Corporate social responsibility (CSR) from public policy to enterprise policy

1. Corporate social responsibility (CSR) from public policy to enterprise policy Thomas Bredgaard, Centre for Labour Market Research (CARMA), Aalborg University, Denmark The research question(s) The issue: Adoption of public policies by private enterprises The case: CSR as a government program in Denmark The question: Under what circumstances and how does private companies adopt public policies? More specifically, how can instrumental (analytical) and operational (empirical) links emerge between social/labour market policy and enterprise policy to alleviate social problems in a voluntary manner and without undermining the capitalist market dynamic? Relevance to the TLM network: Focus on both the supply and demand-side of the labour market (integrative transitions and preventive transitions) – Can CSR as a government program in Denmark be seen as a partial attempt to institutionalise some of the TLM policy proposals? TLM Net, WP5, Rotterdam, 26-27 April 2004

2. 2. Four types of CSR approaches • European Commission (2002): “CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholder on a voluntary basis” • Invalidates cross-national comparisons: What counts as a voluntary social responsibility in one country might be a legal obligation in another country • Instead: Where does CSR initiatives originate from (the business community or public policy)? What is the focus (societal responsibilities or labour market responsibilities)? TLM Net, WP5, Rotterdam, 26-27 April 2004

3. 2. Four types of CSR approaches TLM Net, WP5, Rotterdam, 26-27 April 2004

4. 3. CSR in Denmark • CSR between labour market policy and business (government-driven and narrow focus on labour market responsibilities; integrative and preventive transitions): How can ‘unemployed and employers be activated’ and how can ‘all concerned subjects be ‘responsabilised’ ? (cf. Lathouwer, position paper) • CSR launched as a government policy by the Ministry of Social Affairs in 1994; initially a public campaign • Objective: Make the business community responsible for problems (workplace exclusion and long-term unemployment) that was regarded a public responsibility • A new flexicurity mix? From low job security, generous social security and high employment security…to high job security, high employment security and lower social security? TLM Net, WP5, Rotterdam, 26-27 April 2004

5. 3. CSR in Denmark TLM Net, WP5, Rotterdam, 26-27 April 2004

6. 3. CSR in Denmark TLM Net, WP5, Rotterdam, 26-27 April 2004

7. 4. Analytical framework: Policy instruments and business interests Traditionally: State and market as functionally opposed by different (competing) logics. From a political perspective, there is a tendency to see private enterprises as inferior or subordinate to public actors. From a business perspective, there is a tendency to see public policy as ‘external disturbances’ or irrelevant to the core economic functions of enterprises But: Different types of rationality (economic, normative and coercive, cf. Etzioni 1975), enterprises as coalitions of interests (Cyert and March 1963), short and long-term interests (Ackerman and Bauer 1976), enterprises as political actors (Dahl 1959; Lindblom 1977) Four types of public policy instruments: (1) Regulation (forbid/permit), (2) economic incentives (reward/withhold), (3) persuasion (encourage/discourage) and (4) public activities/organisation (expand/reduce) TLM Net, WP5, Rotterdam, 26-27 April 2004

8. 4. Instrumental links • Private enterprises will adopt public CSR policies if they: • Are perceived as economically beneficial (positive cost/benefit relationship); CSR ‘promises’ more loyal, satisfied and productive employees – and reduces wage-productivity gap • Are perceived as politically legitimate (fair/just/long-term economic interests) • Have sufficient competencies and resources or public authorities assist in reducing lack hereof TLM Net, WP5, Rotterdam, 26-27 April 2004

9. 5. Conclusions: Challenges and potentials of CSR • Congruence between words, decisions and actions, otherwise ‘organised hypocrisy’ • Articulation of unarticulated CSR (especially SMEs) • Conflicts of interests between stakeholders • Contribute to alleviate common, societal problems, otherwise a marketing exercise • Voluntarism is acceptance of non-participation and scattered and incoherent results • Coercion makes stakeholders negative opponents rather than positive partners • If CSR is a response to societal problems, the state and public authorities should not be regarded as any other stakeholder, but need to take an active and offensive position TLM Net, WP5, Rotterdam, 26-27 April 2004

10. 5. Conclusions Four role of public authorities in CSR: Regulate externalities of business behaviour and establish high minimum standards (level playing field) Create favourable framework conditions for CSR: Stimulate and facilitate by persuasion, economic incentives and public services The public sector as employer: Create socially responsible public institutions (leadership by example) Public authorities as a market actor: Attach social obligations to services contracted-out or bought from the private sector CSR evolves contextually with time,environment and national welfare and labour market regimes; therefore, the Danish approach can neither be exported as ‘best’ or ‘worst practice’ – but shows some of the possibilities and limitations of soft government intervention into business behaviour and attitudes TLM Net, WP5, Rotterdam, 26-27 April 2004