CRS management profiles- the gap between the thinking and ...



CSR management profiles- the gap between thinking and doing[1]

Valentina IVANČIĆ

Faculty of Economics (University of Rijeka)

Ivana Filipovića 4, 51000 Rijeka

vivancic@efri.hr

Matej ŽIC

Faculty of Economics (University of Rijeka)

Osječka 22, 51000 Rijeka

matej.zic@

Lara JELENC

Faculty of Economics (University of Rijeka)

Ivana Filipovića 4, 51000 Rijeka

ljelenc@efri.hr

JEL : D21, D64, L21, M14

Abstract

The concept of Corporate Social Responsibility (CSR) is increasingly present in the economic literature and helping to explain interactions between the economic entity and environment. Therefore, according to the contemporary economic conditions, it is necessary to accept the complementarity of both business and social goals. Social and firm welfare are often under mutual influence, because without economic development there is not possible for society to prosper and vice versa the development of society cannot be achieved without economic growth. The literature about CSR is very heterogeneous and multiple meanings are generated by different ways of defining the term.

This paper answers the call in the literature for the pragmatic approach in strategic management pointing out a possibility of a multitude of approaches when looking at socio sensible business aspects. Our research is focused on organizational (micro) level of analysis. Managers often present him/herself and the firm in a better light than it really is. The gap between the perceived impact and the real respond to different stakeholders offers a new light in the area of performing research of corporate social responsibility. Two suggestions for improving the quality of results are context based questions and including multiple respondents from firm. The context based questions disclose the manner in which managers will really react in specific situation when social responsibility issues are touched.

The contribution of the paper can be seen in the methodological approach directed to detect the gap between management perception and management reaction in social complex reality.

Comparing what managers a priori tell and the way they prefer to react in specific CSR situations help to identify different profiles of social responsible management, in this paper shortly named CSR profiles.

Key words: corporate social responsibility, gap, CSR management profile

Introduction

Business operations develop as a result of a series of both inside and outside factors that mutually interact. The interacting process respects and incorporates the needs and demands of various stakeholders. Therefore, firms excepting core business development need to take a compulsory action to provide social benefits for those who affect business or are affected by the business.

Corporate social responsibility circumscribes the firm’s set of obligations regarding stakeholders that are directly or indirectly affected by the firm actions, goals and policies. Corporate social responsibility is a continuous dynamic process meant to harmonize and balance the interests of various stakeholder groups. So far, no system of indicators has been unanimously accepted and no methodology has been crystallized for measuring the effect of social effort made in the sphere of social responsibility (Miron, Petcu, Sobolevschi, 2011, p. 162). A win-win situation represents the optimization of both firms’ goals and social goals. But, in practice, the imbalance is the most widespread situation. Therefore, the management team during the strategy formulation and implementation process might anticipate the impact of stakeholders on firms but also vice versa, the firm impact on various stakeholder groups.

From mutual interaction arise two research possibilities:

• the firm perspective - management testing about the CSR applied aspects

• the stakeholders perspective- stakeholders perception and evaluation of firm actions.

It is expected that stakeholders maintain always a high level of criticism towards firms but the question is if it going to be vice-versa. More specific, researchers present a multitude of frameworks that describe different approaches and different aspects of social responsible business.

Our study wants to point out the imperfection of the methodological approach in evaluating management perception when handling stakeholders. The inconsistence between what managers think and what managers do is not a novelty. But, the point is to establish a mechanism to disclose the gap between management thinking and doing. Reflecting about the existing CSR studies (Bourdieu, 1986; Mahon, McGowan, 1991; Mitchell, Agle, Wood, 1997; Basu, Palazzo, 2008), the paper will try to show how to moderate the research approach weighting the gap between “what managers think” and „what managers do”. The purpose of this paper is to indicate a new methodological approach that will compare these two stages in line to improve the quality of research findings about the management transparency according CSR policies.

The structure of the paper includes three working section: the first explains possible implications of stakeholders in the strategy management process, the second represents the methodological approach in defining the gap between management perception and reaction regarding stakeholders and the last one discusses about the implication of research findings and suggests which direction to take in further studies.

Implications of stakeholders impact on strategic management process

The strategic management process implies that management have at least three engagements: defining, conducting and evaluating strategy (Ivančić, 2013, p. 197). In each stage management staff must identify how to incorporate, implement and analyze CSR measures. Inevitably, CSR policies affect strategy performance. So, incorporating CSR requirements in the firm strategy become an imperative, not a choice. Except legal framework, firms have to show willingness to adopt mechanisms for nature and people protection. The CSR concept is therefore an integral part of many wider concepts such as sustainable development, stakeholder theory and corporate citizenship. Different aspects of CSR manifestation are briefly captured by the triple bottom line concept (Elkington, 1997). This concept is often mentioned in the field of strategic management and controlling as an unwritten rule in developing a sustainable business and establishing an adequate performance indicators system. The incorporation of CSR principles in firm strategy is illustrated as follows.

Figure 1. The social responsibility integrative approach

Sustainable strategy as a result of CSR postulates I incorporation in everyday business

Different areas of CSR manifestation: the triple bottom line

Source: authors

The figure 1 represents an integrative approach between firm strategy and CSR postulates. Firms’ strategy represents the firm willingness while the CSR postulates manifest the stakeholders’ willingness and the way they should be involved in the strategy. Firms need a strategy direction that would simultaneously fulfil strategic plans and meet stakeholders’ requirements. During the interaction process each participant can facilitate or hinder strategy formulation and implementation, influencing positively or negatively business and society. Firms seek to incorporate CSR principles into management process to formalize and embed the practice of stakeholder engagement (Grunig, 2007). Practical implications of social responsibility are inevitably entering firms’ missions.

Through years, many international institutions for sustainable development are founded and CSR norms become an integral part of many certificates. The most important institution that promote the importance of social responsibility are: the World Commission on Environment and Development (1987), World Business Council for Sustainable Development (2000), Social Economic Council (2001), the SA 8000 and ISO 26000 certification.

To better understand the impact of corporate social responsibility on the strategic management process we must start explaining how stakeholders groups are defined and what implication they have in realizing firm strategy. Over the years authors gives different interpretations about social responsibility and stakeholders. The level of stakeholder incursion implies different levels of management engagement in social responsibility issues. The most classical approach provides to identify stakeholders’ roles, analyse stakeholder interests and evaluate the type and the level of stakeholder power (Carroll, 1993; Wood, 1994).

There are two major differences in understanding stakeholders’ theory. The first one is the narrow view of stakeholders (Freeman, 1994; Wicks, Freeman, Gilbert, 1994) as a relevant group in terms of their direct relevance to the firm’s core economic interests. Corporate governance is concerned with internal processes rather than external stakeholder groups, implying the transparency in decision- making process (Vrdoljak, Jelenc, Podrug, 2013). The second one is the broad view that firms could be vitally affected or they can vitally affect, almost anyone. The broad view of social responsibility emphasizes a voluntarily managerial approach of taking care about all stakeholders.

Friedman (1970) is somehow considered as the originator of the corporate social responsibility concept as the first who argued who and how affect firms operations.

The Friedman’s view of corporate social responsibility focuses on profit maximization for shareholders. Shareholders may decide if extra profit will be reallocated on improving benefits for other participants or not. In this process the role of managers is crucial. Managers are seen as agents who create value for shareholders. From this arises the term of professional manager (Mencer, 2012, p. 72) who decides how to invest shareholders money.

A more open and extensive view of corporate social responsibility was given by Edward Freeman’s (1984) in the paper “Strategic Management- A Stakeholder Approach”. The topic emerged with the purpose of giving advice to managers how to manage groups and relationships in a strategic fashion. By the Freeman (1984) definition stakeholders are “any group or individual who is affected by or can affect the achievement of firm’s objectives”. According to Freeman & McVea (2001) the central task in the process is to manage and integrate the relationships and interests of shareholders, employees, customers, suppliers, communities and other groups in a way that ensure long-term success of the firm. The point is in an active management of business environment, relationships and promotion of common interests.

Last two decades authors more intensely developed models linking management and social issues. The broad definition demands a management approach that integrates economic, political and moral analysis.

Furthermore, deep connection between social responsibility and competitive advantage is made by Porter and Kramer (2002) who presumes investing in philanthropic activities may be the only way to improve the context of competitive advantage of a firm. From the seminal work of Mitchell, Agle & Wood (1997) stakeholder approach took additional step forward. They identified power, legitimacy and urgency as the stakeholder attributes based on which there could be possible to identify eight stakeholders’ typology. They are: nonstakeholder, definitive stakeholder, dependent stakeholder, dangerous stakeholder, dominant stakeholder, demanding, discretionary and dormant stakeholder. It is important to point that the levels of attribute can vary from issue to issue and from time to time (Mitchell, Agle, Wood, 1997).

Wood et al. (1999) proposes the social issues management model (SIM), explaining that business must be socially responsible in order to survive. Bermas et al. (1999) propose a strategic stakeholder management model which explains connections between firm strategy, stakeholders and firm financial performance. The link between stakeholder management and financial performance as the most common line of research was emphasized by Harrison, Fiet (1999), Berman et al. (2000), and Luoma and Goodstein (2000).

Managerial attitudes and engagement in social responsible activities allow to identify different management profiles regarding to social responsible behaviour they adopt (mgmt.utoronto.ca/~stake, 04/02/2014). Combining the concept of management with the concept of social responsibility arise a new concept: the CSR management profile. Managers are responsible for defining and developing strategies which underpin firm’s CSR objectives. They conduct research, come up with ideas, develop policies, create detailed plans, build relationships with partner organisations, and then implement and coordinate a range of activities and initiatives, which are designed to have a positive impact on the environment ( responsibility-manager.htm, 08/04/2014).

Managers can show different level of sensibility in front of social responsible activities. Cramer and Berman propose four stakeholder management profile derived from the combination of four dimensions: the level of stakeholder engagement, the contest in which managers deliberate and consider different stakeholders claim, the specificity of policies, standards and rules, the breadth of stakeholders' demand recognition. The characteristics of each profile are discussed below.

• The paternalist profile: imply the decision making process is set in isolation from stakeholders opinions and imposed outward with clear, specific implications. It is mainly characterized by internal discussion and contest over how stakeholders should be treated. However, in absence of stakeholders' information exchange, firms tend to allocate value narrowly among specific stakeholder groups;

• The functionalist profile: predicts low levels of stakeholder involvement. Functionalist firms practiced limited communication with stakeholder groups, often prompted by stakeholders claims. Decision processes exhibit low levels of contest;

• The activist profile: firms which actively manage various stakeholder relationships, represent their interests during internal deliberations, and produce specific policies that distribute value to a broad range of stakeholder groups;

• The pluralist profile: is based on a high level of openness to multiple stakeholder perspectives. A firm encourages high levels of stakeholder engagement by opening multiple channels of communication. There is however the risk that the complexity of relationship management causes focus loss.

CSR policies are particularly important in the context of strategic, long-term management process (Mencer, 2012). So, identifying CSR management enables to establish the conditions for firm sustainable development and success.

Methodology

The aim of the research was to denote the gap between the managers’ normative remarks about CSR principles and their actual behavior when confronting one in everyday life. The first one pick down the general management attitudes about social responsibility issues, while the second one reveal how managers prefers to react in front of socio-sensible situations. In fact, the research methodology focuses on the idea the questionnaire has to cover two different principles of questioning in order to reduce the response bias. In this case, the response bias can be manifested if respondents answer questions in the way they think the questioner wants them to answer or by answering what appears to be the morally right answer. The questions are composed respecting the triple bottom line components by including economic, social and ecological aspects and questionnaire was conducted among upper-level managers.

In line to realize the research objectives the questionnaire is composed of three parts. The first set of questions contains items illustrating "what managers generally think about stakeholders’ impact on firm", the second set illustrates "what managers really adopt when faced with social sensible situations" and the third part examines firms’ general characteristics. The comparison of the first and the second part of the questionnaire would enable to fulfill research objectives. Identifying the gap between what managers generally think about stakeholders and the way they really care about stakeholders in concrete situations it is possible to specify different CSR management profiles. Each profile describes the levels of management sensibility toward different stakeholder groups. It permits to weight general management attitudes about CSR issues with their reaction in specific socio sensible situations. Besides indicating the possible difference between words and deeds, it discloses different levels of management sensitivity toward various stakeholders.

To understand the evaluation procedure it is necessary to explain the way the questionnaire is composed.

The first part consists of two questions: the management evaluation of the stakeholder impact on business and the CSR principles ranking. The management evaluation of stakeholders’ importance is designed as a Likert scale from 1 (not important) to 5 (essential). The second question tests how firms rank CSR principles fulfillment according to the Caroll's and Lantos' CSR core domains of corporate responsibility. Levels of social responsibility proposed by Caroll (1991) and Lantos (2002) are applied as follows (Virvilaite, Daubaraite, 2011, p. 535):

• A1 indicates economic responsibility what means "Being profitable, creating good working conditions, providing quality products",

• A2 indicates legal responsibility described as "Complying with laws and regulations",

• A3 indicates ethical responsibility based on "Conducting business in moral, just and transparent manner",

• A4 indicates philanthropic responsibility as a "Voluntarily supporting social movements, investing in well being of society in long term".

The second part of the questionnaire consists in testing managers' reaction in front of socio sensible situations. In our case, five groups of stakeholders were selected (employee, customers, suppliers, local resident and public opinion) and for each group we propose a set of three questions. The respondents had to choose one of four answering options. Each option represents a specific CSR management profile referring to the four profiles identified by Cramer and Berman. Answering options always maintain a regular scoring logic: one point to option A, two points to option B, three point to option C and four points to option D. Each answering options conceal different CSR management profile. The answering option A describes how a paternalist profile prefer to react, the option B describes how a functionalist profile prefer to react, the option C descibes how an activists profile prefer to react and the last one, the option D, describes how a pluralist profile prefers to react in specific situation. To fix the total score it is necessary to calculate the score of each stakeholder and then to summarize the scores of all stakeholder groups together.

So, the paternalist profile is mostly defined by responses under option A, which presumes decision making is set in isolation from stakeholders opinions taking in account only legal framework and nothing more. The functionalist profile is defined by responses under option B which provide limited communication with stakeholder groups and react only if pressured. The activist profile is defined by responses under option C and includes managers that actively and in a proper manner manage and respect various stakeholder relationships. The pluralist profile is defined by responses under option D which highly encourages high stakeholder engagement but often creates confusion because of the complexity of managing the multitude of relationships. Each CSR management profile is directly dependent on the trend of respondents choosing answering options from A to D. More A responses characterized a paternalist profile, more B responses characterized a functionalist profile, more C responses characterized an activist profile and at the end more D responses characterized a pluralist profile.

This means the paternalist profile is characterized by the lowest score while the pluralist profile has the higher total score. In our case, we adopt three questions per stakeholder group, include five groups of stakeholders and get the following combinations:

- the paternalist profile: around 15 points (5 stakeholders* 3 questions * 1 point[2])

- the functionalist profile: around 30 points (5 stakeholders* 3 questions * 2 points[3])

- the activist profile: around 45 points (5 stakeholders* 3 questions * 3 points[4])

- the pluralist profile: around 60 points (5 stakeholders* 3 questions * 4 points[5])

The score is obtained as a product of the number of questions, the score per each question and the number of stakeholder groups included in the analyses. CSR management profile is determined consulting which total score is nearest to the respondent’s one. Score rating may vary due to the number of stakeholders and the number of questions per each group of stakeholders. For example, in the formula we just proposed, these are the first and the second variable. The third variable must remain fixed as it maintains the logic of the four CSR management profiles.

The number of analyzed stakeholders and the number of questions per each stakeholder may vary but it is necessary to maintain the logic of four CSR management profiles during shaping answering options from A do D in each question. It is also important to post the same number of questions for each stakeholder in order to assure the same quality of attitudes testing. Excepting total scores, it is also important to compare scores among various stakeholder groups within the same firm. In this case it is necessary to share the score of each stakeholder with the number of questions describing it, what is done in the second column in table 1. In the first part of the questionnaire it is not necessary to do this because managers are directly asked to evaluate stakeholders’ impact on firm by a single question. Average values ​​are required for drawing radius chart where average score of first and second questionnaire’s part are compared for each firm and stakeholder separately. Using this methodology it can be established the gap between manager opinion and reaction, predisposing the CSR management profile.

The third part includes questions about firm characteristics as the firm activity, year of foundation, number of employees, ownership etc. Firm’ characteristics can be used to discuss and interpret why for some stakeholders the gap is more pronounced then for others.

To make a graphical representation of the research results we proceed in the following way. Likert scale in the first part is set from 1 to 5 in order to give more responses nuances but as we need to compare the results with the second questionnaire part, the results in the first part are weighted with a weight of 0.8 in order to compare the scores on a uniform scale.

The following table synthesizes basic questionnaire constructs and measurement results of several surveyed firms.

Table 1. Questionnaire results

|Questionnaire first part |Questionnaire second part |Questionnaire third part |

|1. Management evaluation of:[6] |1. Average score: |Rehabilitation center |

|Employee: 4 |Employee: 3[7] |13 employees |

|Customers: 0.8 |Customers: 2.33 |Ownership: public |

|Suppliers: 2.4 |Suppliers: 2 |Foundation: 1954 |

|Local residents and authorities: 3.2 |Local residents and authorities: 2.33 |Subjective performance evaluation: average|

|Pubblic opinion: 2.4 |Pubblic opinion: 1.67 | |

| | | |

|2. CSR principles ranking |2. Total score: 34 | |

|A4->A2->A3->A1 | | |

|1. Management evaluation of: |1. Average score: |Graphics design |

|Employee: 4 |Employee: 3 |28 employees |

|Customers: 4 |Customers: 3 |Ownership: private |

|Suppliers: 4 |Suppliers: 3 |Foundation: 1990 |

|Local residents and authorities: 2.4 |Local residents and authorities: 2.33 |Subjective performance evaluation: above |

|Pubblic opinion: 4 |Pubblic opinion: 3 |average |

| | | |

|2. CSR principles ranking[8] |2. Total score: 43 | |

|A1->A2->A3->A4 | | |

|1. Management evaluation of: |1. Average score: |Tobacco production |

|Employee: 4 |Employee: 3 |500 employees |

|Customers: 4 |Customers: 3 |Ownership: private |

|Suppliers: 4 |Suppliers: 3 |Foundation: 1872 |

|Local residents and authorities: 3.2 |Local residents and authorities: 2.33 |Subjective performance evaluation: above |

|Pubblic opinion: 4 |Pubblic opinion: 2.33 |average |

| | | |

|2. CSR principles ranking |2. Total score: 41 | |

|A1->A2->A3->A4 | | |

|1. Management evaluation of: |1. Average score: |Iron scrap trade |

|Employee: 3.2 |Employee: 3.33 |13 employees |

|Customers: 4 |Customers: 3 |Ownership: private |

|Suppliers: 4 |Suppliers: 3 |Foundation: 1980 |

|Local residents and authorities: 2.4 |Local residents and authorities: 2.67 |Subjective performance evaluation: average|

|Pubblic opinion: 4 |Pubblic opinion: 2 | |

| | | |

|2. CSR principles ranking |2. Total score: 42 | |

|A2->A3->A1->A4 | | |

|1. Management evaluation of: |1. Average score: |Auto industry |

|Employee: 4 |Employee: 3 |1000 employees |

|Customers: 4 |Customers: 3 |Ownership: private |

|Suppliers: 3.2 |Suppliers: 3 |Foundation: 1959 |

|Local residents and authorities: 2.4 |Local residents and authorities: 3 |Subjective performance evaluation: average|

|Pubblic opinion: 2.4 |Pubblic opinion: 3 | |

| | | |

|2. CSR principles ranking |2. Total score: 45 | |

|A2->A1->A3->A4 | | |

Source: empirical research

The study contributes to identify the gap between the manager perception and reaction regarding stakeholders. Although, it is very hard to presume reasons of such imbalance, firm characteristics can help to detect why some stakeholders are treated better than others. The optimal situation is those in which reaction justifies opinion and vice versa. Proceeding from this, situations of imbalance includes:

• situations when the reaction score is higher than the opinion score (positive)( stakeholders are overestimated

• situations when the reaction score is lower than the opinion score (negative)( stakeholders are underestimated

According to calculations of average and total scores explaned before we propose to use the radius chart technique in order to achieve a good clearness and visuality of the situation.

Figure 2. Graphical presentation

[pic]

[pic]

[pic] [pic]

Source: empirical research

The gap itself is a fact that directs toward the imbalance within the same person- manager who is actually leading the corporate social responsibility process.

Considering total scores, we rank CSR management profiles. Four of five firms have an activist profiles, while the rehabilitation center has a functionalist profiles what probably depend on ownership form. The functionalist profile indicates very low levels of stakeholder involvement. Management considers that with limited communication can most effectively solve contentious situation, focusing on particular stakeholder groups more than on others. Predicting socio responsible programs in advance is not very common. The activist profile indicates more open approach to CSR problematic. Management accepts stakeholder suggestions and seeks to incorporate stakeholder interests into corporate strategy, although the number of established communication channels and accepted stakeholders needs are less present than in the pluralist profile.

In other words, management may underestimate or overestimate their socio sensible approach. The most common situation is the one in which management overestimates own social responsible initiatives. The most common sources of such situation often arise from the scarcity of resources and available time modifying management intentions. The research instrument in particularly is designed to evaluate overestimation of management perception about stakeholders and to turn their perception to a realistic level. Realistic level means to assess management social responsibility more by deeds and less by perception. Although in a small number of cases firm underestimated social responsibly actions (as in the case of the rehabilitation center versus customers) what means CSR strategy is not clear formulated and implemented. Probably, in this case, CSR activities are not anticipated and management reactions come spontaneously when faced with social sensitive situations.

Considering stakeholders affect firms’ business but also indirectly they affect each other, effect of stakeholders’ network become very complex to follow. An adequate representation of management thinking and doing about social responsible issues become an important instrument to reflect about the reasons firms adopt different approach to different stakeholders.

Furthermore, presenting and arguing deviations between thinking and doing may represent a useful framework to direct social responsibility through decision making process, building adaptive organizational culture for exploiting stakeholders potential.

By comparing the behavior of various firms towards its stakeholders, we reached the following conclusions. The rehabilitation center pays greater attention to employees what is meaningful considering the institution activity. The human factor in such institutions becomes the most valuable resource. In this case, the largest gap between management thinking and doing is reported in users which are overestimated. This means the management reaction score is higher than the opinion score. As the center deals with special programs for children with developmental disabilities, it is expected users will have so high score in the second part of the questionnaire, which measures the management reaction. However, due to the fact that users can not be involved in the decision-making process, their impact is not evaluated as very important, so the score in the first part of the questionnaire is low. For this reason we have an unusual situation when the management reaction score exceed the opinion score. The type of activity and the firm ownership significantly predetermine relationship with stakeholders. The remaining four firms of our case are privately owned firms. In private firms, the most important influential group is represented by shareholders (Friedman, 1970). The impact of competition plays also an important role in private firms. As a results of competition activities suppliers’, customers’ and labor force market conditions constantly evolved.

From the graph one can still read the primary group of stakeholders (customers, suppliers, employees) have generally higher score. So, they are given the greatest attention. Therefore, public opinion and local residents have weaker impact on firms’ business. Interestingly, for iron scrap trader the reaction score exceed the opinion score for local residents. The situation is vice versa in evaluating the public opinion where the reaction score is under the opinion score. Probably, firm feels the pressure of the local residents in terms we just covered by our questions, whereby firm proactively react solving disputable situations. On the other hand, the firm does not consider the impact of general public because there does not exists a current pressure. This clearly indicates the main problematic of social responsibility manifestation: firms react only when stakeholders manifest dissatisfaction and interfere business.

In the car industry firm, for public opinion and local residents, the reaction score is higher than the opinion score for both. This situation points out the inconsistency of CSR policies inside the firm. In this case, probably the firm does not a priori recognize the need for stakeholder management, but in specific situations tries to solve the problem as better as possible for the firm but also for stakeholders. In any case, it must be considered the stakeholder evaluation is based on socio sensible questions proposed by authors. Therefore, the inclusion of new situations can match different results.

Conclusion and suggestions for further research

The proposed methodological gap has useful implications in understanding management sensibility about social issues and suggests why some firms are able to establish a better relationship with their stakeholders than others.

The gap is the fact that will always be present when dealing with the one respondent based research. When the topic of the research is focused on the perception of social responsibility it is always possible to expect the change in the expressed opinion and real behavior in the office. The commonly accepted methodology about one firm respondent and assumption that the opinions and behavior are consistent about the social responsible activities are questioned in this paper. The paper warn about the need for introducing more elaborated research instruments that would care about management caution in exhibiting such titillating beliefs.

The first suggestion is to use more context based questionnaire, for example case-study questions and offer directions of addressing the issue. Only the contextual frame will offer the setting for the more realistic way of reporting management behavior on social responsible issues. The inclination of managers is to present themselves and their firm in the better light than it really is in practice especially when dealing with socially sensitive issues.

The second suggestion is to use multiple respondents from one firm in order to have more reliable attitude and actual behavior received from one firm.

This paper proves that the gap should not be neglected when thinking about the methodology of performing research on social responsibility issues. The gap identification and understanding allow to: clarify weather the CSR strategy really support firm's vision and mission, identify the consistency between the planning and implementation stage, presume the fulfillment or non-fulfillment of promises give to stakeholders, explain the lack of stakeholders' confidence about firm CSR activities.

It would be very useful for further research to introduce an additional part for testing the reasons of gaps occurrence. In this way it will be possible to give a complete picture about the management reflection, the management reaction and the gap understanding about CSR policies.

The social responsibility is a topic that is important to be perceived not only from the managers but also from the stakeholder’s point of view. The social responsibility is targeted for stakeholders and that is exactly the audience that needs to offer the feedback of manager’s decisions and action. If a social responsible process is in place, stakeholders should have an active role and experience the real-time (positive) consequence.

One more suggestion is to reflect about the specific features that surround each industry and to respect them during questions formatting.

How the environment has a very important impact on the firms' business, during the analysis industry characteristics should be taken in account. For these reasons it is considered better to compare the results of firms within the same industry.

References

Basu, K., Palazzo, G. (2008), Corporate social responsibility: A process model of sensemaking, Academy of Management Review, no. 33, pp. 122-136.

Bermas S.L. et all. (1999), Does stakeholder orientation matter? The relationship between stakeholders management models and firm financial performance, The Academy of management journal, vol. 42, no. 5, pp. 488-506.

Bourdieu, P. (1986), The forms of capital, Handbook of theory and research for the sociology of education, New

York: Greenwood, pp. 241–258.

Caroll, A.B. (1979), A three- dimension conceptual model of corporate performance, Academy of Management Review, vol. 4, no. 4, p. 497-505.

Caroll, A.B. (1993), Business and society: Ethics and stakeholder management (2nd ed.), Cincinnati; South- Western.

Cramer, M.J., Berman, S.A.: Dynamic model of stakeholder management, downloaded from , 21/01/2014.

Elkington J. (1997), Cannibals with Forks: The Triple Bottom Line of 21st Century Business, Capstone Publishing, Oxford.

Freeman, R.E. (1994), The politics of stakeholder theory-some future directions, Business ethics quarterly, vol. 4, no. 4, p. 409-429.

Freeman, E., McVea J. (2001), A Stakeholder Approach to Strategic Management, in M. Hitt, E. Freeman, and J. Harrison (eds.) Handbook of Strategic Management, Oxford: Blackwell Publishing.

Friedman, M. (1970), The social responsibility of business is to increase its profits, New York Times Magazine, September, New York.

Grunig, J. (2007), PR is relationship builder, not buffer. PRweek (US Edition). New York, v.10, no 2.

Ivančić, V. (2013), The biggest failures in managing strategy implementation, Interdisciplinary management Research IX, University of Osijek, pp. 197-208.

Jansen, M.C. (2000), Value maximization stakeholder theory, and the corporate objective function, Business Ethics Quarterly, vol. 12, no. 2, pp. 235-256.

Lantos, G. (2002), The ethicality of altruistic corporate social responsibility, Journal of consumer marketing, no. 3, p.205-230.

Mahon, J. F., McGowan R. A. (1991), Searching for the common good: A process oriented approach, Business Horizons, vol. 34, no.4, pp. 79-86.

Mencer, I. (2012), Strateški menadžemnt, upravljanje razvojem poduzeća, TEB Poslovno savjetovanje Zagreb, Zagreb.

Miron, D., Petcu, M., Sobolevschi, I.M.(2011), Corporate social responsibility and sustainable competitive advantage, Amfiteatru Economic, vol. 13, no. 29, p. 162-179.

Mitchell, R.K., Agle, B.R., 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, Issue 22, pp. 853-886.

Porter, M.E., Kramer, M.R. (2002), The competitive advantage of corporate philanthropy, Harvard Business Review, vol. 80, no. 12, 56-59.

Virvilaite, R., Daubaraite U. (2011), Corporate social responsibility in forming corporate image, Inyinerine Ekonomika- Engineering Economics, vol.22, no.5, p.534-543.

Vrdoljak, I., Jelenc, L., Podrug, N., (2013), Izvori konkurentske prednosti u XXI. stoljeću, Sveučilište u Dubrovniku.

Wood, D.J. (1991), Corporate social performance revisited, Academy of management review, vol. 16, no. 14, pp. 691-718.

Wood, D.J. (1994), Business and Society, 2nd ed., New York; HarperCollins.

-----------------------

[1] This article was created due to the project “Corporation strategy-current future” financed by the University of Rijeka starting from 2014, heading the project: Ivan Mencer, full professor.

[2] Predominantly selected answering option A

[3] Predominantly selected answering option B

[4] Predominantly selected answering option C

[5] Predominantly selected answering option C

[6] Management evaluation of stakeholders impact/ average scores

[7] For each stakeholder we calculate the average score of three asked questions

[8] Management ranks four domains of social responsible business (proposed by Caroll, 1991 and Lantos, 2002).

The principle on the left is the most important for the business while those on the right is the less important.

-----------------------

Firm's strategy

CSR strategy

• Profit

• Planet

• People

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download