In 2010, the development of ISO 26000 has represented a milestone in multi-stakeholder standards development that supported the integration of social responsibility into management processes (Toppinen, Virtanen, Mayer & Tuppura, 2015; Hahn, 2013). Yet, ISO 26000 has never been considered as a management standard as its use cannot be certified unlike the earlier ISO standards, such as ISO 9000 and ISO 14001. The certification requirement has not been incorporated into the development and reinforcement process of ISO 26000 because industry representatives were concerned that costly certification requirements could overburden their businesses. Nevertheless, ISO’s work item proposal for organizational social responsibility was intended to accomplish the following issues:
- Assist organizations in addressing their social responsibilities while respecting cultural, societal, environmental, and legal differences and economic development conditions;
- Provide practical guidance related to making social responsibility operational;
- Assist with identifying and engaging with stakeholders and enhancing credibility of reports and claims made about social responsibility;
- Emphasize performance results and improvement;
- Increase confidence and satisfaction in organizations among their customers and other stakeholders;
- Achieve consistency with existing documents, international treaties and conventions, and existing ISO standards;
- Promote common terminology in the social responsibility field;
- Broaden awareness of social responsibility;
- This standard is not intended to reduce government’s authority to address the social responsibility of organizations.
(Arzova, 2009 in Idowu & Filho, 2009; ASQ, n.d.).
ISO 26000 thus aims to help organizations manage their social responsibility. It helps to improve the individuals’ working and living conditions, whilst fostering better opportunities to different organizations as they benchmark their social responsibility efforts. ISO 26000 has the potential to capture the context-specific nature of social responsibility. Even though the standard aims to unify and standardize social responsibility practices, it also acknowledges that organizations have a responsibility to bear as they are expected to address the strategic areas that are relevant to their business (Hahn, 2013; Figge, Hahn, Schaltegger & Wagner, 2002).
Therefore, the ISO 26000 standard provides guidance on the integration of social responsibility into management processes and on matters relating to stakeholder engagement. Its core subjects represent the most essential areas of social responsibility that an organization should take into consideration in order to maximize its contribution to sustainable development. The standard’s goal is to encourage organizations to adopt socially responsible approaches by reviewing their extant operating practices on organizational governance, human rights, labor practices, environment, fair operating practices, consumer issues and community involvement and development (ISO, 2014). ISO 26000 provides guidance on stakeholder identification and engagement, it assists in improving social responsibility communications and it helps to integrate responsible business practices into strategies, systems and processes. Hence, ISO26000 advises the practicing organizations to take into account their varied stakeholders’ interests. The constructive partnerships agreements with multiple stakeholders are beneficial for the potential of effective consensus building, knowledge sharing, interest representation, and achievement of legitimacy (Fransen & Kolk 2007). According to Castka and Balzarova 2008a; p. 276), ‘ISO 26000 aims to assist organizations and their network in addressing their social responsibilities – as they provide practical guidance that is related to operationalizing CSR, identifying and engaging with stakeholders and enhancing credibility of reports and claims made about CSR’. ISO 26000 can be viewed as an approach to CSR that is rooted in a quality management framework. Moratis (2015) has also reiterated the key contents and tenets of ISO 26000 as he examined strategies that could enhance the credibility of the corporations’ social responsibility claims. He argued that the concept of credibility relates to skepticism, trust and greenwashing. Consequently, the organizations that are renowned for their CSR credentials will have a better reputation and image among stakeholders. This will result in significant improvements to the firms’ bottom lines.
Berman, Wicks, Kotha & Jones (1999) suggested that one approach to how organisations approach stakeholder management is based on an instrumental approach (strategic stakeholder management). They held that the organizations’ concern toward stakeholders is motivated by their self-interest as they strive to improve their financial performance. Yet, there were several empirical studies that have often yielded contradictory results about whether social responsibility can bring financial returns (Camilleri, 2012, Orlitzky, Schmidt & Rynes, 2003; McWilliams & Siegel, 2001; Waddock & Graves, 1997; Russo & Fouts, 1997). Nevertheless, an increasing number of studies reported that the social responsible behaviors should be used strategically (Husted & Salazar, 2006). Others argued that social responsibility offers opportunities for market differentiation, as it could be a source of competitive advantage (Russo & Fouts, 1997).
Donaldson and Preston (1995) maintained that social responsibility is not fully driven by commercial factors. Their altruistic social responsibility perspective (or intrinsic stakeholder commitment) approach assumed that organizations have a normative (moral) commitment to advance their stakeholders’ interests. Similarly, Castka and Balzarova (2008a) have proposed an exhaustive list of social responsibility predictors that were drawn from three perspectives: strategic, altruistic and coercive prior to the formulation of ISO26000. They listed ten propositions in relation to social responsibility orientation of organizations or networks, differences in regulatory systems, and the role of governments and national environments.
One of the mechanisms that led to the development of the social responsibility agenda is a pressure of different groups of activists, consumers and non-governmental organizations. For instance, stakeholders may exert pressure over organizations to adopt social and environmental practices that exceed the minimum requirements that are mandated by legislation and regulation (Christmann & Taylor, 2004; Corbett & Kirsch, 2001). Nevertheless, there may be other stakeholders who could generate new societal expectations and consequently lead to new business practices. In fact, it is a very common practice amongst multinational supply chains to use well established codes of conducts that are imposed on others by the most powerful players (Castka and Balzarova, 2008a).
Organizations ought to consider which aspects of social responsibility to invest in (McWilliams & Siegel, 2001). Their social responsibility can include internal aspects (i.e. physical environment, working conditions, communication and transparency parameters) as well as external aspects (community relations, supplier relations, shareholder relations (Kok, Van der Wiele, McKenna, & Brown, 2001). McWilliams & Siegel (2001) held that there is an ideal level of CSR that managers can determine via cost–benefit analyses.