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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

Corporate social responsibility

communication: stakeholder
information, response and
involvement strategies
Mette Morsing and Majken Schultzn
Introduction While stakeholders previously primarily attribu-
ted negative attention to particular industries (i.e.
Messages about corporate ethical and socially ‘sin stocks’, including companies producing to-
responsible initiatives are likely to evoke strong bacco, alcohol, weapons, pornography, etc.),
and often positive reactions among stakeholders. today CSR issues have become more unpredict-
Research has even pointed to the potential able and changing, and including, for example,
business benefits of the internal and external child labour, gene-modified organisms (GMOs),
communication of corporate social responsibility hormones, union assembly rights, sweatshops,
(CSR) efforts (Maignan et al. 1999). However, etc., which in practice are concerns across many
while CSR is generally associated with positive if not all industries. Furthermore, the number of
corporate virtues (e.g. Johnson & Johnson, The CSR rankings and CSR surveillance institutions is
Body Shop, Patagonia) and reflects an organiza- increasing. Critical stakeholder attention is not
tion’s status and activities with respect to its restricted to a company’s decisions and actions,
perceived societal obligations (Brown & Dacin but also focuses on the decisions and actions of
1997), corporate CSR messages have also proven suppliers, consumers and politicians, which may
to attract critical attention (e.g. Starbuck, Shell, spur criticism towards a company (e.g. Nike,
TDC). In fact, research suggests that the more Cheminova). In that sense, corporate CSR
companies expose their ethical and social ambi- engagement today requires more sophisticated
tions, the more likely they are to attract critical and ongoing stakeholder awareness and calls for
stakeholder attention (Ashforth & Gibbs 1990, more sophisticated CSR communication strate-
Vallentin 2001). Other studies have triggered gies than previously.
questions such as ‘if a company focuses too To increase our understanding of how man-
intently on communicating CSR associations, is it agers can develop and maintain an ongoing
possible that consumers may believe that the awareness towards themselves and their environ-
company is trying to hide something?’ (Brown & ment, we argue, in line with the editors of this
Dacin 1997: 81). Furthermore, stakeholder ex- special issue and other research (Craig-Lees 2001,
pectations regarding CSR are a moving target and Cramer et al. 2004), that the theory of sense-
must be considered carefully on a frequent basis. making is a fruitful method for better under-
standing communication processes. Sensemaking
is inherently social (Weick 1995), as we
n
Respectively: Associate Professor and Director of the Center for ‘make sense of things in organizations while in
Corporate Values and Responsibility; and Professor in the Depart-
ment of Intercultural Communication and Management – both at conversation with others, while reading communi-
Copenhagen Business School, Frederiksberg, Denmark. cations from others, while exchanging ideas with

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Oxford, OX4 2DQ, UK and 350 Main St, Malden, MA 02148, USA 323
 Business Ethics: A European Review
Volume 15 Number 4 October 2006

others’ (Nijhof et al. 2006), implying that no given. Finally, the implications for managerial
manager or organization makes sense in splendid practice are discussed because companies want to
isolation (Craig-Lees 2001). But, the extent to communicate that they are ethical and socially
which an individual – or an organization – is able responsible organizations. This paper concludes
to integrate the sensemaking of others will by suggesting that communicating CSR intro-
influence the individual’s – or the organization’s duces a new – and often overlooked – complexity
– ability to enact strategically a productive to the relationship between sender and receiver of
relationship (Gioia et al. 1994). This implies that corporate CSR messages, which entails a manage-
managers need to develop a sense of the organi- rial commitment to involving stakeholders in the
zation’s internal and external environments (Tho- ongoing sensegiving and sensemaking processes.
mas & McDaniel 1990) and thereafter be willing
to define a revised conception of the organization.
This process is what Gioia & Chittipeddi (1991: Stakeholder theory
434) refer to as ‘interpretive work’ under the label
‘sensemaking’, i.e. trying to figure out what the While the stakeholder model was introduced to
others want and ascribe meaning to it. However, management theory many years ago by Freeman
Gioia and Chittipeddi expand the notion of sense- (1984), stakeholder management has developed
making by introducing the concept of ‘sense- into one of current management theory’s most
giving’, putting a special focus on the managerial encompassing concepts (e.g. Donaldson & Pres-
processes facilitating sensemaking in organiza- ton 1995, Mitchell et al. 1997, Stoney & Win-
tions. According to Gioia & Chittipeddi (1991: stanley 2001). Freeman’s (1984: 25) ‘stakeholder
443), sensemaking is followed by action in terms view of the firm’ instrumentally defines a stake-
of articulating an abstract vision that is then holder as ‘Any group or individual who can affect
disseminated and championed by corporate man- or is affected by the achievement of the firm’s
agement to stakeholders in a process labelled objectives’ and he suggests that there is a need for
‘sensegiving’, i.e. attempts to influence the way ‘integrated approaches for dealing with multiple
another party understands or makes sense. In stakeholders on multiple issues’ (1984: 26). While
contrast to Gioia & Chittipeddi, who have an Freeman framed and demarcated stakeholders as
internal focus on sensegiving and sensemaking elements of corporate strategic planning, he most
processes among managers and employees, we importantly demonstrated the urgency of stake-
add an external focus as we suggest that by holders for the mission and purpose of the com-
involving external stakeholders in corporate CSR pany, and in doing so, also suggested the positive
efforts, managers and employees will also engage financial implications of better relationships with
in the sensegiving and sensemaking processes. stakeholders. In line with Freeman’s thinking,
Building on Gioia and Chittipeddi’s terminology, many other scholars have pursued exploration of
we suggest that not only managers but also the link between corporate social performance
external stakeholders may more strongly support and financial performance (Wood 1991, Pava &
and contribute to corporate CSR efforts if they Krausz 1996), but the conclusions so far paint an
engage in progressive iterations of sensemaking unclear picture (Margolis & Walsh 2003).
and sensegiving processes, as this enhances In recent years, stakeholder theory has devel-
awareness of mutual expectations. oped a focus on the importance of engaging
First, this paper outlines stakeholder theory stakeholders in long-term value creation (Andriof
with a focus on communication and, second, it et al. 2002). This is a process whose perspective
links stakeholder relations to the three CSR focuses on developing a long-term mutual rela-
communication strategies discussed in this paper: tionship rather than simply focusing on immedi-
informing, responding and involving. Next, a ate profit. This does not imply that profit and
demonstration of several survey studies illustrat- economic survival are unimportant, but the
ing the communication challenge for managers is process argument is that in order to profit and

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

survive companies need to engage frequently with Three CSR communication strategies
a variety of stakeholders upon whom dependence
is vital. The emphasis is moved from a focus on Based on Grunig & Hunt’s (1984) characteriza-
stakeholders being managed by companies to a tion of models of public relations, we unfold three
focus on the interaction that companies have with types of stakeholder relations in terms of how
their stakeholders based on a relational and companies strategically engage in CSR commu-
process-oriented view (Andriof & Waddock nication vis-à-vis their stakeholders: the stake-
2002: 19). This implies an increased interest in holder information strategy; the stakeholder
understanding how managers can manage not the response strategy; and the stakeholder involve-
stakeholders themselves, but relationships with ment strategy.
stakeholders. As a result, this increases the scope In 1984, public relations theory argued (Grunig
of stakeholder relationships from public relations & Hunt 1984) that 50% of all companies practised
and marketing managers practising their author- one-way communication (in terms of public
ity and communication skills to a strategic information) to their stakeholders, and only
potential for all functional managers to relate to 35% practised two-way communication processes
multiple stakeholders. Stakeholder relationships (in terms of either two-way asymmetric or two-
in this processual perspective have even been way symmetric communication). This relates to
suggested as a source of competitive advantage the theory of sensemaking in terms of public
(Andriof & Waddock 2002, Post et al. 2002, information building on processes of sensegiving,
Johnson-Cramer et al. 2003) as those companies whereas two-way communication builds on pro-
with strong relations to other organizations, cesses of sensemaking and sensegiving. While
institutions and partners are in a better position some would agree that the prevalence of public
to develop relational rents through relation- information (sensegiving) is also a fairly accurate
specific assets, knowledge-sharing routines, com- picture of corporate communication processes
plementary resource endowments and effective today, we suggest that there is an increasing need
governance (Dyer & Singh 1998). to develop sophisticated two-way communication
The stakeholder relationship is assumed to processes (sensemaking and sensegiving) when
consist of ‘interactive, mutually engaged and companies convey messages about CSR. While
responsive relationships that establish the very one-way information on corporate CSR initiatives
context of doing modern business, and create the is necessary, it is not enough.
groundwork for transparency and accountability’ Grunig & Hunt have also presented a fourth
(Andriof et al. 2002: 9). This brings the notion of public relations model, i.e. a one-way commu-
participation, dialogue and involvement to the nication model defined as ‘press agentry/publicity’
centre of stakeholder theory, with a clear inspira- or a propaganda model. We have not elaborated
tion (and aspiration) from democratic ideals. upon this model as one of our strategies for CSR
While dialogue is the tool, agreement and communication, but we mention it to put our
consensus are most often regarded as the solution three CSR communication strategies into perspec-
on which to base further decisions and action, and tive. The press agentry model serves a propaganda
hence to continue the collaboration. As argued by function in which practitioners ‘spread the faith
Johnson-Cramer et al. (2003: 149) ‘The essence of of the organization involved, often through
stakeholder dialogue is the co-creation of shared incomplete, distorted, or half-true information’
understanding by company and stakeholder’. (Grunig & Hunt 1984: 21). The question of whe-
Today, participation and dialogue have become ther a message is true or not does not play a major
a natural element of corporate self-presentations. role in this model. While the propaganda model
In the following section, three CSR communica- may benefit, for example, the delivery of a sports
tion strategies are presented that cover the develop- promotion, movie press agentry or generally aes-
ment from a classical monologue to more mutual thetic advertising messages, we contend that this
and dialogue-based stakeholder relationships. model is inappropriate for CSR communication.

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

While some messages play with pretending to be tion strategy, a two-way asymmetric communica-
real, this is not the case for messages about ethics tion strategy and a two-way symmetric communi-
and CSR. In this case, the public expects another cation strategy, each of which we relate to the pro-
type of authenticity and organizational support, cesses of sensegiving and sensemaking (Table 1).
i.e. that the company actually means what it says.
In fact, we argue that the press agentry model Stakeholder information strategy
erodes the very ambition of CSR communication,
which is to present the company as an ethical and In the ‘stakeholder information strategy’, similar
transparent socially responsible organization. to Grunig & Hunt’s public information model,
Nevertheless, this model highlights one of the communication is always one-way, from the
assumptions behind contemporary stakeholder organization to its stakeholders. Communication
expectations regarding corporate CSR communi- is basically viewed as ‘telling, not listening’
cation, that it represents the truth. (Grunig & Hunt 1984: 23), and therefore the one-
The following is a presentation of the three CSR way communication of the stakeholder informa-
communication strategies: a one-way communica- tion strategy has the purpose of disseminating
......................................................................................................................................

Table 1: Three CSR communication strategies

The stakeholder The stakeholder The stakeholder
information strategy response strategy involvement strategy
Communication ideal: Public information, Two-way asymmetric Two-way symmetric
(Grunig & Hunt 1984) one-way communication communication communication
Communication ideal: sense- Sensegiving Sensemaking Sensemaking
making and sensegiving:
Sensegiving Sensegiving – in iterative
progressive processes
Stakeholders: Request more information Must be reassured that Co-construct corporate
on corporate CSR efforts the company is ethical and CSR efforts
socially responsible
Stakeholder role: Stakeholder influence: Stakeholders respond to Stakeholders are involved,
support or oppose corporate actions participate and suggest
corporate actions
Identification of CSR focus: Decided by top Decided by top Negotiated concurrently in
management management. interaction with
Investigated in feedback stakeholders
via opinion polls, dialogue,
networks and partnerships
Strategic communication task: Inform stakeholders about Demonstrate to Invite and establish
favourable corporate CSR stakeholders how the frequent, systematic and
decisions and actions company integrates their pro-active dialogue with
concerns stakeholders, i.e. opinion
makers, corporate critics,
the media, etc.
Corporate communication Design appealing concept Identify relevant Build relationships
department’s task: message stakeholders
Third-party endorsement of Unnecessary Integrated element of Stakeholders are
CSR initiatives: surveys, rankings and themselves involved in
opinion polls corporate CSR messages
......................................................................................................................................

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

information, not necessarily with a persuasive Stakeholder response strategy

intent, but rather to inform the public as
objectively as possible about the organization. The stakeholder response strategy is based on a
Companies adopting a stakeholder information ‘two-way asymmetric’ communication model, as
model engage in active press relations pro- opposed to the two-way symmetric model of the
grammes and concurrently produce information stakeholder involvement strategy. In both models,
and news for the media, as well as a variety of communication flows to and from the public. But
brochures, pamphlets, magazines, facts, numbers there is a conspicuous difference between the two
and figures to inform the general public. Govern- models in that the two-way asymmetric assumes
ments, non-profit organizations and many busi- an imbalance from the effects of public relations
nesses primarily use the public information in favour of the company, as the company does
model. The company ‘gives sense’ to its audiences. not change as a result of the public relations.
The stakeholder information model assumes Rather, the company attempts to change public
that stakeholders are influential as they can either attitudes and behaviour. As such, the company
give support in terms of purchasing habits, needs to engage stakeholders by making the
showing loyalty and praising the company, or corporate decisions and actions relevant for them
they can show opposition in terms of demonstrat- because the company needs the external endorse-
ing, striking or boycotting the company (Smith ment from external stakeholders. The corporate
2003). Therefore, the company must inform communication department will typically conduct
stakeholders about its good intentions, decisions an opinion poll or a market survey to make sense
and actions to ensure positive stakeholder sup- of where the company has – hopefully – improved
port. Quite a few companies engage in CSR and can improve its CSR efforts. Communication
initiatives because corporate managers believe is perceived as feedback in terms of finding out
that it is morally ‘the right thing to do’ (Paine what the public will accept and tolerate. This is an
2001), and this often sincere wish to improve evaluative mode of measuring whether a particular
social conditions in the local or global community communication initiative has improved stake-
supports their stakeholder information strategy. holder understanding of the company – and vice
Top management, confident the company is doing versa. Corporate management will champion and
the right thing, believes the company just needs to ‘give sense’ to its decisions according to the market
inform the general public efficiently about what it survey results in which managers ‘make sense’.
is doing to build and maintain positive stake- Although these communication processes are
holder support. One strategic task of stakeholder perceived as two-way methods in Grunig &
information strategies is to ensure that favourable Hunt’s public relations models, we elaborate on
corporate CSR decisions and actions are commu- their model as we stress that responding to
nicated effectively to the company’s stakeholders. stakeholders is still rather sender oriented. The
The task of the corporate communications stakeholder response strategy is a predominantly
department is to ensure that a coherent message one-sided approach, as the company has the sole
is conveyed in an appealing way and that the intention of convincing its stakeholders of its
focus is on the design of the concept message (van attractiveness. We, therefore, highlight stake-
Riel 1995), i.e. that the CSR message conveys, for holder responsiveness rather than their pro-active
example, how the CSR initiatives demonstrate a engagement in communication processes. Stake-
generally shared concern, are linked to the core holders are perceived as being influential, but as
business and show organizational support (Scott passively responding to corporate initiatives. In a
& Lane 2000). It is outside the realm of this company’s attempts to understand stakeholder
strategy to consider that external stakeholders, i.e. concerns in a CSR perspective, it runs the risk of
third-party stakeholders, should endorse corpo- only hearing its own voice being reflected back;
rate CSR initiatives. Trustworthy communication the company asks its stakeholders questions
originates from the company itself. within a framework that invites predominantly

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

the answers it wants to hear. What aspires to be a in terms of their support of, or opposition to, the
two-way communication mechanism is really a company, and it concurs with the stakeholder
one-way method of supporting and reinforcing response strategy in that stakeholder expectations
corporate actions and identity. As the stakeholder should be investigated using opinion polls. The
response strategy is a frequently used commu- involvement strategy, however, further assumes
nication model within CSR communication, and that, while informing and surveying is necessary,
as many CSR initiatives assume stakeholder it is not sufficient. Stakeholders need to be invol-
sensitivity, we find this latter point important, ved in order to develop and promote positive
and return to it in the discussion. support as well as for the company to understand
and concurrently adapt to their concerns, i.e. to
develop its CSR initiatives. Therefore, the stake-
Stakeholder involvement strategy holder involvement strategy suggests that compa-
The stakeholder involvement strategy, in contrast, nies engage frequently and systematically in
assumes a dialogue with its stakeholders. Persua- dialogue with their stakeholders in order to
sion may occur, but it comes from stakeholders explore mutually beneficial action – assuming
as well as from the organization itself, each trying that both parties involved in the dialogue are
to persuade the other to change. Ideally, the willing to change.
company as well as its stakeholders will change as In organizational practice, the primary top
a result of engaging in a symmetric communica- managerial task in the stakeholder involvement
tion model, i.e. progressive iterations of sense- strategy becomes one of ensuring that the
making and sensegiving processes. Because organization is capable of establishing an ongoing
the stakeholder involvement strategy takes the and systematic interaction with multiple stake-
notion of the stakeholder relationship to an holders. The communication task becomes one of
extreme, companies should not only influence ensuring a two-way dialogue (Grunig & Hunt
but also seek to be influenced by stakeholders, 1984) in an almost Habermasian1 sense, in which
and therefore change when necessary. While this the primary aim is to bring about mutual under-
could apply to Freeman’s stakeholder conceptua- standing, rational agreement or consent. As no
lization, it would also challenge his stakeholder top management is capable of engaging in
concept regarding the extent to which a company dialogue with multiple stakeholders on a con-
should change its (CSR) activities when stake- current basis, the organizational implication is an
holders challenge existing (CSR) activities, and ‘integrated form’ (Weaver et al. 1999) of stake-
the extent to which a company should insist on its holder thinking in which the corporate CSR
own possibly divergent assessment. programme depends on its ability to integrate
Rather than imposing a particular CSR initia- not only organizational members’ CSR concerns
tive on stakeholders, the stakeholder involvement but also to integrate external stakeholders’ CSR
strategy invites concurrent negotiation with its concerns in a concurrent dialogue. Corporate
stakeholders to explore their concerns vis-à-vis the policies dictating what organizational units can
company, while also accepting changes when they and cannot do with respect to certain stakeholder
are necessary. By engaging in dialogue with groups are ‘sure to fail to establish successful
stakeholders, the company ideally ensures that it transactions with the stakeholder, no matter how
keeps abreast not only of its stakeholders’ well intentioned the policy’ (Freeman 1984: 162),
concurrent expectations but also of its potential as they neither motivate nor integrate changing
influence on those expectations, as well as letting expectations.
those expectations influence and change the While these three CSR communication strate-
company itself. gies have been presented to underline the in-
The stakeholder involvement strategy is in har- creased necessity for managers to incorporate
mony with the stakeholder information strategy learning and techniques to support more stake-
in the assumption that stakeholders are influential holder involvement, there is only little evidence

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

that two-way communication processes are the general agree that it is important that companies
norm currently being practised. In the following, are responsible for more than just their share-
we explore this apparent corporate hesitation holders. In all three countries, less than 10% of
to engage in two-way communication processes the general public find shareholders to be the only
by presenting empirical observations on the prime stakeholder in 2005 (see Table 3). In
challenges managers face in terms of CSR Denmark, almost half of the general public finds
communication. that companies should take on a broader respon-
sibility that exceeds core stakeholders such as
employees and customers. In Sweden and Nor-
Empirical illustration of the CSR way, this percentage is significantly lower, as only
communication challenge one-third of the population believes that compa-
nies should engage in broader CSR activities.
In the following, we present some empirical The reputation surveys also show the general
observations that serve to demonstrate the man- public’s perceptions of how companies should
agerial challenge in communicating corporate communicate about their social responsibility.
CSR efforts. These empirical data originate from Survey findings from 2005 suggest that the citizens
national reputation surveys in Denmark, Norway in all three Scandinavian countries in general hold
and Sweden, which in further detail demonstrate different perceptions of how companies should
the CSR communication challenge for companies communicate their CSR efforts (see Table 4).
operating in the Scandinavian countries. The data Some find that companies should publicize
serve as illustrations of a managerial challenge in proactively and openly, while others prefer more
practice and not as proof of the validity of our minimal communication based on websites and
discussion on CSR communication. As a result, annual reports. Few people find that companies
no statistical analysis of the data is given. should not communicate about their CSR efforts
The empirical data consist of part of the results at all. There are slight variations between the
from national reputation surveys in Denmark, three countries in that Danes are more reluctant
Sweden and Norway (annual Reputation Quoti- about the use of corporate advertising and press
ents). The survey is conducted in each country to releases than Swedes and Norwegians. The
outline the reputation of the companies most countries are nevertheless similar to the extent
visible among the general public (Fombrun et al. that only 10% of the public finds that corpora-
2000 and see Table 2 for basic information). tions should not publicize information about their
The reputation survey shows how the general CSR activities. The difference between the coun-
public in the three Scandinavian countries in tries concerns how companies should publicize
......................................................................................................................................

Table 2: Data for national Reputation Quotient Surveys in 2005

Country Denmark Sweden Norway
Number of respondents 4178 Online interviews 2783 Online interviews 3397 Online interviews
February 2005 February 2005 February 2005
Number of companies 22 16 20
included in the ranking
Highest ranking company Novo Nordisk 79.9 IKEA 81.1 IKEA 72.7
Lowest ranking company Cheminova 48.1 Skandia 41.5 NSB 51.5
Top five companies in relation to Grundfoss IKEA NRK
social responsibility Danfoss Arla Foods Microsoft
Lego ICA Coop
Oticon Volvo Hydro
Carlsberg Microsoft IKEA
......................................................................................................................................

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Volume 15 Number 4 October 2006

......................................................................................................................................

Table 3: For what should companies be responsible?

Which of the following statements are Denmark 2005 (%) Sweden 2005 (%) Norway 2005 (%)
closest to your opinion?
Only generate profits to shareholders 4 4 9
Responsible towards shareholders and 49 64 56
employees and customers
Shareholders, employees, customers PLUS 45 29 31
broad social responsibility
......................................................................................................................................

......................................................................................................................................

Table 4: How should companies communicate their CSR efforts?

When companies engage in acts of Denmark 2005 (%) Sweden 2005 (%) Norway 2005 (%)
corporate citizenship, do you think they
should publicize their good deeds?
Yes, publicize through corporate advertising 30 47 42
and press releases
Yes, minimal releases such as annual 59 46 49
reports and on website
No, should not publicize 11 8 9
......................................................................................................................................

information. Danes, for example, are more in sceptical about CSR communication than other
favour of more discrete communication channels Scandinavians.
such as annual reports and corporate websites as In general, the reputation surveys point to a
compared to advertising and public relations. particular communication challenge for managers
However, opinions about how companies operating in the Scandinavian countries, illustrat-
should communicate may change over time. This ing the sensitive nature of communicating social
is demonstrated by the development of opinions responsibility for managers in practice. People
among the general public in Denmark from 2002 agree that companies have a responsibility that
to 2005. Figure 1 shows that the Danish scepti- exceeds shareholders’ thinking and as a minimum,
cism towards CSR communication has changed should also be concerned with employees and
from 2004 to 2005. In the period from 2002 to customers. More than a third of the population
2004, approximately 20% of the population found groups find that companies share a broad social
that companies should cease to communicate responsibility. Half of the Scandinavian popula-
about their good deeds. This perception changed tion finds that companies should communicate
during the last year of the reported data, bringing broadly and openly about these important social
the level of Danish scepticism more in line with efforts via advertising and public relations. How-
Sweden and Norway. At the same time, however, ever, the other half of the population encourages
Danes have also become less accepting of the less companies either to communicate in a subtle way
discrete and more aggressive types of commu- or not to communicate about their social respon-
nication (advertising and public relations), while sibility at all. While the reputation surveys do not
the attitude towards using annual reports and serve to prove the quest for more sophisticated
websites has become much more positive since CSR communication, they do suggest a manage-
2002. Although Danes have become more aligned rial challenge in that the general public finds that
with the other Scandinavian countries in the CSR is of high importance to companies, while at
period from 2002 to 2005, they are still more the same time they have mixed opinions about

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

Figure 1: How companies should communicate about their corporate social responsibility efforts:
Danish developments, 2002–2005.

37%
Yes, publicize through
corporate advertising 39%
and press releases
33%
30% RQ Denmark 2002
RQ Denmark 2003
43% RQ Denmark 2004
Yes, minimal releases
such as annual reports 37%
RQ Denmark 2005
and on website 45%
59%

18%
No, should not 21%
publicize 21%
11%

how companies should communicate their CSR may improve their stakeholder relations as they
efforts. This raises the question of which commu- communicate their CSR activities in terms of (1)
nication strategy managers in Scandinavian com- pointing at CSR information as a double-edged
panies should adhere to if they want to convey sword, (2) non-financial reports as a means for
their corporate CSR efforts to the general public subtle CSR communication and (3) involving
in order to achieve the benefits of their corporate stakeholders in CSR communication as a pro-
CSR efforts. Should corporate managers inform active endorsement.
stakeholders about their good deeds, i.e. ‘give
sense’ to stakeholders? Or should corporate
managers instead engage stakeholders in two- CSR information: a double-edged sword
way communication processes in terms of con- In line with other empirical studies (Lawrence
sulting stakeholders using attitude surveys before 2002, Windsor 2002, Lingaard 2006) as well as
communicating their CSR messages, i.e. a process older studies (Arnstein 1969) and more recent
of ‘make sense’ followed by ‘give sense’? Or is the (Smith 2003) theoretical debate, our reputation
manager better advised to involve stakeholders in survey suggests that corporate CSR initiatives are
two-way communication processes in terms of important to the general public. However, the
ongoing iterative processes of sensegiving and example, particularly from the Danish survey on
sensemaking? In the following, we discuss the how companies should communicate their CSR
implications for managers of the complexity initiatives (Figure 1), shows that the general
involved in CSR communication. public has different perceptions of whether
companies should communicate their CSR initia-
Discussion tives in corporate advertising and corporate
releases or in minimal releases, such as annual
While the empirical observations have served to reports and websites. On the one hand, the
illustrate the complexity faced by managers as Danish survey indicates that companies should
they engage in CSR communication, they do not concentrate on developing efficient one-way com-
guide managers in how to approach the complex- munication, i.e. to ‘give sense’ to stakeholders
ity of the communication. Drawing on prior about corporate CSR efforts. According to
research on communication, the concepts of Grunig & Hunt (1984), this is the most preferred
sensegiving and sensemaking, as well as anecdotal way of engaging with stakeholders. Nevertheless, on
empirical examples regarding the general reputa- the other hand, the data also send a warning signal
tion survey, we discuss how corporate managers to corporate managers to avoid communicating

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

CSR efforts too conspicuously, as a large companies with a legitimacy problem, we build on
percentage of the survey sample subscribe to their argument and suggest that contemporary
minimal releases as the most appropriate way of companies increasingly need to prepare for
communicating CSR efforts. potential legitimacy problems.
Reputation surveys in all three Scandinavian As argued in the introduction, CSR is a moving
countries show that people are uncertain with target. Some years ago, CSR had narrower and
respect to how companies should communicate more well-defined limits, whereas today any
their CSR initiatives – in more or less conspicuous company may in principle be associated with the
channels – and this uncertainty has been ad- violation of human rights as supplier and
dressed in prior research, for example, by customer actions are increasingly seen as a
Ashforth & Gibbs’ (1990) discussion on the corporate responsibility by stakeholders. Any
legitimacy risks for companies that are perceived contemporary company may in fact encounter
as overaccentuating their good deeds. Ashforth & legitimacy problems at some point. On the one
Gibbs’ analysis also suggests a preference for hand, informing about CSR initiatives may be a
communicating CSR initiatives through minimal means of preparing to avoid such a legitimacy
releases as they argue that conspicuous attempts problem by concurrently informing stakeholders
to increase legitimacy may in fact decrease about corporate CSR initiatives. On the other
legitimacy. Ashforth & Gibbs (1990: 188) refer hand, CSR communication may in fact provoke a
to this as the challenge of the ‘self promoter’s legitimacy problem if a company encounters a
paradox’ in which they suggest that companies stakeholder concern about its legitimacy. Infor-
that overemphasize their corporate legitimacy run mation on CSR initiatives may then retrospec-
the risk of achieving the opposite effect. They tively be perceived as a means of covering up or
argue that conspicuous CSR communication accommodating the legitimacy problem, which in
often is associated with, and comes from, turn reinforces stakeholder scepticism towards
organizations that attempt to defend their corpo- CSR initiatives and corporate legitimacy. Thus, a
rate legitimacy or from companies that have straightforward ‘stakeholder information strat-
experienced a legitimacy problem: ‘the more egy’ turns out to have a double edge.
problematic the legitimacy, the greater the pro-
testation of legitimacy’ (Ashforth & Gibbs 1990:
185). Too much ‘sensegiving’ regarding CSR A means towards subtle communication:
efforts may be counter-productive. It is argued non-financial reports
that companies already perceived as legitimate The reputation surveys suggest the increasing
constituents do not need to communicate their importance of minimal releases such as annual
CSR efforts loudly. With reference to impression reports and websites as a preferred means of CSR
management, Ashforth & Gibbs indicate that communication by stakeholders on behalf of
individuals who believe that others will become corporate advertising or corporate releases. Prior
aware of their desirable qualities tend to be less research has argued that implicit forms of
self-aggrandizing than individuals who do not. If communication (e.g. organizational rituals and
companies are not granted positive recognition folklore) are perceived to be more credible than
from their stakeholders, they tend to find it explicit forms, e.g. press releases and policy
necessary not only to exemplify desirable qualities statements (Martin 1992). This argument suggests
but also to promote them. Thus, the promotion of that CSR communication will be perceived as
desirable qualities such as CSR will tend to evoke more plausible if it is indirect and subtle, such as,
scepticism if a company is stigmatized beforehand for example, in the presentation of more objective
with a bad reputation or if a company is data in non-financial reports (Tan 2002), which
experiencing a legitimacy threat such as a supports the tendency shown in reputation
corporate scandal. While Ashforth & Gibbs take surveys that many stakeholders prefer more subtle
this argument to one extreme by pointing at forms of CSR communication. Potential regional

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

differences, however, must also be noted. The reinforce information on issues they themselves
reputation surveys presented in this paper are identify with and take a pride in regardless of
from the Scandinavian countries, and other stakeholder concerns, because social responsibil-
research has pointed to certain cross-cultural ity often implies a personal moral designation for
differences in the type of responsibilities that managers (Lozano 1996, Pruzan 1998). The risk is
stakeholders assign to businesses (Maignan & that in deciding what CSR issues to communicate
Ferrell 2003). Another study shows that French and how to do it, managers become what
and Dutch businesses were not as concerned as Christensen & Cheney (2000) refer to as ‘self-
US-based companies about communicating CSR seduced and self-absorbed’, not realizing that
activities on corporate websites (Maignan & other stakeholders may be uninterested in the
Ralston 2002). The explicit North American information presented, and more importantly,
CSR approach (Matten & Moon 2004), which that other stakeholders may not find it appropriate
has a strong tradition of philanthropic giving, for companies to publish information on how good
seems to encourage stakeholders to welcome more they are. To avoid this trap of CSR communica-
conspicuous CSR communication than in the tion, close collaboration with stakeholders on the
European context – including the Scandinavian relevance of what CSR issues to emphasize and
one – with its traditions for more implicit and less report on may possibly increase organizational
conspicuous CSR approaches. awareness regarding stakeholder expectations. This
Nevertheless, while non-financial reports may dialogue contributes to the identification of poten-
be used as a type of ‘subtle CSR communication’, tially critical issues of importance for corporate
they are still predominantly designed as a means legitimacy and a company’s reputation.
to ‘give sense’ to potentially critical stakeholders. One example illustrating our argument is
They are produced to inform and convince public demonstrated by stakeholder involvement, which
audiences about corporate legitimacy and, as is increasingly used as an argument for giving
such, they are framed within a one-way commu- awards for best non-financial reporting. For
nication perspective. In addition, they may be instance, the European Sustainability Reporting
illusory as they may possibly lead managers to Awards (ESRA) emphasize stakeholder relations
conclude that they control meanings and percep- as a separate criterion for the reports to demon-
tions among stakeholders (Crane & Livesey 2003). strate: ‘Stakeholder relationships (e.g. basis for
Non-financial reports may seem an appropriate definition and selection of major stakeholders,
response and ‘sensegiving’ tool for making approaches to stakeholder consultation, type of
stakeholders aware of corporate CSR efforts, information generated by stakeholder consulta-
but they also raise the potential risk of organiza- tions, use of stakeholder feedback)’ (ESRA
tional self-absorption. Organizational communi- 2005: 4). Our contention is that reporting on
cation research has pointed out that one of the stakeholder involvement may be carried out with
major risks for communication in practice is that or without stakeholder involvement, but that the
corporate managers publish the information that latter form, actively involving stakeholders in
they themselves find important, taking pride in sensemaking and sensegiving processes on CSR
what is presented, and therefore also believe it is issues, is a more promising path as opposed to
what other stakeholders want to hear (Morgan emphasizing ‘sensegiving’ in engaging stake-
1999, Christensen & Cheney 2000). Even with holders by eloquent persuasion. In the following
market analysis as an analytical tool to collect section, we further explore how to involve
data to understand stakeholder concerns, prior stakeholders pro-actively.
research has pointed to the risk of self-fulfilling
prophecies in market surveys and opinion polls Involving stakeholders in CSR communication:
(Christensen 1997). In the case where managers pro-active endorsement
are to communicate issues of social responsibility We suggest that communicating messages that
to stakeholders, managers may be tempted to claim to represent a true image of corporate

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

initiatives such as CSR will benefit from a pro- the involvement of external stakeholders in these
active third-party endorsement, i.e. that external processes, arguing that there are benefits from
stakeholders express their support of corporate developing and maintaining stakeholder relation-
CSR initiatives. This implies that managers need ships by inviting external stakeholders to critically
to understand how to enact carefully the dynamic raise CSR concerns in public in collaboration with
processes of sensegiving and sensemaking in order the company.
to develop the endorsement in practice. Further, Novo Nordisk, a Danish pharmaceutical com-
we suggest that this happens during the develop- pany focusing on diabetes, has participated for all
ment of corporate CSR efforts, and for this 5 years of the Reputation Survey and has been
purpose, some companies have demonstrated how among the three most highly reputed companies.
non-financial reporting holds a potentially pro- In 2005, it was the most admired company in
mising tool for managing the complexity of CSR Denmark. Novo Nordisk’s non-financial report-
communication. Today, however, many non- ing is an inspiring and sophisticated example of
financial reports are still expressions of a sophis- how a company has managed to handle its CSR
ticated yet conventional ‘stakeholder information communication challenges in a manner that
strategy’ or ‘stakeholder response strategy’ (see, approaches the two-way symmetric model as
for example, the SAS Group’s Annual Report & outlined in the ‘stakeholder involvement strategy’.
Sustainability Report, KMD’s Strategic Report In 2002, Novo Nordisk (2002) began involving
2004, and Novozymes’ Annual Integrated Report stakeholders in the actual reporting. Critical and
2004). While these corporate non-financial reports highly involved stakeholders were given a voice in
on stakeholder relations demonstrate engagement the report, as they were invited to comment on
in stakeholder concerns, it is most often done and critique issues that they perceived as being of
through a simple listing of the partners with particular concern in their relations with Novo
whom the company interacts (see e.g. Danisco Nordisk. For example, Søren Brix Christensen of
2004, SAS 2004). Shell’s ‘People, Planet and Doctors without Frontiers was given a page under
Profit’ from 2003, and Brown & Williamson the heading, ‘How can we improve the access to
Tobacco’s ‘Social and Environmental Report diabetes treatment by selling our products at
2001/2’, are other examples of companies demon- prices affordable in the developing countries,
strating that they are aware of the importance while we maintain a profitable business?’ (2002:
of stakeholder dialogue. Brown & Williamson 27), to express that he strongly believes that the
Tobacco (2001/2002: 38) write, for example, ‘Here medical industry needs to take responsibility and
we outline some steps we have taken to help us to sell medicine at cost price. In a similar set-up in
ensure we manage the dialogue and reporting 2003, Lars Georg Jensen, programme coordinator
process with the same level of commitment as any for global policy in the Danish chapter of the
other aspect of the business’, as well as, ‘We World Wide Fund for Nature, critically addressed
recognize that a commitment to social reporting is the question of ‘How can we be focused on
a commitment to change’ (Brown & Williamson investing in the health of society and yet not
2001/2002: 38). In addition, BNFL states that ‘It compromise the need to invest in the global
is our aim to talk openly about issues that concern environment?’ (Novo Nordisk Sustainability Re-
you, our stakeholders’. port 2003: 47). A number of managers and
While these companies state how much they employees were also given a voice in the non-
acknowledge the importance of stakeholder dia- financial reports, but giving loyal members a voice
logue, there are no comments from stakeholders remains a more conventional and less risky
in the reports. We would like to point out the communication mechanism than inviting critical
potential of exploring a more pro-active commit- external stakeholders to comment on and critique
ment by external stakeholders, as we draw on shared concerns within the framework of CSR. By
Gioia & Chittipeddi’s notion of sensegiving and inviting external stakeholders inside, so to speak,
sensemaking. In the following examples, we show Novo Nordisk opens the possibility for new issues

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Volume 15 Number 4 October 2006

to emerge and become integrated, hence inviting Concerns about the corporate motives behind
an ongoing reconstruction of the CSR efforts as such invitations to participation and public
stakeholder concerns develop and change. Al- dialogue were already raised many years ago
though the communication is of course controlled and pointed at the inequalities of the partners and
from Novo Nordisk’s corporate headquarters, it the power-play of the strategic dialogue. Based on
nevertheless allows controversial dilemmas for studies of federal community programmes, Arn-
Novo Nordisk’s core business to surface. stein warned that ‘participation without redis-
Another example of the pro-active involvement tribution of power is an empty and frustrating
of stakeholders is Vodafone’s social report from process for the powerless’ (Arnstein 1969: 216).
2004, which demonstrates how the company He argues that participation can cover a broad
involves the capital market, the public, opinion range of gradations of participation, from manip-
makers and customers in identifying critical issues ulation to citizen control (in what he labels a
and actions by bringing these voices into the ‘ladder of citizen control’), and that no matter
report. Rather than being communicated to, the what practical reality participation is enacted in,
critical stakeholders become co-responsible for the underlying issue is the same: ‘Nobodies’
the corporate CSR messages, as they locally attempting to become ‘somebodies’ with enough
articulate their shared concern regarding the power to make the target institutions responsive
company. Instead of imposing corporate norms to their views, aspirations and needs. As an exten-
for CSR initiatives on stakeholders, the invitation sion of Arnstein’s ladder typology, it has also
to participate and co-construct the corporate CSR recently been argued that while dialogue can be
message increases the likelihood that these stake- beneficial for all constituents if they are genuinely
holders and those who identify with them will motivated for dialogue, participation and dialogue
identify positively with the company. can also be expensive, time-consuming and, in fact,
The external endorsement of corporate CSR lead to counterproductive activities that do not
messages differentiates itself from other endorse- build trust, facilitate collaboration or enhance the
ment strategies in the sense that critical issues value of the corporation. Similarly, Crane &
come to the surface. Rather than giving a com- Livesey question the assumption that more in-
pletely positive and almost saintly impression of volvement and dialogue lead to more understand-
corporate CSR initiatives, which may evoke scep- ing. They argue that dialogue may lead to cynicism
ticism, Vodafone communicates that it acknowl- and distrust when it is ‘instrumentally and super-
edges that the company has a way to go yet, but ficially employed’ and not ‘genuinely adopted’
that it is trying to act in a more socially (Crane & Livesey 2003: 40).
responsible manner by taking stakeholder con- While we can only agree with these concerns
cerns into consideration. Vodafone reports on about the risks of the exploitation of stakeholders
controversial issues of great importance for its and other malfunctions connected to participa-
business, such as electromagnetism and health, tion, dialogue and stakeholder involvement – and
responsible marketing, inappropriate content, in fact, to the whole democratic project – we also
junk mail, etc. In addition, Vodafone brings question how one is to know when stakeholders
critical survey results. Similarly, Novo Nordisk are ‘genuinely motivated for dialogue’ and when
brings issues such as obesity, the distribution of dialogue is ‘instrumentally and superficially em-
wealth, poverty and health and hormones in their ployed’ as opposed to ‘genuinely adopted’. Most
report. Many of these issues are reported and importantly, and in keeping with the sense-
commented on by external stakeholders. making perspective of constructivism as high-
By letting critical stakeholders have their own lighted by this special issue’s editors, we argue
comments in the reports, Novo Nordisk and Voda- that the way organizations give and make sense
fone demonstrate that they listen to stakeholders, about themselves and their practices are not
they dare to mention – and even openly express – neutral activities, but constitutive actions that
stakeholder concerns in their public annual report. contribute to the continuous enactment of the

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

organizational reality (Weick 1979). From this releases such as annual reports and websites as a
perspective, the communicative strategies of preferred means of CSR communication by
stakeholder involvement and dialogue contribute stakeholders rather than corporate advertising
to the enactment of such involvement, creating or corporate releases. However, we suggest that
more awareness of the critical potential of such minimal releases would benefit from re-
business–stakeholder relations. It can be argued sponding to, and even more extensively involving,
that the ‘stakeholder involvement strategy’ is an stakeholders directly in a mutual construction of
ideal, and that neither Novo Nordisk nor CSR communication. Although such a commu-
Vodafone are examples of ‘genuine’ two-way nication strategy is minimal in terms of number of
symmetric communication, and that no sustain- channels and public exposure, it allows maximum
ability report can ever be an expression of real flexibility and a strong focus on content. As a
two-way symmetric communication. Yet, we result, we suggest that communicating messages
contend that striving towards stakeholder involve- claiming to represent a true picture of corporate
ment and an improved mutual understanding of initiatives such as CSR would benefit from a
stakeholder expectations towards business and third-party endorsement, i.e. from external stake-
vice versa are crucial elements in its enactment. In holders becoming involved and expressing their
this process, CSR communication is a forceful support of corporate CSR initiatives in actual
player for all partners. corporate CSR messages by taking an active part
in both the sensegiving and the sensemaking
Conclusion process.
Nevertheless, this does not mean that the
Our paper has built on the recent development of ‘stakeholder information strategy’ or the ‘stake-
theories on stakeholder management and criti- holder response strategy’ should be underesti-
cally drawn on public relations theory in the mated. Companies must ‘give sense’ as well as
development of three strategies for CSR commu- ‘make sense’. But, we suggest that the increasing
nication in order to better conceptualize how significance of managers being able to handle the
managers inform, engage with and involve im- simultaneous interdependency between these pro-
portant stakeholders. In line with this develop- cesses and to engage in new and more complex
ment of stakeholder theories, it is our main relations with their stakeholders includes invol-
contention that stakeholder involvement becomes ving these stakeholders in actual corporate CSR
increasingly more important for ensuring that a communication. Our paper has suggested how the
company stays in tune with concurrently changing inclusion of both sensemaking and sensegiving
stakeholder expectations. CSR is a moving target, processes make managers aware of the need to
making it increasingly necessary to adapt and involve stakeholders pro-actively and continu-
change according to shifting stakeholder expecta- ously in both processes. Theories on sensegiving
tions, but also to influence those expectations. and sensemaking focus on internal stakeholders
In particular, we focus on three areas of and the mutual top-down and bottom-up pro-
strategic importance for managers as they embark cesses between managers and employees,
on CSR communication. First, the general but our paper has shown the importance of also
assumption that managers need to improve their involving external stakeholders in the ongoing
corporate ‘stakeholder information strategy’ to processes of sensegiving and sensemaking in CSR
keep the general public better informed about communication.
CSR initiatives to achieve legitimacy and good
reputations is challenged. Such a communication Acknowledgements
strategy has a narrow focus on sensegiving and
runs the risk of the ‘self-promoter’s paradox’. The authors would like to thank André Nijhof
Second, the findings from the reputation surveys and two anonymous reviewers for their helpful
indicate the increasing importance of minimal comments on an earlier version of this paper.

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 Business Ethics: A European Review
Volume 15 Number 4 October 2006

Note Cramer, J., Jonker, J. and van der Heijden, A. 2004.

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