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

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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?
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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)?

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2. Four types of CSR approaches
Initiator Focus Bottom-up (business driven) Top-down (government-driven)
Societal responsibilities 1. CSR between business and society 2. CSR between government and business
Labour market responsibilities 3. CSR in business 4. CSR between labour market policy and business
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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
  securityto high job security, high employment
  security and lower social security?

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3. CSR in Denmark
Objectives Possible instruments
Internal social responsibility Prevent exclusion form the workplaces Health and safety procedures, reducing sickness leave, family friendly workplaces, employability, lifelong learning, flexible retirement
Retain persons in risk of exclusion Active assistance to persons with long-term sickness leave or reduced working ability, informal flexible and soft jobs, social chapters in collective agreements
External social responsibility Integrate unemployed persons and the inactive Job creation and jobs on special conditions for persons with reduced working ability (e.g. formal flexible and soft jobs), activation schemes (wage subsidies, training, (re)qualification, job rotation and rehabilitation on the enterprises)
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3. CSR in Denmark
Activation policy CSR as public policy
Focus Labour supply Labour supply and labour demand
Objective Create more flexible unemployed Create more flexible unemployed and a more inclusive labour market
Strategy Integration Integration, prevention and retention
Implementation Hard regulation (binding regulation and sanctions) Soft regulation (information/ persuasion, economic incentives, public services/organisation)
Main actors Public authorities Local partnerships and networks
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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)
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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

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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

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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