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Social Movements and Corporate Social Responsibility Case Study: Driving…
Social Movements and Corporate Social Responsibility
Case Study: Driving sustainability - Bloomberg
SHAREHOLDER ENGAGEMENT
: set of practices where shareholders try to influence corporations via direct communication
filing resolutions and proxy voting on env'tal, social and governance issues
File resolution --> Private dialogue --> Resolution voted at AGM (threat) OR withdrawn resolution
SHAREHOLDER DIALOGUE: THREAT VS. MUTUAL UNDERSTANDING
traditional explanation of dialogue = reputational threat (Vasi & King, 2012)
however, shareholders use the resolution "to engage in dialogue" (Van Buren, 2007)
dialogue is effective when mutually meaningful parties develop flexibility in working together and understanding each other's constraints (Logsdon and Van Buren, 2009)
FRAMES
CODING
: degree to which activists and company share the same understanding
divergent
mixed
convergent
DISCOURSE FRAME
: nature of relationship b/w activists + corporation
shared discourse frame
: reciprocal and mutually recognized acceptance of discourse from both activists and org
ISSUE FRAME
: understanding of the issue (in this case, climate change)
shared issue frame
: shared perspective on issue
No shared issue frame, no deliberation
PILLARS OF DIALOGUE (HABERMAS, 1984)
social order and coordination of individual action emerges from 2 pillars: strategic and commmunicative action
strategic action
: individuals are oriented towards their individual successes, actions are
purposive interventions
in the world, following rules of rational choice revealing a strategic attitude
e.g. resolution filing
Ppl turn to discourse when there is disagreement --> social interaction (dialogue) can facilitate a common definition of a situation
communicative action
: individuals pursue individual goals under the conditions that they can
harmonize their plans of action
on the basis of common situation definitions
#
THEORY OF DIALOGUE IN SHAREHOLDER ENGAGEMENT
(*FERRARO & BEUNZA, 2016)
Longitudinal Study: ICCR (Sister Patricia Daly & 2 major US Car Manufacturers on climate change)
1997-99: anti-Kyoto protocol lobbying: GM
Sister Daly filed resolution against GM funding the Global Climate Coalition
no action
second resolution
no action
third resolution
no action
last company to leave GCC
2002: Higher fuel standards: GM
committed to improve SUV fuel economy
losses and jobs cuts
cannot meet deadline
resolution filed
no commitment to dialogue
resolution maintained
2004: Emissions as climate risk: GM
resolution filed for reporting emissions data
no action
kept resolution
acknowledges the usefulness of listening through dialogue
resolution filed for climate change is an emerging business reality
GM deem climate change a public policy issue, not a business issue
kept resolution
1997-99: anti-Kyoto protocol lobbying: FORD
Sister Daly filed resolution against Ford funding the Global Climate Coalition
no action
second resolution
Ford unveiled "Citizenship Report" admitting SUVs contributed to greenhouse gas
Sister Daly reported Ford taking positive steps
Ford acknowledges what Sister Daly is doing and is supportive
Ford leaves GCC
Ford accepted ICCR's framing of their relationships as discourse
2002: Higher fuel standards: FORD
Ford committed to improve SUV fuel economy
Ford - profit losses and job cuts
Ford - cannot meet deadline
ICCR filed resolution
Ford published in its proxy summary that it is committed to continuing dialogue
ICCR withdrew resolution
Ford responded cooperatively to the resolution instead of defensively.
illustrates moderating effects of shared discourse frame
once discourse frame is established, parties make sense of their interactions as rational exchange instead of contentious attacks
2004: Emissions as climate risk: FORD
resolution filed for reporting emissions data
uncertainties with tech dev't but supports the principle
kept resolution
resolution filed for climate change is an emerging business reality
Ford publishes Climate Risk Report, w/ business implications of reducing emissions
Ford launches Escape hybrid SUV
resolution withdrawn
RESULTS
shareholder dialogue is a form of communicative action
study shows the
effectiveness of resolution filing (strategic action) in forcing corporations to accept dialogue
dialogue is enabled by shared frames (discourse and issue)
--> when both are in place, misinterpretation is avoided and deliberation is sustained
--> once discourse frame is est. activists can file resolutions w/o appearing confrontational
not all resolutions are threat, and not all withdrawals are signals of progress
shared frames arise from 3-part mechanism: initiation, acceptance and recognition
temporal ordering -->
discourse frame antecedes the emergence of a share issue frame
(*FREEMAN, 1984)
Managing in turbulent times
modern orgs experience ownership dispersion
mgrs
need to satisfy multiple stakeholders
: owners, EEs and their unions , suppliers and customers
Internal Change
: change in the relationships discussed int he managerial view
owners
concerned with ROI and also want control
customers
have more choice today and will compare quality and innovation
employees
: rethink MGR-EE relationship; values changing. Some argue argue values are becoming more important than strat and structure
suppliers
: political issues and policies of control; mgrs must also deal with scarcity
External change
: change in the very nature of the managerial view (e.g. emergence of new groups, events, issues, which cannot be readily understood w/in existing framework
governments, quasi agencies and courts
: policy changes, tax and depreciation schedules, capital formation incentives
competitors
: competitors abroad do not play along the same rules
consumer advocates
: customers can exercise voice
environmentalists
: can lead to new policies
special interest groups
media
: mass communication - large orgs live in fishbowl - open to public scrutiny
RESPONSES OF ORGS:
inactivity
: ignoring the changes and continuing business as usual
reactivity
: waiting for something to occur to response
proactivity
: involves trying to predict the external changes and positioning org toward those changes before the fact
interactive mode
: active involvement w/ the external forces and pressures, to create future for all
need to understand each shift individually in order to adjust position of firm, but if many changes occur simultaneously, piecemeal responses may be inadequate
Stakeholder view of firm: firm is connected to all stakeholders
Stakeholder concept and strategic mgt
stakeholder
: those groups without whose support the org would cease to exist
org theory --> orgs survive to the extent they are effective. Effectiveness derives from mgt of demands (i.e. demands of interest groups that the org depends on for resources and support)
Stakeholder approach to strat mgt
concerns with formulating plans and systems of plans for business level entities, with understanding the role of the corp in social system, with social responsibility of business and the need for integrative theories to explain behaviour of a large pop. of orgs and their envt's
CASE STUDY: BLOOMBERG
case illustrates the difficulty with tensions b/w org values and the bottom line
Bloomberg was successful b/c:
takes care of people
open offices
proactive/ innovative
BUT overdependence on terminals, clients are developing their own data resource spin-offs, competition form Thomson Reuters & pressure from Michael Bloomberg to make business sustainable
RESULTS
sales did not increase
most of marketshare taken up by competitors
began a new initative to lobby the gov't for other matters --> this has been successful