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Corporate Communications: An International Journal Institutionalization of corporate social responsibility within corporate communications: Combining institutional, sensemaking and communication perspectives Friederike Schultz Stefan Wehmeier

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Article information: To cite this document: Friederike Schultz Stefan Wehmeier, (2010),"Institutionalization of corporate social responsibility within corporate communications", Corporate Communications: An International Journal, Vol. 15 Iss 1 pp. 9 - 29 Permanent link to this document: http://dx.doi.org/10.1108/13563281011016813 Downloaded on: 16 March 2016, At: 04:03 (PT) References: this document contains references to 93 other documents. To copy this document: [email protected] The fulltext of this document has been downloaded 5633 times since 2010*

Users who downloaded this article also downloaded: Elanor Colleoni, (2013),"CSR communication strategies for organizational legitimacy in social media", Corporate Communications: An International Journal, Vol. 18 Iss 2 pp. 228-248 http:// dx.doi.org/10.1108/13563281311319508 Jenny Dawkins, (2005),"Corporate responsibility: The communication challenge", Journal of Communication Management, Vol. 9 Iss 2 pp. 108-119 http://dx.doi.org/10.1108/13632540510621362 Urša Golob, Klement Podnar, Wim J. Elving, Anne Ellerup Nielsen, Christa Thomsen, Friederike Schultz, (2013),"CSR communication: quo vadis?", Corporate Communications: An International Journal, Vol. 18 Iss 2 pp. 176-192 http://dx.doi.org/10.1108/13563281311319472

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Institutionalization of corporate social responsibility within corporate communications Combining institutional, sensemaking and communication perspectives

Institutionalization of CSR

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Friederike Schultz Institute for Media and Communication Studies, Free University Berlin, Berlin, Germany, and

Stefan Wehmeier Institute for Marketing and Management, Syddanskuniversitet Denmark, Odense, Denmark Abstract Purpose – The purpose of the paper is to develop a new framework depicting the incorporation of concepts such as corporate social responsibility (CSR) within corporate communication as a process that called “institutionalization by translation”. The paper aims to develop a micro-meso-macroperspective to analyze why and how organizations institutionalize CSR with which effects. Design/methodology/approach – The paper brings together institutional, sensemaking and communication theories. The paper builds on neo-institutionalism to frame the external conditions that foster or hinder the institutionalization of CSR on the macro- and meso-level. And the paper uses sensemaking and communication theories to describe this process on the meso- and micro-level. The paper illustrates the analysis by describing the CSR strategies of a large European energy company. Findings – CSR can be regarded as an empty concept that is based on moral communication and filled with different meanings. The analysis describes how CSR is internally translated (moralization and amoralization), which communication strategies are developed here (symbolic, dialogic, etc.) and that CSR communications are publicly negotiated. The analysis shows that the institutionalization of CSR bears not only opportunities, but also risks for corporations and can, therefore, be described as a “downward spirale of legitimacy and upward spiral of CSR institutionalization”. Finally, alternative ways of coping with external demands are developed (“management by hypocrisis” and “defaulted communication”). Practical implications – The paper shows risk and explains more effective ways of building organizational legitimacy. Originality/value – The originality lays in the macro-meso-micro-perspective on the institutionalization of CSR. It allows the description of this process and its effects from the background of constraints and sensemaking and offers a new perspective on organizational legitimacy building. Keywords Corporate social responsibility, Corporate communications, Trust Paper type Research paper

1. Introduction In academia, one finds different approaches to analyzing the increased importance of corporate social responsibility (CSR) in society. By using a strongly organizationcentred view, many business and communication scholars regard CSR as a special

Corporate Communications: An International Journal Vol. 15 No. 1, 2010 pp. 9-29 q Emerald Group Publishing Limited 1356-3289 DOI 10.1108/13563281011016813

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corporate program that is carried out in order to deal with different stakeholders (Signitzer and Prexl, 2008). The literature shows various and, over time, changing definitions (Carroll, 1999; Frederick, 1986, 1998). However, many emphasize responsibilities and responsiveness, like, for instance, the definition of Black and Ha¨rtel (2004, p. 125). They define CSR as “[. . .] the firm-wide ability to adapt to the social environment by recognizing and responding effectively to the responsibilities inherent in firm-stakeholder relationships”. This leads, primarily, to instrumental concepts, interpretations, and understandings of CSR, whereby CSR is seen as a strategic tool used in obtaining legitimacy from stakeholders (Freeman, 2004) and competitive advantages (Porter and Kramer, 2003; Jensen, 2001; McWilliams and Siegel, 2001). As Bovens (1998), Lammers (2003) and Beschorner (2004) suggest, this stakeholder management perspective usually fails to consider the institutional conditions that confront organizations in contradictory ways on the macro-level, like, for instance, investing money in clean production processes and being a cost leader at the same time. Public expectations and communications, especially, are not taken into account. Furthermore, the negotiated meanings, on the micro-level, which have an impact on the behaviour of organizations, are not analyzed in this approach. By looking at sociological and communication studies, on the one hand, one finds studies describing the forces fostering the institutionalization of CSR on the macro-level (Lammers, 2003; Campbell, 2007). On the other hand, scholars regard CSR as a social construct that emerges out of communication (Gond and Matten, 2007; Roberts, 2003). These theoretical frameworks, however, do not explain how CSR is institutionalized and rarely with which effects. The key contribution of this paper, therefore, lies in developing a general, theoretical framework for institutionalization processes, which allows to depict the institutionalization of CSR within corporate communications holistically and from a non-functionalist perspective. This is accomplished by building on neo-institutionalism, sensemaking and communication theories where a macro-approach with a meso- and micro-perspective are combined. Hereby, we provide a framework that: . explains why organizations institutionalize CSR; . describes how CSR is incorporated, negotiated and carried out; and . focuses on the consequences of CSR as a construct of moral communications (Schultz, 2005, 2009). The paper starts developing this theoretical framework by explaining the process of institutionalization. By combining neo-institutionalism and sensemaking theories, we follow others who tried to bridge the macro-micro-gap (Giddens, 1984; Schimank, 1985; Turner and Boyns, 2006) but take a different path. We argue that neo-institutionalism explains on the macro- and meso-level, why concepts are institutionalized. However, it rarely analyzes the role of communication. To fill this gap, we develop a communication and sensemaking perspectives that focuses on the dimension of meaning on the micro-level. Both perspectives are not logically incompatible, but “ripe with intriguing connections” (Weber and Glynn, 2006, p. 1640). Here, we present a framework, which we call “institutionalization as translation”. We use this to explain the general external conditions fostering or hindering the institutionalization of CSR and to afterwards describe how corporations translate these external conditions internally and which communication solutions they hereby develop.

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We then present some pitfalls and paradoxes that arise when CSR is framed by traditional business and public relations (PR) communication approaches, which overrate the sender communication and underscore the importance of sensemaking. We conclude with suggestion on alternative ways for coping with complexity: “hypocrisy” and what we call “defaulted communication”. To illustrate our theoretical approach, we briefly present the case of the large Swedish energy company Vattenfall Europe AG, which is operating in many European countries. Since 2006, Vattenfall was publicly criticized in Germany for its pricing policies and for incidents at several nuclear power plants. As a result of this bad publicity, the firm finally started institutionalizing CSR. 2. Theoretical perspectives: institutionalization of CSR within corporate communications 2.1 Bridging macro- and meso-levels: the theory of institutionalization By referring to organizational neo-institutionalism, the interplay between organizational action, official organizational statements and environmental expectations is in the centre of scholarly analysis. Neo-institutionalists see institutions as routines, beliefs, norms, cultural rules or ideas that give collective meaning (sensegiving). Organizations follow such rules of appropriateness in order to gain legitimacy for their actions (March and Simon, 1993; Meyer and Rowan, 1977; Dowling and Pfeffer, 1975). They adopt practices “[. . .] they believe their institutional environment deems appropriate or legitimate regardless of whether these practices increase organizational efficiency or otherwise reduce costs relative to benefits” (Campbell, 2004, p. 18). This process, “by which a given set of units and a pattern of activities come to be normatively and cognitively held in place, and practically taken for granted as lawful” is called institutionalization (Meyer et al., 1994, p. 10). Within the institutionalization, organizational action is not limited to one institutional norm only. Institutions such as rationality, bureaucracy or efficiency sometimes have to be actively combined, even though they may be conflicting. Therefore, for organizations “[. . .] it is not always clear precisely which rules are appropriate” (March and Simon, 1993, p. 12). Even worse, they are not able to make a rational decision because they have to follow all of them – at least to a minimum extent (Brunsson, 1985, 2002). Beneath such divergent rules and institutional environments, organizations operate in relational networks that also encourage efficiency (Meyer and Rowan, 1977). From the background of this double structure and resulting conflicts between ceremonial rules and efficiency, organizations use two strategies – “decoupling” and “trust building” (“logic of confidence”) – to shield their core activities bound on material contexts by building a fac¸ade of legitimacy within the symbolic field (Meyer and Rowan, 1977, p. 356). Although deeply rooted in social constructionism, most of the neo-institutional literature focuses on structures, practices and institutions. A central deficit herein, is that it concentrates on macro-level processes, whereby the role of the communication and the sensemaking of actors as interpreters and the way meaning connects actions to actors is not explored in most studies (Zilber, 2002; Maitlis, 2005). These methodological limitations have created the understanding of institutionalization as “diffusion” – a model that is guided by the assumption that practices are adopted intact, by the various actors (Sahlin-Andersson, 1996; Zilber, 2002, 2006) according to predefined rules. By linking neo-institutionalism to communication and sensemaking

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theories, we offer another perspective of institutionalization that incorporates the receiver dimension. 2.2 Bridging meso- and micro-levels: a communication and sensemaking perspectives Following Lammers and Barbour (2006), who contribute towards filling the communication gap in neo-institutionalism, communication is fundamental to the processes of institutionalization: organizational knowledge is communicated in corporate settings and corporate philosophies. Later on, PR reflects prevailing institutional settings. Moreover, institutions become manifest in corporate guidelines, manuals or handbooks that are designed to guide the new member’s actions (Lammers and Barbour, 2006). This perspective, however, remains communicator-centred: it focuses on practices carried out by human relations and/or PR departments and underscores the reception processes, which are central to communication. On a very fundamental level, communication can be defined as symbolic interaction (Schultz, 2005; Krotz, 2007). Actors, in their interactions, use the symbolic to display, which means objects or things have for them. In turn, they act based on their interpretations of the symbolic world; on their definition of situations, expectations and reality constructions (Blumer, 1986; Schmidt, 2003). Therefore, meaning itself cannot be determined or controlled. Actors interpret messages by using different codes (dominant, negotiating or oppositional) (Hall, 1999) and do not necessarily accept the intended version. Building on a symbolic interactionist perspective, sensemaking theory also describes acts of constructing interpretations within signification processes, and, furthermore, implicitly discusses the role of institutions. Following Weick (1993, p. 635), “the basic idea of sensemaking is that reality is an ongoing accomplishment that emerges from efforts to create order and make retrospective sense of what occurs”. Organizational members construct their environment in and through interactions with others. By doing this, they construct accounts that allow them to comprehend the world and to act collectively (Maitlis, 2005). From this perspective, “even stable institutions are best seen as dynamic equilibria that need to be continuously reaffirmed” (Weber and Glynn, 2006, p. 1647). They can be regarded as being emergent from bottom-up sensemaking processes (Weick, 1995; Scott, 2008). Based on this, it can be argued that social structures and cultural rules are not cognitive constraints, as institutional theory would claim. As far as human beings are symbol processing entities and not trivial machines (von Foerster, 1993), institutions are not fixed scripts with fixed meanings and do not determine sensemaking processes automatically (Weber and Glynn, 2006) in a sensegiving way. They always need to be interpreted, translated into practices and are, hereby, sometimes altered, like actors in a play interpret their role and alter the screenplay. To describe the process of institutionalization, the metaphor of “translation” is more appropriate than that of “diffusion” (Creed et al., 2002; Czarniawska and Joerges, 1996; Sahlin-Andersson, 1996; Zilber, 2006, p. 283): Whereas the “diffusion” metaphor comes from physics and connotes transmission to a given entity from one area to another, the “translation” metaphor comes from linguistics and connotes an interaction that involves negotiation between parties and reshaping what is finally [. . .] institutionalized.

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2.3 Building a model: institutionalization of CSR as a multilevel, dynamic process By cross-fertilizing institutionalism, sensemaking and communication theories, and by using the “translation”-metaphor, we are now able to develop a broader perspective and a model of the institutionalization of concepts such as CSR within corporate communications. This perspective describes major processes of the institutionalization of CSR on the micro-level (actors of organizations), meso-level (corporations, organizations, publics and audiences) and macro-level (environment and institutions) (Figure 1). CSR cannot be seen as a fixed script or tool that might be used by corporations in order to produce fixed effects such as legitimacy. Instead, it represents a dynamic continuum of competing meanings. It is part of public discourses, a construct and “symbolic resource”, which is alternately and often competitively used by a variety of players, such as corporations or non-profit organizations, and for

Institutions

Macro

Environment

environmental level

Institutions

Meso

as action as symbolic communication

individual level

as a concept as a myth as a script as dynamic equilibria

Organizations, publics, audience

Corporation

organizational level

Micro

CSR ...

CSR ...

CSR ...

CSR ...

CSR ...

is internally translated/ interpreted/

as internally practice/ redesign and implementation of rules

as internal practice/ redesign and implementation of rules

is internally translated/ interpreted/

Individuals/members of and roles in a corporation

Imitation

CSR ...

Observation legitimization

as action as symbolic communication

Expectations/constructions

CSR ...

Expectations/constructions

as a concept as a myth as a script as dynamic equilibria

Observation legitimization

Institutions

CSR ...

Imitation

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Here, the idea is that cultural schema are re-interpreted, but not re-cited; that ambiguous “translocal ideas” are translated, but not reproduced identically in local settings (for a similar but rare neo-institutional argumentation, see Jepperson, 1991). To summarize, institutionalization can be described as the interplay between (communicative) actions, meanings and actors and the mutual observations and expectations. What triggers institutionalization processes within organizations is the interaction of external conditions, negotiated definitions of problems and mutual constructions of expectations between corporations and other organizations. Although socially constructed, institutions are gaining power, to a certain extent, since they lead actions prospectively and legitimize them retrospectively.

Individuals/members of and roles in a corporation

Figure 1. Institutionalization as a multilevel process

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a variety of purposes (Shamir, 2005; Beaulieu and Pasquero, 2002). On the macro-level, the institutionalization of CSR can be described as a multilevel process between several actors with an uncertain outcome. It is triggered by different external expectations and conditions as described within institutional theory. On the micro-level, organizational actors translate and interpret the institution internally according to their personal values, organizational roles and constructions of reality. While incorporating and translating CSR, a specific version of the institution becomes part of corporate life and, when publicly communicated or practiced, changes the notion of CSR itself. According to Stachowiak’s (1965) seminal work on a theory of models, models simplify in order to emphasize certain aspects. In our model, we emphasize the corporation that is, on the one hand, confronted with CSR as an institution and, on the other hand, with the question of how to cope with this institution and how to internalize it. In order to simplify, the general environment is modelled as the interface between the observed corporation, other organizations and the public/the audience. The theoretical framework is mobilized in order to address the following research questions: RQ1. What are external triggers for the institutionalization of CSR? RQ2. In which way is CSR as a concept internally translated? RQ3. Which strategies and meanings are developed? RQ4. In which way are CSR communications externally “translated” and what are possible pitfalls in the incorporation of CSR by firms? In order to answer these questions from a theoretical perspective, we now unfold the illustrative case of Vattenfall Europe AG. 3. Illustrative case: Vattenfall Europe AG Information was obtained on the actions and communications of the Swedish, state-owned energy company, Vattenfall Europe AG, through the reading of German newspapers, the analysis of the corporation’s web site, as well as through two main CSR documents: the CSR report Vattenfall Europe AG (2006) and a CSR presentation (2008). Furthermore, a Vattenfall PR Manager was interviewed and the findings of more than 800 corporate and media articles were also used (Patriotta et al., 2008). After the liberalization of the German energy market, Vattenfall started operating in Germany from August 2002 and onwards, via the merger of four traditional German energy corporations. Diverse controversies on incidents in nuclear power plants and pricing politics in 2006 and 2007 led to disruptions of the corporation’s social order, triggered corporate sensemaking processes aimed at image restoration, and finally led to the institutionalization of social responsibility in different fields (Patriotta et al., 2008). The debate on the security of nuclear power plants started with a short circuit in the Forsmark nuclear power plant (Sweden) in July 2006. Social actors and politicians from the green and the leftist parties, in particular, regarded Vattenfall as being irresponsible because it was prepared to risk the public’s security by running technologically defective nuclear power plants, while at the same time refusing to deliver important information. Also, Vattenfall was seen as an unfair and profit-driven corporation that was misusing an oligopolistic market structure to raise prices

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(Patriotta et al., 2008). The legitimacy of Vattenfall Europe was further disrupted through incidents in two German nuclear power plants (Brunsbu¨ttel and Kru¨mmel) in June 2007. Vattenfall Europe reacted to the critique and the loss of public trust by firing the German chief executive officer (CEO) and the German head of corporate communications in July 2007 and installing a new CEO. His attempt to regain legitimacy through dialogic communication strategies was accompanied by a further massive loss of customers. In total, Vattenfall lost 250,000 customers in 2007 (Tagesspiegel, 2008). Only six months later, the new CEO was replaced by another CEO, who publicly claimed, “We are hungry for growth” (Tagesspiegel, 2008). In the following months, and according to these huge discrepancies between verbal statements and actual behaviour, as well as between recognized legal and moral norms, the public again reacted very critically toward Vattenfall Europe (see, e.g. the Greenpeace online initiative[1]). In the next sections, we further unfold the theoretical framework and illustrate it with this case.

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4. Expectations and triggers on the macro-level For an appropriate understanding of the institutionalization process, the interplay between organizations and environments will be analyzed by regarding the external conditions and, afterwards, by relating them to the actors involved and their sensemaking of CSR. Campbell (2007) points out eight major conditions that either foster or hinder the process. We combine and partly reinterpret them to produce four lines of argumentation that have similarities with the well-known general neo-institutional approaches of DiMaggio and Powell (1983) and Scott (2008) who see mimetic, regulative, normative and cognitive ways of institutionalizing (Table I).

Triggers

Institutionalization is more likely. . .:

1. Competition (mimetic)

In complex environments and market situations, but not if there is too low or high competition (no need for behaving well, too costly). CSR as a new practice is invented by one corporation and imitated by competitors without exactly knowing whether or why this might be a successful strategy If rules exist to protect nature, to give rights to employees or to enforce strong self-regulation If organizations are members of larger associations that have a set of member rules and if the hired personnel undertake a standardized qualification process where reflexive thinking is included If watchdog organizations or mass media play a vital role in the public sphere

2. Regulative norms (regulative) 3. Professional norms (normative)

4. Public pressure (cognitive)

Dominant strategy

Level of action

Symbolic communication

Talk

Defaulted communication

Decisions and actions

Defaulted communication

Decisions and actions

Dialogic communication

Talk, decisions and actions

Table I. Institutionalization processes and strategies

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The first condition, institutionalization by competition, can often be observed, since many corporations use environmental and social reporting to demonstrate responsibility publicly, without being forced by law, and without knowing whether it is something they will benefit from. Corporations that act in turbulent environments tend to follow innovators and branch leaders. The institutionalization of CSR can be triggered by the development of financial indexes mirroring the behaviour of corporations (Entine, 2003) and specific stock indexes, like the Dow Jones Sustainability-Index (www.sustainability-index.com), the KLD Global Climate Index (www.kld.com/indexes/gc100/index.html) and the KLD Global Sustainability Index (www.kld.com/indexes/gsindex/index.html). At the same time, other external actors make sense of the concept by relating it to improved financial performance, thereby enforcing mimesis. As Matten and Moon (2008) point out with the growing importance of financial markets for business success, CSR may be regarded as a prerequisite for attracting global capital. The more European companies source their capital globally, the more they have to comply with the requirements of international investors, particularly of those in the USA. According to Schultz and Wehmeier (2009), PR consultancies also push CSR forward as a topic, claiming that it increases the financial value of the firm in the long run. Another form of mimetic institutionalization occurs through rating systems, guidelines and models for the implementation within corporations (Waddock, 2000) and CSR-platforms like www.econsense.de. This platform, however, is only a very weak form of self-regulation; in no way is it a law-like regulation. Regulative institutionalization of CSR takes place if organizations are forced by law to behave responsibly. Examples are established measures in occupational health, as well as prescriptive values for the emission of CO2 in the car market. In Germany, an ecological, legal code that binds several fragmented regulations together is being developed, at present. Furthermore, law-like activities, like strong self-regulation in special branches, might foster not only the institutionalization of CSR, but also expectations on possible legal consequences. Political institutions, such as the European Commission (2001), demonstrate strong interest in CSR by promoting a framework for its implementation within corporations, hereby putting pressure on corporations. Although CSR seems to be related to ethical values, as terms like “voluntary”, “responsible” or “social” reveal, the concept shall serve to improve the European Union’s competitiveness, social coherence and the growth of communities of value creation and of employment in that area (European Commission, 2001). Institutionalization by professional norms is fostered by the discussion of CSR in academia and beyond. There are many scientific organizations that produce legitimating accounts for the mimesis processes by presenting CSR to students and professionals as a means to enhance financial performance and competitiveness (Gond and Matten, 2007; Scherer and Palazzo, 2007). There are also business and communication schools (e.g. the International Centre for CSR at Nottingham University Business School and the Center for CSR at Copenhagen Business School) that teach the ethical basis of CSR in a more reflexive way. They are interdisciplinary think tanks that set international standards in the field of CSR by studying the topic from different theoretical perspectives like philosophy, anthropology, business economics, organisation theory and discourse analysis (Morsing et al., 2008).

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The institutionalization of CSR is also triggered by the membership of associations or mutual contact with non-governmental organizations (NGOs) working in the field. Organizations, like Global Compact (www.unglobalcompact.org), try to bridge the gap between the United Nations and business, and initiatives, like Globalreporting.org (www.globalreporting.org), set international standards for sustainability reporting. Institutionalization through public pressure: since social reality is mainly mass medial constructed reality (Merten et al., 1994), mass medial discourses play a crucial role within these processes of definition and negotiation. Public expectations of corporations, of social responsibility and of CSR are negotiated and themselves institutionalized through the interplay between corporate and media communications (Shamir, 2005). This kind of institutionalization is especially triggered by NGOs like Greenpeace or Attac that regularly create public awareness through the use of powerful campaigning strategies (Lo¨ding et al., 2006; Vowe, 2001) and often claim to advocate the general public interest and ethical concerns. Such organizations can be described as “moral” corporations: They aim at dealing with good conscience and reputation. The mass media itself can also bolster up trends, not only by observing, reporting and criticizing in media articles, but also through CSR-rankings (www.manager-magazin. de/unternehmen/csr/) that are created by the media based on their own methods. In the Vattenfall case, CSR was mostly triggered by public pressure and regulative institutionalization: NGOs, customers and politicians criticized the company for the use of oligopolistic power, unethical pricing strategies and for hiding information. Regulative institutionalization came into play as a solution discussed by politicians in case the company would not react voluntarily to the public pressure. Politicians tried to force Vattenfall to shut down the nuclear power plants and forced it to cut its prices (Patriotta et al., 2008). 5. Meso- and micro-level: translations, communication strategies and (a)moralization 5.1 Institutionalization by translation: a “messy affair” The process of institutionalization of CSR within corporations and corporate communications can be described as the “translation” of such perceived triggers and institutional rules. But this “translation” cannot be regarded as guided by a kind of overall concept of CSR. In contrast, it can be described as a multilevel process in different organizational spheres (corporate communications, politics and society) and as a “messy affair” (Jonker et al., 2004, p. 6): it is based on a series of (non)intentional actions and choices made by changing internal and external actors, that are constantly struggling with the translation trying to develop a more encompassing understanding of the concept as a whole, while, at the same time, implementing bits and pieces that they deem relevant. The Vattenfall Europe AG (2008, p. 2), for example, developed its own formal definition of CSR, according to its vision and mission, by “translating” the European Commission’s CSR definition[2]: It is our job and responsibility to provide energy solutions that meet our customers’ needs and that contribute to sustainable development in society. These solutions must include consideration for the environment, customers, employees, and society in general.

In line with this formal translation, the concept is related to certain fields of action such as economic, social and environmental sustainability, and these terms, in turn, are

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translated into concrete practices. They are strategically institutionalized CSR practices, whereby CSR is related to the core business. This can be seen in the CSR report, which is centrally developed in Sweden, or in the CO2-free power plant in Germany. Furthermore, there are department-related practices that are not always interpreted as CSR activities initially, but are seen as thus afterwards, such as local, social and culturally sponsored activities. Finally, there are spontaneous practices, driven by single actors, such as, for example, the initiative of board members to collect money for cyclone victims in Burma (Myanmar) in 2008 (Interview Vattenfall PR Manager 2008). 5.2 Symbolic CSR communication and (a)moralization of corporate culture Although this process of institutionalization can be regarded as “messy affair”, there are dominant strategies, such as trust building, that finally lead to the translation of CSR into formal and informal understandings. According to institutional theory, the process of institutionalization can be regarded as the result of the double structure of institutional and material environments and as based on the strategies of “decoupling” and trust building (Meyer and Rowan, 1977). To shield their main activities and to avoid public pressure, organizations try to build trust through a symbolic fac¸ade that provides evidence that the demands of various actors must be dealt with. This fac¸ade consists of ritualized justifications in social balance sheets and CSR reports, organizational philosophies and the concept of corporate citizenship, moral advertisement and, finally, in the institutionalization of CSR departments and managers. This, in turn, can be described as “moralization” of corporate communications (Schultz, 2005, 2006): corporations developed idealistic definitions of CSR within their self-presentations and refer to ethical or civic accounts and general social or environmental ills, such as climate change. In contrast to this formal understanding and communication of CSR (as an end in itself) and based on the assumed shielding effect, CSR is informally translated and interpreted as a solution to a complex range of specific corporate problems, such as reputation problems. It is seen as a means of saving profitability by repairing the corporation’s image in the external dimension and by enhancing employee motivation and identification with the corporation in the internal dimension (Schultz, 2006). Accordingly, the “moralization” of corporate communication can be accompanied by an “amoralization” of corporate culture (Schultz, 2006). Internally and by the help of external organizations, the public’s understanding of social responsibility is often translated into more functionalist concepts, such as “brand loyalty”, “social investment”, and “community empowerment” (Shamir, 2005, p. 241). Furthermore, there is a general lack of moral meaning for organizational members, since individual morality is subjugated to the functionally specific rules and roles of the organization (Crane, 2000). Interestingly, both meanings are intertwined, wherein CSR is regarded as a win-win-solution for both formally and informally defined problems. 5.3 Dialogic CSR communication: symmetric and asymmetric approaches The idea of building trust by using symbolic (Schultz, 2005) or ceremonial (Meyer and Rowan, 1977) practices and communications that claim, in a more idealized and less reasoned way, that the corporation would behave in a socially responsible manner, needs to be criticised. It is mainly based on a simplistic and rationalist model of

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communication, which focuses on information transmission (Morsing and Schultz, 2006), thus corresponding to the notion of “mechanical” fabrication of trust (Hundhausen, 1951; Bernays, 1947) and the one-way communication model (Grunig and Hunt, 1984). PR researchers, in particular, doubt the assumed effects of such symbolic communication and stress the necessity of stakeholder involvement and dialogue in order to build trust (Grunig and Hunt, 1984). By building on the Grunig and Hunt (1984) model of asymmetric and symmetric two-way communication, Morsing and Schultz (2006) develop dialogic models for CSR communication. The asymmetrical two-way communication strategy (“stakeholder response strategy”) serves as an evaluative mode to measure the understanding of and commitment to the company. Since public feedback is only used to serve the corporation in finding better persuasion strategies, this strategy remains sender-oriented. The symmetric model, in turn, is about consensus finding, rational agreement and mutual understanding. CSR communication following this “stakeholder involvement strategy” allows concurrent negotiation and exploration of concerns while also accepting changes, if necessary. Morsing and Schultz (2006), for example, regard the dialogue strategy, in general, as an effective combination of culturalist-oriented sensemaking and instrumentally oriented sensegiving strategies. This allows a more subtle and indirect and, therefore, effective communication. The dialogue strategy also fits well with the theory of public trust (Bentele, 1994; Bentele and Seidenglanz, 2008). Here, it is claimed that trust can be built if, for example, the actions and public communication of an organization are congruent[3] or if the organization speaks with one voice or if the organization acts transparently in public and is adaptive to external demands. These models do not only occur in academia. They are, for example, but also implemented by PR-agencies that claim to offer tools and strategies for trust building (Schultz and Wehmeier, 2009). They are not, however, consistently used in PR practice (Morsing and Schultz, 2006). This can be also seen in the Vattenfall case. Here, CSR is partly regarded as a means to repair the firm’s reputation and to unite employees because of huge public pressure on the corporation. Under the former head of communication, there were merely idealistic and symbolic image campaigns designed to present Vattenfall as a socially and ecologically responsible corporation. This triggered the institutionalization of CSR. In 2007, under the successor of the fired CEO, and after a series of crises and further critique, Vattenfall launched an asymmetric dialogic communication campaign to improve the corporations’ image. The company developed a dialogue campaign, took out many ads in leading German newspapers, started a consumer consulting promotion tour for more than five million euros and developed a media partnership between Vattenfall and National Geographic to foster ideas for climate protection in schools. The ads, in particular, were designed to demonstrate the willingness of the company to get in contact with its public. The dialogue-strategy, however, was more symbolic than factual. While the left half of the ads presented the number of a special service hotline, the right half was made up of frequently asked questions concerning the ecological responsibility of the corporation. The questions were both asked and answered by the corporation. The openness offered on the left half was immediately constrained by the corporation’s monologue or auto-communication (Christensen, 1997). This kind of CSR communication uses discourse strategically, in order to maintain hegemonic power

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and communication managers doing this are, therefore, criticized as discourse technologists (Motion and Leitch, 1996; Motion and Weaver, 2005). 6. Pitfalls and paradoxes: the limits of moral communication, dialogue and trust From a sensemaking perspective and, on the background of the macro-level analysis, we will now analyze the effects of the different communication strategies. In general, the one- and two-way approaches of internal and external PR communication, as well as the common trust building approaches (Taylor and Kent, 2002; Bentele et al., 1996), need to be questioned because they are based on the rationalist paradigm that argue both in a linear and causal manner. If, for example, discrepancies between corporate talk and corporate action are avoided, trust is built up. As a consequence, trust is regarded as something that can be manufactured by organizations in a rational sensegiving process. However, building on the sensemaking and communication perspectives, meaning is neither transferable nor controllable, but is negotiated within sensemaking processes on the micro-level. The consequence is an enhanced horizon of indeterminacy and contingency evolves. Especially, in such value-laden fields of communication as CSR, there is much room for indeterminacy. As presented in Section 2, communication activities can be translated by internal and external stakeholders, not just with the dominant code (the corporation is seen as responsible), but also with the negotiating code (the corporation is seen as responsible only in some concerns) or the oppositional code (the corporation is seen as irresponsible and its communications are viewed as manipulation). We argue that dominant codes are used by recipients who, for example, have a low involvement or interest in social concerns, in order to avoid disruptions and discrepancies in their social constructions of reality. Oppositional or negotiating codes, in turn, are particularly used by recipients who feel suppressed by corporations trying to develop a dominant frame of their action. Dominant frames are sensegiving frames that evolve in using rationalist communication strategies, like integrated communication and trust building through avoidance of discrepancies. Building or regaining trust through consistency in all corporate communication arenas is somewhat unnatural because corporations consist of many voices that cannot be disciplined in all departments and over time (Christensen et al., 2008). Speaking with one voice might appear necessary to the PR department, but organizations who limit themselves to being consistent in all terms are inflexible. This, especially, is a license to fail in an age of global markets and fast life cycles (Christensen et al., 2007). First, and taking this into account, the one-way communication model will not automatically lead to legitimacy and trust. A too simplistic mirroring, recitation or translation of social expectations in the dominant code easily leads to mere symbolic communication. A too intensive claiming of legitimacy is easily seen as very idealised and increases distrust, especially if today’s recipients of corporate communication know the informal corporate motives and do not really expect corporate altruism. As Ashford and Gibbs (1990) show, legitimating attempts will be seen more sceptically where the general legitimacy is perceived as very low. In these cases, external and internal public opinion sometimes re-translate the corporate communications opportunistically. Watchdog organizations, in particular, use strategies of negating (Malchow and Schulz, 2008). In the case of Vattenfall’s new environmental initiative, Greenpeace did not view the Vattenfall campaign as an offer to start a dialogue.

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They saw it as a challenge and opportunity to take over the lead in the public discourse by imitating the design of the campaign and undermining everything that was claimed by Vattenfall. Second, there are also pitfalls within dialogue communication. The asymmetrical model, in particular, shares the assumption of fixed meanings that are transmitted from one actor to the other (sensegiving). In addition, the model of two-way symmetric communication cannot be regarded as a blueprint for corporate communications and can be criticized as idealized (L’Etang and Pieczka, 1996; Merten, 2000). Social reality is rarely negotiated through rational argumentations in the Habermasian way, but is often constructed by emotionalized and moral communications. Such emotionalized communication is often used by protest movements and does not aim at finding a consensus, but at breaking up dialogue and, therefore, the mutual negotiation of social reality (Schultz, 2005, 2006; Sandeep and Kucuk, 2009). From this perspective, involvement and dialogue with stakeholders might lead to paralyzing effects on organizations and their stakeholders, preventing them from reaching consensus and action. Furthermore, this strategy is very time consuming and expensive. And finally, it can also easily lead to cynicism and distrust when it is instrumentally and superficially employed and not genuinely adopted (Crane and Livesey, 2003). There are also problems from the background of the macro-level analysis. As argued elsewhere (Nothhaft and Wehmeier, 2007), linear and causal models might be of value in environments of low complexity, where the involved stakeholders can possibly be known. In turbulent environments, however, these models might fail because corporations act in complex environments (Weyer, 1993; Busch and Busch, 1992; Degele, 1997)[4]. The future of the relations between a corporation and its environment is only probabilistic. When conditions change at a fast pace or when corporations are facing antagonistic expectations, balancing all stakeholder demands and having mutual dialogic relationships with all relevant publics turns out to be illusionary, if not paradoxical. The Vattenfall case is a good example of how a corporation tries to deal publicly with conflicting demands. Whereas the interims CEO tried to demonstrate social responsibility towards the public, the first public statement of the new CEO was: “We are hungry for growth” – revealed the opposite. Here, conflicting demands (transparency, responsibility and economic growth) led to tensions in stakeholder communication and action. In such situations, causal and linear strategies to gain legitimacy and trust may fail because they are invented to show responsibility to all stakeholders simultaneously. To summarize, the internal and external moralization of corporate communication as one-way communication or asymmetric or symmetric two-way communication does not, consequently, foster more legitimacy or higher financial performance. On the contrary, corporations are taking the enormous risk of increasing delegitimization. By assuming, they could control meanings and perceptions among stakeholders through CSR communication; they will invest in CSR and incorporate CSR communication, thereby binding themselves to certain rules. This confronts them with rising and exaggerated public expectations and produce distrust. Therefore, this process can become a vicious circle: the downward spiral of legitimacy (Crane and Livesey, 2003) leads to an upward spiral of further institutionalization of CSR (Hiß, 2006) that, in turn, might lead to less legitimacy.

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7. Coping with complex and conflicting demands Based on these possible consequences of CSR communications, the question at hand is how organizations might be able to cope with such complex and partly antagonistic demands. One way to deal with situations like these is to follow the concept of organized hypocrisy. Brunsson coined this term in order to describe organizational behaviour that cannot be explained in functionalist terms. Organized hypocrisy means “a difference between words and deeds, the eventuality that organizations may talk in one way, decide in another and act in a third” (Brunsson, 2002, p. XIII). Organizations can meet conflicting demands by using different approaches and by oscillating between talk, decision and action. While some demands are answered by symbolical or dialogical talk (saying that the organization will do something in the future), others are answered by decision (presenting a new CEO as a symbol for a new beginning) and some by action (a price rise). As the analysis of the organizational level shows, hypocrisy already starts within the process of translating CSR formally and informally and might end in such fragmented communications. However, we do not say that this “management by hypocrisy” was a strategic response. It was, probably, just “muddling through” (Lindblom, 1969) a crisis. Especially, when it comes to such sensitive programs as CSR, simply being good might be more appropriate than being good and talking about it. “Defaulted communication” is, therefore, a valuable communication option for avoiding a downward spiral of legitimacy. The term “defaulted communication” is introduced here to characterize silent CSR strategies as used by most of the Danish companies (Morsing, 2003). Silent communication strategies avoid “sensegiving” and, possibly sceptically regarded approaches. They also avoid making promises and communicatively constructing fixed future realities that might never be achieved. By doing so, disappointments can be avoided. On the contrary, it opens the process of institutionalization for stakeholders’ interpretations and sensemaking processes. Co-constructions of multiple social realities might evolve that, in turn, can trigger even more involvement. Furthermore, we argue, that corporations can strategically combine all communication strategies according to the perceived triggers and the recipient’s social constructions of reality. Symbolic communication can be used to get target groups’ attentions but not to convince (competition). Dialogue might be used to answer concrete criticism (public pressure) and defaulted communication should be chosen while implementing CSR practices that are regarded as a matter of course (regulative and professional norms). 8. Conclusion and future research By linking institutional, sensemaking and communication perspectives, the study developed a general understanding of the institutionalization of CSR on the societal and the organizational level. In the latter, we characterize institutionalization as the translation of expectations, definitions of CSR and constructions of institutional norms. As demonstrated with the neo-institutional framework, corporations experience enormous tensions between conflicting economic, ecological and social demands. These demands often remain incompatible and trigger decoupling and trust building processes. They foster a gap between formal and informal behaviour and lead to an increasing moralization, amoralization, and institutionalization of CSR within corporate communications. Here, the meaning of CSR is socially negotiated by the

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different actors. As demonstrated, the widely encompassing communication models – one-way communication, dialogic communication and trust building – often remain deficient while, at the same time, opening room for distrust and delegitimization. Organizations should think twice before proclaiming their own responsibility because, if they do so, they will be held accountable by the public and by politicians. The public (at least in non-socialist countries) does not expect corporations to be social service agencies. Through talking about different and potentially conflicting demands of stakeholders, corporations not only show that they listen to public demands, but they also demonstrate that they can have a share in the demythologization of such normative positions argumentatively. Finally, strategic flexibility between talk, decisions and actions, as well as combinations of symbolic, dialogic or defaulted communication, according to the recipient’s social constructions of reality, might be a way to better cope with antagonistic demands. This analysis facilitates many opportunities for further research. First, the institutionalization of CSR has to be grounded empirically through qualitative methods as, for example, qualitative actor-network analysis (Hollstein and Strauss, 2006; Latour, 2005). Here, actors are not regarded as black boxes, but compatible with our developed theoretical framework as mediators who “transform, translate, distort, and modify the meaning they are supposed to carry” (Latour, 2005, p. 39). Second, the theoretical framework serves as a basis for detailed descriptions of the cultural and national differences between CSR-concepts, cultures and their institutionalization. Third, research should concentrate on the idea of CSR as a social construct and try to develop a less normative and more realistic understanding of the different communication processes. PR-oriented research, in particular, should look at the reception of CSR communication in order to obtain knowledge about the public constructions of CSR. Fourth, research needs to focus on the unveiling of the strategy of “defaulted communication” and of hypocrisies as well as on their effects. Finally, the interplay of the three levels, as well as the sensemaking processes as part of the strategies, has to be analyzed in different situations, such as in crisis situations, in which the common interplay between an organization and its stakeholders gets disrupted. Notes 1. The Vattenfall web site: http://climatesignature.vattenfall.com/; the critical Greenpeace web site: www.klimaunterschrift-vattenfall.de/ 2. Within its CSR presentation Vattenfall Europe AG (2008, p. 2) makes use of the “translation” vocabulary. 3. The thoughtful notion that organizations emerge out of communication and therefore a division of action and communication is not fruitful, is noticed here, but not very helpful in our argumentation that focuses on the behavior of the organization and the (strategic) communication. 4. Neo-institutionalists rarely use the term environment. Instead they talk about organizational fields (DiMaggio and Powell, 1983) when describing the structure the organization is embedded in. Although following neo-institutional lines of argumentation, we decide not to use the term organizational fields, because it is rarely defined. References Ashford, B.E. and Gibbs, B.W. (1990), “The double-edge of organizational legitimation”, Organization Science, Vol. 1 No. 2, pp. 177-94.

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Waddock, S.A. (2000), “Performance characteristics of social and traditional investments”, Journal of Investing, Vol. 9 No. 2, pp. 27-38. Weber, K. and Glynn, M.A. (2006), “Making sense with institutions: context, thought and action in Karl Weick’s theory”, Organization Studies, Vol. 27, pp. 1639-60. Weick, K. (1993), “The collapse of sensemaking in organizations: the Mann Gulch disaster”, Administrative Science Quaterly, Vol. 38, pp. 628-52. Weick, K. (1995), Sensemaking in Organizations, Sage, Thousand Oaks, CA. Weyer, J. (1993), “System und Akteur. Zum Nutzen zweier soziologischer Paradigmen bei der Erkla¨rung erfolgreichen Scheiterns” (“System and actor. On the usefulness of two sociological paradigms in the explanation of successful failure”), Ko¨lner Zeitschrift fu¨r Soziologie und Sozialpsychologie, Vol. 45 No. 1, pp. 1-22. Zilber, T.B. (2002), “Institutionalization as an interplay between actions, meanings, and actors: the case of a rape crisis centre in Israel”, Academy of Management Journal, Vol. 45 No. 1, pp. 234-54. Zilber, T.B. (2006), “The work of the symbolic in institutional processes: translations of rational myths in Israel High Tech”, Academy of Management Journal, Vol. 49 No. 2, pp. 281-303. About the authors Friederike Schultz studied Communication Science at the University of Arts, Berlin, Germany in 2003-2006. Since 2006, he is a PhD candidate at the University Greifswald, Free University of Berlin. He worked as a Visiting Fellow (Research Term) at the Nottingham University Business School (UK), University of Cambridge (UK), and University of St Gallen (Switzerland) from 2006 to 2007. Between 2006-2008, he worked as a Research Assistant at the International Center for CSR (Nottingham University Business School, UK). Since 2008, he worked as a Research Assistant at the Department for Organizational Communication, University Greifswald (Germany). Since 2007, he is a Lecturer at the Institute for Communication Studies, University Greifswald (Germany). Since 2008, he is a Research Assistant and a Lecturer at the Department for Organizational Communication, Free University Berlin (Germany). His research areas are organizational communication, CSR, and marketing communication. Friederike Schultz is the corresponding author and can be contacted at: [email protected] Stefan Wehmeier studied Communication Science, History and Economic Policy, at Westfa¨lische Wilhelms-University Mu¨nster, Germany. Since, he has been a Business to Business Journalist (1998), Public Relations Practitioner (Bertelsmann Subsidiary) (1999). From 2000 to 2006, he was an Assistant Professor at the Department of Public Relations, University of Leipzig. Since 2007, he is a Junior Professor at the Department of Communication, University of Greifswald, Germany, 2008 Interim Chair of Communication Studies at the Department of Communication, University of Greifswald, Germany. Since September 2008, he is an Adjunct Professor at the Department of Marketing and Management, University of Southern Denmark. His research areas are PR, CSR, online communication, media systems, and international media markets.

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