Defining indicators to assess socially responsible enterprises

Defining indicators to assess socially responsible enterprises

Pergamon Fumes, Vol. 29, No. 7, pp. 58 1403, 1997 0 1997 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0016-3287/97 $17.00 + 0.0...

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Pergamon

Fumes, Vol. 29, No. 7, pp. 58 1403, 1997 0 1997 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0016-3287/97 $17.00 + 0.00

PII: SO01 6-3287(97)00034-7

DEFINING INDICATORS TO ASSESS SOCIALLY RESPONSIBLE ENTERPRISES’ Michael

Hopkins

Concern for the social responsibility of business by both the public and enterprises themselves has been growing since the fall of the Berlin Wall. The private sector’s relative unconcern with Apartheid in South Africa, poor and dangerous products, and environmental disasters have all led concerned people to question the relative social autonomy of business. As Government’s tire of social expenditures and the public become weary of paying taxes, the future corporation will have to take its share of responsibility for social concerns more than ever before. Globally, the worlds’ production cannot eventually end up going to the lowest common denominator, ie the country with the lowest social costs, the most paltry wages, poorest working conditions, and those with meager pensions for the old. In practice this means that beggar-thy-neighbor rent-seeking by enterprises whereby production is allocated to the poorest but cheapest working conditions must come to an end. Consumers, too, will insist that the enterprises of the future must be more socially responsible both within and outside their workplaces. What sorts of indicators to measure what will be a ‘socially responsible enterprise’ of the future is the subject of this paper. 0 1997 Elsevier Science Ltd

When Dwight Eisenhower was President of the United States, there was a widespread acceptance of the oft-quoted statement of the chief executive officer (CEO) of General Motors: ‘what’s good for General Motors is good for the USA’. Business practices were rooted in the 19th century operations of American and European industry. The practices Michael Hopkins is an economist and is a Director of a social development consulting company-MHConsulting Ltd. He may be contacted at 4 Rue Jean Jacques Schaub, 1202 Geneva, Switzerland (e-mail: [email protected]).

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of the oil industry

enterprises:

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and its many companies, however, began to bring about an awareness

of the role and power of business in society. Theodore Roosevelt and his ‘trust busters’ attacked many of the monopolistic practices of the largest of American businesses. The reaction of the federal and state governments to regulate the oil industry prompted the industry to examine itself and move toward practices that would better conserve what was rapidly becoming the world’s most important, non-renewable resource. But private enterprise continued to treat certain resources such as air and water as ‘free’ and ignored the effects of using or damaging common resources and releasing waste into what many thought was an inexhaustible rubbish bin. In the 195Os, business practices largely consisted of obeying the law in a minimal action, and retaining good corporate lawyers. tution quite separate from ‘social institutions’ responsible to, society. Not all observers were willing

way, lobbying to defeat regulatory

Business was seen as an ‘economic’ instiand in no way under the control of, nor

to grant such a broad autonomy to business.

In the

195Os, a field of scholarship was developed that questioned the roles and obligations of business in a capitalist-democratic society. Early writers in business and society2 were concerned with what they saw as an excessive autonomy and degree of power for business, apparently unconnected to any responsibility for the negative consequences of business activities.j

Approach of this paper The intended outcome of this paper is to construct a system by which socially responsible enterprises (SREs) can be ranked, relative to one another, on a composite scale in the manner of the Human Development Index (HDI) (United struct such a system,4 the following steps are necessary:

Nations,

1990-1995).

To con-

l

To determine those elements of a business that are connected with social responsibility. Examine the relationships of the elements of an SRE. An SRE is a complex social organization and this requires a clear understanding of internal and external relationships

l

with reference to the outcome of socially responsible activities. On the basis of a mental model of what is an SRE, choose indicators that will social responsibility.

l

Why

a concern

for the social responsibility

measure

of enterprises?

Ethics Researchers have sought an answer to the question ‘what is corporate social responsibility?’ for more than 40 years. Although this field of study has had strong American roots, it has begun to spread to Europe as well and scholars and academic institutes are now contributing to it. The field either grew from, or was coincidental with, the development of a concern for an ethical framework for decision-making in business. Some scholars wrote to defend the neoclassical economics view of Milton Friedman5 that ‘the social responsibility of business is to make a profit’; many scholars sought to challenge that view.

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The global economy Since the collapse of communist nations brought about an effective end to the Cold War, it has been said that the world is a safer place. But safer for whom? As the threat of a nuclear holocaust receded and the clash of superpowers through surrogates such as Vietnam

and

Afghanistan

importance

of global

ended,

so began

the

rapid

globalization

of

and,

therefore,

the

peace.

. ..by the early 198Os, trade between the 350 largest TNCs (transnational corporations) contributed to about 40% of global trade; today the TNCs account for 70% of world trade. Because of their often immense size, decisions about the location of investments, production and technology by the TNCs influence not only the distribution of factor endowments, notably of capital, skilled labour and knowledge, between the countries in which they run their activities, but also assume a crucial importance for their social and political consequences.6

As the United Nations system, the Bretton Woods Institutions (IMF, World Bank) and Governments themselves come under pressure to reduce social expenditure; the need becomes more urgent for the private sector to become involved in some, or even all, aspects of social development. This is because social problems will not evaporate without a concerted effort. The public sector is losing the public’s confidence to do this, thus the private sector has an increasingly The transnational

important role to play.

company

Modern data transfer, information technology, and the high speed transport of goods and material have acted as midwife to the birth of the global economy. Global TNCs can hardly be said to have a ‘home country’ and the results of these immense changes have yet to be studied in any detail. A company, Nike for example, may be nominally a ‘US or UK company’, but it may buy part of its raw materials from country A, have subcomponents manufactured in country B, and all components assembled in country C for worldwide distribution and sales. It is unlikely that a firm’s capital will remain in one country as its financial managers constantly seek the most advantageous countries with respect to taxes, fund transferability, and laws, regulations, and customs concerning worker welfare and safety, pollution, and other concerns. With money existing beyond the reach of any one nation, the largest of the TNCs have become as large as rich nations. Such ‘corporate global nations’ do not, however, exist in a truly autonomous way. The TNC must buy and sell goods and materials and constantly interact with other businesses and national governments in a huge network. As Simone de Colle’ points out, there is ‘a condition of strategic interaction between autonomous, self-interested social actors, in which the result of individual decisions and actions cannot be foreseen with certainty, because it is influenced by the strategies chosen by the other individuals.’ In the new global economy, actual nation states become both buyers and sellers of goods and services to and from the quasi-national TNCs. Global communication and high speed data transfer make it possible for a firm to change certain host country strategies on an hourly or even moment-to-moment basis. As nation states other than such a powerful entity as the European Union have not formed effective collectives based on mutual interest, such states are clearly losing power to the TNCs, and are no longer simply metaphorical nation states. De Colle goes on to point out that: The increase of power of TNCs and has not yet been balanced

is parallel with the corresponding decline of the role of the state by an explicit recognition of the new responsibilities connected

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with the role of the TNCs as global actors. In other words, the shifts in power generated by the globalization of the world economy have, in one sense, strongly eroded the capability of the existing institutions to cope with the social problems that are relevant to their respective ‘constituencies’ without providing, in another sense, an accompanying shift in the assignation of social responsibility towards the new dominant forces. This lack of institutional response to the political and social problems produced by the rapid evolution of the global economic system is at the core of what has been called the ‘crisis of legitimacy and responsibility’. It is this crisis that draws our attention to the social responsibility of business with a particular emphasis on the global economy. The development of this economy carries much promise, but requires a great deal more responsibility and an understanding of the proper role of society’s legitimate concerns.

The global economy and socially responsible The inability

decision making

of nation states to monitor some TNCs

is manifested in environmental

disas-

ters, corporate crime, poor working conditions, and the corruption of host country governments. This is not true of all TNCs and some bend over backwards to be SREs and often behave better than host nation enterprises. However, although the United Nations and others have proposed guidelines in certain areas and some international agreements have been drawn, the problem of the measurement of social responsibility to monitor performance accurately. Further, there have been relatively few efforts to define behaviour, especially in a global context. This is crucial businesses of all sizes are, or are in the process of, becoming able and unacceptable behaviour’ can be culture-relative ask, ‘acceptable to whom?’ The major models proposed to understand

impedes the ability

acceptable and unacceptable as an increasing number of ‘transnational’. Thus ‘acceptterms and business can well

the socially

responsible

enterprise

all

point to a set of principles which, in conjunction with a legal framework, constitute guidelines within which an enterprise makes decisions (for instance those of the Calvert Group, the Caux Round Table, and the CERES Principles reproduced in the March, 1995 issue of Futures). However, a business enterprise is not a faceless entity, but rather a collection of individuals operating within their own principles as well as those of the enterprise. A statement of ethical principles is an easy construct but actions based upon it are more difficult to obtain. A study by Ettore in 1992H surveyed 2000 US companies and found that 85% of the respondents had an ethical code. However, only 50% of these companies had distributed the code to their employees and only 28% had training programs in ethics. Thus, although the organizational level of the ethical principles component of a socially responsible enterprise had been addressed, the individual component had not been addressed. It is individuals who make decisions.

Self-interest The interpenetration of social systems establishes business as an integral, interactive part of the larger society. Before the dawn of the information age, the practices of enterprises outside their home countries were little known and few cared. Such practices seldom had any effect on the home society and those home societies viewed international operations as the rightful domain of the conquering economy. The post Cold War world is,

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however, beginning to operate in a very different manner. Whether

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large or small,

busi-

nesses are increasingly global to a greater or lesser degree and their successes or failures often depend upon their relationships in host countries as well as at home. Even in purely ‘national’ operations, the media and consumer and environmental activists have brought corporate wrongdoing into the public consciousness and ‘corporate good guys’ are also being recognized, to their direct and profitable satisfaction. The ability to hide wrongdoing-no matter how defined-becomes increasingly difficult, and the need to publicize good performance becomes ever more crucial. Individual and institutional investors are becoming increasingly aware that a company which sells a product that is of bad quality or that is positively dangerous is very likely to suffer negative economic effect when this is, inevitably, made public. On the other hand, the growing success of ‘green marketing’, of organic foods marketing, and socially aware shopping guides argue for the economic self-interest of business in acting in a socially responsible manner. Acceptance by new clients and countries

It becomes ever more difficult

for a business to simply enter a field of endeavour or to place itself in a new community or country with a solely economic rationale. Within Western countries, there are a host of legal requirements covering environmental considerations and good corporate citizenship. Beyond laws and regulations, growing consumer and environmental awareness places further societal restrictions on business activities. A firm that is known for its socially responsible the acceptance it requires for profitable operation.

performance will

more easily gain

Acceptance by unions and the general workforce The large sales of a book by Levering and Moskowitz’ entitled The Best 700 Companies to Work For indicate that the working population, despite recessionary times, will vote with its feet. Companies that offer generous compensation and pension packages, an attractive workplace and good health and safety records are those that attract a workforce of the highest quality. Microsoft Corporation is seen as a leader in employee benefits and working conditions (despite very high expectations of staff) and they consistently attract the best and brightest the international workforce can offer and their success is legendary. By contrast, many industries retained their workforce through fear and intimidation, and their union troubles and poor quality assurance have guaranteed ultimate failure. Ability

to attract new investors

Negative social events such as an environmental disaster or conviction of a corporate crime have a clear, negative effect on profitability and return on investment. One studylo showed that large US manufacturing companies with better reputations for social responsibility outperformed companies with poor reputations during the 6-year period 1982-1987 as measured by better stock market returns and lower risk. Conversely, the vast expansion of firms that screen companies for socially responsible performance is having a positive effect on the redirection of investors toward those companies who are top performers in this area. Companies such as KLD of Cambridge, Massachusetts, USA, demonstrate successful performance in the companies they recommend to socially con-

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scious investors and this advice clearly appeals to the individual and institutional investor. This latter investor, pension fund and so forth, have hundreds of billions of dollars available and they speak with a very loud voice. Appalled at being implicated, thousands of investors are placing ethics before personal gain in choosing where to put their money. In response, a number of money managers are tailoring portfolios to allay their clients’ qualms. By now, the managers of perhaps $500 billion of investment funds have channeled the money into companies that pass one test or another for ethics or social responsibility. That represents 5% of all the capital at work in public companies in the US. For people investing their own money, several investment-management companies maintain blacklists. The Domini Social index measures the effects of the market’s ups and downs on 400 companies that are approved by Kinder Lydenberg Domini. Mutual funds or fund groups that belong to the social responsibility movement include Calvert Ariel Appreciation, Dreyfus Third Century Fund, New Alternatives Fund, and Pioneer Group.” The argument is also made that poor social performance may drive away potential investors. The increase in litigation (arising from corporate lawbreaking) has strengthened the penalties on professionals and has made the conduct of business a hazardous occupation. Because of the litigation explosion, business now faces a two-front battle: increases in both the number of multimillion dollar verdicts and the number of actions filed. Expanded third-party liability means that many more professional groups are being held liable, including underwriters, accountants and lawyers. The year 1992 was the first in which substantial awards were given to corporate whistleblowers. The increased focus on business conduct derives from the growing public perception that business should be more socially responsible. Salomon Brothers is just one recent example of a failure to meet rising public expectations that has led to government action. The ancient aphorism that good ethics is good business has never been more important.12 Improved consumer confidence Ralph Nader and his team gained broad public acceptance as spokespersons for the consumer in the US. His successful campaign against GM’s ‘unsafe at any speed’ Corvair brought a new power to the consumer and focussed American lawmakers on consumer’s rights and protection. As the general public became aware of dangerous product defects, the recalls of such products were forced and the costs of these recalls were staggering. The green revolution and the burgeoning national and international awareness of the consuming public brought more issues to light. Councils were formed and publications issued to further strengthen and broaden this awareness. As the public is aware of the negative consequences of instances of social irresponsibility of some businesses, so too has it become aware of good products and socially responsible activities. Business has been forced to become equally aware of the informed consumer. Sustainability Enterprises are aware that natural with their use of water resources, Strong, Secretary General of the (UNCED) stimulated the formation

resources are limited and that there is a cost involved waste disposal sites and clean air. In 1990, Maurice UN Conference on Environment and Development of the Business Council for Sustainable Development.

Sociallyresponsible

enterprises:

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At the first BCSD meeting in 1991, several key issues were agreed upon, most of which were derived from the idea that open competitive markets have proven themselves to be the best ways of creating wealth and of efficiently

using environmental

resources.

The

Council called for liberal trade as one of the major ways by which developing countries can achieve economic growth, and argued that environmental issues should be dealt with through international agreements, not trade embargoes. Technology cooperation for sustainable development multilateral organizations.

is becoming a major focus of business,

governments

and

In August 1994, a small, but significant tuna war was waged between British and Spanish fishermen in the Bay of Biscay; and in March 1995 an acrimonious cod conflict between Canada and Spain broke out. The former issue turned on the length of drift nets used by the British and the latter on the small size of the fish caught by the Spanish, but the basis of both conflicts lies in sustainability. Modern technology, including the use of Global Positioning Satellites, increasingly render the fishing industry more capable of being where the fish are; this technology is available to all. As the number of a fish species available for catch is a limited resource, competing actors must find the means to share what is available. The shrinking pool of marine resources have caused a few meters of net to become the occasion of violent acts. The concept of ‘sustainability’ can and must be accepted by developed countries because they are the major consumers of the world’s resources and the major producers of waste and pollutants. Developed countries are most in need of sustainable development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Planning professionals must understand that sustainability has the potential to make connections between the traditional concerns of city and regional planning, and more recent concerns of global environment and social inequity. Sustainable communities should: l

acknowledge environmental biological limits;

l

aim to reduce the exposure of people and property to natural hazards;

l

seek to reduce air and water pollution; promote a sense of place; and provide housing opportunities for all residents.13

l l

Social responsibility

constraints,

and, as such, work to live within

issues in management-a

rapid review

physical and

of the literature

Introduction One of the earliest statements of the awareness of the intersection of business and society stood written above the market place in the Roman Forum and said simply, Caveat Emptor-let the buyer beware. Even before the Roman Empire, the Sumerians, the Egyptians, and the Phoenicians all sought to regulate commerce for one reason or another. There has long been a tacit understanding that business and society were somehow related but generations of social, economic and philosophical theorists placed these in many different and often conflicting positions. The literature concerning business and society has existed for as long as there have been business enterprises and its span is at

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Hopkins

least as great as the variety of human enterprise throughout history. Because there is an enormous amount and variety of literature about business and society, it is necessary to attempt some classification and limitation within the scope of this paper.

in order to undertake any meaningful

review

Date. The first and most simple classification of the literature is by date of publication. The area of business ethics appears to be the first related topic to come under considerable scrutiny within recent times. ‘Business ethics’ in the 1950s was primarily concerned with the ethics of decision making within an existing legal and regulatory framework. Neoclassical economic theory dominant in the first half of this century viewed the ‘business of business’ as profit. It was not until the late 1960s that, as a result of a growing social awareness and some instances of dangerous products and corporate misdeeds, more attention was focussed on the interrelated roles of business and society. With a few exceptions,

this paper will

concentrate on relevant literature

from the 1960s

onward.

Popular view. Within this period, a further broad division of the literature is possible. As social awareness and concern grew, the business community was forced to make public disclosures on products and practices and these disclosures, in turn, became a matter of public debate. This debate took place among the general public, between the public and the business community and between the public, the business community, and government. As the globalization of the economy (aided by the information revolution) burgeoned, so too did social awareness of the human society increase. These debates form another type of evidence in the literature, which we shall refer to as anecdotal/popular. Popular and anecdotal evidence has been largely responsible for the growth in concern over the socially responsible enterprise and is a vital facet of any review of the literature.

Primary socially

and secondary data on firms. A second division of the literature concerning the responsible enterprise consists of specific data on the various components of

social responsibility (to be discussed in detail in a later section). There are several sources of both primary data as well as numerous analyses performed on such data. The first source of specific data is the firm itself. All companies of any significance publish an annual report. Even the least informative of these reports will reveal information about staff, operations, sales and items such as corporate philanthropy. In addition to such reports required for minimal communication with stockholders, many companies publish a wealth of ancillary material, often including specific reports on activities and outcomes in the area of social responsibility. Beyond the data voluntarily available from the firms themselves, other information may be required by agencies that regulate commerce. These basic data plus data gathered by survey are often used to build databases for various uses which can then be accessed by users for different purposes. Some databases such as those compiled by the KLD Corporation or the Council on Economic Priorities (CEP) are specifically concerned with screening on issues of social responsibility. There are also numerous mutual funds that specifically seek socially responsible enterprises for their portfolios, and these portfolios are a source of secondary information and analysis. The types of primary data available will be discussed only briefly in this paper as they fall into the next phase of the study.

Socially

Academic

literature.

Another

division

of the literature

responsible

enterprises:

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might be termed academic or

scholarly. By this, we refer to research that seeks to define and categorize the elements of social responsibility in order to build models that can describe the relationship of business and society in increasingly objective and measurable terms. The construction of such models would then allow researchers to seek ways in which to predict social performance as it relates to certain variables of the (focal) firm. By establishing such statistical relationships, scholars can then determine how social indicators can be established and tested whereby firms can be ranked relative to one another. Within this broad category of academic research there is a further division that examines the area of ethics at the interface of business and society. This paper will not review this area in depth beyond establishing the basic relationship of business and society, and the role of principles of conduct within a predictive model. Guy Standing14 used a number of indicators to identify a human resource enterprise (HRE) such as: is training usually provided to newly recruited workers, is there a jobrotation policy, whether fewer than 10% of the workforce have non-regular employment status etc. He then combined this into a single index to rank companies (using a survey applied in Malaysia). He found that being a good ‘HRE’ was positively related to economic dynamism and that being a good HRE was compatible with economic efficiency. Popular

view

It can be largely assumed that the popular business publications speak as members of the business community and that their editorial stance reflects the concerns and prejudices of that community. Without reviewing specific articles, magazines such as Forbes, Business Week, and Fortune reflect business’ changing stance toward social responsibility over the past 20 years. One citation from Business Horizons (July/August 1991) reviewed business practices in Proctor and Gamble, McDonalds, and Dayton-Hudson Corporation and reached conclusions that would have startled its readers in a pre-aware era. According to the orthodox view of corporate social responsibility, US corporations do not have an obligation to solve social problems. Perhaps the three strongest arguments against this position are based on the duties of gratitude and citizenship and the responsibilities of power. If international competition requires that social problems be solved and government is unwilling or unable to do so, it would seem that business has no choice but to become involved. For too long, corporate responsibility has been analyzed in terms of the responsibilities of the firm to all other corporate stakeholders. To develop a truly comprehensive theory of corporate social responsibility, a theory must be developed for determining the appropriate reciprocal duties that exist among corporate stakeholders. If the managers and stockholders have a duty to customers, suppliers, employees and the local community, then these groups have a duty to managers and stockholders. There is a large body of literature that is concerned with the question of whether or not business is ‘doing wrong or doing right’ according to guidelines developed by a large number of concerned groups. Corporate wrongdoers. Alice Tepper Marlin, the founder of Priorities (CEP), was the original promoter of a report, that has with the title of Shopping for a Better World: A Quick & Easy sible Supermarket Shopping. The book rates 168 companies

the Council on Economic since sold 600,000 copies, Guide to Socially Responbehind 1800 products in

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such areas as charitable giving, community outreach, information disclosure, environmental impact, and family benefits. So many people contacted companies after the 1989 guide was published that the 1990 issue includes an appendix with the names and addresses of all the listed companies’ chief executive officers. A CEP study of buyers of the guide found that 78% said they had switched brands as a result of using it and that 64% refer to it regularly. The seeds of CEP were planted when Tepper Marlin was a Wall Street securities analyst with a client that did not want to invest in companies that supplied arms to Vietnam. Since its beginning, CEP has had an impact far in excess of its size, which is now at 6500 individual members.15 There are negative rewards, ‘dishonorable mentions’. One of the least coveted awards is that given by the CEP to ‘America’s Worst Toxic Polluters’, which in 1993 was presented to: General Motors, Cargill, DuPont, General Electric, MAXXAM, USX corporations.16

Rockwell

and

Responsible corporations. A second and growing type of anecdotal evidence concerns socially responsible corporations. There are a vast number of attempts today to reward good corporate social performance with the obvious goals of encouraging further successful striving. It seems that not a month goes by without some publication announcing winners of a corporate award. The number of awards in the corporate sector has more than doubled since 1979. According to Gita Siegman, editor of the 10th edition of Awards, Honors & Prizes, there were 6000 listings of awards in the US; in the latest edition, there will be 15,500 listings. Besides the normal complement of prizes in arts, sciences and letters, corporate awards can be given and received in such diverse categories as women’s achievement, human rights and environmental correctness. Many of the significant honors-including the Baldridge-were created in the mid- to late-1980s. Most were established to honor corporate responsibility, initiative, environmental sensitivity or other exemplary behavior. A good corporate award should be clearly defined and relevant. It should should spawn imitative of expectation .’ ’

illuminate exemplary behavior, even corporate heroism, and it actions. It should also be well publicized, so that there is an air

The problem with all of these rewards is that they tend to either acclaim a specific program or policy without regard to other factors or that each awarding agency has its own, often unpublished, criteria for the awards. Thus, each of the awards may carry some motivational impact, but the totality lacks impact because of a lack of comparability. Nonetheless, a few companies appear in a number of anecdotal accounts and this frequency of mention calls for closer attention. The following are examples of firms that have been mentioned in several such accounts: l

Ben and Jerry’s Homemade, Inc.-cited for cause-related marketing, corporate philanthropy and employee benefits. ‘a Ben and Jerry’s deserves an additional amount of attention in this paper as it is a particularly outstanding example of a socially responsible enterprise that is almost astonishingly open about its social endeavours. Ben & Jerry’s Homemade Inc., an ice cream manufacturer that promotes the idea of corporate social responsibility, publishes two types of audits in its annual report-financial and social. The social audit, done by an outside expert, rates company performance in employee benefits, plant safety, ecology, community involvement and customer service. All employees and corporate documents were made available to the auditor. The 1992 audit was very critical of plant safety, citing increases in injuries at the company’s

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The audit

also criticized the company for failure to follow through on its policy of employee ownership. The 1991 audit criticized the company’s charitable activities for being vague. Public relations professionals point out that the style of the report distinguishes it from others, appeals to diverse audiences, and enhances the company’s credibility.19

l

l l

Mobil

Oil-cited

for its role as a catalyst in the arts and humanities

related to its business interest.20 The Body Shop-cited for its concern for employees.2’ Levi Strauss, Apple Corporation, Lotus-all cited for their and other employee benefits.22

in communities

liberal extension

of health

For its part, the business community has recognized the power of both its friends and critics and has largely abandoned its earlier defensive stance. Now the anecdotal literature is abundant with examples of CEOs presenting their personal and corporate ethics through various fora. In an article in Business Horizons, for example, several CEOs addressed social responsibility. According to Robert A. Schoellhorn, chairman and chief executive officer (CEO) of Abbott Laboratories, private enterprise has a role in addressing social problems, but that role is primarily through the conduct of its business. Alcoa Chairman and CEO Charles W. Parry says that an organization cannot operate successfully if its sole goal is profit. Navistar’s Donald D. Lennox feels it is his job to be responsible in an ethical manner that relates to all of the firm’s stakeholders, including lenders, vendors, employees and stockholders. The examples in which corporate leaders insist on a high standard of fair play in their organizations show that fair-minded competition is viewed as being more important than immediate, tangible gains.23 The more academic view. The academic field in which this topic lies is largely known as ‘Social Issues in Management’ (SIM). It has also been known as Business Ethics or Corporate Responsibility. This paper has sought to sample the literature of studies that seek to define and measure the dimensions of the socially responsible enterprise. SIM studies range from pure philosophy, in an attempt to justify themselves, to detailed and documented empirical studies of some particular element of social responsibility. This paper will not review the bulk of the philosophic literature nor the lengthy treatises on business ethics. It will refer briefly to some works that establish the basis for examining business and society, but the day-to-day application of the larger questions ethics is not within its scope.

Measuring

social performance:

of business

the CSP model

Preston and Post24 focussed interest on a firm’s ability to respond to social issues, corporate social responsiveness or ‘CSR2’ as it was named by Frederick,25 the ‘2’ indicating responsiveness rather than responsibility. Thus, several essential ingredients of a social responsibility model now existed: Preston and Post had suggested a basis for the legitimacy of society’s right to expect certain conduct from business; Carroll26 had defined three essential elements of corporate responsibility; and Ackerman2’ added an entirely new dimension concerning the ability of business to respond to social issues.28

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The levels of CSP Wartick l

and Cochran formulated

The level of Principles

a CSP model that has three levels:

of Corporate Social Responsibility,

which had economic, legal,

and ethical components as well as a discretionary component by which corporate philanthropy could be governed. This level of principle forms the ethical framework within which corporations make decisions; l

The level of the Processes of Corporate Social Responsiveness viewed a corporation’s response to a social issue as being either reactive, defensive, accommodative or interactive. This level deals with the actions of an enterprise. However, in the Wartick and Cochran model, process can only discrete elements;

l

be viewed as an ongoing activity

rather than as

The level of Issues Management is concerned with the manner in which the reactive processes of a corporation actually interact with both issue and stakeholder. At this level, the feeling of ‘action’ is retained with some elements being more closely defined, but without

the ability to make further discretionary

judgments.

This model included economic responsibility (that is, the responsibility of the company to earn a profit) while giving significant concern to legal, ethical and discretionary responsibilities. Clarkson used the Wartick and Cochran model on several studies of Canadian companies which sought to connect social responsibility and ethics to profitability. He examined Canadian enterprises through a case-research data base that covered a IO-year period. These studies showed that the more economically motivated a firm is, the less emphasis it will place on legal, ethical, and discretionary issues and responsibility. He also found evidence of a link between economic and social performance. But Clarkson later examined the basic premises of the Wartick and Cochran CSP model and concluded that it was not effective in guiding research on corporate social performance. He believed that the concept of social responsiveness did not provide a framework for the systematic collection, organization and analysis of corporate data. This has led to a great deal of work to explain what ‘responsiveness’ means. The term indicates action and direction, but it does not address the results of these actions.3” Clarkson especially felt that the responsiveness model lacked the ability stakeholders and their multiple interests.

Wood’s

reformulation

to deal effectively

with

of CSP ”

Wood recognized, as did Clarkson, that neither motivating principles nor ‘responsiveness’ lent themselves to measurement, nor did they take full cognizance of the roles of the stakeholders. Wood sought a model that would include the outcomes of social responsiveness as actual indicators of corporate social performance. In 1991, Wood defined CSP to be ‘a business organization’s configuration of: principles of social responsibility, processes of social responsiveness, and observable outcomes as they relate to the firm’s societal relationships’. Levels and elements of the CSP model The three levels of this model are summarized

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in Figure

7.

Socially

PRINCIPLES

I

OF SOCIAL

Legitimacy

PROCESSES Environmental

enterprises:

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RESPONSIBILITY Public

I

OF SOCIAL

responsible

I Managerial

Responsibility

Discretion

RESPONSIBILITY Stakeholder

Scanning

Management

Issues

Management

OUTCOMES

I

Internal

Stakeholder

Effects

I

External

Figure Level I: Principles

1.

Stakeholder

Effects

External

Institutional

Effects

Wood’s CSP Model.

of social responsibility.

The /eve/ of application

of this principle

is

institutional and is based on a firm’s basic obligations as a business organization. Its value is that it defines the institutional relationship between business and society and specifies what is expected of any business. 32 This level of the CSP model itself contains three major elements: Legitimacy. The element of legitimacy concerns business as a social institution frames the analytical view of the interrelationship of business and society;

and

Public Responsibility. This element concerns the individual firm and its processes and outcomes within the framework of its own principles in terms of what it actually does; Managerial Discretion. Managers and other organizational members are moral actors. Within every domain of corporate social responsibility, such discretion as is available to them, toward socially

they are obliged to exercise responsible outcomes.

Level II: Processes ofsocial responsibility. Corporate social responsiveness is a business’s capacity to respond to social pressures. This suggests the ability of a business organization to survive through its adaptation to its environment. To do this, a firm must know as much as possible about this environment, be capable of analyzing its data, and must react to the results of this analysis. But the environment of business is not static, it is a complex and ever changing set of circumstances, encompassing complicated interpenetrations of social systems. The ability to successfully scan, interpret, and react to the business environment requires equally complex mechanisms. Three such elements have been identified as basic elements of this level of the CSP model: l

l

Environmental Scanning. Environmental Scanning (Assessment) indicates the informational gathering arm of the business and the transmission of the gathered information throughout the organization with its ultimate use in forward planning; Stakeholder Management. Stakeholder Management refers to mapping the relationships of stakeholder to the firm (and among each other) while seeking to balance and meet

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M Hopkins

legitimate concerns as a prerequisite of any measurement process. A stakeholder is defined as any group or individual who can affect or is affected by the achievement

l

of the firm’s objectives,33 for example: owners; suppliers; employees; customers; competitors; domestic and foreign governments; non-profit organizations; environmental and consumer protection groups; and others; Issues Management. The area of issues analysis and management concerns those policies to be developed to address social issues. Having identified the motivating principles of a firm and having determined the identities, holders, the researcher now turns to the issues

relationships and power of stakethat concern stakeholders. The

researcher is aware that ‘social problems that may exist objectively but become ‘issues: requiring managerial attention when they are defined as being problematic to society or an institution within society by a group of actors or stakeholders capable of influencing either governmental

Level 111:Outcomes. of the CSP model. only be significant determine if ‘CSP complex of issues l

Internal

action or company policies’.34

The issues of measurement are most concerned with the third level

Programs and the behavioral outcomes of motivating principles can if they are measured in terms of the stakeholders that they affect. To makes a difference’, all of the stakeholders relevant to an issue or must be included in any assessment of performance.

Stakeholder

Effects. This

element

is concerned with stakeholders

within

the

firm. This might be used to examine how a corporate code of ethics affects the dayto-day decision making of the firm with reference to social responsibility. Similarly, it might be concerned with the positive or negative effects of corporate hiring and l

l

employee benefits practices. External Stakeholder Effects. This element examines the impact of corporate actions on persons or groups outside the firm. This might concern such things as the negative effects of a product recall, the positive effects of community related corporate philanthropy, or assuming the natural environment as a stakeholder, the effects of toxic waste disposal. External institutional Effects. This final element of the model would examine the effects upon the larger institution of business rather than on any particular stakeholder group. Several environmental disasters made the public aware of the effect of business decisions on the general public for example. This new awareness brought about pressure for environmental regulation, rather than one specific firm.

which then affected the entire institution

of business

Applying the model: An example. We shall offer an example of the way in which the model might be applied by looking more closely at Ben and Jerry’s Homemade Ice Cream. Ben and Jerry’s founder, Ben Cohen articulated one aspect of the ethical principles of the firm. Businesses tend to exploit communities and their workers, and that wasn’t game should be played. I thought it should be the opposite-that business give back to the community, because the business is allowed to be there business ought to support the community. What we’re finding is that when munity, the community supports you back.”

594

the way I thought the had a responsibility to in the first place, the you support the com-

Socially

responsible

enterprises:

M Hopkins

This is a clear statement of principles that belongs in the first level of the CSP model. As stated, the principle fulfills both the institutional element (it acts to legitimize the institution responsible

of business)

and the discretionary

path) and goes well

element

(it directs the firm

beyond any legal requirements,

responsibility. At the level of processes of social responsiveness,

in a socially

the element of public

Ben and Jerry’s social issues scan-

ning is accomplished through a number of mechanisms ranging from direct community involvement through newsletters to special events sponsored by the company. The effectiveness of the scanning and issues management mechanisms can be seen in their funding of organizations as diverse as the Native American Community Board in South Dakota to the Central Massachusetts Safe Energy Project. We can see clear linkages from the realm of principle toward corporate action. One specific outcome of Ben and Jerry’s concern for community

welfare is carried

out through its purchasing policies. The firm calls on the Greystone Bakery in Yonkers, New York to bake its brownies, a firm that uses its profits to house the homeless and train them as bakers. This outcome is very specific and wholly measurable in a number of ways. One could simply measure the number of homeless people employed by the bakery and the number of trained bakers graduated by the programme. One might also look at how many are still employed at the bakery or someplace else as bakers. There is a clear causal linkage back through corporate mechanisms to ethical principles and the analytical framework

can be seen to function.

Further research could be done at Ben

and Jerry’s to cross-relate different elements and their indicators to determine how, for example, profitability is affected by the 7.5% share of pre-tax earnings given by Ben and Jerry’s to philanthropic purposes. Conversely, one might take a proposed indicator such as ‘outcomes of community involvement’ and examine its statistical relationships to other indicators in other elements.36 The stakeholders in this process are first external to the company and are the homeless who take part in the training programme. A second group of stakeholders can be identified as the community from which the homeless are taken. Clearly, the bakery itself profits as a supplier to Ben and Jerry’s and it, in turn, provides benefits to the stakeholders, which are possible because of their business with Ben and Jerry’s. As one aspect of a very successful firm grows.

social programme, this also benefits shareholders

as the success of the

We have thus defined nine elements of an analytical framework view the dimensions and relationships of an SRE. These are: The Level of Principles...

through which to

0 Legitimacy Public responsibility l Managerial discretion l

The Level of Processes... Environmental scanning Stakeholder management 0 Issues management l

l

The Level of Outcomes... l

Internal stakeholder

effects

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Socially

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M Hopkins

l

External

stakeholder

effects

l

External

institutional

effects

Defining the socially responsible enterprise. Based on the foregoing analytical a working definition of a Socially Responsible Enterprise is one which has: l

developed ethical principles

based upon the relationship

of reciprocal

model,

responsibility

between itself and those (internally and externally) affected by its actions and that have been published openly, disseminated fully within the firm, and been the subject of l l

training of staff; governed its actions by ethical motivating

principles;

undertaken programmes to monitor its own day-to-day decision making behaviour and to implement and evaluate the outcomes of its programmes of social responsibility as related to concerned stakeholders.

Developing

a rating

system

The chosen task in this paper is to propose a simple system that will grant a numerical ranking to the degree of social responsibility of a firm relative to other firms. Initially, a single list will be proposed. Subsequent research and an accumulation of data may indicate a need to develop separate lists of firms according to size (whether by earnings or number of employees), function (service or manufacturing), or industrial sector. At this stage of research, we only intend to seek indicators within the elements of the CSP model that appear to be generic to all business. For example, all businesses share at least the following l

characteristics:

Codes of ethics

Employees; 0 Customers; l

0 Suppliers; 0 Owners; l Community relationships; l Concern with impact on the natural environment.

Existing rating systems At least two rating systems are widely These,

the ‘Fortune

in intent

500

Reputation

magazine

most

admired

tive,

outside

are included

596

and the ‘Domini

Social

Index’,

differ

widely

and methodology.

The ‘Fortune reputation Fortune

known and have gained a degree of acceptability.

Ranking’

ranking’

publishes

corporations’. directors

its

‘Corporate

This

and financial

in the list.

The

Reputation

Survey’

is based on an opinion

Fortune

analysts.

More

index

measures

than

annually

poll

of over 8000

300

companies

such subjective

of

‘America’s

senior in 32

execu-

industries

attributes as:

Socially

responsible

enterprises:

M Hopkins

0 quality of management l

quality of products

0 innovativeness 0 long-term investment value l financial soundness l ability to attract and retain talented people l responsibility to the community and environment 0 wise use of corporate assets Multiple

regression

analysis

is applied to the poll’s data to obtain a reputation rating

on a scale from 1 (lowest) to IO (highest). Given that the poll’s respondents are senior executives, directors and financial analysts, it is not surprising that ‘quality of management’ is considered the most important attribute The primary advantage of this scale is that decision makers and gives some clues as to their as a means of ranking social performance, it fails

of corporate reputation. it serves as an opinion poll of senior own biases and preferences. However, badly. On this scale, a cigarette manu-

facturer can rank among the top five companies even though the very nature of its business may exclude it from socially responsible investment portfolios. In a similar fashion, it is difficult to discern which is better, a firm with mediocre scores on all the measures or a firm with widely varying scores, for example a very high financial very low community

The KLD ‘Domini Kinder,

performance and

performance.

400 Social

Lydenberg and Domini

Index’ (KLD)

have constructed

the ‘Domini

400 Social Index’

(DSI). It is an index of 400 common stocks of companies based on their performance on multiple applications of the KLD ‘Social Performance Screens.’ KLD’s business earns its income by providing advice to investors who have an interest in investing partly on ethical concerns and partly on making a return on their investment. The DSI is based on the idea that socially/ethically concerned investors

will

choose

products and companies that have favorable social performance (KLD’s term) and adequate financial performance competitive with overall market performance. The advantages of this index are that it can help to influence (in terms of promoting socially responsible business decisions) institutional investors such as pension plans. The administrators of such funds are ethically responsible re-corporate social responsibility, but they are also legally responsible for sound financial decisions. Hence, an ethical decision must also be a financially wise decision. KLD constructed seven ‘social screens’.37 The establishment of these screens did not result from empirical research, but were rather largely intuitive or derived from market research among investors who are deemed socially conscious. There are six screens in the system that allow for an actual weighted ranking being given to a company and one screen that is intended to simply eliminate companies from further consideration. Each of the six primary screens are divided into two sets of indicators: ‘Areas of Concern’ (which are negative but not exclusionary) and ‘Areas of Strength’, which yield positive numerical rankings. Nominally, each screen ultimately provides a ranking of ‘0’, ‘I’, or ‘2’ in each of the concern/strength areas. In reports issued by KLD on individual companies, these ratings are amplified in a narrative report that explains the bases for the rank-

597

Socially

responsible

enterprises:

M Hopkins

ings. If there is no indication of a numerical ranking, the issue is essentially neutral for that firm. KLD does not publish the details of their own ranking system, nor how it determined the ‘weighting’ of elements.

Suggested indicators The CSP model is used as a basis here to develop a set of suggested indicators to measure corporate social responsibility profiles. As we have already noted, there are three ‘layers’ of the model and nine essential elements of an SRE. The indicators suggested in this paper will be constructed within these elements and will offer ways to measure and compare outcomes in each element and collectively, impactoutcomes of the total system. Bearing the nine related elements in mind, what questions and issues should be addressed in the construction of social indicators to be used in an overall rating system for socially responsible enterprises? There are five: l

To what extent is the indicator useful to other researchers in the quest to define a socially responsible enterprise through empirical research? How does a proposed indi-

l

l

What basis for the inclusion of an indicator can be given? How can this be validated? How could the indicator gain acceptance and influence? What measures can be applied to the indicator?

l

What data sources that relate to this indicator exist and are they globally comparable?

cator relate to the CSP model? l

We have described the Wood’s CSP Model as being composed of nine elements

in

three interactive layers. We next use the elements of this model to extract and classify a number of additional indicators of social responsibility as related to each element of the model. We have further shown that there are shared characteristics

of all businesses,

which

include: codes of ethics; employees; customers; suppliers; owners; and community relationships. Additionally, some businesses have an impact on the natural environment. These common characteristics will be included in the application of the CSP model to the development of indicators. We have further indicated two possible sources for indicators, the KLD/DSI ‘social screens’ and the results of empirical research in Social Issues in Management. Figure 2, places elements of the model, common characteristics of business and potential indicators into a similar analytical framework to the CSP model. Our purpose is to develop indicators as a basis for a social audit of a firm and, eventually, to help to constitute a general ranking system for placing firms relative to one another in their degree of social responsibility. In this first attempt to construct such a ranking system, we aim at simplicity and whether the indicator has relatively universal applicability. Thus: l

To what extent is the indicator useful to other researchers in the quest to define a socially responsible enterprise through empirical research? How does a proposed indi-

l

cator relate to the CSP model? What basis for the inclusion of an indicator can be given? How can this be validated?

l

How could the indicator gain acceptance and influence?

In parallel to these activities, the aim is to provide an analysis to individual firms, non-profit organizations and NGOs. Like a standard company annual report, a SRE report

598

of SRE

Figure 2.

Continued

overleaf.

-Policies

Issues Management

made on basis of analysis of social issues

-Analytical body for social issues as iintegral part of policy making -Social Audit Exists? -Ethical Accounting Statement Exists?

Stakeholder Management

to review social issues relevant to firm

-Mechanism

Environmental Scanning

Level II - Processes

Responsibility

-Code of Ethics -Managers convicted of illegal activities

Managerial Discretion

of Social

-Litigation involving corporate lawbreaking -Fines resulting from illegal activities -Contribution to innovation -Job Creation

Public Responsibility

II

- Code of Ethics - Code of Ethics

Responsibility

Legitimacy

of Social

Indicator

and Measures

Level I - Principles

Elements Model

Draft Indicators

to employees?

Firm’s regulations

Exists?

Exists?

and policies

Managers and employees trained? Number trained as % of total Number, Amount?

Amount, Size? Amount? R&D expenditure number of net jobs created

Published? Distributed

Measure

Number

0 or 1 0 or 1

Rating figure

0 or 1

0 or 1

0 or 1

Number

Size of fine

size of suits

Numerical quantitative

of suits,

Assigned or other

II

llements node1

of SRE

III - Outcomes

.evel

-Women

and minorities

policies

and benefits

ownership

Pensions

-Employee

-Layoffs

-Pay,

relations

-Union/staff

Employeea issues

of Ethics

-Code

Managers

-Safety

of Ethic:,

wclfarc philanthropy

-Community -Corporate

activity of giving,

in code of ethics

Zxistance,

-Amount

frequency,

rank

with

by per cenl similar

firms,

individuals

litigation

chosen

(measuring

and fines

c/: spent

in demonstrable

0 or 1

measured

on employee

and mensurable

performance

as % of earnings of earnings

relations

firms

good

etc. pollution

and apply

ctc)

to similar programmes.

ranking

fines

of controversy.

as 4

trained

giving

programmes

distributed,

of pretax

standard

recalls,

on investment,

of product

Return

SDJIX industry

-Percentage,

benefirs,

-R&live

-LiLigation,

-Evidence

ways

-Trained

-Published.

-Amount

-Amount

against

number

illegal

value.

-Fines,

or

-Share

lrrcsponsibility

-Corporate

Measure

-Profitability/value

Indicator

-Co&

Owners

Groups

Responsibility

Stakeholder (assumed)

of Social

and Measures

Indicators

Iraft

Slakeholder

Stakeholder

External Effects

External Effects

Business

as a Social

Institution

Figure 2.

Suggested

elements,

b)

indicators

-Code of ethics -Generic litigation -Class action suits -Public policy and legislation corporate irresponsibility

-Firm’s code of ethics -Supplier’s code of ethics -Litigation/fines -Public controversy

Suppliers

-Toxic wasle -Recycling and use of recycled products -Use of eco-label on products’!

-Corporate giving to community programmes -Direct involvement in community programmes -Community controversy or litigation

Environment

-Product Recalls -Litigation -Public product or service controversy -False advertising

Community

Natural

Customers/Consumers

-Applied

litigation, litigation,

and applied number, outcomes type, number, outcome

amount, outcomes outcome

outcomes

costs, benefits

index, index,

to all suppliers

and measures.

-Published -Amounts, -Amounts,

-Number, -Amount,

-Applied

seriousness,

outcomes,

-Number, -Numbers,

percentage

against against

fines

-Amount

-Performance -Performance -Percentages -Yes/No?

-Litigation,

fines fines

-Evidence of application to products or services -Absolute number, seriousness demonstrated by litigation percentage of total production -Amount of fraud, price fixing, antitrust suits -Seriousness, frequency or fines,

Socially

responsible

enterprises:

M Hopkins

would be divided in two parts, the first would be more of a commentary (containing qualitative information) and the second would analyse and present the company performance with respect to quantitative SR-indicators. The SRE report would use indicators in the form of minimum vs recommended requirement (in terms of principles, processes/actions and outcomes). For example: codes of ethics: published, distributed to employees = minimum requirement; managers and employees trained = recommended requirement. For firms whose principal

operations are within the US and who fall under American

commercial regulations, the data for measuring an SREs performance are readily available. We must determine in the next phase of research the degree to which these are globally valid and learn what data are available that are comparable. Such indicators can only show a direction for continuing research, and like the CSP model itself, are evolving and form another stage in the process of learning more about SREs.

Notes and references 1. 2.

3. 4. 5. 6.

7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

602

This paper is a shorter version of a report by the author, Alton Straughan and Simone de Colle. For instance, Bowen, H. R., Social R&pons;bilities of Business. Harper in Wood, New York, 1953; and Elbinn A. 0. and Elbinr. C. I., The Value issue in Business. McGraw-Hill, New York, 1964. In Jones, D. J. and Jones, R. E., R
Socially

25. 26.

27.

28.

29.

30.

31. 32.

33. 34. 35. 36. 37.

responsible

enterprises:

M Hopkins

Frederick, W. C., From CSRl to CSRZ: The maturing of business-and-society thought. Pittsburgh, PA, Working Paper, Katz Graduate School of Business, University of Pittsburgh, 1978. Carroll, A. B., A three-dimensional conceptual model of corporate social performance. Academy of Management Review, 1979,4,497-505; in Wood, D. J. and Jones, R. E., Research in Corporate Social Performance: What Have We Learned? Katz Graduate School of Business, University of Pittsburgh, for the Conference on Corporate Philanthropy, Case Western Reserve University, not published, 1994. Ackerman, R. W., The Social Challenge to Business. Harvard University Press, Cambridge, MA, 1975; in Wood, D. J. and Jones, R. E., Research in Corporate Social Performance: What Have We Learned? Katz Graduate School of Business, University of Pittsburgh, for the Conference on Corporate Philanthropy, Case Western Reserve University, not published, 1994. Wartick, S. L. and Phillip, L. C., The evolution of the corporate social performance model. Academy of Management Review, 1985, 10, 758-769; in Wood, D. j. and Jones, R. E., Research in Corporate Social Performance: What Have We Learned? Katz Graduate School of Business, University of Pittsburgh, for the Conference on Corporate Philanthropy, Case Western Reserve University, not published, 1994, p. 7. Clarkson, M. B. E., Corporate social performance in Canada, 1976-86. Research in Corporate Social Performance and Policy, Vol 10, ed. L. E. Preston. JAI Press, Greenwich, CT, 1988, pp. 241-265; in Wood, D. J. and Jones,.R. E., Research in Corporate Social Performance: What Have We-Learned?, Katz Graduate School of Business, University of Pittsburgh, for the Conference on Corporate Philanthropy, Case Western Reserve University, not published, 1994. Clarkson M. B. E., A Stakeholder framework for analysing and evaluating corporate social performance. Academy of Management Review, 1995, 20, 92-l 17; in Wood, D. 1. and Jones, R. E. Research in Corporate Social Performance: What Have We Learned? Katz Graduate School of Business, University of Pittsburgh, for the Conference on Corporate Philanthropy, Case Western Reserve University, not published, 1994. Wood, D. J., Social issues in management: Theory and research in corporate social performance, journal of Management 17, 383-406 (1991). Davis, K., The case for and against business assumption of social responsibilities. Academy of Business Management, 1973, 16, 312-322; Wood, D. J., Social issues in management: theory and research in corporate social performance. journal of Management, 1991, 17, 389. Freeman, R. E., Strategic Management: A Stakeholder Approach. Ballinger, Boston, 1984. Wood, D. J. Business and Society, 2nd edn. Harper-Collins, New York, 1994. Levering and Moskowitz, 1993, op tit, reference 9. Levering and Moskowitz, 1993, op tit, reference 9. The source is KLD’s Social Screens, KLD Company Reviews’“: Key to Ratings: Analysis Year 1993-l 994).

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