The word “stakeholder” is ubiquitous in sustainability discourse. We see it in corporate sustainability reports, policy documents, business plans, and sustainable development guidelines. Stakeholders are discussed in parliaments, in corporate boardrooms, at sustainability conferences, and in classrooms around the world.
The stakeholder concept was popularized with the 1984 publication of R. Edward Freeman’s Strategic Management: A Stakeholder Approach, where the stakeholder was defined as a person or group who are able to affect or are affected by an organization pursuing its goals. Although the term has been hotly debated ever since, it is clear that Freeman’s work has had a huge impact on management discourse, especially when it comes to social responsibility and sustainability.
In my own ethnographic research over the past few years among people I refer to as “sustainability professionals,” I’ve heard the word stakeholder mentioned countless times, in nearly every context, from venues like the COP21 negotiations in Paris to casual conversations with friends and colleagues at the pub.
Students in my classes use it fluently to refer to groups as distinct as shareholders, consumers, and factory workers. They’re able to classify these different stakeholders according to how important they are from the perspective of the company. Sometimes, the stakeholder concept can seem too expansive, with students questioning whether anyone is not a stakeholder.
But in my own research, I’ve found that although it is pretty widely accepted that most people are stakeholders in one form or another, there is a particular imaginary surrounding stakeholders. In a recent article, I found evidence for this by looking at the images that accompany mentions of the word stakeholder in sustainability reports and standards guidelines.
More often than not, these images depict workers in the Global South who are almost always people of color, and who are often women.
Similarly, when people use the word “stakeholder” in interviews, they are typically referring to people in producer countries, with the implication that these distant, marginalized stakeholders are the ones who stand to benefit the most from sustainability projects and, crucially, stand to lose the most if those projects are unsuccessful.
This led me to question the power dynamics that are inherent in the stakeholder concept. There’s a big literature in geography and anthropology on the power to categorize groups of people, drawing on decades of critical research on international development. More to the point, when companies talking about engaging with stakeholders in their corporate sustainability and corporate social responsibility initiatives, most of the time they’re actually treating the people we think of as stereotypical stakeholders as stakes, that is, what stands to be lost in a game of chance.
Given the power differences between people who can affect an organization and people who are affected by it, perhaps it’s time to come up with an alternative to the stakeholder concept.
About the author
Matthew Archer is Assistant Professor at Copenhagen Business School. He is an ethnographer and political ecologist interested in corporate sustainability and sustainable finance. Visit Matthew’s personal webpage.
Worldwide there is now a search for new ideas, business models, and innovations that can help us in rebounding from the global impact of COVID-19 and bring our planet and world onto a more sustainable future trajectory. One of the areas where this is evident is sustainability in global value chains where we have seen a global disruption of world trade in ways that have affected not only global brands but also suppliers and workers around the world. Some observers argue that this will result in a global backlash against attempts at making global value chains, for instance, the global garments and textile value chains, more sustainable. I.e. that COVID-19 will make brands and suppliers sacrifice long-term sustainability considerations at the expense of short-term business survival.
In my understanding,however, what these recent events demonstrate is not so much the need for new innovations and “thinking out of the box” but rather considering how the current organization of global value chains and thinking around sustainability have overlooked the importance of “supplier perspectives” on what social responsibility actually means in these chains. Amongst many practitioners, especially in the Nordic countries, there has been a tendency to assume that global brands’ adopting corporate codes of conduct and sustainability standards, asking value chain partners (i.e. suppliers) to implement these, and then auditing for compliance as well as helping suppliers to build capacity to enforce these guidelines would be sufficient.
The case of Bangladesh illustrates why this approach is insufficient. First, many brands have cancelled their orders with Bangladeshi garment suppliers, leaving local factories at the verge of bankruptcy, and hundreds of thousands, if not millions of workers at risk, potentially without any income to support themselves and their families. Second, even with orders that have been completed, some brands have refused to honor their contracts and either not paid for the goods received, substantially delayed payments, or asked for discounts on present or future orders from suppliers.
Globally, there has been condemnation of these “unfair” trading practices by both suppliers themselves (particularly in Bangladesh but also highlighted via social media) and also international labor advocacy organizations.
And third, the level of outrage is so strong that the Bangladesh Garment Manufacturers and Exporters Association has allegedly been considering placing a ban on particular brands so that they may not source garments from Bangladesh in the future as they have largely failed to live up to their “buyer” responsibilities towards suppliers and workers in Bangladesh.
To me, a key lesson learned from these events is that global brands, business associations, labor advocacy organizations, NGOs, researchers and students can no longer simply “overlook” supplier perspectives on social responsibility in global value chains.
The only realistic way forward is to take account of the concerns of these suppliers if global value chains are to be more resilient in the long run.
Many of these supplier concerns are already well-documented but tend to be either ignored or discarded by “global North stakeholders” in their policies, practices or discourses more broadly – for instance, in how they conceive and talk of sustainability in sustainability conferences around the world.
Just to recap some of the main points that we have learned from studies of supplier perspectives on social responsibility:
a) The factory manager dilemma – e.g., factory managers and owners – for instance, in the global garment industry – have had been asked for continuous price declines by many of their buyers while the same brands have asked for increased levels of social compliance at the same time.
b) The same dilemma arises when factory managers are asked to provide living wages around the year by their buyers when demand is seasonal and price competition is fierce in the global garment industry. For most suppliers having workers sitting around idle for part of the year is not a viable business option.
c) In addition, there is a general unwillingness amongst most (but not all brands) to co-finance – for instance, 50% – of the necessary social upgrading of factories in countries such as Bangladesh. Hence, brands tend to push “social responsibility” onto their suppliers rather than co-investing in and jointly bearing the costs of these improvements themselves.
d) Profits earned from selling goods sold to end consumers in the global North remain highly unequally shared amongst the (ironically called) value chain partners – often with suppliers winding up with 10-20 percent of the value of final retail price.
e) In addition to this, global North (read: Scandinavian) stakeholders including brands, government representatives, NGOs, students, and others often perceive “sustainability” in value chains as mainly relating to environmental and (to a lesser degree) social responsibility in the value chain. Hence, the general talk often seems to be about how suppliers should make environmental and social investments without considering the need for addressing existing inequalities – i.e. unequal distribution of value in these chains – and the business aspects of running supplier operations. In fact, for many suppliers in countries such as India, Pakistan and Bangladesh, sustainability is first and foremost related to “economic” or “financial” sustainability. Only when suppliers are profit-making can they afford to invest in social and environmental improvements. This is not exactly rocket-science but a point that often seems to be completely overlooked by Scandinavian “sustainability” advocates.
f) Finally, what is sometimes considered “social responsibility in global value chains” in the global North might be narrowly defined as the payment of minimum wages, overtime payment, social insurance, and the implementation of occupational health and safety measures in supplier factories. Of course, I am all for supplier factories implementing these measures. However, I also sympathize with many suppliers, NGOs and other stakeholders in the global South that point to other aspects of social responsibility that may be more contextualized.
For instance, in South Asia, many studies have pointed to factory managers helping to finance the education/school fees of the children of some of their workers. Financing the weddings of young workers or the weddings of the sons/daughters of their workers is another sign of social responsibility amongst many factory owners in South Asia.
From a Scandinavian perspective, this may not be related to “social responsibility”.
However, in the sub-continent, where your wedding day is often considered the most important day in your life, and very important for your family’s wider social standing in society, employers’ financial support may be seen a very valid act of practicing “social responsibility”.
Providing tea to your workers may also be
considered an act of “social responsibility”. Again – from a Scandinavian
perspective – this may not be considered a big act of social responsibility.
However, then again, is it really that difficult to understand? How many of us
in Scandinavia do not value it when our own employers provide us with free tea
or coffee? It gives us the opportunity to socialize with our colleagues or take
a much needed break between different work tasks. Why should it be any different
in countries such as India and Pakistan where tea drinking could almost be
considered a national sport?
Moreover, some factory managers in South Asia allow especially young mothers or women with even slightly older children the option of either working part-time (when the kids are in school or someone else is at home to take care of them) or engaging in home-working so that they may look after their kids while engaging in for instance (embroidery) whenever there is a free moment. Of course, I do recognize that home-working is also often associated with receiving very low wages and not having any social insurance.
However, during COVID 19, even in the Scandinavian context, homeworking has become an absolutely essential part of keeping private companies and public institutions afloat crisis under such compelling circumstances. It has also involved many challenges for families with young children who had to engage in home-based work (typically computer-based) and taking care of their children simultaneously.
Yet if homeworking is indeed not only allowed but also encouraged by most employers in Scandinavia, why it is that brands in the global North sometimes impose an outright ban on their suppliers outsourcing particular work tasks to “home-based locations”?
No wonder that many factory owners and managers in the global South believe that global brands practice double standards when it comes to their social responsibility requirements (i.e. ‘do as I say but not as I do’).
In conclusion, there seems to a great need in Scandinavia for raising our own levels of awareness about the commercial challenges faced by suppliers and acknowledge the myriad ways in which “social responsibility” may be thought of and practiced – of course, without throwing out the baby with the bathwater. Compliance with core labor standards remains a key concern, but it is not the only way of conceiving of supplier responsibility in global value chains.
About the author
Peter Lund-Thomsen is Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research focuses on sustainable value chains, industrial clusters, and corporate social responsibility with a regional focus on South Asia.
More about Covid-19 pandemic on Business of Society blog:
By Jette Steen Knudsen, Erin Leitheiser, Shaidur Rahman & Jeremy Moon
What is the responsibility of Western retailers to the workers who make their garments as the coronavirus forces factories to shut down?
Shopping malls are closed, gatherings are banned, thousands of employees have been furloughed, and movement outside of one’s home is discouraged if not outright illegal. This has meant bad news for apparel brands and retailers as nervous customers cease buying. In the U.S., for example, retail sales in March were down almost 9% compared to in February. Those brands and retailers which have built their businesses on a fast fashion model – predicated on the continuous churn of high volumes of cheap clothes – face unprecedented challenges and questions about responsibilities in the face of the COVID-19 pandemic.
Retailers have responded in different ways. As they have had to shut down their stores many have stated that they will not pay rent. For example, German sportswear producer Adidas stated (March 26 200, Reuters) that
“Almost all over the world there is no normal business anymore. The shops are closed. Even a healthy company like Adidas cannot stand this for long”.
Adidas was one of a string of retailers in Germany that said they wouldn’t be paying their landlords while their stores are closed as part of efforts to stem the coronavirus spread. Adidas said it would need credit even after staff cut their working hours, executives waived part of their pay and the company stopped share buybacks. Adidas’ decision was met with an uproar in Germany eventually forcing the company to formally apologize and to report that it planned to suspend a planned 1 billion euro ($1.09 billion) share buyback in an effort conserve cash after closing its retail outlets in Europe and North America. Adidas also said it would pay rent.
In Denmark, Anders Holck Poulsen, the owner of the clothing company Bestseller and Denmark’s wealthiest man, also announced that the company would not pay rent for its stores. Bestseller (parent company for brands like Vera Moda, Jack & Jones, Pieces, and Name It, among others) later reversed the decision following a public outcry and the CEO went on national television to apologize. Bestseller subsequently laid off 750 employees and sought financial support from the government. This decision was met sharp with sharp criticism because over the last five years Mr. Holck Poulsen has paid DKK 7.6 billion (more than $ 1 billion) in dividends to his private holding company Heartland.
Not all companies have responded this way. Patagonia, for example, has promised that all of its employees will continue to receive their regular pay during store closures.
However, with many large brands scaling back their social responsibility in the Western part of the world, what kind of responsibility can we reasonably expect from Western retailers in places such as Bangladesh?
Bangladesh is heavily dependent on apparel production. Apparel comprises more than 80% of the country’s total export revenue and the sector employs more than 4 million workers, most of them women. However, in recent weeks many Western brands have cancelled their orders from Bangladesh, and it is estimated that more than 2 million workers have lost their jobs. H&M is the largest buyer of garments from Bangladesh and has reluctantly agreed to take and pay for the shipments of goods already manufactured as well as those that are still being produced. Inditex, PVH and Marks and Spencer have also agreed to pay suppliers for orders that are already produced but not all companies have done so. Primark, for example, has cancelled orders, and virtually all buyers have pulled orders that have not yet gone into production. At the end of March 2020 orders for more than $1,5 billion had been cancelled, and Bangladesh reported -19% year-on-year export volume for the month.
What is the responsibility of large brands like Bestseller or H&M for their supplier factories in Bangladesh? Western brands have a long tradition for stating their commitment to CSR in global supply chains, including elaborate Codes of Conduct for social and environmental performance in supplier factories. Bangladesh has staked its claim as the low-cost producer of garments, and its costs and production capacities cannot be easily matched elsewhere in the world. The model of fast fashion needs Bangladesh, and Bangladesh, in turn, needs fast fashion.
Now that crisis reigns upon all of us in the form of a global health pandemic, it is the most vulnerable of workers who have been left in the lurch, be it the retails associates who stock shelves or the stitchers who sew together T-shirts. As buyers cancel orders, few recognize the perilous position that these workers are left in. For those working on the factory floor in Bangladesh, more than 2 million have been furloughed, many without pay, despite a governmental scheme intended to address these issues. The meagre wages of garment factory workers have not allowed for savings that could support them in such times, and the prospect of long-term closures – or at least, no orders to fill and therefore no paid work – means almost certain disaster for them and their families.
Garment workers in Bangladesh have risen up in protest, stating that
“…we don’t have any choice. We are starving. If we stay at home, we may save ourselves from the virus. But who will save us from starvation?”
While some brands, like Primark, have set up charitable funding pools to help support workers, the money has yet to make it to their pockets, and the “charitable” framing of this funding on behalf of brands speaks volumes about what they see as their responsibilities. Yet, when the crisis passes and shopping malls re-open, brands will again be reliant upon these workers to satisfy their demand for an endless supply of cheap garments.
Given that cheap labor is a fundamental need for fast fashion companies to survive, shouldn’t brands likewise ensure the survival of those on which it depends?
This is the first in a series of blogs which will further explore the responsibility of the Bangladesh government, factories, Western governments and civil society organizations for dealing with COVID-19 in places like Bangladesh.
About the authors
Jette Steen Knudsen is Professor of Policy and International Business at the Fletcher School of Law and Diplomacy at Tufts University and holds the Shelby Collum Davis Chair in Sustainability. She is also a Velux Fellow at Copenhagen Business School where she is part of the Regulation of International Supply Chains (RISC) project.
Do you feel uneasy to think that companies use a humorous tone in their communications about grave challenges such as climate change, pollution and inequality? We suggest the notion of helpful hypocrisy to coin this new ironic turn in recent corporate communications.
Ironic campaigns
We have ourselves been intrigued by this new ‘ironic turn’ in corporate communications. Large international fashion brands such as Patagonia, Benetton and Diesel have recently challenged conventional informational approaches to marketing communication about sustainability, choosing instead to incorporate a humorous (or more precisely, an ironic) edge to their visual representations as they address issues of climate change.
Such campaigns are ironic because they bring a twist of message incongruity and ‘double talk’, where they show a world within which ambiguity, incongruity and contradictions are real and leaving it to consumers what to make of it. This stands in sharp contrast to conventional prescriptions in marketing communications where the idea of ‘one message’, or what we refer to as ‘single talk’, prevails with the purpose of targeting consumers effectively. In our recently published paper, we suggest the term ‘helpful hypocrisy’ as a way of coining the ironic turn.
On the one hand, these new ironic messages show consumers the dire consequences of pollution, climate change, flooding and deforestation (i.e. implications of consumption) and on the other hand, they simultaneously carry strong aesthetic appeals to enjoy life and consume more, comforting consumers that ‘life goes on’ and hedonistic lifestyles will continue. In new ‘twisting’ advertising campaigns, companies blend these two narratives in complex, ironic visualization.
Such double talk is often deemed hypocrisy and greenwashing in research as well as in practice. And while we agree with such assessment, our analysis shows that there is also something else going on.
Double talk
We point to how such double talk may also provoke critical reflection and surprise through displaying inconsistencies between ‘talk’ and ‘talk,’ and hereby engage its audiences as more than passive recipients. In a cosmopolitan context, where people like to think that they are able and capable of critically reflect on their own lives and make their own decisions, preaching and moralizing communications about ‘good behavior’ is becoming increasingly less effective.
Youth is particularly opposing being told what to do. And even in spite of the severe consequences of continued consumption, a certain ‘climate change fatigue’ has entered the market. Consumers know that they should buy less and more sustainable products, but they are resistant to messages that give them feelings of guilt and shame.
In such a world, we suggest, one way to gain traction is to engage audiences in ironic and humorous communications in which the receiver is him- and herself activated to interpret incongruous ambiguous messages.
Helpful hypocrisy
Analyzing Diesel’s Global Warming Ready campaign, we find how the technique of irony is particularly outspoken as beautiful people in beautiful clothes are inserted into out-of-place environments, juxtaposing them if you will, by the dire implications of climate change, in a way which makes the whole scenery appear absurd.
In our analysis, we develop an analytical model that positions irony and double talk vis a vis conventional marketing campaigns.
We point to how the blend of climate change and luxury consumption is an ambiguous affair, and we show how incongruity is present across four levels of Diesel’s use of irony: fantasy versus reality (framing), survival versus destruction (signifying), utopia versus dystopia (symbolizing) and political activism versus consumer society (ideologizing).
Without moralizing or telling consumers what to do, or even restraining from telling consumers how good the corporate sustainable activities are, Diesel exposes the ambiguities of society and sustainability by using humor.
Now, we are not fooling ourselves. Diesel is a company with an ambition of selling more products. And where satire is a technique that intends to improve humanity by critiquing its ‘follies and foibles’, companies are generally known to have less noble ambitions.
But we argue – with Swedish sociologist Nils Brunsson – that “hypocrisy appears to be exactly what we demand of modern organizations: if we expose organizations to conflicting demands and norms, and expect that they should respond to them, then we must also expect hypocrisy” (1993: 8-9).
We propose that irony may be considered a means of ‘helpful hypocrisy’ in which the public is exposed to the contradictions and vices of society with the purpose of changing people’s opinion and create betterment of society.
References
Brunsson, N. (1989). The Organization of Hypocrisy: Talk, Decisions and Actions in Organizations. Wiley.
Sarah Glozer is Associate Professor of Marketing and Society in the School of Management at the University of Bath, UK. She is also Deputy Director of the Centre for Business, Organisations and Society (CBOS). Her research focuses on corporate social responsibility (CSR) communication, digital marketing and ethical markets/consumption.
Mette Morsingis Professor and Mistra Chair of Sustainable Markets at Stockholm School of Economics (Sweden) and Professor of Corporate Social Responsibility at Copenhagen Business School (Denmark). Her research concerns how organizations govern and are governed in the context of sustainability. She is particularly interested in how communication, identity and image dynamics work in this regard.
The image is one of the eight images displayed in Glozer & Morsing (2019) from the Diesel Global Warming Ready campaign: New York City submerged in water
I arrived in Australia to discuss and research corporate social responsibility (CSR) with colleagues at RMIT University and the University of Melbourne to see the papers covered in … a banking scandal.
The Westpac Bank product ‘Litepay’, designed to enable customers to transfer small amounts of money overseas, is alleged to have enabled money-laundering on 23 million occasions. It is alleged that 12 customers used this service to transfer $500,000 to child exploitation criminals in the Philippines.
There is the usual background that senior management was aware of the failures but did nothing. There is the usual foreground that the bank’s leadership made light of the problems, and was strangely slow to accept responsibility. So far so depressingly familiar.
I also noticed Johannes Leak’s cartoon published in The Australian newspaper (27.XI.2019). OK, it is a caricature with the CSR consisting of activities that seem trivial and causes that, notwithstanding their social significance, are adjacent to the legality and ethics of Westpac’s main business!
But caricature is part of the cartoonist’s craft and it highlights the main message: the way that Westpac went about its business appeared untouched by the department ostensibly standing for its social responsibility.
So what lies behind this contradiction?
CSR professionals may well be educated, trained and experienced in other society-related issues. But as the cartoon suggests they were unable to address some key social impacts of the bank’s business models. This may be no accident. It may well suit corporate leadership to have a CSR department to focus on ‘the worthy causes’ and to distract from the business of money-making. So whilst the CSR staff engage in legitimation activities, the main CSR message (i.e. to serve societal good) is disconnected from conducting the core business.
So we need to construe CSR as something more pervasive and robust such that it addresses the core business in all its complexity and technicality. This may mean corporations re-thinking how their products are evaluated, who is around the table at strategy meetings, who leaders listen to, who they collaborate with, what sort of qualifications and capabilities are expected of senior managers and board members.
One positive
One positive in the Westpac story is that the triggers of social sanction operated. Whistleblowers within Westpac (who advised the media), governmental leaders (who expressed grave disquiet and suspended Westpac from a public policy initiative), and major investors (who threatened exit), brought immense pressure on Westpac’s leadership for more proportionate responses.
This is a belated success for the main message of CSR: that business needs to be responsible, and that failure here will be very costly.
Sadly, it comes at a price that investors and customers may have to share. The bank needs to ensure that it has sufficient and appropriate CSR capacity to build the message into the practices of business as usual.
About the author
Jeremy Moon – Director of CBS Sustainability, professor of Sustainability Governance at Copenhagen Business School and BOS blog editor. Jeremy has written widely about the rise, context, dynamics and impact of CSR. He is particularly interested in corporations’ political roles and in the regulation of CSR and corporate sustainability.
Romanticized management concepts often seem to fall short in capturing actual management practices in today’s corporate world. Experiences from other types of organisations may help deepen the understanding of the concepts and the phenomena they are trying to portray.
Romanticized concepts
The management literature is full of concepts, which indicate passion, engagement and community. Internally, terms like corporate culture, values, karma, spirituality, passion and even love and religion express a deep symbiosis between the individual and the organization. Externally, corporate communication is soaked in references to sustainability, citizenship, social responsibility, and community engagement.
If we are to believe the “About Us” sections, corporations today are more about benevolence than business.
There is a problem though.
What happens if you compare the rosy picture of business with harsh business realities? One illustrative example is the talk about management commitment. How does it go along with the fact that the average tenure of CEOs is steadily decreasing? And how do you combine talks about commitment with the recurrent discussions about bonus schemes? It seems like an awful waste of money to approve exorbitant compensation packages to CEOs if they were driven solely by an inner sense of duty and dedication to the job.
What all these management concepts have in common is that they try to give business personality, heart, spirit, and soul.
However, if we are interested in concepts like commitment, passion, and loyalty, today’s corporate world is perhaps not always the right place to look. Probably more than ever before, these concepts seem more meaningful in private life and collectives rooted in the local community.
Like community football…
As part of a survey among Danish football clubs (supported by a UEFA research grant), I asked club representatives a simple, open question: – What is the main reason to be engaged in the club? A few quotations are found at the bottom of the text and well illustrate some of the differences between the corporate world and community sport. A few examples:
Stickiness. Commitment means being in it for the long haul. It is not unusual that volunteers are members of football clubs for 20, 30, and 40 years. When managers drift from one company to another, it serves as proof that they are committed to their career. Not the organisation.
Obligation. The quotations from the survey indicate that commitment to community sport is often linked to an obligation to support the local community and paying back for own experiences as active players.
Community. In community sport, commitment has roots. You are committed to something: – the sport, the people, the club, and the community. It is probably no coincidence that local club names usually refer to a city or a region, whereas the corporate names are mostly faceless abstractions referring neither to activity nor geography.
The real motives
The point is not that club volunteers are all saints dedicated to the greater good of society. Most volunteers probably start off with instrumental motives when they become engaged in club life; either because they play themselves and/or have children in the club. However, for some volunteers club life gradually becomes part of one’s identity and network.
The question remains, however, why the management literature seems so eager to wrap business in romantic rhetoric about commitment, loyalty, authenticity etc. when these concepts often seem to reflect what has been lost rather than what can be found in today’s corporate world. Of course, part of the management vocabulary can be passed off as organizational bullshit, but even the disregard of truth may reveal some truths about our society.
Maybe the abundance of romantic management concepts reflects a dream about relationships in a market characterized by transactions.
A seek for passion in a highly professionalized work life. Longing for a community when people have all become individuals. Whatever the reason, a researcher should restrict the use of concepts to organisations where they have not yet become emptied of meaning.
Like community football…
Table 1: Respondents about the main reasons for being active members of the football club (Translation from Danish)
– ”Make a difference in my local community and support my interest in grassroot football. Jeg am a club person and believe voluntary work should be a ”citizen duty” (…)” – ”After a whole life as active in the club, also as trainer and board member, it was natural to continue (…) and give something back. I think it is fun to work with kids and people, who also give me a lot I can use in the work life”. – ”I like the social life in the club and want to help others in getting the same experience”. – ”I have played football from when I was a kid and had wonderful experiences that I like to hand over to the youth” – ”Because I love football and like to give something back for all the years when I was more on the field than outside. Moreover, it is important that somebody do something in the associations in our community”. – ”Because my kids play in the club and because I think you should make an effort in the associations in the city. And not least because I like to be part of making a difference in the local associations. – ”Have been an active football player all my youth, where I met engaged trainers and leaders. So it is probably to give something back” – ”Help our city in having a place where children, young and elderly can play football under good conditions” – ”Funny, I have asked myself the same question:-) I have been an active player from when I was 8-9 years old, to league player, to old boys – so it is simply paid back time for all the experiences (…) to all the people who made it possible.” – ”Always been involved in football. Somebody helped me when I was playing myself. Think that you have to give something back.” – ”Payback to the club which has given me a lot of good experiences. My contribution to Danish associations – the voluntary brigade!” – ”Lifestyle after more than 30 years of voluntary work. Help young athletes to get a good future. This has been my goal throughout the years and has given me a lot of good experiences” – ”Voluntary work helps in creating a well-functioning local community. For children, it is important to promote active living. And it is also developing you personally. Unity and identity” – ”For many years, I had children in the club and therefore I am involved in the work. I have enjoyed playing football and would like to give others the same experience. ” ”As a child, I experienced a lot of good things. Now when I have the opportunities, I feel obliged to give something back.” ”Have always been a volunteer in community sport and for more than 50 years. Nice to see things grow and do something good for a lot of people. Not least the social element of the club. And you get to know a lot of people and build some friendships for life”. – ”Have been involved in football for 45 years. Good friends and good network. Be part of making a difference on a voluntary basis”. – ”For 20 years, I have played football in the same club. To have a good club I also have to take responsibility” – ”The community and the joy of working with other people who love football”.”Football has always meant a lot to me and I think you have an obligation to contribute to the continuation of football. Every community needs a football club. Everyone should have an opportunity to do team sport which can also be a great foundation for your future life.”
Esben Rahbek Gjerdrum Pedersen is Professor at the Department of Intercultural Communication and Management at Copenhagen Business School. He researches CSR, Corporate Sustainability, Non-financial Performance Measurement, Supply Chain Management and Process Management.
The overconsumption of sugar, especially among children, and its long-term health risks re-gained public awareness with the introduction of the British soda tax in 2018. What can we learn for 2019?
Food and beverage manufacturers and retailers produce, advertise and sell their products to millions of people every day. We therefore consider them political actors (see for a similar argument, Whelan 2017) with a responsibility to respect the Human Rights of Children to a healthy diet (OHCHR 1999).
By using sugar as a proxy for the healthiness of children’s dietary patterns, we sought to learn more about the capabilities of food companies to act in favour of children’s long-term health. Children’s health does not only affect themselves and their families, but also implies important economic spill-over effects (e.g., Brownwell et al. 2009, Belli et al. 2005, Heckman 2006).
The Case
In order to better understand existing corporate efforts, we conducted a number of interviews with representatives of Danish and German retailers as well as international food and beverage manufactures. Additionally, we analysed their annual and sustainability reports of the last five years.
Glopan, 2016.
For our analysis, we assumed that individual food choices are contingent on the social and environmental factors that constitute the food system. Dietary patterns and food systems can thereby be seen as a two-way street (GloPan 2016) in as much as consumption choices are being shaped and shape (future) food system configurations. The innovation challenge in improving children’s dietary quality is thus systemic. (See also the Global Nutrition Report 2018 for more on malnutrition).
Corporate Challenge: ‘Sense-Making’, and the Quasi-Objectivity of Materiality
Across our data, our informants emphasized 15 distinctive patterns as ‘enablers of’ and ‘barriers to’ business efforts to effectively address children’s sugar consumption. These perceived enablers and barriers can, broadly speaking, be broken down into two ‘corporate mind-sets’ that crucially affect successes in reducing children’s sugar intake. The common pattern among organizational enablers went along the lines of “The organization itself can and must drive change!”, which we associate with a proactive corporate mindset. The reasoning of the perceived organizational barriers, however, tended to be more like “The organization must foremost account for external demands!”, which we describe as a reactive mindset.
Own illustration (1), 2018.
Drawing on the literature on sense-making (Weick 1995) in general, and the notion of “ethical blindness as the result of a sense-making process based on interactions between framing and context factors” (Palazzo et al. 2012: 328) in particular, we suggest that a mere concentration on the second, rather reactive mind-set, mirrors a perceived ‘lock-in’ within external pressures that can be conceived of as a sense-making process that risks to entail a blindness to the ethical dimension (Palazzo, et al. 2012: 324) of organizational priority-setting (i.e. values).
Example: Corporate materiality assessments are one area in which this blindness becomes performative. Although materiality may refer to different things, the outcome of a materiality assessment is often regarded as tangible. We tend to forget, however, that materiality is nothing absolute or objective. Rather, it is constructed on the basis of (often) taken-for-granted organizational processes and priorities. The design of a materiality assessment itself and the definition of materiality as such has thus an enormous influence on the interpretation of the outcomes (Eccles & Krzus 2014). The question that needs to receive more attention is: Which stakeholders’ interests and needs are ‘worthy’ of prioritization beyond their impact on pre-existing strategic targets?
At this point, the case of sugar reduction in children’s food can be transferred to other industries and future investments of resources. The bottom line is, values are performative.
What is valued, gets measured, gets done
Rather unsurprisingly, our findings suggest the following relationship: The success of corporate efforts to reduce children’s sugar consumption is contingent on whether or not child malnutrition is a corporate priority prior to the assessment of environmental influences.
That leads us to question the almost sacred status of the “outside-in” perspective, which has become somewhat of a gold-standard in corporate sustainability management.
Instead of conducting yet another stakeholder engagement workshop, it may actually be more enlightening to scrutinize from the ‘inside-out’ who decides what is (most) valuable to the organization.
This will require strong leadership among executive decision-makers since the implications of corporate strategies cannot be merely delegated to external stakeholders.
Own illustration (2), 2018.
Our research shows that a reactive approach risks to foster an organizational “lock-in” and thus tighten barriers to innovations that make a real difference for children’s diet and health. The challenge food and beverage manufacturers and retailers thus face is to avoid this ‘lock-in’ within the preferences, values and beliefs of their environment (such as ‘the persistent consumer demand for sugar products’). This, in turn, implies the need for original corporate values and a mission that is informed, but not determined by their environment, and inspires organizational decision-makers to proactively meet and anticipate social and environmental challenges.
Start with Values
The key-take away from our research is that the future evolution of internal processes within food and beverage retail and manufacturing industry need to be driven by an organizational (social) innovation mind-set (see, e.g. Osburg & Schmidpeter 2013), as well as internally recognized and lived values and priorities (see especially Breuer’s & Lüdeke-Freund’s work on ‘values-based’ innovation management).
Very concretely, a starting point for (more) proactively addressing Children’s Right to a healthy diet could be to ask:
How can we strategically contribute to a healthier food environment for children, considering the direct and indirect “touch points” we have with children?
How can we effectively drive the individual and organizational recognition of children’s nutritional health, within and beyond organizational risk management, as a material issue?
Are our global corporate knowledge management practices aligned with the goal of respecting and supporting Children’s Right to a healthy diet?
How can we initiate or contribute to collaborations with other stakeholders to reduce children’s sugar consumption
Active Corporate Support for the Children’s Rights and Business Principles
In light of our research, it became clear that against the background of the respect and support framework of the UN, it is not sufficient for corporations to interpret the “respect” for Children’s Rights in terms of ‘doing no harm’. The Children’s Rights and Business Principles define respect as “avoiding any infringement of the Human Rights of others, including children, and addressing any adverse Human Rights impact with which the business is involved” (CRBPs 2012: 5). The aim of “doing no harm” is insufficient in so far as it implies the existence of a cause-effect relation, which corporations can directly steer. Children’s sugar consumption is, however, influenced by the overall configuration of their food environment. Therefore, there is no such direct cause-effect relation, rendering a mere commitment to do “no-harm” insufficient (see e.g., Schrempf 2014 on the social connection approach to corporate responsibility in the case of the food industry). Rather, food and beverage manufacturers and retailers need to actively support the Child Right to a healthy diet by anchoring positive contributions to social health at the core of their corporate values and operations.
On a more general level, our research demonstrates that an alignment of current food systems with public health objectives is to a large extent contingent on corporations’ capability to innovate and act upon corporate values that put the active support of healthy food systems at the centre of their business practice, i.e. their innovation, marketing and sales activities.
The Authors
Thomas is based in Copenhagen and graduated from
CBS in 2018. He studied economics, business administration and
philosophy. He enjoys addressing dilemmas and ambiguities of
social, economic and business transformation processes.
Feel free to connect with Thomas on Linkedin.
Levinia recently graduated from CBS with a MSc in Business
Administration & Philosophy. She is passionate about identifying and
driving innovative organisational strategies that effectively address the
systemic nature of local and global sustainability challenges across value
chains. Learn more about what Levinia is up to on Twitter and feel free to be in
touch on Linkedin.
References
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