Creating shared value through the mediating role of CSR

Creating shared value through the

mediating role of CSR

MASTER THESIS WITHIN: Business Administration NUMBER OF CREDITS: 30 ECTS

PROGRAMME OF STUDY: Global Management

AUTHOR: Ahmed Amine Hamzaoui and Meron Negasi Tsegay JÖNKÖPING May 2020

Acknowledgement

First, we would like to express our most sincere gratitude to our supervisor Michal Zawadski, for his guidance and his valuable feedbacks and for keeping us on the right track.

Special thanks go to our fellow students, for the time they allocated to prepare constructive criticisms and to provide valuable feedbacks for our thesis.

We are also thankful for every person who contributed to this thesis for devoting their knowledge and time, for participating in interviews with ponderable inputs and for making this thesis possible.

Ahmed Amine Hamzaoui & Meron Negasi Tsegay

Jonkoping International Business School May 2020

Master Thesis in Business Administration

Title: Creating shared value through the mediating role of CSR Authors: Ahmed Amine Hamzaoui, Meron Negasi Tsegay Supervisor: Michal Zawadski

Date: 2012-05-18

Subject terms: Corporate social responsibility, Creating shared value, Corporate sustainability

Abstract

Background: The automotive industry is more often subject to pressure and scrutiny from

consumers, environmental organizations, as well as state regulators. Therefore, this industry is making major investments in implementing a robust CSR strategy in order to tackle these ramifications. The discussion among academia asserts that CSR does not always contribute to creating value, and this leads to the assumption that the implementation of CSR may be detrimental for some companies. Thus, it is questionable whether companies can create shared value through the mediating role of CSR. Considering the automotive industry as among the largest and most criticized industries from a CSR point of view, it was worth to investigate the topic of creating shared value through the mediating role of CSR under this context.

Purpose: The overall purpose of this thesis is to broaden and deepen the knowledge about how

companies can create shared value through the mediating role of CSR in the automotive industry.

Method: In order to attain the research purpose, we conducted a qualitative content analysis, used

an inductive approach, and collected the primary data through semi-structured interviews. A total of eight interviews were held with participants, and the respondents were representing car dealerships and automobile manufacturers.

Conclusion: Throughout the analysis, we have identified eight dimensions that impact shared

value creation for the companies. These dimensions are CSR initiatives, employee relations, consumer relations, supply chain collaboration, local businesses partnership, the potential of local cluster, government regulatory compliance, and barriers to CSR. We have therefore developed a framework to orientate managers on how to tailor a CSR strategy that takes into consideration the aforementioned dimensions, and eventually create shared value.

Table of contents

2.1 Corporate social responsibility ... 5

2.2 Creating shared value ... 6

2.3 Carroll’s CSR Pyramid ... 11

2.4 Corporate sustainability ... 12

2.5 The automotive industry ... 16

3 Methodology ... 19 3.1 Research method ... 19 3.2 Research Approach ... 20 3.3 Research philosophy ... 21 3.4 Research design ... 23 3.4 Data collection ... 23 3.4.1 Qualitative interviews ... 23 3.4.2 Semi-structured interviews ... 24 3.4.3 Remote interviews ... 24

3.4.4 Participant selection and sampling ... 25

3.5 Qualitative Data Analysis ... 25

3.6 Research Quality ... 28 3.6.1 Credibility ... 28 3.6.2 Transferability ... 28 3.6.3 Dependability ... 29 3.6.4 Confirmability ... 29 3.7 Ethical considerations ... 29 4 Empirical findings ... 31 4.1 CSR initiatives ... 31 4.2 Employee relations ... 33

4.3 Supply chain collaboration ... 34

4.4 Local Businesses Partnership ... 36

4.6 Government regulatory compliance ... 39 4.7 Customer relations ... 39 4.8 Barriers to CSR ... 41 5 Data analysis ... 43 5.1 CSR initiatives ... 43 5.2 Employee relations ... 44

5.3 Supply chain collaboration ... 45

5.4 Local businesses partnership ... 46

5.5 The potential of local cluster ... 47

5.6 Government regulatory compliance ... 48

5.7 Consumer relations ... 49

5.8 Barriers to CSR ... 50

5.9 Proposed theoretical framework ... 52

6 Concluding discussion ... 55

7 Limitations ... 58

8 Suggestions for future research ... 59

9 Managerial implications ... 60

10 Reference list ... 61

List of figures

Figure 1: The connection between competitive advantage and social issues (Porter and Kramer, 2011) .... 9 Figure 2: The Pyramid of Corporate Social Responsibility (Carroll, 1991) ... 12 Figure 3: Corporate sustainability challenges (Schaltegger and Burritt, 2005. P 189) ... 14

List of tables

Table 1: Participants overview ... 25 Table 2: Example of coding scheme ... 27

1 Introduction

In this chapter, we provide an overview on the topic of the thesis, outline the problem and the purpose of the study, and introduce the research question.

1.1 Background

In the case of the global automotive industry, changes have been taking place due to technological developments, economic, social as well as cultural structures (Wells and Nieuwenhuis, 2012). The automotive sector have recently been facing various challenges and criticisms related to environmental issues such as carbon emission and global warming (Kushwaha and Sharma, 2016). This also caused this industry to be exposed to other forms of pressure related to costs and complexity problems in relation to innovation arising from increased environmental standards (Kushwaha and Sharma, 2016). However, Kushwaha and Sharma (2016) claim that the automotive industry prioritizes environmental protection and is thus making major investments in the improvement of the research and development department with the aim of developing products that are both less harmful to the environment but also cost-effective. Moreover, other initiatives such as the implementation of green innovation, green supply chain management, and eco-production have played an important role in decreasing harmful emissions (Kushwaha and Sharma, 2016). Thereby, because of the increasing awareness of sustainability with a focus on the environmental aspect, companies are now pressured to consider aspects such as charity, as well as solving social issues as their core values (Mohr et al. 2001). Sustainability aims to meet current needs without compromising the needs of future generation to meet their own needs. This phenomenon is also known as sustainable development (Sollish and Semanik, 2011). The definition of sustainable development consists of three pillars, which are economic, social, and environmental (Schaltegger and Burritt, 2005). The economic pillar extends to cover all financial decisions by securing the production of goods and services on a continuous spectrum. This occurs in order to secure economic growth within organizations and while avoiding damage to industrial production at the same time (Schaltegger and Burritt, 2005). The social pillar is based on creating a pleasant working environment for those people who work within the organization (Schaltegger

and Burritt, 2005). It also extends to external factors, such as ensuring that the organization contributes to the society in which it operates, for instance, to take responsibility for both employees, their families and the communities affected by the organization, as well as including different types of charity (Schaltegger and Burritt, 2005). The third pillar is the environmental pillar and concerns aspects related to the environment. An example of this would be the acidification of water or global warming (Schaltegger and Burritt, 2005). According to Pedersen (2006), Corporate Social Responsibility (CSR) is also a broad concept like sustainability, it contains all three aspects, i.e. economic, social, and environmental aspects. However, Pedersen (2006) expresses that despite its popularity, CSR has still been an unclear and debated theoretical concept from a business management perspective, and therefore it remains difficult to implement from a practical perspective. This means that there is still a gap between CSR that the companies advocate and what happens in practice due to the difficulties that exist in making it operational (Pedersen, 2006).

Furthermore, Porter and Kramer (2011) claim that CSR is used as a tool to improve corporate image and reputation through creating shared value (CSV), a concept that consists of policies and operating practices that improves the competitiveness of an organization while strengthening the economic and social conditions in which the organization operates. Porter and Kramer (2011) explain further that trust in business has been decreasing, as many societal problems are perceived to be caused by companies. Most of the problems are thus based on the companies themselves, caused by an outdated method to value creation that has evolved over the past decades. The traditional approach has been hardly giving focus to value creation, as it prioritizes short-term financial performance, and do not take into consideration the needs of customers (Porter and Kramer, 2011). Hence, companies are avoiding the influential factors that can play a crucial role in the company’s long-term development (Porter and Kramer, 2011). Additionally, based on the outdated approach to value creation, companies continued to ignore the depletion of natural resources that is important to their business activities, the capability of their suppliers to follow policies, and the negative economic growth of the communities in which they operate (Porter and Kramer, 2011). These factors are seen from government and civil society's point of view as contradictory to companies work towards sustainable solutions and a result of a failure in designing robust policy (Porter and Kramer, 2011). Thus, the principle of shared value is a solution to the

above-mentioned problems, as it contributes to creating economic value, while it simultaneously creates value for the society by acknowledging its demands and challenges (Porter and Kramer, 2011).

1.2 Research problem

There is no widely accepted reason why companies pursue social and environmental engagement, but most companies state a purpose for their CSR practices that is founded on ethical principles (Ditlev-Simonsen and Wenstøp, 2011). The discussion of the impact of CSR and environmentally sustainable initiatives extends to the automotive industry. The problem is that there is a discussion among academia that CSR does not always contribute to creating value, and this leads to the assumption that the integration of CSR may be detrimental for organizations (Jonikas, 2014). Moreover, de Los Reyes et al. (2017) mention that companies have not identified yet if they can really create shared value by addressing societal needs and challenges. Therefore, we challenge this idea and attempt to investigate how companies create shared values through the mediating role of CSR in the automotive industry. Until now, only few studies have been done to explore CSV (Lee et al., 2014), and to the best of our knowledge, no such study has been carried out in the automotive industry setting. Additionally, no holistic framework has been developed yet to assess the value created from CSR (Jonikas, 2014). Porter and Kramer (2011) claim that CSV is still a new concept and is relatively different from CSR. Yet, the potential power of shared value is at its infancy and CSV concept has recently received increased attention after being developed by Porter and Kramer (2011). In our view, CSV requires more comprehensive research and therefore we want to shed light on how companies create shared value through the mediating role of CSR in the car industry. In this research, we aim to provide empirical and theoretical backgrounds on how to create shared value through the mediating role of CSR.

1.3 Research purpose

Companies within high impact industries (i.e. industries that consume large amounts of energy and resources and cause considerable pollution) are more often subject to pressure and scrutiny from consumers, environmental organizations, as well as state regulators (Höllerer, 2012). According to Bhattacharya and Sen (2001), the impact of CSR have already been examined in several industry settings; however, they produced different results. Such contradictory findings fail to aid

automotive practitioners in how to engage in CSR activities. For this reason, we decided to investigate this topic within the context of the automotive industry.

Business people have been studying positioning and attempt to find better alternatives to design activities and implement them, but some have missed opportunities to serve fundamental societal needs and failed to grasp how societal weaknesses and harms influences value chains (Porter and Kramer, 2011). Managers focused their efforts on the particular business in which they operate. Although it is imperative to focus one’s attention on his industry, one has also to harness the potential power that location can have on innovation and productivity (Porter and Kramer, 2011). Thus, companies may generate additional value if they grasp the importance of their surrounding business environment.

Throughout this research, we will attempt to investigate this matter in-depth and aspire to enrich the existing body of research with our results. Furthermore, it is vital to grasp the different mechanisms whereby socially and environmentally sustainable initiatives create shared value for companies and its surrounding environment. Once these mechanisms are well understood, it becomes possible to orientate managers’ decisions regarding the most efficient way to highlight the value of sustainable and responsible actions, and to tailor a business strategy accordingly.

1.4 Research question

How do companies create shared value through the mediating role of CSR in the automotive industry?

1.5 Delimitations

This thesis is limited to eight selected companies in the automotive industry operating in Sweden and on a global scale. The specific results and conflicts uncovered in this thesis cannot be generalized since the research was conducted in the context of the automotive industry.

The automotive industry is highly entangled with social, environmental, and economic issues and for this reason, we chose to conduct our thesis in this context.

2 Literature review

This chapter is to present relevant theories and the existing body of literature on this topic. First, insights about CSR are provided before discussing the CSV and other relevant models. Lastly, the existing body of literature relating to the automotive industry and consumers are provided to familiarize the reader with the context.

2.1 Corporate social responsibility

Corporate social responsibility (CSR) has been a topic that has received a lot of attention in recent decades by both scholars and organizations. CSR has mainly three dimensions, namely social, environmental and economical. With that said, companies have been implementing different regulations based on the aforementioned three aspects. The social aspect has been mainly focusing on the human resource of an organization with regard to the social obligations that an organization has in which it operates, this for example, by formulating codes of conduct which aim to guide an individual through rules, norms and responsibilities (Pedersen, 2006). In addition to their social obligations, organizations have also understood the benefits of being social responsible can bring, which are committed workforce as employees are satisfied with the way they are treated as well as the emotional attachment to the organization (Uddin et al., 2008). A social responsible organization takes as well into consideration the community in which the company operates, its customers as well as other external stakeholders. When it comes to the responsibilities that an organization has towards its customers, it covers areas such as the quality of its products i.e. safety and durability, the quality of the service after the customer have received the product as well as how complaints are handled. Moreover, a social responsible organization takes as well into account the people living in the community and support them in different ways for example, by hiring people with special needs or through donations (Uddin et al., 2008).

The environmental dimension is concerned with the impact an organization's operations have on nature, i.e. the ecosystem, air, water and land. It goes beyond the obligations that the company has from the government regulations and extends to minimize waste by implementing efficient use of resources as well as eliminating emissions (Jamali, 2006). It also takes into consideration the use

of natural resources so that the needs of the present are met without risking the ability of future generations to meet their needs (Jamali, 2006). The economic dimension is primarily responsible for the financial impact that an organization can have in the society in which it operates, but also towards its stakeholders. A company's economic growth play an important role for the employees, non-governmental organizations, the community, customers as well as suppliers, and it is achieved through paying a fair amount of salary to the employees and by paying taxes to the government but also by being a good example of as an anti-corruption organization. (Uddin et al., 2008). Additionally, companies are also expected to work in accordance with the CSR regulation of their suppliers, where they are expected strive to work in partnership, adhere to the principles of fair trade and not to monopolize the market by abusing their power, comply with legislations and codes of conduct, monitoring of CSR practice internally as well as allow transparency in CSR-reporting (Mason and Simmons, 2014). According to Daugherty et al. (2006), within the context of partnership, many factors are included that in many ways benefit companies. Through collaboration with other partners, i.e. partnering of two or more independent companies they are able to reach higher goals, as they share processes, invest in new technologies and exchange data, which can be difficult for an individual company to do it on its own (Daugherty et al. 2006). Furthermore, benefits such as improved customer service, organized use of resources, strategic and long-term plans are realized through coordinated cooperation (Daugherty et al. 2006). Hence, for collaboration in order to make it manageable there is a need for a well-functioning interaction between people, information system, technology and the environment in which the business operate, in relation to intellectual skills of workers as well as organizational norms (Patel et al. 2012).

2.2 Creating shared value

According to Porter and Kramer (2006) shared value is defined as providing benefits for both the firm and society. Porter and Kramer (2006) also state that CSV is a novel way to realize economic success; and companies therefore should further expand their pool of social and economic values. In other words, advancing the social and economic conditions of communities wherein the firm operates will enhance its competitive edge (Porter and Kramer, 2011).

In spite of economic needs, the concept of CSV acknowledge that societal needs define the market, and it also acknowledges that social weakness or harms often generate internal costs for companies, such as material and energy waste (Porter and Kramer, 2011). Additionally, Porter and

Kramer (2011) introduce the concept of externalities. In their definition, externalities emerge when companies create social costs such as pollution, and these externalities ultimately translate into internal costs for the business as well as the environment (Porter and Kramer, 2011). As such, companies addressing these issues do not necessarily increase costs; they can increase their productivity through innovative technologies, new operating methods and new management approaches (Porter and Kramer, 2011). In fact, Porter and Kramer (2011) assert that the best companies undertake a broad range of activities to meet the need of communities, workers and supporting other businesses.

Successful CSV strategies involve the participation of consumers in the process of value creation. However, it closely depends on the consumer propensity for CSR (Alniacik et al., 2011). In the same vein, Porter and Kramer (2006) strategy theory maintain that for a company to be successful, it must create a unique value proposition that serve the needs of a selected set of customers, therefore, the organization gains competitive advantage from the set of activities related to creating, selling, producing, and delivering its products and services.

In fact, previous literature asserts that a socially responsible group requires the company to be socially responsible, with a focus on the environment, stability, consumer economics, and human rights (Alniacik et al., 2011). With that said, consumers who perceive a company as socially responsible have a greater intention to buy the product (Mohr and Webb, 2005). Thereby, consumers’ propensity for CSR can influence their acceptance and evaluation of CSV, and their positive attitude will positively affect their intention to participate in creating shared value (Alniacik et al., 2011).

Companies who will embrace CSV must educate their consumers about it in order to generate positive reactions toward CSV practices. This will help companies to reap the benefits of CSV with consumers (Alniacik et al., 2011). An example of these benefits would be increased engagement, co-innovation, and co-creating for value creation (Lee et al., 2012). There is still a lack of research on how shared value is created with consumers, but studies from Piligrimiené et al. (2015) acknowledge that relationships with consumers tends to generate direct and indirect, or tangible as well as intangible value for companies. Furthermore, Walter et al. (2011) described how value for a company or supplier could be received from sustaining customer relationships. In fact, the aforementioned direct benefits are described as increased sales volume, profit, and safety derived from a sustainable relationship with consumers. On the other hand, indirect benefits are

described as opportunities for innovation, or development processes that occur through mutual cooperation with consumers, and thus, generate value for the company, the consumer, as well as offering other consumers an improved product. Other indirect benefits include market expansion and the access of information from consumers about other markets.

According to Porter and Kramer (2011) CSV concept, companies can create value through three distinct ways: ‘reconceiving products and markets’, ‘redefining productivity in the value chain’, and ‘building supportive industry clusters at the company’s locations’. All of these are intertwined and the result of each one give opportunities to the next one (Porter and Kramer, 2011).

Reconceiving Products and Markets: Society’s needs are increasing, from health, to financial

security and, among other things, less environmental damage (Porter and Kramer, 2011). Business have spent a huge deal of time learning how to satisfy and manufacture demand while overlooking the salient demand of all. In fact, in advancing economies, products that serve societal needs are growing very quickly. With that said, new ways for innovation emerged, and thus shared value is created (Porter and Kramer, 2011). Moreover, greater opportunities emerged from serving the disadvantaged communities, and such communities have not yet been recognized as potential markets by some companies. For companies, creating shared value starts from identifying all the societal benefits and harms that could be incorporated in the company’s products, hence, exploring societal needs will enable the discovery of new opportunities for the firm and detect untapped new markets that could otherwise remain out of reach (Porter and Kramer, 2011). In most cases, companies should redesign their products and use different distribution method to meet the needs of these unserved markets (Porter and Kramer, 2011). Lastly, Porter and Kramer CSV concept argue that creating shared values assumes compliance with ethical norms and the law, as well as trying to mitigate any harm engendered by the business (de Los Reyes et al., 2017).

Figure 1: The connection between competitive advantage and social issues (Porter and Kramer, 2011)

Redefining Productivity In The Value Chain: A firm’s value chain affects, and is inevitably

affected by several societal issues, such as energy and resource use, safety and health, work conditions, and fair treatment among employees (Porter and Kramer, 2011). It is important to note that societal problems can generate economic costs and companies should capture such issues as opportunities and tackle them (Porter and Kramer, 2011).

The CSV concept also reveals that the synergy between productivity and societal progress across the value chain is greater than what is believed, by result, this synergy augments when societal issues are approached from a shared value perspective and when companies invent novel ways of operating to tackle them (Porter and Kramer, 2011). An example of this would be energy use and logistics: companies are examining their use of energy across the value chains, whether it is related to processes, transportations, distribution channels, supply chain and so on (Porter and Kramer,

2011). This reexamination is often triggered by the increase in energy price, energy efficiency, and by the fact that carbon dioxide emission became a controversial phenomenon (Porter and Kramer, 2011). This led to enhancements in energy utilization through recycling, better technology and various other practices that create shared value. Another example of this is resource use; technological advancements and the increased environmental awareness are prompting novel approaches to recycling and reuse, water utilization and innovative packaging. Therefore, resource efficiency can pervade the other parts in the value chain and will ultimately spread to supplies (Porter and Kramer, 2011). Furthermore, within the procurement process, companies use their bargaining power with their suppliers to reduce prices, and even outsource to local suppliers to slash costs (Porter and Kramer, 2011). It is important to know that capable local suppliers aid firms to avoid certain costs, reduce cycle time, foster learning, increase flexibility and enable collaborative innovation (Porter and Kramer, 2011). In fact, when companies buy locally, they foster their local suppliers, employ more people, which in turn contributes to the entire community, and create shared value (Porter and Kramer, 2011).

Enabling Local Cluster Development: The success of every organization depends on the

supporting organization and available infrastructure around it. Porter (1990) highlights the importance of being located in a geographic location wherein the home environment of the industry is the most dynamic and challenging.

It is important to note that successful clusters have strong relationship systems and embedded networks, these type of networks often generate informal and formal flows of information and knowledge that benefits the entire cluster and create a knowledge community. Pohl (2017) shows in his work that the higher the knowledge intensity within a cluster, the higher the value created. Innovation and productivity are heavily impacted by organizational clusters in vicinity, such as service providers, related business, related suppliers and the logistical infrastructure of the geographical location (Porter and Kramer, 2011). With that said, the third largest cluster in Sweden is the automotive industry, consisting of cars, trucks and buses, in addition to its surrounding suppliers (Lindqvist, 2009). In fact, Stockholm and Västra Götaland are the two largest clusters in this sector, followed by Jönköping region (Pohl, 2017).

Clustering provides plenty of opportunities for innovation and growth. Porter and Stern (2001) state that the commercialization and innovation of novel technologies often take place in industry clusters. It is important to note that strong cluster provides the perfect opportunity for innovation

and improve the competitive advantages of companies within the cluster (Sölvell et al., 2003). It is evident that the combination of firms together with their knowledge will drive innovation and economic growth of the cluster.

Actors within the cluster can also organize their efforts to increase competitiveness and growth, this involves other cluster companies and government (Sölvell et al. 2003). Clusters are extremely important in all successful regional economies and play a major role in improving productivity, competitiveness and innovation (Porter and Kramer, 2011).

Additionally, Delgado et al. (2010) found that industries located in a strong cluster have a higher level of employment as well as higher wages. Moreover, Wenneber and Linqvist (2008) found that, as new companies are seeded, within a cluster, they tend to create more jobs and attract highly trained labor and in turn increase productivity.

2.3 Carroll’s CSR Pyramid

Archie B. Carroll presented the first CSR model as a pyramid in 1991. This model encompasses the whole range of business responsibilities as legal, economic, ethical, and philanthropic dimensions; all of these concepts are depicted as a pyramid in which they are systematically represented at four levels. Considering that profit-making is the company's primary responsibility and, the economic responsibility forms the basis of the pyramid, wherecompanies must be able to show higher income than expenses in order to survive, although it is not entirely in line with what social responsibility requires (Carroll, 1991). Therefore, economic responsibility is the foundation upon which all the other layers exist. The next level in the pyramid is a legal responsibility, it is about complying with the rules that have been set and always acting lawfully within the framework of the law (Carroll, 1991). Carroll considered that the company should always operate in accordance with government policies and regulation, but also behaving as a loyal state and being a good example. Since the company’s activities directly or indirectly affect the society in which it operates, including all its stakeholders, it is important for the company to comply with legal responsibilities (Visser, 2006).

The next level in the pyramid is an ethical responsibility, which means that the company should conduct its business in an ethical manner while going beyond the normative expectations of society (Carroll, 1991). The company must be responsive to society's norms and values and try to combine these with the company's goals so that they do not conflict with each other (Carroll, 1991). Therefore, legal requirements should be taken as minimum requirements, where the company’s

aim should be to constantly strive that a continuous improvement regarding the work on sustainable business is assured (Visser, 2006). The philanthropic responsibility is the last but not least level of the pyramid where it is located at the top of the pyramid (Carroll, 1991). This responsibility is interpreted as an active engagement of the company in the community in a voluntary way. Philanthropy is based upon voluntary commitment, the quantity and nature of these activities must be voluntary and are guided by the company’s desire to partake in social activities that are generally not required from the company in an ethical sense (Carroll, 1991). Philanthropy is not a literal responsibility, but companies nowadays must demonstrate that they partake in such activities. In this case, companies are able to exercise this responsibility, in different ways, such as donations to events or sponsorship of projects, or contribute with resources to the community and improve quality of life (Visser, 2006).

Figure 2: The Pyramid of Corporate Social Responsibility (Carroll, 1991)

2.4 Corporate sustainability

Sustainability is a concept that has proven to play an important role, while at the same time, have been challenging mostly for companies in industrialized and developed countries (Jain, 2005). This is because it presents the impact that companies have on nature and humans by addressing issues related to global competitiveness, economic development as well as economic growth (Jain, 2005). The concept has its roots back to the German forest industry in the 1713, where a mining administrator Hans Carl von Carlowitz described it in his book named Sylvicultura Oeconomica

Philanthropic responsibilities Ethical responsibilities Legal responsibilities Economic responsibilities

as maintaining a balance between harvesting old trees and making sure to plant new ones in order to secure a continuous supply, which is also known as environmentalism and further included economic and social dimensions (Robertson, 2017). However, it was not until the Brundtland Commission report had been published in 1987, where sustainable development was defined as ‘’meeting current needs without compromising the ability of future generations to meet their needs’’, where the term sustainability became popular worldwide but also came to be implemented in the form of company policy (Redclift, 2005, P. 213). Thereby, the concept has also been used as an alternative term for CSR by consultants, academics and corporate executives (Marrewijk, 2003). This due to some language bias, which also led to an interpretation of the two concepts as a way of doing business in a more transparent, more ethical and more human manner (Marrewijk, 2003). According to Mosca and Civera (2017) the origin of the socially responsible practices dates back to the middle of 1800s, that developed in relation to the industrial revolution, due to the fact that companies started to realize the impact of their daily business activities had on the society in which they were operating. Mosca and Civera (2017) describe further that although companies started to show their social concerns since the industrial revolution, the definition of CSR came first in 1950s and was formally acknowledged in business context, as companies came to play a crucial role in society. CSR was defined as the obligation for company executives and owners to take in to consideration the expectations and values of a society when implementing policies, make decisions as well as take responsibility for their actions (Mosca & Civera, 2017). However, Bakker et al. (2005) claim that even though there has been discussions about corporate social responsibilities by corporations and mangers since the 1950s, there is still no consensus on a broad definition, other than the most commonly used definition ‘’a social good action taken by businesses

in compliance to what the law requires prior to the interests of the firm’’’ (pp 283-284). Thereby,

in different contexts, CSR has also been appeared as a synonym for corporate citizenship, business ethics, environmental policy, corporate philanthropy as well as corporate social performance (Bakker et al. 2005). Thereby, sustainability has also been an important goal to be achieved by companies, nonprofits and states over the past decade (Slaper and Hall, 2011). However, it has been challenging to measure to what extent an organization is sustainable or pursues sustainable development work, due to the uncertainty of the vision of the concept when it comes to how it is defined and the contextual integration of the social, environmental and economic dimensions (Schaltegger and Burritt, 2005; Slaper and Hall, 2011).

Figure 3: Corporate sustainability challenges (Schaltegger and Burritt, 2005. P 189)

➢ Economic effectiveness: is a prior task of corporate sustainability management which aims to achieve a stable economic growth. However in order to achieve a desirable result, the management faces different types of challenges. For instance, identifying a reasonable economic indicator that takes into consideration the benefits of a particular decision while taking into account the negative impacts it may bring. Another example is that not all stakeholders have the same view in terms of predicting the impacts of their business when it comes to risk (as the impacts and their possibility to happen are unknown) and uncertainty (as it is known that there is an impact but their probabilities are unknown), which makes sustainability assessment difficult from an economic perspective.

➢ The ecological/environmental challenge: to improve ecological effectiveness of business activities is a major challenge from a business perspective. All human activities affect the natural environment or the ecosystem in general, where some

Integration Economic effectiveness Economic 3.Eco-efficiency Ecological 4.Socio-efficiency Social 5.Eco-justice 1.Eco-effectiveness 2.Socio-effectiveness 6

of the influences are irreplaceable or even sometimes affect the natural system to a degree of survival and existence. Some of the core environmental problems are related to greenhouse effect, depletion of ozone layer, pollution of soil and water, loss of biodiversity, exposure of harmful environmental chemical that endanger humans and the nature. Thus, ecological effectiveness is used as an assessment for a company on how successfully it has overcome the ecological challenge.

➢ The social challenge: in order to improve the social effectiveness, there are some challenges that a company faces, which are directly or indirectly related to the existence of the company while taking into consideration to the different social, cultural as well as individual needs. The company must first secure its social acceptance and legitimate its business activities in the society in which it operates, however this can be difficult due to the fact that human desire is unlimited as it have to take into account factors such as equal rights and the right to an adequate standard of living. Thereby socio-effectiveness is used as an assessment for how successfully an organization has decreased the negative impact of its business activities in consideration to the expectation of the society while improving its positive influence.

➢ The economic challenge to environmental & social management: the traditional economic challenge for a company are related to value creation, for both the corporate and the shareholders while striving for higher profitability. Thus, the challenges of economic sustainability are primarily to implement practical management approaches in an economically profitable way possible. This is due to the fact that a for-profit corporations primary aim is to earn profit through their business activities. However, organizations find themselves in dilemma as environmental protection and social responsibility need the same amount of effort as the economic aspect, when it comes to increasing value or contributing to profitability. Thereby, efficiency is used to measure the achieved economic success of an organization. When efficiency is interpreted from an economic perspective, it is presented in profitability indicators such as return on equity, return in investment, return on equity etc. Thus, in addition to the economic efficiency, two other efficiencies are of interest, which are economic-ecological efficiency and

economic-social efficiency. The economic-ecological efficiency (eco-efficiency) is used to describe ecological measure through monetary value. An example of eco-efficiency as a measurement is value added in US dollar or Euro/per tonne of emitted CO2, the amount greenhouse effect generated (in CO2 comparable) etc. The socio-efficiency (societal efficiency) on the other hand is defined as the amount of value added (in US dollar or Euro) to the social impact, i.e. social impact added is a representation of an organizations all negative impacts on the society from its operations, through its activities and production processes.

➢ The integration challenge: this phase is about bringing the three aspects together, i.e. ecological, social and economic challenges and integrate both environmental and social management into the traditional profitability focused business management. Thereby, the three sustainable management challenges can be achieved by implementing a systematic efforts to handle in an eco-effective and socially effective and also in an eco-efficient and socio-efficient way. The integration challenge is however the most difficult challenge for the corporate sustainability management. The challenges are based on trying to unite and at the same time accomplish the three different challenges. Thus, in order to integrate the three pillars of sustainability, there should be equal commitment and continuous improvement of the four challenges, which are social effectiveness, ecological effectiveness, socio-efficiency and eco-efficiency.

(Schaltegger and Burritt, 2005; Bond and Morrison-Saunders, 2013).

2.5 The automotive industry

Few industries are as large, influential and diverse as the automotive industry (Orsato and wells, 2007). The largest manufacturing sector worldwide, its management practices, and predominately its response to environmental pressures are prominent in their own right (Orsato and wells, 2007). This industry products touch people’s daily lives by providing mobility for everyone; however, it also carries a wide variety of challenges. An example of this would be global challenges such as global warming and air pollution. From 1980 upwards, the overwhelming majority of automotive makers adopted a proactive initiative toward reducing environmental impacts caused by their products (Orsato and wells, 2007). These companies are devoting their resources to show their

commitment and attention in this area, as well as their socially responsible behavior. An example of this would be ecological Volkswagen new vision "Shaping mobility - for generations to come.”, or Tesla focus on environmental friendliness automotive through the design of electric vehicles, and other products, all of which consider the ecological concern of everyone (Swaen and Chumpitaz, 2008). Nevertheless, after the Volkswagen emission scandal, also called “dieselgate” scandal, the company was accused of using deception to mislead consumers. Eventually, this scandal gave rise to consumer’s skepticism toward the brand and CSR as a whole. Subsequently, the environmental aspects of car manufacturers have been subject to scrutiny, it is drawing much more attention in the mass media, and also entangled with novel legislation in the European Union (Loureiro et al. 2012). It is important to note that when environmental claims tend to be exaggerated or solely motivated by profit, consumers feel that there are being misled by companies into forming wrong decision, and thus, their level of skepticism arises (Albayrak et al., 2011). While some automakers voluntarily adopted the principles of sustainability solely for the sake of ethical commitments, such as Ford and Toyota, other factors that influenced such actions are the search for a competitive edge (Orsato and wells, 2007). Their core strategy is manifested through its market deployment of electric and hybrid vehicles. This search for securing market leadership has prompted criticisms from their counterpart, as they have argued that such initiatives are uneconomic (Orsato and wells, 2017). In fact, Martinuzzi et al. (2011) assert that integrated environmental innovation in the automotive industry is primarily driven by factors such as customer pressure, regulatory pressure, the quest for competitive advantage and not environmental/ethical considerations.

Toyota emphasizes that its environmental efforts are implemented throughout the entire life cycle of vehicles, from design to distribution. Additionally, the automaker says they have achieved zero landfill at their manufacturing facilities situated in North America and reduced landfill waste by 95% (Health et al., 2009). They are actively reporting about the achievement of their goals regarding the reduction of energy consumption and highlighting their reduction of waste, recycling, as well as their environmentally friendly practices. Thus, Toyota is reinforcing its environmental ethos by arguments that build upon facts, figures and examples. In this regard, Toyota not only improves the world through their leadership roles and products, but also by making their own affairs right (Health et al., 2009).

It is evident that Toyota implicitly or explicitly claim that they save the world; in fact, the automaker claims that its electric and hybrid models are a revolution in the history of automotive and in the development of automotive environmental technology (Health et al., 2009). Throughout their whole brochure, Toyota underscore their commitment for the environment and uses the topic of figures and comparison to highlight the environmental value of their vehicles for example, the hybrid Prius from Toyota hat saves up to 1332L year versus the average car (Health et al., 2009). This argument also serves to underpin their ethos claims. This approach to communicate CSR activities is called the stakeholder information strategy and is often exercised by the automotive industry (Greenwood and Lim, 2017).

However, in an article published by the New York Times Magazine, under the headline of “The hybrid emperor’s new clothes”, a hybrid model was tested and proved to provide no tangible economic benefits (Health et al., 2009). This has prompted further critics from environmental organizations (Health et al., 2009). By result, the company was reprimanded for lobbying against harsher environmental regulations (Health et al., 2009). Triebswetter and Wackerbauer (2008) scrutinized the automotive industry on their innovative attitude toward sustainability, they claim that environmental innovation is purely driven by regulatory pressure from governments, the search for a competitive edge and customer pressure.

3 Methodology

This section aims to describe the methodological approach and why it fits the purpose of this thesis. Initially, this section presents the research method, research approach, research philosophy and research design. Furthermore, the data collection and analysis process are described. Finally, this chapter will conclude with research quality and ethical considerations.

3.1 Research method

In an attempt to answer our research question and deepen our understanding about how shared value could be created through the mediating role of CSR, a qualitative research will be used for this thesis.This method involves a naturalistic, interpretive approach to its subject matter (Denzin and Lincoln, 2000). It implies that researchers analyze things in their natural settings and attempt to interpret the phenomenon in terms of the meanings people bring to them, the goal here is to comprehend the social reality of individuals and groups under their natural setting (Lofland and Lofland, 1984). We chose a qualitative research because it gives the possibility to reflect on their own knowledge and add their own insights. According to Lofland and Lofland (1984), a qualitative research tends to be exploratory in nature and consists of open-ended questions rather than pre-coded ones. In this account, semi-structured interviews will be used in order to generate primary data. From a positivistic perspective we are aware of the weaknesses of a qualitative research, as results are subjective and cannot be generalizable, in other words, it is a researcher-dependent research, meaning that results derived from the same data can differ from other researchers interpretations. As such, we chose social constructivism as our philosophical approach to carry out this thesis.

Zikmund and Babin (2016) claim that despite the fact that there is no possibility of drawing a definitive conclusion from a qualitative research, a researcher can however draw out potential explanation. Furthermore, due to the flexibility of the procedures, such research will provide us more ground to explore the subject studied in-depth.

The reason we used qualitative research method in this thesis is that, this method is applicable to access the experiences of the study participants, and to investigate how companies create shared value through the mediating role of CSR. Furthermore, in an attempt to come up with a novel

theoretical perspective, data was collected through semi-structured interviews to permit an interactive and natural engagement during the process.

3.2 Research Approach

In the academic literature, three types of reasoning or approach exist: abductive, inductive and deductive (Dudovskiy, 2018). Inductive reasoning usually starts with the observation of a specific phenomenon, followed by theories that are suggested by the researcher in order to overcome the problem (Dudovskiy, 2018). The advantage of such an approach is that it provides a great foundation to undertake a new lesson. It attempts to establish your previous knowledge about a particular topic (Dell’Olio and Donk, 2007). However, such an approach requires high levels of intellectual, reasoning and analytical skills as the researcher has to develop solutions to the problem postulated. Nevertheless, inductive reasoning has its shortcomings, as it cannot be applicable for explaining a novel idea or concept, and is more suitable for concepts abstract in nature. This approach is based upon learning from previous experiences, as such, any patterns and similarities are experimented with the aim of generating a theory or reaching to a conclusion (Dudovskiy, 2018).

The deductive approach or deductive reasoning is concerned with the establishment of a hypothesis or a multitude of hypotheses based on an existing theory, followed by the formation of a research strategy in an attempt to run tests on the hypothesis (Dudovskiy, 2018). This approach relies on previous theories and premises, and authors primarily attempt to deduce precise inferences or conclusions from preliminary premises or theories (Dudovskiy, 2018). As such, it is more adequate to quantitative studies and is reliant on predefined theories and premises by other studies. Therefore, we assume that this approach is not applicable to our study.

Abductive reasoning can be interpreted as the systematized intuition or creativity in the quest to develop novel knowledge. This research method often begins with a surprising fact or puzzle and the process of research is solely devoted to their explanation. The intuition often stems from an unpredicted observation that necessitates the explanation of a deviation that cannot otherwise be explained while using an already established theory (Gadde and DuBois, 2002). Despite the similarities with inductive and deductive reasoning, this approach differs in the sense that its research process attempts to infer the best prediction from a set of incomplete observations (Taylor et al., 2002). In other words, if the researcher does not possess a complete data on a particular

phenomenon, he or she has to infer to a most plausible explanation based on the readily available data (Douven, 2017).

This thesis has been carried out with the help of a qualitative research method where we applied an inductive approach. According to Thomas (2003) the aim of an inductive approach is to first condense varied and extensive unprocessed data into a short summary, then, the researcher can establish links between the research purpose and the summarized findings derived from the unprocessed data, lastly, the researcher can develop a theory or model about the processes that are evident in the data.

As mentioned above with the help of this method we were able to condense the raw data gathered from the interview in order to make the material more easily manageable and clear without distorting the central contents. This in turn helped us in identifying patterns after the empirical data were collected, which also helped us to generate theoretical data that can be related to the research area. The inductive process thus develops generalizable conclusions based on the observations as a basis. With reference to the above argument and the fact that this research was based on a problem that appeared in the case of the studied companies, we addressed the problem with the help of an inductive approach. The research further intended to lead to new theory, in the form of recommendations for how companies can create shared value through the mediating role of CSR, which is also the purpose of this study and is intended to be used for all the automotive industry.

3.3 Research philosophy

Research philosophy can be seen as the researcher’s own assumptions and thoughts about how to perceive the world, it is the foundation upon which the research strategy and methods will be used and selected (Zaukauskas et al., 2018). Research philosophy in scientific research mainly consists of ontology and epistemology (Zaukauskas et al., 2018).

Ontology is about the study of being in general, and concepts that are directly in relation to being, becoming, reality, and existence. Internal realism, relativism, and nominalism are the primary views of this research philosophy (Saunders et al., 2009). Internal realism argues that none of our beliefs about the world are objective truth, and the way things are in this world is independent of our interests, beliefs, or what anyone might think. A relativist ontology asserts that sociological issues are experienced and defined differently by different people; there is no absolute single reality that can be unraveled, but rather multiple perspectives on the issue (Frowe, 2001). This view assumes that diverse observant may have diverse points of view. However, the nominalist

ontology goes a stage further and suggest that names and labels attached to events and experiences are crucial. According to this position, truth is not absolute.

Epistemology is about the study of nature and origin of knowledge and inquiring in the social and physical world (Saunders et al., 2009). Positivism and social constructionism are the primal contrasting views of this research philosophy. A positivist epistemology states that the social world is existent externally, and its properties should be measured and interpreted through reason, logic, and objective methods rather than being inferred (Easterby-Smith et al., 2018). However, a novel paradigm came to light by philosophers in reaction to the limitations incurred from applying a positivist philosophy to social science issues (Gergen, 1985). This novel view is known as social constructionism and asserts that reality is not exterior and objective, but rather socially constructed by people through their daily interactions (Gergen, 1985). The emphasis should be on what people, collectively and individually, are feeling and thinking, and more attention should be put on how they communicate with each other, whether it is verbal or non-verbal (Easterby-Smith et al., 2018). Therefore, we can appreciate and understand differences in experiences that people have, rather than seeking fundamental laws or external causes to explain behavior.

The ontological stance for this study is relativism. We took into consideration the relative differences of perceptions and considerations among respondents/managers. Moreover, CSR commitment and the extent to which companies address societal/environmental issues differ among companies and thus, the created shared value may differ. Additionally, the relativist approach influenced this study, as the authors’ own understanding and interpretation also influence the findings. In line with this ontology, we chose social constructionism as our epistemological approach. Since this research revolves around creating shared value through CSR, the external society and government hold different beliefs and views and have a significant influence on CSR and CSV. Having said that, the differences among CSR implementation influence the company’s external environments, and the society in which they operate, while taking into consideration that the society might have different cultural systems and beliefs. Additionally, we recognized that the participants' understanding and knowledge of CSV and CSR are constructed through their experiences and might be different.

3.4 Research design

In content analysis, the researcher's aim is to draw systematic inference from qualitative data that is structured according to a set of concepts or ideas. Practitioners question their data for the meanings and relationship of such concepts or ideas, which are derived from pre-established theories or hypotheses (Easterby-Smith et al., 2018). As such, content analysis is used for theory building in qualitative research, as well as hypothesis testing in a quantitative one (Easterby-Smith et al., 2018). According to Easterby-Smith et al. (2018), content analysis is an approach to the analysis of texts and documents that tries to find pre-determined categories while quantifying the content. In general, it is often associated with the examination of inscription contained in newspapers, published reports, books, journals, web pages and other forms of documentation, but it can also be done on interview transcripts. Furthermore, content analysis can be performed with almost all types of data, although practitioners have the propensity to stick to textual data, including observational records, interviews transcripts, diaries and company reports (Easterby-Smith et al., 2018). It important to note that content analysis is mainly a method of analysis and not a method of data collection. Therefore, its use can be combined with broader frames of research design that embodies a systematic form of data analysis as well as of data collection (Leavy and Prior., 2018). In this thesis, we used content analysis to scan and analyze the interview transcripts.

3.4 Data collection

Data can be collected from primary sources and secondary sources. Primary data is collected by the investigator to fulfill a specific purpose and answer his research, they consist of data derived from interviews, observation, focus groups, questionnaires and sampling (Saunders et al. 2009). Furthermore, secondary data consists of second hand-processed information, collected by someone else, and utilized for other than the purpose (Smith and Albaum, 2005).

In this section, a detailed description of primary and secondary data collection is presented in the following. This involves the set-up of primary data collection and the interview set-up with participants.

3.4.1 Qualitative interviews

Qualitative interviews are defined as directed conversations based on questions and answers about a specific topic (Easterby-Smith et al., 2018). Interviews evolve around a series of questions centered on a particular topic to have an in-depth exploration of the topic (Easterby-Smith et al.,

2018). As noted by Easterby-Smith et al. (2018), interviews provide ample opportunities for mutual understanding, discovery, and reflection, and therefore elucidate different viewpoints and lived experiences. With that said, interviews enabled us to access information in context and learn about the phenomena in question. The label “qualitative interviews” encompasses a broad range of interviewing techniques, and they can be structured and highly formalized: an example of this would be an interview in market research, whereby questions are listed in a predefined order and asked accordingly, this is called highly structured interviews (Easterby-Smith et al., 2018). Other forms of interviews are in a more flexible manner such as semi-structured interviews. Furthermore, in the context of ethnographic research, unstructured interviews are used to stimulate a conversation spontaneous in nature, thus difficult to prepare in advance (Easterby-Smith et al., 2018). During this research, we conducted three semi-structured interviews and five remote interviews.

3.4.2 Semi-structured interviews

In order to obtain primary data that offers the desired richness to understand how to create shared value through the mediating role of CSR, we found that semi-structured interviews are the most adequate method to gain insightful knowledge about different factors that created shared values for companies through CSR. According to Yin (2010), semi-structured is the most commonly used method for qualitative research whereby feelings, thoughts, and views could be expressed in the respondent’s own words, thus the semi-structured interview provided deeper insights by not constraining ideas to prejudices. Unlike structured interviews, we did not follow strict questions, we aimed to generate as much data while staying within the scope of the context.

3.4.3 Remote interviews

Managers occasionally prefer mediated interviews that are carried out via telephone, chat or email, as opposed to the traditional face-to-face interview (Easterby-Smith et al., 2018). Remote interview allows more flexibility for managers, whereby they feel less committed since there is no obligation to meet or host the researcher.

Due to the recent development of the COVID-19, and exactly because of this reason, we had no other choice than conducting five remote interviews. We were aware of the limitations of such an approach, as this type of interviews lacks the immediate contextualization, and the non-verbal and depth of communication in face-to-face interviews (Easterby-Smith et al., 2018). However, the remote interviews conducted in this thesis proved to be very effective, as we have established a

relationship of trust with the participants, and which enabled them to conduct follow-up interviews to gather up more data.

3.4.4 Participant selection and sampling

Generally, qualitative sampling intends to identify rational instances of the phenomenon under study. According to (Easterby-Smith et al., 2018), no research exists without any presupposition, as such, every researcher has at least some level of understanding before the act of conducting the interview. In this respect, we chose non-probabilistic sampling strategy to select a purposeful sample while reducing at the same time the likelihood that the sample selected affects the outcome of the research (Easterby-Smith et al., 2018). The most common non-probability sample is called convenience sampling. In this account, during the selection process, we utilized this technique and targeted a specific group of people in a specific industry, which is the automotive industry. The aim of this research is to perform interviews with department managers of the automotive companies and car dealerships located in the vicinity, precisely in Jönköping’s region. We booked the interviews in advance, but unfortunately, the onset of COVID-19 urged five participants to switch over to a remote interview.

Table 1: Participants overview

3.5 Qualitative Data Analysis

According to Bengtsson (2016), when applying a qualitative research method, it is practical to begin with the clarification of what the researcher aims to find out and from whom as well as how

Respondents Company Gender Date and time

1 1 Male 19-03-2020 2 2 Male 19-03-2020 3 3 Male 20-03-2020 4 4 Male 30-03-2020 5 5 Male 24-03-2020 6 6 Male 31-03-2020 7 7 Male 01-04-2020 8 8 Male 23-04-2020

it will be conducted. This is done by documenting the ideas and thoughts that arise and by allowing the stimulation of new emerging ideas. Thereby, before conducting the final analysis, the collected material must be read thoroughly in order to identify categories, patterns, themes, and deviations. The aim of the analysis is to bring order and clarity to the collected data. This also means compiling data in a clear and useful form so that it can be compared with the research question. Thus, the interviews collected were analyzed with qualitative content analysis and inductive approach. As mentioned before, the inductive approach include analyzing texts based on people's description of their experience of a phenomenon (Bengtsson, 2016). Thereby, inductive qualitative analysis is performed without prejudice to the interview texts that were based on the participants' experiences, in order to identify valuable subjects that answers the research question (Bengtsson, 2016). To begin with, we read through the material to gain a holistic view and made notes of our first impressions, which also helped us to identify common categories and to familiarize ourselves with the content. The process of the analysis then continued in several steps. Each author took note of the meaning units that corresponded to the purpose of the research. This means that sentences and words with similar meaning were identified to clarify similarities and differences in the collected data. The meaning units that best answered the purpose of the research were then selected and discussed between us the authors. Subsequently, the meaning units were processed into codes to briefly describe and summarize the content of the meaning units. Based on the relevant codes created in the previous step, we were able to create categories. Ultimately, we have identified a total of 186 codes which were assigned to 8 categories.

Table 2: Example of coding scheme

Meaning units Codes Categories

We also educate your employees regarding energy saving features, and by doing that, we reduce energy costs

Employee education Employee relation

We also invest a lot in learning to market more hybrids and electric cars, all salesmen undergo an internal training to learn more about how these types of cars work

Employee training Employee relation

We select a supplier, based on their consideration of environmental issues

Supplier selection Supply chain

collaboration

We try to sign agreements with different partners that can help us achieve different sustainability goals

Partner collaboration Local business partnership

When we invest our sponsor money where we see that we can contribute to society in some way, for example

to support sports

associations

Philanthropy Sponsorship

CSR initiatives

We work with local suppliers in our own municipality and we are careful about this, as we have the opportunity to visit their facilities and carry out certain checks

Local supplier Supply chain

3.6 Research Quality

In order to ensure the quality of qualitative research, it is imperative to have a clear research design with a well-elaborated and well-structured methodology (Daymon and Holloway, 2011). By doing so, we focused on what is important and strived to avoid the major pitfalls that could lead to false conclusions or findings (Daymon and Holloway, 2011). Moreover, the research design gave us the ability to make consistent and distinct decisions. Nevertheless, to ensure the quality and trustworthiness of qualitative research, four criteria have to be met, namely credibility, dependability, transferability and confirmability (Guba, 1981).

3.6.1 Credibility

According to Guba, (1981), credibility is associated with the validation of results and findings; it relates notably to the extent a practitioner’s account is appropriate and believable. It is the most essential condition for research to be considered trustworthy. In an attempt to achieve this, we informed the research participants about the thesis purpose and the problem the interview would shed light upon. Furthermore, at the onset of each interview, we continued to discuss and clarify the selected method for the thesis as well as offering a certain level of freedom to speak freely in order to not affect the answers. Adding to that, we had regular seminars whereby other students could review their work at different stages. Moreover, since the thesis is written by two authors, we had the opportunity to cross-check the data and compare their interpretations and perceptions in order to enhance the credibility of the thesis. Ultimately, we will share the findings with the participants so that they can critically analyze it and give their opinions to find out if the findings reflect their views and experiences.

3.6.2 Transferability

Transferability is closely associated with the research generalizability and the extent to which the research can be applied to different contexts (Easterby-Smith et al, 2018). The specific results and conflicts uncovered in this thesis cannot be generalized since the research was conducted in the context of the automotive industry, but it can extend to other research within the same context. According to (Guba, 1985), qualitative research must aim at providing a thick description to enable researchers to decide in what manner a transfer can be done In this respect, we provided a thick description of the context in order to allow comparison with other contexts and contemplate the possibility of a transfer.