corporate social responsibilty and branding
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Paper about CSR and Branding presented at the Global Forum 'Business as an Agent of World Benefit' in Cleveland, Academy of Management, Case Weatherhaed School of ManagementTRANSCRIPT
Business ethics from a post-traditional perspective:
a research design for a holistic brand theory
Presented at the
Business as an Agent of World Benefit
Management Knowledge Leading Positive Change
A Global Forum
October 22-25, 2006
Cleveland, Ohio - USA
Conveners
Academy of Management
United Nations Global Compact
Case Weatherhaed School of Management
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 2
Business ethics from a post-traditional perspective:
a research design for a holistic brand theory
Manuel Demetz and Prof. Oswin Maurer
Abstract
The ongoing discussion about business ethics, synthesized by the
paradigm of corporate social responsibility, represents a substantial
domain to consider further research for a holistic brand theory. From a
management perspective, a theory of business ethics is mainly
concerned about the evaluation and legitimization of corporate
strategies and thus corporate behaviour. In business ethics, the construct
of the »corporative actor« is used to describe the ethical aspects of
corporate behaviour. The aim of this paper is to introduce the construct
of »brand« into business ethics. Brand can be considered as a »post-
traditional subject« for describing the ethical behaviour of corporations
and are highly correlated to the identity of corporations. The paper
shows that the concept of brand as a »post-traditional subject« leads to a
culturalistic perception of the ethical problem, whereas the creation of
identities plays a fundamental role. Accordingly identities play an
important role in CSR theory because identities follow a kind of
meaning transfer approach. Thus – prior to the traditional view of ethics
as a rational coordination problem – a post-traditional perspective in
ethics is concerned about the input factors of identities.
The call for integration of business in society demands an improvement
of the quality of strategic management decisions by focusing on both,
economic and social issues. This creates a more complex decision
framework for managers. This paper tries to identify relevant issues
allowing to proceed towards a positive theory of corporate social
responsibility. The paper is indented to provide an interdisciplinary
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 3
overview about relevant factors that may improve convergence of the
paradigms of corporate social responsibility and branding.
Authors
Manuel Demetz (30) is contract researcher at the School of Economics
and Management, Free University of Bozen-Bolzano (Italy) for
Corporate Social Responsibility and Strategic Advisor for Total Identity
bv, an international design and consulting agency for corporate identity
management and corporate design. After his degree in Economics at the
Free University in Bozen-Bolzano he specializes in CSR research. His
main interest is in finding systematic linkages between general
philosophical aspect of ethics, organizational behaviour and
communications. Manuel Demetz has international consulting
experiences and works actually as a PhD researcher to obtain
professorial dissertation. Languages: German, Italian and English.
Email: [email protected]
Oswin Maurer (48) is professor of Marketing at the School of
Economics and Management and Dean of the Faculty at the Free
University of Bozen-Bolzano. After his PhD in Economics at the
University of Resources Sciences, Vienna he worked as a professor in
Europe and Australia. Oswin Maurer is referee for international
journals, external PhD examiner and editorial board member. Further he
works as an advisor to governments and government agencies in Europe
and Australia on international competitiveness and competition
(mergers, anti-trust) and advisor to Business Schools and Universities in
Europe on MBA and Exec-MBA programme development, international
programme accreditation and programme implementation. As a
consultant he worked for international companies on international
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 4
market entry strategies, strategy implementation and sustainability in
global business. Languages: German, English. Email: [email protected]
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 5
Introduction
The establishment of normative principles for managerial decision-
making can be considered as one of the most important aspects for
advancements in developing a positive corporate social responsibility
(CSR) theory (Habisch, 2006). Under these circumstances, the ethical
question characterises one of the fundamental issues in research.
According to the analysis of Lockett, Moon and Visser (2006) business
ethics is one of the four focal points in the actual corporate social
responsibility discussion1.
Next to the actual corporate social responsibility discussion, the
phenomenon of brand poses an interesting paradigm to draw new ideas
for creating methodical contexts towards an interdisciplinary oriented
management-research. Fan (2005) remarks that the notion of brand has
not yet been considered in the established business ethics literature. On
the other hand, the leading branding literature omits the evidence of
ethical aspects, despite the paradoxical situation, that the more
successful a brand, the more important ethical issues become for
management.
The argumentation in this paper follows a sociological based
understanding of the ethical problem that leads, compared to a formal-
rational analysis of the ethical problem in decision-making, to a more
culturalistic dimension. From a managerial perspective, brand could be
considered as a fundamental topic of analysis within CSR.
1 In addition to business ethics, the main discussions within a corporate social responsibility
framework are ecology, social responsibility and stakeholder theory (Lockett, Moon and Visser, 2006)
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 6
In recent discussions about business ethics there is common consent
about the fact that moral problems of business practice are the primary
impetus of the evolvement of business ethics as an independent science
(König, 2005). On the basis of a culturalistic understanding of morality
it is essential, next to the construct of the »corporative actor«, to
establish brand as »post-traditional subject« into CSR theory.
Brand as a subject and source of identity
There are different indications that social functions can be attributed to
the brand (Hellmann, 2003; Tropp, 2004; Fan, 2005; Demetz, 2005).
This perception results in a new understanding of the construct »brand«
in different scientific disciplines. From the traditional role of brands – to
only mark products – to branding theories oriented towards the
personality-principle, there has been a constant evolution in the role and
understanding of brands. Nowadays, the actual communication
imperative and the social implications2 characterize an up-to-date
understanding of brands. Some research approaches assign systemic
aspects to the brand, whereas communication and reputation – as
specific form of communication – characterize the systemic denotation.
Otte [1993] defines the brand as a social being, which is, as an integral
system, in continuous interexchange with the environment. This system
has the need for self-preservation and expansion as well and it is able to
homogenize the behaviour of all concerned. Brand takes a position
between the social and economic dimension and, as a socio-economic
construct, influences behaviour. Finally, brand as the expressive output
of an organisation becomes a relevant factor to analyze the behaviour of
an organisation3, with a focus on communicative aspects. The
2 The social function of brands is characterized by the fact not only communication about brands
exists, but also communication through brands (Hellmann, 2003). 3 According to Habermas’ Theory of Communicative Acting (1995) communication and behaviour are
highly correlated and fundamental for the analysis of social behaviour.
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 7
perception of brands in advertisements is following a meaning-transfer-
approach which perpetually shows »how to think, how to be and how to
live our lives« and it has become a widely accepted dogma (Hellmann,
2003). The fact that CSR cannot be reduced to advertisements only does
not diminish the importance of the brand; in fact it is an indicator for the
increasing complexity of communication and interaction of the brand at
the corporate level.
With regard to CSR, the focal point is not the marketing aspect of
brands, but the brand as a »symbolic code« that reflects corporate
behaviour and provides for a source of identity. The concept of building
identity can be viewed as a continuing process of meaning-construction,
based on cultural attributes, whereas in this process cultural attributes
have a higher priority than other sources of meaning. Identities are
powerful and construct interests, values and projects and provide for a
strong nexus to culture, nature, geography and history as well (Castells,
2003). According to Castells, the power of identities is based on the
underlying information-codes and the pictographic production.
From managerial point of view, this expressive function can be
attributed to the brand and it often absorbs the identity of an
organisation (Olins, 2000). Furthermore, the Brand can be considered as
a collective social actor and a »subject« for identity. This is used as a
starting point for analyzing how brand as a subject of identity can
methodologically be fitted into CSR.
CSR, the normative challenge and the role of identity
Lockett, Moon and Visser (2006) point at ethics playing a central role in
CSR. The basic question is how to design a decision-making framework
for strategic management that, based on the tradition of ethical
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 8
reasoning, focuses on normative principles. The challenge in developing
a combined theory of brand and CSR is not only to support management
decisions, but also in gaining legitimisation for corporate behaviour
(Brink, 2000). Problems of legitimisation always reflect the normative
acceptance of strategies and regularities (Ulrich, 1999) and require a
qualitative oriented evaluation method.
According to economic theory, the criteria for incentives and for the
evaluation of decision-making processes should be based on efficiency.
This perception is in contrast to the concept of ethics where criteria
primarily reflect moral principles. An interpretation of efficiency,
maximising self-interest and applying the principle of functional-
rationality4 does not correspond with the ethical tradition, neither to
theories of Kant nor to Utilitarianism (Gesang, 2003).
The emergence of criticism against a purely quantitative model for
strategic decision-making based on rational-economic5 principles is
prominently represented by Mintzberg [1984], Simon [1987] and Stacey
[1993]. Extensive critique of a pure rational-economic decision making
frameworks is prevalent in Europe. The idea that corporate acting has to
follow social relevant rules and cannot be reduced to efficiency criteria
only represents the common statement of European scholars (Brooks,
4 Functional-rationality is the key-issue for analyzing the complex concept of rationality (concept of
practical-rationality). Max Weber introduced the aspect of technique for describing the rationality of
behaviour with technique describing the well-regulated use of certain instruments in abstractive forms.
Weber has designed a concept of rationality based on the aspects of instruments, preference-setting
and value-orientation, with the instrumental-rationality of behaviour describing the effectiveness of
planning by given preferences, and the rationality of choice valuing the accuracy of utility-calculation by
given instruments and given exogenous factors. Furthermore, the normative-rationality of behaviour
indicates the unifying and systematising power and penetrance of the value-principles that form the
range of desirable preferences. Actions that fulfil the aspects of instrumental-rationality and rationality
of choice are denoted as functional-rational (Habermas, 1995). 5 In economic theory this critique is summarized by the concept of bounded-rationality. The hypothesis
expressly states the fact that the process of decision-making is characterised by limited cognitive
capabilities of human beings and thus only restricted or bounded rational (Bourgoine, 2004).
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 9
2005). Therefore, the main challenge in CSR is to strengthen normative
analysis between established shareholder and stakeholder positions6.
Brooks (2005) analyses different definitions for corporate social
responsibility and finally defines CSR “as the obligation for an
organization to be a contributing member to society by maximizing the
positive impacts and minimizing the negative effects.” Furthermore this
obligation has to address the long-term desires and needs of society. The
maximisation of positive impacts of an organisation on society as a
strategic target for management emphasizes the importance of ethical
aspects in decision-making.
According to the inherent rationale of the corporate social responsibility
paradigm, research-approaches need to follow a more holistic
perspective. Consequently, any research should be concerned with the
strategic importance of CSR to achieve sustainable competitive
advantages for the overall organisation (Brooks, 2005).
A similar argumentation also holds for the notion of identity in an
organisational context. The criterion of sustainable competitive
advantage for CSR is strongly correlated to the criterion of rareness of
identity. Asforth and Mael [1996] define the identity of an organisation
as a scheme that is closely related to core competencies, which reflects
the central, differentiable and enduring aspects of an organisation and it
enables management to identify opportunities for growth and
innovation. But, it also creates a trade-off, since options that are outside
the range of the identity cannot be realized. To be able to create
economic value in such a situation, the value of the realized
opportunities has to be greater than the value of forgone opportunities.
6 See also Schmidt, 2002; Brink, 2000; Sihler, 2000
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 10
If this condition does not hold, identity does not provide for a positive
contribution to the organization.
Applying the criteria of sustainable competitive advantage and holistic
orientation from identity management to the concept of brand, the
traditional market7 oriented approach does not work efficiently (Barney
and Stewart, 2000). Thus, the concept of identity has a more internally
oriented strategic focus and can rather be attributed to the resource-
based-view than to the traditional marketing view.
From a managerial perspective, there is not much evidence on the input-
factors of organisational identity. Birkigt, Stadler and Funck (2003)
refer to it as a black box with the main input-factors behaviour,
corporate design and communication. Their approach partly also reflects
the aspect of symbolism8, which Castells (2003) terms to be central for
identities.
A CSR oriented management approach could only result in the expected
positive reputation when effective brand communication takes place. At
the time, only corporations with brands enjoying high brand awareness
become targets of public concern and moral appeals (Coulter and de
Man, 2005). According to this positive correlation between brand and
social responsibility it seems to be reasonable to bring both paradigms
together in order to get closer to the objective of the CSR discussion: to
improve the linkages between business and society. The concept of
identity allows to create a methodologically link between brand and
CSR from an organisational point of view, providing for a way to show
7 A speeding-up of market dynamics with an ongoing concentration of markets would eventually not
fulfil the criterion of endurance. 8 According to Castells (2003) the instances that induce identities and hence change the actual
cultural codes have to mobilize symbols.
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 11
how identity may fit into positive theory and how it may fulfil the
normative aspects claimed by CSR.
CSR, ethics and morality
In contrast to the natural-rights-theory economists have developed a
decision-making system that is primarily based on functions and not on
normative aspects. Economics, as a political science, is concerned with
the problems of society in an overall context by focusing on the
question of how the dynamics of an economic system are related to
normative regularities in society. With the evolvement of economics as
a special branch of science this relationship between economy and
society was lost (Habermas, 1995).
The ethical tradition in economics goes back to the Aristotelian theory
of ethics. Ethics and engineering9 historically provided for the pillars of
economic theory, whereas in modern economic theory the issue of
ethics has lost in importance. In recent economic analysis an explicit
normative analysis has been strictly avoided (Sen, 1987). A capitalistic
and market oriented economy does not neutralize the normative
problem, which still does exist, but the system is organized in a way that
the problem solving exercise is transferred to the individual (Koslowski,
1996).
The numerous contributions to the ethical problem, summarized by the
concept of CSR and corporate citizenship in the last years, could be
identified as an attempt to revitalize the normative discussion to achieve
an appropriate integration of the economic system in society. The
9 The notion of engineering refers to the approach that is primarily characterized by logistics issues
rather than ultimate ends. This engineering approach has come from different directions and is
especially connected with the functioning of markets (Sen, 1987)
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 12
emerging need of normative integration is related to the constant decline
of social structures that fulfilled those normative functions. Functional
differentiation in modern society is one of the most eminent factors
causing this decline10. In return, the economization of different spheres
of human life can be considered as a continuing process at a global
scale. According to Homann, economic theory may become a kind of
supra-theory for explaining decision-making process and thus
completely absorb the role of traditional ethics (Koslowski, 2001).
One of the main concerns of ethics in decision-making processes is
morality, which in a broader sense is a social concept and, similar to the
legal system of society, describes a complex system of collective,
individual and group-specific beliefs and attitudes that regulate
behaviour. Initially, individuals assume this system to be something
strictly objective and they get familiar with it during the process of
socialisation and interaction. Individuals perceive the normative
function of moral principles as something that is exogenous and, in
contrast to the legal system, the fact of subjective impression is more
important (Birnbacher, 2003). Morality is an inter-subjective necessity
and the justification of moral principles becomes relevant in those
historical moments, when moral convictions loose the value having
been attributed to them in the underlying social and cultural context
(Tugendhat, 1984).
White (2004) and Sen (1977) assume agents to may follow various
hierarchies of preferences. Moral aspects are characterizing the set of
individual preferences for decision-making, as well as suggested by the
utility maximising theory of rational-choice. From an analytical
10
According to Luhmann, it is likely for morality to become a more and more marginal aspect in a
modern, functional-differentiated society. Presently, there are still various attempts to introduce the
principle of morality to assure continuity of the single functional systems in society. But compared to
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 13
perspective, the identification of moral aspects raises a lot of difficulties
because moral specific terms, sanctions and emotions can only be
described through the same concept of morality. Representatives of the
universalistic concept of morality tend to use the criteria of action-
related, categorical principle, generality and universality as the main
parameters for describing morality (Birnbacher, 2003).
Identity and communicative aspects of morality
Although in sociology the ethical discussion has never been a dominant
issue, important innovations in ethical thinking have emerged from the
influence of social theorists and social philosophers11. According to
Reckwitz (2001), a reflection of social aspects cannot be fruitful if it
does not include concerns about the meaning of morality and the
relative social practice. The erosion of morality in modern society is the
outcome of formal rationalization, according to Max Weber’s theory
and the ongoing process of functional differentiation12. Morality has lost
its function of creating social cohesion (Reckwitz, 2001).
Starting from this one-way view, there has been a growing interest in
introducing an »alternative« concept of morality, which has to be
comprehensible in philosophical terms and fit sociological analysis as
well. As an alternative to the predominant Utilitarian and Kantian
conception of morality, this so-called “third” definition of morality
focuses on a culturalistic definition of the moral problem in contrast to
the situation in stratified societies, morality has lost its importance. Nowadays, morality is socially
parasitic (Reckwitz, 2001). 11
e.g. Theory of Justice [Rawls], Discoursive Ethics [Habermas], Political Philosophy [Nozick],
Communitarism [Nussbaum and Walzer], Neopragmatism [Rorty] and the late-work of Foucault,
Derrida and Bauman (Reckwitz, 2001) 12
Prominent representatives are the sociologists Durkheim, Parson, Luhmann (Rechwitz, 2001)
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 14
the formal-rational oriented analysis13. Ultimately, morality is linked to
the problem of collective and individual identity (Reckwitz, 2001).
Morality does not only care about general rules concerning the do’s and
don’ts in society, it focuses on the valuable sources of meaning that
shape the common patterns of lifestyle in society. Furthermore, morality
describes the cultural specific dimension of »what is good«, which
creates the background for the apparently neutral principle of justice
(Reckwitz, 2001).
Moral questions become relevant, when actors try to give a meaning to
their life and consequently behave in a way so that they can succeed in
creating an identity by making use of symbolic and valuable codes.
Moral problems are problems of individual and collective identity and
thus are prior to all problems of rational action-coordination. The
problem emerges when actors ask themselves to which kind of lifestyle
their self-image may correspond (Rechwitz, 2001).
The problem of morality is closly related to the problem of
communication: morality is not a pure abstract and a rational notion, but
a social interexchange. Thus, ethical analysis is not only normative
thinking, but also normative rhetoric (Jensen, 2001). Moral
communication differentiates between what is admissible and what is
not admissible. In contrast to the rationalisation strategies in economics,
it is the claim of moral communication to create a common awareness
on how situations of advantage/disadvantage could be avoided. In the
end, situations demanding negotiations of to the Coase-Teorem type
would not be relevant. A common objection against a rationalisation of
13
Utilitarianism and Kant’s ethic appear to be contradictionary traditions of ethics in first instance, but
both ethical concept assume that the problem of morality is a problem of action-coordination of free
individuals (Reckwitz, 2001). This perception corresponds with the Coase-Teorem that is concerned
with the negative externalities as an effect of different preference-settings (Priddat, 2000).
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 15
morality is based on the fact that moral behaviour can evoke further
moral behaviour. Thus, the relationship between morality and
economies should not be taken as a behavioural restriction, but as a
production process that enables organisations to create new moral
insights. The claim for explicit communication of moral behaviour is
the main difference to rationalisation strategies14 and the expressive
aspect of morality can be considered as a source of innovation (Priddat,
2000).
From this perspective, the expressive output of morality can be
attributed to the brand15. Since brand is an interface between the identity
of the organization16 and the identity of the market17 (Hellmann 2003),
the expressive function of brand determines the moral aspects.
Furthermore, Hellmann (2003) argues that this model of structural
linkage finds a significant echo in brand research. In this context, the
identity of an organisation constitutes an interesting factor with regard
to the normative problem of managerial practice. However, an ethical
theory concerned with identity has to be able to conceptualize morality
primarily as a parameter of distinctiveness and consequently identity,
and not with normative aspects based on traditional ethics (Corsi, 1997).
14
In the context of this analysis it is not possible to deepen this argument. However, it would be
interesting to confront the «Theory of Communicative Acting« of Habermas with the Coase-Teorem to
obtain new insights into communication and rationalisation within an organisational framework. 15
See also Gustafsson (2000) 16
According to Castells (2003) the primary sources of meaning for social actors are formed by
collective identities. 17
For the corporate brand the market is represented by all stakeholder: customers, management,
employees, financial markets, etc.
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 16
Conclusion
What is the importance of identity, code and expressive function of
morality as a productive output for CSR? Going back to the starting
point, the problem of ethics, and consequently morality, is one of the
central issues in CSR. In business ethics the concept of the »collective
actor« is used for describing the ethical behaviour of organisations,
whereas the »collective actor« is embedded in the context of market
competition (Suchanek, 2001; Haase, 2006). However, this construct
shows fundamental deficiencies in its ability to describe moral
behaviour, since it is possible to attribute action but not behavioural
consciousness to »collectives« (Birnbacher, 2003).
The extension of the idea of brand as a »post-traditional subject« allows
for a different perception of moral problems in business practice. Ethics
itself has to be refocused: from a formal-rational oriented analysis to an
identity, cultural-oriented approach. This allows for integration of brand
into the CSR paradigm and allows to evolve towards the development
of positive theory. The term post-traditional is used due to the fact that
the problem of ethics is primarily identity based and not normative as
suggested in traditional ethics.
In sociological studies a growing interest for the ideas of identity and
en-/decoding is prevalent. Particularly new evolvements in system-
theory provide important contributions for further research. The main
background for actual discussions builds on the theories of Luhmann.
The methodical discourse in system-theory itself is highly abstract and it
has not been developed properly in a managerial context. Further
research efforts could be very fruitful, since communication plays a
central role in system-theory and it would allow to create a link to brand
and identity aspects as well. Furthermore, the idea of autopoiesis as a
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 17
central paradigm in system-theory could be linked to evolutionary-
theories18 in management and economics.
Finally, more research into the post-traditional aspect of brand is
needed, whereas the primary focus should be on the definition of basic
cultural and economic concepts from a managerial perspective. In this
context, CSR research may need to focus more on identity,
encoding/decoding, communication and symbolism and not only on
normative aspects. The system-theoretical framework could be an
interesting perspective for developing an integrative and holistic view of
CSR theory.
In addition, the dynamics stemming from the CSR discussion should be
beneficial for overall cultural and societal development. Thus, the
problem of ethics and its practical aspects should not lead to a one-way
street. In a »new« society also an old problem like morality needs
methods and instruments that are more than a renaissance of the
established theories of Utilitarianism and Kant.
18
As admitted representatives of the evolutionary concept in management is Malik (St. Gallener
School) and in economics are Nelson and Winter.
Manuel Demetz and Oswin Maurer: Business ethics from a post-traditional perspective, page 18
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