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(Re)discovering the social responsibility of business in
Germany
Ariane Berthoin Antal, Maria Oppen, André Sobczak
To cite this version:
Ariane Berthoin Antal, Maria Oppen, André Sobczak. (Re)discovering the social responsibility of
business in Germany. Journal of Business Ethics, Springer Verlag, 2009, 89 (supp.3), pp.285-301.
�10.1007/s10551-010-0390-8�. �hal-00794639�
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(Re)discovering the Social Responsibility of Business in Germany
Ariane Berthoin Antal
Professor of organizational change and cross-cultural management at the Technical University of
Berlin, Professor in the international affiliate faculty of Audencia Nantes School of Management
Maria Oppen
Researcher at the Wissenschaftszentrum Berlin für Sozialforschung
André Sobczak
Associate professor at Audencia School of Management in Nantes, Head of the Institute for
Global Responsibility of Audencia Nantes School of Management
Abstract
The concept of corporate social responsibility (CSR) is a relatively recent addition to the agenda in
Germany, although the country has a long history of companies practicing social responsibilities. The
expectations of society had remained stable for many years, encapsulated in laws, societal norms,
and industrial relations agreements. But the past decade has seen significant changes in Germany,
challenging established ways of treating the role of business in society. This contribution reviews and
illustrates the development of diverse forms of social responsibility in German corporations and
analyzes how actors in business and society can build on traditional strengths to find new
institutional arrangements for sharing tasks and responsibilities in the interests of achieving a better
balance between societal, economic, and environmental needs.
KEY WORDS: corporate social responsibility, business ethics, Germany, global responsibility,
intentional experimentation
Introduction
For many years Germany was considered a role model in assuring good product quality, employment
and working conditions, workers’ involvement, public services, and environmental protection. These
high standards have served Germany and its economic development well for many years, both
domestically and on international markets. In essence, ‘‘doing well by doing good’’ was required of
German companies by the multiple institutional mechanisms that embedded business in society.
Although the term ‘‘corporate social responsibility’’ (CSR) was not part of the German vocabulary,
socially responsible practices were expected and these expectations were generally met.
However, during the past decade, a number of significant problems have emerged, calling into
question the appropriateness of corporate practices in Germany, so the topic of the responsibility of
business has been put on the agenda. The revelation of several major scandals in leading German
corporations (e.g., Deutsche Bank, Volkswagen, and Siemens) has shown that there are problems in
the realm of business ethics. Recent internationally comparative research on business ethics revealed
that German respondents have become particularly pessimistic about the likelihood of corporations
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acting responsibly in future (Tsalikis and Seaton, 2007). More generally, at least three interrelated
processes are undermining the country’s ability to maintain and develop high standards.
i
The massive
loss of jobs that resulted from the collapse of the East German economy in the wake of reunification
has not yet been overcome. The significant gap between the living conditions in the Eastern and the
Western parts of the country requires the ongoing transfer of funds, draining public budgets and
leading to cutbacks in public social services. (2) Global competition, too, is eroding standards and
contributing to problems in Germany such as high unemployment, declining social security, and
urban decay (Häußermann et al., 2004; Keller and Seifert, 2006). (3) At the same time, the center of
gravity for determining standards is shifting away from the nation state towards negotiations at the
international and the supranational level and, increasingly, with various representatives of civil
society.
In addition to the shifts in the global context that Germany must grapple with to prepare its future,
the nature of problems is changing too. A growing number of society’s challenges, in Germany and
elsewhere, are perceived as ‘‘wicked issues’’ (Clarke and Stewart, 1997). Problems associated with
illicit work, migration, or epidemic diseases appear intractable because they often have multiple root
causes and they cross sectoral or national boundaries. Dealing with them effectively therefore
requires drawing together a range of resources and competences from multiple actors. There is
growing recognition that the distribution of roles and responsibilities between actors in society must
change because the state alone can no longer be relied onto meet the needs of society. In many
cases the public sector has neither sufficient funds nor expertise to deal with the complex issues
threatening the economic, social, and environmental health of the country. As a result, the business
community is increasingly being expected to step into help, blurring the lines that have traditionally
been drawn between the public and the private sector.
It is perhaps not surprising in this context that the term ‘‘corporate social responsibility’’ has only
relatively recently started receiving increasing attention in Germany (Berthoin Antal et al., 2002;
Loew et al., 2004), particularly after the European Union launched initiatives in this area in 2001. The
social responsibility of business was not subject to explicit discussion for many years because the
relations between business and its employees and business and society were covered by legal
requirements, societal norms, and tripartite conflict resolution procedures. In addition,
internationally comparative research on the related aspect of business ethics suggests that a lack of
explicit discussion may also have been due to a culturally engrained reluctance to address normative
questions publicly, hampered by a preference for relying on a ‘‘traditional but fading business ethos’’
(Palazzo, 2002, p. 196; Ulrich et al., 1996).
This article explores a key challenge Germany faces in shaping its future, namely how to take on
board fresh impulses for negotiating the ways and means of generating a healthy balance between
social, economic, and environmental needs. The learning agenda to achieve this end encompasses
building on Germany’s own past experience with the distribution of social responsibility and with the
processes of conflict resolution inherent in the German corporatist tradition (Berthoin Antal et al.,
2007). It offers opportunities to renew these traditions and to adapt them to the global context.
Furthermore, it entails capitalizing on its second mover advantage by learning from the successes
and mistakes made in other countries in recent years.
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This article is organized in two sections. The first analyzes the reception of the CSR concept in
Germany. It starts with providing some background about the German context, which is
characterized by a high level of social regulation requiring companies to take on responsibilities
beyond their direct economic ones. This tradition of social responsibility could be expected to have
favored the reception of the CSR concept in Germany (Campbell, 2006). However, in fact it made it
more difficult because its added value was less evident than in national contexts where social
regulation was weaker. The section then describes the fragmented way the idea of CSR has
nevertheless entered German companies over the last 30 years. It shows that although there is an
increasing number of interesting initiatives, they usually focus on particular issues without being
integrated in a general approach and without changing the way management makes decisions. The
second section outlines perspectives for the future by exploring potential routes the key actors in
Germany could take to move beyond their current approach of muddling through. It suggests that
the term ‘‘CSR’’ may be a limiting factor in achieving change and therefore introduces the term of
global responsibility that establishes a more inclusive framework for the learning agenda. It proposes
that the German actors engage in intentional experimentation to develop a more interactive and
integrated approach to balancing their diverse interests and responsibilities. Two examples illustrate
initiatives Germany can build on. To conclude, some of the conditions are identified that are required
for effective learning processes in German organizations seeking to put global responsibility into
practice.
The fragmented development of CSR in Germany
The ‘‘revival’’ (Vogel, 2005, p. 1) of CSR as a worldwide phenomenon is part of a wider public debate
on the change in the relationships between business, government, and civil society. It highlights the
interdependencies between these spheres and sees the analytical distinction that has dominated
much of Western thought ‘‘as an artificial divorce of what otherwise inseparably belongs together’’
(Spilotis, 2006, p. 55). It seems to be symptomatic of a search for new organizational forms and
institutional frames related to changing roles and responsibilities (see Argandon˜ a, 2004 for a
discussion of the relationship between institutions and ethics). The implications for business are
twofold. On the one hand, CSR entails expanding the scope of action of business in society because
companies are being expected to participate in solving complex problems that government can no
longer manage alone. On the other hand, CSR is also a means of reining business in and bringing its
activities under public scrutiny. Government agencies and representatives of civil society are
demanding that companies expand their reporting beyond financial information to cover the social
and environmental impacts of business activities. Furthermore, business is under pressure not only
to inform but also to involve stakeholders in strategic decisions that affect society, even leading to
the revision of corporate governance mechanisms. The emergence of the internet as a medium for
rapid communication around the world has enabled stakeholders to share the data they have about
the negative impacts of a multinational corporation’s performance, so that business cannot control
the distribution and interpretation of information concerning its activities.
The dual nature of CSR as a means of restricting as well as expanding the role of business in society
has elicited two kinds of responses from companies: defensive engagement in CSR to keep critics at
bay and to prevent external regulation; and proactive involvement to shape the agenda and benefit
from new market opportunities and improved management processes. Most major companies have
recognized that they cannot afford not to show some level of interest in CSR (Smith, 2003). As the
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Economist recently pointed out, ‘‘It would be a challenge to find a recent annual report of any big
international company that justifies the firm’s existence merely in terms of profit, rather than
‘service to the community’’’ (Crook, 2005, p. 3). Some companies may start defensively, then
discover that pursuing CSR enables them to learn new ways of responding to consumer interests,
leading to improved, processes, products, or services (Siebenhuener et al., 2006). Consultants and
academics in business schools have been stimulating such learning in companies by developing
management tools for assessing risks and monitoring CSR performance (e.g., Triple Bottom Line).
Business organizations and NGOs, sometimes working together in international groups, have also
developed standards and reporting tools (e.g., Global Reporting Initiative), and they have shared
experiences with implementing CSR activities via learning platforms (e.g., the United Nations Global
Compact).
These global trends in the development of CSR and the numerous debates in business, policymaking,
and civil society have not passed Germany by (Re)discovering the Social Responsibility of Business in
Germany 287 unnoticed. They increasingly influence the expectations placed on the roles and
responsibilities of business in society. In order to explore this development and future options in
Germany, we start with a presentation of the way social responsibility was implicitly1 (Matten and
Moon, 2008) conceived and practiced before the CSR concept entered Germany. Then we explore
the outlook for Germany, drawing on examples that the various actors could build on in future.
The social responsibility of business in Germany ‘‘before CSR’’
The relations between business and society are defined in different ways according to the historical,
socioeconomic and legal context and the powers of the relevant actors. In each society the definition
of the responsibilities the different actors and in particular companies should take (Wartick and
Wood, 1998) emerges as a result of discussions and negotiations about contents and forms of social
regulation. The behavior of companies in society is constrained and enabled by ‘‘the institutions and
the sticks and carrots they provide’’ (Campbell, 2006, p. 929). As early as 1983 Mintzberg identified a
range of possible ways a society could obtain the kind of behavior it desired from businesses, and he
arranged them in the form of a ‘‘conceptual horseshoe’’ (1983, p. 529) to position the two extremes
at the end of the continuum closer to each other than to the moderate positions in the middle. One
end of the horseshoe represents a complete control by the state via nationalization of companies,
while the other represents a complete control by the shareholders. Between these two extremes
there are various other potential ways of influencing corporate behavior to fulfill the desired
responsibilities, ranging from state regulation through laws to fiscal incentives over empowering
stakeholders or relying on their pressure. To understand the context into which the concept of CSR
entered in Germany, it is helpful to see which parts of the conceptual horseshoe have been chosen
to shape business behavior in society.
The idea that business bears social responsibilities is a long-standing feature of German culture.
Indeed, the notion that companies have responsibilities in society reaches back throughout the
process of industrialization in Europe. Utopian philosophers and social critics shaped this thinking, as
did philanthropists and proponents of the enlightened self-interest of business (Segal, 2003). In the
absence of state welfare provisions, companies played a central role in assuring the well-being of
their employees and families, as well as the local community. From the outset, a mix of motives
spurred employers to invest in society: religious and ethical beliefs, a concern for employee loyalty,