exploring corporate social responsibility in swedish...

Examensarbete i Hållbar Utveckling 213Master thesis in Sustainable Development

Exploring Corporate Social Responsibility in Swedish Clothing

Retail Sector- A Sense-making Approach

Exploring Corporate Social Responsibility in Swedish Clothing Retail Sector- A Sense-making Approach

Kongjing Xing

Kongjing Xing

Uppsala University, Department of Earth SciencesMaster Thesis E, in Sustainable Development, 30 creditsPrinted at Department of Earth Sciences,Geotryckeriet, Uppsala University, Uppsala, 2014.

Master’s ThesisE, 30 credits

Supervisor: Julia Patrizia RotterEvaluator: Cecilia Mark-Herbert

Master thesis in

Sustainable Development

Uppsala University

Department of

Earth Sciences

Examensarbete i Hållbar Utveckling 213Master thesis in Sustainable Development

Exploring Corporate Social Responsibility in Swedish Clothing

Retail Sector- A Sense-making Approach

Kongjing Xing

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Table of Contents

1. INTRODUCTION ........................................................................................................................... 1 1.1 PROBLEM BACKGROUND AND RESEARCH SETTING .............................................................................. 2 1.2 AIM AND DELIMITATION ........................................................................................................................... 3 1.3 DEFINITIONS ............................................................................................................................................... 5 1.4 OUTLINE ...................................................................................................................................................... 6

2. METHOD ......................................................................................................................................... 8 2.1 MULTIPLE CASE STUDIES AS PART OF THE QUALITATIVE APPROACH ............................................... 8 2.2 CHOICE OF SECTOR AND COMPANIES ...................................................................................................... 8 2.3 LITERATURE REVIEW ................................................................................................................................ 9 2.4 IDENTIFICATION OF A THEORETICAL FRAMEWORK ........................................................................... 10 2.5 EMPIRICAL STUDY .................................................................................................................................... 11 2.6 RESEARCH ETHICS .................................................................................................................................... 11

3. LITERATURE REVIEW ............................................................................................................. 13 3.1 DEFINITIONS OF CORPORATE SOCIAL RESPONSIBILITY ................................................................... 13 3.2 EXTRINSIC DRIVERS ................................................................................................................................. 14 3.3 CSR AND THE CLOTHING INDUSTRY ..................................................................................................... 15 3.4 SUPPLY CHAIN SUSTAINABILITY ........................................................................................................... 17

4. THEORETICAL FRAMEWORK: A CSR SENSE-‐MAKING APPROACH .......................... 19 4.1 COGNITIVE DIMENSIONS: WHAT FIRMS THINK ................................................................................... 20 4.2 LINGUISTIC DIMENSIONS: WHAT FIRMS SAY ....................................................................................... 21 4.3 CONATIVE DIMENSIONS: HOW FIRMS TEND TO BEHAVE ................................................................... 22

5. EMPIRICAL FINDINGS ............................................................................................................. 24 5.1 THE CSR STRATEGIES AND ACTIVITIES OF HENNES & MAURITZ (H&M) .................................... 24 5.1.1 CSR in the supply chain ................................................................................................................ 25

5.2 THE CSR STRATEGIES AND ACTIVITIES OF MINI RODINI ................................................................. 27 5.2.1 CSR in the supply chain ................................................................................................................ 28

5.3 THE CSR STRATEGIES AND ACTIVITIES OF HOUDINI SPORTSWEAR ............................................... 29 5.3.1 CSR in supply chain ........................................................................................................................ 30

6. ANALYSIS .................................................................................................................................... 32 6.1 IDENTITY ORIENTATION ......................................................................................................................... 32 6.2 LEGITIMACY .............................................................................................................................................. 33 6.3 JUSTIFICATION .......................................................................................................................................... 35 6.4 TRANSPARENCY ........................................................................................................................................ 36 6.5 POSTURE .................................................................................................................................................... 38 6.6 CONSISTENCY ............................................................................................................................................ 39 6.7 COMMITMENT ........................................................................................................................................... 40 6.8 SUMMARY OF THE CASE COMPANIES’ CSR PROFILE .......................................................................... 42

7. DISCUSSION ................................................................................................................................ 44 7.1 THE LOGIC BEHIND THE SWEDISH CLOTHING RETAIL COMPANY’S CSR ........................................ 44 7.2 SIMILARITIES AMONG THE CASE COMPANIES ...................................................................................... 45 7.3 DIFFERENCES AMONG THE CASE COMPANIES ..................................................................................... 46

8. CONCLUSION .............................................................................................................................. 47 BIBLIOGRAPHY ............................................................................................................................. 49 APPENDIX: INTERVIEW GUIDELINE ....................................................................................... 55

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Figures

Figure 1 Outline of thesis. ............................................................................................................... 7 Figure 2 The Pyramid of Corporate Social Responsibility. ............................................. 13 Figure 3 The clothing supply chain ........................................................................................... 16 Figure 4 A sense-‐making process model. ............................................................................... 19

Tables Table 1 Databases for literature review ................................................................................... 9 Table 2 Literature search terms ................................................................................................. 10 Table 3 The interview process .................................................................................................... 12 Table 4 H&M company profile .................................................................................................... 24 Table 5 Mini Rodini’s company profile ................................................................................... 27 Table 6 Houdini sportswear’s company profile .................................................................. 29 Table 7 The case companies’ CSR profile ............................................................................... 42

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Exploring Corporate Social Responsibility in Swedish Clothing Retail Sector- A Sense-making Approach KONGJING XING Xing, K., 2014: Exploring Corporate Social Responsibility in Swedish Clothing Retail Sector- A Sense-making Approach. Master thesis in Sustainable Development at Uppsala University, No. 213,56 pp, 30 ECTS/hp Abstract: Corporate social responsibility (CSR) is a voluntary approach for businesses to assume extended responsibilities. Companies are required by various stakeholders to account for the environmental and social consequence of their activities. Stakeholder driven pressure are an extrinsic driver of CSR. Many empirical studies of CSR have focused on extrinsic drivers, but few studies focus on intrinsic drivers of CSR. In this study, the focus is placed on the intrinsic driver of a company’s CSR strategy and activities. Applying a CSR sense-making process model provided by Basu and Palazzo (2008), this study will explore the mindset of a company, so that a profile of CSR characteristic would be created. We will then be able to understand why a company response to external stakeholder expectation as the way it does. In this paper, a case study is carried out within the Swedish clothing retail sector. Three case companies, namely Hennes&Mauritz, Mini Rodini and Houdini sportswear are chosen due to their excellence in CSR actions. The study aims to find out the intrinsic logic behind the Swedish clothing retail companies’ CSR strategies and actions. The similarities and differences of the case companies are compared. Further implications of how to effectively carry out CSR are given to other retailers in the same sector. Keywords: business, corporate social responsibility, clothing, retail, sense-making, stakeholder, sustainable development, Sweden Kongjing Xing, Department of Earth Science, Uppsala University, Villavägen 16, SE- 752 36 Uppsala, Sweden

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Exploring Corporate Social Responsibility in Swedish Clothing Retail Sector- A Sense-making Approach KONGJING XING Xing, K., 2014: Exploring Corporate Social Responsibility in Swedish Clothing Retail Sector- A Sense-making Approach. Master thesis in Sustainable Development at Uppsala University, No. 213, 56 pp, 30 ECTS/hp Summary: Sustainable development is defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” by the Brundtland Commission in 1987 (Brundtland 1987). Nevertheless, however desirable this goal may be seen, the solutions are very complex and involve a large amount of stakeholders that need to be taken into account. Realizing this, many companies together have done much to improve the social and environmental consequence of their activities. Corporate social responsibility (CSR) is currently a prevailing approach in the business world that encourages the companies to benefit society beyond economic wealth creation. The companies need to minimize their social and environmental consequence while maximizing profit for their shareholders. However, business success and social welfare should not be treated as a zero-sum game. CSR can be a source of opportunity, innovation, and competitive advantage (Porter and Kramer 2006). The global clothing and textile industry is facing controversial social and environmental problems. Poor social and environmental conditions in the supply chain have been highlighted in the media since the 1990’s. Consumer and non-governmental organizations (NGOs) are putting great pressure on the world’s largest brands to consider social and environmental conditions along their supply chains. This has caused big clothing retailers to go for acknowledging corporate social responsibility, as protection of the brand and corporate image has been crucial. The fact that clothing retailers are described as pioneers in the area of CSR and that large social and environmental challenges are still facing the industry makes it an interesting sector to study. Facing large social and environmental challenges in the supply chain, big and small brands are now promoting a trend of sustainable fashion. Choosing environmental friendly material, building long-term relationship with suppliers, tackling social problems with industry peers, and taking back end-of-life clothes are some actions clothing retailers take to make the industry more sustainable. This thesis is focusing on three Swedish companies, H&M, Mini Rodini and Houdini sportswear. These three companies are chosen because they are thought to be “frontrunner” companies in the clothing retail sector. The thesis is an empirical study that explores the CSR strategies and actions of these companies, based on a sense-making process model. The aim is to find out why and how these companies involve themselves in the CSR work. The main conclusion that the thesis finds is that the companies involve in CSR work because they identify themselves as good partner of other stakeholders and of our world. Moral and ethical consideration is essential for a company to make strong commitment, and to involve in CSR in a long-term. When communicating their CSR work, they turn out to be transparent and open. These are important CSR characteristic that could be found in all of the three case companies. Their CSR characteristic could become a good example for some followers who want to engage in CSR in the same sector. Keywords: business, corporate social responsibility, clothing, retail, sense-making, stakeholder, sustainable development, Sweden Kongjing Xing, Department of Earth Science, Uppsala University, Villavägen 16, SE- 752 36 Uppsala, Sweden

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Acknowledgement My sincere thank goes to my supervisor Julia Rotter at SLU for her dedicated help and kind consideration throughout the thesis project. Her ideas and feedback had a profound effect on the entire thesis project. Further thanks go to the interviewees from the case companies for their great help to provide the information needed for the thesis. Final thanks go to my family for their great support during my study.

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Abbreviations BCI Better Cotton Initiative CSR Corporate Social Responsibility CoC Code of Conduct DJSI Down Jones Sustainability Index FAP Full Audit Program FUP Follow-‐up Program GOTS Global Organic Textile Standard GRI Global Reporting Initiative ISO International Organization for Standardization ILO International Labor Organization H&M Hennes & Mauritz MNC Multinational Corporation NGO Non-‐governmental Organization PR Public Relation SA Social Accountability SCCC Swedish Clean Clothes Campaign SME Small and Medium-‐sized Enterprise UN United Nations WCED World Commission on Environment and Development

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1. Introduction Corporate Social Responsibility (CSR) refers to the idea of “triple bottom line” (Elkington 1998) – people, planet and profit, which aims to evaluate the social, environmental and financial performance of a corporation. This means companies not only maximize profit for their shareholders, but are expected to serve the needs of all those being affected or affecting the firm, that is to say, the external and internal stakeholders (Freeman 2010). The concept of CSR took shape in the 1950s, since then scholars have been examining and analyzing concepts and theories concerning the responsibilities of business in society (Carroll 2008). Some scholars also combine different approaches and use similar terminology in the research field of CSR, for example, corporate social performance, corporate citizenship, social responsiveness, corporate governance, sustainable development, and stakeholder management (Garriga and Melé 2004). As of today, there is no consensus on a single definition of CSR (Kakabadse 2007). The academic field of CSR is characterized by a wide range of topics regarding the discussion of businesses’ social responsibility, given that the field is highly multi-‐disciplinary. Although many current CSR approaches have made significant contribution to the discussion of CSR, according to Basu and Palazzo (2008), most previous theories were very much based on the content of CSR and its activities, trying to “analyze CSR by examining CSR” (Basu and Palazzo 2008:122). Another critiques arises from Nijhof and Jeurissen (2006) that some assumptions behind CSR are often taken for granted. For example, CSR is often stated based on shared values, without questioning by whom these values are shared, or how a shared meaning of values originates in an organization. Many academic works have been focusing on external institutional influences on organizations and their CSR activities, but few tried to study internal institutional determinants, such as the mental frames and sense-‐making processes within which CSR is embedded (Basu and Palazzo 2008). Therefore, several authors claim that studying CSR from the lens of sense-‐making process might provide a richer understanding of how organizations approach CSR (Basu and Palazzo 2008; Nijhof and Jeurissen 2006). While the debate in academic field of CSR continues, in the business world, many companies are already investing significant resources in “actions that appear to further social good, beyond the interest of the firm and that which is required by law” (McWilliams and Siegel 2001:117), and they are “tackling issues where the impacts are felt far from their firm’s boundaries”(Roberts 2003:159). The current focus for these companies is not on why they should implement CSR activities, but on how they should/could do “effectively” (Roberts 2003). This is consistent with the academic research where the focus of CSR research is shifting from understanding “why” (i.e. reasons for CSR engagement) and “what”

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(i.e. defining the CSR construct) to “how” to best adopt strategies and processes that support CSR decisions within organizations (Basu and Palazzo 2008:130). A sense-‐making process model may well address the “how” questions. Sense-‐making is about people construct their own reality (Nijhof and Jeurissen 2006). In the view of sense-‐making, activities such as CSR are seen as resulting not directly from external demand, but from organizationally embedded cognitive and linguistic processes (Basu and Palazzo 2008). That is to say, approaching CSR from a sense-‐making perspective means focusing on the dynamic and social process underlying the development of CSR in the organizations (Nijhof and Jeurissen 2006). By looking at the underlying processes and investigating how people think, say and tend to behave regarding CSR, we then can explore the unique nature of CSR within an organization (Basu and Palazzo 2008).

1.1 Problem background and research setting This thesis focuses on exploring CSR in the clothing retail sector from a Swedish perspective. This sector is well suited for a CSR study because it closely coordinates international production and distribution, regulation, employment, environmental protection, and wage levels. The clothing companies must handle a multitude of legal and moral standards (Laudal 2010) and expectations from society that are often located outside the direct control of the retailer, especially since the clothing and textile industry is a global industry (Allwood et al. 2006). Many large international retailers, with the headquarters in Western countries outsource their production to low wage countries (Graafland 2002). Such low wage countries are often developing countries, where especially Asian countries increasingly dominate the clothing and textile sector. China, Pakistan, Bangladesh, India, Mexico, Romania, Cambodia, and Turkey, are countries that collectively produce about half of the world’s textile exports and almost three-‐quarters of the world’s garment export (Allwood et al. 2006). While manufacturing is mostly located in developing countries, an estimate of 70% of the consumption is done is Western Europe and 85% in the USA (Allwood et al. 2006). Additionally, the fashion industry is locked into a cycle of unsustainability (Forum for the future 2007), given environmental and social challenges associated with the production and trade of garments. It is associated with being energy-‐, water-‐ and chemical-‐intensive mainly due to wet processing (Kiran-‐Ciliz, 2003), contributing to global warming (Allwood et al. 2006) as well as violating the human rights (Krueger, 2008), besides being driven by a fast and ever-‐changing fashion industry. Due to the above mentioned unsustainability issues, the clothing retail sector was also among the first ones to start working with CSR issues (Grafström 2008). In 1992, several international clothing retail companies, Levi Strauss, GAP, Nike, Disney and H&M were criticized for producing clothes in so-‐called “sweatshops” that were associated with low wages for employees in supplier companies and human rights violations (Grafström 2008:35). According to Young (2006), the case of sweatshops offers an example for illustrating the interconnectedness of different actors operating in the same sector which leads to global structural

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injustices. The vast majority of sweatshops operate in less-‐developed countries. They lie at the bottom of a chain of specification, distribution and marketing that often involves distinct companies. Sweatshops are the place where human rights violence and poor working conditions are occurring. Given Young’s notion of social connection, consumers and retailers also bear responsibility for such working conditions in the manufacturing factories. Retailers and brands are at the end of a supply chain, where they usually hold the largest power (Young 2006). The media exposure in 1992 did lead to consumer boycott for those companies that utilize sweatshops. In order to minimize the risk for being criticized, some clothing retail companies started to emphasized on social responsibility in the supply chain (Grafström 2008:43). Today a growing emphasis on sustainability is strongly evident throughout the fashion industry (Black 2012:11). Due to the growing awareness of sustainable fashion, designers and retailers are looking for alternative solutions to combat the issues of waste, overconsumption, and pollution, as well as the social issues it causes (Black 2012). Designers and retailers are believed to play a key role in driving sustainability along the supply chains, where yet collaborations with other actors are needed, given that collaboration among stakeholders has been pointed out as one way to collectively address sustainability issues (Roloff 2008; Warhurst 2005). But what is theoretically desirable is often difficult to achieve in practice. For example, despite many multinational corporations’ (MNC) efforts to implement strategies to address social and environmental issues in their supply chains, a gap exists between the desirability of supply chain sustainability in theory and the implementation of sustainability in practice (Bowen et al. 2006). The problem seems to be that only a limited number of corporations “walk the talk” of CSR (Andersen and Skjoett-‐Larsen 2009). According to Porter and Kramer (2006), corporation that perceives social responsibility as building shared value rather than as damage control or as a PR (Public Relation) campaign might gain greatest competitive benefit. In the fashion setting, if corporations work to address the social problems that “sweatshops” cause, and environmental problem that are related to the production, a shared value of sustainable fashion could be created. Corporations that make the right choices and build integrated social initiatives with their core business strategies will increasingly distance themselves with other (non-‐ethically aware) actors (Porter and Kramer 2006). Given that sustainability issues in the fashion sector is of great concern, there are many challenges and complexity associated with CSR ambitions in practice. Therefore the question arises, how do corporations “walk the talk” and can therefore potentially harvest a competitive advantage? In other words, how do fashion retailers make sense of their CSR strategy?

1.2 Aim and delimitation Because a simple examination of CSR related activities of the company or analyzing of CSR reports does not provide any translating and application possibilities of the “followers” (Basu and Palazzo 2008), this thesis focuses on

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organizational sense-‐making perspective in order to analyze CSR conceptualization by the “frontrunner” clothing retail companies, their CSR activities and impacts, and their interaction with stakeholders. What can we learn from active CSR corporations if looking through the perspective of sense-‐making theory? This study aims at describe and explore the Swedish clothing retail companies’ CSR process using Basu and Palazzo's (2008) CSR process model of sense-‐making. This study aims to explore the following questions:

-‐ How can we understand the logic behind the case companies’ CSR strategies and actions by exploring their CSR character?

-‐ What are the similarities and differences among the case companies? -‐ What kind of implication could be drawn for other companies in the same

sector that want to adopt CSR? These research questions are tied to a number of delimitations. This thesis focuses on clothing retail companies that work towards sustainable fashion, and the focus lies more on the supply chain responsibility, from design to end-‐of-‐life collection. Therefore, the thesis will not look into a clothing retail company’s internally directed CSR activities, for example reducing energy consumptions in the stores and offices. The thesis focuses only on externally directed initiatives of the case companies. It is further limited to a Swedish context, by looking at selected clothing retailers. The case companies were selected based on their willingness to participate in the study and their expressed proactive stance towards sustainability. The method selected, semi-‐structure interviews, enables a more in-‐depth probing into the issues in question. However, it is both resource-‐ and time-‐consuming to gather data and transcribe and analyze. The number of interviewees is dependent on such constraints, as well as their willingness to participate. Yet, it would be interesting to expand this research at a later stage. It can therefore be seen as a pilot study. Another limitation is that some interviewees have very limited time for discussion, so the interview questions have been adjusted to suit the time constrain of each interview. Website study then becomes an important source to make sure the questions were answered for every company. Theoretically, CSR is a field of study that can be examined from various theoretical perspectives. This thesis takes a stance from business studies, with a focus on management and organizational studies. This thesis has been limited to analyzing data using the CSR sense-‐making theory presented by Basu and Palazzo (2008). The data was collected according to the theoretical framework. The decision to adopt this framework was taken due to its fit with the topic and the other literature as well as its possibility to be easily adapted both for the thesis and for the future study of the same topic. The aim is to create an overview on the fashion companies’ CSR strategies and actions, to understand the sense-‐making process behind their CSR talk and action. By utilizing this framework with the empirical evidence, the framework could be used as a preliminary hypothesis for predicting fashion companies’ CSR profile.

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Regarding the empirical delimitations, the subjects chosen for interview are directly connected to CSR in the fashion sector. CSR as a concept involves several stakeholders: consumers, employees, NGOs, investors, owners, regulatory agencies, and local communities. However, the main focus is placed on how the clothing retail companies work with CSR. Additionally, the units of analysis are only those directly connected with the partnership, for example, retailer-‐consumer, retailer-‐supplier, retailer-‐NGO, are the important partnerships that will be looked into. Stakeholder perspectives will not be the main focus of this study, however, they will be part of a more general discussion of the companies’ responsibility towards society.

1.3 Definitions Corporate Social Responsibility Corporate Social Responsibility (CSR) is linked to actions taken by the company that is interpreted as socially or/and environmentally responsible. More generally, it is linked with the role of business in society (Scherer and Palazzo, 2011). The concept is in line with sustainable development as established by WCED (1987) and with the established application of sustainable development in the business world, referred to as the ‘triple bottom line’ (Elkington 1998). The triple bottom line refers to the idea that beyond a financial bottom line there should be an environmental and social one. In this paper, CSR will be used to describe social, environmental and economic aspects of corporate initiatives. CSR standards CSR standards are those certifications on social and environmental issues reporting for business responsibilities, at the same time, making comparisons between business practices and their reports easier (Zadek 1998). In this thesis, some of the most commonly spread CSR standards will be mentioned:

-‐ The UN Global Compact is a “policy framework” launched by Secretary General Kofi Annan in 2000 where firms enlist and thereby subscribe to 10 CSR-‐related “principles” (Laudal 2010).

-‐ Social Accountability 8000 (SA8000) is a set of international workplace and human rights standards, which was designed to complement and extend ISO 9000 quality management standards and ISO 14000 environmental management certification standards(Miles and Munilla 2004).

-‐ The Global Reporting Initiative (GRI) provides companies and organizations with a comprehensive sustainability reporting framework(Global Reporting Initiative 2013) .

-‐ The Global Organic Textile Standard (GOTS) is recognized as the world's leading processing standard for textiles made from organic fibers. It defines high-‐level environmental criteria along the entire organic textiles

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supply chain and requires compliance with social criteria as well(GOTS 2013).

-‐ BlueSign is an emerging standard for environmental health and safety in the manufacturing of textiles. It is provided by a Switzerland-‐based organization, known as BlueSign Technologies AG. The organization provides independent auditing which creates transparency along the whole supply chain (Bluesign 2013).

-‐ Oeko-‐Tex Standard 100 is an independent testing and certification system for textile products from all stages of production along the textile value chain. The standard was developed in 1992. The aim was to make textile products from conventional production having laboratory testing for harmful substances (OEKO-‐TEX Association 2013).

Clothing, fashion, apparel, and garment The words “fashion” and “clothing” (in the US, “apparel”) denote different aspects of our relationship with what we wear. “Clothing” and “apparel” can be understood as our everyday day basic garments, commodities purchased out of necessity; “fashion”, on the other hand, represents consumers’ discretionary choices, which can be driven by all manner of personal and symbolic motivations: desire, aesthetics, novelty, conformity – both internally and externally stimulated. However, these are not fixed definitions: “fashion” and “clothing” morph fluidly into one another (Black 2012:15). Supply chain & value chain The two different terms, supply chain and value chain, are describing a similar phenomenon. The difference lies mainly in the perspective, hence if looked at from a farm level or from the end consumer (Pullman and Wu 2012). In this thesis a supply chain perspective has been chosen, which refers to the step-‐by-‐step process which the product, in this case cloting and textile, transitions from raw material to finished apparel (Roberts 2003). Sourcing The term ‘sourcing’ refers to a broad meaning of buying, purchasing, outsourcing, manufacturing, production and supply procurement (Fang, Gunterberg, and Larsson 2010).

1.4 Outline The thesis is structured in eight chapters. Figure 1 below illustrates the chapters. Chapter 1 provides the reader with the problem background and the setting for the research question. The research area is introduced, and the delimitation of the study is also provided. Definition of the key concepts is also given in this chapter.

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Chapter 2 gives a discussion about the method chosen for this project. The choice of the sector, case companies, data collecting methods and analytical methods are discussed. Chapter 3 reviews previous academic research in the studied area. Some relevant researches within the studied sector are also presented. Chapter 4 aims at providing the theoretical framework of the study within which the empirical findings will be analyzed. The theoretical framework presents a CSR sense-‐making process model taken from Basu and Palazzo’s (2008) work.

Figure 1 Outline of thesis.

Chapter 5 lists the empirical findings for each case company, H&M, Mini Rodini and Houdini sportswear. Chapter 6 analyzes and interpreted the empirical findings within the theoretical model. Chapter 7 then discusses about the findings, which provides some understanding in a larger context. Chapter 8 is the conclusion of the project that presents together a brief discussion of current situation and suggestion for future research. After the introduction part, the following chapter presents and discusses the chosen method used in this study.

1. Introduc,on

2. Method

3. Literature Review

4. Theore,cal Framework

5. Empirical Findings

6. Analysis

7. Discussion

8. Conclusion

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2. Method This chapter presents the chosen methodological approach for this study. Case study as a study method is discussed. Which sector and which companies were included in the study are presented in the following section. The methods for conducting literature review, theoretical framework identification, and empirical study are also presented. The chapter ends will a discussion on the research ethic that was considered throughout the whole study.

2.1 Multiple case studies as part of the qualitative approach This thesis aims at analyze CSR strategies and activities of the retail firms in the Swedish textile and clothing industry, using the CSR sense-‐making process framework proposed by Basu and Palazzo (2008). A qualitative research design was then chosen due to this aim of the study, because a qualitative research allows using a variety of data collection techniques and analytical procedures to develop a conceptual framework (Saunders 2009), and further to offer insight into complex social processes (Eisenhardt and Graebner 2007). In order to understand CSR characters in a specific firm, a case study approach has been adopted. According to Eisenhardt and Graebner (2007), case study is a theory-‐building approach that is deeply embedded in rich empirical descriptions of particular instances of a phenomenon based on a variety of data sources. Case study approach typically answers questions that address “how” and “why” questions in unexplored research areas (Yin 2009). The results of multiple case studies are considered to be more persuasive, and the overall study to be more robust (Yin 2009). A disadvantage with the case study approach is that no generalization of results or theory testing can be done (Yin 2009), but case study can be used to generate theoretical constructs, propositions and/or midrange theories (Eisenhardt 1989). This study chooses to explore CSR in the Swedish clothing retail sector. The interest of this thesis is not to draw conclusions about the whole Swedish clothing retail sector, but to gain understanding about each case firm on how they response to complex supply chains and large challenges regarding environmental and social responsibility.

2.2 Choice of sector and companies This article focuses on the clothing retail sector. This sector is well suited for a CSR study as it is one of the most global business in the world, with closely coordinated production and distribution lines spread out in regions with great variations in government regulation, employment and environmental protections, and wage levels (Laudal 2010). Thus, clothing retail companies must handle a multitude of legal and moral standards.

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This thesis will focus on the CSR strategies and activities within the Swedish clothing retail companies. When selecting the companies for a case study, one needs sufficient access to the potential data, whether to interview people, review documents or records, or make observations in the “field” (Yin 2009). The case companies should be able to provide such access, and most likely illuminate the research questions, among other candidate cases companies. For this thesis, three major Swedish clothing retail companies, namely H&M, Mini Rodini, and Houdini sportswear were chosen as cases. The companies were chosen due to their active involvement in various CSR activities that were reported or introduced by media and other organizations. In addition, the three companies were chosen because they could be seen as pioneer in the sustainable fashion scene. H&M is an industry leader that has stores all over the world. The company has started to work sincerely in their CSR, both along their supply chain and within the organization. An analysis of such industry leader’s CSR might provide useful implications to other clothing retail companies to work on their own CSR. Mini Rodini and Houdini sportswear are small-‐and-‐medium-‐sized companies (SMEs) that have worked on CSR from the beginning of their establishment. These two companies are suitable for the study because their CSR are integrated into all of the corporation activities. An analysis of their CSR profile will provide rich implication to other SMEs that wants to contribute to sustainable fashion.

2.3 Literature review At the start of the project, when a general topic had been decided upon, a literature search was conducted to get an understanding of previous knowledge in the field and further delimitate the core problem. Consultation with the supervisor was a first step to identify literature that was of relevance to the topic. An Internet search was conducted to browse the library database on earlier research papers and projects. Database used is shown at Table 1.

Table 1 Databases for literature review

Database Uppsala University library database Swedish national library database LIBRIS JSTOR Science Direct Elsevier Emerald EBSCOhost EconLit SpringerLink

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Several search terms were applied when searching for relevant literatures from the databases. These terms were used both independently and in combination with others, depending on the search results. The terms are shown in table 2. The search using the key terms was the source of the initial information. The bibliographies of these initial papers were also browsed to identify commonly cited literature, and additional articles of relevance. The literature field was expanded by using these search methods to identify more papers. Additionally, government reports and NGO reports on the topic provided an insight into the issues. Previous thesis done in related subjects also provided a good overview on the topic area and the used literature. Precise notes were made during the search processes. Search terms and their results were also noted down.

Table 2 Literature search terms

Corporate social responsibility Sustainability Sustainable fashion Cloth-‐retailing Sustainable supply chain/global supply chain Textile/apparel/garment industry Ethical sourcing Environmental management Social responsible

2.4 Identification of a theoretical framework A literature review was conducted before identifying a relevant theoretical framework. The literature review reveals that many academic works have been focusing on the external institutional influences on organizations and their CSR activities, but few tried to study internal institutional determinants. In order to answer “why” and “how” a company conducts CSR activities as they do, one have to understand the mental framework behind the decision making of the company. A model that explain CSR as a sense-‐making process is presented by Basu and Palazzo (2008). The model was used as the theoretical framework to illustrate how companies think, say and tend to behave regarding CSR. We can then explore the unique CSR nature within an organization. The theoretical framework is important in this exploratory study, where we try to learn more about an organization’s intrinsic driving force for CSR. The sense-‐making process model guided the whole study, determined which attributes would be measured and what relationships would be looked into. Basu and Palazzo specifically point to the need for empirical research. They claim that in the business world, corporate engagement in social initiatives is a given, and the problem is not whether to do or not to do, but how to find appropriate way of doing so (Basu and Palazzo 2008:130). Therefore, empirical investigation of CSR process are necessary for locating intrinsic patterns of CSR

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and relating them to impact (Basu and Palazzo 2008:130). The need for empirical research is clear, and the most suitable way to gather data needed for constructing CSR profiles may be that of interviews and observation.

2.5 Empirical study Website study is one data collecting method. Each case company’s website was reviewed, and the data collection was carried out. Reading and collecting data from the case company’s CSR report was the first step. Other CSR related corporate information available at the company’s website was also reviewed and analyzed. The website ought to reflect part of the mindset of the case companies-‐ their identity and the language they use. The CSR report and other media report were reviewed in order to learn more about the reality of the organization-‐ what they have done. A semi-‐structured interview is another data collecting method. Key questions were designed according to the theoretical framework. In the case of this project, the questions would refer to each dimension of Basu and Palazzo’s (2008) model, namely cognitive, linguistic and conative dimension. The use of the question vary to some extend from interview to interview. Some questions were to be covered, and some were omitted, depending on the specific organizational context that is encountered in relation to the research topic. The order of questions was also varied due to different flow of the conversation. Some additional questions were made to explore the research questions. The primary data were captured by audio-‐recording the conversation and note taking. An analysis of the interviews has been conducted to create the CSR profile of the case companies.

2.6 Research ethics To avoid psychological distress in the interviewees, they were informed through the research processes. This included explaining research aims, what information was sought and how their data would be handled. An interview guide with the interview questions was e-‐mailed out one week before the interview took place. The candidate could make and informed decision as to whether they were willing to be involved. Those that agreed to be interviewed were informed at the start of the interview of the recording, and that they had the right to at any point pull out of the interview if they do not feel comfortable continuing. At the end of the interview, respondents were informed that the interview would be transcribed and that the transcript would be sent to them for approval before its use in the study. This was done so that the respondents could correct any misunderstanding, and also so that they could, if they so desired, add to their statements. Table 3 below outlines the interview process. Permission was also asked of the respondents to publish their names and the name of their organization in the study, which was in all case give.

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Table 3 The interview process

The chapter has presented the methodological approach used in the thesis. In the following chapter the literature review will be presented.

Inter-‐viewee

Name

Company

Position

Date of interview

Date of transcript validation

A Elin Hallerby

H&M

Press responsible person of CSR

May 20th, 2013

June 1, 2013

B Klara Gardtman

Mini Rodini

Buyer and CSR responsible person

May 15th, 2013

June 5, 2013

C Mia Tapio

Houdini sportswear

Product manager

and CSR responsible person

May 16th, 2013

June 6, 2013

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3. Literature Review In this chapter the literature review is presented. The chapter first introduces a brief discussion about definitions of Corporate Social Responsibility (CSR) in general, and then it discusses the extrinsic factors for organizations’ CSR strategy and activity. The chapter also includes a discussion of CSR in the clothing industry, and the sustainability issues in the supply chain.

3.1 Definitions of Corporate Social Responsibility The debate on the relationship between business and society has been on going for decades with no consensus on commonly accepted definitions of CSR (Carroll 1991; McWilliams and Siegel 2001; Garriga and Melé 2004). One more cited definition was given by (Carroll 1991:40 ) that “the social responsibility of business encompasses the economic, legal, ethical and philanthropic responsibilities that organizations have at a given point in time”. These four responsibilities are all parts of what Carroll refers to as the pyramid of corporate social responsibility as illustrated in Figure 2.

Figure 2 The Pyramid of Corporate Social Responsibility (Carroll 1991:42) – reprinted without permission.

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Carroll’s definition was widely cited in the academic scope; however, CSR definition is more practical in the business and society scope. For example, The European Union defines CSR as “the responsibility of enterprises for their impacts on society”. To fully meet their social responsibility, enterprises “should have in place a process to integrate social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders” (European Commission 2011). In general, academics tends to assess CSR more in terms of social contract than that of sustainability (Kababadse 2007). Therefore, it is important to reflect upon the meaning of CSR in different contexts. Whichever definition CSR is adopted, one strongly held view is of CSR as a process rather than “a set of outcomes” (Carroll 1999). In this way, CSR is under continual review driven by external factors. The fundamental notions of respect, dignity and care, which lie at the core of any CSR discussion, exist, but how these are enacted becomes an additional critical consideration (Kakabades 2007).

3.2 Extrinsic drivers Governments, activists and the media today are holding more expectations on companies to account for the social and environmental consequences of their economic activities (Porter and Kramer 2006). The corporations today face a whole new set of risk largely linked to their reputations. Thus, reputation has emerged as a critical driver for CSR; “the larger and more highly visible the company, the more likely it is to be developing sustainability programs” (Kakabadese 2007). Why do they have the responsibility to begin to tackle the world’s problem? The answer might be: they have the power and the means to tackle these issues on a large scale (Hopkins 2007; Young, 2006). Today, we live in a “networked society” (Castells 2011) where organizations and society are interdependent. There is a demand from the society for business to be socially and environmentally responsible; and when the legal enforcement body is weak, they should go beyond what is required by law (Scherer and Palazzo 2007). With globalization, the global framework of rules is fragile and incomplete, many corporation account only for those living under a common constitution within a single political community (Young 2006). This is the cause of the global structural injustice (Young 2006). Therefore, business corporation are required to have an additional responsibility to contribute to the development and proper working of global governance (Scherer and Palazzo 2007). Under the changing of societal expectation, some global corporations have started to intensify their CSR engagement. There are various elements that are driving the corporations CSR movement, some of which originate internally in the organization and some of which exist as a result of external pressure. According to Basu and Palazzo (2008) the demand of external stakeholders, such as governments, non-‐governmental organizations (NGOs), and consumers are some of the main forces driving CSR. The anti-‐sweatshops movement in the global textile industry is one example of consumer

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boycott and NGO movement (Young 2006). Other initiatives such as the Swedish Clean Clothes Campaign (SCCC) tries to persuade firms to take responsibility for worker’s rights at their suppliers in developing countries (Ählström and Egels-‐Zandén 2008). The increasing awareness people have of their leverage power can significantly change the responsibility businesses have towards society. If organizations are to mature in baring greater responsibility, they should first reflect upon their own position, behavior, value system and expectation within their organizations (Kakabades 2007). Finally, one more external driver is related to the financial sector. The rise in socially responsible investment has meant an increase in the number of organizations looking to meet the criteria in order to be listed on these indexes. The Down Jones Sustainability Index (DJSI) is one example to measure the large corporations’ sustainability performance. Other corporations see CSR as an important strategy to gain competitive success (Porter and Kramer 2006).

3.3 CSR and the clothing industry The clothing and textile industry is a global industry (Allwood et al. 2006). Large international retailers, located mostly in industrialized countries, like the USA, the EU and Japan, increasingly transfer larger parts of the production process to the supply chain (Illge and Preuss 2012), because an increased competition between clothing retailers has triggered a high concern for low cost strategies. This has resulted in that the location of suppliers moves to relative low wage countries (Graafland 2002). Developing countries, especially Asian countries increasingly dominated the clothing and textile sector. China, Pakistan, Bangladesh, India, Mexico, Romania, Cambodia, and Turkey, are countries that collectively produce about half of the world’s textile exports and almost three-‐quarters of the world’s garment export (Allwood et al. 2006). China is the largest country that produces textile and garment, because of a build up of competitive advantages including short lead times, efficient logistics, a more experience and skilled labor force, a better power infrastructure, and more investment in capital equipment (Allwood et al. 2006). While manufacturing mainly dominated by Asian countries, the international retailers dominate the retailing sector to supply end goods to consumers – 70% selling in Western Europe and 85% in the USA (Allwood et al. 2006). As an industry, the clothing and textile industry is locked into a cycle of unsustainability (Forum for the future 2007). For each stage of the supply chain (see figure 3) the industry implies sustainability problems; there are social, environmental and economic impact at every stage.

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Figure 3 The clothing supply chain – adapted from Graafland (2002)

Major environmental impacts of the industry arise from resource use, waste, and toxicity. The industry is extremely energy-‐, water-‐ and chemical-‐intensive mainly due to wet processing (Kiran-‐Ciliz 2003). The industry’s contribution to climate change is dominated by fuel burning for heating water and electricity generation; toxic chemicals are used widely in cotton cultivating and in many manufacturing stages such as dyeing and printing; waste volumes from the industry are high due to “fast fashion”; water consumption is extensive in cotton crop cultivation (Allwood et al. 2006). Regarding social impacts, about 70% of clothing workers are women(Allwood et al. 2006). Other social concerns include working hours, safety and use of child labor throughout the supply chain. Lower wage level exists though the sector offers an opportunity for development by creating many relatively low skilled jobs. In some countries the right of worker in the sector to form associations to represent their concerns in collective bargaining is suppressed (Allwood et al. 2006). There are two main factors that have resulted in the sustainability problems of the sector (Forum for the future 2007): One is the high street dynamic. Fierce competition among retailers, and between retailers and off-‐shore manufacturers has driven cost and quality down. The trend of “fast fashion”, which H&M is one of the pioneering companies, has becoming popular among retailers to meet the consumer demand for “cheap chic” (cheap and fashion) (Morgan and Birtwistle 2009). This phenomenon has led to consumers purchasing and disposing larger quantities of clothing (Morgan and Birtwistle 2009). Some progress made by the fast fashion companies has provided customers with better choice, increased availability and lower prices while at the same time retailers have benefit from improved profitability (Birtwistle, Siddiqui, and Fiorito 2003). Under such conditions a shift to sustainable fashions may result in reduced profit. The other

Product development

• design, collection, deuinition,samples

Fabric production

• cotton production, knitting, bleaching, printing, dyeing

Garment assembly

• fabric cutting

Distrubiont/ sales

• merchandising, packaging,transit, distribution, retail

Consumer

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factor is the complex global supply chain. Different stages of production (see figure 3) often take place in different parts of the world. Due to the number of small firms and subcontractors active in the area, it is complex to draw boundaries between the stages of supply chain (Allwood et al. 2006). A fragmented supply chain contributes to a lack of clear ownership of the social and environmental problems between consumers, designers, manufacturers, suppliers, retailers and legislative bodies (Black 2012:9). This complexity and lack of transparency makes it hard to identify sustainability problems through out the supply chain. Though sustainability problems are fierce in the industry, these challenges may also hold the key to creating a more sustainable industry (Forum for the future 2007). Some mainstream brands have started to embrace more sustainable options, such as organic or fair-‐trade products. For example, H&M has become the number one buyer of organic cotton in the world (Hennes&Mauritz 2013h). Better traceability of the supply chain will allow responsible retailers to produce more ethically and will allow customers to make more informed choices (Forum for the future 2007). CSR is not longer an individual company’s domain; increasingly, it encompasses the entire supply chain (Andersen and Skjoett-‐Larsen 2009).

3.4 Supply chain sustainability Many fashion corporations have shifted their supply chains to developing countries such as China for various business reasons. The most significant one is to lower their labor cost (Krueger 2008). The quest for reducing cost has come into tension with the treatment of local workers (Kababadse 2007). The ethical question in such process is raised in terms of “how low” a firm might go in reducing those cost at the expense of its workers. This lies at the heart of debates about the moral character of corporate behavior and practices (Krueger 2008). Critics of global supply chain often extend their complaints beyond the fact of lower wages. The complaints include such practices as long work weeks, unsafe working conditions, child labor, harassment, discrimination, low levels of worker participation, ignoring of labor complaints, and other violations of human rights (Krueger 2008). The “anti-‐sweatshop” movement is one of the examples. The increasing consumer demand for products made in conditions that respect workers’ rights has spurred fashion retail companies to conduct ethical sourcing of products(Goworek 2011). That means, the fashion supply chain needs to ensure the implementation of CSR policies. However, corporate supply chains may be long and complex, retailers have to rely on different suppliers, and the large number of subcontractors and home-‐based workers in the apparel sector (Hopkins 2007). This has made it difficult and complex for corporate compliance on high ethical standards with the global supply chain(Krueger 2008). Therefore, developing codes of conduct to apply the same standards through out the supply chain is critical (Park and Lennon 2006).

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Codes of conducts (CoC) are written statement of policies and commitments to specific manners, which companies adopt to manage their activities responsibly throughout the supply chain (Andersen and Skjoett-‐Larsen 2009). The overall objective of the codes is to protect workers’ rights in terms of working hours, fair wages, and working conditions (Allwood et al. 2006; May 2007) Even though many international corporations use codes of conduct, it is criticized that ethical codes cannot be enforced in the same way as legal requirements, nor are they drafted in response to the needs of the employers in supplier companies (Andersen and Skjoett-‐Larsen 2009). Environmental protection in the supply chain is also one of the primary concerns of our society. Besides legal compliance of environmental protection, some companies also develop pro-‐environmental technologies and programs to improve environmental performance, such as development of dyes or fabrics that use nontoxic ingredients and development of recycling programs (Park and Lennon 2006).Environmental concerns have been primarily focused on developing environmentally friendly products(Park and Lennon 2006), for example, using recycled material, recycled cotton, polyester and organic cotton. However, environmental responsibility is not limited to production, it should involve in the entire process from resource management (i.e. raw material acquisition) to distribution and waste management, which is through out the whole product lifecycle (Park and Lennon 2006). To summarize it can be said that CSR in the clothing industry are largely driven by extrinsic factors. But what can a single clothing company react facing different extrinsic drivers? What can we understand from a single company’s mental framework that it react with certain strategies or activities? The next chapter will present a theoretical framework that guild the understanding of such questions.

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4. Theoretical Framework: A CSR Sense-‐making Approach The above section has discussed the extrinsic reasons for a firm’s CSR engagement. From a sense-‐making process perspective, CSR is seen as a reflection of the intrinsic part of the organizational character. That is to say, how businesses might react differently to equivalent external realities based on their CSR character (Basu and Palazzo 2008). Basu and Palazzo (2008:124)define CSR as “The process by which managers within an organization think about and discuss relationships with stakeholders as well as their roles in relation to the common good, along with their behavioral disposition with respect to the fulfillment and achievement of these roles and relationships.” Basu and Palazzo (2008) present a three-‐dimensional organizational sense-‐ making process model to CSR: (1) The cognitive dimension focuses on “what firms think”; (2) The linguistic dimension focuses on “what firms say”; (3) And the conative dimension focuses on “how firms tends to behave”. Each dimension is then split into different sub dimensions, which approach CSR in different directions, and indicate different CSR characters. According to the authors, this theoretical framework (see figure 4) can help to support a CSR analysis (ibid.).

Figure 4 A Sense-‐making process model (Basu & Palazzo, p. 125) – reprinted without permission.

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It is important to point out that while Basu and Palazzo (2008) construct the model, they base their model in the finding of other authors(Brickson 2007; Suchman 1995; Ashforth and Gibbs 1990; Spar 2003; Wood 1991). The work of these other authors forms the basis from which Basu and Palazzo are able to construct different CSR characters, and piece together a broader grouping of three dimensions, namely cognitive, linguistic and conative dimensions.

4.1 Cognitive dimensions: what firms think Identity orientation Basu and Palazzo (2008:125) define identity orientation as “a construct that consists of participants’ shared perceptions of what their organization is, thereby driving motivation and behavior”. To identify an organization’s identity (i.e. “who are we”) will help us to understand how business relate to stakeholders, and why they relate to them as they do. Basu and Palazzo (2008) draw heavily on Brickson (2007) for this dimension. Based on Brickson’s (2007) work, the model shows that identity orientation can be characterized as three types – individualistic, relational or collectivistic. Individualistic orientation emphasizes individual liberty and self-‐interest; Relational orientation highlights relationship with stakeholders; and collectivistic orientation promote the interest of a larger group and define themselves in universal terms (Basu and Palazzo 2008:125-‐126). Each of these orientations all stem from an understanding of the nature of the relationship between the organization and its environment, and the resulting understanding of reality (Brickson 2007). The structure of these perceived relationships will determine the specific nature of their CSR activities. An individualistic organization will try to display a competitive spirit and perform as “the best in business”, thus choosing activities that are best showcased for their salience. A relational organization might emphasize activities that are designed to strengthen particular network relationship, (increase “well-‐being” of all stakeholder, customers, investors, ect.). A collectivistic organization will choose to address a social or environmental issue (Basu and Palazzo 2008). Legitimacy Suchman (1995:574) defines legitimacy as “a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions”. On the basis of this definition Basu and Palazzo (2008) propose three types of organizational legitimacy – pragmatic, cognitive and moral. Pragmatic legitimacy assumes that the firm can control its environment (Suchman 1995). Regarding CSR activities, an organization may response to its

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critics by unleashing advertising campaign to showcase CSR achievements that meets stakeholder expectations and social norms (Basu and Palazzo 2008). Cognitive legitimacy assumes that the environment controls the firm (Suchman 1995). Regarding CSR activities, an organization may adapt to external demands, react to uncertainty or imitate other actors that have faced similar challenges successfully. An example is developing code of conduct (Basu and Palazzo 2008). Moral legitimacy assumes that organizations may strive to achieve legitimacy by co-‐creating acceptable norms of behavior with relevant stakeholders, when facing extreme uncertainty caused by fundamental social changes (Suchman 1995).

4.2 Linguistic dimensions: what firms say Justification The aim of this dimension is to understand how an organization goes about explaining its actions. This will reflect how organizations interpret their relationship with stakeholders and their responsibility to society. The language they use to speak about their actions may indicate their overall understanding of the environment. This in turn has an influence on the formation of the reaction to demands made by stakeholders. Therefore, studying the very nature of justifications may provide insights into why organizations act the way they do (Basu and Palazzo 2008). Basu and Palazzo's (2008) model draws on Ashforth and Gibbs' (1990) three variants of language games: legal, scientific, and economic. Legal justifications means an organization provides officially permitted arguments to support its actions in response to critics. Scientific justifications means a firm claims expertise in its behavior or rely on “neutral experts” to defend itself against criticism. Economic justification means a firm highlights that its actions will contribute tangible economic benefit to its stakeholders, in defense of its actions. These three type of justifications have been critiqued by Ashforth and Gibbs (1990) for trying to silence critics rather than facilitating positive dialogue. The fourth-‐ ethical justification means whereby an organization explains the reason for its action as pursing universal goals of human and social welfare (Basu and Palazzo 2008). In contract to the legal, scientific and economic justifications, the ethical justification opens the organization up to dialogue. Transparency Regarding CSR communication, an organization can choose either balanced or biased reporting (Basu and Palazzo 2008). By communicating in a balanced way, organizations choose to report both positive and negative impacts of their

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actions. By communicating in a biased way, they convey only the positive results but omit the negative impacts. As argued by Sims and Brinkmann (2003) that CSR reporting does not reveal the real nature of CSR engagement, organizations that applied biased communication might use large advertising campaigns and yet not respond to other issues or criticisms. They may aim at using responsible activities as public relations exercises (Basu and Palazzo 2008). Organizations that choose a balanced approach may report both achievements and challenges, including even unfavorable and painful information involving the whole supply chain (Spar & La Mure 2003). They are likely to open up to external audit and stakeholder criticisms (Basu and Palazzo 2008).

4.3 Conative dimensions: how firms tend to behave Posture Posture refers to how a response is made, which reveals the firm’s organizational character-‐who they are and what they say (Wood 1991). A firms responsive posture could be predicted according to a calculation of the cost and benefit of an action-‐ both economic and noneconomic calculation (Spar 2003). An organization’s posture is a good indicator of how it is likely to deal with external critics, which interaction it will take, whether it will result in collaboration or conflict, and how it goes about learning from the past interactions (Basu and Palazzo 2008). Basu and Palazzo (2008) have come up with three types of posture that organizations may react to critics: defensive, tentative, and open. Organizations that take defensive posture presumes their decisions are always right and accept no feedback from others (Basu and Palazzo 2008). They deny involvement or ownership of the problem (Zadek 2007). Organizations that stick to its routine activities and do not want to learn from past interactions will likely to fail adapt to environmental changes (Basu and Palazzo 2008). A tentative posture may results from inexperience with an issue or lack of appropriate tools to deal with the problem. They are uncertain to their actions’ impact. Therefore, they may intent to remain unengaged, or may be unserious about addressing problem, which result in greater critics (Basu and Palazzo 2008; Ashforth and Gibbs 1990). Organizations that take open posture are willing to listen and response to alternative perspectives. They share solutions, their perception of the issue, and discuss with others, both internally and externally, which might bring about real changes (Basu and Palazzo 2008).

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Consistency The consistency dimension is split into two aspects: strategic consistency and internal consistency. Strategic consistency refers to the consistency between an organization’s overall strategy and its CSR activities; while internal consistency refers to the internal coherence among CSR activities through time (Basu and Palazzo 2008). If an organization is judged to have high consistency in both aspects, we can predict that the organization has high credibility and effectiveness (Basu and Palazzo 2008). An organization that act strategically consistent may actively embed CSR in all of the strategic conversations and processes; In contract, if it acts strategically inconsistent, their CSR activities is simply geared up by internal and external stakeholder demands, not preparing to use CSR as the organization’s overall strategy (Basu and Palazzo 2008). Internal consistency implies managers are willing to propose a range of CSR activities that designed to achieve specific aims; while internal inconsistency reveals that no logic or systematic framework is applied to the organization’s CSR activities (Basu and Palazzo 2008). Commitment Commitment, according to Basu and Palazzo (2008), means an organization’s determination to achieve a specific goal. Commitment could be found in organizational leadership, in the full integration with the organization’s all level of decision making; and in the span that involve the whole supply chain. Commitment in the model can either be instrumental or normative. Instrumental commitment means the commitment is derived from external incentives; Normative commitment means the commitment stems from internal and moral considerations (Basu and Palazzo 2008). The presented sense-‐making process model is very complex and abstract. One drawback can be seen that the categories are rather static, where it might be difficult to classify information accordingly. Yet, this framework seems to offer a fruitful departure point to explore the CSR sense-‐making process of the selected clothing retailers. The next chapter will present the empirical findings.

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5. Empirical Findings In this chapter the empirical data as well as some background information of the case companies are presented.

5.1 The CSR strategies and activities of Hennes & Mauritz (H&M) H&M has established itself as a mid-‐price clothing retailer (Table 4). The business concept of H&M is to offer the latest fashion and quality garments to customer while providing the best price. Meanwhile, the company tries to stay as socially and environmentally aware. Sustainability has become an important element that H&M is devoting considerable resources to work on.

Table 4 H&M company profile

Name: H&M Hennes & Mauritz AB Head office: Stockholm, Sweden Founded: 1947 Sales channels: 3200 stores in 54 markets, Internet sales (2013) Employees: 116,000 (2013) Sales/turnover: SEK 150 billion including VAT (2013) Source: http://about.hm.com/en/About/facts-‐about-‐hm.html The relatively low price is often in question because low prices are often linked with unsustainable action. However, one research work shows that the relatively low product price of H&M is guaranteed by cutting out middlemen, buying in large volumes and having efficient distribution processes (Illge and Preuss 2012). Regarding the supply chain management, H&M does not own any factories, but instead places orders at 900 independent suppliers in Asia and Europe through H&M’s local production offices(Hennes&Mauritz 2013a). The production offices have the responsibility to audit working conditions in the factories. Moreover, H&M authorize external auditors to check if suppliers meet the environmental requirements and labor standards set up by H&M’s Code of Conduct (Hennes&Mauritz 2013a). The sustainability vision of H&M is to run the business operation in a way that is economically, socially and environmentally sustainable. To achieve this, the company tries to build close long-‐term partnership with its suppliers. Long-‐term improvement in the supply chain and the communities are important for the company. The sustainability vision of H&M is built on seven commitments. Each commitment contains hundreds of conscious actions, and is carried out through the supply chain. The seven commitments (Hennes&Mauritz 2013b) include:

• Provide fashion for conscious customers; • Choose and reward responsible partners; • Be ethical; • Be climate smart;

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• Reduce, reuse, recycle; • Use natural resources responsibly; • Strengthen communities.

5.1.1 CSR in the supply chain “Our approach is to use our influence wherever possible to promote good practice and raise awareness, not only among our suppliers and their employees as well as others along our value chain. We believe that working together in partnership is the best way we can make a positive difference.” (Interviewee A 2013) H&M buys clothing and other products from its 900 independent suppliers all over the world. The suppliers are required by H&M to meet certain obligations concerning the production of clothing, including environmental rules and working conditions. H&M’s local buying offices formulate orders and choose suppliers based on the balance between price and quality. The local offices also conduct quality tests, verify working conditions in the factories and the safety and quality of goods. Each supplier must underwrite H&M’s Code of Conduct, which includes requirements involving respect for workers, the environment, animals and customers. If local norms and legislation are stronger than what is outlined in its code of conduct, H&M requires its suppliers to comply with local requirements and to have all the necessary permits and licenses for their activities. H&M works to build strong and long-‐term relations with suppliers, by supporting them in the improvement of working condition and the reduction of environmental impact from production. H&M also acknowledge a CSR approach throughout the supply chain including those who are not employed by H&M, involving subcontractors and raw material producers(Hennes&Mauritz 2013a). H&M uses major resources to monitor the suppliers’ sustainability performance, and also support them in making improvements. A supplier factory list is presented in H&M’s corporate website. The suppliers’ compliance in sustainability work in detail is also presented in the website. H&M’s environmental and social responsibility along the supply chain is revealed in the Code of Conduct (CoC) that all of the suppliers mush complied with (Hennes&Mauritz 2013c). The compliance requirements apply only to suppliers directly connected to H&M. Regarding the subcontractors, H&M enters into the Full Audit Program (FAP) and the Follow-‐up Program (FUP), to facilitates the monitoring of both first-‐tier suppliers and subcontractors(Hennes&Mauritz 2013d). Environmental responsibility The Code of Conduct demands the suppliers to comply with the operating countries’ legislation and to act beyond what is regulated by law. Environmental

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responsibility of H&M could be found in four areas: chemicals, water, raw material and end-‐of-‐life garment collecting. Regarding chemicals, H&M has created a Chemical Restriction list that guides the use of chemicals for suppliers. The overall strategy is that chemicals identified as hazardous should neither be used during production nor be detectable in products. According to H&M, the Chemical Restriction list is based on the highest standard in all of the sales countries, as well as on legal information, NGOs and scientific reports. The principal is precautionary that H&M preventively restrict chemicals even when there is scientific uncertainty. Chemical management is also part of H&M’s FAP. H&M has provided chemical training and audits to suppliers through the local Quality Assurance team that consist of various experts, including chemical experts. A lifecycle approach is used to limit the use and discharge of hazardous chemicals throughout the value chain(Hennes&Mauritz 2013e). Water is another key issue that H&M commits to ensure responsible use throughout the value chain. Partnered with WWF, H&M aims to set new standards for water in the fashion industry. The water strategy consist of five steps: (1) Raise water awareness among H&M employees, suppliers and customers, including global water challenges and freshwater dependence; (2) Spread the knowledge of impact, including footprint and risk; (3) Take internal action, for example, optimize governance, improve efficiency and reduce pollution for own and supplier operations; (4) Engage stakeholder to take action in their focus regions; (5) Influent public policy to manage water basins in a sustainable way. Current work on water for example includes: through the Better Cotton Initiative to reduce water use in cotton cultivation, and through mill development program and cleaner production program to reduce water and other environmental impacts in fabric production(Hennes&Mauritz 2013f). H&M does not purchase raw material directly. The responsibility is to make conscious choice of material where H&M can reduce impacts. The aim of H&M is to use raw material as efficiently as possible and to close the loop(Hennes&Mauritz 2013g). Cotton is the raw material H&M use the most. In collaboration with the Better Cotton Initiative and Organic Exchange, H&M is supporting the improvement of working conditions for conventional cotton cultivation and the use of organic cotton. H&M is the biggest user of certified organic cotton since 2010. Their target is cotton should come from more sustainable sources by 2020, namely organic cotton, better cotton and recycled cotton(Hennes&Mauritz 2013h). Regarding other raw materials, H&M is an important user of many innovative fabrics, like recycled polyester and wool, organic linen and organic hemp. By driving the demand of sustainable material, H&M aims to strengthen the market for these materials and encourage innovation. Regarding the end-‐of-‐life garments, H&M has launched a global garment collection initiative. By doing this, H&M aims to reduce waste and close the loop of textile production. There are three ways that H&M deal with the unwanted garments: (1) reduce waste-‐ clothes that can by worn again will be sold as

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second hand products; (2) reuse-‐ old clothes and textile will be turn into other products, such as cleaning cloth; (3) recycle-‐ old textile is turned into textile fibers that can be used again to produce new garment (Hennes&Mauritz 2013i). Social responsibility H&M possesses great social responsibility throughout the supply chain, because many of the products are made in some of the world’s poorest countries. H&M sees in a positive way-‐ creating millions of jobs in developing countries as one of the world’s largest fashion companies. H&M tries to influence the suppliers to act in a more sustainable way. All of the suppliers must comply with the Code of Conduct. Besides this, H&M also provide long-‐term contract, and training in good business and sustainable practices. The social aspect of H&M’s CoC is based on the International Labor Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work and the UN Convention on the Rights of the Child. In particular, the code of conduct is a system to assess compliance regarding(Hennes&Mauritz 2013c):

-‐ Legal requirements -‐ Health and safety -‐ Worker’s rights, wages, benefits, working hours and leave, and their

housing conditions, -‐ Ban of child labor, gender discrimination, and forced work

H&M also uses their influence to promote social responsibility. They work on country-‐to-‐country basis to discuss with governments, trade unions and NGOs to enable a fair living wage for workers in the textile industry. For example, they work with supplier factories to pay all their workers a fair living wage, support the right to freedom of associating and collective bargaining. They help educate workers in Bangladesh and India about the worker rights. More sustainability activities also include promoting fire safety in garment factories in Bangladesh.

5.2 The CSR strategies and activities of Mini Rodini “Mini Rodini’s business concept is to make it both easy and exciting for parents to buy better products for their children in regards to the design, but perhaps more importantly to environmental and ethical aspects” (Interviewee B 2013).

Table 5 Mini Rodini’s company profile

Name: Mini Rodini Head office: Stockholm, Sweden Founded: 2006 Sales channels: 3 independent stores, 250 retailers, Internet sale Employees: 17 Source: www.minirodini.com

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Mini Rodini is one of Scandinavia’s fastest growing children’s wear brands. Mini Rodini started in 2006 by its founder Cassandrar Rhodin. The company has 17 employees in 2013. It is represented today in 250 locations, 150 retailers, 2 fully owned stores and a web channel. The company identifies itself as “high design value, medium price”. Quality is as important as design in Mini Rodini. Sustainability is one of Mini Rodini’s strongest aspects in the design process. 80% of their collection is made of organic cotton. CSR vision and sustainability work is among Mini Rodini’s strongest core values. The stated core values are: equality, simplicity, long-‐term engagement, responsibility and sustainability. Mini Rodini refers to their CSR as “Our goal is to have a 100% sustainable company.”(Interviewee B 2013) They identify themselves as a sustainable company that recognizes its responsibility towards the environment, employees and the people who make the products.

5.2.1 CSR in the supply chain Mini Rodini aims to produce all products as responsibly and sustainably as possible. This is a continuing process between Mini Rodini and its producers. The company wants to involve in the whole process of the products – from raw material to finished products. They are consistently looking for new fibers and materials that could make it easier to produce sustainable clothing. Long-‐term CSR approach to the entire business is a constant factor in all decision making at all levels. Environmental responsibility The company states that they understand that chemicals, water and energy use in the textile industry have great impact on the environment. The most important action Mini Rodini takes is to use organic cotton and recycled materials. They used GOTS-‐certified cotton since the company began its business. Nowadays the collections of their clothes consist of about 60% GOTS-‐certified cotton yearly. The GOTS-‐standard guarantees 95% organic cotton, and consider the whole production process(Mini Rodini 2013a). Moreover, Mini Rodini claims that sustainability means much more than just organic cotton. Sustainability in the textile industry includes farming, harvesting, production, processing, manufacturing, packaging and branding. This means the company recognizes and works on creating a more sustainable supply chain. Mini Rodini uses also recycled materials to product their garments, which includes polyester from soda bottles, recycled cotton and recycled wool(Mini Rodini 2013b). Regarding chemicals in the production process, Mini Rodini takes several actions to minimize the usage and waste of chemicals. The first step is to use environmentally friendly materials like organic cotton and recycled material,

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which minimized the risk of using harmful and illegal substances. Mini Rodini has a list of prohibited substances and formulas that all suppliers must sign and comply with. The company complies with GOTS and Oeko-‐Tex 100 standard, which have strict restrictions on harmful chemicals. The company conducts random laboratory tests made by a third party for each season, especially on products that demand more chemicals in the production, such as synthetic materials. Mini Rodini claims that their operations along the supply chain are always complied with local laws and restrictions. This is clearly stated in the Code of Conduct (CoC) which all of their partners must sign and comply with. Social responsibility Regarding social responsibilities, Mini Rodini thinks it is very important that the factories they cooperate with should have fair labor conditions. To ensure the factories they employ have fair employee policy, the company applies GOTS standard to ensure safe and non-‐abusive environment with living wages. Social Inspection Audits are made regularly in order to verify that GOTS’ environmental and social requirements are met. In the Code of Conduct (CoC), the company also specifies social criteria based on the ILO’s key norms, including: employment is freely chosen; freedom of associating and the right to collective bargaining are respected; working conditions are safe and hygienic; child labor must not be used; living wages; working hours are not excessive; no discrimination is practiced; regular employment is provided; and harsh or inhumane treatment is prohibited. Other social responsibility includes that they cooperate with other brands using the same factory to create local community projects with the suppliers. They intend to establish long-‐term relationship with suppliers, which ensures both the company’s and the suppliers’ interest.

5.3 The CSR strategies and activities of Houdini Sportswear “In Houdini, CSR does not mean supporting charity or climate projects. CSR is to work and produce our garments responsibly from scratch.” (Interviewee C 2013)

Table 6 Houdini sportswear’s company profile

Name: Houdini sportswear Head office: Nacka, Stockholm, Sweden Founded: 1993 Sales channels: 2 stores, retailers in 7 other countries and internet store Employees: 20 Source: Interviewee C

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The company’s vision is to provide high quality products and inspire people to lead a healthier and happier lifestyle on a living planet. The company applies a “cradle-‐to-‐cradle” approach when developing products, which means the material they choose to use should be long lasting, and it should be recyclable once worn out. They company aims to close the loop of textile production.

5.3.1 CSR in supply chain Environmental responsibility In relation to environmental responsibility, Houdini aims to limit the negative environmental impact of every product and close the loop of material. Regarding raw material, the company avoids using mixture of materials because it complicates the recycling process. Their goal about material use can be categorized as: (1) material made out of recycled or renewable material; (2) and/or be BlueSigned; (3) recyclable or biodegradable. These goals can be reached through developing and designing high quality and long lasting clothing(Houdini 2013). In the beginning of the design process, the clothing should be timeless design and the material used should be possible for recycling in the end of its lifetime. Regarding the chemicals, Houdini has created a list to ban and limit hazardous chemicals. The list is based on BlueSign standard. The BlueSign standard help factories implement an input-‐stream management system for raw materials, which includes the screening of chemicals. One of three categories will assign to the material: blue (safe to use), grey (special handling required), and black (forbidden under the standard). The BlueSign standard help factories eliminate black chemicals and find suitable alternatives(Bluesign 2013). In the case that a supplier is not BlueSign certified, Houdini required that it work systemically with environmental problems through ISO 14001 or other environmental certifications(Houdini 2013). Transportation along the supply chain is the biggest challenge for Houdini(Houdini 2013). The company does not have any employee that is responsible for logistics. Nowadays the company relies on third party partners to handle the logistic services. The company’s aim is eventually to calculate and reduce the environmental impact of its logistics. Social responsibility In order to produce for Houdini, the supplier must comply with Houdini’s Code of Conduct. The social aspects of the CoC includes: no human rights abuses; healthy working environment; safe working place; fair labor conditions; right to collective bargaining; and no use of child labor. Houdini does not have an audit program for code of conduct. Therefore, Houdini requires that suppliers comply with Fair Trade, SA 8000 and BlueSign to ensure the working condition of workers; so that consumers can be sure that Houdini’s products are

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manufactured in a social sustainable way(Houdini 2013). In addition, the Houdini producers are all located in Europe, which according to Houdini, the employees have better rights to vacation, paid parental leave, a fair salary and fair working hours. Houdini works to build close and long-‐term relationship with its suppliers; according to Houdini, a majority of its suppliers have cooperated with the company for more than five years, and they visit every supplier twice a year to ensure a professional cooperation. When choosing new suppliers, the company makes sure they meet the BlueSign standard. The basic idea behind the BlueSign standard is: consumer safety, water and air emissions, occupational health and safety. The general objective of BlueSign standard is to minimize the use of natural resources. Besides the CSR activities presented above, Houdini has also launched rental program and Kids Reuse program, trying to go further than merely sustainable production. The Rental program was started to rent out functional jacket to their customers, trying to change customer behavior so that reduce unnecessary waste. Kids Reuse is a garment-‐collecting program encourages parents to sell the kids’ outgrowing clothes as second hand, at the same time gaining coupons to buy new ones. This also reduces the waste of garments. This chapter has presented the empirical findings of each case companies. The empirical findings focus on each case companies’ CSR activities along their supply chains. After presenting the empirical findings in context, the following chapter will analyze such findings using the theoretical framework presented in above.

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6. Analysis This chapter presents the analysis of empirical findings of the case companies. Basu and Palazzo’s (2008) sense-‐making process model is applied to analyze the findings. The analysis will be presented following each CSR dimension of the sense-‐making process model.

6.1 Identity orientation H&M-‐ collectivistic identity When facing complex challenges of the textile industry, H&M has chosen to collaborate with various partners. They believe that “collaborating with others is one key to tackle the complex problems” and “we need to team up with our peers, suppliers, NGOs and many more players” (Interviewee A 2013). H&M is member to a range of organizations and initiatives that facilitate members to collaborate for sustainability work. For example, H&M is an active member of the Better Cotton Initiative (BCI) and cooperate with other stakeholders to develop and promote more cotton to be grown, while reducing water and chemical use and protecting both working conditions and biodiversity. H&M chooses to address different environmental and social issues. An example is they use their large buyer influence to demand minimum wages be increased in Bangladesh. H&M tries to influence along the value chain, and go simply beyond stakeholders to achieve universal goals. Therefore, the goal appears to be extended that using H&M as a brand and its partnership with other stakeholders to promote activism around the focus area. This fits with the definition of a collectivistic organization which views “themselves almost in universal terms”(Basu and Palazzo 2008:126). H&M may to some extent classified to be relational identity orientations but tend to be collectivistic. They appear to be trusted partners of their suppliers and NGOs. H&M tries to reduce dealing with middlemen, and instead works on building long-‐term and direct relations with suppliers, and thus ensure lower risk for suppliers. However, the goal of H&M is more universally oriented, which such relationship will lead to sustainability along H&M’s value chain. Mini Rodini-‐ relational identity Mini Rodini can be classified to be relational identity orientation. The business concept for Mini Rodini is “to make it easy for parents to buy better clothes for their children in regards to the design, environmental and ethical aspects” (Interviewee B 2013). The business concept comes first from its founder Cassandra Rhodin to add something new to the market for conscious parents. Therefore, Mini Rodini seems to be committed to their customer that they would provide the highest quality, the best design and the most sustainable child clothes for customers.

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Regarding the cooperation with other stakeholder, Mini Rodini relies on third party testing and auditing for chemical knowledge. And they think cooperation with other brands and NGO’s are of high importance to improve the social and environmental criteria. They cooperate with suppliers and open to adapt their work based on suppliers needs. Mini Rodini is similar to the position of H&M because the company could be defined as collectivistic to some extend. The difference between Mini Rodini and H&M is the company appears to be more relational orientated. The company does not act as an activist or a leader in the industry. They do not focus on using resources to make systematic change. Instead, the company tends to team with other stakeholder to address sustainability issues. Mini Rodini focuses mostly on “CSR actions that are designed to strengthen particular network relationships” (Basu and Palazzo 2008:126) and thus could be defined as relational oriented. Houdini-‐ individualistic and relational identity Houdini has decided “not to support any charity or climate projects because they believe it is more important to produce garments responsibly from the beginning” (Interviewee C 2013). They are confident that they have the tools and knowledge to produce high quality products without impacting the environment so much. As a small company, they are more feasible to reach their sustainable vision by design and choosing the best material available. Their CSR actions based more on sustainable design, and less on partnering with other actors over environmental and social projects. From this point to view, Houdini is an “atomized entity that is distinct and separate from others”(Basu and Palazzo 2008:125), and thus can be classified as individualistic orientation. Though Houdini has limited numbers of partnership with NGOs, they build long-‐term and strong relationship with their suppliers. All of the suppliers have cooperated with Houdini for more than five years. Houdini became a BlueSigned partner in 2010. The aim is to work only with suppliers that are implying BlueSign standard. However, they have existing suppliers that are not BlueSign proved today; but Houdini has decided not to replace the suppliers because such suppliers work in a sustainable way, which Houdini is sure about. In such point of view, Houdini appears to be a “trusted partner” which could be classified as relational orientation.

6.2 Legitimacy H&M-‐ moral legitimacy For H&M, they work hard to co-‐create norms. This means the company does not simply comply with what is expected of them from the outside, but rather they seek to create widely accepted ideas and respond to external expectations by providing sustainable solutions that are demanded. Consumers now expect

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retailers and manufacturers to demonstrate greater responsibility and transparency regarding their suppliers at all level of the supply chain, from fiber to garments. In response to such societal change, H&M is working to collaborate with suppliers and NGOs to promote sustainable fashion in the industry. Regarding the end-‐of-‐life clothes, H&M is now promoting up-‐cycling old clothes be a standard in the industry, by starting collecting used and second-‐hand garments in their stores. In this way for example, the company strives “to achieve legitimacy by co-‐creating acceptable norms by behavior with relevant stakeholders”(Basu and Palazzo 2008:126). To a more in-‐depth discussion, H&M has gong through a transition from cognitive legitimacy to moral legitimacy. In early 1990s, H&M together with other large garment retailers were under media scrutiny for using “sweatshop” to produce their garments. However, in 1997, the company instituted a Code of Conduct (CoC) that all of H&M’s suppliers must comply with, and maintain inspectors in the supplier countries. In doing so, H&M demonstrates that low costs are not a result of exploiting Third World countries. They claimed that low costs are due to better supply chain management. In 1990s, H&M gained its legitimacy from successful adaptation to external demands. But today, as discussed before, the company turn to be a leader who will co-‐create acceptable norms in the textile and clothing sector with other stakeholders.

Mini Rodini-‐ moral legitimacy Mini Rodini “aligns its actions to be congruent with perceived societal expectations”(Basu and Palazzo 2008:126). They stay up to date with all news and changes regarding CSR issues. The way they get news is to attend as many seminars and meetings as they can, and they are always open to adapt the work according to suppliers needs and new social norms in the industry. The company thinks that transparency and cooperation with other brands are of high importance to improve social criteria as well as environment. Many small fashion brands produce at the same factories, different from the big mass-‐producing companies who own their own factories. Therefore they think that it is important to cooperate with other brands and to consider suppliers interests. The reason for the company to cooperate with other stakeholder is that they think it is important to create a sustainable fashion together with the other stakeholders. Therefore, the company could be seen as seeking moral legitimacy. Houdini-‐moral legitimacy Within Houdini, they believe their way of incorporate sustainable design from the very beginning is the right way to do. The CSR messages they send out about their sustainability work are largely about what they have done, and they want to educate customers on why they are doing so. Therefore, the legitimacy they are searching is not simply adept to comply with the expectations from the outside environment. According to the interviewee C, the company is not doing CSR to get positive media reportage; they are doing CSR because it is the right

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way to do things. By saying that, the company communicates to the world and their stakeholders about what they can do to address sustainability problems. This can be viewed as an attempt to co-‐create acceptable norms between the company and relevant stakeholders. Such approach is proactive, which according to Basu and Palazzo’s (2008) classification, the company appears to seek moral legitimacy.

6.3 Justification H&M-‐ economic and ethical justification When asking about the reason to engage in CSR, the interviewee A in H&M claimed the reason to be that “improving conditions and creating a leaner supply chain which is more efficient, stable and sustainable will give us competitive advantages in the long run”. For H&M, it simply makes business sense to think about and invest in sustainability. Because using resources efficiently often means reducing costs. In addition, H&M believes that sustainability opens opportunities to strengthen customer offering and build brand differentiation. To attract and retain talent employees to ensure continued growth is also one important reason to engage in CSR (Interviewee A 2013). These, according to Basu and Palazzo’s classification, are economic justifications that “highlight tangible contributions to stakeholders” (2008:127). H&M contributes quite a lot to economic growth, job creating in the purchasing countries due to its large buying quantity. However, in addition to such economic justification, H&M thinks that by creating strong partnerships with the best suppliers will help them improving environmental and social performance. Moreover, H&M claims that strong presence in supplier countries can help improve livelihood of many people that directly or indirectly related to H&M, thus will help develop the entire community (Interviewee A 2013). Therefor, it is an ethical justification that is directed “towards achieving universal goals of human welfare”(Basu and Palazzo 2008:127). Mini Rodini-‐ ethical justification Interviewee B in Mini Rodini claimed that the reason for them to engage in CSR is ethical from the beginning. They are working on being a more sustainable company, one that recognizes its responsibilities towards the environment, the employees and the people who makes products. For the company, according to interviewee B, it is not only getting better in addressing impacts throughout the supply chain, but also creating better value for the business and modernizing for a better world. Such statement was interviewee B’s answer to Mini Rodini’s vision and their reason to engage and involve in CSR activities. Hence, the company could be said to achieve an ethical justification.

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Houdini-‐ ethical justification Similar to Mini Rodini, the reason for Houdini to involve in CSR is also ethical from the very beginning. They believe that sustainability is “the right thing to do”. When Houdini was founded in 1993, they have already nature in mind; and in 1995 the company started “life-‐time repairs” which helped customer to keep life-‐long garments. In 2001 Houdini started to find recycled fibers for production through hard and endless discussion with their suppliers. Such initiatives, was driven mainly by Houdini’s vision to become a sustainable company, not because of economic reasons. However, though Houdini does not aims to earn huge profits through CSR actions, the company wants to grow organically to become a healthy company which will meet their sustainable plan. In the long run, they want the company to be profit-‐driven in 10 and 50 years; but from a short time perspective, they are not profit driven. Therefore, Houdini could be classified as owning ethical justification.

6.4 Transparency H&M-‐ balanced communication It is quite clear for an external observer that both H&M’s sustainability report and its website communication make use of balanced reporting. Especially in the sustainability report, they choose a balanced approach where accomplishments and challenged are reported. We can read the dilemmas H&M are facing in the whole supply chain from the report. In the report, measurable goals have been set, and the progresses are reported against these goals using quantitative data. Reasons why the target has or hasn’t been met are also given and discussed. They are clear about what should be done in the next step. The data and material of H&M’s sustainability report is collected from a multitude of sources, ranging from diverse stakeholders. All of the information in the sustainability report is audited and evaluated by Ernst & Young AB, a third party accounting company, which also points to their willingness to present balanced information. Moreover, unlike some clothing retail companies who consider supplier list as a competitive issue, H&M publishes all active first tier factories that are owned or subcontracted by the strategic suppliers in the website. H&M disclose their names and even locations without major concerns about the ongoing competition in the industry. This means they have built strong and strategic relationships with the suppliers; and they aim to make the industry more transparent and sustainable. H&M wants to play a leading role in creating transparency in the industry. Mini Rodini-‐ balanced communication

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Mini Rodini does not publish any CSR or sustainability report yet. Their external CSR communication is mainly through the CSR presentation on the webpage, various themed brochures and folders for stores and fairs. They also communicate CSR in the on-‐product label and hangtag system, describing materials and certifications. Mini Rodini also communicate CSR internally, by continuously engaging and teaching employees, agents, retailers and suppliers on how and why Mini Rodini work with CSR. Their CSR information is supported by financial data like order value, quantitative and percept statistics, certificates, agreements, and contracts, etc. Although one cannot find negative aspects or challenges Mini Rodini is facing in their webpages, the company could still to be classified as making use of balanced communication. Because the language they are using does not seen as lofty which only in favor of their good deeds. In stead, they use detailed languages in explaining the materials they use, the certificate they meet, and how the garments should be cared. The company still makes an attempt to be balanced. In addition to this, interviewee B admitted numerous challenges and dilemmas the company is facing along the whole supply chain, including also higher raw material prices and limited resources. Interviewee B also highlighted that transparency, cooperation with NGOs, and freedom to act and speak are important factors in their communication strategy. They also cooperate with other brands that produce garments in the same factory in meeting the suppliers’ needs and pursuing sustainable development. Given the company perform in a transparent way; we could define it as attempting a balance approach in communication. Houdini-‐ balanced communication Houdini’s purpose of reporting its sustainability work is to make themselves aware of how the CSR work progress year by year, and where they should put on more resources to make the sustainable improvements. The data is collected from suppliers, as well as from internal financial and quantitative data. Houdini’s first GRI report gives a balanced view of where the organization is in terms of CSR activities and where the dilemma and challenges lie in. The overall report attempts to communicate to relevant stakeholders honestly using concrete data; and does not seek to convey only positive and favorable outcomes. Main challenges they are facing, for example the transportation challenge, are also presented in the GRI report. Similar to H&M, Houdini publishes also a supplier list in the webpage, with their names and websites. Houdini holds a very transparent attitude towards its supply chain and the CSR work they have done along the product value chain. Therefore, Houdini makes use of a balanced approach towards its external and internal communication.

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6.5 Posture H&M-‐ open posture “An open posture is oriented toward learning that is based on the organization’s willingness to listen and respond to alternative perspectives offered by others”(Basu and Palazzo 2008:129). The criticism of H&M comes from different channels, traditional media, NGOs, social media, customer complaints, etc. H&M publishes regularly criticisms they have received in the newsroom which one can read from the company’s website, together with H&M’s perception of the issue. The company also discusses and debates on the issues, providing an explanation to the complaints. Most complaints relates to the wage issue, connecting H&M’s low price to poor working conditions of textile workers. H&M was open to such complaints by responding to why they could maintain such low price: buying in large volumes, effective logistics, little middleman, own design and selling in own stores. However, H&M support wage increase issues in their supplier countries, together with other companies using the same factory for production. For example, H&M also cooperates with other stakeholders to influence wage issues at a political level in Bangladesh, so that the minimum wages in the textile industry could be increased and benefits all works. Another example is H&M’s response to the recent fire accidents in Cambodia, India, and Bangladesh. Although H&M claimed that none of the factories produced for H&M, we could see that H&M responded quickly and used the opportunity to promote fire safety in its garment factories in Bangladesh. This shows that the company is willing to use criticism to drive them closer to their sustainability goals. Moreover, the company tries to listen and learn from other perspectives and opinions. Therefore, the company could be defined to have an open posture when facing criticisms. Mini Rodini-‐ open posture According to interviewee B, external feedback are more on questions and interest on how the company work with CSR and why, instead of critics. The questions range from chemicals and chemical control, materials used, certificates to social criteria and others. The company is neither defensive, nor tentative, because a relevant person from the company would answer each external feedback. There are clear information on what the company is doing and how the company would plan to address the issue in question in the future. It seems that the company is willing to hear other perspectives, which gives the company an open posture. Houdini-‐ open posture

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Interviewee C could not recall any negative critics from outside the company. Rather, external feedback was mostly about questions from customers, and the number of such questions is increasing. The first GRI report is one of CSR actions the company takes to meet the customers’ need and interest on knowing how Houdini deals with environmental and social issues. According to Interviewee C, more and more customers are asking for recycled and recyclable functional clothes; but some of them complaints the price is too high. In response to the customers need, Houdini on one hand is looking for more sustainable materials and apply it in the designing process; on the other hand, Houdini started rental services for high priced skiing clothes, and the reuse program for children’s clothes, meeting both economic and environmental need from the customers. We can see that the company is willing to open external feedback and take it as an opportunity for new CSR actions.

6.6 Consistency H&M-‐ strategically and internally consistent H&M takes a long-‐term view of the business and their sustainability work. H&M wants to continue create jobs and growth, and to be seen as a leader in terms of innovation and sustainable fashion (Interviewee A 2013). H&M has set up seven ambitious strategic commitments, with which they work hard trying to achieve a more sustainable future. According to H&M, all of the conscious actions are steps to put the seven commitments into practice. H&M sees CSR as an on-‐going process and “a journey”; they want to use their scale to bring about systemic change to the garment industry. Therefore, H&M according to Basu and Palazzo (2008:129)could be defined as “it initiate internal and external processes to set up appropriate environmental standards to be followed by all players, in order to achieve industry-‐wide leadership both in terms of business performance and CSR engagement”. The seven sustainability commitment H&M has set up can serve as an internal framework for different departments and employees to implement the CSR strategy. Sustainability is therefore integrated in H&M’s internal work. H&M’s head office has a sustainability department that consists of 20 people and is responsible for developing and carrying out CSR actions needed to fulfill the seven commitments, together with all departments. Sustainability is also integrated in the decision-‐making level, involving CEO and managers. H&M also has about 100 people from the sustainability term in its 15 production offices around the world. They work directly with the suppliers and support them to comply with the Code of Conduct, and make sure the supply chain becoming more sustainable. We can therefore say that H&M is an internally consistent company regarding CSR work. Mini Rodini-‐ strategically and internally consistent

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CSR in Mini Rodini is strategically consistent. CSR vision and sustainability work is among the very strongest core value, and is a constant factor that takes in consideration in all decision-‐making levels. Interviewee B admitted that it’s a challenge to engage and teach employees about all facts and news; but since CSR and sustainability is the core value, it is something that the company always strives to teach from the beginning and develop more and more. The efforts that they make, such as only use GOTS certified cotton, are also largely link to the core business concept: make it easy for the conscious parents to choose sustainable clothes for their children. So we can be able to classified Mini Rodini as a strategically consistent company. The internal coherent logic that underlines Mini Rodini’s CSR activities is sustainability, fairness and equality. The focus areas of their CSR activities are sustainable design strategy, environment, chemicals, and social criteria. Such activities are closely related to Mini Rodini’s core value. Therefore, it appears that CSR activities in Mini Rodini are internally consistent. Houdini-‐ strategically and internally consistent Houdini believes that it is their own duty to do the best to reduce the company’s environmental impact. Their company policy is to change to the sustainable alternatives as soon as possible if not compromising with product performance and quality. This strategy has been the company’s core value and has played a central role for the company’s identity. It has guided the company’s developing towards the future, both in the strategic planning and the daily operation (Interviewee C 2013). Therefore, all of Houdini’s CSR activities could be said to be consistent with its core strategy. The company is also internally consistent, because sustainability lies always in the process of product development. It takes several years for a product to be developed and tested before it goes out to the market. All of the products are designed to last a very long time and be able for recycling after its lifetime. Houdini cares about the supply chain sustainability. They produce the garments mainly in Europe where they are sure the environmental and social work of their suppliers is at the same level of the company. Based on my observation and the answer of the interview, Houdini applied CSR in every aspect of the company’s operation, thus we could define it as internally consistent.

6.7 Commitment H&M-‐ instrumental and normative commitment H&M has defined seven ambitious commitments on sustainability: 1) Provide fashion for conscious customers; 2) Choose and reward responsible partners; 3) Be ethical; 4) Be climate smart; 5) Reduce, reuse, recycle; 6) Use natural resources responsibly; 7) Strengthen communities. The interview and the analysis of website have expressed both types of commitment: instrumental (derived from external incentives) and normative (stems from internal and

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moral considerations). Reading the CEO interview and the interview of Head of Sustainability published in their website, it felts that the leadership of the company offer a moral commitment to CSR. The company has also initiated a sustainability department to make sure the sustainability goals being met in the whole supply chain. The company may to some extend defined to have instrumental commitment, because managers and employees are guided by some internal documents that include cost consciousness, salesmanship, continuous improvement and other. Such documents are vital to the day-‐to-‐day operation. It seems that some commitments appears to stem for the business case for CSR. External pressures like consumer awareness, NGO investigation are admitted. In the light of such, H&M might turn out to have instrumental commitment. However, sustainability is a very important element of the company’s business concept. The company’s leader team stresses largely sustainable fashion. The recent CSR activities are coherent with the aim that has expressed about sustainable fashion. As H&M is a huge global company, it is not easy to change the company operation in short time. Based on the interview result, it could be observed that the commitment dimension is under transition from instrumental to normative. Mini Rodini-‐ normative commitment Interviewee B stressed that CSR was highly integrated into the company’s day-‐to-‐day practice. Strong moral commitment comes down from the top leadership. As they are a small company, everyone works hard to be an even sustainable company. Mini Rodini is actively looking for better fabrics, materials and labor they use. Interviewee B didn’t mention any external factors that drive the commitment other than moral consideration. The commitment of this company is therefore classified as normative because the commitment is internal and driven by strategy, leadership and all employees throughout the company. Houdini-‐ normative commitment Sustainability is also highly integrated into all of the company’s strategies and day-‐to-‐day operation. Both the leadership and the employees are the driving force behind commitment to CSR. Supply chain sustainability and sustainable design are always in the center consideration throughout the produce cycle. The company’s CSR responsible team also involves actively in the buying process. They are familiar with the companies CSR practices. The reflection of improvement could be applied to the design team and buying term rapidly. The commitment of the company therefore could be defined as normative.

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6.8 Summary of the case companies’ CSR profile The responses of the interviewees and the website study were able to produce a CSR profile for each case company. The CSR profile is summarized in the following table:

Table 7 The case companies’ CSR profile

H&M Mini Rodini Houdini Identity

orientation Collectivistic Relational Individualistic/

Relational Legitimacy Moral Moral Moral Justification Ethical/Economic Ethical Ethical Transparency Balanced Balanced Balanced

Posture Open Open Open Consistency Strategically and

Internally consistent

Strategically and Internally consistent

Strategically and Internally consistent

Commitment Instrumental /Normative

Normative Normative

H&M’s CSR profile The collectivistic orientation of H&M is the foundation of the rest of its CSR profile. Other profile characters seem to reinforce each other. For example, the moral legitimacy and ethical justification seems to be consistent with the collectivistic orientation, because H&M tries to use the power of the brand, the big size, and their good relationship with other stakeholders to create a platform for activism. In this light, H&M commits to work hard towards making sustainable fashion possible and easy to access. They possess a transparent attitude that leads to a balanced reporting. In overall, the outcomes of H&M’s CSR leads to the observation that H&M is an industry leader, communicate a lot about their CSR initiatives. They occasionally receive critics from the external stakeholder questioning their supply chain, which might result in risk for their reputation. But they have a strong commitment to CSR nowadays, which makes it a sincere competitor in the market that differs from many other clothing retail brands. Even though the company talks about economic incentives in their business, and its CSR commitments is driven partially by external pressure, they have well integrated CSR in their way of doing business. The CSR profile has indicated that the company is going through a transition from a traditional clothing retail company to a more sustainable one. The CSR profile explains that H&M has produces a brand to commit to CSR and uses CSR to drive innovation and make their operations as sustainable as possible.

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Mini Rodini’s CSR profile The moral legitimacy that Mini Rodini seeks will perhaps lead them further to have a more collectivistic identity, however, given the small size, it seems enough for them to consider themselves as a good partner, and thus lead to relational identity. Such identity helps them to keep balanced communication and holds an open posture. The normative commitment reveals that the objectives of CSR have been internalized in the company, which has helped them to reinforce strategic and internal consistency. In general, their CSR outcome looks as: they have a strong sustainability commitment from the beginning the company was found. They make the message clear and spread it out using various marketing methods. Houdini’s CSR profile Houdini in its individualistic identity orientation, differentiate itself from other company, and it choose not to engage in many partnerships; even though, it appears to remain as a good partner for suppliers and consumers. However, Houdini has moral legitimacy, which helps the company to keep open posture and transparent communication. The normative CSR commitment is highly integrated in Houdini’s all strategy and daily work, which contribute to its strategic and internal consistency. In summary, their CSR outcome can be described as: Houdini is also an industry leader with many sustainability awards, showing their CSR initiatives are quite successful. They have not received any critics from the outside, compared to H&M who constantly received external criticism. They are not in collectivistic identity orientation that uses their influence to help transform the fashion scene. However, the company’s normative commitment has kept them to go ahead in their CSR actions. The profile described above gives rise to a successful CSR. Having summarized different case companies’ CSR profile, the next chapter will discuss the similarities and differences regarding their CSR profile.

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7. Discussion The thesis has explored an overview on the Swedish fashion companies’ CSR strategies and actions. Does the case companies’ CSR make any sense? How do we understand the intrinsic driver behind their CSR activities? The sense-‐making approach requires us to understand the interconnection between a company’s belief and its action. The analysis of the Swedish clothing retail companies’ CSR strategies and actions reveals that Basu and Palazzo’s (2008) sense-‐making process model are useful to describe and understand the clothing retail companies’ CSR. For instance, why do they produce a sustainability report; why do they build a sustainability section; and why do they consider stakeholder as opposed to only shareholder. All their specific actions could in a sense-‐making process tie closely with its beliefs and values.

7.1 The logic behind the Swedish clothing retail company’s CSR The sense-‐making approach “could help explain CSR behavior in terms of processes managers are likely to adopt in coming up with their own view of what constitutes appropriate relationships with their stakeholders and of the world” (Basu and Palazzo 2008). Stakeholder expectations are one of the main driving force of CSR (Lee 2011). This driving force was discussed as extrinsic driver of CSR before. Because of this, fashion companies need to collaborate closely with diverse stakeholder group to fully understand their expectations and to use that knowledge in managing their supply chains(Wolf 2011). Fashion companies also face various critique from stakeholders, such as customers, medias, and NGOs. How business react to stakeholder expectations and external critiques bases on their CSR characters. Different businesses might react differently to equivalent external realities based on their CSR characters. Analyzing the CSR characters of each case company, one may understand why the company carries out CSR as the way it does. Identity orientation sets the foundation of the rest of CSR characters of a company. Corporations’ strong relationship with stakeholders and their moral legitimacy likely lead to ethical justification, balanced transparency along with open posture, and strategically and internally consistent commitment to their CSR programs. Such hypothesis was supported by the case data and added a deeper understanding of how “frontrunner” fashion companies can best adopt strategies and processes that support sustainability and CSR decisions within the organization. For example, they may inspire other fashion companies to adopt similar philosophy, build public-‐private partnership, and leverage high credibility when marketing their products. Such hypothesis formation could describe either profile of particular fashion companies’ CSR, or a number of this kind with the fashion industry (Basu and Palazzo 2008).

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7.2 Similarities among the case companies When we understand the logic behind the case companies’ CSR and have analyzed their CSR profile, we will be able to discuss what kind of “shared value” a “frontrunner” fashion company has created, in connect with stakeholders and the world in large. Stakeholder relationship is the most important element that all of the case companies have related to. Knowledge of key stakeholders and the development of stakeholder relationships beyond the contractual and financial relationship have been recognized as a central management issue. The case companies have built long-‐term and trust-‐oriented relationship with suppliers. This is mentioned to be key to generate innovation and maintain high quality of products, as well as ensure high labor and environmental standards. The collaboration with NGOs also mentioned as an important institutional strategy. Customer and employees are recognized as important stakeholder relationship. As mentioned in the introduction chapter, a corporation that perceived social responsibility as building shared value rather than as damage control or as a PR campaign might gain greatest competitive benefit (Porter and Kramer 2006). The findings reveal that social and environmental responsibilities are values that are integrated into the corporate philosophy, and give directions to all of the decisions made in the daily work. This is the shared value that managers are trying to build through the corporate’s rhetoric and actions. Moreover, having reviewed the mindset of the three case companies and the fashion industry in large, it seems that sustainable fashion is becoming a trend in the industry, and some industry leaders such as H&M is working on co-‐creating such norms. It is reasonable to say that CSR has gone beyond gaining competitive advantage; it has become some kind of industrial standard that most companies have to consider when they manage their supply chain and their other activities. To discuss further, the findings also shows that the “frontrunner” fashion companies have strong moral consideration when facing the highly fragmented global textile industry than merely gaining competitive advantage. Their legitimacy lies in co-‐creating norms when facing fundamental social change. The clothing retail companies are the most powerful agents along the global supply chain, and therefore should share responsibility with other who situated differently (Young 2006). Sharing responsibility means that, they need to cooperate with each other in order to bring changes. However, they could have conflicts of interest, and there is no need for them to struggle with one another. But the global social and economic processes bring the institutions to a structural connection with one another across national border (Young 2006). Even though there is no a universal law to create a level playing field for the companies to improve sustainability in a very competitive business sector (Laudal 2010), the “frontrunner” companies still strive to cooperate closely with their partners, stakeholders even some other fashion brands in achieving shared values and visions.

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7.3 Differences among the case companies The findings of this paper also imply some differences among the case companies’ CSR profile. H&M is the industry leader that is under frequent media focus, while Mini Rodini and Houdini are small and medium sized companies that pursue sustainability since the beginning and they receive rarely any critics. Mini Rodini and Houdini are very similar to each other, in turns of size and value. H&M has collectivistic identity orientation; they define themselves in universal terms. H&M usually claims its leadership in the industry, and speaks for the environment through a moral concern. However, the economic justification sometimes still draws the focus of media that their commitment might be accused of green washing. A shift of their commitment to a more normative one may help the company creating better reputation. Among most large clothing retail companies, H&M choose to differentiate the brand through socially and environmentally responsible goals that more is expected of them from the outside. The external pressure could be a driving force for H&M to better internalize sustainability in their identity and commitment, if they consider themselves as a worldwide leader in sustainable business. Mini Rodini and Houdini’s profile looks very similar to each other. One similarity is that they have similar size. Many authors have argued that small and medium-‐sized enterprises (SMEs) possess unique behavioral characteristics and experience resource limitations, thus they could find themselves difficult to manage the supply chains globally, and the concepts relating to the implementation of CSR in large corporations cannot be easily transferred to SMEs(Tilley 2000; Jenkins 2004; Spence 1999). However, a recent research shows that it is easier for SMEs to use CSR as a brand differentiation strategy(Schmitt and Renken 2012). Due to the size and limited resources, SMEs do not have the necessity create many CSR activities and program together with NGOs and the government. However, they still maintain long-‐term and strong relationship with their suppliers. They are claimed to be “good partner”. Their normative commitment creates good corporate image of these companies that they are always doing the “right” thing.

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8. Conclusion This chapter summarizes the findings of the study and research aim, namely to describe the intrinsic logic behind H&M, Mini Rodini and Houdini sportswear’s CSR strategies and actions, their similarities and differences. The sense-‐making process model is useful to explore a company’s CSR characters, thus provide rich explanation of the logic behind a company’s CSR strategies and actions. The Swedish clothing retailers presented in this thesis, namely H&M, Mini Rodini and Houdini, have shown a pro-‐active attitude towards driving a sustainable development in the fashion scene. This can be partly explained by the external pressures coming from relevant stakeholders such as governments, NGOs and consumers. However, facing various external pressures, the fashion companies in Sweden have realized that Western retailers possess greater power along the global textile supply chain than other actors, as illustrated by Young (2006). Such reaction is seen as co-‐creation of norms in the fashion scene, which is supported by the analysis of using the sense-‐making process model. Having analysed the intrinsic driver of their CSR engagement, the thesis finds out that collaborating with industry partners and different stakeholders are seen as a more important idea when associating with CSR effort. Moreover, the case companies are seeking to contribute to a systematic change to sustainability in the fashion industry, which is mainly due to moral considerations. The smaller companies, such as Mini Rodini and Houdini even consider that more than gaining financial benefit. Having explored the Swedish clothing retail companies’ CSR, some suggestions could be considered given to other retailers in the same sector:

! It is necessary and important to be a trusted partner to cooperate with other stakeholders and industry peers along the supply chain in order to achieve a sustainable development in the sector;

! For industry leaders, it is vital to use the brand and the size as a platform for sustainable transformation. For SMEs, one is more feasible to consider environmental and social issues by incorporating sustainable design into their products;

! For most of the clothing retail companies, it is vital to be a transparent company who keep balanced communication with stakeholders, about the supply chain and other activities. Moreover, having an open posture to external feedback could turn out to be an opportunity for new CSR actions;

! When a company start to take any CSR action, it should take a long-‐term view. Sustainability should be a long-‐term strategy, and all of the CSR actions of the company should be consistent. In addition, an internal consistency among different department and employees are also consider of great importance;

! Sustainability commitments should be integrated into a company’s day-‐to-‐day operation.

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Basu and Palazzo’s (2008) CSR sense-‐making process model is useful in this study to explore and predict fashion companies’ CSR profile. It is well fitted with the empirical evidence gathered through the case companies. The model is also useful to identify a cluster of CSR characters of the “frontrunner” companies. However, this case study has some delimitation. It focuses on clothing retail industry; and the study is carried out in the Swedish setting. Therefore, further empirical study needs to be done in other industry, to explore if the CSR profiles of the “good” companies vary from industry to industry. Furthermore, cultural difference could cause differenced in CSR characters even the case companies fall in the same industry (Basu and Palazzo 2008). It is necessary to examine and compare CSR character in different cultural setting.

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Appendix: Interview guideline

1. Can you describe the vision that lies behind the company’s CSR policy?

2. What is the company’s mission general mission? Does the vision you describe above related to the company’s general mission?

3. What kind of CSR activities does the company involve?

4. Do you have particular issues in mind when the company conducts CSR

activities? (e.g. global warming, child labor, combating poverty, etc.)

5. Do the company collaborate with other actors when you conduct CSR activities? If yes, who are they? (e.g. NGOs, local community, suppliers, consumers, etc.)

6. In general, do you view that the company conducts CSR activities mostly

independently? Or the company mostly relies on other organizations to conduct CSR activities?

7. You have describe the issues that CSR activities focus, in which way do

you make other actors accept your CSR actions? Can you give an example? (e.g. advertising campaign, Code of Conduct, public consultation, etc.)

8. Have the company ever gained any critics from outside the company? If

yes, please give an example, and describe how do the company deal with that.

9. How do the company react to the uncertainty of social changes? Do you

adapt to external expectation? Or do you co-‐create social norms with other actors in face of the change? Can you give an example? (e.g. sustainable consumption, etc.)

10. What are the reasons for your company to engage in CSR? (e.g. legal

compliance, scientific analysis, economic benefit, ethical reason, etc.)

11. Is there any particular story behind the use of CSR in you company? Could you tell the story?

12. How does the company communicate CSR information? (e.g. CSR report,

sustainability report, etc.)

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13. How is the CSR information supported? (e.g. by financial data, quantitative data, survey, etc.)

14. Are there any dilemma and challenges the company and the whole supply

chain are facing? How do you deal with those challenges?

15. Will the company communicate your dilemma and challenges with other actors? Why or why not?

16. Do you receive any external feedbacks? Would you report any negative

aspect of your CSR actions? If yes, give an example.

17. In your own view, are CSR activities internalized in the company?

18. How does the company’s employees think about CSR? Do CSR policy open to ideas of employees?

19. On a strategic level, do you feel there is a coherent framework behind CSR

in the company?

20. Do you feel that there is a coherent logic that underlines your CSR endeavor? What is that? (e.g. sustainability?)

21. Where does the CSR commitment stem from, external expectations or

moral considerations?

22. Is CSR taken into account in the decision-‐making process in the company? If yes, how is it taken into account?

23. Does the company consider outsourcing decision and the sustainability of

supply chain into account the company’s CSR approach?

24. Does the leadership in the company act as a driving force for CSR?

25. Can you describe your role as a CSR manager?

26. Do you think other manager and employees integrate CSR-‐related activities into daily work pattern? Do you think they have necessary skills and mindset that contribute to successful delivery of CSR?

27. Are CSR activities easily removed from the company’s day-‐to-‐day

operation?

28. Do you think I have miss something interesting? Would you add something more?

exploring corporate social responsibility in swedish...

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