Do CSR management control systems walk the talk? From Bhopal to Rana Plaza, 30 years of CSR practices. Guest editorial

International audienceRana Plaza disaster: what lessons can be learned over the past 30 years of corporate social responsibility management practices?The collapse of the Rana Plaza building of 2013 was the last disaster that caught the media’s and academics’ attention out of a long list of disasters that happened in the past decades. As the explosion of the Union Carbide factory at Bhopal in India in December 1984, to limit ourselves to industrial globalization in developing countries, many catastrophes happened in developing countries as a consequence of the increase of the wave of delocalization of industrial factories from well-regulated developed countries into weakly regulated developing countries. These catastrophes are reminiscent of older industrial catastrophes that paved the way of the history of industrial capitalist development, in developed countries in the 19th and 20th centuries (Aggeri and Godard, 2006). The Triangle Shirtwaist factory fire in 1911 in New York, caused the death of 146 people and dozens of injured, generating important media coverage and popular protest when the macabre circumstances were described by the press, with the doors to the stairwells and exits locked to prevent workers from taking unauthorized breaks. The fire led to stricter legislation and changes in safety prevention standards and participated to develop labor unionism (Drehle, 2004).Similar catastrophes in developing countries’ factories most of the time did not result in stricter legislation or strengthening of labor unionism but in the development of private mechanisms of corporate social responsibility (CSR).The different coalitions of NGOs, industrials, governments and labor unions formed after each catastrophe or scandal in the 1990s, resulting in the form of multi-stakeholder initiatives (MSIs) or private mechanisms of CSR. As explained by Bartley (2003), these practices were favored by the neoliberal institutional context, favoring private mechanisms considered as more efficient and cheaper for public finance than public intervention. These CSR practices, such as private mechanisms of certification, extra-financial reporting or management capacity building, were developed only after the coalition failed two previous attempts. They first failed to implement stricter importation policies in developed countries, banning goods involved in social and environmental dumping as in the case of Austria in 1992 because of the GATT considering social and environmental norms as barriers to trade. They then failed to convince producing countries such as Indonesia to strengthen their own legislation like protecting their forest, a request that Europeans did not apply to their own forest during their industrial development as duly noted by the Indonesian Government.Thus, CSR can be viewed as a disputed concept (Brabet, 2010, 2011) for which multiple stakeholders struggle and collaborate. As such, its definition depends on how each of them ideologically analyzes controversies and the outcome is related to power influences between their different CSR ideas. This history of the path non-taken (Veyne, 2014) is then important to understand the explosion of CSR mechanisms, the market for virtue (Vogel, 2010), during the past 30 years, as an alternative to governmental regulation. In this context, MNCs implement CSR management tools to prevent state intervention and carry on maximizing shareholder value (Chamayou, 2018).When stakeholders’ willingness (Brabet, 2010, 2011) is admitted by MNCs, management literature has demonstrated how biased and selective this MSI coalition process is, after the Nike scandal in Pakistan for instance (Khan et al., 2007), showing how invisible mechanisms of power operates: privileging northern consumers’ preferences (no child work) while ignoring the demands of local workers in developing countries, e.g. pay rises or freedom of association and bargaining. In a similar way, De Neve (2013, 2014) showed the ethnocentrism of CSR mechanisms developed in Indian factories, importing the “iron cage” bureaucratic power model, controlling and imposing workers’ productivity and imposing strict discipline and obedience to management.Corporate social responsibility vs shareholder value: two institutionally paralyzing managerial logicsCan CSR regulations govern the logic of capital (O’Laughlin, 2008)? Questioning the ability of CSR devices initiated by MNCs to improve social and environmental conditions in developing countries implies explaining the paradoxical strengths inside this type of private organization.Even if top executive management supports internal CSR programs and initiatives, the first back managerial actions that maximize shareholder value (Boyer, 2002; Moquet, 2010). The top management has constantly to deal with this double bind – CSR concerns vs financial value as schizophrenic constraints – but in the end, because of existing neoliberal governance systems and despite it goes against their personal convictions, they will choose to put resources where financial value might be optimized on a short-term basis.These MNCs’ systems of governance, therefore, explain that highest priority programs address the shareholder value, thus belonging to the neoliberal logic and that secondary managerial programs deal with CSR concerns as part of the CSR logic, both being internal competing institutional logics (Thornton and Ocasio, 1999, p. 804). That is why MNCs cannot be considered as organizations with a simple logic as it is deemed when CSR managerial tools are observed with an institutional external view. At an operational level, managers take part in one of these two managerial logics by implementing CSR or neoliberal action plans. These paradoxical logics are sometimes surprisingly visible at the corporate level when, for instance, CSR senior director’s office is next to the tax directors who are in charge of the controversial international fiscal optimization of the accumulated free cash flows.In some way, corporate purchasers are a good example of these paradoxical logics where the neoliberal one takes over the CSR one (Quairel and Auberger, 2007). Again, purchasers implement CSR and shareholder value devices. However, at this step, managerial practices become more complex as both institutional CSR and neoliberal logics are different in home and host countries (Tan and Wang, 2011). If you consider purchase practices in home countries, you can observe that CSR tools have expanded in parallel with regulation, in particular in European countries, the last example being the law on Duty of Vigilance enforced in 2017 in France. Through these institutionalist lenses, CSR devices embody legitimacy flows (Moquet and Pezet, 2006) initiated by management as (only) symbolic solutions to comply with new CSR rules or answer to disputed working conditions-related issues. CSR initiatives are then made of voluntary actions and binding regulation that stems from hard or soft laws. That is why CSR managerial practices are ambivalent: they are at the same time very ineffective in tackling working-related issues and very effective in marginalizing workers’ demands and promoting anti-unionism practices. When corporate purchasers implement CSR tools, they are well aware of the organizational hypocrisy (Brunsson, 2002; Dumez, 2012) that urges them to develop new CSR practices, knowing that it will postpone more constraining rules and focus on managerial actions that will maximize financial results. CSR mechanisms can be understood as a response from managers to resolve this double bind. Until now, this situation explains why CSR tools are counterproductive and lead at best to a no change in the working conditions in developing countries.Do current corporate social responsibility management control systems improve poor workers’ conditions in developing countries?In what conditions is it then possible to give more internal power to CSR tools and managers? As part of the CSR institutional logic, some internal CSR managers act as tempered radicals (Meyerson and Scully, 1995), who can be defined as:[…] individuals who identify with and are committed to their own organizations, and are also committed to a cause, community or ideology that is fundamentally different from, and possibly at odds with, the dominant culture (Meyerson and Scully, 1995, p. 589).Convinced by their own cause and conscious of the limitation of the dominant neoliberal institutional logic of their organization, they work out tactics to fight against neoliberal logic (Moquet, 2010). Hence, they advocate for social improvement using neoliberal logical arguments. Their actions enable only small incremental steps that help to give more institutional power to the CSR institutional logic and, in the best cases, give birth to effective CSR progress (Capron and Quairel–Lanoizelée, 2016; Moquet, 2010), even if these initiatives are limited to small pockets of CSR-driven values. The enforcement of the law on Duty of Vigilance is then a good example that could potentially bring those tempered radicals new opportunities for improving working conditions in developing countries. Hence, they could argue the requested diligence plan to give momentum to improve social conditions in developing countries. Progress is nevertheless limited to individual initiatives that do not change the dominant neoliberal institutional logic. It nevertheless may lead to neoliberal logic to take into account some CSR considerations. In this conceptual framework, MNCs’ neoliberal institutional logic has no other choice but to change to take into account CSR-driven concerns for future corporate actions. However, when it comes to the operational level, this change requires cooperation and struggles between multiple private and public actors on the local and global level, and then give the opportunity to those tempered radical managers to use these external forces to convince internal operational managers and senior officers that now the institutional neoliberal logic needs to move on to new needs that can no longer be ignored. In that case, MNCs – as part of the dominant institutional neoliberal logic – have no choice but to recognize stakeholders’ willingness (Brabet, 2010, 2011).As their emergence at the beginning of the 1990s (Bartley, 2003), MSIs control mechanisms of working conditions in supplier factories located in developing countries, literally exploded to enlarge the market for virtue (Vogel, 2010). A quasi-market composed of private mechanisms of certification, consulting services (management capacity building) and extra-financial reporting such as SRI (Levy et al., 2010) run by (not-) for-profit organizations. As their origin, numerous academic articles and reports from experts have insisted on their limited efficiency to detect or correct working condition issues across the global supply chain, this literature being a thickening contribution for understanding MSI internal organizational weaknesses (O’Rourke, 2006; Wells, 2007; Locke, 2012; Anner, 2012; Chung, 2015; Lund–Thomsen, 2012). While most of the literature in management continues to favor a reformist perspective on CSR mechanisms, calling for their improvement, amelioration and strengthening, one of the main criticisms of CSR practices and MSI impact is directed beyond these practices, at the institutional level. Different studies have clearly emphasized the difficulty for such MSI – excluding their internal weaknesses – to efficiently control and improve the global supply chain in weak institutional context (corruption, social and environmental dumping, failing resources, etc.).On the contrary, this audit regime governing control mechanisms of working conditions seems rather effective in preventing workers’ right to improve, wages to increase or freedom of association to emerge (Gall and Dundon, 2013; Le Baron et al., 2017; Scheper, 2017). To a certain extent, CSR control mechanisms help to maintain industrial hegemony on global value chains (GCVs), thus performing a passive revolution (Kourula and Delalieux, 2016) granting menial ethnocentric improvements (De Neve, 2014; Khan et al., 2007) favored by northern consumers while preventing at the same time strategic changes to occur for local workers such as freedom of bargaining. For some researchers (Guénin-Paracini and Gendron, 2010), these mechanisms have another important function, besides bringing profits to their shareholders: they provide useful scapegoats that can be blamed when CSR disasters happen, focusing attention on them, their weaknesses and lack of reliability while sweeping under the carpet deeper and structural inequalities at the basis of capitalism (Newell, 2008). As such, CSR mechanisms provide another good example of neoliberal technologies of government (Murphy, 2010) that, behind a rhetoric veil of transparency, participation and dialogue, operates a depoliticization process, a “CSRization” (Sum, 2010) of social and environmental issues, securing social elite domination (Lipschutz, 2005).What are the clues for more effective corporate social responsibility practices?If we go back to the origins of CSR practices as told by Bartley (2003) mentioned at the beginning of this introduction, one has to remind that MSIs were developed as a default solution, after failing attempts to develop institutional answers, e.g. include social and environmental clauses in commercial treaties or empower local administration to control working conditions. The historical path taken with the explosion of MSIs was opened by neoliberal institutions, favoring private mechanisms of certification largely subsidized at the beginning by governments (Clinton administration) over direct governmental interventions. Maybe the time has come to reflect on the paths not taken by history as follows: social and environmental norms to regulate importations of goods for importing countries and stronger local legislation, an administrative system to control and judicial system to sanction for producing countries as practical illustrations of an embedded coregulated RSE (Brabet, 2010, 2011)?Alternatives to classical CSR mechanisms already exist. The International Labor Organization (ILO) better factory Cambodia program (Polaski, 2006; Oka, 2017; Bastianutti et al., 2020) implemented a reliable control program of working conditions in factories as a substitute for failing local authorities, even if this program is not free from criticism (Arnold and Hess, 2017). INTERPOL developed different programs aiming on the contrary to strengthen and empower local administrative and judicial forces through capacity building programs. However, these programs clearly lack public financing to secure their independence. In the wake of the Rana Plaza disaster, the Accord agreement signed between International organizations, the government of Bangladesh, factories and buyers was an attempt to propose an alternative to MSI: Alamgir and Banerjee (2019) showed how this agreement while providing the legitimacy of MNCs, did little to improve workers’ conditions and counter aggressive pricing and procurement policies. In this case, government involvement, including repression of opposition such as labor unions, offers a good example of a neoliberal reconfiguration of state power to refuse industrial democracy (Donaghey and Reinecke, 2018) while meeting global production network pressures.Collective commercial negotiations on importation regulations are at a dead-end; on the contrary, bilateral agreements signed between countries tend to rely on audit mechanisms to avoid more social and environmental dumping. This institutionalization of this audit regime in governmental (Lebaron et al., 2017) or international regulations is taking a step further the neo-liberalization of the state initially observed by Bartley (2003)