The role of engagement in the implementation of integrated CSR strategy

The role of engagement in the implementation of integrated

CSR strategy

Anna Herder - 10079009

Amsterdam business School, University of Amsterdam Msc Business Administration - strategy track Supervisor: dhr. dr. A.E. (Arno) Kourula

Statement of originality

This document is written by Student Anna Herder who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

Inhoudsopgave

1.5 Structure of the study 10

2 Literature review 11

2.1 Corporate Social Responsibility 11

2.1.1 The fundamental responsibility of the firm 12

2.1.2 Motivational considerations 12

2.1.3 The principle of shared value 13

2.1.4 The conceptualisation of CSR 14

2.2 Strategy implementation and the role of employees 15

2.3 Integrated CSR strategy and value congruence 17

2.4 Value congruence, employee engagement and job performance 19

2.5 Job performance and organisational performance 21

2.6 Role of stakeholder management 22

2.7 Preliminary framework 23 3 Methodology 25 3.1 Research design 25 3.1.1 Document analysis 26 3.1.2 Unstructured interviews 27 3.2 Sampling 27 3.2.1 Terminology 28 3.3 Data collection 29 3.3.1 Unstructured interviews 29 3.3.2 Organisational documents 31

3.4.1 Coding 33 3.5 Evaluation of data 34 3.5.1 Validity 35 3.5.2 Reliability 37 3.5.3 Objectivity 37 3.5.4 Limitations 37 4 Results 39 4.1 Case characteristics 39

4.2 Analysis of the data 40

4.2.1 The perception of the organisational strategy 40

4.2.2 Proposition 1 43 4.2.3 Proposition 2 44 4.2.4 Proposition 3 46 4.2.5 Proposition 4 49 4.3 Additional results 50 4.3.1 Role of management 50 4.3.2 Type of employees 52

4.4 Summary of the key findings 52

5 Discussion 54

5.1 Key findings 54

5.2 Strengths 56

5.3 Limitations 56

5.4 Implications for future research 57

5.5 Implications for practice 58

6 Conclusion 59

References 60

Appendices 67

Appendix A – Interview guide 67

Appendix B - Sample characteristics of interviewees 68

Appendix C - Characteristics organisational documents 70

Abstract

Organisations experience difficulties with implementing Corporate Social Responsibility (CSR) strategies. There is said that organisations are more successful for their business and the society when the CSR strategy is integrated to the core of the organisation. In addition the role of employees is increasingly recognised. Therefore, this study explores the role of employees in this process of implementing integrated CSR strategy. The research question that is central in this study is: What is the role of employee engagement in the implementation of an integrated CSR strategy and the subsequent CSR performance? A qualitative case study with was used to find an answer for this question. Data was collected using unstructured interviews and organisational documents. A multi-level framework based on the literature formed the basis for the data analysis. The results show that integrated CSR strategy facilitated employee engagement through value congruence. Subsequently employee engagement results in performance that contributed to the successful organisational performance.

Keywords: Corporate Social Responsibility, Integrated strategy implementation, Employee engagement

Acknowledgement

The process of writing this thesis can be compared to playing a game of Rummikub. During the game you collect stones and try to make combinations and put them in a right order. There are different ways to place these stones. Thus there are different tactics to win. Winning, in this case, was submitting a thesis. Collecting the stones was like collecting pieces of data, literature and doing the interviews. Quite late I realised that I was that one player who had chosen to keep all the stones on the play board. This tactic consists of making sure all, not just some, of the stones on your play board can be placed on the table. Everyone who is familiar with this game knows that although it is one of the tactics you can adopt, it is often not the most efficient, especially because the thing with Rummikub is that you can take your advantage of other people. But in the end, it did not matter. It was my turn and I put the stones on the table, and here it is: My Master Thesis.

The thing that distinguishes a game of Rummikub from writing a thesis is that although you can benefit from the other players, with Rummikub you play alone. In the end, you write your thesis by yourself, but the process, how you get there, you do not do it alone. Therefore, I want to thank some of the people who were of great help.

My supervisor, Arno Kourula, for his endless patience, trust and direction allowing me to discover and explore this topic on my own. There were the people from the hospital where I collected my data. Their hospitality and openness was extraordinary. Hugo re-inspired on my study, the topic and eventually this thesis. Anja was a delight to be with, always so helpful and friendly. Anna, Coby, Emma, Nynke, Tosse and Fien for being at the right place at the right time. Aretha, Otis and Lianne, to give some soul to the process. And lastly and most importantly I want to thank my family: my parents, for giving me that place I still call home and Dorien, for the absolute unconditionality.

1

Introduction

1.1 Background

The United Nations (UN) developed an Integrated Implementation Framework with the purpose of aligning the perspective of ‘responsibility’ for organisations throughout the UN with the goal of achieving the Millennium Development Goals (www.iif.un.org). The framework anticipated on the reported problem that although there were many initiatives to commit to the UN Goals, there was a lack of clarity and difference within and across countries in the approach of committing to the goals. As was explained: “[...] in many cases, goodwill fails to translate into action” (www.iff.un.org). The Integrated Implementation Framework was developed to target and align the many initiatives that contributed and should result in the achievement of the Millennium Development Goals.

As reported above, there exist many initiatives from organisations focused on acting in a responsible manner (Glavas, 2016). That many organisations engaged in responsible policies is the result of the change in governance of responsible behaviour (Elkington 1997). Governments used to have the power to regulate the behaviour of organisations, whereas nowadays big international organisations have gained power and governments have lost theirs. Organisations are now expected to take responsibility in their corporate behaviour (Elkington, 1997). Over the last decades, organisations have taken up on this responsibility. Increasing numbers of organisations show the integration of Corporate Social Responsibility (CSR) within their business operations. However, organisations report problems with implementing CSR strategies (Glavas, 2016). It is important to understand the problems that organisations face with implementing CSR because: ‘Well formulated strategies only produce superior performance for the firm when they are successfully implemented’ (Bonoma, 1984; Noble, 1999).

The example of the Integrated Implementation Framework and need for it is illustrative for what happens internal in organisations that incorporate responsibility into their strategies. Organisations face a lack of guidance on CSR implementation issues such as management, performance measurement and communication. This is as a result of trying to make sure that CSR strategy and corresponding policies and activities match with other organisational constructs (Lindgreen, Swaen, & Maon, 2008).

1.2 Research gap

The problems that organisations experience with implementing their CSR strategy, is reflected in the gaps in the research field of CSR (Glavas, 2016). As in practice, scholars pay a lot of attention to CSR related topics. Many of these articles are at the organisational or macro level, and develop conceptual frameworks about CSR. (Aguinis & Glavas, 2012). The focus in the research field can explain the problems organisations face in implementing their CSR strategy. This is because macro-level research only explains the organisational level processes and the conceptual models are not empirically tested in the workplace. Consequently they do not reflect what happens in practice. However, in strategy implementation, employees play a significant role (Gemmel & Vereecke, 2004). In order to understand the implementation process better, there is a need for studies that explain the role of employees in CSR strategic issues (Glavas, 2016). To bridge this gap there is need for multilevel research where micro foundations explain strategic issues experienced at a macro level (Bridoux & Stoelhorst, 2014; Felin & Foss, 2005; Aguinis & Glavas, 2012). So micro foundations in multilevel research can explain the importance of employees is in implementing a CSR strategy. In other words, there is a need for empirical, qualitative research that incorporates multilevel research to provide insight in how implementation actually takes place (Glavas, 2016).

To sum it up, scholars as well as practitioners pay a lot of attention to CSR, but the knowledge from both fields do not fully cover each other. As a result there exists a gap between theory and practice (Glavas, 2016). This gap could be seen as the underlying problem for the difficulties companies face with implementing CSR strategy and how this strategy can eventually contribute to a successful organisational performance. Therefore it is essential to fill this gap in the research field, in order to help organisations with the strategy implementation.

1.3 Research question

In order to fill this research gap, this study will explore the following question: What is the role of employee engagement in the implementation of an integrated CSR strategy and the subsequent CSR performance?

1.3.1 Research objectives

The research question will be answered by meeting the following research objectives:

➢ Defining the underlying role of employees in the implementation process between CSR strategy and the subsequent performance.

➢ Exploring the role of integrated CSR strategy ➢ Exploring the role of employee engagement.

➢ The process surrounding value congruence and job performance.

1.4 Definitions

In order to meet the research objectives and thus answering the research question, it is essential to have clear what is meant with CSR. The conceptualisation of CSR has caused some difficulties, which was already expressed by Votaw (1972): “Corporate social responsibility means something, but not always the same thing to everybody”. Dahlsrud (2006) explains that

CSR is seen as ambiguous not because of the conceptualisation, but because of the context specificity in which CSR is used. Therefore in this CSR is defined by Aguinis and Glavas (2012): “Context-specific organisational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social and environmental performance”.

1.5 Structure of the study

This thesis consists of six chapters. In chapter one, a background of the organisation is given and the research question and research objectives are introduced. Chapter two reviews the relevant literature areas which lead to the propositions and preliminary framework that form the basis of this study. Chapter three provides an outline and justification behind the research approach. It presents the methods, describes the samples and outlines the research procedure and analysis of the data. Chapter four presents the findings of the study. Chapter five discusses the key findings from the data. Lastly in chapter six conclusions about the study are drawn.

2

Literature review

In this chapter, the literature background is described to answer the research question: What is the role of employee engagement in the implementation of an integrated CSR strategy and the subsequent CSR performance? The literature will describe the key constructs of this study and leads to the four propositions that together will form the preliminary framework that is used as a basis of this study.

First, this literature review provides an overview about what is known of CSR. As the CSR research field is diffuse, it is important to give a clear understanding of the perspective of the current study. Then there will be looked at the literature about strategy implementation with its roots in the strategic management. Next, more specific role of integrated CSR strategy and the influence on value congruence is figured out. Then, the key role of employee engagement on the individual level is highlighted. And lastly, with the contribution from job performance to organisational performance this literature review is completed.

2.1 Corporate Social Responsibility

This study is about the implementation of CSR. First there is background provided of the CSR research field which contributes to give insight in the implementation of CSR strategy. Therefore, four important trends in the research field of CSR are discussed that influence the process of CSR strategy implementation. These trends are: the debate about the primary responsibility of the firm, the underlying motivations that organisations have to engage in CSR, the principle of shared value as a win-win situation and lastly the conceptualisation of CSR (Glavas, 2016).

2.1.1 The fundamental responsibility of the firm

What is the fundamental responsibility of the firm? Or in other words, for whom should the firm create value (Verweire & Van Den Berghe, 2004)? An influential perspective on this question is the shareholder approach of Milton Friedman (1970), who states that the primary responsibility of the firm is ‘to make as much money for their stakeholders as possible’ (Barnett & Salomon, 2012; Carroll, 1999; Hanke & Stark, 2009; Rupp, Williams & Aguilera, 2010). This shareholder approach on the responsibility of the firm changed with the introduction of CSR (Rupp, Williams, & Aguilera, 2010). Not solely the shareholders, but all stakeholders are the responsibility of the firm (Carroll, 1991; Freeman, 1984). A stakeholder is defined as ‘any group or individual who can affect or is affected by the achievement of organisation’s objectives’ (Freeman, 1984). For the implementation of CSR this is important, because this is the underlying reason for the motivation to use CSR in the organisation. This is important for the implementation of CSR, because it determines the different motivational considerations on how organisations use CSR. This brings us to the second trend in the research field of CSR (Glavas, 2016).

2.1.2 Motivational considerations

The second trend in the research describes the different perspectives and theories on how organisations use CSR (Garriga & Mélé, 2004). Four general theories are described by Garriga and Mélé (2004) which are instrumental, political, integrative and ethical theories. The two most adverse theories in the literature field are first described, which are instrumental theories and normative theories. Instrumental theories understand CSR as a strategic tool to achieve economic objectives. In these theories, CSR is used on a cost-benefit based base. This is in accordance with Friedman’s (1970) view, because the right decisions for the organisation are those which are most profitable and where the shareholder is central. The problem with

instrumental theories is that the motivation to use responsible behaviour is incompatible with the motivation to gain profitability (Idowu, Capaldi, & Zu, 2013). By contrast, normative theories of CSR are value based. This means that organisations need to take into account the interests of all appropriate stakeholders (Garriga & Mélé, 2004). These theories have its roots in the stakeholder theory of Freeman (1984), which was named above. From this perspective, organisations need to take into account the ethical principles in their decisions and behaviours towards all important stakeholders (Freeman, 1984; Garriga & Mélé, 2004). The two more moderate theories described by Garriga and Mélé (2004) are political theories and integrative theories of CSR. Political theories are about the network of business and society and the powerful position organisations have that inherently contains responsibility. Integrative theories focus on how organisations can integrate their business with social demands (Garriga & Mélé, 2004). These different motivations of organisations behind the use CSR has significant consequences for the implementation process. When the motivation to use CSR is financial, the strategies are often formulated as short term, clear and measurable (Ebstein & Buhovac, 2014). By contrast, when CSR is used to obtain the broader objectives, the strategies are often long-term oriented, unspecified and consequently not easy to measure (Ebstein & Buhovac, 2014).

2.1.3 The principle of shared value

In the previous section, the different motivations of organisations for the use of CSR were described. There is a trend in the CSR literature to create win-win situations in which not only economic value for business is created, but also social value for society (McWilliams & Siegel, 2011; Porter & Kramer, 2006; Glavas, 2016), this is called the principle of shared value (Kramer, 2011; Porter & Van Der Linde, 2006; Rangan, Chase, & Karim, 2012). Organisations

create this win-win situation by aligning the goals of CSR with the business purpose and values (Rangan, Chase, & Karim, 2012).

So this principle of shared value opens up new possibilities for value creation for business and society (Mirvis, 2012). But there is also criticism on this ‘popular’ win-win solution. There is explained that social and environmental issues are looked at in the light of profitability, not as a matter of true responsibility (Mirvis, 2012).

2.1.4 The conceptualisation of CSR

The next important trend in the research field described is the conceptualisation of CSR which underlies the implementation of CSR strategies. The conceptualisation of CSR is seen as the underlying problem of the difficulties organisations face with implementing CSR strategies. There are many definitions of CSR and related topics (McWilliams et al., 2006; Van Marrewijk 2003). As a result, there is still no theoretical construct of what CSR exactly is (McWilliams et al., 2006; Wang, 2015), this leads to problems with measuring CSR (McWilliams, 2006). This lack of metrics of CSR makes that it is still unclear what the added value is of CSR (Haigh & Jones, 2006). In other words, the difficulties research and practice point out to have with the conceptualisation of CSR can be seen as the underlying problem of the difficulties organisations face with implementing CSR.

But there is an opposite perspective on the conceptualisation of CSR, which states that there does exist congruence in the definition of CSR. This was shown by the content analysis of definitions of CSR performed by Dahlsrud (2006). This research distinguishes five dimensions in the definition of CSR that are consistent and recognised, which are: the environmental dimension, the social dimension, the financial dimension, the stakeholder dimension, and the voluntarism dimension. So Dahlsrud (2006) explains that the problems that

are related to CSR is not in how CSR is defined, but in how CSR is operationalised. He stresses out that CSR is always constructed in a context specific way. This means that CSR acquires significance when it is placed in the specific context of an organisation. This has implications for the implementation process, because only when CSR strategies are used in the context of a specific organisation, this will lead to a successful CSR strategy (Van Marrewijk, 1970).

This study adopts the definition of CSR developed by Aguinis and Glavas (2012) as this definition emphasizes the context specificity, the triple bottom line as well as the importance of stakeholders: “Context-specific organisational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social and environmental performance”.

So where we stand today is that there is a lot done in the research field of CSR, but in practice organisations face problems with implementing CSR into their organisation. To get a better understanding of this problem, there will be looked deeper into the process of strategy implementation.

2.2 Strategy implementation and the role of employees

Strategy implementation is about the ‘communication, interpretation, adaptation, and enactment of strategic plans’ (Noble, 1999). There is only limited research about strategy implementation (Gemmel & Vereecke, 2004; Noble, 1999). This can be explained, because implementation has its roots in strategic management (Noble, 1999). Strategic management in general is about how strategy leads to value creation for organisations (Foss & Lindenberg, 2013; Freeman et al., 2010). The research field of strategic management is characterised by an emphasis on the macro level studies. (Foss, 2011). This means that the level of analysis was

always on the organisational level, which means that here is more focus in the research field on the formulation than the implementation of the strategy that leads to the organisational success (Noble, 1999). The problem with research solely on this level of analysis, is that it does not give a full covered explanation of phenomena, because there are things happening on the micro level that are significant for the explanation of macro level issues (Abell, Felin, & Foss, 2008; Foss, 2011). In fact, individual performance is seen as the underlying explanation of the success of an organisation (Gemmel & Vereecke, 2004). This view is recognised in the field of strategy, because in the last decade there is a growing interest in the role of individuals and specifically micro foundations (Felin, Foss, & Ployhart, 2015).

More specifically, employees are recognised to contribute to the success of the organisation (Bauman & Skitka, 2012), as they play a significant role in the strategy implementation. This is because the daily activities of an organisation contribute to the implementation process. And these activities are performed by employees on the operational level (Gemmel & Vereecke, 2004). That way employees are responsible for and therefore can determine if they want to contribute to the execution of the strategy (Aguinis & Glavas, 2012; Bridoux & Stoelhorst, 2014; Felin & Foss, 2005).

And indeed, for the implementation of CSR initiatives, stakeholders are especially important, because stakeholders can serve as ‘catalysts’. This means that when their position in the organisation is more salient, the relation between the initiatives and the outcomes become stronger (Aguinis & Glavas, 2012). In other words, employees serve as the underlying mechanism by which the CSR strategy implementation leads to CSR performance of the organisation. This brings to the first proposition of this study:

Proposition 1: The employee behaviour as underlying foundation explains how the implementation of integrated CSR strategy leads to CSR performance.

2.3 Integrated CSR strategy and value congruence

In understanding why employees play an important role in the implementation of CSR strategies, it is first important to understand how CSR influences employees.

The role of integrated CSR is first looked at. Alagaraja and Shuck (2015) explain generally that alignment in the organisation leads to a better organisational performance. With alignment they mean the same as integrated CSR strategy. They explain this as that the processes are aligned with the core of the organisation, and consequently they serve the needs of the organisation (Alagaraja & Shuck, 2015; Verweire & Van Den Berghe, 2006). This can be done when organisational goals are shared within the organisation. By this alignment the organisational processes contribute to these organisational goals and so successful

organisational performance. Integrated strategy explained by Verweire and Van Den Berghe (2004) is meant to get everybody headed in the same direction with a shared purpose and integrate the processes of the organisation to achieve the organisational purpose (Verweire & Van Den Berge, 2004). These alignments of values of the organisation are likely to influence employees.

As mentioned above, integrated CSR strategy is a win-win solution. Shortly explained is CSR integrated when there is alignment with core values and processes of the organisation. This strategy is said to have positive outcomes for both business and society (McWilliams & Siegel, 2011; Porter & Kramer, 2006; Glavas, 2016). Simultaneously, the alignment with

mission and values of the organisation is also seen as a predictor for the success of CSR initiatives (Bansal, 2003).

Integrated CSR influences then the business processes on the operational level and therefore individual employees (Alagaraja & Shuck, 2015; McElhaney, 2009). The organisational processes aligned with the core of the organisation influence the performance of employees and subsequently the organisation performance (Alagaraja & Shuck, 2015).

There are underlying mechanisms and processes through which CSR leads to important outcomes for employees and organisations (Aguinis & Glavas, 2013). One explanation is when an organisation integrates CSR in its organisation’s core objectives, employees feel that they help the organisation achieving a greater goal (McElhaney, 2009). Because this CSR is integrated, this greater goal is in line with the purpose and values of the organisation, and therefore with the employee. Another suggestion is given by Aguinis and Glavas (2013), although they do not further explain this mechanism. The suggest that one of these mechanisms through with CSR integrated in the organisation leads to outcomes, is that employees are able to present more of their whole selves at work. This is because CSR leads to value congruence, which means that employees perceive that personal values are congruent with those of the organisation for which they work for, they perceive that organisational role expectations are congruent with their self-images and experience more value congruence.

So that means that when CSR is integrated in the organisation, the employees can experience congruence with the purpose and values of the business. This leads to the second proposition of this study.

employees.

2.4 Value congruence, employee engagement and job performance

So integrated CSR strategy seems to influence the experience of value congruence of employees. Subsequently, value congruence is likely to affect people’s attitudes and behaviours towards CSR activities and the organisation (Jong & Meer, 2015).

One of the things value congruence influences is employee engagement (Alagaraja & Shuck, 2015; Rich, Lepine, & Crawford, 2010). Employees experience engagement when they feel they can take their whole ‘selves’ to their work (Kahn, 1990). More specifically, employee engagement is defined as ‘the simultaneous employment and expression of a person’s preferred self in task behaviours that promote connections to work and to others, personal presence, and active, full role performances’ (Kahn, 1990). Kahn (1990) explains that there is a variating degree to which employees bring this selves to the organisation. And this in turn depends how employees experience the organisation and how they perform their work (Kahn, 1990). Although engagement receives a lot of attention in research and practice, there is no full understanding of the concept of engagement (Eldor & Vigoda-Gadot, 2016).

Despite the attention in research (Eldor & Vigoda-Gadot, 2016), there is very little known about this relation between value congruence and employee engagement (Rich, Lepine, & Crawford, 2010). An empirical study about this relationship is done by Rich, Lepine, & Crawford (2010). This study found support of the mediating role of job engagement between value congruence and job performance. They explain that when employees experience alignment between their personal values and values of the organisation, employees feel they

can bring more of their selves into the organisation and thus experience more engagement (Rich, Lepine, & Crawford, 2010; Glavas, 2016).

Another way this relationship is explained is that value congruence leads to the perception of employees that organisational role expectations are congruent with their self-images (Chatman, 1989; Kahn, 1990; 1992; Kristof, 1996).

Next to that value congruence influences employee engagement, engagement subsequently influences the job performance of employees. This was what the empirical study of Rich, Lepine, and Crawford (2010) also shows. In their study, job performance as ‘the aggregated value to an organisation of the set of behaviors that an employee contributes both directly and indirectly to an organisational goal’ (Borman & Motowidlo, 1993; Campbell, 1990; Rich, Lepine, & Crawford, 2010). They formulate two dimensions of job performance, which are task performance (which are linked to the core job tasks), and organisational citizenship behavior (this is the performance employees show which is outside their formal job description, but in that way contributes indirectly to the organization) (Motowildo, Borman, & Schmit, 1997). The research showed that when employees were more engaged, they are more likely to do more for the organisation next to their job tasks (Rich, Lepine, & Crawford, 2010).

There are three dimensions of engagement by which engagement influences behaviour (Alagaraja & Shuck, 2015). There is cognitive engagement, in which employees agree upon a common purpose with the organisation and as a result are more willing to invest in the job. There is emotional engagement, in which employees are identified with the values and norms of the organisation and therefore behave in a way which is in alignment with the organisational norms and values. And lastly, there is behavioural engagement. This leads to employee behaviour as it helps with reaching the organisational goals by putting much effort in the job

(Kahn, 1990; 1992). Further explanation of these dimensions is outside the scope of this research, as the purpose is to look at the general role of employee engagement in the broader process of integrated CSR strategy implementation. But with these explanations how engagement leads to employee behaviour, it seems reasonable that engaged employees will perform better than the employees that are not engaged (Alagaraja & Shuck, 2015). Therefore it is for organisations important to understand how engaged employees can contribute to the success of the organisational performance.

In the above there is shown that engagement has a key position in how employees create their performance. More specifically for this study, the literature shows that engagement has a link with CSR. It is suggested that CSR can influence employee engagement positively (Glavas, 2016; Kahn, 1990; Rich, Lepine, & Crawford, 2010) and simultaneously that employee engagement influences organisational level outcomes (Macey & Schneider, 2008). This is confirmed by the empirical study of Glavas and Piderit (2009), which show that CSR contributes to the level of engagement people experience.

Value congruence means that the employee experience that his or her values are shared by the organisation. As a result, an employee can take more of his/herself to the work. Being more fully there results in a better performance towards the job but also towards the organisation. This leads to the third proposition of this study.

Proposition 3: Employee engagement mediates the relationship between value congruence and job performance.

2.5 Job performance and organisational performance

With the integrated strategies, were the core of the business is integrated with the organisational processes, this leads to a shared understanding and commitment to the strategic organisational goals (Noble, 1999). Employees understand what they need to do within their job in order to contribute to the organisational goals and that way they contribute to the organisational success.

With integrated strategy, job performance is aligned with the organisational goals. Therefore, the job performance of employees will lead to a better organisational performance. This leads to the fourth proposition of this study.

Proposition 4: The job performance of employees contribute to the organisational CSR performance.

2.6 Role of stakeholder management

As was explained is strategy not only about the formulation but especially about the implementation (Noble, 1999). This means that there is an active role for the organisation to translate the formulated strategy into the organisational processes. The contribution stakeholders make to the value creation of the organisation, is influenced by this active role of the organisation, which is stakeholder management (Ley, Petrovits, & Radhakrishnan (2010). Stakeholder management is important for organisations who engage in CSR, because this will contribute to the organisational success. This is because socially responsible behaviour will improve the relationship with stakeholders and subsequently when organisations manage their stakeholder relationship well, they are more successful (Barnett & Salomon, 2012).

Stakeholder management can influence the overall process of strategy implementation. Therefore it will not lead to a proposition. But it will be taken into account throughout the study.

2.7 Preliminary framework

A general model of Coleman (1990) with its roots in the social science was developed to explain practical phenomena (figure 2.1) (Abell, Felin, & Foss, 2008). This model reflects the characteristics of the current study, as this model is based on the principle of methodological individualism. This principle states that in strategic management, issues on the macro-level must be explained in mechanisms that contain individual level actions and interactions (Abell, Felin & Foss, 2008).

Figure 2.1. Coleman’s general framework of social science (1990; Abell, Felin, & Foss, 2008).

Applying the four propositions developed from the literature review in this general model, the preliminary model of the current study was developed (Figure 2.2).

Figure 2.2. Preliminary framework

This preliminary model shows the macro and micro level of this research, it shows how value link the organisational strategy to the individual level variables. The model also clearly shows the mediating role of employee engagement. And lastly, the preliminary framework shows how individual level job performance contributes to the overall organisational performance.

In the next chapter, the methodology of how this framework is tested in the current study will be explained.

3

Methodology

The goal of this study is twofold. On the one hand, the study will explore the constructs and the relations between the constructs by analysing the data guided by the preliminary framework (Yin, 2009). On the other hand, the goal of this study is to see if based on the findings the framework needs adjustment (Yin, 2009). This chapter will justify the methodology of this study, it will describe the sampled case, the process of data collection, and process of data analysis. Finally a description is given on how the quality of this data was ensured, but also what the limitations of the study are. In the next section, a justification is given for the research approach that was used.

3.1 Research design

This study tries to get an understanding of the role of employee engagement in the process of strategy implementation of an integrated CSR strategy. The research on both CSR as well as engagement is not very comprehensive, and therefore this study is exploratory in nature. Exploratory studies are flexible in design and therefore can give new insights into topics (Saunders & Lewin, 2012). Although there is flexibility in how the study is conducted, the preliminary model brings basis and guidance to this study.

This study uses qualitative data collection methods, which fit the exploratory nature of this study. Qualitative research methods are of good use in this study for two reasons. First, as was mentioned before that the research on both CSR as well as employee engagement is not very comprehensive and thus qualitative methods are useful in exploring areas to get a new or better understanding about a topic (Corbin & Strauss, 1990). Also, qualitative research is useful in studying underlying mechanisms and individual actions and interactions in CSR (Aguinis & Glavas, 2012; Eisenhardt, 1989). As this study looks at employee engagement, which is

expected to be the underlying mechanism between integrated CSR strategy and CSR performance, qualitative research is useful.

The method used to examine the research question is a single case study. Case studies are defined to provide ‘an in-depth exploration from multiple perspectives of the complexity and uniqueness of a particular project, policy institution, program or system in a ‘real life’ context’ (Simons, 2009; Yin, 2009). Case studies are useful to give insight in the dynamics of a single setting (Eisenhardt, 1989) where context plays an important role (Saunders & Lewin, 2012). CSR is conceptualised as highly context specific, where the interesting thing is the specific context in which CSR constructed (Dahlsrud, 2006; Aguinis & Glavas, 2012). Case studies are therefore particularly suitable to study this nature of CSR. The case study can provide rich data, and therefore provide insight in the important events of this case (Yin, 2009; Eisenhardt & Graebner, 2007).

To answer the research question, this qualitative case study makes use of two types of data collection methods: document analysis and unstructured interviews. The following two paragraphs provide justification for the use of these two research methods.

3.1.1 Document analysis

Document analysis can provide contextual background about a study and is consequently of great value in qualitative case study research (Bowen, 2009; Yin; 1994). So using document analysis, will help to better understand and develop empirical knowledge about the current topic (Corbin & Strauss, 2008). But document analysis should not be used as a single strategy for data collection. Because the documents are context-specific, it is necessary to evaluate the data against other sources of data (Bowen, 2009). Therefore, next to document analysis,

unstructured interviews are used to provide data to answer the research question of this case study.

3.1.2 Unstructured interviews

Unstructured interviews are a main method to collect data in qualitative research (Legard, Keegan, & Ward, 2003). ‘Conversation with a purpose’ is how this type of interviews is also called (Legard, Keegan, & Ward, 2003). The literature shows that the constructs of CSR as well as employee engagement are difficult to define. Interviews allow for in-depth and rich data to be collected that can provide a better explanation of these constructs (Lewin & Saunders, 2012). Interviews provide in-depth knowledge about how the interviewee’s unique perspective. These interviews are context specific to each individual who is questioned (Dahlsrud, 2006). Therefore, with this type of interview, it is explored how CSR is integrated in the strategy of the organisations and how the employees experience engagement towards it.

Bowen (2009) emphasize that in qualitative research it is important to provide the documentation of the data collection techniques and the research procedure. The next sections will provide an accurate description of the research process.

3.2 Sampling

As the purpose of this study is to develop a solid conceptual framework which explains the dynamics of strategy implementation, theoretical sampling is used for the selection of this case (Eisenhardt & Graebner, 2007). Theoretical sampling means that cases are selected because they fit the research question, and can therefore give insight in these particular constructs and the relationships among these constructs (Eisenhardt & Graebner, 2007). Therefore the case is illustrative and representative for the conceptual framework that is provided (Saunders &

Lewin, 2012). So the process of theoretical sampling is relatively straightforward in the sense that case is selected because it is most relative to the particular research question (Eisenhardt & Graebner, 2007; Yin, 1994).

According to the theoretical sampling, the case that was selected for the current study was a Dutch hospital. Because of confidentiality, the name of the organisation was taken out. This specific case was selected for different reasons. This case was primarily selected because the constructs researched in this study fit the organisation. The core of this hospital is about providing care, not about making money. But the business process in Dutch hospitals are increasingly important, because the hospitals are not any more fully subsidized by the government. As a result, Dutch hospitals needs to be more self-reliant and therefore running the business properly is important. Besides that, publicly online available documents showed that the hospital has an extensively described strategy towards CSR related topics and seemed to try to integrate this strategy with the core business of the hospital. And lastly, the researcher had access to the organisation, but there must be added that the researcher was an outsider of the hospital in the sense that she was not an employee of the hospital.

3.2.1 Terminology

Before the description of the interview guide is given, there should be placed a note about the terminology used in the current case. The current organisation described in their strategy several topics about their organisational responsibilities, for this they use the term sustainability. Sustainability is defined in the ‘Common Future’ report from the World Commission on Environment and Development as: “Development which meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland et al., 1987). Sustainability is a term that is often used in management, but refers

to a more broad, system wide process. If the data was shortly examined, the dimensions of the concept of CSR seem to feature the use of sustainability in the current studies organisational strategy. This will be tested before the data analysis starts, to be sure that was meant the same with the two definitions.

3.3 Data collection

The initial idea was to compare the results of the interviews of employees of the hospital’s two locations to make it a semi-multiple case study. But it became clear from the documents as well as from the first interviews that although the hospital has two locations and there are some slightly cultural differences, the organisation is perceived and functional as one entity.

In the next two sections the data collection of the interview data and the organisational documents is described.

3.3.1 Unstructured interviews 3.3.1.1 Interview guide

Because the interviews were unstructured, the goal of these interviews was to get rich data which offer insights in the topics from the perspective of the employees. The interview guide was developed to offer guidance and framing of the conversation (Saunders & Lewin, 2012), but at the same time allowed for flexibility in the conversation. To support this flexibility of the exploratory nature of this study, the interview guide consisted of broad questions about the relevant themes where interviewees were asked to give their perspective on these relevant issues. At the same time did the preliminary framework formed the basis for the interview guide (Appendix A), which contains the five broad questions the researcher used as guideline for the interview.

3.3.1.2 Sampling of participants

This study made use of purpose sampling, which is a type of non-probability sampling in which the researcher determines if the sample members are of good use of answering the research question. (Saunders & Lewin, 2012). The intention of the interviews was to get a representative view about the organisation. Therefore, employees from different hierarchical levels were selected for the interviews. The purpose for interviews from different hierarchical levels is to provide differing viewpoints. Interviews with management can give an explanation of the strategy and organisational performance. Interviews with executive employees can illustrate what the activities are in implementing and executing the organisational strategy.

Interviews were conducted with twenty two individuals, five male and seventeen female. The interviewees worked, on average, for the organisation for 9,7 years and came from different departments as well as different positions in the organisation: from operational employees to the business operations manager and the board of executives (Appendix B).

3.3.1.3 Conduct of interviews

Interviews were scheduled by a secretary of the organisation. All the interviews took place in the hospital, at the office of employees or a place nearby their workplace. To ensure the data was understood correctly, the interviews were conducted in the native language of the interviewer and the interviewees (with the exception of one interviewee for whom Dutch was not its native language, but spoke Dutch fluently). The interviews were recorded with permission of the interviewee and during the interview, the researcher took notes about important topics that brought the interviewee in.

Before the interview started, the researcher explained important information about the interview, such as confidentiality, duration of the interview and the purpose. The researcher

asked for permission to record the interviews and discussed the procedure after the interview was completed. The transcription were sent to all the interviewees, and how the interviews would be processed in the research report. After the groundwork was laid, the interview started. First, with some questions to provide some contextual background for the particular interviews. Questions were asked about the role of the employee in the organisation and general questions about how long the interviewee worked for and how they came to work for the organisation. Secondly, questions about the strategy of the organisation and how the role of sustainability plays within their strategy. Lastly, employees were asked about their values and the engagement they feel with the organisation.

Afterwards, the interviews were transcribed and send back to the interviewees for a final check. Interviewees send back only small corrections that did not modified the content of the interviews. Suggestions for correction came from elements of the text that were not transcribed properly due to the researcher mishearing or requests for changes to ensure confidentiality.

3.3.2 Organisational documents

As explained, the purpose of the organisational documents was to provide contextual information about the organisation. Therefore, documents of good quality were selected that could provide a good understanding and evidence in answering the research question (Bowen, 2009). The documents were gathered from publicly available resources, such as the website of the organisation, and internal data sources, to which the secretary provided access. As a result of the collection and selection of the above mentioned criteria, the eventual collection contained ten organisational documents that were used for this study (Appendix C).

3.4 Data analysis

Qualitative analysis is defined by Strauss and Corbin (1990) as: “[...] a nonmathematical process of interpretation, carried out for the purpose of discovering concepts and relationships in raw data and then organising into a theoretical explanatory scheme.” First a more general description of the overall process of data analysis is given. Thereafter, a more detailed description is given of the coding process, as this plays a central part in the overall process of data analysis. Because the raw data from the interviews and the document analysis are both qualitative and textual, the analysis of the data from both sources was done simultaneously. Therefore the description of the analysis in this section is combined

Based on above mentioned definition of data analysis, three general phases of the data collection were identified. In the first two phases the central goal was to use the description of the case as an explanation for the reasoning conducted from the preliminary framework (Yin, 2009). These two phases are described by Bowen (2009) as the content analysis and thematic analysis, which will be elaborated below. Additional to these two phases, this study adds a third phase to the data analysis to meet the second goal of the research, which is to see if the preliminary framework needs adjustment based on the conducted results. So in the third phase, the findings of the study were linked back to the preliminary model to see if any adjustment was necessary.

In the first phase of content analysis (Bowen, 2009), the raw material of the study were organised into the categories that were related to the central research question (Bowen, 2009). This means that the transcriptions of the interviews together with the organisational documents were added as sources to the project file of NVivo. This is a computer-aided qualitative data analysis software program (Saunders & Lewin, 2012), that facilitates in organising and

analysing qualitative data. Also the variables from the preliminary framework were added as codes to NVivo, for the deductive approach of the coding process.

In the second phase, the focus moved from content analysis towards the thematic analysis. Here the coding process played a central role, which is elaborated below. Patterns in the data were identified and formed the categories of the reasoning conducted from the analysis (Bowen, 2009; Fereday & Muir-Cochrane, 2009). This part of the analysis has a more inductive approach, where pattern matching in the broadly coded data from the first phase were coded more specific categories (Yin, 2009). Lastly, in the additional third phase, the categories and results were linked back and judged to see if it fits the framework and to see which categories were neglected in the initial framework. The framework was adjusted by using the recognised patterns in the data among the constructs within the preliminary framework and using the underlying arguments from the data to adapt the framework (Eisenhardt & Graebner, 2007).

3.4.1 Coding

Since the coding plays a central role in the data analysis, this section gives a more extensive description of the coding process.

Five steps of coding were described by Fereday and Muir-Cochrane (2006), which contain both the deductive and inductive approach, which corresponds to the two research goals (checking the framework and adapting the framework). Step one was to develop a coding manual. For this initial coding manual the variables from the preliminary framework formed the basis (Chapter Two, figure 1.2). Based on this framework five broad categories of data, are created: integrated CSR, value congruence, employee engagement, job performance, and organisational CSR performance. In step two, the central activity involved summarizing the data and identifying initial themes in which the researcher had to listen to, read through and summarized by the raw data (Fereday & Muir-Cochrane, 2006). Step three of the coding

process was about applying the initial coding manual and and additional codes (Fereday & Muir-Cochrane, 2006). First, the data was coded according to the initial coding manual developed in the first step of the coding process (this is the deductive approach). The researcher coded the data by applying segments of the data selected to representative codes. NVivo sorted the coded segments of texts into the categories. Subsequently within these categories, inductive coding took place. So the segments that were not representative of the preliminary described codes, were assigned to a new code that was added to the codebook what did represent the segments of data (Fereday & Muir-Cochrane, 2006). From the broadly coded data (parental nodes), more specific subcategories (childnodes) were formed. In step four, codes were connected and themes within the coded data were identified (Fereday & Muir-Cochrane, 2006; Yin, 1994). All the data in these broader and subcategories were compared (Bowen, 2009), in which similarities, differences and general patterns were identified (Bowen, 2009; Fereday & Muir-Cochrane, 2006). This process resulted in confirming explanations of the dynamic relationship displayed in the preliminary framework, and alternative explanations the relationship displayed in the framework (Fereday & Muir-Cochrane, 2006). In the final fifth step, the coded themes were corroborated and legitimated (Fereday & Muir-Cochrane, 2006). Specific developed constructs were linked back to the initial preliminary framework. This precise process of coding made that in this last phase, explanation of the dynamic process of strategy implementation was given. If the alternative explanations did not fit in the framework, they could be accurately identified and could then be explained in the context of the initial framework.

3.5 Evaluation of data

“Without rigor, relevance in management research cannot be claimed” (Scandura & Williams, 2000). But the rigidity of the data collected in case studies is questioned (Gibbert & Ruigrok,

2010). This is because the dynamic and flexible characteristics that are associated with the exploratory nature of qualitative studies make it difficult to ensure consistency (Saunders et al., 2003). Therefore it is important to show how the quality of the data is ensured. In this section outlines gives a description of how the quality of data in the current study is ensured according to the three criteria of rigidity in scientific research: Validity, reliability, and objectivity (Gibbert & Ruigrok, 2010). From this description, a critical reflection on the limitations of the current study follows.

3.5.1 Validity

Validity is about whether the findings are really about what they appear to be about (Saunders & Lewin, 2012). Different types of validity are distinguished.

3.5.1.1 Construct validity

Construct validity refers to the extent to which a study investigates what it claims to investigate (Gibbert & Ruigrok, 2010). This is especially about the data collection phase (Gibbert & Ruigrok, 2010). In this study there were two approaches used to ensure the construct validity of this study. The first approach was triangulation of the data collection. This means that contrasting angles were adopted to look at the same phenomenon using distinctive data collection strategies and diverse data sources (Denzin & Lincoln, 1994; Gibbert & Ruigrok, 2010; Yin, 1994). In this case the interview data was used to check document analysis, as well as controversy (Bowen, 2009). This way, the findings were corroborated across different data (Bowen, 2009).

The second approach to ensure the construct validity of this study was to establish a clear chain of evidence which allows the reader to reconstruct how the researcher went from the initial research to the final conclusions (Eisenhardt & Graebner, 2007; Yin, 1994). A clear

explanation of the data collection procedures, reflection on the planned versus the actual process, and the discussion (Yin, 1994).

3.5.1.2 Internal validity

The internal validity refers to the presence of causal relationships between variables and results (Gibbert & Ruigrok, 2010). This is also about how the data analysis phase of the research was constructed. The internal validity of this study was ensured, using a clear research framework which shows the relations between the different variables, that was based on the literature in which multiple perspectives were adopted (Gibbert & Ruigrok, 2010). By using pattern matching as a strategy to analyse the data, empirically observed patterns were compared with the predicted ones (Eisenhardt, 1989; Yin, 2009). Lastly, by using data triangulation the researcher tried to verify findings about the relationships between the different variables by adopting multiple perspectives in the data (Gibbert & Ruigrok, 2010; Yin, 1994).

3.5.1.3 External validity

The external validity or generalisability is grounded in the intuitive belief that theories must be shown to account for phenomena not only in the setting in which they are studied, but also in other settings (Gibbert & Ruigrok, 2010). There are two types of generalisability, namely statistical generalisation where the findings can be generalised, and analytical generalisation where the theory developed from research can be generalised (Yin, 1994; 2009). In single case studies only single phenomena are studied which are highly context specific, and therefore generalizing the findings is hard (Saunders & Lewin, 2012; Gibbert & Ruigrok, 2010). Therefore, this single sample is not representative, however that is not the purpose of case studies in general (Siggelkow, 2007). The purpose of the current case study was to test the

framework and to adapt it with the findings, adjusting it to create a solid, generalised framework rather than assumptive findings (Eisenhardt & Graebner, 2007).

3.5.2 Reliability

Reliability is about the extent to which data collection methods and analysis procedures will produce consistent findings (Saunders & Lewin, 2012). An absence of random error enables the subsequent researchers to arrive at the same insights if they conducted the study along the same steps again (Denzin & Lincoln, 1994; Gibbert & Ruigrok, 2010). To ensure transparency and replication, the researcher documented the data carefully, tried to present the data as detailed as possible, with minimal inferences and with careful clarifications for the research.

3.5.3 Objectivity

The objectivity of the research refers to the minimalisation of the impression management and sense making of the researcher (Eisenhardt & Graebner, 2007). The objectivity of this study was ensured by the selection of the individuals for the interviews. The individuals came from different hierarchical levels and from different departments throughout the organisation (Eisenhardt & Graebner, 2007). All were knowledgeable employees so they could describe the phenomena from different perspectives.

3.5.4 Limitations

Even though different methods are applied to ensure good quality of the date, there are some limitations which should be mentioned. The first limitation of this study is that the

exploratory nature of this study together with the qualitative data collection method of unstructured interviews, replication is difficult. The second limitation is that the selection of the documents as well as of the participants for the interviews was done by someone from the

organisation. The selection can therefore be subject to the selectivity bias. The selection could be done with the purpose to give a certain impression (Bowen, 2009).

Despite these limitations, this study will give a rich insight in the process of integrated CSR strategy implementation.

This chapter gave a description of the research methodology used to explore the research question in this study, which is: What is the role of employee engagement in the implementation of integrated CSR and subsequent CSR performance? A justification was given for the used research approach and method. A description of the sampling of the used case was given. A description of the data collection and the data analysis was provided and lastly the quality of the data was critically evaluated. In the next chapter, the results of this research method described.

4

Results

This chapter will describe and analyse the data of this case study that was collected by means of the unstructured interviews and organisational document analysis in order to explore the research question: What is the role of employee engagement in the implementation of an integrated CSR strategy and the subsequent CSR performance? In this chapter, the characteristics of the case are presented, followed by a presentation of the data with its key findings.

4.1 Case characteristics

From inductive coding, contextual background information about the organisation was provided which is necessary in order to answer the research question. The organisation was founded through the merger of two hospitals from the same region ten years ago. The two locations still exist, but they are integrated into one organisation. In the last decade, lateralisation of most of the departments emerged. This means that almost all of the departments were merged and located at one of the two locations.

Separated over the two locations, there are 2782 employees working at the organisation (Annual Report 2015). The organisational structure is build according to the unit structure (Organogram; Interview 15). The board of executives directs the four business operations managers. The organisation consists of four units and each business operations manager is responsible for one. Within each unit, departments are categorised according to medical specialty, these departments are called Result Responsible Departments (e.g. RRD Neurology, RRD Intensive Care). Each department has a department manager that is responsible for controlling the operations on the work floor. Besides the medical departments, there are four supporting departments that fall within one of the four units (e.g. Finance & Control). The

board of executives is advised by three advisory councils: the labour council, the nursing advisory council, and the client council.

4.2 Analysis of the data

This section provides the key findings derived from the data which will be discussed according to the proposition. But first it was necessary to check the data on the conceptualisation of sustainability.

4.2.1 The perception of the organisational strategy

The organisation uses the term sustainability in the description of their strategy. However, it seems that how they elaborate on sustainability, corresponds to the dimensions of CSR described by Dahlsrud (2006). Therefore it was necessary to check this, before the analysis was started. In the strategic plan of the organisation, sustainability is described as: ‘Sustainability, in regards to how the environment and the natural resources are dealt with, but also sustainable investments in relation to the patients.’ [Multi-year strategic plan]

The definitions given by the interviewees were scored on the five dimensions of CSR (environmental, social, financial, stakeholder and voluntarism). Findings of this scoring are shown in appendix D. Three observations are worth to highlight: Firstly, four of the dimensions (environmental, social, financial and stakeholder) clearly match with how the interviewees see their sustainability in the strategy of their organisation. Examples of how the interviewees defined these four dimensions are below shown.

‘Sustainability at [the organisation] is primarily about green, less energy consumption. So the technical aspects of sustainability.’ [Interviewee 8]

‘For me [the organisation] is there to see how you can deal with the environment, looking at the future. And on several points, including energy, materials, to deal with things efficiently.’ [Interviewee 9]

Examples of the description of sustainability according to the social dimensions are

‘What we especially want when it comes to the strategy of [the organisation], is an important position here in the region. So how we can help and support the people who live in [the region], with questions in the field of health and disease.’ [Interviewee 11]

‘As [organisation] we have a kind of social contract. That social contract corresponds to handling things in a responsible way, with many aspects. [...] There are different manifestations of sustainability. I think it is more important that it is about sociality than about sustainability specifically, because sociality is the context for sustainability.’ [Interviewee 11]

Examples of descriptions of the sustainable strategy of the organisation in financial terms: ‘What sustainability stands for and what the strategy stands for is that we persevere. I look at it from the financial perspective. My goal is that we are financially sound in five years. [...] I want to link it to the long-term, in order to perform sustainably long-term and find a niche in the market to be financially healthy.” [Interviewee 7]

Examples of descriptions of sustainable strategy of the organisation in terms of the important stakeholders, which are patients and employees:

“How I see sustainability is the treatment you offer to a patient.” [Interviewee 2] “But also that you are a good employer, that is also sustainability.” [Interviewee 10]

Secondly, it can be noticed that the interviewees did not name the voluntarism dimension when they described the sustainable strategy of the organisation. This corresponds to the definition of Aguinis & Glavas (2011) that is used in the current study. This definition does not contain the voluntarism dimension, but does contain the three elements of environmental, social and financial, as well as the stakeholder dimension.

Thirdly, an additional dimension was recognised in the answers of the interviewees when they described the sustainable strategy. This was the description about long term or future oriented perspective. An interviewee described the sustainable strategy in terms of the long term perspective as: ‘[…] you are not going for the short-term solutions. You go for the long-term solutions and the quality of life.’ [Interviewee 15] This was not in the dimensions of Dahlsrud (2006), nor in the definition used in the current study. But this does link to the definition of sustainability, where it is more broadly about future generations.

Consequently, in this analysis sustainability refers to the environmental, social and financial perspective as well as taking into account the primary stakeholders which corresponds to the definition of CSR, together with the long term or future oriented perspective.

The next section will provide the results of the data gives an explanation how employees play an important role in the implementation of this organisational strategy, guided by the first proposition.