Professor Tommaso Ramus, ESSEC Business School, together with colleagues David Risi and Christopher Wickert address the issue of the CSR department-functional department interface within the firm and how both can work together to implement impactful CSR practices throughout the corporation.
How CSR Grows and Resonates within Firms: The interplay between the CSR and functional departments by CoBS Editor Ana Sofia Bello. Related Research: Coordinated Enactment: How Organizational Departments Work Together to Implement CSR, David Risi, Christopher Wickert, Tommaso Ramus, Business & Society 2023, Vol. 62(4) 745–786, SAGE Journals.
CSR implementation unveiled
In the quest for corporate social responsibility, we often only see the tip of the iceberg – the CSR departments, the public commitments, the grand gestures. But beneath the surface lies a coordinated system involving the entire organization, where functional departments, such as accounting, human resources, and procurement, can play their vital roles.
Profs. Ramus, Risi, and Wickert investigate the collaboration between CSR departments and functional departments, revealing the evolving stages that companies undergo from CSR centralization to autonomy.
Evolving through stages: The progression of CSR implementation
The creation of a CSR department is not merely a public statement. Neither is it to simply take the role of implementer of new regulations and procedures. Moreover, its purpose is to act as a “filter” between the external demands for CSR implementation and the needs and operations of the corporation. This comes in a context in which responsible leadership is increasingly becoming a regular issue in the corporate sphere, with companies subject to both internal and external expectations.
Indeed, CSR departments are created to decipher public demands and interests and embed standard responsible practices throughout the entire organization. However, the ability for departments to work together has been found to vary depending on the implementation stage.
Profs. Ramus, Risi and Wickert identify three different stages: Nascent, Intermediate, and Mature built on a comparative study involving seven Swiss financial institutions that already have CSR departments in place. These three steps can then be divided into six courses of action: centralizing, coalescing, decentralizing, orchestrating, tailoring, and consulting.
Each of these steps marks a more established CSR department. This is not to say that the CSR department has a major influence or a say in implementation – indeed, the researchers found that the goal of CSR departments is to lead and guide functional departments and company operations to reach autonomy in how they embody and enact CSR.
Building a CSR foundation
At a nascent stage, typically, a CSR department has recently been created in the company. This specific step is referred to as centralizing. From its name, one can deduce that CSR is contained in the department, with its primary role being to identify relevant CSR issues and develop necessary regulations and operations to implement in the company. Unlike the later stages of CSR implementation, it this stage it is the CSR department that manages not only the overarching strategy but also the operations to implement it. As such, this role carries a lot of weight, with initiatives often supported by a 50% increase in budget and staff.
The Coalescing step aims to keep the operations of the company’s functions in line with the pre-identified CSR objectives. Typically, this is when the CSR department starts to discuss with functional departments. Two main objectives must be met in this stage: first, to spread knowledge of what CSR means to the company and why it is important, and second, to gain valuable information about functional departments to obtain a better understanding of their needs. The nascent stage is imperative, as it is the foundation to continue with and eventually lead to the full autonomy of functional departments.
Empowering functional departments
The Intermediate Stage provides functional departments with some responsibility and freedom. This stems from the coalescing step that customizes CSR practices for each functional department. Decentralizing takes a step forward with CSR departments not enacting objectives, but rather the functional departments working on suggestions provided to implement CSR in their day-to-day activities.
The fact that functional departments increasingly take over CSR enactments often means a reduction in budget and staff in the CSR department. Decentralizing’s goal is to enable a better understanding of CSR and adapt it to the different functionalities of a corporation. Next, before moving onto the Mature Stage, CSR departments undergo the orchestrating step. Here, the functional departments now bear full responsibility for identifying market opportunities offered by social and environmental issues. As such, the role of the CSR department is solely to provide expertise and guidelines to align their goals with the company’s CSR commitment. This includes web-based training, information events and CSR training.
Autonomous action for greater CSR ownership and impact
In contrast to the nascent and intermediate stages, the mature stage creates a strong separation between the CSR department and the functional departments. Functional departments are seen to act on their own with the past guidance of the CSR department. The Mature stage begins with tailoring.
This is very similar to the decentralizing step, but in this case the CSR department does not have as strong an involvement in the inclusion of CSR commitments. Nevertheless, functional departments still align their initiatives with the company’s CSR commitment. Finally, the CSR department completely steps back in the final step of consulting. The department’s role switches from conductor to advisor, with the CSR department only intervening when approached by functional departments and offering context to any current socio-environmental issues.
As such, because there are fewer interactions between these departments, the CSR team adopts a research-role dimension. In this light, functional departments take complete control by customizing CSR goals for their specific needs and, if guidance is needed, the CSR department is available to offer suggestions.
CSR: A Coordinated future
So what about that tip of the CSR iceberg? Is CSR the only child of a dedicated CSR department? It seems not. For firms to be able to make impactful public commitments and play an active part in positive social and environmental change, CSR must be let to fly with its own wings. And this is best done by adopting a coordinating role and progressively stepping back and giving ownership to the departments – accounting, HR, procurement among others – which drive the operations of the firm.
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