Corporate social responsibility
– A case study of three Swedish MNC`s in the emerging Peruvian market
Author(s): Moa Ekerhed,
International business
Mariana Sandvall, International business
Tutor:
Examinator Susanne Sandberg Petter Boye Subject:
International business Level and semester: Bachelor thesis, spring
2010
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Acknowledgements
The concept of corporate social responsibility has been very interesting to study and we have gained a lot of knowledge concerning the subject. First, we would like to give our sincere thanks to SIDA that enabled us the opportunity to conduct this minor field study in Peru. We would like to thank our supervisor Susanne Sandberg that has supported and guided us during this whole process. Further we want to thank all of our interview persons for the valuable information and time they gave us before, during and after the interviews;
Gina Muñiz -‐ Securitas
Stefan. E Sandberg – General Council Lorena -‐ Perez Helden – SKF
Ignacio Francisco Menéndez Larrea – Atlas Copco
Raul Alta Torre Del Aquila – Nordic Chamber of Commerce
Moa Ekerhed Mariana Sandvall
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐
2010-‐05-‐28 2010-‐05-‐28
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Abstract
Date 2010-‐05-‐28
Level: Bachelor thesis in international business 15 hp
Authors: Moa Ekerhed Mariana Sandvall Birth year 1986 Birth year 1988 Supervisor: Susanne Sandberg
Commissioned by: SIDA
Project: Minor field study
Title: Corporate social responsibility – A case study of three Swedish MNC`s in the emerging Peruvian market
Purpose: The purpose with this thesis is to gain understanding of how Swedish multinational corporations work with CSR in an emerging market. We will study what kind of CSR they are implementing on the market and how their surrounding environment influences them. From a theoretical perspective we will analyze the impact of the stakeholders and how they gain legitimacy, further how this is taken into practice.
Method: The research is built upon a qualitative method where the primary data was studied from conducting several interviews concerning corporate social responsibility and sustainability practices. The research was conducted with an abductive research approach.
The three companies that were examined were SKF, Atlas Copco and Securitas. We also performed interviews with the Nordic Chamber of Commerce and the Swedish General Council in Peru.
Conclusions: Our conclusion is that the CSR concept is very in time and companies are nowadays raising more awareness of CSR issues and implementing more CSR and sustainability practices. The stakeholders are becoming more important than ever and in order to gain legitimacy companies have to work hand in hand with their stakeholders and surrounding environment to be able to achieve a sustainable future. CSR is vital for the sustainability and plays a significant role for the future of corporation’s existence and progress.
Keywords: Corporate social responsibility, sustainability, stakeholder, legitimacy, the Peruvian market and cooperation.
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Table of contents
... 0
1. Introduction... 5
1.1 Background... 5
1.1 1 CSR in Latin America and Peru ... 6
1.1.2 General description of Peru ... 7
1.1.3 Project Niño’s socialmente responsable... 8
1.2 Problem discussion... 9
1.3 Questions... 10
1.4 Purpose... 10
1.5 Limitations... 10
1.6 SIDA (Swedish International Development Agency)... 11
2. Methodology ...12
2.1 Choice of subject ... 12
2.2 Research strategy... 12
2.2.1 Case study ... 13
2.3 Research approach... 13
2.4 Data gathering... 14
2.4.1 Gathering of primary data... 15
2.4.2 Gathering of secondary data... 15
2.5 Procedure ... 16
2.6 Research quality ... 17
2.6.1 Validity... 17
2.6.2 Reliability... 18
2.7 Criticism of the sources... 18
3. Theoretical framework...20
3.1 Background CSR:... 20
3.1.2 The CSR movement in Peru... 21
... 22
3.2 Internal and External CSR... 22
3.2.1 Internal CSR ... 22
3.2.2 External CSR... 23
3.2.3 Corporate Communication... 24
3.3Stakeholder Theory ... 24
3.3.1 Primary and secondary stakeholder ... 26
3.4 Legitimacy theory... 26
3.4.1 Carroll’s pyramid ... 27
3.4.2 Triple bottom Line... 28
3.5 Codes of conduct... 29
3.6 CSR criticism ... 29
4. Empirical findings...31
4.1 CSR History and background ... 32
4.2 CSR practice of the firms ... 33
4.3 External stakeholder influence ... 35
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4.4 Legitimacy... 38
4.4.1 How much corporate social responsibility should a company take?... 39
4.5 Future ... 40
5. Analysis...42
5.1 The CSR concept... 42
5.2 CSR practice of the firms ... 42
-‐ How do Swedish MNC´s work with corporate social responsibility in an emerging market? ... 42
5.3 External stakeholder influence ... 44
How do external stakeholders in the emerging market influence the CSR involvement of the Swedish MNC´s?... 44
5.4 Legitimacy... 46
6. Conclusion ...48
6.1 CSR... 48
6.2 Stakeholders... 49
6.3 Legitimacy... 49
6.4 Recommendations ...51
Reference list...52
Attachment... 56
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1. Introduction
In this chapter we will begin to introduce the corporate social responsibility (CSR) concept to further continue with our problem discussion and our formulation of research questions.
1.1 Background
Corporate Social Responsibility is an issue that has been acknowledged as a competitive business strategy, firstly implemented in multinational corporations in industrialized countries. According to Rowe (2005) a business strategy poses to business’s collective self-‐
interest and argues that CSR has been one of global business’s preferred strategies for quelling popular discontent with corporate power. In recent years CSR practices has become more common in emerging markets but has not yet been implemented in a broader sense.
Today’s business world is getting more integrated and sees advantages in putting more effort in the development of social, environmental and work related issues. CSR means that businesses return a favor to society and can earn a higher degree of commitment and trust among the society. CSR defined by the World Business Council for sustainable development follows:
"Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” (Sims, 2003).
A positive company image and reputation makes the company become more competitive.
Surveys have showed that a positive view of a company increases the market shares and also the company’s legitimacy towards society, stakeholders and their employees (Kotler & Lee, 2005). Stakeholders are having a greater importance in the companies’ business strategies and issues like corporate communication and stakeholder dialogue is being acknowledged and discussed. Having a dialogue with the stakeholders is important because in today’s world having cooperation’s and alliances with reliable partners is becoming very useful considering companies potential on a foreign market (Pedersen 2006). Legitimacy is a part of the CSR concept and a definition follows:
Organizations continually seek to ensure that they operate within the bounce and norm of their respective societies, that is, they attempt to assure that their activities are perceived by outside parties as being legitimate (Deegan 2002).
For companies it is becoming more crucial to gain legitimacy as the development of CSR is evolving further (Deegan 2002). CSR can be both internal and external for a company.
Internal means more focus on the company’s internal issues such as their employees and the development of human capital, while the external CSR is more concentrating on human
6 rights and to be good corporate citizens, for example having different projects concerning social incentives (Baumgartner & Ebner 2010).
A new era of internationalization and globalization has taken place, and according to Aguero (2004) no business is any longer only local in the sense of production, trade and technology because internationalization means further connection with companies throughout the world. An aspect of internationalization is increased contact with firms globally. Adopting the features of international business has also led to adopt social responsibility as a matter of international legitimacy (Augero 2004). According to the Swedish Trade Council emerging markets are the future and in 20 years’ time they will be as large as the traditional markets.
Common for the emerging markets of the world is that they grow rapidly. A company that is entering an emerging market needs to be well prepared, chose the right cooperation partners and most importantly think in a long-‐term view (www.swedishtrade.se). During the last decades emerging markets have become very attractive for foreign direct investments and many multinational corporations (MNC´s) have expanded their global strategies to take advantage of business opportunities in these countries. On the contrary the emerging markets can also be huge challenges due to uncertainties such as political, economic and social issues (www.ccsenet.org).
1.1 1 CSR in Latin America and Peru
The concept of the socially responsible firm is becoming larger in both developed and developing parts of the world. The Latin American CSR movement first appeared in the 60s in Brazil and since the 80s it has become more significant and companies and organizations begun to plan seminars and events to enlighten CSR. CSR in Latin America is a growing phenomenon and the subject is getting more enlightened. Private businesses that implement CSR codes are in the center of a system of pressures that involves many actors.
This include domestic actors such as the firm, the state, local business and industry, local independent non-‐governmental organizations (NGOs), academic institutions and organized labour; as well as foreign actors such as the foreign firms to which the local firm is linked (through sales, contracts, inputs, or ownership), foreign governments, private foundations from developed countries, international NGOs, and multilateral organizations (Haslam 2004).
According to Ans (2010) the influence of international actors weights heavy on the CSR in Latin America. In 1996 the organization “Peru 2021”, founded in 1994, started to engage in the promotion of corporate social responsibility and involve companies in the CSR work (Pareja Sedano 2009).
“Peru 2021” stated that CSR is "a business vision that incorporates respect for ethical values, people, communities and the environment. CSR is seen by leadership-‐companies as more than a set of specific practices or occasional initiatives motivated by marketing, public relations or other business benefits. It is seen as a broad set of policies, practices and programs that are integrated throughout business operations and supports the decision making process and is awarded by the administration” (www.peru2021.org).
Important is also the role of social pressures, business leader’s views and management concepts in the promotion of CSR. The origins of CSR in Latin America consists of three interrelated factors that may be deposited as a basis for the emergence of CSR in these
7 countries; social mobilization and pressure from below, changing views among business leaders and development in management theory and practice (Aguero 2004). Today as business´ expands globally a new context and era of internationalization and globalization has made that no business can be seen only as local. Firms that export to or are based in developing countries, influence the expansion of CSR promotion to Latin America (Aguera 2004).
In our case the head offices of Atlas Copco, Securitas and SKF are located in Sweden where the base for the CSR policies and standards are set, with only local adjustments depending on which country of operation. In Peru there is low private sector participation and low government involvement concerning CSR (Haslam 2004). Peru is a country that is still in a development phase concerning foreign direct investments. There are 27 active Swedish companies in Peru most of them multinational corporations (swedenabroad.se). Most commonly is that larger companies have policies concerning CSR, such as the International labour organization (ILO) and the Global Compact; both United Nations based standards for sustainability and social responsibility. Companies have to implement global standards and policies to be able to be competitive on the international area; moreover the presence of Swedish companies can contribute to that development by implementing their standards and policies. Peru is far behind in their CSR work compared to other South American countries. That depends for example on Peru’s last period of unstable political and economic situations, of course more important and prioritized issues.
1.1.2 General description of Peru
Peru has 27 million inhabitants, and the country is divided into three different regions; the jungle, the mountains and the coast. Lima, the capital of Peru is located on the coast Peru is a relatively instable country with social and ethical tensions, an extensive poverty and a very small middle class. President Alán García Perez represents APRA – Alianza Popular Revolucionaria Peruana, a social democratic party that has the length of office to 2011. In a try to achieve macroeconomic balance between the rich big cities and the poor countryside, a new law releases the Peruvian highlands from taxes, which Garcia means should be seen as a Free trade agreement. President Alán García Perez represents APRA -‐ Alianza Popular Revolucionaria Peruana, a social democratic party that have the length of office to 2011. In a try to achieve macroeconomic balance between the rich big cities and the poor countryside, a new law releases the Peruvian highlands from taxes, which Garcia means should be seen as a Free trade agreement.
The largest contribution to the Peruvian economy is the mining, but also export gods like wool and fishmeal. The manufacturing industry is not well developed, but has global competitive advantage because of comparatively low production costs (swedenabroad.com).
Here are infinite possibilities in Peru and that the Peruvian economy is stable and in order, even though the Swedish willingness to invest for the moment is pretty low. Peru has the latest years exploded in foreign direct investments but Sweden is no longer number one of the Nordic countries; Norway and Finland are far ahead of us in investing. The poverty is a threat for the democracy even though the poverty decreases and the middle class increases.
South America is a relatively small market for the Swedish trade, approximately 2-‐3%
because the major focuses are in Asia and the United States. Traditionally Sweden and Peru
8 have had a positive trade balance. The values of the exported goods have always been higher than the imported goods, but in 2009 a difference was noticed in the statistics for the first time ever. Now, the import is of larger value then the export, and both are heavily increasing. Peru has a lot to deal with considering the social and institutional instabilities.
One example is that in the southern parts of Peru the mining companies have been facing a lot of problems with the local communities, with protest actions, strikes and riots (interview Sandberg, 2010-‐05-‐05). This has happened because the local and regional government has not dealt with the problems and has not treated the locals in a correct way. Companies has to be prepared for that change is coming and more and more people are becoming aware of social problems in society and wants to have a change (interview Raul 2010-‐04-‐19).
1.1.3 Project Niño’s socialmente responsable
One of Securitas external projects that are connected to the Securitas association is Niño’s Socialmente Responsable. It is a project where Securitas together with the community and the local church cooperate in order to give these children and their families a better life. They started this project in 2005 and today around 90 children and their families are a part of the project. We got the opportunity to see in practice how these Swedish multinational corporations work with CSR, both internally and externally.
We went to Surco, a district in Lima where it is very common that poor groups of people without any place to live move up in the hills to build their homes there. This is against government regulations, but because the people have nowhere else to live they create small communities there without electricity nor water. These communities are called invasions in Peru and we visited one called Diente de Oro, situated in Villa Libertad. The children that are a part of the project live here. The local people told us about their situation, how they only receive water every fifteen days. Securitas has a small facility in Villa Libertad where they give the children breakfast every morning for a good start of the day. This is a part of their project of decreasing the malnutrition of the children. In Villa Libertad they are starting to build up a church to use as a wawa wasi (a kind of kinder garden) and also a room for the mothers where they can knit and sew, to further sell their handcrafts to earn some money of their own. Once a week, every Saturday, the children of the Securitas project comes to Securitas to have a class in values and principals and we were a part of this action during a day. We arrived at nine in the morning when the children were eating breakfast and the mothers were starting their knitting lessons. The children are then divided into different groups; the younger ones in the ludoteca (a play house), while the older children go to class.
The older children had two teachers who were strict about the rules during class, to prevent a smaller chaos in the room. Securitas believe that these children need structure and discipline in their lives that can be useful throughout their whole life. The Vice President of Securitas, Gina Muniz, said it is not their responsibility to educate the children, which is the responsibility of the government, but they give the children better opportunities and especially motivation to perform in school. If the children behaved correctly during the one and a half hour in class, they were allowed to play and swim in the pool. All of these activities took place at Securitas own facilities (see attachment 2).
9 1.2 Problem discussion
Companies in foreign markets that want to gain legitimacy can engage in social issues in the market of operation in order to receive the legitimacy desired. Social responsibility is becoming more important both for the stakeholders of a company and for the company itself (Holmestedt et al 2009). In recent years large multinational companies have perceived more pressure from outside actors to be good corporate citizens and as the competition stiffen the image and reputation of a company is becoming more vital. Companies need to secure their international position as the companies expand further across the world. If a company acts as good corporate citizens they will not only gain more sales and good word of mouth but also commitment and trust from their employees and society, which will benefit them in the long run (Pedersen 2006). While the trade barriers are decreasing it sets higher demands on companies to act in a certain way and have a good image within the society to maintain sustainable growth. Legitimacy is then crucial to be able to continue their operations globally.
It is important for companies to interact with their stakeholders in a positive way to be able to have sustainability in an emerging market where the relationships are the core of a long-‐
term commitment. The stakeholders are the ones that can affect a company both direct and indirect and therefore are a major part of the future of a company. The relationship towards your stakeholders is the best way for your company to evolve and continue the development of your CSR practices and therefore companies should lay focus on their stakeholder relationships (Holmestedt et al 2009). Having a thorough communication with the surrounding environment is also becoming a more critical point to be able to be competitive on a market. Studying the concept of CSR involves theories connected to relationships and commitments, such as the stakeholder and legitimacy Theory (Pedersen 2006). Legitimacy and relationships goes hand in hand when talking about CSR, they are the core of sustainability and CSR practices, which is why they are important to discuss (Carol 1991). We are all individuals with different preferences so therefore when discussing and debating issues concerning legitimacy it is complex in the sense that it differs from organization to organization, both the definition of what stakeholders and what legitimacy actually are.
During the last decade CSR have been adopted not only by voluntary organizations that are designing social and environmental management standards, also by academics and consultants in articles, papers and books. Governments and international organizations increasingly integrate CSR in policy papers and while companies have started to report on the social and environmental impacts, investors place money in companies that are social responsible. Still there is an on-‐going debate whether companies have only a financial responsibility or if they also have social responsibility in a new market of operation, and the question remains what social responsibility actually consists of and that the practical perspective of CSR is difficult to grasp (Pedersen 2006).
10 1.3 Questions
-‐ How do Swedish MNC´s work with corporate social responsibility in an emerging market?
-‐ What kind of CSR do Swedish MNC´s practice in the emerging market and why?
-‐ How do external stakeholders in the emerging market influence the CSR involvement of the Swedish MNC´s?
-‐ How do the Swedish MNC´s get legitimacy from the society and their surrounding environment in the emerging market?
1.4 Purpose
The purpose with this thesis is to describe the different CSR actions of our chosen organizations to gain understanding of how Swedish multinational corporations work with the subject in the emerging market. We will study what kind of CSR they are implementing on the market and how their surrounding environment influences them. From a theoretical perspective we will analyze the impact of the stakeholders and how they gain legitimacy, further how this is taken into practice. Thereafter the actual actions will be concluded in order for us to be able to give a recommendation.
1.5 Limitations
We have chosen to focus on three Swedish MNC´s CSR concepts in the Peruvian market as a foundation for our study. We will also interview the Nordic Chamber of Commerce and the General Council of Sweden in Peru to get a broader view of the social responsibilities in the country. Our main focus is the external CSR, but will briefly include the internal CSR as well because it provides an overall picture of the CSR concept. Different theories are used to base our thesis on where the stakeholder theory and the legitimacy theory are in center of our study, both widespread theories that are essential to our thesis. Moreover, within the three companies we have chosen we will not advert CSR actions taken place in Sweden when our area of interest is Peru.
11 1.6 SIDA (Swedish International Development Agency)
This thesis has been made possible by financial support from SIDA that enabled the authors to travel to and spend the thesis-‐writing period in Lima, Peru. SIDA works according to directives of the Swedish Parliament and Government to reduce poverty in the world. Minor Field Studies (MFS) is a scholarship program for field studies in developing countries. It is intended for students at universities and university colleges with an international interest, who wish to gather material for their Bachelor or Master dissertations for periods of 8-‐10 weeks. It aims to provide Swedish students with the opportunity to build up their knowledge of developing countries and development issues (www.sida.se).
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2. Methodology
In this chapter we will introduce the choice of subject and describe our methods to further explain and motivate our different approaches concerning our research.
2.1 Choice of subject
Our interest for business and social development made us curious about companies’ social responsibilities when operating in emerging markets. The South American market is growing but still huge parts of the people are living in poverty. That led us specifically into the Peruvian market. We became more involved in the subject and understood that CSR is an important part considering a company’s ethic position as well as their competitive edge.
2.2 Research strategy
With qualitative research the information gathered is analyzed; as well as in the quantitative research, and provides more creativity for the researcher, which can lead to new discoveries.
In accordance with Merriam (2005) we believe that research concentrated upon discover, insight and understanding of the basis how people perceive the world provides the best opportunities for development of knowledge within the area of interest. The performance of a number of interviews with persons that we think can contribute with important information to our thesis, made us creative in that sense that we afterwards discussed and questioned theories we are using and also tried to find new solutions to our problems.
Qualitative research is in the contrast to the quantitative focus more traditional in that sense that there is only one objective reality that is constant and further on is to see rehabilitation in the result. In our case statistics and numbers are not relevant which is the quantitative strategy main focus, our focus is set on observing and gathering information from our interview objects, we are interested in people’s thoughts and opinions within the subject.
That is the reason for choosing the qualitative approach.
In qualitative research the process, the meaning and understanding are of greater interest.
The use of words and pictures rather than figures is tools to describe the discoveries gained by the researcher. Bryman & Bell (2002) claims quantitative researchers sometimes criticize qualitative investigations because of their too impressionistic and subjective ways.
Quantitative researchers state that of the reason that a qualitative researcher often starts in a relatively open way and only gradually precise the questions, the reader can receive somewhat poor information of why an certain area is chosen to be studied and not another.
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2.2.1 Case study
A case study is a study of a specified phenomenon, such as a program, an event, a person, an institution or a social group. Learning from a particular case should be considered as strength rather than a weakness. The interaction between a phenomenon and its context is best understood through in-‐depth case studies. To an increasing extent, the case study approach has become a common method in many scientific disciplines (Dubois & Gadde 2002). We have put emphasis on qualitative case studies, as most case studies are related to practical problems from a holistic perspective. This means that a researcher chooses the case study method to gain deep insight into a particular situation and how the persons involved interpret this. Focus is set on process rather than on results, rather than on context-‐
specific variables and to detect rather than to prove (Dubois and Gadde 2002).
In a qualitative case study the researcher seeks a greater understanding of the case. The researcher wants to understand and integrate her to the complex context that a case study is. Qualitative research has an extensive history with the human kind’s curiosity as an engine. Which has been the case for us, we wanted to know more about this specific problem and gain more knowledge of the chosen case.
When choosing a specific case it is important to choose a case that is typical or representative of other cases. To have case studies as a research approach is not primarily to see or connect your study to others done in the area, the main reason for conducting a case study is because the researcher wants to understand that specific case, which means that the case is pre-‐selected (Stake, 1995). A definition of a case study follows:
“Case study is the study of the particularity and complexity of a single case, coming to understand its activity within important circumstances “(Stake, 1995).
To have been given the opportunity to perform a case study did not only help us to receive a broader view of the problem but also enabled us to study the problem on a deeper way, when having the opportunity to do a field study and see the peoples actions and reactions before during and after the interviews.
2.3 Research approach
In researching there are different approaches and questions that need to be considered; the relation between the empirical material and the theory is crucial for having a well-‐executed thesis. There are three different ways to proceed with a thesis: the deductive, inductive and abductive approach. Clear inductive research begins with gathering of data and continues with empiric observations and thereafter the researcher uses theories depending on the
14 information that is found Merriam (2005). A researcher that works with the inductive approach follows the path of discovery, which means that she can study a specific object without any deeply rooted knowledge about an already established theory. After receiving the empirical findings the researcher will formulate a theory, which is on the contrary from the deductive way of working. That means that in use of an inductive approach the researcher shall discover something and gain knowledge enough to explain and formulate a theory. The deductive approach means that the researcher uses established theories and studies a specific phenomenon: the deductive researcher turns theory into empiricism (Bryman & Bell 2005).
The abductive approach is a combination of the deductive and the inductive approach, however Dubois & Gadde (2002) say that an abductive approach is only relevant if the researcher has as an objective to discover new variables and relationships. In our case this suits us because we are having an objective to discover new relationships or angels to the CSR framework. The authors’ stress that the systematic combination that is most suitable when performing a case study is more related to the inductive approach than the deductive, because of the continuous change between theory and empirical observations is more based on what they call grounded theory. Performing a case study provides a good prerequisite to develop theory by having opportunity to see the empirical observation in another context.
There are many methodology textbooks that fail to take into account the benefits that come with performing an interview when conducting a case study, which other authors describes as a linear process (Dubois & Gadde 2002).
Abductive means that the researcher could formulate a hypothesis pattern from one case that could explain the specific subject chosen to study and provide suggestions for a deeper structure. The first step that an abductive researcher takes is an inductive way: where a theory or hypothesis is created. Secondly, the theory is tested through new cases: and the researcher works deductive. The advantage that the abductive approach has is that it is more opened compared to the other two approaches Patel & Davidson (2003). We have chosen an abductive approach because it gives us more room for analysis and reflections which we believe suits us better then the inductive and deductive approach. It would give us the opportunity to explore new angles through our gathered empirical findings. After we have obtained theoretical previous knowledge we will carry out an empiric study and finally compare the empirical findings against the theory to see if these two match. This shows that the most suitable approach for us is the abductive approach. We will be able to gain knowledge from the theoretical frame and also receive understanding from our empirical findings, which will bring us a broader view of the problem and simultaneous give, us a more satisfying end result.
2.4 Data gathering
The written sources possess an information source that is huge if we consider the CSR concept in general, but very limited in different areas within our specialization. Moreover, is the issue to choose the relevant information from the documents that provides information from different kind of views. The documents most important issue is that they are able to in every way help the researcher to discover meaning, develop understanding and mediate insight of relevance for the researcher. The value of the information source must also be
15 relevant for the formulated questions. There are two different types of data sources.
Primary data is the material that is gathered for the actual research area. In this thesis the primary data consists of interviews. The secondary data is data that already exists and have been gathered by other researchers or institutions (Merriam 2005).
2.4.1 Gathering of primary data
To base the thesis upon only written facts was never a consideration for us. Jacobsen (2002) says that by having face-‐to-‐face interviews the researchers are given an opportunity to see a more honest and fair atmosphere in comparison when performing a telephone interview, where it is easier for the interview object to not give correct answers. We choose to perform interviews. An interview guide with partly structured questions was created for the companies of interest, but with some orientation depending on differences in the companies CSR work (sees attachment 1) (Merriam 2005).
We chose to meet our interview objects in their everyday environment from the 5th of April to the 5th of May. We conducted one interview with each company and organization. We felt like we received complete answers during the interviews and did not have to conduct any more.
When using a qualitative method, a low degree of standardization of the questions is preferable. A low degree means that open questions are used and the respondents have the opportunity to answer relatively free (Patel & Davidson 2003). Personal interviews ease the communication and we presented the subject for our interview objects and sent in the questions on forehand if desired. The respondents were supposed to be able to prepare themselves so that we would receive correct and thorough information.
A qualitative research reflects people’s opinions, how they act and their experience within the area, which we believe is the most interesting part in research. We created our interview guide in accordance with our four formulated questions (see background), and on the basis of them we phrased our questions. We divided our questions under different headings that we connected with our theoretical framework. We sent the main questions to the respondents in advance even though we earlier on the telephone discussed the subject of our thesis. We wanted the respondents to be able to prepare so they could answer more detailed and if needed find information for the interview in forehand to prevent uncertainties to occur. When we conducted the interview we started by presenting ourselves and explained that we were enabled to conduct this thesis in Lima, Peru thanks to SIDA. We then continued to ask simple questions about the company and the Interview person in order to proceed with the more deep questions about their CSR work. We did this in order to receive a broader view of the organization, the person and also their CSR commitment.
2.4.2 Gathering of secondary data
We tried to find the most suited interview persons for our thesis that could provide us with valuable information within the CSR area. In our point of view all of the persons we interviewed had specific and important information concerning our subject. The MNC: S we choose to interview were all companies that had a relatively long experience of the Peruvian
16 market because by interviewing MNC` s that has a long presence in Peru they will most probably be well aware of issues concerning the Peruvian society. The people we interviewed where all involved in CSR actions and procedures. We also choose to interview the president at the Nordic Chamber of Commerce and the General Council of Sweden, because we believe that to be able to receive a broader view of the studied problem we have to involve interest organizations as well as companies in order to achieve a more reliable end result. The Nordic Chamber of Commerce and the General Council provided us with a more objective view rather than just relying on the information gathered from the companies. The interviews took place at the companies’ offices and at the organization headquarters or their own facilities. All of the conducted interviews took more or less two hours, which gave us a deeper connection to the person and also a greater opportunity to receive as much important information as possible.
The interviews took place between the 5th of April and the 5th of May 2010.
Ignacio Francisco Menéndez Larrea, General Manager of Atlas Copco Perú, 2010-‐04-‐05. We had the interview at Atlas Copco headquarters, Santa Catalina, Lima
Gina Muniz, Vice President Securitas and President of the Association Securitas Peru, 2010-‐
04-‐29. The interview was conducted at Securitas headquarter, Surco, Lima
Lorena Perez Helden, Marketing Director & Sustainability Director SKF, 2010-‐04-‐15.The interview took place at SKF`s headquarters, San Isidro, Lima
Stefan Sandberg General Council of Sweden, Peru, 2010-‐05-‐05, the interview was conducted at the office of the Swedish General Council, San Isidro, Lima
Raul Alta Torres Aguila, President of Cargamar & Vice President of Nordic Chamber of Commerce 2010-‐04-‐19. The interview took place at the headquarters of Cargamar, San Isidro, Lima
To gain more understanding for the subject, we read articles and literature where CSR is treated. Information about CSR is widely spread, even though CSR in South America is a much more limited subject, furthermore CSR in Peru. We have used a lot of scientific articles from the databases ELIN and Google scholar as well as literature that thoroughly describe the different theories in the area as well as essays within the subject of CSR. Furthermore web pages concerning for example the Global compact, ILO and our case study company’s web pages. Most of the scientific articles we have used are from known business papers such as the international business review and the business and society review, which give them high creditability.
2.5 Procedure
We started to search for Swedish companies operating in Peru; there are 27 MNC`s operating on the Peruvian market (swedenabroad.se). Continuously we started to look at the company’s web pages and choose 10 companies that we thought would be interesting
17 for our thesis. Then we formulated an email explaining our study and why we thought that their specific company would be interesting for us to interview. After we received answers from some of the companies we choose the ones that we felt gave us the best feedback and that we received a good impression from. Because we felt that having a good connection with the companies from the start would benefit us in the end when we had our interviews in Peru.
We felt that during our interviews the conversation went smoothly and our interview objects felt comfortable and relaxed during the whole interview. The respondents took a lot of time both before the interview and after to answer our questions and were very helpful. Both of us were present at all of the interviews and both took notes and complemented each other if one of us forgot to write something down.
According to Jacobsen (2002) conducting an interview with a recording device is preferable rather than taking notes during the whole interview, because then the researcher can concentrate on what the interview object actually is saying and create trust between one and other. The fact that we used a recording device eased the information gathering for us because then we had the answers recorded and could listen to them many times, and did also give us a chance to analyse what the interview objects answered. Doing a transliteration of the interviews also helped us in case we needed to go back and listen to the interviews once again for complementing further; we had the interviews both on paper and on tape.
2.6 Research quality
2.6.1 Validity
Validity means that the object that was supposed to be researched has been researched.
When having a qualitative approach the validity is valid through the whole process because when having a qualitative approach it is about interpreting and understanding rather than to measure a problem (Patel and Davidson 2003). We have listened to the interviews several times to avoid misunderstandings when writing the transliteration and in this way receive a more valid result. The theoretical framework is based on scientific articles written by known researchers in the CSR area and we have also used written essays to get a broader view of the subject.
There are different types of validity and it is measured by how accurate the gathered data material is compared to the approach of the problem (Patel and Davidson 2003). The validity that is most common concerning qualitative studies is competence, pragmatic and communicative validity. The ones we have chosen to work with are the competence validity and communicative validity. We have interview objects that are experts within the field we are studying which gave us relatively valid answers and also gave us a chance to be as objective as possible when seeing the person face to face (Patel and Davidson 2003).
The fact that we use a qualitative approach gave us the opportunity to have thorough dialogs and discussions with our interview objects. When we prepared for the interviews we
