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elationships with critical stakeholders. To improve these relationships, a company
must proactively engage in dialogue with its internal and external stakeholders, and
integrate the outcomes of these discussions into its decision making (Smith, 2003;
Galbreath, 2006). Dialogue with stakeholders is the first step for identifying the key
sustainability issues that the company needs to address; for each identified issue, the
company must then define a set of indicators and concrete targets to be attained
(Terry Porter, 2008).
Measurable and achievable goals should be set for each CSR activity, also specifying
the expected benefits for both stakeholders and the firm (Lantos, 2001). To ensure
that CSR objectives are given
equal weight to the company’s other strategic objectives, they must be included in
the system of manager rewards and incentives (Werther and Chandler, 2006)—for
example in the Management by Objectives process.
Sometimes, a company may not possess all the competencies needed to address the
different concerns of its key stakeholders, and will therefore have to enter into
strategic alliances to bring complementary skills to its CSR initiatives (O’Brien,
2001). For this reason, companies often implement their CSR programs through
partnerships and long-term collaborations with nonprofit organizations (Seitanidi and
Crane, 2008) or specific community groups (Galbreath, 2006).
Formalized Management Systems and Organizational Tools for CSR
A part of the recent literature on CSR focuses on the different tools and standards for
CSR management and reporting which companies can implement to support the
handling of CSR issues. These tools are intended to improve the integration of CSR
within the organization and ensure CSR is managed in a systematic rather than
sporadic manner. One of the main causes of misalignment between business
operations and CSR is the fact that most large corporations implement their social
projects through a contributions office or a corporate foundation, which tend to be
isolated from line management and business decisions (O’Brien, 2001). To overcome
this, companies should create an organizational structure dedicated to CSR, and
positioned at a high hierarchical level to ensure strong commitment from
management (Wherter and Chandler, 2006; Leigh and Waddock, 2006).
The CSR management process is no different from the other strategic management
processes customarily implemented within firms. Waddock and Bodwell (2007)
point out that responsibility management, though complex, is very similar in its
general framework to other systems with which managers are already familiar, such
as quality and environmental management. The authors describe a Total
Responsibility Management system, drawing a parallel with the Total Quality
Management system, which follows the traditional Deming cycle: plan - do - check -
act. McAdam and Leonard (2003) investigate how quality management can serve as
a foundation for developing Corporate Social Responsibility.
The work of Castka et al (2004) provides a comprehensive overview of the numerous
standards dealing with different aspects of the CSR agenda, and offering certification
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