Corporate Social Responsibility, Stakeholder Management and Network Governance

Can networks comprising civil society, private sector and political actors steer globalisation? This is just one of the questions investigated by the Hamburger Stiftung für Wirtschaftsethik in collaboration with the Konstanz Institute for Values Management (KIeM) as part of this research project (June 2007 to December 2009). The key outcomes of the project are the books edited by Josef Wieland: ‘CSR as Network Governance – Theoretical Challenges and Practical Answers’ (Metropolis, 2009) and ‘The Practice of Social Responsibility in Small and Medium-Sized Enterprises’ (Metropolis, 2010).

Overview

This research project advanced work on the concepts of Corporate Social Responsibility (CSR) and stakeholder management. Particular emphasis was placed on developing and clearly defining the still-emerging concept of ‘network governance’. Another key focus of the project was to identify the specific form that governance through networks takes in small and medium-sized enterprises. To this end, two workshops were held: one focusing on the academic debate, and a second aimed at practitioners to ensure the transfer of academic insights.

Research questions

This research project sought, on the one hand, to investigate whether policy networks – alliances of civil society, private-sector and political actors – constitute a form of organisation capable of remedying the institutional deficit in the supranational sphere caused by globalisation. Topics that received particular attention included the modern governance of public tasks and the company as a form of social cooperation. Furthermore, the study discussed the extent to which policies developed through CSR networks are, on the one hand, an effective instrument for shaping under-regulated spheres, whilst, on the other hand, giving rise to concerns from a legitimacy perspective.

In addition, the study examined the form that network governance takes, particularly in small and medium-sized enterprises. In contrast to large enterprises, which usually establish dedicated roles or even teams to handle CSR-related tasks, small and medium-sized enterprises (SMEs) do not, in the vast majority of cases, have these resources and pursue social objectives less in isolation from the company’s core activities. Furthermore, the local interdependence of SMEs is generally greater than that of larger companies.

Network governance

The research question on network governance is based on the assumption that, at the supranational level, there is a lack of institutions capable of effectively and legitimately regulating tasks that were originally the responsibility of the state. Instead of the political authority to shape policy that exists within the nation-state, a multitude of non-state actors has emerged. This has resulted in an imbalance between the capacity to enforce decisions, on the one hand, and the legitimacy of such decisions, on the other. Furthermore, an increased level of multipolarity is assumed, i.e. a rise in the number of relevant actors claiming the right to shape policy. In this complex landscape, so-called tri-sectoral networks – or policy networks – that is, networks in which civil society actors such as NGOs, private-sector and political actors come together – appear to offer a way of combining legitimacy with the capacity to achieve results.

Whether such networks constitute a suitable structure for integrating legitimacy and effectiveness was one aspect discussed at the project’s academic symposium in March 2008 (and in the resulting publication). Furthermore, the implications of this for the governance of public tasks were examined. Alongside these action-oriented insights, the implications of this new form of governance for the theoretical model of firms were explored.

A further symposium in October 2009 was aimed primarily at practitioners working in the field of network governance. Its aim was to translate the academic findings into practical application. Furthermore, the implementation of network governance in SMEs was discussed, particularly in the form of regional networks comprising businesses, politics and civil society. The various contributions from this workshop are collected in the edited volume *Die Praxis gesellschaftlicher Verantwortung im Mittelstand* by Josef Wieland, which was published in 2010.

Milestones

The project ran from June 2007 to December 2009. Key milestones were:

• Academic symposium on network governance (March 2008)
• Publication by Josef Wieland (ed.) ‘CSR as Network Governance – Theoretical Challenges and Practical Responses’ (April 2009)
• Expert workshop on the transfer of findings into practice (October 2009)
• Publication by Josef Wieland (ed.) ‘The Practice of Social Responsibility in Small and Medium-sized Enterprises’ (July 2010)