Keywords

1 Introduction

This article deals with Corporate Social Responsibility (CSR) as economic, ethical, and communicative concept. While CSR has been an issue in business administration, management, and business ethics literature for quite a while, the concept has been taken up by communication science only recently. We want to discuss the issue from different angles: First it seems important to locate CSR at the heart of organizations and enterprises, i.e., as core task with influence on an organization’s goals and business strategies. This is done in Sect. 2, where the main differences between the concepts CSR, Corporate Governance, and Corporate Citizenship are depicted and the economic viewpoint of these is stressed. Second, CSR always has ethical implications, and therefore it needs to be discussed within the antagonist paradigms of shareholder value and stakeholder management, as well as conceptualized as part of business ethics; this we try in Sect. 3. Lastly, CSR and its communicative features will get more important in a mediatized society; communication of and with responsibility is an issue of some importance to mediatized organizations and CSR in the information society. Section 4 is therefore devoted to the communicative challenges for such “publicly exposed” organizations. If it is true that under the premises of changing expectations and broader responsibilities of corporations CSR is a strategic key concept—and we strongly believe this is true—this has not only implications for the organizational structures and the overall strategy, but also for the communication of these responsibilities. As corporations are more and more publicly exposed organizations, any interaction with stakeholders (from any department) will also be monitored under CSR aspects, thus making integrated CSR communication not only a strategic option, but a necessity.

2 CSR, Corporate Governance, and Corporate Citizenship: Basic Principles

The overall question of responsibility of companies and organizations has been an important part of a steadily growing literature in economics, business administration, organizational studies, public relations, marketing and business ethics, to name only a few academic fields. Unfortunately there are at least three distinctive concepts that are in use to deal with this issue, namely Corporate Social Responsibility (CSR), Corporate Governance (CG), and Corporate Citizenship (CC). Sometimes they are used to describe the same phenomenon, sometimes they refer to different empirical matters; in addition, some authors see one concept as part of another and vice versa. In order to bring some clarity to the discussion, we try to differentiate between these concepts as follows.

Corporate Governance is a system of rules to steer companies and organizations according to legal, economic, and sometimes ethical considerations. While CG began to gain importance as an answer to countless enterprise scandals, e.g., in the USA (see Enron, Arthur Andersen or Worldcom), and was devised as a tool to protect shareholders and other financiers, today a more encompassing definition of CG as a system “by which companies are strategically directed, integratively managed and holistically controlled in an entrepreneurial and ethical way in accordance with a particular context” (Hilb, 2006, p. 10) is in use. Defined as such, the concept entails questions of legality and legitimacy. Internationally, there were efforts to devise hard law (legal rules) and soft law (guiding principles) to make companies behave in a self-controlled way. Examples like the “OECD Principles of Corporate Governance” (1999, 2004), the “Sarbanes-Oxley Act” (2002), the “Dodd-Frank Act” (2010), and similar guidelines in Austria (“Österreichischer Corporate Governance Kodex”) and Germany (“Deutscher Corporate Governance Kodex”) show incorporations of these efforts. While they are very different in the contents they provide and goals they want to reach, they are all signs of a “legal” attitude towards governance (even though only few of the regulations are legal in the sense of having become law) and try to impose values from the political realm to the company world. To give a recent example: There have been ongoing discussions as to whether “stock-options programs”, i.e., the payment of bonuses via engaging managers in the profits their company makes (e.g., by giving them stock at a lower than market price), really induce managers to act solely in the interest of a company (and therefore raising its profit rates) or at least partly induce them also to think only in the short run and neglect a lot of duties to stakeholders (see also below), by only giving regard to their shareholders. Many experts saw the latter as being factually the case and therefore recommended cutting those programs. One effect was the putting into effect of the “Guidelines on Remuneration Policies and Practices” by the European Banking Authority, which try to rule out exactly such misbehavior by (in this case) bank managers.

However, it is not only legal requirements (hard or soft) that exercise boundaries on specific management behavior, but also the potential legitimacy of actions. This means that actions can also be governed by influencing management directly, e.g., through continuing education programs or specific management ethics. Organizational structures can also have deep impact on individual behavior as Steinmann and Löhr (1994) have shown in an early work on business ethics. They define ethical problems on the meso-level of an organization, specifically in the organizational structure (e.g., hierarchies, communication, division of labor) and organizational culture (e.g., group think, lacking ethics codex), and demand to give ethical deliberation a “place” in an organization, e.g., by installing an ethics officer or conducting ethics surveys and audits. However, CG rules have been devised first of all to control the behavior of managers as agents of the principals (the shareholders), i.e., to solve the underlying principal-agent problem in capitalist institutions. This is maybe the biggest difference to CSR concepts, as these guidelines focus on individual behavior.

It is exactly the connection of organizations like companies to their social environment, which is at the heart of CSR. The responsibility for stakeholder claims in a time where markets dominate our economic transactions and nation states withdraw from their role as socially responsible actors seems to be left to enterprises and big institutions. Companies are expected to fill the gap governments leave (Roberts, 2006, p. 10ff.) when dealing with internationally mobile capital, environmental disasters or growing unemployment. Ever since the “Greenbook CSR” was published by the EU Commission in 2001, CSR has been denominating social responsibility as voluntary inclusion of social and ecological issues into the economic strategies of a firm (Allouche, 2006, for an overview). Later on the ISO Norm 26000 “Guidance on Social Responsibility” (2010) tried to make CSR operational for company management. One important sign of CSR being alive in organizations is the existence of a “social reporting” (or “triple bottom line reporting”), i.e., reports trying to give a concrete picture of CSR measures pertaining to social, economic, and ecological goals (Cooper, 2004, for “corporate social performance”). Many guidelines (like the “Global Compact” devised by the UNO under Kofi Annan, or the “Global Reporting Initiative GRI”) show possible ways to report figures and measures beyond what is legally necessary; so called “sustainability reports” are another example of this.

Critique on the concept of CSR has come from different angles. Some authors like (business ethicist Freeman) think that CSR is too often a PR measure to “greenwash” doubtful actions. Also, he sees CSR as gaining attention too late along the value chain, i.e., not when production and basic strategies are concerned, but when it comes to “soften” the possibly negative impact of economic decisions (Freeman, Harrison, Wicks, Parmar, & De Colle, 2010, p. 42). Instead of integrating social and ethical issues into the company strategy, CSR comes as an addition to already profit-maximizing strategies. Therefore (ibid., p. 241), the so called “separation fallacy”, i.e., the (virtual and misguided) separation of “business” and “ethics” is prolonged. Ethics must be placed before the value chain starts and legitimate the kind of value creation a company choses to follow. The difficult question of whether responsibility is served best when understood as voluntary action on the side of organizations or when legally prescribed (as in some instances of CG) is part of an ongoing debate in business ethics and not to be solved in this introduction to CSR (see Wieland, 2003, p. 16 against arguments for voluntariness). We will get back to this issue, however, when discussing ethical implications of CSR in the shareholder–stakeholder paradigms (see Sect. 3).

Corporate Citizenship has many parts in common with CSR; to differentiate between the two seems difficult (Schrader, 2003, p. 64ff.). The themes of stakeholder orientation and responsibility for more than economic goals are part of both concepts. However, CC can be understood as a broader concept (see Ulrich, 2001; Wieland, 2003) and focuses on the duties of companies and organizations as citizens. The ethics of an “economic citizen” (“Wirtschaftsbürger”), Ulrich (2001, p. 438) argues, is to adjust entrepreneurial strategies with all stakeholder claims a priori, i.e., before the value chain comes into effect. While in the CSR paradigm responsibility should be taken over within the framework of a given economic structure and market order, a firm as economic citizen is a “pluralist value added institution” that may even have to set back profit interests behind legitimate third claims. This understanding of a company’s “license to operate” has its foundations in discourse ethics (which cannot be further explored here) and would define entrepreneurial duties on three levels (Schrader, 2003, p. 64):

  • CC in a narrow sense: firms are at the intersection to civil society and should be charitable (corporate giving).

  • CC in a wider sense: firms are at the intersection to civil society and the government, and should take over political responsibilities, for instance when competition needs to be restrained (framework order responsibility).

  • CC in the widest sense: firms are at the intersection to civil society, the government, and the economy, and should manage the externalities of their business along the complete value chain, taking care of sustainability, ecology, working conditions etc. (republican business ethics).

We can draft the overall concept of “Corporate Responsibility”, including CSR, CG, and CC, as depicted in Fig. 1 (adapted from Tokarski, 2008, p. 152):

Fig. 1
figure 1

Corporate responsibility

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The basic difference between the concepts can be seen along the value-added chain: While CG deals mainly with internal and external power distribution within organizations and their shareholders/creditors, CSR finds itself along the value added chain, and CC is the embodiment of “republican” duties of organizations outside the value added chain. Encompassing all three concepts is the important topic of “communicative responsibility”, which will be dealt with in Sect. 4.

The criteria for undertaking measures of CSR and CC have three central elements, according to Waddock (2006, p. 24ff.): responsibility, transparency, and accountability. Responsibility is important all along the value chain and product life cycle, and implies the central arguments given above for CSR and CG; transparency needs to be reached by internationally comparable standards (like the above mentioned standards for social reporting); accountability will be reached best when legal prerequisites, like the Dodd-Frank act in the US, make institutions “accountable” for their actions (in the latter example it is e.g., possible for financial managers to be held accountable for wrong information in financial statements).

The economic sense of all three concepts can be seen on the enterprise and the social level and comprises indirect positive effects for companies: Socially, we want stakeholder interests to be safeguarded and principal-agent problems solved, because trust and social capital are important fabrics of economic transactions and GDP in general. All measures deemed viable to prevent firm scandals, company misbehavior and misuse of trust in big concerns should be taken into account and can at best prevent economic crises, as we have seen during the last years. On the company level (Schrader, 2003, p. 78ff.) we can expect better reputation on the market, rising loyalty on the side of clients, better qualified personnel (that prefer to apply for jobs in companies with high reputation), and better investor relations. While some ethical arguments for CSR (and its neighboring concepts CG and CC) have already been given in this section, Sect. 3 focuses on these arguments by giving an account of the opposing concepts of stakeholder and shareholder management and their implications for CSR.

3 CSR in the Shareholder–Stakeholder Debate: Ethical Issues

The alleged dichotomy between shareholder value orientations and stakeholder management is as old as business ethics itself. Basically, as shareholders are one kind of stakeholders, we could say that stakeholder management is the overall term, also encompassing stockholders. But this would be missing the important key point, namely that the stakeholder approach impersonates a completely different philosophy and demands a different thinking from managers. True CSR, we argue in this section, can only be had by managing for stakeholders. Let’s start with a short history of the concept.

The groundbreaking publication of the strategic meaning of the stakeholder approach was Freeman’s “Strategic Management: A Stakeholder Approach” (see Freeman, 1984), where stakeholders were defined as persons or groups of persons having a “stake” (or an interest) in an organization’s decisions and actions, because they are influenced by them. In the early days of the approach it was seen as part of strategic management, helping managers to overcome the (possibly damaging) focus on their shareholders (and their demands for high returns on investment). We could call this approach “instrumental”, as stakeholders are of instrumental interest for an organization’ success. Later on a more comprehensive view came into being, one that is more aligned with ethical considerations in business. In this view, a “stakeholder approach to business is about creating as much value as possible for stakeholders, without resorting to trade-offs” (Freeman et al., 2010, p. 28), which means that one cannot prioritize amongst different claims according to power or financial influence, but only according to ethical legitimization. We could call this approach “intrinsic”, as the value of an organization to stakeholders also gains importance.

Nowadays an approach that can be called “convergent stakeholder theory” (Donaldson & Preston, 1995; Jones, Wicks, & Freeman, 2002) seems dominant in business ethics literature. This view comprises three parts: the descriptive, the normative, and the instrumental part. The descriptive part of stakeholder theory describes how organizations actually deal with their stakeholders; the instrumental part tries to show how this behavior influences the “balance sheet” of an organization; the normative part tries to give philosophical foundations and reasons for why organizations “should” manage for stakeholders. These arguments can be derived from many normative considerations and form the “normative core” of stakeholder theory. Freeman et al. (2010, p. 213ff.) name Kantian approaches (stakeholders as means, not as ends), contractarian theories (enterprises as networks of contracts), discourse ethical considerations (stakeholders must be enabled to legitimate their claims as equal and free persons), social contracts (all stakeholders and an organization agree to cooperate for mutual benefits), liberal theories (personal freedom and voluntary co-operations on the market), or justice theories (e.g., justice as fairness).

It is important to see the realm of stakeholder approaches: they were developed for organizational ethics and questions of strategic management (Phillips, 2003). As such, they cannot solve problems above the meso-level, e.g., questions of human rights violations by enterprises; also, concepts developed for macro level ethics, like social contract theories, are not apt to solve organizational ethical dilemmas (they only provide the groundwork for legitimating the approach itself). This point needs to be stressed, as many critiques of this approach stem from the belief that stakeholder theory is an all-encompassing ethical theory. Similarly, it is not true that all stakeholders need to be treated equally, which of course would make stakeholder management an impossible task in everyday management. The distinctions between primary, secondary, and tertiary stakeholders (see Fig. 2, where the inner circle comprises primary, the outer circles secondary and tertiary stakeholders), or between normative and derivative stakeholders (i.e., those to whom strong moral obligations are owed and those who can benefit or damage the organization, but cannot expect moral obligations, e.g., the media or competitors) show this point clearly.

Fig. 2
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Primary, secondary, and tertiary stakeholders (source: Karmasin, 2015, p. 344)

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In an ethical approach, not only primary and secondary, internal and external stakeholders (stakes), which have the ability to affect the company in its portfolio, should be included in business decisions, but also those who are affected by decisions and actions of the company. In an ethical notion of responsibility, or in an “intrinsic approach” (see above), also those stakeholders not able to articulate their interests directly or indirectly should be taken into consideration. For these claims we have (see Karmasin, 2015) suggested the term “tertiary stakes” and “tertiary stakeholders”. These comprise e.g., future generations, the natural environment, fundamental values of human society, or the common good. From a mere economistic perspective, these stakes would only be considered in business decisions if they affected the strategic existence of the company. So at least the consideration of these stakes could be exploited as a symbolic difference in the sense of marketing the company as ethical consumer, ethical investor or ethical employer. From an ethical perspective, these stakes (if affected by actions of the company) should be considered out of responsibility or fairness. In our understanding, only the definition and the range of stakes (stakeholders) included in management decisions can prove whether stakeholder management serves only as “Sunshine Value” to claim legitimacy (as long as business is not affected) and as part of “greenwashing”, or whether it is a credible corporate ethical commitment.

For an ethical conception of stakeholder management it is also important to see how the “efficiency” argument comes into play: it is often argued that managing for shareholders only is the “efficient” way of doing (and understanding) business. Management can rely on one (and only one) function of an enterprise, which is maximizing shareholder wealth. This is efficient, because maximizing implies an operational calculation of this value and doesn’t need balancing; it is also efficient as a guideline for everyday management of an organization, as managers can focus on one group and its interests. But efficiency has a normative meaning as well, and maximizing means one cannot do anything else, but satisfy shareholder claims. Would a manager recognize any other claim and try to give it some weight, the whole maximizing effort falls apart: you can only maximize one (and only one) function. As Donaldson and Preston (1995) have put it, you have to declare and make transparent your normative claims, no matter if you are an adherent of a shareholder or stakeholder approach. Freeman and Evan (1993, p. 262) make clear: “The stakeholder theory does not give primacy to one stakeholder group over another, though there will surely be times when one group will benefit at the expense of others. In general, however, management must keep the relationships among stakeholders in balance. When these relationships become unbalanced, the survival of the firm is in jeopardy”. Stakeholder Management is an alternative within capitalism, not an alternative to capitalism, in order to balance economical and ethical performance.

Taken together, the above arguments seem to speak in favor of stakeholder management as part of CSR, although theorists like Freeman are critical of an equalization of CSR and business ethics (see above), because of business ethics dealing with the complete value chain of organizations and their respective external effects, and CSR being applied too late in the process of value added. However, if CSR argues for an inclusion of social and ecological arguments into a formerly economic and strategic alignment of organizations, the ethical foundations of the stakeholder approach combine strategic and ethical elements of CSR.

There remains an important issue to be dealt with in this approach, namely finding an answer to the itching question of how to operationalize stakeholder management, giving it more flesh by measuring and indicators. We do not have the space here to depict this problem with all its implications (Karmasin & Litschka, 2008, p. 159ff., for a more detailed discussion) but want to hint at some possibilities to reach this goal:

  • Economically, one could try to calculate a Return on Investment of stakeholder relations, as Figge and Schaltegger (2000) show with their concept of a “Stakeholder-Value-Added”.

  • The Balanced-Scorecard concept (Kaplan & Norton, 1997) shows the relative contribution of different organizational parts to the overall strategy and goes beyond purely monetary indicators.

    Ethically, Bowie and Dunfee (2002) show a classification of stakeholder claims and the correct answering strategies by enterprises.

  • Bowie and Werhane (2005) give an account of Kantian approaches to stakeholder management, thereby also staying in the realm of ethics, instead of instrumental thinking.

The dominant approach in business administration and neoclassical economics, to always give preference to utility maximization and shareholder wealth, has come under severe pressure during the last decades. Moral misbehavior by managers, financial crises, economic and ecological scandals, rising unemployment rates and gaps between rich and poor, and many more things, may of course not be solved by CSR and stakeholder management. Nevertheless, these two concepts as part of business ethics seem the only possible backlash to the one-sided principle of shareholder-centered management.

4 Communicative Aspects of CSR for Mediatized Organizations

The last section depicts our understanding of companies as publicly exposed organizations and the rising responsibilities that come with this development. As we argued elsewhere (Litschka & Karmasin, 2012), in a mediatized society characterized by ever rising communication possibilities, communicative complexity, and communicative aggregation, where media take over considerable parts of structuring society as a whole, organizations are also subject to mediatization. Media provide information and moral orientation at the same time and have become the most important storyteller about society itself (see Hjarvard, 2008, p. 7). The “mediatization of communication” (Krotz, 2001, p. 19) also touches on the role of economic organizations.

Organizations in general, and enterprises in particular, use media-related ways of generating value added (e.g., in process management, workflows, channel management, customer relationship management, collaborative working environments, etc.; see Doyle, 2002, or Picard, 1989, for media economic analyses including these technological and business model features). Also, the mode of communication with stakeholders is changing, e.g., via social media applications or Web 2.0. Enterprises develop into social contractual and interactive organizations, and it is communicative processes, not only the allocation of resources, which define their boundaries.

In communication science and business ethics we talk about enterprises being “publicly exposed” or “quasi-public” institutions, meaning that no matter if the organizational form (and the means of production) may be private, it always operates in the public and must legitimize its actions within a potentially unlimited public. “Publicity” in this sense is the necessity and possibility to publicly exchange and legitimize views of the world and moral claims. Social claims return to organizations, and organizations determine social claims; this recursive constitution of organization and society, deemed by Giddens as duality and recursivity of structure, can be found in the analyses of e.g., Saxer (1999), Schmidt (2000), or Ortmann (2002), who understand organizations as communicative constructs. Via such communicative power (which not only lies in media companies, but any organization operating in the public and with communicative means) organizations also have great responsibilities. If it is true that organizations like schools, universities, media, production companies, financial institutions decide upon possibilities to purchase, chances in professional life, gainful employments, uses of time, structure networks, produce real and social capital, and simply construe the world for us, they automatically become moral instances with ethical responsibility (for arguments that enterprises have such responsibility see e.g., Göbel, 2006; Karmasin & Litschka, 2008; Noll, 2002; Ulrich, 2001).

Taking CSR seriously also in this communicative sense would mean that organizations communicate their responsibility in a transparent and credible way.

This comprises ways to institutionalize ethics within the organization, e.g., by installing an ethics officer or producing an ethics code, and making accountability possible, e.g., by introducing new forms of disclosure. One example for this last point would be triple-bottom line reporting (using indicators for economic, social, and ecological performance). Weder and Karmasin (2011) even suggest a “quadruple bottom line” insofar as the whole issue of institutionalizing ethics and commitment must be understood communicatively, as well. They demand to connect framework order and individual ethics in organizations by communicatively operationalizing ethics (through reproducing it and providing incentive systems); outside the organization must be bounded to society via communicative methods. In this understanding, “Corporate Communicative Responsibility” is the fourth dimension of the triple bottom line; hence the “quadruple bottom line”, depicting the way how responsibility is communicated and how communication is done responsibly. Communicating “with” responsibility would of course include the use of new forms of communication (stakeholder dialogues, stakeholder assemblies, stakeholder participation via social media…) and is the other side of communicating “of” responsibility (via e.g., new disclosure methods, see above). This also implies an integrated approach to CSR communication, as any public engagement of the organization will be monitored. The internal labeling and organizational structure (e.g., as marketing, advertising, public relation) is not decisive—the key point is communicating with responsibility in any aspect and via every channel. This highlights the necessity of an integrated strategy for CSR communication that focuses not only on communicating corporate responsibilities but to communicate with responsibility.

5 Conclusion and Outlook

Following Ulrich’s (2001) conception of a republican-liberal duty of economic organizations to legitimize its actions and decisions in front of the unlimited public, the “license to operate” of organizations does not stem from profit goals, but from balancing stakeholder interests and providing value added for all stakeholders. The stakeholder approach seems to take this argument seriously and should be the organizing principle within a CSR-orientated firm or organization.

We tried to give a complete picture of CSR as economic, ethical, and communicative concept: CSR is more than just the question of “governing” power within companies, and it is more aligned to strategic questions than would be a macro-level understanding of Corporate Citizenship (though they share some features like responsibility for non-profit goals). We then discussed ethical implications of CSR within the antagonism of shareholder and stakeholder management and argued for the inclusion of primary, secondary, and tertiary stakeholders in the organizational decision processes. Lastly we connected CSR with the rising communicative tasks (communication of and with responsibility) of organizations in a mediatized economy. The communication of and with responsibility demands new ways of institutionalization of ethics (giving ethical deliberations a concrete place within an organization) and new ways of communication (two-way communication with stakeholders).

As digitalization and mediatization are only at the beginning and the change of the corporate landscape has just begun, the field has heuristic potential. In our understanding it will be interesting to monitor how companies embrace the new possibilities of communicating responsibility and if there are differences across industries and cultures regarding the degree of integration of CSR communication, the organizational structures, the channels of communication and of course—the content of the communication. We are convinced that this topic will stay on the agenda for quite a while: inside academia, but also in the corporate world.

6 Exercise and Reflective Questions

  1. 1.

    What are the main differences between CSR, Corporate Governance, and Corporate Citizenship?

  2. 2.

    What are the most important ethical arguments for undertaking CSR?

  3. 3.

    What makes stakeholder management different from shareholder orientated approaches?

  4. 4.

    What are primary, secondary, and tertiary stakeholders?

  5. 5.

    To what extent is stakeholder management a “meso-level” ethics?

  6. 6.

    Explain the concept of “publicly exposed institutions” and the responsibilities that come with this understanding of organizations.

  7. 7.

    What is the “recursive constitution” of organizations in a mediatized economy?

  8. 8.

    How can ethical deliberation be given a “place” in organizations?

  9. 9.

    Why does CSR lead to the need for integrated communication?