integration of csr into management control systems
TRANSCRIPT
Linköping University SE-581 83 Linköping, Sweden
+46 13-28 10 00, www.liu.se
Linköping University | Department of Management and Engineering
Bachelor Thesis in Business Administration, 15 credits | Atlantis Program
Spring 2020 | ISRN-nummer: LIU-IEI-FIL-G--20/02244--SE
Integration of CSR into Management Control Systems
A focus on the social and environmental pillars
through four case studies within the food industry
Marine Courtot
Coline Laurier
Supervisor: Aliaksei Kazlou
Preface
This thesis has been written as part of the Atlantis Program at Linköping University, Sweden.
It has been carried out during Spring 2020 in order to complete our Bachelor in Business
Administration.
This study has been accomplished thanks to the support and help of everybody involved in
the project. We are very thankful to:
Aliaksei Kazlou, our supervisor, for his dedication and regular feedback to make us stay on
the right track. Without his support, the thesis would not have been executed as smoothly as
it has been.
Courtney Recht-Debreuille, French Director of the Atlantis program and Gunilla Söderberg
Andersson, Swedish Director of the program, for the great opportunity to participate in the
three-diploma program. We used the learnings from the Atlantis courses to enrich our
research.
Olga Yttemyr, for introducing to us the course and setting the directives to be well organized.
The interviewees, for their time and cooperation. Their answers and experiences allowed us
to understand and analyze the concept of CSR.
Other Atlantis students, for their thoughtful comments each week on our progressive work
and necessary advice to review some essential parts of our study.
Finally, our two proofreaders, for their constructive feedback and suggestions for
improvement in the paper’s structure and writing.
Abstract
The purpose of this research is to improve the understanding of the organizational role of
CSR and more specifically the sustainable development implementation process into various
companies’ Management Control Systems (MCS). It aims to determine crucial internal and
external factors influencing the CSR integration and evaluate the role of controls carried out
during this process.
To handle CSR complexity, a qualitative study has been conducted through five interviews
among four companies from the food industry, more precisely, dairy, beverage, and catering
fields. It gives us an insight into the social and environmental measures’ integration into the
companies’ activities. To get an overview of the procedures for applying, following-up and
controlling these initiatives and recognize CSR actors, we selected companies that differ in
terms of size, strategy, and goals.
Overall, this paper provides contribution to the existing CSR implementation four-level
model designed by Szczanowicz and Saniuk (2014). Building on the cases’ findings and the
literature examined, a framework is proposed that provides the basis for the effective
integration of CSR into MCS. In line with past research, the study finds how CSR integration
process into MCS, that is into the planning, reporting, evaluation, and rewards systems, is
influenced by six factors: legislation, consumers’ expectations, competition, organizational
structure, corporate willingness to engage with stakeholders and managerial attitudes. Based
on these key internal and external variables, two types of approaches towards sustainable
development implementation are highlighted. The main contribution of this study is that it
demonstrates that the approaches adopted by the company towards CSR, either proactive or
reactive, will affect the effectiveness of the CSR measures and indicators integration into
MCS. Significant findings regarding proactive companies’ behavior have been formulized as
drivers for an effective CSR implementation and thus contribute to the model.
This framework is to be used by organizations willing to develop their sustainability
commitment and respond to societal growing expectations. Managers and CEO should
review the design of the MCS in order to better consider CSR.
Keywords: Corporate Social Responsibility, Management Control Systems, Integration,
Food Industry.
Table of Contents
1 INTRODUCTION ............................................................................................1
1.1 Background ............................................................................................................... 1
1.2 Problem Statement ...................................................................................................3
1.3 Research Purpose ..................................................................................................... 4
1.4 Research Questions .................................................................................................. 4
1.5 Scope of Research .................................................................................................... 4
2 LITERATURE REVIEW ................................................................................... 7
2.1 Definition of key terms ............................................................................................. 7
2.1.1 Definition of CSR ............................................................................................... 7
2.1.1.1 The Pyramid of Social Responsibility .................................................................... 8
2.1.1.2 The Stakeholder’s View .......................................................................................... 9
2.1.1.3 Triple Bottom Line................................................................................................. 11
2.1.2 Definition of MCS ............................................................................................ 13
2.1.3 Definition of Embeddedness ........................................................................... 13
2.2 The Four-Level Model ............................................................................................. 14
2.2.1 Presentation of the Model ............................................................................... 14
2.2.2 Level One: Fulfilling Legal Requirements ...................................................... 16
2.2.3 Level Two: Fulfilling Basic Ethical Norms ..................................................... 17
2.2.4 Level Three: Involving Stakeholders .............................................................. 17
2.2.5 Level Four: Implementing CSR into MCS ...................................................... 19
2.2.6 Limitations of the Model ................................................................................ 20
3 METHODOLOGY ......................................................................................... 23
3.1 Research Philosophy .............................................................................................. 23
3.2 Research Approach ................................................................................................ 24
3.3 Research Method ................................................................................................... 24
3.4 Sampling ................................................................................................................. 25
1
3.5 Data Collection ....................................................................................................... 26
3.6 Data Analysis .......................................................................................................... 27
3.7 Validity and Reliability .......................................................................................... 28
3.8 Ethical Considerations ........................................................................................... 28
3.9 Limitations ............................................................................................................. 29
4 EMPIRICAL FINDINGS .................................................................................. 31
4.1 Market Presentation ............................................................................................... 31
4.2 Companies’ Background ........................................................................................ 34
4.2.1 Company A ..................................................................................................... 34
4.2.2 Company B ...................................................................................................... 35
4.2.3 Company C ..................................................................................................... 38
4.2.4 Company D ..................................................................................................... 39
4.2.5 Companies’ Background Summary ............................................................... 40
4.3 Empirical Framework ............................................................................................ 42
4.3.1 Organizational Structure ............................................................................... 42
4.3.2 CSR Legal Requirements and Ethical Expectations ...................................... 43
4.3.3 Role of Stakeholders in CSR ............................................................................45
4.3.4 CSR Management Control Systems ................................................................ 47
4.3.4.1 Implementation Process ........................................................................................ 47
4.3.4.2 Control and Evaluation of CSR Objectives’ Achievement .................................. 49
4.3.4.3 System Assessment ................................................................................................53
5 ANALYSIS ..................................................................................................57
5.1 CSR Integration into MCS ...................................................................................... 57
5.1.1 Formalization of a CSR Strategy .................................................................... 57
5.1.2 Control Systems’ Structuration ......................................................................59
5.1.3 Environmental and Social Measures: Different Integration Levels .............. 61
5.2 External Factors Affecting the Effectiveness of CSR Implementation .................. 63
5.2.1 Legislation ...................................................................................................... 63
5.2.2 Consumers’ Pressure ...................................................................................... 64
2
5.2.3 Competition .................................................................................................... 66
5.3 Internal Factors Affecting the Effectiveness of CSR Implementation .................... 67
5.3.1 Organizational Structure: a Dual Relationship Between CSR Implementation and Company’s Structure ................................................................... 67
5.3.2 Willingness to Engage with Stakeholders ..................................................... 69
5.3.3 CEO and Managerial Attitudes Towards CSR .............................................. 70
6 DISCUSSION .............................................................................................. 73
6.1 CSR Integration Process and Effectiveness ............................................................ 73
6.2 Contributions to the Four-Level CSR Implementation Model ............................... 77
7 CONCLUSION ............................................................................................. 81
7.1 Main Findings ......................................................................................................... 81
7.2 Future Research ..................................................................................................... 82
8 REFERENCES ............................................................................................. 85
9 APPENDICES ............................................................................................. 93
9.1 Appendix 1: Interview Guide (English version) ..................................................... 93
9.2 Appendix 2: Information Sheet .............................................................................. 97
Table of Figures
Figure 1: The Pyramid of CSR (Carroll, 1991) ........................................................................ 8
Figure 2: Stakeholder Theory (Freeman, 1983) .................................................................... 11
Figure 3: Triple Bottom Line (Elkington, 1994) ................................................................... 11
Figure 4: CSR Implementation Model by Szczanowicz and Saniuk (2014) .......................... 16
Figure 5: Deming's Cycle (1993) ........................................................................................... 19
Figure 6: CSR Consideration (Deloitte Global Human Capital Trends survey, 2018) ......... 32
Figure 7: Food & Drink Industry Commitments by Issue (Lumina Intelligence’s Food &
Drink Sustainability 2019 Global Progress Report, 2019) ................................................... 33
Figure 8: Case Studies' Recapitulative Table (own source) .................................................. 41
Figure 9: Factors Affecting the CSR Integration into MCS's Effectiveness (own source) ..... 75
Figure 10: CSR Implementation Model (own source, improvements from the original model
- Szczanowicz and Saniuk, 2014) ...........................................................................................78
1
1 Introduction
1.1 Background
Over the last two decades, there has been a growing interest in Corporate Social
Responsibility (CSR), which concept has been widely discussed in the literature, as going
through changes in terms of both importance and significance (Carroll and Shabana, 2010:
86). CSR was first introduced in the twentieth century (Carroll, 1999) and is defined
nowadays by the World Business Council for Sustainable Development (WBCSD, 1999) as
“the continuing commitment by business to behave ethically and contribute to economic
development while improving the quality of life of the workforce and their families as well
as of the community and society at large”. The concept of CSR is seen as multidimensional
and is often divided into three categories: People, Planet and Profit, commonly designated at
the Triple-Bottom Line. The “profit” category has been largely discussed, and financial gain
from CSR activities has been widely researched (Friedman, 1970; Cornell and Shapiro, 1987;
Sebastian Johansson et al., 2015; Shafat Maqbool, 2019). Therefore, this paper will focus on
the social – People – and environmental – Planet – dimensions.
The idea that organizations have to adopt ethical corporate values and behavior has been
substantially debated. In fact, companies are being heavily pressured by governments, Non-
Governmental Organizations (NGOs) and the society to act more responsibly (Gond,
Grubnic, Herzig, and Moon, 2012). In the food industry especially, the series of food scandals
starting with the mad-cow disease in 1986 in the UK has significantly damaged the trust and
confidence of consumers in food safety (Banati, 2011). This has considerably affected the
image and reputation of firms (Shnayder et al, 2016). Beside the food scandals, the industry
has dealt with strong ethical issues that go beyond economics, such as human health and
quality of life (Poirier et al, 2016). In this context, organizations have adopted CSR strategies
to communicate their values and demonstrate responsible behavior in order to avoid any
consumer harm. They annually produce sustainability reports which review their CSR efforts
(Shnayder et al, 2015).
More generally, companies comply with legal standards and regulations, qualified by M.
Armstrong and Stephens (2008) as “hard” elements of CSR due to being imposed by laws,
procedures, and structures. Companies often externally report those hard components to
stakeholders. In fact, integrating these elements is a necessity, but there has been research
showing the lack of consideration of those legal requirements and the divergence in terms of
its outcomes, suggesting their superficiality (Yin and Schmeidler, 2009). They are rather
2
used as a form of symbolic behavior, to increase external legitimacy without effectively
implementing changes related to CSR inside their organization (Christmann and Taylor,
2006). However, the rise of a more stakeholder-centric governance approach (Shahzad et al,
2016) has led organizations to go beyond regulation and ethical requirements by integrating
“soft” elements of CSR, such as managers’ values, employees’ commitment, etc. Soft
components derive from the presence of people, their values, and attitudes (Robbins, 2001).
Thus, they are informal, intangible and above all, voluntary, and they demonstrate the
companies’ rising willingness to focus on and satisfy the needs and expectations of their
stakeholders. The soft elements, which depend on individual and discretionary initiatives,
are likely to contribute to the effectiveness of formal management systems and the
internalization of CSR management standards and regulations. More precisely, they reduce
the likelihood of a symbolic CSR implementation into Management Control Systems (MCS)
(Testa et al, 2018). Nevertheless, the CSR performance depends on the integration of both
hard and soft elements.
Traditionally, CSR has been linked to the achievement of financial goals (Lee, 2008),
performance and profitability being the main social responsibility of a company (Friedman,
1970). The relationship between CSR and financial performance has been thoroughly
studied, and it presents a lack of consensus. A majority of researchers argue that their
relationship is positive. According to Cornell and Shapiro’s social impact hypothesis (1987),
a socially responsible company will be able to lower its costs for implicit claims from
stakeholders, and thus, achieve greater financial performance. Du (2007) also indicates that
brands which differentiate through their CSR activities are more likely to be preferred by
consumers, suggesting that CSR provides a source of competitive advantage. Consequently,
CSR would represent an intangible asset for companies developing responsible activities
(Surroca and al, 2010). Others indicate a negative relationship by CSR resulting in
unnecessary additional costs, which creates an economic disadvantage for a responsible
company and place it in a “strategically unfavorable position in comparison with its
competitors” (Friedman, 1970). Finally, some theorists argue that there is no possible direct
relation between the two as there are too many intervening variables (Ullmann, 1985). No
common agreement regarding the effect of CSR when being implemented in a company has
been found despite considerable attention given to the subject, suggesting an inadequate –
or even absence of – control and monitoring for activities related to social and environmental
matters.
Today, the rise of the stakeholder-view has led organizations to re-think their objectives by
systematizing CSR implementation and engaging with key stakeholders around CSR (Dobele
et al, 2014). Within this context, there is a need of clarifying the integration of CSR into
3
Management Control Systems (MCS) to better internalize sustainable strategies and
activities and respond to the society requirements.
1.2 Problem Statement
CSR is an ambiguous and evolving concept, which appears to challenge businesses and
managers to interpret and integrate CSR internally. In fact, Friedman (1970) claimed that
CSR is vague and foolish, whereas later authors argued that it provides a competitive
advantage, that goes beyond the cost expansion of CSR (Porter and Kramer, 2006). To
legitimize CSR and strengthen managers’ attitudes towards sustainable development, the
literature has been focusing on the financial benefits of the CSR engagement. By studying its
financial impact, the literature has shown that CSR should be viewed by companies as a
strategic opportunity and a competitive tool, and not as an obligation only. Aligning both
economic objectives, which are about profit maximization, and CSR on a strategic level
promotes responsible behavior and commitment from managers towards CSR.
While most research on CSR tends to investigate the motivations for and consequences of
CSR activities and its effect on performance, the analysis of the integration of CSR into MCS,
originally based on financial measures, has been under-researched (Moore, 2013).
Traditionally, CSR is not a management tool but more a moral duty (Zwetsloot, 2003), and
to comply with social, ethical, and environmental norms, businesses need to prioritize their
CSR contributions with the help of CSR processes. This suggests the need of guidance
through a framework that breaks down CSR into manageable processes.
Few researches have focused on external reporting, as an extension of external financial
reporting (Moir, 2001). Nevertheless, a limitation of such management tool is that, on the
contrary to financial reports, there is no international obligation to produce CSR reports, and
no standard has been established. Thus, companies can choose which information to
externally communicate, and these data are often uncertain. Dowling and Pfeffer (1975)
argued that the goal of CSR external reporting is linked to business image enhancement,
suggesting its superficiality.
In such context, there is a need for studying more thoroughly the integration process of CSR
within firms. Additionally, the role of MCS in supporting CSR strategies and activities within
the company is under-studied (Gond et al, 2012). More particularly, factors affecting the
integration of CSR into MCS are not included in the existing theoretical models. Gond et al
(2012) states that CSR controls are peripheral and fail to reshape strategy since they are not
integrated to the traditional MCS. Furthermore, Ledwidge (2007) argues that CSR is seen as
4
complementary rather than integral to the organization’s core strategy, which indicates the
lack of an efficient integration process.
Therefore, this thesis intends to address this limitation by analyzing how a company can
effectively integrate CSR into its traditional MCS and identifying the factors intervening in
that process. A better understanding of the implementation of CSR into MCS and the internal
management control issues would improve the decision-making process, which would
include ecological and social data as well as economic dimensions (Burritt and Schaltegger,
2010).
1.3 Research Purpose
The aim of this thesis is to examine deeply how CSR is integrated into traditional MCS and
to identify the factors that could affect the effectiveness of the integration process. In other
words, we want to assess both internal and external factors that could have an impact on the
proper integration of CSR into MCS, either by positively or negatively influencing it. The
purpose is therefore to go beyond superficial implementation of CSR and to analyze the CSR
strategies and activities integration that leads to internal changes in the organization.
The theory included in the literature review proposes a 4-level model illustrating the
implementation of CSR into MCS, but it does not address the variations the implementation
process can face because of identified variables. Thus, this paper will address this issue and
intend to propose a new framework that could be applied more generally. We intend to
provide knowledge about CSR integration into MCS so that companies can adopt effective
strategies in times of ecological transition and CSR activities implementation. To some
extent, this might contribute to enhancing internal processes and improving businesses
behavior towards social and environmental issues.
1.4 Research Questions
The study aims to answer the following questions:
- How do companies integrate CSR into Management Control Systems (MCS)?
- Which factors affect the implementation of CSR into MCS’ effectiveness?
1.5 Scope of Research
The research context is bounded by sectoral specifications, as the thesis will focus on
companies from small and medium-sized enterprises (SMEs) to large businesses from the
food industry only. According to INSEE’s definition (2018), the business size is determined
5
based on two criteria: the number of employees and the amount of revenues. Therefore,
SMEs employ less than 250 individuals and have a turnover of less than €50 million, while
large organizations employ more than 5000 workers and achieve a turnover of at least €1,5
billion. Different sizes of organizations will be examined, in order to get a better overview of
the CSR implementation. However, the focus will be on the food-industry. Given its history
regarding the management of CSR scandals and the high ethical expectations shaped by
society, we have assumed that investigating this sector would be the most relevant for this
thesis. Additionally, Shnayder et al (2016) identifies the characteristics of the food industry,
which are the enormity of size and potential for growth (Plunkett Research estimated the
global food and agricultural industry for 2018 at $8.7 trillion, an approximate 10% of the
world’s GDP), the ongoing demand and the ethical issues it faces (regarding health, disease
risk and quality of life). The author also suggests that the characteristics of the food industry
could be applied to other large sectors, such as energy and pharmaceutical. This allows some
level of generalization for our study.
Moreover, the thesis will be limited to four European companies and cases, having their
headquarters in France and Switzerland, due to time and resource limitations. We assume
that it will be sufficient to obtain in-depth and detailed answers and to identify factors
affecting CSR implementation thanks to the different characteristics of each of the four
companies. However, because the focus is on the European market, the results cannot be
applied more generally on an international level. The study is carried out through interviews
conducted with one employee from each organization. The interviewees are all in charge of
CSR strategies and activities, even though they have different roles and positions within their
respective company. Because of the restricted number of organizations, the outcomes of this
research are specific and linked to each participant’s own experience with working with CSR
and sustainability issues. This might be a limitation to the thesis, as the generalization factor
can be questioned based on the sampling.
Finally, the paper studies the environmental and social aspects’ considerations and
integration into the companies’ strategy and procedures. The third pillar of CSR, which is
economic, will not be discussed here, as it has already been thoroughly studied in past
research (Lee, 2008).
6
7
2 Literature Review
The literature review chapter is divided into two sections. Firstly, the key terms of the
subject are defined, and the research exploring the concept of CSR is further widely
discussed. Secondly, an existing framework illustrating the CSR integration into MCS is
examined.
2.1 Definition of key terms
2.1.1 Definition of CSR
CSR does not have the same meaning for everyone. According to the European Commission
(2011), it refers to “a concept whereby companies integrate social and environmental
concerns in their business operations and in their interaction with their stakeholders on a
voluntary basis”. The objective of CSR is to maximize the value creation for shareholders and
stakeholders, by adopting a long-term strategy and innovative actions and simultaneously
identifying and minimizing the potential unfavorable impacts by developing risk assessment
and management in the whole supply chain.
This concept however faces modifications through time and with the global evolution. This is
the reason why a myriad of authors from different eras have tried to establish in what consists
CSR. Most of the time these definitions are presented following specific interests based on
personal experiences and viewpoints. Several definitions will be cited hereinafter thanks to
previous theoretical research, and a general and more concrete one will be formulated. This
latter will be the basis of the theoretical framework. According to Aguinis and Glavas (2012),
CSR can be defined as a “context-specific organizational actions and policies that take into
account stakeholders’ expectations and the triple bottom line of economic, social and
environmental performance”. For Davis (1973) CSR is the “firm’s consideration of and
response to issues beyond the narrow economic, technical and legal requirements of the
firm”. Carroll (1979) tried also to define CSR understanding as a “formulation and
implementation of social goals and programs and the integration of ethical sensitivity by
firms into all decision-making, policies and actions”.
In our research we are using a combination of the definitions above to create our own view
of the concept. CSR will be interpreted as a socially responsible conduct of companies which
integrates in the daily operations and decision-making processes ethical actions regarding
the environment, the society and the human rights, including stakeholders’ interests beyond
what is required by the law or the solely economic interests of the firm.
8
Three approaches are used to define more precisely the concept of CSR: The pyramid of social
responsibility (Carroll, 1991), the stakeholder’s view and the Triple Bottom Line (Elkington,
1994).
2.1.1.1 The Pyramid of Social Responsibility
The Pyramid of Social Responsibility (Carroll, 1991) is constituted of four responsibilities
that are part of CSR and can help a company to identify its expected obligations to strictly
follow the definition of CSR (Figure 1).
Figure 1: The Pyramid of CSR (Carroll, 1991)
The first responsibility in the pyramid is economic. The aim is to maximize profit for
shareholders through operating what is the core activity of a company, that is, producing and
selling goods and services required by customers and the society. It is in fact vital for the
company to develop activities to survive. The economic matter is a primary concern as it is
the foundation of a business and of potential future social and environmental investments.
This economic responsibility can enable an organization to create a competitive advantage
and attract more consumers. Novak (1996) defined several economic responsibilities towards
stakeholders: shareholders want the highest possible return on their investments, employees
want to be well paid for their work and customers want a fair price.
The second step of the pyramid is the legal responsibility. Companies are expected to act in
alignment with current written laws and regulations transmitted by federal, states, and local
communities under which businesses should operate. This applies for local, national but also
international laws and regulations.
9
The economic and legal components of the pyramid are considered by Carroll (1991) as the
basics of CSR. In a shareholder approach, the principal ambition would be to maximize the
organization’s profit, and social concerns would come after as an obligation requested by the
government. In this view, the minimum social components would be completed since the
first objective is to be profitable for the long-term shareholders’ interests (Van Marrewijk,
2003).
To act ethically is also an expected requirement for a company. It represents standards,
norms, and expectations that customers, employees, shareholders, and the community see
as fair even if there are not written in the law. It can thus be defined as implicit moral rules.
Ethical responsibilities even if not imposed by the law are expected from ethical companies
by the public and governments. After a lot of ethical scandals, this component has become a
main preoccupation for companies, which have to act in a manner fairly beyond their legal
responsibilities. Stakeholders have high expectations upon ethical concerns. In a stakeholder
view, organizations do not only have responsibilities towards shareholders but also have to
respect stakeholders’ interests which are essential for the corporate operations.
The last pyramid responsibility is philanthropy. It is the component at the top of the pyramid
which means that it is the most luxurious one, where companies are supposed to be good
corporate citizens as expected by society. It refers to voluntary and discretionary acts towards
programs and charities to promote human welfare and goodwill. These acts can be shown
through devoting time or money to contribute to the well-being of a cause. It is important for
the external image a company reflects in the society and can also be done without expecting
anything in return.
In order to have a complete CSR, the whole range of business responsibilities should be
covered in a hierarchal way. It starts from the economic and legal responsibilities, then
develops the ethic and philanthropic aspects of a company that Carroll (1991) considers as
the highest levels of responsibilities and not as the primary ones.
2.1.1.2 The Stakeholder’s View
Stakeholders are individuals or groups of people who can be affected by or who are able to
affect the accomplishment of a corporation’s objectives (Freeman, 1983). They have a moral
claim to participate in the decision-making process. They are considered as vital for a
company’s existence and success and managers should pay higher attention to all of them.
10
According to Smith (2003), the stakeholder theory is based on the fact that a business has to
be careful of the effect of its acts on “all constituencies”.
The five cardinal stakeholders are shareholders, employees, customers, suppliers, and the
community (Figure 2). A shareholder is a person or an institution that holds stocks in a
company and expects return on investments. The higher risk they take the higher profit,
growth and share prices they demand. They have the power to put pressure on the
management as they own the company. The actions of shareholders influence corporate
activities, how much they should sell and earn, how and where they will invest money, etc.
An employee is a person achieving a specific type of work in a company in return for monetary
and non-monetary compensations. A worker will contribute to the organization’s activities
giving time, effort, skills, knowledge, ideas, loyalty and expect in return to be well-paid, to
have a job security, non-monetary benefits, recognition, and career opportunities. This is
called the psychological contract and play an important role in the CSR regarding the
commitment of employees.
A customer is an individual or a business that purchases another company’s goods or services
expecting a specific quality in return. Customers are important in CSR as they drive revenues
for a business and set their expectations towards a company’s environmental engagement,
social considerations, and fair actions. They have power over businesses as the market is
highly competitive. The businesses will adapt in order to attract and retain them through
advertisement, prices, quality but also social responsibilities.
A supplier is a person or a company providing goods or equipment to customers in return for
a financial compensation. He or she acts as an intermediary between the manufacturer and
the retailer, the communication in this relationship is important to keep good contact and
ensure a long-term relationship. The company, to become involved in CSR with its supplier,
has to choose them according to their level of social and environmental engagement.
Finally, the community is a group of people living in a particular area and sharing common
characteristics or interests. This group has members interacting with one another and with
the environment. They are able to influence decisions of an organization with their critics. A
company applying CSR is obliged to take the community as a whole into account.
In the stakeholder theory, the nature of these stakeholders, their values and their influence
on decisions are relevant for predicting organizational behaviors and outcomes (Brenner and
Cochran, 1991). Freeman includes other stakeholders such as creditors, public interest
11
groups, competitors, and governmental bodies (Figure 2). For Blowfield & Murray (2008),
the stakeholder is a vital part of CSR as it helps managers to understand to whom they are
responsible. Moreover, stakeholders have a set of interests and expectations that need to be
considered by businesses as it affects their activities. Smith (2003) claims that all groups
should be considered even if it leads to a reduction of profitability. As a consequence, a
stakeholder can influence an organization’s decisions but also can be affected by the actions
of a company.
Figure 2: Stakeholder Theory (Freeman, 1983)
2.1.1.3 Triple Bottom Line
In 1987, the concept of the Triple Bottom Line (TBL) has been introduced in Brundtland
Commission and named by John Elkington (1994). This theory is also well-known under the
name of 3 P’s or three pillars. The TBL aims at structuring the three pillars for which a
company should take responsibilities: Profit (economic), People (social) and Planet
(environmental) (Figure 3). This theory is important to understand better the concept of
sustainability. If one of these pillars is omitted, the CSR engagement is not complete and
cannot last on the long-term.
Figure 3: Triple Bottom Line (Elkington, 1994)
12
Profit is an essential element of a company’s activities in order to exist and develop in a
competitive environment. CSR should not put at stake the profit of a company. A reasonable
profit has to be won to provide value for shareholders. The latter own shares of the
organization, they are thus owners of the company and without them its existence is
jeopardized. To be socially responsible in the long-term, being profitable, saving costs and
providing value to shareholders is a mandatory requirement. Without sufficient monetary
value, the success of a firm is compromised and future investments in improving
stakeholders’ standard of living would not be able to occur. Three aspects of the profit
dimension are highlighted by Uddin et al (2008). The multiplier effect assesses the impact
that a business has on its various stakeholders. The more individuals are reached by the
company’s activities, the higher the multiplier effect will be. That is why creating more profit
can benefit the surrounding actors. There are also taxes on profit that are then given to the
government. A higher profit will enable the society to invest this money into responsible
social activities for all citizens. Finally, a business has to keep its actions ethical to maintain
a good image, reputation, and trust with its stakeholders.
People is the second pillar and covers all individuals affected by or who affect a firm’s
activities which cannot exist without them. Employees, customers, and all participants in the
process are interdependent with the business (Porter and Kramer, 2006). This implies that
people should be respected and fairly treated to be retained. Uddin et al (2008) defined CSR
regarding to customers and employees. First, customers buy goods and services from
companies and care about their social responsibility engagement towards the society and
environment as well as their ethical behavior. As Golaszewska-Kaczan (2009) demonstrated,
“new consumers” are concerned about their purchases and give high importance to
transparency. Their socially responsible opinion is crucial for companies as they decide to
buy or not according to the business behavior. Second, the employees for whom the business
environment and conditions of work are important factors. They need to feel respected and
rewarded for their work. With a good salary, perspectives of career evolution and stimulating
tasks that enable them to develop their competencies (Wieczorek-Szymanska, 2017), it will
drive their motivation and contribution for the organization.
Planet is the third pillar and corresponds to the environment. All organizations and
stakeholders are responsible to take care of the environment and avoid negative impacts
resulting from their behaviors and resource usage. To avoid all harm on the natural
environment, a company has to pay attention to the production of its goods and services value
chain from the raw material choice to the way of making these ones available to the end
customers and how they will be used (Life cycle assessment). It also means being
environmentally responsible when choosing intermediaries in the channel process avoiding
13
all procedures that can damage the atmosphere. It comes by integrating social norms in the
corporate culture to invite employees to have responsible behaviors. Uddin et al (2008)
explain this through the environmental impact measurement using tools such as the
ecological footprint to evaluate resources usage and availability and through the win-win
situation in which the company gains at improving environmental actions by attracting more
customers and finally develop a competitive advantage.
2.1.2 Definition of MCS
Management control is a systematic process by which an organization’s higher-level
managers influence lower-level managers to implement the strategies of the company
(Anthony et al, 2014). These strategies are implemented in order to increase the
organization’s long-term performance according to financial and non-financial tools such as
budgeting, transfer pricing, evaluation and rewards, allocation of responsibility centers and
resources. Most of the time financial measures are frequently used.
Control plays a significant role in an organization. The systems can be formal: clear
procedures, rules, and guidelines to explain the managerial requirements; and informal:
unwritten processes to boost motivation and goal congruence. It enables to detect mistakes
made and to correct variations in order to stick to the initial plan and minimize the deviations
that could jeopardize the goals’ achievement. According to Lauden Cheyo (2015), control
comprises three main activities: setting standards, measuring actual performance, and taking
corrective actions. Control systems are necessary as they can be used as a foreseeing tool
avoiding unfixable errors to be committed and to prevent potential recurrence. Management
control systems pertain to frequent checking to see whether the actual performance resulting
from the business efforts is in line with the predetermined standards or if immediate deeds
need to be taken. These actions have the objective to use the current resources effectively and
efficiently for the expected corporate outcomes’ completion.
The control systems are essential to reduce risks in a company as goals are not pursued
blindly but with processes assessing and monitoring the evolution of goals’ realization. Issues
can be noticed faster and turned into making the performance grow. Thanks to these systems,
information flow and fill the communication gap between employees and the management
which improves the awareness, confidence, and motivation of all (Belyh, 2018).
2.1.3 Definition of Embeddedness
Although it is not the purpose of the present document to explore the question of
embeddedness, we will use the following notions “embedded CSR” and “degree of
embeddedness”. The definition that we choose for the concept of embeddedness is in line
14
with Granovetter’s conceptualization (1985), who develops it using Polanyi’s (1983).
According to him, the economic action is embedded into the personal relationships’
networks. In other words, an enterprise is not only economic, but results also from concrete
interactions between actors, closely liaised with the socio-political environment. Polanyi
(1983) designates embeddedness as the inscription of the economy defined into social,
cultural, and political rules which govern some forms of production and goods and services
trading. Granovetter (1985) goes further by including economic actions into social networks,
and he uses this notion of social networks in order to explain the institutional formation and
evolution. He aims to avoid the “atomization” of actors, conceived in previous socialization
conception (Hirschman, 1982; Wrong, 1961):
“Actors do not behave or decide as atoms outside a social context […]. Their attempts
at purposive action are instead embedded in concrete, ongoing systems of social
relations.” (Granovetter, 1985)
He also uses the argument of embeddedness to show the role of concrete personal relations
and networks in generating trust and discouraging malfeasance. Actors indeed generally
prefer to rely on transactions with reputable individuals rather than on generalized morality
or institutional structures, to produce trust in economic life.
More generally, the notion of embeddedness provides evidence of the extent to which
business relations are mixed up with social ones. This is the reason why we use this term
when exploring the concept of CSR. In fact, William Sun (2013) views embedded CSR as an
intrinsic value and inherent building block of business, and not as an add-on. CSR is
embedded in the business organization, culture, governance, and strategy, which contrasts
with the business ethics school of thoughts which considers that CSR is externally added and
separately developed from the core business (Visser, 2010). This notion will thus be further
discussed in the empirical sections.
2.2 The Four-Level Model
2.2.1 Presentation of the Model
The model, on which this study is based, is organized around four levels for the CSR
implementation into MCS (Szczanowicz and Saniuk, 2014). Originally, the concept was
designed especially for the needs of Small and Medium Enterprises (SMEs). In fact, there is
a strong need to follow-up CSR integration, as these types of companies face several issues,
related to the lack of financial resources as well as of knowledge about such concept. SMEs
seem to have a poor awareness about CSR. They also indicate that implementing sustainable
strategies would have a very insignificant impact on their local community and environment
15
(Polska Agencja Rozwoju Przedsiębiorczości, 2013). In response to these limitations,
Szczanowicz and Saniuk (2014) have designed a model which distinguishes the different
levels of social and environmental responsibility. The CSR implementation model
differentiates between responding to legal standards and basic ethical norms defined by
society and highly committing towards CSR by involving stakeholders and integrating CSR
into MCS. According to the authors, this model suits the needs of the SMEs: it provides more
practical information for effectively integrating CSR into their core business and MCS than
the existing guidelines and formal procedures for this sector. Nonetheless, we assume that it
is applicable to all types of companies’ needs, from SMEs to large corporations as it provides
structure for integrating CSR and enhancing sustainable behavior, whichever the size of the
business. This is also because Szczanowicz and Saniuk’s model is based on the three levels of
CSR defined by Carroll (1991) with the pyramid model, which was initially designed for large
corporations. The CSR pyramid includes four responsibilities, which are the economic, legal,
ethical and the philanthropic ones, as identified in part 2.1.1. Szczanowicz and Saniuk (2014)
have used the legal, ethical, and philanthropic dimensions of Carroll’s pyramid, that is why
we assume that their established model is suitable for companies from all sizes.
The two authors have used those three responsibilities to define the first three levels of their
CSR implementation, and they have added one final level, which includes the Deming cycle
and allows a better implementation into MCS. Therefore, their CSR implementation
framework includes four levels (Figure 4), that will be discussed more thoroughly in the
following sections. Moreover, the model implicitly suggests a few factors that will have an
impact on the CSR integration into MCS’ effectiveness. More precisely, it includes the
legislative context, societal expectations, and company’s relationship with stakeholders as
playing a role on the CSR implementation. These factors will be examined further in the
empirical chapter.
It is also important to mention that the first level must be fulfilled before passing to the
second level, as well as the second one has to be completed to be able to start the third one,
and so on. More generally, the fulfilment of the requirements of the lower level allows the
shift to the higher level of responsibility.
16
Figure 4: CSR Implementation Model by Szczanowicz and Saniuk (2014)
2.2.2 Level One: Fulfilling Legal Requirements
The first level of CSR implementation corresponds to the fulfillment of legal obligations and
the compliance with various federal, state, and local regulations. The society, and more
precisely, the government, has established ground rules, that businesses must respect. These
obligations are part of the “hard components” of CSR, as defined in Section 1.1 (Armstrong
and Stephens, 2008). Legal requirements reflect the “codified ethics”, this means that they
represent the obligatory fundamental norms and behaviors that the society has set, in
comparison to the ones in the second level, which are non-mandatory.
An important limitation of the legal requirements is that they do not incorporate all basic
behavior, that the society is expecting from the businesses. In fact, Carroll and Buchholtz
(2008) identifies three reasons for which laws can be inadequate. Firstly, it is argued that
legislation cannot cover all issues that the companies can encounter. This is partly because
new challenges continuously emerge (for instance, in the food industry, there are new issues
related to genetically modified food, the consumer’s growing interest for sustainable supply
chain and blockchain, etc.) Secondly, laws become obsolete and outdated as new concepts
and technologies arise. In addition, regulations are not frequently reviewed. Finally, because
laws are established by a few specialists, they may not reflect the actual ethical needs but
more personal and political interests.
17
2.2.3 Level Two: Fulfilling Basic Ethical Norms
The second level refers to informal social expectations and the compliance of the company
with ethical norms that are consistent with the CSR purpose. Ethical responsibilities are
needed to balance laws that are essential, but not the most appropriate in some cases. The
difference is that they do not represent obligations from the government and laws but are
requirements from the society. Some processes, behaviors and actions are expected or
banned by stakeholders, even though they are not codified by the legislation. One example of
such basic and ethical norm is the SA8000 standard, which is also a “hard component” of
CSR as it is recognized as a formal structure to adopt. This certified management standard is
considered to be one of the most relevant standards (Sartor et al, 2016), as it is used to
internalize business ethics within firms. It encourages companies to integrate management
practices in line with the human rights norms (child labor, health and safety, discrimination,
etc.). Therefore, this standard sets socially acceptable practices in the workplace, that are
fundamental to social welfare. Such ethical norms and expectations are the basis for the
creation of new laws. They reflect the new values that the stakeholders are demanding from
the companies to embrace. Thus, they are continually evolving (Szczanowicz and Saniuk,
2014).
In fact, the society that sets these ethical norms includes both internal and external
individuals of the businesses. More specifically, they are employees, shareholders,
consumers, suppliers, and lenders, and they all assess what is fair and consistent with the
respect of their own rights. At this level, a dialogue must be maintained with the society, to
make sure to avoid all harm and undertake preventive (and in the worst cases corrective)
actions.
The completion of the first two levels are necessary for a company to be perceived as socially
responsible. These legal and ethical levels correspond to formal types of control, both
including “hard components” of CSR. They must be fulfilled in order to start the next ones.
If the business skips these first two levels and directly develops the third or fourth one, it
might face embarrassment and failure (Szczanowicz and Saniuk, 2014).
2.2.4 Level Three: Involving Stakeholders
From this level, the activities linked to CSR must go beyond the basic expectations of
stakeholders, and they aim at building competitive advantage by adopting several specific
CSR actions. This third level considers more deeply the stakeholders, and its aim is to
operationalize their engagement in CSR. The first step of this process is to identify key
individuals, that have the greatest impact on the company’s competitiveness, as well as key
relationships (Madsen and Ulhøi, 2001). One way to ensure the stakeholders’ engagement is
18
to decide and select individuals which the organization will connect with. Mitchell et al (1997)
argue that this selection should be based on power, legitimacy, and urgency. Additionally,
there must be a continuous dialogue between the companies and the selected stakeholders in
order to secure their interests in engaging towards CSR. This is supported by the AIDA
model, standing for Awareness, Interest, Desire and Action (Russ and Kirkpatrick, 1982),
which concedes the value of gaining individuals’ interest by adopting a two-way
communication (Kitchen, 1993). Even though this model was originally developed in the
marketing field, to understand the consumers’ purchasing process, it has also been applied
to public relations to show the importance of securing stakeholders’ interests through
communication that could then lead to behavioral changes. Therefore, by creating awareness
and maintaining interest through a continuous dialogue, stakeholders are more likely to
engage in CSR and act towards sustainable development.
This communication is crucial at all phases of implementation because it provides rich and
meaningful information that the organization can use. It begins, as mentioned previously, at
the planning phase, with the identification and selection of stakeholders and their respective
needs. Knowing their expectations allows the company to assess what the right CSR practices
to implement are. These practices should be a negotiation between what is essential for
stakeholders and what is doable for the company. After the planning phase, stakeholders
should engage and interact during the CSR implementation and evaluations stages. A way of
assessing this performance and the effects of CSR should be defined from the beginning, at
the planning phase, and all stakeholders involved in the process must be aware of the
measurement criteria. Therefore, one possible way to assess the CSR progress and
accomplishment is by using relevant KPIs (Key Performance Indicators). These indicators,
by giving specific and pre-determined information, give a clear picture of the achievements
and plans for the future and show the effectiveness of the CSR integration (Szczanowicz and
Saniuk, 2014). In addition, to involve stakeholders more thoroughly, the latter can be invited
to discuss CSR implementation and to exchange ideas, that would be reported to the
organizational decision-making.
A key advantage of involving various stakeholders in the CSR integration process is that it
provides more control for the company. Organizations can indeed more easily manage and
persuade workers to acknowledge and contribute to CSR strategies and actions. However,
this might be seen as industrialism and is criticized by the researcher Greenwood (2007).
Therefore, the focus should mainly be on achieving results that develop stakeholder
relationships and collaboration.
19
Finally, this process results mostly into informal controls and includes “soft components” of
CSR (Armstrong and Stephens, 2008). It is impacted by individual behavior and corporate
culture. It is in fact assumed that managers’ and employees’ exemplary attitudes and
commitment towards CSR are likely to strengthen the integration of CSR into MCS and to
enhance the internalization of standards (Testa et al, 2018). Testa also argued that adopting
responsible behaviors that are discretionary and not directly related to formal reward system
improve the integration and performance of CSR.
2.2.5 Level Four: Implementing CSR into MCS
The fourth and final level requires the integration of CSR values, procedures, and practices
to business strategy, and thus the implementation of CSR into MCS. This integration is based
on the Deming’s cycle, divided into four steps: Plan, Do, Check, Act (Figure 5). This method
includes all economic, social, and environmental aspects of a firm.
Figure 5: Deming's Cycle (1993)
In the planning phase, the organization needs to conduct a CSR assessment (from what has
been established during the previous levels), and based on this, it develops a CSR strategy,
including long and short-term goals. This strategy, providing a sense of direction, a purpose
and setting boundaries and focus areas should be communicated to internal and external
stakeholders. Therefore, clear goals, a vision and guidelines should be set up in order to
implement the process and propose CSR actions.
The second phase, which corresponds to “Do” and the third one, “Check” should then overlap,
in order to develop and integrate the CSR commitments and actions previously planned,
while continuously following up on them and reporting. To improve the CSR implementation
within the firm, the latter should provide CSR training and consult affected stakeholders. In
the second phase, senior and middle management play a crucial role (Raps, 2005) as their
opinions influence others, through tone-at-the-top. They have a great responsibility and
possess knowledge that must not be neglected during CSR implementation. In addition to
assigning clear roles between managers and between workers, measurable targets should be
20
set through KPIs. Practices should be regularly reviewed in phase three, “Check”. This is why
the MCS play an important role, as sustainability measures must be integrated to the
reporting and monitoring systems, in order to measure the effectiveness of CSR actions.
Measuring progress is also a way to exclude risks with preventive actions or to take corrective
measures. Heslin and Ochoa (2008) also suggest that progress, if successfully managed,
should be rewarded, in order to increase working morale.
Finally, the fourth phase refers to “Act”, that is improving the in-place systems and the
interactions of and engagement with stakeholders. After evaluating the performance,
adjustments should be implemented if the outcomes are not the ones expected. Further,
future opportunities should be assessed, through a SWOT analysis (Strengths, Weaknesses,
Opportunities, Threats). When one cycle is completed, the next cycle should start taking into
consideration the decided variations and corrections that would improve the quality of the
process (Hohnen, 2008).
During all four stages of the cycle, communication is particularly important (Szczanowicz
and Saniuk, 2014). The organization must ensure an adequate transmission of information
as well as a continuous dialogue with stakeholders. They must be recognized as fully-fledged
members of the CSR team. Objectives, actions to undertake, KPIs and occurring changes
must be communicated to them during the whole process.
2.2.6 Limitations of the Model
Several limitations can be identified in this actual model. Firstly, the two first levels relate to
legal and ethical norms that are more symbolic rather than systematic. Even though fulfilling
these two levels is necessary to be perceived as responsible and engaged, it does not provide
any guarantee of substantial internal commitment to CSR and sustainability (Yin and
Schmeidler, 2009). This is partly because their components do not require to be
implemented into the formal MCS, but a simple adoption of a formal system. However, it was
shown that formal systems create heterogenous outcomes in practice. They are more adopted
as a form of representative behavior in order to increase their external legitimacy by
externally reporting CSR commitments and actions.
Secondly, controls linked to sustainability are rarely interconnected with financial controls,
so this has to be reshaped. As argued by Gond et al (2012), sustainable control systems are
autonomous tools and are not integrated to the core strategy and controls. Therefore, they
do not have any strong impact of the company’s actions and remain secondary, while
financial measures and profitability-driven actions are primary. It is thus very important to
consider this limitation and to identify the degree of integration of CSR into the core business.
21
Interlinks must be drawn, as both financial and sustainable systems should go towards the
same direction (Buhr and Gray, 2012).
Lastly, CSR measures are largely related to environmental aspects, and social ones tend to be
less considered (Durden, 2008). Therefore, we should investigate the measurement and
monitoring of both aspects within MCS, in an equal manner.
22
23
3 Methodology
This chapter provides an overview of the methods and tools used to conduct the study.
Choices regarding philosophy and approach are discussed, as well as methods for collecting
and analyzing data. Lastly, reliability of data and ethical aspects are considered.
3.1 Research Philosophy
The research is based on understanding how CSR is integrated to traditional MCS and how
this integration can be affected by internal and external factors. Two ontological positions
can be adopted when conducting the collection of data: objectivism and constructionism
(Bryman and Bell, 2011). Objectivism asserts that social phenomena and their meanings
exist independently or separately from social actors. On the other hand, constructionism
implies that social phenomena and their meanings are continually being accomplished by
individuals and are in constant state of revision. In other words, a constructivism ontology
means that the research and results are not considered as definitive and can still evolve
through further research. New variables can also modify the context and the reality of a
phenomenon (Bryman and Bell, 2011). The research philosophy in this thesis is thus based
on constructive ontology. In fact, the research presents a version of social reality that is
subject to fluctuations, with the understanding that findings and interviewees’ answers are
subjective. Moreover, our empiric studies will be limited to a few interviews involving only
several organizations. The study could not be developed on several years involving a myriad
of participations and opinions enabling more precise results. As our study is limited by time
and CSR actions in different companies and industries are constantly evolving according to
external and internal factors, an objectivism ontology would not be accurate. Thanks to a
constructivist perspective, our data collection and analysis of the results do not correspond
to a unique and absolute correct path to follow therefore should not be taken at face value.
On the contrary, they would remain open to discussion and debate, and additional
information and knowledge in future projects would be welcome to enhance this research.
Concerning the epistemology, positivism depicts the use of natural sciences to study social
reality where only confirmed knowledge can be applied. Data collection is considered as
credible if it comes from a sensory observable phenomenon and if the research purpose is to
gather facts to generate hypotheses providing the basis for laws (inductivism, Bryman and
Bell, 2011). In contrast to positivism, there is an epistemology of interpretivism which can be
interpreted as a view respecting the dissimilarities of material and unmaterial of natural
sciences considering the social action aspect. This study will not use a positivism
epistemology as we are not using strict data with confirmed knowledge. Instead, we are
24
utilizing various participants proceedings to interviews from whom results and viewpoints
are discussed.
3.2 Research Approach
There are two main strategies for linking theory and research. The deductive study implies
that theory drives the process of collecting data, and it aims at comparing findings with
theories. More concretely, a hypothesis is raised based on the theory, and then, an empirical
study is conducted to verify this hypothesis validating it or disapproving. Afterwards, the
theoretical framework can be revised to be able to analyze the collected data in a more
appropriate manner. On the contrary, the inductive approach consists of creating theoretical
concepts from data and observations (Bryman and Bell, 2011). The deductive approach is
mainly used for quantitative research, while the inductive is used for qualitative studies.
Since the thesis uses the existing CSR implementation into MCS model which contains some
flaws and might not be applicable to all organizations, depending on identified factors, an
abductive approach seems to be the most appropriate for this research. Abduction aims at
overcoming the limitations of both deductive and inductive approaches. It grounds social
scientific accounts of social worlds in the perspectives and meanings of participants in those
social worlds. As defined by Peirce (1960), abduction is the creation of new concepts relying
on research data but based on theory. Therefore, the CSR four-level implementation model
is adjusted according to some flaws we identify with both theory and real data. Thus, the new
designed model better suits the implementation conditions in the food industry for various
companies.
3.3 Research Method
In order to get a detailed analysis of the methods used and factors affecting CSR when being
integrated to MCS, a qualitative study is the most suitable choice for this thesis. A qualitative
research is defined as a research based on words, while a quantitative research is based on
numerical data. We did not select a quantitative research for this study as the process is too
precise and cannot fit the complexity of CSR that needs to be analyzed in a nondefinite way.
Figures would have established a perfect truth and unique manner of perceiving and
answering our questions, while a qualitative study would help on understanding variables
around the CSR concept letting possible improvements and reflection in the future. In
addition, detailed answers were required to get a deeper understanding of the CSR
implementation into MCS. In a qualitative research, there is emphasis on interviewee’s
perspectives, and the participants point of views is collected, rather than the ones of
25
researchers as in quantitative studies (Bryman and Bell, 2011). Therefore, to collect data,
qualitative interviews are conducted.
3.4 Sampling
This research firstly studies the sustainability reports of the companies selected. However,
because external reporting is more a question of business image and do not always represent
the reality and the CSR internalization within firms, interviews are performed with
employees in charge of CSR management and projects to get a deeper understanding of the
CSR implementation. To select the participants for this thesis, a purposive sampling
approach is used as a strategy, but a snowball sampling can also be used. The goal of
purposive sampling is to sample cases and participants that are relevant to the research
questions (Bryman and Bell, 2011). At the same time, following a snowball sampling,
valuable contacts are selected and used to obtain access to individuals having more
knowledge about the topic and being more able to provide useful information to complete
the research (Bryman and Bell, 2011). We use both the purposive sampling when we have
access to specific contacts and the snowball sampling when choosing an individual in a
company who can provide redirection towards a more knowledgeable person. The first
contact is established via email. After explaining the purpose of the research, the employee,
generally enrolled in the company’s CSR is asked whether he or she is interested in
participating to this study. If the answer is positive, interviews are scheduled and conducted.
Appropriate companies and individuals were selected in terms of three criteria: company’s
size, type of industry and CSR engagement. Firstly, concerning the industry, all companies
must be active in the food-industry as it is the sector which we are focusing our study on. As
suggested in the background, firms from the food industry are strongly confronted to CSR
challenges, and there is a need of acting responsibly to respond to consumers’ expectations.
The food sector is very diverse and complex, it includes for instance agriculture, food
processing, food service and distribution, grocery, food processing, etc. To entail different
aspects of food industry, from production and processing to sale, we have interrogated food
and beverage producers as well as a company providing food service and catering. Secondly,
because we want to assess the size of the organizations as a potential variable affecting the
effectiveness of the CSR integration into MCS, we have selected different size of companies.
Thirdly, all interviewed companies must be conscious of the actual social and environmental
stakes and act, more or less, towards sustainable development. They have to be aware of CSR,
otherwise, it would be ineffective to investigate an organization that is not informed, or
interested, by social and environmental challenges and is not acting, or trying to act, in a
responsible way. Concerning the selection of the individuals being interviewed, the
participants were all in charge of CSR or social and environmental aspects of their business
26
more globally. Depending on the size of the company, some were directly responsible of CSR,
acting as Sustainable Development Manager in large companies, while some others were
high-level managers, in the case of small companies. This is because SMEs do not have the
human or financial resources as well as not feeling the need of establishing a formal structure
managing CSR only.
3.5 Data Collection
Our intention is to collect information through interviews. Since we chose a qualitative
method for the subject of CSR, the primary data collected are planned interviews in different
organizations. Conducting interviews is believed the best way to get honest and developed
information as more in-depth details can be requested when an answer provided is vague.
Due to limited time constraints and interviews are time consuming to prepare and analyze
(Justesen and Meyers, 2011), we selected participants via sampling methods due to
conducting a significant number of interviews proving challenging.
The main interview types in qualitative research are unstructured and semi-structured
interview. Qualitative interviews tend to be flexible, with an aim of obtaining rich and
detailed answers (Bryman and Bell, 2011). For this thesis, semi-structured interviews are
conducted. Therefore, we used an interview guide (Appendix 1), which provided some
structure, but unlisted questions may have been asked. This allowed the interview process to
be flexible when appropriate and necessary (Kvale, 1996). Both authors are able to ask
questions during the interviews and take notes. Before the interview, the interviewers present
themselves, explain again the purpose of this meeting and clarify the method and ethical
terms and conditions. Interviews are remotely performed since the interviewers are not in
the same geographical area, and it would take additional time to physically get to each
company located in different places. Each interview is recorded which prevents missing out
any crucial information. We consequently have the possibility to listen repeatedly to these
records for a more thorough post-examination of respondents’ answers. Interviewees were
previously asked approval if the session could be recorded. Furthermore, to ensure credibility
of information and good correspondence between findings and experiences, we have asked
validation of respondents when necessary. The research is written in English, but interviews
were performed in French, as it is the mother tongue of both interviewers and interviewees.
Results are this way more developed and reliable as we can overcome the language barrier.
At the beginning of the interview, the concept of CSR is introduced, and the first objective is
to understand the company’s history and actual relationship with sustainable development.
In addition, the organizational structure is defined, as we believe that it might be a factor for
an effective integration of CSR into MCS. After these identifications, the next questions are
27
related to the CSR implementation model of Szczanowicz and Saniuk (2014). Firstly, the
interviewers ask about legal and ethical obligations, to refer to the first two levels of the
model. Secondly, they investigate on the company’s relationship with and commitment of
stakeholders. Thirdly, the PDCA model is assessed: processes of planning, reporting,
monitoring, and performance evaluation are reviewed. The aim is to understand how those
processes work, by identifying key players, the type of measures used, the degree of formality
of the system and its link with the global systems. The participant is asked to evaluate the
strengths and weaknesses of such systems. Finally, the interviewee is questioned about more
personal information related to its current position, its past experiences, and competencies.
One interview was initially planned for each company. Thus, we selected the participants
based on their role and responsibilities, and according to their availability. However, for one
company, the participant did not feel adequately confident to respond to all our
interrogations, since he was working in the firm for six months only. He gave us the contact
of one of his colleagues, who is working in a subsidiary belonging to the cooperative. This
allowed us to collect additional information about the company’s CSR background and the
different projects, and to obtain another point of view from a transformation site regarding
CSR’s integration.
3.6 Data Analysis
Multiple manners to analyze collected data in a qualitative study are explained by Bryman
and Bell (2011). The research is based on the grounded theory, that involves a sampling which
has been explained before, and a coding system to break the collected data into component
parts that are decided by the researchers. Further collection could occur if some points are
missing for the analysis of the concept. The open coding process of the grounded theory is to
be developed, as according to Charmaz (1983) it allows to label, separate, compile and
organize data. Coding in the qualitative study is in constant state of potential revision and
fluidity, it is not fixed codes only to manage data but to enhance the theory and have a deepen
analysis to compare the results and improve our theoretical model based on these
comparisons (Khan, 2014). Interview transcripts are coded using our recording and notes to
gradually define codes for its application. However, a limitation is many codes might be
generated; to overcome this potential difficulty, they are compared, and some are combined.
A thematic analysis approach is used in this research, in which categories are created to
organize collected data. This method helps us to structure the collected data in a way that the
literature review can be linked to the qualitative research. To assist the thematic analysis, a
framework is designed as a matrix to organize and structure data through themes and then
synthesize them into subthemes from interviews’ answers. This matrix is designed in a way
28
that collected data are logically arranged and placed into each cell belonging to a category.
Some of these categories are gathered into themes with a color code which makes them
recognizable and organized for writing our empiric framework based on these themes. A
matrix enables to have a clear view of how to organize our data when analyzing it and
exploiting the results (Heslin and Ochoa, 2008).
3.7 Validity and Reliability
Validity concerns the integrity of conclusions drawn based on research and data collection
(Bryman and Bell, 2011). Internal validity relates to the causality and the responsibility
between several variables and the conclusion established. The fact that it is these variables
and not others that drive this impact can be put in question. Nonetheless, several interviews
are conducted and answers to the same questions are to be compared which can eliminate
the validity doubt between these variables and drawn conclusions. In addition, external
validity refers to the generalization of a conclusion. It questions whether the results obtained
can be generalized or if these outcomes relate to a particular context that cannot be found
again. However, an interview guide has been constructed in order to stay focus on the initial
objective of the study and not be impacted by a specific and unique context.
Reliability assesses the consistency and credibility of the results and if the collection of data
can be trusted (Bryman and Bell, 2011). In a qualitative study, results depend on the
participants’ answers and honesty. We are choosing to collaborate with trustworthy
managers having a deep expertise in the CSR field of research and experience to answer in as
the most reliable way as possible. The collection of data cannot though be perfectly and
absolutely reliable as it is not established, verified, and confirmed facts. However, we are
trying to make this research as reliable as possible using our native language to conduct
interviews. This allows a better understanding and analysis of the collected data.
3.8 Ethical Considerations
Diener and Crandall in Bryman and Bell’s book (2011) arise four ethical principles to be
respected when conducting a business research: harm to participants, lack of informed
consent, invasion of privacy and deception. Harm can include physical harm, harm to
participants development in terms of career and employment, loss of self-esteem, stress and
performing reprehensible acts. The lack of informed consent is an essential ethical aspect of
a research as the participants should be informed as much as possible to take informed
decisions about whether to collaborate or not in this study. If the participants are not
informed enough about crucial terms, their answers might be biased and cannot be taken in
consideration as they were not aware of certain decisive information. Invasion of privacy is
29
another ethical aspect; the privacy is violated when inappropriate or too personal questions
are asked to participants, and they refuse to answer them on order to protect their privacy.
Finally, deception occurs when researchers give wrong information to participants leading to
misunderstanding and misinterpretation.
To deal with these ethical issues, interviewees are clearly informed of the purpose of the
research in the first email and about their potential role in the study. This allows us to obtain
a clear and wise approval or refusal before scheduling an interview. Before each interview,
the interview guide will be sent to the participants, so they can prepare their answers and
include other participants if they do not have sufficient knowledge to provide expected
answers. To ensure consent, at the beginning of each interview, interviewees are informed
about the number of questions asked and their purpose as well as their right to refuse
answering certain questions. All participants have the option to be anonymous as their name
is not relevant for our study, but titles are used to make our research choice of participants
coherent. They were notified via email that the thesis will be published after completion.
Moreover, as we wanted to record all interviews, we had to ask them their permission for
doing so and get their approval. The confidentiality for the name of the organization is
maintained to not divulgate information that could be used against this entity. We
understand that employees might be reluctant to provide their personal opinion on the
company activities and function as it can damage their career, that is why we have formulated
questions in a way that cannot be perceived as too personal and broad enough to not narrow
the possible answers. Therefore, we have named the studied companies as Company A,
Company B, Company C and Company D. To respect the participants’ privacy, we have
referred to them as Interviewee A, Interviewee B1 and Interviewee B2 (as two employees from
Company B were interviewed), Interviewee C, and Interviewee D, relating to their respective
company. Moreover, we employ the gender pronoun “He” for all participants, both male and
female workers.
A study information sheet (Appendix 2) has been written and sent via email to the
interviewees before the video meeting in order for them to be clearly and officially informed
of the ethical terms and conditions of their participation. We give them the choice to provide
some modifications if they needed to.
3.9 Limitations
The main limitations of this study are that interviews cannot be conducted face-to-face, but
by visio-meetings, and that the study is constrained by time and resources. As a matter of
fact, the researchers are not located in the same country which makes face-to-face interviews
impossible if they both want to be present. Moreover, the different companies we are
30
interviewing are not located in the same areas, we do not have sufficient time to meet the
participants in person. Because we are currently in a crisis situation with strict social contact
restrictions in Europe, all physical contacts are forbidden by the law for an undetermined
amount of time. Finally, this research has a time limitation of two months.
Consequently, we have to adapt our work according to these variables and limit our
interviews to a few companies and participants. In addition, we bound our thesis to the
European geographical area, even though some studied companies have their headquarters
in Europe but operate internationally. This limitation implies that the firms’ behaviors are
directed by the European regulations and markets, so we cannot assume that our results are
applicable on a worldwide scale. The CSR consideration indeed differ among the companies
that are in various regions. However, the time and resource limitations do not allow us to
study sustainability integration outside of the European borders, so this issue could be
further studied in future research. Besides, it would have been interesting to evaluate the
implication and the impact of decision-making and implementation of CSR on different
stakeholders such as suppliers, customers, and shareholders. Once again, the time
restrictions challenge our ability to conduct this research beyond CSR managers interviews.
It is a perspective that could be considered in future thesis research.
Finally, as financial performance has been studied previously by numerous researchers, and
because financial data are kept strictly confidential by the firms, we will not focus our study
on the economic pillar of CSR but rather on the environmental and social ones.
31
4 Empirical Findings
This chapter serves as a comprehensive explanation of the collected data from our
interviews. The first section includes a presentation of the market and of the four studied
companies and provides information about their backgrounds and general approaches
towards sustainable development. The second section is then organized according to our
theoretical framework’s levels, and relevant parts of the interviews are gathered. The
empirical data is not connected to theories, but it is structured this way to get a clearer
understanding of the integration process. This, in addition to the literature review, provide
the basis for analysis and discussion in the next chapters.
4.1 Market Presentation
CSR initiatives have been growing in a global context since the 1980s, when organizations
started to incorporate social interests in their business practices. Nowadays, they also
integrate the environmental stakes in their activities. These preoccupations come with a legal
context. In fact, regulations from national countries or regional areas oblige companies to
take some measures or at least guide their actions. These regulations are reactive and not
created randomly, they either come from existing issues for which consequences have to be
reduced, or from a positive context that could enable further initiatives to be conducted for
global interests. This is why the European Union produced in 2001 the first CSR-oriented
documentation, known as the Green Paper (Albisu, 2012). It gave environmental directives
as companies were more involved in CSR and as the political context was favorable for new
actions. The Commission went a step further when launching a CSR European Alliance in
2006 (Albisu, 2012), establishing a reference for excellence to create partnerships with some
countries involved in human rights, environmental protection, and governance. Finally, the
European Commission formulated a sustainable development agenda with mandatory and
voluntary actions to complete for 2030.
The European CSR strategy is renewed when necessary to include more commitments, push
long-term sustainability in companies and involve more stakeholders. In fact, stakeholders
play an important role in CSR practices. They are more and more aware of the impact that a
company’s activities can have on the external environment and ask for transparency
(Thacker, 2019). According to Wayne Elsey’s study (2018), 76% of participants would refuse
to do business with a company supporting issues contradictory with their beliefs. Further,
87% would purchase a product or service based on the company’s social commitment (Elsey,
2018). Hence, consumers’ expectations significantly influence the companies’ reactions since
CSR can have economic benefits. It is in fact a source of value-added for those products and
32
services. According to the study “Project ROI: Defining the Competitive and Financial
Advantages of Corporate Responsibility and Sustainability” (2015), conducted by IO
Sustainability and Babson College, environmental, social, and governance programs within
businesses can increase the companies’ market value by 4% to 6%, and over 15 years of CSR
activities, the shareholder value can grow significantly by approximately £1.28 billion. In this
case, CSR is a business stake as it can help avoiding losses by 7% and build more than 40%
of a company’s reputation (Doerr, 2018). As stated by Forbes, companies that are highly
purpose-driven, in other words, that engage towards CSR in addition to their core business,
outperform the market by 5 to 7% per year (growth and profitability).
In this research, the focus is on the food industry, and one can see that the CSR impacts are
similar. Under environmentalist pressures such as the climate change and the increasing
water stress, the risks for the agriculture push the food industry to quickly react, by launching
responsible programs (World Bank). It is also a way to include this new function in their
activities and find a competitive advantage, by using it not only “to do good”. According to a
Deloitte survey (Deloitte Global Human Capital Trends survey, 2018) conducted on 22 000
professionals, 78% of them increased their CSR focus, and 18% considered it as a top priority
(Figure 6), while 77% of the workers claimed that it is important to include it in corporate
activities.
Figure 6: CSR Consideration (Deloitte Global Human Capital Trends survey, 2018)
Sustainable development includes a lot of possible initiatives in several areas of focus. The
international and largest food and drink company would like to raise $5.2 billion towards
sustainability initiatives by 2050, and 36% of the companies from the food industry have
invested in R&D for environmental protection, 44% are dairy industries and 50% are
transformers (Aude and Genuit, Insee, 2017).
A top priority and reflected in strategy
Not a focus/not well-developed or
invested in
High on our list of priorities
Social Responsability is...
18%
56%
26%
33
In the following graph (Figure 7), one can see that the first priority of the food industry is
certified sourcing (11.3%). Being audited by an external sourcing to control CSR programs to
recognize that the company pledges to act responsibly attracts more food and drink industry
commitments. Waste management (7.6%) and reduced emissions (7.2%) are also important
preoccupations of the industry, followed closely by the farmer support (7.2%). We know that
farmers are main stakeholders, as they produce and grow the raw materials and ensure
animal welfare. Another preoccupation is packaging (5.2%): companies tend to be seen as
more environmentally responsible when using resources without negative external impacts
on the ecosystem. In fact, 72% of consumers would be interested in purchasing products
made totally or partially with recycled materials (Cope and Cottney, 2018). On the social side,
employees are also considered as an important pillar of CSR (6.7%). According to Jeffery
Hayzlett (2016), 70% of millennials consider commitment to the community as a decision-
criterion when selecting their employer, and CSR projects would reduce the employee
turnover by 50%. This way, CSR allows to better retain human resources. Additionally,
gender equality (3.2%) is a source of commitment as 69% of executives rate diversity and
inclusion as important issues (Deloitte, 2017). Establishing perfect equality is a long-run
process, but it can generate 30% higher revenues per employee as well as a greater
profitability (Deloitte, 2017).
Figure 7: Food & Drink Industry Commitments by Issue (Lumina Intelligence’s Food &
Drink Sustainability 2019 Global Progress Report, 2019)
0,70%
1,10%
1,30%
1,30%
1,50%
1,50%
1,50%
1,80%
2,20%
2,50%
3,10%
3,20%
3,30%
3,80%
4,60%
4,90%
5,20%
5,40%
6,60%
6,70%
7,10%
7,20%
7,60%
11,30%
Transparency
Animal Welfare
Poverty Reduction
Child Labor
Traceability
Nutrition Labelling
Clean Label
Food Safety
Social
Public Health
Supplier Demands
Gender Equality
Sugar, Salt and Fat Reduction
Energy
No Deforestation & Agroforestry
Nutrition Targets
Packaging
Water
Company Programme Sourcing
Employees
Farmer Support
Reduced Emissions
Waste
Certified Sourcing
34
This evolution in CSR initiatives encouraged companies to formalize their measures and to
communicate them to the large public:
“While just 20% of S&P 500 companies published a CSR report in 2011, 86% reported
doing so in 2018!” (Governance & Accountability Institute, Inc., 2019)
4.2 Companies’ Background
4.2.1 Company A
To start with, Company A is a large company: it employs more than 10,000 employees, and
it has a worldwide presence, as it sells its products in more than 50 countries. It is a subsidiary
of a larger group, which is one of the food industry leaders in the world and employs more
than 300,000 people internationally. Additionally, Company A achieves a turnover of more
than €1.5 billion, which confirms the fact that the company is considered as large. It is active
in the beverage industry, as it produces drinks and distributes the products either in its own
shops or in specialized chains. This particular beverage market is expanding; in France for
example, there has been a growth of 5-10% in terms of consumption in 2019. The
organization is thus in the top 5 of the world leaders and represent one of the highest growths
among its competitors. The brand is in fact very well-known for its technical expertise and
unique know-how and is reputed for its social and environmental commitments.
Company A has started to adopt CSR policies and developed a sustainability program during
the 2000’s, as it quickly realized that “without commitment towards sustainable
development, the firm would not exist” (Interviewee A). It works on several social and
environmental actions. Firstly, it aims at guaranteeing a durable supply of raw materials and
a sustainable production and consumption by developing trustful relationships and long-
term partnerships with suppliers and by engaging with the local communities. It has also
created centers dedicated to customer relationship in order to enhance consumers’
experience. Therefore, inclusion, people empowerment and transparency are key values to
develop these practices. Company A commits to create shared and optimized value that
benefits to all stakeholders and shareholders. Secondly, concerning the environmental
activities, it seeks to preserve biodiversity and resources and engages towards climate issues
to achieve a neutral carbon footprint. Especially because the beverage production is directly
impacted by the unstable climate, the company needs to address these environmental issues
by adapting its behavior and reducing its consumption in terms of water, electricity, and
carbon footprint. Thirdly, it has developed several recycling initiatives, to respond to
consumers’ expectations. It promotes sustainable production and circular usage of its
35
materials and works on the creation of recycling channels to re-use its products’ packaging
for instance.
Because the raw materials have very specific quality criteria and become more and more
scarce due to global change, the organization needs to secure its supply in order to meet the
external growing demand. Hence, this was allowed by adopting a solid CSR strategy, for now
more than 15 years. Therefore, the company has very early adopted a proactive approach
towards CSR in order to ensure future growth. It is today highly committed to responding to
social and environmental challenges, and its actions go beyond regulations and ethical
requirements.
The organization communicates its CSR policies and actions through external reporting.
From its CSR annual report, one can see that it engages with stakeholders, and particularly
suppliers, and an ongoing dialogue is maintained to identify key challenges and needs in
terms of sustainable development. It reviews the different measures it is working on, as well
as its objectives for the next few years. It also suggests the tools that are used to assess its
performance and progress and presents the partners it is working with. However, according
to Interviewee A, there is a significant lack of external communication for CSR actions, and
the report does not represent the whole commitment of the company. Thus, there is a need
of clarifying its responsibility and devotion in order to better manage external critics.
In order to understand Company A’ approach towards CSR and implementation of
sustainable measures into its system control, we have met Interviewee A, who is a Sustainable
Development Manager for the French region. He has been working in this position for less
than two years and was before employed in a consulting firm. Therefore, he had the
opportunity to discover various approaches to CSR integration and is able to adopt a critical
eye when considering Company A’s practices.
4.2.2 Company B
Company B is a large organization, and it is active in the dairy industry. The group owns a
union responsible for the upstream production, which closely collaborates with breeders, and
several subsidiaries, called Business Units, which produce milk, cheese, butter, cream, and
frozen food. Company B’s main subsidiary offers more than 50 products to the market, from
flavored milk, infant milk to vitaminized milk and organic milk, etc. It owns a dozen
transformation sites in one country only and employs about 1,500 workers. Overall, the firm
employs almost 10 000 employees and achieves a turnover above €1.5 billion. It also has an
international presence thanks to its exports but owns more than 50 industrial sites in one
European country only. Company B’ governance mode is quite unique as it acts as an
36
agricultural cooperative. This means that the 20,000 producers are members of the
company, and they have power in the decision-making processes and representants’
designation, since each adherent can vote and elect consultative bodies. In fact, the board of
directors is composed of 25 elected milk producers, who then design a Chief Executive.
Therefore, the union ensures that all adherents are represented through a democratic
governance and guarantees controls and strategy implementation with the help of an
intermediary structure. The latter gathers central services and support of the group, and the
subsidiaries implement the strategies defined at higher levels and communicate back their
results. However, each subsidiary is independent in terms of operational functions and
financial result.
Because Company B is a cooperative, the stakeholders, especially the suppliers, are at the
heart of the company. The concept of CSR started to be mentioned in one of the subsidiaries
in 2003, when an employee from the quality department started to deploy minor CSR
actions. However, the contemporary CSR was very different from the one today: it was less
considered by stakeholders and shareholders and also not regulated by legislation. CSR
became more important in 2017, as the laws imposed the publication of an annual Extra-
Financial Performance Declaration (EFPD). Because this report requires a strong
commitment in CSR and a continuous work to follow up objectives, which were now are
externally published, Company B decided to create a total of five new job positions, which are
fully dedicated to CSR management. Two were established in 2017 and 2018, in the studied
subsidiary, and the last three were created in 2019 and are more transversal. In addition, the
new CEO positioned CSR as a main vector of the group’s strategy. That is why he decided to
significantly restructure the organization to better embrace CSR challenges. Before 2017,
CSR was already discussed in the organization, but only partially: no employee was working
full-time on the subject. This legislative declaration became obligatory for all companies
which have more than 500 employees and get a turnover of €100 million at least. Therefore,
the organization has been subject to a restructuration to meet this new legal requirement and
has thus adopted a reactive approach towards CSR. It has waited on external pressure, more
precisely, on the growing societal expectations, from both the customers and the state, to
move to a structure more adapted to respond to sustainability stakes. In this way, the main
subsidiary received two new employees as Sustainable Development Manager in 2017 and
CSR Project Manager in 2018. The next year, one job position was created for the upstream
production, because clients question the raw materials origin, the animal well-being, etc. It
was hence needed to manage consumers’ uncertainties and doubts. In addition, another
transversal position was established for packaging management, and the last one
corresponds to the CSR director, who coordinates CSR for the whole group and ensures
coherence between the Business Units. Consequently, Company B has re-organized its
37
structure very recently to face the planet emergency as well as the emergency to meet social
needs. These recent recruitments suggest the willingness of the organization to commit more
towards CSR.
Today, Company B’s CSR commitments are articulated into four main pillars, that are
externally communicated into the obligatory EFPD. Firstly, it seeks to create value in the
dairy production process and distribute it equally between the producers. For instance, it
establishes dairy prices transparently and supports young farmers by helping them
financially to settle down: it offers a maximum of €10 000 to young farmer and allocates a
volume, which gives them free rights to produce. Thus, it wants to be a major actor of
dynamism on the territory and guarantees the perennial collection of the raw materials in all
geographical areas in the country. Secondly, it considers environmental issues by
encouraging sustainable breeding practices. Thirdly, it commits to the planet and contributes
to its protection. It has developed a program to reduce its environmental footprint, from the
production to the sale. It sensitizes breeders to evaluate their footprint themselves and
conducts a more detailed audit in order to identify the causes and find solutions to reduce
the footprint, starting with the cattle's wellbeing. It prepares its farmers for the future and
sensitizes them on tomorrow’s fundamental issues to act responsibly. It guarantees
transparent practices, that respect their values and the quality’s expectations. Finally, it aims
to create a breeders’ and collaborators’ community to defend the cooperative interests and
improve their working conditions and security. This pillar has been the priority of Company
B from its creation, because as a cooperative, men and women, dairy producers all have a
common objective and share the same vision: to offer the best product to the market and
develop their activities on the long-term.
Similarly, the studied subsidiary has established three key pillars which are aligned with the
group’s strategy. The first one focuses on quality and nutrition, as the subsidiary wants to
highlight organic milks, and it reviews its products recipes in order to reduce the ingredients’
number and avoid usage of additives and preservatives. Then, it aims at using 100%
recyclable or reusable packaging, and avoids usage of aluminum to employ more vegetal
components, and finally, it engages with its breeders so that they become more responsible.
They thus offer a better remuneration to farmers, encourage animal well-being by forbidding
GMO (Genetically Modified Organism) food for cows and requiring access to pasture (150
days in average). However, the subsidiary’s strategy is still not fully defined and is currently
in a formalization process, and thus, it is not communicated to the public yet.
To better evaluate the integration of Company B’s CSR measures and initiatives into the core
business, two participants were interviewed. Firstly, Interviewee B1 was quite recent in the
38
organization, as he works for one of the new job positions and integrated the enterprise in
2019. He is indeed responsible for CSR activities in the upstream production and works
under the supervision of the new CSR director, responsible for the entire group. To get a
deeper understanding of the subsidiaries’ commitments towards CSR, we have secondly
questioned Interviewee B2, who works for the described Business Unit, which is one of the
main subsidiaries of Company B, specialized in milk production. He has been working in the
organization for one year and is in charge of developing CSR projects for the subsidiary. He
works under the supervision of the subsidiary’s Sustainable Development Manager.
4.2.3 Company C
Company C corresponds to a small organization. It has a turnover inferior to €5 million. It is
in fact a peculiar company as it is an agricultural chain that supports the production of
regional cheese, which is recognized by the label Protected Designation of Origin (PDO). The
organization is composed of 20 employees, and it works in close collaboration with
approximately 10,000 farmers allocated into 2,500 family or holdings farms, 140 dairies and
13 refiners, which form together a cooperative. Its role is to improve the quality management
of the cheese from the raw materials to the finished goods, thanks to a specific design brief,
listing tens of specifications. Therefore, Company C works on the design brief and ensures its
proper application by operators. It also defends the PDO by monitoring the market and suing
potential copies of the product and promotes the cheese through social networks, publicity,
newspapers, etc. In addition, several members of the organization are part of a regional
Controlling Union that manages several PDOs. This union is managed by six individuals, who
are in charge of the product’s and production processes’ control, in terms of PDO
specifications, hygiene and sanitary aspects and environmental and social commitments.
Few years ago, Company C and the cheese producers underwent several public aggressions
regarding the quality and security of the food. The chain has been severely affected by media
attacks following a gossip related to glyphosate usage, which turned out to be false. Despite
the fact that these events were built on misleading accusations, consumers’ demand became
stricter, and farmers wanted to communicate more on their production processes and
expertise in order to better inform the market. That is why Company C implemented a clear
CSR strategy, and thus, it had first a reactive approach towards sustainable development. The
organization faired negative reactions from the farmers as they were highly affected by the
previous scandals, but it realized that they were in fact demanding to better respond to the
demand that was addressing social and environmental issues. Today, Company C has a more
proactive approach towards CSR because its measures, especially in the design brief, go
beyond the specifications required from the French Institut National des Appellations
d'Origine (INAO - PDO National Institute).
39
Company C includes more environmental issues than social ones in its measures. Because
the farmers it is working with form a cooperative, all stakeholders play a major role, and
workers have a participatory responsibility. The organization sensitizes its collaborators and
suppliers to CSR stakes. It has developed several initiatives that correspond to consumers’
expectation, in terms of environmental respect and animal well-being for instance. Farmers
have a plethora of environmental norms to comply with. Concerning fertilization, they need
to ensure the food autonomy of their exploitations and develop the biodiversity and to avoid
usage of pesticides which pollute the fields. Waste management is also required, and animal
well-being must be guaranteed. All these standards are developed and monitored by
Company C.
To collect information, we have interviewed Interviewee C, who is Company C’s deputy
director and director of the regional Union which controls the PDO’s specifications
application. He was responsible for reviewing the design brief, so he worked on the inclusion
of CSR measures. Interviewee C has been working in this firm for more than twenty years
and has thus considerable knowledge and a deep understanding on the need to commit to
sustainable development.
4.2.4 Company D
The fourth company is a large multinational, which employs more than 400,000 people in
the world and has a turnover of €20 billion. It is one of the top 3 company from the food
services and collective restoration industry. The organization is present in more than 70
countries and reaches millions of consumers daily. It is organized by consumer segments,
and all the regions and divisions are implicated in CSR actions.
As a service company, it is defined as a “people company”. Ever since its foundation, social
aspects were already considered by the creator, as “its wealth is men and women which
compose the organization” (Interviewee D). The operations are realized directly at the
customers’ places, so local manpower and participation to community development were
already crucial. It has thus adopted a strong proactive approach towards CSR, and especially
towards diversity. The environmental issues were less prominent at the time of the company’s
creation, but nowadays, both social and environmental initiatives are equally managed.
Today, the founder’s perspective has been maintained, and Company D developed a very
structured policy concerning sustainable development about 10 years ago and has publicly
published clear objectives for the next few years, that are frequently reviewed. It considers
CSR as a “business driver, that leads to growth and differentiation” (Interviewee D) and
works to achieve an equilibrium between the three P’s, Profit, Planet, and People.
40
Company D has established a plan that lists numerous initiatives which concern health and
security, carbon footprint, social mix, commitment to local communities, balance of offers,
waste management and partnerships with charitable food associations. However, it focuses
on three key priorities. Firstly, as it has been a strong element from the beginning, social and
gender mix and diversity are crucial. Inclusion is a fundamental value, and Company D
ensures to promote the integration of all generations, all cultures, and all backgrounds.
Secondly, it fights against hunger, and thousands of voluntary employees support local
communities and provide meals to a non-profit organization which works towards a hunger-
free world. Finally, the third priority concerns waste management and recycling: it promotes
the reduction of its consumptions throughout its supply chain and traces its practices to
emphasize reduction of carbon emissions and waste. These initiatives are in addition
recognized by the United Nations, which gives them universal validity.
Initially, CSR was not as strategic as it is now, so a new job position as CSR director was
created two years ago. We have therefore contacted Interviewee D, who was, for more than
six years, the Diversity and Inclusion Manager and is today the CSR director. Thanks to his
significant experience in Company D, he was able to inform us about the CSR implementation
and controls.
4.2.5 Companies’ Background Summary
Hereinafter is a recapitulative table of the main information regarding each studied
company’s background and participant’s role (Figure 8).
41
Fig
ure
8:
Ca
se S
tud
ies'
Rec
ap
itu
lati
ve
Ta
ble
(o
wn
so
urc
e)
42
4.3 Empirical Framework
4.3.1 Organizational Structure
Depending on their commitments and needs, the organizations generally have a more or less
developed and defined structure for CSR activities. During our interviews, we observed that
half of the companies had a department dedicated to the CSR development with specific
employees and managers assigned to these projects, and half did not have this kind of
structure. As a matter of fact, Company A and Company D which are the two largest
companies we interviewed have a department devoted to CSR.
Concerning Company A, the sustainable development division is part of the quality and
technical Business Unit, and Interviewee A insisted on the fact that is was part not of the
promotion and communication unit. The organization initially needed a deep technical
expertise in sustainability to take concrete and real actions rather than only communicating
on these projects. Generally, CSR is part of the communication department, as the main part
of the work consists of making the taken actions visible and sending information through
several means of communication. Even though the CSR is not in the communication
department, the quality and technical Business Unit works very closely with the person
responsible for promotion and communication. Two project managers and a CSR manager
(that is, Interviewee A) work on a full-time basis for sustainability development, with a direct
link with the CEO who is extremely convinced by the CSR importance. The latter takes the
decisions and enables the existence of a certain budget to invest in projects despite some
managerial critics. The CSR manager recommends projects and then validates their
relevance and temporality, as he has the most accurate visibility of the market. He identifies
which actions can and cannot be initiated. A discussion can occur between the CSR manager
and the CEO if they both need more information to take the final decisions. The CSR team
can then evaluate the definite and validated projects while implementing them. Moreover,
Company A has a Sustainability Advisory Board including ambassadors, partners, managers,
experts, etc., in order to pursue further CSR initiatives. It intervenes during the process by
giving advice and providing recommendations thanks to each own area of expertise. These
external viewpoints allow more flows of ideas and sometimes risks’ considerations that could
come out, which the CSR team had not thought about initially. It is a way of enhancing
sustainability on the long-term, taking more relevant elements into account.
Then, Company D counts six employees in the CSR department, in addition to ambassadors
in each consumer segment which are independent from the unit. Segments are created to
facilitate the CSR implementation since they do not have the same priorities, needs and
approaches to CSR, and clients differ among them. The employees are related to the
43
Strategical Project’s Direction and CSR Business Unit, integrating the initiatives of the group
in each department. The ambassadors coordinate policies and diffuse group politics in each
segment and division. What is more, the employees working in the CSR department are more
generalists than specialists, as they need to have a global vision on CSR and be able to answer
questions about the strategy and the actions taken. The CEO of Company D sets the goals and
shows the path to follow for employees through directives.
Company B and Company C decided to not have a separated division for CSR management
but to integrate CSR actions in daily operations of all departments while at the same time
assigning one or several employees to specific tasks regarding CSR without creating a
detached business unit. For Company C, it is due to its size: the small organization does not
require one department dedicated to CSR, nor does it have the resources. It only has one
person dedicated to sustainable development within the controlling union, but all the 20
employees of the corporate committee are involved in those actions as well as external actors
as it is part of the whole production process. The union defends and promotes the PDO of the
regional cheese, by integrating CSR initiatives and directives in the design brief, checking
their applications by all operators, and monitoring the delivery and proper utilization of the
cheese on the market. The PDO is then promoted thanks to communication using
advertisements, social networks, and events. Concerning Company B, there is no Business
Unit but a CSR director for the group, two persons responsible of the main subsidiary,
another working for the upstream part of the activities, and a last one taking care of the
sustainable packaging. Other employees and managers work on CSR actions through the
diverse existing Business Units, even if it is not their unique responsibility. In fact, the main
subsidiary’s CSR workers are integrated into the Marketing department, in order to better
translate CSR issues in innovations and product renovations and thus to allow a faster
development of projects. Interviewee B2’s role is to construct the CSR strategy and develop
projects, in collaboration with other stakeholders and to support other units (such as the
Customer Quality department) to respond to CSR issues from legislation and customers’
expectations. According to this participant, “all subjects involve CSR: it is up to the company
to make sure that a CSR department does not exist on its own, but that CSR is integrated
into each department”. Therefore, from Company’s B point of view, each worker and
department should be accountable for adopting CSR initiatives, and this should not be
realized by one specialized department only.
4.3.2 CSR Legal Requirements and Ethical Expectations
Because the society is more and more concerned with environmental and social issues, the
territories have established several legislations that must be adopted by all companies in the
country. One example of these CSR legal requirements, as suggested by both Interviewee A
44
and Interviewee D, is the Gender Diversity Index. In Company A, 60% of the workers are
women, and company D was named as one of the Top Companies for Executive Women.
More generally, companies must ensure that men and women have an equal access to growth
and opportunities in the workplace, and this is a legal requirement in Europe. Moreover,
Company B’s main subsidiary production sites have been recognized as Classified
Installation for Environment Protection (CIEP) and are thus subject to several general
regulations, that include some CSR aspects (security at work, pollution management, waste
collection and valorization, etc.).
Company D is concerned with one specific additional law, as compared to the other three
companies which are active in the food production. Because Company D is concerned with
collective restoration so it must comply with a French law called EGalim law, which is
constituted of several chapters about waste management, plastic substitution, organic
products, local production, producers’ remuneration, etc. Regularly, these laws differ among
the regions, so international organizations must adapt their control systems in order to
comply with legal norms according to each country. Even though the standards may differ,
the group managing the regions and subsidiaries often sets procedures which must be applied
everywhere. This is the case for companies A and D.
Company C’s compliance with legal requirements is quite different from the other companies’
approaches. In fact, as it produces food recognized by the PDO label, INAO decides the
specifications it must comply with, so Company C has a lot of measures to consider which are
established in the design brief. However, INAO does not provide any CSR paragraph in its
obligations. Since the creation of PDOs in 1955, subjects of measures are growing, and INAO
includes more and more procedures concerning the product’s presentation, the production
methods, quality requirements, etc. Therefore, Company C assumes that the design brief will
expand, so it has decided to already implement CSR specifications, even though it is not
legally required for now. Nevertheless, these CSR criteria are expected by society, and they
meet basic societal needs. According to Interviewee C, Company C could comply with another
label, called High Environmental Value (HEV) as it meets all the specifications defined by
this norm. However, the participant argued that “if the organization asks to an external label
to acknowledge its CSR commitments, it is a sign of weakness for the PDO label, as it
publicly recognizes that the PDO’s design brief is not complete enough” (Interviewee C).
Company C has thus independently decided to be more demanding with its suppliers and
employees in terms of sustainable development, as compared to what INAO was expecting.
It assumes that CSR measures will sooner or later be integrated into the official design brief.
45
In the same way, the three other companies have decided to go beyond what was legally
obliged and to meet basic requirements shaped by society. They are all recognized by ISO
norms. In fact, Company A is currently working on achieving the triple-certification ISO 9001
(quality management), ISO 14001 (environmental management systems) and ISO 45001
(health and security at the workplace), Company B is labeled by ISO 9001 and ISO 22000
(food security in transformation sites), and Company D has been recognized by several norms
including ISO 14001 also. These ISO norms are non-obligatory, but they are often necessary
to meet demand in terms of transparency, as companies are frequently audited for these
labels by external parties. In addition to ISO norms, Company B has decided to integrate a
production certification (Agri Confiance, translated as Agri Trust) which guarantees a high
quality in the production practices with the preservation of the environment and the animal
well-being value. Its major subsidiary also aims to fit customers’ and ISO CSR requirements,
particularly by adopting a circular economy, as suggested by the anti-waste law. For instance,
it has set packaging’s objectives which respond to constraints set by customers.
Company D seems to adopt more thoroughly its legal and societal norms. As a matter of fact,
Interviewee D explained that for certain aspects of the EGalim law, the company goes beyond
what is compulsory according to the legislation. For instance, he said that “[Company D]
imposes waste weighing on a daily basis, whereas the government expects the
implementation of a weighing system on a regular basis, without precising the frequency”.
Therefore, the organization places more constraints on its employees for its CSR actions. For
some other aspects however, it does not push the subject that much, because the measures
are confronted to the CSR maturity of its suppliers. It is the case for example of the plastic
management: Company D highly depends on the production of its suppliers. Thus, the entire
process should be changed, and “the right equilibrium among all the measures must be
found”, according to Interviewee D.
Overall, the four companies are subject to CSR legislations, even though they are different
types of organization, and they offer various products. However, they all decided to
additionally comply with non-obligatory ethical norms, often defined by ISO (International
Organization for Standardization), which is the biggest institution that establishes and
publishes international norms. These norms allow the four companies to better meet the
demand from the market.
4.3.3 Role of Stakeholders in CSR
During our video calls, we asked to the interviewees who the most important stakeholders
were, which were influencing their activities and decisions as well as their engagement
towards CSR. We received different answers from them. For Company A, their suppliers are
46
the “most important partners of all” (Interviewee A). Their farmers receive an award during
quality control and assessment. To help them to achieve it, 400 agronomists annually visit
farms to improve quality management and yield and provide trainings to fit the local
agronomic practices. Company A is also highly engaged with its employees and sensitizes and
communicates with them by offering trainings, starting during the integration of the new
members in the company. The organization is finally developing a new training program to
reinforce the workers’ consciousness regarding the significance of the role that CSR plays in
the organization and with collaborators.
Company C has the same viewpoint than Company A: it believes that suppliers are the most
vital to the organization. That is why they have a strong commitment towards them, ensuring
a constant dialogue. To develop new CSR measures, they create communication flows to
make sure that they fit their needs and not impose any new initiative. For example, during
the design brief revision process, which lasted two years and a half, they organized 60
meetings with more than 1000 participants including producers and experts in breeding,
associations’ representants, and vets to discuss and discover new technics. Company C uses
participative democracy and collective work to enrich the original specifications and sensitize
farmers to CSR. They create open discussions around biodiversity and sustainability.
Company D describes itself as “a people company” dedicated to employees with only a few
levels in the hierarchy, consisting of only 10% managers. The company is mainly constituted
of employees being at the same level, deployed in customers’ sites. CSR directors try to
simplify the concept of CSR in order to facilitate the sensibilization of employees to this
model. For Interviewee D, it is essential to explain what CSR is and which role it has for the
company, because usually, it adds new constraints and additional work to employees. If they
do not understand CSR, they will not be willing to work more and will not even understand
their tasks. Unfortunately, in this firm, there is a lack of training which makes
communication and CSR understanding harder to spread. According to Interviewee D, it is
due to a lack of budget (low profitability of the company) and to the complexity of the
corporate structure. In fact, the organization has in France 30,000 employees on 4,000
different sites in various areas, so it meets practical issues when organizing training sessions.
The second stakeholder to which Company D is strongly committed are the customers, who
have a huge influence on the decision-making process. It is a market company; thus, the
demand needs to be anticipated to answer to customers’ expectations. Customers help CSR
actions to happen quicker and in an accurate way. For instance, several transformation
companies, which are the clients of company D, ask for some actions to be taken towards
CSR, so this drives the sustainability initiatives of the organization.
47
Finally, Company B identifies customers and farmers as having the greatest influence on its
decisions. Customers influence the demand in the mass retailing and dairy transformation
sectors. To connect with this type of stakeholders and understand its expectations,
Interviewee B2 explained that “the subsidiary opens its production sites during two
consecutive days, for schools and general public, in order to be transparent on the adopted
practices”. Collaborators and breeders have the opportunity to meet consumers, and this
event facilitates the exchange between them. The organization also organizes discussions’
times to interrogate users about the current products and potential innovations. In addition,
Company B and its subsidiaries aim to create strong link and a community feeling between
employees and breeders. For instance, both actors participated to the CSR Story project,
which explains the CSR strategy in a recreational way. As the firm is a cooperative, farmers,
who know what happens in reality as they are directly on the field, play a crucial role in the
organization’s activities and decisions. Before choices are made, discussions’ sessions are
organized with Company B’s employees and the elected farmers to strengthen
communication and exchanges. Employees suggest some perspectives of development to the
elected farmers. Then, group works are created to share propositions and information on
several subjects such animal well-being, grazing, footprint, etc. in the upstream part as well
as concerning packaging, security and quality of life of employees and producers, methods
for sustainable purchases, etc. After this work has been accomplished within several groups,
ideas are presented to the board of directors and either validated, rejected, or modified after
discussions. According to Interviewee B1, Company B has to show the commercial aspect of
CSR, the economic return on investment that could occur on the long-term as well as the
need to respond to social requirements for the survival of the organization. This only can
convince the CEO and other employees that they have to do significant efforts for CSR.
Regularly, the CSR employees visit production sites to communicate Company B’s four pillars
and make sure that the subsidiaries are well integrated to this CSR roadmap, to confirm the
understanding of employees and proper implementation of CSR actions. Additionally, to
make sure that the CSR concept is well accepted, Company B’s main subsidiary co-builds its
strategy with the executives and operational employees. As explained by Interviewee B2, “if
you want your CSR strategy to be successful, it must be validated and shared by the board
as well as co-constructed with the different stakeholders of the organization”.
4.3.4 CSR Management Control Systems
4.3.4.1 Implementation Process
The implementation process of CSR activities for the three large companies is quite similar,
while it slightly differs for Company C. Company B is a national organization and is
coordinated, as previously mentioned, by regions. In the same way, Company D is an
international firm and is organized by regions also, and by consumer segments. Finally,
48
Company A is a subsidiary of a larger group, so it is also arranged by markets and
subsidiaries. Therefore, these three societies have global CSR strategies, either on the
international or on the country level, that represent the guiding lines for the whole group or
firm. In fact, they establish programs, that are publicly announced, and list key objectives
and policies for the whole organization. However, according to each regions and markets’
constraints, they are adjusted, even though they must fulfil the initial guideline often
established by the executives.
In Company A, the parent company is working on several CSR commitments, and the global
program is declined in numerous smaller projects and initiatives according to each market.
For instance, as the French market is well-informed about CSR issues and is more developed
in terms of CSR expectations than other markets, Company A has to adapt the global strategy.
It implements more projects than what is firstly expected, as suggested by Interviewee A. He
says that this is the case for waste management for instance: “the French market is quite
peculiar because it engages for waste sorting, but it expects that the companies will
facilitate the waste management act”. Therefore, Company A in France has decided to go
beyond the group’s program and to deploy selective collection for the market, in order to
simplify the recycling process for consumers. More generally, CSR is implemented into
Company A through several small projects, which all come from the global program, and
additional projects can be created to respond to specific demands of the market. This
implementation process is comparable to the one in Company D. The group also defines a
big project and objectives. Interviewee D indicated that “according to the up-to-date events
and the directors’ convictions, certain projects can be modified”. However, the main CSR
initiatives remain intact and the guideline stays the same.
Finally, Company B similarly has a program that is established on the national level, as it is
only present in one European country, but exports its products internationally. Then, the
projects differ among the regions. One person is responsible in each region for implementing
the measures according to the problems the area is facing, the internal resources as well as
the regional council backing, which occasionally provides financial funds to execute CSR
actions. For example, one initiative is to adapt the activities to climate change, but only two
regions in the country are affected. In this way, the subsidiaries establish their own
sustainability strategy and projects, based on these factors as well as on the type of products
they offer. Still, as suggested by Interviewee B2, “the subsidiary’s strategy integrates into
the group’s one, and it follows the directives established in the CSR roadmap: it has common
objectives”. Broadly speaking, large organizations seem to establish programs, that are then
tailored according to customers’ expectations, managers’ decisions, regions, and products
themselves.
49
The CSR implementation process in smaller companies is relatively different, since only one
program is established for the whole organization. Because Company C only has 20
employees, CSR implementation does not require any adaptation, however, the
establishment of a sustainability program is in this case a very long process, since it is
controlled by INAO, and it must fit the PDO’s design brief. This process, before the proper
implementation, is divided into four internal steps, as described by Interviewee C. Firstly,
experts meet in order to discuss the current knowledge, difficulties, and field observations.
They then identify potential innovations and establish suggestions. Interviewee C insisted on
the fact that “innovations must be explored only if they are progress”. The second step is
conducted by the technical commission, which is composed of employees from Company C.
It ensures that the quality and CSR propositions are coherent with the actual PDO’s design
brief, and that it follows Company B’s long-term vision and goals. Then, the executive
committee, which meets on a monthly basis, takes the decisions, and defines which measures
are solid, peripherical or to be reviewed. Finally, the latter presents the new measures to the
General Assembly, who must validate them. Because PDO is a European recognition, they
must make sure that the project is applicable and published into the European Official
Journal, after consulting the ministries and the competition. It is presented to INAO and to
the French Agricultural Ministry and is then examined by the European Commission. It is
also submitted to national and European opposition procedures, in order to ensure that all
structures agree with the planned initiatives. Therefore, “before the CSR implementation
process, there is a significant examination procedure, which takes two to three years”
(Interviewee C). Only after both internal and external validations can the CSR specifications
be implemented. The process applies for all specifications, which concern quality aspects,
and social or environmental ones.
4.3.4.2 Control and Evaluation of CSR Objectives’ Achievement
The four companies have implemented MCS, which are more or less formal, in order to better
manage the integration and follow-up of CSR measures and actions. As defined in the
literature review, MCS include the planning processes, in terms of long-term objectives and
budget, the reporting and monitoring systems, and finally the performance evaluation and
rewards systems. Therefore, these various processes have been studied among our four case
studies.
Firstly, concerning the CSR long-term objectives planning processes, these were defined on
a high hierarchic level, either by the group’s executives or by legal institutions in some cases.
In both Company A and Company D, which are part of a large multinational group, the
objectives are formalized for the next five to ten years, by the parent-company in Company A
or by the worldwide group in Company D. The CSR objectives are as formal as financial or
50
quality objectives are, since they are publicly communicated through CSR official report,
organizations’ website, and media. For Companies B and C, the long-term objectives are not
defined within the organization itself. In fact, Company B aligns its goals with the dairy
sector, on an interprofessional level, while Company C sets them based on INAO’s decisions,
as it must make sure that objectives are coherent with the PDO’s requirements. In addition
to publicly communicating goals, Company B ensures that all employees are well-informed
about sustainability measures by sharing new decisions and projects launchings on the
extranet tools. This way, all workers have an equal access to the information.
Even though CSR actions are difficult to measure, and their results are potentially achievable
in tens of years, all four companies set quantitative long-term objectives, expressed in terms
of percentages or numbers (zero accident politic, 100% sites must implement waste
management processes, etc.), and follow them with performance indicators on a frequent
basis. For instance, Interviewee D argues that the organization annually conducts a survey,
with more than 350 questions, to control the performance of each region, and objectives may
differ among regions as the group goals are adapted to local constraints. Key Performance
Indicators (KPIs) are established and regularly controlled. “Clear and formalized objectives
lead to real actions”, according to Interviewee D, and “quantitative inflow of information is
very important to ensure the concrete measurement of CSR actions’ impact, and to act in
consequence”.
Concerning the CSR budget planning, we noticed different processes between Companies A,
C and D and Company B. The three companies establish a CSR budget which includes
salaries, actions’ funding, communication, training campaigns, external agencies work, etc.
The budgets are obviously confidential, but Interviewees A and D indicated that their
sustainability budget was very substantial, as both organizations have established significant
programs and partnerships to improve their CSR commitments and actions. The budget is
also defined by the group’s executives and distributed between the CSR department and the
other Business Units, which must develop and implement the measures defined by the
former. Because Company C is a small organization, the sustainability budget consists of
approximately €50,000, which corresponds to the annual salary of one individual dedicated
to CSR. Additionally, CSR projects are financed by the Controlling Union. On the contrary,
there is no clear definition of budget in Company B, as there is no CSR department. Each CSR
manager, deployed in the different Business Units, must ask his or her higher-level manager
the approval for implementing a CSR action and the budget granted for this. Therefore, in
Company B, the CSR budget is less formalized than in the three other companies.
51
Several actors are involved in the control measurement process, and they use tools which are
part of the reporting and monitoring systems. In the four companies, both internal and
external controls from third parties are executed. Controls are scattered in Company A, as
they are organized between the CSR (projects control), financial (financial and yield control),
quality (ISO certification control) and legal (regulation conformity control) departments.
Thus, many internal actors participate to this process, in addition to an external organization
which guarantees sustainability performance indicators’ follow-up. The same external
company is employed by Company C: this third party controls the CSR and quality measures
implemented by the farmers and evaluates the quality of internal audits. It ensures that
Company C is developing its procedures in accordance with the requirements. On the internal
level, Company C itself organizes internal audit in order to supervise PDO specifications
application. The internal auditors are experts in the field, as Interviewee C indicates that
“auditing is a complex process, which requires thoroughness and fairness”. Some partners,
from the Agricultural Chamber mainly, are also involved in this control process. In the same
way, Companies B and D internally audit their employees and suppliers through surveys,
reporting processes, and group audits realized by specialized technicians, which are trained
and have strong knowledge about audit criteria. On the external level, controls are executed
by specialized and independent audit firms. Interviewee B2 reports that external controls are
carried out as part of the EFPD, and reporting tools, industrial sites as well as Business Units
are assessed. Furthermore, some controls are performed by customers, still, these procedures
do not focus on CSR only, but progressively integrate this aspect.
To ensure conformity during these audits, reporting systems are implemented and list several
indicators to follow and documents to provide, for both suppliers and employees. In
Company A, the reporting system is mainly designed for farmers, as they are the raw
materials providers, and quality of the products at this stage is crucial. Data are collected via
a mobile application, which defines objectives, farmers’ achievements and performance, pre-
requisites, and critical practices. It provides third party verification and highlights drivers of
change and new insights across the beverage supply chain. The interface is globally
accessible, so all suppliers are monitored on the same performance indicators, which are for
instance social wellbeing, satisfaction, productivity, environmental protection, etc. Any
failure to comply with one of the indicators gives an alert to Company A, so that it can resolve
the issue. Therefore, for its suppliers who represent the organization’s most valuable
stakeholder, a performance scorecard has been established in order to follow up the work
and monitor the performance according to the defined indicators. However, concerning
employees, Interviewee A claims that there is a lack of reporting, and the firm aims to
implement reporting and monitoring systems which comply with the ISO certifications. The
52
creation of this system faces several issues, and this is mainly due to the fact that it always
needs to consult the parent-company.
Similarly, Company B has developed reporting systems for several basic indicators, such as
water consumption, energy consumption and accidents frequency, which are relatively
simple to follow-up. Other indicators are, according to Interviewee B1, to be built.
“Establishing the missing indicators is the next step towards CSR development”
(Interviewee B1). He implies that the indicators are piloted by different persons, depending
on their profile, but one employee collects all information about the existing indicators to
ensure a strict follow-up. Interviewee B2 also suggests that the subsidiary’s KPIs are currently
in a re-formalization stage. Moreover, Company D seems to have implemented numerous
KPIs to monitor CSR performance for their different initiatives. After KPIs are defined, they
are validated every year to ensure coherence and progress.
In contrast, when asking about the reporting process to Interviewee C, he did not talk about
KPIs but about documents to provide to guarantee traceability and examine practices of
suppliers. In fact, to ensure that all criteria are met, farmers have to provide three documents
that enable control from Company C. The first document is a spreading book: farmers
communicate what has been realized and report the external conditions (weather, place) in
order to trace their activities. The second one is a spreading plan, which corresponds to a
field mapping. It enables breeders to have a good knowledge of their field, and therefore act
in consequence and in a respectful way. The last one is a fertilization plan, which provides
annual previsions for the farm. Therefore, these three documents are the basis for controlling
and reporting the activity of the farmers, and it is studied by Company C’s employees.
Company C uses a monitoring method, called BIOTEX, to measure the biodiversity level,
from the field to the exploitation. It examines producers’ practices and landscapes in order
to deduce a biodiversity level, which must fit the CSR requirements (extensive practices and
thin landscape mosaic). Thus, this last company has a quite different approach regarding
reporting systems, and this is due to its dependence on PDO’s specifications defined by an
external party, INAO.
The performance of the CSR measures is, as suggested above, evaluated by both internal and
external actors, when controlling and auditing the activity. It is based on the indicators and
objectives defined in the planning phase, and societal performance is, for all four companies,
distinct from the financial performance. The role of external auditors is to assess the CSR
indicators and give, according to their coherence and application, certifications or labels
which publicly recognize the companies’ engagement. Companies A, C and D indicated that
indicators are generally annually evaluated, then published in their CSR annual report and
53
programs. The evaluation is finally the basis for continuous improvement. In Company B,
the participant suggested his desire to better integrate CSR into performance measurement
systems, as CSR should be one of the company’s priorities. “CSR is at the heart of the strategy
but is very long to implement, and [Company B] needs to create a transformation within
its own structure” (Interviewee B1).
Based on the performance evaluation, companies often create a reward system to encourage
their stakeholders to progress. The rewards systems are quite different among the four case
studies. In Companies A and B, CSR quality bonuses are created, but only for the suppliers.
Company A pays 30 to 40% more its farmers that are certified, and Company B offers three
levels of rewards, in the form of financial compensation, to encourage breeders to adopt more
responsible practices. Both companies however have not implemented any bonus system for
their employees yet but are discussing the integration of CSR parameters in bonuses, salaries,
and budgets. Interviewee B1 argues that it could “better engage workers towards CSR”. In
Company D, CSR bonuses are included in the managers and employees’ bonuses, and they
are reviewed every year. In fact, Interviewee D claims that “bonuses help to start launching
an initiative, but then, motivation must come from something else than money”.
On the contrary, Company C has a totally different approach and opinion on the subject. It
does not offer any financial reward, neither to its suppliers nor to its employees. Interviewee
C says that motivation is led by human rewards, and not by financial rewards. Stakeholders
are proud of the products, whose quality has been recognized by a European certification,
and the feeling of belonging is the main motivation driver. “Progress is faster with
cooperating and mutual assistance, instead of competition for financial bonuses”
(Interviewee C). Therefore, the community belonging, and sense of proudness are the most
important rewards, and money does not mobilize people. Financial rewards, according to
Interviewee C, isolate workers and create a permanent competition between them, which
could be harmful for CSR actions implementation and more generally for the well-being of
the company. We have therefore two diverging opinions on the rewards subject.
In general terms, the four companies have integrated CSR control systems in their activities,
but they are distinct from the financial MCS. They are more often integrated into the quality
control system since CSR is viewed as a quality parameter.
4.3.4.3 System Assessment
It has been for a while that the four interviewed companies have been implementing CSR
measures in their activities and interacting with various internal and external stakeholders,
who play an important role in the decision-making process. Thus, we asked each interviewee
what they were identifying as the keys to success, the obstacles, and risks to consider. Finally,
54
they put in a nutshell the essential aspects to keep in mind when committing towards CSR.
We observed similar strengths and weaknesses in the system process but also some that are
completely related to the companies’ activities and policy.
Firstly, the numerous CSR objectives are highlighted as the basis to every decision. Engaging
towards CSR is naturally valuable, but if realizable goals are not set, no further moves will
take place. For Company A, it is paramount to formalize measures in order to follow up their
implementation, make sure that all specifications are respected and be able to control and
assess their impacts. This helps to improve the actions taken and make them more accurate,
according to the internal needs and external environment. Interviewee C also claimed that
including measures in the design brief allows to enhance each actor’s responsibilities. In fact,
as it is written down, it must be carefully followed to reach the objectives. Thus, the four
organizations consider formalization as a strength in the system. This is also highly
represented in Company D’s plan which sets a myriad of goals and initiatives based on official
programs to be accomplished in a few years. To follow up on their measures, Company C
identifies internal and external controls as crucial for the well development of the process.
Regular audits and checking in from experts from different fields of the value chain are
conducted to ensure the application and conformity of the original specifications. Secondly,
an essential strength is the employees working to implement the directives properly. Human
seems to be a key resource to make sustainable development possible. Interviewee B2
identified the willingness of collaborators and executives to commit as a core strength. In
addition, Interviewee C insisted on the importance of communication with all actors implied
in the system process by setting meetings, to ensure a proper cooperation and an equal
attention given to different viewpoints of all actors. This allows companies to take common
and rational choices. It is also done in the cooperative of Company B with a participative and
democratic approach that reinforces the long-term relationships, cohesion, and trust with
external actors. This is a way, according to the interviewees, to satisfy all stakeholders without
imposing strict measures and to continue developing CSR thanks to the suggestions and ideas
of participants.
On the opposite, challenges can arise in the process. A common recognized weakness is that
employees still need to prove the importance of CSR actions to other employees, producers,
and farmers and even sometimes to the CEO for releasing the necessary budget to take
measures. Company C said that “some actors are hard to convince” or are even “reluctant to
changes” (Interviewee B1). At the same time, having everyone on board is a long process
according to Interviewee B2: it takes time to raise consciousness in others’ minds and to
implement concrete measures with visible outcomes.
55
To overcome these pitfalls, CSR employees of Company C try to demonstrate that changes
are necessary for the survival of the organization and that they will generate profits on the
long-term. This would also foster proudness of employees and managers, being part of a
company generating sustainable activities to take care of the planet and in the stakeholders’
interests. Interviewee C said that he has to show and prove the role of CSR for the company’s
viability. It is however not easy to execute, as outcomes are on the very long-term. That is a
reason why some employees and other stakeholders do not understand the importance of
CSR as results cannot be seen rapidly. Interviewee D even qualified CSR as “a non-priority”
in the opinion of some employees and external collaborators who do not realize the
importance of CSR measures and its future consequences on both the long-term financial
(purchasing less and better) and non-financial activities. Company D is obliged to show
proofs in order to make some statements acceptable. For instance, they conducted a five-year
study to demonstrate that mixed teams perform better in terms of commitment, customers
loyalty and operating margin than unmixed teams. What is more, financial difficulties have
been identified as a weakness as a company’s core purpose is first to make profit. If it is not
profitable enough, then CSR cannot be considered as a priority. As Company D mentioned in
the interview, it can happen that financial resources are limited and, in this case, it is not
enough to invest in CSR. CSR is one of the four strategic pillars of Company D but the three
other ones which are margin, growth and talent acquisition will be prioritized. Hence, “it is
admirable to have ambitions but if there is not the budget going with it, it is useless”
(Interviewee A). To sum up, the common challenges rely in the financial capabilities and the
convincing and pedagogical powers of CSR managers and employees.
Individually, Company A identified a weakness in its system which is a temporality issue.
Some departments have a short term-vision such as the marketing or finance services, while
the CSR department has a long-term vision. This makes it sometimes complicated to
coordinate. We also noticed that Company C’s CSR system does not include any social
measure which could be seen as a weakness as it is a pillar of CSR. Finally, in Companies A
and B, there is a lack of communication on the measures with the public. Thus, the external
stakeholders do not always see and understand what is done for the society, in their interests,
and for the environment. This lack of communication also appears internally as Interviewee
B2 suggested. Further discussions within the company could already help workers to
understand their role in CSR and how it influences their own work.
Two main aspects when implementing CSR are considered by all companies: the necessary
budget to invest in and implement projects and the adequate involvement of employees and
stakeholders in CSR.
56
Interviewee B2 sees the co-construction of CSR measures as a way to get various stakeholders
involved in the process. It indeed gives more sense to the current system as they understand
its stakes and issues as well as consider the impact of their individual work on CSR activities.
CSR employees need to be convinced that sustainable development is crucial for the
upcoming years in order to persuade executives of the stakes that CSR plays in a firm’s
lifecycle. Interviewee B2 considers that the whole context of CSR should be taken into
consideration. Measures are developed not only to protect the planet but because there is a
context of regulations from stakeholders and the government, and customers have increasing
expectations. Thus, CSR turns out to be a crucial business stake. The latter can be
strengthened by the attitude adopted by the CEO. In fact, the CEO must stand for CSR: it is
the most important aspect for Interviewee A as the internal governance sets future actions
and results and thus should not be neglected. Company D sees the directors’ CSR
commitments and public speaking as essential, in order to formalize it and make it a priority.
In addition, Company A highlights the significant role of formulizing an action plan which is
the basis for developing a strategy and following up the progress on the long run. For
Company C and B, it is the collective work, communication and discussion which were related
as the fundamental elements to consider. Even it if is a longer process, conflicts should be
avoided, by having continuous communication flows. For Interviewee B2, the periodization
of subjects is crucial, as there are a lot of interesting and urging CSR topics to handle, on both
the short- and long-terms. The prioritization should be fostered thanks to the business
interests, the convictions of each participant and the current stakeholders’ requirements.
Lastly, Interviewee D explained the key factors using the French ECAP principle which
consists of 4 steps, to illustrate how to integrate CSR in the daily routine:
- To be engaged: having the willingness and motivation to drive changes.
- To understand: being informed, trained, and sensitized to understand CSR interests.
- To adhere: accepting the objectives by understanding the roadmap.
- To participate: being involved in a sustainable way on the long-term because
employees understood the goals and necessity of CSR measures for the collective
well-being.
Overall, having an adequate budget that satisfies CSR projects’ needs and development,
ensuring the commitment of all stakeholders towards sustainable development, especially
the involvement of the CEO, and clearly formulizing an action plan are key aspects to consider
when integrating CSR into the core business and MCS.
57
5 Analysis
In this chapter, findings from the empirical results are further discussed and connected to
theories from the literature review. The section provides a broader understanding of the
CSR integration processes into the control systems and identifies the external and internal
factors that affect the effectiveness of CSR implementation.
5.1 CSR Integration into MCS
5.1.1 Formalization of a CSR Strategy
To understand how companies integrate CSR into their MCS, one can firstly evaluate how
they formulize CSR policies within their organizations. In fact, formulization is identified by
Interviewee A as an essential aspect to consider when integrating CSR. He states:
“Constructing a clear plan is crucial. Conducting frequent internal situational
assessment allows to formalize an action plan to ensure progress on the long run.
Companies need to establish a structured strategy as a basis before developing
further CSR actions”. (Interviewee A)
Therefore, formulating clear CSR policy and objectives in the planning phase, and making
them formal among all stakeholders, before even integrating it into control systems is
necessary. This helps to ensure a proper progress and identify the development perspectives.
In fact, it corresponds to Deming cycle’s first step, and the literature identifies that
formalization gives a sense of direction and sets boundaries (Szczanowicz and Saniuk, 2014).
Formalization is partly executed through the CSR report publishing. Companies A, B and D
annually communicate this report to the public, as it is required by the legislation, and they
notify their action plans for the next few years. For instance, Company A, for each of its
sustainable activity, sets out the detailed programs, evaluates its level of progress against
associated goals and quantitative objectives and identifies the key priorities to focus on for
the following years. Therefore, the organization’s ambitions are established, and a clear and
structured plan is set to formalize the strategy to follow and the actions to take. In the same
way, Company D points out its goals, based on its missions, its strategic positioning, and the
requirements from diverse stakeholders. It has thus created a global action plan, defining its
current position and commitment towards CSR, its objectives as well as the indicators and
reporting methodology it will use to assess development. Only Company C, who is a SME, is
not legally obliged to write this documentation, and so is not supposed to officially follow a
CSR strategy. Still, it decided to declare its objectives and achievements on its website, as it
58
must follow the PDOs specifications as well as meet consumers’ expectations. Consequently,
all four companies externally communicate their CSR strategies and announce their actions
and goals, either on the CSR declaration or on their website. Publicly revealing a
sustainability strategy and goals implies a substantial degree of formalization, as companies
will later be evaluated and judged by controlling actors, based on what they officially
published. Hence, it is the basis for combining CSR with the core business and integrating it
into MCS, that is, establishing CSR indicators, reporting, and evaluating tools and methods.
However, CSR strategy formalization through external report is not sufficient to evaluate the
level of integration within the firm, as it was suggested that this tool is mainly superficial (Yin
and Schmeidler, 2009). We can see from the interviews that, even though the four studied
companies publicly announce their objectives, it is very difficult, if not impossible, to assess
the level of integration of CSR indicators and control systems as a consumer. In fact, it was
clear that Company B lacked the internalization of MCS linked to CSR. Nevertheless,
according to its EFPD, Company B seems highly engaged: it has formulized its commitments
and objectives for maintaining the dairy fields’ dynamism, developing the stakeholders’
community, and preserving the environment. For each of these goals, an evident action plan
is publicly communicated. However, Interviewee B2 explains:
“The CSR strategy is co-constructed and formulized with several actors to respond to
reglementary aspects and customers’ interrogations. […] However, we need to
develop tools to reach more easily the established objectives. We admit that we are
somehow late on certain subjects, and not all the adequate methods and systems have
been implemented to develop our action plans. That is why CSR strategy is currently
in a restructuration process.” (Interviewee B2)
Interviewee B1 adds:
“One national program has been created. […] There is still a strong desire to integrate
CSR in [Company B]’s priorities, and there is thus a need to create a transformation
within the organization. Several indicators have to be built, and CSR control and
evaluation systems need to be reviewed, to better integrate CSR at the heart of the
strategy.” (Interviewee B1)
Thus, both participants honestly argue that there is a lack of integration of CSR into Company
B’s main strategy, and this leads to a poor internalization of CSR indicators and control
methods. Even though a clear plan has been structured by several internal parties, they
declare that without the right tools and MCS, achieving CSR objectives and measuring
progress is not feasible. Therefore, the image of commitment communicated through
company’s sustainability reports might not reflect the internal dedication to CSR
development and follow-up (Gond et al, 2012). Ditillo and Lisi (2016) demonstrate that such
59
mismatches are more likely to happen in companies adopting a reactive approach towards
CSR. Thus, it fits Company B’s case, as we identified in the data collection that the
organization has acted towards CSR as a necessary response to external pressures, which are
legislation, local communities, media, and pressure groups often. Company B has therefore
aligned its strategy with stakeholders’ requests by adopting a reactive approach, and so this
might explain that there is a quite significant gap between the CSR strategy formulization
and its integration into MCS.
Overall, formulizing a clear CSR policy in the planning phase is necessary to ensure a proper
integration of CSR into MCS. Nevertheless, a clear formulization does not imply that its
implementation will be effective and successful, especially in the case of reactive companies.
The second step is thus to establish structured MCS.
5.1.2 Control Systems’ Structuration
The theory highlights that the various control systems, financial, social, and environmental,
must be integrated with each other’s in order to work in harmony (Buhr and Gray, 2012).
Nevertheless, the four companies have developed CSR control systems that are distinct from
the financial MCS. Still, the participants argue that some linkages are drawn between the
tools and procedures, since the CSR policy is becoming an integral part of the firms’ global
strategy. In fact, Interviewee D argues:
“Control and performance measurement systems for financial and societal initiatives
are totally different. However, these systems are rapidly evolving, and some new
procedures are completely innovating. For instance, [Company D] has contracted a
loan, whose repayment rate has been indexed to the carbon footprint reduction
capacity. I thus observe that this CSR thematic increasingly influences the financial
strategy, and we can identify a linkage between the financial, environmental, and
social strategies.” (Interviewee D)
The participant here shows that, despite the fact that the control systems are separated, there
is a growing concern to mix the two approaches. Similarly, Company B uses some indicators
that are common to both systems, even though the controls are distinct. It concerns for
instance the breeders’ remuneration, which is controlled financially but also assessed by CSR
tools, as bonuses systems have been implemented to encourage farmers to adopt more
responsible behaviors.
The control systems among the four companies are similar in the sense that they are not part
of the main MCS, linked to financial achievements. However, they differ in terms of level of
CSR measures’ integration and indicators creation within the organization. This CSR
integration into MCS depends on the actual strategy of the company and its level of
60
consideration, whether CSR is a key pillar of the organization and considered as a driver for
the business, or if the company is only on the move, in a restructuration process to better
meet the societal requirements. In fact, the reactive Company B recognizes that there is a
considerable lack of reporting and reward systems.
“We have established a reporting system for several basic indicators, that are today
quite easy to measure, such as water consumption, energy consumption, frequency
of accidents. More complex KPIs are to be built. […] There is also no bonus system for
employees, but it is currently discussed, as we wish to encourage workers to better
engage towards CSR and valorize the work they accomplish. […] We need to create a
transformation within the company, but changes, especially in MCS, are long to
implement.” (Interviewee B1)
The CSR manager here suggests that KPIs to better follow up and control measures
implementation are necessary, but it takes time to structure an effective MCS for CSR
development. Additionally, Interviewee B1 explains that no budget is dedicated to CSR, and
financial demands have to be discussed with higher-level managers. Even though the firm is
currently restructuring its control tools and procedures, this suggests that there is a poor
integration of CSR into MCS, and this late transformation is partly due to the reactive
approach it has adopted. Because of this lack of control tools, the two phases Check and Act
of the Deming Cycle (1993) are affected: there is no established procedure to control and
improve the processes based on the given results.
The three other companies, who are more proactive towards sustainable development, seem
to have implemented more concrete and structured control systems to manage CSR. In both
Companies A and D, objectives and budget are defined on the group level, KPIs are created
and adapted to each region. Data are collected on a regular basis, and external auditors
evaluate the performance related to CSR. Nevertheless, Company A recognizes that there is
an absence of reward system and insufficient reporting and monitoring systems for
employees, while Company D already grants some bonuses to its main stakeholders and has
established a complete and well-structured MCS linked to CSR. Still, both firms are very
active to enhance their control systems, as they acknowledge the importance of measuring
and assessing societal performance in order to motivate stakeholders and achieve great
results on the long-term. In fact, Interviewee D claims:
“CSR is often considered as a non-priority. However, employees and external actors
need to realize the importance of CSR measures and initiatives and their future
implications for long-term financial and non-financial activities. To make them
understand the significance of CSR and adhere to the strategy, the organization needs
to motivate, sensitize, and guide stakeholders by implementing transparent and well-
61
structured controls, through objectives and KPIs definition. Surveys, reporting tools,
internal audits, and evaluation […] and bonus systems must be established.”
(Interviewee D)
This statement suggests the importance of having a rigorous control system to manage CSR
measures and actions implementation. Company C, which operates under a different control
system as it is audited by INAO and must comply with PDOs specification, has integrated
CSR measures evaluation into the quality control system. To maintain its certification,
sustainable methods are assessed with the help of a clear design brief as well as
documentation linked to sustainable development management, which list measures and
KPIs to follow up on.
More generally, because the CSR concept is quite recent, and the focus is often on financial
achievements, organizations, especially those adopting a reactive approach towards CSR
development, may lack reporting and controlling tools for CSR implementation and
management. Thus, the absence of procedures affects the CSR implementation, as suggested
by Deming (1993). The two last phases Check and Act/Improve cannot be performed
properly. Still, the collected data suggest that linkages between the systems are crucial to
further develop and work in better harmony. CSR control systems need to be transparent and
coordinated, in terms of quantitative and qualitative objectives and KPIs, so that
stakeholders can more easily engage and implement meaningful CSR changes within the
organization. Overall, a common infrastructure to gather, process and represent economic
and sustainable information, targets and indicators would be the optimum way to manage
new initiatives and projects (Ditilllo and Lisi, 2016). However, the firms argue that this
change is complicated and long to implement, especially because the focus is still on financial
data.
5.1.3 Environmental and Social Measures: Different Integration Levels
The empirical results suggest that the studied companies seem to have formalized more
environmental measures than social measures. Programs mostly revolve around reduction
of water and energy consumption, protection of the environment, neutral carbon footprint,
preservation of biodiversity, etc. This finding relates to previous theory-based assumptions,
which highlighted that limited attention has been given to MCS related to social issues, while
the attention relates to the area of environmental issues (Bartolomeo et al, 2000). It seems
here that focusing more on social or environmental measures depends on which stakeholder
is the most important for the company. When we asked which internal or external actor was
the most vital for their activities, Companies A, B and C mentioned farmers and suppliers as
the ones having the more influence on them and needing the greatest consideration. It is
62
especially true for Companies B and C which are cooperatives and integrate several
stakeholders into their decision-process and strategy establishment:
“Eight breeders are elected to be part of the board of directors. They take decisions
for the cooperative. It is a democratic system of management by the breeders.”
(Interviewee B1)
In this sense, we understand that interests of the breeders are taken into consideration the
most. Breeders are directly related to the environmental stakes, as measures involve taking
care of their animals, limiting their carbon footprint, and managing the landscapes to protect
the biodiversity. As Interviewee C said:
“There are examinations of practices for the landscape to evaluate if it is favorable to
biodiversity.” (Interviewee C)
As these three companies’ activities and products’ quality (Quality Audits for Company A and
PDO for Company C) depend on the farmers management of the environment, they formally
address environmental challenges and objectives. These measures directly impact the
businesses, so firms organize rigorous controls to verify their proper application.
In these companies, social aspects also are considered. Organizations help breeders to settle
financially (Company B) or give them a more important gratification (30% to 40% more than
what the market offers for Company A). However, those are not always subject to a project
planning and implementation process and do not concern all stakeholders. For instance,
employees are much less considered by formalization of social measures (working conditions,
community involvement), while suppliers are, as they enable the core production of the
business to be possible. Hence, they have defined fewer social actions as compared to
environmental ones. Company C for instance does not have any social measure in place.
The company we interviewed that takes the most social measures and even more than
environmental ones is Company D. In fact, this “people company” has a formalized plan,
which lists several objectives to achieve in the next few years. On the social facet, it concerns
for instance measures related to diversity, especially gender equality and inclusion, fair and
competitive remuneration, fight against hunger and commitments to local communities.
Some initiatives go beyond the regulations, concerning for example disabled individuals, and
Company D even performs philanthropic activities that can be considered as social as it is to
donate food to people in the need.
From the four companies’ vision and working approaches, we assume that they consider
social stakes within their organizations, however, one can distinctly assume, from the
external reporting systems, that they are less formalized and so less controlled.
63
Environmental measures are more often visible, followed and assessed by quantitative
indicators. In fact, quantitative indicators enable a regular check in process of the evolution
of their implementation in the MCS. It is thus easier to control formalized measures. Finally,
social evolutions are more difficult to evaluate in terms of numbers, as they relate more to
punctual actions and not to long-term objectives.
5.2 External Factors Affecting the Effectiveness of CSR
Implementation
To identify external factors affecting the effectiveness of CSR integration into the core
business and the MCS, we have found common phenomenon or differences among the
companies. We detected that, according to the level of consideration granted to external
factors, companies were either proactive, or reactive. In other words, the attention given to
these external variables, such as legislation and pressure shaped by society or competitors
leads to the adoption of different CSR approaches. Either the companies decide to go beyond
these external factors and consider CSR as an essential component of their business model,
or they are subject to measures which are imposed by the outside demand and act lately as a
necessary response to meet external demand.
5.2.1 Legislation
The literature identifies legislation as the first level of the CSR implementation model
(Szczanowicz and Saniuk, 2014). It is indeed the initial element to consider when integrating
CSR to the business, as sustainability initiatives are nowadays required by the legal
authorities. Depending on the industrial sector as well as on the organizations’ specificities,
it is submitted to varying regulations, which will impact the effectiveness of the CSR
implementation.
As compared with the three other firms which are food or beverage producers, Company D
offers food services. This is why it is subject to a different legislation, which imposes specific
norms in terms of waste management, remuneration, price, and promotion policies, etc. They
differ from the standards established for other types of companies. In fact, organizations
from the food service and catering industry are directly in relation with customers, as
suggested by Interviewee D:
“Company D operates on customers’ sites. Its wealth is women and men which
compose the firm, so social aspects are particularly crucial to consider and to
develop.” (Interviewee D)
64
Various stakeholders have an integral role in the organization, and customers especially are
on a daily basis in contact with employees. This explains why legislation is more fastidious in
this sector: organizations need to better consider CSR’s responsibilities which will impact the
whole value chain and ensure that it addresses the public’s needs. Similarly, Company C
needs to focus on legal environmental and social issues, in order to be recognized by the PDO
label and maintain its prestige. Companies A and B naturally have comparable regulations to
comply with. As a matter of fact, the 2017-legislation on the EFPD publication forced
Company B to adopt more CSR measures and ensure their effective integration into MCS:
“With the EFPD, CSR commitments became public, and they are subject to
verification and regular audit from third parties. [Company B] and its subsidiaries
must thus re-organize their approach and control systems to ensure the proper
integration of sustainability objectives and indicators.” (Interviewee B1)
Companies A and D were already following up their CSR actions, so participants did not
mention any organizational adaptation to the EFPD regulation. However, Company B, as
suggested by Interviewee B1, had to urgently adapt to this new law.
Therefore, these four cases imply that legislation is an external factor which affects the
effectiveness of the CSR integration into MCS. According to the industry they are operating
in, companies need to adapt to general or specific laws. Regular audits are performed by
external parties to ensure the proper integration of the required CSR measures.
5.2.2 Consumers’ Pressure
Fulfilling societal basic expectations is identified as the second level of the CSR
implementation model (Szczanowicz and Saniuk, 2014). In this actual context, consumers
are progressively becoming aware of environmental and social issues, and they can even act
aggressively when a firm is acting irresponsibly. Interviewee C explained that the company
has been affected by several attacks in 2014: some farmers were in fact accused to use
pesticides and environmentally disturbing components. Thus, the organization was forced to
urgently react to these accusations and better integrate CSR initiatives into its control
systems, to ensure that all farmers and employees adopt the right behavior and equally
commit towards sustainable development. Consumers have a very strong power to push
industries to adopt new behaviors, as identified in the literature with the consumer inference
theory. The public recognizes the importance of firms engaging in CSR and reward their
commitment (Green and Peloza, 2014). If a company acts unethically, it will have an impact
on the society, as suggested by the case of Company C: consumers are more likely to boycott
and use negative word of mouth (Creyer and Ross, 1996). Therefore, in case of
environmentally or socially damaging actions, organizations will be under a high level of
65
pressure from societal actors. This will drive them to better integrate CSR into MCS to
improve measures’ control and follow-up.
Additionally, clients have a significant influence on the main business and CSR decision-
making, as identified by Interviewee D:
“Customers play a big role in the company. The latter needs to anticipate the demand,
feel the market, and respond to its expectations. CSR concerns both B2C (Business to
Customers) and B2B (Business to Businesses). In fact, the companies are even more
demanding than individual buyers, as they also develop sustainable activities to
respond to their own customers’ expectations. Hence, [Company D] is obliged to give
high priority to CSR and consider it in its strategy. […] For example, our biggest
customer has audited us to ensure the appropriate formulization and integration of
measures related collaborators’ health and security, fair remuneration, disabled
people employment, etc. These societal requirements structure the enterprise and
force it to act quickly to respond to external demands.” (Interviewee D)
This statement implies that societal needs are always growing and more challenging, and
companies must guarantee that the market’s expectations are taken into consideration, by
integrating CSR aspects into MCS. This integration allows to coordinate policies and manage
indicators to ensure progress and CSR development. It is actually the basis for reporting to
the public and satisfying requests.
It also shows that companies themselves have expectations from other companies they are
buying from. There is indeed a double demand, both from the individuals and their societal
basic requirements and from other industrials. For instance, Company D must assure the
respect and implementation of CSR initiatives for its clients, but it also expects its suppliers
to consider CSR aspects such as waste management, plastic usage reduction, etc.
“The whole production chain has to be reviewed. We depend on our suppliers and
their practices. They have different levels of CSR experience, so we need to adapt to
this and suggest new processes to substitute some components such as plastic. The
external demand is confronted to the maturity of the production firms regarding CSR
development.” (Interviewee D)
Thus, the organization has set several requests for its suppliers, in order to better respond to
its own needs. Similar policies are applied in the three other companies. For example,
Company B, whose mass retailers and dairy transformers influence decision-making within
the firm, also sets objectives for its suppliers. It is very demanding with its breeders, so that
it can afterwards guarantee the quality and responsible production of its goods.
Consequently, we can identify this dual responsibility for the industrials. They first need to
66
integrate CSR measures into their control systems to prove their commitments to the public.
Additionally, they become demanding with other firms and expect sustainability-oriented
behaviors and measures’ adoptions from them. To ensure their proper integration, many
organize clients’ audits to control the integration of CSR into MCS.
Overall, consumers’ distrust towards companies and growing societal expectations have
pushed organizations to act responsibly and effectively integrate CSR into the control
systems. They must certify the implementation of sustainability actions to create confidence
and transparency with customers. Moreover, the companies themselves put increasing
pressure on other firms, and the whole value chain is impacted by and must adapt to external
pressure.
5.2.3 Competition
Competition is the last external factor affecting CSR integration’s effectiveness we will
consider. As identified in part 5.2.2, organizations put pressure on others to better consider
CSR initiatives. As a result, the whole chain can benefit from these commitments and deliver
products that are from high-quality and that fits the public demand. In addition to being
more demanding, the companies also influence each other’s in the sense that they compete
to respond to societal requirements. As suggested in the literature review, CSR is a source of
competitive advantage (Du, 2007): it can allow to reduce costs, appeal more customers,
increase market share proportion, attract new talents, etc.
Company A argues that it was a pioneer when implementing CSR, and it was quickly able to
work on sustainability programs on a significant scale, due to its size and allocated budget.
On the contrary, Company B and its subsidiary acted towards CSR quite lately, and the
competition, which was more committed to sustainable development, drove them to act
differently and restructure their organization to better respond to demands in terms of CSR.
In fact, CSR integration within the core business allows firms to differentiate, as recognized
by Interviewee D:
“CSR is a driver for business. I am convinced that it has a positive impact on
[Company D]’s financial performance, as it becomes a differentiation lever, as part
of the calls for tender.” (Interviewee D)
Half of the investigated companies (A and D) clearly reflected on the importance of CSR to
create value, and they are the largest studied organizations, active internationally and
providing their products or services to millions of customers. Witnessing the strong
engagement of large corporations and the customers’ reactions to these commitments lead
medium and small enterprises to review their strategy and better integrate CSR into their
67
MCS. Interviewee B1 recognizes that CSR brings a competitive advantage, that is why it must
be integrated into Company B’s priorities.
Therefore, competition is an external factor affecting CSR consideration and
implementation: it brings a differentiation advantage to the companies that are the most
committed and leads others to rethink their position to respond to the market.
5.3 Internal Factors Affecting the Effectiveness of CSR
Implementation
Internal factors affecting the CSR integration into MCS were also found from the empirical
results. In fact, the structure of the organization, its willingness to engage with stakeholders
and the managerial attitudes strongly impact the CSR orientation of the firm, either proactive
or reactive, and affect the effectiveness of CSR initiatives execution and control diligence.
5.3.1 Organizational Structure: a Dual Relationship Between CSR
Implementation and Company’s Structure
Companies A and D both have integrated a specialized department to manage CSR policies
and activities. This unit is dedicated to CSR, and its employees act as ambassadors of
sustainable development. They coordinate projects and ensure the implication of the entire
company. In addition, these two companies have adopted proactive approaches from their
creation which means that they integrated CSR to develop the organization’s activities as it
is part of it and built the business on these values.
“Without sustainable development, the company would not exist […]. The strategy
was to support the farmers and conserve the ecosystems to provide sustainable
products and ensure the yield and the best quality the company was looking for to
meet a specific demand”. (Interviewee A)
“Since the foundation of the business, social and development were already included
[…] Today, the viewpoint of the founder who well understood that development was
not possible without local resources and participation in the economic development
has been reconsidered […] The three pillars were already taken into account even
though Planet was least important at this time”. (Interviewee D)
Companies A and D are the largest organizations that we interviewed: being a large company
and having sufficient financial and human resources can be some factors enabling the
creation of a separated CSR department.
68
However, it might not be the only factors because Company B has the financial means to
establish a CSR unit, as it already has the human resources, but it did not choose to have a
special division. The employees are all deployed among the Business Units. This may be
because the company adopts a reactive approach towards sustainable development: it may
be less aware of the benefits of having an adapted organizational structure, since it evolved
lately, because of external pressure and obligations. Or it might be a personal choice from the
company to not separate CSR from each individual daily work as Interviewee B2 claimed:
“It is the ambition of all companies to not have a separate CSR department only, for
it to be integrated into each department as normal values and considerations in every
employees’ work. This takes time. For it to be efficient, it is required to prioritize
within the corporate context”. (Interviewee B2)
This decision can nevertheless affect the communication process and the effectiveness of the
CSR integration as it is not structured. Having no dedicated department suggests that CSR
workers have less power, and therefore, may be less considered by other actors who do not
consider CSR as a priority. As a matter of fact, a sustainability unit would facilitate the CSR
integration process by communicating sustainability values and enhancing coordination of
responsible activities with other departments such as the Marketing or the Research &
Development services and with external actors. It acts as a facilitator in the CSR integration
process, by fostering coordination among departments and diffusion of sustainability values
(Ditillo and Lisi, 2016). If only a few persons are devoted to CSR but if it is not structured in
the first place, real budget cannot be allowed, and actions might not take place for specific
parts of CSR. Having a separate service might also simplify the controls, instead of spreading
procedures through all departments and hence facilitate the integration of CSR into MCS.
The case of Company C is quite different, as it is very small, and there is no department
defined within the organization. Responsibilities are assigned to employees, but they may
vary according to some events (paid leaves, maternity leaves, etc.). Hence, roles are not
totally fixed. The company does not require a special unit for CSR, as it is already managed
by one employee from the Controlling Union, and the CSR projects are dispersed among
workers. In this case, the conclusions do not completely apply, since the structure of a small
company will not strongly affect the integration and effectiveness of CSR measures and
indicators. A small enterprise does not need nor does it have the means to organize a
dedicated unit to CSR, however, it does not necessarily mean that CSR will be badly
implemented, as shown with Company C’s example.
Therefore, we can establish a dual link between CSR integration and the organizational
structure for large firms only. When an organizational structure is well-defined with a
separate department, clearer roles’ distribution and objectives planning are established.
69
Thus, CSR tends to be better integrated and controlled in the company. The same way, when
there is a willingness from a company to develop CSR activities, a new structure develops
through time as it is the case for Company B, where three positions have been created to
better dedicate towards CSR. This way, CSR initiatives’ establishment involve a structure’s
existence. Hence, there is an important role played by the type of approach used by a
company. One that is proactive tends to initially develop a CSR department with the formal
intentions to make the integration of CSR initiatives possible, easier, and more effective. One
that is reactive is more likely to initiate some sustainable actions first to answer external
expectations in a quick manner. Then only, it starts building a structure to better integrate
CSR.
5.3.2 Willingness to Engage with Stakeholders
Stakeholders’ engagement process plays a key role in the CSR integration effectiveness. This
is the third step in the four-level model for the implementation of CSR according to
Szczanowicz and Saniuk (2014). In fact, some CSR measures are put in place in the interests
of specific stakeholders. That is why it is important for a company to identify which
stakeholders are the most involved in their core activities, in order to then respond to their
expectations. The level of integration of CSR depends thus on the stakeholders influencing
power on the company’s actions and on their degree of significance for the firm. When
various stakeholders are implicated in the organization, it is easier to respond to societal
requirements, justify CSR choices and strategies and exchange ideas. Here, the type of
approaches does not seem to affect the willingness of the organizations to engage with various
actors. In fact, we think that the type of company’s governance (classic or cooperative) might
play a role in this case.
Both Companies B and C, which are cooperatives, involve suppliers and employees in group
works, in order to communicate information and collect data from the field, sensitize all
stakeholders to CSR issues and create discussions to enrich perspectives of development. As
some farmers are in the board of directors in Company B, they play a crucial role in the
decision-making process. Stakeholders in this company are highly involved and make the
CSR measures effective. This way, they are not reluctant and accept to realize them and
follow-up on their evolution. The same applies in Company C, whose members of the
committee have very close bonds with producers. They put communication in the center of
this relationship. Communication with stakeholders can thus be seen as an important factor
for the integration of CSR initiatives.
Companies A and D are classic companies, however since they are proactive, they consult
several stakeholders in their decision-making process. They both include suppliers,
70
customers, and employees in their decisions. Employees’ interests are taken into
consideration in these large structures since this will drive their motivation and commitment
which can strengthen the integration of CSR into MCS. Suppliers are obviously considered
as they must accept the CSR strategy to ensure the quality of the product or service delivered.
Moreover, customers, which either directly use the products or services or collaborate with
the firm, such as distribution centers or transformation companies, influence the decisions
of a company. In fact, when they ask specific requirements to a company in order to continue
doing business with them, Companies A and D do not have another option than following
their requests. This way, the level of CSR integration in the company and in its MCS is
influenced.
More generally, we consider the company’s willingness to engage and communicate with its
various stakeholders as a key internal factor affecting the effectiveness of the CSR
implementation. Connecting with these actors allows to better consider their interests and
needs and makes them more committed to properly integrate and control CSR initiatives. In
fact, goals should be relevant to all stakeholders (Durden, 2008) and translated into
components of the MCS.
5.3.3 CEO and Managerial Attitudes Towards CSR
Managerial attitudes are important to consider when implementing CSR effectively, they can
affect the type of approach, reactive or proactive, adopted by a company and thus the degree
of integration of sustainable development in the core business. CSR concept is ambiguous,
and if not clearly characterized, higher-level managers might not fully understand the
importance and role of sustainable development. Because of the central role managers have
in the organization, this variable might affect the company’s social and environmental
commitment (Ditillo and Lisi, 2016). Additionally, committed managers can perform
informal control by promoting a corporate culture that integrates monitoring and
measurement (Durden, 2008).
On one hand, as suggested by both Interviewee A and Interviewee D, CEOs especially seem
to be extremely convinced by CSR subjects and as a consequence launched a proactive
approach. They have adopted pioneer behaviors, despite some critics, and thus, by
communicating their goals, they inform all employees about the importance of CSR.
“The CEO is pro-CSR. If the board of directors is not convinced by CSR, it is
complicated to move forward with the projects […] The relational skills and internal
governance of the company are to not be neglected in order to convince managers
and employees.” (Interviewee A)
71
We can here refer to the tone-of-the-top concept (Anthony, R. et al, 2014) : executives and
higher-level managers set the example, by expressing their opinions and acting. Their actions
are imitated by employees, and even amplified. Therefore, the management style and higher-
level managers attitudes highly influence the behavior of the lower-level managers and
workers.
“When [the CEO] talked for the annual speech, [he] mentioned the importance of CSR
and the directives. […] It is important to be engaged and willing to provide changes.
[…] The high managers set the objectives and the path to follow, then it fosters a
sustainable participation and understanding from all managers to implement these
measures and achieve these objectives.” (Interviewee D)
On the other hand, Interviewee B1 suggests a dissimilar method to drive managerial
attitudes. According to him, it is the responsibility of CSR employees to attest the role of CSR
and convince executives. They drive managerial attitudes, and persuasion competence is key
in this case.
“It is the role of people in charge of CSR to talk to the board of directors and to
convince them of the importance of CSR and of the stakes for the viability and
sustainability of the company. The ability of persuasion is crucial for these persons,
who have the leadership to spread the word and strategy in the various Business
Units”. (Interviewee B1)
However, it is not always successful, as if CSR workers do not demonstrate the financial
interest in CSR, sustainable development will never be a priority for managers. Informal
control might thus be significantly limited since CSR is not a considered as a pervasive
component of operations.
“The objective is to show that demanding changes will either generate more market
shares or better answer customers’ expectations or give an access to a new market.”
(Interviewee B1)
This contrasts with the managers’ attitudes from Companies A and D, where executives fully
acknowledge the need of CSR for future growth, without emphasizing its immediate financial
results. They chose a proactive approach in the opposite of the reactive approach adopted by
Companies B and C initially, to integrate CSR into MCS. In this first case, the integration is
much more effective than in the second case, as CSR perceptions and attitudes of higher-level
managers drive the organization to act responsibly. More social and environmental aspects
are incorporated in the business model and prioritized among other issues. Thus, the level of
CSR initiatives and control depends on managerial sustainability orientations and
interpretations, as suggested by Ditillo and Lisi (2016). Both formal and informal controls
are necessary to implement successful MCS. Without managers convinced by CSR’s benefits,
72
informal measurements will not be possible, as the sustainability culture will not be spread
among employees. However, according to Durden (2016), formal controls alone do not
underpin the role and importance of CSR.
73
6 Discussion
The section gathers data from the analysis chapter with theories studied in the literature
review. It aims to answer the two research questions raised in the introduction. Firstly, it
will provide the basis for integrating CSR into companies’ MCS and assess the influence of
factors, both external and internal, on the companies’ approaches and CSR integration
process’ effectiveness. Secondly, based on our findings, a revised framework will be
proposed, to illustrate the ideal and most successful CSR implementation model for all
organizations.
6.1 CSR Integration Process and Effectiveness
Research has initially addressed CSR institutional level issues, for instance complying with
regulatory elements as well as normative and cultural ones shaped by society and consumers
(Scott, 1995). However, the attention has lately been given to the organizational level
(Aguinis and Glavas, 2012). By adopting this perspective and relying on these past theories,
we explain how companies integrate CSR into their MCS and examine the factors that can,
positively or negatively, affect this integration process.
From the data collected throughout the interviews, we can identify different approaches and
methods when implementing CSR and integrating it into the MCS. The interviewees
highlighted various level of sustainability consideration and organizational awareness, and
this impacted CSR integration process. As a matter of fact, two CSR approaches are defined
among the four studied cases: proactive and reactive. Similarly, two levels of integration have
been theoretically discussed. Aguinis and Glavas (2013) have in fact conceptualized CSR as
embedded or peripheral. An embedded CSR is indeed part of the overall strategy and
integrated to the daily routines and operations, while a peripheral one is more symbolic. It is
integrated into the strategic goals of the organization but not into the routines and practices.
Thus, in the first case, CSR is well-implemented into the MCS, and linkages between the
financial and socio-environmental systems are created, so we can determine a connection
with the companies adopting a proactive approach. Likewise, we can draw a link between
reactive firms and the second case, peripheral CSR. CSR implementation does not imply
significant changes in the organization, and the organizational procedures and controls are
not appropriately adapted. When examining this categorization of CSR integration into the
control systems, we noticed that a nuance has to be underlined. Both proactive-reactive
approaches and embedded-peripheral CSR are extremes. It is indeed very rare to find an
organization that is extremely proactive towards sustainable development and embeds CSR
perfectly (Aguinis and Glavas, 2013). As it is the case for the studied companies, they
74
consider CSR in between the two extremes, and the degree of embeddedness vary among
them. Company D is the most proactive and strongly integrates CSR into both organizational
strategy and daily routines and operations, but still needs to improve its integration process
into the financial systems. Company B, on the contrary, is the most reactive and has until
now considered CSR as more symbolic. Still, the latter is currently rethinking its approach in
order to implement CSR initiatives more effectively and be more competitive on the market.
Both embrace distinct levels of commitments towards sustainable development and are
developing their control systems and measures to improve CSR implementation. Therefore,
our contributions support previous findings regarding the different weights given to CSR
integration into MCS, according to the adopted approach.
To achieve a successful integration, we concluded based on the collected data that a clear
formalization of goals and measures as well as the creation of structured processes and
control systems are necessary. CSR control systems are often used as autonomous (Gond et
al, 2012). In the four case studies, connections between the main MCS, related to financial
measurements and results, and the CSR control systems remain minor. However, we noticed
that the proactive organizations especially work on establishing stronger linkages between
the systems to ensure that business operations are developed in line with sustainable
development objectives. The literature on this subject has demonstrated the importance and
usefulness of integrating CSR into the main MCS (Buhr and Gray, 2012). Thus, because
proactive firms are more active to uniting control systems, we find that the adopted
sustainability orientation explains the variation in CSR integration into MCS.
The CSR orientation is influenced by several factors, that will impact the effectiveness of CSR
implementation. Our analysis allows us to contribute to existing theory and identify these
main external and internal variables which affect the companies’ CSR approaches (Figure 9).
According to the level of consideration granted to each of these factors, the companies
consequently endorse differing approaches towards sustainable development. The various
behaviors that the firms can adopt are listed for each of the factors mentioned in the table
hereinafter. Depending on this, they are categorized into distinct approaches, proactive or
reactive, and as identified previously, it will impact the CSR integration process into MCS’
effectiveness.
75
PROACTIVE APPROACH REACTIVE APPROACH
NATIONAL
LEGISLATION
- Anticipate regulations
- Implement measures that go
beyond laws
- Adapt lately to regulations
SOCIETAL BASIC
EXPECTATIONS
- Respond to consumers’ demand,
create a trust and transparency
climate
- Expect CSR commitments from
other stakeholders
- Can be subject to external
accusations if damaging actions
- Need to prove commitments
COMPETITION - Act as a CSR pioneer
- Differentiate through their
commitments (value creation)
- Are driven by competitors to act
differently
ORGANIZATIONAL
STRUCTURE
- Integrate a CSR department to
coordinate and sensitize workers
- CSR integrated into each
individual’s work
- Deploy CSR workers among units
- Less power and employees’
consideration
ENGAGEMENT
WITH
STAKEHOLDERS
- Value and consult stakeholders
- Involve in decision-process
- Consider all interests
- Are unwilling to connect with
stakeholders
- Consider shareholders’ interests
first
MANAGERIAL
ATTITUDES
- Are self-convinced by CSR benefits
- Use tone-of-the-top
- Need employees to persuade
managers and executives
- Prioritize financial results
CONSEQUENCES Strong and effective integration
of CSR into MCS
CSR is a competitive advantage
Weak and ineffective
integration of CSR into MCS
CSR is a source of distrust
Figure 9: Factors Affecting the CSR Integration into MCS's Effectiveness (own source)
These factors appear to play key roles in the integration processes and effectiveness across
the studied organizations. When adopting the behaviors listed for proactive approach, they
act as enablers of integrating CSR considerations into decision-making and control
processes. On the contrary, the lack of attention and understanding of these variables leads
to poor and inefficient integration. The two approaches presented in Figure 9 are naturally
two extremes: most organizations are currently on the move towards sustainable
development and try to better incorporate it into their daily operations.
Moreover, the size of the firm was studied as a potential factor affecting the CSR integration
process effectiveness. In fact, Ditillo and Lisi (2016) suggested that the lack of financial and
personnel resources could play a role for the paucity of integration, as it restricts the
possibilities of initiatives related to sustainability issues and infrastructure for measuring
implementation. We thus primarily expected similar conclusions regarding the size factor,
since smaller companies (Company C) have less financial and human means than large
corporations (Companies A, B and D). Nevertheless, we observe that Company C has better
76
implemented CSR actions and controls than Company B for instance. Thus, we cannot rely
solely on the size variable since organizations’ integration process is mostly influenced by the
other identified factors. We therefore contribute to Ditillo and Lisi (2016) suggestion
regarding the resource factor, which is not a variable that necessarily affects CSR
implementation. Likewise, the case studies provide us information regarding the type of
company’s structure (cooperative or classic), and we initially projected that the structure
would influence the CSR integration and implementation effectiveness, because agricultural
cooperatives, by definition, use the principle “one human, one voice” in its policy. Farmers
own the enterprise, which contributes to the local economy and valorizes its products.
Therefore, it seems that the focus on environmental and social aspects is stronger in this type
of firm, as compared as in classic companies. Nevertheless, our empirical study implies that
cooperatives are not automatically the most effective ones in term of CSR implementation.
Hence, we cannot identify this variable as facilitating the CSR integration effectiveness.
In the same way, we conclude that industrial sector does not necessarily play a role in the
CSR integration’s effectiveness. The four companies come from the same industry, so we
should expect similar configurations, but various approaches towards sustainable
development were highlighted among them. Therefore, this element does not act as levers for
developing CSR initiatives and properly integrating them into control systems.
Our findings provide rich insights on the various way of integrating CSR into the core
business, and the factors affecting the effectiveness of this integration. The literature has
suggested other factors that could positively or negatively affect CSR implementation. We
found a great interest in the top-down VS bottom-up CSR approach internal factor. In this
research, it was concluded that a more bottom-up CSR leads employees to find more sense
in this concept and therefore integrate it more properly into their daily routines (Aguinis and
Glavas, 2019). This assumption strengthens our findings on the organizational structure
factor: all workers, at all levels, need to engage, and it is their role to create initiatives, adopt,
participate, and react to CSR. It should not be seen as an added-task and obstacle to carry
out one’s main work (Kahn, Wolfe, Quinn, Snoek, Rosenthal, 1964). Employees need to
experience meaningfulness through their job (Berg, Dutton and Wrzesniewski, 2013), and
this is allowed by implementing a bottom-up approach, as it enhances the effectiveness of
new measures and control methods’ adoption. However, based on our empirical data, we
identified that a top-down CSR approach is also necessary, especially at the launching phase
of new initiatives. In fact, the top-down CSR approach implies that senior managers are
convinced by CSR urgency, and they transmit their values to and motivate lower-level
managers and employees to accomplish the company’s CSR goals. This is done by ensuring
the proper understanding of the objectives, setting the results to achieve, and providing
77
available resources (Anthony et al, 2014). Our findings suggest that it is paramount that
executives are persuaded by CSR stakes and provide a sense of direction for the whole
company. The interviewees indeed highlighted the importance of having a sustainable
development-committed CEO so as to initiate the CSR strategy as well as to offer the
appropriate resources, especially in terms of budget. Still, Maitlis and Christianson (2014)
found that top-down and highly controlled processes lead to small input from employees,
and it gives them a feeling of pressure. Therefore, we contribute to the analysis of this internal
factor by suggesting the use of a mix between top-down and bottom-up approaches. Top-
down management control is necessary to drive employees, but bottom-up is also crucial to
ensure the staff commitment and to achieve planned results, without putting too high
expectations on them. Thus, this respond to the need of goal sharing and cooperation among
all workers.
6.2 Contributions to the Four-Level CSR Implementation Model
To conduct this research, we used the four-level model of CSR implementation designed by
Szczanowicz and Saniuk (2014) with the intention of improving it after gathering the results
from the empirical framework. We first noticed that this concept, originally created to fit the
Small and Medium Enterprises’ needs, was actually matching with larger companies
(Carroll, 1991) as we observed during our interviews. In fact, the issues that SME are dealing
with also concern larger companies, so we contribute to this model by broadening its public
and considering all sizes of organizations. Szczanowicz and Saniuk (2014) designed the
model using basics outlines to foster SME willingness to start including CSR requirements in
their daily operation process. As we saw previously, the implementation of CSR is not a
matter of size or financial resources but of global context and personal engagement for an
organization’s future. Hence, we wanted to go further, by contributing to this model to
suggest a new one hereinafter (Figure 10).
78
Level 1: Legislation
Fulfilling legal requirements
Going beyond regulations
Level 2: Societal expectations
Responding to societal needs Setting expectations for external actors
Level 3: Stakeholders’ engagement
Setting clear organizational structure
Engaging and sensitizing stakeholders
Ensuring proper managerial CSR’s interpretation and attitudes
Level 4: Implementation of CSR into MCS
Clear formulization of CSR objectives
Linkages between control systems
Regular monitoring and evaluating processes
Equal consideration between social and environmental measures
First, the legal requirements imposed by the government and the local authorities must be
fulfilled to not put the company out of the law (Armstrong and Stephens, 2008). We add to
the model the ambition of going beyond these formal obligatory rules. In fact, some basic
rules are specific to the sector and type of companies and are not always written in the law
(Carroll and Buchholtz, 2008). However, these informal rules have to be respected for the
company to develop its activities properly and can evolve through time and by the
intervention of external factors. Laws represent “codified ethics” but each company has its
own ethic which is in its interest. That is why it is necessary to go beyond legal requirements;
it is also the case for CSR objectives that are set by the federal. Interviewee D highlighted that
a sustainability-committed company’s objective is not only to fulfill what has been asked but
to perform even better when possible. This goes with the second level of the model that we
propose. In the model of Szczanowicz and Saniuk (2014), it was about basic social
expectations which correspond to ethical responsibilities, that are not mandatory but
expected by stakeholders. Answering society’s needs and preoccupations when implementing
CSR is essential to consider, as stakeholders determine and guide decisions of the firm. This
way, they set which behavior to adopt is fair and normal. In addition, we contribute to this
next level by identifying a dual link between the expectations shaped by society as a whole
Constant
dialogue
Plan
Do
Check
Act
Figure 10: CSR Implementation Model (own source, improvements from
the original model - Szczanowicz and Saniuk, 2014)
79
and the role of companies in setting their own expectations to external actors. Stakeholders
have a power on guiding the decisions of a company and can collaborate together to put
pressure on a firm if this one is not respecting their interests (Tuuli Parviainen, 2017). We
indeed find that companies also have expectations from surrounding stakeholders in order
to integrate CSR in their daily activities. They must understand, accept, and align their
practices with the company for CSR measures to be effective.
When these two steps are reached, the companies must identify their key stakeholders, those
influencing their activities the most or influenced by the organization itself. Employees and
managers are almost always considered as crucial in the process of CSR implementation.
That is why we contribute to the third level, dedicated to stakeholders’ management, by
considering several aspects. Firstly, a clear organizational structure should be determined.
Having a department dedicated to CSR enables the employees to be aware of their place and
role. It helps driving their motivation to the accomplishment of goals. Secondly, senior
managers play an important part in the development of sustainable measures. Their attitude
must be positive and CSR-enthusiastic. It represents the top-down concept previously
mentioned. If managers understand the stakes of CSR and are motivated to develop the
company in this direction, projects will be feasible. The last point we identified to involve all
stakeholders into the CSR implementation is the importance of keeping them engaged. This
starts with discussions to sensitize them to sustainable development. The current issues and
future possibilities must be explained, so that they better contribute to CSR progress, as well
as power and decision-making should be decentralized. The organizations should enable
stakeholders to make some decisions with the organization or suggest perspectives of
evolution in line with their interests and the company’s. When engaging stakeholders into
CSR, communication channels must be used constantly as a way of clarifying everyone’s
interests and agreeing on measures to take. Commitment towards CSR is driven by exchange
of thoughts and ideas.
To end with the fourth level, we contribute to the Deming cycle and create a more complete
procedure. The first step is to formulate clear objectives for all stakeholders before starting
to integrate the CSR measures into MCS. By making the objectives visible and measurable,
each stakeholder knows its role and can see its progress towards the targets’ attainment. They
can be formulized in the CSR report or in a design brief, more generally, anywhere they can
be written down. This corresponds to the planning phase of the Deming cycle. In order to
then follow-up with the measures taken, internal and external controls have to be organized
regularly as the “check” step suggests. These controls, if linked, are more effective since the
interdependence between several departments’ activities can be assessed, especially between
the finance and CSR departments. This way, CSR can become part of the global strategy of a
80
company and be developed furtherly, by progressing at the same pace as financial systems
are (Buhr and Gray, 2012). The more controls there are, the better it is to follow-up the
evolution of the taken initiatives and improve the implementation of CSR, even though it
should not kill the motivation of stakeholders who might feel pressured (Anthony et al,
2014). What is more, several participants highlighted that, in the CSR implementation
process, environmental measures sometimes outweigh social ones. This has been confirmed
by Chris Durden (2008) who shows through different studies that numerous tools are used
in order to assess the evolution of environmental measures, but that a lack of attention is
given to social accounting into MCS. If one pillar of CSR is more formalized than another,
then the control systems might not be equal, and it could jeopardize the expected end results.
For an ideal implementation of CSR, environmental and social measures should be equally
formalized and followed-up.
Therefore, the theories and collected data provide us a better understanding of the ideal
integration process of CSR into MCS, that is valuable for all companies’ sizes. We thus bring
several contributions to the existing model, which can be useful for CSR-proactive firms or
companies that currently have the ambition of developing further initiatives to use CSR as a
competitive advantage and fully integrate it into the core business.
81
7 Conclusion
7.1 Main Findings
This paper helps to fill a gap in the literature concerning knowledge about CSR integration
into the MCS. The research is based on four case studies of food companies adopting different
behaviors towards sustainable development. Our conceptualization of proactive and reactive
approaches towards CSR allows us to identify various levels of CSR integration into the
organizations’ control systems. In proactive companies, CSR tends to be more effectively
integrated into the core strategy and linked to financial control systems, while CSR remains
peripheral, and linkages with the main MCS do not exist in reactive firms. Although past
research refers to the common lack of CSR integration and understanding regarding the role
of MCS in supporting sustainable activities among the enterprises (Gond et al, 2012), our
empirical data suggests that proactive firms especially are aware of the actual environmental
and social stakes and consider CSR as a business driver and source of competitive advantage.
This implies the importance of moving the CSR dimensions beyond a business image
enhancement, as previously argued by some experts (Dowling and Pfeffer, 1975). Thus, the
development of control tools is crucial and includes planning, reporting, evaluation, and
rewards procedures. In line with previous research (Durden, 2008), the study presents the
internal and external factors, including legislation, consumers’ expectations, competition,
organizational structure, CEO and managerial attitudes and interpretation of CSR, and the
company’s willingness to engage with its stakeholders, that affect the CSR integration into
MCS’ effectiveness. Depending on the behavior adopted for each of these variables, they will
either act as CSR development obstacles or as growth levers.
Based on our understanding of CSR implementation and variables affecting this process, we
review Szczanowicz and Saniuk’ 4-level model (2014) and propose an innovative framework
that considers our empirical findings. In the first level related to legislation, we contribute by
suggesting that companies which can go beyond regulations set by federals should do so. We
secondly identify a dual expectation between the company and the society: the organizations
aim to respond to societal demand, and in the meantime, require CSR commitments from
external actors and partners. In addition to the third level outlines, we highlighted the
relevance of considering internal influencing factors, especially ensuring CSR-enthusiastic
managerial attitudes. Finally, in the fourth and most important level for an effective CSR
integration, our findings suggest the need for linking CSR control systems to the financial
ones as well as equally formalizing environmental and social measures and guaranteeing
equivalent controls for both. These contributions allow companies to operate in line with all
82
stakeholders’ desires by establishing trustful and cooperative relationships and by creating
clear plan and processes for integrating CSR into each system and activity.
The concept model for the integration and implementation of CSR is applicable for all sizes
of companies. Its suggested use is for the CEOs and managers (not only CSR managers) to
understand the importance of CSR integration and its short- and long-term benefits on the
companies’ economic, social, and environmental performances. Our results suggest the
advantages of adopting a proactive approach towards sustainable development, as it will lead
to more effective CSR integration and consideration among the stakeholders. Thus, in
practice, our contributions should encourage managers to fully acknowledge CSR and
integrate it at all levels of the organization.
7.2 Future Research
The empirical section presents detailed information regarding CSR integration, collected
through a qualitative method, more precisely in-depth interviews with managers responsible
for sustainable development in their organization. The study’s framework has been based on
data from a very specific context, that is, the food industry and its highly CSR demanding
setting in Europe and has been limited to a few participants. Recommended future research
is thus to explore further the empirical evidence to evaluate whether or not the findings are
applicable in other sectors that are less challenged by CSR issues, to allow some level of
generalization. Additionally, it could be interesting to apply this model and verify its success
in practice. Although it is based on practical cases and approved by specialists, its real-life
application could further strengthen findings. Since our study has been limited to the
European geographical area, it would be relevant to extend this research on a global scale to
observe whether or not results would differ from ours or be similar despite the differences of
regulations, markets, and cultures.
What is more, the choice for conducting a qualitative analysis was the most appropriate to
identify factors influencing the integration of CSR into MCS while letting a room for
discussion and possible improvements. Thus, we did not seek for nor use quantitative data
to answer our research questions. However, in future research, a quantitative study could be
added in order to include the economic pillar of CSR in the results. This could be a way to
link the financial aspect to the efficiency of CSR implementation as well as identifying the
economic role of shareholders in the process.
Because of the time limitation, the impact of only a few factors on CSR integration has been
thoroughly discussed. Other variables could be further examined, such as national culture or
83
family context on the external side and work orientation, moral identity, and corporate values
on the intra-individual and -organizational sides. Even though we considered the variables
that are having a major influence on CSR integration’s effectiveness, additional minor factors
could play a role, and this could be a perspective of research development.
Finally, this study was conducted based on the CSR manager perspective, but other
stakeholders’ perspectives could be assessed. In fact, it is worth studying for instance
customers, suppliers and employees’ implication and impact on CSR integration into the core
business and gathering their impressions regarding sustainability stakes. This could provide
supplementary elements to consider when joining CSR with control systems and be the
starting point of further studies on how to involve each type of stakeholders in the CSR
integration and operationalization processes. In order to go beyond this integration notion,
an additional research avenue could be the exploration of power relationships between
stakeholders. Our study highlighted the key roles that these actors play, so one could study
the power relation during the decision process and the implementation process of CSR within
companies.
84
85
8 References
Adams, C. and Frost, G. (2008) Integrating sustainability reporting into management
practices. Accounting Forum 32(4), pp. 288-302.
Aguinis, H. and Glavas, A. (2012) What we know and don’t know about corporate social
responsibility: A review and research agenda. Journal of Management 38, pp. 932-968.
Aguinis, H. and Glavas, A. (2013) Embedded Versus Peripheral Corporate Social
Responsibility: Psychological Foundations. Industrial and Organizational Psychology, pp.
314–332.
Aguinis, H. and Glavas, A. (2019) On Corporate Social Responsibility, Sensemaking, and the
Search for Meaningfulness Through Work. Journal of Management, Vol. 45, No. 3, pp.
1057–1086.
Albisu, L. M. (2012). Social responsibility in food distribution 10, pp. 211-226.
Anthony, R. (2014) Management Control Systems, 1st ed. McGraw-Hill Education.
Armstrong, M. and Stephens, T. (2008) Management and leadership: A guide to managing
for results, 2nd ed. London: Kogan Page.
Aude, J. and Genuit, H. (2019) Les investissements pour protéger l’environnement
diminuent de nouveau en 2017. [online] Insee Focus, No. 161. Available at:
<https://www.insee.fr/fr/statistiques/4188106?sommaire=4248596> [Accessed 7 May
2020].
Banati, D. (2011). Consumer response to food scandals and scares. Trends in Food Science &
Technology 22, pp. 56-60.
Bartolomeo, M., Bennett, M., Bouma, J.J., Heykamp, P., James, P. and Wolters, T. (2000)
Environmental management accounting in Europe: current practice and future potential.
European Accounting Review, Vol. 9, No. 1, pp. 31-52.
Basu, K. and Palazzo, G. (2008) Corporate social responsibility: A process model of
sensemaking. Academy of Management Review 33, pp. 122–136.
Belyh, A. (2018) Management Control System – Definition, Characteristics And More.
[online] Cleverism. Available at: <https://www.cleverism.com/management-control-
system-guide/> [Accessed 20 May 2020].
Berg, J. M., Dutton, J. E. and Wrzesniewski, A. (2013) Job crafting and meaningful work.
Purpose and meaning in the workplace, pp. 81-104. Washington, DC: American
Psychological Association.
86
Blowfield, M. and Murray, A. (2008) Corporate responsibility: a critical introduction.
Oxford, Oxford University Press.
Bourke, J., Garr, S., van Berkel, A. and Wong, J. (2017) Diversity and inclusion: The reality gap. [online] 2017 Global Human Capital Trends, Deloitte. Available at: <https://www2.deloitte.com/us/en/insights/focus/human-capital-trends/2017/diversity-and-inclusion-at-the-workplace.html> [consulted 9 May 2020]
Brenner, S. N. and Cochran, P. (1991) The stakeholder theory of the firm: Implications for
business and society theory and research. Proceedings of the Second Annual Meeting of the
International Association for Business and Society, pp. 449-467.
Bryman, A. and Bell, E. (2019) Business Research Methods. Oxford, Oxford University Press.
Buhr, N. and Gray, R. H. (2012) Environmental management, measurement and accounting:
Information for decision and control? Oxford Handbook of Business and the Natural
Environment, pp. 425–443. Oxford, Oxford University Press.
Burritt, R. L. and Schaltegger, S. (2001) On the interrelationship between ecoefficiency and
operational budgeting. Environmental Management and Health 12 (2), pp. 158–174.
Carroll, A. B. (1979) A Three-Dimensional Model of Corporate Performance. Academy of
Management Review, Vol. 4, No. 4, pp. 497-505.
Carroll, A. B. (1991) The Pyramid of Corporate Social Responsibility: Toward the Moral
Management of Organizational Stakeholders. Business Horizons 34, pp. 39-48.
Carroll, A. B. (1993) Business and society: ethics and stakeholder management, 2nd ed.
College Division South-Western Publishing Co, Cincinatti, Ohio.
Carroll, A. B. (1999) Corporate social responsibility: Evolution of a definitional construct.
Business & Society, 38 (3), pp. 268–295.
Carroll, A. B. and Buchholtz A. K. (2008) Business & Society: Ethics and Stakeholder
Management, 7th ed.
Carroll, A. B. and Shabana, K. M. (2010) The business case for corporate social responsibility:
a review of concepts, research, and practice. International Journal of Management Reviews
12(1), pp. 85–105.
Charmaz, K. (2008) Constructionism and the Grounded Theory. Handbook of
Constructionist Research, pp. 397-412.
Cheyo, L. (2015) Management Control Systems. [online] Available at: LinkedIn. [consulted
22 May 2020]
87
Christmann, P. and Taylor, G. (2006) Firm self‐regulation through international certifiable
standards: Determinants of symbolic versus substantive implementation. Journal of
International Business Studies 37, pp. 863–878.
Cope, R. and Cottney, C. (2018) Europe: Consumer Trends 2018. [online] Available at: <https://frederic-sanuy.com/articles/mintel-europe-consumer-trends-2018.pdf> [consulted 20 April 2020]
Coppola, L. (2019) Flash Report: 86% of S&P 500 Index® Companies Publish Sustainability.
[online] Responsibility Reports in 2018. Governance & Accountability Institute, Inc.
Available at: <https://www.globenewswire.com/news-release/2019/05/16/1826306/0/en/
FLASH-REPORT-86-of-S-P-500-Index-Companies-Publish-Sustainability-Reports-in-
2018.html> [Accessed 7 May 2020].
Cornell, B. and Shapiro, A. (1987) Corporate stakeholders and corporate finance. Financial
Management 16, pp. 5-14.432.
Creyer, E. H. and Ross, W. (1996) The impact of corporate behavior on perceived product
value. Marketing Letter 7, pp. 173-185.
Davis, K. (1973) The Case For and Against Business Assumption of Social Responsibilities.
Academy of Management Journal 1, pp. 312-322.
Ditillo, A. and Lisi, I. E. (2016) Exploring Sustainability Control Systems’ Integration:
Relevance of Sustainability Orientation. Journal of Management Accounting Research, Vol.
28, No. 2.
Dobele, A. R., Westberg, K., Steel. M. and Flowers, K. (2014) An examination of corporate
social responsibility implementation and stakeholder engagement: A case study in the
Australian mining industry. Business Strategy and the Environment 23(3), pp. 145–159.
Doerr, P. (2018) Why Corporate Social Responsibility Matters More Than Ever In The Age
Of #MeToo. [online] Forbes. Available at: <https://www.forbes.com/sites/
patsydoerr/2018/10/11/why-corporate-social-responsibility-matters-more-than-ever-in-
the-age-of-metoo/#3a289960343c> [consulted 27 April 2020].
Dowling, J. and Pfeffer, J. (1975) Organizational legitimacy: social values and organizational
behavior. Pacific Sociological Review, Vol. 17, pp. 122-36.
Du, S., Bhattacharya, C. B. and Sen, S. (2007) Reaping relational rewards from corporate
social responsibility: the role of competitive positioning. International Journal of Research
in Marketing 24(3), pp. 224–241.
Durden, C. (2008) Towards a socially responsible management control system, Accounting,
Auditing & Accountability Journal, Vol. 21, Iss, 5 pp. 671–694.
Elkington, J. (1994) Towards the Sustainable Corporation: Win-Win-Win Business
Strategies for Sustainable Development. California Management Review, 36, pp. 90-100.
88
Elsey, W. (2018) Why Your Company Should Be More Socially Responsible. [online] Forbes
Business Development Council. Available at: <https://www.forbes.com/sites/forbes
businessdevelopmentcouncil/2018/05/30/why-your-company-should-be-more-socially-
responsible/#13c5be312c32> [consulted 29 April 2020].
Freeman, R. E. (1983) Stockholders and Stakeholders: A New Perspective on Corporate
Governance. California Management Review 25.
Friedman M. (1970) The social responsibility of business is to increase its profits. The New
York Times Company, New York.
Gołaszewska-Kaczan, U. (2009) Zaangażowanie społeczne przedsiębiorstwa, Wydawnictwo
Uniwersytetu w Białymstoku, Białystok.
Gond, J. P., Grubnic, S., Herzig, C., and Moon, J. (2012) Configuring management control
systems: Theorizing the integration of strategy and sustainability. Management Accounting
Research 23 (3), pp. 205–223.
Grafton, J., Abernethy, M. A., and Lillis, A. M. (2011) Organizational design choices in
response to public sector reforms: A case study of mandated hospital networks. Management
Accounting Research 22, pp. 242–268.
Granovetter, M. (1985) Economic Action and Social Structure: The Problem of
Embeddedness”, American Journal of Sociology 91, 3, pp. 481-510.
Green, T. and Peloza, J. (2014) How do consumers infer corporate social responsibility? The
role of organisation size. Journal of Consumer Behaviour 13. 10.1002/cb.1466.
Greenwood, M. (2007) Stakeholder engagement: Beyond the myth of corporate
responsibility. Journal of Business Ethics 74(4) pp. 315–327.
Hackett, A. and Strickland, Ka. (2018). Using the framework approach to analyse qualitative
data: a worked example. Nurse Researcher 26.
Hayzlett, J. (2016) Why Should Your Business Care About Social Responsibility
Heslin, A. H. and Ochoa, D. J. (2008). Understanding and Developing Strategic Corporate
Social Responsibility. Organizational Dynamics 37 (2), pp. 125-144.
Hohnen, P. (2007) Corporate Social Responsibility – An implementation Guide for
Business. International Institute for Sustainable Development.
Johansson, S. et al. (2015) The relationship between CSR and financial performance - A
quantitative study examining Swedish publicly traded companies. Linnaeus University.
Justesen, L. N. and Mik-Meyer, N. (2012) Qualitative Research Methods in Organisation
Studies. Gyldendal, København.
89
Kahn, R. L., Wolfe, D. M., Quinn, R. P., Snoek, J. D. and Rosenthal, R. A. (1964)
Organizational stress: Studies in role conflict and ambiguity. Oxford, England: John Wiley.
Khan, S. (2014). Qualitative Research Method: Grounded Theory. International Journal of
Business and Management 9.
Kitchen, P. J. (1993) Public relations: a rationale for its development and usage within UK
fast moving consumer goods firms. European Journal of Marketing 27(7), pp. 53–75.
Kvale, S. (1996) Interviews: An Introduction to Qualitative Research Interviewing. The
American Journal of Evaluation 19, pp. 267–270.
Ledwidge, J. (2007) Corporate social responsibility: the risks and opportunities for HR:
Integrating human and social values into the strategic and operational fabric. Human
Resource Management International Digest.
Lee, M. D. P. (2008) A review of the theories of corporate social responsibility: Its
evolutionary path and the road ahead. International Journal of Management Reviews 10(1),
pp. 53–73.
Madsen, H. and Ulhøi, J. P. (2001) Integrating environmental and stakeholder management.
Business Strategy and the Environment 10(2), pp. 77–88
Maitlis, S. and Christianson, M. (2014) Sensemaking in organizations: Taking stock and
moving forward. The Academy of Management Annals 8, pp. 57-125.
Maqbool, S. (2019) Does corporate social responsibility lead to superior financial
performance? Evidence from BSE 100 index. Decision.
van Marrewijk, M. (2003) Concepts and Definitions of CSR and Corporate Sustainability:
Between Agency and Communion. Journal of Business Ethics 44, pp. 95–105.
Mitchell, R. K., Agle, B. R. and Wood, D. J. (1997) Toward a theory of stakeholder
identification and salience: Defining the principle of who and what really counts. Academy
of Management Review 22(4), pp. 853–886.
Moir, L. (2001) What do we mean by corporate social responsibility? Corporate Governance,
Vol. 1, No. 2, pp. 16-22.
Moore, D. R. J. (2013) Sustainability, institutionalization and the duality of structure:
Contradiction and unintended consequences in the political context of an Australian water
business. Management Accounting Research 24 (4), pp. 366–386.
Novak, M. (1996) Business as a Calling: Work and the Examined Life. The Free Press, New
York, NY.
Parviainen, T. et al. (2017) How can stakeholders promote environmental and social responsibility in the shipping industry? WMU J Marit Affairs 17, pp. 49–70.
90
Peirce, C. S. (1960) The Collected Papers of Charles Sanders Peirce. Harvard University
Press.
Poirier, P., Giles, T. D., Bray, G. A., Hong, Y., Stern, J. S., Pi-Sunyer, F. X. and Eckel, R. H.
(2006) Obesity and cardiovascular disease: pathophysiology, evaluation, and effect of weight
loss: an update of the 1997 American heart association scientific statement on obesity and
heart disease from the obesity committee of the council on nutrition, physical. Circulation
113(6).
Polanyi, K. (1983) La grande transformation. Aux origines politiques et économiques de
notre temps. Paris, Gallimard. 419p.
Polska Agencja Rozwoju Przedsiębiorczości (2013) Badanie kadry zarządzającej w ramach
projektu. Społeczna Odpowiedzialność Biznesu, Warszawa.
Porter, M. E. and Kramer, M. R. (2006) Strategy and Society: the link between competitive
advantage and corporate social responsibility. Harvard Business Review 84(12), pp. 78–92.
Raps, A. (2005) Strategy Implementation – an Insurmountable Obstacle? Handbook of
Business Strategy 6(1), pp. 141-146.
Robbins, S. P. (2001) Organisational behaviour (rev. ed.). Upper Saddle River, NJ: Prentice‐
Hall.
Russ, F. A. and Kirkpatrick, C. A. (1982) Marketing. Boston, MA, USA: Little, Brown.
Sartor, M., Orzes, G., Di Mauro, C., Ebrahimpour, M. and Nassimbeni, G. (2016) The SA8000
social certification standard: Literature review and theory‐based research agenda.
International Journal of Production Economics 175, pp. 164–181.
Scott, R. W. (1995) Institutions and organizations. Thousand Oaks, CA: Sage.
Scott, R. (2015) Doing Good Is Good Business, But Can You Prove It? [online] Forbes.
Available at: <https://www.forbes.com/sites/causeintegration/2015/08/26/doing-good-is-
good-business-but-can-you-prove-it/#eb46605a52d7> [consulted 29 April 2020].
Shahzad, A.M., Rutherford, M.A. and Sharfman, M.P. (2016) Stakeholder-centric governance
and corporate social performance: a cross-national study. Corporate Social Responsibility
and Environmental Management 23(2), pp. 100–112.
Shnayder, L., van Rijnsoever, F.J. and Hekkert, M.P., (2015) Putting your money where your
mouth is: why sustainability reporting based on the triple bottom line can be misleading.
Shnayder, L., van Rijnsoever, F.J. and Hekkert, M.P. (2016). Motivations for Corporate Social
Responsibility in the packaged food industry: an institutional and stakeholder management
perspective. Plos One 10(3).
91
Smith, N. (2003) Corporate Social Responsibility: Not Whether, But How. California
Management Review 45, pp. 52-76.
Sun W. (2013). Embedded CSR. In: Idowu S.O., Capaldi N., Zu L., Gupta A.D. (eds)
Encyclopedia of Corporate Social Responsibility. Springer, Berlin, Heidelberg.
Surroca J., Tribo´ JA. and Waddock S. (2010). Corporate responsibility and financial
performance: the role of intangible resources. Strateg Manag J 31(5):463–490.
Szczanowicz, J. and Saniuk, S. (2014). Implementation of CSR concept in manufacturing
SMEs. Management, Vol.18, No. 1.
Testa, F., Iraldo, F. and Daddi, T. (2017) The effectiveness of EMAS as a management tool: A
key‐role for the internalization of environmental practices. Organization & Environment.
Thacker, H. (2019) CSR: The Food Industry Trends of the Future. [online] The CSR Journal.
Available at: <https://thecsrjournal.in/csr-the-food-industry-trends-of-the-future/>
[consulted 9 May 2020].
Uddin, M. B., Hassan, M. R. and Tarique, K. M. (2008) Three Dimensional Aspects of
Corporate Social Responsibility, Daffodil International University Journal of Business and
Economics, Vol. 3, No. 1, pp. 199 – 212.
Ullmann, A. A. (1985) Data in search of a theory: a critical examination of the relationships
among social performance, social disclosure, and economic performance of US firms.
Academy of Management Review 10(3), pp. 540–557.
Visser, W. (2010) CSR 2.0: From the age of greed to the age of responsibility. Reframing
corporate social responsibility: Lessons from the global financial crisis. Bingley.
WBCSD. (1999). Corporate social responsibility: Meeting changing expectation. [online]
World Business Council for Sustainable Development, Geneva, Switzerland. Available at
<http://www.wbcsd.org/pages/edocument/edocumentdetails.aspx?id=82&nosearchcontex
tkey=true> [consulted 8 April 2020].
Wieczorek-Szymanska, A. (2017) Organisational Maturity in Diversity Management. Journal
of corporate responsibility and leadership, Vol. 4, Issue 1.
Yin, H. and Schmeidler, P. J. (2009) Why do standardized ISO 14001 environmental
management systems lead to heterogeneous environmental outcomes? Business Strategy
and the Environment 18, pp. 469–486.
Zwetsloot, G. I. J. M. (2003) From Management Systems to Corporate Social Responsibility.
Journal of Business Ethics 44(2-3), pp. 201-208.
92
93
9 Appendices
9.1 Appendix 1: Interview Guide (English version)
Introduction
- Presentation of the authors Coline Laurier and Marine Courtot
- Presentation of the study’s background, purpose and research questions.
The authors will make sure that the participant has fully understood the aim of the work
and of the interview and that he/she agrees to take part in the thesis’ project.
Ethics
Before starting the interview, we would like to remind you of the ethical procedures of our
study. Firstly, we will process your personal information confidential and not use any name
in the study. However, do you allow us to use your work title to better define your role and
responsibilities? Concerning the company, which information do you want to keep
confidential? Are we allowed to employ its name?
Secondly, during the interview, if there is any question you do not want to answer, you can
inform us without providing justification, and we will pass to the next one.
Finally, we would like to record the interview so we can review your answers and summarize
them afterwards. Do you give us your consent on recording it?
Questions
Introduction to CSR
1. How does your organization define the Corporate Social Responsibility (CSR)? Which
term does it use?
2. Could you describe the history of your company regarding sustainable development
with the four following questions?
a. When did your company start implementing CSR activities?
b. What drove this sustainable behavior?
c. What challenges did you encounter when starting to integrate CSR activities
in the core business?
d. What were the results (both positive and negative)?
3. What are your company’s main CSR initiatives today?
Company’s organizational structure
4. Is there a structure or unit responsible for managing CSR within the company? If yes,
how is it organized (members, governance, level of formality)?
94
5. What is the weight of this structure in the global decision-making process?
Fulfillment of legal and basic ethical expectations
6. Which legal norms or standards does your company fulfill? Are they different
according to each region you operate in?
7. What do you consider to be basic ethical norms, but non-obligatory, that your company
has to fulfill?
8. When implementing legal and ethical sustainability requirements, what has changed
within the organization?
Stakeholders’ relationship
9. How would you define the company’s relationship:
a. With its employees?
b. With its suppliers?
c. Towards its customers?
d. With its shareholders?
e. Towards the society?
10. Which type(s) of stakeholders (customers, employees, suppliers, lenders…) do you
involve in the decision-making for CSR strategies and activities?
11. How do they influence the decisions taken?
12. How would you evaluate the stakeholders’ involvement in the implementation of CSR
activities?
Employees’ commitment towards sustainability
13. How would you define the attitudes of managers towards CSR?
14. How would you define the attitudes of employees towards CSR?
15. Do you provide to your managers and employees:
a. Training sessions related to CSR?
b. Sessions for feedbacks and discussions around the concept of CSR?
Company’s sustainable control systems
PLAN (long- and short-term goals & budget planning)
16. How are Sustainability long-term goals and plans developed?
a. Who is responsible for defining them?
b. Is it a formal and structured or informal process?
95
c. How does this process relate to the business planning process?
d. How are the Sustainability long-term goals communicated and translated
into the daily operations?
17. What kind of social and environmental targets and measures, both long- and short-
terms do you set? Which aspect has the more weight?
18. How is Sustainability budget set?
a. Who is responsible for setting it?
b. What is included in the sustainable budget?
c. How structured is the sustainable budgeting process?
d. How does this process relate to the company’s budgeting process?
e. What percentage do CSR activities represent in the overall budget?
DO (reporting & monitoring)
19. How do you implement CSR actions?
20. How do you follow-up on sustainable targets?
21. How does the Sustainability internal reporting system work?
a. Which actor(s) is (are) involved in the reporting system?
b. What types of measures are used?
c. How formal is the reporting process?
d. How does this process relate to the company’s reporting process?
CHECK (performance evaluation & rewards)
22. How do your company assess sustainable performance?
23. How much emphasis is placed on financial performance? VS on social and
environmental performance?
24. Is the sustainable performance information communicated within the company? If yes,
to whom? Why? How?
25. Do you use any form of reward systems for sustainable behavior?
a. On what do you base your rewards?
b. Who receives the rewards (top, middle, low-level managers, employees)?
c. What type of rewards do you offer for sustainable behavior and activities?
ACT (implementation & improvement)
26. Does your company use a separate sustainable control system or a common
infrastructure representing both financial and sustainable information?
27. How have your company’s sustainability control systems changed over time? Why?
96
28. Did you use any new method to improve the CSR implementation process?
29. Do you initiate regular small projects to improve CSR or do you have one project
common to everyone that you develop through time?
General questions
30. What are the main strengths of your implementation processes and systems?
31. What challenges did you face when implementing CSR activities?
32. What do you consider to be the most important element(s) to consider when
implementing CSR?
33. What are the barriers to an effective CSR implementation according to you?
34. Is there anything you would like to add, that was omitted in this discussion?
Personal details
35. Can you describe your position, role and responsibilities within your firm?
36. How long have you been working in this company? In this position?
37. Why did you choose this company and this position? How does your company help you
with improving your knowledge and skills?
38. What background and experiences do you bring to your position?
Conclusion
Thank you for your time and your cooperation for this study.
May we contact you if we need any additional information?
97
9.2 Appendix 2: Information Sheet
Thank you for agreeing to participate in our research. This information sheet explains what
the study is about, the role you will have and conditions for taking part of it.
The study purpose, as we previously mentioned with our first email contact, is to investigate
further research on the integration of CSR strategies and activities into Management Control
Systems. Additionally, it aims at identifying and analyzing the variables influencing the
effectiveness of CSR implementation.
In order to get more information on this topic, we would like you to be interviewed by both
of us. If you agree, we would like to audio record the interview in order to be able to listen
again to your explanations and analyze your answers afterwards. Before the interview, you
will receive an interview guide, setting the subjects and questions we will mention. Still, the
interview will be flexible, and we will adapt the questions according to your answers and
knowledge, as well as to the type of company you are working in. If there is information that
you do not want to provide on a specific question, you can refuse answering without providing
any justification.
In order to respect your privacy, your name and email address will not be displayed unless
you want to. With your approval, we would like to use your title in order for us to justify the
selection coherence of the interviewees and better define your role and responsibilities.
If the company you are working for does not desire to reveal its name, we will keep it
anonymous as well as other information that you think should remain confidential.
The information that you will provide will be used only for research purposes. This thesis will
be published, this means that other researchers could access the collected data.
If you disagree with certain of these terms, please let us know, and we will proceed to some
modifications. Thank you again for your participation.