Syst Pract Action Res (2014) 27:363–376 DOI 10.1007/s11213-013-9287-7 ORIGINAL PAPER
Corporate Social Responsibility as a Messy Problem: Linking Systems and Sensemaking Perspectives Ursˇa Golob • Trine Susanne Johansen • Anne Ellerup Nielsen Klement Podnar
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Published online: 3 July 2013 Springer Science+Business Media New York 2013
Abstract Corporate social responsibility (CSR) has become an essential topic with regard to the relationship between business and the wider society. It is a complex and controversial phenomenon that can best be addressed via systems theory and the sensemaking perspective. This paper proposes a way to link a dialectical systems perspective with communications that includes the sensemaking and dialogic collective approaches, which help to build systems of organised activities that aim to find solutions to complex problems from a holistic perspective. Companies are increasingly aware that if they wish to be successful actors in their business and societal relationships, the traditional sole focus on maximising profit is counterproductive, especially in terms of sustaining their value chains. A holistic approach to CSR and the value chain involves companies integrating their stakeholders along their value chains, especially at the downstream and upstream extremes (their customers and suppliers). This paper illustrates its theoretical perspectives with a case study of JYSK, a multinational company based in Denmark, which demonstrates how the company based its actual management of CSR on its willingness to learn from its own actions and from the actions of others. Keywords Corporate social responsibility (CSR) Dialectical systems thinking Sensemaking Dialogue Supply chain Case study
U. Golob (&) K. Podnar (&) Marketing Communication and Public Relations Department, Faculty of Social Sciences, University of Ljubljana, Kardeljeva pl. 5, 1000 Ljubljana, Slovenia e-mail:
[email protected] K. Podnar e-mail:
[email protected] T. S. Johansen A. E. Nielsen Department of Business Communication, Aarhus University, Jens Chr. Skous Vej 4, 8000 Aarhus, Denmark
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Introduction Corporate social responsibility (CSR) has been an important phenomenon for stakeholders, societies and corporations for a considerable amount of time. People increasingly scrutinise corporate activities for their effects on society and the environment, making it unimaginable for a company in such circumstances to declare that its only goal is to make a profit for its shareholders or owners. CSR’s core idea is that no company can afford to act in opposition to or isolation from society’s problems (Matten and Moon 2005). It implies behaviour that includes a variety of social obligations towards such stakeholders as consumers, employees and others in the wider society (Habisch and Jonker 2005). Wider political and European Union circles have also debated the issues involved with CSR. The European Commission (2011, p. 6) has defined CSR as ‘‘the responsibility of enterprises for their impacts on society.’’ It has also emphasised CSR’s importance for achieving the objectives of its Europe 2020 strategy, noting that it ‘‘can help to shape the kind of competitiveness model that Europe wants.’’ CSR is also central to the voluntary international standard ISO 26000:2010, Guidance to social responsibility, which asserts that acknowledging the interdependence of organisations, their stakeholders, society at large and the natural environment leads towards a holistic understanding of CSR (ISO 2010). Porter and Kramer (2006), furthermore, noted the importance of a holistic view of mapping the social impact of a company’s value chain that includes all its business activities. Business organisations have become increasingly aware that in order to function successfully in their business and societal relationships they must relinquish their traditional one-sided approach. Consumer and public expectations have changed, and demand by different stakeholders for participation has risen. The world is highly interconnected, with information technologies easily helping to shape networks of stakeholders in short periods of time, and these networks can put significant pressure on companies and other organisations. The complexity of social issues has increased along with the interconnectedness of the actors involved. Companies are confronted with the forces of globalisation, which include cultural differences and increasingly interconnected production and consumption systems (Pater and van Lierop 2006). Companies are rarely able to address such challenges alone or in a vacuum. Aram (1989) argued that companies’ individual actions may even prevent them from achieving their goals and that the presence of different, often conflicting, interests in large social systems results in a paradox of interdependent relations, a central focus of business and societal relationships. Calton and Payne (2003, p. 7) concluded that in such highly interconnected environments stakeholders and companies confront messes, which are ‘‘complex, emergent and interdependent problems’’ that force them to interact with each other and enter into relationships in new, creative ways. Business organisations therefore need the support of external stakeholders in order to respond successfully to seemingly contradictory demands and to address CSR problems (Calton and Payne 2003). This demands a holistic way of thinking, decision-making and action (Knez-Riedl et al. 2006), all of which need to be built on multi-stakeholder initiatives that include actors who are often excluded from problem-solving such as consumers, who also participate in constructing CSR’s meanings through their consumption decisions (Smith et al. 2010). This logic indicates that a systems approach is likely to be an appropriate perspective for enabling organisations to address the complexity of CSR-related issues in order to understand and respond to them. However, the systems approach should be integrated with
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an interpretative view of organisations (Maon et al. 2008; Weick et al. 2005). This paper’s purpose is therefore to explore the phenomenon of CSR and its related complexities from a holistic systems perspective that includes a process-oriented understanding of sensemaking as a construction of shared meanings (Calton and Payne 2003). It draws on theory and research related to complex systems, sensemaking and collective learning through stakeholder networks to elaborate on how the managements of organisations can use these aspects of their activities to understand and implement CSR strategies. It illustrates this with a case study of the Danish multinational company JYSK, which has acknowledged the complexity of its environment and has made an effort to cope with messes in the working conditions upstream and the consumption decisions downstream in its supply chain by adjusting its way of thinking, its behaviour, and its methods of engaging with others. Starting Points: Dialectical Systems Theory and Sensemaking The literature addressing systems theories, dialectical theory, sensemaking and dialogic communication provides a useful framework for studying how stakeholder networks and partnerships become established, the construing of shared meanings, and the solving of CSR-related problems. A systems perspective sees businesses in general as constantly being in open and diffusible relationships with their environments, and as being integrated with their stakeholders rather than isolated. Such thinking centres on the concept of interdependence and the idea that the views, thinking, decision making and actions of societal actors, including companies, should not be one-sided (Potocan and Mulej 2003). Although many systems theories exist, dialectical systems theory is especially interesting from this paper’s perspective (Knez-Riedl et al. 2006; Mulej 2007; Potocan and Mulej 2003). Mulej’s (1978) dialectical systems theory was developed in a socialist country—a latecomer to modern post-industrial life—with the aim of supporting changes towards a more innovative and holistic culture. According to the author, the main difference between a dialectical systems approach and Bertalanffy’s general systems theory and many other systems approaches lies in influencing individuals to enhance their thinking and behaviour in a more systemic, creative and holistic way (Mulej 1978; Mlakar and Mulej 2012). Individuals should engage in the interdisciplinary creative co-operation that would lead to a synergy of insights that build up a dialectical system. Hence, dialectical systems theory is based on the notion of dialectical system, which is a mental rather than tangible system ‘‘of all and only essential viewpoints and resulting systems (mutually different and complementary mental pictures of the object under consideration)’’ (Mlakar and Mulej 2012, p. 24). Mulej (2007, p. 348) noted that a dialectical system consists of ‘‘interdependent crucial viewpoints of dealing with the topic at stake.’’ This often results in synergy, leading to a new interdependence (Mlakar and Mulej 2012). Thus, stakeholder viewpoints are subjective starting points that are subject to change during communication processes. They influence the stating of objectives and their attainment. During these processes collaborating stakeholders and organisations enter into different forms of relationships and influence each other in achieving their objectives. Entities as well as their viewpoints must recognise their interdependence (Bantham et al. 2003; KnezRiedl et al. 2006). They must be aware that they cannot serve their interests by working in isolation, and that they share problems with others. The dialectical view ‘‘focuses on relational forces in context rather than on discrete, elementalistic, individual-level aspects of relationships’’ (Bantham et al. 2003, p. 267). This perspective therefore views relationships as network-focused rather than as organisation-centric, with a network of stakeholders being engaged in solving shared problems (Svendsen and Laberge 2005).
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The contexts of relationships shaped by expectations, interests, mutual goals and the ability to resolve conflicts define what is relevant, thereby helping to explain why actors make particular choices during the interdependent problem-solving process (Bantham et al. 2003). Mulej (2007) called this the law of requisite holism, which is a condition somewhere in between fictitious holism (which emerges inside a single viewpoint) and total holism (which represents a network of all viewpoints). Requisite holism can best be approached using a dialectical system. The dialectical perspective recognises the complexity of one or many partial insights or viewpoints called systems (Mulej 2007), and acknowledges that organisations exist in environments full of colliding forces that compete with each other for supremacy. When these forces confront and engage with each other in constructive conflict, they allow systems to evolve and change to occur in the form of creative synthesis, creating novel constructs different to the initial starting points (van de Ven and Poole 1995). One way to achieve such confrontations and their potentially positive outcomes through interdependent problem solving is with a dialogic communication process that leads the stakeholders and organisations involved into reconsidering their own and others’ starting positions and value assumptions, thereby forcing them to be reflective (Bantham et al. 2003). Communication as a process through which entities interact with and influence each other is therefore a possible way to put requisite holism into practice (Mulej 2007). Weick et al. (2005, p. 413) defined communication as ‘‘an ongoing process of making sense of the circumstances in which people collectively find ourselves and of the events affecting them.’’ (Calton and Payne 2003) argued that the reflective processes that emerge during communication enable the exploration of paradoxes and cognitive complexities and lead to the construction of shared meanings. Due to the world’s pluralistic nature, collective learning strategies that can solve complicated and complex problems better than unilateral approaches should replace them (Calton and Payne 2003). To understand the processes involved in solving messy problems, it is important to understand sensemaking as a process in which things, situations and even entities come into existence through communication. It is ‘‘the primary site where meanings materialise that inform and constrain identity and action’’ (Weick et al. 2005, p. 409). Weick et al. noted further that the process of sensemaking involves actors in searches for meanings with which to address uncertainty, a state in which the perceived state of the situation is different to the expected state and actors must confront discrepancies, breakdowns, surprises, opportunities, interruptions, or some combination of these. In such disorganised states, therefore, sensemaking is a process of constructing a plausible sense of what is happening and of building a coordinated system of organised activities directed toward finding solutions for emerging problems. The sensemaking perspective views the function of communication to be a manifestation and source of shared meanings and interpretations of reality and power relationships. The dialectical and dialogical approaches both emphasise interdependence and related dynamics, heterogeneity, and conflicting discourses that transform the meanings and reflect the holistic and situated nature of communicative relationships (Markova 2000). Figure 1 illustrates this. Dialogical communication is therefore a process of co-creative learning that dynamically and socially co-constructs cognition (Markova 2000; Svendsen and Laberge 2005). Such dialogical cognition is ‘‘oriented towards the study of ideas, meanings and significations of others’ ideas as well as of those belonging to one’s own mind’’ (Markova 2000, p. 426). Sensemaking and dialogical communication are increasingly becoming an important part of CSR (Golob and Podnar 2011; Morsing and Schultz 2006; Pater and van Lierop
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External forces
367 Starting point N (‘Anti-theses’)
Sensemaking and (multi)stakeholder dialogue
Turbulent environment
Creative solutions (‘Synthesis’)
Fig. 1 Dialectics and interdependence in communication processes
2006). In the CSR context stakeholder dialogue represents a search for consensus. It is a structured and interactive process aimed at co-creating CSR strategies (Kaptein and van Tulder 2003). Sensemaking of CSR in the Firm’s Value Chain The literature presents CSR as a rich but somewhat unclear concept (De Bakker et al. 2005; Dahlsrud 2008). Pater and van Lierop (2006) identified two main streams within it: one oriented towards CSR-related outcomes concerning the consequences of corporate actions and defining such responsible outcomes of organisational behaviour as producing highquality offerings, preventing pollution, and paying fair wages; and the other oriented towards processes and how organisations interact with their stakeholders and respond to their demands and expectations, being relatively unconcerned with defining the scope of their responsibilities towards society. Pater and van Lierop argued that these streams are interconnected in that interactions between organisations and their stakeholders influence their interpretation and execution of CSR. CSR has been an important factor in organisational value chains with regard to both processes and outcomes for some time (Porter and Kramer 2006). This indicates that it involves other important stakeholders, such as suppliers, as well as organisations’ internal domains (Andersen and Skjoett-Larsen 2009). A holistic perspective of CSR and value chain integration holds that companies should implement CSR policies that integrate different stakeholders along the value chain, especially those at its downstream and upstream extremes (their customers and suppliers). In the past companies mostly confined their CSR-related relationships to their customers, for instance by avoiding causing them harm, and rarely extended CSR policies to their relationships with suppliers. They also tended not to recognise the interdependence of CSR-related factors in their supply chain management (Smith et al. 2010).
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Globalisation has brought about the systematic outsourcing of production to developing countries. Smith et al. (2010, p. 621) argued that this has often led to ‘‘harm-doing by marketers in the name of consumers.’’ Consumers’ consumption decisions favouring extremely low-priced products have contributed to various forms of harm-doing, and this has increasingly come into the CSR discourse. ‘‘It is the rational decisions of consumers that drive the production machinery’’ (Smith et al. 2010, p. 623). Consumer decisions and CSR have therefore become linked due to CSR-related problems in global supply chains. Smith et al. (2010) noted further that the inclusion of consumers in the CSR discourse has moralised consumption, as particular groups of consumers are interested in the moral dimensions of products and production conditions. Recognising the supply chain’s CSR-related issues has therefore become increasingly important, as it is the essential part of the value chain. Supply chain management has increasingly come to focus on building sustainable relationships with suppliers and customers. It therefore encompasses and integrates all activities that enable organisations to build competitive advantage with CSR through the creation of high-level networking. Supply chain management consequently also has an important impact on the diffusion of CSR-related standards and issues (Mueller et al. 2009). Smith et al. (2010) noted two problems related to CSR in supply chains. One is that companies often forget to include consumers in multi-stakeholder initiatives when addressing their CSR-related problems; the other is that corporations often limit their efforts to engage in CSR-related activities in the supply chain to mere image management and not to substantial changes in their behaviour and the behaviour of their suppliers. Andersen and Skjoett-Larsen (2009) found that only a few multinational corporations were actually making their actions consistent with their words with regard to CSR in their global supply chains. The idea of sensemaking as a collective process offers a way to address such complex phenomena (Calton and Payne 2003; Pater and van Lierop 2006). It integrates various standpoints and opinions with regard to CSR-related problems and constructs a shared definition of these problems that is a starting point for further action. Having a holistic perspective with regard to value-chain CSR factors that includes all the relevant stakeholders and enhances open communication amongst them obviously offers a process for linking efforts down the supply chain ‘‘to a strategy of behavioural transformation up the supply chain’’ (Smith et al. 2010, p. 631). This paper’s next section illustrates how the company JYSK has used thinking about the holistic perspective and collective sensemaking to address CSR. The case study structure follows a framework based on dialectics and interdependent communication processes, which are vital to dialectical systems theory and inspire reflective and collective CSR practices. In the manner of requisite holism or the dialectical system, the case firstly introduces the reader to the ‘thesis’ or the subjective viewpoint of JYSK. This is followed by the introduction of the objective viewpoint, which is developed outside JYSK by external stakeholders as an antithesis. The next step in the case explains that JYSK’s thesis has been under scrutiny and that JYSK should acknowledge the imposed objectives of external stakeholders and aim towards a synthesis that can be achieved via sensemaking. Finally, the synthesis reflects JYSK’s recognition of holism. Thus, JYSK’s dilemmas and organisational responses illustrate the complexity of extended organisational responsibility, which involves the widening of organisational responsibility to include supplier practices and beyond (Spence and Bourlakis 2009; Johansen and Nielsen 2012).
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JYSK: Addressing CSR Holistically JYSK is a Danish interior design and furniture retailer with a strong international presence. It offers home furnishing products for the bedroom, the bathroom, the living room and the patio in approximately 2,000 stores in 34 countries, primarily in Europe but also in Canada and China.1 The company has expanded continuously and plans for continued growth to ensure that it can deliver attractive offers in the future as well as in the present. Thesis: A Deal is Always a Deal The company’s founder, Lars Larsen, is central to its organisational strategy. The company’s website claims that its organisational values, which include cost consciousness, reliability, honesty, straightforwardness and commitment, mirror Larsen’s personal values. The company also derives its name from these values, asserting that: the word ‘JYSK’ has always been intentionally included in the company name. In Danish ‘JYSK’ designates anything or—like Lars Larsen—anybody from the Jutland Peninsula, and it is often associated with modesty, thoroughness and honesty—three values that Larsen himself has always identified with. JYSK stands for trustworthiness, and a deal is always a deal. (JYSK n.d., n.p.)2 Its central business proposition is to give its customers what it calls great offers, its mission statement being, ‘‘To be a great offer for everyone within sleeping and living’’ (JYSK n.d., n.p.).3 It therefore employs a strategy of bulk buying high-quality products at low prices in order to retail them inexpensively. The proposition articulated by JYSK is thus that the best deal is the cheapest possible deal. Antithesis: A Killer Bargain Offering bargains, however, can be costly. JYSK was confronted by a public and political outcry resulting from a 2006 television documentary on Danish national television called ‘‘A Killer Bargain’’, which exposed environmental and working conditions at some of the Indian textile factories that were part of JYSK’s supply chain, making value for consumers a key source of criticism. This documentary, which later won several national and international awards, showed how exposure to chemicals, dyes and acids posed serious risks to employees’ health and eventually led to the untimely deaths of many of them.4 The film’s tagline stated that ‘‘globalisation may be the stepping stone for many developing countries, but don’t fall into the water; you might die from it’’. The documentary also showed the environmental impact of the production process, with wastewater draining unfiltered into lakes and streams. It displayed globalisation’s downside by showing how towels and sheets sold cheaply in Denmark and other developed countries came at a high cost for others. The global marketplace’s winners were companies and consumers in developed countries, and its losers were the workers in developing countries.
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http://jysk.com/frontpage/about_jysk/quickfactsjysk.htm, accessed on 15 February 2013.
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http://jysk.com/frontpage/about_jysk.htm. Accessed 15 Feb 2013.
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http://jysk.com/frontpage/mission_and_values.htm. Accessed 15 Feb 2013.
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The documentary ‘A killer bargain’ can be accessed on http://www.dr.dk/Salg/DRsales/Programmes/ Documentary/Society_and_Social/Society_and_Social_A-L/20100223122458.htm
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The documentary named several other large Danish and Swedish retailers in addition to JYSK, repeatedly noting that they had responded to all inquiries with ‘‘no comment’’. It also intercut passages from corporate texts with visuals of the conditions. Following a segment featuring an anonymous worker who spoke of low wages, long working hours, a lack of unionisation and the use of child labour, it quoted a JYSK statement that ‘‘we rely on Scandinavian political traditions upholding freedom of speech, democracy, and basic human rights’’. The antithesis negates JYSK’s proposition that the greatest deal is also the cheapest deal by suggesting that cheapness comes at a cost. The negation challenges the notion of a ‘‘great deal’’ and points to the inherent complexity of integrated stakeholders from both sides of a firm’s value chain in CSR. Setting the Stage for a Synthesis: Sensemaking CSR The documentary revealed a conflict between what JYSK was saying to its home-market customers as part of its marketing strategy and its actual business practices. By exposing the negative side of offering value to consumers, the programme challenged JYSK’s core business proposition. By exposing the company’s lapses in supplier control and the harm done to others in order to secure low-cost fabrics, it also attacked its core values as an organisation and a brand. It also implicitly asked consumers to take responsibility as well as the retailers by commenting that unless customers put pressure on retailers to improve their supply-chain practices, nothing was going to change. The documentary led to public debate amongst trade unions, politicians and consumers, all of whom demanded that JYSK and the other organisations named take responsibility for the working conditions it had exposed. Trade unions offered their assistance in ensuring that the suppliers established and maintained minimum wages and working hours (e.g. Rasmussen 2006). Politicians called for legislated regulations if organisations were unable or unwilling to ensure improvements.5 Consumers rose to the documentary’s call for action by demanding action and threatening to boycott the implicated retailers.6 The public outcry was visible in the media (e.g. von Sperling 2006; Bernth 2006), as well as in such online media as discussion forums and weblogs. JYSK received emails from outraged consumers. The activities of different stakeholders helped JYSK to start making sense of the situation. Its management tried to synthesise these external contributions with their own values and preferences. They responded to the political and public demands by expressing their concern and launched an independent investigation of the suppliers that the documentary had named. At the start of this process the company refrained from engaging directly in a dialogue with consumers, but its representatives visibly listened, took notes and acted. The company’s founder later described the documentary and the debate that followed it as a ‘‘wakeup call’’. In a newspaper interview the company’s communications manager acknowledged that the company’s emphasis on low prices might have been a contributing factor pressuring suppliers to compromise their workers’ health in order to make a profit (Lambek 2006).
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Politicians took part in the debate with statements such as ‘‘Na˚r tilbud dræber, skal der handles’’ [When bargains kill, we need to act] published on the website of the left-wing party ‘Enhedslisten’, 19 June 2006 (http://www.enhedslisten.dk/naar-tilbud-draeber—skal-der-handles).
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Examples of the public debate can be found at discussion forums such as 24.dk (http://www.24.dk/group/ eksistens/forum/thread/40100).
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Admitting that the company had an apparent blind spot with regard to its supply chain management, the management proceeded to remedy the situation with several initiatives. It began by removing the towels featured in the documentary from its stores. It then hired an independent auditor to investigate the allegations by inspecting the factories that the documentary had named. The auditors’ report disputed some of the allegations, finding no evidence of child labour, violence or union bans. The auditors did, however, criticise the working environment, working hours and procedures. JYSK responded to this report with a series of concrete initiatives, which included working with the suppliers to improve the working conditions, with the threat of terminating their contracts otherwise. It also implemented a new supplier strategy that focused on working closely with all suppliers, clarified its ethical guidelines, and continued working with the independent auditors to ensure that its suppliers respected those guidelines. It then became the first Danish organisation to join the Business Social Compliance Initiative (BSCI), a leading business-driven association of companies committed to improving working conditions in the global supply chain (BSCI 2010). Finally, JYSK’s management assigned its Communications Manager responsibility for CSR and went on to develop a CSR strategy centred on supply-chain factors. It based this strategy on its newly formulated definition of CSR, which is ‘‘taking responsibility for the production and manufacture of the goods we sell’’ (JYSK Nordic 2010, p. 29). Synthesis: A Holistic View of CSR JYSK took an integrated strategic approach to implementing and practising CSR (Perrini and Minoia 2008; Porter and Kramer 2006; Carroll and Shabana 2010). Most of its CSR initiatives are directly connected to its core business activity and value of delivering high quality at low cost. Its initiatives also focus on forestry in addition to supply chain management, as wood is central to the production of its furniture. JYSK’s initiatives with regard to supply chain management are a consequence of the wake-up call it received from ‘‘A Killer Bargain’’. The initiatives, however, can also be seen from the broader perspective of being part of a general movement towards harmonised labour standards and their institutionalisation, and an increasing global focus on human rights (Matten and Moon 2005). This movement has manifested itself in such common frameworks as the United Nations (UN) Global Compact and the International Labour Organisation (ILO) (Aras and Crowther 2008). JYSK has conformed to such frameworks by implementing a supplier code of conduct in 2009 that put considerable restrictions on its suppliers. It expects its suppliers to respect the ethical principles of this code, which is a result of the company’s participation in BSCI, if they want to continue to do business with JYSK. BSCI supports the UN Global Compact and the ILO, and has established a set of 10 principles with which its participants need to comply. These principles range from its members being aware of the rules and regulations in the countries where they operate, to organising control and assessment procedures for subcontractors via local auditing. Most of the principles regulate the sort of unethical actions and behaviour that the documentary revealed. JYSK’s subscription with BSCI may therefore be considered to be a direct response to critical stakeholders with regard to the issues that the film exposed (health and safety, child labour, and the right to form trade unions). JYSK’s CSR strategy has also included its environmental commitments in addition to such environmental issues as waste management, energy reduction, and the use of polyvinyl chloride and phthalates in production. Forestry, as noted earlier, is also an important
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factor. As one of the largest retailers of garden furniture in Europe, JYSK has been the target of heavy pressure from critical nongovernmental organisations (NGOs) with regard to deforestation. JYSK has consequently committed itself to using wood certified by the Forest Stewardship Council (FSC) in its production. As much of 80 % of the wood it uses is currently certified. JYSK has claimed that its CSR strategy involves concrete action and not just public relations, and insists that its policy is one of ‘‘fewer words and more action.’’7 As its values include modesty and honesty, its management initially deliberately chose an indirect communication strategy and has not stressed CSR in its marketing activities. Instead of integrating CSR into its marketing activities, responsibility is a key element of its media policy, so its CSR communications take place via the media. According to the Communications and CSR Manager, this involves the management trying to engage in dialogue with people in the media who take an interest in the organisation and its operations, rather than planting stories. Despite this approach, the company has recently apparently been moving towards more progressive or visible CSR communication activities. JYSK has launched several proactive initiatives since 2006 focusing on industry cooperation. These represent a move towards a more pluralist sensemaking process for coping with CSR-related paradoxes. The company’s approach to implementing and practising CSR can best be characterised as one of process-oriented learning. It participates in such national and international networks as BSCI, Tropical Forest, FSC and Fairtrade in order to play an active part in promoting specific CSR approaches among its peers from its own business perspective. The company is also a founding member of the Forest Trust (TFT), which works to create more sustainable forestry. Its representatives are board members of TFT and BSCI and attend regular meetings in Brussels to discuss CSR in the retail industry. Cooperation is therefore a defining feature of the company’s approach to CSR. As its Communications and CSR Manager noted, ‘‘I don’t think we have to fight each other when it comes to responsibility. There, I find, you stand stronger together’’. In addition to its participation in multiple industry networks and associations, JYSK has entered into a partnership project with the NGO Save the Children called Work2Learn.8 This offers 16 and 17-year-old street children internships at JYSK’s suppliers in an effort to break their cycle of social disadvantage. The initiative, which other major retailers within the Danish textile industry also support, helps the affected children but also aims to influence and add further informative details to the debate amongst Danish consumers about child labour. It is reasonable to perceive JYSK as indirectly trying to negotiate perceptions and expectations with regard to the central dilemmas of supply chain responsibility by asking consumers to rethink some of their preconceptions. One example of such negotiation or re-framing relates to the use of child labour. Consumers in developed countries traditionally view child labour as wrong, evil and exploitative (Andersen and Skjoett-Larsen 2009). JYSK, however, has been encouraging members of the public to rethink such perceptions by asking them to consider the alternative. If JYSK were to demand that its suppliers refrain from employing children, those children and their families could starve, or they could resort to other means of supporting themselves such as prostitution. The company has therefore argued that it is more responsible to offer secure, regulated work conditions and education than to return the children to the streets. It is playing a provocative role in trying to change industry standards 7
Interview with Communications & CSR Manager at Jysk, conducted in May 2011 (cf. Johansen and Nielsen 2012).
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cf. http://jysk.com/frontpage/responsibility/work2learn.htm. Accessed 15 Feb 2013.
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and consumer expectations in this regard. The company management recognises that the position is controversial, but as the communications and CSR manager explained, ‘‘I feel that you shouldn’t be afraid of getting punched once in a while … it shows that you’re doing something’’.
Discussion Operating in a global market changes the responsibilities of organisations. As supply chains expand across continents to include factory workers in developing countries and retailers in developed countries trying to buy and sell low-cost products, so does the consequent responsibility. JYSK recognised the complexity of this extended responsibility after the documentary had informed consumers about its side effects. By incorporating the consumers into the chain, the documentary showed how the extended responsibility lies with them as well as with retailers. By stressing how interdependence extends beyond retailers and into the broader market, the documentary represented an essential starting point from a dialectical systems perspective, an outer reality that had to be taken into account (Knez-Riedl et al. 2006). JYSK’s response was to pluralise. From a systems perspective this means acknowledging that more than two kinds of ultimate reality exist, rather than striving to achieve managerial control, and then acting on the basis of a shared understanding of CSR formed in the process of sensemaking (Glynn et al. 2000). JYSK’s management has recognised that they need to cooperate with others in order to solve the problems involved. So they addressed the complexity that confronted them by recognising interdependence and distributing the responsibility among suppliers, retailers, NGOs and consumers. To interpret their response with the help of the dialectical systems theory: they selected their dialectical system viewpoints based on the interdependence of their own subjective starting points (in the form of needs and possibilities) using the objective starting points that occurred outside their realm—i.e. those of their stakeholders. JYSK’s approach illustrates how the complexities related to handling responsibility issues may take shape in practice. It resulted in a CSR strategy that is process-driven. By cofounding, cooperating and negotiating with peers and other organisations in different networks and partnerships, the company implemented CSR from a learning perspective. Its management sought to benefit from the experience of the company’s competitors as well as taking the lead by contributing tactics and strategies for changing industry standards and stakeholder expectations from which others can learn (Johansen and Nielsen 2012). Such company-initiated collective action with the collaboration of other stakeholders is called structural CSR (Martin 2002). Christensen et al. (2006) and Porter and Kramer (2011) have concluded that this is characteristic behaviour of companies that are socialinnovation driven, using disruptive innovation to achieve meaningful social change and create shared value for business and society. Acknowledging the interdependence of stakeholders in a value chain and understanding the importance of CSR for business success also enables companies such as JYSK to understand that marginalised suppliers cannot sustain or improve quality or perform better in terms of environmental efficiency (Porter and Kramer 2011). This conforms with dialectical systems theory, which shows how companies can achieve broad societal objectives along with their business objectives by performing business operations innovatively (Potocan and Mulej 2003), and helps them to ‘‘add the requisite holism to their own specialisation by creative interdisciplinary cooperation’’ (Mlakar and Mulej 2012, p. 25).
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The JYSK case demonstrates how an organisation can become willing and able to learn from its own actions as well as from the actions of others. From a sensemaking perspective this entails both the conventional retrospective sensemaking process, in which an organisation thinks in terms of social issues that arise and need to be addressed, and prospective sensemaking, in which stakeholders try to envision how to work on a specific social need innovatively (Selsky and Parker 2010). JYSK’s social innovation for changing industry standards emerged from pressure to adapt to a complex and turbulent environment, which Selsky and Parker (2010) associated with what they called a societal-sector platform. The main characteristics of societal-sector platforms, which the JYSK case clearly illustrates, are (a) an integrative view of CSRrelated issues as social investments, (b) interdependencies, (c) partnership logic, and (d) an orientation towards the future and new sectoral roles.
Conclusion and Limitations This paper has attempted to show that organisations can best address the complexities of CSR-related issues with systems theory, particularly dialectical systems theory, which recognises the interdependence of different systems and includes different essential viewpoints of the same object or problem (Knez-Riedl et al. 2006; Mulej 2007). It has attempted further to link the systems perspective with a communications approach to CSR by showing that this perspective provides a foundation for collective learning processes, of which sensemaking is an essential part (Calton and Payne 2003; Pater and van Lierop 2006). The JYSK case illustrates that these processes are the necessary condition for attaining holistic and innovative thinking, behaviour and engagement with regard to CSRrelated issues. Although this paper, like previous research linking CSR with the systems perspective such as that done by Cordoba and Campbell (2008), Knez-Riedl (2006) and Maon et al. (2008), has concluded that CSR requires organisations and other stakeholders to think and act on a systemic and holistic basis, its dialectical systems and sensemaking framework would benefit from stronger empirical support, as that would provide more insights. The JYSK case is a unique and relatively extreme one, being that of a family-owned company that has addressed its CSR-related issues within a specific Scandinavian context (Andersen and Skjoett-Larsen 2009). So it cannot easily be applied generally to other companies or to other institutional environments. However, it may be useful as an example of addressing complex CSR-related issues holistically by taking different voices from a company’s environment into account and thinking even further into the future by starting to change an industry’s CSR standards. Other organisations coping with complex and interdependent CSR-related issues may therefore be able to use it as a source of inspiration.
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