The analysis of HA values were explicated as part of an expressive strategy. ˚ G’s aim in this process was to be ‘‘different and better’’ HA than its competitors, a proactive response to global competition making it challenging to survive as a manufacturer ˚ G has been in a high-cost region like Scandinavia. HA internationalized both through its customer range and by joining a Scandinavian business conglomerate; however, it continues production in a high-cost, Norwegian community. In order to generate additional value to its products, legitimizing a relatively high price level, it cultivated an ˚ G is a marketing-driven company, expressive strategy. HA and proactive communication on CSR, stressing the immaterial aspects of its product in addition to the physical quality, becomes a natural part of its expressive strategy to stay competitive. ˚ G responded quickly when the German market in the HA early 1990s demanded environmental data on its products. The focus on environmental values was an immediate response to this request. This exemplifies how globalization pushes the explication of CSR: while questions of social and environmental responsibility used to be a matter of adapting to the given, institutional demands of the Norwegian society, it has now become a matter of communicating values and norms across national and institutional borders. In this situation, environmental performance is no longer simply a matter of compliance with externally defined standards, but becomes a matter of representing ˚ G’s values of strategic importance to the company. HA strategy thus represents ‘‘organizational expressiveness’’ (cf. Schultz et al. 2000), a force pushing the explication of CSR on a global basis, even in the highly regulated and institutionalized Scandinavian economies (cf. Røvik 2007; Hagen 2009). The explication of CSR is a strategic move by which the company seeks to maintain legitimacy by foreseeing emerging challenges (cf. Suchman 1995, p. 595), in this case the growing concern about environ˚ G’s bold language and mental issues among consumers. HA proactive attitude towards social and environmental issues in the 1990s and early 2000s could be seen as symptomatic of expressive companies. The setback, when the bold environmental language fades and is gradually replaced by more commonplace phrases on responsibility and sustainability, might also be seen as symptomatic of an expressive company: when the news value is gone and enthusiasm
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fades, environmental issues are no longer perceived as a distinguishing factor for the company. It becomes natural to move on and look for new ways to maintain legitimacy and promote the company as ‘‘different and better’’. However, CSR remains an explicit part of the company’s strategy. CSR as Re-legitimizing The analysis of Hydro showed that the explication of social and environmental values happens more gradually and ˚ G, and takes the form of reclaiming reactively than at HA the legitimacy of the company as a ‘‘community cornerstone’’. Globalization and increasing pressure from old and new stakeholders force the explication of CSR in the company. In order to cut costs and come closer to emerging markets, Hydro relocates business operations from small, local communities in Norway to low-cost regions abroad. Explicating CSR is part of a re-legitimizing strategy for the company, an attempt to redefine its societal role in the new situation: from being ‘‘good for the local community’’, via ‘‘good for Norway’’, to ‘‘good for the world’’. Defining the company in terms of the way it contributes to building communities might be seen as symptomatic of CSR as a (re)legitimizing strategy. It might be argued that this explication of values is a matter of ‘‘window dressing’’ more than of actual changes in corporate practice. However, as the former vice-president of CSR at Hydro, Rolf Lunheim, argues in the article ‘‘Confessions of a Corporate Window Dresser’’, a bold CSR language might actually drive real changes within a company: [A]s Oscar Wilde once pointed out, it’s only superficial people who don’t care about appearances. This applies to organizations as well. If you dress things up a little—that is, begin to tell the company’s CSR story—it can affect, positively, how you feel and act. It can have other consequences as well (Lunheim 2005, p. 7). Hydro meets the challenges of globalization by moving major parts of its production units abroad (cf. Frøland and Karlsen 2008; Røyrvik 2008). The company is arguably making a necessary move in order to regain competitiveness in a global market. This entails closing down plants in vulnerable, one-sided industry locations in Norway, with big consequences for the affected local communities. At the same time Hydro must deal with the demands and expectations of new local communities in the host countries of its new plants and factories. In this situation of ‘‘double pressure’’, Hydro is more or less pushed into explicating its social and environmental values. In an attempt to re-legitimize business, Hydro refers to the company’s long history of being a community cornerstone
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and a responsible actor in society—from local communities, via Norway, to the global community. At the same time, Hydro continues to emphasize its Norwegian and Scandinavian heritage, e.g. by referring to itself as ‘‘Askeladden’’, a Norwegian folk tale figure (cf. ˚ G’s almost ‘‘AmeriReiten 2007). And compared to HA can’’ expressiveness and proactive fronting of environmentalism, Hydro’s communication on CSR seems to be more typically ‘‘Scandinavian’’, in the sense of framing CSR as a joint effort between companies, governments and civil society. A fundamental difference in point of departure between American and Scandinavian companies is that while the former have traditionally been more focused on discretional, philanthropic activity, the latter typically frame CSR in terms of collaboration and cooperation (cf. Vallentin and Murillo 2010; Strand 2009). The collaborative or cooperative aspect of CSR is stressed in Hydro’s approach to CSR as well—specifically the need to cooperate closely with government in order to solve the complex problems emanating from corporate activity: Challenges connected with corporate social responsibility – whether regarding human rights, relations to local communities or fighting corruption – are issues we cannot deal with alone. Solutions must be developed and implemented in close cooperation between government, business and NGOs (Tamagno and Aasland 2000, p. 6, our translation). This quote from Hydro’s ‘‘Invitation to Dialogue’’ indicates that even when CSR is explicated as the individual policy of the company, it is still shaped and coloured by the collective values of the home community. It also reflects that in Scandinavia, CSR is government-driven to a larger extent than in the U.S. (Gjølberg 2010; Midttun et al. 2006). According to Suchman, strategies for maintaining legitimacy in an organization fall into two categories: Perceiving future challenges and protecting past accomplishments (cf. Suchman 1995, p. 594). By referring to their history as a responsible company, Hydro seeks to preserve goodwill and support from society. At the same time, the company launches a number of new legitimation initiatives in order to meet the emerging challenges of a globalized and less regulated market situation. The analysis of these two cases illustrates that CSR is explicated by Scandinavian companies as a result of the externally given, economic-competitive conditions shaped by globalization, but within the constraints of ethical, political and cultural antecedents in the Scandinavian societies. The way CSR is explicated also reflects the competitive situation of the specific company in question, and the corporate culture and personal values of those involved.
From Implicit to Explicit CSR in a Scandinavian Context
Concluding Remarks In this article, we have argued that the way Scandinavian companies assume and communicate CSR has changed over the past two decades. The changes are related to companies becoming more communicative and outspoken on what social responsibilities they claim to take. Our aim has been to explain this shift and describe the driving forces behind it. Theoretically, we have founded our analysis on Matten and Moon’s distinction between implicit and explicit CSR which explains the historic differences between CSR in an American and a European context (Matten and Moon 2008). Scandinavia has a unique model of the business– society relations based on a consensual political culture, a strong social-democratic welfare state, and well-functioning partnerships between business, government and labour organizations—differentiating it from other European economies. Still, we argue that Matten and Moon’s framework is useful to understand the development of CSR in this context, and our analysis shows that there has been a transition from implicit to explicit CSR in Scandinavia. Furthermore, we have elaborated Matten and Moon’s framework by pointing out two interconnected forces driving the transition from implicit CSR to explicit CSR in the Scandinavian context; organizational expressiveness and relegitimization. Legitimizing strategies are corporate adjustments to the ongoing globalization processes, changing both the market and production conditions for Scandinavian ˚ G case illustrates how organizational companies. The HA expressiveness drives the development from implicit to ˚ G, CSR was incorporated into the brand explicit CSR. At HA in order to promote additional values of the product and thereby maintain demand for their high-priced products. The Hydro case exemplifies how the potential loss of legitimacy in a new market situation drives the development from implicit to explicit CSR. At Hydro, CSR has been explicated in order to regain legitimacy in a situation where business operations are relocated from vulnerable local communities in Norway to low-cost regions abroad. By the use of the Matten and Moon’s framework and neo-institutional theory (Meyer and Rowan 1977; Røvik 2007) we also address why Scandinavian companies become increasingly similar to U.S. companies regarding CSR communication and practice, but at the same time remain distinctly Scandinavian in their approach. While the cultural bonds between the U.S. and the Scandinavian countries are strong, the Scandinavian economies are to a larger extent institutionalized and regulated, the corporate culture is comparatively less individualistic and more directed towards collaboration, and CSR is to a larger extent government-driven. An interesting follow-up would be to look at how and to what extent CSR is explicated in
other and differently regulated business frameworks, notably the emerging economies of Asia. Acknowledgments The authors would like to thank three anonymous reviewers as well as the editors of this thematic issue on the Scandinavian Approach for their thoughtful and instructive comments on earlier drafts of this manuscript. We would also like to thank Sverre Lie for proofreading of the manuscript.
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