Can SMEs climb the ladder to sustainability?
Research on the effectiveness of the CSR Performance Ladder in the SME sector
By
K.E. de Wolff
University of Groningen
Faculty of Economics and Business
Msc. Small Business and Entrepreneurship
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Abstract – The initial CSR theory that is based on large firms cannot be scaled down to fit SMEs due to their difference in nature. Scholars emphasize the need for the development of a CSR instrument that takes into account the characteristics of SMEs. The CSR Performance Ladder could be the answer for this need and is therefore researched on effectiveness. Six case studies by three small and three medium-sized firms were conducted to find an answer on the research question. An interview guide with questions about the two variables perceived effectiveness and (critical) success factors provided information to form a discussion and conclusion about the effectiveness of the CSR Performance Ladder. Concluded can be said that this instrument can enhance CSR in an SME. The instrument contributes to CSR awareness. Most of the characteristics of SMEs corresponded with the CSR Performance Ladder; somewhat better suited to medium-sized firms. However, difficulties reveal themselves when we look at the relationship of SMEs and their stakeholders. The instrument has a strong emphasis on stakeholders which is a crucial condition to embed CSR in the core business. The CSR Performance Ladder can become a financial and administrative burden for SMEs when the stakeholders lack the willingness to sustainability.
Key words – Corporate Social Responsibility, Small and Medium-sized Enterprises, CSR Performance Ladder, Perceived Effectiveness, Critical Success Factors, Case study
Acknowledgments
I would like to thank several people who helped me complete my Master’s thesis.
Dr. C.H.M. Lutz for help with the formalisation of this research and his connection to Bureau Veritas.
Prof. Dr. P.S. Zwart for guidance in this process and the end result of the thesis.
The employees of Bureau Veritas, especially R. van Dam, who provided me with all the information about the CSR Performance Ladder, contacts with participating companies and feedback.
The small and medium-sized firms who participated in my research. My family and friends for their guidance and motivation.
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Table of contents
1. Introduction
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2. Theoretical background
8
2.1 The concept of CSR 8 2.1.1 Definition 82.1.2 Push and pull factors 9
2.1.3 Benefits and burdens 10
2.2 Firm size 12
2.2.1 SMEs and MNCs 12
2.2.2 Influence of firm size on CSR 13
2.3 Perceived effectiveness 15
2.4 Tools for fostering sustainability 16
2.4.1 Existing tools 16
2.4.2 CSR Performance Ladder 18
2.4.3 MVO Wijzer 19
2.4.4 Comparing the CSR Performance Ladder to the MVO Wijzer 20
2.4.5 (Critical) Success factor(s) 22
2.5 Conceptual model 24
3. Methodology
25
3.1 Research method 25 3.2 Participants 26 3.3 Data collection 27 3.4 Data analysis 294. Results
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4.1 Results perceived effectiveness 30
4.2 Results (critical) success factor(s) 31
5. Discussion
40
5.1
Perceived effectiveness40
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6. Conclusion
45
6.1 Sub questions 45 6.2 Research question 48 6.3 Limitations 49 6.4 Further research 50References
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Appendices
56
Appendix A Firm differences 56
Appendix B Firm differences in relation with CSR 57
Appendix C Tools for CSR embracement 58
Appendix D Themes and indicators of the CSR Performance Ladder 61 Appendix E Five entry levels of the CSR Performance Ladder 64
Appendix F Model of the ‘MVO Wijzer’ 65
Appendix G Indicators of the ‘MVO Wijzer’ 66
Appendix H Table raw variables 69
Appendix I Interview guide 71
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1.
Introduction
The concept of Corporate Social Responsibility (CSR) originated decades ago when Multinational Companies (MNCs) were seen as the norm. It was a response to various environmental scandals and degrading working conditions at especially large firms (e.g. the conflict between Shell and Greenpeace about the sinking of the Brent Spar oil plant in the Norwegian Sea). The media became involved in these kinds of environmental matters and that created consumer awareness about sustainability. Several studies were conducted in this field as CSR became more and more important. On the one hand, stakeholders have pushed businesses to integrate CSR attributes (e.g. consumers are more willing to buy products that are sustainable or for which the government sets sustainability standards for procurement). On the other hand, business owners think it is important that they not only create business but also take care of their people and the planet (McWilliams & Siegel, 2001).
CSR is currently a ‘deep-rooted trend’ by the government, businesses and the society; not only by large businesses but also by small and medium-sized enterprises (SMEs). Over the last ten years there has been an increasing body of literature published that focuses on SMEs in relation with CSR (Graafland, Ven, & Stoffele, 2003; Jenkins, 2006; Lepoutre & Heene, 2006; Perrini, Russo, & Tencati, 2007; Swinkels, 2008). SMEs were seen as ‘little big companies’ and there was not really a place for them on the CSR agenda. The expectation was that SMEs did not feel the external pressure of government and the public and that it was difficult for SMEs to engage in CSR because of resource constraints (Nooteboom, 1994; Swinkels, 2008). However, these assumptions are a myth and the CSR concept is applicable to any type of business. Researchers acknowledge the fact that MNCs and SMEs have different natures (Castka, Balzarova, Bamber, & Sharp, 2004; Jenkins, 2004). SMEs are very important for the European economy, which is more than justified. MNCs have a lot of impact but the large scale of SMEs cannot be forgotten: 99.79% of all companies in Europe are SMEs and they provide around 76 million jobs in the EU, which equals 69.73% of total employees (European Commission, 2005). It is therefore important that more research will be conducted about SMEs in relation to CSR.
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economy apply practices, which were developed for just a few large firms’? Moore and Spence (2006), Murillo and Lazona (2006), Perrini (2006), Perrini et al. (2007) and Tilley (2000) have all emphasised the fact that there is great interest among scholars in developing a framework where CSR is integrated into the core business, but that also takes into account the characteristics of a small firm. On the other hand, Fassin (2008) pointed out that the essence of CSR for SMEs lies in the implementation of responsible practices like the right attitudes or corporate culture and not in formalisation with an instrument.
A few years ago, the CSR Performance Ladder was developed as a certification standard based on management system requirements including the core principle ‘People, Planet and Profit’ (Bureau Veritas, n.d.). It was inspired by initiatives in the field of sustainability. This instrument claims to be suitable and applicable to any type of business regardless of its nature and to help with the engagement of CSR. The ladder can be used by non-profit or for-profit businesses and for any activity scope, organisation size, number of employees or market segment. The CSR Performance Ladder gives organisations guidelines for how to engage with CSR.
The instrument consists of five levels and the highest level stands for a fully sustainable organisation. Sustainability certifications can be earned at each level and a certification agency like Bureau Veritas issues these certificates. Bureau Veritas works positively with this certification standard on large corporations and on SMEs. This is interesting because the ladder could provide an answer for researchers who are looking for an instrument that can help SMEs engage with CSR. However, as explained above, these researchers claim that it is impossible for one instrument to help any size of business engage with CSR; their natures are different and they therefore need different focuses and approaches. The strength of SMEs could not lie in formalisation. This contradiction needs further research and the aim of this study is therefore to investigate the effectiveness of the CSR Performance Ladder in the SME sector. The research question is as follows:
Can the CSR Performance Ladder be seen as an effective instrument for organising Corporate Social Responsibility by small- and medium-sized businesses?
Six sub-questions have been developed to answer this research question. First, it is important to clarify the concept of CSR. According to Marrewijk and Werre (2003), the specific circumstances of a company or research determine the choice of a CSR definition. The first sub-question is:
1) How can CSR be defined in this research?
7 Researchers (Castka et al, 2004; Jenkins, 2004) have emphasised that there is a need for a tool that takes the characteristics of an SME into account. The second and third sub-questions are therefore:
2) What are the differences between small, medium and large firms? 3) What is the relationship between firm size and the engagement of CSR?
The main goal is to determine the effectiveness of the CSR Performance Ladder. The perceived performance of an instrument is highly correlated with the self-predicted use of it (Schultz & Slevin, 1975). The fourth sub-question is therefore:
4) How can perceived effectiveness be defined?
Several tools already exist to help organisations engage with CSR but most of them are not necessarily suitable for SMEs. An overview of these tools will be given, as well as a detailed description of the CSR Performance Ladder and the MVO Wijzer, which is a comparable instrument on the market. Not much research has been done about these existing tools, but several scholars have investigated the (critical) success factor(s) for an effective CSR tool in the SME sector. The fifth and sixth sub-questions are therefore:
5) What are the existing tools for fostering CSR?
6) What are the (critical) success factor(s) for a tool that fosters CSR by SMEs?
The six sub-questions will be discussed in the theoretical background section (H2). Next, the research method will be explained. The method consists of qualitative research which includes six case studies of small and medium-sized firms that have implemented the CSR Performance Ladder. Several scholars (Castka et al., 2003; Fassin, 2008; Holliday, 1995; Perrini, 2006) have emphasised that case studies are important in research about CSR and SMEs. Qualitative research respects the heterogeneity of small firms within and between firms (Holliday, 1995). A case study can serve as an example for SMEs engaging with CSR. When SMEs can see specific practices that impact successfully engagement they tend to be more likely to become involved (Castka et al., 2003). Perrini (2006) adds that there is not enough knowledge about business scenarios and obstacles and drivers of SME-CSR relationships and that the body of evidence can be a major contribution for further adoption. This academic research goes into the field of sustainability and gathers case studies and inside opinions of people to acquire an inside understanding (H3). Findings will be presented and then followed by a discussion (H4 and H5). The conclusion is based on a reflection of the research; this section includes also the limitations of this research and implications for further research (H6).
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2.
Theoretical background
This chapter consists of a literature review that forms the foundation of the research by explaining the important definitions, concepts and subjects related to the research question. First, the concept of CSR and its implications will be discussed. Next, the different firm sizes and their characteristics will be described, as well as their relation to the engagement of CSR. Subsequently, perceived effectiveness will be defined. This will be followed by an overview of the existing tools for fostering CSR and a thorough explanation of the CSR Performance Ladder. (Critical) Success factor(s) for a tool in the SME sector will be enumerated. This chapter will conclude with a conceptual model that explains the reasoning used in this research.
2.1
The concept of CSR
2.1.1 Definition
Corporate Social Responsibility has been defined in various ways by several researchers. The reason for this is confusion about what exactly CSR means. The first contribution to the CSR agenda came in the 1950s, when Bowen (1953, p44) proposed the first CSR definition: ‘obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society’.
McWilliams and Siegel (2001) defined CSR as the actions that appear to further some social good, beyond the interest of a firm and that which is required by law. Hopkins (2003, p.10) explained that ‘CSR is concerned with treating the stakeholders of the firm ethically or in a responsible manner where ethically refers to acceptable by society’. These days, most articles use the definition of the Commission of the European Communities (2001, p.6) to explain the concept. They defined CSR as ‘a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary base’ (Spence, 2007, p.534; Tencati, Perrini, & Pogutz, 2004, p.173; Von Weltzien Høivik & Shankar, 2010, p.175). Thus CSR goes beyond what is required of an enterprise from a legal or regulatory standpoint and makes a shift from an obligation to a voluntary action. This definition is consistent with the goal of the Sustainable Development Strategy of Europe that ‘in the long term, economic growth, social cohesion and environmental protection must go hand in hand’ (Commission of the European Communities, 2001, p. 2).
9 principles of CSR (Burrit, 20120; Castka et al., 2004; Marrewijk & Werre, 2003). People refers to the social dimension and is about the well-being of the labour and the community and region where the business operates. It refers to a number of aspects that involves man and society within the context of economic activity (e.g. human rights, child labour and stimulation of fair trade). Planet refers to the environmental dimension. It is about the environmental issues, to do no harm to the environment or to minimise a company’s ecological footprint as much as possible. Measurements (e.g. reduction of energy and water) or issues (e.g. biodiversity or the use of raw materials) have to be taken into account. Profit refers to the economic dimension and is about the economic value of a business and how it sets up its financial reporting and business results. It is also about social welfare and a firm’s contribution to the local economy.
Several definitions of CSR exist because the definition should fit the specific circumstances of a company or research question (Marrewijk & Werre, 2003). This research used definition by the Commission of the European Communities (2001). Several European countries use the CSR Performance Ladder and the Triple-P concept is the essence of the CSR Performance Ladder, which can also be seen in this definition. It is the most up-to-date definition and it will be used for making future decisions in the field of European public and private policies promoting corporate socially responsible behaviour (Tencati et al., 2004).
2.1.2 Push and pull factors
There are two main reasons why organisations engage in CSR: push and pull factors (McWilliams & Siegel, 2001; Swinkels, 2008; Von Weltzein Høivik, & Shankar, 2012). The push factors can be described as external drivers, defensive attitudes or strategic motivations. They are about value-based expectations like climate change and structural expectations like labour laws. An organisation feels pressure from their stakeholders and is more or less forced to engage in CSR. The development of legislation and international standardisation and certification of CSR also play a role. This is a strategic action taken by a business to enhance various stakeholder relations and to decrease the firm’s business risk. More and more MNCs engage in CSR and push CSR requirements on their supply chain. This demands CSR initiatives from SMEs which include documents, measurements and reports about these efforts.
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the term ‘business champions’, which means that owner-managers pioneer or champion CSR in their businesses and that they have the freedom to try out sustainable practices. It is then far more likely that these practices will be adapted into the core strategy of the business.
Four phases can be noticed towards the tendency of a firm to be socially responsible (pull factors) or responsive (push factors): reaction, defense, accommodation and proaction (Jahawar & McLoughlin, 2001; Tilburg, Francken, Tulder & Da Rosa, 2012). The phase reaction means that the organisation is denying its organisational responsibility. Firms are in the defense phase when they only respond to social challenges when it is necessary to defend their current position. Firms with the accommodation phase have an approach to CSR that adapts to public policy in doing more than the minimum required. Proaction shows social responsiveness and an approach to CSR that includes behaviours that improve society.
The choice to engage in CSR may have to do with one of these factors or a combination of them. Stakeholder pressure is an important encouragement for many SMEs to improve their social initiatives. In addition, an owner-manager’s personal values and beliefs are an important incentive for SMEs to integrate the CSR concept.
2.1.3 Benefits and burdens
CSR can bring benefits, problems and mixed results to a company. Bertens, Veldhuis-van Essen and Snoek (2011) conducted research about the influence of CSR activities on 1,663 Dutch SMEs. Most of these firms experienced a reduction in energy costs and pollution, 30% of them worked on the development of sustainable products and services, 28% set requirements for suppliers in the field of working conditions and environment and 20% hired people who are lagging behind in society. Scholars mention several benefits that can be divided into four main categories: environmental benefits, social benefits, business opportunities and improvements in a company’s reputation (Jenkins, 2006; Joseph, 2002; Nederlandse Norm, 2010; Morsing & Perrini, 2009; Tencati et al., 2004).
Environmental benefits – Environmental benefits like a reduction in solid waste generation or improvements in waste water can be noticed. The production of sustainable and cheaper products can be valuable for resource and cost savings. The term for this combined production is eco-efficiency (Tilburg et al., 2012).
11 Business opportunities – A company’s quest to become sustainable has a positive influence on its innovativeness. Companies have to innovate in new products, services and revenue models to become sustainable (Tilburg et al., 2012). For example, the quality of a company’s product can be improved or a new market can be created (Joseph, 2002; Tencat et al., 2004). CSR also supports an organisation’s ‘license to operate’. Social approval in performing business activities, better risk management and informed business decisions will positively influence an organisation (Nederlandse Norm, 2010).
Image and reputation – A company’s image and reputation can be improved once it engages
with sustainability. Stakeholders are more willing to do business with a company that is good for the environment and customers are more willing to buy products if the company is sustainable (Jenkins, 2006). This can also be positive for the company’s competitive context. However, the percentage of people who find sustainability important is much higher than the percentage of people who are actually willing to pay for it (Tilburg et al., 2012). Conflicts with consumers about products and services can also be prevented or reduced, which lead to a better reputation (Nederlandse Norm, 2010).
The burden of CSR lies mostly in the fear that it costs too much money, time and effort to ‘pull off the program’ (Freisleben, 2011). Most SMEs lack these resources and therefore perceive that there is a high barrier to engaging in CSR. According to Von Weltzein Høivik and Shankar (2010), CSR is not implemented by many SMEs because they perceive CSR to have a high cost. SMEs share the perception that CSR is a burden and a financial cost. Castka et al. (2004) also found that a fear of bureaucracy, time and costs are the main barriers. However, according to these researchers, this was not the experience of SMEs that have integrated CSR.
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before it is clear if the corporate social performance will bring financial loss or returns. There are currently no models in the literature that can indicate this in advance (Tilburg et al., 2012).
The benefits of CSR could motivate a company to embrace CSR because it can bring improvements to the company. CSR can enhance market opportunities, cost savings and a positive distinction into the market and the company image which are also important drivers in times of crisis. However the real or perceived problems, resource constraints and mixed financial results can demotivate companies and form a barrier to engaging in CSR.
2.2
Firm size
2.2.1 SMEs and MNCs
The CSR concept has evolved differently for MNCs and SMEs because they are fundamentally different. Bowen’s first definition of CSR (1953) was originally designed for MNCs. As explained earlier, researchers saw large firms as the norm and thought that theories about these firms could be scaled down to SMEs. SMEs were not seen as important because of their minimal scale. These days, researchers acknowledge the large impact of SMEs and the different characteristics of large and small firms. SMEs have now been placed on the CSR agenda.
The European Commission (2005) defined SMEs as follows: ‘the category of micro, small and medium-sized enterprises is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total net exceeding 43 million euro’ (Von Weltzien Høivik & Shankar, 2011, p.176). Not only do the headcount, turnover and balance sheet totals differ, but other characteristics can be identified. Small, medium and large firms will be discussed, but micro firms will not be taken into account to maintain focus in the research. The characteristics of micro firms and small firms seem to be more similar than those of small and medium-sized firms. This distribution is therefore interesting to this research.
13 number of stakeholders, with whom they have personal and close contact (Vykarnam, Bailey, Meyers & Burett, 1997). The literature often defines this as ‘social capital’, which is a more appropriate theory for small firms than the stakeholder theory. According to Adler and Kwon (2002, p23), ‘social capital is the goodwill available to individuals and groups. The source lies in the structure and content of the actor’s social relations’. Small businesses are not socially isolated and they are engaged in a wide range of activities. They do not act purely in self-interest because the business is fused in social relationships with other businesses (Spence & Rutherfoord, 2003).
Medium-sized firms make increasing use of external sources of capital that lead to the first steps in separation of ownership and control (Preuss & Perschke, 2009). However, the relationship between principal and agent remains close. Employees in a medium-sized firm have greater firm-specific managerial knowledge and they will experience some communication problems. The informal, flexible, ad-hoc way of doing business in a small firm entails difficulties by medium-sized firms. Therefore, they begin making some functional differentiation. The amount of resources also grows alongside the size of the business. The stakeholder theory becomes important because medium-sized firms have an increasing body of stakeholders who become more and more important for the growth and success of the business. Stakeholder theory is about corporate responsibility towards a firm’s stakeholders. The balance between a stakeholder’s interests and needs has to be taken into account (Freeman, 2004).
Large firms face a separation of ownership and control. In line with the agency theory, large firms have much higher agency costs because there is a danger that the agent will act in his own interest (Preuss & Perschke, 2009). Large firms have employees with specific knowledge, obvious functional differentiation and formal communication. They usually operate in more than one country and play an important role in globalisation. Large firms have a wide range of stakeholders that are kept informed by managers. Stakeholder management is very important and the relationships are formal, planned and strategic. According to Fassin (2012, p.83), ‘stakeholder management, with its underlying business ethics component, focuses on the fair treatment, by the firm of its various groups of stakeholders: especially of employees, customers, consumers and stockholder’.
This distribution does not apply to all small, medium and large firms, but it shows that the size of a firm can have an impact on the way it does business. Table 1 in Appendix A gives an overview of the most important differences.
2.2.2 Influence of firm size on CSR
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Small firms who utilise environmentally friendly practices are not easily identifiable due to the inapplicability of traditional CSR theory and approaches. The owner-manager of a small firm plays an important role in the engagement of CSR. Empirical research has confirmed that the owner-manager’s values can be a determinative motivation for CSR in SMEs (Jenkins, 2006; Preuss & Perschke, 2009). The informal management style causes the employees to engage with CSR in an informal, ad-hoc and local manner (Moore & Spence, 2006). Because small firms are flexible, they can respond rapidly to new market information that incorporates social and environmental issues (Jenkins, 2006). Since small firms have limited resources, it is unlikely that they will use formal tools like codes and ethical standards because they require a large investment of time, finance and energy from an entrepreneur (Perrini, 2006). However, pressure for responsible behaviour along the supply chain can be created when a small firm is overly reliant on one large customer. Small firms could therefore be forced to adopt standards such as the ISO 9000 quality standard or the ISO 14001 environmental standard (Jenkins, 2004). Small firms have close contact with a few stakeholders and shape CSR through personal relationships, social ties and local interdependencies (Vykarnam et al., 1997). Social capital is evident in a small firm and the important influence of social relationships on their ethics has to be taken into account.
Medium-sized firms already have a more external focus. Both the stakeholders and the owner influence the engagement of CSR. Small and medium-sized firms differ in the extent to which they bring the CSR concept to the supply chain. Medium-sized firms are in the middle of the supply chain: they are supplied by small firms and in turn supply large firms or the market directly. They can therefore manage their responsible behaviour along the supply chain (Russo & Tencati, 2008). According to Udayasankar (2007), the relationship between firm size and CSR is U-shaped: medium-sized firms are the least motivated. He suggests that three firm-level attributes are associated with CSR and firm size: visibility, resource access and operation scope. For example, on the one hand, the more resources a firm has, the more likely it is that they will engage in CSR. They are better able to donate and to invest in CSR initiative like large firms. However, on the other hand, firms with limited resources can, like small firms, approach CSR in a strategic way to gather critical resources, sometimes to the exclusion of competitors.
15 range of stakeholders that managers will keep informed. The wide range of stakeholders (e.g. trade associations) has a huge influence on the implementation of CSR.
Thus differences in firm size impact how or whether a company embraces CSR. As a firm grows from small to medium to large, the characteristics change in the opposite. Small firms tend to have ‘silent CSR’. The lack of CSR codification shows the difficulties in measuring social responsibility in small businesses. They use an informal, internal approach and the owner-manager is an important factor in the engagement with CSR. Large firms have a more external, formal approach to CSR and the wide range of stakeholders has a huge influence on their CSR engagement. Medium-sized firms are in the middle of this contrast and are, according to Udayasankar (2007), the least motivated. Table 2 in Appendix B gives an overview of the most important differences.
2.3
Perceived effectiveness
Effectiveness is defined as the maximisation of return to the organisation (Friedlander & Pickle, 1968). According to Davis (1989), research has been constrained by the shortage of high-quality measures for key determinants of user acceptance. Measures do not correlate highly with system use. A model is not likely to be used when it does not help to improve performance, in spite of the implementation efforts. Schultz and Slevin (1975) researched the perceived effect of a model on the performance of a manager. The outcome was that perceived performance was highly correlated with self-predicted use of a decision model. Therefore, the perceived effectiveness is further discussed.
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a high effectiveness to sustain his ego and his work, he will do his very best to make the change successful and effective.
The definition of Davis (1989) will be used for testing the effectiveness of the CSR Performance Ladder. The perceived effectiveness is highly correlated with reality and gives therefore a good impression of the effectiveness of the CSR Performance Ladder in the SME sector.
2.4
Tools for fostering sustainability
2.4.1 Existing tools
Researchers have emphasised the need for a tool that can help SMEs effectively engage in CSR (Moore & Spence, 2006; Murillo & Lazona, 2006; Perrini, 2006; Perinni et al., 2007; Tilley, 2000). Several tools already exist to help organisations foster CSR: they can be divided into cross-industry initiatives and sector-based initiatives. This information is extracted from the ISO 26000, which is an international standard providing guidelines for social responsibility (Nederlandse Norm, 2010).
Cross-industry initiatives can be divided into three types: intergovernmental initiatives, initiatives of more shareholders and initiatives of a single shareholder. Intergovernmental initiatives are initiatives and instruments that are carried out under the direct responsibility of intergovernmental institutions such as the United Nations. An example is the OECD (Organization for Economic Co-operation and Development) guidelines for MNCs. By following these recommendations for responsible business conduct, 44 governments encourage their enterprises to observe responsibility wherever they operate. Initiatives of more shareholders are initiatives and instruments that are developed or managed by processes with more shareholders. An example is the Global Reporting Initiative (GRI), which is a non-profit organisation that promotes economic, environmental and social sustainability. GRI provides all sorts of companies with a sustainability reporting framework that enables all organisations to measure and report their sustainability. Initiatives of one single shareholder are initiatives and instruments that are developed or managed by processes with one single shareholder. An example is the IBLF (International Business Leaders Forum), which is a directive about human rights assessment.
Sector-based initiatives have been developed by specific industries such as agriculture. An example is the UTZ certification, which stands for sustainable farming and better opportunities. The UTZ program enables farmers to learn better farming methods, improve working conditions and take better care of their children and the environment.
17 safety), country-specific tools or internal tools. The development of new tools is still in progress (Graafland et al., 2003; Mares, 2010; Tencati et al., 2004). Since ISO 26000 is an international norm, country-specific tools are not included. For example, the Dutch initiative MADE-BY is an independent consumer label for fashion brands and retailers who would like to improve their sustainability. Internal tools are informal tools that firms use to order their social activities. For example, an ethics committee can give a clear signal about ethics to an organisation. An overview of the two ISO management systems, initiatives in the Netherlands and internal tools are listed in Table 3 in Appendix C as a complement to the ISO 26000.
Very little research has investigated these existing instruments. Only Tencati et al. (2004) and Graafland et al. (2003) have said something about the kind of tools companies use for their social activities. Tencati et al. (2004) investigated CSR practices among a representative sample of Italian enterprises. They were all somehow proactive with their CSR behaviour; ISO 14000 was the most popular CSR tool. The research did not describe the influence of firm size on the use of these tools. However, Graafland et al. (2003) investigated the kinds of strategies and instruments that large and small firms use to engage with CSR. Large firms used more formal instruments to foster ethical behaviour: the most used instruments were a social handbook, ISO 9001 (quality management system) and ISO 14000 certification. Large firms were more likely to use instruments that improve the accountability of external stakeholders. A significant proportion also used a code of conduct, published an annual social report and appointed a member of the board to advise about ethical questions.
Small firms made little use of these instruments; their most common instrument was a member of the board, generally the owner-manager, who was answerable for ethical questions. Small firms were more likely to use instruments that improve the accountability of internal stakeholders. Bertens et al. (2011) had similar findings: only 9% of small firms publish a sustainability report and 31% communicate about CSR activities. However, they all indicated that they would like to do this more often in the future.
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2.4.2 CSR Performance Ladder
About two years ago, the CSR performance Ladder was developed by the Foundation Sustained Responsibility (n.d.) that was claimed to be suitable for helping any type of business foster CSR (Bureau Veritas, n.d.; BV Training, 2012). The CSR Performance Ladder is a certification standard based on management system requirements including the core principles of CSR: People, Planet and Profit. It has been claimed that the ladder has a generic nature that makes it applicable to any type of business. This ladder was inspired by national and international trends and developments in the field of sustainability: ISO 26000, ISO 9001, AA1000 (principle-based standards to help organisations become more accountable, responsible and sustainable) and the GRI. Especially ISO 26000 influenced the creation of the CSR Performance Ladder and will therefore be explained:
The definition of ISO 26000 is as follows:
Responsibility of an organization for the impacts of its decisions and activities on society and the environment through transparent and ethical behavior that: (1) contribute to sustainable development, health and the welfare of society (2) take into account the expectations of stakeholders (3) is in compliance with applicable law and consistent with international norms of behavior and (4) is integrated throughout the organization and practiced in its relationships. Activities include products, services and processes; relationships refer to an organization’s activities within its sphere of influence (Von Weltzien Høivik & Shankar, 2010, p.175).
ISO 26000 is a flexible guidance standard. It allows companies to engage in CSR in their own contexts and gives a step-by-step implementation plan according to their needs. An organisation should treat and monitor the impact of its decisions and activities on society and the environment in a way that takes into account the size of the organisation and its effects. Therefore, ISO 26000 can be used in a practical, simple and cost-efficient way. It is a universal standard for all companies, private or public and developed or undeveloped. Since it gives guidelines and not requirements, it is not a certification standard. Therefore, the CSR Performance Ladder was developed to give a company a certification for their CSR practices. The advantage of a certification can be that a company can make its CSR efforts transparent, internally and externally. Stakeholders become informed about a company’s CSR practices and this can lead to benefits like increasing market opportunities and strengthening the company’s image (as discussed earlier).
19 Table 4 begins with the first encompassing key theme, which is governance. A company demonstrates governance by elaborating and being accountable to its stakeholders regarding the key CSR themes that fall under the Triple-P concept. The next four key themes fall under People: working conditions and meaningful work (five indicators), human rights (seven indicators), ethical business practices (five indicators) and consumer affairs (five indicators). The next key theme falls under Planet: eight indicators about the environment, materials, energy and emissions. The last key theme falls under Profit: three indicators about community involvement and development.
The CSR Performance Ladder consists of five levels; depending on the results of an audit, a certificate can be issued for each level (Appendix E gives an overview of the five levels). An organisation can decide for themselves at which level they wish to aim. The higher the level, the more the business chain with the corresponding stakeholders contains CSR practices. Levels 1 and 2 are starting levels and require a commitment to further develop the system to at least Level 3, which is the general attainable achievement for the sector. Levels 4 and 5 can be obtained when a company continues their sustainable development. Levels 1 and 2 are only valid for one year and Levels 3, 4 and 5 are valid for three years. Levels 3, 4 and 5 require a follow-up audit every year and a reassessment after three years. Levels 3 and 4 require at least one and Level 5 two of the following certificates: ISO 9001, ISO 14001, OHSAS 18001, ISO 22000 or SA 8000.
2.4.3 MVO Wijzer
The EBN Certification (n.d.) has developed the MVO Wijzer; another CSR certification standard based on management system requirements that include the Triple-P concept based on the ISO 26000. Other systems are not needed for its implementation and it can be included in a company’s management system. This certification is only meant for Dutch organisations. The model of this tool can be found in Appendix F. The MVO Wijzer has some principles that correspond with the CSR Performance Ladder, but there are differences in elaboration.
The MVO Wijzer consists of nine CSR themes and 74 indicators. The themes are as follows: code of conduct (seven indicators), legislation and regulation (seven indicators), good governance (nine indicators), personnel policy (11 indicators), customer policy (11 indicators), surroundings policy (six indicators), chain policy (seven indicators), environmental policy (eight indicators) and communication (eight indicators). An overview of the themes and indicators can be found in Appendix G.
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positive assessment, it can earn a ‘CSR Statement’ that will be verified by a consulting firm or certifying institution. The statement is valid for two years. An organisation has to score at least 20 points on each CSR theme to directly receive the ‘CSR Statement’. If an organisation scores less than 20 points on no more than three CSR themes, it must write a plan of improvement within one month. If this plan is positively assessed, the organisation can still obtain the ‘CSR Statement’. If it receives a negative assessment, the organisation gets one last chance to improve the plan of improvement. If it receives another negative assessment, the organisation must wait six months before submitting a new application.
Phase 2 is about earning a CSR certification and it can only start after Phase 1 is completed. It must take place within two years after the ‘CSR Statement’ is obtained. This certificate is valid for three years. Phase 2 consists of a document review based on the indicators and an implementation audit to see whether the indicators have been implemented effectively. Phases 1 and 2 can be combined when an organisation is directly going for certification. The CSR self-evaluation will then be a part of the audit documentation.
2.4.4 Comparing the CSR Performance Ladder to the MVO Wijzer
When the CSR Performance Ladder and the MVO Wijzer are compared, similarities and contradictions can be noticed. These are summarised in Table 5 (see next page). Both instruments claim to be suitable for any type of business, they are both based on the Triple-P concept and the IS0 26000, both instruments’ entry level is based on self-evaluation and both offer a path to earning a certificate for an organisation’s sustainable activities.
Contradictions can also be noticed. First, the CSR Performance Ladder has a more international character. This is due to the international principles (e.g. the AA1000 and GRI) that are also the foundations of the instrument. The ladder is already used by firms in Germany and France. In addition, the CSR Performance Ladder incorporates seven CSR themes and 33 indicators and the MVO Wijzer incorporates nine CSR themes and 75 indicators. It may seem that the CSR Performance Ladder is more comprehensive, but it spreads the themes and indicators over five levels while the MVO Wijzer does so over two phases. The growth path of the CSR Performance Ladder is therefore higher, which could give organisations more space to grow their sustainability level. On the other hand, the higher the level, the more requirements have to be achieved. It can take a while for an organisation to reach Level 5 and some organisations never reach this level.
21 Wijzer consists of earning a ‘CSR Statement’; a certificate can only be earned in Phase 2. The certificate can only be earned when the organisation is actually sustainable.
Variables CSR Performance Ladder MVO Wijzer
Principles Triple-P concept, ISO 26000 AA1000, GRI, ISO 9001
Triple-P concept, ISO 26000
Type of business Any type of business Any type of business Working field International National
Number of CSR themes Seven Nine
CSR themes - Governance
- Working conditions & meaningful work - Human rights
- Ethical business practices - Consumer affairs
- Environment materials, energy and emissions
- Community involvement and development
- Code of conduct
- Legislation and regulation - Good governance - Personnel policy - Customer policy - Surroundings policy - Chain policy - Environmental policy - Communication Indicators 33 75
Levels / phases Five levels Two phases Entry level An organisation decides their entry level
from one of the five levels based on self-evaluation. It can only earn certificates.
Based on self-evaluation with an online questionnaire. If an organisation receives a positive outcome, it can earn a ‘CSR Statement’ by Phase 1.
Growth opportunities Potential to move up five levels Only one level to move up Requirements for growth Levels 3 and 4 require one and level 5 two
of the following certificates:
ISO 9001, ISO 14001, OHSAS 18001, ISO 22000 or SA 8000
Phase 1 must be completed before an organisation begins Phase 2
Certification A certificate can be obtained at each level A certificate can only be obtained at Level 2 Validity Levels 1 and 2 are valid for one year
Levels 3, 4 and 5 are valid for three years
Phase 1 is valid for two years Phase 2 is valid for three years
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2.4.5 (Critical) Success factor(s)
A lot of literature can be found about (critical) success factor(s) that a new CSR tool should have to be successful in the SME sector. Critical success factors are the limited number of areas in which results, if they are satisfactory, will ensure competitive performance in an organisation. They are the few key areas where things must go right for a business to flourish (Rockart, 1979). A success factor is critical when all researchers agree on the same factor. If we look at an instrument for embracing CSR, one critical success factor and eight other success factors can be noticed. Researchers (Castka et. al, 2004; Fassin, 2008; Jenkins, 2006; Avram & Kühne, 2008; Perrini, 2006; Russo & Tencati, 2008) have their own opinions about the most important elements that must be included in a CSR instrument.
All researchers agree that the instruments that are designed and used by large firms cannot be simply scaled down to SMEs. It is therefore important to develop an instrument that takes each company’s differences into account. As explained earlier, SMEs approach CSR differently due to their characteristics.
It is also important that CSR becomes embedded in an organisation with the help of an instrument. Castka et al. (2004) and Jenkins (2006) mentioned that CSR has to be integrated into the organisational system and all aspects of its operations; CSR should not simply be seen as a cost externality. CSR has to become ‘just the way we do things’ and an organisation must place CSR at the core of everyday business decisions. The owner-manager takes an important role here as he has to set up a vision and principles that align with the company’s understanding of CSR. Russo and Tencati (2008) added that the new CSR activities should ideally be integrated into existing behavioural patterns. This can be done by involving employees in CSR activities that fit their jobs.
The presence of stakeholders should also be taken into account as an important element of the instrument. The cooperation of stakeholders is important in the process towards sustainability (Tilburg et al., 2012). A company should look at the needs of stakeholders to learn which aspects of CSR are important (Castka et al., 2004; Jenkins, 2004). SMEs have to make a difference where they can and adopt practices that are relevant to their business and feasible to the organisation’s profitability into the CSR agenda. Social capital theory is important here because the stakeholders are embedded within SMEs’ social capital (Perrini, 2006). Practitioners recognise the strong influence SMEs have on their surrounding communities, so specific tools for managing SMEs’ social capital are needed.
23 A tool must be transparent so that it shows stakeholders that CSR is represented in all the
business activities (Castka et al., 2004; Russo & Tencati, 2008).
A tool must be low cost because of the finance constraints of SMEs (Castka et al., 2004; Russo & Tencati, 2008).
A tool cannot be excessively time and resource consuming to operate (Castka et al., 2004; Russo & Tencati, 2008).
Castka et al. (2004) pointed out that SMEs need one single way of integrating CSR, so that they can make contact with other organisations to learn from each other. Bertens et al. (2011) showed that SMEs need independent information and the opportunity to ask questions and share experiences with other firms. A platform might be able to fulfil these needs.
Fassin (2008) does not believe in formal instruments; he believes that CSR lies in the right attitudes and corporate culture rather than in formalisation. For example, responsible SMEs do not need ISO CSR standards; they behave in a social and responsible way because that is a good way of doing business. According to Castka et al. (2004), business frameworks such as ISO serve as vehicles for integrating CSR into day-to-day business. Voluntary aspect of engaging in CSR should remain important (Fassin, 2008; Tencati et al., 2004). Tencati et al. (2004) emphasised that a set of performance indicators could help support SMEs in their self-assessment of their own social performance.
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2.5
Conceptual model
The conceptual model is shown in Figure 1 below and it explains the reasoning of this research. The CSR Performance Ladder is the centre of this research, which will examine the effectiveness of this instrument in the SME sector. It will present case studies about SMEs who have implemented the CSR Performance Ladder. These cases will be tested on two variables: perceived effectiveness and the (critical) success factor(s).
Figure 1 Conceptual model
First, the perceived effectiveness of the CSR Performance Ladder will be tested. This will show whether users perceive the instrument to be effective for engaging with CSR. Second, the (critical) success factor(s) from the literature review will be tested on the CSR Performance Ladder. These factors are needed for the CSR Performance Ladder to have success in the SME sector. The information collected in the literature review about the characteristics of SMEs and existing tools are also important; they correspond with the (critical) success factor(s) and will give more depth to the interview questions and final results. The outcome of the case studies will provide perspective about the effectiveness of the CSR Performance Ladder in the SME sector. The instrument may be effective or it may need some adjustments that fits the SME sector which is reflected in the so called ‘SME CSR Performance Ladder’. It is also possible that the instrument is ineffective and that another tool or way of integrating would be a better option.
CSR Performance Ladder SME CSR Performance Ladder Perceived effectiveness (Critical) Success factor(s)
Existing tools Characteristics of SMEs
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3.
Methodology
This chapter will present the method used to test the effectiveness of the CSR Performance Ladder in the SME sector. The chosen research method will be explained, the participants will be introduced, and an explanation of the data collection will be given. In the end is the validity and reliability of this research reviewed.
3.1 Research method
Primary and secondary research was conducted to answer the research question. The primary qualitative research includes case studies of SMEs that have implemented the CSR Performance Ladder. According to Yin (2003), a case study is defined according to an empirical inquiry that investigates a contemporary phenomenon in a real-life context. As explained in the introduction, case studies are important in research about CSR in relation to SMEs (Castka et al., 2003; Fassin, 2008; Holliday, 1995; Perrini, 2006).
Secondary research consists of desk research which was gathered in the literature review section in the fields of CSR, characteristics of small, medium and large firms, perceived effectiveness, CSR tools, and (critical) success factor(s). Electronic databases such as Business Source Premier were used to gather scientific journals and books about these topics. Bureau Veritas provided the information about the CSR Performance Ladder by means of training and reports.
3.2 Participants
One hundred and ten CSR Performance Ladder certificates have been given to companies who have implemented this instrument. Bureau Veritas has issued certificates to twenty-four firms, of which twelve comply with the European Commission’s (2005) definition of SMEs. Six of them were willing to participate in this research, which resulted in two categories with multiple cases: three small and three medium-sized firms. According to Eisenhardt (1989), this reflects the selection of specific cases to extend the theory to a broad range of SMEs. The firms in the case studies will be briefly described and the information will be treated confidentially. Therefore, the names have been changed.
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Small firm B was established in 1985 and is located in Heemskerk and ‘s-Hertogenbosch, in the south of the Netherlands. This 45-employee firm is specialised in engineering consulting in the construction sector and also in management and maintenance services. The company wants to contribute to a socially responsible business environment, so they are certified for ISO 9001, ISO 14001, ISO 18001 and Level 3 on the CSR Performance Ladder.
Small firm C was established in 1996 and is located in Tilburg, in the south of the Netherlands. This 25-employee firm supplies all kinds of IT products online, which are supported by professional account management. The quality of their service is a high priority, so they have earned the ISO 9001 certification. This company is an example where ‘silent CSR’ was observed and they wanted to make this transparent to their stakeholders. They are certified at Level 2 on the CSR Performance Ladder and intend to advance further.
Medium-sized firm D was established in 1902 and is located in Tilburg, in the south of the Netherlands. This 110-employee firm provides a full-service concept in the construction sector. They perform special projects in the fields of work, relaxation, learning, caring, housing, culture and industry. Firm D would like to take responsibility not only for themselves but also for future generations. Therefore they are certified for the Co2 Performance Ladder and level 3 on the CSR Performance Ladder.
Medium-sized firm E was established in 1913 and is located in Twello, in the east of the Netherlands. This 150-employee firm specialises in construction projects where personal contact with clients is important. In their projects, Firm E always looks for sustainable solutions in which the economy, environment and society are balanced. They are certified for ISO 9001, ISO 14000, OHSAS 18001 and Level 3 on the CSR Performance Ladder.
Medium-sized firm F was established in 1961 and is located in Tilburg, in the south of the Netherlands. This 180-employee firm provides concepts in the field of toilet hygiene. All their products and services are tested for the impact they have on society and the environment. Firm F is certified for ISO 9001, ISO 14001 and Level 3 on the CSR Performance Ladder. In addition, they have earned the Ecolabel of Scandinavia (the Nordic Swan) for their paper towels and toilet paper and the European Ecolabel (the Euro Flower) for their toilet paper.
3.3 Data collection
27 disagree to fully agree. The open questions elicited valuable data with the opportunity to ask follow-up questions.
The interview guide was created with the help of Table 6 in Appendix H. It consists of two variables which were derived from the literature review: perceived effectiveness and (critical) success factor(s). The raw variables were translated into items from which questions were made. The operationalisation of the variables will now be explained.
Perceived effectiveness
The variable perceived effectiveness tests the degree to which a user perceives that the CSR Performance Ladder enhances their performance (Davis, 1989). An instrument is more likely to be effective in the SME sector when users experience the results of the instrument as useful with the least amount of effort during the implementation process. Perceived effectiveness consists of two raw variables:
- Perceived usefulness tests the improved CSR performance and satisfaction with the result after using the CSR Performance Ladder. One item in the interview guide tested this success factor: 10.1 (questions A, B and C).
- Perceived ease of use tests the degree of effort needed to implement the CSR Performance
Ladder and the satisfaction with this process. One item in the interview guide tested this success factor: 10.1 (questions D, E and F).
Question 10.2 in the interview guide tested the overall mark for the perceived effectiveness of the CSR Performance Ladder.
(Critical) Success factor(s)
The variable (critical) success factor(s) tests important factors that the CSR Performance Ladder must have in order to be effective in the SME sector (Rockart, 1979). The more (critical) success factor(s) the CSR Performance Ladder complies with, the higher the success and thus effectiveness of this instrument in the SME sector (Castka et. al, 2004; Fassin, 2008; Jenkins, 2006; Avram & Kühne, 2008; Perrini, 2006; Russo & Tencati, 2008). This variable consists of nine raw variables (also see Table 6 of Appendix H):
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- Embed CSR in the core business is a success factor that tests whether the CSR Performance Ladder helps the organisation foster CSR in the company. CSR has to become ‘just the way we do things’. Five items in the interview guide tested this success factor: 11.4 – 11.8.
- Strong emphasis on stakeholders is a success factor that tests whether the CSR Performance Ladder puts enough emphasis on stakeholders. The firm and the stakeholders should cooperate with one another and the stakeholders’ CSR needs must be kept in mind. Stakeholders have to be an important element of the instrument because SMEs use a lot of social capital. Two items in the interview guide tested this success factor: 11.9 and 11.10 (questions A and B).
- Simple and practical is a success factor that tests whether the CSR Performance Ladder is a simple and practical tool to use. One item in the interview guide tested this success factor: 11.10 (questions C and D).
- Transparency is a success factor that tests whether the CSR Performance Ladder makes the firm’s CSR practices transparent to their stakeholders. One item in the interview guide tested this success factor: 11.10 (question E).
- Low cost is a success factor that tests whether the CSR Performance Ladder is low cost for the organisation. One item in the interview guide tested this success factor: 11.10 (questions F and G).
- Not excessively resource and time consuming is a success factor that tests whether the CSR Performance Ladder is resource and time consuming for the organisation to use. One item in the interview guide tested this success factor: 11.10 (questions H and I).
- One instrument is a success factor that tests whether the CSR Performance Ladder can be the only instrument that SMEs use for their CSR practices. There are so many other tools on the market and it could be easier for SMEs if there was only one instrument to learn from. It might be helpful to have a platform with independent information and the opportunity to ask questions and share experiences. The literature review about existing CSR tools was used to give more depth to this raw variable. Eight items in the interview guide tested this success factor: 11.11 – 11.18.
- Low formality is a success factor that tests whether the CSR Performance Ladder might be too formal for CSR integration by SMEs. Voluntary aspects in the instruments might be used to lower the formality. However, the indicators can be effective for a company’s CSR self-assessment. Two items in the interview guide tested this success factor: 11.19 and 11.20.
29 3.4 Data analysis
Four tests can be conducted to judge the quality of a research: construct validity, internal validity, external validity and reliability (Yin, 2003). The application of these test on this research are discussed.
Construct validity is about correct operational measures for the concept being studied (Yin, 2003). The main concept studied in this research is the perceived effectiveness and the (critical) success factor(s), with the underlying variables existing tools and different characteristics. The theory of Davis (1989) was used for the operationalisation of the variable perceived effectiveness. The theory of several researchers (Castka et. al, 2004; Fassin, 2008; Jenkins, 2006; Avram & Kühne, 2008; Perrini, 2006; Russo & Tencati, 2008) was used for the operationalisation of the variable (critical) success factor(s). An interview guide was made based on the theory of these researchers to find an answer on the research question. It was not possible to use multiple sources of evidence due to the time period.
Internal validity is about establishing a causal relationship (Yin, 2003). This test cannot be applied because this research is an exploratory research. This means that the goal is to gain in knowledge and understanding and not to prove a causal relationship.
External validity is about the domain to which a study’s findings can be generalized (Yin, 2003). Cases studies rely on analytic generalisation which means that the set of results have to be generalised to a broader theory (Yin, 2003). Previous theory about the effectiveness of the CSR Performance Ladder in the SME sector does not exist. However, the existing theory about the variables was compared with findings of this research in the discussion. Important similarities and/or contradictions were noted.
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4.
Results
This chapter presents the results of the case studies. The information is collected with the help of the interview guide (Appendix I). The individual cases can be found in Appendix J. The results of the case studies will be explained per variable in the two groups: small (A, B and C) and medium-sized firms (D, E and F). The results for the variable perceived effectiveness will be shown first, followed by those for the variable (critical) success factor(s).
4.1 Results perceived effectiveness
Table 7 shows the results of question 10.1 of the interview guide. This question contains of six sub questions about the perceived effectiveness of the instrument in the SME sector. The first three questions relate to perceived usefulness and the last three questions to perceived ease of use.
Question 10.1 Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree
A. Improved sustainability E ABCD F
B. Pleased with end result BE ACD F
C. Expectations are true A CD BEF
D. Easy to use the instrument BC ADEF
E. Pleased with the process F ABCDE
F. Would implement the ladder again ABCD EF
Table 7 Perceived effectiveness
31 Perceived ease of use – One small (A) and three medium-sized firms (D, E and F) found the CSR Performance Ladder easy to use. Two small firms (B and C) did not find the instrument to be easy and had difficulties understanding the indicators. Firm C also had difficulties using the Deming circle. Three small (A, B and C) and two medium-sized (D and E) firms were pleased with the instrument’s implementation process. Firm F missed having a format to work with. The interviewee developed the ‘MVO-Meter’ for a more organised implementation. It shows the state of affairs per indicator. All six firms would implement the ladder again now that they know what it takes to achieve it.
Question 11.2 of the interview guide provides an overall mark for the CSR Performance Ladder: 7.3 ( (A:7.5 B:7 C:7 D:7 E:7 F:8) / 6 ).
4.2 Results (critical) success factor(s)
One critical success factor and eight success factors were tested on the CSR Performance Ladder. The results of these factors are shown respectively.
Different characteristics
Table 8 shows the results of question 11.1 of the interview guide. The answers on the nine Likert scale sub questions show if the CSR Performance Ladder takes into account the characteristics of small and medium-sized firms.
Question 11.1 Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree
A. The owner chose the use A BDEF C
B. The stakeholders chose the use EF BC AD
C. ‘Silent CSR’ becomes visible EF ACD B
D. A lot of adjustments A BEF CD
E. Informal character ACDF B E
F. Takes into account various features ABCDE F
G. Structure fits with existing structure AB CDE F
H. Easily implemented with existing resources D ABCEF
I. Room for personal contact A BCDE F
Table 8 Results of question 11.1
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use of the CSR Performance Ladder; this firm only used it for certification. The owner and the stakeholders at Firm D both influenced the use of the ladder; this firm wants to be sustainable but the stakeholders had increasing CSR demands.
The CSR Performance Ladder made ‘silent CSR’ visible in three small (A, B and C) and one medium-sized firm (D). This did not happen in medium-sized Firms E and F because CSR-specific functions existed in these companies. Firm F created the ‘MVO-Meter’ format, which eventually made CSR practices transparent to this firm.
Few adjustments had to be made by two small (A and B) and two medium-sized firms (E and F) for them to implement the instrument. Firms C and D had to make some adjustments: Firm C hired two interns for the implementation process and Firm D explained that there were not many adjustments to make in the short term but there were some in the long term.
One medium-sized firm (E) found the CSR Performance Ladder to be informal. Small firm B neither agrees nor disagrees. Two small (A and C) and two medium-sized firms (D and F) did not find the character of the instrument to be informal. Firm B neither agreed nor disagreed with that. Firm C added that the audits were informal in nature.
Three small (A, B and C) and two medium-sized firms (D and E) agreed that the CSR Performance Ladder did not take the diverse features of these firms into account. Firm E noted that the instrument has a very general interpretation. Firm F found that the instrument did take the diverse features of their business into account.
The structure of one small (C) and three medium-sized firms (D, E and F) fit well with the structure of the ladder. This was due to the earlier implementation of other management systems by the medium-sized firms. Since Firm C is a very young company, their structure is flexible. Firms A and B had mixed feelings about the fit of the company structure with the instrument structure.
Two small (A and B) and three medium-sized firms (C, E and F) thought the ladder could be implemented easily using their existing resources. Firm D did not find this easy.
Two small (B and C) and three medium-sized firms (D, E and F) agreed that the CSR Performance Ladder gives room for personal contact with stakeholders. Firm A disagreed because of stakeholders’ unwillingness to become sustainable. Firms B and C agreed with this fact. It did not show in practice.
