University of Vaasa - Vaasan yliopisto

CASE STUDY OF THE DEVELOPMENT OF CSR IN
DANFOSS
Abstract
Rufei Ma, ImnLin Toh*, Per Christensen & Martin Lehmann
Department of Development & Planning, Aalborg University, Denmark
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This work‐in‐progress focuses on the CSR practice within the Danfoss Group, a leading global
manufacturing company based in Denmark. Its mechanism in CSR policy making and its
learning capacity in reaction to changes that may be caused by major events (climate change and
the current financial crisis) and its global expansion to other countries (globalization), are central
in our discussion. Based on the premises of Institutional and Stakeholder theories, a case study
investigation was carried out. Information was gathered from the available reports and the
accessible online materials, through questionnaire surveys with those at management level and
also to the general employees. The outcome of the research shows that Danfoss is at an advanced
stage of CSR development. It is engaging more in the second and third CSR waves (Products &
Processes and Employee Relations), using “Foundation”, “Volunteering” as CSR Modes. Its
positive learning capacity is a contributing factor to its conducive environment for CSR to
flourish. The development of CSR in Danfoss was a gradual progression influenced by its
concern for its employees, environmental and labour market issues, and its commitment to the
UN Global Compact. The current financial crisis did not impede the implementation of existing
CSR initiatives. Although there is a definite focus in employee relations, Danfoss did not
consider formulating a CSR policy simply to attract talented personnel and in retaining staff. The
CSR policy was in place because Danfoss felt it was the right thing to do.
Keywords: CSR, Climate Change, Financial Crisis, Globalization, Competitive
Advantage, Learning Capacity
Introduction
Corporations have come a long way from the standard financial accounting that
businesses of yesteryears are used to. They are now becoming increasingly aware of
the need that they should also build strong public profiles and the common approach
is to maintain a balance between maintaining financial stability and at the same time,
participating actively in socially responsible activities (Carroll 2003).
The key point is that many corporations know they cannot simply disengage
themselves from the community. As businesses become progressively more global,
interactions with civil society also become increasingly broader in context. This is
especially so for multi‐national corporations whose activities, more often than not,
transcends geographical boundaries and are thus inevitably under international
scrutiny. Ultimately, however, corporations exist as a way to systematically organize
its activities for the purpose of profit‐making. While there should be no confusion
that this is still the main objective of most corporations, at the same time, neither can
they ignore the responsibility they bear to ensure that their activities are acceptable to
the society at large.