Corporate Social Responsibility and the Influence of Non-Governmental Organizations : Tactics, mechanisms and legitimacy

Abstract

The thesis explores the influence of Non-Governmental Organizations (NGOs) on the Corporate Social Responsibility (CSR) measures of Transnational Corporations (TNCs) operating in Less Developed Countries (LDCs). NGO influence is explored by studying two case NGOs; NorWatch and Amnesty International Norway (AIN), and their influence on three Norwegian corporations; Statoil, Hydro and the Varner Group. The thesis shows that NorWatch and AIN promote different tactics towards business, and rely on different mechanisms for influencing TNCs. It is shown that while NorWatch utilizes outsider strategies and attempts to threaten companies’ reputation, AIN is increasingly attempting to pressure companies from the inside, through partnership approaches. However, using a typology of NGOs that distinguishes between four different categories (Ählström and Sjöström 2005); it is clear that both NGOs can be seen as using several tactics in combination. Using theoretical positions on power and norm-socialization the thesis argues that both case NGOs influence companies by utilizing non-material resources as information and knowledge. Influence however, depends on the NGOs’ capability to utilize these resources in an effective manner. While NorWatch has power to influence companies to the extent that they are able to create public debate and threaten company reputation, AIN relies more on the capability to persuade the companies that an action is right or wrong. Common features between the two NGOs are that the effect of their workings is often subtle and difficult to trace. Another important finding is that both NorWatch and AIN can be understood as norm-entrepreneurs, trying to challenge the entire societal discourse on CSR. Hence they do not only target TNCs directly, rather they attempt to create public debate, influencing a number of actors to put pressure on the TNCs. As a result, a finding that relates to both NGOs is that much of their influence is evident in terms of challenging a process of defining CSR within a company, rather than influencing concrete outputs and outcomes. It is however argued that challenging the companies’ processes of defining what CSR is; may materialize into more concrete outputs and outcomes in time. Although common features exist, it is also argued that different NGO tactics are influential in different phases of norm-socialization. While some tactics are important in putting new norms on the agenda, other tactics are important in terms of internalizing CSR norms within companies. It is also argued that while the partnership of AIN seems to guarantee some degree influence, the most dramatic case of influence seems evident in the case of NorWatch. Nevertheless, the success of NorWatch in influencing companies seems to vary greatly between cases. The thesis also argues that recent criticism towards NGOs in lacking legitimacy in terms of representativeness and accountability, is valid to some extent. The severity of these threats is however called into question, when seeing how subtle the effects of the NGOs studied are.