Keywords

1 Introduction

A few years ago, one of the authors of this paper stumbled upon a sign that had been sprayed on a sidewalk in Melbourne, Australia stating: “Iceland is the freest country on the planet!” (Australia is on the exact opposite side of the globe from Iceland)—an excellent reputation indeed, at least for the liberally attuned. Furthermore, Iceland, along with the other Nordic countries, has been seen as a country which lays emphasis on socially responsible business, gender equality and sustainable development. Moreover, it seems to symbolize the aspiration towards key human values. If this is actually the case, it might be interesting to ask if Icelanders stand for something universally meaningful in how they go about things. So what can we learn from the Icelandic companies that have been identified as excelling at management in our search for insights that might have universal implications for the project management profession?

According to the Oxford Dictionary, excellence means: “the quality of being outstanding or extremely good”. But what makes a business excellent? Quite a few models claim to measure business excellence. In this paper, I will be taking a closer look at four internationally recognized business excellence models. In the book “Afburðastjórnun”, the authors investigate three excellence models and discover that they have a lot in common, e.g. they all measure success as having met or exceeded the expectations of four key stakeholder groups; the clients, the employees, the owners and society, for at least three consecutive years [1]. In Iceland there are a few awards that reward companies for performance excellence in a specific area. What do those awards mean, and is a company with an award more excellent than a company without one? One of the Icelandic awards is given by the company Credit Info and is the Outstanding Companies Award (Icel. Framúrskarandi fyrirtæki). According to the company’s website, outstanding companies build their operations on solid ground and grow the interests of investors and shareholders. Its main purpose is to reward companies for doing good and contributing to a better business environment [4]. To be an Outstanding Company, nine financial figures or financially related measurements must meet a standard set by Credit Info [3] If we were to compare it to the business excellence models, it would fit nicely into the “expectations of owners” part.

Another award is the Exemplary Company Award given by the labour union VR. It measures nine key factors in the employees’ work environment, management, workplace morale, salary, work conditions, flexibility, independence at work, company image, happiness and pride and lastly, equality. A survey is sent out to the employees, and the award is given to those fifteen companies which get the highest score in each of the three predetermined size groups [30]. Again, if we were to compare this award to the business excellence models, it would cover the “expectations of employees” part.

But is getting either of these awards enough for an organization to be truly excellent? An organization which gets both awards can be said to have met and/or exceeded the expectations of two of the four key stakeholder groups. What about the other two? Corporate Social Responsibility (CSR) awareness is on the rise, and as our society becomes even more transparent, the image of an organization can quickly be destroyed with a few pictures or quotes on social media. There are signs that this trend will only increase as a CSR survey done in 2017 by Cone Inc. finds that 79% of Americans expect companies to keep improving their CSR efforts. 87% also said that they would buy a company’s product if it advocated an issue they cared about. 92% say they have a more positive image of a company when it supports a social or environmental issue, 87% are more likely to trust the company and 88% are more loyal to it. On the other hand, 88% would stop buying products from a company if they learned it was irresponsible or deceitful, and 50% reported that in the past 12 months, they had done just that [5].

In this paper, we investigate how the companies that have received both of these awards meet the fourth criterion of the excellence models in an effort to try and answer the question: Are “excellent” companies in Iceland socially responsible?

2 Literature Review

This section briefly describes four internationally recognized business excellence models; the Baldrige Excellence Framework, the EFQM Business Excellence Model, the Canadian Framework for Business Excellence and the Shingo Model. It will highlight what they have in common and what they can tell us about measuring the excellence of an organization. It will then briefly go into the topic of Corporate Social Responsibility (CSR) and how it can be measured.

2.1 The Baldridge Excellence Framework

In 1987 the Malcolm Baldrige National Quality Award was created, with the goal of increasing the competitiveness of U.S. organizations by focusing on quality. The scope of the awards has since expanded to organization-wide excellence [18]. The award focuses on performance and outcomes in five key areas; product and process, customer, workforce, leadership and governance, financial and market. To receive the award, an organization must meet the Criteria for Performance Excellence, which are a part of the Baldridge Excellence Framework, Fig. 16.1 [19].

Fig. 16.1
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The Baldridge excellence framework

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The framework focuses on seven critical areas as displayed in the blue shapes on the grey platform in Fig. 16.1. It is based on 11 beliefs and behaviours which have been found in high performing organizations, shown in the blue base of Fig. 16.1 as core values and concepts. According to the framework, performance excellence consists of three things; improving value delivered to customers and stakeholders, improving overall effectiveness, and more knowledge for the organization and employees [2].

2.2 EFQM Excellence Model

In 1988, to promote higher standards, leaders from fourteen companies founded the European Foundation for Quality Management, now the EFQM. In 1991, the EFQM Excellence Model was launched, and in 1992 the first EFQM Global Excellence Award was given. Since then, the model has been developed and extended [6]. The EFQM Excellence Model is based on nine different criteria as seen in Fig. 16.2, as well as on the Fundamental Concepts of Excellence, which are eight principles [7].

Fig. 16.2
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EFQM excellence model

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The framework is supposed to help organizations understand the relationship between what they do and what they achieve and assumes that an excellent organization will comply with the ten principles of the UN Global Compact [7]. According to the Excellence Model, “Excellent Organisations achieve and sustain outstanding levels of performance that meet or exceed the expectations of all their stakeholders” [7].

3 Excellence Canada

The National Quality Institution, now Excellence Canada, was established in 1992 by Industry Canada. The goal was to help organizations perform better and become more globally competitive by providing best practices [9]. The framework has since been expanded, and a more recent development is the Excellence, Innovation and Wellness Standard. The standard is split into five drivers; leadership, processes, people, customers and planning (Fig. 16.3) and claims to ensure that “organisations achieve the best results possible across all areas” [8].

Fig. 16.3
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The drivers of excellence

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The standard has a four-level staged approach to certification and organizations with a certification can apply for the Canada Award for Excellence. The definition of excellence is “meeting and exceeding rigorous standards and requirements, demonstration of continuous improvement, measurement of progress and verification” across all five drivers [10].

3.1 The Shingo Model

The Shingo Model was created as a part of Utah State University in 1988. The programme’s goal is to recognize the best in enterprise excellence throughout the world. When using the Shingo Model, an organization’s culture is aligned with the Shingo Guiding Principles [24] in Fig. 16.4.

Fig. 16.4
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Shingo guiding principles

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The framework revolves around the three insights of enterprise excellence. All three insights are about how to influence culture and people’s behaviour towards the Shingo Guiding Principles. The first insight is about how that ideal behaviour will get ideal results. The second insight says that behaviour is driven by purpose and systems. The third insight states that if principles are behavioural rules that have consequences, then the better people understand the principles, the better they understand ideal behaviour. “Operation excellence requires ideal behaviour that translates into consistent and ideal results” [24].

3.2 Intersections

If the basic ideas of each of the models are compared, a certain trend begins to appear. The main concepts can be sorted into six dimensions; Leadership, Vision and strategy, Continuous improvement, Processes, People, and finally Universal success and Systematic approach. According to the models, excellent management of these six dimensions will lead to excellent performance when it comes to meeting or exceeding the needs and expectations of the four key stakeholder groups, the clients, the employees, the owners and the community [1]. In Table 16.1, the intersections of the models are shown by sorting their key concepts into the six dimensions.

Table 16.1 Excellence models and their intersections
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When we compare how the models define excellence, another trend appears. The key drivers of success can be grouped into fulfilling or exceeding the needs of four key stakeholder groups; the customers, the employees, the owners and society [1]. In short, according to the business excellence models, an organization cannot be excellent if it leaves out one of the four groups.

3.3 Corporate Social Responsibility

Festa is the Icelandic Center for Corporate Social Responsibility. It is a member-based not-for-profit association of organizations in Iceland. It is “dedicated to raising awareness of CSR and sustainability among Icelandic businesses and the general public, as well as supporting its member organizations in implementing sustainability and CSR into their strategy and day-to-day operations.” [11]. According to FESTA, “In its purest form, corporate social responsibility (CSR) is about companies taking responsibility for the impact they have on people and the environment” [12]. Socially responsible companies organize their operations in a way that will not impact society or the environment in a negative way. There are many ways for an organization to practise CSR, and here I will name a few. An initiative named The Global Compact was established in July 2000 by the United Nations. Its mission is to “mobilize a global movement of sustainable companies and stakeholders to create the world we want” [27]. The compact is based on ten principles, which cover human rights, labour, environment and anti-corruption [28, 29]. In 2015, 17 highly ambitious goals were set in order to make the world a better place by 2030—The Global Sustainable Development Goals of the United Nations. The agreement involves sustainable developments on social, economic and environmental scales [13].

The International Organization for Standardization (ISO) brings experts together in order to share knowledge and develop standards with the aim of ensuring quality, safety and efficiency. It is an independent, non-government international organization [14]. One of those standards is ISO 26000: Guidance on social responsibility. It helps organizations be more socially responsible. It helps organizations to create effective actions and shares/share best practices [16]. The ISO 14001: Environmental Management Systems is grounded in mapping out a framework that establishes an effective environmental management system. A company with an ISO 14001 certification can measure and improve its environmental impact [15]. ISO 45001: Occupational Health and Safety Management Systems provides a framework a company can use to improve the occupational health and safety (OH&S) in the workplace [17]. IST 85 is the Equal Wage Management System. According to Icelandic laws, companies with 25 employees or more must be certified according to this standard to show that they are respecting the equal wage act [23]. Every company that has 25 or more employees must fulfil this standard, but the time limit for certification varies, depending on the company size. The range is from 31st December, 2019 to 31st December, 2022, with the smallest companies having the longest time [23].

4 Research Method

The objective of this research is to determine to what extent companies that have been deemed as excellent in Iceland are socially responsible. The authors try to achieve this by determining which companies are excellent according to the business excellence standards and measuring how socially responsible they might be deemed to be.

4.1 The Excellent Companies

In this research, excellent companies were determined/identified as all companies that appeared on Credit Info’s Outstanding Companies list and VR’s Exemplary Companies list in 2018. The lists of the 2018 winners were cross-referenced to find the companies which were on both lists. In total, the companies were 25. They ranged from small to medium to large, small having less than 20 employees and large more than 50. The size distribution between groups was almost completely even, with nine small companies, eight medium-sized and eight large ones. E-mail addresses of managers and directors were then found on company websites or by calling the companies.

4.2 The Survey

Originally, the authors wanted to interview all the companies. However, once they reached the final number of 25 companies, this was not deemed to be feasible for a paper of this scope. Then the choice was between getting a small glimpse of many of the companies or choosing three or five and getting detailed information from them. The benefits of doing a survey are that it offers an easy way to reach all the companies, which in turn, if the response ratio is sufficient, returns a broader spectrum of answers. Therefore, the authors resorted to doing a survey among these 25 companies.

The survey was sent to the CEOs of each of the “excellent” companies, followed by a reminder a week later, and a phone call in the course of the last days of the survey, so as to get a better response ratio. The survey was open from 16 April, 2019 to 3 May, 2019. It comprised nine questions, seven of which had yes or no answers and two of which were multiple-choice questions. A copy of the survey can be requested from the authors. In the end, CEOs of 19 companies answered the survey, making the response ratio 76%. It was a good mix of small to large companies, 8 small, 5 medium and 6 large corporations.

The survey questions addressed each company’s social responsibility to four different groups of stakeholder/interested parties in the business excellence models; customers, employees, owners and society. As the authors started to assemble the survey, they decided to focus more on society and “making the world a better place”, rather than on the other three groups. The reasons for leaving out the employees was that the companies had already been given the Exemplary Award that covers that part extensively. Furthermore, since the response was based on a self-reflection, the authors did not think it would give an accurate depiction of the current status on behalf of the customer group. The same applies to the shareholders (owners)—that is, they were not asked.

Quite a few articles have been written about how to measure CSR. However, none of the methods claim to be the best one. As a result, the survey questions were taken from a few different directions, some from the business excellence models, while others were from articles written on the subject. The authors tried to have a broad range of questions; global impact, the environment [26], standards, social initiatives [22] and finally whether CSR was incorporated into the company strategy and vision.

4.3 Limitations

When reading the survey and the interpretation of results, it should be borne in mind that the authors are approaching the subject out of interest rather than expertise. Also, there are a few limitations that must be addressed: (1) Firstly, an assumption is made that the awards chosen as a starting point are close enough to the corresponding dimensions in the business excellence models to be real indicators of excellence. (2) A second limitation is the companies themselves and the fact that they vary greatly in size, ranging from less than 20 to more than 100 employees. Also, the Exemplary Award survey is sent to all employees of the companies it evaluates. However, not all employees of every company answered the Exemplary survey done in 2018, and the response ratio ranged from low, 35–49%, to high, 80–100%. However, in the case of the survey conducted for the purposes of this paper, 14 of the 19 companies had a response rate of 80–100% in the Exemplary survey, with only one company in the 35–49% interval/range. (3) Finally, the measurement of CSR is not straightforward. A lot has been written on the subject, but each method has its limitations. A survey this size can never take into account all of the company’s stakeholders, e.g. employees, customers, society, government, competitors, environment, future generations and nongovernmental organizations [26]. Also, since 11 of the 19 companies answered the survey independently online, the respondents may not have understood the questions in the way that the authors meant them to be understood. Therefore, the survey can only ever offer a glimpse of the real situation.

5 Research Results

The results are based on the answers of 19 companies to the nine questions in the survey. Eleven companies answered through an online survey, the other 14 companies were called up and asked to answer the survey via telephone with eight of them eventually reached and/or willing to answer. The questions were then sorted into the two different groups, local community and making the world a better place.

Seven questions were assigned to the local community group. The questions were: (1) Does the company offer jobs for disabled people? (2) Does the company support causes concerning people with disabilities? (3) Does the company offer different methods of practicing sustainability? (4) Does the strategy or vision of the company involve CSR? (5) Does the company fulfilled three different standards? (6) Does the company strategy and or vision involve social responsibility? (7) Does the company strategy and or vision involve social responsibility?

It turns out that most of the companies, i.e. 15 of them, support some causes concerning disabled people, while six offer jobs specified for them, see Fig. 16.5. During a phone call, one company mentioned that it offered jobs for people trying to get back to work after burnout or a long-term illness, and another said that they did not dismiss people of retirement age who wanted to keep working, the oldest person still working being 75 years old.

Fig. 16.5
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Answers to Q8 and Q9

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Almost all of the companies, or 16, practise corporate social philanthropy and many, 13, are also socially responsible in their business practices, Fig. 16.6. On the phone, one of the companies also mentioned that they regularly donate items to those in need.

Fig. 16.6
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Answers to Q7

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A total of 15 answered that either or both the vision and strategy involved social responsibility, Fig. 16.7, and 11 of those answered yes to both. Only four out of the nineteen answered that neither of them did. One of the companies which answered the question with a no mentioned that even though it was not written down, they had an informal strategy of never turning down people that asked for donations.

Fig. 16.7
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Answers to Q6

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Questions one, two, four and five had to do with making the world a better place. They pertained to whether the company was a member of Festa, whether it had signed Festa’s climate declaration or set itself climate goals and also (pertained? is this the sense?) to the two UN initiatives, the Global Compact and the Global Goals for Sustainable Development. Only two companies were members of Festa (Fig. 16.8), which is an Icelandic non-profit association. Its role is to increase CSR among Icelandic companies as well as to raise awareness of it and of sustainability among the general public. It also supports its members in the implementation of CSR and sustainability [11]. The answer to the climate goal question was an overwhelming 17 noes against 2 yeses. However, in the phone calls made to companies, two answered that even though they did not have a climate goal at the moment, they were in the middle of creating it. Another company mentioned that their eventual goal was to be a leader in environmental issues. Another company mentioned that even though they did not have climate goals written down, their product was very environmentally friendly, which was a primary goal of theirs.

Fig. 16.8
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Answers to Q1 and Q2

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Most of the companies had not signed the Global Compact nor chosen a goal from the Global Goals initiative (Fig. 16.9), with 16 noes against 3 yeses. One company was very interested in these initiatives and asked the authors to send over some information about them. The same three companies that have signed the Global Compact have chosen SDGs. One of them is also a member of Festa and has signed its climate declaration.

Fig. 16.9
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Answers to Q4 and Q5

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Question three was a multiple answer question, which touched on a few different standards and both stakeholder groups. For the local community group, there was ISO 9001, which is a quality management standard, ISO 45001 for health and safety and ÍST 85 for equal pay. For making the world a better place, there were two standards; ISO 26000, which provides guidance on how to operate globally in a socially responsible way and ISO 14001, which is an environmental standard. Out of the 19 companies that answered, 13 did not fulfil any of the standards (Fig. 16.10). When phoned, two of the companies said they had never heard of some of them and asked the authors to send them more information. One company mentioned that they were working towards fulfilling ÍST 85 very soon, and two others mentioned that they would not fulfil it because of their size. Another two companies said that even though they themselves did not fulfil these standards, all their manufacturers did, and a third company said that they were working towards being certified in ISO 45001 and fulfilled the other ones but were certified by a third party.

Fig. 16.10
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Answers to Q3

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When individual company responses are compared, the companies vary, but with two extremes. One company answers all questions but one in a negative way while the other one answers all questions, except one, in a positive way. All the other companies are somewhere in the middle.

6 Discussion

After all of the companies within the survey had been contacted by telephone ?? (via a phone call to those eight companies omit words in this bracket ??), the authors realized that it would have yielded more accurate results to call all the companies and ask the questions herself. The discussions that took place during the phone calls gave the authors a much better insight into what the companies were really doing and showed her a few gaps in her survey. This also helped with a common understanding of what the authors were really asking.

One gap is that the authors did not ask the companies to answer if the company was small, medium or large. This was a significant oversight, and as the authors went through the results, she discovered that it would have been more interesting and would probably have given a more relevant outcome to be able to compare the companies within the same size range. Comparing how the small and medium companies did versus the large ones would also have been interesting, as in the authors’ opinions it is likely that smaller companies are doing less, since they may have to put more focus on day-to-day operations than on CSR. It is impossible to corroborate with this dataset, but the authors’ opinions were strengthened by the phone calls made to the smaller companies.

From the survey results, it is reasonable to assume that the excellent companies are all aware of CSR. The authors then tried to determine how socially responsible the companies were by comparing the questions in the two shareholder groups. Since most of the companies were rather on the small side, (I think) the authors decided to split the local community group into two parts, A and B, and keep the fulfilment of standards as a secondary indicator. This was decided because she did not believe that the questions with the standards were telling the whole truth. Even though the question was not, “Are you certified in these standards?”, many companies she called were doing almost everything right, but as they were not certified, they were not comfortable with answering the questions with a yes. It would have been better to ask the companies questions that were less leading such as “Do you have an operational quality management system?”.

The authors were pleasantly surprised by how well the companies did on part A on local community (Fig. 16.11). All questions got a positive answer percentage of over 60%, except the question about work for disabled people. In the question about different types of CSR practised, two or more types of CRS practised were required for a positive result.

Fig. 16.11
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Local community A—Percentage of companies, co, with positive answers

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A gap in the survey was made clear when one company talked about how they assisted people who were trying to get back to work after, e.g. illness or burnout. This was not addressed in the survey but could have been rectified by having an open question at the end of the survey about what else a company was doing. However, since this came up in a discussion it is not certain that such a solution would have been adequate.

The companies did not do as well in part B. It was disappointing to the authors to see that only one company fulfilled either the ISO 45001 or the OSHAS 18001 standard and just five companies fulfilled ISO 9001. ÍST 85 is a different matter. By law, a company does not have to get certified if it has less than 25 employees, and the first companies have a deadline until 31st December, 2019. Since eight out of the 19 answers were from companies with fewer than 20 employees and the survey was done in the first quarter of 2019, it is not a big surprise to see that only two of the companies fulfil ÍST 85. However, one company mentioned that they were working towards getting certified as soon as possible [25].

In the dimension of making the world a better place, the results were not very positive (Fig. 16.12). However, it was encouraging that one company was very interested in the UN Global Goals and asked the authors to send some information about them, and another wanted more information about the standards. There is definite room for improvement in this dimension, and the authors believe it shows that the companies are more concerned about the local community they operate in than about the rest of the world.

Fig. 16.12
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Local community B—Percentage of companies, co, with positive answers

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The results show many good examples of CSR on a local community scale, but in the end the question is how the companies are doing over both dimensions. It is not possible to say that as a group these companies are socially responsible. On the global scale, taking the first step has been made easy by organizations such as Festa and the UN, and anyone can choose a global goal suited to their operations (Fig. 16.13).

Fig. 16.13
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A Better World—Percentage of companies, co, with positive answers

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Incidentally, to what standard do we hold companies with awards for not only being outstanding but exemplary as well? The premise of this paper is that these companies must be the best. However, the international business excellence models all agree that a company cannot be truly excellent without fulfilling the needs of society and customers as well as owners and employees. The authors fully support the acknowledgment of companies for a job well done, but these award titles are misleading and need to be called something more descriptive of what is really being measured.

7 Conclusion

With the interest in CSR on the rise [5] and the world becoming smaller and smaller as technology advances, the importance of CSR keeps growing. The result of this survey shows that Icelandic excellent companies are more invested in their local community than in the world at large. Of course, everyone must start somewhere, and it looks as if they are off to a good start. However, it must be said that with recent threats to the world we live in, such as Global Warming [20] and an ever increasing plastic pollution [21], thinking locally may not be enough, and it would be a shame if Icelandic excellent companies were to ignore their role in global society.

Compliance with Ethical Standards

We declare that we ensured the objectivity and transparency in our research and that accepted principles of ethical and professional conduct have been followed. Prior informed consent was obtained from individual participants included in the study before the research. No sensitive personal data was accessed. Anonymity of individual participant data is maintained. The research does not require ethics approval, as it mentioned in the waiver no. 11-57-59, issued by the Reykjavík University (RU) Ethics Committee.