Abstract
Changes in social framework conditions, accelerated by globalization or political inventions, have created new societal demands and requirements on companies. The concept of corporate social responsibility (CSR) is often considered a potential tool for meeting societal demands and criticism as a company voluntarily takes responsibility for society. The spotlight of public attention has only recently come to focus on agribusiness-related aspects of CSR. It is therefore the objective of this paper to provide an overview and a critical examination of the current state of research into CSR in agribusiness from different perspectives. Upon that this paper goals to define CSR special cases in agribusiness and derive implications for further research. CSR in agribusiness is a multi-dimensional and complex concept, which is sensitive to ongoing exchange processes between companies and stakeholders. We conclude with the special position of CSR in agribusiness and that future research should focus on adding value to industry-specific CSR aspects in the general CSR framework borrowed from management literature. Explorative fieldwork such as expert interviews with different stakeholders might be suitable for gaining insights into agribusiness-specific aspects of CSR in firms.
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Introduction
Changes in social framework conditions, accelerated by globalization or political inventions, have created new societal demands and requirements on companies. Consumers, especially in developed societies, are increasingly concerned about the social and ecological aspects of production processes. A noticeable shift in their preferences regarding these aspects can be observed when buying food products (Hirschfelder 2001; Hierholzer 2010). Another aspect is the development and growing importance of the mass media, which has lead to more transparency in companies’ activities (Rommelspacher 2012; Vanhonacker and Verbeke 2014) and growing challenges with regard to firms’ public relations activities (Kayser and Theuvsen 2014). Due to these developments, an increasingly critical society demands that companies from all industries take responsibility for their business environment to solve social issues and meet societal expectations. The concept of corporate social responsibility (CSR) functions in this context as a tool for meeting such demands, as CSR means that a company voluntarily takes responsibility for society (Ankele 2005; Dubielzig and Schaltegger 2005). CSR has been a scientific issue since the 1950s, when it was first defined and described in general management literature (e.g., Bowen 1953; Davis 1960; Carroll 1999) and has evolved to a central notion in the corporate world (Engle 2007; Dahlsrud 2008).
As Hartmann (2011) observed, the special role of the agribusinessFootnote 1 sector can be distinguished in many developed economies, for example, Germany. First, the agriculture, forestry and fishery sector used to be an important part of these economies although, in Germany, for instance, this sector provided a share of less than 1 % of total GDP in 2015, it generated a production value of EUR 54.3 bn. in 2013. This is considerably more than the production value of the entire German textiles and clothing sector (EUR 22.3 bn.), the pharmaceutical industry (EUR 42 bn.) or the paper industry (EUR 38.1 bn.) (Meixner et al. 2012; DBV 2014; Destatis 2015). Second, writ large alongside its importance to the economy, food production concerns every individual, as it satisfies basic human needs. Hence, people are generally concerned about the food they consume and the way it is produced (Hartmann 2011; Meixner et al. 2012; Vanhonacker and Verbeke 2014). Third, agricultural production depends to a great extent—in contrast to other sectors—on natural resources, such as soil and water, and on human labor (Hartmann 2011) and has a huge impact on ecological issues such as biodiversity (Hierholzer 2010; Vanhonacker and Verbeke 2014; Winterberg 2015).
As a result, agricultural products and their production have been a part of social discussions since the industrial revolution converted agrarian societies to industrial countries. Since then, discussions about the availability of food and thus food security, gave way to concerns focussed on the quality and ethical aspects of food production. Furthermore, increasing urbanization supported the alienation of consumers from primary agricultural production and increasingly critical public perspectives on production processes (Hirschfelder 2001; Hierholzer 2010). Nowadays, agribusiness is observed attentively and comes under increasing public scrutiny.
Due to food crises, consumers have lost trust and are increasingly critical concerning animal production systems (von Alvensleben 2003; Meixner et al. 2012). Issues regarding intensive livestock husbandry (such as animal welfare), environmental aspects of production (such as reduction of water and energy use, or social aspects like labor conditions) increasingly matter for society (Maloni and Brown 2006; Hartmann 2011) and can lead to lower spending capacity by consumers (Aktar 2013; de Magistris et al. 2014). Albersmeier and Spiller (2008) show in their study of agribusinesses’ reputation, particularly of slaughtering companies, is even worst compared to other industries often criticized by the public such the chemical industry. However animal farming also often has a bad image with consumers. Busch et al. (2015) affirm this in a recent survey on consumers’ attitudes towards keeping farm animals. The critical perception of the industry by a number of stakeholders [e.g., nongovernmental organizations (NGOs), the media, political decision-makers, and the general public] can threaten the reputation and legitimacy of individual companies as well as of the whole sector (Maloni and Brown 2006; Hartmann 2011; Heyder and Theuvsen 2012). Both reputation and legitimacy can be considered important social capital resources that provide access to other resources, such as information (Lin 2001), and serve as a basis for sustained competitive advantage (Nahapiet and Ghoshal 1998; Flint and Golicic 2009) and guarantee a firm or industry’s ‘license to operate’ (Hiss 2006; Ross et al. 2015). Any widespread dearth of these resources could compromise a company’s hopes of long-term economic success (Heyder and Theuvsen 2012). These developments have caused companies in the agribusiness sector to start to think about their social responsibility (Heyder and Theuvsen 2012). So, although societal demands and a need for CSR characterize many industries, the agribusiness sector can be considered to be somewhat special due to the broad spectrum of issues discussed, the predominantly negative connotation of media debate and the extraordinary intensity of public concern (Kayser 2012) making this industry a prime example for an in-depth analysis of the status quo and future research needs regarding CSR.
Until now literature concerning CSR and specifically agribusiness CSR, lacks in various aspects: a common definition of CSR or rather a consensus on what the concept actually implies for the agribusiness sector, for example, does it exist (Dahlsrud 2008; Sheehy 2014). The spotlight of public attention has only recently come to focus on agribusiness-related aspects of CSR. As a result research still remains scarce despite a gradual growth in the body of literature (Hartmann 2011; Heyder and Theuvsen 2012; Ross et al. 2015). Despite the acute relevance of CSR to agribusiness many studies have been more focused on other industry sectors than on agribusiness (e.g., Brown and Dacin 1997; Berens et al. 2005; Kirat 2015). Furthermore, scientific analyses of CSR with respect to food products tend to be conducted from a consumer perspective (e.g., Rommelspacher 2012; Moon et al. 2015) or only tackle specific aspects such as animal welfare (Forsman-Hugg et al. 2013; Hieke et al. 2015), ecological aspects, effects on biodiversity (Forsman-Hugg et al. 2013) or worker well-being and satisfaction (Näther et al. 2015). To date, therefore, a comprehensive overview is missing. Nonetheless existing studies with a managerial focus on CSR have found that it offers great potential for companies in the agribusiness sector as it can have a positive influence on their reputation (e.g., Maloni and Brown 2006; Heyder and Theuvsen 2009a; Mazur-Wierzbicka 2015) and subsequently on their profit (Heyder 2010). Yet once again many effects of CSR and the conditions under which they can be observed so far remain are unclear.
Against the background of these research gaps, the purpose of this paper is to provide an overview and a critical examination of the current state of research into CSR in agribusiness from different perspectives. Upon that it aims to define CSR special cases in agribusiness and derive implications for further research. The remainder of the paper is structured as follows: the second section covers methodology and is followed, in part three, by a presentation of findings of various topics on CSR in agribusiness. This paper closes with future research directions in section four.
Methodology
To compile current knowledge, identify industry specifics and derive future research directions, this paper sets out a comprehensive survey and analysis of the existing literature on CSR in agribusiness. In order to classify and describe existing literature, an analysis framework was developed which enabled systematic examination of the relevant literature under the following headings:
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Definition of CSR
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Motives for implementing CSR
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Variables influencing the implementation of CSR concepts
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Responsibility for and design of parameters for CSR
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CSR and firms’ performance
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Communication of CSR
The literature review referred to a number of electronic and hardcopy sources. Initially it included all economic agricultural journals from their first publication as listed in the comprehensive German-Austrian GEWISOLA/ÖGA journal ranking (Dabbert et al. 2009) using the search terms ‘CSR’ and ‘corporate social responsibility’. Next, Google and Google Scholar were intensively searched for relevant literature using the terms ‘CSR, corporate social responsibility, agribusiness, agricultural, agriculture, farming, food and feed’. All articles identified during the literature research were then analyzed under the various aspects of the analysis framework as previously set out.
Findings
Definition of CSR
Studies referring to CSR in agribusiness basically use definitions from the general management literature. Heikkurinen and Forsman-Hugg (2011) as well as Forsman-Hugg et al. (2013) refer in their studies to the triple-bottom line approach defined by Elkington (1997). Therein, CSR is explained with reference to three dimensions regarding ‘profits’ on the economic, ‘people’ on the social and ‘planet’ on the environmental responsibility level. Hartmann et al. (2013) in turn rely in their paper on the ISO 26000 (2011) definition, according to which a firm is responsible for its societal and environmental influence. Other studies on CSR in an agribusiness context follow Carroll (1979: 500) who said that ‘the social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time’, as Maloni and Brown (2006), Heyder and Theuvsen (2008, 2009a, b, 2012) or Mueller Loose and Remaud (2013) did in their investigations.
Most of the studies looking at CSR in agribusiness have a focus on the whole food chain (i.a. Maloni and Brown 2006; Forsman-Hugg et al. 2013; Hartmann 2011; Hartmann et al. 2013; Manning 2013). In these considerations, definitions from general management literature are used and applied to the food chain approach and enriched with additional aspects, which are considered special for the agribusiness sector. Forsman-Hugg et al. (2013), for instance, identified seven relevant CSR dimensions for the agribusiness sector; environment, product safety, human health, nutrition, occupational and animal welfare, economic responsibility and local well-being. Hartmann et al. (2013) classify various CSR aspects under several CSR dimensions in the agribusiness. The dimensions are: CSR animal welfare (cf. animal husbandry, treatment of animals, transport distance to slaughterhouse, adequate anesthesia before slaughter), CSR employment (cf. employees’ training, fair wages, no contract workers, good working conditions), CSR environment (firms’ environmental protection, local origin of food) and CSR philanthropy (employees’ volunteering, firms’ donation). Heikkurinen and Forsman-Hugg (2011) as well as Maloni and Brown (2006) described the CSR aspects for agribusiness more generally. Both studies mentioned animal welfare, nutrition and environmental as well as health and safety. In addition the CSR aspects of product safety, local market presence, economic responsibility (cf. Heikkurinen and Forsman-Hugg 2011) biotechnology, labor and human rights, procurement and community (cf. Maloni and Brown 2006) are mentioned.
Similar to the general management literature, various authors tackling CSR in agribusiness discuss the close relationship between the two concepts of CSR and sustainability. Some authors mention that sustainability is implemented as part of the operational management activities of companies through CSR (e.g., Ingenbleek and Meulenberg 2006; Glover 2007; Heyder 2010). In this research strand, CSR is interpreted as the management version of the sustainability concept (Schmitt 2005; Smith 2008; Rana et al. 2009; Forsman-Hugg et al. 2013). However there are also other authors who see a clear difference between sustainability and CSR. According to this viewpoint, sustainability encompasses all effects a company has on its natural and social environment as well as on future generations, whereas CSR can, in turn, only refer to a firm’s voluntary actions toward its stakeholders but not stipulated by law (Bassen et al. 2005).
All in all, the concept of CSR in agribusiness still lacks any clear definition (Poetz et al. 2013). This very much parallels the situation in general management literature where, despite (or due to) a much longer research tradition; Dahlsrud (2008) was able to analyze 37 different definitions. Carroll (1999) has catalogued the evolution and conceptual development of the CSR construct since the 1950. As a result, Carroll found that very diverse CSR concepts are summarized under the same label. This may be explained by the fact that a firm’s CSR commitment is the result of an ongoing exchange process. For example, a firm is willing to fulfill demands and expectations of stakeholders but these demands change over time and are highly firm specific. As a result, all the commitments a company takes on in assuming social responsibility and meeting stakeholder demands are rated by society. In turn, the results of this evaluation process influence a company’s reputation. This exchange process does not lead to consensus as a firm is continuously in communication with its stakeholders (Carroll 1979; de Quevedo-Puente et al. 2007; Heyder and Theuvsen 2012). This ongoing exchange process, as well as the strategic nature of CSR, generates considerable variation in the CSR activities implemented by different firms, which in turn have impact on different environments and interact with various stakeholders.
It can be concluded that CSR generally is a complex and multi-dimensional activity. In addition to the general management literature, specific CSR aspects in the context of agribusiness can be derived since environmental attributes (e.g. sustainable land use, organic food production), animal welfare (for instance, animal husbandry) plus food safety and health (nutritional aspects) are important industry-specific aspects. So far, there is no specific definition for the agribusiness context in the literature. Nonetheless, since CSR is a continuous exchange process, highly firm-specific and firm structures are very heterogeneous, it could turn out to be very difficult to find a definition generally applicable to the agribusiness context. Thus future research should aim to integrate agribusiness specific aspects into existing models and definitions of CSR in order to get a broader understanding of the multi-facetted concept of CSR in agribusiness.
Motives for Implementing CSR
Agribusiness companies’ motives for implementing CSR are the most intensively researched topics in the literature which names various reasons for them doing so. In the light of highly volatile producer prices for agricultural products and fierce international competition, CSR is mentioned as an instrument for agribusiness companies to stay competitive and improve their ability to cope with unpredictable market conditions. Economic aspects such as improved competitiveness are therefore basic reasons for firms in the agribusiness sector to implement CSR (Heyder 2010; Hartmann 2011). Beside competitive pressures, companies in the agribusiness are particularly confronted with demands and expectations from their societal environment. Agribusiness has been closely scrutinized by critical stakeholders and has suffered increasing public criticism in recent years. Livestock farming and meat production have become particular focal points for public debates in many industrialized countries (Singer 1977; Albersmeier and Spiller 2008; Böhm et al. 2009). Besides animal welfare (cf. Heyder and Theuvsen 2012; Hieke et al. 2015), the use of GMOs (cf. Savadori et al. 2004; Heyder and Theuvsen 2009a) as well as the environmental impact of production (including carbon footprint) (cf. Kissinger 2012; Ross et al. 2015; Swinton et al. 2015) and consumer health (cf. Burton and Creyer 2004; Schmitt 2005; Hieke et al. 2015) are central aspects of the public debates. The main topics publicly debated are manifold and presented below (Table 1).
The ever more critical perception of the industry can threaten the reputation and legitimacy of individual companies, as well as of the whole sector. Reputation and legitimacy can be considered important social capital resources that provide access to other critical resources, for instance information (Lin 2001) or political support. These serve as a basis for sustained competitive advantage (Nahapiet and Ghoshal 1998) and guarantee a firm’s or industry’s social ‘license to operate’ (Hiss 2006; Heyder and Theuvsen 2009a, b, 2012; Wiese and Toporowski 2013; Kim 2015; Ross et al. 2015). As a result the pressure exerted by the public on companies in the agribusiness sector is the most frequently mentioned motivation for CSR. In this context, agribusiness firms carefully consider the role of NGOs. Helmig et al. (2016) affirm this in a study in which they surveyed 1000 managers in Switzerland and showed that NGOs such as Greenpeace had an increasingly high impact on firms’ CSR implementation.
Great potential is attributed to CSR in resolving conflicts or disputes between society and agribusiness subsectors or individual companies. As Meixner et al. (2012) as well as Manning (2013) state in their study into cases of food or other scandals, CSR is perceived as part of firms’ crisis management employed to secure market shares and maintain customer loyalty (see also Heyder and Theuvsen 2009a). The considerable complexity of modern agricultural and food value chains has caused huge information asymmetries between producers and processors and the wider public. For a long time, the meat industry in particular has failed to communicate changes in its production technologies adequately. A number of food scandals have exacerbated this situation and resulted in growing uncertainty among consumers and a loss of confidence in producers and processors (Hierholzer 2010; Busch et al. 2015). Hansen and Schrader (2006) and Heyder and Theuvsen (2009b) as well as newer studies by Assiouras et al. (2013) and Mazur-Wierzbicka (2015) mentioned that the implementation of CSR could increase the transparency of business activities and so reduce these information asymmetries on the part of consumers and other important stakeholders. An overview of studies related to possible motives for agribusiness companies to implement CSR is shown in Table 2.
Growing urbanization and structural changes in agriculture and the food industry have caused societies’ alienation from the agribusiness. Due to this development and the public concerns already mentioned, agriculture production firms in the agribusiness are highly motivated to focus on CSR issues in order to respond to public pressure as well preventing loss of reputation.
What is missing so far, despite the large number of studies on motives of agribusiness firms to implement CSR, are in-depth analyses of relevant stakeholders and their requirements; for instance suppliers and customers. These analyses would help managers to tailor CSR strategies better towards societal expectations. Thus, from a theoretical point of view, CSR research in agribusiness should take into account stakeholder management approaches more thoroughly (Freeman 1984; Mitchell et al. 1997). Expert interviews might give first insights into relevant stakeholders’ views together with their perceptions and requirements of a firm. There is also a need to analyze separately stakeholders’ requirements along whole value chains and in different agribusiness sub-sectors as perceptions might differ between the various stages of a value chain and also between the sub-sectors.
Variables Influencing the Implementation of CSR Concepts
Contingency theory proposes that the design of management instruments, such as organization structures or strategies, is influenced by a multitude of situational factors. The latter include internal (e.g., firm size, firm age, ownership structure) and external factors (e.g., industry competition, technological change, cultural diversity) (Lawrence and Lorsch 1967; Donaldson 2001). This also applies to the implementation of an agribusiness firm’s CSR engagement, which is subject to a great many situational influencing variables. Therefore, how responsibility towards society is perceived and how this perception is transformed into a CSR strategy and the implementation of CSR measures can differ considerably between various economic sectors or within an industry. Agricultural economics research has revealed a number of contingency factors that influence agribusiness firms’ CSR strategies.
In terms of the structural changes on farms, consumers are increasingly concerned about so-called ‘agriculture industry’ or ‘factory farming’. This means that attitudes are increasingly negative towards larger farms and agribusiness companies. Lower animal welfare standards, lower quality standards as well as the use of GMOs are associated with large farms and firms. Along the food chain, big companies, for example large slaughterhouses, have increasingly come under critical public view (Salamon et al. 2014; Winterberg 2015). Hartmann (2011) as well as Bourlakis et al. (2014) confirm that size is an important determining factor for CSR management because larger firms are more in the public eye than small and medium-sized companies. Heyder and Theuvsen (2012) were also able to show in a survey of 170 companies from the agribusiness sector that size has an influence on the CSR efforts of a firm.
Agribusiness companies operating in other countries must be aware that stakeholders’ attitudes towards several topics, for instance the use of GMOs, animal welfare or labor rights, can vary remarkably worldwide. Heyder and Theuvsen (2009a) identified different requirements on firms depending on their degree of internationalization. Multinationals face more diverse external environments. Internationalization therefore is a second influential variable on how agribusiness companies perceive and implement CSR (Heyder and Theuvsen 2009a). In the context of the internationalization of agribusiness, a country’s level of economic development—such as whether it has an industrialized, developing or emerging economy—plays an important role, as Kambalame and de Cleene (2006) illustrated in their study of agribusiness companies in Malawi (cf. Tersoo 2014).
Hartmann (2011) states that a firm’s brand orientation can also influence its engagement in the field of CSR. Companies with strong brands strive harder to implement CSR strategies and provide CSR-related information since they want to protect their brands from public criticism. Furthermore, the position of an agribusiness company in the value chain has an impact on the implementation of CSR as retailers have the power to influence their direct suppliers concerning several CSR requirements (Halbes et al. 2005; Heyder and Theuvsen 2009b; Hartmann 2011). Vanhonacker and Verbeke (2014) as well as Albersmeier and Spiller (2008) stress that the various levels of the food chain differ with regard to their reputation and in turn their need to consider CSR. The stage of slaughtering, for example, has the worst image in the eyes of several stakeholders whereas the farming sector enjoys a much better reputation (Vanhonacker and Verbeke 2014). These differences result in different needs to implement CSR. Additionally, reputation and image vary between agribusiness sub-sectors, which in turn influence the CSR commitment. Firms focusing on animal production, for instance, have a different focus in their CSR concept than firms acting in the field of plant production. Table 3 summarizes the influencing factors on the design of CSR strategies and the implementation of CSR measures.
Compared to the motives for implementing CSR, there is much less research on the relevant contingency factors that influence the design of CSR strategies and the choice of CSR measure. The analysis of contingency factors is difficult since these factors are often intertwined. For instance, large firm size can be accompanied with a high degree of internationalization, which makes a clear distinction between these factors and their influence on CSR activities more complicated. Influencing factors need therefore to be seen in their full context and require comprehensive analyses. Taking into account the brief history of research into CSR in agribusiness and the multitude of potential contingency factors, it is not really a surprise that only limited knowledge is available. This clearly reveals a direction for important future research. From a methodological point of view, one can choose a latent class analysis to measure indirect and direct factors influencing a firm’s CSR commitment. Future surveys may therefore focus on the influence of different firm characteristics and their interdependency with the firm’s CSR commitment.
Responsibility for and Design of Parameters for CSR
Social responsibility has only recently entered the research and management agenda in agribusiness. More and more agribusiness companies have started to design and implement comprehensive CSR concepts (Friedrich and Theuvsen 2011; Poetz et al. 2013). Theuvsen and Friedrich (2012) survey showed that in agribusiness companies, the top management team is responsible for CSR. In addition, various staff positions, such as quality or sustainability managers, are engaged in CSR (Theuvsen and Friedrich 2012). This reflects a tendency in bigger companies to decentralize CSR activities. Various CSR subtasks are allocated to different departments with specialized qualifications (Heyder and Theuvsen 2009a).
CSR is a very broad management area that embraces economic, environmental and social issues across a wide spectrum of commercial activities. Similar to the field of quality management, bureaucratic control seems to be of major relevance for steering the behavior of firms in the desired direction and providing the required documentation (Theuvsen 2005). As a result there are guidelines on ecological and social procurement (cf. Heyder and Theuvsen 2009a; Hieke et al. 2015), standards and norms; such as ISO standards, which are in constant use (cf. Heyder and Theuvsen 2009a; Poetz et al. 2013; Hieke et al. 2015). Upon that certification systems focusing on sustainability issues such as Fair Trade for coffee or Marine Stewardship for aquatic products (cf. Dentoni and Peterson 2011; Hieke et al. 2015) can be found in the literature (Table 4).
Besides bureaucratic instruments, agribusiness companies employ a wide spectrum of CSR measures. In designing their CSR policies, the companies focus either on general topics, such as employee concerns, or more specific ones, such as a commitment to better animal welfare. Table 5 shows several CSR activities that are considered relevant for agribusiness companies in the literature. It is quite obvious that these activities relate closely to CSR management motives, in turn arising from public vigilance and criticism (see chapter ‘Motives for Implementing CSR’). A closer look at the list of CSR measures reveals that the literature refers to both agribusiness-specific CSR instruments as well as instruments, which are not specific to the industry. Food safety and animal welfare initiatives can be regarded as agribusiness-specific as they relate to animal production and to the safety of food products. Working conditions and job security are instruments relevant to all industries and are not agribusiness-specific in character.
Due to the short history of research on CSR in agribusiness, there is only limited knowledge on how companies design and implement their CSR activities and which measures they actually prefer. One important starting point for future research on CSR instruments in agribusiness is Poetz et al. (2013) study, which analyzed and categorized existing CSR frameworks in agribusiness. According to their results, guidelines as well as policy commitments are in the majority of frameworks with a relation to agribusiness but not standards. Secondly, in agribusiness CSR frameworks refer to specific products, which the critical public focuses on. This is in line with our results (cf. Tables 4, 5). Most of the studies merely present statistical information on the prevalence of various instruments. So far very little research has been done on such subjects as the significance of alternative design instruments, the interplay of various instruments, the influence of situational factors (firms’ size, age or strategy on design decisions) or the managerial preferences and efficiency assumptions underlying the choice of instruments (Egelhoff and Frese 2009). Future research should therefore focus on these aspects.
CSR and Firm Performance
For all actors along agribusiness supply chains, acceptance of their activities by society at large, their reputation, legitimacy and the trust of consumers and other stakeholders are central determinants for long-term success (Gössling 2011). Hiss (2006) pointed out that acceptance, reputation, legitimacy and trust reflect the societal ‘license to operate’, without which companies are not able to act successfully in the long run. This important ‘license to operate’ is put at risk when the agribusiness sector or agribusiness firms suffer public criticism. Crisis phenomena in agribusiness have repeatedly contributed to a loss of reputation not only for individual companies and their products but also for the entire sector. CSR’s central concept is that of a potential tool for rebuilding social recognition and acceptance of business activities. This recognition is highly relevant to a company’s long-term success, as the above-mentioned ‘license to operate’ safeguards a company against growing societal demands, public criticism and provides access to critical resources. It has been argued repeatedly that improving how a company is perceived by the wider public can boost its internal and external relationships and thus, contribute to its future legitimacy and performance (Heyder and Theuvsen 2008, 2009a, b; Vidales et al. 2012; Ross et al. 2015).
Furthermore, Manning (2013) proposed that CSR has a positive influence on a company’s competitive advantage and success because social responsibility contributes to product differentiation and the efficient use of resources. For investors, an agribusiness company’s CSR commitment can be an important decision-making factor (Kong 2012). Recently more in-depth research has been conducted on the relevance of CSR to consumers’ buying behavior. Aktar (2013) and de Magistris et al. (2014) as well as Tully and Winer (2014) argue that a firm’s CSR commitment exerts a positive influence on consumers’ willingness to pay thanks to the associated transparency and readiness to provide information on social and ecological factors, which relate to consumers’ buying decisions. In the meat market, a CSR commitment to animal welfare, for example, could have great potential in influencing consumers’ buying behavior (Hartmann et al. 2013). Concerning other products, such as wine, an engagement in the field of environmental protection has been shown to have a positive influence on consumers’ willingness to pay (Mueller Loose and Remaud 2013). Overall, due to image and reputational effects, CSR seems to have a mainly positive—albeit indirect—influence on company performance. It is much more difficult, of course, to demonstrate a direct positive effect on firm performance due to the large number of potential success factors affecting agribusiness companies. This is why empirical studies typically show significant effects of CSR activities on reputation but less significant—although in most cases positive—effects on financial performance (cf. Heyder 2010). More recent research has revealed a mixed picture with some consumer groups who are very concerned with animal welfare but also other completely unconcerned consumers (Deimel et al. 2010).
Table 6 summarizes the proposed or empirically examined links between CSR activities and firm performance in agribusiness.
Measuring the performance effects of using specific management instruments is notoriously difficult and, despite tremendous efforts, empirical research into companies’ success factors has been frustratingly inconclusive (Kieser and Nicolai 2005). This has often led to the emergence and dissemination of management fashions—sometimes scientifically ill founded—which have influenced decision-making in fields where exact knowledge is scarce (Kieser 1997). Most of these studies on CSR’s performance effects are merely explorative literature reviews (Vidales et al. 2012; Manning 2013; Ross et al. 2015) based on large-scale, explorative but not representative surveys (Heyder 2010; Heyder and Theuvsen 2008, 2009a, b, 2012; Friedrich and Theuvsen 2011) or have an experimental design (Aktar 2013; de Magistris et al. 2014). This is typical of a rather new research field where mostly explorative fieldwork is done to obtain initial insights into relevant research topics. Future research needs to take a further step forward. One way to measure the effects of CSR on corporate performance is to use databases, which specifically address CSR performance such as Systainalytics, Dax Global Alternative Energy Index, FTSE4GOOD or MSCI World ESG Index (Aachener Stiftung Kathy Beys 2016). This might also provide a chance to analyze differences between agribusiness and other industries with regard to the influence of CSR on performance. Challenges in this context will include the fact that these databases are based on stock indices. In 2010 only 0.1 % of the agribusiness firms were listed on a stock exchange (Schiereck 2014). Future research therefore must also focus on systematic questionnaire-based research to improve data availability on this topic.
Communication of CSR
Besides the core aspects mentioned above, there are additional topics, which are occasionally discussed in the literature concerning CSR in agribusiness. Communication is identified as an important factor because of the great relevance of public pressure as a motivator for implementing CSR (Hansen and Schrader 2006; Meixner et al. 2015). Table 7 gives an overview of relevant CSR communication topics.
This poses two questions: what knowledge do consumers and other stakeholders already possess about CSR in agribusiness, and what information on CSR activities is relevant? Existing research shows that consumers generally lack knowledge about CSR. They tend to focus on selected social and environmental CSR aspects but economic aspects, transparency and access to information are less frequently perceived to be CSR elements. For agribusiness firms, this means their communication should focus on environmental topics, such as energy efficiency, climate protection and environmental standards, and social topics, including staff welfare, job security and compliance with social guidelines. It is also important to include employees in the communication process. Doing so raises the credibility and authenticity of an agribusiness company’s commitment to CSR activities (Halbes et al. 2005; imug 2006; Meixner et al. 2012).
In the context of increasingly critical consumers, the topic of information availability through CSR communication becomes ever more relevant for agribusiness. Consumers’ knowledge about modern food production is rather low (Vanhonacker et al. 2008; de Jonge and van Trijp 2013). In this respect NGOs have a strong position as they have a huge lobby (Helmig et al. 2016) reporting in the media and influencing consumers’ awareness of the agricultural sector with their—mostly critical—views. It is therefore important from a company’s view to communicate its production processes competently, in order to increase transparency, consumers’ knowledge, trust and reputation.
Further research should focus on consumers’ information requirements and on the success of different communication instruments concerning CSR. A survey including a questionnaire could provide insights into consumers’ perceptions of and current knowledge about a firm’s CSR. Based on these insights a strategy for delivering information could then be derived.
Future Research Directions: A Summary
Studies on CSR have quite a long tradition in general management literature. Research on agribusiness-related topics is still scarce in that the spotlight of public attention has only more recently come to shine on agribusiness firms (Heyder and Theuvsen 2012). The tentative nature of the knowledge currently available, has led the authors of this paper to provide an overview of the current state of the research on CSR in agribusiness, to illustrate specific CSR aspects for the agribusiness and to derive topics for further research in this area. The focus on the agribusiness sector is justified by harsh public criticism that this industry has been facing over the last couple years and which increasingly threatens the sector’s ‘license to operate’. CSR has therefore been paid a great deal of attention by agribusiness firms and researchers in recent years. The analysis was based on a comprehensive literature review and conducted using a conceptual framework that distinguished between the definition of CSR and the motives for implementing CSR in an agribusiness company, the variables influencing the implementation of CSR concepts, design parameters for CSR, the link between CSR activities and firm performance and how CSR is communicated.
In this study, we found that CSR in agribusiness is a multi-dimensional and complex concept, which is sensitive to ongoing exchange processes between companies and stakeholders (cf. Schmitt 2005; Rana et al. 2009). The necessity of a clear definition is therefore questionable, as CSR has to be a flexible concept within a company in order to react to changing stakeholder demands (de Quevedo-Puente et al. 2007). We conclude with the special position of CSR in agribusiness and that future research should focus on adding value to industry-specific CSR aspects in the general CSR framework borrowed from management literature. Explorative fieldwork such as expert interviews with different stakeholders might be suitable for gaining insights into agribusiness-specific aspects of CSR in firms. From broader insights into what CSR actually means in agribusiness, firms can build their own CSR strategy individually, tailored to fit their business concept and internal and external situations.
The pressure on companies from various stakeholders is the most frequently mentioned motive for companies to assume social responsibility. A company should strive to meet society’s expectations with a commitment to social and ecological activities in order to safeguard its future ‘license to operate’ (Heyder and Theuvsen 2009b; Wiese and Toporowski 2013; Ross et al. 2015). The motivations of agribusiness companies to implement CSR are among the most thoroughly analyzed aspects of CSR in agribusiness. As it can be shown, the critical environment in which most agribusiness firms operate, increases their motivation to respond to public pressure. The results of the studies by Albersmeier and Spiller (2008) as well as Vanhonacker and Verbeke (2014) need to be considered in this context. They both show that image and reputation differ between agribusiness sub-sectors as well as along food supply chains. Future research should therefore compare the CSR commitments of firms that are subject to public criticism, for instance slaughter houses, with the CSR activities of companies enjoying a better reputation, such as dairies. A questionnaire and a cross-sub-sector specific comparison could provide interesting insights into the motives for agribusiness firms committing to CSR as well as the CSR measurement preferred by the firms under analysis. A regression analysis could be conducted to measure the influencing variables on a firms’ motivation to engage in CSR activities.
With regard to implementing the CSR concept, various internal and external contingency factors, such as the size or culture of a firm (internal) or industry characteristics (external), have an influence on how social responsibility is perceived, how a CSR strategy is designed and how CSR measures are implemented. Despite some pioneering empirical studies, there is a general lack of knowledge about relevant contingency factors. The factors influencing a firm’s CSR commitment are often intertwined. A questionnaire-based survey of firms along the supply chain could be sent out and a latent class analysis conducted to measure direct, as well as indirect effects on a firm’s decision to commit to CSR.
Existing research shows that CSR activities have a positive influence on a company’s reputation and on its internal and external relationships (cf. Heyder and Theuvsen 2008, 2009a, b; Vidales et al. 2012; Mazur-Wierzbicka 2015). In contrast, literature on the link between CSR and a company’s financial performance is scarce; some publications even state that CSR does not have a measurable influence on a company’s success at all (cf. Heyder 2010). Existing databases on the CSR activities of companies, for example Systainalytics, mainly focus on stock-listed companies, which make up a small minority of the agribusiness sector. Additional questionnaire-based research on the impact of a firm’s CSR commitment on its financial performance is therefore needed. The results of this research could also be used to analyze improvements and developments concerning CSR in agribusiness firms.
In summary, research on CSR in agribusiness is still in its infancy. Although the number of conceptual and empirical studies has increased in recent years, there are still a lot of open research questions and interesting research topics. Existing studies have dealt mainly with the clarification of concepts and a description of the design of CSR activities in agribusiness companies. Future research requires more thorough conceptual underpinning in order to gain deeper insights into the determinants, design and both financial and non-financial outcomes for CSR in agribusiness; an industry, which is increasingly under scrutiny and subject to critical stakeholders concerning its social and ecological sustainability.
Notes
In the remainder of the paper, we follow the common definition of agribusiness in the literature: Agribusiness is a sector comprising all upstream and downstream industries involved in the production of agricultural and food products (Strecker et al. 1996).
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The publication was funded as part of the project ‘Corporate Social Responsibility’ by the Federal Ministry for Nutrition and Agriculture and the Federal Institute for Agriculture and Nutrition (Grant Number: 2812HS018).
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Luhmann, H., Theuvsen, L. Corporate Social Responsibility in Agribusiness: Literature Review and Future Research Directions. J Agric Environ Ethics 29, 673–696 (2016). https://doi.org/10.1007/s10806-016-9620-0
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DOI: https://doi.org/10.1007/s10806-016-9620-0