The Implementation process of ISO 26000 in Corporate Strategies: The Benefits and Limitations for SME’s

Abstract

The analysis of corporate social responsibility in modern times has shown us the importance of companies’ impacts on society and the environment, but most importantly the business decisions that lead to those results. The literature review followed on that subject discusses the the ISO 26000 standard – the leading document on CSR practices – and its benefits on companies. Moreover, it has highlighted the lack of results of the ISO 26000 guidance document as it still remains in its development period. In order to counteract those inefficiencies and aid the process of approaching the sustainable development matter, it has led us to selecting this hot topic. Furthermore, we have chosen this subject to highlight the current answers to the standard’s development in companies and make adequate recommendations for improvements. On that basis, we have elected a research question that has guided us throughout the elaboration of this thesis: “What is the implementation process of ISO 26000 in SME’s?”. While the focus was given to SME’s, a certain comparison with larger firms was established in order to attack the subject from different angles and make more accurate recommendations. Analyzing our main question in the literature review has enabled us to demonstrate all the different components and concepts that define ISO 26000 in various theories. In addition, it helped us understand the values on which the standard is based on and its relation with partners and other guidance documents. On the other hand, it has shown us many barriers of implementation to which SME’s and larger firms are being confronted to. The two main issues singled out were: “The unfamiliarity/ poor knowledge of CSR strategies and ISO 26000 benefits in companies” and “The stakeholder’s lack of involvement in the application of ISO 26000 norms”. The initial literature review has given us first insights to the application processes of ISO 26000 and the difficulties organizations can encounter. On that basis, two hypotheses have been laid out, prior to the practical analysis on companies, to try and answer our main question. These two hypotheses were: “Businesses’ leaders will converge to ISO 26000 to benefit from its label of quality in order to improve their market status as a sustainable business” and “ISO 26000 will most likely be applied in companies which have previously adopted a similar framework”. As the theoretical part clearly showed us the culture and values defended by ISO 26000 and its objectives in companies, many questions remained unanswered as to the practical side of its implementation. Part 2 of this thesis has therefore been focusing on real life examples by interviewing companies of different types on the basis of their relationship with ISO 26000. That division was made in order to grasp every inch of information available by tackling the subject from different angles. As a result, the types of organizations interviewed were: 1) companies that have adopted ISO 26000; 2) companies that promote ISO 26000 in other companies; 3) companies that don’t follow ISO 26000 but act socially responsible. This broader range of results didn’t only enable us to gather more information but helped us get a more objective overview of ISO 26000. Indeed, the answers gathered from the businesses were very different from one group to another. To collect this data, a firm methodology needed to be put up in order to organize the interviews and collect the information that were required. We therefore decided to redirect our analysis towards a qualitative approach with semi-directed interviews as they were necessary to open the dialog about ISO 26000 processes of implementation. 14 companies, of different sizes and relation towards ISO 26000, have been interviewed in order for them to share their experience with the standard. The next step of the thesis was to translate the results obtained by our interviews into concrete verifications of our two hypotheses. While the first hypothesis confirmed that companies will converge to ISO 26000 to benefit from its label of quality in order to improve their market status as a sustainable business, a clear problem arises from that reality. As SME’s wish to participate in the ISO 26000 development, their relatively small access to resources doesn’t enable them to fully gain their place on the market as a sustainable business. For them to do so, they would have to invest much more in that matter and ask for third party consultancy to gain the know-how. Verifying the second hypothesis has proven to be a bit more complex in its answer. Indeed, in the majority of all types of companies, a certain background in CSR or a similar framework is usually preferred and in some cases necessary to implement ISO 26000 efficiently. While this aspect is completely relevant for SME’s, the answer for larger firms needs to be nuanced. The immediate answer, concerning large firms, is that they would implement ISO 26000 in the case they have already embedded a CSR scheme prior to it. But this answer is double-edged as their experience with CSR also plays the role of an active deterrent to implementing it. This phenomenon is explained by their knowledge being generally sufficiently concise to not need a guidance document like ISO 26000. The last step of our thesis was to translate the results into concrete managerial recommendations in order to reopen the debate on ISO 26000 and promote its good values. The main issue that SME’s are confronted with is the sheer size of the ISO 26000 document and it broad content. SME’s are usually characterized by their very precise field of expertize and tend to focus on one aspect of the business chain. This inevitably results in their interest of developing CSR practices that can be fitted to their small business focus. Our first recommendation would be to reedit the document with national and sectoral considerations in order to offer specific guidance precisely related to their business focus. Companies are redirecting their purchasing in a sustainable way not only to reduce environmentally negative consequences of the products but also to offer a whole new process for their production line. Companies develop that idea by selecting key strategic suppliers that share the same values. ISO 26000 doesn’t make links with other of their standards on the sustainable matter. Our second suggestion is to redesign ISO 26000 in a way that companies can not only develop the ISO 26000 content but link it to other standards that have the same focus. This would inevitably lead to higher knowledge, but also to higher efficiencies. ISO 26000 should also be linked to a new standard that will soon be released on sustainable procurement identified as ISO 20400. Our last managerial recommendation is to emphasize the need for ISO 26000 to become a certifiable standard in order to improve its awareness and push companies to develop their strategies around it. The interviews have shown us the unwillingness of large companies to follow ISO 26000 due to its non-certifiable opportunities. That solution would lead to value creation and development at the center of business strategies. This thesis has helped us analyze the process behind ISO 26000 in companies and the value that it defends as an international and recognized standard. This has helped us answering our main question of this thesis by verifying the research problems observed in the theoretical part and analyzing the results of our hypotheses in the practical part. On the other hand, this subject remains open to debate, but more importantly, to further results. As we developed our analysis on basis of qualitative results on only 14 different companies, many more results still need to be gathered on a qualitative approach, but also statistical analysis. This is crucial to give relevancy to our work and for all the businesses involved for them to use as a benchmark. Creating that information would be very interesting for the development of ISO 26000 and its possibilities for growth.

Master [120] en sciences de gestion, Université catholique de Louvain, 2016