Maritte van Huijstee

1
How bank NGO interactions foster Corporate
Social Responsibility
Copernicus Institute for Sustainable Development
and Innovation

• Mariëtte van Huijstee
• 27-6-2008

2
outline

• Research background
• Research question
• Theoretical positioning
• Research approach
• Findings
• Conclusion
• Relevance

3
Research background

• Corporate Social Responsibility (CSR) and
  stakeholder theory interlinked.
• Prescriptive literature abundant, analytical
  models for the study of business-NGO interactions
  scarce.
• Banking sector fairly recently discovered by
  NGOs

4
Research question

• Whether and in what way do bank NGO
  interactions lead to changes in the banks CSR
  policies, practices and structures and how can
  this be explained?

5
Theoretical Positioning collaboration theory

• Collaborative discourse dominant in CSR
  literature, however
• The link between business stakeholder
  interactions and improved CSR has not been firmly
  established empirically
• The collaborative discourse suggests merging the
  interests of firm and stakeholder and engaging in
  collaborative interaction is feasible and
  conducive for change

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Theoretical Positioning stakeholder theory

• Characterizes the firm within a network of
  interrelated stakeholders that create, sustain
  and enhance its value-creating capacity, however
• Instead of delving into the character of these
  relationships, it treats the diverse stakeholders
  as external pressures on a focal organization

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Integration Stakeholder model of bank-NGO
interactions
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Research Approach

• Case study Rabobank FoEN interaction
• Issues palm oil and soy
• Process orientation timeline of events
• Influence
• Improvement in Rabobanks CSR in accordance with
  NGO whishes
• Perceived influence by bank and NGO

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Findings CSR Changes at Rabobank

• Timeline of Rabobank's CSR Changes

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Findings Rabobank-FOEN interaction

• Confrontational NGO action on palm oil issue
  provokes reputation crisis -gt first wave of
  awareness regarding the scope of the banks CSR.
  
• Wake-up call followed by all kinds of ad hoc CSR
  initiatives at Rabobank.
• Agenda-setting efforts by DSC increase the
  importance of soy issue. Possible new crisis
  creates a second wave of awareness -gt profound
  changes in the CSR organizational structure.

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Findings Rabobank-FOEN interaction

• Soy issue is dealt with pro-actively and
  satisfactory, palm oil dossier remains
  problematic.
• New structure affects Rabo-FOEN relationship
  Rabobank takes a more proactive stance.
  Interaction shows more collaborative traits.
• First, the center of gravity in CSR debate was
  situated between Rabobank and the NGOs. Now
  between the CSR department at Rabobank
  headquarters and a few Rabobanks international
  branches.

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Findings Stakeholder context

• Stakeholder context can either impede or
  encourage the realization of CSR outcomes of a
  bank NGO interaction process
• International branches
• Competitors
• Clients
• NGOs
• Social and political arena

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conclusions

• The most fundamental changes in CSR terms to
  date, were made in a conflictual setting.
• Supports Hardy and Philips (1998 218) the
  creative and synergistic outcomes, which many
  writers associate with collaboration, may also
  follow from conflictual interorganizational
  relationships.

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Conclusions (2)

• However conflictual or collaborative a bank NGO
  relationship may be, the effectiveness of the
  interaction in terms of CSR is largely determined
  by the (internal and external) stakeholder
  context.

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relevance

• Empirical link between bank NGO interaction and
  improved CSR established
• Downsizes the relevance of the collaborative
  discourse for the CSR field
• Offers analytical model for bank-NGO interactions
  in CSR context
• Stresses importance of internal stakeholder
  context

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Thank you!
Contact information E m.vanhuijstee_at_geo.uu.nl W
www.unpop.nl