Communicating Corporate Social Responsibility, Article Critique Example

In this paper I will briefly analyze Susanne Arvidsson’s Communication of Corporate Social Responsibility: A Study of the Views of Management Teams in Large Companies. This is a 10,000 word, 17-page article, now available online in PDF format but originally published in 2010 in The Journal of Business Ethics, an academic publisher of peer-reviewed articles relating to ethics and business. Author Susanne Arvidsson holds a PhD and as of 2009 was with the School of Economics and Management, at Lund University, in Scania, Sweden.

In the article, Dr. Arvidsson studies the problem of both how and why corporations specifically and businesses in general communicate their corporate social responsibility (CSR) policies and initiatives and their results to their employees, stockholders, customers, and the public at large — the involved groups and individuals with the power, legitimacy, and urgency to merit inclusion in the collective of stakeholders. The article is told almost entirely from the European perspective, indeed English seems not to be Dr. Arvidsson’s native tongue. This sometimes causes problems in basic writing skill and even comprehension. It is enough merely to note that a good copy editor would have prevented her use of milder as a transitive verb.[1]

The aim of Arvidsson’s study is to collect and then analyze the views of the investment relations managers (IRMs) of some of the largest companies listed on the Stockholm stock exchange. What she wanted to know from them is what, if anything, they had to say about disseminating their companies’ CSR policies and initiatives to those interested in knowing them. In the next two pages I will summarize the key parts of the study and its relevant disciplines employed; identify the positive and negative aspects of both the research methodology employed, and the logic used to draw conclusions from the evidence gathered.

Arvidsson is clear herself on the main components of her thesis. They are: 1) its theoretical and empirical foundations; 2) its formal methodology; 3) empirical results; and 4) concluding remarks. I would agree, but before beginning, a clarification is in order. The word corporate in corporate social responsibility refers to profit-seeking business in general, not only the twenty-seven stock-exchange listed firms that were directly surveyed as part of the study. The idea, not Arvidsson’s alone, is that only the largest publically-owned companies have an interest in leading by example and thus changing the mindset of the larger business community.

The first key part of the paper, the theoretical foundation, begins with an explanation of what it calls the stakeholder perspective. Unsurprisingly, there is more than one. But the basic idea in common is clear: do socially responsible policies make money, and if not, how should this fact be reported to the stakeholders? This leads to a secondary question: do companies report reactively or proactively, and is the difference good or bad? Both of these questions are derived from a comment that Dr. Arvidsson makes early on in the study, one that essentially lays the empirical foundation: The reasons underlying the decision by management teams to engage in ethical communication are scarcely focussed on. This means she does not go deeply into why there is a perceived need for businesses to even talk about social responsibility in the first place. She is saying (I think) that the reasons are obvious, and she mentions in passing some examples justifying her assumption: the case of Enron, child labor (at third world contractors of first world companies), excessive executive compensation, excessive carbon emissions, etc. (Her named examples are American, while her own study is European). In brief, the empirical foundation for the study is the frequent news reports of companies caught breaking moral (including environmental) law, and statutory labor and tax laws in order to make money. So now the purpose of the paper: how are specific corporations reacting to this, if at all?

The methodology used in the study is two-fold: a questionnaire, and follow-up interviews. The questionnaire itself had two parts: the first to get the recipient’s demographic data, the second to ask Do you see any new trend(s) for the future when it comes to communication of non-financial information?[2] No further information was requested, and ample space provided for an answer. The question was not response-tested beforehand, it being thought unnecessary. Intended respondents were first contacted by phone and invited to participate, but the actual focus of the study (communicating CSR information) was not mentioned. Reminders were sent to ensure a reply, and the response rate was 67%. Of those managers who did respond, seven agreed to an onsite, in-person interview. In the study’s comment section, it was stated that the assumptions of the study were basically validated, with one surprising lesson: that the consensus seemed to be that CSR-information policies were mainly about avoiding loss of value and reputation than adding to it. This, of course, was one of the questions specifically asked.

I will say now that the paper left me skeptical as to its importance or success. In my opinion, it is a good example of a badly conceived and badly conducted project. The problem is in the statement of the problem itself. What, exactly, is the problem? The theory behind the study is that “stakeholders” are interested in companies communicating to them (and so to the world) what the companies are doing above and beyond what is required by law to stay in business, make a profit, and (in the case of publically listed firms) enhance shareholder value. The empirical reason given, the reason “scarcely focussed on”, is the spate of news stories of documented and alleged bad behavior by business. The problem, as I see it, is that the study, being so limited in scope, could only be used to confirm, via a statistical sampling, the conclusions of a hypothetically much more comprehensive study. In other words, the study was far too small in scope to warrant any kind of notice or action on the part of the wider world.

Next, besides listing the least imaginative forms that CSR-communications have taken in the past (accounting and 10-K reports, stockholder meetings, etc.) there was no attempt to define or describe what more creative forms they could and have taken in the real world. Put another way, it totally ignored the fact that CSR programs lend themselves to advertising, a word that does not appear in the study. A perfect example of a company doing just that is Chevron’s We Agree campaign. It seems obvious that any effective CSR campaign would have to take the form of advertising, albeit in the guise of public-service announcements, like the kind that warn against the dangers of smoking, drinking, and driving without seatbelts. Indeed, one may assume that the managers’ written responses to Arvidsson’s questionnaire, as well as their participation in the follow-up interview, was itself a form of advertising — a demonstration of, at least, their willingness to be publically associated with such a study, presumably on the assumption that doing so would reflect well on themselves and their companies. Lastly, the study was far too selective in its respondents. Targeting the top companies listed on the Stockholm stock exchange was fine, but only in conjunction with the targeting of other businesses at other points in the spectrum. The reason for this is subtle but real: to see how many others don’t respond at all. Would the number really be higher for companies of lower profiles — non stock-exchanged listed? To be fair, Arvidsson at least hints her awareness of this problem when she alludes to an earlier study of hers on the reporting of non-financial information in company’s financial reports.

My own comments here shouldn’t be misconstrued. I think the study is useful to the extent of testing the waters for further work. But the larger problem must be addressed first: before making it a policy, one must define exactly what social responsibility is in the first place.

[1] From page 1, Introduction: Both on national and international levels different actions have been taken to better govern companies and, thereby, milder the public opinion and restore society’s trust in companies and in those managing them.

[2] “Non-financial” means CSR.