Thus do they all: The CSR that doesn't yield
According to backers of corporate social responsibility (CSR), businesses should adopt CSR practices to improve their relationship with stakeholders and thus ensure privileged access to resources and better economic returns. International studies and surveys demonstrate, however, that CSR support is almost universally widespread (80% of businesses in the Global Fortune 250 publish information connected to CSR and 75% have a formalized CSR strategy, according to KPMG) but the link between CSR and economic results is at most slight.
In the paper The Convergence of Corporate Social Responsibility Practices, to be published soon in Management Research News, Nicola Misani of Bocconi's Department of Management argues that the tendency of too many socially responsible businesses to converge towards the adoption of standardized CSR practices, imposed by government institutions, non-governmental organizations or associations, is at the origin of the poor link between CSR and economic results. In this case, no business ends up differentiating themselves from the others and economic results level off.
Misani identifies three mechanisms that would explain the converging behavior of businesses. Flocking behavior occurs when environmental uncertainty suggests reproducing the steps of leading businesses in the hopes of aligning to their best practices. Institutional isomorphism is discussed when regulating authorities, non-governmental organizations or particularly influential stakeholders define the appropriate behavior to some businesses and they adjust so they do not lose legitimization with their audiences. Strategic cooperation proves to be a reaction to the worries about interest group reputations (those from the same industry, for example), whose image would be damaged by their bad behavior. In this case, the best businesses can also be interested in adopting practices that can be promptly imitated by others.
Even if the mechanisms are applied to different situations, they can sometimes add up or be triggered consecutively and, in any case, confirm the existence of pressures to conform that can be more powerful than pressures to have better results by differentiating from competitors.
Misani talks about divergent CSR for the businesses (which do exist) that want to obtain a competitive advantage through superior social performance or the differentiation in satisfying stakeholder requests. He also discusses convergent CSR for businesses that focus on useful social practices to legitimate themselves, and are available to collaborate with other businesses to avoid common risks and safeguard group reputation. "Socially responsible business that are inclined to convergent CSR," explains Misani, "can create social value and appropriate a part of it for themselves, but their competitors are generally capable of doing the same thing."