Challenges in controlling CSR: A case study of two Swedish companies

Abstract: The purpose of this study is to provide insight on how companies control Corporate Social Responsibility (CSR) and to shed light on the challenges faced by formal and informal management control of CSR. Few studies investigate CSR control systems and even fewer include both formal and informal controls in doing so. Although some challenges faced by CSR control have been previously identified, no study has provided an overview over the challenges faced by CSR control. This study aims at filling these gaps by answering the two research questions: 1. How is CSR controlled in large companies? And, 2. What challenges do large companies meet in controlling CSR? The research questions are answered through in-depth case studies of two large Swedish companies. It is found that both companies use formal and informal control systems to control CSR. Informal controls showed to play a larger role than might be expected; due to that formal control systems were found partly dysfunctional. Especially in one company, managers used internal communication to increase the intensity of CSR values being expressed in the corporate culture thus influencing the informal controls. Furthermore, nine challenges in CSR control were found of which three had not been previously identified. One of the challenges, insufficient CSR measures, was likely to cause several of the other challenges. Several prominent CSR experts confirmed the findings of the study. The findings imply that managers and researchers should focus their efforts on finding simple measures that reflect CSR performance well. In addition, managers should use internal communication to support CSR values in the culture. Researchers could further use the overview of challenges as a smorgasbord of future research topics.