A General Theory of CSR: How Uncertainty and Stakeholder Conflict Determine Different CSR Strategies

A General Theory of CSR: How Uncertainty and Stakeholder Conflict Determine Different CSR Strategies

How can firms most effectively engage with stakeholders on controversial and uncertain social issues?

BTF suggests two important variables in organizational decision making:

conflict (controversy) and Knightian uncertainty

In order to build our general theory of CSR, we will discuss the different scenarios or states that might arise along the two dimension of BTF

When both are moderate, implement shared values strategically

When Knightian uncertainty is high, but conflict is moderate, create shared value

When Knightian uncertainty is moderate, but conflict is high, accumulate corporate stakeholder capital

We propose the following steps to build stakeholder capital:

Case for corporate stakeholder capital: The Brent Spar

The Brent Spar Case (cont’d)

When Knightian uncertainty and conflict are both high, design corporate social contract

There can be many creative methods of designing and implementing a corporate social contract

Case for corporate social contract: NIKE and outsourcing

Applying the veil of ignorance

Conclusion