literature on CSR focuses on two opposing visions that have different consequences.
1.1. The issues at stake in the liberal and contractual conceptions of CSR
The first vision is a radical liberal conception, which is taken up by Levitt (1958) and Friedman (1970) in particular, who consider that the sole social responsibility of a company is to make profit. In this approach, the State is the only political and public actor, while companies, as private, non-political actors, are exempt from exposing their decisions to public scrutiny, or justifying their behavior, if they comply with the regulations in force and the morality of the practice (Friedman 1962, 1970). Companies are rarely seen as agents of societal change, even though, as Kramer and Pfitzer (2017) point out, the correlation between social progress and business success is becoming increasingly evident. The second vision is the instrumental position of CSR, which can be seen in the works of Mitchell et al. (1997), Jensen (2002), and Sundaram and Inkpen (2004). CSR CSV can be called “strategic” because it affects the firm’s position in relation to its competitors and goes far beyond action, to correct or anticipate potential damage to the firm (boycott, etc.). When this strategy is associated with competitive societal innovation, the company can improve its financial and societal performance. Profit maximization is one of the ultimate objectives of a company, but does not contradict the consideration of the interests of its various stakeholders. With this contractual conception of CSR, the company becomes a major economic and social player. The two visions of CSR differ in terms of the nature of the value created. The radical liberal vision is limited to the creation of shareholder value, but has evolved with the emergence of partnership value creation (Charreaux and Desbrières 1998). According to these authors, in the traditional financial approach, the value created is equal to the income received by shareholders, whereas partnership value is based on an overall measure of income created by the firm in relation to its stakeholders, not just the shareholders. Partnership value creation does not focus entirely on the process of value creation and sharing, but is merely an extension of the creation of shareholder value to other stakeholders, such as employees (Gautier et al. 2013). In recent years, companies have become increasingly interested in creating shared value (CSV), thanks to CSR practices as part of the contractual approach, which advocate a partnership-based mode of governance. In this case, taking into account the expectations of the various internal and external stakeholders with regard to acceptable behavior in the company’s activities is at the heart of the CSR concept. Jensen (2002) acknowledges that the partnership perspective of stakeholder-based governance can contribute to maximizing the firm’s market value. This valuation led him to propose the concept of “enlightened value maximization”. Subsequently, the innovative concept of “creating shared value” was mainly proposed by Porter and Kramer (2006, 2011). In their 2006 article, this concept was based on the interrelationships that existed between companies and society, whereas in their 2011 article, they considered that companies were not able to seize the opportunities that CSR represented, in terms of overall performance (financial and societal). For Pfitzer et al. (2014), the shared value is “the implication of integrating a social mission into the culture of the company and the allocation of resources towards the development of innovations that can help solve social problems”. For Kramer and Pfitzer (2017), CSV is “the creation of profit (business success) for the company while generating benefits for society”. These various definitions all converge towards the same principle: the activities of the company can affect society, and society can in turn affect the company.
1.2. CSR as a lever for adapting corporate governance
This interdependence means that companies have an interest in finding solutions to societal challenges. With the CSV approach, CSR must be understood as a set of discourses and practices, which work towards extending corporate governance to its various stakeholders (Dupuis 2008). A stakeholder refers to a group or individual that can affect or is affected by the achievement of the organization’s objectives (Freeman 1984). Nowadays, it has become imperative for companies to place their overall strategy within a CSV-based perspective and better identify their CSR, by explicitly taking into account the expectations of their internal and external stakeholders. Therefore, the company is at the heart of a set of relations with stakeholders that are no longer just organizational (shareholders and management), but also involve internal (employees) and external stakeholders, who have an interest in its activities and decisions. The sharing of returns and externalities must then be regulated through quasi-contractual arrangements (Freeman 1984). With CSV, the integration of societal issues must be thought of as a strategy in its own right, by approaching these issues as a business problem (Porter and Reinhardt 2007). To do so, this integration must be seen as an opportunity to create financial and societal performance.
The integration of CSR thus assumes, as Coriat and Weinstein (1995) point out, a theorization of the firm under its dual organizational and institutional dimension, where profit maximization is no longer the sole or obligatory hypothesis. Therefore, there would be a set of organizational competencies built within a particular institution, where rules are partly imposed by stakeholders with divergent interests (Dupuis 2008). Post et al. (2002) identify three categories of stakeholders, distinguished by their strategic dimensions, which can play the role of regulatory mechanisms to encourage companies to develop societal strategies based on CSV. The first category is associated with the “basic resources” dimension that includes shareholders, employees and customers. The second category belongs to the “market” sphere that consists of commercial and competitive partners. The third category belongs to the “socio-political” sphere embodied by the regulatory authorities (hard power) and soft power players, also called “institutional stakeholders”. By integrating the expectations of these stakeholders, CSR plays a role in a new approach that consists of adapting the company’s governance systems to the realities of new organizational forms. This adaptation implies that the company must respond to the interests of all its internal and external stakeholders in order for its strategy to be viable. To this end, the justification for CSR proposed by stakeholder theory (SHT) gives the firm a role of societal regulation that organizes the interactions between various stakeholders. This theory essentially aims to better understand the company’s environment, rather than to help the manager to manipulate it (Mercier and Gond 2005). The SHT approach is based on a representation of the company that is totally embedded in society, its laws, values and culture (Capron and Quairel-Lanoizelée 2007).
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CSR as a Lever Which Corrects and/or Anticipates Potential Damage to the Company
Potential damage may arise from the pressures that socio-political and/or market stakeholders may exert on the company, if its activities produce negative social and/or environmental externalities, or if it is unaware of their existence.
2.1. CSR as a lever to avoid pressures from socio-political stakeholders
Today, companies feel “almost” obliged to reconsider, indirectly, the way they relate to their internal and external stakeholders. They are increasingly exposed to risks in terms of image (as an institution), legislation (environmental and social risks) and competitiveness, if they do not behave in a way that is acceptable to these stakeholders. Some companies have developed CSR strategies based on creating shared value (CSV) without this being an entirely voluntary or a spontaneous act, but many other companies have only “woken up” after being surprised by the reactions of hard and soft power stakeholders, to issues they had not previously considered as part of their job responsibilities (Porter and Kramer 2010). The relationship between the company and its stakeholders should therefore not be analyzed as a relationship of agency, but as a relationship of dependence on the resources they hold (Quairel and Auberger 2005). This dependence subordinates the firm to the stakeholders and asserts that its sustainability depends on its ability to manage their demands and, above all, on those whose resources and support are decisive for its survival (Pfeffer and Salancik 1978).
