CSR Dynamics in the Midst of Competing Injunctions: The case of Danone

• Date: 01 March 2020
• Author: Laurent Vilanova,Emmanuelle Reynaud,Magalie Marais
• Published date: 01 March 2020
• DOI: http://doi.org/10.1111/emre.12305

CSR Dynamics in the Midst of Competing

Injunctions: ThecaseofDanone

MAGALIE MARAIS,

1

EMMANUELLE REYNAUD

2

and LAURENT VILANOVA

3

1

Montpellier Business School, Montpellier, France

2

Aix-Marseille Université –IAE –CERGAM, Aix en Provence, France

3

Université Lumiere Lyon 2, COACTIS, Lyon, France

This study examines how firms manage competing injunctions for corporate social responsibility (CSR) across

time. We first develop a theory of CSR dynamics that accounts for the idea that a firm’s actual CSR (what the firm

does) and its professed CSR (what it says it does): (i) depend on both internal injunctions (a firm’sidentity

orientation) and external injunctions (stakeholder demands); and (ii) are not necessarily constant over time, that

is, there might be discernible phases of CSR. We illustrate our theory with a longitudinal case study of Danone, a

French food-processing company. We show that in the midst of conflicting injunctions, Danone adopted a multi-

phase strategy that consisted of proactively managing opponents in the short term to better impose CSR in the long

term. During the different phases, decoupling actual from professed CSR was a key instrument to maintain

organizational cohesion.

Keywords: CSR; CSR dynamics; decoupling; internal and external injunctions; stakeholders; strategic phases

Introduction

In an increasingly complex business world, large firms,

and especially multinationals, must respond to

competing and often conflicting demands (Crilly,

2011; Scherer et al., 2013). Although they are under

pressure to create value for shareholders, other

stakeholder groups (e.g., customers, employees, society

at large) expect them to address social and

environmental issues. Large firms are also subjected

to increasing pressure to engage in corporate social

responsibility (CSR) (Aguilera et al., 2007) –that is,

to consider and respond to issues that go beyond a

firm’s narrow economic, technical, and legal

requirements (Davis, 1973; Crilly and Sloan, 2012).

Whatever the underlying reasons (e.g., corporate

scandals, limitations of governmental regulations, or

shifts in citizens’values), the evidence is clear that

firms are facing increasing demands for sustainable

and safe products (Forbes et al., 2009; Young et al.,

2010), progressive social policies (McWilliams and

Siegel, 2001; Xu and Li, 2013), and proactive

environmental strategies (Bansal and Roth, 2000;

Dhanda, 2013). Attending to these CSR demands is

especially crucial because negative information on large

companies can easily ‘go viral’and spread

uncontrollably across the internet, putting corporate

reputations at great risk (Castello and Lozano, 2011).

Given these factors, large firms consider their impact

on society more than ever before and regularly

communicate on their socially responsible initiatives

(Johnson and Greening, 1999). However, whether and

how they find appropriate responses to these

heterogeneous demands (Pache and Santos, 2010;

Scherer et al., 2013) and effectively meet both

economic and social obligations is another matter.

Past research on CSR has largely focused on the ‘why’

question: the true motivation for engaging in CSR. At the

organizational level, a distinction has been made between

those firms that use CSR instrumentally–that is, because

they perceive CSR as economically beneficial

(McWilliams and Siegel, 2000; Hillman and Keim,

2001) –and those that engage in CSR for moral or ethical

Correspondence: Magalie Marais, Montpellier Business School, 2300

avenue des Moulins 34080 Montpellier, France. E-mail m.

marais@montpellier-bs.com

DOI: 10.1111/emre.12305

©2018 European Academy of Management

European Management Review, Vol. 17, 19–633, (2020 )

3

39

reasons (Joyner and Payne, 2002).

1

The ‘how’question,

or the processes by which firms and their top managers

2

set the intensity, nature and timing of CSR activities and

communicate on them to stakeholders, has received less

attention (Rasche et al., 2013; Epstein et al., 2015;

Wickert et al., 2017). There are two reasons for this

oversight. First, if CSR increases both

social/environmental and financial performance (i.e., the

traditional instrumental view), firms should face limited

opposition when implementing CSR activities

(McWilliams and Siegel, 2001). Second, if one actor

(e.g., the CEO or shareholders) has a prominent influence

on the firm’s strategic decisions (Hambrick and Mason,

1984), this actor should be able to impose its own CSR

preferences even if it is not shared by other stakeholders.

In sum, the ‘how’question could be of secondary

importance if firms encounter little difficulty in

implementing a pro-CSR strategy.

Yet the ‘how’question is of primary importance w hen:

(i) certain stakeholder groups perceive CSR activities as

detrimental to their interests; or (ii) CSR supporters are

unable to impose their preferences immediately and

unilaterally on powerful opponents. In these cases, even

firms with strong internal injunctions for CSR may have

to adopt more complexstrategies than generally admitted,

especially in a context where the business case for CSR

has still not been demonstrated and where shareholders

may contest CSR initiatives, as, for example, when

financial performance is low (Dincer, 2011). Overall, the

‘how’question is particularly relevant to an integrative

perspective on CSR (Hahn et al., 2015a) that

acknowledges the need to combine economic,

environmental and social dimensions without apriori

prioritizing one dimension over others. From this

perspective, CSR is a political object, and tensions

between pursued objectives and demands are accepted

(Aguilera et al., 2007). Beyond a mere consideration of

CSR as a moral duty or a tool for profit enhancement,

the key question is how firms dynamically manage CSR

over time in the midst of conflicting injunctions and

motivations for CSR.

This paper seeks to understand how firms manage

competing demandsfor CSR across time. In pursuing this

objective, we first develop a theoretical model that

accounts for the ideas that: (i) both internal injunctions

(a firm’s identity orientation) and external injunctions

(stakeholder demands) matter in the explanation of how

firms shape their actual CSR (what they do) and their

professed CSR (what they say they do); and (ii) a firm’s

actual and professed CSR may vary across time, such that

there might be discernable phases that are each

characterized by a distinct pattern of injunctions and

CSR activities. Within this framework, we propose that

in the midst of competing injunctions, firms neither adapt

passively to stakeholder demands nor impose unilaterally

their own beliefs. Rather, organizational decision-makers

are likely to adopt a multi-phase strategy that consists of

proactively managing stakeholders over the short term in

order to promote their firm’s current or intended identity

orientation over the long term. We next illustrate our

theory with a longitudinal, single-case study of Danone,

a French food-processing company. Our aim is to better

understand how external and internal injunctions interact

to determine the dynamics of CSR within a single firm

and to gain insight into the mechanisms that drive the

transition from one CSR phase to another.

Our contributionsare twofold. First, by introducing the

idea of CSR dynamics, we extend the findings from prior

studies, which have tended to focus on the repertoire of

static responses that firms mobilize in response to

competing stakeholder and CSR demands (e.g., Pache

and Santos, 2010). From this perspective, we show how

top managers can dynamically manage conflicting short-

term stakeholder pressures in order to better impose

CSR in the long term. This dynamic stakeholder

management implies a multi-phase strategy whereby a

pro-CSR firm sometimes temporarily acquiesces to

powerful CSR opponents. In this respect, our paper

responds to recent calls for a dynamic approach to how

firms manage conflicting stakeholder claims (Sachs and

Maurer, 2009; Minoja, 2012). It also contributes to the

CSR literature by showing that firms with strong CSR

beliefs that encounter strong resistance from powerful

opponents (e.g., shareholders) can pursue a multi-phase

strategy and are not condemned to either definitively

sacrificing CSR or immediately imposing it despite

adversity. We also provide new insight into the

phenomenon of decoupling, which can be defined as the

situation where firms use different patterns of substantive

and symbolic actions (Meyer and Rowan, 1977). Prior

work has typically assumed that decoupling is a short-

term and deliberately deceptive strategy that firms use to

1

Previous researchhas identified two categories of motives forCSR: ethical or

intrinsic motives, and instrumental or extrinsic motives. Instrumental CSR is

externallydriven and firms that pursue this rationaleengage in CSR to manage

risk or to increase their financial performance (Basu and Palazzo, 2008). In

contrast, ethicalCSR is intrinsically driven and firmsthat follow this rationale

act on the basis of ethical standards and moral principles (Aguilera et al.,

2007). The terminology used (either ins trumental vs. ethical or intri nsic vs.

extrinsic) may vary but many papers use the two terminologies indifferently

(Muller andKolk, 2010; Story and Neves, 2015).In this paper, we refer rather

to the instrumental/ethical typology because this terminology is more

comprehensive and encompasses not only the drivers (intrinsic vs. extrinsic)

but also the logics and the justifications of CSR activities (Hahn et al.,

2015b). This more comprehensive stance facilitates the identification of

Danone’s motives forCSR in our case study.

2

Althoughall managers in a companyhave to consider CSR issuesand integrate

theminto their practices (Egriand Herman, 2000; Wonget al., 2011), this article

adopts astrategic vision of CSR involvingthe integrationof CSR at the highest

level of decision within a company (Smith and Tushman, 2005; Pache and

Santos, 2010). We therefore anchor our theoretical developments and our

empirical study in a top-management perspective (Adams et al., 2011; Chin

et al., 2013).

M. Marais et al.

©2018 European Academy of Management

20