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Communication of Corporate Social Responsibility: A Study of the Views of
Management Teams in Large Companies
ArticleinJournal of Business Ethics · October 2010
DOI: 10.1007/s10551-010-0469-2
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Communication of Corporate Social
Responsibility: A Study of the Views
of Management Teams in Large Companies Susanne Arvidsson
ABSTRACT. In light of the many corporate scandals,
social and ethical commitment of society has increased
considerably, which puts pressure on companies to com-
municate information related to corporate social responsi-
bility (CSR). The reasons underlying the decision by
management teams to engage in ethical communication are
scarcely focussed on. Thus, grounded on legitimacy and
stakeholder theory, this study analyses the views manage-
ment teams in large listed companies have on communica-
tion of CSR. The focus is on aspects on interest,motives/
reasons,users and problems related to corporate communica-
tion of CSR information. A questionnaire survey and
in-depth interviews confirm that there is a distinct trend shift
towards more focus on CSR in corporate communication.
Whilst this trend shift started as a reactive approach initiated
by the many corporate scandals, the trend shift is now argued
to be of a proactive nature focussed at preventing legitimacy
concerns to arise. These findings are significant and inter–
esting, implying that we are witnessing a transit period
between two legitimacy strategies. Furthermore, the find-
ings suggest that the way respondents argue when it comes to
CSR activities coincides with consequentialism or utilitari-
anism, i.e. companies engage in CSR activities to avoid
negative impacts instead of being driven by a will to make a
social betterment or acting in accordance with what is fun–
damentally believed to be right to do. This provides new
input to the ongoing debate about business ethics. The
findings should alert national and international policy makers
to the need both to increase the vigilance and capacity of the
regulatory and judicial systems in the CSR context and to
increase institutional pressure to enhance CSR adoption and
CSR communication. Furthermore, stakeholders need to be
careful in assuming that CSR communication is an evidence
of a CSR commitment influencing corporate behaviour and
increasing business ethics.
KEY WORDS: corporate social responsibility, CSR
communication, legitimacy, stakeholders, utilitarianism
Introduction
In recent years, we have witnessed alarming reports of
amplified consumption of natural resources, increased
pollution, multinational companies’ exploitation of
child labour, the Enron affair and similar, gigantic
management bonuses and so forth. In this context,
the awareness and environmental, social and ethical
commitment of society have increased. As has
widespread mistrust towards how management teams
run our companies (Goodman, 2009; Holder-Webb
et al., 2008; SOU (2004:47), 2004b). This has influ-
enced society to impose new restrictions on compa-
nies to prevent them from engaging in inappropriate
behaviour (see Sutantoputra, 2009). Both on national
and international levels different actions have been
taken to better govern companies and, thereby,
milder the public opinion and restore society’s trust in
companies and in those managing them. Examples of
actions taken are, e.g. increased power to the SEC
(Security Exchange Commission) and its equivalents,
the introduction of national ‘‘Code of Conduct’’
and ‘‘Code of Corporate Governance’’.
Also on company level, actions have been taken to
turn the negative trend by meeting the demand for
more information related to their environmental,
social and ethical activities. This area of information
is, hereafter, referred to as corporate social responsi-
bility (CSR), which is defined by the European
Commission (2001, p. 5) as a concept by which
‘‘…companies decide voluntarily to contribute to a
better society and a cleaner environment’’ by
‘‘…going beyond compliance and investing ‘‘more’’
into human capital, the environment and the relations
with stakeholders’’ (p. 8). A decade ago, companies
Journal of Business Ethics (2010) 96:339–354 Springer 2010
DOI 10.1007/s10551-010-0469-2
devoted very little focus on communicating CSR
(Arvidsson, 2003; Bukh et al., 2006); today it appears
as if this area of information receives increased focus in
corporate communication (Arvidsson, 2009; Ihlen,
2008). Claims for transparency and accountability
have pressured companies to place CSR on the
agenda. However, this poses problems related both to
implementation of CSR strategies and to communi-
cation of CSR achievements. From a management
team perspective, the communication problems arise
in establishing which and how CSR information
should be communicated in order to satisfy the
information needs of stakeholders and, thereby, to
legitimate their behaviours. Due to the lack of
an established framework for how to communi-
cate consistently about CSR, Ellerup Nielsen and
Thomsen (2007) argue that many companies are
completely unprepared for this task.
Grounded on legitimacy and stakeholder theory,
the aim of this study is to analyse the views man-
agement teams in large listed companies have on
corporate communication of information on CSR.
The focus is on aspects on interest,motives/reasons,
users and problems related to corporate communica-
tion of CSR information. The data are based on a
questionnaire survey followed by in-depth inter-
views with investor relation managers (IRMs) at the
largest companies listed on the Stockholm Stock
Exchange. The selection of the largest companies is
motivated by their position as first-adopters and
trend setters when it comes to corporate commu-
nication (compare the development of the Generally
Accepted Accounting Practices, GAAP, in the 1930s).
This study contributes to a richer understanding of
CSR communication, which is an area that has
received limited attention within the body of CSR
research (Birth et al., 2008). Whilst CSR disclo-
sures (annual reports, websites, 10 K reports) have
received some attention, there is a distinct lack of
studies that have examined how management teams
de facto reason when it comes to communication of
CSR information. Thus, this study paves the way for
a discussion of the challenges and opportunities
perceived with CSR communication. Both man-
agement teams and policy makers at national and
international level may find insights on how to
develop relevant and effective CSR communication
by drawing on the multiple aspects focussed upon in
this study. This study builds further on the findings
in Arvidsson’s (2009) questionnaire survey focussed
on how management teams in large companies
communicate non-financial information via the
annual report.
This article has been structured as follows: first the
theoretical and empirical foundations motivating this
study are discussed. Then, the methodology under-
lying this study is presented. Next, the results from
the interviews are discussed, and finally some con-
cluding remarks are presented.
Theoretical and empirical foundations
A stakeholder perspective on CSR
The idea of CSR, as we understand the term,
developed into a debated area in business society
already in the 1920s. During the Depression and the
World War II the debate went silent and when it
woke in the 1950s, the CSR debate was focussed on
companies’ obligation to society. However, defining
what lies in the concept CSR was regarded to be too
complex and obscure to be handled by the man-
agement teams themselves. In the 1970s, it was
proposed that CSR instead could be viewed as
‘‘corporate social responsiveness’’ to the expectations
and demands society had on companies (Ackerman
and Bauer, 1976; Frederick, 1994). In his seminal
paper, Frederick (1994) outlined a conceptual tran-
sition from the philosophical-ethical concept of
CSR (companies’ obligation to work for social
betterment) to the action-oriented managerial con-
cept of corporate social responsiveness (the capacity
of a company to respond to social pressure). Thus,
society should define social responsibilities and then
the management teams should respond to these
societal demands or expectations on how companies
should act in order to be regarded as socially
responsible. Following the nonfigurative and broad
nature of society, Freeman (1984) introduced the
stakeholder perspective as a way for management
teams to define which part of society they should
respond to regarding CSR. Mitchell et al. (1997)
elaborated further on how stakeholders that count
should be identified by evaluating them in respect to
their possession or attributed possession of three
different attributes: power, legitimacy and urgency.
340 Susanne Arvidsson
In 1970 Milton Friedman published an article in
the New York Times Magazines, in which he
argued that the social responsibility of business is to
increase its profits. Also during the 1980s and the
1990s the overriding mantra in business society was
maximising shareholder value and the prime stake-
holder management teams should respond to was the
shareholder. Thus, the intensified debate around the
CSR concept came to challenge the beliefs of
business society by proposing an inclusion of social
responsibility aspects in the hitherto strict focus
on managing companies towards increased share-
holder value. This proposed augmentation of the
shareholder-value concept came to be known as the
enlightened value maximisation or the enlightened
stakeholder theory, which was introduced by Jensen
(2001) – a former advocate of the shareholder-value
concept. Prior et al. (2008) argue that this means an
adoption of a stakeholder-agency perceptive, where
a company is conceived not as a bilateral relationship
between shareholders and management teams, but as
a multilateral set of relationships amongst stake-
holders.
Corporate scandals provide a hot-bed for CSR
Around the turn of the century, the opinion against
the strict focus on shareholder value grew stronger
with the many corporate scandals taking place on the
social, ethical and environmental arenas (e.g. Enron,
WorldCom, gigantic bonuses, exploitation of child
labour, increased pollution and CO
2
emission),
which resulted in a widespread mistrust against
management teams. Kennedy (2000) warned in his
book The End of Shareholder Value for boycotts from
stakeholders if the management teams did not
broaden their focus and acknowledge the needs of
other stakeholders than only shareholders. Ghoshal
(2005) criticised the theory underpinning share-
holder value for having contributed to short-sight-
edness and a lack of moral responsibility amongst
management teams. Similar concerns were raised by,
Gray et al. (2005) in their book Corporate Scandals –
the many faces of greed.
Thus, the corporate scandals with their origins in
the social, ethical and environmental arenas provided
a perfect hot-bed for CSR, which at the time was
highlighted as a means to decrease mistrust and
restore stakeholders’ confident in management teams
(see e.g. SOU (2004:46), 2004a; SOU (2004:47),
2004b). The number of CSR articles published in
the European business press increased from 4 to 273
between 1996 and 2005 (Windell, 2006). The
increase in CSR articles in business papers came a
few years later in Sweden than in the U.S. (Borgl-
und, 2009). During this period also the shareholders’
interest in socially responsible companies awoke.
This was manifested in an increasing will to invest in
companies categorised as managed socially respon-
sible. A direct outcome of this was the introduction
of Dow Jones Sustainability Index, FTSE4GOOD
Index and Ethibel Sustainability Index, which are all
examples of indexes in which companies meeting
globally recognised corporate responsibility standards
are included. Friedman and Miles (2001, p. 523)
argue that one possible outcome with the increase in
making Socially Responsible Investments (SRIs)
might be that companies see ‘‘…a business case, as
well as, or as opposed to a moral case, for acting in a
more responsible manner’’. In 2006, the U.N.
introduced PRI –Principles for Responsible Investments,
which is a guideline for how investors should
include perspectives on environmental, social and
corporate governance (ESG) issues when they make
investments. Waring and Edwards (2008) argue that
the use of rankings and screens by fund managers to
decide whether to invest in a company or not,
imposes considerable pressure on companies to pro-
vide attractive track records on the issues of impor-
tance to the fund. In Europe and in the U.S., every
one out of eight dollars invested is subject to a social or
ethical screen (Social Investment Forum, 2006).
The financial focus is, however, not replaced or
marginalised by the introduction of the CSR con-
cept. For example, the idea behind the enlightened
value maximisation ‘‘…accepts maximisation of the
long run value of the firm as the criterion for making
the requisite trade-off amongst its stakeholders’’
(Jensen, 2001, p. 298). Maignan et al. (2005) argue
that companies should select stakeholders to respond
to based on the stakeholders’ power to – in different
ways – influence corporate financial results. Accord-
ingly, it is not only shareholders that are put forward
as the company’s prime stakeholder. It is acknowl-
edged that other stakeholders than shareholders
could be influential and, thus, should count. How-
ever, with the increased interest in CSR from
341
Communication of Corporate Social Responsibility
shareholders (e.g. manifested in an increase in CSR
investments), the argument that companies should
respond not only to shareholders’ demands but also
to societal demands might be less of a conflict.
Ascertaining a positive relationship between the
investments companies make in CSR activities and
the financial outcome has attracted interest for dec-
ades and still is regarded as important for making the
financial benefits with CSR visible to both man-
agement teams and investors (Eccles et al., 2001;
McGuire et al., 1988; Waddock and Graves, 1997).
Margolis and Walsh (2003) show that of 109
empirical studies exploring the relationship between
corporate social performance and financial perfor-
mance, 54 of the studies confirm a positive rela-
tionship, 7 confirm a negative relationship and the
rest show no or indistinct relationship. van Beurden
and Go
¨ssling (2008) also confirm, from their review
of earlier empirical studies, a positive correlation
between corporate social and financial performance.
CSR communication – a proactive or a reactive approach
towards achieving legitimacy
accessible to both internal and external stakeholders
(Maignan et al., 1999). This is achieved through
corporate communication.
In terms of legitimacy theory, large companies are
socially more visible and more exposed to public
scrutiny. According to Branco and Rodrigues (2006),
these companies are considered to experience more
social and political pressure to act in a more socially
desirable manner and, therefore, are more likely to
provide more CSR information. However, com-
municating too much about its CSR activities might
be contra productive. Ashforth and Gibbs (1989) and
Morsing and Schultz (2006) define it as the self pro-
moters’ paradox, i.e. if a company discloses a too high
CSR profile it might hurt its credibility. They argue
that the level and type of investments a company
makes in CSR activities must feel natural in respect to
its business and correspond with what the company
has taken responsibility for historically. Furthermore,
there is a non-negligible scepticism amongst stake-
holders to companies’ CSR communication. The
scepticism lies in a suspicion that CSR is something
you talk about but not act on, i.e. mere window
dressing or some sort of PR invention (Fan, 2005;
342 Susanne Arvidsson
