Firm Response to Advocacy Campaigns
- A Case Study into How Campaigns Stimulate
Organizational Change
DISSERTATION
of the University of St. Gallen,
Graduate School of Business Administration,
Economics, Law and Social Sciences (HSG)
to obtain the title of
Doctor of Political Science
submitted by
Rahel Wendelspiess
from
Wegenstetten (Aargau)
Approved on the application of
Prof. Simon J. Evenett, PhD
and
Prof. Winfried Ruigrok, PhD
Dissertation no. 3801
Books on Demand GmbH, Norderstedt, 2010
The University of St. Gallen, Graduate School of Business Administration, Economics, Law
and Social Sciences (HSG) hereby consents to the printing of the present dissertation, without
hereby expressing any opinion on the views herein expressed.
St. Gallen, May 17, 2010
The President:
Prof. Ernst Mohr, PhD
To My Parents
Every Path We Take Leads to Fantasies about the Path not Taken
–Halcom (Patton 2002, 257)
Abstract
Increasingly, advocacy campaigns challenge companies to take social responsibility along
global supply chains. To prepare for such situations, stakeholder management argues for
proactive firm strategies and corporate communications promotes early identification of issues. Considerable research has been conducted about susceptibility of campaigns but it
still is inconclusive about the relative importance of institutional factors and firm attributes.
Much attention also is given to private politics and the evolvement of global non-state governance systems (private standards and certification). Firm-level responses and outcomes of
campaigns are discussed mainly as corporate social responsibility, addressing firm policy (e.g.,
codes of conduct) and reporting procedures. Little attention has been given so far to firm
organizational-level factors that influence firm response. Also, only seldom have campaigns
been addressed as triggers for organizational change. Some contributions are identified in the
literature of organizational learning and about personal preferences of managers. This thesis
contributes to this research gap by applying a process model of firm response to advocacy
campaigns that build on literature of sensemaking in organizations.
A qualitative approach has been chosen to study a situation in which the issue under focus
interlaces with the context. Interview, documentary, and archival data of four companies has
been collected to conduct a multiple case study (Nestlé and Kraft in the coffee sector and
Blackout and Mammut in the clothing sector). The research process has involved building
categories for a cross-indexing procedure according to qualitative content analysis, supported
by the software MAX qda.
The results indicate that firm response is more subtle than proposed. Two types of changes
are identified. First, categorical change is reported in more open firm posture. Second, relative
change is reported in legitimation, justification, transparency, and commitment. No notable
change is reported in identity orientation and consistency. The findings do not support claims
of cultural transformation and they also contradict arguments that blame firms for only
green-washing their image. The results support that campaigns are input for organizational
learning. Consequently, further research may consider firm posture as dependent variable of
firm response to advocacy campaigns. These findings indicate that firms are likely to become
aware of the underlying campaign issue. Campaign managers may notice that campaigns
have an impact on firms and facilitate change of business practices. However, firms are not
likely to adapt to specific claims. They develop their own initiatives consistent with their
strategies.
Zusammenfassung
Zunehmend fordern Interessengruppen mittels Kampagnen Firmen heraus, soziale Verantwortung entlang ihrer globalen Wertschöpfungsketten wahrzunehmen.
Zur Vorbereitung
schlägt Stakeholder Management proaktive Firmenstrategien vor und die Unternehmenskommunikation befürwortet Früherkennung von Issues. Zahlreiche Beiträge haben sich mit der
Empfänglichkeit von Firmen für Kampagnen beschäftigt aber sie sind nicht schlüssig bzgl. des
Einflusses von institutionellen und firmenbezogenen Faktoren. Grosse Aufmerksamkeit wird
auch nicht-staatlichen Governance-Systemen geschenkt (z. B. Zertifizierung). Antworten
von Firmen auf Kampagnen werden hauptsächlich in den Bereichen Firmenverantwortung,
Verhaltensregeln und Reporting thematisiert. Bisher wurde organisatorischen Faktoren, die
Antworten von Firmen beeinflussen, wenig Aufmerksamkeit geschenkt. Zudem wurden Kampagnen bisher kaum als Auslöser von organisationalen Veränderungen gesehen. Einige solcher
Beiträge können in der Literatur der lernenden Organisation und in den Präferenzen von
Führungskräften identifiziert werden. Die vorliegende Studie trägt zu dieser Forschungslücke
bei indem sie ein Prozessmodell, das auf der Literatur von Sensemaking in Organisationen
aufbaut, auf Firmenreaktionen auf Kampagnen von Interessengruppen anwendet.
Für diese Studie wurde ein qualitativer Ansatz gewählt, weil das Thema mit dem Kontext
verwoben ist. Interviews, Dokumente und Archivdaten von vier Firmen wurden für die vergleichende Fallstudie verwendet (Nestlé und Kraft aus dem Kaffee- und Blackout und Mammut
aus dem Bekleidungssektor). Der Forschungsprozess beinhaltete Kategorienbildung und Indexierung gemäss qualitativer Analyse, unterstützt durch das Computerprogramm MAX qda.
Die Resultate zeigen, dass Firmenantworten auf Kampagnen komplex sind. Beachtliche
Änderungen wurden durch offenere Firmenhaltung verzeichnet. Relative Veränderungen wurden bzgl. Legitimierung, Rechtfertigung, Transparenz und Verbindlichkeit identifiziert. Keine
bemerkenswerten Veränderungen gab es bei der Firmenidentität und der Konsistenz. Die Resultate widerlegen Argumente, die kulturelle Transformation vorhersagen. Sie entkräften aber
auch den Vorwurf, Firmen vergrünen lediglich ihr Image. Die Resultate stützen Argumente,
dass Kampagnen Input für organisatorisches Lernen sind. Weitere Studien könnten die Firmenhaltung als abhängige Variable berücksichtigen. Die Resultate beinhalten weiter, dass
Firmen, die mit Kampagnen konfrontiert sind, sich des zugrunde liegenden Themas bewusst
werden. Kampagnenführende sollten berücksichtigen, dass Kampagnen zwar Veränderung von
Firmenpraktiken unterstützen. Allerdings antworten Firmen nicht unbedingt auf spezifische
Forderungen sondern entwickeln eigene Initiativen.
Contents
List of Abbreviations
v
List of Figures
vi
List of Tables
vi
1 Introduction
1.1
1
Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1.1.1
Practical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1.1.2
Literature Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
1.2
Research Objectives and Questions . . . . . . . . . . . . . . . . . . . . . . . .
3
1.3
Research Approach and Process . . . . . . . . . . . . . . . . . . . . . . . . . .
4
1.4
Organization of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
2 Literature Review
9
2.1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
2.2
Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
2.3
Precedents of Advocacy Campaigns . . . . . . . . . . . . . . . . . . . . . . . .
13
2.3.1
Preparation of Firms for Advocacy Campaigns . . . . . . . . . . . . . .
13
2.3.2
Motivation for Proactive Strategies . . . . . . . . . . . . . . . . . . . .
19
2.3.3
Target Selection Strategies of NGOs
. . . . . . . . . . . . . . . . . . .
21
Dynamics of Advocacy Campaigns . . . . . . . . . . . . . . . . . . . . . . . .
23
2.4.1
Inter-Organizational Process of Private Politics . . . . . . . . . . . . .
23
2.4.2
Tactics of NGOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
2.4.3
Firm Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
2.4.4
Determinants of Firm Response . . . . . . . . . . . . . . . . . . . . . .
27
Impact of Advocacy Campaigns . . . . . . . . . . . . . . . . . . . . . . . . . .
29
2.5.1
Impact on the Regulatory Environment . . . . . . . . . . . . . . . . . .
29
2.5.2
Impact on the Organizational Level of Firms . . . . . . . . . . . . . . .
31
Recap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
2.4
2.5
2.6
i
ii
CONTENTS
3 Frame of Reference and Propositions
34
3.1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
3.2
Organizational Response to Inputs as a Process . . . . . . . . . . . . . . . . .
34
3.3
Specifying the Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
3.3.1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
3.3.2
The Cognitive Dimension . . . . . . . . . . . . . . . . . . . . . . . . .
40
3.3.3
The Linguistic Dimension . . . . . . . . . . . . . . . . . . . . . . . . .
43
3.3.4
The Conative Dimension . . . . . . . . . . . . . . . . . . . . . . . . . .
44
Propositions about Change of Firm Profiles . . . . . . . . . . . . . . . . . . .
46
3.4.1
Definition of Change in this Context . . . . . . . . . . . . . . . . . . .
46
3.4.2
Mutual Influence of Dimensions . . . . . . . . . . . . . . . . . . . . . .
47
3.4.3
Influence of a Firm’s Visibility . . . . . . . . . . . . . . . . . . . . . . .
48
3.4.4
Influence of a Firm’s Initial Stance . . . . . . . . . . . . . . . . . . . .
49
Recap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
3.4
3.5
4 Methodology
52
4.1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52
4.2
Qualitative Research Method . . . . . . . . . . . . . . . . . . . . . . . . . . .
52
4.3
Quality Criteria of Qualitative Research . . . . . . . . . . . . . . . . . . . . .
53
4.3.1
Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
4.3.2
Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56
Bounding the Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57
4.4.1
Questions, Purpose, and Conceptual Model . . . . . . . . . . . . . . . .
57
4.4.2
Case Design: Multiple (Holistic) Case Study . . . . . . . . . . . . . . .
58
Sampling Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59
4.5.1
Selecting Cases in Qualitative Research . . . . . . . . . . . . . . . . . .
59
4.5.2
Purposive Sampling in this Study . . . . . . . . . . . . . . . . . . . . .
61
Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69
4.6.1
Data Triangulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69
4.6.2
Access to Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70
4.6.3
Collecting and Storing Data . . . . . . . . . . . . . . . . . . . . . . . .
71
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
4.7.1
Diversity of Qualitative Data Analysis Methods . . . . . . . . . . . . .
73
4.7.2
Data Analysis in this Study . . . . . . . . . . . . . . . . . . . . . . . .
75
4.8
Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78
4.9
Recap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79
4.4
4.5
4.6
4.7
CONTENTS
iii
5 Case Studies
81
5.1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81
5.2
Context for Cases One and Two . . . . . . . . . . . . . . . . . . . . . . . . . .
81
5.2.1
Characteristics of the Coffee Market
. . . . . . . . . . . . . . . . . . .
81
5.2.2
The Oxfam Coffee Campaign . . . . . . . . . . . . . . . . . . . . . . .
87
5.3
5.4
5.5
5.6
5.7
Kraft Foods Inc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
5.3.1
Building the Case Study Context . . . . . . . . . . . . . . . . . . . . .
88
5.3.2
Determining the Initial Response Profile . . . . . . . . . . . . . . . . .
91
5.3.3
Analyzing Changes during the Campaign . . . . . . . . . . . . . . . . .
96
5.3.4
Interpreting Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.3.5
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Nestlé SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
5.4.1
Building the Case Study Context . . . . . . . . . . . . . . . . . . . . . 110
5.4.2
Determining the Initial Response Profile . . . . . . . . . . . . . . . . . 112
5.4.3
Analyzing Changes during the Campaign . . . . . . . . . . . . . . . . . 119
5.4.4
Interpreting Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
5.4.5
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Context for Cases Three and Four . . . . . . . . . . . . . . . . . . . . . . . . . 136
5.5.1
Characteristics of the Clothing Sector . . . . . . . . . . . . . . . . . . . 136
5.5.2
The Clean Clothes Campaign . . . . . . . . . . . . . . . . . . . . . . . 137
Blackout AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
5.6.1
Building the Case Study Context . . . . . . . . . . . . . . . . . . . . . 139
5.6.2
Determining the Initial Response Profile . . . . . . . . . . . . . . . . . 142
5.6.3
Analyzing Changes During the Campaign . . . . . . . . . . . . . . . . 144
5.6.4
Interpreting Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
5.6.5
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Mammut Sports Group AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
5.7.1
Building the Case Study Context . . . . . . . . . . . . . . . . . . . . . 156
5.7.2
Determining the Initial Response Profile . . . . . . . . . . . . . . . . . 157
5.7.3
Analyzing Changes During the Campaign . . . . . . . . . . . . . . . . 161
5.7.4
Interpreting Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
5.7.5
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
6 Cross-Case Analysis and Discussion
178
6.1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
6.2
Initial Firm Response Profiles . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
6.3
Change of Firm Response Profiles . . . . . . . . . . . . . . . . . . . . . . . . . 181
iv
CONTENTS
6.4
Probing the Types of Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
6.5
Assessing the Impact of Campaigns . . . . . . . . . . . . . . . . . . . . . . . . 192
6.6
Influence of the Firm’s Visibility . . . . . . . . . . . . . . . . . . . . . . . . . . 193
6.7
Influence of the Firm’s Initial Stance . . . . . . . . . . . . . . . . . . . . . . . 194
6.8
Discussing the Framework and Research Method . . . . . . . . . . . . . . . . . 195
6.9
Recap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
7 Conclusion
197
7.1
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
7.2
Recommendations for Further Work . . . . . . . . . . . . . . . . . . . . . . . . 198
7.3
Implications for Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
Appendix A: Case Study Protocol
ix
Appendix B: Category System and Coding Instruction
xiii
References
xvii
CONTENTS
v
List of Abbreviations
4C
CCCC: Common Code for the Coffee Community
BD
Berne Declaration
BSCI
Business Social Compliance Initiative
CCC
Clean Clothes Campaign
CEO
Chief Executive Officer
CHF
Swiss Franc
CPA
Corporate Political Action
CSR
Corporate Social Responsibility
ETI
Ethical Trading Initiative
EU
European Union
FWF
Fair Wear Foundation
GDP
Gross Domestic Product
GMO
Genetically Modified Organisms
GNP
Gross National Product
ICA
International Coffee Agreement
ICO
International Coffee Organization
ILO
International Labor Organization
NGO
Non-Governmental Organization
P&G
The Procter & Gamble Company
SAI
Sustainable Agriculture Initiative
UN
United Nations
UNCTAD UN Conference on Trade and Development
UK
United Kingdom
U.S.
United States
USD
U. S. American Dollar
WHO
World Health Organization
WTO
World Trade Organization
List of Figures
1.1
Research Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
1.2
Organization of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
2.1
Literature Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
3.1
General Process View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
3.2
Process Model of Sensemaking . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
4.1
Conceptual Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
4.2
Sample Frame . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
5.1
Kraft Event Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
90
5.2
Kraft Posture Cause and Effect Loops . . . . . . . . . . . . . . . . . . . . . . 106
5.3
Nestlé Event Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
5.4
Nestlé Posture Cause and Effect Loops . . . . . . . . . . . . . . . . . . . . . . 133
5.5
Blackout Event Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
5.6
Blackout Posture Cause and Effect Loops . . . . . . . . . . . . . . . . . . . . . 154
5.7
Mammut Event Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
5.8
Mammut Posture Cause and Effect Loops . . . . . . . . . . . . . . . . . . . . 175
6.1
General Posture Cause and Effect Loops . . . . . . . . . . . . . . . . . . . . . 193
vi
List of Tables
3.1
Properties of Sensemaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
4.1
Application of Quality Criteria
. . . . . . . . . . . . . . . . . . . . . . . . . .
54
5.1
Largest Coffee Roasters 2000–2008 . . . . . . . . . . . . . . . . . . . . . . . .
84
5.2
Kraft Results: Conceptually Ordered Matrix Phase 1 . . . . . . . . . . . . . .
92
5.3
Kraft Response Profile Phase 1 . . . . . . . . . . . . . . . . . . . . . . . . . .
96
5.4
Kraft Results: Conceptually Ordered Matrix Phase 2 . . . . . . . . . . . . . .
97
5.5
Kraft Results: Conceptually Ordered Matrix Phase 3 . . . . . . . . . . . . . . 102
5.6
Kraft Response Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
5.7
Kraft Case Study Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
5.8
Nestlé Results: Conceptually Ordered Matrix Phase 1 . . . . . . . . . . . . . . 113
5.9
Nestlé Response Profile Phase 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 119
5.10 Nestlé Results: Conceptually Ordered Matrix Phase 2 . . . . . . . . . . . . . . 120
5.11 Nestlé Results: Conceptually Ordered Matrix Phase 3 . . . . . . . . . . . . . . 127
5.12 Nestlé Response Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
5.13 Nestlé Case Study Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
5.14 Blackout Results: Conceptually Ordered Matrix Phase 1 . . . . . . . . . . . . 141
5.15 Blackout Response Profile Phase 1 . . . . . . . . . . . . . . . . . . . . . . . . 144
5.16 Blackout Results: Conceptually Ordered Matrix Phase 2 . . . . . . . . . . . . 145
5.17 Blackout Results: Conceptually Ordered Matrix Phase 3 . . . . . . . . . . . . 150
5.18 Blackout Response Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
5.19 Blackout Case Study Documents . . . . . . . . . . . . . . . . . . . . . . . . . 155
5.20 Mammut Results: Conceptually Ordered Matrix Phase 1 . . . . . . . . . . . . 159
5.21 Mammut Response Profile Phase 1 . . . . . . . . . . . . . . . . . . . . . . . . 161
5.22 Mammut Results: Conceptually Ordered Matrix Phase 2 . . . . . . . . . . . . 162
5.23 Mammut Results: Conceptually Ordered Matrix Phase 3 . . . . . . . . . . . . 168
5.24 Mammut Response Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
5.25 Mammut Case Study Documents . . . . . . . . . . . . . . . . . . . . . . . . . 177
vii
LIST OF TABLES
viii
6.1
Case-ordered Initial Response Profiles . . . . . . . . . . . . . . . . . . . . . . . 179
6.2
Case-ordered Change of Response Profiles . . . . . . . . . . . . . . . . . . . . 182
6.3
Case-ordered Cognitive Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . 183
6.4
Case-ordered Linguistic Patterns
6.5
Case-ordered Conative Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . 187
. . . . . . . . . . . . . . . . . . . . . . . . . 184
Chapter 1
Introduction
1.1
Motivation
This introductory chapter presents the motivation behind this thesis. A practical motivation
for the analysis of campaigns and firm response is the growing importance of interaction
between companies and NGOs. In addition, there is a literature gap that consists, first, of
a missing framework of types of firm response and, second, of scarce comparative studies of
advocacy campaigns and firm response.
1.1.1
Practical Issues
Globalization and the related change of availability and flow of information have changed
the relationships between businesses and NGOs. It is mainly the reach of NGOs that has
changed: the Internet has provided a way to gather and spread information about crossborder activities of firms and to monitor these activities in a connected way across the globe
that has not been possible before. With regard to the public interest movement, the public
as well as politics have become receptive of such information (Vogel 1996). One of the most
famous examples is the Nestlé boycott due to conflicting infant formula marketing methods.
This controversy led the WHO to implement a code of marketing for breast milk substitutes
(Post 1985). Besides international organizations such as the WHO, governments particularly
in Northern Europe have become responsive to NGO claims. An example is the de facto
embargo in the EU of products containing genetically modified organisms, which resulted
from incessant NGO and media campaigns in the mid and late 1990s (Charles 2001). From
such experiences, companies have come to accept NGOs as forces that in principle have the
capacity to influence the company’s public perception, the political arena, and therewith the
company’s business scope (Vogel 1996).
NGOs not only direct their claims at governments; they also pressure firms directly. Wellknown examples are the cases of UBS and the Nazi gold, fashion designers using fur and animal
1
CHAPTER 1. INTRODUCTION
2
rights activists, cell phone companies and electro-smog, Nike and labor rights, and Shell/Brent
Spar and Greenpeace (Winter and Steger 1998). These examples show that corporations
are increasingly under fire concerning ethical behavior. In today’s global economy, such
discussions of roles and responsibilities of corporations have become transnational (Yziji and
Doh 2009). Therefore, it often is not a question of whether transnational firms will ever face a
conflict with society in general or with NGOs in particular, but rather a question of when that
will happen. Given the case of an actual activist campaign—if specific claims are directed at
a company—the question about how to respond is not easily answered. High costs (human
and/or financial resources, loss of reputation) and a high degree of uncertainty about the
outcome may be involved. This thesis examines advocacy campaigns from an organizational
point of view to address questions of organizational change. Usually, advocacy campaigns are
accompanied by media campaigns. Hence, most members of an organization are directly or
indirectly confronted with the issue of the campaign and with the fact that their employer
is charged with certain deficiencies in ethical behavior. A well-conducted campaign easily
is the topic of media talk and hence of firm managers and staff. In this context, it is of
interest to managers how far underlying organizational processes (such as mental, linguistic,
and behavioral models) of the firm are challenged by a campaign. Such models indicate how
managers interpret and respond to external inputs. This paper addresses the impact of such
campaigns on organizational processes. Deeper knowledge about the impact of campaigns on
the organizational level beyond firm policies enhances the position of managers to guide an
organization through a campaign in terms of, for example, choices as opposed to unplanned
developments.
1.1.2
Literature Gap
There are various concepts and theoretical approaches that deal with the general topic of
business and society, such as stakeholder management, issues management, corporate social
responsibility (CSR), and a small body of literature in political economy. Empirical analysis of
interaction between firms and NGOs on the basis of campaigns rarely exceeds descriptive case
studies. Scarce contributions address specific topics but a framework of firm response profiles
to campaigns that identifies organizational process is missing. And, there is a literature
gap in the area of comparative case studies. Campaigns and firm responses have been well
described as specific cases but they have not been compared analytically. A few empirical
comparative studies focus on accommodation of particular demands from NGOs (Julian et al.
2008) and on determinants of such accommodation (Trullen and Stevenson 2006). Hence, the
identified literature gap that motivates this thesis is two-fold: First, there is no framework
1.2. RESEARCH OBJECTIVES AND QUESTIONS
3
that comprises firm response to NGO campaigns on organizational levels of firms; and second,
there are hardly any comparative case studies with a specific focus on firm response.
So far, the literature has contributed mainly to how firms may prepare strategically for
advocacy campaigns and why firms apply such proactive strategies. Also, considerable knowledge has been developed about which firms are particularly susceptible to campaigns due to
underlying target selection strategies of NGOs. Political economy has contributed to the understanding of interorganizational processes during campaigns. Also, firm and NGO tactics
have been addressed. Determinants of firm response also have been a research topic.
However, there has been little discussion about the dynamics between campaigns and
organizational processes, such as underlying mental, linguistic, and conative models. Also,
little attention has been given to the extent to which such organizational factors influence firm
response, and reciprocally, how much these underlying organizational processes are altered by
an advocacy campaign. In other words, organizational change seldom has been addressed in
the context of firm response. The focus instead generally has been on content of firm policies
and how they match evolving non-state corporate governance, private global standards, and
certification systems. This thesis contributes to this knowledge gap by applying Basu and
Palazzo’s process model of sensemaking to the context of advocacy campaigns.
Further, cases of firm response to advocacy campaigns have only occasionally been rigorously compared, which is another motivation factor for the research method (see below).
1.2
Research Objectives and Questions
This study is set out to contribute to understanding of how organizational processes determine
firm response to advocacy campaigns. Further, it aims to comprehend how far, if at all,
advocacy campaigns may be regarded as input for organizational change. The underlying
research questions raised are:
ˆ How do firms respond to advocacy campaigns?
ˆ Why do they respond in the way they do?
ˆ In what ways, if at all, can campaigns be considered as input for change?
To address the first question, it is asked whether firms show different response profiles and,
if so, how such profiles are altered during a campaign. Further, it is investigated whether
certain factors can explain different developments of such profiles.
In order to answer these questions, the role of campaigns for firms has to be understood,
as well as the role of organizational change in the context of campaigns. Further, a frame of
reference has to be identified that is suitable to analyze firm response on an organizational
CHAPTER 1. INTRODUCTION
4
level. The final objectives are to contribute to theory and practice on the basis of empirical
assessment of the proposed impact of campaigns on firms.
1.3
Research Approach and Process
Approach The study follows an interdisciplinary approach to understand, explain, and
give advice regarding firm behavior in the sociopolitical arena. In other words, the study
is performed in the area of political economy in a broad sense. The motivation lies in the
literature gap about the understanding of firm response to campaigns from NGOs, but also
in the practical situation that firms increasingly are exposed to outside pressure from NGOs.
Therefore, this study pursues theoretical and practical goals. The research performed is
understood as business research as applied social science. The research style is qualitative,
which is discussed next.
Qualitative Case Study Research The qualitative case study research approach has been
chosen for several reasons. Scholz and Tietje argue that embedded case studies are particularly
suitable when the investigation focuses on ”. . . historic dynamics and perspectives of real social
[. . . ] systems . . . ” (2002, 4). Yin (2003, 3-6) has declared that case studies are chosen when
questions starting with “how” and “why” are to be answered and when the context and the
issues to be studied are not clearly separated from each other. Existing cases and empirical
studies about how firms respond to pressure from society has shown that context plays a major
role. For example, Post, Preston, and Sachs (2002b) emphasize this issue by explaining Shell’s
reaction to the Brent Spar issue with so-called path-dependencies. The underlying research
questions of this study are how do firms respond to campaigns from NGOs? and why do they
respond the way they do? and such questions are, according to Yin (2003), well approached
with a case study design. There are various kinds of case studies: descriptive, explanatory,
and exploratory. This thesis aims to assess a theoretical framework. From multiple case
studies, one may generalize analytically (Yin 2003, 31-33) to develop theory. This stands in
contrast to a statistical generalization aimed for in quantitative designs.
The roots of qualitative methods can be retraced to the pragmatic research approach
that eveolved at the University of Chicago in the 1920s and 1930s (Bortz and Döring 2006).
Qualitative and quantitative research methods differ according to the kinds of data and the
methods of of data collection and analysis. Even though there seem to be two camps of researchers and some claim insurmountable differences between the two methods, many authors
build bridges between the two disciplines. King, Koehane, and Verba (1994) even argue that
the two approaches do not differ fundamentally but are only different in style. Moreover, they
claim that outstanding research integrates the advantages of both qualitative and quantita-
1.4. ORGANIZATION OF THE STUDY
5
tive methods. Accordingly, Yin (2003) suggests that case study research can be conducted
qualitatively or quantitatively. Further considerations why this study has chosen a qualitative
approach is addressed in Chapter 4.2.
Qualitative research has been charged with various deficiencies, such as being less exact
and less generalizable than quantitative research. Gibbert, Ruigrok, and Wicki (2008) show
that such charges may be absolutely legitimate and that many published case studies do not
meet benchmark quality standards. Quantitative research has gained much experience in
quality requirements, and these specifications have been adapted to qualitative research. Yin
(2003) presents extensively how case studies can meet internal validity, construct validity,
external validity, and reliability. What these quality requirements ask for and how this study
addresses these qualifications in order to minimize errors of various kinds is presented in
Chapter 4.3 ff.
Research Process The research is organized according to the process illustrated in Figure
1.1 that builds on the research approach, the questions, and the objectives of this study. First,
this study critically assesses how existing literature has addressed advocacy campaigns and
firm response so far. Further, this study presents and specifies a framework of organizational
process based on sensemaking in organizations. Building on this framework, propositions are
advanced. Also, the study is set out to assess these propositions in a qualitative multiple case
study. Results are presented consecutively and analyzed. Finally, propositions are evaluated
and the results are held against the chosen framework and the broader context of the literature.
Implications for theory and practice are formulated. The process involves one major direction
from top to bottom and iterative processes from bottom to top and back to bottom—as
indicated by the arrows in Figure 1.1.
1.4
Organization of the Study
The thesis is organized in seven chapters and is illustrated in Figure 1.2. The introductory
Chapter 1 describes the motivation for this study, the research objectives and questions, and
the research approach. Chapter 2 clarifies terms and concepts and presents the literature
review. The existing literature is critically analyzed in term of antecedents, dynamics or
campaigns, and outcomes. Chapter 3 develops the frame of reference, which is based on the
process model of sensemaking by Basu and Palazzo (2008). It also puts forward propositions
about firm response profiles and their change during campaigns. Chapter 4 discusses the study
design, in particular qualitative case study research, data collection, and analysis. Chapter
5 describes the research results and Chapter 6 discusses them by holding them against the
CHAPTER 1. INTRODUCTION
6
Figure 1.1: Research Process. Source: own illustration.
1.4. ORGANIZATION OF THE STUDY
7
framework, the proposition, and existing literature. Chapter 7 draws conclusions and presents
implications for research and practice.
CHAPTER 1. INTRODUCTION
8
Figure 1.2: Organization of the Study. Source: own illustration.
Chapter 2
Literature Review
2.1
Introduction
Chapter 2 presents and critically assesses what is known about how firms respond to advocacy
campaigns. It mainly argues that contributions to firm response to advocacy campaigns have
largely remained on a conceptual level and theories and empirical studies are scarce.
This chapter is organized as follows. First, it defines the terms that will be used throughout
this thesis (Chapter 2.2). Second, the existing literature accounting for precedents (Chapter 2.3), dynamics (Chapter 2.4), and outcome and impact of advocacy campaigns (Chapter
2.5) is examined. These three subchapters are organized according to the literature map
(Creswell 2009) presented in Figure 2.1. It shows contributions from various research areas to
the topic of this study. Researchers who directly or indirectly contribute to a better understanding of advocacy campaigns and firm response mainly have backgrounds of stakeholder
management, corporate social responsibility, political economy, and public relations. Often,
research contributions from these areas to the topic of firms and advocacy campaigns are
tightly interwoven and belong to the area of literature of Business and Society with their
respective focuses. Stakeholder management essentially concentrates on relationships and on
their potential benefits to an organization. Political economy contributing to this context
studies interaction among players of campaigns and change in public and private policy. The
central focus from a communications perspective is to preserve company reputation. The
corporate social responsibility literature describes firm response to advocacy campaigns as
implementation of responsible business practices. Finally, Chapter 2.6 provides a summary
and introduces Chapter 3.
2.2
Definition of Terms
This subchapter introduces the key terms that are used throughout this thesis.
9
CHAPTER 2. LITERATURE REVIEW
10
Figure 2.1: Literature Map. Source: own illustration.
2.2. DEFINITION OF TERMS
11
Firm This thesis uses the term firm in a broad sense to refer to businesses and their entities
that have been and possibly will be subject to advocacy campaigns. The terms firm, company,
and business are used interchangeably.
Firm Response Firm response also is used broadly and includes any type of response to
advocacy campaigns, such as strategies, tactics, actions, and “no-actions,” whether they be
planned, spontaneous, unconscious or unintended.
Advocacy Campaigns Advocacy is defined as an activity with the intent to influence a
firm’s policies, practices, or decisions. Baron and Diermeier have described advocacy campaigns as follows:
A campaign consists of an issue such as environmental protection, a target, which
could be a firm or an industry, and a strategy for success. A campaign can have
effects at two levels. At one level, a campaign can affect the practices of the
target to which the activist objects. Such threats require a responsive strategy
as well as a proactive strategy by potential targets to reduce the likelihood of
being targeted. At the other level, a campaign can affect supply in an industry. A
successful activist campaign can reduce the returns in an industry by increasing
costs and reducing demand. (Baron and Diermeier 2007, 601)
Topics of advocacy are various and comprise sociopolitical issues such as development topics,
trade issues, environmental concerns, human, civil, and labor rights (Yziji and Doh 2009, 93).
Nongovernmental Organizations (NGOs) Nongovernmental organization is a term frequently used in the literature but to date there is no consensus about a common definition.
Hence, it is necessary to clarify what is meant by a nongovernmental organization throughout
this thesis. For further reference, the common abbreviation NGO is used.
Vakil defines NGOs as “. . . self-governing, private, not-for-profit organizations that are
geared to improving the quality of life of disadvantaged people” (1997, 2060). Martens (2002)
describes the challenge to grasp the whole spectrum of juridical and sociological interpretations of NGOs and concludes, “NGOs are formal (professionalized) independent societal
organizations whose primary aim is to promote common goals at the national or the international level” (2002, 282). These definitions include the constitution of NGOs and their field
of activities that are briefly addressed next.
The first part of their name indicates that NGOs are private players. They are nongovernmental organizations, which means that they are based on private actors in contrast
to government-based actors. The emphasis on the private basis of NGOs distinguishes them
from international (governmental) organizations, which are constituted of state or state-close
entities (Archer 2001; Martens 2002). This connotation is related to the history of the term
in connection with the United Nations, of which both Vakil and Martens provide an overview.
CHAPTER 2. LITERATURE REVIEW
12
NGOs are organizations, which means that they are formally organized and structured.
As defined above, their members are of a private nature. This provides them with the characteristic of a potentially relevant actor (Schuppisser 2002, 93). This characteristic stands in
contrast to individual activists or activist groups. Individuals and ad-hoc formed groups may
join an NGO campaign and together, they may form an advocacy network (Keck and Sikkink
1998). However, this thesis focuses on activities of distinct organizations. Historically, NGOs
are international organizations. However, Martens’s definition shows that entities organized
on a national level also are considered as NGOs today.
NGOs perform various activities that are addressed in the second parts of both definitions. Vakil (1997) limits activities of NGOs to alleviate burdens for disadvantaged people.
She therewith refers to the original field of activity of NGOs that mainly have been active
in development politics. However, the scope of activities has broadened, as indicated by
Martens’s definition, which refers simply to “promoting common goals” (2002, 282). Most
NGOs have main activities in either welfare services, development activities, advocacy, education, networking, and research (Vakil 1997).
Yziji and Doh (2009) recently introduced a comprehensive taxonomy of NGOs by the
beneficiaries of the activities and by what the NGO does (advocacy or service, and further
dividing advocacy into watchdog and social movement organizations). This thesis focuses
on advocacy directed at firms that represent interests of others. This distinguishes NGOs
as defined in this thesis from other types of NGOs, such as interest groups, which direct
their (political) interest at governments during a public policy process. These groups usually
represent such services to their members.
Advocating NGOs initiate or take part in campaigns that are the vehicle to pressure firms
on certain issues. NGOs usually conduct other activities as well, such as educating the public
and conducting actual development or aid activities.
Examples of advocating NGOs that will occur throughout this thesis are Oxfam (a transnational NGO with various national entities with a focus on development issues), Greenpeace
(also a transnational NGO with national entities, with a main focus on environmental issues),
Global Exchange (a U.S. NGO acting on various domestic and international issues like fair
trade and climate change), and the Berne Declaration (a Swiss NGO focusing on domestic
and international issues like implications of globalization and consumption).
Oxfam International names current campaigns in the areas of climate change, AIDS, agriculture, health and education, and the control of arms. Global Exchange names six current
campaigns: fair trade, fair treatment; freedom from oil, peace: stop the next war now; local
green economy; Mexico, trade and migration; and sweat-free communities. Greenpeace International names the following areas for their campaigns: energy, oceans, forests, disarmament
and peace, toxic, and sustainable agriculture.
2.3. PRECEDENTS OF ADVOCACY CAMPAIGNS
13
In sum, for the purpose of this study, NGOs are organizations advocating sociopolitical
issues in the area of responsibility of firms in their global production activities.
Sensemaking The concept of sensemaking serves as the underlying model for addressing
organizational change in the context of campaigns. Sensemaking in organizations is about
how and why (people in) firms think, what they believe, and how they act. It is about “how
they construct what they construct, why, and with what effects. . . ” (Weick 1995, 4). Further
details are provided in Chapter 3.2.
2.3
2.3.1
Precedents of Advocacy Campaigns
Preparation of Firms for Advocacy Campaigns
Engaging with Stakeholders
The core of stakeholder management is the motivation for firms to establish relationships
with their stakeholders. This core, stated most explicitly by Freeman (1984; 1994; 1999), is
the claim not to separate the “discourse of business from the discourse of ethics” (Freeman
1999, 234). According to Freeman, the stakeholder concept offers a way to connect business
and ethics. Firms and stakeholders collaborate if they agree to a series of common values.
Therefore, stakeholder management is values-based management (for the main characteristics
of stakeholder management see Freeman and McVea (2001)). This perspective emphasizes the
focus on relationships between firms and stakeholders and considers stakeholders as a diverse
group with differing interests.
From the stakeholder management perspective, advocacy organizations are stakeholders
of firms. It is argued that stakeholders have a stake in the firm and/or the firm’s activities.
According to stakeholder categories, advocacy NGOs are considered secondary stakeholders
because their influence on firms is only of an indirect nature (Freeman 1984). Lawrence,
Weber, and Post (2005) would call them non-market stakeholders and Post et al. (2002b) call
them stakeholder in the social-political arena. In contrast to making categories of stakeholders,
Mitchell, Agle, and Wood (1997) developed a framework to identify stakeholders who really
count by attributing legitimacy, power, and urgency, which has found wide acceptance.
Even though it has been acknowledged that there are different groups of stakeholders, most
of the stakeholder management literature deals with primary stakeholders. Literature with
a focus on secondary stakeholders, in particular NGOs, is scarce—not to speak of respective
empirical analysis. Many contributions stay on a conceptual, normative basis. An example is
Freeman, Harrison, and Wicks’s model of four strategic positions of stakeholders toward the
firm and deducted firm strategies (2007). Characteristics of the four positions differ in the
CHAPTER 2. LITERATURE REVIEW
14
potential for cooperation with the firm and the potential for threat to the firm. The potential
for cooperation is defined as the degree to which this stakeholder group can “. . . help a firm to
achieve [its] objectives” (Freeman et al. 2007, 114). The threat potential by a stakeholder is
determined by its degree of influence on decisions that affect firms. The concept is plausible
but does not indicate empirical assessment. The same holds true for the concept of stakeholder
engagement, which is presented next.
Types of firm stakeholder management often are presented as a continuum ranging from
reactive to proactive. Most authors of stakeholder management favor proactive stakeholder
management (also called stakeholder engagement) over less proactive strategies (Lawrence
et al. 2005; Freeman et al. 2007; Post et al. 2002b). As Post, Preston, and Sachs state,
“Proactive corporate behavior is better than reactive behavior” (2002b, 245).
Post, Preston, and Sachs (2002a) argue that companies position strategically in the stakeholder environment for the long-term success of the corporation. The authors prefer an
interactive stakeholder strategy. Stakeholder engagement enables companies to proactively
anticipate stakeholder concerns. Post, Preston, and Sachs’s new stakeholder view is a framework to analyze societal challenges and develop future business practices with a specific focus
on three strategic settings: the resource base, the industry structure, and the social-political
arena. NGOs are part of the social-political arena: “In the social-political arena, the firm is
challenged to identify key actors and issues throughout its extended purview, as well as to
anticipate and respond to new developments, so as to bring long-term benefits (or at least
no harm) to the entire organization and its critical stakeholders” (Post et al. 2002a, 22). In
order to implement an engaging strategy, companies are advised to:
ˆ “Identify relevant stakeholders and their potential impact on the success or failure of
the enterprisze
ˆ Specify the goals to be achieved in each stakeholder relationship (e. g., loyalty, efficiency,
and cooperation), the factors contributing to goal-achievement, and the risks involved
ˆ Develop opportunities for mutual benefit
ˆ Monitor inter-stakeholder relationships and attempt to harmonize or balance them as
much as possible” (Post et al. 2002a, 23).
According to Lawrence, Weber, and Post (2005), firms may ignore stakeholder concerns,
they may take reactive positions, and they may proactively or even interactively anticipate
stakeholder concerns. Like Post, Preston, and Sachs, they prefer proactive over reactive or
inactive stakeholder strategies. In the early years of globalization and the rise of technological
change, firms generally have not been prepared for international campaigns. However, firms
have established more proactive strategies to anticipate stakeholder concerns (Lawrence et al.
2.3. PRECEDENTS OF ADVOCACY CAMPAIGNS
15
2005). Proactive strategies can be unilateral and bilateral (interactive). Unilateral actions are
compared to a public relations approach which only includes one-way communication from
the firm to the public. Freeman, Harrison, and Wicks (2007) acknowledge public relations
as an important business task, however, they recommend to integrate it into the “strategic
thinking process of the firm” (125), meaning that public relations should not be separated
from business decisions. Freeman, Harrison, and Wicks (2007) have presented another proactive strategy called implicit negotiation. It is another unilateral way of firms to anticipate
stakeholder concerns by including them into business decisions and can be observed in business products, sources, or initiatives. Freeman, Harrison, and Wicks (2007) argue to validate
such unilaterally collected information and to engage more interactively with stakeholders in
bilateral ways. They even warn of unilateral actions as they easily may be misunderstood
and provoke overreaction by the other party, which may then develop into a crisis.
Further, these authors also argue that ignoring relevant stakeholders causes difficulty.
Therefore, it is an advice how not to act. The most successful strategy is to engage actively
with stakeholders. Engagement comprises dialogue and negotiation. With dialogue, the authors refer to a sophisticated communication process including both (or all) affected parties,
particularly firms and stakeholders. They warn companies of the risks of unilateral undertakings that often provoke overreactions. Informal are to be preferred over formal negotiations
because they minimize transaction costs. Further elements that make this strategy succeed
or fail are integrity of the parties involved, the environment in which the negotiations take
place, and the willingness of the firm management to think of “win-win” answers to issues
raised.
Harrison and St. John (1996) have also presented tactics on a continuum of more or less
active approaches. They differentiate between a passive approach to managing stakeholders
and a proactive approach to partnering with them. Consequently, managers should not only
satisfy external demands by establishing internal programs, maintaining public and political
relations and granting financial donations. Partnering tactics with activist groups should
include consulting with them on sensitive issues, setting up joint ventures for research, appointing representatives to board members, and jointly sponsoring public relations efforts.
The stakeholder concept has found acceptance and has been integrated in many other fields
of literature, such as in the corporate social responsibility approach (Carroll and Buchholtz
2008) or in corporate communications (van Riel and Fombrun 2007). Corporate social responsibility speaks of responsibilities toward certain stakeholders, and corporate communications
develops strategies to address particular stakeholder groups.
CHAPTER 2. LITERATURE REVIEW
16
Positioning the Firm as a (Socially) Responsible Company
It is a traditional phenomenon that firms take actions that exceed what is required by law
and that may be considered as socially responsible. A considerable body of literature has
addressed topics of corporate social responsibility (CSR), responsiveness, and performance
(Carroll 1979). These concepts are interrelated and have influenced other areas of literature,
in particular stakeholder management. Literature on corporate social responsibility discusses
in how far businesses are responsible to society. Carroll (1991) has presented dimensions of
responsible action (1991): economic, legal, ethical, and philanthropic (Carroll 1979; 1991).
This morality-based approach has been further developed into a more action-oriented focus
toward a model of corporate social responsiveness. Carroll has summarized contributions of
various authors about how firms respond to demands from society and has arranged them
on a continuum from doing nothing to doing much. Some companies proactively anticipate
demands from society, others accommodate, defend, and react (1979, 502).
Carroll (1979) has combined corporate social responsibility with responsiveness and with
categories of stakeholders and issues involved (such as environment, product safety, or discrimination) into a model of corporate social performance. Carroll and Buchholtz (2008)
excellently summarize the historic development of corporate social responsibility and corporate social performance.
The concept of corporate social responsibility has recently gained more attention and
its scope has changed over time. While socially responsible actions have been conducted
on a community level for a long time, they have gained international momentum (Vogel
2006). Companies have applied so-called self-regulation in various fields. Self-regulation and
certification ranges from individually developed firm codes of conduct, industry codes, codes
by external groups, and codes on multilateral level (Gereffi et al. 2001). Such self-regulation
goes beyond what is required by law and may be declared as responsible action. Reasons for
firms to join such self-regulating schemes are addressed in Chapter 2.3.2 about motivation of
proactive firm strategies. Self-regulation, or certification, has emerged in “almost every major
industry” (Gereffi et al. 2001, 57), including coffee and apparel, which are the focus of the
subsequent case studies.
CSR has been widely investigated (Carroll and Buchholtz 2008; Mohan 2006; McWilliams
and Siegel 2001). Often, these discussions are closely related to the stakeholder management literature as both include ethical considerations (Carroll and Buchholtz 2008). Carroll
and Buchholtz refer to government, consumers and environmental interest groups as external
stakeholders. Other authors, however, focus on firms and NGOs (Argenti 2004; Doh and
Guay 2006; Burchell and Cook 2008). There is a small body of literature that specifically
discusses CSR as firm response to campaigns from NGOs (Zadek 2004; Argenti 2004; Vachani
2.3. PRECEDENTS OF ADVOCACY CAMPAIGNS
17
and Smith 2004; Werre 2003; Fombrun and Foss 2004; Curbach 2007). Another considerable
body of literature has researched corporate social performance and has investigated the potential link to financial performance (Ruf et al. 2001; Roman et al. 1999; Griffin and Mahon
1997; Marom 2006; McWilliams and Siegel 2001).
The most recent development of CSR is what is called global corporate citizenship (Lawrence
et al. 2005). It is based on the change of concerns from NGOs. They have always been various
but the scope of criticism has changed. In the 1990s, criticism has increasingly become global
and has focused on responsibility that referred not only to a firm’s domestic activities but
on the entire supply chain. An example is how NGOs have raised the issue of responsibility
in Nike’s supply chain concerning the working conditions in the company’s subcontracting
factories in developing countries (Zadek 2004). Whereas corporate social responsibility has
for a long time referred to a firm’s obligations to society and was tackled by domestic, local
philanthropic activities, it has developed into a global approach that includes partnerships
between firms and NGOs and the management of corporate social performance on a global
level (Lawrence et al. 2005). The corporate citizen approach has also found acceptance in
practise as can be seen, e. g., by the highly noted results of the yearly published list of best
corporate citizens by the Corporate Responsibility Officer Magazine. This can be seen as a
confirmation of the argument that says that nowadays, it is not a question of whether companies should take responsibility for their actions but to what extent (Meznar and Nigh 1993).
Companies position in the non-market environment with specific intentions just as they position in their market environment (Baron 2003a, 34-42). A firm may preventively change
its practices in the hope for not becoming a target (Baron and Diermeier 2007). A firm’s
positioning should take place in all three spaces of the non-market environment: in the public
sentiment, in the political, and in the legal space. Some firms position as socially responsible
companies and participate in private orderings (above called certification and self-regulation
schemes). Elaborations on this topic closely correspond to corporate social performance issues. It has not been possible so far to empirically tell what the benefits of such preventive
actions are (Baron 2003b). Nevertheless, companies take preventive actions and position as
responsible companies even though precisely such a strategy may lead to accusations, as will
be shown in the next subchapter.
From a communications perspective, firms may build a proactive reputation before being
confronted with charges (van Riel and Fombrun 2007). Pfau, Haigh, Sims, and Wigley (2008)
have shown that conducting (public relations) campaigns that spread the word of the socially
responsible actions of the firm can be a successful method in reputation building.
CHAPTER 2. LITERATURE REVIEW
18
The opposite positioning strategy of building a proactive reputation is to build the company’s reputation to oppose external claims and to be willing to fight for its current position
by being a tough counterpart that does not concede to external claims (Baron and Diermeier
2007). However, this approach has not found much attention in the literature.
Building Capabilities
The early cases of successful company boycotts, such as the case of Nestlé and it criticized
infant formula practices, have taught that companies should take advocacy groups for serious
(Pagan 1986). This case suggested that firms should build specific capabilities to prepare for
such situations which at the time, Nestlé did not (yet) dispose of. In particular corporate
communications, public relations, and issues management have addressed how firms may
prepare for the unexpected, such as advocacy campaigns. Issues management has dominated
contributions to how companies may anticipate topics that are of importance to the public
and which eventually may influence a company’s activities. Issues management ranges from
early recognition and awareness systems of issues to models that advise managers when and
how to apply crisis management. The model of the life cycle of issues helps to understand
the dynamics and the stage of an issue. Issues management has entered many research areas
that deal with the societal environment of business. For example, the CSR literature refers
to issues management (Carroll and Buchholtz 2008) and so does integrated strategy (Baron
2003a).
The issues management approach is not unquestioned as a concept as such (Freeman 2004)
and neither in how far it contributes to firm performance (Heugens 2001). Nevertheless, a
considerable body of literature has evolved around issues management as an early detection
system for social issues. Issues can develop into scandals and can reach crisis dimensions,
which is why it is vital for companies to identify potential dangers early. The concept has
also arisen around the same time as stakeholder management and it has also been presented as
a way to deal with the changing environmental conditions (Ansoff 1980). Issues management
does not only consist of identification methods but also of evaluation and response and focuses
on organizational measures that enable implementation of issues management strategies and
the actual handling of issues (Wartick and Rude 1986). Issues management helps to integrate
strategic processes with corporate communications (Heugens et al. 2004). Tucker and Melewar
(2005) present issues management to identify topics that may lead to a crisis. However, they
also stress that there are limitations to identification of issues. These limitations are mainly
based on the broad orientation of activist groups.
Similar guidelines about preparing for potential crises are identified in case studies. Argenti (2004) has presented seven lessons for companies that he has deduced from the case
2.3. PRECEDENTS OF ADVOCACY CAMPAIGNS
19
study of reaction of Starbucks to the demand by GlobalExchange to buy Fair Trade certified
coffee beans. These lessons are: First, realize that socially responsible companies are likely
targets but also attractive candidates for collaboration. Second, do not wait for a crisis to
collaborate. Third, think strategically about relationships with NGOs. Fourth, recognize
that collaboration involves some compromise. Fifth, appreciate the value of the NGOs’ independence. Sixth, understand that building relationships with NGOs takes time and effort.
Last, think more like an NGO by using communication strategically (Argenti 2004).
Vachani and Smith (2004) have presented lessons for various parties that have been involved in the AIDS drugs pricing case. They have concluded with lessons of which some can
be applied to any type of campaign: First, define the opportunity and the barriers. Second,
anticipate pressures and seize the initiative. Third, partner with diverse stakeholders.
The Shell and Brent Spar case has provided several lessons about building capabilities in
crisis communication, such as adopting a dialogue rather than a top-down approach, being
flexible in addressing criticism, and involving media counselors (Löfstedt and Renn 1997).
2.3.2
Motivation for Proactive Strategies
This subchapter presents why firms employ proactive strategies with regard to topics that
may be addressed by NGOs. Baron (2001) has named three motives for a proactive position:
strategic, preventive, and moral. A firm may strategically position as socially responsible in
order to directly improve financial performance (e. g., sales of organic product is lucrative).
Preventive strategies are also applied because they are expected to help to prevent actions from
the non-market environment against firms, such as campaigns from NGOs. Moral motives
account for socially responsible actions when firms do it because they think it is the right thing
to do. However, Baron admits that motives are difficult to evaluate (Baron 2001; 2003a, 652).
The first two motives may be subsumed as instrumental reasons and the third as normative.
The instrumental claim argues that firms profit from proactive strategies. The instrumental argument appears intuitive: why else would firms pursue proactive strategies if not
because they profit in one way or the other? Yet, what is the profit?
A survey conducted by PricewaterhouseCoopers (Carroll and Buchholtz 2008, 45) confirmed that firms expect benefits from acting socially responsible. Polled companies expected
enhanced reputation, competitive advantages, cost savings, and access to capital. In the
literature, two categories of instrumental arguments are identified. The first, a general instrumental argument, claims that firms that engage with their stakeholders or that employ
socially responsible actions have a higher chance to survive. The second, a specific argument,
proposes that firms with higher corporate social performance benefit directly from a higher
financial performance.
CHAPTER 2. LITERATURE REVIEW
20
On the one hand, stakeholder management literature argues that establishing and maintaining relationships with stakeholders benefits the firm by creating value (Freeman et al.
2004; Freeman and McVea 2001). This results in a firm’s overall success in a turbulent,
changing business environment. Post, Preston, and Sachs (2002b) have introduced the concept of organizational wealth to describe the benefits of stakeholder engagement to the firm:
“Organizational wealth is the summary measure of the capacity of an organization to create
benefits for any and all of its stakeholders over the long term” (45). Organizational wealth
comprises tangible and intangible features. Similarly, Baron presents overall performance as
the main reason why firms engage in the non-market environment: Firms implement nonmarket strategies because non-market issues may have implications on a firm’s market and
non-market performance: “For many companies, success in their non-market environment
is critical for success in their market environment” (Baron 1995b, 89). With non-market
strategies, firms try to improve their overall performance (Baron 1995a, 47). The market and
non-market environment and respective strategies are interrelated. With a non-market strategy, a firm may shape the market environment, e. g., when a company lobbies for a policy
reducing trade barriers (Baron 1995a, 48). Conroy (2001) presents additional support for the
general instrumental argument. He names the following reasons why firms may participate in
private certification systems: they consider branding aspects, expect to reduce vulnerability
and risk, improve their credibility, lower costs, and firms expect ancillary benefits, such as the
positive advantage of the early mover and positive feedback from the financial market, which
is increasingly aware of socially responsible investors. Also, the motivation for companies
to apply issues management is inherently instrumental. All activities are directed toward
influencing public policy to make a positive impact on the firm’s future (Lütgens 2001, 60).
Various parts and functions of issues management, such as early detection of social issues, can
be regarded to support a firm as a whole. Closely related, reputation management and crisis
management also support a firm to operate properly. Reputation management is a general
approach to build reputation that may be considered an important secondary resource of a
company (van Riel and Fombrun 2007, 1), whereas crisis management is aimed at preventing
too much damage to the reputation of a company because a crisis can threaten a company’s
license to operate (van Riel and Fombrun 2007).
On the other hand, corporate social performance describes the outcome of corporate social responsiveness. When in a further step social performance is linked to a firm’s financial
performance, it can be viewed as an attempt to prove the specific instrumental claim of socially responsible action (Carroll and Buchholtz 2008). There are three approaches to the link
between social and financial performance. Perspective one assumes that firms that engage
in socially responsible actions are more profitable in financial terms. The second perspective
contrarily assumes that firms that perform well engage in more socially responsible actions.
2.3. PRECEDENTS OF ADVOCACY CAMPAIGNS
21
This would imply that a firm can only afford to be socially responsible if it performs well.
Many investigations have attempted to prove that socially responsible actions are rewarded
with higher financial performance. Notwithstanding the plausibility of the general instrumental argument, research has not been able to conclusively prove the positive link between social
and financial performance. Studies have revealed ambiguous results (Griffin and Mahon 1997;
Roman et al. 1999; Ruf et al. 2001; Marom 2006). Perspective three of the link between social
and financial performance includes corporate reputation and therewith includes the general
instrumental argument. This perspective argues that the three factors of social performance,
financial performance, and reputation influence each other and that their interaction is complex. Therefore, it is difficult to tell which of the three is the core determinant factor to
influence the others.
Normative arguments for a proactive firm response to the threat of advocacy campaigns
are mainly found in the early literature on CSR and in stakeholder management. Harrison
and St. John have comprehensively summarized the normative argument as “. . . proactive
stakeholder management is simply the right thing to do” (1996, 49). The roots of CSR are
normative. The initial claim was that firms are responsible for what they do, that they are
obliged to behave in responsible ways, and that they are accountable for their actions and their
impact (Carroll and Buchholtz 2008). Further developments of the CSR concept have focused
not so much on questions of duty and moral concerns but rather on firm behavior and actions
(corporate social responsiveness) and on outcomes (corporate social performance). Donaldson
and Preston (1995) have argued that stakeholder management tackles normative question in
a large part of its discussions. By answering the fundamental questions of stakeholder management what is the purpose of the firm? and what responsibility does management have
to stakeholders?, normative discussions cannot be avoided. The philosophical background of
stakeholder management can be drawn to the ‘founding father’ who gave priority to the logic
of the argument (Freeman 2004, 230). Baron (2001) has also acknowledged that some firms
are be motivated internally by moral arguments.
2.3.3
Target Selection Strategies of NGOs
Yaziji (2005) has developed three antecedents of social risk for firms that focus on factors that
influence whether or not firms are challenged by NGOs: firm attributes and behavior, the
institutional context, and the social movement context. Specific studies, presented as follows,
mainly refer to firm attributes and behavior.
Eesley and Lenox (2006a;b) have developed an economic model how secondary stakeholders
select their targets and they have tested the model with data from environmental concerns.
CHAPTER 2. LITERATURE REVIEW
22
They found that consumer-oriented, financially sound firms were more likely to be a target of
environmental NGOs. Further, they also concluded that small firms may become a target if
the performance on the concerns is poor. However, large firms may be targeted even if they
perform relatively well within their industry. Lenox and Eesley (2009) have further developed
their model. Empirical tests reveal that the likelihood of firms to be a target is raised by firm
assets, but lowered by by firm cash. Further, firm advertising intensity and firm emissions
raise the likelihood to be a target. Consecutively, activists decide on the level of harm and
punishment of the firm.
Similarly, Hendry (2003) has found that (environmental) NGOs first select the target area
(human health, biodiversity, and ecosystem preservation). Then, they select the industries
that have the most negative effect on the target area. Then, NGOs select target firms. He has
found that firms are targeted in an opposing manner based on assessment of their corporate
environmental performance. Further, NGOs evaluate in how far the firm may serve as a role
model for other players, which usually is the case for large firms. Also, producers of branded
products who sell them to end-consumers are more likely chosen as targets. Hendry (2006)
has refined and further developed his earlier findings into a model of target selection. He
confirmed that environmental NGOs first choose the issue, based on the magnitude of the
consequences. Second, environmental NGOs target the industry, and third, environmental
NGOs choose between adversarial and cooperative tactics. Within the adversarial tactics,
factors for target selection are the impact on the environment, the firm’s ability to influence
competitors and suppliers, and the firm’s hostile attitude toward the environment and toward
stakeholders (80).
Monroe Friedman’s research on consumer boycotts in the Unites States has shown that boycott leaders have chosen their targets according to image-related criteria, such as visibility,
reputation, recent economic problems, and unknown with regard to the boycott topic (1999,
220). Firms that are leaders in their industry and have one or several well-known brands are
preferred as boycott targets. Companies that have well-established reputation to be socially
responsible and that may be lost or pressured with a boycott are favorite boycott targets.
Boycott targets are likely to having had recent economic downturns that makes the companies
willing to make a change if there is a chance to return to market success.
More generally, Baron (2003a, 93) has identified three criteria for firm susceptibility to
public protests and boycotts: products, operating environment, and organization. First, with
regard to products, Baron argues that companies that make consumer products, products
with low switching costs, and products with brand names are susceptible to boycotts. Second,
emitters of negative externalities, companies that act in an interest group-rich environment,
multinational corporations and firms with operations in developing countries are more likely
2.4. DYNAMICS OF ADVOCACY CAMPAIGNS
23
to be targets of boycotts. Third, a decentralized organization is more susceptible to boycotts
than a centralized one.
It is compelling that certain factors reoccur. Consumer-oriented firms that sell branded
products and large firms within their industry are likely to be company targets. However,
as emissions, or more general, negative externalities, are criteria, too, small firms also may
become campaign targets.
2.4
2.4.1
Dynamics of Advocacy Campaigns
Inter-Organizational Process of Private Politics
In terms of dynamics during campaigns, the political economy approach by David P. Baron is
highly comprehensive. He has developed an economic model to describe interactions between
firms and NGOs during advocacy campaigns (what he calls activist campaigns). Baron refers
to private politics when activists and companies—both private players—interact to resolve a
conflict. Private politics is part of a firm’s integrated strategy that is directed at the market
and the non-market environment (Baron 1995a). Non-market actions of firms consist of two
components: public and private politics. Through public politics, firms stress their interests in
the legal and political environment (Baron 2003c). The other part of non-market strategies are
actions directed at private players as opposed to governmental bodies or regulatory agencies.
Therefore, these actions are called private politics. Baron presents a model of private politics
for the interaction between activists and companies to resolve a conflict (2003c).
The model of private politics explains how individuals settle conflicts when no public
institutions are involved to resolve the problem (Baron 2001; 2002; 2003c). Baron defines
private politics as “. . . situations of conflict and their resolution without reliance on the law
or government” (Baron 2003c, 31). It is the situation when “. . . interest and activist groups
attempt to influence economic activity directly without reliance on public institutions or
officeholders” (Baron 2001, 7). “The term private means that the parties do not rely on
public order, i. e., lawmaking or the courts. The term politics refers to individual and
collective action in situations in which people attempt to further their interests by imposing
their will on others” (Baron 2003c, 31).
The approach is based on economic bargaining theory. Firms and activists hold a competition and bargain over the attention in the media and the beliefs of the public and the
consumers, they bargain about how to resolve the conflict and how to establish a stable situation for the time to come. Baron describes private politics in four games. The first game
is the game of politics, the second is the game of public sentiment, the third is the game of
conflict resolution, and the fourth is the game of public ordering.
CHAPTER 2. LITERATURE REVIEW
24
During the game of politics, activists choose a topic on which they want to influence firms’
behavior. In the first game, activists and firms compete over information on the respective
topic. Both firms and NGOs intend to influence the beliefs of the citizen consumers about the
topic. The firm has various options to provide information to the public. Baron argues that
the most effective way is through the media because it may be more credible to the audience
than self-published information. Most likely, both parties are promoting their point of view
and they compete over the credibility of their position. Firms and NGOs alike validate their
current position by presenting supporting facts. Often, the media are the information carrier
and based on this information consumers have to play the second game.
The second game, the game of public sentiment, is played between the consumer citizens
who have to decide whether to follow the boycott call or not.
In case of a boycott, activists and the firm play the third game, which is the game of
conflict resolution. It is to note that Baron uses the term boycott as “the instrument of the
activist. . . as a generic term to refer to a campaign by the activist to cause the firm to change
its practice” (Baron 2001, 13).
In the game of conflict resolution, firms and NGOs bargain about the amount of change
of the firm’s practice concerning the issue.
The game of public ordering is the last game and sets the standards both the firm and
the NGO agree to and admit as sustainable. This usually involves consecutive monitoring of
the firm. The set of acceptable public orderings, in other words the acceptable scope of each
actor, influence the game of conflict resolution.
Baron’s model has inspired Charles Eesley and Michael Lenox to advance and empirically
test the economic approach to campaigns. They focus mainly on target selection strategies
(Eesley and Lenox 2006b; Lenox and Eesley 2009) and determinants of firm response (Eesley
and Lenox 2006a), therefore, their findings are presented in Chapter 2.3.3 and 2.4.4, respectively.
2.4.2
Tactics of NGOs
NGOs use a multitude of tactics to pressure firms. On a general level, Baron (2003a) names
direct and indirect activist strategies. Indirect pressure is issued through the influence of
public institutions or the public sentiment and direct pressure is addressed at firms. The
two strategies are often combined: The NGO pressures the firm directly while educating the
public and lobbying for its position.
More specifically, de Bakker and den Hond (2008) have named four categories of tactics:
shareholder activism, political consumerism, social alliances, and alternative business systems.
2.4. DYNAMICS OF ADVOCACY CAMPAIGNS
25
These tactics are often used simultaneously, and eliciting media attention is accompanying the
campaign. Media coverage, negative publicity, and potential damage of the firm’s reputation
are the most powerful weapons of NGOs.
Shareholder activism means that activists buy shares of firms and therewith have the
right of speech at annual assemblies. This tactic is used to directly confront management
with certain issues and demands for change. Sjöström (2008) has provided an overview of
the state of the art of shareholder activism that she found is increasing and gaining more
importance. Guay, Doh, and Sinclair (2004) have investigated effectiveness, and also Waygood
and Wehrmeyer (2003) and Sjöström (2007) have shown that, under certain conditions, NGOs
have been successful in shaping firm actions in the area of social and environmental topics.
Political consumerism (de Bakker and den Hond 2008), or the launch of company or product boycotts (Baron 2003a), is another NGO tactic to influence firms. Even though one
intuitively thinks that a boycott can only be negative for a company, impact and effect of
boycotts and boycott calls have been difficult to measure and have revealed ambiguous results
(Baron 2003c). Koku et al. (1997) have conducted a study of the effect of announcements of
boycotts on firms’ stock prices. The authors compared them to the effect of announcements
of boycott threats. They could not find any statistically significant differences between these
two events. Stock prices even rose on the announcements of boycotts and boycott threats.
Friedman’s investigation about consumer boycotts may provide some explanation for these
results. He has found that most boycotts that have been launched since the 1980s have not
been directed at the marketplace but at the media (1999). Friedman (1985) has defined consumer boycotts as “an attempt by one or more parties to achieve certain objectives by urging
individual consumers to refrain from making selected purchases in the marketplace” (97).
This definition highlights three aspects. First, a consumer boycott is directed at individuals.
Second, a consumer boycott may broach issues that concern the marketplace. This aspect is
particularly important for this thesis as boycott calls from NGOs nowadays usually focus on
goals that do not directly concern market aspects but social, environmental, or ethical concerns (media-related boycotts). Third, the definition emphasizes that consumers are directly
or indirectly lobbied to behave in a certain way.
NGOs also establish so-called social alliances (also called co-operations or partnerships),
with firms to pressure other firms to act alike (de Bakker and den Hond 2008). Heap (2000)
has presented uncountable examples of such partnerships. While de Bakker and den Hond
(2008) claim that such alliances make firms less sensitive for further NGO demands, Heap has
shown that firms may simultaneously be partners and opponents of NGOs. This conclusion
illustrates that to engage in a partnership may not be the goal of all NGOs as it may not be
part of what they see as their business.
CHAPTER 2. LITERATURE REVIEW
26
NGOs also have established and supported alternative business systems, such as the Fair
Trade certification scheme. Such alternative business systems may meet the beliefs of NGOs
more thoroughly than the world market. However, even if such such alternative business
systems have gained in importance, they have not shown much impact on business policies.
Multinational corporations most likely participate in such alternative business systems if
they expect financial profit, e. g., by offering Fair Trade certified products to increase their
customer base (de Bakker and den Hond 2008).
2.4.3
Firm Strategies
Two major ways of selecting the appropriate firm strategy when confronted with an advocacy campaign have been suggested: either to make it dependent on the type of stakeholder
(Freeman et al. 2007) or on the degree of activism and allowed response time (Heugens et al.
2004).
Freeman et al. (2007, 103–32) have introduced firm strategies for different types of stakeholders, based on their potential of threat and cooperation. Within their category, advocacy
organizations are considered as offensive stakeholders or critics. In a campaign, NGOs oppose firms on certain issues. Direct influence of NGOs on decisions that affect firms is usually
low, but cooperation with the NGO from the firm perspective bears potential benefits. Even
though the direct influence of NGOs on firm decisions is usually low, NGOs are of interest
to firms because they may influence the opinion of the public, they may play major roles in
voluntary standards, and the firm may benefit from alliances with NGOs (Post et al. 2002a,
11). If criticism is strong and has been ongoing, any change from the firm’s side may improve
the situation.
Critics are suggested to be addressed with offensive strategies. One strategy is to demonstrate to the critic that its beliefs about the firm are inaccurate and that in fact, the company
is different from the critic’s claims. This may be achieved by repositioning the company or
only a product. The other strategy is to accept the stakeholders’ demands.
Other strategies (for other types of stakeholders) are change-the-rules strategies (for rule
setters), defensive strategies (for friends), and holding programs (for monitors).
Even though these strategies are plausible, Freeman et al. (2007) have not investigated
them empirically. A few empirical studies about firm response are presented below in Chapter
2.4.4 as they have mainly focused on factors that influence firm response (Julian et al. 2008;
Trullen and Stevenson 2006).
Public relations are regarded as the type of communication to be chosen when a company
communicates with a “. . . diffused set of NGO and activist groups motivated by concern over
2.4. DYNAMICS OF ADVOCACY CAMPAIGNS
27
a specific social problem to which the company may be contributing” (van Riel and Fombrun
2007, 182). Specifically, Heugens, van Riel, and van den Bosch (2004) suggest tackling social
issues either by dialogue, advocacy, silence, or crisis communications. Choosing the strategy
depends on the allowed response time and on public activism. Dialogue with NGOs is recommended when public activism is high and the allowed response time is low. Advocacy is
recommended when public activism is low and allowed response time is low. Silence (no reaction) is advised when the allowed response time is high but public activism is low. And last,
crisis communication is recommended when public activism is high and the allowed response
time, too.
Dialogue between firms and NGOs will include some sort of negotiation between the
two. This implies that managers require specific issues management capabilities, including
negotiation skills (Charan and Freeman 1979). Such firm capabilities and other determinants
of firm response are discussed next.
2.4.4
Determinants of Firm Response
Literature about determinants of firm response may broadly be categorized into contributions
that address characteristics of the firm environment, factors on firm-level, and such that
address both and/ or consider their interdependence.
In the firm environment, important factors of influence are involved institutions. Doh
and Guay (2006) have argued that varying institutions in the macro-environment influence
how companies respond to stakeholder demands. They state that institutional culture shapes
perceptions of corporate social responsibility and that companies respond differently to these
perceptions. The authors have compared the United States and Europe and have identified
major differences between the two regions.
Eesley and Lenox (2006a) have empirically tested Mitchell et al.’s model of stakeholder
power, legitimacy, and urgency and how these factors influence firm adaptation to demands
from environmental groups. They found particular support for the importance of power and
legitimacy of the stakeholder request (but not for legitimacy of the stakeholder group and not
for urgency of the request).
Baron (2003c) has paid particular attention to the media as a powerful player in advocacy
campaigns. By either providing coverage and treatment or not, the news media either do or
do not carry messages and information to the general public. The media are an institution of
democracies, on the one hand, and strategic players, on the other. This is why the news media
are considered in the model of private politics. Whereas Baron has called for further research
of the influence of the media in the context of campaigns, Trullen and Stevenson (2006) have
included them as a factor of influence in their study. These authors researched firm behavior
CHAPTER 2. LITERATURE REVIEW
28
to demands directed at pharmaceutical companies to lower prices of AIDS drugs in developing
countries. They have investigated how institutional factors and task environmental factors
have influenced the reactions. The study has shown that task environmental factors had a
stronger influence on company reactions than institutional factors. The task environment
that also can be considered as industry dynamics among competitors has provoked stronger
reactions than institutional inputs. The authors defined the media and NGO actions as
institutional pressure. Overall, pharmaceutical companies have reacted strategically to this
campaign by separating announcements of intentions from their actual activities.
Some authors have investigated firm-level determinants of firm response to campaigns
from NGOs.
Baron has stated that the success of non-market strategies is based on particular assets,
such as a manager’s expertise to handle non-market issues, and on the reputation of the firm
regarding responsible action (Baron 2003a). Further such non-market asset are competencies
in media relations, building firm reputation, and particular issues management capabilities
(Baron 2003a; van Riel and Fombrun 2007), and negotiation skills (Charan and Freeman
1979).
Lenox and Eesley (2009) have focused on the probability and the degree to which firms
adopt demands from NGOs. Their economic model is based on Baron and Diermeier (2007).
It aims at predicting the likelihood that firms comply with a threat of an activist. They
argue that firms calculate potential loss of adapting to the demand. They further argue that
hindering reputation loss cannot equalize the operational loss caused by adapting to claims.
“The probability that a targeted firm responds positively to an activists request . . . depends
on whether the benefit of avoiding the threatened harm . . . exceeds the expected operational
loss associated with complying with the request” (Lenox and Eesley 2009, 47–48). Spar and
La Mure (2003) have argued that the focus on such a cost calculus (transaction costs, brand
impact, competitive position) would most likely lead to resist NGO claims. However, they
have observed that often, companies preempt or capitulate NGO demands. They suggest to
focus more on the personal level of employees. They suggest a hypothesis that managers’
personal beliefs and preferences play an important role as determinants of firm response to
demands from NGOs. However, an empirical assessment is missing.
Julian, Ofori-Dankwa, and Justis (2008) have combined firm environment and organizational characteristics. They have recently conducted an empirical study about why firms
accommodate demands from interest groups. They have developed a model based on institutional, resource dependence, and resource-based factors that influence an organization’s
cognition factors. All four factors then influence the degree of organizational accommodation
issued by the special interest group. Julian, Ofori-Dankwa, and Justis (2008) developed sev-
2.5. IMPACT OF ADVOCACY CAMPAIGNS
29
eral hypotheses and tested them empirically in the context of a campaign conducted by the
U.S. National Heart Saver’s Association in the early 1990s.
2.5
Impact of Advocacy Campaigns
This subchapter discusses outcome of campaigns and presents impact on the firm’s policy
environment and on the firm’s organizational level.
2.5.1
Impact on the Regulatory Environment
Campaigns may have an impact on the policy, or regulatory, environment of firms. Policy
or regulations are in this context defined in a broad sense. They not only comprise what is
commonly understood as regulations, namely public policy. They include what Baron (2003c)
called private policy. Public and private policy compare and contrast in various ways.
Public policy results from public politics that is the process of building new or adapting
existing legislation. Governmental actors determine the outcome of public policy that is legally
binding. Public policy can take place at domestic (national legislation) or international level
(regional or international agreements). Some advocacy campaigns gain sufficient public and
governmental attention that they initiate a public policy process. Advocacy campaigns may
try to involve government actors to threaten companies with a policy process or outcome. In
this case, firms are interested in policies that do not worsen their market position, including
costs that a policy may impose on a firm to meet (new) legal requirements. Literature on
corporate political action studies how firms engage in the public policy process and try to
influence it (e. g. Getz (1997; 2002); Hillman et al. (1999); Hillman (2002; 2003); Bonardi
et al. (2006)). Example campaigns that have introduced new legislation are the campaign on
genetically modified organisms (GMO) and the Shell and Brent Spar case. The anti-GMO
campaign in Europe resulted in a de facto moratorium of consumer products containing
GMOs in the EU. It even had impact on international level and has led to a considerable
trade dispute between the United States and the EU (Burke 2003; Grant and Kerr 2003).
In the Shell and Brent Spar case, multiple international (governmental) bodies at the time
discussed the issue and even an international public policy emerged from the campaign: the
North Sea Conference decided that henceforth, oil platforms had to be disposed on land
(Jordan 1998).
Even though advocacy campaigns may initiate public policy, there is a tendency that
such campaigns increasingly focus on private politics instead. Vogel (1996) has noted that
NGOs have initially (in the 1960s and 1970s) mainly lobbied government and have therewith
pressured firms indirectly. With globalization, firms are not tied to state boarders so much any
CHAPTER 2. LITERATURE REVIEW
30
more and corporate transnational activities have become more important. This has changed
NGO strategies. They have increasingly pressured firms directly.
Advocacy campaigns demand from firms to change certain practices. Such claims are often
not only directed at single firms but “. . . are designed to challenge and change the institutional
framework” (Yziji and Doh 2009, 97). This includes private institutions, also called private
policy (Baron 2003c). Private policy results from interaction between private players that
defend their interests (the concept of private politics has been introduced above in Chapter
2.4.1). In contrast to public policy that is legally binding, private policy has an optional
notion. A private ordering can be the results of negotiations between one NGO and one
firm. They are also common on domestic industry level what has also been referred to as
self-regulation. Private policy can, like public policy, be international and this type has also
been called civil regulation (Vogel 2006). Vogel defines civil regulations as “. . . private, nonstate, or market-based regulatory frameworks to govern multinational firms and global supply
networks” (2006, 2). Advocacy organizations seek to develop private international standards
in areas where governments are not as present. Typical areas of private or civil regulations
are working conditions, environmental quality, and human rights. Vogel (2006) has compared
effectiveness of civil regulations to public policies. Civil regulation often comprise private
standardization and certification schemes. Once a company agrees to comply with private
policy, it may be certified by a third party and firms that do not comply may be excluded.
However, private policies are committed to voluntarily. Both private and public policies can
be developed at domestic and international level (Vogel 2006). Various agricultural supply
chains dispose of private certification schemes (Gereffi et al. 2001), such as coffee (Kolk 2005),
banana (Werre 2003), and cotton (Ruigrok and Zajitschek 2007).
Environmental governance systems have particularly been addressed where they challenge
existing state schemes (Cashore 2002; Cashore et al. 2003; Boström and Klintman 2006;
Raynolds 2004).
Civil regulations are often set-up as multi-stakeholder initiatives, also called joint
voluntary initiatives. Such initiatives involve various kinds of actors of a supply chain, such as
producers, international firms, traders, worker unions, NGOs, and also governmental entities.
However, in this context, governmental actors are involved on equal level with the other
actors and not with the intention to set-up binding rules. The outcome of the campaign
against Nike regarding the issue of working conditions in its Southeast Asian subcontractor
factories is a typical example of a multi-stakeholder initiative. U.S. government representatives
and companies from the U.S. apparel industry collaborate within a group called the Apparel
Industry Partnership and developed an industry code of conduct. They further formed the
Fair Labor Association, which has been assigned to inspect company compliance with the
code (Lawrence et al. 2005).
2.5. IMPACT OF ADVOCACY CAMPAIGNS
2.5.2
31
Impact on the Organizational Level of Firms
Organizational change can be described on the analytical-technical and on cultural-relational
level (Rüegg-Stürm 2005). Whereas the analytical-technical dimension is quite accessible, the
relational-cultural dimension may be more difficult to comprehend. Impact of campaigns on
firms have been described on both levels.
Fombrun and Foss (2004) have investigated how companies have responded to scandal.
They have found that, at the analytical-technical level, firms have appointed chief ethics officers and they have introduced ethical guidelines and codes of conduct. Similarly, de Bakker
and den Hond (2008) have found that in response to pressure from NGOs, firms have changed
organization structure (establishment of issues management and/ or public affairs departments) and respective communication and programs. Participation in certification schemes
are other processes that might be implied. The two dimensions of analytical-technical and
cultural-relational are not completely separate from each other. Codes of conduct obviously influence, if applied properly, the cultural-relational dimension of a firm. It has been elaborated
above in Chapter 2.3 that participating in governance systems may not only be considered as
outcome of campaigns but they may be introduced as a proactive measure, for instrumental
or for normative reasons.
Collaborations between firms and NGOs comprise both the analytical-technical and the
cultural-relational dimensions. On the one hand, they establish new programs and possibly
new products on an analytical-technical level. But they also have to manage their relationships
that may not be easy as different organizational cultures coincide. This stress field that
challenges both parties to create value has found increasing attention in practice (Austin
2000; Heap 2000) and called for considerable contributions in the academic literature as well
(Kourula and Halme 2008; Peloza and Flakenberg 2009; Yziji and Doh 2009).
Two interrelated aspects have been particularly highlighted and investigated in the context
of interaction between firms and NGOs: change in relationships and organizational learning.
Studies that focus on the cultural-relational dimension often apply a process approach that
seems to adequately address impact of campaigns on firms. Specifically, Schuppisser (2002)
has shed light into how a campaign can be an initiator for relationships between firms and
NGOs, how such relationships develop, and what factors influence such developments. He
has analyzed relationships between firms and NGOs and has developed three frameworks:
one about how relationships between firms and NGOs develop and two about factors that
influence the development of relationships. According to the model, relationship development between firms and NGOs consists of three stages (potential, activated and de-activated)
and seven phases (discovery, initialization, stabilization, scoping, deepening, change, breakup,
re-discovery). This framework proposes that firms respond to pressure from NGOs by devel-
CHAPTER 2. LITERATURE REVIEW
32
oping a relationship with them that undergoes some or all of the above-mentioned stages
and phases. Schuppisser found that issues are the starting point for an NGO to think about
whether to approach a company and start the phase to discover a relationship. Based on
internal debates on the issue, NGOs and firms independently decide on what kind of interdependency the relationship is based on (cooperation, exchange, conflict, or competition) and
they decide whether or not to communicate with the other party. In other words, firms and
NGOs decide whether to initiate a relationship with the other organization. Next, they either
strengthen the relationship or they break off. A strengthened relationship shows certain interorganizational and/or inter-personal exchanges. After strengthening a relationship, there is
another opportunity to break off or to scope the relationship by extending or diminishing the
common issues. If the relationship is not broken up afterwards, it is deepened. Next, the
relationship may alter and therewith the forms of interdependency. Organizations may break
off relationships abruptly or gently. This phase is characterized by the loss of factors that
stabilize the relationship. Schuppisser was able to confirm his framework with two in-depth
case studies that have revealed that these phases do in fact exist but not all of them may
always occur, such as the altering phase.
Post, Preston, and Sachs (2002b) emphasize that a company may change its strategic
position based on an advocacy campaign. The authors have analyzed Shell’s reaction to the
assaults from environmentalists and from human rights activists in the 1990s. The authors
have identified the campaign as the actual reason for Shell to implement stakeholder management and to reposition the company in the social-political arena. The case is used to
illustrate that a company taking an ignorant and reactive position may change this position
toward a more proactive engagement with stakeholders due to such a campaign. Under the
pressure of the campaign, Shell had shifted from an inactive to a reactive position and finally
it adopted the NGO demand. The long-term response from Shell was a cultural transformation and Post, Preston, and Sachs (2002b) argue that this transformation is best explained
by so-called path-dependencies of organizational learning.
Zadek (2004) has described changes in corporate social responsibility and has identified
five stages companies usually experience: defensive, compliance, managerial, strategic, and
civil. These categories refer to corporate social responsibility but he describes them as stages
of organizational learning. Zadek (2004) has argued that the way companies react to a campaign (based on how Nike responded to the issue of subcontracting factories) is to be explained
by organizational learning that proceeds along a learning curve.
Process approaches as just described appear promising in approaching firm response and
impact of campaigns on organizational level. However, they have only seldom been applied,
as just described. Basu and Palazzo (2008) provide a further contribution to the process
2.6. RECAP
33
approach. Their model is based on sensemaking in organizations (Weick 1995) that offers a
processual view on organizational change. Basu and Palazzo have combined this approach
with a corporate social responsibility perspective. This combination appears highly promising to advance impact of advocacy campaigns on firms and provides the starting point for
Chapter 3.
2.6
Recap
This chapter has presented the literature that addresses advocacy campaigns directed at firms
to change business practices regarding certain sociopolitical issues. The literature has been
presented according to contributions to precedents of advocacy campaigns, their dynamics,
and impact.
The literature review has shown that the topic of firms that are confronted with advocacy
campaigns has called for contributions of various subfields in particular from the research
area Business and Society that comprises in particular literature about CSR and stakeholder
management. Some aspects, such as NGO target strategies, have been considerably developed
theoretically and empirically. However, many contributions to how firms respond to advocacy
campaigns have remained on a conceptual level. They describe general strategies of how firms
may position as socially responsible companies and how they may respond to campaigns.
Individual cases provide considerable insight into how particular situations have evolved.
However, contributions to patterns of organizational change are scarce.
The approach of sensemaking in organizations (Weick 1995) offers a perspective to regard
external input as a trigger for an organizational process. Basu and Palazzo (2008) have
combined this approach with a corporate social responsibility perspective. Their concept
appears to have the potential to specify a process view of how firms respond to advocacy
campaigns not only as a change in firm policies or programs but as a change in cognitive,
linguistic, and behavioral organizational patterns. This study subsequently stipulates and
empirically assesses this framework. Chapter 3 presents this framework and its theoretical
background.
Chapter 3
Frame of Reference and Propositions
3.1
Introduction
The literature review has revealed that certain parts of firm response to advocacy campaigns
have been well investigated. Additionally, it has shown that an overarching framework that
puts firm response and campaign impact on organizational level into perspective is missing.
It has been concluded that an approach of organizational change to how firms respond to
advocacy campaigns is comprehensive yet underdeveloped. This study aims to contribute to
this gap by applying a recently developed model by Basu and Palazzo (2008) about CSR to
analyze firm response to advocacy campaigns. This chapter, firstly, introduces sensemaking in
organizations on which the model is based, secondly, the framework is specified, and thirdly,
propositions are put forward on the basis of this framework.
3.2
Organizational Response to Inputs as a Process
This thesis gives thought to a process-related view in addressing firm response to advocacy
campaigns. The standpoint is advanced that campaigns trigger organizational change of firms.
A model that allows for a process view is sensemaking, which is based on the reciprocal
influence of thought, language, and action in the context of giving meaning to, interpreting,
and acting upon certain inputs.
Figure 3.1 illustrates the general process view in an oversimplified way. It suggests a
reciprocal influence between a company and inputs from its environment. This general view
emphasizes that the overall interaction between organizations is a process as well as there are
processes within each organizational entity.
Next, this subchapter provides a concise summary of how Weick (1995) introduced sensemaking in organizations. Consecutively, this subchapter presents how the process perspective
is identified in numerous publications based on the concept of sensemaking.
34
3.2. ORGANIZATIONAL RESPONSE TO INPUTS AS A PROCESS
35
Figure 3.1: General Process View. Source: own illustration.
Weick (1995) has identified seven properties of how individuals make sense of information
they receive from their environment (see Table 3.1). First, sensemaking is grounded in identity
construction, which means it assumes that individuals construct their identity by interacting
with the environment. It is important to note that individuals in organizations are not only
agents of an organization but they “[act] as the organization” (Chatman and Staw 1986, 211).
They construct a dimension of themselves within the organization, with its values, beliefs,
and with the respective environment that contributes to this self-conception.
Second, sensemaking is retrospective, which refers to the importance of experience. People
make sense of situations they face by relating them to what they have faced earlier, how they
have reacted upon it, and how the environment has responded.
Third, sensemaking is enactive of sensible environments, which comprises two elements.
Enactment relates to the fact that people reproduce their environment to some extent and are
therefore always a part of their environment. Simultaneously, the environment is also sensible
and responds reciprocally to the actor.
36
CHAPTER 3. FRAME OF REFERENCE AND PROPOSITIONS
Characteristics of Sensemaking
1. Idea of the individual in an organization
Grounded in Identity Construction
2. Time perspective (timeline)
Retrospective
3. Relation between individual and environment
Enactive of Sensible Environments
4. Social process perspective
Social
5. Time perspective (duration)
Ongoing
6. Triggering entity
Focused on and by Extracted Cues
7. Exactness of perception
Driven by Plausibility Rather Than Accuracy
Description
Individuals have the need for identity through selfconception that is dynamic and multi-dimensional. Flexibility, mutability, and adaptability are central elements.
“People learn about their identities by projecting them
into an environment and observing the consequences
(23). Reciprocal influence with the environment and simultaneous shaping and reacting to environment, yet refer people to themselves.
Sensemaking (thinking, speaking and acting) is based on
experience that means past actions e.g., planning is only
reasonable when connected to past events/ experience
Enactment: People often produce part of the environment they face (30). People construct their environment.
Environment is not detached or fixed but people are always a part of it and often reconstruct what they face.
“Sensemaking is a social process” (39), “Sensemaking is
never solitary because what a person does internally is
contingent on others” (40).
“Sensemaking never starts. . . [and] never stops” (43).
“To understand sensemaking is to be sensitive to the
ways in which people chop moments out of continuous
flows and extract cues from those moments” (43).
Extracted cues = aspect of a larger entity that people
extract and accommodate to make sense of what they
construct as the whole situation, based on the extract.
Assumption that perception does not need to be completely accurate to make plausible sense.
Table 3.1: Properties of Sensemaking. Source: Weick (1995).
Fourth, sensemaking is social, which emphasizes that it is not a solitary action but a
(social) process between various players whose actions influence each other. Fifth, sensemaking is ongoing, referring to the perspective on duration and states that sensemaking neither
commences nor halts. It is a continuous activity. Sixth, sensemaking is focused on and by
extracted cues. This principle states that there are triggering entities that people select from a
multitude of stimuli. With these smaller pieces of information, people construct the situation
that they believe they face in its entirety. Seventh, sensemaking is driven by plausibility rather
than accuracy. The principle of sensemaking assumes that a person does not need all pieces
of information of a situation to make sense of it.
Weick’s elaborations on sensemaking reveal the process view of the concept particularly
in properties two, three, and five. The notion of sensemaking being retrospective emphasizes
that everything that has already happened influences what is to come. What we do is based
on what we just did. Stating that people, or in this context organizations, reciprocally
reproduce their environment indicates that there is interaction between an organization and
other players in its surroundings. The notion of sensemaking being ongoing emphasizes that
the interaction is constant and does never stop.
3.2. ORGANIZATIONAL RESPONSE TO INPUTS AS A PROCESS
37
Weick has argued that certain characteristics of what is called sensemaking nowadays can
be traced back to the early 20th century. The management pioneer Mary Parker Follett has
already suggested in the 1920s to adapt a more relational and interactive view of individuals
and their environment. Today, these ideas can be recognized in multiple areas of literature,
however, the historical background of these ideas is less known.
Current contributions to sensemaking in organizations have focused on strategic change (Stensaker and Falkenberg 2007; Gioia and Chittipeddi 1991; Sonenshein 2009; Ericson 2001), corporate culture (Ravasi and Schultz 2006), strategic management accounting (Tillmann and
Godard 2008), crisis management (Roux-Dufort 2007), and corporate social responsibility
(Cramer, van der Heijden, and Jonker 2006; Basu and Palazzo 2008). The following paragraphs show how the process view can be identified in these publications.
Cramer, van der Heijden, and Jonker conducted a qualitative exploratory study with 18
companies about how they develop their own CSR-approach. The authors identified five
different sesemaking-processes: pragmatic, external, procedural, policy-oriented, and valuesdriven. Within each way, they identified interaction between language, activities, and reflection about them. They found, “The change agents and others involved in the process reflect
upon their behavior during the implementation of the change process” (387). However, the
authors argued for a particularly important position of language. They claim that it is the
change agents’ language, which triggers other people in the organization to act.
Similarly, Livesey (2001, 59) identified reciprocal influence of language and actions, even
though she analyzed the Shell and Brent Spar case mainly from a linguistics point of view.
Ravasi and Schultz (2006) conducted a longitudinal case study of Bang & Olufsen about
how the organization responded to various identity threats in their history. The authors
identified organizational culture as “. . . a source of cues supporting sensemaking action. . . ”
(433). They focus on identity construction, which is primarily described as a cognitive activity,
i. e., constructing external images and reflecting on cultural practices and artifacts. Ravasi
and Schultz’s longitudinal study reveals that the cognitive process to modify the identity of
the organization is triggered by company behavior, namely producing and selling products
that do not meet customer demand. Consequently, company leaders reconsider what the
company is all about. They initiate a modification of the linguistic level (evidence is found
in internal and external communication tools) and they also initiate a modification of action
with regard to product development and marketing (what the authors call sensegiving). It
is shown that this process is ongoing—a feature of sensemaking—when a few years later,
customer demand anew triggers modification of organizational identity, communication, and
products.
CHAPTER 3. FRAME OF REFERENCE AND PROPOSITIONS
38
As mentioned above, further authors applied sensemaking to organizational change. Ericson (2001) argued for a more process-oriented perspective in the study of organizational
change. He identified an abundance of literature that focused on the content of change while
neglecting the process of change as such. Ericson (2001) advanced the theory by taking a
sensemaking perspective and presented the change process in a Swedish hospital in a case
study. He focused on the meaning the top management team gave to the change proposed.
One may note the link between the mental and the behavioral processes of the change initiative, even though the study focuses on the cognitive aspects. When cognitive schemes and
mental frames differ too much among members of an organization (of the the management
team, as in the case study), actions of change are hindered.
Sonenshein (2009) has recently discovered that ethical issues emerged at the employee
level during a strategic change program by a U.S. retailer. The case study is constructed with
a framework of trigger points (in other words: actions) that initiate a cognitive process. In
addition, he has discovered that such trigger points also invoke emotions that interfere with
the cognitive process and that may cause (over-)reactions. Sonenshein calls for including
emotions in the sensemaking concept because they can influence this process.
One of the process models that applied the concept of sensemaking to corporate social
responsibility is particularly striking. Basu and Palazzo (2008) have developed a framework
that has the potential for serving as an analytical frame for the study of firm response to
advocacy campaigns. The next chapter presents this framework, argues for its applicability
in this context, modifies the framework where needed, and suggests propositions.
3.3
3.3.1
Specifying the Framework
Overview
This introductory chapter first summarizes Basu and Palazzo’s process model of sensemaking
and argues for its suitability as a basic framework for this study. Basu and Palazzo have
developed a process model based on sensemaking to describe corporate social responsibility.
Their model comprises three major dimensions that are divided into (sub-)categories. Figure
3.2 depicts their model.
The three major process dimensions are cognitive, linguistic, and conative processes. The
cognitive dimension refers to what organizations think, the linguistic dimension relates to how
organizations speak, and the conative dimension refers to how organizations act.
Cognitive processes comprise identity orientation and legitimacy. The model distinguishes
three subcategories of identity orientation (individualistic, relational, and collectivistic) and
three categories of legitimacy (pragmatic, cognitive, and moral).
3.3. SPECIFYING THE FRAMEWORK
39
Figure 3.2: Process Model of Sensemaking. Source: Basu and Palazzo (2008, 125).
Linguistically, companies justify themselves either legally, scientifically, economically, or
ethically and firms communicate either biased or balanced.
The model distinguishes three categories in the conative dimension: posture, consistency,
and commitment. Organizations either take a defensive, a tentative, or an open posture.
Firm activities can be consistent or inconsistent with respect to the overall strategy and with
respect to internal matters. Finally, an organization’s commitment can be categorized as
instrumental or normative.
The concept of sensemaking and in particular Basu and Palazzo’s framework seem viable
for analyzing firm response to NGO campaigns for several reasons, which are presented next.
CHAPTER 3. FRAME OF REFERENCE AND PROPOSITIONS
40
First, the central topic of sensemaking is “. . . how people cope with interruptions” (Weick
1995, 5). An interruption breaks in the current practice, which is based on certain assumptions. The interruption contradicts the assumption and consequently, one has to make sense
of the new situation—literally. A campaign can be seen as an interruption. It challenges
current believes, standpoints, practices, and operations.
Second, the framework focuses on process. This view encourages to see firm response to
advocacy campaigns as a process. A campaign directed at a firm has an iterative character and
a process view seems plausible. An NGO approaches a firm, the firm responds (whereas not
responding is a response, too), the NGO responds to this response, and so on. Simultaneously,
the parties involved mutually influence each other. This means that responses are based on
constantly altering circumstances. Hence, it seems plausible that campaigns can trigger a
process within an organization.
Third, the focus on process is a focus on change. The literature review has shown that
change has been acknowledged as outcome of campaigns. Instead of focusing on change in
content of certain activities or actions, Basu and Palazzo focus on sensemaking dimensions.
The observation that some firms have introduced major changes in corporate culture supports
that firm organizational change could as well described as changes in cognitive, linguistic, and
conative dimensions.
Hence, the framework allows to propose patterns of change in the course of a campaign.
This view describes and analyzes in what ways, if at all, the input of a campaign may be a
trigger for change of organizational processes of thinking, speaking, and acting.
The next subchapter applies this model to firm response to advocacy campaigns.
3.3.2
The Cognitive Dimension
Identity Orientation
Identity orientation is the concept of how members of an organization see the organization
in relation to others and in particular to specific stakeholders. An individualistic identity
orientation is characterized by organizational members emphasizing that their organization is
a separate entity that is better at doing something than other organizations. The organization
is relational if they rather point to the importance of relationships to specific stakeholders. If
members see their organization connected with others on the basis of higher-level goals, the
organization’s identity orientation is collectivistic.
Brickson (2005; 2007) divided organizational identity orientation into three categories: individualistic, relational, and collectivistic. These types of identity orientation fundamentally
defer from each other. However, as these are ideal types, Brickson (2005) discovered in her
3.3. SPECIFYING THE FRAMEWORK
41
empirical study that organizations often show shades of each pure type. Her study revealed
that pure types are common, however, hybrid types (showing multiple properties simultaneously) are widespread, too. Therefore, one can distinguish between strong or moderate pure
types, weak types, and moderate and strong hybrids. The ideal types are not designed as a
hierarchical taxonomy but as qualities that most likely occur as a combination in different
degrees: “To the extent that organizations are more or less similar to these ideal types, they
are likely subject to the same influences and outcomes” (Brickson 2005, 580). For simplicity
and having in mind that this study does not feature as many samples, the fine grading of
hybrid types is neglected.
Assuming that firms respond to advocacy campaigns according to their identity orientation, what can be said about the response? A later publication by Brickson (2007) focuses
more specifically on (theoretical) prediction of specific relationship patterns and the creation of
social value of the various types of identity orientation. This work provides the opportunity to
propose how the ideal-type companies are expected to respond to advocacy campaigns. With
regard to relationship patterns (based on Brickson (2007, 871)), businesses with an individualistic identity orientation establish instrumental relationships with weak ties. Specifically,
relationships with NGOs are managed through decoupled ties. Hence, a firm with an individualistic identity orientation is expected to establish a relationship with the campaigning NGO
only if it is considered as serving its self-interest. Such relationships would be characterized
by being independent and “decoupled from the rest of the organization” (873). This means, e.
g., that there are few relationships that are managed by specific staff (not generalists), they
are characterized by hierarchical structures, and they have clear objectives. Applying Brickson’s elaborations about the influence of a firm’s identity orientation on social value creation,
an individualistic firm would respond to an NGO campaign by, inter alia, offering financial
contributions to NGOs that deal with the issue (philanthropy). Brickson (2005) describes
companies with a relational organizational identity orientation as organizations that build
relationships with stakeholders through dyadic partnerships. Such diadic partnerships show
personal characteristics and are in the responsibility of high-level individuals that stands in
contrast to individualistic organizations.
Brickson (2007) argues that relational companies are particularly well equipped to create
social value. In contrast to solely making philanthropic contributions, organizations with a
relational orientation attempt to “. . . build capacity in their nonprofit partners” (2007, 874).
Relational companies are interested in other organizations as such because they believe that
strong partners are beneficial for them. Hence, the relational company like none of the others aims for cooperative relationship patterns with NGOs. Hence, it may be proposed that
relational organizations are more likely than individualistic or collectivistic organizations to
respond to advocacy campaigns by engaging in specific partnerships that benefit both organi-
CHAPTER 3. FRAME OF REFERENCE AND PROPOSITIONS
42
zations. Collectivistic organizations establish relationships with NGOs that are characterized
by serving a common purpose. Relationships between collectivistic organizations and NGOs
correspond to alliances serving a specific purpose or a common goal. They do not focus on
the relationship between the organizations as such. Collectivistic firms are expected to have
more relationships with NGOs than any other identity orientation type. Consequently, it
may be proposed that companies with a collectivistic organizational identity orientation are
more likely than individualistic or relational companies to respond to an NGO campaign by
establishing relationships with NGOs as coalitions (coalition-based ties). Collectivistic organizations are likely to engage in social change initiatives by contributing knowledge and
resources to joint efforts. They have the capacity to unite various types of organizations.
Therefore, collectivistic organizations are more likely than relational or individualistic organizations to respond to an NGO campaign by actively engaging for the issue at stake, to
support its advancement and enforce social change.
Legitimacy
The second main category of the cognitive dimension is legitimacy. Legitimation patterns
describe values and beliefs that serve as the basis for a company to understand its actions as
desirable, suitable or acceptable (Suchman 1995). Organizations seek recognition in society
in order to do business successfully (Kostova and Zaheer 1999). Suchman combined institutional and strategic approaches and distinguished three dimensions of how organizations are
legitimized by its environment: pragmatically, morally, or cognitively. Companies confronted
with advocacy campaigns face the threat to loose legitimacy and they therefore have to repair it. According to Suchman, general strategies are to normalize, to restructure, and not to
panic. Pragmatic, normative, and cognitive legitimation types of firms apply these strategies
in different ways.
If a company mainly refers to the benefit of the addressee of an action, it legitimizes
pragmatically. Pragmatic legitimation is based on a direct or indirect exchange between
the organization and its primary stakeholders. Such companies make an effort to receive
“. . . support for an organizational policy based on that policy’s expected value to a particular
set of constituents” (Suchman 1995, 578). The value may be direct or indirect, such as
firm engagement for the stakeholders’ interests. The organization gains legitimacy because
its stakeholders consider its services, products, or processes as beneficial. In other words,
this type of legitimacy is based on a judgement of benefits provided by the organization.
It is proposed that organizations of a pragmatic legitimation type repair their legitimacy
in response to an NGO campaign by denying responsibility in the particular issue. If they
decide to restructure, it is most likely that they introduce monitors. In the context of advocacy
3.3. SPECIFYING THE FRAMEWORK
43
campaigns this could mean that the company participates in a certification and/ or verification
scheme.
Cognitive legitimacy may be considered as the opposite: Instead of the firm controlling
the environment, indicated by pragmatic legitimacy, the environment controls the firm and
the firm attempts to gain legitimacy in cognitive way by aligning its behavior and its products
to stakeholder expectations. The company legitimizes cognitively when actions are grounded
on comprehensibility and acceptance of the company. Organizations of a dominant cognitive
legitimacy type repair their legitimacy in response to an NGO campaign by explaining their
past or current behavior.
A company legitimizes morally when referring to common (moral) standards. Moral legitimacy is, like pragmatic legitimacy, based on a judgement by an audience. However, instead
of evaluating benefits, moral legitimacy is based on the opinion of the stakeholders that the
company is doing the right thing. An organization reaches moral legitimacy by engaging with
critical stakeholders to define and look for norms that are acceptable for both. Moral legitimation types repair their legitimacy in response to an NGO campaign by normalizing through
excusing and justifying their behavior. If such organizations restructure, it is most likely that
they replace personnel and revise existing practices.
3.3.3
The Linguistic Dimension
Justification
Based on Ashforth and Gibbs (1990), Basu and Palazzo (2008, 127) present four categories of
how how firms may justify their action and behavior: legal, scientific, economic, and ethical.
Legal explanations justify actions on the basis of arguments that refer to the origin of the
permission. Such legal justifications may mention public law, regulations, and firm-internal
rules as well as rights and obligations. In the context of a campaign, it could happen that
a company argued that it complied with existing regulation, an existing code of conduct,
or standardized procedures. Scientific justifications are arguments based on, for example, a
claimed expertise in a topic and they are often supported by external experts and studies.
Economic justification focuses on general or specific advantages a firm claims to generate
for its stakeholders. In the context of an advocacy campaign, a company might emphasize
the jobs it has created in developing countries or other contributions the firm environment
directly benefits from.
An organization may also justify its actions by claiming to contribute to superior societal
interests, such as alleviating poverty, which would indicate ethical justification.
CHAPTER 3. FRAME OF REFERENCE AND PROPOSITIONS
44
Transparency
Basu and Palazzo (2008) suggest that the degree of transparency of a company’s communications may range between being balanced and biased. In contrast to the so-far presented
categories of the model, this characteristic shows only one dimension and is a continuum of
the degree of transparency. Either transparency is high because the company communicates
in a balanced way or it is low because the company communicates in a biased way. In the
context of campaigns, biased communication only recognizes a positive view of the company’s
actions and does not admit any downside aspects. Balanced communication on the other
hand recognizes multiple viewpoints, discusses pros and cons of various solutions, and also
addresses deficits on the company’s part. With regard to assessing transparency, a middle
category of ambiguous is introduced in order to describe the situation in which a company
shows both biased and balanced characteristics.
3.3.4
The Conative Dimension
Posture
Posture describes how a firm interacts with others. Basu and Palazzo (2008) divided the
category of the conative posture into three subcategories: defensive, tentative, and open.
Similar to transparency, the posture of a firm can be identified along a single dimension
with various degrees of openness. Various subcategories indicate posture in the context of
advocacy campaigns: acceptance of feedback, adaption to direct claims from the campaign,
and engagement with NGOs.
A firm may or may not accept outside feedback with which it is confronted by the campaign. Accepting feedback indicates a more open, not accepting feedback a more defensive
posture. Starting internal discussions in a firm about the issue raised indicates that feedback
is accepted. It does not mean, however, that a company then adapts to particular claims,
which is another characteristic of posture. Accommodating specific claims and hence introducing specific change of firm behavior indicates an open, not accommodating claims indicates
a defensive posture. A tentative posture would be indicated by, e. g., acceptance of feedback
and non-adaptation to demands. The third category of posture specifically refers to interaction with ‘others’. For the context of a campaign, interaction between the campaigning or
other NGOs in the issue of concern indicate firm posture. Engagement with stakeholders has
been described to occur on a continuum (Carroll 1979; Lawrence et al. 2005; Freeman et al.
2007). Particular engagements between firms and NGOs can be described in five stages: great
suspicion and no interaction, exploratory interaction, philanthropic engagement, partnerships
between firms and NGOs benefitting both, and integrative engagement, which includes col-
3.3. SPECIFYING THE FRAMEWORK
45
laboration on regulatory or standardizing affairs (Austin 2000; Lindenberg 2001; Yziji and
Doh 2009).
Several authors have suggested that a firm posture may change over time and in particular
when confronted with a campaign, such as in the cases of Nike (Zadek 2004) or Shell (Mirvis
2000).
Consistency
Basu and Palazzo (2008) refer to strategic consistency of a firm’s CSR activities by distinguishing between overall and internal consistency. Overall or strategic consistency refers
to “. . . the consistency between an organization’s overall strategy and its CSR activities. . . ”
(129), whereas internal consistency refers to consistency “. . . within the varieties of CSR activities contemplated during any given period of time” (129). Hence, CSR activities ought to
be in line with an organization’s overall strategy and they also should be in line with each
other.
Strategic consistency is a result of managerial rigor to prepare CSR activities (Porter
and Kramer 2002). Consistent activities are planned in the course and in accordance with
the overall strategy. Inconsistent activities are based on ad-hoc decisions when problems
arise. Hence, preparation versus unreadiness are indications of overall consistency. Similarly,
consistency within CSR activities is dependent on the organizational management’s effort
to conduct CSR activities in a coherent way. Newly introduced activities either match or
differ from existing activities. Similar to general CSR activities, organizational response to
campaigns from NGOs can be consistent or inconsistent with overall strategy and existing
CSR activities. Firms that act strategically consistent are likely to combine a response to an
NGO campaign with a business aim (Porter and Kramer 2002). The extreme form of strategic
consistency is an activity that a firm would still conduct even if it remained unknown.
Commitment
Basu and Palazzo (2008) divided organizational commitment into instrumental and normative.
Normative and instrumental considerations are presented as two fundamentally different concepts that, however, may end up in the same behavioral types (Wiener 1982). Yet, normative
commitment may be clearly distinguished from instrumental motivation by three characteristics: personal sacrifice, persistence, and preoccupation. Applied to firms confronted with an
advocacy campaign, normative commitment would be indicated by an organizational sacrifice.
It would somehow be shown that the chosen path entails some sort of disadvantage(s) to the
organization.
CHAPTER 3. FRAME OF REFERENCE AND PROPOSITIONS
46
Persistence states that the behavior is not only enforced by beneficial support and punishment but indicates self-initiative. Further, normative commitment reveals preoccupation, i.
e., the company devotes a considerable amount of resources, comprising time and/ or money,
to the issue. If these three processes occur, the behavior may be characterized as normative
commitment.
3.4
3.4.1
Propositions about Change of Firm Profiles
Definition of Change in this Context
Now that the various dimensions of the process model of sensemaking have been presented,
the question about the potential change in the respective dimensions of cognitive, linguistic,
and conative characteristics is raised. Before propositions about change are developed, it is
addressed what change in this context means.
Basu and Palazzo (2008) raised the question in how far firms underwent considerable
change on their organizational level after having been exposed to scandals. Rüegg-Stürm
(2005) explains in the new St. Gallen management model that organizational change can be
incremental or discontinuous. Incremental change is an optimization within existing structures. Firms conduct such a fine-tuning of existing structures parallel to their daily business.
Employees of a firm can still recognize the original organizational structure and their work
environment after this type of organizational change. Discontinuous change disrupts with existing structures and introduces fundamentally new patterns of behavior, cognitive structures,
or organizational routines. It is a renewal of such existing patterns in which, for example,
the firm builds new core competencies. This type of change is much more fundamental than
incremental change. Discontinuous change can make employees feel displaced because they
may not recognize their original firm environment.
These types of change are now transformed to the context of this study and in particular
to the frame of reference. In the context of the applied framework, discontinuous change is
regarded as change in categorical terms. Substantial change in a category is indicated, for
example, if a firm dominantly justifies in economic terms at the beginning but mainly in
ethical terms at the end of a campaign. In the context of this study, incremental change is
defined as relative change within existing categories. Incremental, or relative, change could,
for example, be observed when a firm justifies economically and ethically at the beginning of
a campaign but existing patterns are intensified during a campaign.
3.4. PROPOSITIONS ABOUT CHANGE OF FIRM PROFILES
3.4.2
47
Mutual Influence of Dimensions
It is argued that the three dimensions of sensemaking mutually influence each other. The
inherent concordance of thought, language, and action is actually the underlying premise of
sensemaking as such. Weick (1995, 61–62) has accentuated this inseparable connection with
the following sentence: ‘How can I know what I think till I see what I say?’ He addressed
the mutual influence of the sensemaking dimensions mainly in two ways. On the one hand,
he argued that the process of sensemaking is ongoing (43–49). This means that there is no
end to sensemaking and and no beginning. Details have been described above in Chapter
3.2. Processes in each dimension happen simultaneously. On the other hand, Weick argued
that people, and therefore also organizations, constantly create their environment by reacting
upon it. This aspect is illustrated with the expression “language is action” (44). By speaking,
people produce a part of their environment to which other actors react to and to which the
first actor responds again. Hence, there is an inseparable connection between the sensemaking
dimensions in so far as they constantly influence each other.
Before focusing on change of firm response profiles in response to campaigns, types of
firm sensemaking dimensions are elaborated. In their model, Basu and Palazzo (2008) have
not determined any organizational types of sensemaking in terms of stable relationships between dimensions. Their model is still in a conceptual stage and has not yet been assessed
empirically. Yet, the authors suggest that identifying typologies among the subcategories
of their model is of interest to the the literature about CSR. They also mention that there
are potentially uncountable combinations of subcategories. Based on the empirical example
of how Wal-Mart is perceived to respond to assaults, it is assumed that some subcategories
build clusters. Basu and Palazzo (132) reflect whether, for example, firms with an individualistic identity orientation legitimize pragmatically and justify economically, whether such
companies show strategic and internal consistency, and whether they commit instrumentally.
It is emphasized that so far, such typologies have empirically only been investigated by
Brickson (2005) who focused on identity orientation. Brickson (2007) related particular types
of identity orientation to particular types of engagement with NGOs. For example, she
suggests that individualistic identity orientation corresponds with a philanthropic engagement
with NGOs. Another suggestion is that a relational identity orientation corresponds with
collaborations between firms and NGOs that benefit both.
The last step before putting forward the propositions of this study is to match the interest
for a typology with the notion of change in such types. Based on the just-presented arguments which make it plausible to assume that major patterns of sensemaking exist, Basu and
Palazzo (2008) proceed and raise the question of what would make an organization to change
such a pattern of sensemaking. They call such a change CSR transformation (132). The
CHAPTER 3. FRAME OF REFERENCE AND PROPOSITIONS
48
superordinate question of interest is in how far companies engage in CSR activities substantially or only superficially (Laufer 2003). Basu and Palazzo (2008) raise the question whether
scandals or setbacks have the power to make a company change its underlying sensemaking
type. This study assesses whether an advocacy campaign contains such power.
It is assumed that, first, categories influence each other, second, there are major types of
sensemaking built from clustering subcategories, and third, a campaign has the power to make
a firm change its sensemaking profile. Accordingly, it is assumed that a change in sensemaking
categories occurs across all the dimensions of the framework. This proposition addresses the
descriptive ability of the suggested framework to address firm response to advocacy campaigns.
By combining these assumptions, it is proposed that companies change their initial response
profile in similar ways across all three major dimensions of the framework. Either, they
change in relative terms (incremental change) or in categorical terms (discontinuous change
or substantially).
Proposition 1: When confronted with an advocacy campaign, firms alter their
initial response profile across all three dimensions (cognitive, linguistic, conative)
in similar ways (relatively or substantially).
This proposition is put forward to explore notions of change in the context of the framework.
So far, literature does not confirm particular patterns or types of sensemaking. Also, this
study does not focus on generating such typologies. However, the proposition builds on the
assumption that types do exist and it focuses on the change of such types. Hence, this
proposition does not address the identification of such types but addresses change of types,
no matter what they might be. It is suggested that the type of change is similar across
all dimensions of the model because the literature suggests that there is a mutual influence
between dimensions. It is consequently proposed that if there is a change in one dimension, the
ongoing process and the enactment between the dimensions evokes a change in all dimensions.
3.4.3
Influence of a Firm’s Visibility
The next aim is to address the explanatory ability of the framework. Hence, it was asked
what causes particular change. Having in mind the literature about impacting factors of firm
response to advocacy campaigns, it is particularly the factor of firm visibility, or size, which
has repeatedly been addressed. Yaziji (2005) put forward a theory of social risk of firms.
Public awareness of a firm is the first of various factors which influence whether advocacy
organizations select a firm as a target for a campaign. The author argues that public awareness
positively influences the likelihood for a firm to be challenged by advocacy groups. Firm size
influences public awareness, or visibility, of a firm.
Firm visibility does not only dominate target selection strategies of NGOs, it also influences
how companies respond to campaigns once they are a target. Firms manage their social risk
3.4. PROPOSITIONS ABOUT CHANGE OF FIRM PROFILES
49
accordingly. This means that visible firms, e. g., firms with a well-known consumer brand,
such as McDonalds, will not diminish their brand in order to lower the social risk they are
exposed to due to their strong brand (Yziji and Doh 2009, 108). In contrast, such firms will
most likely accept and live with a higher exposure to advocacy campaigns. If such firms have
well-known brands, the probability for a campaign is even augmented (63–64).
Similarly, Lenox and Eesley (2009) proposed that “. . . compliance should increase with
increasing harm and decrease with greater operational loss” (48) and further, “The larger and
more visible a targeted firm, the more harm an [. . . ] activist will threaten against the firm”
(50). The authors confirmed this hypothesis in their empirical study about environmental
advocacy campaigns against firms in the United States form 1988 to 2003.
These arguments are also in accordance with van Riel and Fombrun (2007) who argued
that firm reputation has been considered a major factor and motivator of firm response.
Similarly, Julian et al. (2008) hypothesized about firm accommodation of activist demands
and they also hypothesized that “visibility is positively related to the extent of accommodation to interest group pressure” (965). The authors found support of this hypothesis in their
empirical study for firm size. The authors identified a direct effect of firm size on positive
accommodation of demands (positive as in accordance with the advocacy campaign’s demands). Julian et al. (2008) have recently found support for this assumption. In accordance
with these arguments, this study proposes that more visible firms change more substantially
during advocacy campaigns than less visible firms:
Proposition 2: A more visible firm is more likely to change its initial response
profile in categorical terms than a less visible firm, which is more likely to change
in relative terms.
3.4.4
Influence of a Firm’s Initial Stance
Literature has shown that firms have differing experience and assets when confronted with an
advocacy campaign. Reasons may be the firm’s strategy to position as a socially responsible
company to various degrees. Companies may have built their reputation of either being
accommodative of activist claims or to withstand them. These factors, among others, influence
whether at all a firm is selected as a campaign target and with what intensity of threatened
harm it is confronted with. Yaziji (2005) argued that the magnitude of the challenge by the
advocacy organization increases with the intent of the firm to resist to it. This has been
considered to be a firm-specific risk factor which is based on the NGO’s perception of the firm
(Yziji and Doh 2009). Lenox and Eesley (2009) argued that firm compliance with the NGO
claim “. . . should increase with increasing harm. . . ” (48). Combining the two arguments, the
first, that compliance increases with increasing harm and the second, that harm increases
with a defensive position of the firm, builds the basis for proposition three.
CHAPTER 3. FRAME OF REFERENCE AND PROPOSITIONS
50
While responding to advocacy campaigns, firms have been acclaimed of green-washing
their reputation or to conduct image laundering (Renard 2003; 2005; Laufer 2003). These
expressions refer to the discussion and claim that some companies only take temporary and
selective measures to improve their socially responsible or ethical behavior. Some empirical
studies have even found support for this claim. Accordingly, Weaver, Treviño, and Cochran
(1999) have found that firms often decouple their programs from actual activities. They have
investigated in how far companies have integrated or decoupled announcements of change
in their ethics programs. Based on institutional theory, they suggested that external pressure makes firms decouple their programs from their announcements. Similarly, Trullen and
Stevenson (2006) have recently identified a particular form of decoupling in their study about
pharmaceutical companies. Under institutional pressure, they had announced changes in behavior (in context: price cuts of AIDS drugs) but have not followed suit according to their
own announcements. Based on these arguments, it is suggested that firms that have an initial cooperative stance toward advocacy organizations may remain their original position and
change less during campaigns than more defensive initial positions. The argument is also in
line with Suchman’s identified forms of gaining, building, and repairing legitimacy and with
Zadek’s learning curve of a firm’s stage of CSR. Accordingly, it is argued that firms which are
at a further position on the learning curve change less in order to respond to the campaign.
Contrarily, firms that are in an earlier stage of their CSR strategy change more in order to
respond to an advocacy campaign. In sum, the argument of proposition three is as follows:
Public pressure, issued through the campaign, hits the defensive firm harder than the cooperative firm. A firm under high public pressure is likely to announce concessions to the claim
of the campaign but to decouple their actual activities in response.
Proposition 3: A firm with an initial cooperative stance is more likely to change
its initial response profile in relative terms than a firm with a defensive stance
that is more likely to change in categorical terms.
3.5
Recap
This chapter has argued that firm response to advocacy campaigns may be assessed with a
model based on sensemaking in organizations. It has been proposed that this model is suitable
for describing initial firm response and to assess change of firm response during campaigns
on the level of organizational processes of thinking, speaking, and acting. Based on existing
arguments, it is proposed that, first, firms change their initial profile across all categories of
the framework in either categorical or relative terms. Second, it is proposed that more visible
firms are more likely to change in categorical than in relative terms. And third, it is proposed
that firms that have a cooperative stance at the beginning are more likely to change in relative
3.5. RECAP
51
terms than firms that initially are more defensive and are proposed to be more likely to change
categorically. A comparative case study has been designed and the next chapter presents its
methodology.
Chapter 4
Methodology
4.1
Introduction
This chapter presents the procedures and tactics of data analysis and discusses quality issues in
qualitative case study research. Like any study, qualitative case studies ought to meet certain
quality criteria in order to call for academic acceptance and to omit obvious research errors.
The general aim is to conduct credible and objective research. This subchapter presents
the quality criteria for case studies, and the subchapters 4.4 to 4.7 elaborate how this study
attempted to meet these criteria. Subchapter 4.8 admits limitations that are inevitable and
need to be addressed in order to create transparency.
4.2
Qualitative Research Method
Selecting the research method involves discussing what each method is capable of—in general
and in the particular context of a study. Which research method is appropriate for the phenomenon to be studied may depend on the actual research topic and question, on availability
of data, and on preferences, skills, and limitations of the researcher (Silverman 2005).
Further, it is argued that a qualitative research approach is suitable because it allows to
study the situation of firm response to advocacy campaigns on organizational level in detail.
Moreover, this allows to identify whether the chosen framework is suitable for describing firm
response. Only afterwards, systematic comparison and variance can be studied.
Another point to consider is how the topic to be researched has so far been addressed
and whether there is a well-accepted and commonly applied method. In that case, it may
be carefully considered whether it is worth to choose a different approach (Silverman 2005).
However, the research field of firm response to advocacy campaigns is still in its beginnings.
The scarce empirical studies about firm response have applied both qualitative (Trullen and
Stevenson 2006) and quantitative (Julian et al. 2008) methods. Appropriate combination of
52
4.3. QUALITY CRITERIA OF QUALITATIVE RESEARCH
53
both methods is recommended by various authors (King et al. 1994; Silverman 2005). Hence,
this study follows this advice and in analyzing qualitative data, simple quantitative methods
have been applied, mainly frequency analysis.
4.3
Quality Criteria of Qualitative Research
Yin (2003) mentions three major concerns case study research has been confronted with:
the lack of rigor, the inability to generalize, and the abundance of endless documents. He
presented a rigorous procedure how to conduct case studies and the first concern may be
diminished by following his guidelines. The second concern is a spurious comparison of case
studies with survey research and refers to a case study’s external validity that is addressed
below. The third concern is usually based on a confusion of case study research with particular
methods of data collection that indeed produce large documents, such as ethnography or
participant observation. Case studies do not necessarily apply these methods. Similar to
quantitative research, there are a few tests that may be undertaken to judge the quality of
any social science research study. To enhance the rigor of a case study, these criteria have
been adapted for qualitative inquiries. Many authors, e. g. Yin (2003) or Silverman (2005),
present comprehensible and extent elaborations of these quality criteria and they are briefly
summarized below. This study attempted to meet these criteria in various stages of the
research procedure. Table 4.1 summarizes how each aspect of quality has been addressed in
this study and refers to the respective chapter.
4.3.1
Validity
Silverman (2005) introduces validity as “another word for ‘truth’ ” (210). Quantitative studies
can address validity by standardized methods of analyzing type one and two errors (Silverman
2006). Addressing validity in qualitative research is not as straight forward and called for
discussions of various approaches which are briefly presented next.
Construct Validity Construct validity refers to the objectivity of a study in so far as it
assesses how the topic is operationalized and whether it investigates in line with its intentions
(Silverman 2006). Yin (2003) proposes researchers to enhance construct validity by using
multiple sources of evidence and by establishing a chain of evidence. Further, key informants
may review a draft of the case study report. Using multiple sources of evidence also is called
data triangulation. Common sources of evidence for qualitative research are documentation,
archival records, interviews, direct observations, participant observation, and physical artifacts. Yin (2003, 85–97) presents these six sources of evidence in detail. The principle of
establishing a chain of evidence requires a link between all elements of the case study that
CHAPTER 4. METHODOLOGY
54
Quality Criteria
Enhancing Quality of this Study
Construct Validity
Construct validity as a quality criteria of case study
research (whether the study investigates what it intends to)
Data triangulation
-Various sources of evidence: interview data, archival
data, company documents
-Review of draft reports by informants
Internal Validity
External Validity
Reliability
Chain of evidence
-How access to data has been gained
-How data has been analyzed
Internal validity as a quality criteria of case study
research (causal relationships between variables and
results)
Addressed in
Chapter
4.3.1
4.6.1
4.6.2
4.7
4.3.1
Research questions, purpose, and conceptual framework built on the literature to bound the case study
(including diagram).
4.4.1
Various tactics of data analysis, e. g., counting, pattern matching, addressing rival explanations
External validity as a quality criteria of case study
research (generalizability)
4.7 & 5 & 6
Cross case analysis
-Case design: multiple (holistic) case study of four
companies
-Sample frame building on theoretical background
-Details on case study context in case reports
Reliability as a quality criteria of case study research
(addressing consistency in the research procedure)
4.3.1
4.4.2
4.5
5.2 & 5.5
4.3.2
Interview data collected based on a case study protocol
4.6.3
Appendix A
Raw data stored in separate database
4.6.3
Organizations studied are named
4.5
Table 4.1: Application of Quality Criteria
4.3. QUALITY CRITERIA OF QUALITATIVE RESEARCH
55
ought to be understood by an external reader: the case study report should be linked with the
database, with the protocol, and the questions. Such a chain can be supported by citations
from the database. The reader desires to “. . . move from one part of the case study process
to another. . . ” (Yin 2003, 105). Triangulation and establishing a chain of evidence are to be
applied during data collection and the latter also during data analysis. In contrast, Silverman
is sceptical about triangulation and verification of respondents as appropriate methods to enhance validity (2005; 2006). On the one hand, he doubts that various data sources will provide
an overall truth and on the other, he questions interest and comprehension of respondents for
an elaborate research report. However, his contrasting position can be overcome. Difficulties
only arise when accounting either some sources of data more weight than another or the informants’ reactions over the researcher’s analysis. Rather, various data and also informant
reactions to reports should be considered as additional data that is to be treated with similar
care like any kind of data. Silverman favors methods that address internal validity.
Internal Validity Internal validity addresses the arguments of causal links between variables and results and mainly applies to explanatory case studies (Yin 2003). It is a difficult
task to address internal validity in case studies. There are several techniques of data analysis that enhance internal validity, e. g., pattern matching, building explanations, addressing
rival expectations, and using logic models. Internal validity should be addressed during data
analysis. Similarly, Silverman (2006) presents analytic induction, the constant comparative
method, deviant-case analysis, and appropriate tabulations as methods to approach validity.
Pattern matching confronts empirically observed patterns with expected (predicted) patterns. Patterns may be analyzed in dependent or in independent variables.
Building explanations is a subcategory of pattern matching (Yin 2003). It also applies
mainly to explanatory case studies. Explanation building can also be seen as pattern matching
and considering rival explanations across cases (as compared to a single variable within each
case). When thinking about rival explanations ahead of time, then the data collection phase
should also intend to collect information about this rival evidence in order to avoid being
blamed to having collected only the data supportive of the first explanation.
Using logic models also can be viewed as a specific type of pattern matching. It considers
developments over time in which the dependent variable of a previous stage becomes the
independent variable for the next stage, forming a cause-effect-cause-effect pattern (Yin 2003).
External Validity As mentioned above, external validity is a major concern about case
studies and is to be established when creating the research design (Yin 2003). External validity
addresses whether a case study is generalizable beyond the single case. The crucial issue is to
distinguish between statistical and analytical generalization (Yin 2003). Survey research aims
CHAPTER 4. METHODOLOGY
56
at statistical generalization, whereas case study research aims at analytical generalization.
The latter means that case study results are not to be generalized to a population but to theory
and related propositions. In order to enhance analytical generalization, the researcher ought
to follow a replication logic when selecting cases (not a random-sampling logic as in survey
research). Replication may be concerned with predicting the same results (literal replication)
or with predicting contrasting results building on theory (theoretical replication). Similarly,
other authors refer to theoretical sampling (Corbin and Strauss 2008), purposive sampling
(Silverman 2005), and theory-driven sampling (Punch 2005), which are further addressed
below in Chapter 4.5. Overall, authors agree that researchers should report the rationale for
selecting the cases and they should provide a rich description of the case study context in
order to enhance external validity (Cook and Campbel 1979).
General advice with regard to the specific number of cases is difficult. Similar to sampling
logic, the higher the number of cases, the higher the confidence in the propositions. Eisenhardt
(1989) suggests a cross-case analysis of four to ten cases as a reasonable ground for analytical
generalization. In sum, case studies are theory-based in so far as their results refer to the
underlying theory and the propositions based on this theory. The emphasis on theory links to
another major difference between selecting cases according to the replication and the sampling
logic. The criteria for selecting cases may change during the research phase. Replication
comprises a feedback loop that may alter the criteria for case selection during the research
process. It may be the case when results do not occur as predicted by theory. If this is
the case, the theory needs to be reconsidered and the research design needs to be adapted
accordingly. With regard to the number of cases, the case study comes to closure when
findings are saturated, which means no new patterns are being discovered (Eisenhardt 1989).
4.3.2
Reliability
“ ‘Reliability’ refers to the absence of random error. . . ” (Gibbert et al. 2008) and ought to be
addressed when collecting data. Yin (2003) presents what is expected of a reliable case study.
Reliability refers to the criteria that another investigator also should be able to conduct the
same case study and when following the procedure described by the previous researcher, the
later investigator should attain the same results. In order to produce a reliable case study,
the investigator should conclusively document the research procedure. Techniques include
establishing and referring to the case study database and protocol and it should report what
material was used. The case study protocol is about documenting the research process and
includes an overview of the project, the field procedures, the questions, and a guide for the
report. The case study database comprises the actual data collected and the reports from the
4.4. BOUNDING THE CASE STUDY
57
researcher. It is important to distinguish the raw data from other documents, such as case
study notes, documents, tabular materials, and narratives.
4.4
Bounding the Case Study
4.4.1
Questions, Purpose, and Conceptual Model
Designing a case study starts with clarifying the question to be answered and the propositions to be tested (Yin 2003). This study explores in how far advocacy campaigns trigger
organizational change. It investigates how the model of sensemaking of CSR developed by
Basu and Palazzo is suitable to describe and explain firm response to advocacy campaigns.
Its main goal is to contribute to a growing body of literature about firm response to advocacy
campaigns.
The main research questions of this thesis have been presented in Chapter 1. They are
about how firms respond to advocacy campaigns and why they respond the way they do,
including in how far campaigns can be regarded as triggers of change. To address these
questions, this case study has asked the following more specific questions:
ˆ How, if at all, do firms initially respond to advocacy campaigns in terms of cognitive,
linguistic, and conative processes?
ˆ How, if at all, do these response profiles change in the course of an advocacy campaign?
ˆ In how far do advocacy campaigns account for change?
ˆ In how far does the visibility of the firm account for change?
ˆ In how far does the initial stance of the firm account for change?
The purpose of this study is indicated by the propositions to be assessed. The propositions
put forward above-mentioned aim at evaluating the frame of reference from Basu and Palazzo
(2008). The purpose of this study is to find out how firms respond to campaigns and in
what ways, if at all, organizational change is initiated by the campaign. Case studies may be
applied to describe and also to “. . . explain. . . causal links in real-life interventions. . . ” (Yin
2003, 15). On the one hand, this study describes firm response by identifying firm profiles of
response. On the other hand, it aims to explain impact of campaigns by identifying change
in firm profiles during campaigns. The conceptual model of this study is illustrated in Figure
4.1. It presents a simplified view of a campaign being a cause of organizational change. This
organizational change is defined as a change in the response profile of the firm consisting of
cognitive, linguistic, and conative processes. It is also investigated in how far visibility and
CHAPTER 4. METHODOLOGY
58
Figure 4.1: Conceptual Model
initial stance of the firm may be mediators of the change in response profiles (Dul and Hak
2008).
4.4.2
Case Design: Multiple (Holistic) Case Study
This paragraph describes the study design, the case selection process, and the units of analysis.
Deciding on the study design is not a question of the right but the most appropriate for
the particular purpose while considering its advantages and disadvantages in addition to the
limitations of the researcher. Overall, a qualitative design was preferred over a quantitative
because the model to be assessed has only been theoretically conceptualized and initial empirical validation has not been conducted. A quantitative study based on the results of this
investigation could be subject of further work.
This study is designed as a multiple (holistic) case study (Yin 2003, 46-53) (also called
cross-case study or comparative case study). The reasons are as follows. The purpose of this
study is to test a framework in terms of its potential to categorize and predict change initiated
by a campaign. To test the framework with a single case would evoke the question whether
the results can be replicated to make them more robust. Hence, a multiple design was chosen.
The rationale for choosing a holistic design with one major unit of analysis rather than an
4.5. SAMPLING CASES
59
embedded design with multiple subunits of analysis is mainly based on the limited resources
of the investigator.
This study applies a holistic multiple-case design (Yin 2003, 46-53) and each case has one
major unit of analysis. As this study is about organizations, the major unit of analysis is the
corporate level of firms or, alternatively, the business entity that responded to the campaign.
Data collection, has been carried out on the organizational and also on the individual level
(Yin 2003, 76).
The research strategy within each case consisted of analysis of documents and archival records
and conducting and analyzing interviews. Data collection is described next.
4.5
Sampling Cases
Selecting cases in qualitative research raises considerable discussions. Researchers of qualitative studies are often confronted with the question in how far their findings are generalizable
when based on a low number of cases (Eisenhardt and Graebner 2007). In order to identify the
current discussion in the literature, the topic is first briefly addressed from a rather abstract
perspective and the subchapter after the next presents how this study has sampled cases.
4.5.1
Selecting Cases in Qualitative Research
This subchapter discusses sampling cases in qualitative research that mainly refers to the
question of generalizability of findings from a small sample of cases. It is important to understand that sampling in qualitative research is different from random sampling of quantitative
studies. As in quantitative research, selecting cases follows the criterion of generalizability.
However, generalizability in qualitative research has a different meaning than in quantitative
research. The latter defines generalizability in relation to the population from which the
sample is selected. The question is in how far the sample represents the entire population.
In qualitative research, however, the purpose is to build theory and the critical question is,
therefore, in how far the selected cases provide theoretical insight and the aim is to enhance
theory “. . . within the set of cases” (Eisenhardt and Graebner 2007, 27).
Based on this criterion of ‘theoretical usefulness’, sampling in qualitative research varies
from sampling in quantitative research in several aspects. First, sampling in qualitative
research is less straight forward than in quantitative research because the judgement of theoretical usefulness can be argued. This leads to another distinction: There is a large variety of
sampling strategies in qualitative research. Silverman (2005) mentions four ways to achieve
generalizability in qualitative research. A first strategy is to combine qualitative research with
CHAPTER 4. METHODOLOGY
60
quantitative measures of the population. A second strategy is so-called purposive sampling
that presents a theoretical purpose of the selection of the cases. A third strategy is theoretical sampling that is developed and applied by grounded theorists (Glaser and Strauss 1967;
Corbin and Strauss 2008). The distinction between the two is mainly that theory-driven or
purposeful sampling can be determined prior to the data collection process whereas theoretical sampling is guided by data analysis and conducted repeatedly during the research process.
A fourth strategy is considered more radical and argues that any single case has the potential
to provide generalized insights. Even when not focusing on the basic approach of strategy one
and the radical approach of strategy four, purposive sampling still offers uncountable ways to
select cases. Consequently, it can be said that sampling strategies of any qualitative research
designs differs from another one except for an exact replication study. However, this does not
mean that sampling of cases is entirely random. As stated, the theoretical usefulness in the
particular context has to be revealed and discussed according to some criteria that also are
presented in this chapter. First, however, the concept of purposive sampling and its subcategory of theoretical sampling are presented in more detail to enhance the understanding of
the purposive sampling strategy of this study.
Purposive sampling builds on the features or focus of a study. While quantitative research
has the goal to sample entities from a population, qualitative research samples the concepts it
intends to study. This is exactly what statistical sampling should not do. As the qualitative
study aims at building theory, purposive sampling is tightly linked to the purpose of the study
and its research questions. As mentioned above, purposive sampling is the general concept
for two common main types of qualitative sampling. Punch (2005) distinguishes between
theoretical sampling and theory-driven sampling and considers purposive sampling as the
general term for both. Theoretical sampling is initiated at the beginning of data collection
and may be repeatedly conducted during the research process. It is the accepted way of
sampling for building grounded theory (Corbin and Strauss 2008). Theoretical sampling is a
process of moving back and forth between data collection and analysis where analysis guides
the next sampling level. Findings of a first case guide to the selection of the next.
As a variation of purposive sampling, theory-driven sampling focuses on theoretically
useful cases that are predefined. Even if a sampling plan is predetermined, it does not mean
that it is strict and cannot be adapted. However, the researcher entering the field with a
sampling plan has already a better picture of which cases to investigate than the researcher
with a theoretical sampling plan. Eisenhardt (1989) has described how various researchers
have argued theoretical usefulness of their cases. Some have argued for replication of existing
cases, some have chosen cases to extend the arising theory, and yet others have developed
conceptual categories that argue for the use of studying polar types of cases. Yin (2003) has
even specified the replication logic and distinguished between literal and theoretical replication
4.5. SAMPLING CASES
61
(whereas literal replications produces the same results for predictable reasons and theoretical
replication produces different results for predictable reasons).
The specific criteria for theoretically useful cases are not standardized as in quantitative
research and they have to be identified in each qualitative study separately. Similarly, it
is difficult to determine the quality of a sampling strategy. Therefore, the six criteria from
Miles and Huberman (1994, 34) are helpful when evaluating a sampling plan. They directly
address the issues mentioned above and address the relevancy of the sampling in connection
with the conceptual framework, the chance to study the phenomena of interest, the possibility
to describe and explain, feasibility of the plan in terms of time and money, and ethics issues.
These criteria are applied to this study in the next section.
4.5.2
Purposive Sampling in this Study
This subchapter presents the sampling plan of this study and eventually holds it against
the criteria from Miles and Huberman (1994) that have just been addressed. The specific
description of how the sampling strategy was developed and applied should enhance the
(theoretical) generalizability and therefore the external validity of this study. Also, reliability
of the case study is enhanced when organizations under examination are named by their
names and not kept anonymous.
Bounding the overall population
Even though qualitative research does not randomly sample from a population defined on
a statistical basis, it also is useful to have an overall population in mind when sampling
purposely. It is reasonable to consider the context in which the phenomena in focus will be
studied. This helps screening cases.
The first aspect that helps to defining the population of this study is the fact that the
phenomenon to be studied is composed of two aspects: advocacy campaign and firm response.
Hence, the first boundary to the population is firms that are confronted with an advocacy
campaign. There are various types of advocacy campaigns but this study has limited its
focus from the beginning to advocacy campaigns from NGOs that act in the area of social
movement (they desire to change the rules) and to serve others. This builds on the taxonomy
of Yziji and Doh (2009). As such proxy war campaigns pose a particular delegitimation
(or social ) risk for firms, firm response to these campaigns is of particular interest (Yaziji
2005). Watchdog campaigns (Yaziji 2005) may focus on a particular company to change its
behavior. Proxy war campaigns have the intention the change the rules. They usually have an
international component as (public) business regulation and (voluntary) standards are often
anchored internationally. Proxy war campaigns are meaningful. They usually have the power
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62
to call for media attention and evoke public firm response. The focus on proxy war campaigns
eliminates mere national or local or community initiatives as they usually focus on changing
a particular firm’s behavior.
Having in mind that case studies have by definition a context to the presence and that
data collection focuses on interviews, the campaigns to be studied should not lie too far back
in time. A time frame of five years seemed feasible to screen possible candidates. This time
frame limited the focus on campaigns as far back as 2001 as screening cases commenced in
2006. In sum, the overall population is defined as firms confronted with a (proxy war) advocacy
campaign after the year 2000.
Developing a sample frame
This study starts off with some theory in mind. The model has been presented in Chapter
3. Therefore, a theory-driven sampling strategy that is somewhat more structured than
theoretical sampling is argued to be reasonable. Whereas grounded theory starts off with
“no theory under consideration” (Eisenhardt 1989), this study has a model in mind that is
assessed. Hence, a sample frame has been developed in order to guide selecting cases and
eventually data collection. Eisenhardt suggested a sample frame to consist of two dimensions
in order to have a variety of cases to study the phenomenon. It is then possible to match
patterns across cases in regard of the categories the cases were chosen from.
The question of the suitable number of case studies should be raised. Yin (2003) has
argued that already two case studies are to be preferred over a single one and he moderately
favors the multiple-case over the single-case design. Eisenhardt (1989) argues in a similar
direction and has claimed that four to ten case studies may be suitable to developing theory
and analytically generalize from their findings. The number of cases may augment external
validity.
The rationale for a sample frame has to be tightly connected to the purpose and the
question of the study. The case study questions have been specified above. They ask for
cases in which the concept of change in firm response profiles occurs, defined as a change in
cognitive, linguistic, and conative patterns, in connection with impact of the firm’s visibility
and its initial standpoint toward advocacy campaigns and their demands.
The challenge for defining the sampling plan is to identify cases where these phenomena
actually appear. Alternatively, it may be questioned whether the phenomenon can appear at
all (see below the second criterion by Miles and Huberman (1994) to evaluate the sampling
plan). As stated by Watzlawick, Bavelas, and Jackson (1967), we cannot not communicate.
Hence, the phenomenon of firm response can be expected to appear as soon as the firm has
taken notice of the campaign. Whether the response profile changes, however, is impossible
4.5. SAMPLING CASES
63
to identify in advance. The theory that shall be developed refers to variation in response
based on firm visibility and initial stance. Accordingly, the sample frame is based on these
two dimensions.
Eisenhardt (1989) has argued that examples of polar types would be of particular interest.
The two categories discussed provide such polar types. Even though this sample frame is based
on variation across cases, it focuses on “typical” examples that have, according to Miles and
Huberman, “great payoff” (1994, 34). Smaller and larger companies can be campaign targets
and it has been observed repeatedly that some firms are initially rather defensive and others
are more willing to cooperate with advocacy organizations.
The sample frame is presented in Figure 4.2, including the selected cases. How they were
selected is presented next.
Screening and selecting cases
The guide to screen and select cases was the overall population and sample frame. This meant
that advocacy campaigns had to be identified first before cases could be screened whether
they matched the criteria from the sample frame. Potential campaigns and their targets
were identified by screening public sources, in particular the news media and web sites from
advocacy organizations, and academic literature. It was noted that most of the well-known
campaigns reached their peak before 2001, such as the campaign on pricing of AIDS drugs
targeting pharmaceutical companies and the campaign on genetically modified organisms
targeting agricultural businesses and public policy processes (both late 1990s, see Trullen and
Stevenson (2006) and Nelson (2001) respectively). In order to match the category of company
visibility, it was searched for a campaign that targeted large, transnational companies and
another campaign that targeted national companies. The two campaigns identified were
Oxfam’s campaign in the coffee sector targeting the largest coffee roasters (with its peak in
2002) and the Clean Clothes Campaign (CCC) targeting Switzerland-based companies (with
its last major actions in Switzerland in 2008).
The first campaign that was selected as a context for this study was a sub-campaign of
Oxfam’s Make Trade Fair, an umbrella campaign for several initiatives. It was initiated at the
end of the 1990s with targeting the pharmaceutical industry regarding the pricing of AIDS
drugs in Africa. The second initiative under the roof of Make Trade Fair was directed at the
coffee sector and targeted large coffee roasters in particular with regard to their responsibility
of drawbacks in the coffee supply chain. This campaign was initiated in 2001 and reached its
peak in 2002.
The second context, the CCC, is an ongoing initiative by a European network of NGOs.
This network is largely concerned with labor conditions in apparel production sites worldwide.
CHAPTER 4. METHODOLOGY
64
In 2008, this network has launched a European-wide campaign and addressed the major
apparel companies in respective European countries to report about transparency in their
supply chain. The companies were targeted on the basis of their headquarters, which made
that in Switzerland; smaller type companies were targeted as none of the large players in the
apparel sector are Swiss companies.
These two campaigns provided the context to screen case candidates. The criterion of
companies with a high visibility were met by Oxfam’s coffee campaign as they targeted the
largest coffee roasters at the time: Nestlé, Sara Lee, Kraft, and P&G. The second criterion
about the initial stance was assessed from public sources.
Sara Lee was soon considered not to be a suitable case for this study. First of all, a public
response to the coffee campaign could not be identified. Hence, it was not clear whether the
phenomenon to be studies could actually appear (see paragraph assessing the sampling plan
below). Further, even though the company is a large player in the coffee market, its brands
are more known than the company as such. Hence, the company did not provide an ideal case
in terms of visibility, either. P&G also was considered as not ideal because by the time of
investigation, the company had sold its coffee business. Including other disadvantages, such
as missing current activities, the person who had been involved in the coffee campaign no
longer worked with P&G (confirmed with an e-mail correspondence with a P&G employee).
The criterion of the initial stance would be assessed by analyzing the standpoint of the
company toward advocacy campaigns and their claims in an earlier case. The first two of
the five stages in the learning curve developed by Zadek (2004) served as categories. It was
assessed in how far firms showed defensive or cooperative behavior prior to the campaign
under examination in this study.
With the largest players, the initial stance was determined by their standpoint in an earlier
case as both Nestlé and Kraft had been campaign targets before the Oxfam campaign. The
largest player, Nestlé, had an initial cooperative stance. This was assessed on the basis of how
the firm had responded to an earlier challenge from advocacy organizations. Nestlé had gained
experience with large advocacy campaigns in the 1970s and 1980s with the campaign against
the company’s marketing activities in developing countries about its infant formula (Pagan
1986; Post 1985). In the time between the infant formula issue and the coffee campaign, no
major advocacy initiatives against Nestlé were identified. Nestlé had developed a cooperative
way to handle the infant formula conflict by establishing the Nestlé Coordination Center for
Nutrition (NCCN) which was considered as a “. . . change in crisis management strategy for
Nestlé” (Pagan 1986, 13). This autonomous commission was a first step towards dialogue with
the advocating actors. A second important step was for Nestlé to agree to an independent
audit commission (Nestlé Infant Formula Audit Commission NIFAC). With these experiences
4.5. SAMPLING CASES
65
and actions in the background, it was considered that Nestlé had a rather cooperative than
defensive initial stance towards advocacy organizations.
Kraft, on the other hand, had an initial defensive stance. This was also assessed based
on another earlier, famous case: the the tobacco deal (Lawrence et al. 2005). Kraft’s mother
company Philip Morris had been involved in the argument about the industry’s responsibility
for people suffering from consequences of smoking tobacco and about banning tobacco advertisements. In that case, all tobacco companies had opposed to agree to a deal for many
years. Only when the U.S. Congress passed the National Tobacco Policy and Youth Smoking
Reduction Act did companies agree to a deal with lawyers and politicians (Baron 2003a). The
companies were defensive of their position for years and they did not initiate any dialogue between the players such as Nestlé in the above-mentioned case. It is argued that this indicates
a defensive position. Kraft had not been involved directly in another advocacy campaign on
which to assess its standpoint which is why the tobacco case serves as a substitute. It is
argued that the mother company’s standpoint on a public issue would be relevant for Kraft,
too.
Hence, the two companies of Nestlé and Kraft were the selected candidates of campaigns
with high public visibility and with a different initial stance on advocacy campaigns.
The criterion of companies with low visibility was met by the CCC which was conducted
by the Berne Declaration (BD) in Switzerland. Twelve companies were targeted in the campaign in 2008. The goal was therefore to select one company with a defensive and one with a
cooperative position. Initially, listed companies were contacted with the intention to enhance
availability of data. However, this plan could not be followed because access to the listed
companies could not be established properly. In the case of one company, the responsible
person was on maternity leave. And in the other case, the company declined its participation
due to claimed shortage of time. Further, companies were contacted on the recommendation
of the campaign manager at the BD with the question of which company she considered as
particularly responsive to the campaign. Among the companies she mentioned, two had different initial standpoints: Mammut and Blackout. For these smaller companies, hardly any
public information was available. Most likely, before the CCC, they had not been involved in
advocacy campaigns. Also, they did not report about any engagement in the area of social
responsibility in earlier years which would indicate their initial stance. Only one public source
in the case of Mammut, at the time Arova-Mammut, indicated that Mammut had an initial
cooperative stance. Benz (1997) reported in a newspaper article that the company committed
to ecological goals and that they fostered on environmentally sound production. It was stated
that since its foundation, the company cared for conserving handling of resources. The com-
CHAPTER 4. METHODOLOGY
66
Figure 4.2: Sample Frame. Source: own illustration.
pany is described to care for an integrated approach which not only included a meaningful
market demand but also environmentally balanced production and packaging.
As for Blackout, no public information was available about the company’s earlier experiences or position in another issue. Hence, it was assumed that the company had no experience
with advocacy campaigns at all. Zadek (2004) argued that companies initially handle CSR
issues in a defensive manner. Without any experience, a firm is likely to decline responsibility
when confronted with claims from a campaign for the first time. Hence, it was concluded that
that Blackout initially had a more defensive stance than Mammut.
Based on these considerations, the sample frame developed above was completed with four
companies: Nestlé, Kraft, Blackout, and Mammut as illustrated in Figure 4.2. Access to data
is described in Chapter 4.6.2.
Assessing the sampling plan
Finally, the sampling plan has been held against the criteria from Miles and Huberman (34)
which repeat some of the issues already addressed above and the following will partly serve
as a summary.
Is the sampling relevant to your conceptual frame and research questions? The
frame has been developed based on the research questions, the underlying theoretical framework, and the propositions. The question is how firms respond to advocacy campaigns and
one dimension of the sampling frame refers to the firm’s initial stance and the second to
the firm’s visibility. It has repeatedly been discussed in the literature that firm size is an
important factor for firms to respond to advocacy campaigns as such companies are more
visible. Hence, these two dimensions provide some variation among cases that are still typical
examples. Further research questions focus on the change of firm response during campaigns
4.5. SAMPLING CASES
67
and differing initial standpoints and differing firm sizes provide a potential for insight into
different development of firm response over time.
Will the phenomena you are interested in appear ? In principle, can they appear?
The first is a question that cannot be answered. The research focus is on dimensions that
whether they appear can be determined only after their actual analysis. However, the second
question can be answered positively. First of all, it has been argued above in line with
Watzlawick et al. (1967) that as soon as two entities have taken notice of each other, they
cannot not communicate.
Applied to the study of firm response to advocacy campaigns, this means that firms
cannot not respond once they have taken notice of the campaign. In order to assess whether
the companies had taken notice of the campaign, an initial assessment of public sources was
conducted. As all companies could be identified with some reaction to the campaigns, it was
concluded that they had taken notice of the campaign and that therefore, in principle, the
phenomenon of change in firm response could appear. Under these circumstances, it should
be possible to assess in how far campaigns are input for change and also, by selecting different
initial stances and firm sizes, it should be possible to assess in how far companies develop into
different directions during campaigns as suggested by the propositions.
Does your plan enhance generalizability of findings, either through conceptual
power or representativeness? This study has not started with no theory or concept in
mind. It has started with a set of general suggestions with which the proposed framework is
assessed. Hence, this study does not aim at developing a novel conceptual framework. Rather,
it aims at refining the propositions is started off with. In this regard, advancing propositions
suggests generalizability from this study (Punch 2005, 146). The case study as such is not
representative for all companies confronted with advocacy campaigns. However, as it focuses
on typical examples, it is argued that some common features may be identified across cases
that can then be suggested to be true for the overall population (always having the theory
in mind). Such propositions can then be further tested, for example, in quantitative studies.
This type of research aim asks for rather abstract data analysis that goes beyond description
(Punch 2005, 147). Punch also refers to the fact that case studies are common to be learned
from in practice, for example, in professional business schools, public administration, and law,
which emphasizes potential generalizability from single cases.
Can believable descriptions and explanations be produced, ones that are true to
real life? Data collection is described below. It is anticipated that people who were involved
in a campaign are interviewed and the context of the case is provided by extensive research
68
CHAPTER 4. METHODOLOGY
of archival data. Hence, the data is collected in tight connection to what actually happened
and this is assumed to provide a relation to real life.
Is the sampling plan feasible, in terms of time, money, access to people, and
your own work style? Four cases are considered feasible to be conducted with the limited
resources available. A major aspect of this monetary restriction is that this is an unfunded
study. Therefore, it had to be considered whether access to people could be established in
Switzerland or at least Europe that would reduce traveling costs. As described in Chapter
4.6.2, this was possible.
Is the sampling plan ethical, in terms of such issues as informed consent, potential
benefits and risks, and the relationship with informants? The principle of informed
consent basically addresses the right of research subjects to be informed what the research
is about (Silverman 2006). This study addressed this issue in particular during the process
of gaining access to interview persons. An introductory e-mail provided explanations about
why a subject was contacted and how the researcher obtained the contact information of this
person, why and how the study would be conducted, and that reports could be counterchecked
before publication. Another point in time to address informed consent was the introduction
to the interview when it was explained to participants that interviews would be recorded
for the analysis but the data would remain with the researcher. Anonymity of people was
granted for the report, however, it was addressed that the thesis supervisors would be informed
about the names of the people interviewed. How findings could be shared also was discussed.
Another ethical aspect is that subjects should voluntarily participate in the research. This
was obviously the case as all participants were adults and all had the possibility to decline
the interview. Overall, naming of the organizations that are subject of a study is desired in
order to enhance reliability of the research. This was discussed with participants and they
agreed the companies to be named explicitly. The companies certainly all faced a certain
risk—the risk that they agreed to be named explicitly in connection with a report they did
not anticipate. This was acknowledged and the cross-check of the report and quotes from
interviewees was assured. In terms of the relationship with participants, trust had first to be
established. Usually, a first telephone conversation contributed to this issue. The researcher
was then honest in giving answers to questions. Generally, major issues that provoke major
ethics issues were not faced in this study because no children were involved, no marginal
groups or otherwise particularly sensitive persons, research was open (not hidden), and it was
not a study of ‘strange’ cultures that might limit the model of informed consent.
4.6. DATA COLLECTION
4.6
69
Data Collection
So far, the questions of what this study intends to find out, why, and from whom have been
addressed. The next issue is to describe how the data has been collected. Yin (2003) suggests
data collection for case studies to be guided by three principles to avoid “random error”
(Gibbert et al. 2008). Principle one states to use multiple sources of evidence (also called
data triangulation). Principle two calls for creating a case study database. Principle three
suggests to maintain a chain of evidence that is enhanced mainly in data analysis but can
be contributed to in data collection by indicating data collection procedures. Following these
principles enhances the quality of a case study with regard to construct validity and reliability.
Miles and Huberman (1994) address the topic more generally by questioning the degree of
prior instrumentation. There are arguments that speak in favor of a lot of instrumentation
and some for little and some acknowledge that there are studies where the instrumentation
depends on the situation.
Again, as many issues in qualitative research, discussion of instrumentation depends on
the type of the study and they are discussed below in this context.
4.6.1
Data Triangulation
When considering what kind of data to collect, a principle to follow is to consider multiple
sources of evidence that enhances construct validity (Yin 2003). Punch (2005) names four
sources of data: interviews, observation, participant observation, and documentary data. Yin
(2003) names six sources of data by distinguishing between archival data and documents
and adding physical artifacts. This study has used interviews, documentation, and archival
records. The case study reports in Chapter 5 list the documents used in each case study.
The decision factors for instrumentation of data collection from Miles and Huberman
(1994) represent ideal types of studies; hence, they assist in deciding on the choice of instrumentation. This study lies between the two extremes of a lot and little instrumentation. The
context of the respective campaign and the circumstances in which the companies responded
to campaigns are considered to be important, which would call for little instrumentation.
Also, this study is theory-driven to some extent (it starts with a model in mind) but is still
exploratory (as the model has not been empirically assessed before). The study focuses on
descriptive as well as explanatory aspects (how and why do firms respond the way they do),
which again is in the middle of the two extremes. Generalizability is a concern but not in
a statistical sense but with the aim to stress propositions. These aspects show that some
instrumentation is appropriate for this study.
There are various types of interviews that can be placed on a continuum between structured
and unstructured interviews. In the middle are semi-structured interviews that have been
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70
chosen for this study. The interviews have been conducted as open-ended interviews to gain
as much insight as possible from the interviewees and to leave space for new aspects. At the
same time, some specific questions had to be asked, having in mind the model of firm response
profiles.
Data triangulation calls for additional data collection tools. This study has considered
archival data and company documents as viable supplements of interviews. Other archival
documents, such as essays, letters, or personal notes were not considered appropriate in
particular because the units of analysis are organizations, not individuals. It is argued that
these two additional types of data provide a broader picture of the companies studied. Archival
documents that mainly consist of press articles provide the outside perspective on the company
on the one hand and show in how far companies stated their position publicly. Company
documents display the company’s position on corporate level whereas interview data also will
collect information about company level (the unit of analysis) but on individual level (Yin
2003, 76).
In addition to these three sources of evidence, data triangulation is enhanced by conducting
two case studies in the same contexts respectively: The Kraft and Nestlé case studies take
place in the context of Oxfam’s coffee campaign and the case studies of Mammut and Blackout
are in the context of the Clean Clothes Campaign.
4.6.2
Access to Data
Interview data needs further sampling of whom to interview. The ideal persons to receive
information about how the company responded to the campaign would be the people directly
involved in the campaign. As much as possible, it was pre-investigated who that was in each
company. In the case of Kraft and Mammut, it could be desktop researched. With Kraft, the
person who had been involved in the coffee issue at the time could be identified from archival
sources and her contact information was identified with a search of the internet. Only then it
was identified that she no longer worked with Kraft. However, in response to an e-mail request,
she agreed promptly to give an interview about her experience with the coffee campaign. In
the case of Mammut, the company web site provided a responsible person for CSR issues.
Similarly, he immediately agreed to give an interview in response to an introductory request.
In the case of Nestlé, a gate opener (a private contact) provided assistance in establishing the
contact to a person who had been involved in the coffee campaign at the time. This person
suggested a second Nestlé representative to be of interest for this study. They suggested a
joint instead of two separate interviews. In the case of Blackout, it was assumed that the
CEO would be the best initial contact person. Also approached with an introductory e-mail,
the response arrived promptly and Blackout also suggested a joint interview with the CEO
4.6. DATA COLLECTION
71
and the person responsible for issues in the context of the CCC. As the archival records and
documents selected are all published documents of some sort, access was gained by press and
company databases and the internet (e. g. company web sites).
4.6.3
Collecting and Storing Data
To conduct semi-structured interviews, a case study protocol was developed (see Appendix
A). The case study protocol differs from the actual questions asked in the interview. The
protocol gives the background of the case study and situates the researcher in the context.
The protocol includes the questions of the case study that distinguish between the actual
questions asked in the interview.
Special attention was given to the art of conducting interviews and respective skills were
trained. Kvale (2007) provided helpful guidance for semi-structured interviews. His elaborations also provided support for transcribing interviews.
All interviews were conducted by the researcher (myself). The interviews were usually
conducted at the respective companies’ offices, details are found in the respective case reports in Chapter 5. Given by the time frame, the type of data to be collected is mostly
retrospective. Retrospective data collection has been used in various cases and even in time
frames as far back as ten years (Julian et al. 2008). In order to minimize retrospect bias of
the interviewees, all interviews were intensely prepared by studying archival data in advance
about the campaigns and about the companies. Specification was addressed when answers
did not seem to correspond with gathered information.
Retrospect bias was a challenge for the collection of interview data. Another challenge
was the number of interviews in each case. It is noted that one interview per case is low
in comparison with other case studies. The major reasons were that in the case of Kraft
and Mammut, not further interviewees were suggested. Further, in the cases of Nestlé and
Mammut, where two people were suggested, companies proposed joint interviews. I asked for
separate interviews but they were not granted. It seemed that the company representatives
intended to do a favor to the investigator. They considered a joint interview a good way of
saving time of the investigator and they did not consider that the preference of the investigator
would have been otherwise. The next paragraph addresses the consequences and limitations
to the collected data posed by the low number of interviews, the situation of joint interviews,
and how the investigator prepared and lowered these limitations.
The low number of interviews implies a high dependence on a single person’s perceptions
and wording. In two cases (Kraft and Mammut), only one person’s standpoint entered the
analysis. This major limitation to the variety of data posed a challenge to the interviewer.
The response to this challenge was to prepare interviews with a particular focus to also capture
CHAPTER 4. METHODOLOGY
72
different aspects of the case even from one person. The focus was on the interview technique.
The idea was to ask the same question repeatedly by encouraging the interviewee to consider
different aspects. The caveat due to the low number of interviews may be relativized by some
extent. The interviewees were the people directly and intensely involved in the company’s
response to the respective campaigns. They all were the major actors when the campaign
occurred and all of them were themselves involved in finding and implementing solutions to
the campaign the firm was confronted with.
In the other two cases (Nestlé and Blackout), two people were suggested for the interview
but they decided to only give one interview. This posed an additional challenge. It meant
that, for example, there would be an additional influence factor in the interview. Not only
would the interviewer possibly influence the interview situation, the two interviewees would
also influence each other. The interviewer had to be aware of the fact that interviewees may
respond differently if their colleague listens to what they are saying. It could be that this
fact restricted critical answers. It could also be that certain views simply were not addressed
as they may be forgotten if another aspect is mentioned first. Even though this situation
was not ideal in the aspect of data collection, this fact could not be removed. The only
way was acknowledging this challenge, considering its consequences for the data quality, and
developing ideas how to face it.
In the case of Nestlé, the two interviewees were colleagues. They were from different
departments an have been collaborating on issues in the coffee sector for several years. They
can be considered as peer colleagues who value the other’s expertise in their respective field.
One of the interviewees was an expert of the coffee market and the other an expert of public
affairs. There was no formal hierarchy between the two. Both of them have been working for
Nestlé for many years and they have known each other for a long time. From this particular
situation, it could be assumed that there was only a minor influence of how they answer
in terms of arguing their own standpoint. The interview with Blackout differed from this
joint interview among peers. In the case of Blackout, the joint interview was conducted with
the firm’s CEO and his assistant who is also responsible for Blackout’s engagement with the
FWF. As the investigator, I had to be particularly aware of the potential influence the CEO
has on answers given from his assistant. It was likely that she would be cautious with what
she said, in particular if she actually intended to express critical aspects. Vice versa, a CEO
most likely expresses his thoughts differently if accompanied by employees.
The interviewer could not eliminate the problem of joint interviews but could at least
prepare for this difficult situation. One aspect was to highlight the problematic situation
at the beginning of the interview before the interview actually started. Interviewees were
encouraged to complement each other’s statements and to also address if they had a different
opinion. Further, it was anticipated to ask questions to the second person after the first had
4.7. DATA ANALYSIS
73
provided their answer. In the case of Nestlé, the assumption that the interviewees actually
answered the questions as peers was confirmed in the interview. On one hand, the interviewees
were freely answering questions independent of each other. They also expressed if they had
a different point of view and they encouraged each other during the interview to express
another aspect of the situation if available. Also, both expressed critical statements about
the company to some extent. In the case of Blackout, the concerns were partially confirmed.
Even though the CEO encouraged his assistant to provide answers to some of the questions
first, he repeatedly interrupted her and in some cases he also amended her answers in a
corrective way which presumably influenced her consequent answers. Hence, even though
the interviewer prepared carefully for this difficult situation, it was not possible to eliminate
potential caveats. Therefore, particular attention was given to data triangulation in order to
enhance the richness of data by using additional sources of evidence.
All interviews were tape recorded and subsequently transcribed (by myself).
Collecting archival records about the respective advocacy campaigns and firm response
was a rather simple procedure. They were drawn from the press database factiva, from company databases such as the Euromonitor, and from campaigning organizations (for example
their press releases). The first research procedure was to gain as much documents about
the campaign and the responses of the companies as possible. Company documents were
collected via the internet. These documents included annual and corporate responsibility
reports and relevant web site excerpts. In some cases, these documents also were handed out
by interviewees.
According to the principles of enhancing case study reliability, data was stored in a
database in order to strictly separate raw data from analyzed data. While collecting data,
the principle of establishing a chain of evidence has been kept in mind, inducing to report
details in the database of where and how data was collected.
4.7
4.7.1
Data Analysis
Diversity of Qualitative Data Analysis Methods
Qualitative analysis is concerned with data in the form of words as opposed to numbers,
which is the essence of quantitative data analysis (Mayring 2008; Miles and Huberman 1994).
However, this does not mean that numbers are banned from qualitative analysis. In certain
situations, counting and frequency analysis are suitable subsequent tactics (Mayring 2008;
Miles and Huberman 1994; Silverman 2005).
It has been addressed repeatedly that research methods within qualitative research are
various. This issue becomes highly obvious when turning to qualitative data analysis. Punch
CHAPTER 4. METHODOLOGY
74
(2005) accentuates this point by reminding the reader that even the term “analysis” has
different meanings within the literature about qualitative data analysis. Punch presented
some common methods of qualitative data analysis such as analytic induction, the framework
of Miles and Huberman (1994) (building on data reduction, display, and concluding and
verifying), abstracting an comparing, and grounded theory analysis. It is emphasized that
these methods of analysis overlap in many aspects but distinguish in others. For example,
grounded theory starts with no initial theory in mind whereas analytic induction takes an
initial proposition as a starting point. Coding and memoing are techniques that are found
across almost all methods of analysis, in particular in grounded theory and in the approach by
Miles and Huberman (1994) and so are techniques of abstracting and comparing. Comparable
activities across various methods include also identifying patterns in data and relationships
between variables, taking initial conclusions to the next sequence of data collection, developing
generalizations, and finally comparing and contrasting them with existing theories.
Langley (1999) distinguished seven strategies to analyze process data, including some of
the above-mentioned strategies. Her framework contributes a focus on the key anchor points
(such as time, events, outcomes, and phases) and on the form of the theory that emerge from
these different strategies (stories, patterns, mechanisms).
Data analysis is particularly concerned with credibility, or internal validity (Miles and
Huberman 1994, 278). Silverman (2005; 2006) suggests that analytic induction, the constant
comparative method, deviant-case analysis, comprehensive data treatment, and appropriate
tabulations are viable methods to enhance validity. Miles and Huberman (1994) suggest
a variety of thirteen “tactics for generating meaning” (245–62 and summarized by Punch
(2005, App. 2)): Noting patterns and themes, seeing plausibility, and clustering to identify
which data match others. Making metaphors and counting aids to identify topics. Making
contrast and comparisons and partitioning variables clarifies perception. Subsuming particulars into the general, factoring, noting relations between variables, and finding intervening
variables illustrate relationships more abstractly. Establishing logical chains of evidence and
making conceptual/theoretical coherence further progresses organized comprehension of the
data. When now considering the four strategies Yin (2003) proposes, pattern-matching,
explanation-building, addressing rival explanations, and using logic models, it becomes even
more clear what was meant by overlapping aspects of various approaches of data analysis.
Also, analysis tactics within general approaches are repeated or slightly differently subdivided
or summarized. Tactics of addressing internal validity are not further described on a conceptual level but are specifically addressed in the context of data analysis in this study in Chapter
5. Miles and Huberman (1994) also provide assistance in testing and verifying conclusions
with another thirteen tactics. Some of these were applied in this thesis when interpreting the
results (Chapter 6).
4.7. DATA ANALYSIS
4.7.2
75
Data Analysis in this Study
The data analysis of this study has mainly built on the approach by Miles and Huberman
(1994), influenced by other methods, such as analytic induction (Punch 2005) and qualitative
content analysis (Mayring 2008). In addition, Yin (2003) was an invaluable source in each
stage of the research process as well as Coffey and Atkinson (1996). Analysis, in particular
coding and memoing, was supported by MAXQDA text analysis software.
The approach from Miles and Huberman (1994) comprises three components of data analysis that are subsequently and repeatedly conducted. After data collection, there are multiple
cycles of displaying the data, reducing it, drawing conclusions, and verifying them. Coding
and memoing are the major operations of data reductions. Displaying the data is considered
as a core activity of data analysis. Miles and Huberman are convinced that, “You know what
you display” (91). Methods of displaying data are matrices and networks.
What follows is a concise description of how this approach has been applied in this study.
The display of the results and related analytical text that results from drawing conclusions is
presented in Chapter 5.
Creating initial categories and defining codes
This study has set off to assess a model of firm response profiles to advocacy campaigns.
Therefore, the first task was to transform the model and how far it has been developed to
this point into coding categories. This aspect of data analysis is rather unusual for qualitative
analysis methods that are often inductive. This stage of the data analysis of this study is
rather based on analytic induction, which starts analysis with a proposition in mind. In this
study, the framework that builds on the model of Basu and Palazzo (2008) was the starting
point for building initial categories and defining codes. However, the model was kept open
for an inductive process of adding categories while analyzing data. Mason (2002) provided
helpful advice concerning practical questions of categorical indexing, such as the purpose and
rationale for indexing data, the link to the analytical logic, and the application and timing of
indexing.
The framework had first to be transformed into categories. The main categories were
given by the three patterns of cognitive, linguistic, and conative dimensions of firm processes.
Among these main categories, two were already defined by Basu and Palazzo for the cognitive
dimension (identity orientation and legitimation), another two for the linguistic dimension
(justification and transparency), and three for the conative dimension (posture, consistency,
commitment). The next step was to define the codes. It was found that the cognitive and
linguistic dimensions were already specified on a level of subcategories that could serve as
codes. Identity orientation could be coded as either individualistic, relational, or collectivistic.
CHAPTER 4. METHODOLOGY
76
Legitimation patterns could either be pragmatic, moral, or cognitive. Conative patterns posed
an exception. The subcategories of the model were considered to be interpretations of lowerlevel characteristics. Hence, possible codes were established that could be interpreted into the
characteristics of the subcategories. These codes were developed based on the literature on
which Basu and Palazzo built their model. Whether a company had a defensive, tentative,
or open posture is described as being based upon whether or not it accepts outside feedback,
whether or not it adapts to external demands, and in how far it interacts with others. For
this context, all these characteristics were transformed into what happens during campaigns:
in how far the company accepts feedback about the issue addressed by the campaign, if the
company adapts to the specific claims of the campaign, and in how far the company engages
with NGOs in the context of the campaign.
Transforming the model’s categories into categories and codes revealed that they have
not yet been described in sufficient detail. As a next step, attention was therefore given
to describe the categories, giving examples for each category, and establishing coding rules
with a trial run. It was conducted with an existing case study about Starbucks Corporation
and the campaign led by Global Exchange (Argenti 2004). It was assessed whether codes
could potentially be applied with specific data. Also, coding instructions were established
for delineating categories where unclear. This pre-test helped to enhance the coding system
to make it applicable. General coding rules encouraged to define the main category first
before assigning the actual code. Specific coding rules supported appointing the codes and
delineating categories, such as legitimacy from justification. The category system and the
coding instructions are enclosed in Appendix B.
The pre-test also revealed the time issue. As the analysis aimed at identifying a process,
periods of analysis had to be distinguished. This meant defining a first, second, and third
phase of firm response. As each campaign and each firm response is different, this issue had
to be solved individually for each case and are described in the respective reports in Chapter
5.
The main entity of analysis, the coding entity, and the context entity also were preestablished and adapted in the trial run. Paragraphs were appointed as entities of analysis and
were subsequently analyzed. Whole sentences were firstly established as smallest entities to
be coded but the trial run revealed that several codes sometimes are found in a single sentence. Therefore, the part of a sentence was declared as the coding entity. Several paragraphs
(sections) were set as context entities.
4.7. DATA ANALYSIS
77
Displaying and reducing data, drawing and verifying conclusions
From this stage, description of data analysis becomes difficult because actions take place
simultaneously and iteratively.
During the coding procedure (also called cross-sectional indexing) memos were written as
well. As described above, the codes had been previously developed and therefore the coding
procedure was mainly a deductive analysis. The coding procedure has initially remained
open for creating new codes inductively in order to potentially identify additional patterns.
However, it may be noted in retrospect that no additional codes were introduced regarding
the framework. However, separate codes were introduced to identify indirect effect of the
campaign, such as indications about media activities. To enhance reliability, coding was done
several times within one case and codings were compared across cases.
While initial coding reduces data to some extent, displaying them further reduces data
and forces the analyst to focus on patterns and helps to find explanations.
Mostly, this study displayed data in matrices. Initially, matrices that displayed events
over time, ordered by actors and market developments were conducted, so-called event listings.
Further, data was analyzed to be displayed in conceptually ordered matrices to show response
profiles within time periods and finally, abstract response profiles were displayed in timeordered matrices to show development over time. Before data can be entered into a matrix it
has to be reduced and therefore analyzed possibly several times. An important tactic applied
was counting and tabulating to assess frequencies. Consecutively, further tactics of analysis,
or conclusion drawing, were applied. They mainly included finding, comparing, and matching
patterns first within and then across cases. It was paid attention to receiving an understanding
for each case separately before entering the cross-case analysis (Eisenhardt 1989). A chain of
evidence was established by showing how the original data has been categorized by providing
a selection of data extracts and by linking the time periods with previous periods. Overall,
analysis was tightly kept to the theoretical propositions by structuring the case studies into
subchapters according to the propositions. Also, rival explanations were paid attention to.
These tactics are proposed by Miles and Huberman but also by Yin (2003). Referring to
theoretical propositions meant in this study to focus on changes in the concepts of the firm
response profiles and their subcategories, which helped to focus on how these concepts altered
during the campaign. To consider opposing explanations assessed whether changes actually
occurred due to the campaign and in how far other aspects could be made accountable for
the change (addressing so-called direct rival explanations).
Richness of case studies has been widely discussed, in particular in single case studies
analyzed with a narrative strategy (Yin 2003; Langley 1999). Multiple case studies have
to cope with trade-offs between providing rich descriptions and supporting their emerging
CHAPTER 4. METHODOLOGY
78
theories (Eisenhardt and Graebner 2007). Eisenhardt and Graebner (2007) suggest focusing
on the theory and presenting the empirical evidence accordingly. Weick (2007) provided
more general advice how to gain richness of a case. Particularly helpful for this study were its
lesson number three about rich comparisons, lesson number four about being critical of simple
accounts, and lesson number five about avoiding the verb to be when developing descriptions.
Case study reports are presented in Chapter 5, followed by their cross-case discussion in
Chapter 6.
4.8
Limitations
Major limitations of this case study refer to the study design, drawback of the researcher,
and restrictions of resources.
With regard to the study design, there are certain drawbacks of the multiple holistic
case study design in this context. A multiple case design was chosen in order to enhance
external validity. Due to limited resources of the investigator, the holistic design was chosen.
Embedded designs would provide more insight into an organization as they consider multiple
entities. Also, the number of interviews per case was limited. In two cases, separate interviews
were suggested by the investigator but companies preferred joint interviews. In the two other
cases, no further interview partners were suggested by interviewees.
Another disadvantage of the design is that the study calls on retrospective data of interviewees with certain limitations, such as lacking or biased memory. In addition, some interview
bias can hardly be avoided, such as desire to please, Hawthorne-effects, self disclosure, profiling, and anticipation of negative effects (for details see Bortz and Döring (2006)).
The perspective is mainly limited to the firm’s perspective and the firm’s response. In
particular form a process perspective, it would be sensible to include the advocating organization and change in their profile as well as the general process view assumes that all involved
parties are affected by a change. However, this would have gone beyond this study and may
be subject of further research.
This study starts its analysis at a certain point in time. It does not derive, describe, or
explain how the companies came to that initial point in time. The study is not able to explain,
e. g., how the company came to have the first response profile. Further exploration of this
field would have gone beyond this study and also may be the subject of future research.
It may be noted that the researcher does not dispose of much experience in data analysis
and this may limit the overall rigor of this case study.
Another limit to the quality of this study is that there was no opportunity to enhance
consistency by having another researcher do the coding procedure. Leastwise, some data
extracts considered as critical were discussed with a colleague.
4.9. RECAP
4.9
79
Recap
This chapter has presented the research method. The multiple (holistic) case study consists
of four cases in two different contexts. Quality criteria of validity and reliability that help to
conduct a rigorous case study have been addressed as concepts and as applied in this study.
These criteria have guided the study design, the selection of cases, data collection, storage,
and data analysis. This chapter also has addressed the caveats of the study design, of available
resources, and of researcher drawbacks. The next chapter presents the results and therewith
quality criteria are addressed repeatedly by various tactics of data analysis.
Chapter 5
Case Studies
5.1
Introduction
This chapter presents the context and reports the results of the case studies. In order to
enhance construct validity, the draft reports have been reviewed by the people interviewed.
It was attempted to establish a chain of evidence between the results and the data. This is
facilitated by having numbered the data extracts with a code. Data extracts are selectively
presented. The raw data (full texts of the documents) has been stored separately. In the
following reports, the data extracts are referenced with their source (document identification)
and the paragraph where it can be identified in the raw data. Documents used in each case
study are listed at the end of each case study report. For example, K1–25 indicates a quote
from document K1 in paragraph 25. Accordingly, K refers to documents of the Kraft case
study, N to Nestlé, B to Blackout, and M to Mammut.
5.2
Context for Cases One and Two
5.2.1
Characteristics of the Coffee Market
Coffee is a fascinating commodity and has absorbed many authors on various topics. It is
subject of this section to point out a few aspects that are important in the context of the
following case study. References for further reading are made in the respective context. Luttinger and Dicum (2006) were an invaluable source. They have provided a concise historical
background on the rise of coffee trading and have comprehensively introduced major changes
in today’s coffee market, such as the rise of the big roasters and the growth of sustainable
coffee. Ukers (1935) and Pendergrast (1999) provide further reading on the early history
and developments of the coffee sector, and Clarence-Smith and Topik (2003) focus on early
economic developments in producing countries.
81
CHAPTER 5. CASE STUDIES
82
Three aspects of the coffee market are highlighted. First, the main coffee producing
and consuming nations, the volatility of coffee prices and the commodity chain of the coffee
sector are presented. Second, the coffee market for a long time has been heavily dominated
by international politics and agreements, even cartels between the largest producing and
consuming nations. Third, the so-called coffee crisis that started in the 1990s is elaborated
because it was the trigger for the Oxfam campaign in the coffee sector.
The Coffee Market and Its Commodity Chain
Coffee is an important agricultural product. In 2006, more than 70 countries produced more
than seven million tonnes of coffee (Food and Agriculture Organization of the United Nations 2009, table B.8). In the 1980s, Brazil and Colombia were the largest coffee producers,
exporting between 10 million and 18 million bags of coffee per year (1 bag of coffee is 60 kg).
Indonesia and Côte d’Ivoire took third and fourth place until the end-nineties when Vietnam
rose to be the third largest coffee exporting country. Since 2000, Vietnam has become the
second to largest coffee producer, displacing Colombia to third. The CIA World Factbook
refers to coffee being the most important crop for 18 countries, and for another 16 it is on
second or third place (CIA 2009). More about the rise of Vietnam as a coffee producing
country and related effects are described below in the paragraph about the coffee crisis.
For the past almost twenty years, the largest coffee consuming countries were the United
States, Germany, Japan, France, and Italy, accounting for more than half of the world consumption in 2008 (International Coffee Organization 2009c, data on world consumption).
The coffee sector is a volatile market. Like any agricultural product, coffee is subject to
weather, such as sunshine and rain. Coffee is particularly sensitive to frosts and droughts.
Coffee also is sensitive to the climate, the soil, and the general geographical conditions. The
two different kinds of beans, Robusta and Arabica, ask for different conditions. The International Coffee Organization (2009a) provides interesting details that are not relevant for this
study. However, it is important to acknowledge that due to this dependency on the weather,
coffee supply may largely vary. As documented by the International Coffee Organization
(2009a), there have been frosts and/ or droughts every few years (reported since 1902). As a
consequence, prices for coffee are highly volatile and are (today) determined by supply and
demand (the quota system that regulated coffee prices for 30 years is presented below).
Most traders use the futures market in London (Coffee Terminal Market for Robusta
coffee) and New York (Coffee, Sugar, and Cocoa Exchange for Arabica beans) where prices
are set. With the futures market, traders may be able to extenuate the volatility of prices.
However, financial traders have begun to buy and sell coffee futures and therewith, the coffee
price has attained a speculative aspect.
5.2. CONTEXT FOR CASES ONE AND TWO
83
The elaborations about the commodity chain of today’s coffee market serve as a rough
understanding and may differ slightly between countries and participating players (for details,
see Luttinger and Dicum (2006) and Talbot (1997)).
Coffee is grown, dried and/ or washed at coffee farms, resulting in what is known as green
coffee. The International Coffee Organization (2009a) provides details about botanical aspects
and processing methods, among other valuable information about coffee. Depending on the
coffee scheme in the producing country, green coffee is usually sold to either an intermediary,
such as a cooperative or trader, or it is sold to a governmental or private exporter. Green
coffee is either sold to a direct importer or to a broker or coffee trader in a consuming nation,
and further to a roaster where coffee is processed into the ready-to-use beans. Depending on
the roaster and its business and distribution channel, it either sells to distributors, to outlets,
to restaurants and cafés, or directly to the end consumer.
As described, this system comprises many players. Having regard to the case studies that
follow, two players are highlighted: the growers and the coffee roasters.
Coffee growers are mostly small-scale farmers. It is estimated that 20 million people are
involved in growing coffee around the world.
From a corporate point of view, the coffee market has been dominated by consolidation
since the early 20th century when the rising food corporation General Foods (Kraft Foods Inc.
today) acquired one of the largest U.S. coffee brands, Maxwell House (in 1928). In the 1960s,
consolidation continued with P&G acquiring Folgers, another important U.S. coffee brand.
Market consolidation came to a peak in the eighties with the large European food giant
Nestlé buying the brands Hills Brothers and MJB in 1985 (and therewith entering the U.S.
market) on the one hand and with General Foods acquiring Kraft and therewith entering and
consolidating the European coffee market in 1988. Some coffee brands switched hand several
times, however, the concentration is extremely high, as illustrated in Table 5.1. In 2000, the
five largest coffee roasters were Nestlé, Kraft Foods, Sara Lee, P&G, and Tchibo, together
owning more than 45% of the world coffee market. The picture in 2008 has not changed
much, except for P&G, which sold its coffee business to The J.M. Smucker Company, which
is now on rank six, and Tchibo and each Lavazza moving up one rank. In 2008, the five
largest coffee roasters were therefore Nestlé, Kraft Foods, Sara Lee, Tchibo, and Lavazza, still
sharing roughly 45% of the world market.
Luttinger and Dicum (2006) provide more details about the consolidation of the coffee
market. Alongside, the large roasters fought a battle for market share, image, and prices that
dominated the coffee market in the eighties and nineties. The quality of coffee fell along with
the price and the companies were so much into the competition that they lost the focus on
the end-consumer (Magrath 1992). Simultaneously, in the 1990s, the prices for green coffee
fell tremendously due to the coffee crisis that is described below. Against the background
CHAPTER 5. CASE STUDIES
84
Rank 2000
1
2
3
4
5
Nestlé
20.2%
Kraft Foods
13.9%
Sara Lee
5.8%
P&G
3.4%
Tchibo
3.0%
2002
2004
2006
2008
Nestlé
20.5%
Kraft Foods
14.3%
Sara Lee
5.5%
Tchibo
3.2%
P&G
3.2%
Nestlé
20.6%
Kraft Foods
15.0%
Sara Lee
6.0%
Tchibo
3.2%
P&G
2.7%
Nestlé
17.9%
Kraft Foods
14.4%
Sara Lee
5.8%
Tchibo
3.2%
P&G
2.3%
Nestlé
20.2%
Kraft Foods
13.8%
Sara Lee
6.5%
Tchibo
3.3%
Lavazza
2.3%
Table 5.1: Coffee Roasters Ranking and World Market Share. Source: Euromonitor (2009).
of the low coffee quality and the misery of the coffee farmers caused by the coffee crisis,
consumer preference has changed toward a higher quality and a product that accounts for
sustainability. This was the time when The Starbucks Company entered the market. The
change in consumer preference and the consciousness of the weaker entities in supply chains
(such as coffee farmers) also is to be seen in the realm of globalization. Its effects on developing
countries had become a topic of national and world politics (e. g., the protests at the WTO
conference in Seattle in 1999).
International Politics and Coffee Agreements
Luttinger and Dicum (2006) explain the circumstances of the first International Coffee Agreement (ICA) in 1962 in the context of the U.S. industry’s interest of stable coffee prices on the
one hand and the U.S. government’s interest in collaborating with South America to prevent
communism from expanding. The main players in the coffee market at the time were the two
large coffee producers Brazil and Colombia, the United States as the main consuming country, and the large U.S. roasting companies. The ICA connected these players by assigning
export and import quotas. In 1963, the International Coffee Organization (ICO) was founded
to administrate the quotas. Due to volatile prices of coffee on the world market, producing
nations had signed agreements before. However, the ICA of 1962 established a novel situation
because it included producing and consuming nations and also was supported by the industry
(Krasner 1973, 495). The main goal was to stabilize the market with a quota and a stock
pile system by withholding coffee when prices were low and providing stocks when prices were
high. Effectively, the ICA was an international cartel controlling coffee production and supply.
Since the quotas had to be negotiated every five to six years (1968, 1976, 1983), international
coffee trade turned into a political game, resulting in stable but high coffee prices in ICO
member-countries (International Coffee Organization 2009b).
5.2. CONTEXT FOR CASES ONE AND TWO
85
The outward signal of the ICA with stable and high coffee prices resulted in growth of
production in other developing nations, especially in Central America, Africa, and Indonesia.
Countries that were not members of the ICA at the time could only sell their coffee beans to
other non-members, mainly located in Eastern Europe. Relatively high-quality coffee beans
were sold at low but stable prices, ending in a global coffee surplus in waxing coffee producing
countries. Simultaneously, the large roasters in the United States had increased to compete
with each other and had started a fight for market share and prices. The entry of Nestlé into
the U.S. coffee market in 1985 by acquiring Hills Brothers accentuated competition between
the coffee companies. The large U.S. roasters were afraid that Nestlé had access to the
higher-quality beans sold in Eastern Europe and would conquer the U.S. market.
Just as the establishment of the first ICA has to be regarded in its context and the time,
so does its collapse in 1989. By the 1980s, the U.S. government had changed its political focus
from Southern to Central America. Countries in Central America produced a lot of coffee
but were not members of the ICA. Consequently, the U.S. government could not support
them by buying their coffee. When it came to renegotiation of the ICA in 1989, the U.S.
government had abandoned the supporting side. The Ronald Reagan administration asked
for indefensible demands from the producing countries Brazil and Colombia. The ICA could
not be renegotiated and therefore, the quota and controls provisions were suspended and the
verification of stocks and production policies discontinued. It also was impossible to agree
on a new quota and price control system in the following renegotiation round in 1994. With
the 1994 agreement, the ICO became a more informational and promotional trade group and
could no longer be regarded as an international cartel. The United States had even quit the
organization and did not rejoin until 2005. Latest agreements added even more qualitative
aspects to the agreement, such as encouragement of sustainable production and coffee quality.
The Coffee Crisis
Almost immediately after the fall of the quota system, coffee prices fell tremendously and
stayed at a first low for five years. And even though participants of the coffee market are
used to volatility, the shock of this price decline was dreadful. The primary reaction of
existing ICO producing members to the falling prices was flooding the market with their
stocks and prices slumped even more. The market volatility of before 1962 seemed to be
back in 1994 when prices rose due to a severe frost in Brazil. But instead of a longer market
recovery, remaining producers expanded their production and even more producers entered
the market. Since there were no government organizations to weaken the resulting effects,
impact was more extreme than before the 1960s. The coffee futures market additionally
CHAPTER 5. CASE STUDIES
86
increased market volatility during the coffee crisis. In 1994, a large part of coffee trading was
speculative (Luttinger and Dicum 2006, 112).
Another effect of the collapse of the ICA was a growing oversupply of coffee to which arising
coffee producing countries contributed. The biggest surprise with considerable effect was the
rise of Vietnam as a large coffee producer. Vietnam had been a coffee producer before, but
in the 1980s, new plantations were established with the goal to produce and provide instant
coffee for the countries of the Soviet Union. At the end of the 1980s, the Soviet Union broke
down and the ICA was abolished simultaneously. For Vietnam, this resulted in the access to
Western (coffee) markets at the same time as receiving Western development money, including
investment by the International Monetary Fund (IMF) and the World Bank. Simultaneously,
the Vietnam government committed to coffee production, labor was cheap, there was plenty
of land, and the Vietnamese currency was weak. These circumstances combined have allowed
Vietnam to rise into the second largest coffee producer in the world. In the 1990s, many
countries expanded their coffee production, e.g. India, Uganda, Guatemala and Ethiopia,
resulting in an overproduction of two billion pounds of coffee at the beginning of the 2000s.
The increased production also was enabled through the mechanization of the coffee production
fostering mass production and harvesting.
Effects on producing nations were destructive. Coffee-dependent countries saw their export value and therefore GNP fall. “Worldwide, annual export earnings of coffee-producing
countries dropped by USD five billion” (Luttinger and Dicum 2006, 97). Especially nations
that had grown their coffee sectors in the stable environment of the ICA suffered from the now
reigning free market. The Columbian Coffee Federation (Federación National de Cafeteros
FNC) tried hard and did quite well in protecting its members from the low prices by buying
their coffee while increasing marketing for Columbian coffee worldwide. This resulted in running a deficit but receiving higher prices for Columbian coffee. Unfortunately, such attempts
did not help much. In 1994, producing countries tried to unify to act collectively again, but
the regime was badly organized and it failed. This was the final fall of the once strong collective producing power. The small-scale farmers suffered severely from the coffee crisis. In
the already poorest nations of the world, coffee farmers faced a diminishing income and were
therefore affected by famine, their children could not be sent to school, and people were forced
from their land. The coffee crisis was a “full-blown global development disaster” (Luttinger
and Dicum 2006, 102-103). Additionally, mechanization of coffee production reduced labor
input and production costs by one hundredth, adding to the plight of the already suffering
farmers. Abandoning the quotas of the ICA had deep effects on power and money distribution
within the value chain. It was shifted from producing to consuming countries, in other words,
from small-scale farmers to roasters based in consuming countries. When a consumer spent
5.2. CONTEXT FOR CASES ONE AND TWO
87
one USD on coffee in 1986, 37 cents went to the producer. In 2001, only 12 cents went into
the producer’s pocket (Talbot 1997; Luttinger and Dicum 2006).
The coffee supply chain and its characteristics have raised development issues and has
produced abundant academic literature before and in particular after the coffee crisis.
5.2.2
The Oxfam Coffee Campaign
It may initially be noted that some consumer groups, in particular from the health store
segment, have cared about poor coffee farmers for a long time. The coffee sector has been one
of the first sectors of the Fair Trade movement to gain ground. Long before the discussion
of certification started, concerned people in the North found ways to support coffee farmers
by ensuring that they would receive a higher price for their coffee from an alternative trading
system than from the international market. The later rise of demand in sustainable coffee on
a larger scale could grow on the basis of these early developments. Also, the coffee sector has
seen a number of advocacy campaigns. An example is the campaign from the Organization
Neighbor to Neighbor, which had launched a 27-month boycott of Folgers coffee in order to
stop P&G from buying coffee from El Salvador, due to the civil war (Wall Street Journal
1992). Another example is the campaign against Starbucks in 1994 about labor conditions
on coffee farms (US/Labor Education in the Americas Project 2007). A third example is
a campaign against Starbucks launched by Global Exchange in 2000 that demanded from
Starbucks to buy Fair Trade certified coffee.
The largest campaign against all four large coffee roasters was initiated by Oxfam in 2001.
Oxfam is an international NGO, comprising Oxfam International and a multitude of national
Oxfam sections. Oxfam International was formed in 1995 and its goals are to initiate change
and to improve living for the poor. The history of the Organization goes back to 1942 to the
“Ox ford Committee for Famine Relief” in Britain (Oxfam International 2009). Today, Oxfam
International consists of national divisions in the United States, Australia, Belgium, Canada,
France, Germany, Great Britain, Hong Kong, Ireland, Netherlands, New Zealand, Québec,
and Spain. Further, Oxfam International runs advocacy offices in Brussels, Geneva, New
York, Washington, Brasilia, and a campaign office in Rome. Oxfam is dedicated to advocacy
and campaign work on the one hand and to development and immediate pain-relief work from
emergencies on the other. Oxfam International conducts ongoing campaigns, among others,
in the issues of health and education, trade, and climate change.
The issue of the Oxfam coffee campaign was the severe coffee crisis and the suffering
farmers. As a first step, the campaigning group called for a windfall tax on the large roasters
to help destroy low-grade coffee on the market. The idea was to back a plan by the ICO
to establish an international coffee quality standard that should be supported by taking five
CHAPTER 5. CASE STUDIES
88
million bags of low-quality coffee out of the market. The call for the tax on roaster companies
was stated at the World Coffee Conference in London but directed at the US government
(Roberts 2001). The actual campaign started 18 months later, in the fall 2002, with the
publication of a report on the coffee crisis called Mugged. Poverty in your coffee cup (Oxfam
America 2002). The report was conducted under the Oxfam international Make Trade Fair
campaign, supported by Oxfam organizations in several countries, such as Germany, Britain,
and Australia, and the United States. Oxfam targeted all players in the coffee market and
stated particular demands or suggested action how the coffee crisis may be approached. It
demanded the following (Oxfam America 2002, 49): First, commit to paying a decent price to
farmers. Second, commit significant resources to tackle the coffee crisis (including a financial
contribution to aid packages that deal with the crisis). Third, label coffee products on the
basis of their quality. Fourth, commit to buying increasing volumes of coffee under Fair Trade
conditions directly from producers. Within one year, this should apply to two percent of their
total volume, with significant subsequent incremental increase to be determined annually by
the Fair Trade movement. Fifth, lobby the U.S. government to rejoin the ICO. Last, adopt
clear and independently verifiable commitments to respect the rights of migrant and seasonal
workers, including respect for ILO conventions.
Company responses to the campaign are presented in the next sections.
5.3
5.3.1
Kraft Foods Inc.
Building the Case Study Context
This subchapter presents the coffee business of Kraft and introduces the company response
to the Oxfam campaign by identifying themes and altering patterns.
Kraft Foods Inc. (Kraft) has a rather turbulent company history with regard to its ownership. JL Kraft & Bros. Company was founded in 1909 and became Kraft in 1976. The
tobacco firm Philip Morris acquired Kraft in 1988 and consequently merged it with the previously acquired General Foods company into Kraft General Foods. These two firms were
integrated and renamed Kraft Foods in 1995 (Euromonitor International 2007a). Kraft Foods
is mainly known as a maker of cheese, biscuits, and chilled processed meat. Coffee and beverage concentrates are only part of its business; however, Kraft is the leading company in
hot drinks in the United States. Their market strength is based on the instant and fresh
coffee Maxwell House, one of the oldest U.S. coffee companies, which was acquired by General Foods in 1928. Important acquisitions in the coffee business in Europe were the Kenco
brand in the United Kingdom in 1987 and the German Jacobs Suchard, which made Kraft
the number one company in Europe regarding fresh coffee. Today, Kraft has its headquarters
5.3. KRAFT FOODS INC.
89
in Northfield, Illinois, in the United States. In 2008, Kraft had a world share of the coffee
business of 13.8% with main shares in Western Europe (18.2%) being market leader and in
Eastern Europe (21.2%) being second behind Nestlé. Kraft also is second in the Asia Pacific
Region (15.9%) and in North America (10.2%) (Euromonitor 2009). Besides Maxwell House,
other well-known Kraft Food coffee brands are Jacobs, Carte Noire, Maxim, Blendy, Gevalia,
Kenco, Kaffee HAG, Saimaza, and Tassimo.
The Kraft response to the Oxfam coffee campaign has been approached by making an event
listing—a data display in a matrix form that shows important events and incidents and that
helps to understand the context of the case. The phases of the Kraft response have been
divided into three, according to the development of the Oxfam campaign. In spring 2001,
Oxfam investigated for their report and confronted the companies with the campaign for the
first time. This phase lasts until the end of 2002, which is three months after Oxfam’s report
Mugged was published. The second phase lasts until the end of 2005 when Oxfam’s follow-up
report was published and when the coffee prices have reached a level that could be considered
as recovered and the crisis in its worst stage was over. The third phase refers to longer-term
developments after the actual coffee campaign was over. By then Oxfam had shifted its focus
to general trade issues in agriculture of which coffee was still part of but further actions did
not specifically focus on the largest roasters any longer. The phases of the campaign and
the company response have been addressed in the interview and they have been confirmed.
Figure 5.3.1 presents the Kraft event listing.
Oxfam actions take a peak in the first phase that finds its parallel in the coffee crisis.
While Kraft and other players start to take action, in particular in the second phase, Oxfam
decreases its public actions.
In the first phase, Kraft internally discusses the claims from Oxfam and is rather astonished. People have little understanding for the claims of the campaign and that the company
should be responsible for the state of coffee farmers. This indicates an initial refutable response toward the claims from the campaign. However, internal discussions start already
in the first phase, which obviously had some impact as Kraft invited Oxfam representatives
for a first meeting. It is considered to be stiff and the ambiance full of distrust between
the two delegations. This distrust must have vanished to some extent as Kraft and Oxfam
intensely collaborate in the second phase. This collaboration traces back to the fact that a
multi-stakeholder initiative, the 4C project, has been initiated. Initiators were the German
development agency (Deutsche Gesellschaft für Technische Zusammenarbeit GTZ) and the
German Coffee Association (Deutscher Kaffeeverband DKV). Kraft is considered as a driver
of this initiative because the person at Kraft responsible for sustainability was at the time the
president of the DKV. The second phase is dominated by specific contributions from Kraft,
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Figure 5.1: Kraft Event Listing
5.3. KRAFT FOODS INC.
91
which contribute to alleviate the coffee crisis. One major project was the 4C initiative and
another was the launch of Rainforest Alliance certified coffee.
It also is noted that in the second phase, Kraft publications increasingly include the topic
of the coffee crisis and the more general topics of corporate responsibility and sustainability.
The third phase is the time when the topic of the coffee crisis as such has decreased in
urgency (the international media does not pay attention any longer). Kraft publicly states
that is intends to increase Rainforest Alliance certified coffee every year. However, it also
may be noted that specific claims of the campaign, in particular that roasters should by Fair
Trade certified coffee, have not been met.
Several themes and possibly altering patterns have been identified: First, a change in the
content of the Kraft public statements and publications. They appear to tackle the topic of
the coffee crisis and the topic of sustainability on a more general level in response to Oxfam’s
campaign. Second, the firm’s internal attitude toward the claimed issue of responsibility for
the conditions under which products are manufactured alters. Content of internal discussions
changes from refusal toward evaluating Kraft contributions. Third, Kraft adapted its individual engagement. Whereas there were a few individual projects in selective coffee growing
countries, Kraft formalized its engagement for sustainably grown coffee and launched a partnership with the Rainforest Alliance. Fourth, the relationship between Kraft and Oxfam has
changed. Whereas initial meetings were full of distrust among the parties, they initiated a
collaboration in the context of the 4C initiative.
5.3.2
Determining the Initial Response Profile
The two main methods of analysis to identify the Kraft initial response profile have been
reducing and displaying the data in a concept-ordered matrix that presents the number of
codings and summarizes data content. In order not to overload the matrix, selective quotes
are provided separately.
Cognitive Patterns
Identity orientation Identity orientation in the first phase of the response shows individualistic and relational characteristics. Topics of individualistic statements are the concern
for coffee quality and the danger of such a campaign to be a threat to the Kraft coffee brands
and a possible financial loss that may be the consequence of such a campaign. Also, it is
important at this first stage that Kraft does not lag behind its competitors:
. . . coffee plantations are not taken care of properly and hence quality of coffee
possibly suffers. (K1–5)
Also, it is not so amusing for us with this crisis if qualities decrease and so on.
And who knows what is going to happen to coffee in the long term? (K1–55)
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Cognitive Patterns
Identity Orientation
Main & Middle Category
Legal
Scientific
Economic
Ethical
Favorable
Unfavorable
Cognitive Legitimacy
Relational
Collectivistic
Pragmatic Legitimacy
Moral Legitimacy
Individualistic
Sub-Category
-
-
-
-
Specification
8
4
0
2
6
2
3
1
0
6
0
0
3
2
1
0
2
3
0
5
5
6
No. of Codings
Phase 1
Creating more demand for coffee
Helping small farmers
Coffee sector sparely covered
-
Concern for quality of coffee quality
Threat for Kraft brands
Possible financial loss
Not to lag behind competitors
Concern for well-being of farmers
Well-being of farmers and coffee prices on world market are not the company’s responsibility
Doing business with suffering farmers is not all right
Company response has to be honest and substantial
Important actor in coffee business
Summarized Content
Commitment
Consistency
Conative Patterns
Posture
Transparency
Linguistic Patterns
Justification
Legitimation
Acceptance of feedback
yes
no
yes
no
no/ suspicion
interaction
philanthropy
partnership
integrative
preparation
Refusing everything could not be appropriate answer in the long-term
Industry tries to refute certain claims
Claim to buy Fair Trade coffee was considered unfeasible
Distrust to directly interact with activists
Initial meeting full of suspicion
Company responsibility as being a good neighbor (community engagement), not coffee sector
Community partnerships, connected with philanthropy. No partnerships in the coffee sector
Not complete surprise of the topic
Public affairs department is prepared for general crises and gains experience with contemporary issue of obesity
Public answers are prepared
Overall, preparing for incidents is difficult
New activities match existing projects with coffee farmers
Investment of time in meetings and money in coffee projects
Self-initiated (already existing) coffee projects
Internal (CSR)
Strategic (overall)
Engagement with NGOs
Adaptation to demand
ad-hoc decision
match
different
2
1
0
1
2
0
Preoccupation
Persistence
Sacrifice
Table 5.2: Kraft Results: Conceptually Ordered Matrix Phase 1
5.3. KRAFT FOODS INC.
93
An in this regard, Kraft was. . . , that is what a corporation does in the moment
of being confronted with something like this Bitter Coffee Report: It makes a
competitive analysis. Where are we, where are the others? (laughs) Who is really
vulnerable? . . . And Kraft was not better or worse off than the others. (K1–20)
. . . because then, it is less dangerous and does not affect the brands directly. . . (K1–
29)
Statements that indicate a relational identity orientation express concern for the well-being
of the coffee farmers:
And this ‘too much’ made that prices were tremendously low and the farmers
were doing really bad, all over the world. They received less than the costs of
production. (K1–5)
We have to engage with sustainability in this topic because coffee prices are so
low and farmers are not doing well. (K1–14)
No statements refer to a collectivistic identity orientation.
Legitimation Statements of the former company representative indicate all types of legitimation with pragmatic and moral legitimacy scoring higher than cognitive legitimacy. In
a first phase, a refusing attitude can be noted that is a typical pragmatic legitimation pattern.
Kraft internally discusses that it is not their business to take care of coffee farmers. As the
company buys the coffee on the world market, they do not understand why they should be
responsible for what happens at the other end of the supply chain. Accordingly, the first
reaction of the company is defensive:
We only produce it. Who consumes it and where is out of our influence. We put
it on the shelf and people buy it. . . (K1–24)
Because it was considered as a crisis, answers came quickly. I guess within four
weeks, the industry had written a letter about its position and tried to refute
certain claims and tried to say: ‘we don’t know, we did not have this before.’
(K1–44)
Yes, and at this point in time, it was clear what was officially stated had to be
defensive. ‘It is not our fault,’ and ‘it it is not as bad as you claim.’ ‘It is not the
case that our margins rise while farmers do not receive enough’ . . . we were not
very conscious of guilt. (K1–53)
Simultaneously, moral arguments arise in internal discussions: If the farmers are really doing
so badly, we should not make business and support this situation. No matter whether Kraft is
guilty or not about the farmers’ situation, people do not like to support this situation because
it is the wrong thing to do. In addition, the company was aware of providing an ‘honest’ and
‘substantial’ answer:
. . . if people down there are doing so badly, this is nasty. This is dishonorable and
inhumane. . . no matter whether one is guilty or not, we did not want to have it in
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94
our business—this is something we did not like. One should not be doing business
with people who are so bad off. This must not be happening. (K1–57)
It it is not honest, it does not matter. It is too transparent if you have a close
look. (K1–92) The answer cannot only consist of words, there must be substance
to the content. (K1–115)
Cognitive legitimation is marginal and calls on the acceptance of the company by society
based on the mere existence of Kraft:
And we wanted—we were in the business for one hundred years. At this time,
everybody was about to celebrate its hundredth anniversary. And we wanted to
stay in business a little longer. (K1–56)
Linguistic Patterns
Justification During the first phase of the response, linguistic justification patterns are
based on economic and ethical arguments. Economically, Kraft considers its main contribution, yet its responsibility, to alleviating the coffee crisis in creating more demand for coffee.
Also, sustainability is connected to a business reason:
Kraft has helped educate Peruvian growers, among other programs, but it, too,
believes that its ‘most important contribution’ is to promote demand. . . (K31–32).
Ethical arguments focus on Kraft caring for coffee farmers and the intention to help them:
Kraft, Sara Lee and Nestlé say they, too, go out of their way to help small growers.
(K31–32)
Transparency In phase one, Kraft documents cover the coffee sector only sparely. There is
a biased connotation because it is mentioned that Kraft’s coffee projects help small farmers
and caveats are not mentioned.
Conative Patterns
Posture Initially, Kraft’s posture is tentative. Officially, feedback is refused, which gives
the impression of a defensive posture. There are strong internal defensive reactions at first
but within short, discussions are initiated. Kraft is aware of the urgency of the situation and
develops a more open posture:
However, internally, we said that this defensive answer is most likely not satisfactory in the long run. (K1–54)
Kraft does not adapt to demands from Oxfam: “Oxfam’s claim was to buy more Fair Trade
coffee. And Fair Trade—no one liked Fair Trade” (K1–63).
In terms of engagement with Oxfam, there is a lot of suspicion between the two organizations at the beginning of the campaign. At first, the company does not like to interact
5.3. KRAFT FOODS INC.
95
directly with the advocacy organization, it appears easier to communicate through either the
coffee association or other organizations, such as labor unions:
. . . This is how it usually happens: We have our associations. And associations
have the role to be be a protective shield for the industry. And they. . . let us send
a representative from the association. He shall. . . (laughs) . . . and then we can
start on this level. (K1–63)
To find allies is important. That also is what companies tried to do. Who can we
talk to before we talk to them? That was horrible. (K1–33)
Even though there is abundant suspicion, there are some individuals at Kraft who suggest to
invite Oxfam to talk about the issue. Hence, exploratory meetings between Oxfam and Kraft
take place before Oxfam publishes its main coffee report. This indicates a more open posture
of Kraft:
Large excitement but then we invited them. We said OK, then come and we can
talk about it . . . (K1–10)
At the time, the president of the German coffee association worked at Kraft. In this role,
Kraft helped to shift the response to the Oxfam campaign to a higher level involving the
German government development agency (GTZ). The 4C project was founded in 2002 with
Kraft as a founding member and further industry members aboard. This stage of the project
has been interpreted as exploratory as the 4C code was developed in the consecutive years.
Kraft documents of 2001 and 2002 focus on the Kraft community programs and do not
mention the coffee sector and its crises.
Consistency In the first phase, Kraft is overall inconclusive and internally consistent.
People at Kraft are not completely unprepared for a campaign in the coffee sector because
they know that coffee farmers are in trouble. Also, the topic of sustainability has already
been broached. At the same time, such an intense campaign is a complete surprise. There is
a general public affairs department to handle crises, yet, there was no specific preparation for
such an event:
It was not that people in the company in Bremen had never thought of the problematic situation of the coffee farmers. But it was on a low level. (K1–8)
Insofar—for the first campaign we were not prepared at all. Afterwards, actions
were smaller in other countries . . . Preparing was, is always difficult. Even if you
knew something was coming. I think it is like in real life. One cannot believe
something until it actually happens. There was no remarkable preparation.
(K1–35)
In terms of internal consistency, the reactions to the coffee campaign are compared to the
existing Kraft coffee projects (see below). Further engagement, such as involvement in the
4C project, matches these existing activities.
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Main & Middle Category
Cognitive Patterns
Identity Orientation
Legitimation
Linguistic Patterns
Justification
Transparency
Conative Pattern
Posture
Consistency
Commitment
Kraft Response Profile Phase 1
Individualistic
Relational
Pragmatic
Cognitive
Moral
Economic
Ethical
Biased
Tentative
Overall inconclusive
Internally consistent
Instrumental
Table 5.3: Kraft Response Profile Phase 1
Commitment Commitment is instrumental in the first phase. Kraft shows some commitment and invests time in meetings with Oxfam and engages in a few self-initiated coffee
projects. However, the number is small and there are no hints for accepting any disadvantages.
Max Havelaar had single projects, and so had Kraft engaged in Peru and Colombia
to help somewhere somehow on a small scale. (K1–20)
Recap
Having analyzed data referring to the Kraft response to the Oxfam campaign during phase one,
the initial profile is displayed in Table 5.3. Kraft’s identity orientation is mixed individualistic
and relational and the company legitimizes on a mixed pragmatic, cognitive, and moral basis.
It justifies both economically and ethically and communicates biased in terms of transparency.
The Kraft posture has been interpreted as tentative, consistency is overall inconclusive and
internally consistent, and commitment is instrumental.
5.3.3
Analyzing Changes during the Campaign
After having determined Kraft’s initial response profile, the profiles of phases two and three
are analyzed and compared.
Response Profile Phase Two
Table 5.3.3 presents the conceptually ordered matrix for phase two.
Commitment
Consistency
Conative Patterns
Posture
Transparency
Linguistic Patterns
Justification
Legitimation
Cognitive Patterns
Identity Orientation
Main & Middle Category
Preoccupation
Persistence
Sacrifice
Internal (CSR)
Strategic (overall)
2
0
4
0
4
7
0
0
7
9
philanthropy
partnership
integrative
preparation
ad-hoc decision
match
different
3
0
6
7
0
5
yes
no
yes
no
no/ suspicion
interaction
5
9
3
0
0
5
6
4
3
3
0
6
No. of Codings
Phase 2
Publicly recognizing a problem in the coffee sector
Investment of resources
No guaranteed price to farmers
Exchange with Oxfam
New interaction with Rainforest Alliance
Establishing a partnership with Rainforest Alliance
Multi-stakeholder initiative 4C is further established and develops a code for the industry
Meetings on international level with international governmental organizations (e.g. World
Bank)
Further actions are discussed to build on what has already been done
New projects are in line with existing projects in the coffee sector
Investment of time in meetings with 4C, money in Rainforest Alliance (higher coffee prices)
Main driver of 4C project
-
Responsible business is good for business
Customer demand for responsible business
Responsible business practices is the right thing to do
Praising own progress
Admitting that engagement in sustainable business may not be a simple task
Ongoing concern for quality of coffee, threat for Kraft brands, and possible financial loss
Ongoing concern for well-being of farmers
Solution has to fit Kraft’s mainstream coffee business
Public/ consumers demand a substantial answer
Well-being of farmers demands a substantial answer (awareness of counter-effects)
Doing the right thing
Explaining the company actions to the public with a story
Summarized Content
Table 5.4: Kraft Results: Conceptually Ordered Matrix Phase 2
Engagement with NGOs
Adaptation to demand
Acceptance of feedback
-
Ethical
Favorable
Unfavorable
-
Cognitive Legitimacy
-
-
Moral Legitimacy
Legal
Scientific
Economic
-
Specification
Individualistic
Relational
Collectivistic
Pragmatic Legitimacy
Sub-Category
5.3. KRAFT FOODS INC.
97
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98
Cognitive Patterns
Identity Orientation Identity orientation remains the same as in phase one: Individualistic and relational. The concern for the company brands is ongoing:
The threat was clearly identified with the brands and consumers. In comparison,
we thought of the Shell story. If this leads to consumers say: I do not drink this
coffee any more because bad things are happening in the production process of
this brand. This is the large threat. Definitely. (K1–117)
Legitimation As in phase one, Kraft legitimizes in all three types. Relative changes in
number of codings are insignificant. Pragmatic arguments emphasize that a solution to
the coffee crisis in which Kraft participates has to match its mainstream business system
and respective consumer demands. The majority of the Kraft consumers ask for mainstream
coffee and Kraft cannot change its business system. Also, the public demands an answer with
substance and Kraft cannot sit back and refuse all criticism.
. . . We had to provide an answer. And the answer cannot just be words but has
to be substantial in terms of content. (K1–115)
It has to fit our business system. It is is too different it cannot become mainstream.
We are a mainstream coffee supplier by majority. . . everything we do has to match
this approach. . . (K1–75)
Arguments with a moral connotation consider the well-being of the coffee farmers that could
be even worse off if consumers stopped drinking coffee.
It was always an argument brought up by the coffee association: be careful what
you do. If coffee (business) is damaged and people drink less coffee. . . the poor
people down there are even doing worse than today. That is always a danger of
such campaigns that much can be damaged. (K1–118)
Kraft enhances cognitive legitimacy by describing and explaining to the public what is is
doing.
It is necessary that one can display its actions in terms of a corporate affairs
efficiency. . . to show the world, to explain. . . (K1–76)
Accordingly, the 2004 annual report explains what the company has been doing:
Through our partnership with the Rainforest Alliance, we have been able to help
tens of thousands of farm workers grow better coffee more efficiently, improve
living conditions and protect the environment. In 2005, Kraft will purchase more
than 13 million pounds of Rainforest Alliance certified coffee—more than double
our purchase in 2004. While that is still a small amount of all the coffee we buy,
we are helping to ensure the long-term supply of quality coffee for our brands and
reassuring consumers that the coffees they know and trust are grown and produced
in a responsible manner. (K23–22)
5.3. KRAFT FOODS INC.
99
Linguistic Patterns
Justification Justification in phase two remain a combination of economic and ethical
arguments. Relatively speaking, a more intense justification is identified than in phase one.
Often, both categories appear within one statement. For example, Kraft emphasizes that
taking responsibility as a global citizen is the right thing to do (moral argument) and it also
serves its business (economic argument):
Meeting our responsibilities as a public company and global citizen is not only the
right thing to do—it’s right for our business. (K22–13)
. . . the awareness of our coffee consumers and customers had grown. They wanted
to know where their coffee was coming from. The notion of what defines good
quality shifts over time, and sustainability is now an additional element of quality.
The sustainability of our agricultural supply base is essential for our business,
today and for the long term. (K24–13)
Achieving sustainable growth is not enough. We must do it in a responsible way.
In fact, we think business success is not sustainable if it ignores the economic,
social and environmental consequences on which it is built. (K22–3)
Transparency Communication is dominated by favorable statements. However, compared
to phase one, it is more balanced. Therefore, transparency is interpreted to be ambiguous.
On the one hand, the company praises its progress and that it increases the coffee it buys
from the Rainforest Alliance: “We are making progress, including the growth of our programs
and partnerships in coffee, cocoa, and cashew nuts” (K24–16).
On the other hand, Kraft admits that engaging in sustainability is “not always a straightforward task” (K24–15) and that the amount of certified coffee they buy is “still a small
amount of all the coffee [they] buy” (K23–20).
Conative Patterns
Posture Kraft’s posture in the second phase has changed from tentative to open. The
company accepts feedback publicly and states that the company recognizes that there is a
problem in the coffee sector:
[The] director of commodity sustainable programmes at Kraft said all parties
recognized there was a problem and that a workable structure had to be created.
(K33–16)
On the other hand, statements about the adaptation to demands from the campaign are
balanced with regard to adaptation and refusal:
‘Commit significant resources to tackle the coffee crisis.’ It is certain that everyone
met this demand. Not only human but also financial resources. (K1–128)
‘Commit to paying a decent price to farmers.’ We never did this. Afterwards like
before, there is the coffee market and the coffee price is determined by the market.
(K1–125)
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The degree of engagement with Oxfam has changed considerably in comparison with the
first phase. No more statements indicate suspicion and numerous data extracts relate to
exploratory interaction and even integrative collaboration. There is not only direct interaction
between Kraft and Oxfam. New interaction is reported with another NGO, the Rainforest
Alliance, which leads to a partnership within a relatively short time. The partnership is
about Kraft buying Rainforest Alliance certified coffee. The partnership is presented in the
Kraft documents. Most outstanding, however, is a multi-stakeholder initiative, the 4C project,
which was initiated in the first phase but increases in intensity and importance in the mediumterm as an integrative collaboration on voluntary industry standards between all actors of the
coffee supply chain. Also, direct discussions with Oxfam, coffee roasters, and representatives
of the World Bank take place at that time, which indicate openness to the issue and willingness
to collaborate with government-based actors.
The major change of the company’s posture encouraged further analysis of how this had
happened. Indeed, interview data indicates factors that have led to the development of a
more open posture: While discussing with an opposing party, explaining one’s position and
listening to the other party’s position, participants have developed a mutual understanding
of the situation. Further, trust has arisen between the parties. Where suspicion, distrust and
prejudice has been dominant in the first phase, discussions enable these negative connotations
to soften and to understand the other party. This alleviates collaboration in terms of the
problem itself. It is reported that these debates are not always easy and that it is a back
and forth between agreeing and opposing standpoints. Yet it is clear that if the originally
opposing organizations Oxfam and Kraft identify their common goal, they interact:
It happens that when you deal with the issue that you become closer to the NGOs.
And we had other meetings, not only formal and stiff ones across the table. This
has been a contribution form the 4C project that we were closely engaged day and
night, sometimes (laughs). We established working groups, and so on. And then
something happens that always happens in life. You develop an understanding for
the counter-party. . . Kraft and Oxfam remain different, that is a fact. . . However,
one can somewhere discover a common ground that states: It would be nice if
conditions in the coffee sector improved. And if we concentrate on this and we
say OK, you come from this end and we from the other but in the end there is a
common goal. Then, you find ways to work toward this goal. (K1–67-70)
Hence, a process of developing a more open posture by direct engagement with the campaigning organization can be identified.
Consistency In the second phase, Kraft’s behavior is overall and internally consistent.
This means a change compared to phase one as there are no more indications for not being
prepared or taking ad-hoc decisions. Kraft develops its strategy about responsibility and
sustainability in the coffee sector based on the first actions the company takes. The company
5.3. KRAFT FOODS INC.
101
assessed whether the actions match the company’s overall beliefs and further actions are
adapted accordingly.
Commitment Kraft’s commitment in the second phase is stronger than in phase one but
interpreted to be instrumental. Even though Kraft is intensely engaged, there are no hints
that it has to deal with serious disadvantages to the company. Kraft shows considerable of
preoccupation and persistence in the medium-term. Time and therewith human resources
are invested in the 4C project. Buying Rainforest Alliance certified coffee is investment
of monetary resources because the price paid is above the market price. Kraft introduces
Rainforest Alliance certified coffee in various countries and commits to buying more certified
coffee every year.
Response Phase Three
Cognitive Patterns
Identity Orientation Identity orientation in the third phase is still individualistic and
relational. Exceptionally, identity orientation was analyzed on the basis of the Kraft documents and is therefore only an approximation. The interviewee for this case study was a
former Kraft employee who knew the coffee campaign but could not describe Kraft’s identity
orientation in the third phase. The most recent company documents provide incidents for
an individualistic and relational identity orientation. On the one hand, there is a focus on
company growth and increasing engagement in sustainable agriculture. On the other, it is
emphasized that this engagement is (also) conducted to help coffee farmers.
Legitimation Similar to identity orientation, legitimation is only an approximation based
on company documents (web site). Legitimation patterns are found to be pragmatic and
cognitive. Kraft emphasizes that consumers are the center of their business and that they
adapt to consumer demands whenever possible. Also, Kraft sill describes and explains what
they do in the coffee sector that indicates cognitive legitimation:
Since 2003, we have partnered with the Rainforest Alliance, a leading international
conservation organization to protect ecosystems and wildlife. We’re also working
with the organization to set comprehensive standards that are designed to conserve
biodiversity and provide sustainable livelihoods in coffee farming. (K27–44)
Linguistic Patterns
None of the annual reports 2006, 2007, and 2008 consider the topic of responsibility or sustainability that is why the web site only provides data to analyze linguistic patterns in the
third phase of the response.
CHAPTER 5. CASE STUDIES
102
Main & Middle Category
Cognitive Patterns
Identity Orientation
Legitimation
Linguistic Patterns
Justification
Transparency
Conative Patterns
Posture
Consistency
Commitment
Acceptance of feedback
Legal
Scientific
Economic
Ethical
Favorable
Unfavorable
Individualistic
Relational
Collectivistic
Pragmatic Legitimacy
Moral Legitimacy
Cognitive Legitimacy
Sub-Category
yes
no
yes
-
-
Specification
0
0
4
0
0
3
3
3
2
3
2
0
1
0
2
No. of Codings
Phase 3
Kraft still invests resources and buys increasing amounts of Rainforest
Alliance certified coffee
Kraft does not pay ‘decent price to farmers’
-
Supporting sustainable agriculture is good for business
Supporting sustainable agriculture helps farmers
Praising progress
Granting limits of the company’s impact
Largest buyer of coffee and focus on growth
Sustainable coffee to help farmers
Consumers as driver of actions
Explanation of actions in coffee sector
Summarized Content
Strategic (overall)
Engagement with NGOs
Adaptation to demand
no
no/ suspicion
interaction
philanthropy
partnership
integrative
preparation
ad-hoc decision
match
different
Internal (CSR)
Ongoing partnership with Rainforest Alliance
Ongoing engagement in 4C association
Overall Kraft sustainability strategy
Several activities match each other
Goodwill still present in ongoing engagement
-
4
0
0
0
1
3
1
0
6
0
4
0
0
Preoccupation
Persistence
Sacrifice
Table 5.5: Kraft Results: Conceptually Ordered Matrix Phase 3
5.3. KRAFT FOODS INC.
103
Justification Justification in the third phase is still based on economic and ethical arguments. Patterns as such have remaind the same. They have decreased to the frequency of the
first phase of the response. Similar to the previous phases, economic and ethical arguments
are often presented together:
From cookies to crackers, from chocolates to nuts and from cheese to coffee, our
business depends on farm products. That’s why we support sustainable farming
projects. It’s good for our business [economic argument], helps the environment
and can improve the lives of local farmers [ethical argument]. (K27–29)
Transparency Transparency is still ambiguous. Overall, it is more balanced than in
phase one. Even though there are only few codings in total, it is remarkable that there are
statements that admit that Kraft is not an all-round company. They do not exactly report
unfavorable aspects of Kraft’s actions, which is why they should not be overestimated. Yet,
they do grant limits to the company’s impact that is a difference to the short-term response
where such acknowledgements were not identified:
But, we cannot do everything. (K27–27)
Improvements do not happen overnight, but we have made some good progress.
(K27–38)
Conative Patterns
Posture The posture in the third phase is open. Posture is indicated by evaluating in how
far Kraft has followed the original claims from Oxfam. On the one hand, some of today’s
actions can be considered as adopting the demands from Oxfam. Kraft still invests resources to
develop sustainable coffee production. Buying Rainforest Alliance certified coffee can directly
be traced back to the time of the campaign. Yet, Kraft does not buy Fair Trade certified
coffee that was Oxfam’s initial claim but they do pay a higher price for their certified coffee:
We pay higher prices than market prices for coffee from Rainforest Alliance certified production. How much is determined by the market. (K1–127)
On the other hand, there are some claims that are not at all met. An example is the claim
to pay a ‘decent’ price to farmers to which Kraft never agreed. The open posture is mainly
indicated by ongoing and further integrative collaboration between Kraft and the Rainforest
Alliance and between multiple actors, such as governments of producing countries and the
coffee industry:
We also integrated other actors, such as governments and so on, who are tremendously important in such a situation. What can three coffee roasters do?
(K1–130)
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104
Consistency Kraft has implemented a CSR approach and various activities match each
other that make it to be overall and internally consistent. The Kraft web site indicates
that there is an overall sustainability strategy with focus areas that indicates preparation of
other activities:
Sustainability is about preserving our world—land, air, water and people. At
Kraft Foods, our sustainability journey has put us on a path that is making a
real difference. But, we can’t do everything. So we’re focusing on those areas
where we can have the greatest impact, and that means the most to our business
performance. (K27–25-27)
Further specific activities match with others:
You can read it on the Kraft web site. How everything matches. Where it matches.
Where the priorities are. (K1–111)
Commitment Kraft is still preoccupied with the coffee sector and the commitment is considered to be instrumental. As mentioned above, resources are still invested and more
certified coffee is bought. The problems in the coffee sector have, on a general basis, be
successfully tackled. Finally, questions arise about the future. As other topics become more
important to the company (and to NGOs, too!), the company may focus on other areas. The
long-term response is in a way still ongoing and the phase of maturation is not conclusive yet.
Nevertheless, it is considered that “goodwill” is still present:
Now is the phase of maturation. Now, things have to happen. There are other
priorities and the urgency is passed. This does not mean that 25 million farmers
are sustainably producing coffee and that the environment is saved. . . It also has
to pass to producing countries’ governments. It is not a matter between NGOs
and corporations any longer. (K1–103)
Recap
Table 5.6 shows the Kraft response profile and respective changes during the time periods
analyzed. It has been found that in most categories noted change is relative (legitimation,
justification, transparency, and commitment) or insignificant (identity orientation and consistency). Substantial change has only been identified in the firm’s posture. The next chapter
interprets these results.
5.3.4
Interpreting Results
Assessing the Influence of the Campaign
It is compelling that there is only one category of substantial change: firm posture alters
from tentative to open. The main question is whether this change can in fact be traced to the
advocacy campaign or whether there were other factors to influence this change. Figure 5.3.4
5.3. KRAFT FOODS INC.
Main & Middle
Category
Cognitive Patterns
Identity Orientation
Legitimation
Linguistic Patterns
Justification
Transparency
Conative Pattern
Posture
Consistency
105
Response Profile
Phase 1
Response Profile
Phase 2
Response Profile
Phase 3
Overall
Change
Individualistic
Relational
Pragmatic
Cognitive
Moral
Individualistic
Relational
Pragmatic
Cognitive
Moral
Individualistic
Relational
Pragmatic
Cognitive
I
Economic
Ethical
Biased
Economic
Ethical
Ambiguous
Economic
Ethical
Ambiguous
R
Tentative
Open
Open
Overall inconclusive
Overall consistent
Overall consistent
Internally consistent Internally consistent Internally consistent
Commitment
Instrumental
Instrumental
Instrumental
R: Relative change
I: Insignificant change
S: Substantial change
R
R
S
I
R
Table 5.6: Kraft Response Profile
displays cause and effect loops. The campaign is identified as the major cause of the change
of firm posture. However, alternative causes, or rival explanations, have been identified as
well. The campaign is not only directed at the firm but also at the media and the general
public and consumers that indirectly affect firm posture. If the Oxfam campaign had not
been able to cause media attention and make the public become aware of the issue and to
take action (Kraft received many protest e-mails), the effect of the change in firm posture
would most likely have been less intense. It may be called an indirect effect on the firm
through the evaluation of critical players (Yaziji 2005). Two other side-causes are identified.
The first is existing proactive measures from Kraft. Before the campaign had been initiated,
Kraft had already announced a person to be responsible for sustainability in the coffee sector.
Also, Kraft already had a few projects in coffee producing countries. This shows that Kraft
has already been aware of the problem in the coffee sector and internal discussions about
the situation of coffee farmers had already taken place to some extent. Other acknowledged
factors are similar developments in other business areas. In the context of this case, there was a
contemporary campaign going on in the United States about the food industry’s responsibility
for obesity. The specific topics of the two campaigns were different but the general discussion
about company responsibility for what happens in its supply chain (whether downwards or
upwards) is similar.
These additional factors support the argument that campaigns have an influence on firms.
Overall, the Oxfam coffee campaign has contributed to company change of posture toward
sustainability issues in the coffee sector. It is acknowledged that there were other causes, too,
but it is argued that without the campaign, the effect of change of firm posture would not
have been as significant.
CHAPTER 5. CASE STUDIES
106
Figure 5.2: Kraft Posture Cause and Effect Loops
Probing the Types of Change
Proposition one also has suggested a mutual change in all dimensions of cognitive, linguistic,
and conative patterns. Data analysis does not suggest that cognitive, linguistic, and conative
structures alter similarly. Substantial change has only been noticed for firm posture and
other patterns remain the same in categorical terms. However, some change in relative terms.
It may be questioned in how far the campaign has caused “real” change if cognitive and
linguistic structures are not fundamentally affected. Morrison (2003) provides the basis for
an explanation. He has identified that shocks may be too small or too large to affect cognitive
restructuring. This confirms Brickson (2005) who has suggested that firms have a relatively
5.3. KRAFT FOODS INC.
107
stable identity orientation. Was the Oxfam campaign too large or too small? At least, it
caused the firm to pay attention, it caused action, and it also caused novel action (Morrison
2003). This supports that the shock of the campaign caused change. The company was
however able to resolve the problem within its existing cognitive structures. In Morrison’s
words, it was not the right shock to initiate change in cognitive structures of the company.
The content of the structures may be different but not structures as such. An example
is the definition of coffee quality and the importance of what consumers demand. Before
the coffee crisis, most Kraft consumers did not care about the conditions under which the
Kraft brands were produced. However, over time, the sense of quality alters. Consumers
increasingly demand for quality not only in terms of taste of the product but also in terms
of the conditions of production. Adapting to these consumer demands is a change of the
definition of quality but does not display a change of pragmatic legitimation of the company.
5.3.5
Summary
The Kraft results are summarized as follows. Initially, the company responds to the Oxfam
coffee campaign with a mixed cognitive profile of individualistic and relational identity orientation and all three types of legitimation. Kraft justifies its actions on an economic and ethical
basis and with a biased transparency toward favorable impact of company behavior. Posture
is tentative, consistency is overall inconclusive but internally consistent, and commitment is
instrumental.
These patters alter in various ways during the campaign. Substantial change is identified
in firm posture that becomes open during the campaign.
Relative change has been identified in the categories of justification and commitment,
legitimation, and transparency. Justification and commitment are more intense in the second
phase. Commitment is particularly strong in the second phase due to the self-initiatives
and investments of time and money into the topic. Alteration of legitimation patterns are
relative but inconclusive, which may be explained by a lack of available data in the third
phase. Transparency also changes in relative terms. It alters toward being more balanced
from phase two where first statements of the company’s limited impact occur.
Insignificant change has been noted in identity orientation and in consistency.
The overall claim of campaigns having an impact of firms is confirmed but it has been acknowledged that there are additional causes of changes in firm posture. Advocacy campaigns have
an impact on critical players (the media, the general public, and consumers) that also affect
firm posture. This implies that a campaign that does not cause media and/ or public response
may not have a comparable impact. Further, contemporary developments in other business
108
CHAPTER 5. CASE STUDIES
areas of the firm and a firm’s proactive actions have effects on firm posture, too. However,
it is argued that the change in Kraft’s posture toward the issue of the campaign would have
been considerably lower without the Oxfam campaign. Table 5.7 lists the documents used for
the analysis.
Archival Records
Kraft Documents
Document Type
Interview
Table 5.7: Kraft Case Study Documents
Document
K1: Interview with the former (= at the time of the Oxfam campaign) Senior Director, Commodity
Sustainability Programs, Global Corporate Affairs of Kraft Foods in Bremen, Germany (March 2009).
K20: Kraft Foods Inc. Annual Report 2001 (p. 58)
K21: Kraft Foods Inc. Annual Report 2002 (p. 24)
K22: Kraft Foods Inc. Annual Report 2003 (p. 18–19)
K23: Kraft Foods Inc. Annual Report 2004, (p. 7; 20–21)
K24: Kraft Foods Inc. Corporate Responsibility Summary 2005 (p. 3; 7)
K25:Kraft Foods Inc. Annual Report 2006 (neither coffee sector or sustainability in general are addressed)
K26: Kraft Foods Inc. Annual Report 2007 (neither coffee sector or sustainability in general are addressed)
K27: Kraft Foods corporate web site www.kraftfoodscompany.com, selected sections of About Kraft Foods:
Who We Are, Community Involvement, and Sustainability—Protecting our Resources (accessed Dec 2008)
K30: Frankfurter Rundschau (2002)
K31: Fritsch (2002)
K32: McLaughlin (2002)
K33: Crooks (2002)
K34: Morrison (2003)
K35: Williamson (2004)
K36: Beattie (2005)
K37: Brauhardt (2007)
K38: Euromonitor International (2007a)
K39: Euromonitor (2009)
5.3. KRAFT FOODS INC.
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CHAPTER 5. CASE STUDIES
110
5.4
5.4.1
Nestlé SA
Building the Case Study Context
This introduction presents Nestlé’s coffee business in a nutshell and provides an overview of
the company response to the Oxfam campaign.
The food company Nestlé was founded in 1866 by Henri Nestlé and is headquartered in
Vevey, Switzerland. The firm’s origin is the development of breast milk substitute for infants
and it has grown to a leading firm in nutrition with approximately 280’000 employees worldwide and operations in almost every country in the world (Nestlé SA 2009). Nestlé has been
in the coffee business for a long time, with Nescafé as its most important brand in the soluble
coffee business. This first commercially available soluble instant coffee had been developed
in the 1930s on the basis of a request by the Brazil coffee institute to help to reduce Brazil’s
large coffee surplus (Nestlé SA 2009). The Nestlé fresh coffee business was launched in the
1970s when the Nespresso system was developed and was outplaced in a separate company
in 1986. These and other Nestlé coffee products, such as Taster’s Choice, were extremely
successful and Nestlé became the most important global player in the coffee business and has
held its position for many years (as seen above in Table 5.1). In 2008, Nestlé has a market
share in the world coffee market of 20.2% and is present in all regions of the world (Western
Europe (17.1% market share), Eastern Europe (22.9%), North America (2.5%), Latin America (16.1%), Asia Pacific (39.1%), Australasia (56.8%), and Middle East and Africa (23.3%))
(Euromonitor 2009).
Figure 5.3 provides the event listing of the Oxfam coffee campaign and the Nestlé actions. The
Nestlé response to the Oxfam coffee campaign has been divided into three phases in accordance to the Kraft case (for a description, see above Chapter 5.3.1). This type of data display
has allowed to identify initial patterns and themes in the Nestlé response to the advocacy
campaign.
In the first phase, a few official company statements have been identified in the media
that were sceptical to some of the Oxfam claims, such as fixed prices for farmers and a
windfall tax on coffee roasters. Yet, Nestlé also has emphasized that low coffee prices and
suffering coffee farmers were not in their interest. From the beginning, the CEO has engaged
to meet with Oxfam. Such a dialogue has not existed before. Nestlé starts to explain to the
campaigning organization what it has been doing for a long time in the coffee sector, such as
having established a direct procurement scheme and technical assistance projects for farmers.
There is a lack of knowledge about these engagements and Nestlé feels the need to let Oxfam
and the general public know about them. Nestlé also has been involved in the 4C project
Figure 5.3: Nestlé Event Listing. Source: own illustration.
5.4. NESTLÉ SA
111
CHAPTER 5. CASE STUDIES
112
early on. In the second time period, Nestlé published reports about the coffee sector. Nestlé
engagements, such as intense collaboration with Oxfam in the 4C project and the foundation
of the coffee working group in the network of the SAI are based on considerations that low
prices and low coffee quality are not in the interest of Nestlé. In the second phase, Nestlé also
launches a Fair Trade certified Nescafé in the United Kingdom. The third phase is dominated
by new engagements of Nespresso with the Rainforest Alliance to expand its AAA Sustainable
Quality Coffee Program.
Three themes are highlighted: First, Nestlé has been engaged directly with coffee farmers
for a considerable time period. The Oxfam coffee campaign seems to have evoked the company
not only to tell Oxfam about it but to inform the public about its engagement. Second, new
projects have been initiated during and in the aftermath of the coffee campaign. On the one
hand, Nestlé has engaged with other large food companies in the SAI to improve sustainable
coffee growing and Nestlé also has also engaged in the 4C initiative. On the other hand,
quite remarkable, Nestlé has introduced a Fair Trade certified Nescafé after several years of
an opposing opinion of fixed prices for farmers. The third theme that has emerged from
the overview is the engagement by the Nestlé CEO on an international level, e. g., his
participation in the Meeting of Eminent Persons to which he was invited by UNCTAD.
5.4.2
Determining the Initial Response Profile
Cognitive Patterns
Identity orientation Nestlé’s initial identity orientation regarding the coffee campaign is
by majority individualistic accompanied with some relational characteristics. The main
topic that indicates individualistic identity orientation is the emphasis on the security of the
coffee supply that meets the Nestlé quality standard:
Because that is in our own business interest as well because we need to secure,
make sure that we secure supplies of good–quality coffee. So it is not in our interest
if farmers are deterred from supplying coffee because of the low prices. Or are not
perhaps producing coffee to the quality that we want. (N1–4)
We have the criteria, the quality criteria according to which we buy coffee. And
we have also the price which changes every day or every week. So everything is
transparent. When a farmer comes or a supplier, we check the quality, we calculate
the price according to the quality. (N1–119)
Another topic that also indicates an individualistic identity orientation is the relevance of
the Nestlé brands. They are the basis for the success of Nestlé and the company is therefore
sensitive to brand issues like other consumer goods companies, too:
We are a company that deals with consumers, consumer brands... (N1–12)
Commitment
Consistency
Conative Pattern
Posture
Transparency
Linguistic Pattern
Justification
-
unfavorable
Preoccupation
Persistence
Sacrifice
Internal (CSR)
3
0
0
2
1
7
1
0
0
4
0
1
0
1
6
0
0
7
5
0
0
12
3
0
8
0
15
9
No. of Codings
Phase 1
Involvement of CEO
Existing direct procurement scheme and production in developing countries
-
Engagement in 4C matches existing projects
Common willingness to address coffee crisis
Denying Fair Trade product
Oxfam are the “bad guys”
Exploratory meetings with Oxfam and for 4C initiative
Collaboration with multiple organizations
Sustainable development becomes important role
Such low coffee prices are a disadvantage
Contribution to coffee crisis is to create demand
Contributing to sustainable (also, social) development through SAI
Success of sustainability approach: second year of listing on Dow Jones Sustainability Index
-
Telling Oxfam (and the public) what the company has been doing in the coffee
sector
Concerned about security of coffee supply that meets the internal quality standard
Worry about company brands
Comparison with competitors
Care for coffee farmers, wanting to help them
Meeting consumer demands
Summarized Content
Table 5.8: Nestlé Results: Conceptually Ordered Matrix Phase 1
Strategic (overall)
Engagement with NGOs
Adaptation to demand
yes
no
yes
no
no/ suspicion
interaction
philanthropy
partnership
integrative
preparation
ad-hoc decision
match
different
-
Ethical
favorable
Acceptance of feedback
-
Legal
Scientific
Economic
-
Relational
Collectivistic
Pragmatic Legitimation
Moral Legitimation
Cognitive Legitimation
Legitimation
-
Individualistic
Cognitive Pattern
Identity Orientation
Specification
Sub-Category
Main & Middle Category
5.4. NESTLÉ SA
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CHAPTER 5. CASE STUDIES
114
I think that is also one of the reasons why campaign groups often target consumer
goods companies, because those companies have the brands that the public know.
And they know that those companies will have to get engaged in the debate.
(N1–156)
The third topic that indicates that Nestlé has an individualistic identity orientation is the
comparison with competitors. Brickson (2007) argues that individualistic companies make
inter-organizational comparisons when evaluating themselves. Accordingly, Nestlé refers to
its competitors that also were part of the campaign and they are used as a point of reference
in the response to the campaign:
And the competitors also reacted. (yes, yes) Actually, the competitors we were
talking about, like Kraft, Sara Lee, and Tchibo. They are also in the 4C. . . So
indeed, if we had not done anything, that would have been very bad for us. It is
not possible, I think, to envisage such a situation. (N1–147)
Besides the strong individualistic identity orientation, Nestlé also has some relational characteristics. They are identified by statements about the coffee farmers that are the suppliers of
Nestlé. The well-being of the farmers is important to the company because without the farmers cultivating coffee, the supply of the commodity is questioned, which is disadvantageous
to Nestlé:
So I think we were very conscious of the need to work closely with the farmers
to help them through this situation. . . So, we were always quite actively engaged
with farmers helping them to address the situation. (N1–4)
It is not in our interest for farmers to be going out of business and not doing well.
(N1–93)
There are no statements that refer to a collectivistic identity orientation.
Legitimation During the first phase of the campaign, Nestlé introduces a legitimation
strategy that shows pragmatic and cognitive patterns. On the one hand, Nestlé emphasizes
the need to respond to consumer demands, indicating a pragmatic legitimacy pattern. Nestlé
indicates that it has to “fulfill [its] consumers’ needs and desires” (N20–15-16) and further
that “consumers throughout the world are increasingly demanding assurance that food and
beverage products are made from quality ingredients, produced through agricultural best
practices” (N21–2). Interviewees generally reveal the importance of consumer needs and the
consequence to respond to them:
And indeed there was this initiative of Oxfam which made that at the end some
consumers, I would say, started to be hesitant about drinking coffee because if
they drink coffee, they want to be sure that by drinking coffee they are not doing
something wrong. And if there is a lot of negative information saying that Nestlé
is not paying, that farmers are not receiving a decent price, consumers, at least I
5.4. NESTLÉ SA
115
think part of the consumers, started to hesitate to drink coffee. Because by doing
that, they could be afraid of doing something wrong. Therefore, at the end, such
a crisis is detrimental along the supply chain: for the farmers, for the traders, for
the roasters, for all of us. One of the reasons is that it is to induce doubts in the
spirit of the consumers. (N1–23)
Our consumers want to know what we are doing as well. So it is not an option to
not participate. (N1–151)
The statements about the general need for companies with valuable brands to respond to
campaigns also have been interpreted as pragmatic legitimation patterns.
Responding to demands is one indication of pragmatic legitimation patterns, denying
responsibility is another one. During the first phase, a Nestlé representative is quoted in a
newspaper article as denying that the company increased its revenues due to low coffee prices:
He argued that Oxfam was distorting the facts by attributing the increase in
Nestlé’s profits to lower commodity prices. ‘That is a selective quote. Commodity
prices played a very minor role in the improvement in our profits.’ (N40–19)
On the other hand, Nestlé initiates an attempt to explain itself to its opponents and to the
public that is evidence for cognitive legitimation patterns (Suchman 1995). There seems to
be an underlying notion stating that if one knows how the coffee marked works and what
activities Nestlé is part of, the company may be accepted for doing business how they do
it. Nestlé firstly responds to the campaign by explaining the situation from the company’s
view to Oxfam: “Obviously, we had to also explain to Oxfam the things that we were doing”
(N1–5). They have several meetings prior to Oxfam publishing the actual coffee report. They
explain that Nestlé has been working with farmers directly for a long time and that this is the
world’s largest direct purchase scheme that indicates Nestlé’s special position in the market:
Well, Nestlé has always been very active in terms of working with coffee farmers
directly. So, we have the world’s largest direct purchase scheme for coffee. And
we also, we buy a lot of coffee directly in developing countries and then it goes
on to be manufactured in factories that we also have in developing countries. So
I think we were very conscious of the need to work closely with the farmers to
help them through this situation. Because that is in our own business interest as
well because we need to secure, make sure that we secure supplies of good-quality
coffee. (N1–4)
. . . if you compare us to other companies, we are in a quite unique situation. Because if we look at our Nescafé factories, we have 27 factories worldwide. We have
12 in green coffee producing countries, in countries like China, Thailand, Ivory
Coast, Mexico, Colombia. We have also three other factories in developing countries but not green coffee producing countries: Morocco, South Africa, and Korea.
Which makes, at the end, more than half of this coffee, about 55%, something I
have checked again six month ago. About 55% of Nescafé is produced in developing countries. And this is unique to Nestlé because most of our competitors, they
mainly or only produce in importing countries. In Europe, in the U.S., in Japan.
If they have factories, one or two, but not at all something comparable to us. So,
by several aspects, we are in a quite favorable position. (N1–33)
CHAPTER 5. CASE STUDIES
116
The cognitive legitimation pattern also is recognized in the company documents. The Nestlé
Management Report 2001 and the Sustainability Review 2001 are full of descriptions and
explanations of the coffee market and of the Nestlé activities. Examples are the following:
In the Philippines, new strains and improved farm management techniques are
leading to higher-quality coffee, improving the price that growers can receive.
(N21–9-10)
Nestlé installed a direct coffee-purchasing scheme in Chiapas State, Mexico, over
20 years ago. All direct purchases are governed by formal contracts set up between
Nestlé Mexico and each individual post-harvest treatment plant. The contract is
different depending on whether the plant is run by a farmer co-operative or by
private owners who buy all or part of the coffee they treat from small farmers.
(N21–11-12)
There are no moral legitimation patterns.
Linguistic Patterns
Justification During the first phase of the campaign, Nestlé publicly justifies its actions on
an economic basis, combined with ethical arguments. The company refers to the concern in
the coffee supply chain and explains that low prices are, on an economic basis, a disadvantage
for Nestlé:
A current concern shared by Nestlé is the low price of green coffee on the international market. Nestlé strongly supports long term stability in commodity prices
that give an adequate return to the farmer, as low commodity prices inevitably
lead to price volatility and high prices in the future. Although the price of coffee
beans is a small part of the price of a jar of Nestlé, price swings penalize both the
farmer and coffee product manufacturers. (N21–4)
Also, Nestlé publicly claims that their contribution to the coffee crisis is to create demand for
coffee, which is an economic argument:
It is counterproductive to penalize the companies that create that demand. Between 1980 and 2000 Nestlé has increased its green coffee usage from 6.5m to
12.2m bags—an increase of 88 per cent. (N40–19)
Ethically, Nestlé argues that they are a member of the SAI, which contributes to several
aspects of sustainability:
Our hope is that SAI will act on a world-wide scale as a platform for industry
collaboration in the development and implementation of sustainability in agriculture. It will also offer a platform for development in areas of public concern such
as the quality and safety of produce, the well being of rural communities, animal
welfare, and soil, water, air, energy and biodiversity aspects. (N21–20)
Often, economic and ethical arguments are closely tied and hardly separated:
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As the world’s leading food and beverage company, we are committed to being
a leader in the three pillars of sustainable development—economic, social and
environmental—not least because it makes good business sense. (N20–6)
A distinctive feature of Nestlé’s approach is to locate higher value aspects of
production in the emerging world: 46% of our factories and 48% of our employees
are located in such countries even though these countries represent only about a
third of our sales. Thus, in many different ways, including transferring technology,
training local employees to international standards and paying taxes that help
fund local infrastructure, Nestlé is contributing to sustainable social and economic
development around the world. It is estimated that 1 million jobs and 3.4 million
workers and family members are sustained worldwide due to Nestlé’s economic
activity. (N20–10-11)
Legal and scientific justification arguments do not appear at all.
Transparency The company does not comment much on the impact of its actions, yet, the
few remarks only report positive, which indicates biased transparency in their communication:
Nestlé’s achievements in sustainability were recognized for the second year in a
row through inclusion in the Dow Jones Sustainability Index. The index selects
the top 10% of sustainability companies from the Dow Jones Global Index.
(N20–7)
Examples of Nestlé’s approach to sustainability will also be included in an official
United Nations Environment Programme (UNEP) report to the upcoming World
Summit on Sustainable Development (WSSD) to be held in Johannesburg, South
Africa, in September 2002. This report was prepared. . . with Nestlé leadership.
(N20–8)
Conative Patterns
Posture The Nestlé’s posture has open notions (accepting feedback), defensive characteristics (not adapting to demands), and also tentative to open aspects (showing the whole panoply
of engagement with NGOs). Therefore, the overall posture is interpreted as tentative.
From the beginning, not responding to the claims from Oxfam is not an option for Nestlé.
This indicates that the company accepts the feedback with which it is confronted:
So I would say the ground was very favorable to do something. And therefore, I
believe that even if Oxfam would not have been involved, I believe that there was
a common willingness to do something. (N1–54)
However, this does not mean that Nestlé would adapt to all claims from Oxfam. In its shortterm response, Nestlé opposes any Fair Trade certified products (“Because in the past, Nestlé
was totally against Fair Trade products.” (N1–37)) and officially declares the considerations
by Oxfam as “cosmetic and short-term, ” saying they did not address the fundamentals of
the problem (N40–18).
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While dismissing the Oxfam claims in the media, Nestlé holds exploratory meetings with
Oxfam, which is a novel action: “. . . something started which did not exist before. It was the
discussions between Nestlé and Oxfam. Because in the past, they were only the bad guys and
we did not want to talk with them” (N1–34).
Consistency Behavioral patterns in the first phase are overall and internally consistent. On the one hand, interviewees show awareness of the topic before the campaign started
as they were aware of the low coffee prices and also of the potential public concern about
the well-being of the farmers in producing countries. The management report 2001 indicates
that the topic of sustainable development begins to play an important role at the company,
which indicates that there was a sort of a preparation on a general level of the company for
social issues. In addition, no inconsiderate or ad-hoc decisions can be identified. Internal
consistency can tentatively be indicated. The new action the company performs (being active
in the multi-stakeholder initiative 4C) matches the declaration in the Management Report
2001 that the company has collaborations with various organizations and with its existing
activities with coffee farmers.
I guess if... we know that particularly in the United Kingdom there is quite a lot
of interest in concern about the livelihoods of people in developing countries. So
I guess it was not a surprise (laughs) when this happened for Oxfam to launch
something. So I guess it was... it was not a complete surprise. (N1–66)
As the world’s leading food and beverage company, we are committed to being
a leader in the three pillars of sustainable development - economic, social and
environmental - not least because it makes good business sense. (N20–6)
Commitment Commitment is instrumental in the first phase. It does not seem that the
company provides any type of sacrifice that would be indicated by accepting disadvantages of
its own actions. The fact that the CEO Peter Brabeck-Letmathe gets personally involved in
the issue is an indicator for commitment in terms of time—time of the hierarchically highest
person in the company:
And the message at that time came, I think from Peter Brabeck himself. He
started to discuss also with them and to try to have contacts with them. (N1–35)
Nestlé talks about activities it has been doing for many years, which shows self-initiative, or
persistence, in the coffee sector:
Well, Nestlé has always been very active in terms of working with coffee farmers
directly. So, we have the world’s largest direct purchase scheme for coffee. And
we also, we buy a lot of coffee directly in developing countries and then it goes
on to be manufactured in factories that we also have in developing countries. [...]
So, we were always quite actively engaged with farmers helping them to address
the situation. (N1–4)
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119
Main & Middle Category
Cognitive Pattern
Identity Orientation
Legitimation
Linguistic Pattern
Justification
Transparency
Conative Pattern
Posture
Consistency
Commitment
Nestlé Response Profile Phase 1
Individualistic
Relational
Pragmatic
Cognitive
Economic
Ethical
Biased
Tentative
Overall consistent
Internally consistent
Instrumental
Table 5.9: Nestlé Response Profile Phase 1
Recap
After having analyzed the data referring to the first time period, the Nestlé response profile is
displayed in Table 5.9 and summarized as follows: Nestlé has a mixed individualistic and relational identity orientation and legitimizes pragmatically and cognitively. The Nestlé official
language is dominated by economic and ethical justifications and the transparency is biased.
In conative terms, Nestlé has a tentative posture that is overall and internally consistent. The
Nestlé commitment is instrumental.
5.4.3
Analyzing Changes during the Campaign
Response Phase Two
Cognitive Patterns
Identity orientation Identity orientation remains individualistic and relational. The
topics also remain the same with a main focus on the concern for coffee quality. Nesté has a
system of direct purchasing and provides technical assistance to coffee farmers in projects of
the SAI. Coffee quality is an essential part of these programs and Nestlé sometimes shows to
farmers that other equipment may bring advantages in terms of coffee quality:
And after having been able to convince them and when they were able to see
the quality, it is amazing. Now, they have imported the same equipment from
Colombia. (N1–125)
But also, when you have such a crisis, you have more difficulties to ensure the
supply of your raw material. . . And therefore, again, when there is such a crisis, it
is definitively negative for business. (N1–24)
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Legitimation
Cognitive Pattern
Identity Orientation
Main & Middle Category
unfavorable
Legal
Scientific
Economic
Ethical
favorable
Moral Legitimacy
Cognitive Legitimacy
Relational
Collectivistic
Pragmatic Legitimacy
Individualistic
Sub-Category
philanthropy
partnership
integrative
yes
no
yes
no
no/ suspicion
interaction
-
-
-
-
-
Specification
0
1
9
5
0
5
4
0
2
0
0
1
24
14
8
0
26
3
0
8
11
No. of Codings
Phase 2
Importance of coffee quality, coffee brands that may be at stake, and behavior of
competitors
Care for farmers to help them through the difficult situation
Responding to new consumer demand of additional aspect of quality (equitable production)
Summarized Content
Transparency
Conative Pattern
Posture
Consistency
Commitment
Engagement with NGOs
Strategic (overall)
Internal (CSR)
Extensive investment of time and money in technical assistance programs
Various coffee projects under roof of SAI
CEO engagement on international level
Convincing farmers of more efficient technologies is difficult
Engagement in 4C matches, e.g. new engagement in Philippines
Establishment of partnership for own Fair Trade coffee
Collaboration in multi-stakeholder initiative 4C with various players to develop a code
of conduct for the coffee sector
Introducing Fair Trade Nescafé is well prepared
Meetings with Oxfam and also with Fair Trade Foundation regarding sustainable
coffee
Introducing Fair Trade certified coffee
Initially, Fair Trade was not planned. Fair Trade is considered as niche market.
Starting to do new projects
Investment in research
Economic motivation to introduce equitably produced products
Contributing to farmers’ well-being
Stories and quotes how much farmers benefit from theNestlé contributions to coffee
crisis
Explaining Nestlé activities to the public
Acceptance of feedback
preparation
ad-hoc decision
match
different
3
0
3
0
14
12
Linguistic Pattern
Justification
Preoccupation
Persistence
1
Adaptation to demand
Sacrifice
Table 5.10: Nestlé Results: Conceptually Ordered Matrix Phase 2
5.4. NESTLÉ SA
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In the second phase, the Nestlé contribution to sustainable development gains company-wide
importance. One of the interviewees explains what Nestlé gains by assuring quality:
The agriculture and sourcing, the value... so we look at our purchasing practise,
and the different things that we can do in the value for Nestlé is the access to raw
materials at specified quality and price. (N1–110)
As in the first phase, there are no remarks that would indicate a collectivistic identity orientation.
Legitimation Overall, legitimation patterns during phase two remain similar to the first
phase. They have strong pragmatic and strong cognitive characteristics, whereas the number of statements to match a cognitive legitimation pattern has doubled compared to phase
one.
In phase two, Nestlé continues to realize that consumers are increasingly demanding for
another aspect of quality. They no longer only ask for coffee quality but for equitable social
conditions under which the product is made. Consumers have a new demand to the company
and the company responds to this demand. It is admitted that Oxfam raises the awareness
on the consumer side:
And indeed there was this initiative of Oxfam which made that at the end some
consumers, I would say, started to be hesitant about drinking coffee because if
they drink coffee, they want to be sure that by drinking coffee they are not doing
something wrong. And if there is a lot of negative information saying that Nestlé
is not paying, that farmers are not receiving a decent price, consumers, at least I
think part of the consumers, started to hesitate to drink coffee. Because by doing
that, they could be afraid of doing something wrong. Therefore, at the end, such
a crisis is detrimental along the supply chain: for the farmers, for the traders, for
the roasters, for all of us. One of the reasons is that it is to induce doubts in the
spirit of the consumers. (N1–23)
It is a little bit in line with what I said before about quality and about the
impact on roasters. Again, I think, from my point of view, there were two key
aspects. First of all, the bad image that the consumers could have. And of course,
we cannot let that happen, we have to do something. So this is more from a
perception point of view. (N1–94)
Another typical pragmatic legitimation pattern is to deny responsibility. Nestlé does not
directly deny responsibility. Rather, the company enlarges the circle of responsible actors
and therewith tries to lower the responsibility on its own shoulders:
Companies are not the only ones which need to be taking responsibilities. Governments, civil society, coffee companies, as well as the growers themselves, each have
an important role. ‘In the coffee-growing countries, farmers need to be supported
in their efforts to increase their revenues. Those farmers who have the potential
to improve the quality of their supplies should be helped in this process. Simultaneously, it is important that growers diversify into other productive pursuits with
better returns. (N25–8)
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The increase of cognitive legitimation patterns in company documents indicates that the desire
to explain the coffee market as such and Nestlé’s business model in particular is implemented
in an adapted communication strategy. Nestlé seizes the chance for its audience to develop
a better understanding of the company. Facts are presented. Connections explained. Nestlé
repeatedly meets with Oxfam and explains how the coffee market works. Nestlé publishes
reports about the coffee market and its issues. The company tries to build, maintain, or
regain where lost, its legitimacy in a cognitive manner and makes the experience that its
audience may actually have had a deficit in knowing how the company worked, expressed by
the following statements:
I think certainly for coffee, we did go out and talk more. And there was also more
interest. I think we have been conscious on a range of topics that perhaps we have
not talked about or talked to people of communicated as much as we could have
done. . . And I guess what happened with coffee, was that a lot of people were also
interested in what we had to say. Because if you are a company and you want to
talk about things, obviously, people have to want to hear what you have to say
(laughs). You... and with this topic, obviously, there was a lot of interest in what
companies were doing. So it did give opportunities to explain that. And as [my
colleague] said, one of the benefits of the meetings with Oxfam was that we were
able to sit down and say: Actually, look at all these activities that we do, which
was news, I think, they have not really realized. (N1–112)
When I start to talk about what we are doing, direct procurement or technical
assistance or projects, it is a surprise for practically all people. Because they are
not aware. They say even, well we thought that Nestlé was just buying coffee,
and big machine, and nothing else. (N1–114)
Linguistic Patterns
Justification During phase two, economic justification patterns are again accompanied
with ethical ones. Economic justification is still stronger than ethical. The frequency in
statements has doubled compared to the short-term. There is only one scientific and no
legal justification argument. It has been stated that the Nestlé publications explain the coffee
market and the business model to a broader audience. These explanations are based on
market facts and have an economic connotation:
Due to an ongoing over-production of coffee compared to demand, coffee bean
prices are at historically low levels. In 2002/2003, 111 million bags of coffee
were produced, while about 109 million bags were consumed. This has added
to the already large stock of coffee accumulated over the past years, resulting in
a disturbing increase in poverty among some coffee farmers and their families.
(N24–3)
It is explained that low coffee prices are rather disadvantageous for Nestlé’s coffee business:
At first sight it might be assumed that low prices are good for a company such as
Nestlé. However, low prices are not only bad for farmers, but also bad for Nestlé.
5.4. NESTLÉ SA
123
The first negative impact of low coffee prices is that they lead inevitably to a
lowering of the raw material’s quality, making it more difficult to find the coffees
needed to meet the company’s standards for its products. (N24–35)
The text segments identified in media articles show that Nestlé justifies its action to introduce
a Fair Trade certified Nescafé in the United Kingdom economically. It states directly that
there are commercial reasons for introducing such a coffee line:
Fair Trade is quite clearly growing enormously in terms of its awareness. Specifically in terms of coffee Fair Trade is 3% of the instant market and has been
growing at good double-digit growth and continues to grow. (N43–16)
Further, it es argued that there is an economic need (or: a consumer demand) to introduce products which mirror the company’s engagement for sustainability: “Increasingly, our
consumers expect us to bring this commitment to social responsibility alive in our brands”
(N45–15).
As already noticed in phase one, economic and ethical justifications are often presented
together. One the one hand, Nestlé argues that it requires high-quality coffee for its business,
which is why Nestlé provides technical assistance to coffee farmers, which in turn improves
their situation:
It is evident that quality improvement has a direct impact on farmers’ income.
Quality coffee will be bought at a higher price and will compensate for the reduced
quantities of coffee produced. Technical assistance to coffee farmers is an efficient
way to help them improve their farming techniques. Based on a win-win philosophy, the free assistance provided by Nestlé Agricultural Services allows farmers
to benefit from state-of-the-art training while ensuring the company that it will
receive the quality it needs for its Nescafé factories. (N24–38)
Plain ethical statements emphasize that Nestlé is “contributing to the farmers’ well-being for
many years” ((N24–65), emphasis added) and it is stated to be its responsibility to do so.
The company is committed to helping with the problems in the sector.
The explanations of the Nestlé actions refer to what the company has been doing for
several years (technical assistance and the direct purchase scheme are not novel) and also
to new projects, in particular to projects under the roof of the SAI. This could be seen as
a redefinition of means and ends that supports the claim of a strong cognitive legitimation
pattern explained above.
The single scientific statement is neglected.
Transparency The Nestlé documentation presents stories about farmers who tell how much
they benefit from the collaboration with Nestlé. It is reported what Nestlé contributes to the
coffee crisis, e. g., by purchasing green coffee directly from farmers and therewith contributing to raising their income. In sum, the documentation report several stories covering the
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124
favorable impact of the Nestlé actions. No statements could be identified in all the documents
that relate to remaining problems or possible disadvantages. Hence, the transparency in the
Nestlé documentation is interpreted as biased.
The project activities realized in 2005 are well appreciated by the coffee producers
and received positive feedback from the local partner organizations as well as from
local policymakers. Within the framework of rolling out the project, experience
gained to date is being communicated to neighboring provinces from 2006 onwards.
(N28–12)
Conative Patterns
Posture The posture during the second phase is more open than during the first phase of
company response. Nestlé accepts outside feedback in the sense that it listens to what its
critics are saying and it starts new projects and initiatives in the coffee sector.
Nestlé introduces Fair Trade certified coffee in the United Kingdom in 2004, which is a
main adaptation to the Oxfam campaign claims. The Nestlé representatives say that they were
planning a sustainable coffee without certification mark at first and they changed their mind
while being in contact with Oxfam and the Fair Trade Foundation in the United Kingdom:
But initially, it was envisaged not. . . just as a Nescafé project. (sustainable) Just
sustainable Nescafé, but not with a certification mark. But in talking with Fair
Trade we realized, actually, we were trying to do the same thing, so why not work
together. (laughs) So that is how it arose. (N1–49-50)
In phase two, the suspicion between Nestlé and Oxfam that still existed during phase one
eases even more and the two organizations collaborate in the context of the 4C project. It is
a positive experience for Nestlé to explain their activities. They started to work on the code
of conduct for the coffee sector:
. . . one of the benefits of the meetings with Oxfam was that we were able to sit
down and say: Actually, look at all these activities that we do, which was news,
I think, they have not really realized. (N1–112)
There was some industry initiative, sector-wide initiatives that took place at that
time, including the common code for the coffee community that many actors in
the chain joined as (...?). That initiative arose actually directly from the coffee
crisis. (N1–15)
But Oxfam was and is on board. They are one of the members. Also, to give
an idea of the diversity of 4C. We have also in 4C IUF, which is in Geneva, it
is the Union of workers for food companies, tobacco, catering. It is a big union
that is based in Geneva and is, to be honest with you, from time to time, we have
problems also. But they are a member, and they are a member of the 4C. (N1–58)
There is another initiative that is less known, less active, that is called Sustainable
Coffee Partnership. It is supported by UNCTAD, the United Nations Conference
for Trade and Development. We have contributed a little bit also to that but it is
less active compared to 4C. (N1–29)
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125
In terms of introducing the Fair Trade certified coffee, Nestlé also was in contact with Oxfam
and the Fair Trade Foundation and they went as far as establishing a partnership between
the two. So, in contrast to phase one, Nestlé establishes a partnership with an NGO in the
coffee sector, indicating a more open posture:
We started to set-up the projects. At the same time, we were talking with the Fair
Trade Foundation in the United Kingdom and also with the Oxfam representative
in the United Kingdom and we shared with them in confidence what we were
doing. And from those meetings it began to be clear that actually, there was a
shared agenda. That what we were trying to do with the farmers in Ethiopia and
El Salvador was really working toward similar objectives as what the Fair Trade
Foundation and Oxfam were working toward. So, we finally thought it would
therefore make sense that we work together on this. And that is how the idea of
the Fair Trade coffee was developed. So then it had to go to the CEO. (N1–48)
Consistency Nestlé’s actions are overall and internally consistent. The decision to
introduce a Fair Trade certified coffee is, as reported above, well prepared and not an ad-hoc
decision:
I think that finally, it was launched end of 2005, so I believe that the decision for
that was taken in 2004. (P2: 2004, yes). It means that we started before. We
started the project maybe in 2002 or 2003, and in 2004 we decided to move to
Fair Trade. When it was launched, in 2005 in October, it was with the Fair Trade
seal. (N1–51)
Other activities in the area of CSR match existing activities. Nestlé’s engagement in the 4C
initiative matches its (new) engagement in the Philippines for sustainable coffee production.
Also, the subsidiary Nespresso starts projects related to sustainable agriculture and establishes
a partnership with the Rainforest Alliance:
And besides that, we have Nespresso also, which is active in the same way. But
considering their need they are mainly active in South Mexico, Central America,
Columbia, Brazil. (N1–127)
Commitment There are almost triple the amount of codings in the second than in the first
period of company response in terms of preoccupation and persistence. However, there is only
one statement to indicate disadvantageous aspects, which is why commitment is interpreted
as instrumental, yet strong.
There are many text extracts that indicate that Nestlé spent a considerable amount of
time and money to alleviate the coffee crisis. Expenditure of resources becomes evident from
statements that describe company actions and how they are executed. For example, the
technical assistance program breaks down to actual teaching of how to use machines and
fertilizers, when and how to plant and how to process green coffee. Further, P3 is intensely
engaged in the 4C project, which takes a lot of his time traveling to meetings. Nestlé’s CEO
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Peter Brabeck-Letmathe is engaged in the issue as well. He is featured in the coffee report
published in March 2004 by explaining Nestlé’s position and the coffee market. More relevant,
he is engaged on international level (UNCTAD) to lobby for actions to stabilize commodity
prices, such as lowering tariffs on agricultural goods by the wealthy countries. It also is noted
that the CEO engages in the decision of the Fair Trade certified coffee.
So just to say that it was not superficial, we really went into details with a given
group, with equipment, with agronomists, things like that. So between direct
procurement and technical assistance, the SAI platform coffee working group, and
Partners’ Blend, we have been active in several countries. (N1–126)
And our CEO was also quite active in talking and lobbying on international level
on the problems of commodity price fluctuations. And he took part, one of the
things he took part, he did many things. One of the things he took party was the
consultation, it is called the UN Eminent Persons Consultation. . . . Because this
was a consultation that looked at the problems caused by coffee prices fluctuating
in that way . . . So Nestlé, we were quite active not only our CEO kind of lobbied
and has spoken as advocacy on this topic of how to kind of address the structural
issues. (N1–16)
The category persistence, indicating self-initiative and endurance of the engagement, also
scores high. The medium-term response is the time when Nestlé set up, together with other
food companies, the SAI coffee working group. Specific coffee projects from Nestlé arise
in various countries. The engagement of the CEO on international level with regard to
commodity prices is a self-initiative of Nestlé, too.
In collaboration with two other food companies, Nestlé founded the Sustainable
Agriculture Initiative (SAI). A coffee working group of eight companies has been
created and is working to identify ways to help coffee growers. (N25–41)
With regard to the third criterion of commitment, only one statement could be identified
that showed that at times, the Nestlé engagement is not only paid off by advantages. When
P3 explained details about how the technical assistance programm works, he emphasizes that
teaching farmers is at times arduous (“At the beginning they were criticizing our idea” (N1–
125)). They may be convinced that their existing procedure is the only right thing and they
may not be willing and ready to introduce something new. However, as Nestlé can build
its assistance on experiences at other places, they are able, in the long-run, to demonstrate
improved results.
Response Phase Three
Cognitive Patterns
Identity Orientation In the long run, patterns of identity orientation remain the same.
Individualistic statements decrease in number, however, this should not be overestimated.
Commitment
Consistency
Conative Pattern
Posture
Transparency
Linguistic Pattern
Justification
Legitimation
Cognitive Pattern
Identity Orientation
Main & Middle Category
Persistence
Sacrifice
0
0
0
3
0
13
ad-hoc decision
match
different
Expanding Fair Trade certified coffee line
Initial engagement with WWF on new issue of illegally grown coffee
New established partnership between TechnoServe and Nespresso
Ongoing engagement in 4C association
Coffee engagements under umbrella of Nestlé creating shared value concept
Nestlé and Nespresso activities are similar
Ongoing coffee farmer projects, engagement in 4C, increasing amount
of labeled coffee
-
Another crisis will follow (coffee cycle)
Engagement with farmers to access high-quality coffee
Farmers benefit from technical assistance program
Praising the Nespresso sustainability program
Admitting that company does not have all answers
Explanation of company activities
Coffee quality is always an issue
The work with farmers does not end
Adapting to client demands
Customers increasingly ask for equitable coffee
Summarized Content
Table 5.11: Nestlé Results: Conceptually Ordered Matrix Phase 3
Preoccupation
Internal (CSR)
Strategic (overall)
Engagement with NGOs
Adaptation to demand
0
0
3
0
0
1
0
1
1
5
1
1
2
0
0
6
0
9
6
3
0
11
No. of Codings
Phase 3
yes
no
yes
no
no/ suspicion
interaction
philanthropy
partnership
integrative
preparation
-
Ethical
favorable
unfavorable
Acceptance of feedback
-
-
Moral Legitimacy
Cognitive Legitimacy
Legal
Scientific
Economic
-
Specification
Individualistic
Relational
Collectivistic
Pragmatic Legitimacy
Sub-Category
5.4. NESTLÉ SA
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Identity orientation is still determined by strong individualistic and some relational characteristics. One statement explicitly mentions that coffee quality is always an issue, not only
in times of a crisis:
But I would say again without going to this level of crisis, something... yes, you
cannot realize, but even now that the coffee prices are better, not fantastic but
better, when we do - what I have told you before—when we check the quality of
the coffee before shipment. First of all, we always reject... it is not surprising for
us in one month in a given country to reject 10, 20, even 50 percent of the coffee
which is proposed to us. And we are not in such a bad situation. (N1–97)
Relational characteristics are not limited to the situation of crisis either:
The work we are doing with farmers does not kind of end. . . So there is not a kind
of end and we go home (laughs). (N1–100)
Legitimation Overall legitimation stays the same in the third period as in the first and
second. There are pragmatic and cognitive but no moral patterns. There are recent
examples of how Nestlé adapts to demands from clients that indicate pragmatic patterns in
the third time period. Even though Nestlé has introduced a Fair Trade certified coffee in
2005, the overall company standpoint of Fair Trade certified coffee has not yet finalized. In
the meantime, as the following examples show, the company pragmatically adapts to client
demands:
We have also a tangible example. In the past, for a long time, we have been the
supplier of a bank in the Netherlands, ABM Amro. And in the past, we supplied
them with a normal, with conventional Nescafé. Some two, three years ago, they
have decided to distribute a Fair Trade product to their employees or clients.
They asked us to provide them with a Fair Trade soluble, and therefore, because
we already had Partners’ Blend in our range, we were able to propose Partners’
Blend and they use this coffee. . . and for some clients it can also make a difference.
(N1–40)
In the meantime, we have clients, like IKEA. They have decided from one day
to another to move all their coffee they distribute in their shops to Utz Certified.
And we are a supplier of IKEA. So they simply came to Nestlé and said, well now,
if you want to sell soluble to us, it has to be Utz Certified. So again, lots of talks
inside Nestlé, and finally, we produce a specific Nescafé for IKEA in our factory in
France, and also in Japan, because they have the same approach in Japan. And
so in indeed, at the end, we have some Fair Trade, we have some Rainforest, we
have some Utz Certified. As a member of 4C, we buy some 4C coffee, in increasing
volumes. And finally, as also [my colleague] said, in Sweden, they have decided
to combine Fair Trade and organic. So finally, we do a little bit of each. But we
have still to define our global strategy and this is ongoing. (N1–133)
The development for consumers to increasingly demand company contributions to sustainable
development is considered to continue:
5.4. NESTLÉ SA
129
Particularly because more and more consumers are concerned about that.
(N1–107)
We are doing a lot with farmers but nobody knows. And now because the things
are moving because we have climate change, we have sustainable development,
we have more and more consumers that are not expecting only good quality but
also, they want to be sure that the source, everything is fine. So now, we have to
take more this aspect into account. And we have to be going to take even more
advantage of what we are doing with farmers. . . we did not modify our activities
in relation with the better price, and I hope that I am not wrong, I believe that
now we are even going to develop, not only to maintain, but to develop these
activities. (N1–109)
The company also still shows cognitive legitimation patterns by explaining how the coffee
market and its coffee work. The decrease in statements frequency is explained by the decreasing urgency of the issue. Nestlé reports from its SAI coffee projects in Vietnam and
Nicaragua separately and explains what the company is doing there and with whom they
collaborate. The most recent company document, the Creating Shared Value Report 2008,
again shows and explains Nestlé’s engagement in the coffee market with its direct purchase
scheme, technical assistance, SAI projects, and its collaboration in the multi-stakeholder 4C
initiative, which has by now turned into an association.
Linguistic Patterns
Justification Overall justification patterns remain the same as in the first and second
phases. Thy are economic and ethical but their frequency has decreased (which may again
be explained by the decreasing pressure of the issue). The economic perspective on the
situation reveals that even though the situation for farmers is now better than in 2002, a
new crisis is to be expected in the usual cycles of the coffee sector. The Nestlé engagement
with farmers is still explained economically in company documents with the “access to high
quality raw materials” (N31–2):
By engaging closely with the communities that supply us with agricultural commodities, we benefit from a more secure supply of better quality raw materials,
which lowers our procurement costs (due to fewer middlemen, fewer defects and
reduced waste), and results in better end products, helping to ensure consumer
preference and profitable growth for our brands. (N31–5)
The remaining ethical argument also refers to the technical assistance program, emphasizing
the benefits for coffee farmers:
Thousands of farmers use our advice and technical assistance to produce greater
yields of higher quality crops using fewer resources, which benefits the environment
and increases their income. Rural communities also gain from wider employment
and economic development opportunities. Consumers also know the products they
buy are safe, of high quality and produced using sustainable agricultural practices.
(N31–7)
CHAPTER 5. CASE STUDIES
130
Transparency The data extracts with regard to transparency are to some extent astonishing. Unfavorable impact of Nestlé actions have in no respect been addressed in early phases of
the response. In the third phase, a slightly self-critical statement is identified in the Creating
Shared Value Report 2008: “Although we have direct contact with almost 600 000 farmers,
we recognize that we do not have all the answers” (N32–4). Additionally, one of the interviewees admits that Nestlé does not buy large amounts of Fair Trade coffee. The favorable
argument praises the positive impact of the newly established Nespresso AAA Sustainable
Quality Programme.
As the statements are few on the unfavorable, but also on the favorable side, it may only
cautiously interpreted that the Nestlé justification pattern tends toward being balanced and
hence is categorized as ambiguous.
Conative Patterns
Posture In the last phase of the company response, Nestlé’s posture is still open but not as
strong as in phase 2. Acceptance of feedback is no longer mentioned. This is not surprising as
the campaign is closed and the issue as such is no longer of daily importance. However, Nestlé
still shows some indications of adapting further to some of the original campaign demands:
Nestlé is gradually expanding its line of Fair Trade certified coffee, particularly in Sweden:
And now, they have eight SKUs, that is eight different packs; they have two
separate brands and eight different packs of Fair Trade and organic coffee on the
market. So it has done particularly well in Sweden with the Zoégas company.
(N1–42)
New issues in the coffee sector arise, such as the disclosure of Nestlé (and other large roasters)
having sold illegally grown coffee. Nestlé responds openly and starts to engage with the World
Wide Fund for Nature (WWF). Also, a partnership between TechnoServe and Nespresso are
reported:
In 2006, Nespresso and TechnoServe initiated a three-year sustainable development project in Caldas, Colombia, to help coffee farmers improve the quality of
their coffee and their yields, and achieve higher prices as a consequence. The
total investment of CHF 847 000—including CHF 472 000 from Nespresso and
TechnoServe—is being used to improve farm productivity, establish a pricing system and help build new laboratories. By 2011, the investment is expected to have
generated an additional CHF 3.5 million GDP in the Caldas region—around 20%
(CHF 880) extra per farmer—and enabled Nespresso to buy 25 000 bags (1500
tonnes) of AAA green coffee. (N31–24)
And Nestlé is still engaged in the 4C association and buys 4C certified coffee, which is now
mainly interpreted as commitment, see below:
5.4. NESTLÉ SA
131
The Common Code for the Coffee Community (4C) builds on a voluntary code
of conduct adopted by the coffee producers, traders, civil society and other stakeholder organizations that form the not-for-profit 4C Association, who are committed to good farming and management methods to improve efficiency, profitability,
transparency and sustainability in the production, processing and trading of coffee. By December 2007, approximately 6 million 60 kg bags (360 000 tonnes) of
coffee, 6% of the world’s supply, was 4C-verified, and more than half of the global
coffee producers, as well as the largest trading houses, roasters and manufacturers,
are now represented among the 72 members of the 4C Association. Nestlé will
receive 4C coffee in 6 of our coffee factories by the end of the first quarter of 2008.
(N31–36)
Consistency In the long-term, Nestlé’s actions are still strategically and internally
consistent. It is stated that sustainable development and sustainable agriculture are becoming more important at Nestlé, which indicates the company’s overall strategy and that the
activities in the coffee sector are prepared under its umbrella and they match each other:
And even now, I would say that it took a lot of time but I believe I hope that I
am not wrong, all these aspects are now taking more and more importance within
Nestlé. (N1–106)
Such close cooperation with farmers brings opportunities for differentiation at a
product level too, such as the premium-quality ingredients needed for Nespresso
AAA coffee and speciality ingredients like the Ecuadorian cocoa and ginger in
Mövenpick Classic ice-cream. They can also add weight to cause-related marketing
campaigns, like Häagen-Dazs’ support for research into the decline of the honey
bee. For more information, please see the accompanying Management Report.
(N32–6)
Commitment Nestlé still participates in and conducts all the activities it has started short
and medium-term: It still is the leading company at the coffee working group with SAI; it
still has technical assistance and direct purchasing programs; it still is a member of the
4C association, and it is buying increasing amounts of 4C certified coffee. However, no
new self-initiatives are mentioned in the long-term and there are no indications for accepted
disadvantages of the engagements. Hence, the commitment is interpreted as instrumental.
Recap
Table 5.12 presents an overview of the results of the Nestlé case. Analysis has revealed
that most categories alter in relative (legitimation, justification, transparency, commitment)
or insignificant (identity orientation, consistency) terms. Only the firm’s posture changes
substantially from tentative to open during the Oxfam campaign. The next chapter interprets
these results.
CHAPTER 5. CASE STUDIES
132
Main & Middle
Category
Cognitive Pattern
Identity Orientation
Legitimation
Linguistic Pattern
Justification
Transparency
Conative Pattern
Posture
Consistency
Response Profile
Phase 1
Response Profile
Phase 2
Response Profile
Phase 3
Overall
Change
Individualistic
Relational
Pragmatic
Cognitive
Individualistic
Relational
Pragmatic
Cognitive
Individualistic
Relational
Pragmatic
Cognitive
I
Economic
Ethical
Economic
Ethical
Scientific
Biased
Economic
Ethical
R
Ambiguous
R
Biased
Tentative
Open
Open
Overall consistent
Overall consistent
Overall consistent
Internally consistent Internally consistent Internally consistent
Commitment
Instrumental
Instrumental
Instrumental
R: Relative change
I: Insignificant change
S: Substantial change
R
S
I
R
Table 5.12: Nestlé Response Profile
5.4.4
Interpreting Results
Interpretation of the results focuses on two aspects. The first is to assess in how far the
change in firm posture can be attributed to the Oxfam campaign. The second aspect is to
discuss the various types of changes in the different categories.
Assessing the Influence of the Campaign on Posture
The most outstanding result is that Nestlé posture changes substantially (from tentative to
open). This sections discusses alternative explanations than the coffee campaign in order to
verify this result.
Even though not particularly asked, the Nestlé interviewees provided their considerations
in how far Oxfam’s campaign had an influence on the company’s activities in the coffee sector.
They were sceptical of the influence. They stated that Nestlé, first, had already had many
programs for coffee farmers in place and second, had been aware of the serious situation of
coffee farmers already before the campaign. Nevertheless, after some reconsideration, they
admitted (again, unasked) that the dialogue with Oxfam had not existed before. And this
dialogue was judged positive for Nestlé. It altered the relationship between Oxfam and Nestlé
as the direct interaction gave the opportunity to accept outside feedback and to explain
its own position. It is a fact that Nestlé had many of its activities in the coffee sector in
place before Oxfam initiated its campaign, such as the direct procurement system and the
program for technical assistance for farmers. However, besides the dialogue with Oxfam,
Nestlé also became involved in the multi-stakeholder initiative that arose out of the crisis
and in connection with the Oxfam campaign and which fostered integrative engagement with
NGOs and governmental actors. Also, Nestlé co-founded the coffee working group of the SAI
5.4. NESTLÉ SA
133
Figure 5.4: Nestlé Posture Cause and Effect Loops
platform in early 2003. Also, Nestlé’s engagement on international level seems to be difficult
to be detached from the Oxfam campaign and the coffee crisis because Oxfam also lobbied at
inter-governmental level for the issue. However, there were other influence factors as well. A
topic mentioned multiple times was climate change, an issue that has gained momentum at
about the same time and has influenced the activities of Nestlé. In sum, to attribute changes
in firm posture exclusively to the Oxfam campaign could be an overinterpretation of the data.
However, it is argued that it has been plausibly displayed that the campaign played a major
role and can be regarded as a facilitator of change in firm posture. Figure 5.4.4 displays
the major cause and effect loops between the campaign, firm posture, and other factors of
influence.
Probing the Types of Change
Proposition one has suggested that firm categories alter likewise during a campaign. However,
this has not been the case. Most categories altered in relative terms, one in categorical, and
some not at all. How should these results be understood? An explanation can be found in
CHAPTER 5. CASE STUDIES
134
the rigidity of certain patterns. Brickson (2005) has found that firms have stable identity
orientations and the results of the Nestlé case confirm this finding. Morrison (2003) provides
another basis to explain such a result. He has argued that some inputs on organizations
are too big or too small to provoke attention, action, novel action, or a restructuring or
cognition structures. Hence, the Oxfam campaign can be seen as an input that has called
for attention, action, and also for novel action. However, the underlying cognitive structures
have not substantially altered. People who had to make sense from the situation were able to
resolve the issue within their existing cognitive scheme. In this context, time may play a role.
It could be the case that changes in cognitive structures are much more rigid than conative
structures. Hence, a substantial change of the cognitive level could possibly only be analyzed
over a larger period of time.
5.4.5
Summary
This subchapter summarizes the findings of the Nestlé case. The overall results have been
displayed above in Table 5.12.
The initial cognitive response profile of Nestlé is comprised of a mix of individualistic and
relational identity orientation and pragmatic and cognitive legitimacy. Linguistic patterns
are characterized by economic and ethical justification and biased transparency. Conative
characteristics are a tentative posture, strategic and internal consistency, and instrumental
commitment.
These patterns alter in various ways during the campaign. The following aspects are
highlighted. Substantial change has been noted for firm posture that becomes open during
the campaign. Relative change has been indicated for transparency. Another remarkable
relative change is noted for commitment. Preoccupation (investment of resources) increases
over time and so does persistence from the first to the second phase. What has been started
in phase one and two is still conducted in phase three, which is why preoccupation remains
high. As there are no hints for specific accepted disadvantages, commitment is interpreted to
become stronger over time yet it remains instrumental. Insignificant change is noted for
identity orientation and consistency.
Ultimately, Table 5.13 lists the documents that were used for the analysis of the Nestlé
case in order to enhance the reliability of the case study.
Archival Records
Nestlé Documents
Document Type
Interview
Table 5.13: Nestlé Case Study Documents
Document
N1: Transcript of the joint interview with the Public Affairs Manager at the company headquarters who was
formerly involved in the coffee campaign at Nestlé United Kingdom (P2), and the Commodity Sourcing Senior
Manager at Nestlé (P3). The interview was held at the company headquarters in Vevey, Switzerland (in spring
2009)
N20: The Nestlé Management Report 2001 (chapter Sustainable Development, p. 26–31)
N21: The Nestlé Sustainability Review 2001 (p. 15–16; 47)
N22: The Nestlé Management Report 2002 (chapter Sustainable Development, p. 23-30)
N23: The Nestlé Management Report 2003
N24: Today, farmers suffer form depressed coffee prices. What can be done?
N25: The Nestlé Coffee Report. Faces of Coffee (p. 60 ff.)
N26: The Nestlé Management Report 2004 (chapter Corporate Social Responsibility, p. 18–23)
N27: The Nestlé Management Report 2005
N28: Nestlé’s Sustainable Agriculture Initiatives, Project News Report Vietnam, September 2006
N29: Nestlé’s Sustainable Agriculture Initiatives, Project News Report Nicaragua, September 2006
N30: The Nestlé Management Report 2006
N31: The Nestlé Creating Shared Value Report 2007 (p. 26–36)
N32: Nutritional needs and quality diets. Creating Shared Value Report 2008 (p. 60–68)
N40: Roberts (2001)
N41: Crooks (2002)
N42: UNCTAD Report of the meeting of eminent persons on commodity issues (TD/B/50/11), Sep. 30, 2003.
N43: Caterer and Hotelkeeper (2004)
N44: Hickman (2005)
N45: Caterer and Hotelkeeper (2005)
N46: Sarmiento (2005)
N47: Agence de France Press (2007)
N48: Euromonitor International (2007b)
N49: Euromonitor (2009)
5.4. NESTLÉ SA
135
CHAPTER 5. CASE STUDIES
136
5.5
5.5.1
Context for Cases Three and Four
Characteristics of the Clothing Sector
The following paragraphs provide an overview of the clothing sector in order to provide the
context of the case studies.
Sector Relevance in the World Economy The industries of textile, clothing and footwear
are a one-world employer (International Labour Office 2000). This expression summarizes the
importance of the sector to the world economy. On the one hand, hundreds of thousands of
people work in these sectors across the world (approximately 16 million in textiles, 10 million
in clothing, and another 2 million in footwear (International Labour Office 2000). In 2008,
China was the largest exporter of knit of crocheted fabric, followed by Hong Kong, Taipei,
Korea, and the United States. The ranking of the top five exporters is slightly different for
apparel where China is followed by Hong Kong, Italy, Turkey, and Germany. And for other
textile articles, the four largest exporters besides China were Pakistan, India, Turkey, and
Germany (International Trade Centre 2009).
On the other hand, one-world employer refers to the supply chains of these sectors that are
highly globalized. Demand, production, and trade have been dominated by key developments
such as concentration of the retail sector and just-in-time production that has led to an intensified demand-pull nature in the supply chain. Customer demands are observed by retailers,
usually on a weekly basis, to transform them into orders (Nordås 2004). Globalization has
contributed to this development and production has largely shifted to low-wage countries.
The clothing sector also has been the subject of world trade discussions. Until 2005,
the General Agreement on Tariffs and Trade (GATT) excluded the clothing sector. Some
importing countries—the EU, the United States, Canada, and Norway—remained high quotas
while granting special preference to selective countries. In 2005, the quotas were finally
dismissed. The International Labor Organization has fostered international discussion about
fair globalization within their sector activities programme (International Labour Office 2005).
Sector Relevance to Particular Producing Countries Some countries highly depend
on their textiles and/ or clothing sectors. While they may be small exporters on the world
market, shares of clothing of total exports can be extremely high. Examples are Cambodia
(83%), Bangladesh (71%), Macau, China (63%), Mauritius (35%), and Pakistan (23%) (for
the year 2006 from International Trade Centre (2009)). This dependence on the clothing
sector, together with critical labor practices, has increasingly called for advocacy campaigns
and self-regulation of companies that is addressed next.
5.5. CONTEXT FOR CASES THREE AND FOUR
137
Labor Practices and Codes of Conducts The ILO Sectoral Activities Programme is
mainly concerned with child labor, freedom of association, discrimination, and forced labor in
the clothing, textiles, and footwear industries (International Labour Office 2000). It has been
noted that international campaigns including attention of the media have risen awareness of
child labor in producing countries. Progress since the 1990s has been acknowledged but it
also is stated that the situation could be better. Freedom of association is largely granted
across the world, however, particular situations vary greatly. In terms of discrimination, the
primary victims are migrant workers and women. The Abolition of Forced Labor Convention
of 1957 required to end forced labor in any form. This has been ratified by countries that by
2000, no forced labor was identified in textile and clothing producing countries (International
Labour Office 2000). Issues rather focus on high dependence between workers and employers
in terms of complying with excessive working hours (versus losing the job) and on clandestine
labor that may provide ground for abuse of workers. Another form of abuse is debt bondage of
workers. So-called export processing zones have called for attention in terms of labor practices
as these areas set-up by the local government and are often alleviated from certain laws or
regulations to attract foreign investment.
Within the last almost twenty years, a multitude of private, voluntary codes of conduct
have evolved in the clothing and textile sector. A well-known pioneer of such a conduct is the
Levi Strauss company, which installed such a code back in 1992 (International Labour Office
2000). Many companies have followed its model and have established their own sourcing
guidelines or ethical codes. In the meantime, multiple initiatives involving NGOs and worker
unions have developed model codes that provide assistance to companies and that foster
a certain harmonization across individual codes. The Clean Clothes Campaign (CCC) has
been dominant in fostering codes of conduct in the clothing sector in Europe and the Apparel
Industry Partnership in the United States. By now, a second generation type of model codes
can be noticed that call for third-party monitoring of the code implementation of suppliers.
Faure (2001) introduces various joint voluntary initiatives in the textiles and clothing sectors
and their particular codes as well as their contribution to social dialogue (the Charter by the
social partners in the European textile and clothing sector, the Ethical Trading Initiative, the
CCC, Social Accountability International (and the SA8000 system), the Apparel Industry
Partnership (and the Fair Labor Association), and a few smaller initiatives).
5.5.2
The Clean Clothes Campaign
The CCC is a network of various organizations and groups, such as NGOs advocating human
rights, action groups of various areas, trade unions, and aid organizations. The CCC is
currently active in 13 European Countries and collaborates with partner organizations around
138
CHAPTER 5. CASE STUDIES
the world. The aim is to support workers in the apparel sector (Clean Clothes Campaign 2009).
The CCC came into existence in 1989 in the Netherlands, which was a time when working
conditions in Asian subcontracting factories of U.S. clothing and footwear companies, such
as Nike, have become a public issue. The CCC focuses on four main aspects. First, they
give voice to workers in the South. Second, they raise awareness in the public about issues
in the clothing sector by education. Third, the CCC directly contacts companies to raise
awareness of certain topics and pressure to take action to improve working conditions and
fourth, they lobby governments to influence legislation and regulation in areas of clothing
or public procurement. In terms of company contacts, the CCC asks companies, first, to be
transparent about their business and second, to set-up a code of conduct in which they commit
to workers’ rights, working hours, and wages. Third, they ask companies to take measures to
implement their code and fourth, to participate in an independent verification system such as
the Fair Wear Foundation (FWF), a multi-stakeholder initiative. European companies also
participate in other monitoring systems, such as the Business Social Compliance Initiative
(BSCI) and the Ethical Trading Initiative (ETI). The CCC considers the latter two not as
a sufficient commitment because there is no independent verification. In the United States,
companies often join the Fair Labor Association.
The CCC started in Switzerland in 1999 and was at the time carried by the Berne Declaration (BD), Bread for All (Switzerland), and the Swiss Catholic Lenten Fund. Since 2003,
BD alone coordinates the campaign in Switzerland. The BD is a Swiss NGO that has been
advocating and raising awareness in the public for equitable North-South relations since 1968.
Issues they currently focus on are, among the CCC, international financial relations, agriculture, and health (Berne Declaration 2009b).
The first actions of the CCC in Switzerland were postcard actions. The CCC prepared
and distributed postcards in the public with a text of protest regarding concern about labor
practices in the clothing sector (and/ or the behavior of a particular company). People were
encouraged to send the cards to the companies where they bought their clothes. The CCC
newsletter reported that 40000 postcards had been sent to companies within just a few months
(Clean Clothes Campaign (Switzerland) 1999). The central claim for companies at that time
was to introduce a code of conduct with regard to working conditions, and workers’ rights. As
consumers have increasingly asked for guidance about which firms they could trust, the CCC
has launched firm surveys and has rated companies in the Swiss clothing sector repeatedly.
The first rating comprised 29 companies and was first published in 2004 (Berne Declaration
2006c), the second in 2006 (Berne Declaration 2006a), the third in 2008 (Berne Declaration
2008), and last in 2009 with a focus on outdoor companies (Berne Declaration 2009a). In the
meantime, physical postcards have been replaced by protest e-mails that can be generated
directly on the BD web site.
5.6. BLACKOUT AG
5.6
5.6.1
139
Blackout AG
Building the Case Study Context
This introduction presents the Blackout company and provides an overview of its response to
the CCC. Blackout is a Swiss family business and its roots as a textile trading company called
Metzler Textil date back to the 1960s (Blackout 2009a). The second generation took over in
1990 and founded the fashion company Blackout. Blackout has grown from a small firm with
two sales points into a medium-sized company with 75 subsidiaries and 400 employees all over
Switzerland. Blackout has opened new sales stores in 2009 and plans further openings in 2010
(Blackout 2009b). The company is privately owned, which is why further information about
the business is concealed. Its headquarters is in Oensingen (Solothurn), Switzerland.
Figure 5.5 shows the event listing of the Blackout company that provides an initial approach to the firm response to the CCC. The CCC is an ongoing campaign that is why time
periods were defined by comparing particular firm actions and the Blackout response. The
time periods were checked in the interview. Three phases emerged: There was an initial
phase in the early 2000s when Blackout was confronted with the CCC for the first time.
The above-mentioned postcard actions from the CCC showed that Blackout also received
such protest cards. Blackout received a few of such cards from customers who expressed
their concern about the conditions under which the clothes they bought at Blackout were
produced. Based on these consumer reactions, Blackout initiated a meeting with the CCC
representative from the BD to have him explain what the campaign is all about. However,
it remained at such an initial meeting and there were no further interactions between the
two organizations. However, this meeting initiated a long period of evaluation of options to
join a verification organization. It has been a central claim of the CCC that companies do
not only implement their own code of conduct but that they let it verify by an independent
organization. During this time of evaluation, Blackout was confronted for the first time with
a company survey from the CCC. Yet, Blackout did not fill in the forms of the survey and
responded simply by remarking that they had already been in contact with the FWF. As of
January 1, 2009, Blackout joined the FWF, which signals the beginning of the third phase.
The third phase is dominated by company experiences with the implementation of the code
and initial verification activities at supplier companies.
CHAPTER 5. CASE STUDIES
140
Figure 5.5: Blackout Event Listing
Commitment
Consistency
Conative Pattern
Posture
Transparency
yes
no
yes
no
no/ suspicion
interaction
philanthropy
partnership
integrative
preparation
ad-hoc decision
match
different
1
0
0
0
1
4
0
0
0
1
0
0
0
0
2
0
0
0
0
0
0
0
2
0
1
0
3
3
No. of Codings
Phase 1
Customer feedback about equitable sourcing is acknowledged
(no accommodation of demands)
No intense interaction between Blackout and BD
Single meeting between Blackout and BD
Evaluation of verification was initiated
(no formalized engagements in CSR)
Blackout initiative to contact BD
-
-
-
Focus on core business
Separation from organizations that are not directly linked with core
business
Long-lasting supplier relations
Response to customer feedback
Company size influences feasibility of verification organization
Management is willing to take responsibility
-
Summarized Content
Table 5.14: Blackout Results: Conceptually Ordered Matrix Phase 1
Preoccupation
Persistence
Sacrifice
Internal (CSR)
Strategic (overall)
Engagement with NGOs
Adaptation to demand
Acceptance of feedback
-
-
Moral Legitimacy
Cognitive Legitimacy
Legitimation
Legal
Scientific
Economic
Ethical
favorable
unfavorable
-
Relational
Collectivistic
Pragmatic Legitimacy
Linguistic Pattern
Justification
-
Individualistic
Cognitive Pattern
Identity Orientation
Specification
Sub-Category
Main & Middle Category
5.6. BLACKOUT AG
141
CHAPTER 5. CASE STUDIES
142
5.6.2
Determining the Initial Response Profile
Cognitive Patterns
Identity orientation Blackout’s identity orientation in phase one is individualistic and
relational. Individualistic statements indicate the company does not engage much with
organizations in its environment that do not belong to its core business:
We are doing our business in a quite simple way. We do not want many external
organizations. We also do not have consultants. (B1–39)
We keep it simple. We also—you are an exception! We welcome students and
provide information. Not so with other requests. (B1–64)
Otherwise, what is sent to us, may it be from the federal government regarding
salary surveys from Seco [State Secretariat for Economic Affairs] or whatever, we
do not fill it in. We have to concentrate on our business. (B1–66)
These few but strong statements about Blackout’s position in regard to other organizations
are accompanied with some relational statements in regard to their suppliers: “We have
maintained relationships with some of our suppliers since we founded Blackout, since 18, 19
years” (B1–34).
Legitimation Legitimation patterns are pragmatic and moral during the first response
to the CCC. Blackout legitimizes pragmatically by responding to customer concerns expressed
via a protest postcard and consequently initiates a meeting with the BD. This is somewhat
astonishing because the postcard actions are at the same time considered “insignificant” to
Blackout (B1–45). It can be concluded from these statements that customer feedback does
not occur often, however, if it occurs, it is taken seriously:
Also based on a postcard from a customer. From such a postcard action. [The
BD] always distributed postcards to people in the cities. And based on such a
postcard I contacted them and said they should come and explain what they want
to do and what this is all about. However, this was a while ago. (B1–53)
Also, it is argued that company size–comparatively small—has so far not allowed to join a
verification organization
Moral arguments are identified in statements about the Blackout management that is
“generally willing and thinks it is important to take responsibility, not only within its own
four walls but with regard to the products [we] sell” (B1–69). Another general statement
shows that some moral ideas are kept high, such as “supporting the youth because they are
our future” (B1–65). Also, it is stated that it is a “general attitude” (B1–69) that is relevant
in the context of taking responsibility.
5.6. BLACKOUT AG
143
Linguistic Patterns
No linguistic patterns are available in the first phase because there are no company publications from that time and Blackout is not present in the media.
Conative Patterns
Posture The Blackout posture in the first phase is interpreted as tentative based on the
following arguments. On the one hand, the posture seems defensive. There are no indications
to adapt to the CCC demands in a first phase such as implementing a code of conduct.
Further, the contact with BD is only a one-time incident and the contact is dismissed after
the first meeting. Also, the meeting is kept at an informal level and it is not documented
at the BD even though they usually keep the records of company contacts. In addition,
Blackout does not report any type of philanthropic activity or any type of partnership with
any organization in the realm of firm responsibility. Here are some of the data extracts:
Yes, we had [a contact person]. But some time ago. I do not know when. We had
someone here from the BD. . . He explained the concept, what he does. . . (B1–49)
It was in the direction of the BSCI, he presented various projects (P4: yes, yes)
and what we could do. (B1–50)
By my knowledge there was no formalized exchange of information. I do not know
of any initial, small-scale consulting of my predecessor. (P7–3)
On the other hand, there are some open notions in the firm posture. The mentioned meeting
only took place because Blackout accepted the feedback of a customer who sent a protest
postcard. Based on this feedback, Blackout took the initiative to contact the BD. Therefore,
the firm posture is interpreted as tentative.
Consistency Blackout is strategically consistent. The company starts to consider the topic
of joining a verification organization long before the decision is taken. This indicates that the
decision is carefully prepared:
And at some point, four or five years ago—I think it is about four years ago—we
started to discuss this topic. (B1–52)
Internal consistency cannot be interpreted because it was the first time at all that the company thoroughly engaged in the topic of corporate social responsibility. Therefore, internal
consistency is inconclusive.
Commitment The Blackout commitment in the short-term can be judged only on the
fact that the company has proactively contacted the BD on its own behalf, which shows selfinitiative. As there are no indications for further preoccupation with the topic during the first
phase and no disadvantageous aspects either, commitment is considered as instrumental.
CHAPTER 5. CASE STUDIES
144
Main & MiddleCategory
Cognitive Pattern
Identity Orientation
Legitimation
Linguistic Pattern
Justification
Transparency
Conative Pattern
Posture
Consistency
Commitment
Response ProfilePhase 1
Individualistic
Relational
Pragmatic
Moral
Tentative
Overall consistent
Instrumental
Table 5.15: Blackout Response Profile Phase 1
Recap
Table 5.15 summarizes the Blackout response profile during the first time period studied.
Blackout has a mixed individualistic and relational identity orientation and legitimizes pragmatically and morally. There are no available linguistic patterns as the company does not
publish company documents and is not present in the media. Blackout has a tentative posture,
its actions are overall consistent and commitment to the campaign topic is instrumental.
5.6.3
Analyzing Changes During the Campaign
Response Phase Two
Cognitive Patterns
Identity orientation Identity orientation patterns are the same as in the first phase
(individualistic and relational). During the evaluation phase, Blackout discussed various options with its suppliers. Blackout collaborates closely with the FWF in order to find
solutions how to keep their suppliers in the new verification scheme:
And with Fair Wear, what I like and why we decided to join this organization is
that it is actual collaboration not working against each other. (B1–32)
Fair Wear has the goal that we audit our major suppliers first. Where we have
volume and where we can, based on this volume, make change happen. And there,
we try to improve in a sustainable manner. Not changing suppliers or threaten
them to withdraw orders. This is not the goal of Fair Wear and not at all our goal
but to further work with them in the long term. (B1–34)
This indication for a diadic relationship between Blackout and its suppliers is complemented
with the general individualistic identity orientation and it is supported by an emphasis on
the importance of improving quality:
Commitment
Consistency
Conative Pattern
Posture
Transparency
Linguistic Pattern
Justification
Legitimation
Cognitive Pattern
Identity Orientation
Main & Middle Category
-
Cognitive Legitimacy
no/ suspicion
interaction
philanthropy
partnership
integrative
preparation
ad-hoc decision
match
different
Engagement with NGOs
2
1
9
5
0
0
0
3
1
0
0
5
2
0
0
7
0
0
0
0
0
0
0
8
4
4
0
4
No. of Codings
Phase 2
From BD perspective: Blackout becomes active by evaluating FWF
Not filling in BD survey
No public code of conduct
Not engaging with CCC/ BD
Intense contact with BSCI and FWF for evaluation reasons
Joining FWF carefully prepared
From BD perspective: quick decision
Evaluation time for verification organization of several years, taking
suppliers into account
Evaluation based on company initiative
Convincing sceptical suppliers
-
Improving quality and efficiency is important
Particular importance of supplier relations
Negotiation power of small company is limited, displacing responsibility
to large players
Acting responsibly is sign of trust for the future
It is reasonable and the right thing to do to take (formal) responsibility
Goal is to improve working conditions
-
Summarized Content
Table 5.16: Blackout Results: Conceptually Ordered Matrix Phase 2
Persistence
Sacrifice
Preoccupation
Internal (CSR)
Strategic (overall)
Adaptation to demand
yes
no
yes
no
Acceptance of feedback
-
-
Moral Legitimacy
Legal
Scientific
Economic
Ethical
favorable
unfavorable
-
Specification
Individualistic
Relational
Collectivistic
Pragmatic Legitimacy
Sub-Category
5.6. BLACKOUT AG
145
CHAPTER 5. CASE STUDIES
146
And with them [the suppliers] we aim at improving quality. If working conditions
are improved, if security is improved, there is an automatic improvement in product quality. And this has to be the goal. Also to improve efficiency. Then the
supplier gains and we do, too. If we do not reach this we do not have a chance on
the market. (B1–35)
Legitimation In the second phase, Blackout legitimates both pragmatically and morally.
The patterns as such are therewith the same as in the short-term. Pragmatic patterns refer to
the argument that as a small company it is difficult to take influence on suppliers. It implies
that under a certain company negotiation power, responsibility in the supply chain may be
difficult to take. Also, when buying from large brands, there is no option to influence work
practice at supplying companies. In this context, responsibility is displaced to the large players, such as Levi’s and Hugo Boss. However, when consumers request it, then the company
should take responsibility and join a verification scheme. The Blackout CEO also refers to
the trust of its sales personnel in the products they sell as an important factor. Yet, it is
stated that there are hardly any consumer reactions, not even after the television program
that states that Blackout is ignorant according to the BD ranking. Hence, consumer reactions
do not seem to play an important role in the medium-term.
The situation is as such that Blackout has grown in the past few years. The smaller
you are, the more difficult it is to influence your suppliers. Or even impossible. If
you are very small, almost impossible. In addition, some goods we by ready-made
from brands such as Hugo Boss or Levi’s where we have no options. (B1–19)
And I think it is an important step for the future for our trust in our customers and
in our sales personnel. The sales person can trust our product. This is transferred
to the customer and this is also important for the customer. (B1–41)
These pragmatic statements are accompanied with moral statements. It is claimed that when
a company has a certain size, it is “reasonable” and “right” to institutionalize a verification
scheme. It also is stated that the goal of such a scheme is “to improve the working conditions
in a sustainable manner.” The decision against BSCI and for FWF also is based on moral
arguments: Blackout was more certain of the FWF to “cause enough improvement in the
field, for the seamstresses” (B1–20).
We have the same goal [as the FWF]. The goal is to sustainably improve working
conditions for the seamstresses. And not just to change manufacturers. This is
an important aspect. Other organizations have the interest to make many audits
because they earn money with every audit. (B1–33)
Linguistic Patterns
As in the first phase, no linguistic patterns are available in the second phase either. Blackout
is not in the media (except for the publication of the BD ranking but there were no media
5.6. BLACKOUT AG
147
requests that requested Blackout statements) and there are no company publications from
that time.
It may be remarked that Blackout did not explain to the BD either why it did not fill in
the survey. Company representatives confirmed this in the interview. The question why they
did not fill in the survey was answered by stating they they do not fill in any questionnaires
that has been included in the interpretation of identity orientation.
Conative Patterns
Posture The posture is interpreted as tentative, being a combination of being defensive
toward the BD but rather open to the verification organizations. From the BD point of
view, Blackout accepts their feedback in terms of evaluating a monitoring and verification
organization. After the questionnaire was sent, Blackout communicates that they may join
the FWF in short.
. . . in the sense that they would tackle the topic that they actually did. (P7–9)
[They just said] they had initial meetings [with the FWF] and evaluated the topic
for themselves. In that sense, yes, it happened by surprise and quickly. (P7–11)
While the demand to joining the FWF is discussed at Blackout, they do not adapt to other
CCC demands, such as filling in the survey. The CCC notes in the company profile that
Blackout has not adapted a code of conduct:
The questionnaire came from the BD. And we were already discussing the topic
with the FWF. And we told them we would not fill in the questionnaire. (B1–15)
Explicit acknowledgement of workers’ rights: Blackout has not explicitly approved
of the General Declaration of Human Rights or local legislation in any official
document. (B30–3-4)
The posture of Blackout toward BD is rather defensive. The company does not fill in the
questionnaire and there are only few direct contacts between Blackout and the BD.
Engagement with NGOs is ambiguous. On the one hand, Blackout does not engage with
the CCC, influenced by suspicion about their action:
From our side it is obviously not so nice. . . they [the BD] have to exercise pressure,
it belongs to them. (B1–55)
I have to admit that I was only selectively in touch with [Blackout], maybe once
or twice. (P7–4)
On the other hand, Blackout is in intense contact with the FWF even before the CCC survey
is sent to them. The second phase is dominated by intensive evaluation of monitoring and
verification initiatives, BSCI and FWF. Exploratory interactions with both organizations take
place to assess which one is suitable for Blackout. These discussions were initiated before the
CHAPTER 5. CASE STUDIES
148
BD sent their survey in 2007. Hence, the company is rather defensive toward the BD but
comparatively open to others (BSCI, FWF).
It also may be added that this profile fits with the general remark that the company does
not respond to requests from other (external) organizations, either. This also matches with
the result that there are no indications for any philanthropy or partnerships with other NGOs.
Consistency The evaluation phase is strategically consistent but internally inconclusive. Blackout carefully prepares the membership of the FWF with their suppliers that were
integrated in the decision process and are asked about their opinion:
It was a process until we found the way that is best for us, the right partner for us
to approach such a project. There are different organizations [that verify]. One
that we evaluated intensely is BSCI. We also, even before we evaluated this in
more detail, we talked to our suppliers in the Far East about it. (B1–11)
On the other hand, the CCC manager has the impression that it was a quick decision for
Blackout to join the FWF. This single hint for an ad-hoc decision is relativized based on
indications that BD could not know the decision process of Blackout as they were not in
touch. There was no contact established between BD and Blackout during this period and
also afterward, there were no intensive contacts that indicate that Blackout explained itself to
BD. There are no other formalized activities in the area of CSR, which makes its assessment
impossible.
Commitment Commitment is interpreted as instrumental yet with a normative tendency. Preoccupation considerably increases from the first phase. Evaluating the monitoring
organization takes several years. It is discussed with suppliers and various organizations are
taken into consideration, which shows that time and money are invested.
We evaluated to join a verification organization during several years. (B1–18)
Hence we looked at it together with our suppliers. (B1–21)
Also, the interview reveals that it is a self-initiative of Blackout to start this evaluation process
that started long before the CCC sent its survey to the company.
We searched for various options. What is there? And then we found Fair Wear.
(B1–12)
The Blackout suppliers were asked about their opinion and they recommended the BSCI that
they already knew. Yet, Blackout found what the BSCI offered was not the right path for them
and they started to persuade their suppliers to collaborate with them to meet the standards
of the FWF. This indicates that Blackout accepted to be confronted with scepticism and the
effort to convince their suppliers of going a different path.
5.6. BLACKOUT AG
149
Our suppliers suggested to join the BSCI, which is the easiest for them, they knew
it already, they had signed contracts and participated in classes. And we saw how
this works. . . . I personally informed myself on location and concluded that. . . this
was not what we wanted. This is why we did not join the BSCI. (B1–21)
Response Phase Three
The third phase begins with Blackout joining the FWF in January 2009. With this membership, they have committed to a high-standard code of labor practices. As this phase has
just started, the data collected can simply indicate a trend and may at best prospect the
long-term response.
Cognitive Patterns
Identity Orientation Identity orientation still is individualistic and relational. On
the one hand, there is a close relationship between Blackout and its suppliers that also is
emphasized in the long term. Blackout desires to improve quality together with the suppliers.
Blackout also appreciates the close contact to the staff from the FWF, another indicator of
relational aspects of identity orientation.
It is about convincing suppliers that this is reasonable in the long-term, also for
them. Certain processes can be improved. If employees dispose of more information they will be better workers. (B1–78)
We have a contact person in Switzerland, which is important for us. . . this close
contact. (B1–30)
No statements match with a collectivistic identity orientation pattern.
Legitimacy Legitimacy is still pragmatic and moral in the third phase and in addition,
has some cognitive characteristic. As already mentioned, Blackout prefers the FWF from the
BSCI. This is confirmed because now Blackout can observe that “action is taken” (B1–30).
We can observe really well how these audit mechanisms work. An agent is certified
and entitled to audit companies, for example in China. We have the possibility to
join such an audit. It is very interesting that we can actually see how this works.
That we can do something. (B1–30)
On a moral basis, the CEO emphasizes that the suggestions for improvements in the supplier
factories made by the FWF (based on first audits) are accepted and are considered as valid,
which is a typical pattern of moral legitimation (Suchman 1995). An example of such a claim
is that the administration of salaries has to become more transparent.
What these audits reveal is valid. There are improvements of security or that it
has to be comprehensible how the wages were paid. It is not that no salaries were
paid so far but at times it is difficult to trace the path because administration,
the paperwork, is not neatly enough conducted. (B1–31)
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150
Main & Middle Category
Cognitive Pattern
Identity Orientation
Legitimation
Linguistic Pattern
Justification
Transparency
Conative Pattern
Posture
Consistency
Commitment
Acceptance of feedback
unfavorable
Legal
Scientific
Economic
Ethical
favorable
Cognitive Legitimacy
Moral Legitimacy
Collectivistic
Pragmatic Legitimacy
Individualistic
Relational
Sub-Category
yes
no
yes
no
no/ suspicion
interaction
philanthropy
partnership
integrative
preparation
-
-
-
-
-
-
Specification
0
2
0
0
3
0
1
0
0
0
4
1
0
0
0
4
1
1
1
4
0
2
3
2
No. of Codings
Phase 3
Desire to improve quality with verification scheme
Close relationship with suppliers
Direct contact with FWF
Company size now allows effort in verification organization
Marketing asset for the future
Preference of FWF over BSCI because the contribution to improving working
conditions is more visible
Deficits reported from supplier audits are considered as valid
Demonstrating FWF membership on web site as firm philosophy
Summarized content
Engagement with NGOs
Joins FWF
Next questionnaire may not be answered, either
Collaboration with FWF which is multi-stakeholder initative
Already considering further engagements even though not ready to implement
yet (organic cotton)
Joining FWF matches evaluation phase
Early consideration of activities which match current engagement
Audits at suppliers cost time and money
More sensitivity about other topics, such as organic cotton
-
Importance of quality and service
Improving working standards
Code of conduct aims at improving working conditions and management system at supplier factories
-
Strategic (overall)
ad-hoc decision
match
Adaptation to demand
Internal (CSR)
different
0
7
2
0
Preoccupation
Persistence
Sacrifice
Table 5.17: Blackout Results: Conceptually Ordered Matrix Phase 3
5.6. BLACKOUT AG
151
The cognitive legitimation pattern is identified in the company concept and on the web site,
respectively. After having joined the FWF, the company demonstrates the membership as a
part of its “philosophy.”
Linguistic Patterns
Justification For the first time, linguistic patterns can be identified. However, there are
only scarce Blackout documents that do not comprise actual justification patterns. Yet,
they repeatedly state that quality and service is of utmost importance to Blackout, revealing
economic arguments. It also should be noted that these economic patterns do not specifically
refer to them joining the FWF. The fact that Blackout is a member of the FWF is stated
in the Blackout Concept (B–20). It presents what the FWF is and what its goals are. An
ethical justification argument can be identified because the description refers to the code of
conduct to which Blackout now conforms, such as auditing supplier factories to assure that
there is no forced labor, no discrimination, freedom of association, etc.
Transparency Transparency patterns are hard to identify, as the Blackout Concept (B30)
neither comments on its general business impact nor admits to the FWF positively or negatively. It simply lists the code of labor practices and it states that Blackout has committed
to meet this codex. Therefore, transparency is interpreted as ambiguous.
Conative Patterns
Posture Blackout’s posture toward the issue of labor conditions of workers is more open
than in the second phase and is therefore, cautiously, interpreted as open. In the long run,
Blackout adapts to a central claim of the CCC by joining the FWF:
And then we joined the FWF by January 1, 2009. (B1–13)
As already mentioned in the medium-term, this step is regarded as a quick decision by the
BD. Even though this action is adaptive, the CEO makes clear that this does not mean that
Blackout would alter its behavior toward the BD. Consistently with other statements, he
emphasizes that the next questionnaire will again be judged by how much time it will cost to
fill it in. Blackout may repeatedly not complete it and may simply refer to the FWF. There
is no direct contact between the BD and Blackout at the time, and the statement about the
likelihood of not filling in the next questionnaire confirms that there is no intention to do so.
There are no more exploratory interactions with NGOs than with the FWF, which by now is
on an integrative level. No other partnerships or philanthropic activity are identified.
Consistency Consistency is interpreted as overall and internally consistent. Blackout
considers further engagement in other issues of responsibility even if there are no indications
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152
for an overall Blackout CSR strategy. Strengthening Blackout’s engagement of taking responsibility in its supply chain is prepared and it may take some time until a decision will be
taken.
However, [introducing organic cotton] has been a topic before, we are not ready
yet but we are thinking about it to check such aspects and the possibility. It is
more difficult in the far East, it would be easier in Turkey. (B1–68)
In sum, joining the FWF is consistent with the preceding evaluation of monitoring systems
and further activities are likely to be consistent with this engagement, demonstrated by
considerations about introducing organic cotton.
Commitment Commitment in the long-term is still present and is instrumental. While
the phase of evaluation is over, time and money flow into audits and into improvements
of working conditions and processes at supplier factories. In other words, Blackout is still
preoccupied with the topic:
There are audits. And then there are aspects to improve and there we have to do
the follow up. And this is related with work. This is obvious. (B1–78)
Persistence of responsible business practice is indicated by the above-mentioned statement
about introducing organic cotton. In sum, the CEO considers the company to be more
sensitive to topics in the area of responsible business practices that initiate new ideas:
Maybe we are a little more sensitive about these topics which go in this direction, maybe with organic cotton.. . . It is certainly the case that we are now more
sensitive to such topics. When one considers this topic as such. (B1–68)
Yet, there are no more indications of accepting disadvantages and taking the difficult path.
Number of codings of preoccupation and persistence increased, however, as there are no more
indications for devotional actions, commitment is considered as instrumental.
Recap
Table 5.18 lists the reported response profiles over time. Alternation of the initial profile has
been identified in various ways. Substantial change has been reported for linguistic patterns
and for firm posture. Insignificant change has been identified for identity orientation and
relative change in legitimation, consistency, and commitment. The next subchapter turns
to interpreting these results.
5.6. BLACKOUT AG
Main & Middle
Category
Cognitive Pattern
Identity Orientation
Legitimation
Linguistic Pattern
Justification
Transparency
Conative Pattern
Posture
Consistency
153
Response Profile
Phase 1
Response Profile
Phase 2
Response Profile
Phase 3
Overall
Change
Individualistic
Relational
Pragmatic
Moral
Individualistic
Relational
Pragmatic
Moral
Individualistic
Relational
Pragmatic
Moral
Cognitive
I
-
-
S
-
-
Economic
Ethical
Ambiguous
Tentative
Tentative
Overall consistent
Overall consistent
Commitment
Instrumental
Instrumental
R: Relative change
S: Substantial change
Open
Overall consistent
Internally consistent
Instrumental
I: Insignificant change
R
S
S
R
R
Table 5.18: Blackout Response Profile
5.6.4
Interpreting Results
Assessing the Influence of the Campaign on Posture
One of the outstanding results from this case study is that the Blackout posture is reported to
change substantially from tentative to open. This paragraph addresses in how far this change
can in fact be attributed to the CCC and respective activities from the BD.
The cause and effect loops in Figure 5.6.4 display the consecutive argument that the campaign activities had a major influence on the Blackout posture. Simultaneously, other aspects
cannot be neglected. So far, the chain of evidence has mainly been established between early
activities of the campaign and respective customer feedback upon it. The Blackout company
has accepted such individual feedback and has been triggered to engage with NGOs. It has led
to a period of thoughtful evaluation of how the company can formalize responsibility toward
workers in their supplier factories. The discussions have led to Blackout joining the FWF and
to comply with a major demand from the CCC. Another cause that has merged in the data
is the claimed general willingness of the company management to take responsibility not only
for its direct employees but for what happens in the supply chain. The cause and effect loops
attempt to demonstrate that such a general positive attitude toward campaign claims fosters
self-initiative and firm posture. However, the general attitude may not be enough and that
the campaign activities that were able to mobilize customers to send postcards to Blackout
were crucial. They had a direct influence of the level of acceptance of outside feedback and
on the company’s self-initiative regarding engagement with NGOs.
CHAPTER 5. CASE STUDIES
154
Figure 5.6: Blackout Posture Cause and Effect Loops
Probing the Types of Change
Changes are of various types, which means they do not occur mutually across all dimensions
analyzed. This results questions proposition one. Instead of an equal change in all dimensions,
several types of changes are indicated. Insignificant changes in cognitive patterns confirm
findings of Brickson (2005) who argued that identity orientation is relatively stable. Some
categories also have been seen to change in relative terms. Such a relative change, for example
in commitment, indicates that the issue has in fact caused attention in the company. Even
though the type of commitment is not different, it has become stronger during the time of
evaluation and continues in the third phase. Linguistic patterns have undergone a substantial
change as well; however, there were no linguistic patterns at all in periods one and two.
5.6.5
Summary
This section summarizes the findings from the Blackout case study and Table 5.19 lists the
documents used.
Blackout initially responds to the CCC with a mixed individualistic and relational identity
orientation and legitimizes pragmatically and morally. The company does not communicate
about the issue, which leaves linguistic patterns blank. Conative patterns are characterized by
5.6. BLACKOUT AG
Document Type
Interviews
Blackout Documents
Archival Records
155
Document
B1: Transcript of the joint interview with the Chief Executive
Officer of Blackout and the Executive Assistant responsible for
the partnership with the FWF. The interview was held at the
company headquarters in Oensingen (Solothurn), Switzerland
(in Sept. 2009).
P7: Relevant excerpts from the interview with the CCC manager at the Berne Declaration. The interview was held at the
organization’s head office in Zurich, Switzerland (in fall 2009).
B20: Extract of the Blackout Konzept which was provided during the company visit and which corresponds approximately
with the current state of the company web site (fall 2009).
B21: Blackout Code of Labor Practices
B22: Blackout Questionnaire on labor standards for supplyers
B30: Blackout profile in Berne Declaration (2008)
Table 5.19: Blackout Case Study Documents
a tentative posture, overall consistency but internal inconclusive consistency and instrumental
commitment.
This initial profile alters as follows. Categorically, posture changes from tentative to open
during the campaign. Further, linguistic patterns change in the long run from no communication to some with economic and ethical justification but an ambiguous transparency as
impact of firm behavior is not mentioned. Relative change is identified in consistency, which
indicates continued preparation and that further activities of responsible business behavior
match existing ones. Commitment remains instrumental but becomes stronger during the
campaign.
It is interpreted that the activities of the CCC have a major impact on the Blackout
posture because it is able to generate customer feedback to which the company sensitively
reacts. Also, the general positive attitude of the management toward the central claim of
the CCC, that firms should take responsibility for their actions, is regarded as an important
factor to influence change of firm posture.
CHAPTER 5. CASE STUDIES
156
5.7
5.7.1
Mammut Sports Group AG
Building the Case Study Context
This introduction presents the Mammut company and provides an overview of its response
to the CCC. Figure 5.7 shows the event listing for an overview and to identify themes.
The history of the Mammut Sports Group dates back to 1862 to a traditional rope manufacturing firm (Mammut Sports Group AG 2009). The company has grown its reputation
for high-quality products on the basis of ropes and has specialized in synthetic ropes for
mountaineers since the 1950s. In 1982, Mammut joined what is today Conzzeta AG, a listed
company holding machinery, engineering, foam materials, real estate, and sports goods firms.
In the 1980s, Mammut expanded its products of equipment and offered the first collection
with clothing, backpacks, and sleeping bags. Today, Mammut holds various companies in the
outdoor sector, such as Raichle and Toko. The group employs 300 employees in Switzerland
of which 200 at its headquarters in Seon (Aargau), Switzerland, where products are developed
and designed. Ropes are manufactured in Switzerland, clothing mainly in China. The group
has six locations worldwide and holds a large network of agents for distribution. Its revenues
reached almost CHF 200 millions in 2008 (Conzzeta AG 2009).
“The CCC and Mammut have a long history” (M1–2), the Mammut Sports Group representative started the interview. Mammut Sports Group has been confronted with the CCC
from its early actions in Switzerland in the early 2000s, mainly with postcards from customers.
As the early focus of the CCC was on large Swiss retailers, Mammut was publicly mentioned
in the BD ratings for the first time in 2004 (Berne Declaration 2006c). The second time period begins with Mammut indicating interest in collaborating with a verification organization
and when internal discussions about Mammut’s position in formalizing responsible business
practices are initiated in the year 2005. It is remarkable that this phase of evaluating options takes considerable time and is ended in October 2008 when Mammut officially starts its
membership with the FWF and appoints a CSR manager. Simultaneously, another company
survey from the DB is published that includes a company ranking for the first time. This
ranking causes considerable discussions at Mammut and makes them engage more with the
BD about their survey and the ranking. Also, the BD initiates just another survey about the
specific industry of outdoor companies and gains even more attention from the companies
and also considerable coverage in the Swiss media.
The following patterns and themes are identified. During the observed time periods,
Mammut has implemented a code of conduct in the first phase and has adapted to a major
demand of the CCC by joining the verification organization FWF. This is part of a broader
responsibility strategy that has been discussed and developed during the second phase. This
5.7. MAMMUT SPORTS GROUP AG
157
strategy development and evaluation phase has taken a considerable amount of time. Also,
engagement with the BD has changed from not having a specific contact person to particular
exchanges and a meeting in Mammut’s premises.
5.7.2
Determining the Initial Response Profile
Cognitive Patterns
Identity Orientation The identity orientation of Mammut is individualistic and relational during the first phase. During the first and second phase of the Mammut response
to the CCC, the company does not have specific staff in the area of corporate responsibility,
indicating individualistic identity orientation:
One time it was the procurement department and another time it was sent to the
public relations which seems plausible, too, it is up to them to answer. We also
shifted the request back and forth a little. Then we said, well, if we have to answer
to a request from the CCC, the procurement provides the technical input and the
contact person is from public relations. (M1–16)
On the other hand, there are long-lasting and well-established relations between Mammut
and its suppliers that refers to relational identity orientation.
. . . in our long-lasting collaboration with our suppliers which we all know personally. . . (M1–69)
Legitimation In the short-term, legitimacy has moral and pragmatic characteristics. The
Mammut representative argues morally when he emphasizes that the company has “always
discussed this topic seriously, and we demonstrated in the 1990s that. . . it became part of
work of the procurement managers to explicitly talk about it with the suppliers. We never
marginalized this topic” (M1–21). Further indications that Mammut legitimizes morally is
the confession that campaigns such as the CCC are “basically legitimate—there is no doubt
about that” (M1–48).
Besides these moral characteristics, there also is evidence for pragmatic legitimacy in the
first phase. The Mammut representative states that they “balanced pragmatically” (M1–23)
whether it was necessary to respond—it is emphasized that he even used the word pragmatic
himself. As in the first phase it was only fashion companies were targeted by the CCC,
Mammut realigned according to what happened with the larger fashion companies (M1–26).
More evidence for a pragmatic legitimation pattern is found in the reasoning why working
conditions in the supply chain became an important issue for Mammut. Customer feedbacks
are the cause:
One can generally state that of all customer feedbacks we receive in the broad
sense of social and ecologic issues, the majority is concerned about “made in
CHAPTER 5. CASE STUDIES
158
Figure 5.7: Mammut Event Listing
Commitment
Consistency
Conative Patterns
Posture
Transparency
Linguistic Patterns
Justification
Legitimation
Cognitive Patterns
Identity Orientation
Main & Middle Category
-
Cognitive Legitimacy
3
0
3
0
0
0
0
0
0
1
0
0
0
1
1
0
yes
no
yes
no
no/ suspicion
interaction
philanthropy
partnership
integrative
preparation
ad-hoc decision
match
different
0
0
0
0
0
0
0
2
1
1
0
3
No. of Codings
Phase 1
Taking customer feedback and campaign claims seriously
Answering CCC survey
Introducing code of conduct
Consideration in relation to existing practice
Considering CCC and claim to introduce a code of conduct
Introducing code of conduct
-
-
No responsible staff for NGO claims
Long-lasting supplier relations
Weighing importance of campaign request
Responding to customer feedback
Taking issue for serious
Implementation of code of conduct in purchasing scheme
-
Summarized Content
Table 5.20: Mammut Results: Conceptually Ordered Matrix Phase 1
Preoccupation
Persistence
Sacrifice
Internal (CSR)
Strategic (overall)
Engagement with NGOs
Adaptation to demand
Acceptance of feedback
-
-
Moral Legitimacy
Legal
Scientific
Economic
Ethical
favorable
unfavorable
-
Specification
Individualistic
Relational
Collectivistic
Pragmatic Legitimacy
Sub-Category
5.7. MAMMUT SPORTS GROUP AG
159
CHAPTER 5. CASE STUDIES
160
China.” What happens there and how do you treat the seamstresses and how
are the working conditions in the supply chain? This is certainly the topic which
raises concern dominantly also with customers. (M1–35)
Linguistic Patterns
Mammut did not communicate about its (social and ecologic) business practices in the first
phase.
Conative Patterns
Posture Mammut’s posture is tentative in the first phase. One the one hand, it accepts
feedback from the CCC and also adapts to the demands at the time (introducing a code of
conduct), which make the posture fairly open. On the other hand, Mammut does not engage
with the CCC or any other NGO, which weakens the open posture.
As mentioned above, Mammut does not have a CSR manager in the first time period, yet,
requests are not rejected even if they are internally sent from one department to another until
the answer is given (cf M1–16). It is further reported that even though there is no particular
CSR strategy in place in the 1990s, the topic is discussed seriously and is not underestimated
(cf M1–21). In the first phase, internal discussions are mainly initiated by customer feedbacks
via postcards (cf M1–35):
Since the 1990s, or since the first actions of the CCC, Mammut has let its suppliers
sign a code of conduct. (M1–2)
No statements denying feedback is interpreted as confirmation that the Mammut company
accepts outside feedback. It also is reported that Mammut adapts to the very first CCC
claims that focus on companies to adapt a code of conduct. Mammut adapts such a code
even though it is not the center of the CCC at the time. “Like the large retailers Migros and
Coop, Mammut adapted a code of conduct, let the suppliers sign, and behaved in the best of
its knowledge” (M1–2). Further statements confirm that Mammut adapts to the CCC claims
by letting the suppliers sign to comply with local law.
Yet, no particular contact between Mammut and the CCC is reported for the first period
nor does Mammut establish or sustain any other type of institutionalized engagement with
NGOs in the area of ecological or social responsibility.
Consistency Implementing the code of conduct and having suppliers sign it should be held
against consistency with existing business practice and the company strategy. However, it
was the first formalized move in responsible business practices, which is why it cannot be
compared to existing activities. Therefore, internal consistency is inconclusive but the
5.7. MAMMUT SPORTS GROUP AG
Main & MiddleCategory
Cognitive Pattern
Identity Orientation
Legitimation
Linguistic Pattern
Justification
Transparency
Conative Pattern
Posture
Consistency
Commitment
161
Response Profile Phase 1
Individualistic
Relational
Pragmatic
Moral
Tentative
Overall consistent
Instrumental
Table 5.21: Mammut Response Profile Phase 1
company seems overall consistent because it is remarked that implementing such a code
has been considered as institutionalizing the company’s existing practice.
Commitment Commitment is tentatively interpreted as instrumental. Mammut is preoccupied with the topic of the CCC and shows some self-initiative by discussing the issue of
labor practices and introducing a code of conduct even though they are not directly targeted
by the CCC at that time (cf M1–2 & M1–21).
Recap
Table 5.21 summarizes the initial response profile of Mammut. It comprises a mixed individualistic and relational identity orientation and pragmatic and moral legitimation. There are no
linguistic patterns as there is no company communication about its CSR activities. Mammut
has a tentative posture, stringent overall consistency, and instrumental commitment.
5.7.3
Analyzing Changes During the Campaign
Response Phase Two
Cognitive Patterns
Identity Orientation Identity orientation is individualistic and relational. As in the
first phase, statements refer to not having any staff responsible for particular questions and
claims from NGOs and to the importance of the long-lasting supplier relations.
Legitimation In the second phase of the Mammut response to the CCC, legitimation patterns are pragmatic and moral. Mammut pragmatically evaluates whether a new campaign
CHAPTER 5. CASE STUDIES
162
Main & Middle Category
Cognitive Patterns
Identity Orientation
Legitimation
Linguistic Patterns
Justification
Transparency
Conative Patterns
Posture
Consistency
Commitment
Acceptance of feedback
Legal
Scientific
Economic
Ethical
favorable
unfavorable
Cognitive Legitimacy
Moral Legitimacy
Individualistic
Relational
Collectivistic
Pragmatic Legitimacy
Sub-Category
no
yes
no
no/ suspicion
interaction
philanthropy
partnership
integrative
preparation
yes
-
-
-
-
Specification
0
3
4
3
2
0
0
0
6
8
0
0
0
0
0
0
0
6
1
1
0
5
No. of Codings
Phase 2
Agreeing that code has to be verified and company resources have to be invested
Accepting mediocre
Response to all surveys
Not joining verification organization
Initial response to company ranking is conflictual, filled with anger from the Mammut side
Discussions about company ranking (before publication)
Initiation of discussing CSR strategy
Taking time to evaluate verification scheme
Acting responsibly also in ecological terms with various activities
Discussions about strategy and about investing human and financial resources
Joining working groups on industry level
Awareness of the strong commitment with FWF (“Rolls-Royce” of verification)
-
No particular staff for questions of business responsibility
Importance of supplier relations
Customer feedback indicated importance of working conditions
Weighing trade-off between answering and not answering to NGO requests
Taking company responsibility for its supply chain for granted
Acknowledging that signing code of conduct is not enough
Having been doing business in a responsible way
-
Summarized Content
Internal (CSR)
Strategic (overall)
Engagement with NGOs
Adaptation to demand
ad-hoc decision
match
different
0
4
0
2
5
1
Preoccupation
Persistence
Sacrifice
Table 5.22: Mammut Results: Conceptually Ordered Matrix Phase 2
5.7. MAMMUT SPORTS GROUP AG
163
is “important or rather less important? Do we have to [respond] or not?” stating that this
tradeoff was made “somewhat superficial[ly]” (M1–20). Nevertheless, Mammut acknowledges
external demands that indicate a pragmatic legitimation pattern: “. . . the relevancy for our
stakeholders, specifically the BD but also the concern of the customers, made it obvious that
the topic of working conditions in the supply chain in emerging markets would be our first
priority” (M1–35). Consecutively, Mammut evaluates monitoring initiatives and considers
whether to join the FWF or the BSCI. Not only, but pragmatic considerations also paid a
role in taking the decision: “. . . administration effort may be mentioned as an argument. I
looked at all the documents and the monitoring system of the BSCI. And it is another level
of complexity than we do with FWF which is not too lean either” (M1–71).
Moral legitimation arguments are equally frequent. They are identified by the acknowledgment of general company responsibility for its supply chain and that simply signing a code
of conduct is not enough but it is accepted that it should be verified by a third party. In
addition, Mammut is convinced that they have been doing business in a responsible manner
all along and is not concerned about independent audits:
Who would seriously and earnestly deny such obvious responsibility? In my opinion, there are duties which a company does not have because it is regulated by
government or because it is an individual responsibility and is not related to the
company. Yet, there is equally evident responsibility which no firm can seriously
deny that it does not have to bear at least part of. And this perception is difficult
to deny. That a company has social responsibility. (M1–107)
We realized, at some point, and also some NGOs increased pressure, when they
recognized that signing a document is not enough but [the code of conduct] should
be verified and supervised by an independent third party. (M1–3)
In the discussion we always emphasized that, first, we do not have to hide anything.
We have the feeling that ever since we have been doing business we have been doing
it to our best knowledge and to man’s possible responsibility and somehow we have
been doing our best all along. Yet, we are not as naive or autocratic either not to
having known that to simply acting in good faith is not enough. This feeling has
to be exposed to an independent audit. We knew this at the same time. However,
as stated, we had the background that we did not expect that in our long-term
collaboration with our suppliers which we all know personally, that any hidden
scandals would be revealed when independent auditors visited the manufacturers.
Therefore, there were no reasons not to join the FWF. (M1–69)
In sum, Mammut’s standpoint is, “even though we have not actively addressed social and
ecological aspects in the past without meaning mischief, yet, to our best knowledge, we have
met them somehow” (M1–109). There are no cognitive legitimation patterns. Compared to
the short-term response, legitimation patterns as such have remained the same but they have
become stronger.
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164
Linguistic Patterns
Like in the first phase, Mammut does not communicate about its social or ecological business
practices, which is why no linguistic patterns can be determined.
Conative Patterns
Posture Mammut’s posture is more open than in the first phase but still interpreted as
tentative. There is no doubt that Mammut accepts outside feedback, evidenced by multiple
statements. Mammut initiates a discussion about joining a verification organization. This is
related to intensified activities from the CCC in connection with the first report of fashion
companies which included Mammut (M1–9). It was the discussion in connection with the
CCC, which “initiated a process in which we recognized, yes, we need respective resources
if we seriously wish to commit to such an independent verification” (M1–11). As described
above, Mammut did not have a CSR manager yet at that time, however, the company had
always responded to requests and customer feedback in a way which was possible with the
available resources (cf M1–16, M1–20 & M1-35). It is remarked that Mammut “has learnt
to handle emotions and to accept feedback on a technical level to treat the central claim
professionally” (M1–52). This process was necessary because “the first, spontaneous reactions
are emotional and one tends to react with denial and anger, which does not mean, however,
that one neglects or dismisses the issue as such. Yet, the positions are very clear” (M1–51).
The latter statement refers to the positions between the BD/ CCC and the firms they target.
The CCC representative confirms this observation:
I think Mammut was quite shocked of the first analysis in which they did not rank
so well. They were in the center span, together with two other outdoor companies.
I was quite intensely in touch with these three companies. Also during the time of
the publication of the survey results. They were hurt and bothered. It showed that
companies which focus on sustainability react sensitively to these topics. (P7–5)
In the medium term, Mammut responds to the CCC demands in so far as it fills in all the
questionnaires and sends additional information (M32, M38–3, M34–2). Mammut demonstrates openness to the verification initiatives already in 2006: “Basically, we are interested in
collaborating with an independent verification organization” (M38–9). Yet they do not join
it immediately and still in the CCC company profile 2008, Mammut does not communicate
any intentions to join a monitoring initiative (M34–7). Also, the company does not meet
other demands by the CCC, such as providing transparency in terms of management salary
(M34–3).
There is hardly any Mammut engagement with the CCC at first yet it increases over
time. They send a few e-mails back and forth and make a few phone calls, firstly to express
their disagreement with the ranking and in a later stage to explain and justify its position
5.7. MAMMUT SPORTS GROUP AG
165
as explained by Mammut and also the CCC manager. It becomes evident that by actively
denying a claim, the process of exploratory interaction is simultaneously initiated and can
hardly be separated from the phase of mere suspicion:
It cannot be denied that between all companies in the focus of the CCC, and
specifically between Mammut and the CCC, that in a first spontaneous reaction,
the companies react nervous, denying, and angry. . . because there are clear frontlines. (M1–51)
Of course, every company reacts differently. Yet, all reacted quite harshly at
first and said ‘it is not true at all what you write. Everything is wrong.’ Then,
there was a phase of discussion in which we clarified what they thought was not
true. And I also explained our system of inquiry. That we had not just estimated
the ranking but that we actually looked at companies quite systematically and
in detail. It was also a time when companies explained themselves and provided
some more information. There were some interactions back and forth, not too
many, but quite a few compared to other companies. (P7–13)
Besides initiating discussions with the BD about the demands and procedures of the CCC,
Mammut initiates the engagement with the FWF. “It was a topic to be tackled. We wanted
to act and find answers. And then we conducted opening discussions with the FWF, an initial
informative consultation, and we went home to think about it” (M1–64).
On the web site, Mammut reports the initiation of several initiatives in the area of ecological and social business practices. Yet, they are based on collaborations on industry level and
NGOs do not seem to be involved. Therefore, these initiatives are accredited to Mammut’s
commitment, see below.
Consistency The activities of Mammut are overall and internally consistent. In the
medium-term, Mammut initiates a strategy discussion about CSR that enhance strategic
consistency of activities in the ecological and social business areas of the company:
And it was on the top of our agenda or priority list when we analyzed options in
terms of our company strategy in terms of responsibility. We had to identify, first,
what is CSR? Second, what are relevant responsibilities we have to bear where
we have a direct influence with our core business where we can and have to be
responsible. And what are engagements which we do not count as our primary
responsibility? It was not so hard to find our focus. (M1–35)
It is a time for the company to discuss and realize that the topic of sustainability and responsibility is becoming more important to them and to the industry:
It was also a time in which it was foreseeable or in which we as a company recognized that the topic of social responsibility but also responsibility toward the
environment, meaning overall CSR as sustainability, would become more important. And we wanted to provide a competent and strategic answer and did not
only want to look at it in an isolated way because a stakeholder, here the CCC,
brought up this topic. (M1–6)
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166
As already mentioned above, joining the FWF was a well-prepared decision that took some
time until it was taken because daily business may seem more important than such fundamental decisions that take time to be evaluated:
And it was. . . well. . . there are many other daily activities or other strategic topics
which are always higher-ranked in the agenda. This is why it is a conscious decision
which has been latently present for a long time. And we knew it was one we had
to approach, such as the FWF. If it is overtaken by the daily business one tends
to leave it on the paper in the future provisions plan. It does not hurt like some
other topics. And this is certainly what happened with the FWF. We had an
initial conversation to find out about consequences. (M1–65)
Simultaneously, Mammut considers joining the BSCI, which also indicates that becoming a
member of the FWF is anticipated (M1–66 & 68).
Based on these strategic discussions, the Mammut activities in the social and ecological
area are considered to correspond to each other and that Mammut’s strategy of CSR is
consistent. For example, the company acts ecologically internally and complements water taps
with low-flow nozzles in 2007 (M21—51-55). On an international level, Mammut establishes
the Kyrgyzstan project in 2007 that “promotes environmentally-friendly mountain sports
tourism in Kyrgyzstan” together with partner companies (M21–77). Further, Mammut joins
the Sustainability Working Group and the Association for Conservation of the European
Outdoor Group, which are both industry initiatives and are acknowledged in the next section
of persistence.
Commitment The commitment is instrumental. Mammut is preoccupied with social
(and environmental) issues:
[Initial discussions with the FWF] initiated a process in which we recognized that
we need appropriate resources if we wanted to be serious about committing to an
independent verification organization. (M1–11)
Further, joining working groups of the industry association preoccupies the company with the
topic of sustainability and responsibility.
In addition, Mammut shows persistence by initiating a broad discussion of their CSR
strategy and does not only answer the questions and demands from the CCC (M1–6) and
by joining industry initiatives of the European Outdoor Group. The Sustainability Working
Group works on and coordinates sustainable business practices for the outdoor industry.
Mammut is a member of the steering committee. The Association for Conservation supports
projects that protect the nature. Also already mentioned, Mammut initiates its tourism
project in Kyrgyzstan.
Mammut does not exactly make a sacrifice, yet, the company is aware of the strong
commitment the FWF demands and therewith accepts what one could call a disadvantage in
comparison with other organizations:
5.7. MAMMUT SPORTS GROUP AG
167
Even though we knew that the FWF is the Rolls-Royce of the verification organizations. Rolls-Royce in so far as they have the toughest standards and the
most extensive commitment we had to make in terms of putting our cards on the
table. And to engage ourselves. But we neither avoided effort nor transparency.
(M1–70)
Response Phase Three
Cognitive Patterns
Identity Orientation Identity orientation is still individual and relational in the third
phase. Individualistic identity orientation is confirmed by comments that emphasize that
quality is of utmost importance to Mammut, they intend “to offer the very best alpine products” (M21–2).
Relational aspects of identity orientation are indicated by emphasis on a stakeholder focus.
The newly appointed CSR manager is the contact person for the CCC, enhancing a diadic
relationship between the two organizations:
It is only now that we have CSR institutionalized in the company as a new department, it is obvious that the contact person is not in the marketing or procurement
any longer but it is the CSR manager to communicate with the CCC. (M1–17)
Since we are set-up with human resources in this field that such topics are clearly
addressed to specific people we can act differently and establish and maintain such
contacts differently and more intensely. (M1–39)
This is certainly part of our strategy with the situation of staff resources we have
today to actively engage with a dialogue with stakeholders. (M1–41)
Legitimacy Patterns that legitimize the decision to invest in a sustainability strategy and
joining the FWF are pragmatic, moral, and cognitive.
Mammut is aware of consumers who demand responsibility from companies and is willing
to adjust to these demands, indicating pragmatic characteristics of legitimacy: “Consumers
will more likely prefer a brand which is known for meeting is responsibility to the possible
and demanded extent” (M1–78). Also, Mammut apparently knows consumer surveys that
confirm a trend that more and more people care for a healthy and sustainable lifestyle: “I
think if transparency which we try to establish by joining the FWF can be communicated to
the end-consumer. . . then one can expect that it will be a crucial factor in the buying decision
whether or not a brand is preferred” (M1–77).
Comments that indicate a moral legitimation pattern emphasize that the company is doing
the right thing: “. . . where we do something right and reasonable” (M1–77). Further moral
statements focus on coherence of promises and respective behavior and on the acknowledged
responsibility the company has:
CHAPTER 5. CASE STUDIES
168
Main & Middle Category
Cognitive Patterns
Identity Orientation
Legitimation
Linguistic Patterns
Justification
Transparency
Conative Patterns
Posture
Consistency
Commitment
Acceptance of feedback
unfavorable
favorable
Ethical
Legal
Scientific
Economic
Moral Legitimacy
Cognitive Legitimacy
Individualistic
Relational
Collectivistic
Pragmatic Legitimacy
Sub-Category
preparation
no
yes
no
no/ suspicion
interaction
philanthropy
partnership
integrative
yes
-
-
-
-
-
-
Specification
11
1
3
0
0
7
0
0
3
5
3
6
9
0
0
4
5
9
3
4
0
2
No. of Codings
Phase 3
Emphasis on high-quality products which make the price less relevant
Establishing stronger contact with stakeholders
Response to customer demands which claim for brand products being manufactured in a responsible
manner
Transparency as marketing asset
Doing the right thing
Explaining company attitude and behavior to the public on web site and internally
Summarized Content
Engagement with NGOs
Management commitment
CSR staff
FWF membership and audits
Multiple projects in various areas
Measuring advantages of formalized CSR is considered as not possible
Latest outdoor survey considered as having initiated something, also on industry level
Inviting responsible person of CCC
Criticism toward some aspect of the CCC survey
Joining FWF
More specific interaction between Mammut and BD
Work in multi-stakeholder initiative FWF
Engagement on industry level to foster European solution
Overall CSR strategy
Acting upon promises
Systematic approach of CSR, extensively described on web site
Quality alpine products as reason for the company to exist and there is an inherent connection with
acting responsibly
Both committing and providing resources
Responsible behavior important not only from business point of view
Social responsibility considered as given
Good ranking in CCC outdoor company survey
Fair manufacturing
Implementing sustainability is ambitious goal
A single company cannot do much about big issues like climate change
Strategic (overall)
Adaptation to demand
Internal (CSR)
0
12
0
14
13
3
ad-hoc decision
match
different
Preoccupation
Persistence
Sacrifice
Table 5.23: Mammut Results: Conceptually Ordered Matrix Phase 3
5.7. MAMMUT SPORTS GROUP AG
169
Internally, I would say, [joining the FWF] means that we act upon what we proclaim. We have always said that we do not avoid effort or transparency because we
have the impression that we do not have to hide anything. We act upon what we
say. This gives a good feeling. We can say we are transparent. And certainly, by
joining the FWF we demonstrate to be a pioneer of our industry which is certainly
an interesting aspect of which we were aware. (M1–75)
Then who wants to buy a product from a firm not bearing its social responsibility?
Or [a company] which ignores such topics? (M1–78)
Cognitive patterns are recognized by Mammut commencing to communicate about is actions.
All of the Mammut web site section on responsibility describes in detail what and how they
think about and what they do in the area of corporate responsibility.
The cognitive pattern also is pursued on a company-internal basis. After joining the FWF,
the company invites its employees to listen to (internal and external) speakers to the topic
of CSR and in particular social responsibility in the supply chain. They also invite the CCC
manager form the BD and she assumes:
I think they wanted to demonstrate openness and it is also a matter of internal
positioning. Company surveys or when the company is in the news media or if
there are consumer reactions, all of this creates reactions from the employees.
They hear it from somewhere, from the sales people or from somewhere else. . . I
think they wanted to let the staff know that ‘OK, we were criticized, but now we
take our position and we even invited her [the CCC manager]’. (P7–24)
Linguistic Patterns
Justification In the third phase, Mammut communicates about its newly introduced activities in the social and environmental business environment. Justification patterns are
economic and ethical yet there are no statements based on legal and scientific arguments.
It is emphasized that offering quality alpine products is the ultimate reason of the Mammut
business (M21–2). The “economic logic” (M21–7) of the the company is manifested by stating
that the company wants to tackle everything professionally. Mammut stated in the media, “It
is not enough to commit to equitable manufacturing conditions. . . one has to provide human
resources in order to approach the topic systematically and professionally. Otherwise, it does
not work at all” (M39–28). Mammut is rather confident about manufacturing “in a fair and
clean manner” due to the high technical standard they ask for and it is declared, “Therefore,
it is already almost certain that our suppliers provide rather reasonable working conditions.
Otherwise, the workers just go to the competitor” (M39–29). These media statements show
that the economic logic is combined with ethical arguments. This combination of arguments
further appears on the web site. An intact environment is “of great importance. . . not only
from a business point of view” (M21–29). Further ethical arguments are identified, such as,
“Our aim is to. . . assume our social responsibility, including social responsibility toward our
CHAPTER 5. CASE STUDIES
170
partners” (M21–3) and the company intends to “leave behind the best possible ecological footprint” (M21–5). Further, Mammut claims to be “passionate about the mountains. Mammut
lives by and for nature” (M21–29). Also, Mammut has the goal to act “. . . in an ecologically and socially responsible manner, both internally—toward our employees, apprentices,
and athletes—as well as at an external level—toward our suppliers, partners and other target
groups” (M21–57).
Transparency Overall, transparency is ambiguous. Most of the explanations and descriptions in the Mammut communication show the Mammut activities in a good light. Referring
to the most recent CCC company survey that focuses on the outdoor industry, a Mammut
press release states that, “Mammut was ranked as one of the top two companies. . . an excellent result” (M20–2, 6). This discloses the fact that Mammut was on the top of the ranking
only from a relative point of view in comparison with its competitors—none of the companies
ranked in the highest category. It is further emphasized that the company has been “advocating fair working conditions and a minimal environmental impact along the supply chain”
(M20–5) for a long time and it committed to a code of behavior more than 10 years ago
(M21-22–23). Yet, statements about how difficult it may be to implement such a code are
missing.
Yet, there are a few acknowledgments about the difficulty of the chosen path that are
remarkable:
The Mammut Sports Group’s long-term aim is to bring its corporate activities in
line with the principles of sustainability. This is an ambitious goal and requires
an ongoing process and gradual implementation. (M21–4)
However, it is not possible for one company alone to tackle and improve global
issues such as climate change. (M21–32)
In the framework of our membership of the Fair Wear Foundation (FWF), we also
undertake, from 2010, to report transparently and regularly on our commitment
in relation to Corporate Social Responsibility (CSR). This is an ambitious goal
and it will not be achieved overnight. It is part of a continuing process to which
Mammut signed up almost ten years ago. (M21–59)
Conative Patterns
Posture Mammut’s posture is open in the third phase. Mammut accepts outside feedback
and acknowledges what the CCC achieved in terms of sensitivity to the topic, not only at
Mammut but also at industry level:
It is certainly the credit of an organization like the CCC that with such campaigns, the industry becomes more sensitive. Specifically, the CCC approached
the outdoor industry concretely recently in 2009 and published a ranking with
precursors, followers, and ignoramus, this certainly triggered something. (M1–25)
5.7. MAMMUT SPORTS GROUP AG
171
And I am sure that, maybe with some delay, this specific outdoor benchmark will
evoke reactions in the industry. (M1–27)
Mammut demonstrates to accept feedback by inviting the CCC manager from the BD to an
internal training event. The campaign manager was at first not certain whether she could
accept the invitation. Yet, her experience with the situation indicates that the Mammut
company was open to a critical voice even in front of their staff:
I had to carefully consider whether I could accept the invitation in my role. What
it would mean to me and what expectations they had. If it had been clear that a
critical point of view would not be possible, I would have had to reject. If they had
wanted the allowance of a critical NGO I would have had to set the boundaries. I
considered it very carefully and I was very aware of the fact that they would most
probably see me as their potential enemy. There were a few side blows from people
directly involved in the survey. However, all in all, the climate was complaisant,
especially the staff was very interested. . . I thought it was very positive, after all.
(P7–22)
I think they wanted to demonstrate openness. . . (P7–24)
An open posture does not mean that they accept all type of feedback. Especially in the most
recent company survey, Mammut criticized the way the CCC included environmental topics:
“We criticized the questions of percentage of recycled textiles which we have in our collection
which was a rating criteria where in the ranking one would be at” (M1–37).
With joining the FWF, Mammut mets one of the major claims of the CCC in the long-term
response. This is a major step for the company: “Seriously and solidly [tackling responsibility]
means that we are a member of the FWF since October 1, 2008, which was, ultimately, a
central claim of the CCC” (M1–13). This move is acknowledged in the latest fashion company
ranking among the latest developments (M34–13-14).
The FWF membership shifts the Mammut engagement with NGOs to a different level. As
the FWF is a multi-stakeholder-initiative, Mammut collaborates with them in an integrative
manner. And as described above, there is much more interaction between Mammut and the
CCC than ever before. They have the staff to debate with the CCC about the survey and
they demonstrate interest in maintaining the contact with them. Yet it is recognized that
both parties have to take a step forward toward each other:
It has changed in so far as we both advanced toward cooperation, which means that
we. . . invited the BD. . . and they were ready to come and give a presentation. And
we actively contacted them when we finalized our responsibility strategy for an
exchange and to show them where their topic is embedded in the overall strategy.
What priority it has for us. Thus, it has certainly intensified and changed to the
positive. (M1–58-59)
Consistency As there are multiple statements that refer to Mammut’s general strategy
or the preparation of decisions and new activities in the area of CSR match and are not
completely different, both overall and internal consistency is attributed.
CHAPTER 5. CASE STUDIES
172
Responsibility as a company business field received strategic character only after October
2008, which was after having taken the decision to join the FWF and to create jobs in this
area. This indicates the preparation of the decision. Jobs cannot be created ad-hoc. The
dialogue with the CCC has been intensified, a prepared decision, too: “Of course it is part of
our strategy with the situation of personnel we have today to be more actively engaged with
our stakeholders” (M1–41). It has already been stated that the decision to join the FWF
had been well-prepared by comparing it with another verification organization. Anticipating
considerations also are indicated: “[Mammut] wanted to act upon our promises” (M1–75)
because the company wants to be a pioneer in the area of CSR in the outdoor industry. This
also was recognized by the CCC manager:
It is obviously great to have companies, especially in the outdoor sector, to have
ambitions—which I assume—to be forerunners. This is remarkable because this
enhances competition form inside. This can do some good to the issue. To trigger
discussions among the companies to provide input. (P7–35)
The engagement of Mammut on international industry level in various working groups of the
European Outdoor Group also is attributed to indicate preparation of decisions in the CSR
field. Mammut acknowledges CSR to be “a process of continuous improvement and changing
established ways of thinking” (M21–8-14).
The web site text on responsibility contains a lot of detailed information. However, it
becomes evident that responsibility is approached systematically and all activities find its
place in this structure: the activities match each other for a consistent CSR strategy. May it
be that Mammut is in the steering committee of the mentioned working groups on industry
level, the awareness to include such activities everywhere, also in Mammut-internal matters,
the fact that they initiated a partnership with Remei AG for organic cotton, or that Mammut
produces “climate neutral” ropes (all of which is declared on the Mammut web site).
Compared to the second phase, the patterns remain the same but they are strengthened,
indicated by more statements about the topic.
Commitment Commitment in the third phase is instrumental but has some normative
aspects. Mammut (still) invests time and money. For example, the company management
involves its time:
The top-down commitment from the management is absolutely necessary. They
have to say that responsibility is an integrated part of our strategy, of our legitimacy. And consequently to live up to these words. Commitment consequently
living after it provides specific results and a a professional handling of the topic.
(M1–105).
Mammut invests in personnel, meaning time and money, in the field of CSR:
5.7. MAMMUT SPORTS GROUP AG
173
And this process led to me being in a management position to deal with CSR in
30% of my working time and a job of 80% supports me. With this strengthened
situation of personnel, it was possible to tackle this topic seriously and solidly.
(M1–12)
It also may be noted that joining the FWF is a timely effort and costs money, too. The
situation has to be assessed and the membership as well as supplier audits have to be paid
for. Further, the company commits to publishing a CSR report that also takes time of
personnel resources.
The CCC manager confirms that Mammut has started the path of equitable working
conditions and they are and will further be preoccupied with this issue. “I think they are at
the beginning of a long journey. . . I think they have started with certain pillars and decisions
and gave the issue some weight” (P7–33).
All the activities that Mammut starts in the third phase have the connotation of selfinitiative. From the Kyrgyzstan Mountain Project (establishing and promoting climbing)
over their commitment at industry level right down to what they do with organic cotton and
Mammut-internal measures they take.
Last but not least and again remarkable to mention, there are a few disadvantages Mammut may be confronted with in the long-run of the FWF membership. First, it is difficult
to measure the advantages—which is a disadvantage if a concept has to be presented to investors. “I think this is something intangible and unquantifiable which cannot be transferred
into turnover and revenue” (M1–36).
The CCC campaign manager also puts the enthusiasm about the CSR strategy and the
membership of the FWF into perspective: “Now, I think, a difficult time will come in which
they have to show that they are willing to implement the ideas and to show impact. I am
very curious about it” (P7–34).
At least financial disadvantages are not expected: “For us, the disadvantages may not be
as relevant because we have high demands of quality” (M1–100).
Recap
Table 5.24 displays the overall Mammut response profile during the three time periods.
Substantial change has been noted in justification, transparency, and posture. Relative
change has been reported for legitimation, consistency and commitment, and insignificant
change has been identified in identity orientation. The next chapter interprets some of the
remarkable results.
CHAPTER 5. CASE STUDIES
174
Main & Middle
Category
Cognitive Pattern
Identity Orientation
Legitimation
Linguistic Pattern
Justification
Transparency
Conative Pattern
Posture
Consistency
Commitment
S: Substantial change
Response Profile
Phase 1
Response Profile
Phase 2
Response Profile
Phase 3
Overall
Change
Individualistic
Relational
Pragmatic
Moral
Individualistic
Relational
Pragmatic
Moral
Individualistic
Relational
Pragmatic
Moral
Cognitive
I
-
-
S
-
-
Economic
Ethical
Ambiguous
Tentative
Overall consistent
Instrumental
Tentative
Overall consistent
Internally consistent
Instrumental
R: Relative change
Open
Overall consistent
Internally consistent
Instrumental (some
norm.)
I: Insignificant change
R
S
S
R
R
Table 5.24: Mammut Response Profile
5.7.4
Interpreting Results
Assessing the Influence of the Campaign on Posture
This paragraph critically discusses in how far the substantial change in firm posture can be
attributed to the CCC. Cause and effect loops have helped to address rival explanations (see
Figure 5.7.4).
Repeated CCC activities have raised the attention of the media and have been able to
cause customer feedback. The CCC activities also were conducted at companies and customers
directly. This outside feedback that was directed at Mammut has been accepted from the
first phase. In this context, it should be noted that there was a receptive ground for the
topic of taking responsibility, which is found in cognitive patterns. In addition, it has been
mentioned that the general trend (“Zeitgeist” (M1–20)) also has contributed its part to raising
awareness about the issue and causing internal discussions that have led to accepting feedback,
evaluating a verification organization, and to adapting to campaign claims. These factors have
also raised commitment, Mammut has spend time and money with the topic of improving
working conditions in supplier factories and ecological aspects of its business. It should
be noted that the time from when the company initially showed tentative posture toward
campaign claims it took considerable time to institutionalize CSR. Reconsidering the data
reveals that the campaign issues of responsibility have met practical boundaries of the daily
business that is, under certain circumstances, more pressing than tackling the project of
joining a verification organization. The issue has been “latently present” (M1–41). They did
not want to simply join a verification organization as a quick decision but wanted to develop
an overall strategy of responsible company behavior first. Through the repeated activities
from the CCC, consumers have expressed their concern about the raised issues and also
5.7. MAMMUT SPORTS GROUP AG
175
Figure 5.8: Mammut Posture Cause and Effect Loops
have contributed their input at Mammut. A connection between media coverage, customer
feedback, and company response can particularly be identified in the second phase when CCC
survey results are discussed in the context of the outdoor industry. And even more in the
third phase when another campaign survey is directed only at the outdoor industry. While
the company has already taken the decision to join the FWF at that time, the published
ranking, media coverage, and customer feedback caused high awareness at the company and
led to interactions with the CCC. Considering these various aspects, the repeated activities
of the CCC have risen awareness over a long period of time and can be considered as having
had a major impact on Mammut eventually implementing an overall responsibility strategy.
Probing the Types of Change
No notable change is identified for identity orientation. The substantial change of linguistic
patterns is explained by the fact that Mammut only publicly communicates about its activities in the CSR field in the third phase. Relative changes in consistency and commitment
CHAPTER 5. CASE STUDIES
176
indicate that the topics of the campaign initiate awareness in the firm. Firm posture changes
substantially during the campaign. Overall, these results suggest to reject proposition one
in terms of mutual and equal change across all dimensions of company underlying models of
cognitive, linguistic, and conative patterns.
5.7.5
Summary
The results of the Mammut case are summarized and Table 5.25 lists the documents used for
the case analysis.
Table 5.24 shows that Mammut initially responds to the CCC on the cognitive level with
an individualistic and relational identity orientation and pragmatic and moral legitimation
pattern. No linguistic patterns can be identified as the company does not communicate about
the campaign issue. Conative patterns are a tentative posture, inconclusive consistency, and
instrumental commitment.
In terms of development of the response profile, categorical change is noted in posture
that becomes gradually more open over time.
Relative change is noted in legitimation patterns that are, in addition to pragmatic and
moral, cognitive in the third phase. This is explained with the fact that the company commences to communicate about is socially responsible business practices in the third phase.
In the company documents and in archival data, justification is economic and ethical in
the third phase. Transparency is ambiguous because a tendency of balanced statements are
noted. Patterns become more intense (more frequent). As company actions to implement
a CSR strategy increase, consistency increases overall and internally. Commitment becomes
stronger over time, too. It is mainly instrumental, yet the few statements about disadvantages to the company indicate a slight normative commitment. However, identity orientation
is stable over time.
5.7. MAMMUT SPORTS GROUP AG
Document Type
Interviews
Mammut Documents
Archival Records
177
Document
M1: Transcript of the interview with the Head of Corporate Social Responsibility at Mammut Sports Group AG. The interview
was conducted at the company headquarters in Seon (Aargau),
Switzerland, in fall 2009.
P7: Relevant excerpts from the interview with the CCC manager at the Berne Declaration. The interview was held at the
organization’s head office in Zurich, Switzerland, in fall 2009.
M20: Company News from June 25, 2009: Mammut fairs well
in the Clean Clothes Campaign survey
M21: Mammut Sports Group AG Web site as of October 2009,
Chapter “Responsibility”
M30: Berne Declaration Company Analysis 2004. Online access,
last visited in Dec. 2009 (http://www.evb.ch/p25003173.html)
M31: Schnyder (2004)
M32: Berne Declaration (2006c)
M33: Berne Declaration (2006b)
M34: Mammut profile in Berne Declaration (2008)
M35: Regenass (2008)
M36: St. Galler Tagblatt (2008)
M37: Malach (2008)
M38: Berne Declaration (2009a)
M39: Der Schweizerische Beobachter (2009)
M40: Tages Anzeiger (2009)
M41: Die Südostschweiz (2009)
M42: St. Galler Tagblatt (2009)
Table 5.25: Mammut Case Study Documents
Chapter 6
Cross-Case Analysis and Discussion
6.1
Introduction
This chapter explains and comments the results. They are held against the propositions,
against previous research, and against the framework that includes discussing their generalizability.
In reviewing the literature, no conclusive relationship between advocacy campaigns and
their impact on firms has been identified. On the one hand, companies have been blamed to
green-wash their image by responding on a superficial level to advocacy campaigns (Renard
2005). On the other hand, it also has been reported that companies have integrated demands
from society (Post et al. 2002b). Therefore, this study set out with the aim of assessing
the impact of advocacy campaigns on organizational level. A model developed by Basu
and Palazzo (2008) who defined organizational dimensions of sensemaking as a tripartite
of cognitive, linguistic, and conative patterns was the basis of this study. It has analyzed
alteration of these patterns and their specificities in the course of advocacy campaigns in four
cases.
This chapter makes the cross-case comparison of single-case results and discusses them. It
should be noted that specific results, such as the number of codings of categories, cannot be
directly compared across cases. Rather, general trends within the cases and overall findings
are compared on a relative basis.
This chapter is organized as follows. First, categories of initial response profiles are compared, second, change of categories over time are cross-analyzed, and third, they are interpreted according to the elements of the propositions: types of changes, impact of campaigns,
and influence of company visibility and difference in initial concessive or defensive attitude.
178
Commitment
Transparency
Conative Pattern
Posture
Consistency
Linguistic Pattern
Justification
Legitimation
Case
Main & MiddleCategory
Cognitive Pattern
Identity Orientation
Tentative
Overall consistent
Internally consistent
Instrumental
Tentative
Overall inconsistent
Internally consistent
Instrumental
Tentative
Overall consistent
Instrumental
Tentative
Overall consistent
Instrumental
-
Moral
Moral
-
Individualistic
Relational
Pragmatic
Mammut
Individualistic
Relational
Pragmatic
Blackout
Table 6.1: Case-ordered Initial Response Profiles
Economic
Ethical
Biased
Individualistic
Relational
Pragmatic
Cognitive
Individualistic
Relational
Pragmatic
Cognitive
Moral
Economic
Ethical
Biased
Nestlé
Kraft
6.1. INTRODUCTION
179
CHAPTER 6. CROSS-CASE ANALYSIS AND DISCUSSION
180
6.2
Initial Firm Response Profiles
Table 6.2 displays the case-ordered initial response profiles. The following aspects are highlighted.
It is interesting to note that all four cases have an initial bipartite identity orientation
of individualistic and relational characteristics. None of the companies show any collectivistic
identity orientation.
In contrast to identity orientation, the companies initially differ in legitimation patterns.
Kraft has all three patterns but Nestlé’s are pragmatic and cognitive. Mammut and Blackout
have pragmatic and moral characteristics.
Both Nestlé and Kraft present strong economic and ethical justification arguments but
no legal or scientific. Blackout and Mammut do not publicly justify their actions in phase
one at all (it is recalled that justification is in this study limited to public justification).
Transparency of published documents and statements is biased for both Kraft and Nestlé.
Mammut and Blackout do not publicly communicate about the campaign topic or related
issues, which is why transparency cannot be identified.
Initially, all companies have a tentative posture. Consistency slightly differs across
cases. Nestlé is strategically and internally consistent and Kraft is overall inconsistent but
internally consistent. Blackout and Mammut are both overall consistent but internal consistency could not be determined. This is the case because they have not yet or just started to
formalize responsible business practices and their activities cannot be compared to existing
programs.
Initially, commitment is interpreted as instrumental for all companies.
This study focuses mainly on the change of response profiles and not on particular types
of response profiles. However, a few aspects are highlighted that also flow into the subsequent
discussion about change.
First, it is compelling that multidimensional categories occur in combinations. Identity
orientation, legitimation patterns, and justification show various subtypes. What appears to
be opposed, such as individualistic and relational identity orientation, occurs in combination.
The same is true for the other categories mentioned. It is not so surprising, however, that
characteristics occur as combinations. At least for identity orientation, Brickson (2005) has
shown that organizations are most likely what she calls hybrid types. The results of this study
indicate that this might not only be true for identity orientation but also for legitimation and
justification.
Second, it is striking that the less visible companies Blackout and Mammut do not publicly
communicate about the issue. This indicates that more visible firms may respond differently
6.3. CHANGE OF FIRM RESPONSE PROFILES
181
than less visible firms. The large companies fairly quickly communicated publicly about the
issue but this was not the case for the smaller companies.
Third, it is eye-catching that many of the combinations and other characteristics of firm
responses are similar (legitimation) or even the same (identity orientation, posture and commitment). A possible explanation for these results is an overall similarity across the cases
that overrules the just-mentioned difference in visibility. Overall, the four companies have
in common that they all provide consumer goods that rely on brand names. The brands
differ in type (Nestlé and Kraft are global brands, Mammut is a global brand in a specialized
niche market, and Blackout is a national brand). Their response profiles indicate that they
pay high attention to their consumers and suppliers, they all focus on quality of products
and there is a connection of this mental frame of a combined relational and individualistic
identity orientation, mixed profiles of legitimacy, and a tentative posture toward the issue of
the campaign.
Holding these aspects against the framework, the almost uncountable combinations of
subcategories may be reduced for consumer goods companies. Hence, for further investigation
in profile types, results indicate that companies should be more fundamentally different than
the cases chosen for this study. However, this study does not focus on particular combinations
of subcategories. Still, these aspects may provide input for the discussion about change in
response profiles and are subsequently re-addressed.
6.3
Change of Firm Response Profiles
Table 6.2 displays the overview of reported change in firm response profiles. Substantial
change for all companies is reported for firm posture. Substantial change in linguistic patterns
only account for Blackout and Mammut. Relative change across all companies is identified
in legitimation and in commitment. Linguistic patterns of both Kraft and Nestlé are altered
in relative terms. Consistency also is altered in relative terms for only two companies, but
not for the other two (Blackout and Kraft). Insignificant change for all companies is reported
for identity, whereas consistency of Kraft and Nestlé hardly is altered, either. The following
subchapters present these patterns by going back to the data to assure patterns match across
cases and to hold results against existing studies in order to find explanations.
Cognitive Dimension
Identity Orientation: insignificant change for all companies When comparing patterns of identity orientation across cases, it is revealed that they are similar. Table 6.3
summarizes earlier displayed conceptually ordered matrices. All companies emphasize the
importance of product quality that explicitly includes company brands for Kraft and Nestlé.
182
CHAPTER 6. CROSS-CASE ANALYSIS AND DISCUSSION
Case
Main & MiddleCategory
Cognitive Pattern
Identity Orientation
Legitimation
Linguistic Pattern
Justification
Transparency
Conative Pattern
Posture
Consistency
Commitment
S: Substantial change
R: Relative change
I: Insignificant change
Kraft
Nestlé
Blackout
Mammut
I
R
I
R
I
R
I
R
R
R
R
R
S
S
S
S
S
I
R
S
I
R
S
R
R
S
R
R
Table 6.2: Case-ordered Change of Response Profiles
The large players explicitly refer to their competitors. The smaller companies both indicate
a focus on their core business. The topic of the relational identity orientation is supplier relations and the concern for the well-being of the apparently affected people (farmers, sewers).
Even though these patterns slightly differ in content, they are alike on the abstract level. All
companies show individualistic and relational but no collectivistic characteristics. Further,
no remarkable change has been recognized in any of the cases.
On one hand, it is not astonishing that identity orientation does not change. It has been
noted earlier that Brickson (2007) argued that identity orientation of a company is a fairly
stable characteristic. However, she also has stated that a change in identity orientation is not
impossible and certain events may provoke “dramatic changes” (869). A possible explanation
that no remarkable change occurs in identity orientation is that the observed campaigns were
not striking enough to call for a change of identity orientation. This explanation can further be
supported with findings of Morrison (2003). He argued that some shocks may be too small or
too large to provoke cognitive restructuring of organizations. These aspects are reconsidered
when discussing the types of change in the context of the changes in the other categories.
Legitimation: relative change for all companies Table 6.3 stacks legitimation patterns
across cases. It is acknowledged that they are multi-fold in all companies. This basically supports Suchman (1995) who argued that companies legitimize in various ways simultaneously.
Yet, the particular types are less of interest in this study but their changes. In how far can
changes be identified across cases? Unfortunately, Suchman did not address the questions of
change in legitimation strategies. Therefore, patterns are identified from the available data.
Comparing patterns has suggested that legitimacy changes in relative terms for all cases.
Overall, the patterns remain stable. For example, all companies show pragmatic legitimation
characteristics during all phases. More compelling is the change in cognitive legitimation pat-
6.3. CHANGE OF FIRM RESPONSE PROFILES
183
Case
Phase 1
Phase 2
Phase 3
Reported Change and Summarized Data
Identity Orientation
Kraft
Individualistic Individualistic Individualistic Insignificant change
Relational
Relational
Relational
Concern for product quality and company
brands
Threat of possible financial loss
Referring to competitors
Well-being of affected people (farmers)
who are the company suppliers of commodity
Nestlé
Individualistic Individualistic Individualistic Insignificant change
Disquiet about quality and supply of prodRelational
Relational
Relational
uct and comp any brands
Observing competitor positions
Emphasis on important position of farmers
for company
Blackout
Individualistic Individualistic Individualistic Insignificant change
Focus on core business
Relational
Relational
Relational
Importance of improving quality
Relevance of supplier relations
Mammut
Individualistic Individualistic Individualistic Insignificant change
Focus on core business
Relational
Relational
Relational
Product quality
Supplier relations
Extending relations to stronger contact
with other stakeholders
Legitimation
Kraft
Pragmatic
Pragmatic
Pragmatic
Relative change
Major increase in explanation of company
Cognitive
Cognitive
Cognitive
Moral
Moral
actions (cog. leg.)
Nestlé
Pragmatic
Pragmatic
Pragmatic
Relative change
Major increase in enhancing company comCognitive
Cognitive
Cognitive
prehensibility by explaining its activities to
its audience (cog. leg.)
Blackout
Pragmatic
Pragmatic
Pragmatic
Relative change
Strong moral arguments in second phase,
Moral
Moral
Moral
considering what is ‘right’ to do
Cognitive
New cognitive leg. to be connected with
showing company philosophy on web site
Mammut
Pragmatic
Pragmatic
Pragmatic
Relative change
Increased consideration of providing beneMoral
Moral
Moral
fits to customers in second phase (prag.)
Cognitive
Increased look into what is right to do in
second phase
New coginitive pattern in third phase, related to new overall CSR strategy and
newly established communication about it
Table 6.3: Case-ordered Cognitive Patterns
terns. They differ between the larger and the smaller companies. Kraft and Nestlé legitimize
cognitively in the first phase and they intensify in the second by increased communication
about their activities. Blackout and Mammut only legitimate cognitively in the third phase.
This can be explained by their newly established parts on their web sites that present their
activities in the area of taking responsibility in their supply chains.
An explanation of this general increase in cognitive legitimation patterns could be the
relative importance, or saliency, of the issue Mitchell et al. (1997). When looking back at the
CHAPTER 6. CROSS-CASE ANALYSIS AND DISCUSSION
184
Case
Justification
Kraft
Phase 1
Phase 2
Phase 3
Reported Change
Economic
Ethical
Economic
Ethical
Economic
Ethical
Nestlé
Economic
Ethical
Economic
Ethical
Blackout
-
Economic
Ethical
Scientific
-
Mammut
-
-
Relative change
Increase in both patterns in phase two indicates relevancy of issue
Relative change
Increase in both patterns in phase two indicates relevancy of issue
Substantial change
No earlier patterns available
Substantial change
No earlier patterns available
Transparency
Kraft
Biased
Ambiguous
Ambiguous
Nestlé
Biased
Biased
Ambiguous
Blackout
-
-
Ambiguous
Transparency
-
-
Ambiguous
Economic
Ethical
Economic
Ethical
Relative change
Increase in caution about contribution, e.
g. acknowledgement that company does
not have all solutions to the coffee crisise
Relative change
Becoming slightly cautous about power of
impact, shown in, e.g. admittance in company document that company does not
have all the answers to the coffee crisis
Substantial change
No earlier patterns available
Substantial change
No earlier patterns available
Table 6.4: Case-ordered Linguistic Patterns
event listings of cases one and two (Tables 5.3.1 and 5.3), the coffee campaign had its peak in
the first phase analyzed and in the second, companies increased their activities to alleviate the
coffee crisis. These activities made the companies explain their activities to the broader public
more intensely, which would enhance the comprehensibility of the company. In the context
of the CCC, the companies were confronted with the activities of the campaign as such for a
longer time period but they intensely engaged with the issue in phase two and three. In other
words, the issue can be considered more salient during the second and third phase, which led
to altered communication patterns that included explaining company activities about taking
responsibility for working conditions in supplier factories.
Generally, companies have not only intensified cognitive legitimation but also existing
patterns. An explanation can be found in the urge to repair or at least to maintain legitimation
in the context of campaigns (Suchman 1995). More intense existing patterns indicate that
the companies considered their legitimacy at stake.
Linguistic Dimension
Table 6.4 displays linguistic patterns across cases and comments on the respective reported
changes.
6.3. CHANGE OF FIRM RESPONSE PROFILES
185
Justification and transparency: substantial change for Blackout and Mammut
Blackout and Mammut substantially alter their linguistic dimension in so far as they commence to publicly communicate about their newly established activities with the FWF in the
third phase. This substantial change is therefore of a special kind. The profile cannot be
compared to an earlier one. There were no earlier patterns in this context at all. This type
of modification of the linguistic dimension indicates particular impact of the CCC and the
engagement of both companies with the issue at hand. Once the two companies communicate about their activities in the area of responsible business practice both companies justify
economically and ethically and both are ambiguous in their transparency.
Justification: relative change for Kraft and Nestlé Going back to the data and
stacking case-ordered matrices (see Table 6.4) show that linguistic patterns remain stable
for Kraft and Nestlé in categorical terms. The single scientific statement relating to (own)
research by Nestlé is neglected as it is a single statement that does not reoccur. It is interpreted
that Nesté does not rely on scientific arguments, overall.
Results for both Nestlé and Kraft show a notable increase of both economic and ethical
arguments. In the third phase, both categories are slightly less intense than in phase one.
Economic arguments center on the direct benefit the companies create for farmers. The
combination of economic and ethical arguments is particularly compelling. Mostly, economic
and ethical arguments occur very close together and argue that a certain activity serves the
business, which is the economic argument as it refers to consumer and investor benefits. Also,
the same activity is argued to help coffee farmers, which is the ethical argument. Both Nestlé
and Kraft have increased publications about the problems of the coffee sector and about the
standpoints of the companies on the topic. Basu and Palazzo (2008) were the first to combine
these particular categories of justification, which is why there is no empirical study these
results can be compared with. However, as discussed about legitimation, a higher intensity
of justification can be explained by the urgency of the issue at a certain time. For Kraft and
Nestlé, the issue increased in urgency from the first to the second and decreased from the
second to the third phase.
Transparency: relative change for Kraft and Nestlé In the first phase, transparency
of Kraft and Nestlé is biased. The fact that all companies mainly present favorable aspects of
their activities is not surprising. It is striking, however, that none of the companies noticed
specific unfavorable aspects. The statements counted as unfavorable are weak as they only
admit that companies do not have all the solutions to a problem or that the path to sustainable
business (agriculture or manufacturing) is a long way to go. These results show a sensitization
about the issue over time at Nestlé and Kraft, which also is communicated publicly. The time
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CHAPTER 6. CROSS-CASE ANALYSIS AND DISCUSSION
frame in which the changes occur indicate that such a change, even a slight one, takes time.
As such balancing aspects are presented over time, ambiguous transparency is attributed
to Kraft from the second and to Nestlé from the third phase. It is highlighted that these
results suggest a tendency toward a a more balanced way of communication in the long run
of campaigns. These results contradict criticism that firms ‘green-wash’ their publications
(Laufer 2003; Renard 2005).
Basu and Palazzo (2008) argue that a balanced approach may be conducted by organizations that tend to expose their actions to external monitors. This argument is confirmed for
Blackout and Mammut as both companies join the verification organization FWF, which is
considered as an external monitor. However, the argument has to be cautiously interpreted
for Kraft and Nestlé as they only indirectly introduce monitors. Nestlé in the context of
starting its own project of Fair Trade certified coffee, Kraft by buying Rainforest Alliance
certified coffee. The discussion about certification and verification is not continued at this
point. However, the difference is highlighted between letting third parties monitor its actions
and agreeing to buy products that conform with a certain standard (where verification is
‘outsourced’) is highlighted.
Conative Dimension
Case-ordered conative patterns are displayed in Table 6.5.
Posture: substantial change for all companies The most striking change across cases
has occurred in firm posture.
The development of the posture over time is similar for all cases. They become more open
during the campaign. None of the companies have a defensive posture at any point in time.
All four companies have a tentative posture in the first phase and alter to an open posture
during the campaign.
Posture is constructed of several subcategories and it is worth highlighting a few aspects
of engagement with NGOs.
A striking observation is that engagement with NGOs altered for all companies. This
supports the findings of Schuppisser (2002) who found that there is usually a trigger, such as
a specific issue, which initiates interaction between firms and NGOs.
Nestlé and Kraft provided similar overall answers about their engagement with Oxfam
but they differed in the details. Generally, both companies indicated direct engagement with
Oxfam, which was new (did not exist prior to the campaign). Kraft was initially suspicious and
did not wish to directly communicate with Oxfam but internal discussions concluded to invite
them for an initial meeting that was dominated by distrust. In addition, Kraft searched for
support of the coffee association. Nestlé appeared less suspicious at the beginning. Similarly,
Open
Tentative
Tentative
Tentative
Tentative
Nestlé
Blackout
Mammut
Instrumental
Instrumental
Blackout
Mammut
Instrumental
Instrumental
Instrumental
Instrumental
Overall consistent
Internally consistent
Overall consistent
-
Mammut
Nestlé
Overall consistent
-
Overall consistent
-
Blackout
Instrumental
Overall consistent
Internally consistent
Overall consistent
Internally consistent
Nestlé
Commitment
Kraft
Instrumental
Overall consistent
Internally consistent
Consistency
Kraft
Overall inconclusive
Internally consistent
Tentative
Tentative
Open
Phase 2
Phase 1
Case
Posture
Kraft
Relative Change
Intense self-initiative in second phase, ongoing spending of resources
Relative change
Increased preoccupation and persistence in second phase, ongoing but decreasing in third
Hardly any disadvantages to bear
Relative change
From no preoccupation to intense investment of time in second and additional financial resources in
third phase
Relative Change
From simple code of conduct to engagement in verification organization and industry working groups
Acknowledgement of disadvantages in third phase but not enough for normative commitment
Insignificant
Except for slight hints of unpreparedness for campaign at beginning, decisions are considered and new
activities are explicitly built on existing ones
Inisignificant change
Preparation of major decisions and new activities are integrated in existing ones, e.g. coffee working
group in SAI
Relative change
Long evaluation time of decision to join FWF
Newly established formal CSR in third phase, cannot be compared to earlier activities
Relative change
Taking time to evaluate verification scheme
Newly established formalized CSR
Development of other CSR activities
Substantial change
Increased engagement with Oxfam and other NGOs, particularly integrative engagement in 4C project
Substantial change
Increased engagement with Oxfam and other NGOs, particularly integrative engagement in 4C project
Adaptation of campaign claim to buy Fair Trade certified coffee
Substantial change
From no engagement with NGOs to interactive engagement with FWF which is also adaptation of
major claim of campaign
Substantial change
Adaptation of major campaign claim (joining FWF) in third phase and engagement with NGOs
Reported Change and summarized data
Table 6.5: Case-ordered Conative Patterns
Instrumental
Instrumental
Instrumental
Instrumental
Overall consistent
Internally consistent
Overall consistent
Internally consistent
Overall consistent
Internally consistent
Overall consistent
Internally consistent
Open
Open
Open
Open
Phase 3
6.3. CHANGE OF FIRM RESPONSE PROFILES
187
188
CHAPTER 6. CROSS-CASE ANALYSIS AND DISCUSSION
both companies engaged in a direct dialogue with Oxfam rather soon. Parallel to interacting
with Oxfam, the coffee roasters involved in the development of the multi-stakeholder initiative
4C. On the one hand, this increased discussions with Oxfam as they encouraged the NGO
to join the project. On the other hand, this increased integrative engagement with a new
organization, the 4C, including industry players as well as other NGOs, such as unions. This
collaboration is rated integrative because the aim of the 4C project was to develop a code of
conduct for the coffee sector (which it did).
When comparing the coffee sector with the clothing sector, developments of company
engagement with NGOs show both similarities and differences. Differences are, for example,
that the CCC demanded from the companies to join an existing multi-stakeholder organization
(the FWF). Mammut and Blackout engage similarly with the FWF. Engagement increases
from no collaboration over an evaluation phase to the membership of the organization. This
engagement develops over the time of the activities of the CCC in Switzerland. In terms of
engagement with the CCC, the two companies differ. Blackout did hardly engage with the
CCC and is still suspicious of the organization. By contrast, Mammut engaged actively by
discussing the claims of the CCC, the consequences for Mammut and the implementation
with the CCC manager on various occasions.
Neither coffee roasters nor clothing companies adapted to all claims from the campaign.
These results support findings of Trullen and Stevenson (2006) who stated that pharmaceutical companies reacted to institutional pressure from activist groups and the media in the
context of pricing AIDS drugs. However, pharmaceutical companies did “not passively adapt
to these pressures” (178) but initiated their own strategy.
It has been noted that posture becomes more open with time for all companies. These
results confirm Zadek’s case analysis of Nike that developed its CSR strategy from defensive
to civil in the course of the long-lasting campaign in the clothing sector against Nike.
In the course of the campaigns observed in this study, companies moved along the continuum, yet, overall, they missed the middle categories between exploratory interaction and
integrative engagement that are suggested to be philanthropy and partnership. The few indications for partnerships and philanthropy were identified in other areas, sectors, and issues.
There is not more than exploratory interaction with the CCC but integrative engagement with
the FWF. It is noted that Kraft conducts some philanthropic activities but Nestlé hardly does.
Nestlé has its own projects or partnerships and does not merely provide money.
The results of engagement with NGOs confirm the findings of Burchell and Cook (2006;
2008) who found that when firms and NGOs initiate dialogue, their relationship alters. Similarly, the results correspond with findings of Schuppisser (2002) who identified a “trigger”
to foster relationships between NGOs and firms. In this study, the triggers are the respec-
6.3. CHANGE OF FIRM RESPONSE PROFILES
189
tive campaigns. This study provides new insight in so far as relationships may not only be
triggered with the campaigning NGO but with other organizations, too.
Consistency: relative change for Blackout and Mammut Blackout is strategically
consistent in all phases but internally inconclusive in phases one and two (no formal activities of CSR yet). In the third phase, however, Blackout also is internally consistent. The
development of Mammut is similar because also in the beginning, there are no other types
of CSR activities to which the introduction of a code of conduct could be compared with.
The difference between the two companies is that Mammut initiates an overall CSR strategy
discussion and initiate other activities to which internal consistency can be attributed already
in the second phase.
Consistency: insignificant change for Kraft and Nestlé Consistency does not meaningfully change for Kraft and Nestlé. They remain relatively stable and patterns are, overall
interpreted, strategically and internally consistent. Minor differences are noted in the individual development of Kraft. Nestlé shows no categorical changes whereas Kraft is initially
overall inconclusive but consistent in both categories afterwards.
Porter and Kramer (2002) claimed that company activities with the label CSR are “almost
never truly strategic” (57). However, the findings of this study do not support their argument.
In contrast to their presentation of activities in the area of CSR that often do not correspond
with business needs, this study found that all companies cared much about the fit of the
activities with business goals and firm strategy. A possible explanation may be that the small
sample revealed strategically consistent companies by incident. Further investigation with
a larger sample would be necessary to answer this questions. In correspondence to Porter
and Kramer (2002), it is interpreted that credibility of the company actions in this study is
high and it is argued that the activities support the firms in conducting their overall strategy.
Specific statements about the match of the activities with other goals support this argument.
Commitment: relative change for all cases Commitment is instrumental over time
for all companies but alteration has been noticed in relative terms. Number of codings
meaningfully increase in the second phase for Nestlé and Kraft and in the third for Blackout
and Mammut. This is interpreted as a more intense commitment as this characteristic is
determined by dedication of time and money and by self-initiative. This relative frequency of
statements shows serious commitment to the issues.
Even though commitment is interpreted as overall instrumental for all cases, it is worth
noting a few differences across cases. Blackout and Mammut differ from Nestlé and Kraft in
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CHAPTER 6. CROSS-CASE ANALYSIS AND DISCUSSION
terms of statements that indicate a stronger tendency toward normative commitment. Both
Nestlé and Kraft are committed to the issue to a considerable extent. Yet, commitment
remains instrumental as statements about accepted disadvantages are missing. It is noted
that both companies have more persistence in the second phase and both are increasingly
preoccupied with the topic over time.
Blackout and Mammut report about actual or potential disadvantages for the companies
that are or may be connected with the choices they have made about joining the FWF.
Blackout accepts disadvantages in particular in the phase of evaluating the verification organization as some suppliers would rather see Blackout choosing another one. Similarly,
Mammut is aware of disadvantages for the company in connection with the FWF in comparison to other verification organizations. Nevertheless, commitment has been interpreted as
instrumental because these disadvantages are relatively scarce in comparison with the other
statements of commitment. And for normative commitment, the category of sacrifice would
have to be explicit.
The relative increase of intensity of commitment during the campaigns confirms Hoffman
(2001) who found that company commitment to issues increases with awareness of the public.
As the studied campaigns have evolved, the commitment of Kraft and Nestlé increased in
phase two and that of Blackout and Mammut increased in phase three.
However, the results do not support arguments that state that instrumentally committed
CSR is less integrated (Weaver et al. 1999).
This might be the case if instrumental commitment is weak. In this study, observed
commitment is fairly strong and cannot be considered as not integrated in the daily activities
of firms, as seen by the consistency of their activities.
It has been shown that all companies observed in this study undertook considerable
amount of self-initiative (persistence). These results are in line with findings of Trullen and
Stevenson (2006) who found that pharmaceutical companies developed their own strategy in
response to the campaign about pricing of AIDS drugs. Also, the overall finding of strong
instrumental commitment of companies in this study corresponds with the findings of Trullen
and Stevenson (2006) who found that companies weigh economic reasons when responding to
claims from NGOs.
Results of this study also indicate that after a company has intensely engaged with the
issue of the campaign, commitment may decrease in the long run. This confirms Schuppisser’s
observation that relationships alter over time and may be broken off and re-discovered, depending on the issues at hand. This study also found that in some cases (Blackout), there no
particular relationship is established with the campaigning NGO. This also confirms Schuppisser’s observation that a firm may decide not to engage with an NGO.
6.4. PROBING THE TYPES OF CHANGE
6.4
191
Probing the Types of Change
Proposition one suggested that firms change in all dimensions of cognitive, linguistic, and
conative structures either substantially or relatively. As reported above, changes have been
of various types across categories. Many categories changed in relative terms. Posture is the
only category that altered substantially for all companies and identity orientation did not
change at all. It has been addressed above that within the category of identity orientation,
this is not particularly surprising. The change in firm posture that is heavily dominated by
engagement with NGOs also supports previous findings of change in relationships between
firms and NGOs.
How should these results be understood in the context of the literature of sensemaking that
states that cognitive, linguistic, and conative dimensions are interrelated and influence each
other? There are several aspects to be considered. The first is the magnitude of the external
shock exercised through the campaign. The second is the processual interrelationship between
the three dimensions, including a third aspect, the question of development over time.
Morrison (2003) has argued for taking the magnitude of a shock into account when studying their ability to evoke change in organizations. His framework refers to shocks that may
call for attention, action, novel action, or a reconstruction of cognitive structures. Some of
these different types of impact occur when shocks are neither too small nor too big. Advocacy campaigns can be considered as shocks. Applying Morrison’s framework to this study,
relative changes in assessed categories have indicated awareness of the campaign, action, and
also novel action. However, results about the cognitive dimension indicate that the campaigns
were, for all companies, too small or too big to impose alteration of cognitive structures.
This immediately evokes the question of the processual interrelationship and mutual influence of the three dimensions of thought, language, and action. Whereas Weick (1995)
considered the “struggles with identity. . . the root act of sensemaking” (77), a central feature
of sensemaking is its retrospective time perspective. Cognitive interpretation follows what
has been said and done: ‘How do I know what I think until I see what I say?’ In the business field, this aspect has been addressed by Ravasi and Schultz (2006). They found that
organizations reconsider their identity (asking ‘what is the organization really about?’) after
existing actions have not led to respective aims. Their case company has reconstructed its
identity when their products in the market did not achieve the expected revenue.
This study has shown that companies have altered actions but their identity orientations
have remained largely the same during campaigns. On the one hand, these results support
arguments that action may be taken before cognitive models are re-evaluated. On the other
hand, they indicate that the studied campaigns did not have the ‘right’ magnitude to evoke
CHAPTER 6. CROSS-CASE ANALYSIS AND DISCUSSION
192
cognitive restructuring. In other words, all organizations were able to ‘make sense’ of the
upcoming advocacy campaign within existing cognitive structures.
A third aspect should be considered: the element of time. Sensemaking is ongoing and with
their longitudinal study, Ravasi and Schultz (2006) have suggested that cognitive restructuring
has to be considered in longer time frames than just a few years. This also is supported by Post
et al. (2002b). They have considered Shell to having undergone a ‘cultural transformation’
over the period of more than 30 years. Hence, the chosen time frame may have to be larger
than in this study when assessing changes in identity orientation—or shocks have to be of a
different magnitude.
In terms of alike changes across categories, proposition one has to be rejected. There is
no mutual and similar change of categories across all dimensions of the framework. Rather,
it is suggested that companies mainly alter their posture. Its substantial change across all
four cases suggests that posture could be the critical characteristic of change in response to
advocacy campaigns. It has been noticed above that companies are, overall, similar. They are
all consumer goods companies. Hence, as all four cases had alike initial posture (tentative)
and they all changed alike during campaigns (to open postures), it is proposed anew that
consumer goods companies alter from tentative to more open postures during campaigns:
Proposition: Consumer goods companies develop more open postures during advocacy campaigns.
This proposition could be further tested in additional quantitative studies.
6.5
Assessing the Impact of Campaigns
After having considered change in firm posture as an effect of advocacy campaigns, it should
not be missed to scrutinize this causality. An overall display of cause and effect loops show
that firm posture is heavily influenced by advocacy campaigns. It is recognized that there
are other factors of influence that could evoke a change in firm posture, too. However, an
advocacy campaign intensifies cause effects and can catalyze change in firm posture. In sum,
separating firm response from its context, such as parallel developments, is not suitable. Also,
as repeatedly stated in the literature, mass media response and related consumer actions are
important in causing firm posture to change. These findings confirm Trullen and Stevenson
(2006) who concluded that NGOs and the media are central to make companies aware of an
issue.
6.6. INFLUENCE OF THE FIRM’S VISIBILITY
193
Figure 6.1: General Posture Cause and Effect Loops
6.6
Influence of the Firm’s Visibility
Proposition two has suggested that more visible firms are more likely to change substantially
than less visible firms. This study has not found much support for this proposition. On the
contrary. Table 6.2 has shown that categories in which more visible firms have not changed
(consistency), less visible firms have. And where more visible firms have altered relatively
(linguistic patterns), less visible firms have changed substantially. In all other categories,
types of changes were equal.
Another explanation of not finding support for proposition two is provided by what Julian et al. (2008) called non-dynamic capability. Previously installed structures, procedures,
routines, etc. have a negative impact on adaptation to activist challenges. Such non-dynamic
CHAPTER 6. CROSS-CASE ANALYSIS AND DISCUSSION
194
capabilities are assumed to be much more dominant in international corporations than in
small firms.
Minor support for the proposition is given when looking at change in firm posture in
more detail and when taking time into account. The larger companies have altered toward
an open position already in the second phase whereas the smaller companies only changed in
the third. This slight difference may be explained by the experience of the larger companies
with advocacy campaigns. Julian et al. (2008) have called such experience preexisting ability.
The larger companies had both been targets of advocacy campaigns in the past. Nestlé had
gained much experience with public issues with the topic of breast milk substitute and the
company’s marketing activities in developing countries (Pagan 1986). Kraft, having long been
part of the Philip Morris Corp. had been confronted with boycott calls in the context of the
anti-tobacco campaign (Lawrence et al. 2005).
An explanation for the modest support of proposition two can be given by combining
Morrison’s above-mentioned idea of the relevance of the magnitude of the shock. In relative
terms, the CCC may have been the more influential shock to the assessed firms than the
coffee campaign. The changes in consistency and linguistic patterns both refer to the changes
in newly implemented programs that have not existed before. Relative change in linguistic
patterns of Kraft and Nestlé may be called, to take Morrison’s expressions, action. The CCC
evoked novel action (newly established communication about CSR practices) in linguistic
patterns of Blackout and Mammut.
6.7
Influence of the Firm’s Initial Stance
No support can be identified for proposition three. The pairwise comparison of cases that
were initially more cooperative (Nestlé and Mammut) than the others (Kraft and Blackout)
did not reveal any insight into different developments of change. Therefore, proposition three
has to be rejected.
These results are in opposition to literature about firms decoupling their activities from
announcements. An explanation in this difference could be found in the intensity of institutional pressure. In the study of Trullen and Stevenson (2006), firms have made their decoupled
announcements in situations of particularly strong institutional pressure. Hence, it could be
the case that institutional pressure in both considered campaigns was not strong enough to
call for unsubstantial announcements that only proclaimed good intentions. When combining
the rejection of proposition three with the noticed relative change in commitment (becoming
stronger during campaign), the general prejudice that companies merely green-wash their
image in response to advocacy campaigns is rejected in this study.
6.8. DISCUSSING THE FRAMEWORK AND RESEARCH METHOD
195
Trullen and Stevenson have concluded from their observation that pharmaceutical companies have decoupled announcements from particular action that pharmaceutical companies
are most of all businesses that only follow NGO demands if they find a business reason for it.
This argument, however, can be confirmed with results of this study. Company commitment
has remained instrumental for all companies during all phases of the campaigns.
6.8
Discussing the Framework and Research Method
To some extent, these results are disappointing. They have not shown much variance. As
Weick (2007) has pointed out, caution should be applied when results of qualitative case
studies are similar across cases. This subchapter addresses in how far additional caution
should be applied when interpreting the results of this study. One possible explanation of
the similarity across cases is the identified likeness of the selected cases as discussed above.
Other explanations for the missing difference in results across cases may be identified in the
research framework and in the research method applied.
With regard to the research framework, two aspects may be highlighted: the early development stage and the abstractness of categories. Basu and Palazzo (2008) have combined
multiple conceptual ideas. It was found that only few subcategories have been empirically
investigated in earlier studies. An example for a fairly well researched subcategory of the
model is identity orientation. However, even this category is only based on one major empirical investigation (Brickson 2005). Most other categories are founded on theoretical reasoning
but lack empirical foundations. This would not cause a major problem if categories had been
further developed theoretically. However, they remained on a conceptual level with hardly
any basis for operationalizing them. This posed a major challenge to the research method
which is addressed below. Further, it should be noted that the framework with its multiple
middle and subcategories is highly complex. Even though the categories have been defined
and well distinguished from each other, they remain at an abstract level. Retrospective, it
may be stated that some of the categories may not have captured certain changes. This may
have influenced the results in so far as they were not able to display all types of changes which
may have occurred during the firm response to the campaign. One example is the focus of
firms on product quality. While at an early stage of the response, quality meant merely, e.g.,
the taste of coffee or the look and price of a piece of garment. At a later stage, the term
quality has changed in companies. Later, quality included what consumers considered as fair
production conditions. The research framework was not able to capture this type of change
in the meaning of quality within companies. There may have been other categories where a
change in content occurred but was not identified. In retrospect and considering the complexity of the framework, a research question only focusing on a single category, e.g., transparency
CHAPTER 6. CROSS-CASE ANALYSIS AND DISCUSSION
196
or posture, could have provided a sufficient methodological challenge. The overall research
framework developed by Basu and Palazzo (2008) is still considered as suitable to study firm
response to advocacy campaigns. However, with an initial focus on fewer categories, it could
have been possible to focus even more on the process of change.
With regard to the research method, four major caveats are highlighted. First, the design
was holistic as compared to embedded (or nested). This design may have influenced the
results in an balancing way. This design had to do without great richness. It could be that
further distinguishing aspects of change would have been found when further entities of each
firm would have been analyzed. It is very likely that the low number of interviews, addressed
above in Chapter 4.6.3, may have had a similar effect. If additional interviews with many
different people involved in the campaign would have been conducted, further variation may
have been noticed. Another aspect of the research design is the number of cases. With such
a small number of cases, caution must be applied as the findings are highly restricted to
the context of each case. If more cases had been included in the study, more variance in
results may have been possible. Further caution must be applied as the interviews relied on
retrospect data. And even though much care was applied for interview preparation to recall
the memories of the interviewees, it is possible that they were so much involved in the change
that it was only possible in a limited way to report the change which had occurred.
6.9
Recap
Conclusively, the chosen framework is suitable to describe firm response to advocacy campaigns in terms of identification of change of organizational processes. It has been shown
that all companies under investigation have substantially changed their posture toward the
campaign issue, which is the only substantial change noted across all four cases. This has
led to suggesting that an overall similarity of the chosen firms overrules the other criteria by
which the cases have been chosen. Consecutively, it is suggested that this overall similarity
is the companies being consumer goods companies. It is further proposed that consumer
goods companies change toward more open postures during advocacy campaigns. Additional
caution must be applied when interpreting the results with regard to the research framework
and the research method applied. Points of discussion were the early development stage of
the framework and influence of the abstractness of categories on the results. In addition,
the research method was reflected in terms of the influence of the holistic design, the small
number of interviews conducted, the small number of cases, and retrospect data.
Chapter 7
Conclusion
The concluding section summarizes the findings of this study and brings them into a broader
context, it suggests contributions to research, evaluates its limitations, and proposes implications.
7.1
Summary
This dissertation has investigated the impact of advocacy campaigns on firms by focusing on
the alteration of firm response profiles. The study has been aimed at testing a framework of
organizational processes in the context of firm response to advocacy campaigns. The study
has mainly been set out to contribute to theory of firm response to advocacy campaigns.
The literature review has revealed that specific aspects of advocacy campaigns have been
addressed but comparative studies about organizational processes and impact on firms are
scarce. The framework of Basu and Palazzo (2008) has been identified as suitable to describe
firm response to advocacy campaigns from a process perspective. A qualitative case study
was conducted to assess the framework.
Returning to the research questions posted at the beginning of this study, it is now possible
to say that campaigns have an impact on firm response profiles and they can be considered
as a trigger for change. Whilst this study did not confirm major changes of organizational
cognitive models due to a campaign, it did partially substantiate general impact of campaigns
on organizations, in particular of firm posture that indicates how firms tend to behave.
One of the more obvious findings to emerge from this study is that firms respond to
advocacy campaigns by developing a more open posture toward the addressed issue. Even
though posture becomes more open, firms do not simply meet demands by the campaign but
develop their own response by showing a high level of self-initiative.
The current findings also add to a growing body of literature on responsible business
practices and to collaboration between firms and NGOs in this context.
197
CHAPTER 7. CONCLUSION
198
Taken together, these findings suggest a role for advocacy campaigns in promoting awareness of firms in terms of their responsibility in their global supply chains.
Finally, a number of important limitations need to be considered. First, the current study
has only examined four cases and has therefore been designed to enhance theory. It cannot be
extrapolated in statistical terms and can only provide narrow implications for a larger group
of companies. Quantitative studies are subject of further work.
Further, the current study was limited greatly by resources that influenced the whole
project. I was the all-in-one PhD student, researcher, investigator, and author of this study.
It was an individual project and did not receive any financial research funds. Therefore
this study faced considerable limitations of financial and human resources. It was aimed at
limiting the sources of error due to these limitations, of which one was a limitation to four
cases.
7.2
Recommendations for Further Work
This research has raised some questions in need of further investigation. Such considerations
include confirmation of the theoretical findings of this study in a larger number of companies
that would imply a quantitative study.
It would be interesting to assess initial firm response profiles in more detail. A quantitative
study would be needed to analyze whether the similarity of response profiles holds true for a
larger number of cases, and how far they differ from firms that are fundamentally different
from consumer goods companies.
Further work needs to be done to establish whether change of firm posture toward an issue
is always indicated or whether there are certain circumstances that hinder a development
toward a more open posture. Further work is suggested in terms of the time frame of such a
change in posture.
Another aspect of interest could be to assess whether firms that are not direct targets of
campaigns change their postures toward issues or not. What would be needed is a quantitative
comparative study involving firms that were targets of a campaign and a control group that
was not. It could be conducted within the same industry to reveal the difference between
companies that have been campaign targets and between companies that were not.
7.3
Implications for Practice
These findings suggest several courses of action for practice.
7.3. IMPLICATIONS FOR PRACTICE
199
An implication of these findings is that managers of firms should take into account that, if
their company is the target of an advocacy campaign, their company most likely will change
in one way or another. The mere discussion of the topic will raise awareness and probably
lead to a more open posture of the firm toward this issue. It also should be noted that a more
open posture likely is influenced by a change in engagement with NGOs, whether it be the
campaigning organization or another in the environment of the same issue. In this regard, the
company has possibilities to influence posture. It also should be noted that multi-stakeholder
initiatives seem suitable forums for companies to become involved in an issue.
Another implication is that advocacy campaign managers may note that campaigns do
have an impact on firms. Most likely, they raise awareness in the company about an issue.
Firms do not necessarily adapt to particular demands and they most likely will tackle the
issue in a way that suits their business. Also, it may take time until a company shows
specific response to the issue, as not all considered actions are communicated. Often, the
daily business is considered more important than topics of social responsibility. Companies
do not take ad-hoc decisions; they carefully prepare changes in business practices and they
have to suit their overall strategy. Therefore, in order to catalyze the process of engagement,
it could be more promising to seek collaboration with firms from the beginning rather than
engage in a hostile conflict.
CASE STUDY PROTOCOL
ix
Appendix A
Case Study Protocol
This case study protocol has mainly been composed on the basis of Yin (2003, 141–66).
1. Introduction to the case study
This case study is conducted in the context of a PhD thesis at the University of St.Gallen,
Switzerland. I am all-in-one PhD student, researcher, investigator, and author of the
case study. The motivation for this research is my interest in how businesses encounter
challenges posed by today’s networked and demanding society. In particular, this case
study investigates how and why firms respond to the specific challenge of advocacy
campaigns. Instead of focusing on the content of company response, it evaluates underlying mental, linguistic, and behavioral models of organizations. This study aims at
identifying changes in such underlying models.
The main question of this case study is: How do mental, linguistic, and behavioral
models change in response to an advocacy campaign?
The main proposition to be evaluated is: Advocacy campaigns have an impact on all
three models (cognitive, linguistic, behavioral patterns).
The theoretical framework is based on a model developed by Basu and Palazzo (2008)
which is grounded in the idea of sensemaking in organizations (Weick 1995).
This protocol serves as an agenda for the data collection process and also outlines how
to report the case study results.
2. Data collection procedures
Several types of data are collected for this case study: newspaper articles, press releases
and other documents of the involved NGOs, market data, company documents, and
interviews.
Newspaper articles about the issue are identified by searching the factiva database in
the respective period of time. The idea is to be wide-open with search terms (company
name, the NGO’s name, the campaign name, etc.) and time period in order to ensure
that all relevant documents are identified.
The involved NGOs’ web sites are important sources for documents which cover the
campaign.
Market data about the companies are found in economic databases, such as the Euromonitor and on respective company web sites.
Company documents are collected from web sites and in person when meeting company
representatives. Company documents include annual or specific reports, in particular
reports on corporate social responsibility or similar, and press releases regarding the
campaign or the issue of the campaign.
Interview data are collected where its suits the interviewees. This is most likely at
their working place. The open-ended, semi-structured interview is to be recorded. The
questionnaire which serves as a rough guide for the qualitative interview is included
below.
It is important to conduct the document search and reading first in order to fully
understand the context of the case, to be able to follow the elaboration of the interviewee,
and to be able to ask clarifying questions.
APPENDIX A
x
3. Case study questions
This section covers two sets of questions. First, it lists the questions asked of the
individual case (questions the investigator ought to keep in mind while collecting data).
It is important to distinguish these questions from the second set of questions which are
the interview questions asked of individual interviewees.
The purpose of the case is to identify cognitive, linguistic, and conative patterns of an
organization in various points in time of a campaign. Finally, the purpose is to identify
changes between patterns at the beginning and at the end of a campaign. Hence, data
should be collected with a time axis in mind and also with the three main questions:
How does the organization think, what does it say, and what does it do?
(a) Case questions
ˆ Course of the campaign
Find out how the organization experienced the campaign. What did it think
of the issue? What did it think of how the issue was addressed? Did it agree
or disagree with the advocacy organization?
Find out about the pre-existing structures to cope with a campaign. Was the
organization surprised or did it expect a campaign?
ˆ Firm response
Find out about the firm response to the campaign. Distinguish between internal response and external response. Distinguish the course of the response.
Keep in mind that the aim is to find out about changes in response from the
beginning to the end of the campaign. What was the initial, internal response?
Did people internally think differently, and if yes, why? What was the shortterm official, external response? Did it respond differently to NGOs than to
the media?
Find out about the interactions between the organization and the advocating
organization. When and how did they get in touch? Did they have contact
before?
Find out about why the organization responded the way it did. How did the
response develop? What were the arguments, the reasons to respond the way
they did?
ˆ Specific organizational changes
Find out where the organization stands at the final situation when the campaign is closed. What was the point in time when they thought it ended?
What has changed since the beginning? Investigate what the organization
changed in the course of a campaign. Changes may have occurred in what
they thought was important and also in terms of what they actually did with
regard to the issue.
(b) Interview questionnaire
The interview is qualitative and open-ended. Hence, the questionnaire serves as
a guide to be roughly followed. Each question may be covered, however, it may
not be necessary to ask each and every one specifically as interviewees may cover
certain answers without being asked specifically. The guiding principle is to let
interviewees talk as much as they want and not to interrupt their flow of speech
when not essential. Clarifying questions may be asked in addition to the questions
below.
ˆ Please tell me the story of your company and the campaign X.
ˆ Circumstances preceding the campaign
CASE STUDY PROTOCOL
xi
– What was the external context, such as the market situation, customers,
or other contemporary phenomenon?
– How do you describe the situation preceding the campaign with regard to
the company’s internal context (e. g., the organization structure, the position regarding a potential campaign, attitude toward NGOs, experience
with campaigns)?
– Did your company expect a campaign in this context?
ˆ Course of the campaign
– How did the NGO contact your company?
– What level, department and person of the company were addressed?
– What did the NGO do?
– Were there earlier contacts between the NGO and your company?
– How did your company respond internally (internal reaction, meetings,
decisions, influence of decisions, goals, plans)?
– How did your company respond externally (toward the NGO, the media)?
– What did you think of the NGO?
– What did you think the NGO thought of you?
– Were there changes in the course of the campaign?
ˆ Situation after the campaign
– When was the end for the campaign for you?
– What was the result of the campaign for your company?
– Were you satisfied with the result, and why?
– What were the changes you noted after the campaign?
– Do you think the campaigning NGO was satisfied with the result?
ˆ Do you have any additional remarks, any thing we forgot to talk about which
seems important in this context?
4. Guide for the case study report
This section serves as a guide for the case study report to facilitate its write-up after the
data have been analyzed. The report will follow a linear-analytic structure according
the the entire thesis. Whereas the previous chapters present the literature reviewed and
the methods applied, the case report as such presents the context of the case, including
market and company information and the background of the respective campaign. Further, it presents the actual results of the analyzed data with regard to the questions of
the case study. Also, the report lists the data which have been collected and analyzed.
This provides about the following structure for the single case: context of the case study,
cognitive patterns, linguistic patterns, conative patterns, and a list of documents.
CATEGORY SYSTEM
xiii
Appendix B
Category System and Coding Instruction
Categories
Code of
Code of
subcategory
specification
Cognitive Patterns
Identity
Individualistic Orientation
Legitimation
Relational
-
Collectivistic
-
Pragmatic
Leg.
-
Moral Leg.
-
Cognitive
Leg.
-
Linguistic Patterns
Justification
Legal
Transparency
-
Scientific
-
Economic
-
Ethical
Favorable
-
Description & Remarks
Emphasis on separation from other organizations
Emphasis on own capabilities
Importance of specific/ dyadic relationships to stakeholders
Connection to stakeholders through
higher-level goals (common purposes)
Companies try to convince stakeholders of
usefulness of their activity (products, decisions, processes, etc.), e.g. through advertising campaign
Self-interest of audience/ SH: judgement
of evaluator-benefit (direct exchange, support for larger interests, or values!)
Companies deny responsibility
Companies create monitors
Judgement of whether action is the right
thing to do
Based on larger cultural rules
Companies excuse and justify
Companies replace personnel and revise
their practices
Engagement in creating common social
norms
Companies are taken for granted
explaining themselves
Aligning company to societal expectations
and adapting to external demands
Self-regulation by establishing codes of
conduct
Based on larger cultural rules (not audience self-interest)
Justification based on legal arguments (officially permitted)
Justification based on scientific arguments
(relating to scientific studies and experts)
Justification based on economic arguments
(=tangible contributions, benefits to others, e.g. jobs, taxes, etc.)
Justification based on ethical arguments
Noting that what the organization does
has positive consequences
APPENDIX B
xiv
Unfavorable
Conative Patterns
Posture
Acceptance of
feedback
-
Noting that what the organization does
may have negative consequences
Organzational action may also bring disadvantages
yes
The organization can listens to, considers
and evaluates outside (and inside) feedback
The organization refuses to listen to outside (or internal) feedback
There is an adaptation of behavior in terms
of claims from campaign
New patterns of behaviour are recognized
No adaptation of behavior in terms of
claims from campaign
Established patterns are continued
Extreme suspicion and/ or no interaction
no
Adaptation to
demand
yes
no
Engagement
with NGOs
no/ suspicion
interaction
philanthropy
partnership
integrative
Consistency
Strategic
(overall)
preparation
ad-hoc
sion
Internal
(CSR)
match
different
Commitment
Preoccupation
Persistence
Sacrifice
deci-
Exploratory interaction
Partnership between firm and NGO on
specific issue
Collaboration to develop and implement
voluntary industry standard
Engagement between firm and NGOs to
shape legislation
Consistency of response to campaign with
overall strategy
Hints for preparation for changes/ campaigns
Combining response to campaign with
business aim
Hints for ad-hoc decisions when problems
occur
Cisruptor with existing firm strategy
Reference/ hint to other CSR activities
Mismatch with other CSR activities
Investing time and/ or money
Self-initiative
Accepting certain disadvantages or deficits
of the chosen path
CATEGORY SYSTEM
xv
Coding instructions, or rules, enhance reliability by clearly delineating categories from each
other. They guide the researcher through the process of data analysis.
Coding instructions to determine the main category
ˆ Questions for cognitive dimension: What does this statement stand for? Considerations
are the following: Is the statement about how the organization views itself in relation
to others? Is it about how the organizations gains acceptance in society?
ˆ Questions for linguistic dimension: Is the statement a (public) explanation why the
organization behaves the way it does? Does the statement mention advantages or disadvantages of their specific behavior? Linguistic patterns are only identified in public
documents.
ˆ Questions for conative dimension: Does the statement refer to an organizational action?
Does it say something about how the organization treats feedback, or how it prepares
decisions?
ˆ If main category appears unclear, consider the next-higher context entity (the paragraph
or chapter).
Coding instructions to determine subcategories
ˆ General instruction: consider the context and follow the description of the category.
ˆ Difficulty may occur in delineating legitimation from justification. To clarify: In this
study, legitimation statements show how organizations seek recognition in society, usually not directly stated publicly. Justification in this study is defined as public explanations why they act the way they do (press releases, interviews, news media, annual
reports, other publicly available documents)
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Curriculum Vitae
Rahel Wendelspiess
Born on August 10, 1980 in Wettingen, Switzerland
EDUCATION
2006–2010
PhD studies in Political Science
University of St. Gallen, Switzerland
2000–2005
Studies in International Affairs and Governance
University of St. Gallen, Switzerland
Degree: MA HSG
2004
Exchange semester
EM Lyon, France
2000
Matura
Kantonsschule Baden, Switzerland
1997–1998
Exchange year
Frankling High School, Seattle, United States
WORK EXPERIENCE
Since 2009
Financial Consultant
Wendelspiess Partners AG, Zurich, Switzerland
2005–2008
Project Manager & Client Advisor
Greater Zurich Area AG, Zurich, Switzerland
2004–2005
Research Assistant
Institute for Technology Management, University of St. Gallen, Switzerland
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