Evaluation of Sociotechnical Systems in Managing Corporate Social Responsibility and Stakeholders' Engagement

Evaluation of Sociotechnical Systems in Managing Corporate Social Responsibility and Stakeholders' Engagement

Toivo Niskanen (Ministry of Social Affairs and Health, Finland)
DOI: 10.4018/978-1-5225-7192-6.ch002


The aim of this chapter is to explore at the Finnish Kemira Corporation how a corporation manages corporate social responsibility (CSR) and stakeholders' engagement. Greimas' actantial model and Senge's five disciplines were applied to evaluate CSR reports with a sociotechnical systems approach in relation to the stakeholders: (1) employees, (2) suppliers, (3) financiers and shareholders, and (4) communities and authorities. It was found that issues of CSR management and stakeholder engagement should be involved in strategic corporate decision making. The business strategy of the corporation emphasizes adherence to CSR guidelines and business standards that reflect the concerns of the stakeholders. CSR strategic procedures indicate the implementation of the corporation's measures to promote and pursue CSR goals that extend beyond their legal responsibilities.
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Introduction And Background

A Sociotechnical Systems Approach in Corporate Social Responsibility

The concept of the sociotechnical system originated with the insights of Tavistock Institute researchers in the early 1950s, specifically with respect to examining the impact of the introduction of novel technical systems (e.g. Trist & Bamforth, 1951). A sociotechnical system is the synergistic combination of humans, machines, environments, work activities and organizational structures and processes that comprise a given enterprise (Mumford, 2006). Carayon et al. (2015) suggest that sociotechnical systems are a type of complex adaptive system, and that analysis from that perspective could significantly enhance our understanding of how sociotechnical systems function and how they might be made to function better. Such systems are frequently described as ‘self-organizing’ in that adaptations that occur are generally not deliberately or explicitly mandated but instead represent a quasi-organic process of redistributing activity and responsibility across the system (Carayon et al., 2015).

Dobers and Wolff (2000) have argued that the holistic business approach will create sustained success for a company if it is successful in balancing stakeholders’ demands and sustainability requirements in sociotechnical systems. Nonetheless, this balancing process is not easy; the management of a business has to be able to deal with value concepts that are conflicting and inherently contain trade-offs (Dobers & Wolff, 2000). To achieve the successful implementation of corporate social responsibility (CSR), managers must build bridge with their stakeholders - through formal and informal dialogues and engagement practices - in the pursuit of common goals and convince them to support the organization’s chosen strategic course (Andriof & Waddock, 2002). Business leaders must address the moral complexities that result from the multitude of stakeholder claims and build enduring, mutually beneficial relationships with relevant stakeholders (Maak, 2007). Stakeholder engagement then becomes “CSR in action.”

Three elements are key to CSR in systems thinking (Dyllick & Hockerts, 2002, p. 132): 1) working towards a triple bottom line by integrating economic, ecological, and social aspects, and accepting the multiple influences that these aspects have on each other; 2) looking beyond short-term profits driven by shareholders’ expectations toward long-term value for all stakeholders; and 3) maintaining not only the capital base of the firm, but also paying attention to the management of natural and social capital. Mounting pressure to implement CSR is applied by stakeholders, e.g. employees, customers, consumers, supply chain partners, competitors, investors, lenders, insurers, nongovernmental organizations (NGOs), media, the government, and society overall (Berns et al., 2009, p. 10). In a regenerative circular economy, the goal is zero waste, renewable energy, recyclable material, and accountability for all materials flowing through the system (Senge et al., 2008, p. 215).

Zink (2014) argues that a sustainable work system must be able to function in the corporation’s environment and achieve economic or operational objectives, while development of various human and social resources is also engaged in their sociotechnical systems' operations. Although the concept of sustainability was developed at the macro level rather than at the corporate level, it can also be considered to have a relevant corporate dimension (de Lange, Busch, & Delgado-Ceballos, 2012). The term came into widespread use in 1987, when the World Commission on Environment and Development (United Nations) published a report known as the ‘Brundtland Report’; this report stated that ‘the “corporate sustainability” seeks to meet the needs of the present without compromising the ability to meet the future generation to meet their own needs’ (WCED, 1987, p. 8). Senge et al. (2008, p. 167) suggests that the sustainability innovators creating tomorrow’s regenerative economy have all, in their own ways, learned how to see the larger systems in which they live and work. They look beyond events and superficial fixes to see deeper structures and forces at play; they don’t allow boundaries (either organizationally or culturally imposed) to limit their thinking; they make strategic choices that consider natural and social limits; and they work to create self-reinforcing cycles of innovation (Senge et al., 2008, p. 167).

Van Luijk (1997) shows that the fundamental task of business ethics is to enhance the ethical quality of decision making and action at all levels of business: at the personal (micro-), organizational (meso-), and systemic (macro-) levels. The corporation is part of a large purposeful system, society. The same is true of CSR, which is a “part” of the corporation. Learning organizations invest in improving the quality of thinking in sociotechnical systems, the capacity for reflection and team learning, and the ability to develop shared visions and shared understandings of complex business issues (Senge, 1994, p. 289). The five disciplines of what Senge (1994, p. 289) has developed refers to as a “learning organization” as follows: (1) Personal mastery is a discipline of continually clarifying and deepening personal vision, of focusing people’s energies, of developing patience, and of seeing reality objectively; (2) Mental models are deeply ingrained assumptions, generalizations, or even pictures of images that influence how people understand the world and how they take action; (3) Building shared vision - a practice of unearthing shared pictures of the future that foster genuine commitment and enrollment rather than compliance; (4) Team learning starts with dialogue, the capacity of members of a team to suspend assumptions and enter into genuine thinking together; and (5) Systems thinking - The Fifth Discipline that integrates the other four.”

The growth of sociotechnical systems resources is secured through equal and open interaction among various stakeholders, leading to better mutual understanding and a greater capacity for collaboration (Zink, 2014). Idealized design helps corporations' managers to not only achieve their CSR objectives, but also promotes a better understanding of sociotechnical systems, enhances creativity, simplifies the planning process and accelerates implementation (Ackoff, 2002). Business ethics persistently raises the question of the purpose of business and the economy in economic sciences and business and economic practice and offers well thought-out answers at all levels of action: at the individual, organizational, and sociotechnical systems’ levels (Lindgreen & Swaen, 2009). Systems thinking is important in corporations' business strategy because managers are inherently pragmatic and need insights into “current reality”, as well as a picture of the future toward which they are moving (Senge, 1994, p. 344). Little research has been carried out to evaluate evidence-based data in CSR. The present study attempts to address this knowledge gap, concentrating on the qualitative analysis of sociotechnical relationships with respect to CSR.

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