An Understanding for CSR Communication Strategies
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Bachelor Thesis An Understanding for CSR Communication Strategies A content analysis of furniture & interior retailers CSR communication strategies Author: Joel Karlsson & Oskar Sörman Supervisor: MaxMikael Wilde Björling Examiner: Clarinda Rodrigues Date: 2022-05-27 University: Linnaeus University Term: VT22 Subject: Business Administration III – Degree Project 15 Credit, 2FE67E Level: Degree Bachelor 1 (75)
Abstract The increased interest and awareness of sustainability from an consumer perspective has also implicated increased interest among furniture and interior retailers. Sustainability does not only imply environmentally friendly products and have become a discussed topic in multiple contexts. Corporate Social Responsibilities (CSR) have been implemented in several businesses to align with what society demands, which includes sustainability in multiple aspects. The increased interest for this matter has also implied communicating CSR practices as an answer to consumers and stakeholders demands. CSR and communication has a strong connection in theory but excludes detailed CSR communication strategies. Therefore, in this thesis, the aim is to gain a deeper understanding for CSR communication strategies from a consumer perspective in the form of a content analysis of the Swedish furniture and interior retailers. The purpose is to benefit both a theoretical and managerial perspective with contribution of CSR communication strategies main foundation. The research that has been conducted is a content analysis of 8 companies' content conveyed in their communication. The content analysis includes sustainability reports, CSR related documents and annual reports that have been analyzed from the Triple Bottom Line (TBL) framework. To fortify the research, a deductive approach with previous research has been conducted to analyze the findings. The conclusion of the research results in a clear pattern of content conveyed by furniture and interior retailers. Presentation of goals and practices, including only positive CSR material and a focus on the environmental aspect are distinct. The large and less complex retailers convey their CSR practices more than smaller and more complex retailers. Conclusion can also be drawn that the economical aspect is often underlying in the conveyed content and the three aspects of TBL are often merged together. Key words Triple Bottom Line (TBL), Corporate Social Responsibility (CSR), Communication, Furniture and Interior Retailers, Business Ethics, Sustainability
Acknowledgments We would like to take the opportunity to thank our supervisor, MaxMikael Wilde Björling for the support and guidance throughout the period of the thesis. We would also like to thank our examiner Clarinda Rodrigues for the constructive criticism during the seminars. Not to be excluded, our colleges that have been of support with constructive criticism in seminars but also outside of the seminars, thank you for your deepest helpfulness. Finally, we would like to take the opportunity to thank each other for the great and fun work but also empathy and caring. Linnaeus University Kalmar, 27 May 2022 _________________ _________________ Oskar Sörman Joel Karlsson
Table of Contents 1 Introduction....................................................................................................... 1 1.1 Background ................................................................................................. 1 1.2 Problem Discussion .................................................................................... 5 1.2.1 Theoretical Problematization .............................................................. 5 1.2.2 Managerial Problematization .............................................................. 6 1.2.3 Research Gap ...................................................................................... 8 1.3 Research Question ...................................................................................... 8 1.4 Purpose ....................................................................................................... 9 1.5 Delimitations............................................................................................... 9 2 Literature Review ........................................................................................... 10 2.1 Corporate Social Responsibilities (CSR).................................................. 10 2.1.1 Carroll’s Pyramid of CSR ................................................................. 10 2.1.2 The Importance of CSR .................................................................... 12 2.2 Sustainability & Ethics ............................................................................. 13 2.2.1 Sustainability .................................................................................... 13 2.2.2 Ethics ................................................................................................ 14 2.3 Communication......................................................................................... 16 2.3.1 Communication in Theory ................................................................ 16 2.3.2 Methods of Communication ............................................................. 17 2.4 Conceptual Framework ............................................................................. 19 3 Method ............................................................................................................. 20 3.1 Research Approach ................................................................................... 20 3.2 Research Strategy ..................................................................................... 21 3.3 Research Design ....................................................................................... 22 3.4 Type of data .............................................................................................. 22 3.5 Research Method ...................................................................................... 23 3.6 Research Framework ................................................................................ 24 3.7 Selection of Cases ..................................................................................... 25 3.8 Data Analysis ............................................................................................ 26 3.9 Quality of Research .................................................................................. 26 3.10 Ethical Considerations .............................................................................. 28 3.11 Sustainable Considerations ....................................................................... 28 4 Findings/Analysis ............................................................................................ 29 4.1 Sustainability Reports/Documents............................................................ 29 4.2 Annual Reports ......................................................................................... 49 5 Discussion ........................................................................................................ 54 6 Conclusion ....................................................................................................... 58 6.1 Answering the Research Question ............................................................ 58 6.2 Theoretical Implications ........................................................................... 59 6.3 Managerial Implications ........................................................................... 60 6.4 Social, Ethical & Sustainable Implications .............................................. 60 6.5 Limitations ................................................................................................ 61 6.6 Suggestions for Further Research ............................................................. 61
Appendices Appendix A – Authors Individual Contribution – Joel Karlsson……………………………..ix Appendix B - Authors Individual Contribution – Oskar Sörman……………………………..ix List of figures Figure 1: Carroll (1991) The pyramid of corporate social responsibility. ……………………...11 Figure 2: Conceptual framework………………………………………………………………..19 Figure 3: Research framework………………………………………………………………….24
1 Introduction 1.1 Background Eco-friendly, earth-friendly, low-carbon footprint, green and balanced, the list of how sustainability can be defined is infinitely long (Webb, 2020). Add while each individual has their own thoughts and ethical values regarding how they perceive sustainability in different countries, societies and generations. Although many individuals are well aware of both definitions, risks and opportunities around the practices of sustainability in society, there are still those individuals who are critical of the concept and do not take the development of the climate seriously (Pandya, 2022). Responsibility in sustainability and ethics is becoming increasingly meaningful in the world, and 1987 the concept of sustainability was described as following: “... meet the needs of the present without compromising the ability of future generations to meet their own needs” (UN Secretary-General, 1987, p. 24), and precisely these words testify to how important it is for the whole society to work together towards a better and more sustainable and ethical future. According to Parafiniuk (2019), sustainability and ethics are two major areas that companies must deal with on a daily basis, which requires well- designed strategies and methods to create the best possible conditions both for their consumers, but also for a competitive advantage. On the other hand, Parafiniuk (2019) considers that the daily problems around sustainability and ethics are a very complex issue, which means that virtually, the whole world is involved in e.g. environmental aspects, which means that companies actions should be put in focus as a guideline for others to follow. Nowadays, people are becoming more aware and have an increased interest for a sustainable future, by contributing to the factors that they can actually influence, in their consumption of products and services (Arslan et al., 2021). Young et al., (2010) consider that when a consumer buys a product or service, the choices are based on the individual´s values to a very large extent, and that today´s consumers attach great importance to striving for as sustainable alternatives as possible. This means that consumers demonstrate a crucial understanding of the importance of consuming green alternatives for a change in their everyday lives and throughout the world (ibid.). These factors that become decisive for consumers are more about how the material is produced, how the products are manufactured and how the goods are transported, which ultimately means that consumers today, take a greater responsibility of what they can contribute in the future and in the development of welfare and the environment (Bernyté, 2018). Rizkallah (2012) notes that people all over the world become more thoughtful and aware through different channels, as in today's society there are a multitude of sources of information. Today's consumers show an increasingly positive 1 (61)
attitude towards choosing environmentally friendly products and services, which means that today's generation has to some extent realized the risks and threats that exist if consumers do not live up to the right guidelines (Solomon, Askegaard & Hogg, 2016). Triple Bottom Line (TBL) is a recurring model in different industries when it comes to aspects of sustainability and ethics (Investopedia, 2022). According to the founder of TBL, John Elkington (1998), TBL includes three important pillars: environmental, society and economic, which is reflected on the planet, people and profit. The long-term goal of the TBL framework is to, with the help of these three elements, strive for a more sustainable and ethical world with a focus on the environment, society and the economy being at the center as winners at all levels, which basically is about creating conditions for a better world from many perspectives (Elkington, 1998; Streimikiene & Ahmed, 2021). According to Chamberlaine (2022), the various parts of the TBL measures how well an organization's sustainability and ethical practices works, in terms of whether the business lives up to the expectations that exist both internally and externally. Another important part of organizations´ strategies is ethical issues, which are often linked to the concept of Corporate Social Responsibilities (CSR) (Ferrell et al., 2019). Ferrell et al. (2019), describe this link as different layers of ethics with a good mix of CSR from companies, to create strategies and methods that stand well against other companies´ working methods. At the same time, Ferrell et al. (2019) are critical of the fact that CSR has a tendency in many companies to sound better than what actually reflects reality, which can lead to differences of opinions from the consumers perspective when it comes to assessing which companies really take responsibility for community in society. On the other hand, Ferrell et al. (2019) consider that concepts such as responsibility for the environment, welfare and responsibility for employees are very much about conducting a benign business in order to appear as an industry that places great responsibility and importance on being ethically at the forefront. Ethical issues and their actual growth started in the 1970s, and have in recent decades increased more and more as companies want to show their skills in the subject, to show competitive advantages over competitors in various industries (Mili, Gharbi & Teulon, 2019). In recent years, ethical issues have become increasingly linked to the structure and concepts of CSR, which has contributed to companies in various industries emphasizing ethical practices together with sustainability practices, with a strong focus on different values in the society (ibid.). Mili, Gharbi and Teulon (2019) argues that “a socially responsible company (i.e. with a corporate social responsibility policy) should be an ethical company, and an ethical company should be socially responsible” (Mili, Gharbi & Teulon, 2019, p.974), and with this quote one can draw exemplary parallels between companies ethical actions and companies practices with their CSR. Mili, Gharbi and Teulon (2019) state that the ethical behaviors that companies are responsible for, culminates in responsibility in guidelines with strategies in CSR, which 2 (61)
on different levels integrate with each other, which leads to a cause and effect in many industries, which then spread to an increasingly positive response from consumers. Furthermore Mili, Gharbi and Teulon (2019) argues that ethical issues and their management of companies should be used to create an interest among stakeholders, and to create opportunities for the company itself to build and strengthen its brand against other companies in the same industry. In research conducted by Ferell et al. (2019), it could be concluded that the business ethics that the companies stood for was a more important factor of relationship with the company's consumers, than what CSR stood for. However, this did not mean that the strategies around corporate social responsibility was unnecessary, as there was important value in these methods as well (ibid.). On the other hand, a lot has happened with the companies in the subject, as they take greater responsibility for the development of sustainability in ethical issues. Today, more and more companies are making themselves responsible for climate change by tailoring their operations and actions, to strive for a more sustainable and ethical community (Insightssuccess, n.d). At the same time, companies make sure to advance their own positions by convincing consumers and other stakeholders that their business is the one “that has what it takes” to be at the forefront of sustainability and ethical issues, which is often about highlighting aspects of CSR (ibid.). According to Tai (2022), CSR is about companies developing and using methods and strategies that will benefit the well-being of the whole society and using a focus that not only gives positive results in the companies´ profits, but also beneficial for an entire community. This means that the companies of the world have a great responsibility when it comes to looking from a bigger perspective whether the actual profit should be made in their organization or for the well-being of the planet (Khung, Truong & Thang, 2021). Petkovic, Alfirevic and Radakovic (2022) emphasize that CSR, sustainability and ethics are three topics that are strongly interconnected in today's society, which form a major foundation of companies´ operations. According to Carroll (1991), CSR includes four different parts, which can be illustrated as a pyramid. The pyramid includes; Economic Responsibilities, Legal Responsibilities, Ethical Responsibilities and Philanthropic Responsibilities. The different layers mean parts and aspects that each company should take into consideration in order to succeed as much as possible in operation and striving after being a responsible and credible company (ibid.). Li et al., (2021) emphasize that the concept of CSR indicates that companies in different industries and countries become more responsible when it comes to striving for a greener development of the organization, which in many ways should benefit the entire population. De Marchi, Maria and Ponte (2013) emphasize that different industries are more or less forced to take action in environmental aspects, especially as consumers around the 3 (61)
world become more aware and more knowledgeable about different products, and how the supply chain looks like. If focusing on furniture and interior retailers, these industries also contribute to increased consumption, at the same time as they increasingly think about sustainability and implement strategies and methods to create a greener and more sustainable community (De Marchi, Maria and Ponte, 2013; Zutshi et al., 2016). IKEA, as one of Sweden’s most well known furniture and interior retailer, focuses on sustainability and ethical issues in many ways (IKEA, 2022). In their sustainability report from 2021, you will find sustainable management throughout the whole supply chain but also considerations about ethical dilemmas. For furniture and interior retailers in Sweden, sustainability and ethical issues are at high steak. For a matter of fact, Mio, Trademax, Nordic Nest, Chilli and IKEA, to just mention a few furniture and interior retailers, are all working towards a better world in sustainability and ethical issues in some way (Mio, 2022; Trademax, n.d; Nordic Nest, n.d; Chilli, n.d; IKEA, 2022). Rettie, Burchell and Riley (2012) emphasize that the part of communication that takes place on the basis of a sustainability and ethical perspective, should be shaped in a way that attracts consumers to feel present and close with the company in question, which in turn hopefully leads to long-term relationships and emotional values in a positive direction. By taking responsibility for sustainability and ethics, by demonstrating environmental aspects in communication at companies, this can create competitive advantages, which in many cases creates a great deal of interest among stakeholders around the company (White, Habib & Hardisty, 2019). According to Kemper and Ballantine (2019), communication can have a great impact on how consumers perceive and make their purchase decisions for different products and services, while they at the same time discuss the relationship between marketing and sustainability, and emphasize that communication and sustainability together is not always so obvious. The reason for this not so obvious relationship is based on the fact that sustainability in many cases is about not overconsuming products, while traditional communication is about convincing consumers to buy products and consume more. At the same time, communication shows several concepts and genres that will derive consumers' perception of communication in a more sustainable way, which will lead to increased commitment for the entire population in a greener context (ibid.). Smolka, Smolková och Vilceková (2021) continues to describe that the type of communication carried out by the various companies in society is a major challenge for many parties when it comes to weaving in as many sustainable aspects as possible in their strategies for success. The way in which consumers get information, and above all how aware today's consumers are, is a big difference, compared to how it was just a few years ago (ibid.). Furthermore, Thomas (2018) emphasizes that methods that have to do with consumption can affect people on earth so much that the entire quality of life deteriorates significantly, which means that the communication of products or services 4 (61)
can be a contributing factor to everyone´s living conditions. Ramos-Hidalgo, Diaz- Carrion and Rodriguez-Rad (2022) argue that companies have to take great responsibility in how they communicate with their consumers, but are at the same time critical of the fact that consumers themselves do not always do or live on the basis of what they should contribute with their responsibility for the development of the environment, when referring to sustainability aspects. 1.2 Problem Discussion 1.2.1 Theoretical Problematization A common framework in sustainability and ethics, research originates from John Elkington’s (1998) Triple Bottom Line (TBL). TBL includes three dimensions: economic, social and environmental. TBL yields a framework for business organizations to create long-lasting relationships and is constructed to meet sustainable goals (ibid.). TBL are like many other theories based on a similar structure. Corporate Social Responsibilities (CSR) (Carroll, 1991;2016; Garriga & Melé, 2004) and TBL (Elkington, 1998) all include these dimensions and aspects. Although CSR has been around for many years, the concept has no dominant definition (Schramm-Klein, Morshett & Swoboda, 2015; Khung, Truong & Thang, 2021). According to researchers, CSR strategies are increasingly important for businesses regardless of industry. As mentioned, CSR has no dominant definition but has been defined in general as a concept or tool for responsibilities within a business organization to reduce negative effects and instead create positive impact on society (Khung, Truong & Thang, 2021). Archie B. Carroll (1991;2016) as the developer of one of the most discussed and used models for CSR (Khung, Truong & Thang, 2021) defines it as: Responsibilities a corporation has towards its society and stakeholders including four categories: Economic, Legal, Ethical and Philanthropic responsibilities (Carroll, 1991). Other researchers have developed CSR theories further. Garriga and Melé (2004) divide CSR theories in four categories: instrumental, political, integrative and ethical. As mentioned earlier, CSR has a strong foundation in sustainability and ethical dilemmas, but researchers have different opinions on the details of CSR. From a consumer perspective, CSR initiatives are highly important for the good of a greater society (Nickerson et al., 2022). For a business organization, the corporation perception, differentiating products and the negative impact on public relation misunderstandings can be reduced by developing effective CSR strategies (ibid.). For a retailer, Schramm-Klein, Morshett and Swoboda (2015) argues that motivation for CSR strategies is not based on legal regulation but rather on consumers' awareness of a retailer's socially responsibles. Therefore, retailers should act in a socially responsible manner to align with its consumers for the greater good (ibid.). Business ethics have in the last decade been more and more implemented in the CSR strategies in business 5 (61)
organizations (Mili, Gharbi & Teulon, 2019). Ethical behavior is seen from a customer perspective as something valuable and has therefore been implemented to succeed with CSR strategies (ibid.). Business ethics involves societies norms, values and beliefs and businesses should consider all aspects to meet society's demand (Bagis & Ardic, 2021). Moreno and Kang (2019) also mean that successful implementations of CSR in a business organization communication leads to positive changes in consumers behavior, intentions towards the business and Word-of-Mouth (WOM). In a research conducted by Utgård (2018), the researcher tried to find connections in retailers' communication and CSR strategies. The research provides relevant information to support the connection between Norwegian retailers CSR initiatives and their communication strategies on their website. Utgård (2018) argues that retailers using private brands, vertical integration in the supply chain and foreign chains tend to signal their CSR initiatives. On the other hand, Utgård (2018) concludes that Norwegian retailers do not see CSR signals as a crucial implementation in their communication. This could be about whether the cost does not match the effect on the Norwegian market but could also be about political, economical and culture in Norway (ibid). Further research has been done within the field of CSR communication and skepticism. Moreno and Kang (2020) argues that there is a challenge in communicating CSR engagements without arousing skepticism among the receiver. In today's society, consumers are aware of a business operation and will therefore also be critical of the information-flow, especially with CSR communications (ibid.) Research has been conducted in the field of CSR and communication. What can be identified is that CSR has been well researched without any dominant definition, but a general description of the concept has been done. CSR research can not tell what specific CSR practices to communicate and are instead suggesting a general picture. Researchers can tell the effect of CSR communication (Moreno & Kang, 2019; Utgård, 2018; Nickerson et al., 2022; Khung, Truong & Thang, 2021), but exclude the relevant specifics to achieve the effect. Furthermore, Moreno and Kang (2019) mean that there is a thin line between right and wrong in communicating CSR towards consumers. Therefore it is of high relevance to research further for what businesses include in their CSR communication strategies. 1.2.2 Managerial Problematization Retailers are more or less forced to consider sustainable and ethical dilemmas in their business (De Marchi, Maria & Ponte, 2013). As consumers become more aware of sustainability and ethics in consumption (Arslan et al., 2021) retailers also have to take these questions into consideration. To meet or align with consumer demand, in sustainability and ethical issues, business retailers are suggested to implement Corporate Social Responsibilities (Khung, Truong & Thang, 2021). As Moreno and Kang (2019) 6 (61)
describes, advanced technology, exposure of social media and variety of information let consumers evaluate a business and its practices of CSR. Moreno and Kang (2019) further argue that CSR communications need to be clear and understandable from a consumer perspective. In the study they can conclude that actual practices of CSR instead of claiming integration of CSR can counteract skepticism. This means that what and how retailers communicate CSR also has an impact on what the outcome will be (ibid.). According to theory, CSR has an impact on consumers, on intention (Moreno & Kang, 2019), increasing value (Mili, Gharbi & Teulon, 2019), behavior (Mili, Gharbi & Teulon, 2019) and perception (Nickerson et al., 2022). How CSR is communicated, also has an effect (Moreno & Kang, 2019). Theory has set up a foundation and framework for how to implement (Mili, Gharbi & Teulon, 2019) and work with CSR (Moreno & Kang, 2019; Utgård, 2018). But excludes what specific industries should focus on to align with their audience, which is the foundation for CSR. Therefore by doing research on what strategies are used within the furniture and interior retail industry, the dots can be connected. The furniture and interior retail industry put a lot of effort into CSR practices (Mio, 2022; Trademax, n.d; Nordic Nest, n.d; Chilli, n.d; IKEA, 2022; Jysk, 2020; FurnitureBox, n.d; Homeroom, n.d; Jotex, n.d; BHG, 2021 ). Therefore this 1 industry not only contains a large amount of data, but could also become a role model for retail businesses for succeeding implementations of CSR communication strategies. There is a complexity in implementing successful CSR strategies, and one strategy might not work for all businesses (Johnson, Sutton & Theis, 2020). According to Dal Mas et al. (2021), despite a retailer's CSR undertakings the retailer must consider implementation of CSR along the whole supply chain. This means that it is not only depending on what the actual retailer practices within CSR, but also the retailer's whole supply chain which is crucial. Therefore all retailers can not implement the same CSR strategy because of the various in supply chains. Further complexity comes with communicating CSR for a retailer (ibid.). CSR is a complex concept for a retailer to undertake, but research has shown its positive and effective impact. Due to retailers in the furniture and interior industry, which put a lot of effort into this matter, understanding of CSR communication strategies can be brought to the surface and further developed. Not only will the industry of furniture and interior benefit from such research, but also retailers in general. To solve this issue, more retailers can have the opportunity to implement successful CSR communication strategies. 7 (61)
1.2.3 Research Gap From the problem discussion an evident research gap can be identified. CSR is a well researched concept and topic meanwhile businesses have increased their interest for CSR implementation. Therefore, CSR could be seen as complex with various opinions and no correct right or wrong approaches. Researchers can at least agree upon the foundation for CSR, efforts for the greater good for business stakeholders and society (Moreno & Klang, 2019). And as Carroll (1991;2016) and Garriga and Melé (2014), they agree that a foundation, like Elkingtons (1998) concept of TBL , should include environmental, economic and social aspects. The increasing interest for businesses to implement CSR has its origin in consumers' awareness, opinions and values (Schramm-Klein, Morshett & Swoboda, 2015). The effect of CSR practices has also been proven to enhance a business reputation (Nickerson et al., 2022) but also the effect of attracting consumers (Moreno & Kang, 2019; Mili, Gharbi & Teulon, 2019). Communication about CSR has also shown positive effects, but also negative effects (Dal Mas et al. 2021; Moreno and Klang 2020; Lee, 2020). The overall perspective of CSR and communication has therefore been researched among various researchers, but deeper knowledge and understanding can not be gained from research about business retailers' actual practices and their strategies. To gain deeper understanding for this issue, CSR communication needs further understanding to later on develop successful strategies for other businesses and industries to become better in their operations within CSR. 1.3 Research Question Based on the problem discussion and the research gap, further research on CSR communication has to be conducted. Therefore, the assembled research question: What CSR content is conveyed in communication by the furniture and interior retailers to their stakeholders and consumers? 8 (61)
1.4 Purpose The purpose of this research is to create an exploratory context regarding what is important from companies in the furniture and interior retail business to communicate to their stakeholders and consumers within CSR. With the research, the authors will contribute with a deeper understanding of the subject of CSR communication. This will benefit both furniture and interior retailers, consumers and further research in CSR communication. The authors want to contribute to a brighter future in environmental, social and economic aspects by highlighting and gaining understanding of content in CSR communication. 1.5 Delimitations In this thesis, focus will lie on the furniture and interior retail business in Sweden. The authors will for that matter only focus on CSR communication material and information from the Swedish market, even if the business operates abroad. In the thesis, focus on accessible material from furniture and interior retailers chosen for the research will be relevant. Therefore, a consumer perspective has been chosen to investigate the industry’s CSR communication. 9 (61)
2 Literature Review In the literature review chapter, previous research, relevant to the research question will be presented. The used sources are peer-reviewed and follow the structure as follows: Corporate Social Responsibilities (CSR), Sustainability and Ethics, and Communication Theory. This chapter will later on in this thesis be analyzed with the empirical findings to draw conclusions for the stated research question. 2.1 Corporate Social Responsibilities (CSR) Corporate Social Responsibilities (CSR) can be defined in various ways, but includes in all definitions the same fundamental structure (Khung, Truong & Thang, 2021). Dahlsrud (2008) emphasizes 37 different definitions of CSR and conclude in his research that CSR definitions refers to five different dimensions: The Environmental-, Social-, Economic-, Stakeholder- and Voluntariness- dimension. According to Nickerson et al. (2022), CRS implies business practices that are used from a corporation's resources to enhance the society's well-being. According to Khung, Truong and Thang (2021), CSR intends business organizations to take responsibilities to impact its society with a positive outcome. With CSR strategies, a business organization enhances its reputation and it is a strategy to align with consumers values and propositions (Khung, Truong & Thang, 2021; Nickerson et al., 2022). CSR strategies have aroused increasingly among business organizations of its positive impact on competitive advantage (Khung, Truong & Thang, 2021). This type of strategy is seen as an accommodating approach towards moral and ethical commitments that brings business and consumers together. Although CSR has a complex and not clear definition, Dahlsrud (2008) concludes the complexity of CSRs definition later on makes it more difficult for businesses to implement CSR strategies. CSR definitions describe a phenomenon but exclude guidance on how to manage it for the benefit of the business (ibid.) 2.1.1 Carroll’s Pyramid of CSR Carroll (1991) suggests four dimensions of CSR for a business organization to consider: economic, legal, ethical and philanthropic. The concept is visualized as a pyramid where a business needs to first implement economic CSR to later on develop further up in the pyramid, followed by legal, ethical and philanthropic. The economic dimension of Carroll’s (1991;2016) pyramid builds a foundation for the business organization which is vital for growth, reinvestments and rewards. Profit is the one thing that can keep the business operating and the fundamental idea behind business organizations is profit. Carroll (1991;2016) also argues that profit is needed to benefit society in the long-term. Without the ground pillar economy, organizations have to go out of business and with that, suffering for the rest of the responsibilities will come. Carroll 10 (61)
(1991;2016) suggests that maximizing earnings per share and high operation efficiency, are some examples to build a strong economic foundation. Operating as a business organization also implies following laws and regulations required by the lawmakers and governments (Carroll, 1991;2016). Laws and regulation are obligated to perform but are also society’s “codified ethics”. Therefore, the legal aspect of Carroll’s (1991;2016) pyramid should be implemented to a bare minimum at least. Ethical responsibilities implicate, according to Carroll (1991;2016), society’s demand on ethical behavior from the business organization. This means that what society sees as fairness and justice should be followed. Ethical responsibilities therefore involve norms, standards and practices and are not involving any legal issues, rather what society demands further than regulations and laws. This aspect in the pyramid is often more unstable and changing depending on many factors, for example, trends (ibid.). The last part of Carroll’s (1991;2016) pyramid is philanthropic responsibilities. Philanthropic responsibilities intend a business organization's discretionary actions towards its society. These actions of responsibilities are not required as a business organization but are demanded and value increasing among society. Philanthropic responsibilities are, according to Carroll (1991;2016), charity of any sort, donations, volunteering work, development of community, etcetera. As a key factor for fulfilling CSR, philanthropic is often confounded with ethical responsibilities. To separate them both, it is seen as unethical to differentiate human race, but it is not seen as unethical to not contribute for a human race foundation who strives for equality (ibid.). Figure 1: Carroll (1991) The pyramid of corporate social responsibility. 11 (61)
Carroll’s (1991;2016) pyramid of CSR has also been criticized by others in the field. According to Hopkins (2003), critics against Carroll’s structure of the pyramid and the thinking behind the process have been made. Hopkins (2003) argues that Carroll saw businesses as economic institutions and that profit builds the first responsibility of a business for the rest. Businesses within the business are decision makers towards socially responsible outcomes, rather than see the business as a decision maker. Hopkins (2003) also argues that support for ethical decision making of its members should be built upon instead of profit. Hopkins (2003) states ethical responsibilities as the next level of responsibilities followed by law and then profit. When these responsibilities are fulfilled, only then a wider range of social responsibilities can be achieved (ibid.). 2.1.2 The Importance of CSR Because of consumers' awareness of socially responsible behavior an increasing interest has aroused for implementing CSR strategies (Schramm-Klein, Morshett & Swoboda, 2015). Being a socially responsible retailer does not only benefit the ideological view of a business but also benefits the economical aspect (ibid.). Moreno and Kang (2019) also emphasize that consumers have become more aware because of the highly advanced technology and information flow. CSR is seen as something important for businesses to implement and follow from a consumer perspective, but it also generates benefits for the business (Nickerson et al., 2022). Effective CSR increases consumers' perception of the business, enhances the differentiation of products but also reduces negative public relations dilemmas (ibid.). Nickerson et al. (2022) conclude a positive connection between CSR practices and brand sales. In their research they state that by reducing negative effects on the environment or ethical issues, a brand tends to win consumers’ approval. What is also found by Nickerson et al. (2022) is that going beyond a business standard in these questions, that is not seen as fully met, might be seen as impudence from a consumer perspective. What is also seen in Nickerson et al. (2022) research is a business with an already high degree of CSR practices challenged more with their continuous and improved image of CSR. According to Fernández-Ferrín, Castro-González and Bande (2021), consumers' purchasing decisions are affected depending on a company’s CSR appearance. Companies that are seen as “good” (responsible for social issues), attract consumers meanwhile “bad” (irresponsible for social issues) companies instead get punished by consumers. Fernández-Ferrín, Castro-González and Bande (2021) also emphasizes that consumers often cannot recognize to what extent or if a company is socially responsible. 12 (61)
2.2 Sustainability & Ethics 2.2.1 Sustainability A fundamental part of sustainability is the Triple Bottom Line (TBL) (Elkington, 1998). The phenomenon TBL refers to the parts; social, environmental and economy, which in one way or another also form parts of our society in combination with people, profit and the planet. The purpose of these three elements, in sustainability and ethics, is to contribute to a better community for the welfare of our entire society, while giving companies an opportunity to strive for a better future in many aspects (Streimikiene & Ahmed, 2021). According to Elkington (1998), TBL acts as a framework where companies around the world have different factors to practice on when it comes to responsibility and contribution to creating a better environment and society, and at the same time be able to carry out commitment in the business that will generate in profit for companies. Streimikiene and Ahmed (2021) consider in their research that the concept of TBL has such a positive impact on both the company, but also stakeholders around the company, that the phenomenon by far should be included in every company´s framework in one way or another. When considering sustainability in the retail sector, the term leads to practice with methods and strategies that will intend a positive living for the future generations in our world (Vadakkepatt et al., 2021). By placing great emphasis on the aspects of social, economic and environment, companies can be assumed to show such a necessary awareness in order to protect the entire planet as much as possible (ibid.). At the same time, it is becoming trendier to follow green concepts, with an effort to be able to influence what can be affected, and at the same stage show good business operations within the sustainable and ethical framework (Hosta & Zabkar, 2021). It is also important to keep in mind that sustainability can look different from different perspectives, which Hosta and Zabkar (2021) believe depends entirely on the situation you are in, and refers to whether you are employed in a business, CEO or if you are only a consumer in connection with a company. By following green trends, consumers also show a greater and broader awareness when it comes to the factors within sustainability and ethical issues that affect consumers behavior (Bernyté, 2018). How companies show their sustainability practices when it comes to different points in the value chain means that consumers are also influenced to contribute to a better society (ibid.). These different values regarding how one looks at sustainability and ethical issues, are thus largely about what relationship you have to something (Hosta & Zabkar, 2021). Vadakkepatt et al. (2021) are also careful to emphasize that sustainability is a word that have many different meanings for different individuals, but that for companies it is 13 (61)
about protecting the environment and their employees, and being at the forefront when it comes to a strong welfare and community in today's society. On the other hand, Schaltegger and Burritt (2015) states that what one can be critical of is the companies’ way of dealing with the various strategies for sustainability, as the companies are generally looking for a financial gain that should basically benefit the company in the long run, and that the methods and strategies applied do not always include the “things” that companies promise in sustainability and ethical work. A clear example of this is in companies marketing of products or services as the company's purpose is to get consumers to buy, but at the same time the norm in sustainability and ethical issues says that today's consumers in society should consume less to protect environmental aspects (Kemper & Ballantine, 2019). This dilemma between less consumption and more consumption is something that companies must take into consideration and work continuously with in order to somehow exercise a balance between their own profit for the company, but at the same time create a better place on our planet for future generations (Vadakkepatt et al., 2021). The more skilled companies become in combining financial gains with the sustainable ones, the more credible and brand-strengthening they will be in the long run when it comes to creating and preventing long-term relationships with consumers around the world, while giving companies the opportunity to create competitive advantage against other companies (Alghababsheh & Gallear, 2020). One method that many companies use to show their awareness and importance around sustainability and ethical dilemmas, is to use CSR in their activities to strive for a development of and together with society at different levels (Schaltegger & Burritt, 2019). By using CSR in companies’ daily operations, companies show a sense of responsibility regarding their impact on how society together with companies can develop a community, and finally that this responsibility ultimately creates a win-win situation for many stakeholders (ibid.). 2.2.2 Ethics The concept of ethics goes hand in hand with sustainability, which is a relevant topic of conversation in terms of how companies conduct their societal issues nowadays (Bagis & Ardic, 2021). Reeves and Sinnicks (2021) describes ethics, or business ethics as follows: “...a field which typically presupposes not only that contemporary society is not “radically evil” but that it is perfectly possible to flourish, act rightly, and prosper within corporate modernity” (Reeves & Sinnicks, 2021, p. 500). To simplify the expression even more, one can briefly convey that business ethics is about managing different values, emphasizing one´s norms and living by them in one's actions, and finally that both values and norms should agree well with how society and consumers argue about these things, in order to live up to their needs (Bagis & Ardic, 14 (61)
2021). According to Bell, Winchester and Wray-Bliss (2020), ethics is about people having a good life, that there should be justice in different areas, equal conditions and that human well-being should be at the center of everything. Nowadays, acting in different organizations is about showing ethical actions that agree well between words and actions, which DeTienne et al., (2021) argue can be a challenge for a variety of companies as unethical behaviors can easily occur when companies in different situations know what is right but still end up in making wrong. According to DeTienne et al. (2021), a solution to this is that companies themselves must understand the consequences of speaking in one way and acting in another, as it can otherwise create major problems for the consumers associated with the company, since the credibility of the company is put at the forefront. If, on the other hand, companies in different industries act in a clear, well-formulated and ethical way, by matching words and deeds well, it can benefit the company as their consumers experience and credible companies that act in the same line as they communicate, which provides good opportunities to create long-term relationships with their stakeholders (ibid.). Hwang and Chung (2018) also consider that ethics in business has a large degree of influence when it comes to creating and maintaining long-term relationships with their consumers, as it provides an opportunity to form emotional ties based on emotional values. On the other hand, Hwang and Chung (2018) strongly argue that one should be tolerant of how ethical work can differ between large and small companies, as large companies see more long-term with their strategies while smaller companies conduct a more “one-day-at-a-time'' business. Hwang and Chung (2018) also emphasize the importance for different organizations to create a clear culture in the company, which leads to being able to show the exact values that one stands for within the organization, but also on an external level, for example in a company's communication and marketing aimed at consumers. At the same time, Ferrell et al., (2019) consider that the whole concept of business ethics and all its components such as justice, equality and “doing right or wrong” is very similar in terms of how one looks at CSR, and seeing from one perspective to another, one can draw many parallels and similarities between these two areas and that within certain frameworks they are two overlapping concepts. Ferrell et al., (2019) are also careful to highlight that there are no clear differences between business ethics and CSR, but mention that these concepts are most often found in the same context. 15 (61)
2.3 Communication 2.3.1 Communication in Theory According to Bittner-Fesseler and Weicht (2020), communication is an important part of a business, in both the internal communication that must be mediated between employees and different departments, as well as the external communication that must take place to the stakeholders who are connected to the organization. The main characteristics of communication is in particular about creating relationships between different parties and individuals, as well as conveying messages with a variety of meanings, while communication action is important for creating opportunities to establish an understanding of different things. For companies, communication is also about creating interesting content regarding messages that are to be communicated to their stakeholders, where Bittner-Fesseler and Weicht (2020) with quotes consider that: “If communication is a social process in which community orientation, mutual control, and informative communicative action takes place, communication is to be understood as a socializing principle, whereby the ´inside´comes to the ´outside´” (Bittner-Fesseler & Weicht, 2020, p.94). At the same time, Reilly and Hynan (2014) emphasize that the messages communicated from the companies in their sustainability reports can be interpreted as activity reports to convey messages about the organization's values and its culture, from a sustainable and ethical perspective. On the other hand, Hossain et al. (2019) believe that the communication of various community projects and the responsibility behind these projects are as important from the management's point of view as they are for the stakeholders around the company. It is therefore very much about communicating these commitments externally, as the stakeholders have rarely been as active in this area as they are today (ibid.). Furthermore, Hossain et al. (2019) emphasize the importance of companies actually using sustainability reports to create a chance and opportunity to communicate with the external side of a company, as it demonstrates credibility and reliability on the part of the company to demonstrate their commitment in society to contribute to a strong community. Hossain et al. (2019) also argues the importance of using CSR in i a company's communication as his research states that those companies that succeeds in mixing this topic (CSR) with environmental, social and economic aspect have gained a lot from the beginning and indicate a strong responsibility in the development of sustainable and ethical issues. Communication and its various strategies have always been in the companies´ toolbox in one way or another, with the hope of arousing interest in different values, products 16 (61)
and services among a variety of stakeholders (Laczniak & Shultz, 2021). While companies have an important role and responsibility when it comes to external communication, Johnson, Sutton and Theis (2020) consider that there is a responsibility of the stakeholders to take part of the information that the companies share. In addition to the classic communication campaign with sustainability reports every year, companies now open up even more through various channels, such as membership letters, social channels, surveys and so on, where stakeholders can access a wealth of information about the day-to-day work that a business puts into community projects linked to CSR (ibid.). If a company succeeds in creating and designing proper communication methods that suit the company in a good way, there will be good opportunities to make profits financially, in the long run, and to attract the attention of consumers in the market (Laczniak & Shultz, 2021). Johnson, Sutton and Theis (2020) also argue that communication in a company represents a variety of advantages when it comes to building and creating relationships, and that the credibility of the current sustainability work increases significantly and gives rings on the water and also a variety of competitive advantages. Research conducted in Norway by the researcher Utgård (2018), proves a connection between CSR initiatives and website CSR communication. Private brands and foreign supply chains are more likely to signal CSR performances on their websites. Utgård (2018), proves that the structure of a retailers supply chain also has an effect on if CSR performances are signaled on websites or not. This could mean that foreign supply chains without “eco-labeling” might benefit from signaling CSR initiatives elsewhere, rather than certifications and memberships connected to CSR for products (ibid.). 2.3.2 Methods of Communication Johnson, Sutton and Theis (2020) consider that companies around the world use several different models of strategies depending on the size of the company, as well as who are the external stakeholders around the organization. At the same time, it is required that the company or organization tailors the communication to communicate (ibid.). Another possibility when it comes to communication is that a company should see communication as a tool to use when it comes to creating long-term relationships with its customers, as well as when it comes to building and strengthening the companies´ brand outwardly (Laczniak & Shultz, 2021). Nowadays, consumers have become increasingly aware of living below standards of sustainability, which Vafaei, Azmoon and Fekete-Farkas (2019) consider that today's companies need to review their communication-concept and tailor it in such a way that really attracts consumers with clear and valuable messages. These messages may be about emotional elements, to get under the skin of consumers and influence their views in a more dramatic way than 17 (61)
traditional communication does (ibid.). By using communication methods that are perceived by consumers as sustainable and ethical approaches, can be the difference between succeeding or not succeeding as a company (Laczniak & Shultz, 2021). Sanchez-Chaparro, Soler-Vicén and Gómez-Frias (2022) are on the same track and consider that consumers around companies care more about how companies’ values and social practices look like, than what is delivered in the products or the services. Johnson, Sutton and Theis (2020) are at the same time critical of whether the communication between companies and stakeholders gives the effect that companies are really looking for when it comes to communicating about sustainability in annual sustainability reports, as they consider that there is no obvious behavior that indicates that the messages that are communicated affect the stakeholders ́ interest in the business. A concept that several companies use in their communication with their consumers is thus about Sustainable Responsible Marketing (SRM), and according to Vafaei, Azmoon and Fekete-Farkas (2019) it is about linking communication strategies together with CSR, which should lead to the company showing a sustainability side with a great responsibility for ethical action. On the other hand, Lee (2020) emphasizes that the appearance of responsible sustainability practices is often faced with great skepticism among many consumers as they believe that what companies communicate does not always agree very well with the real picture, since consumers believe that companies often want to highlight information that does not contain much truth. Moreno and Klang (2020) also highlight consumers' skepticism of CSR communication and emphasize that communicating actual CSR practices with evidence instead of claiming CSR practices or goals can prevent consumer skepticism (ibid.). Lee (2020) also states that in the center of companies, when it comes to content of communication, the biggest foundation should be on the sustainability practices that are conducted as the stakeholders around the companies hold this topic very important. According to Dal Mas et al. (2021) extensive initiative CSR communication has an essential role for engaging and creating awareness for both employees and consumers. The aspects of social and environmental initiatives have a positive impact on consumers and employees, and are therefore important in a communication strategy. If businesses miscarry CSR communication in important aspects, the overall CSR of the business might be harmed. Therefore CSR initiatives should be communicated and implemented due to its crucial impact (ibid.). Finally, Hossain et al. (2019) state that it is extremely important for companies to communicate sustainability goals in their reports as these issues have become increasingly attractive from the perspective of consumers and stakeholders. 18 (61)
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