André SOBCZAK (AUDENCIA Nantes Ecole de Management, UET)
A.1. General lines of approach
We set out to research the reality on the ground to learn how European companies had developed models of best practice around the issue of working and employment conditions. In view of the fact that the field of CSR is still vast and changing, and that there are no standards or guarantees laid down in this area, we were not concerned to know whether or not the companies studied deserved a seal of CSR approval. We simply sought to establish why and how they had acted, the opinions of the in-house stakeholders and, if possible, those outside the company, on what had been achieved, what future developments were planned and, if applicable, what limits had been encountered in implementing these models of good practice. Naturally our intention was subsequently to analyse these materials, to enable us to contribute original material to the debate on CSR in Europe, describing both the general trends currently finding expression in each of the countries studied and the tools being put in place. We never lost sight of the obvious fact that in our case studies, we covered only part of the huge range of corporate situations in Europe.
To this end, we developed an approach demonstrating the following three characteristics:
A.1.1 Firstly, it was an inductive approach
Based on the collection of case studies, on the basis of which we sought to discuss the question of the specific content currently derived on the ground from the concept of socially responsible practice, when applied to the areas of employment and working conditions. The cases analysed present socially responsible practices in the field of employment and working conditions, but they are not necessarily success stories or business cases worthy of being taught “at school”. The very credibility of our method depended on our not seeking to make the situations analysed “even more attractive”.
A.1.2 Secondly, it was a transnational approach
Examining a range of situations in four European countries, Germany, the UK, France and Hungary, being careful to take account of the contextual dimension of corporate social responsibility. Each national report reviews the way in which the question of CSR is formulated in its country and in the academic literature on the subject. Despite this degree of diversity, our work makes no claim to represent the whole wealth of experience existing in the EU Member States or the candidate countries. Nevertheless, it aims to look beyond the realities of the four countries studied and to take account of wider realities.
A.1.3 Lastly, it was a sociologically inspired approach
Aiming not only to describe good practice in the companies studied, but also to analyse the interplay of the actors involved in planning, implementing and evaluating the practices concerned. With this in mind, discussion forums were organised to facilitate discussion of the results of our case studies in France and Germany.
A.2. Problems with our approach
Even when reduced to matters relating to production organisation and its consequences for employment and working conditions, the field of practice covered by the research proved to be so wide that we felt it was necessary to try, if not to reduce it (we had no reason to rule out particular examples of good practice), at least to organise it by bringing out the priority areas with regard to the basic question asked about CSR, which seems to us to be that of the relationship between the enterprise (in the legal sense of its internal perimeter) and society.
In this connection, two subjects then stood out clearly, restructuring, since it obviously has an effect both within and outside the company owing to its impact on employment and the strength of the local economy, and subcontracting relationships in the widest sense, which today lead companies to develop daily links with outside businesses to meet their production needs.
In both cases, the important thing for the company is to know how to reconcile its economic interests and its competitiveness (cost control, for example) with a widespread social problem, taking account in responsible fashion of the impact of its decisions on the other stakeholders (the local area, the company’s employees, the subcontractors’ employees).
On the other hand, and this is important for our subject, to date the two fields have not given rise to statutory regulations of equal significance. Preventive and curative handling of the CSR aspects of restructuring tends to be organised in an increasingly formalised fashion. Models of good practice, legislation and agreements are beginning to be collected and to gain widespread acceptance (although there are still notable differences in the ways in which these principles are applied). In contrast, there has been little legal regulation of subcontracting relationships. While the social partners learned long ago to work together in areas such as work safety within the legal framework of the enterprise, the field open to socially responsible practices in the sense traditionally ascribed to CSR is only just emerging, particularly under the influence of the involvement of new parties. But this means that it is all the broader.
In accordance with our response to the call for tenders from the Foundation in Dublin, we strove to treat these two topics as a priority, although we knew that the first would be easier for us to document than the second. In particular, we were not in a position to broaden the geographical scope of our investigations on the issue currently very frequently raised by NGOs of monitoring of supplies and subcontracting outside Europe. Instead, on the advice of the steering committee, we asked our interviewees questions about this subject. We also devoted attention to the question of the transnational transfer of good practice within Europe and to the way in which European works councils, where they exist, address this issue.
The problems of restructuring are a topic with a rich and longstanding history, as well as a significant framework of legislation and agreements, at both European and national levels. It is clear that restructuring involves two areas, both of which we wanted to investigate:
* One aspect is anticipation of the changes to come (management of change) and strategic decision-making that makes it possible, by training men and women in house but also by taking other action in advance of reducing the workforce (information sharing, re-industrialisation, diversification), to adopt “socially responsible” courses of action and to minimise the social costs caused by adaptation to market realities.
* Another dimension, which is a hot topic in all the countries we studied, is the handling of situations in which such anticipation did not take place or was not of sufficient scope to avoid the need for emergency action in respect of these problems of re-industrialisation, training, and regrouping of the employees affected.
While we are fully aware of the increasing complexity of the subject, with regard to the multiplicity of forms currently taken by business relationships within and between companies, it seemed to us essential to incorporate these new realities which make the company’s new borders so dynamic, at this time of globalisation. We have tried to take account of what CSR could have to say in an economy of decentralised production and networked enterprises. We have deliberately avoided entering into the debates in progress on issues of outsourcing, relocation, dualising of labour markets and the new international division of labour. They would have led us away from our research field. We have deliberately concentrated on the issues of the commitments entered into and the actions taken by companies in conjunction with this new dynamic of production activities. In fact they play a major part in CSR, particularly as regards the issues of the job quality and working conditions of the employees of subcontracting companies. All we have actually done is to ask again, at the micro-economic level of the enterprise, the questions occupying the national and international bodies responsible at macro-economic level. These questions relate, in particular, to the link to be established (or not) between business relationships and social or ethical criteria within a globalised economy.
A.3. The criteria for selecting enterprises
We decided to select our cases in the basis of three criteria:
We wished to include in our sample enterprises with socially responsible practices for which the enterprise itself claims responsibility. We took as our reference point the definition proposed in the Commission’s Green Paper, which puts forward at least three essential criteria:
* The relevant commitments taken on by the enterprise should be voluntary in nature and should go beyond the compulsory stipulations of laws or collective agreements.
* These commitments should be sustainable, representing a concern to incorporate sustainably into the enterprise’s problems the views of the other parties affected by its decisions and practices.
* The commitment should have a degree of transparency, enabling the stakeholders to be informed and facilitating debate.
However, in order to take account of the variety of national contexts in which we worked, the variety of situations we observed and, above all, a pragmatic principle of adaptation to the realities encountered, we were obliged to interpret these principles broadly, for example by regarding as socially responsible the practices that showed most respect for not only the letter but also the spirit of an agreement or a regulation (with regard to which, everybody knows that they can give rise to more or less restrictive interpretations). Therefore we took account in our selections of this capacity to do the right thing which, to be validated, had to be both vouched for by our national experts and recognised at the level of local opinion as socially “progressive” practice.
A.3.2 The importance of diversifying the composition of our sample of enterprises
This criterion had to be consistent with the inductive nature of our approach. The fact that the concept of social responsibility was still developing meant that it must be matched by an investigation that was exploratory in nature, seeking to vary the situations observed, in order to obtain ways of understanding how the same concept is put into practice differently according to context. We adopted three criteria for diversifying our sample:
* A criterion of national diversity: taking into account the human resources available to us in each of the participating countries, we agreed to carry out two case studies in the UK and Hungary and four in Germany and France. Furthermore, one of the case studies includes an area of investigation in Belgium.
* A criterion of sectoral diversity: the industrial sector, where the question of jobs (restructuring) and working conditions (with the subcontracting dimension) is particularly acute, has an important place in our sample (iron and steel, chemicals, automotive), but we also endeavoured to include at least one case study of a service enterprise in each country, in the fields of banking, marketing and telecommunications.
* A criterion of diversity of size and status: our sample includes large groups operating on a global scale (VW, CORUS, TESCO, BASF, CONTINENTAL, ROCHE), former public companies that have been restructured and are involved in large-scale mergers (DEUTSCHE TELEKOM, MATAV, MOL, ARCELOR), a medium-sized subcontractor (ACOME), and a medium-sized enterprise in the process of development (CHEQUE-DEJEUNER), the latter two enterprises belonging to the cooperative sector.
A.3.3 A criterion of transparency and of accessibility to data
Our topic, namely in-house practices in the areas of work organisation, employment and health and safety, is of a kind to arouse a great deal of reluctance on the part of many companies to “open their doors”, including some that flaunt their socially responsible credentials as regards their practice in environmental management or the local community. We gave preference to those which agreed that we could study the “restructuring” aspect (most commonly) or the “subcontracting” aspect (more rarely). Given the limited time at our disposal to complete the work and the impossibility of reducing the time required simply to establish preliminary contact with management with a view to persuading them to collaborate with us, we gave preference to enterprises in which the researchers in our team had contacts enabling them to benefit from the necessary trust. In some cases we used the results of recent on-the-spot studies conducted in these enterprises by certain of our researchers. Each time we were able to do this, we visited the location to see for ourselves the actions mentioned and to meet the local players (trade unions, public authorities). One of the main problems in our work was obtaining access on the ground. We are therefore particularly grateful to the companies that agreed to play the transparency game and opened their doors to us, which can be regarded as additional evidence of their commitment to CSR.
We finally selected 12 companies in four European countries: CORUS (iron and steel) and TESCO (marketing) in the UK, BASF (chemicals), DEUTSCHE TELEKOM (telecommunications), ROCHE (pharmaceuticals) and VOLKSWAGEN (automotive) in Germany, ACOME (electric cables), ARCELOR (iron and steel), CHEQUE-DEJEUNER (financial services) and CONTINENTAL-TEVES (automotive subcontractor) on France, MATAV (telephony) and MOL (petrochemicals) in Hungary.
A.4. Our work programme and its coordination
Our work was carried out between December 2001 and July 2002, during which time we had three meetings with our steering group in December 2001, April 2002 and July 2002, at which we were able to present our work in progress and profit from advice and criticisms from our Research Group.
The transnational research team met four times, in November 2001, and in February, May and June 2002. The first meeting was to prepare the project, and the second to develop a joint questionnaire prior to conducting the case studies. The third meeting gave us an opportunity to compare our initial results and to prepare the summary report, which was discussed at our last working meeting. Lastly, we were able to effect a useful comparison of our initial hypotheses by organising in Germany and France, as announced in our project, two discussions forums open not only to the players in the companies studied but also to other managerial, union and social players.
In view of the geographical and sectoral diversity and the variations in the sizes of the companies in our sample, we regarded it as sufficient to draw up a standard questionnaire for all our case studies, while allowing each researcher great autonomy in conducting research on the spot.
This led us to draw up an analytical grid, which took one of two forms, depending on the course the case study took:
either a traditional questionnaire addressed to those responsible within management and the unions (particularly in large companies), which they could answer in writing or orally, particularly in the course of telephone interviews;
or a survey grid in case studies in which we developed approaches more oriented towards field sociology (particularly on certain industrial sites and in the medium-sized enterprises in our sample).
This analytical grid (a detailed version of these questions will be found at the end of the national report for Germany) is based on five points:
Our first concern was to find the main features of all the models of good practice in the selected companies. We therefore sought their views on a fairly large scale, both on their intentions and on their specific actions in this connection.
A second topic involved exploring the motivation leading these companies to act in this way. Was it a deliberate policy on the company’s part, independent of the economic environment, or a reaction to pressure from this environment?
The third subject involved studying the roles of the various actors, both internal (management, unions) and external (public authorities, the other stakeholders when they exist) in implementing and evaluating this good practice. With this in mind, we ensured that we always collected a minimum number of viewpoints on the models of good practice studied.
For our fourth topic, we set out to explore the tools used by the company sustainably to implement, monitor and evaluate the results of its actions. This question of “how” was a direct response to one of the Foundation’s strongly voiced expectations.
The last subject involved the question of the effectiveness of the relevant practices. What were their specific consequences and what had they added to the practices seen in “ordinary” companies?
B. WHAT OUR CASE STUDIES TAUGHT US
B.1. An initial inventory of the examples of good practice discovered
The practices described in the 12 companies investigated in four different countries affect different aspects of the field studied, working conditions and employment. These examples of good practice do not relate to a specific sector or company size – they came from industrial sectors as varied as iron and steel, chemicals, telecommunications and marketing. They were as likely to be encountered in large companies operating on a global scale as in medium-sized enterprises. They are found in many fields – in-house social dialogue, training preparing employees for future mobility, implementation of restructuring, and relationships with subcontractors. At this point, we propose to draw up an initial inventory, and then to elaborate further before effecting an analysis.
B.1.1. Socially responsible handling of restructuring
This is found in a large number of our cases. This is not surprising, since the relevant decisions, for which management is responsible, have major consequences both for the employment of wage- and salary-earners directly or indirectly employed and for the local area.
Certain of the practices described lie a long way upstream of the point at which the company has to restructure its activities. Here, we can mention the case of the two French cooperatives, ACOME and CHEQUE DEJEUNER, which by different routes, in one case diversification of activities on the industrial site, and in the other preventive realisation of a strategy of preparation for mobility, show an ongoing concern for continuity of employment for their workforce (a concern that is all the more real in that it is this workforce that explicitly gives its management this social mandate every year). Mention should also be made of VW’s active policy designed to preserve employment via the now famous agreement on reducing working time.
Other socially responsible measures are taken, for example in the French case involving site closure (CONTINENTAL-TEVES), in contexts where sufficient time is allowed for the local players, management, unions, sometimes external players, to develop together the best (or the least bad) scenarios possible, seeking solutions implemented by mobilising all the resources and know-how available locally. The KTA (key task analysis) practices realised by CORUS in Wales show how, by early involvement of the various stakeholders in house, both employees and unions, a joint process can be developed despite difficulties. Other measures, also long term, have been described in former large public structures such as DT, MATAV or MOL, which have been obliged to make major cuts in their workforces in recent years. Our team regarded the social guidance in these measures as socially responsible, stressing the extent of these in-house efforts in respect of training, a unit providing vocational guidance and management of in-house mobility, outplacement, and permanent social negotiation as at DT.
Then there is the topic of encouraging local development, particularly through active training and expansion policies, also of course included in this field of socially responsible practices around restructuring. This is found in Germany in particular, for example at BASF, VW and ROCHE, always in collaboration with the regions. We also encountered new practices in Hungary, encouraging former employees to develop new businesses, as implemented by MOL and MATAV as subcontractors motivated by awareness of their responsibility vis-à-vis a local environment extremely dependent on their activities.
B.1.2. The slow and difficult emergence of responsible subcontracting
We encountered more problems in identifying socially responsible measures accompanying subcontracting, a relatively new topic in respect of which legal rules are much less developed than in the context of restructuring, and at the same time the companies studied are much less voluble on this subject. It is clear that the scope available in this area for the problems of social responsibility is much wider than in the area of restructuring. Some companies remain totally silent on the subject, while others are beginning to take an interest in it.
TESCO displays a willingness to establish forms of equitable business with its suppliers (avoiding the accusations of suppressing suppliers that are often made with respect to mass marketing). The social charter recently adopted (06.06.2002) by VW states that it supports and advocates application of the principles set out by its suppliers and subcontractors throughout the world. The ARCELOR business unit studied in France relies on a large amount of subcontracting at its Fos site – drawing inspiration from the USINOR charter, which gives “unconditional priority to the safety and health of our collaborators and all those who play a part on our sites”, it has developed monitoring and coordination of the initiatives taken by its subcontractors in respect of occupational safety (having been driven to take this action by the increase in the industrial accident rate). On the other hand, concern of this type is much more recent in the Liège plant, which is governed by the same charter but not for as long. In the case of ACOME, a French subcontractor for several large companies, we established that the pressure exerted by the latter essentially relates to the adoption of standards on compliance with manufacturing and environmental quality. The companies employing it pay regular visits to the site to check the general quality of the plant’s operations. However, certain tender procedures are introducing, purely on the basis of a declaration, new questions relating in particular to training policy, social dialogue and preventive health care.
B.1.3. Other examples of good practice
These relate to working conditions and employment, involving, for example, the policies adopted by several of the companies in our sample that are designed to contribute to training of future employees they know they will need in the future (this is the case with BASF and with ACOME on a more modest scale), but which also set out to maintain and update existing know-how (while other companies that are less careful have sometimes been too quick to deprive themselves of the skills of employees deemed to be redundant). For example, this is the case in the acquisition by ROCHE of Boehringer, with no reduction in workforce numbers, in order better to preserve skills they believed would be useful in the future.
The two cooperative enterprises in our French sample (which are not in a position to represent all cooperatives and which are even somewhat atypical owing to their size and their volume of activity) also showed us another kind of socially responsible practice, emanating from a management board elected by cooperative members who are both employees and shareholders in their own enterprise and, as such, are attached to anything capable of sustainably consolidating its operations, this dimension being integrated into the corporate strategy.
Lastly, the examples of socially responsible practice observed in Hungary have led MOL in particular to develop initiatives in the area of social protection that now extend beyond the enterprise.
B.1.4 Timid transnational expansion
The social charter recently adopted by VW states that it supports and advocates application of the principles set out by its suppliers and subcontractors throughout the world. The German company DT supplied us with an example of transnational support provided by a parent company to its Hungarian subsidiary MATAV, where at the same time the local officers encountered by our Hungarian colleagues proclaim their independence and state that their practices are in no way influenced by DT). This support takes many forms, ranging from secondment of experienced managers to shared training activities, and including inviting the Hungarian social partners to the Group works council and developing coordinated human resources management programmes. The other case, that of Arcelor/Usinor, also has transnational elements, including in particular drafting of a joint purchasing policy at Group level, taking account of certain social criteria such as industrial safety.
B.2 These examples of good practice have certain characteristics in common
B.2.1 Responsible commitment by the company’s management at the outset
Although employee representatives are closely involved, as will be seen in the next section, and this makes a substantial contribution to the quality of the realisation ultimately achieved, in the cases observed, the initiatives are primarily, if not exclusively, a matter for management, however much their motivation and the tools, whether or not formalised, they use may vary (cf. section C.3). The motivation includes a wish to share more information with employees or their representatives at an early stage, to enable them both to prepare themselves for the coming changes (which are now an everyday occurrence in company life) and to participate in developing the relevant systems. The Hungarian, French and British cases are examples of this.
As a player, the union accompanies the move rather than leading it. It is true that it lacks the necessary information and networks to enter into this emerging problem, which it tends to observe from outside and with a degree of suspicion. There is something paradoxical about this distance, or even absence, at a time when the social stakes of corporate functioning are increased tenfold by the dynamic of globalisation, if one remembers that social responsibility was traditionally a substantial element of the birth and development of trade unionism.
B.2.2 The “in-house” dimension of CSR: a “private” matter?
Our various case studies are also stories played out among the local players directly involved. Not only are the external players rarely seen (except when they are providing or financing some of the measures taken), but it is also the case that little or no information on what has been decided among the stakeholders reaches them. This is to say that they are largely out of the picture as the system stands at present. We are forced to acknowledge that this is widely applicable to the employees of subcontractors. Officers of large companies admit privately that in the event of problems, the socially responsible spirit (very evident in managing of restructuring) ends at the company’s borders (the first action they take may even be to bring the responsibility back into the company).
In this context, there is a real difference between the “external” dimension of CSR (action directed to the local community and for the environment), where the practices engaged in are visible and measurable and generally involve external parties, and this “in-house” dimension of CSR, which appears to be based on a “private” domain in which “sensitised” management involves employee representatives. The fact that monitoring of good in-house practices can be conceived of is currently regarded by the players involved in such practices as a very abstract prospect. Nor did we find (except for the now traditional monitoring of industrial accidents) any “voluntary” in-house systems, applied for example to the issue of employment quality or to the progress of employee employability, laying down qualitative or quantitative objectives and regularly measuring collective progress. When we did find such systems, for example for monitoring precarious employment or for equal opportunities for men and women, they were implementing compulsory measures provided for by law (e.g. social reporting in France).
B.2.3 These examples of good practice have boundaries close to the immediate perimeter of the company
Nor did we find any examples of good practice exported from one country to another within a transnational group. The adage “Think global, act local” still seems to be the watchword for the managers of these global players. We were even struck by the absence of shared information within transnational groups, on the situation prevailing at the same time in establishments in neighbouring countries. Union players always have local roots, and information on what is happening elsewhere (sometimes even in the same country) is very limited. To this day, European works councils still have only a limited role, possibly with the exception of VW.
B.2.4 These examples of good practice rarely make reference to the term “corporate social responsibility”
The researchers found that in each of the four countries studied, the concept of CSR is still relatively unfamiliar, particularly in Germany and Hungary. However, a certain dynamic appears to be taking shape. Perhaps the companies that claim to be socially responsible have not hitherto made the same effort in house to convince their own employees of the reality and sustainability of their commitment as they have to communicating this to their external environment (are the relevant activities not generally assigned to their communications department?). Of course the task is more difficult, since naturally their employees are well placed to see the gaps that may exist between the intentions expressed and effective realisation.
In any case, we have to concede that at local level, where our work was deliberately located via the case study method, references to the concept are rare. Few of these practices are situated explicitly under the banner of CSR – many company officers, and this is even more true of the unions and the public authorities, have not heard of the concept of CSR and say that they did not wait for it before developing good practices. When the concept is identified, there is a certain confusion in people’s minds (including those of the people responsible for these areas in large international groups) concerning the relevant content to assign to the concepts of ethical, citizens’ or socially responsible enterprise, or enterprise committed to sustainable development, etc. This is even truer of the unions and works councils. The concept of CSR appears to be remote from them or even unknown to them. They tend to see it as something to be feared – reduction in entitlements, weakening of social dialogue, competition with other stakeholders – rather than grounds for potential social progress.
B.3. However, there are also substantial differences between these good practices
B.3.1 Multiple sources of motivation for CSR
The word “voluntary”, which characterises the commitment of enterprises to CSR practices, covers a large number of possible situations that bear witness to the variety of motives leading enterprises and their officers to commit themselves to the path of socially responsible practices.
The Anglo-Saxon literature cited by the British team puts forward three dimensions strengthening the link between sustainable commitment to CSR and corporate profitability. Firstly, CSR may have a positive effect in distinguishing the enterprise’s products, which may give it an advantage on its market. It also represents a way of preventing environmental or social risks that may seriously undermine a brand’s reputation. CSR can also be a positive factor in attracting and retaining a workforce sensitive to this ethical dimension and more willing to put a lot into an enterprise whose socially responsible commitments it shares.
In our own case, we identified a wide range of situations from our case studies:
* We noted that managerial commitment could be accompanied by “individual” and “ethical” performance on the part of officers acting at local level, guided by their conviction or driven by the invisible force of the need to find a form of agreement between the parties in order to escape from a critical situation, without necessarily being in a position to guarantee the dynamic they are starting up (CONTINENTAL, CORUS, TESCO, MOL, MATAV). At the same time, however, in the two French cooperatives in particular (ACOME, CHEQUE-DEJEUNER), we found situations in which employees give management an explicit social mandate, in accordance with the sustainable statutory form of governance of these enterprises.
* We also identified the weight of public and social history in certain companies engaged in privatisation processes. These companies continue to maintain their social, and sometimes local, commitment (DT, ARCELOR, MOL, MATAV, CORUS, VW up to a point), in order not to compromise their corporate image vis-à-vis both their employees and public opinion. However, we found other legacies in private enterprises which have had a social tradition for a long time (TESCO, BASF), a tradition that may also represent a wish continuously expressed by their top managers to join in the social tradition of local employers (ROCHE).
* We measured the influence of a kind of “necessity” imposed by the advent of problems (restructuring, industrial safety) of such a kind that only socially innovative and exemplary practices enabled the company to respond to the challenge (CORUS, VW, DT, ARCELOR, CONTINENTAL). Media promotion, and sometimes the bringing of certain events within the jurisdiction of the courts, events associated with either employment or occupational safety, brings the company to the attention of public opinion or even the courts and obliges it to do more than it had originally intended (DT, ARCELOR, VW, BASF, MOL, MATAV). Such events lead many of these companies to practise implicit or explicit risk management in social matters.
* With regard to the viewpoint of medium-sized enterprises in a structural position of subcontracting, we have mentioned the role of the request transmitted by certain large companies to their subcontractors, identical or smaller in size, to certify that they are meeting socially responsible minimum standards. Here, we are in the presence of CSR initially imposed from outside, which is seen “at the bottom” as a possible factor in exclusion from the market (ACOME, ARCELOR, TESCO). Certain reservations expressed by associations of SMEs on the subject of proposals for codifying and characterising socially responsible practices refer to these realities.
* Lastly, we were struck by the influence of national contexts and the variety of institutional and/or legal pressures that have to date driven companies in certain countries, particularly Germany and France, to adopt high social standards, whereas in other countries, in Hungary or the UK, the relevant pressure is much less strong.
B.3.2 What is (or is not) regarded as a socially responsible practice varies substantially from one country to another in our sample
We also looked at how good practices, regarded locally as socially responsible corporate performance, may be seen in other European countries as ordinary or even surprising.
In Hungary, a country on the threshold of transition to a post-Socialist economy, the two enterprises studied were regarded as socially responsible firstly, and above all, because they retained a substantial element of elementary social protection. Under the former regime, this was translated into large state companies which, since their dismantling and privatisation, have continued to play this role only voluntarily, concerned as they are about the state of their immediate environment but also guided by their managers’ social and ethical concerns. MOL and MATAV are continuing to play this role, while at the same time being obliged to modernise it.
In the United Kingdom, where the norms governing dialogue between management and employees are much less formalised and less a matter of standard practice than in Germany, the voluntary establishment of a sincere dialogue with employee representatives is based on what is regarded locally as socially responsible corporate performance. TESCO and CORUS are developing practices that are original in their environment and from which they seem to have been able to derive an advantage in their general operations.
On the other hand, “socially exemplary” practices in France, the UK or Hungary of early sharing of socially relevant information with the social partners are not regarded as “extraordinary” in Germany. It is a special feature of the German cases that the relevant practices are seen there as “natural” in the context of co-determination [Mitbestimmung], which is regarded there as a form of CSR applied to in-house issues such as local management of employment and working conditions. It is a question of social organisation of the company’s functioning rather than a responsible management commitment. Thus CSR is seen there only as a less solidly constructed by-product of the same principles. As seen by the traditional players in German social dialogue, there would be little room for CSR, it could play a part only in its external dimension, and it would make no fundamental contribution to the country’s social dynamic.
B.3.3 Unequal development of tools
We identified wide variations in the level of the instruments in the practices we studied, whether it was a matter of beginning to satisfy the need for the transparency expected of socially responsible practices or of enabling the various stakeholders to monitor and check implementation of the commitments entered into by the company, for example in the context of a negotiated agreement.
Some of our companies have the size, skills and resources necessary to report on practices they declare to be socially responsible, even if few of them have made much progress with monitoring of the actions undertaken in this context in the field of employment and working conditions. Several of the global players in our sample (DT, BASF, VW) devote significant resources to communicating their socially responsible commitments (often more externally than in house). Other companies in our sample have never dreamed of doing this, no doubt feeling much less exposed to questions from outside than the large companies that have a brand image to develop and defend, and know that they are likely to be questioned about the first environmental, social or business incident. However, the example of ACOME shows that an enterprise can be medium-sized (1000 employees) and still work on formalising its practices.
Some monitoring procedures for past agreements are based on the informal agreement reached between the parties. Others are more formalised, involving, for example, monitoring of commitments entered into in the context of negotiation of a social plan and/or restructuring. The fact that the local players are not equally familiar with these monitoring tools, the greater or lesser stability of the monitoring structures, and the quantity of material and human resources scheduled to perform the relevant tasks explain the size of the differences identified between one situation and another, particularly in the context of restructuring (CONTINENTAL, CORUS, ARCELOR).
C. GENERAL CONCLUSIONS
From all the elements collected firstly in the field, in the context of our case studies, then in the discussion forums on our work, which we ourselves organised, and lastly from the fruitful discussions with our steering group (Research Group and Research Managers), we have derived a set of conclusions which we propose to structure around four topics:
CSR, employment and working conditions – what does CSR contribute?
CSR and corporate structure – how far are good practices disseminated?
The players in CSR and the issue of social dialogue.
CSR, product or process? What impact on its evaluation?
C.1. CSR, employment and working conditions
C.1.1 Restructuring and CSR
We have reported both on practices positioned in advance of restructuring, in order to anticipate the effects on employees and to prepare them for the coming changes, and on practices subsequent to a decision to restructure, for which the employees directly involved are not, in this case, prepared, and in which they are not involved. In order to be considered genuinely socially responsible, companies must, in our view and in the opinion of all those with whom we have discussed our results, come into the first category, in which the company incorporates into its strategy, in a sustainable fashion, a willingness to anticipate change and to prepare its employees responsibly for this prospect.
In the course of our case studies, we have noted that CSR has the merit of being able to enrich existing practices relating to handling of restructuring situations in two ways in particular:
* Firstly, by intensifying social dialogue in countries that do not have recourse to it systematically. This intensification involves the concept of sufficient time for a solid social “partnership” extending, for example, to analysis of the processes, of work organisation and of jobs. It may also involve combining traditional forms of information/consultation or collective bargaining with innovative, large-scale forms of consultation with a company’s employees.
* Secondly, by increasing corporate responsibility over time and space – by monitoring employees made redundant over time, and by taking action to support employment in local areas.
However, we have noted that the relevant instruments, for example the development of indicators enabling the process to be monitored and the real scope to be evaluated, are currently generally lacking:
* It is difficult to know the situation of employees 12 to 18 months after restructuring and their departure from the company.
* Measurement of actions taken in and with local areas remains very vague and measurement of the balance between job losses/job creation and the effect on the local economy (subcontracting, for example) is rarely performed.
C.1.2 Subcontracting and CSR
The question of corporate “social” performance vis-à-vis suppliers has been asked only relatively recently. The extent and complexity of this cannot be concealed. The question of a company’s responsibility as a link in a supply chain or a member of a production network is often not taken into account, particularly in all its ramifications. In this context, companies make choices that are primarily strategic, with regard to the resources they are prepared to invest here. Some companies, exposed to the risk of being called into question by NGOs or consumers, undertake to monitor the social practices of their suppliers in southern countries. Others give priority to the link with their most strategic suppliers or their local subcontractors, who often work with and alongside their own employees on a daily basis.
The question also arises of the tools used by the companies employing subcontractors to check the latter’s practices. Here, many of these companies exert a dominating influence on their suppliers, compelling them to standardise and label their practices, for example in the fields of quality, safety and the environment. Is it enough to send questionnaires or to undertake regular audits, or should they go further by providing specific assistance? How does social responsibility travel down the supply chain, and does its content not change at each stage? Can we continue to talk of “voluntary” practices on the part of suppliers when they are absolutely essential to them if they want to stay in the market?
A three-part question therefore arises today: firstly, that of the (co-)responsibility a company acknowledges in respect of its subcontractors and suppliers; secondly, that of the scope and consistency (which subcontractors and suppliers?) of this responsibility vis-à-vis the whole supply chain or the network; thirdly, that of the actions large companies are prepared to undertake in partnership with their smaller subcontractors, to ensure that CSR is not an additional stipulation but an opportunity to improve existing practices substantially.
C.2 Corporate structures and dissemination of CSR
C.2.1 The question of company size
Today, large transnational companies are developing tools for reporting on their practices more and more often, and are publishing ever fuller reports on this subject, without always being able to measure the real impact of these initiatives (what readers, what use, what feedback?). These reports currently give priority to the most “visible” dimensions, which may be environmental action and commitments to serving civil society and local communities. With regard to the specific questions we have raised in this study, in particular those of restructuring and subcontracting, there appears to be a broad field available for the development of both quantitative and qualitative evaluation of these subjects. DANONE, one of the most advanced companies in terms of reporting on these “in-house” practices, devoted a chapter in its last report on social responsibility to the issue of restructuring (which had been a hot social topic in France). The viewpoint adopted was deliberately factual, reporting, involving for example in its Hungarian factories the number of jobs lost or relocated, with reference also being made to the social negotiations held on the subject and to the compromise finally reached with the unions.
The question of CSR tools becomes more complicated when one addresses smaller companies, which do not possess the human and financial resources required to produce this formalisation. Today such a proposal comes up against strong reservations on the part of SMEs, which regard this prospect as an additional bureaucratic expense, which does is not really of interest to them. It is significant that organisations representing SMEs have argued for a change of name, suggesting that the concept of CSR be replaced by the term “responsible entrepreneurship”, based on the extent of voluntary contributions by SMEs to their local communities. However, CSR cannot simply be boiled down to the voluntary contributions that many European companies, including SMEs, have long been undertaking to make to civil society. The “in-house” dimension of CSR and its minimum threshold, which constitutes compliance with standards on jobs and working conditions, deserve the same attention, even if this vigilance would sometimes be perceived as undermining the “freedom” of entrepreneurs who state that they are socially responsible.
C.2.2 The issue of disseminating good practice to SMEs
So is there a need to help these SMEs to report on their practices (which is in itself an aim of social interest) by establishing typical procedures? Both for large companies and for SMEs, the question arises of the role of employers’ organisations in CSR. Nowadays few of them constitute a resource in this area, and companies desirous of becoming more involved in CSR often have to manage on their own. The public authorities and European networks are beginning to concern themselves with this situation and to develop solutions, for example by developing databases accessible online. However, these initiatives are not necessarily known of on the ground.
C.2.3 The issue of international dissemination of good practice
Our case studies show that despite the existence of transnational groups which claim to be socially responsible, there has been very little dissemination of CSR practices beyond national borders. The “think global, act local” theory clearly applies to the area we are studying. We encountered no examples of voluntary transfer of good practice from one country to another. Moreover, European works councils (in which the main thing that national unions are currently doing is learning the differences in their working methods and, often, in the interests of their constituents) play virtually no part here, or at most a secondary role. Yet CSR and the ensuing practices could constitute an agenda of choice for European works councils, strengthening the substantive character of both their procedures and their content.
When they diversify on an international scale, companies laying claim to social values face serious problems, far from base, in “transmitting” their original values (not to mention the sensitive issue of combining “global cohesion” of action principles with another imperative, that of respecting social and cultural diversity). Since the question of disseminating CSR practices already arises even within transnational groups that claim to implement them, it is conceivable that it is of particular concern to the countries where these global players operate. The codes of conduct and similar tools with which these companies equip themselves today give rise to exactly the same questions that we raised with regard to CSR, namely how they are produced (who writes them, who gives the undertaking), how the content of the commitments entered into evolves as one moves further away in geographical and contractual terms from the parent company, and what monitoring and checking methods are adopted to give credibility to the commitments entered into.
C.3 The players in CSR
What does one mean when one speaks of the socially responsible “company”? Can this meaning of responsibility be limited to the structure, releasing the players from their responsibilities? On the other hand, do we not often attribute to the company merits that are originally those of the in-house players who have committed themselves to socially responsible actions? So how can we express what relates to one or the other? On the one hand, to corporate governance, which is responsible for ensuring that the relevant commitments continue, by displaying their strategic and sustainable nature, and, on the other, to the players involved in CSR and, particularly in the case of employment and working conditions, to the social partners, who are the main stakeholders in these in-house issues? Is the sustainable nature of a company’s commitment, often linked to that of its senior managers (PDG, DRH), not at risk of being weakened by the current context of mergers/acquisitions and the “managerial musical chairs” accompanying fluctuations in stock market prices?
C.3.1 Corporate governance and CSR
If CSR is to be the fruit of a strategic and sustainable corporate commitment and not the temporary fruit of a fashion, the question arises of how this commitment can be consolidated to protect it from the many hazards capable of affecting its realisation in concrete form. There are also a number of questions arising out of corporate governance, in particular those of the social mandate given to top managers by shareholders, the nature of the interests represented in the “governance”, or the fate of earlier corporate commitments when the company enters into mergers or alliances substantially modifying its legal boundaries, but also its previous identity and the historic link established with an area.
Is the top manager who is the driving force behind the good practices in his company motivated solely by his conscience, his values and his personality, or does he hold a “social mandate” from his shareholders? How can he establish continuity in the company’s socially responsible performance in the absence of such an explicit mandate?
The question acquired particular importance when the company’s boundaries are modified as the result of mergers or acquisitions. The clash of cultures, the result of which many observers see as one of the major factors in the success or failure of mergers, also involves a social responsibility aspect. In the context of such operations, how can existing good practices in the field of CSR, where they are already in place, be preserved on the one hand and, on the other, how can forms of “positive infection” of new subsidiaries be promoted?
Could a company where CSR issues remained the concern of top management alone and/or the resources committed were, to a greater or lesser extent, limited to a communications or coordination unit be seriously regarded as socially responsible? Without a doubt, the political will of the top managers is essential to transmit the logic of CSR down to the operating level, but training for middle managers, who implement the policies every day, is almost equally important. How can operational management be trained in CSR issues and tools? What parts can be played by companies and initial or continuing training bodies respectively?
C.3.2 CSR and the trade union movement
There is a certain paradox in union attitudes to CSR. Although this is a field within the company which is traditionally acknowledged to be the preferred field for union action, initiatives, to date the relevant projects have been primarily implemented by management. Our case studies have produced the following findings in particular:
* CSR is not a major topic of concern to or, in particular, of claims by the unions. The union representatives interviewed tend, rather, to express a fear that CSR will lead to the disintegration of traditional social dialogue, and to a reduction in entitlements and in the ability of employees and unions to make themselves heard.
* That said, there is something of a distinction between works council members, particularly in Germany and France, who are more willing to become involved in CSR processes, and trade union organisations as such, which remain more remote.
* The union element also lacks training in this field, networks to coordinate its actions on an international scale, and also a means of putting pressure on the image of those available to NGOs, which seem to be better prepared on all these points.
This gives rise to questions to trade unionism about the response it can make to the dilemma with which CSR confronts it – should it commit itself wholeheartedly to CSR, which could lead it into a form of co-management of CSR with management, but would, of course, risk cutting it off from its members? On the other hand, should it stay out of the picture, at the risk of becoming marginalised and consequently absent from the dialogue which could develop with the other stakeholders in the near future? In order to answer these questions and to act in this sphere with full knowledge of the facts, trade unionists and works council members need to acquire new skills, different from those forged and transmitted through the long history of traditional trade unionism.
C.3.3 Social dialogue and CSR
All our case studies describe experiences based on in-depth in-house social dialogue. In doing so, they suggest that successful CSR, at least in the field of employment and working conditions, can only exist in conjunction with strong social dialogue. However, our case studies also show us that it is not necessarily easy for the traditional players in social dialogue to practise CSR.
* Incorporation of CSR into the agenda of in-house social dialogue is still minimal – many information/consultation or negotiating procedures ignore it wholly or in part, or deal with it only in the margins, while at the same time the company is developing at management level a significant quantity of CSR activities. How can access for all to information on CSR be promoted, so that the existing social dialogue can expand to include these new dimensions?
* As a result of decentralised production networks, recurrent restructuring, mergers and acquisitions, it is increasingly difficult for company boundaries to coincide with the boundaries of social dialogue, whether the latter takes place at company or sectoral level. CSR, the effects of which drive the company to extend the boundaries of its information and consultation, could actually encourage this trend, while the content and boundaries of traditional social dialogue are already having difficulty keeping up with new forms of production organisation, for example as regards monitoring working conditions at subcontractors or monitoring the fate of employees in the context of restructuring.
Social dialogue appears to be facing a dilemma: either it remains based on a binary model with two opposing logics, and appears to exclude any other parties, or it opens up to multiple logics, but then runs the risk of reducing employees and their representatives to one stakeholder among many, while workers see themselves as the parties most directly involved. Finding players prepared to put in the effort, the means to prepare them and places to bring them together, in such a way as to promote an expanded dialogue but without weakening the traditional social dialogue, is, from this viewpoint, one of the major challenges in the development of CSR. The platforms proposed in the recent communication from the European Commission on CSR will doubtless look into this issue.
C.4. CSR, product or process? What impact on its evaluation?
C.4.1 CSR as learning process
CSR has a history, and one should not be misled by the recent emergence of a new designation (CSR). Sometimes CSR goes back to old practices which continue to be preserved. Examples of this are certain forms of sponsorship and social benefits that are only modernised versions of a traditional form of paternalism that is far from having disappeared, particularly within the large web of SMEs in Europe. The same is true of a type of CSR which, like it or not, goes back in the countries of Central and Eastern Europe to a form of generalised social guardianship, some aspects of which evoke that practised before the 1990s. Thus CSR did not come into being in a vacuum. At the same time, recent history teaches us that the process representing this concern by companies to incorporate into their decisions consideration of the interests of the stakeholders within and outside the company is not irreversible. It can just as easily extend to new subjects or shrink away.
Considering CSR not as a product or a state (being or not being socially responsible) but rather as a process (gradually learning what is involved in sustainable orientation of a company’s management towards CSR) enables us to take a more realistic view of the subject, incorporating the time factor into the analysis and guarding against the excesses of enthusiasm or pessimism of which traces are still apparent in the current debate on CSR.
The history of social relations from the beginning of the industrial era to the present day reminds us how lengthy, contradictory and interspersed with episodes of violence in the majority of countries was the process of constitution and then recognition of trade unionism as a player. A look at the forms social dialogue takes today in the various countries of the world also shows us the progress made to date and what remains to be done. The development of new players will not fail to raise similar questions of recognition and representativeness, not to mention the essential (but often so difficult) creation of cooperation and trust between the various stakeholders, without which CSR would be deprived of its substance and its capacity to impact on reality.
It will be in the interests of the criteria for evaluating CSR to take account of this “process” dimension of CSR in at least two ways:
* On the one hand, it seems reasonable to take account of the contexts in which companies are evolving, whether it is the national context (for example, not measuring the progress of the commitment to CSR in the candidate countries against the same yardstick as in the Member States) or company size (not expecting the same from SMEs as from large companies).
* On the other hand, there is a need to devote particular attention to tools capable of monitoring over time the progress of the efforts made by the company in the area of CSR and to promote the dissemination of good practice already put in place by the companies most advanced in this area.
C.4.2 Is it possible to specify common lower and upper limits for CSR practices?
For example, a dynamic leading SMEs to position themselves within the spirit of the laws and collective agreements would already represent considerable progress. An increase in the efforts of companies to monitor their “restructured” employees, opening up to the working conditions of their subcontractors, intensification of social dialogue or even its extension to other stakeholders would be seen in the same way.
In analysing the good practices we have found, we have sometimes found it difficult to distinguish what in these practices went beyond the law from that which was “wholly in the spirit of the law”. This is particularly true in the case of restructuring, a field in which national legislation is increasingly exacting (in respect of information and consultation of employees) and increasingly precise. The methods we describe in our case studies, whether they involve conducting a social dialogue or reassigning personnel and re-industrialising sites, are some of the best we found in each of the countries studied. Going beyond compliance with the letter of the law, which would be satisfied with less, they are wholly faithful to the intentions of the legislator.
The lower limit set by the definition in the Green paper (CSR is voluntary in nature and not obligatory, and thus begins by going beyond compliance with the laws) thus opens up a genuine question, that of recognising the quality of application of the law, particularly in areas where minimalist application of the letter of the law is a long way from full application of its spirit. Some companies may, for example, claim to be socially responsible, emphasising certain of their practices that obviously go beyond the law or collective agreements, while implementing only the minimum requirements of the law in other spheres where it is more exacting. At the same time, other companies may apply the law in full, consistently and exactingly, without seeking to increase, under the banner of CSR, the standing of initiatives profoundly in agreement with its philosophy.
The absence of an upper limit may be regarded as an incentive factor (citius, altius, fortius), but also as a factor deliberately designed to maintain a degree of vagueness in people’s minds. Is there a threshold above which the company could be discharged from its CSR commitment? SMEs would like to know, for example, how far beyond the law they have to go to show that they are socially responsible when in their eyes, fulfilment of existing standards already constitutes a not insignificant form of civic commitment. Large companies would also like to know to what level of the supply chain their responsibility as the company employing subcontractors extends, knowing that their capacity to monitor and check the practices of their subcontractors decreases at every stage.
C.4.3. What tools for the future?
Most of the practices we have described are not currently subject to evaluation procedures ex post facto. And when it exists, this evaluation is rarely on more than one level, which is all the more contradictory. With the exception of the Belgian social label and some Danish initiatives, there is no body outside the companies designed to objectivise in-house certification by compiling the viewpoints of all the stakeholders. The current ethical rating agencies, whose attention is focused on a small area of the subject and the companies, cannot claim to be such bodies. We ourselves became aware in the context of our work of how difficult it is to organise such cross-sectional evaluation, particularly given the lack of sensitisation of the other stakeholders in advance. Of course the company produces speeches on the subject and displays the methods and objectives, but it does not possess a means of measuring the results (positive or negative) achieved. It is particularly unusual for formalised reporting procedures to exist, and even more unusual to find facts and figures on the time or money devoted to CSR, at least in its “in-house” dimension touching on employment and working conditions.
One can see how it may currently be difficult to envisage long-term evaluations of CSR practices, although that is the timescale where its evaluation really has meaning. Only with the benefit of hindsight is it possible to be aware of the durable nature of the practices invoked and to confirm the strategic value of the relevant commitment, including in periods in which the economic climate is less favourable. If everyone agrees to accept the need to produce such indicators, the question remains of who will be the recipients of the relevant information. Do the various stakeholders need to have the same indicators? Is there not a risk that to trim a system that SMEs will inevitably perceive as (too heavy) a burden, “financial” targets (shareholders) will be given priority over “salary” targets (employees) and “citizen” targets (local communities)?
The question remains of future homogenisation of tools for evaluating CSR, given that we are currently witnessing the constitution of a new audit and social rating market, while there are at present no real reference systems or established professional code of ethics. In considering the questions raised around the current trials of financial auditors, beginning with that of their independence, particularly their financial independence, one is assessing at what point the future of CSR will very broadly depend on its capacity to develop credible evaluations of the corporate practices implemented “in its name”. We have deliberately spoken of “future evaluation”, which is not to say that we fail to recognise the topicality of the subject and the large quantity of work and reflection already in progress. Our analysis of CSR as a corporate learning process, shows that it is still largely embryonic today, since the indications in the case studies of the extent of the ground that still needs to be covered make us cautious about any early prospect of harmonisation or homogenisation. This having been said, we should like to end this work on a positive and constructive note by championing an idea that is simple but for us, fundamental – care must be taken to maintain, from the perspective of a framework of European tools, a degree of balance between “substantive” logics measuring the specific effects of CSR on the various stakeholders and “procedural” logics of compliance with good practice in both development and reporting.