These needs, although related by being the outcomes of linked economic and
social changes that have affected business, are each quite distinct. They each face
in a different direction, the first towards employees, the second towards
customers and shareholders, and the third towards government and other civil
society actors. This multiplicity of audiences is commonly aggregated (and
confused) through usage of the term ‘stakeholders’ — giving the impression of a
uniform group. In practice, each of these groups invite quite specific management
actions. What each of the groups share, however, is the difficulty of establishing
clearly the scope of knowledge and accountability that they desire, and
consequently the nature of activities that business needs to make. There is no way
of defining clearly what responsible behaviour is, or who’s view of what
constitutes responsible behaviour should be taken into account. There will exist
varieties of opinion at any one time, and views will change over time. What is
deemed responsible today may appear irresponsible tomorrow. Marginal
opinions today can become mainstream opinions in the future. Audiences of
corporate responsibility are usually diffuse, not organized and not active in the
sense of having close and continuous relationships with firms. The contexts
within which social norms for business are formed and shaped are therefore
ambiguous, open-ended and dynamic.
The mobile and unfocused nature of corporate social responsibility promotes a
great variety of responses from different firms, and this apparent variety of
responses fuels a counter demand for greater standardization in the practice of
corporate responsibility. Many firms seek to appeal to groups of stakeholders in a
coherent and integrated way through dedicated management functions and
though common sets of approaches. Broadly, these have four features:
E values and norms promoted within and by the organization;
E actions consistent with these norms through which responsibility is
demonstrated;
E the setting of performance objectives; and
E routines for reporting on actions.
The balance between these features differs between organizations, and also
gives rise to differing views about the role of corporate social responsibility. The
‘normative’ view holds that corporate social responsibility is a response to firms’
need to demonstrate social and ethical values that match those of consumers and
employees. Corporate social responsibility is seen, therefore, as a means of
securing a ‘licence to operate’. An alternative ‘functional’ view sees corporate
social responsibility as a way of imposing better management control in business
organizations through the introduction of new management and information
systems. A simple equation is made between better management control and
better corporate performance. Amongst the many influences on this view is the
‘balanced scorecard’ literature in strategic management. In the environmental
G. Azzone, M. Brophy, G. Noci, R. Welford and C. W. Young, A stakeholders’ view of
environmental reporting, Long Range Planning, 1997, 30 (5), 699—709.
R. Kaplan and D. Norton, The balanced scorecard: measures that drive performance, Harvard
Business Rev., 1992, January/February, 71—79.
F. Berkhout
164
social changes that have affected business, are each quite distinct. They each face
in a different direction, the first towards employees, the second towards
customers and shareholders, and the third towards government and other civil
society actors. This multiplicity of audiences is commonly aggregated (and
confused) through usage of the term ‘stakeholders’ — giving the impression of a
uniform group. In practice, each of these groups invite quite specific management
actions. What each of the groups share, however, is the difficulty of establishing
clearly the scope of knowledge and accountability that they desire, and
consequently the nature of activities that business needs to make. There is no way
of defining clearly what responsible behaviour is, or who’s view of what
constitutes responsible behaviour should be taken into account. There will exist
varieties of opinion at any one time, and views will change over time. What is
deemed responsible today may appear irresponsible tomorrow. Marginal
opinions today can become mainstream opinions in the future. Audiences of
corporate responsibility are usually diffuse, not organized and not active in the
sense of having close and continuous relationships with firms. The contexts
within which social norms for business are formed and shaped are therefore
ambiguous, open-ended and dynamic.
The mobile and unfocused nature of corporate social responsibility promotes a
great variety of responses from different firms, and this apparent variety of
responses fuels a counter demand for greater standardization in the practice of
corporate responsibility. Many firms seek to appeal to groups of stakeholders in a
coherent and integrated way through dedicated management functions and
though common sets of approaches. Broadly, these have four features:
E values and norms promoted within and by the organization;
E actions consistent with these norms through which responsibility is
demonstrated;
E the setting of performance objectives; and
E routines for reporting on actions.
The balance between these features differs between organizations, and also
gives rise to differing views about the role of corporate social responsibility. The
‘normative’ view holds that corporate social responsibility is a response to firms’
need to demonstrate social and ethical values that match those of consumers and
employees. Corporate social responsibility is seen, therefore, as a means of
securing a ‘licence to operate’. An alternative ‘functional’ view sees corporate
social responsibility as a way of imposing better management control in business
organizations through the introduction of new management and information
systems. A simple equation is made between better management control and
better corporate performance. Amongst the many influences on this view is the
‘balanced scorecard’ literature in strategic management. In the environmental
G. Azzone, M. Brophy, G. Noci, R. Welford and C. W. Young, A stakeholders’ view of
environmental reporting, Long Range Planning, 1997, 30 (5), 699—709.
R. Kaplan and D. Norton, The balanced scorecard: measures that drive performance, Harvard
Business Rev., 1992, January/February, 71—79.
F. Berkhout
164