University of Applied Sciences
Corporate Approaches to CSR
Stakeholder Engagement
in the Pharmaceutical Industry
University of Applied Sciences
Professor Dr. Linda O‘Riordan
Agenda
2
1.
Introduction
2.
The Research Gap
3.
Research Design
4.
Research Findings
4.1 CSR Practices
4.2 Anglo-German Comparison
4.3 Influencing Factors
5.
Summary of Research Contribution
IFSAM 2012
Professor Dr. Linda O‘Riordan
Introduction
The Management Challenge
Definition of Accountability …
“… the responsibility of
an organisation for its
decisions and activities,
and state of being answerable
to its governing bodies,
legal authorities,
and more broadly
its other stakeholders
regarding these decisions
and activities”
(Re)considering the Relationship
and Impact between
Business andSociety…
(ISO 26000, 2010:2)
This thou must always bear in mind,
what is the nature of the whole…
(Marcus Aurelius 180)
3
(Source: Deresky, 2000; Zadek et al, 2001;
Donaldson and O’Toole, 2007:21-36).
Introduction
The Management Challenge
Various Varying Perspectives…
1970: Milton Friedman
Business objective
“…to make as much money
as possible while conforming
to basic rules of the society,
both those embodied in law
and those embodied in ethical custom…”
1984: Edward Freeman
Stakeholder Theory:
… a stakeholder view of
strategy which suggests
combining business
management and ethics
(i.e. morals & values
in managing an organisation) …
1776: Adam Smith in
“The Wealth of Nations”
Concept of the invisible hand:
… unintentional promotion
of public interest by business
pursuing its own interests….
4
= > Practical Challenge for CSR
Decision-Makers:
What is Responsible Management?
Introduction
CSR Stakeholder Engagement in the Pharmaceutical Industry
Managing in Challenging Operating Environments
increases the complexity…
What is “the right” thing to do?
 How to balance competing
Stakeholder Interests?
 The issue of Globalisation and
Cultural factors?
 Who is responsible when
Governments are corrupt and/or
do not protect their citizens?
5
IFSAM 2012
Professor Dr. Linda O‘Riordan
Introduction
Problem Definition
Who is responsble to whom and for what ?
The CSR debate is triggering
broad questions regarding:
• Who in society controls
corporations…?
• To whom are corporations
accountable for their actions…?
=> How to balance the triple
bottom-line goals sustainably?
6
IFSAM 2012
Professor Dr. Linda O‘Riordan
Introduction
Problem Definition
Who is responsble to whom and for what ?
The CSR debate is triggering
broad questions regarding:
• Who in society controls
corporations…?
• To whom are corporations
accountable for their actions…?
=> How to balance the triple
bottom-line goals sustainably?
7
IFSAM 2012
Professor Dr. Linda O‘Riordan
Agenda
8
1.
Introduction
2.
The Research Gap
3.
Research Design
4.
Research Findings
4.1 CSR Practices
4.2 Anglo-German Comparison
4.3 Influencing Factors
5.
Summary of Research Contribution
IFSAM 2012
Professor Dr. Linda O‘Riordan
The Research Gap
CSR Practices
… Stakeholder engagement and its
associated contextual factors have
been under-researched for the
pharmaceutical sector....
1.
CSR Practices:
• Terminology
• Stakeholder Pioritisation
• Communication
• Projects/Themes
• Organisation
• Expectations
2.
Anglo-German Comparison
3.
Influencing Factors
=> Research Questions…
9
IFSAM 2012
Professor Dr. Linda O‘Riordan
Agenda
10
1.
Introduction
2.
The Research Gap
3.
Research Design
4.
Research Findings
4.1 CSR Practices
4.2 Anglo-German Comparison
4.3 Influencing Factors
5.
Summary of Research Contribution
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Design
Introduction
PERSPECTIVES ON
CORPORATE SOCIAL RESPONSIBILITY
Corporate Approaches to Stakeholder Engagement
in the Pharmaceutical Industry in the UK and Germany
LINDA O’RIORDAN
PhD
School of Management, Bradford University, UK
2010
11
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Design
Research Questions
•
Research Objective:
Exploratory research to identify and describe CSR stakeholder engagement
practices, to explain the factors that influence them, and to disclose whether
differences exist between the approaches in the UK and Germany
•
Research Question 1:
What CSR stakeholder engagement practices do pharmaceutical companies
undertake?
•
Research Question 2:
What similarities and differences exist in pharmaceutical companies’ stakeholder
engagement practices in the UK and Germany?
•
Research Question 3:
What factors influence the practices and what factors explain the differences in the
CSR stakeholder engagement practices of pharmaceutical companies targeting
stakeholders in the UK and Germany?
12
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Design
Methodology
 Examines the CSR practices and perceptions of senior
executives within major pharmaceutical companies in the
UK and Germany
 Employs a case-study strategy using mixed methodologies
 Qualitative, exploratory research obtained via multiple
research methods
 Data collected between 2005 and 2010 via four methods:
1. Documentary analysis
2. Telephone survey
3. Observation
4. In-depth interviews
13
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Design
Data Collection
 Data collection and analysis via six codes:
1.
2.
3.
4.
5.
6.
Terminology
Stakeholders
Communication
Organisation/Governance
Projects
Expectations
 Data employed to examine and revise a previously published
explanatory framework which conceptualises the
management steps involved in CSR stakeholder engagement
 The resultant revised explanatory framework is the main
contribution of this paper
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IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Design
Conceptualising CSR Practice
The Original Explanatory Framework
Stakeholders
Context
CSR
Stakeholder Engagement
Practices
Management
Response
Event
Phase 1: CSR Strategy Development
Values
Alternatives
Strategy
Phase 2: Implementation
Implement/
Control
Output
Source: O’Riordan, 2006; O’Riordan and Fairbrass, 2008)
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IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Design
Conceptualising CSR Practice
The Revised Explanatory Framework
Credibility
Communication
Results
Business
•Innovation
•Loyalty
•Image
Calculation
Society
Sustainable
Relationships
•Development
•Progress
Choice
Equitable
Reciprocation
Company
Government
Suppliers
Context
Society
Others
Customers
Source: O‘Riordan, 2010:352
16
IFSAM 2012
Professor Dr. Linda O‘Riordan
Agenda
17
1.
Introduction
2.
The Research Gap
3.
Research Design
4.
Research Findings
4.1 CSR Practices
4.2 Anglo-German Comparison
4.3 Influencing Factors
5.
Summary of Research Contribution
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Findings
CSR Practices
RQ 1: Characterise CSR Stakeholder Engagement via 6 Codes (I)
1.
Terminology
– Multiple & diverse use of labels
– CSR most often utilised
– Employment of individualised terms
2.
Stakeholders
–
–
–
–
3.
Top Rankings: Customers (Physicians/Patients) & Employees
Lowest Ranking: NGOs
Task-Specific approach
Stakeholder theory approach confirmed in CSR conceptualisation
Communication
– Stakeholder concept not always explicitly communicated
– Highly visible & explicit communication of CSR activities
18
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Findings
CSR Practices
Terminology
Overview of All Terminology Used
to Describe Activities
24
38%
CSR
12
19%
Other
11
17%
CC
7
11%
CR
SR
5
8%
Sustainability
5
8%
0
5
10
15
20
25
Sum
19
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Findings
CSR Practices
RQ 1: Characterise CSR Stakeholder Engagement via 6 Codes (I)
4.
Organisation/Governance
–
–
–
–
5.
CSR concept spans a broad range of business functions
Rarely the responsibility of one dedicated department
Multi-functional networks of designated individuals & ad-hoc project groups
Centralised & Decentralised management appraoch
Projects
– Philanthropic Projects
– Integrative CSR principles
– Diverse range of themes & Activities
6.
Expectations
– CSR perceived as a cost to the business
– Measurement challenges
20
IFSAM 2012
Professor Dr. Linda O‘Riordan
Agenda
21
1.
Introduction
2.
The Research Gap
3.
Research Design
4.
Research Findings
4.1 CSR Practices
4.2 Anglo-German Comparison
4.3 Influencing Factors
5.
Summary of Research Contribution
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Findings
Anglo-German Comparison
RQ 2: Stakeholder Engagement in the UK and Germany
• Broad similarity in practices due to centralised company
principles and international guidelines
• Some national differences revealed:
–
–
–
–
–
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De-centralised national practices at affiliate level
More environmental regulation & CEO involvement in Germany
More use of the terms ‚CSR‘ and ‚Sustainability‘ in Germany
Higher standardisation in terminology in the UK
Differences in perceptions on the meaining of ‚value‘
IFSAM 2012
Professor Dr. Linda O‘Riordan
Agenda
23
1.
Introduction
2.
The Research Gap
3.
Research Design
4.
Research Findings
4.1 CSR Practices
4.2 Anglo-German Comparison
4.3 Influencing Factors
5.
Summary of Research Contribution
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Findings
Influencing Factors
RQ 3: Factors Influencing Stakeholder Engagement
External (Contextual) Factors
–
–
–
–
–
PEST Factors
Stakeholder Pressure
Media
Industry/Competitor Behaviour
Business Role/Activity
• Internal (Company) Factors
–
–
–
–
Leadership Mindset / Personal (moral ) Interest
Company Profile (Size, origin, type, scope of activity, success)
Business Aims
Internal Stage of CSR Development
= > Company Culture => Vision & Mission => CSR Approach
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IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Findings
Summary (I)
Evidence from the Data :
• The CSR concepts and the resulting CSR stakeholder engagement practices
with respect to the six codes adopted by the selected sample are diverse,
inter-active, and dynamic.
Inference :
• As stakeholders’ expectations increase, CSR practice is influenced by
internal and external contextual factors.
As a result, CSR stakeholder engagement responses are still evolving.
25
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Findings
Summary (II)
Evidence from the Data :
•
•
Pharmaceutical industry Stakeholders’ negative perceptions
Mindset Misalignment
–
–
•
Personal (agent) and company (principle) interests/goals
Stated company values and actual CSR policies
Management uncertainty due to:
– Operational complexity
– Stakeholder (negative) stance/ unpredictable reaction
– Unclear:
• CSR scope/definition
• Cost/benefits measurement
• Management process
Inference :
•
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Key aspects of the current CSR stakeholder management approach (mindset) could
be improved...
IFSAM 2012
Professor Dr. Linda O‘Riordan
Agenda
27
1.
Introduction
2.
The Research Gap
3.
Research Design
4.
Research Findings
4.1 CSR Practices
4.2 Anglo-German Comparison
4.3 Influencing Factors
5.
Summary of Research Contribution
IFSAM 2012
Professor Dr. Linda O‘Riordan
Summary of Research
Contribution
 Fresh empirical data collected over 5 years which illuminates how the
pharmaceutical sector in the UK and Germany manages CSR
 Advances past scholarship by filling many of the identified previous gaps
 Explores similarities and differences amongst firms in two operating
environments
Provides some explanation for the patterns observed by indicating the
likely determining factors
 Identifies where alteration is required to the existing framework
 This research may help to advance this industry’s overall accountability
in society
28
IFSAM 2012
Professor Dr. Linda O‘Riordan
Research Contribution
Next Steps
Proposal for Further Research:
• This evidence will be employed to test and improve a conceptual
framework which was developed in separate research
Credibility
Communication
Stakeholders
Results
Context
Business
CSR
Stakeholder Engagement
Practices
Society
Management
Response
Alternatives
•Development
•Progress
Event
Sustainable
Relationships
Phase 1: CSR Strategy Development
Values
•Innovation
•Loyalty
•Image
Calculation
Strategy
Phase 2: Implementation
Implement/
Control
Choice
Equitable
Reciprocation
Company
Output
Suppliers
Government
Context
Society
Others
Customers
29
IFSAM 2012
Professor Dr. Linda O‘Riordan
Agenda
30
1.
Introduction
2.
The Research Gap
3.
Research Design
4.
Research Findings on CSR Practices
4.1 CSR Practices
4.2 Anglo-German Comparison
4.3 Influencing Factors
5.
Summary of Research Contribution
IFSAM 2012
Professor Dr. Linda O‘Riordan
Thanks for listening!
…QUESTIONS…
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