Stakeholder involvement in the selection of Corporate Social Responsibility (CSR)-focussed voluntary standards within the food / agri-business industry

This study examines issues concerning the sustainable sourcing of raw materials in the food manufacturing sector, with a specific focus on the utilization of third-party, externally-recognised certification standards. The research is set within the context of debates surrounding the use of externally certified certification standards as a means of generating credibility in the supply chains and communities in developing countries. The findings inform the theoretical debate regarding stakeholder theory and the integration of Corporate Social Responsibility (CSR) in business activity, particularly with regards to impacts on biodiversity. The theoretical positioning of the thesis is in two areas. Regarding stakeholder theory, the findings recognise the conflicting views within stakeholder theory relating to the motivations of businesses that implement sustainable business practices. Secondly, the thesis is positioned within the theoretical debate relating to the sources of notions of legitimacy. The research informs the position taken by Gilbert (2010) that the normative nature of voluntary standards is prone to being ‘decoupled’ from the realities of organisational practices. The research question considers the extent to which voluntary certification standards are an effective method of generating legitimacy within stakeholder groups beyond owners and managers. The research objectives are to consider whether certification standards are implemented strategically by ‘best practice’ business managers within food manufacturing, and whether managers consider the implementation of such certification standards as a route to securing and generating credibility and legitimacy amongst their stakeholder groups. This thesis is the product of a mixed-methods research strategy, combining qualitative and quantitative analysis methods. The quantitative element demonstrates the construction of an ‘Environmental Management and Stakeholder Engagement’ (EMSR) composite index to identify best-practice companies in the global food manufacturing sector, and incorporating quantitative analysis using correlation, Ordinary Least Squares (OLS) linear regression, and logistic regression methods. Methods combine with the EMSR Index to focus on the management systems and certification standard-related practices of a ‘best-practice’ sub-set of the Composite Index sample of constituent companies to determine relationships between the composite index outcome score, and elements including operational presence, company size and certification commitments. Following the identification of best-practice companies in the food sector, a case study approach analyses considers (i) best-practice company approaches to sustainable sourcing, company strategy and certification-standard participation, and (ii) RSPO and Rainforest Alliance certification standard-providers, to understand the extent that standard design incorporates affected stakeholders in developing countries. The findings provide an empirical account of the level of integration achieved by the best-practice companies in developing stakeholder engagement channels and relationships with the supply chain. The quantitative analysis supports the null hypothesis that claims that no wealth bias exists. Furthermore, only a weak relationship is identified between the extent that a company has quality internal management systems and engagement channels with stakeholders, and a weak relationship is identified between such commitments and the size or location of the parent company: that size and location do not impact on the quality of stakeholder engagement and environmental management systems. The case study findings challenge the use of certification standards as an effective means of establishing legitimacy within the supply chain and community stakeholders. Best-practice companies demonstrate clear steps to embed a sustainability-related ‘Strategic CSR’ approach to business within their business strategy. This approach features a combination of both instrumental and normative approaches to stakeholder theory, with the strategic embedding of stakeholder groups into its business activity representing an input-driven, ‘moral legitimacy’ approach. Best-practice food companies recognise standards as a means of achieving market transformation in areas of sustainable sourcing, and are used from a reputational-risk perspective, but not as a source of legitimacy. Certification standards are considered meaningful mechanisms for developing precompetitive relationships and collaboration. The lack of inclusiveness and representation of non-financial stakeholder interests in the design and governance structures of the observed standards make it difficult for participants to see such standards as being sources of moral legitimacy at local level, and particularly in developing countries