Corporate Social Responsibility

Corporate Social Responsibility (CSR)
Models and Theories in Stakeholder Dialogue
          
 ABSTRACT        
     The pharmaceutical sector, an industry already facing stiff tests in the form of intensifiedcompetition and strategic consolidation, has increasingly become subject to a variety of otherpressures. Significantly, in common with other large-scale businesses, pharmaceutical firmsare being exhorted to respond positively to the challenge of corporate (social) responsibility(CSR). Clearly, for individual managers within pharmaceutical firms the issue of CSR in theform of closely connected questions relating to patient access to health treatment, patentprotection and affordability presents major problems. Part of the burden of addressing thedemands of CSR is the need to engage effectively with a range of stakeholders. Individualmanagers in pharmaceutical companies have to confront the complicated task of choosingwhich stakeholder dialogue practices to adopt and why. This real-world managementpredicament runs parallel to an academic interest in CSR stakeholder dialogue theory andmodels. Accordingly, this paper contributes to primarily to the academic debate by reviewingpast attempts to theorise CSR and stakeholder dialogue, identifying gaps and weaknesses, andproposing a diagram-type model as a refined prototype framework. However, ultimately theintention is to offer guidance to business managers. The model proposed here contains thosefactors considered most relevant for describing, analysing, and explaining the CSRstakeholder dialogue practices of pharmaceutical companies, with the intention of conductingcomparative international research. It is envisaged that the model outlined will be employedin future empirical research concerning stakeholder dialogue practices amongst UK andGerman pharmaceutical firms

           
 
INTRODUCTION               
 Given the critical attention that ‘big business’ in general and pharmaceutical companies inparticular have received from inter alia the media, Governments and non-governmentalorganisations (NGOs), the pharmaceutical sector has increasingly come under the pressure ofresponding to the challenge of corporate (social) responsibility (CSR). This trend is setagainst a background in which the industry is already under considerable pressures arisingfrom intensified competition and strategic consolidation. Clearly, CSR and the closelyconnected questions of access to health treatment, patent protection and affordability presentmajor concerns for managers of pharmaceutical companies today. Part of the burden ofaddressing the demands of CSR is the need to engage effectively with a range of stakeholders.Individual managers in pharmaceutical companies have to confront the complicated task ofchoosing which stakeholder dialogue practices to adopt and why. This real-worldmanagement predicament runs parallel to an academic interest in CSR stakeholder dialoguetheory and models.To develop the points introduced above, it could be argued that the general public, whetherrightly or wrongly, typically holds a negative perception of ‘big business’ (Acutt 2004:306;Clark 2000; Crane & Matten 2004:12; Deresky 2000:16; Greenfield 2004; Handy 2003:78;Hoertz Badaracco 1998; Kotler and Lee, 2005:221-2; Weiss 1998:4; #p#分页标题#e#www.mallenbaker.net2004). One likely cause for the negative image associated with ‘big business’ is the repeatedoccurrence of certain high profile events, labelled by many as ‘scandals’. These events haveinvolved some of the largest and, previously, most highly regarded organisations in the worldincluding, for example, Enron, Arthur Andersen, Parmalat, Shell, Nestlé, Union Carbide andNike (Ruggie 2003; O’Higgins 2005; Handy 2003). Their tainted image has often beenfuelled by attention from the media and other stakeholders (Oxfam/VSO/Save the Children2002; Clark 2000; Brammer and Pavelin 2004; www.twnside.org. 2004; Weiss 1998:35).

 
The pharmaceutical industry in particular has been criticised by various stakeholders for avariety of reasons including their allegedly high profit levels, use of patents, marketingexpenditures, political lobbying, considerable investment requirement for new drugdevelopment, ‘creative accounting’, high price levels and price fixing, excessive executivesalary levels, limited patient access to life saving/extending/enhancing drugs, animal testing,research methods and patient clinical trials, as well as environmental concerns (Haugh 2003;Quist-Arcton 2001; www.ethicalmatters.co.uk. 2004; www.iblf.org 2004). Accordingly, thepharmaceutical industry has been selected as the case study for this paper because it isdeemed to be a distinctive for a number of reasons. First, given the nature of its products (i.e.therapies for human consumption to enhance the quality of life, to cure illness and/or savelives) the industry operates in a highly regulated market place. Second, owing to the veryhigh level of profits it makes and extreme concentration of power found in the industry, whichhas been described as having “reached staggering proportions” (Rifkin 2005:2). The thirdreason is that the profits it makes are derived from a basic human need: health. This isregarded by many as a basic human need (www.abpi.org.uk, 2005).Undoubtedly, for all types of business, how a firm is viewed and evaluated by stakeholders islikely to have a major impact its interactions with its stakeholders and is, therefore, a matterof significant managerial interest. However, for pharmaceutical companies in particular, whoregularly face informed, critical, and active stakeholder attention from government, the media,from NGOs, and the public at large the nature of their relationships and communications withstakeholders are especially important. Many of these stakeholder groups view, to varyingdegrees, health as a fundamental human right and the direct responsibility of a sector thatmakes high profits relative to other industries. At the same time, financial stakeholders and regulators continue to place more demands on financial performance and informationrequirements.In short, business in general, but in particular the pharmaceutical industry, has come underincreasing pressure from its stakeholders to act responsibly and to engage effectively withstakeholders via various dialogue practices. ‘Stakeholder dialogue’ has come to be seen bysome as part of the broader spectrum of socially responsible action and activities that shouldbe undertaken by companies. Stakeholder theory (Freeman 1984) suggests the idea thatinvesting time and other resources in addressing stakeholders’interests is a justifiablemanagerial activity. In this way stakeholder dialogue stands in contrast with the past explicitprofit-orientated focus held by business, which was the focus of previous strategic, planningapproaches (Crane and Matten 2004:50). The task of developing effective CSR stakeholderdialogue strategies for individual business managers in general, but in particular in thepharmaceutical business, an industry that is often termed “sensitive”, and whether rightly orwrongly, a proven prime target for negative stakeholder attention, is without doubt achallenge.Building on some initial exploratory empirical research conducted in 2005 (Fairbrass et al.2005), this paper makes a timely contribution to the debate about CSR and stakeholderdialogue practices. The paper plays its part primarily by entering the academic debate but inalso offering some guidance for business managers. To achieve these objectives, the paperreviews past attempts to theorise stakeholder dialogue, identifies gaps and weaknesses inprevious literature, and proposes a diagram-type model as a refined prototype framework. Themodel proposed here contains those factors considered most relevant for describing, analysing,and explaining the CSR stakeholder dialogue practices of pharmaceutical companies, with theintention of conducting comparative international research. It is envisaged that the proposedmodel here will be employed in conducting empirical research concerning CSR andstakeholder dialogue practices amongst UK and German pharmaceutical firms.This paper aims to present an alternative framework that describes, refines, and explains CSRstakeholder dialogue within the context of the pharmaceutical industry. To achieve these aims,the paper selectively maps the literature including key, concepts, ideas, and some theories,frameworks, and models on some subjectively chosen areas specifically related to the topic.The aim is to identify contemporary debates and show the importance of the various factorswithin the context of the CSR stakeholder dialogue challenge. The paper is theoretical indesign and based on desk research comprising a literature review and secondary empiricaldata. The real world CSR stakeholder dialogue challenges facing pharmaceutical decisionmakers when choosing which practices to adopt form the basis for an academic perspective totheorise and model CSR stakeholder dialogue.The remainder of this paper is divided into three parts as follows. Section two serves to justifythe need for a new model by highlighting the key factors considered relevant for thedevelopment of a prototype model and indicating how current research fails to adequately toprovide such a framework. In doing so the paper briefly provides an analytical, evaluative,and critically orientated review of salient themes, theories, and frameworks within CSR,stakeholder dialogue, and the pharmaceutical industry. Section three then selects, describes,and justifies those elements that are considered to be critical for explaining CSR stakeholderdialogue practices and thought to be essential to the new prototype model. Finally section fourconcludes the paper by summarising, clarifying, and defending the choice of elements andfactors in the model.#p#分页标题#e#