Bringing CSR to the Table – Strategic Dialogue and Stakeholder Management
CSR strategy implementation within business has rightly been heralded as a means of boosting a firm’s environmental performance and working conditions for its employees. However, the grass is only green if managers are willing to engage in proactive, open dialogue with their stakeholders in order to develop such a strategy in the first place. A closer look at the different approaches to CSR discussions with stakeholders shows that all is not as rosy as it would appear in today’s business world. However, the failures as well as the success stories offer important learning opportunities.
The increasing importance attached to CSR strategy represents good news for all proponents of responsible business practice. However, it also means a lot of extra work for managers. Such an across-the-board strategic issue cannot realistically be applied from the top down only, so the input and support of all stakeholders within a private firm or public organisation is required to successfully adopt and then apply such an initiative. CSR strategies vary in content and objectives, whilst the discussion process differs from one institution to another regarding the objective, what are the main subjects discussed, who participates and how often. In addition, in an ideal world, strategic dialogue should lead to concrete actions, which need to be monitored in terms of success. A recent study into a range of French-based organisations has revealed a number of approaches with mixed results.
Reasons to be cheerful
Successful development and application of a CSR strategy hinges on four main factors, underpinned by two main approaches. Firstly, a firm must want to commit, rather than using CSR as a short-term, quick-fix solution to an external or internal problem or threat. Secondly, support needs to come from the very top in order to underline the whole firm’s commitment to the cause. Thirdly, monitoring of subsequent actions is crucial in order to follow up on the implementation process. Finally, third party assessment is also strongly recommended as a means of obtaining an objective view, which can then be shared internally and externally in the interests of transparency and legitimacy.
Once these four boxes are ticked, the firm should open the dialogue in order to raise its chances of successfully devising and adopting a CSR strategy. The first step is to draw a stakeholder mapping and a materiality analysis in order to provide a clear overview of the different parties involved, their expectations and their relationship with the firm. Such an approach fosters trust, provides opportunities to find innovative business solutions and use the newly-devised CSR strategy to road-test new business projects. With all these factors combined, one is inclined to ask how private firms or public organisations could get things wrong. However, the reality of CSR strategy development is, in some cases, far removed from how it looks on paper…
Putting stakeholder management to the test
In order to compare the theoretical model for CSR strategy development and stakeholder management against real-life cases, in-depth analysis of 12 French-based organisations was conducted based upon investigation of five main dimensions with CSR managers: communication style, dialogue framework, frequency, stakeholder profile, and topics covered. In contrast with previous research into the area, a wide spread of organisation types and sectors were placed under the microscope, comprising seven multinationals, five publicly-traded firms, one state-owned, two family-owned, one cooperative, and two public institutions from the construction, food and beverages, pharmaceutical, public services and transport industries. What emerged were four clearly definable approaches, each with differing styles, approaches and objectives.
The first type of dialogue is characterised by a reactive response to a crisis or threat and the use of a CSR strategy as a band-aid solution. Performance ultimately supersedes CSR concerns in the long term and dialogue is ultimately uncooperative. The next identified approach of the dialogue is a veritable Pandora’s Box of opportunities for CSR implementation, generated by very open dialogue but to the extent that the organisations who demonstrated such a tendency could not handle all the challenges faced. Whilst applicable to public organisations, this approach to stakeholder management where consensus is achieved through transparency is not ideal for private businesses. The third trend is typified by a more mature approach to CSR dialogue and the development of tools to support strategy, but above all with a view to avoiding conflict rather than seeking solutions. In short, firms looking to protect their image and reputation first and foremost display this tendency. The final, most proactive approach to the whole discussion and development process sees dialogue held between a variety of stakeholders in order to anticipate problems and build collaborative and sustainable solutions. The goal is to improve the efficiency of the firm as a whole by creating shared value for all.
Margin to experiment
The variety of approaches and mixed results identified via the study may, on the surface, appear to present CSR managers and strategists with equally mixed news. However, what these results underline is that such dialogues do not fit into one model. The type of organisation can heavily influence the ideal approach to adopt. However, what is common to all scenarios is the need to overcome the key barriers of closed and infrequent dialogue, a lack of feedback and using CSR as a short-term, quick-fix solution to a crisis situation. Clear stakeholder dialogue objectives and agendas need to be set and communicated and a wide array of stakeholders involved throughout the process. From there, CSR managers should not be afraid to experiment with different formats and set-ups. With the key building blocks in place, they can avoid the trap of using CSR as a greenwashing PR exercise, instead applying a comprehensively discussed and devised strategy as a real game-changing tool to boost performance.
This article draws inspiration from the paper Stakeholder Dialogue: Strategic Tool or a Waste of Time?, written by Laetitia Guibert and Julia Roloff.
Julia Roloff is an Associate Professor at Rennes School of Business, France. Her research interests include Innovation Management, Academic Entrepreneurship, Economics of Innovation, Science-industry interactions, and Social network analysis.