S1MacKenzie124RP

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Corporate Social Responsibility: HRD As A Mediator Of Organizational Ethical
Behavior
Refereed Paper
MacKenzie, Clíodhna; Garavan, Thomas; Carbery, Ronan
Abstract
A substantial body of research on Corporate Social Responsibility (CSR) has emerged over the last
decade highlighting the need for organizations to address the triple bottom line CSR philosophy of
economic, social and environmental goals and objectives. This paper reviews some of the current
HRD literature that examines the theme of corporate social responsibility (CSR) and addresses how
HRD professionals can clarify ambiguity around CSR practices through a better understanding of the
sensemaking processes of the organizational actors. Understanding the sensemaking processes will
illuminate how HRD professionals can contribute to the achievement of the triple bottom line CSR
philosophy and ensure CSR goals and objectives are realistic and not rhetoric. We propose a
conceptual model that elucidates the potential positive impact of HRD interventions when linked to a
balanced scorecard measurement instrument.
Key words: Ethics, Organisational Behaviour, HRD, Corporate Social Responsibility
Advancing the Role of HRD as a Mediator of Organizational Ethical Behavior
The role of HRD in today’s contemporary organizational setting may be shifting beyond purveyor of
learning, training & development and human & organizational development to now include the role of
gatekeeper of corporate social responsibility (CSR) and ethical behavior. The tenuous surface level
process and structure analysis of CSR appears deficient when one examines the failure of many
organizations that claimed to be paragons of ethical behavior (see Ashforth and Anand, 2003;
Balthazard et al., 2006; Ely, 2009; Kish-Gepart et al., 2010; Lange, 2008; Lehman and Ramanujam,
2009; Levine, 2005; Stein, 2003; Van Fleet and Griffin, 2006; Weyhrauch and Culbertson, 2009).
Whilst these examples of corporate social irresponsibility have been shown to include forms of
unethical behavior and in some cases illegal and corrupt behavior, they highlight the difficult and often
compromised positions HRD professionals can find themselves in when the organizational rhetoric
conveys one message and the reality is somewhat different. The dichotomy of serving two masters,
the organizations management and leadership on the one hand and the employees on the other hand
often results in what Bierema (2009) notes is a return to a stockholder orientation that favours
managerial and organizational welfare above all else. This internal stakeholder dichotomy is
complicated further by the competing demands of external stakeholders and institutional pressures
(DiMaggio and Powell, 1983; Meyer and Rowan, 1977; Oliver, 1991). Mintzberg et al (2002) have
cogently argued that the organization can engage in a series of half-truth’s solely focused on profit
maximization and increasing shareholder wealth - CSR practices appearing little more than rhetorical
lip service (Campbell, 2007). It is this degree of ambiguity and doublespeak that poses the greatest
difficulty for HRD professionals to pursue a triple bottom line (Cornelius et al., 2008; Garavan and
McGuire, 2010) philosophy.
It is possible however, for HRD professionals to clarify any ambiguity around CSR policies and
practices, provide an ethical frame of reference for all organizational stakeholders (SHRM, 2008) and
at the same time, become instrumental in the development of an ethical climate and culture (Ardichvili
and Jondle, 2009; Foote and Ruona, 2008). Through continued development and implementation of
its own policies and procedure around CSR objectives, it can contribute to the facilitation of a positive
triple bottom line culture. HRD professionals are in a central position to ensure that the organization’s
CSR orientation is realistically achievable and not rhetorically vacuous.
Methodology
The literature on CSR illustrates that is a broad meta-construct incorporating economic, social,
environmental and reputational dimensions; it is multi-perspective, contextual, temporal and
organizationally diverse capturing the shift away from a purely financial bottom line philosophy to one
that reflects a more diverse set of goals and objectives aimed at addressing environmental and
societal goals (Cornelius et al., 2008; Gioia, 2003; Laufer, 2003; Siegel, 2009) as well as economic
goals. Given the accepted position that CSR has an applied management focus, the initial search
criteria included the top tier management journals along with the wider social science journals that
captured the focus of Human Resource Development (HRD), Ethics and Sensemaking central to this
paper.
Selection of Journals
The selection of top tier management journals was the initial first step in this literature review process
and was conducted using the following Grade 4 (*ABS Rankings) general management journals:
Academy of Management Review, Academy of Management Journal, Administrative Science
Quarterly, Journal of Management and Harvard Business Review. As the focus of the paper is on the
Human Resource Development (HRD) role in the development/implementation/communication of
CSR initiatives, a search of HR (HRM/HRD) and organizational studies journals was appropriate and
covered the topics of sensemaking and cognition in the searches, these journals included but were
not limited to: Human Resource Management (HRM), Human Resource Development Review
(HRDR), Human Resource Development Quarterly (HRDQ), and Human Resource Development
International (HRDI), Organization Science, Organization Studies, Human Relations, Organization.
Finally, as Ethics is a central focus of this paper, a search of Grade 4 (*ABS Rankings) Ethics focused
journals included but was not limited to: Journal of Business Ethics, Corporate Governance: An
International Review, Business Ethics Quarterly, and Business Ethics: A European Review
Selection of Articles
It was necessary to delineate the search criterion for this paper given the broad meta-construct of
CSR, to that end, a number of theme’s were used as general search area’s which provided a
narrower search criteria for each theme. The search criterion included but was not limited to: Human
Resource Development (HRD and CSR, HR and CSR, Leadership and Ethical Behavior, CSR and
Leadership, Corporate Social Irresponsibility); Ethics (Corporate Governance and CSR, Corporate
Social Responsibility and Ethical Organizational Behavior, Ethical Behavior and Corporate
Governance, CSR and Financial Performance, CSR and Unethical Behavior, Corporate Social
Irresponsibility); Sensemaking (CSR and Sensemaking, Corporate Social Irresponsibility, Corporate
Governance and CSR, Culture and Sensemaking, Culture and Cognition, Culture and Ethics, Ethics
and Sensemaking). The search term Corporate Social Irresponsibility was included in all the themes
illustrating the boundary spanning concept of CSR. The literature search used standard academic
databases such as: Business Source Premier, Academic Source Premier, Econlit, Web of Science
and Web of Knowledge. As this literature review is not an exhaustive literature review, many of the
results of the search on CSR were outside the scope of this paper.
Defining Corporate Social Responsibility
As a broad meta-construct, Corporate Social Responsibility (CSR) and its various synonyms reflect a
clearly articulated set of organizational goals and objectives beyond those of the purely economic
bottom-line (Friedman, 1970) that address the wider social and economic reach of the organization
(Chih et al., 2010; Dunne, 2008; Matten and Moon, 2008).
Although there are many definitions of corporate social responsibility (see Basu and Palazzo, 2008;
Benz and Frey, 2007; McWilliams and Siegel, 2000; McWilliams and Siegel, 2001; Ryan et al., 2010)
the definition offered by McWilliams et al. (2006) and Basu and Palazzo (2008) seem most
appropriate for the focus of this paper in addressing whether HRD can act as a Mediator of
organizational ethical behavior.
McWilliams et al. (2006: 1) provide a succinct definition of CSR amid the many conceptualizations
and definitions, they defined CSR as “…situations where the firm goes beyond compliance and
engages in actions that appear to further some social good, beyond the interests of the firm and that
which is required by law”. Similarly, Basu and Palazzo (2008) propose a definition of CSR based on
their sensemaking perspective which is applicable from a HRD perspective. They noted it is a
“…process by which managers within an organization think about and discuss relationships with
stakeholders as well as their role in the greater good…and behavioral disposition” (p. 124). Basu and
Palazzo’s (2008) definition is particularly noteworthy given it addresses the strategic multi-stakeholder
orientation of HRD (see Garavan, 2007; Peterson, 2008; Ulrich and Brockbank, 2005; Wright, 2008).
Basu and Palazzo (2008: 122) have noted that prevalent academic enquiry of CSR falls into three
general themes: stakeholder driven, performance driven and motivation driven (see Campbell, 2007;
Matten and Moon, 2008; McWilliams et al., 2006) with some of the broader literature focused on the
ethics dimension central to CSR practices (e.g. Foote and Ruona, 2008; Kulik, 2005; Levine, 2005).
These general themes are integral to HRD interventions. In their examination of CSR, Basu and
Palazzo (2008) argued there had been little by way or research that focused on institutional variables;
specifically internal variables such as mental models and sensemaking processes. Given the central
role of HRD in the development of human capital in the pursuit of sustained competitive advantage
(Garavan, 2007; Peterson, 2008) it seems appropriate that HRD have a central role to play in any
conceptualizations of CSR seen through a sensemaking perspective.
Corporate Social Responsibility – The Financial Imperative
The concept of corporate social responsibility (CSR) has emerged as a critical dimension of many
organization’s strategic goals and objectives. Today’s organization actively promotes CSR practices
and achievements in their mission, vision and financial statements along with public articulation of
those efforts by senior management (Scalet and Kelly, 2010). It is however, unclear whether these
statements reflect the reality of their true CSR position or the rhetoric of what makes the organization
appear like a good citizen. Over the past decade, CSR objectives have become quite prominent in
organizational vision, mission and financial statements following incidents of corporate social
irresponsibility (see Dhir, 2009; Giroux, 2008; Jensen et al., 2009; Kulik, 2005; Levine, 2005; Werther,
2003). The question of whether this reflects an overriding organizational philosophy that addresses
the triple bottom line (Cornelius et al., 2008; Garavan and McGuire, 2010) of economic, social and
environmental accountability remains ambiguous at best.
The economic importance of a CSR mandate is evident in the literature on CSR and Corporate
Financial Performance (see Brammer and Millington, 2008; Orlitzky et al., 2003; Surroca et al., 2010).
Orlitzky et al (2003) noted there was a positive association between Corporate Social Performance
(CSP) and Corporate Financial Performance (CFP) and argued that market forces have a positive
outlook on organizations that engage in socially responsible behavior, a departure from the hard line
economic position of Friedman (1970) who noted that the raison d’être of business was to make as
much money as possible without breaking the law. Similarly, Surroca et al (2010: 464) found that
Corporate Responsibility Performance (CRP) which they defined as “…a broad array of strategies and
practices that a company develops to deal with and create relationships to deal with its multiple
stakeholders and natural environment” is positively linked to Corporate Financial Performance
through the organization’s intangible assets. They found that CFP stimulates the development of
intangibles such as human capital, culture and reputation which have a positive knock-on effect on
CFP, thus highlighting implications for HRD interventions at the organizational level (Foote and
Ruona, 2008; Garavan et al., 2010; Garavan and McGuire, 2010). However, in the research carried
out by Hine and Preuss (2009) they provide a counter argument highlighting that empirical evidence
that CSR/CRP increases or impacts positively or negatively on CFP is lacking either way.
CSR and Human Resource Development
There is a growing body of research on HRD’s contribution to Corporate Social Responsibility with
Garavan and McGuire (2010) arguing that HRD is viewed as central to the pursuit of financial
(economic) and non-financial (social and environmental) organizational goals. Fenwick and Bierema
(2008) similarly note that HRD, given its commitment to individual and organizational development,
seems well positioned to contribute the any conceptualizations of CSR. There is however, much
debate about whether HR professionals see CSR as central to their role in the organization other than
acting as a compliance based gatekeeper of organizational ethical violations. This point was
highlighted by the Society for Human Resource Management report “The Ethics Landscape of
American Business” (SHRM, 2008: 17) which found that 58% of respondents in their study believed
they were not “part of the ethics infrastructure” but were primarily there to enforce ethics violations.
This was in contrast to the 72% of respondents who argued that they had a “moderate or large” role in
the formulation of ethics polices and procedure, noting a degree of ambiguity around corporate ethics,
central to any CSR mandate. The question of whether HRD can translate the triple bottom line
philosophy into tangible results will be the challenge which has been highlighted by Bierema (2009:
75) who trenchantly argued that the conflicted position of HRD generally tends to give way to a
“stockholder orientation” which is focused on the financial bottom line and ignores the social
orientation unless mandated by law. The recent global economic crisis has pushed CSR, ethical
behavior and corporate governance front and centre of the business agenda in today’s contemporary
organization and this provides an ideal time to examine whether CSR policies and practices are
genuine and socially focused or merely window dressing for the doublespeak and half-truth’s that
Mintzberg et al (2002) noted. More crucially, the ability of HRD professionals to move beyond the
historical performative role highlighted by Peterson (2008) and Wright (2008) may prove to be a
difficult task unless they can bring something credible and sustainable to the table.
HRD professionals will need to challenge their traditional role within the organization without
alienating the powerful internal stakeholders whose primary objective may be more aligned with the
financial and not environmental or social goals. Moreover, HRD professionals will need to be
cognizant of the institutional variables highlighted by Matten and Moon (2008) that have the capacity
to influence the CSR orientation and behavior of various organizational actors. The impact of these
institutional pressures can result in questionable ethical behavior with adverse social and
environmental outcomes (MacKenzie et al., 2010).
CSR and Ethics
Incidents of corporate social irresponsibility over the past decade have prompted organizations to
become more critical of their ethical orientation and CSR standing within the wider business and
social community. The importance of the ethics / CSR relationship has also contributed to the diverse
literature relating to research on ethical and unethical organizational behavior (see Biron, 2010; Brass
et al., 1998; De Cremer et al., 2010; Gino and Bazerman, 2009; Kane, 2009; Kulik, 2005; Poff, 2010;
Trevino et al., 2006) as well as the growing body of HRD related research (e.g. Ardichvili and Jondle,
2009; Foote and Ruona, 2008; Hatcher, 2002). The development of ethics programs is to ensure a
degree of conformity among organizational members through adherence to ethical policies and
procedure (Weaver et al., 1999). Indeed as the SHRM (2008: 17) noted, HR professionals play a
central role in the administration of various ethics related activities. The research carried out by the
SHRD found that 83% of respondents believed that HR was the primary organizational resource for
ethics related issues, although, there was some ambivalence among HR professionals about their
involvement in the ethics infrastructure and policy formulation. This research highlighted the important
role of HR professionals in the development of ethics related activities in US companies but also shed
some light on the complexity of developing the infrastructure, policies and procedures associated with
an organization’s ethical orientation. Following a comprehensive and insightful review of the literature
on ethical behavior in organizations, Trevino et al (2006) illustrated some of individual and contextual
variables that can contribute to ethical behavior. From an individual perspective, cognitive and
affective variable had some bearing on an individual’s predisposition to ethical / unethical actions with
contextual organizational variables such as reward/punishment, ethical infrastructure, ethical culture
and leadership also determinants in the ethical organizational behavior. Trevino et al (2006: 970) also
noted that although external pressures (normative, coercive and mimetic) had the capacity to affect
how an organization adopted an ethical stance, the ethical predisposition of the mangers and
leadership played a central role in “propagating and modelling” ethical values that might then become
internalized by organizational members to become part of the corporate culture (Ardichvili and Jondle,
2009; Martynov, 2009). This point will play a central role in how HRD professionals can moderate
ethical organizational behavior.
Foote and Ruona’s (2008: 301) conceptualization of the institutionalization of ethics and its
implications for HRD provided a comprehensive review of the literature on ethics over a 15 year
period and revealed that “infrastructure, leadership and involved stakeholders” were paramount in the
formulation of a culture that fosters ethical behavior. In their synthesis of the literature, Foote and
Ruona (2008) noted that the organization’s culture was central to promoting and sustaining an ethical
orientation with HRD acting as a facilitating interconnect that contributed to the “building of
infrastructure, developing the stakeholders and working with the leadership” (p.301). A general theme
that has emerged in the research on ethics and CSR is that of corporate culture. Ardichvili and Jondle
(2009: 226) argued corporate culture was one of the “main determinants of ethical or unethical
organizational behavior” and given the centrality of ethics in any conceptualization of CSR, it could
have a major impact on the development of ethics / CSR policies, procedures and practices.
CSR and Sensemaking
The extant literature notes that most CSR decisions are primarily mandated by the organization’s
managers and leadership (e.g. Berrone and Gomez-Mejia, 2009; Hemingway and Maclagan, 2004;
Waldman et al., 2006). CSR practices reflect how managers and leaders frame their mental models,
how they perceive who they are in the world, influences how they interact with their stakeholders.
Other contextual institutional variables noted by Matten and Moon (2008) can also impact and
influence the CSR orientation of organizational members, from top leadership to non-management
staff (Angus-Leppan et al., 2010; Basu and Palazzo, 2008; Foote and Ruona, 2008). Ambiguity
around the organization’s CSR policies and procedures may result in internal stakeholders taking their
cues from the organization’s management and leadership resulting in behavior that is divergent from
how the organization is promoted in terms of CSR practices (Pinto et al., 2008; Premeaux, 2009; Tett,
2009). Foote and Ruona (2008: 303) argued that leaders often underestimate their “role in the ethical
tone of the organization”, furthermore, they noted that moral management and leadership were
considered to be at the “crux” of an ethical climate and culture. This cogently argued point has
resonance when one examines instances of corporate social irresponsibility over the past decade.
Duchon and Drake (2009: 301) noted how questionable practices can become socialized in
organizational assumptions and identity, they contend questionable behavior within an organization
may transcend the individual, it can be a “consequence of a corporation’s self-concept; a
consequence of how it defines itself”. This is consistent with how individual’s schema-driven cognition
is heavily influenced through “normative pressures arising from behavior of others” (Harris, 1994:
316).
The reality of how internal stakeholders perceive or understand CSR policies and practices is often
driven more by the cues they interpret from management, leadership and how they perceive the
organizational identity of which they are members. Brickson (2007) argued that an organizational
identity orientation consisted of organizational members shared perceptions of what the organization
is and who they are within that construct, ultimately driving behavior and motivation. This is consistent
with Hatch and Schultz (2002) notable paper on The Dynamics of Organizational Identity in which
they posited that the development of organizational identity is in a constant state of flux embedded in
a recursive cycle internal and external reflection. What matters most is not so much what is overtly
articulated in terms of CSR policies and practices, but how organizational members make sense of
how they perceive the world and their interactions and relationships with the various stakeholder
demands both internally and externally (Basu and Palazzo, 2008). The role of management and
leadership in providing cues to other organizational members is crucial (Foote and Ruona, 2008) in
that they set the ethical and moral tone of the organization which becomes socialized within the
culture and climate.
Foote and Ruona (2008) illustrated how organizational culture was fundamental “in promoting and
sustaining ethics” (p.301), although they note that the other variables: infrastructure, leadership and
stakeholders were systemically important as they interoperated with each other constantly. A point
that Ardichvili and Jondle (2009) further advanced when they argued that corporate culture was a
conduit for conveying moral principles that may be congruent with a triple bottom line CSR
philosophy. In recognition of this fact, Angus-Leppan et al (2010) examined how the sensemaking of
institutional drivers (normative, coercive and mimetic) influenced the organizational interpretation of
CSR and leadership behavior in the practice of CSR. They found in their study of an Australian bank
that both explicit and implicit CSR (Matten and Moon, 2008) existed simultaneously. They also noted
that institutional drivers existed on 4 levels: individual drivers, organizational drivers, organizational
field drivers (industry) and the National Business System (NBS). Their research on the Australian
bank highlighted some “general confusion” (p. 205) around the explicit and implicit CSR practices,
illustrating that explicitly stated CSR policies were at times in contrast to the implicit policies and
where ambiguity existed the referent point became the management and senior leadership.
Consistent with Basu and Palazzo’s (2008: 192) contention, sensemaking was potentially seen as an
“internal institutional determinant” that provided a frame of reference for decision relating to CSR
practices, a position that has been echoed throughout the literature review.
Table 1: A Review of Some Literature on Corporate Social Responsibility
Author
Angus-Leppan et al (2010)
Journal
Journal of
Ethics
Dependent Variable
Interpretation of CSR
Independent Variable/s
Sensemaking
of
institutional Drivers &
Leadership Behaviors
Basu and Palazzo (2008)
Journal
Ethics
CSR Behaviors
Sensemaking
Frames
Foote and Ruona (2008)
Human
Resource
Development Review
Multiple
Analysis
Levels
of
-
-
Garavan and McGuire (2010)
Advances
Developing
Resources
in
Human
Multiple
Analysis
Levels
of
-
-
Becker et al. (2010)
Human
Resource
Development Review
Multiple
Analysis
Levels
of
-
-
Garavan et al. (2010)
Advances
Developing
Resources
in
Human
Multiple
Analysis
Levels
of
CSR and CS
Behavioral Barriers
Ardichvili and Jondle (2009)
Human
Resource
Development Review
Multiple
Analysis
Levels
of
Ethical
Culture
Matten and Moon (2008)
Academy
of
Management Review
Multiple
Analysis
Levels
of
Practice of CSR
of
Business
Level of Analysis
Multiple Levels
Analysis
of
Business
Business
Formal
and
Structures
Procedures
&
Mental
Informal
and
Institutional Variables
Core Themes
 Individual:
 Organizational
 Organizational Field
 NBS
 Cognitive
 Linguistic
 Conative
 Infrastructure
 Leadership
 Stakeholders
 Organizational Culture
 Global HRD
 Strategic HRD
 HRD Policies & Practices
 HRD Systems
 HRD Practitioner
 CSR
 Supply Chain Management
(SCM)
 HRD
Typology of HRD Interventions
 Depth of HRD Intervention
o Surface / Deep
 Focus of HRD Intervention
o Individual
/
Organizational
 Mission & Vision Statements
 Codes of Conduct
 Socialization Process
 Decision-Making Process
 Behavioral Standards
 Organizational Culture &
Climate
 Normative / Coercive /
Mimetic
 NBS / Financial / Educational
/ Cultural Systems
Synthesizing the Literature and Conceptual Model
Stakeholder Theory and Institutional Theory are important in elucidating the impact of organizational
interventions on CSR practices (Angus-Leppan et al., 2010; Basu and Palazzo, 2008; Foote and
Ruona, 2008). In recognizing this, we propose a multi-level conceptual model to illustrate how HRD
interventions can act as a Mediator in ensuring ethical adoption of CSR practices. At the micro-level,
the focus is on individual CSR and HRD policies and procedures, ethical awareness programs
(boundary-spanning) and leadership development programs. At the meso-level, the focus is on
cognitive and sensemaking processes, CSR communications and performance measurements,
mission/vision statements and creating and sustaining an ethical culture and organizational identity.
At the macro-level, the focus is on institutional variables that can impact and influence the adoption of
CSR policies and practices.
Infrastructural
Ma
croLev
el
Instituti
onal
Pressur
es
Sensemaking
Outcome
Normative
Coercive
Mimetic
NBS
Vision/Mission Statement
Me
soLev
el
Understanding Organizational Culture
and Sense Making
Communications on CSR
Commitments & Performance
Ethical Awareness
Programs
Mic
roLev
el
Culture
Conative
Linguistic
Cognitive
Leadership
Style
Ethical CSR
Organizational
Identity
CSR Policies
HRD Policies &
Procedures
Figure 1:
Conceptual Model of HRD Interventions from a Sensemaking Perspective
Source: Developed from ideas developed by Foote and Ruona (2008), Garavan et al (2010), Angus-Leppan et al (2010) and Basu and Palazzo (2008).
Micro-Level: CSR/HRD Policies & Procedures
HRD policies and practice can contribute to the development of an ethically aware and socially
responsible organizational culture (Ardichvili and Jondle, 2009; Garavan and McGuire, 2010).
Ardichvili and Jondle (2009) noted that clear communications and codes of practice can contribute to
the development of an ethical corporate culture, furthermore, they argued that incentives linked to
codes of conduct send out a clear message that behavior should be linked to social goals as well as
economic ones. On a similar note, Foote and Ruona (2008) argued that systems can be built to
incorporate ethical programs that can be fundamental to learning and development interventions,
performance reviews and career development, more crucially, they can be incorporated into the
organizational culture that recognizes the CSR triple bottom line philosophy. These systems allow for
whistle-blowing without fear of retribution in the event of ethical violation (SHRM, 2008) but also serve
as a measurable outcome in that they can be linked into the organizations’ balanced scorecard
(Kaplan and Norton, 2007).
Lubatkin et al. (2007: 59) argued that a “firm’s governance” is in a constant state of flux as “managers
and owners engage in recursive cycle of individual and collective sensemaking” in the incentives and
monitoring relationship. Moreover, they noted that the dependence of the firm on multiple
stakeholders has shifted the power dynamic away from solely senior managers and directors. The
literature on CSR and HRD offers a significant degree of analysis and offers possible solutions on
how the HRD profession can contribute to the triple bottom line; however, HRD’s management role
and close alignment with management peers and top leadership has the potential to influence the
ethical disposition of HRD professionals which may see a return to a stakeholder orientation and
financial bottom line when faced with a more challenging operating environment (Bierema, 2009).
In our conceptual model, HRD interventions can positively impact development of CSR and ethics
policies. Communication and accountability can positively affect cognitive and sensemaking process
and contribute to an ethically oriented organizational identity. HRD may need to incorporate
“responsibility and sustainability into is repertoire” (Bierema, 2009: 88) if it is to engage successfully in
ensuring CSR results in the triple bottom line philosophy.
By aligning the micro level HRD interventions such as generic HRD/CSR policies & practices and
ethical awareness programs (which we characterize as a boundary-spanning intervention in that it
operates at both micro and meso levels) with the balanced scorecard as measureable dimension,
HRD has the potential to positively impact how organizational actors perceive or understand CSR
practices by tapping into how organizational members engage in their cognitive processes. By doing
so, it may allow HRD professionals to become part of the sensemaking processes at both individual
and organizational levels. This addresses Bierema’s (2009) critique regarding integrating
responsibility and sustainability into HRD’s character and at the same time, addresses any ambiguity
around CSR practices. Moreover, if organizations incorporate these measureable interventions into
the balanced scorecard it is possible for HRD professionals to “tap the trenches” (Trevino et al., 1999:
145) and ensure consistency among internal and external stakeholders. Mere compliance with the
legal requirements of CSR practices ignores the critically important role of an ethical culture (Ardichvili
and Jondle, 2009; Foote and Ruona, 2008) as cultural values can become embedded or “baked”
(Trevino et al., 1999) into the corporate identity. In our conceptualization, we argue that multi-focused
CSR practices and ethical awareness programs can positively affect organizational culture,
organizational identity and ethical leadership development through accountability, responsibility and
sustainability when integrated into the balanced scorecard approach. Furthermore, it is possible that
by applying a balanced scorecard methodology as a means to measure the impact of HRD
interventions at the micro/meso level, the possibility for HRD professionals to become genuine
change agents (Garavan, 2007; Ulrich and Brockbank, 2005) has a credible exchange currency with
senior management and top leadership, in effect, affecting change from the grass roots up.
Meso-Level: Sensemaking, CSR Commitment & Performance
Strategic HRD is premised on the notion of HRD professionals becoming partners with the business
(e.g. Garavan, 2007; Peterson, 2008; Wright, 2008) however, as Wright (2008: 1066) noted,
managerial professions “compete for status and control” in a constant battle to prove how their
“expertise is linked to resolution of business problems” and historically these have addressed
primarily economic and performance problems. Considering this – how does HRD as a profession
tasked with the learning, training and development functions along with its individual,
management/leadership and organizational development repertoire balance power relations in an
ethically professional and altruistic manner? How do HRD professionals, who are part of the
managerial profession detach themselves from competing for status in the organization and act
ethically and altruistically? Becker et al. (2010) make a compelling argument, they noted, there must
be a shift away from viewing human capital as mere economic factors of production in the marketbased business models. The role of HRD must shift away from short-term incentive structures in line
with economic organizational goals. Moreover, the sole focus on economic based objectives and a
market-driven business model diminishes the value of the organizations human capital and social
networks and justifies questionable ethical practices that negatively impact multiple stakeholders.
Ardichvili and Jondle (2009), Becker et al (2010) and Garavan and McGuire (2010) note the
importance of infrastructural interventions such as performing a governance role within the
organization, engaging in the socialization process, relationship building with multiple stakeholders
and development of a functional organizational culture in pursuit of corporate social responsibility and
corporate sustainability. Each of these infrastructural interventions interoperates at multiple levels
within our model.
Basu and Palazzo (2008) analysis of CSR through a sensemaking lens has significant currency in
terms of how HRD professionals can contribute to the CSR triple bottom line of economic, social and
environmental goals. In their conceptualization, Basu and Palazzo (2008) put forward the notion that
understanding the processes that contributed to making sense of CSR policies might provide greater
insight into how organizational actors view their relationships with multiple stakeholders. Central to the
sensemaking conceptualization is the “tripartite view” of essential process: cognitive, linguistic and
conative. These sensemaking concepts integrate into the typology offered by Garavan et al (2010:
599), the conceptual model posited by (Foote and Ruona, 2008) and reflects the various institutional
drivers that have been shown to contribute to ethical behavior and CSR orientation (see AngusLeppan et al., 2010; Basu and Palazzo, 2008; Campbell, 2007; Matten and Moon, 2008).
Basu and Palazzo (2008) defined cognitive as relating to how actors “think about their relationship
with their multiple stakeholders and views about the broader world”, linguistic involved ways of
explaining organizational decision and how these decisions were shared with other organizational
actors and conative related to the behavioral position, consistency and commitment shown when
engaging in activities that impact its stakeholders (p.124). Taken as independent variables they have
the potential to influence positive or negative CSR outcomes; however, we note that these variables
do not operate in a vacuum and operate both contextually and temporally.
The cognitive disposition of organizational actors is the most critical and important sensemaking
dimension as it reflects how organizational members think and act and is heavily influenced by
cultural factors (Ardichvili and Jondle, 2009). This has implications for how HRD professionals
manage the organizational culture development. Cognition is often expressed as a set of thought
processes that precede behavior or action (Eden and Spender, 1998; Gibson and Earley, 2007) and
at an aggregrate level, collective cognition resides in the interralations and actions of the group or
organization, this is an important distinction when exploring sensemaking processess from a cultural
perspective. Brickson (2007: 865) argued that profit-taking organizations have three distinct “identity
orientations vis-à-vis stakeholders” (individualistic / relational / collectivistic) that elucidate the
motivational assumptions that can contribute to the triple bottom line CSR philosophy. Similarly,
Angus-Leppan et al (2010) whose research on leadership styles and CSR practice illustrated that
different leadership styles (autocratic /authentic / emergent) were predisposed to either explicit or
implicit CSR practices (Matten and Moon, 2008) and had the capacity to produce some ambiguity
around CSR engagement. This is important from a HRD perspective as understanding the leadership
style can help moderate ambiguity around CSR policies, practices and procedures.
Collective identities create “social representations that produce schemata” that then acts as a referent
“consistent with organizational member’s ideal or material interest” (Dimaggio, 1997: 275). LangfieldSmith (1992: 353) defined collective cognitions as “a transitory phenomenon, changing in response to
circumstance”, this transitory phenomenon is centred around the cultural belief system. On this point
Langfield-Smith (1992) clearly illustrates the contextual and temporal variables that can impact
cognition both at an individual and organizational level. Langfield-Smith (1992) further argues “…in
order for an organizational group to function, they must share a set of domain-specific beliefs, that is,
a collective map” (p.353). Collective patterns emerge from individual cognitive interactions before
propagating across that social construct. It is these individual cognitive interactions that become part
of the system, the greater the individuals’ connectivity to the system the higher the cognitive
processing priority and the more reliant on schema/scripts in the decision-making process (Schneider
and Angelmar, 1993). Any break in the system may result in organizational actors referring to their
direct supervisors or management/leadership to aid in the decision-making process.
In our conceptual model, we position cognitive processes and organizational identity as boundaryspanning illustrating that cognitive and identity orientations are both individual and organizational. Any
communication on CSR commitments and performance must be more than surface level, it will need
“sincere commitment from leadership at all levels” (Trevino et al., 1999: 149) which includes HRD
professionals. A notion also advanced by Basu and Palazzo (2008) who argued that how
organizations justify their actions signals their stakeholder orientation. The organization’s linguistic
process conceptualizes how organizations engage in defending their CSR position by using legal,
scientific and economic rationale to justify their CSR actions. The use of these linguistic dimensions
can illuminate a surface-level CSR orientation aimed at addressing only the economic and not social
or environmental goals.
The moderating role of HRD professionals here will be to manage how CSR justifications are
communicated. This will be a challenging dimension for HRD professionsals as they will need to
moderate inward pressure from mangement and leadership that may not be congruent with the the
core ethics and CSR orientation of the organization. HRD professionals can also play an important
role in ensuring transparency around CSR practices and achievements, not rhetoric that masks
deception aimed at glossing over unethical practices. Sims and Brinkmann (2003: 249) highlighted
this point when they noted that Enron’s value statements and Codes of Ethics included in their annual
reports maintained communications about commitments to “respect, integrity and excellence” yet
following the collapse of Enron, there was “little evidence that mangement modellling those
behaviors”.
In our conceptual model, HRD professionals can aid the senior management and leadership in
choosing a “balanced approach” (Basu and Palazzo, 2008: 128) to CSR measurement that not only
reflects positively in terms of external monitoring but can also help develop and sustain an ethical
culture and organizational identity that over time will become embedded in a recursive cycle of
internal and external reflection that solidifies a deeper commitment to CSR practices but also has the
capacity to influence the ethical orientation of the organizational leadership as shown in our model. If
HRD interventions can ensure strategic consistancy in terms of the organization’s CSR practices and
these practices can be measured through a balanced scorecard methodology they will reflect tangible
and measurable CSR impact that will positivley affect internal stakeholders in terms of morale and
commitment but equally has the capacity to positively impact the external stakeholders who can
measure CSR performance by referring to external CSR rating agencies (Scalet and Kelly, 2010).
Macro-Level: Institutional Pressures, Mission/Vision Statements
Many of the HRD interventions so far reflect an individual and organizational orientation; however, as
Angus-Leppan et al (2010) and Matten and Moon (2008) have illustrated, macro-level variables can
impact the organization in a more influential (positive / negative) way than many of the micro / meso
variables. Matten and Moon’s (2008) adoption of Institutional Theory (DiMaggio and Powell, 1983) to
illustrates the influence of external variables such as coercive, normative and mimetic pressures to
conform to a particular behavior highlighting the challenges facing HRD in contributing to the
organization’s CSR mandate. They noted that “institutions” referred not only to the “formal
organizations of government and other corporations, it also referred to rules, norms and incentives”
(p.406). The creation of an ethical business culture is contingent upon alignment of micro-level
policies and practices (HRD/CSR), ethical value based leadership behavior (Ardichvili and Jondle,
2009) but more importantly reflects the “practice-based interaction among multiple organizational
actors as well as internal and external stakeholders” (p.237). The institutional level of analysis has
become a critical dimension of analysis when examining CSR practices (Garavan et al., 2010) and
reflects the influence external institutional actors can place on both the leadership and the
organization.
These institutional level pressures were evident during the lead up to the global economic crisis when
banks engaged in business practices that were predatory and were based on business models that
were adopted in response to mimetic pressures. The challenge for HRD professionals in dealing with
ethical behavior and CSR practices at the macro level two fold. They will need to be cognizant of what
types of institutional pressures exist so that appropriate interventions can be put in place to ensure
these pressures do not result in unethical organizational behavior (Fahlenbrach and Stulz, 2011). An
example of this reflects how incentives and bonuses were paid to professionals in the banking and
financial institutions, these monetary performance based rewards reflected short-term business
objectives that ignored the social impact (see Hannon, 2010; Shleifer and Vishny, 2010; Tett, 2009).
Bierema (2009) trenchantly remarked that the HR profession had escaped unscathed following
incidents of corporate social irresponsibility and more recently in the financial crisis, she noted HRD
“trained, promoted and monitored” (p.88) these individuals highlighting that during the recent
economic crisis HR/HRD professionals were not actively engaged in moderating short-term economic
objectives that had such a detrimental impact at a societal level. Our model allows for HRD
interventions to moderate any sustained and potentially negatively affecting institutional pressures
through the development of an ethically oriented culture and organizational identity. In our model, we
illustrate the how normative and mimetic pressures are likely to impact on the organization’s culture
and its leadership. These institutional pressures reflect professional affiliation (e.g. accountancy,
engineering, banking), other firm specific institutions (e.g. banking / finance) and the wider societal
culture. These pressures have been shown to influence cognition, behavior and action so it is
important for HRD professionals to understand the forces these institutional pressures can place on
the actions and behavior of organizational members in the absence of explicit CSR policies or
ambiguous CSR polices.
As we have previously elucidated, HRD interventions at the micro-level and meso-level have the
potential to ensure the CSR mandate achieves the triple bottom line philosophy in reality.
Discussion, Conclusion and Implications for HRD
Understanding sensemaking from the perspective of organizational actors, specifically managers and
leaders will allow for a greater understanding of the decision-making process they engage in. This is
crucial for future conceptualizations CSR through a HRD lens. The pursuit of CSR through HRD
interventions need not be a zero-sum game (Pandey and Chermack, 2008), it is possible to balance
the demands of multiple stakeholders and integrate CSR into the fabric of organizational life – but it
will not be easy. It is questionable whether corporate social responsibility can be delineated in any
simplistic mathematical way with the argument that the “ideal level of CSR can be determined by a
cost benefit analysis” (McWilliams and Siegel, 2001: 125) a moot argument. The capacity of human
nature to act ethically, socially and altruistically is contingent upon social, environmental and specific
organizational factors. As noted by Pfeffer (2005) “what we do comes from what and how we think”.
HRD can act as a Mediator to ensure CSR is seen to be genuinely integrated into the social fabric of
the organization without compromising the demands of multiple stakeholders. Our conceptual model
provides a sensemaking perspective that offers an approach to CSR that may be possible to
measure. If it can be measured it may be possible for HRD professionals to become positive change
agents that move beyond the strategic partners to the business but strategic partners to society.
Implications for Theory
The growing body of research on CSR illustrates the importance of socially responsible behavior in
business. Understanding how organizational actors interact with multiple stakeholders, both internally
and externally is critical if HRD professionals are to enact interventions aimed at achieving a realistic
triple bottom line philosophy. The notable research on CSR to date has illuminated some of the areas
worthy of further research and attention (see Angus-Leppan et al., 2010; Basu and Palazzo, 2008;
Campbell, 2007; Foote and Ruona, 2008; Matten and Moon, 2008). We would argue that HRD
interventions in the absence of clearly articulated CSR practices provides a degree of ambiguity
among organizational actors that can have a detrimental effect on both organization and society. We
would see the greatest benefit from future HRD research focused on the sensemaking and cognitive
processes of organizational actors, with particular reference to the management and leadership
processes and interaction with multiple stakeholders. Given the significant focus of HRD research on
leadership development over the past decade it seem appropriate that future research on HRD and
CSR might tap into this extensive body of research in better understanding how managers and
leaders make sense of their corporate social responsibility.
Implications for Practice
We argue that the approach HRD professionals take in pursuit of a CSR mandate will ensure its
application is neither an ethical panacea nor organizational rhetoric but sustainable and realistic that
aligns with organizational goals without compromising the organization or society. The ability of HRD
to integrated interventions into a balanced scorecard that reflects tangible results will give HRD
professionals the opportunity to become an integral dimension in positive and realistic CSR practices;
however, it will also mean that HRD professionals will need to become responsible and accountable.
The ability of HRD professionals to illustrate CSR performance in a measureable way may provide
them with a degree of credibility not just among their management peers but among organizational
members who look to them for ethical guidance (SHRM, 2008) in matters that relate to CSR practices.
Moreover, if HRD professionals can integrate CSR commitments and performance into all aspects of
the balanced scorecard: Financial, Learning & Growth, Customer and Internal Business Processes, it
may provide refutable evidence that HRD professionals are both strategic in vision and change
agents in practice.
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