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CSR in Japanese Firms in Transport Sector PDF
CSR in Japanese Firms in Transport Sector PDF
Corporate Social Responsibility (CSR) reporting has become common practice for
large organisations globally, yet there is variance in the CSR related activities
claimed in disclosures. CSR researchers argue that cultural and historical
backgrounds are the influential drivers of CSR behaviour. However, the links
between actual activities claimed in CSR reports and the cultural systems that
underpin these reported activities is an under-explored area. This thesis discusses
the uniqueness of Japanese socio-cultural aspects. While Japan is well-known for
having the most advanced energy efficient technologies in the world, it is also
known for being below international standards for gender equality in the workplace.
Therefore, this thesis aims to explore and examine organisational behaviours
through the lens of relativism in order to understand what organisations are
reporting and how and why managers prioritise these activities. This thesis is based
on longitudinal qualitative research focusing on the Japanese transport companies
that published CSR reports between 2005 and 2009.
The findings from manually coded content analysis revealed: (1) that activities
related to providing public safety, waste management and the 3Rs (reduce, reuse
and recycle), and environmental innovation were the top three most frequently
reported CSR activities; and (2) complying with laws, career planning, flexible
work practices, and providing public safety were the three categories that showed
the most significant increase in reporting frequency from 2005-2009.
This thesis extends the previous literature. Takagaki (2010b) identified that the
transport industry, particularly the air and water sub-sectors, is the industry where
the environmental problems are serious and require urgent attention. Takagaki
(2010b) chose to explore the electronics industry as this industry is considered to
be middle ground for its level of seriousness and urgency. This research: (1)
examines the transport industry; (2) investigates the links between the actual
activities reported, and the activities reported to be influential drivers of these
activities.
i
KEYWORDS
Corporate s o c i a l r e s p o n s i b i l i t y , C S R r e p o r t i n g , e n v i r o n m e n t
g e n d e r e q u a l i t y , philanthropy, Japan, transport industry, content analysis,
thematic analysis, NVivo
ii
STATEMENT OF ORIGINAL AUTHORSHIP
The work contained in this thesis has not been previously submitted to meet the
requirements for an award at this or any other higher education institution. To the
best of my knowledge and belief, the thesis contains no material previously
published or written by another person except where due reference is made.
Signature
Date: 7/05/2013
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TABLE OF CONTENTS
ABSTRACT.......................................................................................................... i
KEYWORDS....................................................................................................... ii
STATEMENT OF ORIGINAL AUTHORSHIP............................................... iii
TABLE OF CONTENTS ................................................................................... iv
LIST OF FIGURES .......................................................................................... vii
LIST OF TABLES ........................................................................................... viii
ACKNOWLEDGEMENTS ............................................................................... ix
ABBREVIATIONS ............................................................................................. x
CHAPTER 1: Introduction ................................................................................. 1
1.1 Problem Statement ..................................................................................................1
1.2 Overview of the Study .............................................................................................2
1.3 Research Significance .............................................................................................4
1.4 Outline of Thesis Structure ......................................................................................5
1.5 Conclusion ..............................................................................................................6
CHAPTER 2: Literature Review ........................................................................ 7
2.1 Introduction.............................................................................................................7
2.2 Corporate Social Responsibility...............................................................................7
2.3 CSR Activities ........................................................................................................9
2.3.1 Global Reporting Initiative (GRI) .....................................................................9
2.3.2 Business in the Community (BITC) ................................................................ 12
2.3.3 International Organisation of Standardisation (ISO) ........................................ 14
2.4 Previous Studies of CSR Reporting ....................................................................... 14
2.5 Previous Studies of CSR Reports Using Content Analysis ..................................... 18
2.5.1 Limitations of Quantitative Content Analysis for CSR Studies ........................ 20
2.6 Why Companies Report CSR activities .................................................................. 21
2.6.1 Stakeholders as Key Driver ............................................................................. 21
2.6.2 Legitimacy as Key Driver ............................................................................... 26
2.6.3 Values as Key Driver ...................................................................................... 31
2.6.4 Limitations of Carroll’s CSR Pyramid ............................................................ 42
2.7 West to East .......................................................................................................... 43
2.8 Conclusion ............................................................................................................ 44
CHAPTER 3: The Japanese Context ............................................................... 45
3.1 Introduction........................................................................................................... 45
3.2 About Japan .......................................................................................................... 45
3.3 The Japanese Government ..................................................................................... 47
3.4 Japanese Business ................................................................................................. 49
3.5 Japanese Corporate Governance ............................................................................ 55
3.6 CSR Drivers in Japanese Firms.............................................................................. 57
3.6.1 Environmental CSR Drivers............................................................................ 57
3.6.2 Workplace CSR Drivers ................................................................................. 68
3.6.3 Community CSR Drivers ................................................................................ 73
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3.6.4 Marketplace CSR Drivers ............................................................................... 74
3.7 Japanese Studies of Environmental CSR Activities ................................................ 76
3.8 Japanese Transport Industry .................................................................................. 79
3.8.1 Background of Japanese Transport Industry .................................................... 79
3.8.2 Sub-sectors in the Japanese Transport Industry ............................................... 80
3.9 Research Questions ............................................................................................... 82
3.10 Conclusion .......................................................................................................... 86
CHAPTER 4: Methodology .............................................................................. 87
4.1 Introduction........................................................................................................... 87
4.2 Research Paradigm ................................................................................................ 87
4.3 Qualitative Research.............................................................................................. 89
4.4 Research Design Strategy ...................................................................................... 90
4.4.1 Methodological Fit ......................................................................................... 90
4.4.2 Qualitative Content Analysis .......................................................................... 91
4.5 Data Collection ..................................................................................................... 93
4.5.1 Population and Sampling Frame ..................................................................... 93
4.5.2 Sampling Strategy .......................................................................................... 93
4.6 Data Analysis ........................................................................................................ 97
4.6.1 Thematic Analysis and Coding Data with NVivo Software ............................. 97
4.6.2 Inductive Approach ........................................................................................ 97
4.6.3 Coding Classification.................................................................................... 101
4.6.4 Analysis Objectives ...................................................................................... 102
4.7 Evaluation Criteria .............................................................................................. 104
4.7.1 Evaluation Criteria One: Credibility.............................................................. 105
4.7.2 Evaluation Criteria Two: Transferability ....................................................... 105
4.7.3 Evaluation Criteria Three: Dependability ...................................................... 106
4.7.4 Evaluation Criteria Four: Confirmability ....................................................... 106
4.8 Methodological Limitations and Delimitations..................................................... 106
4.9 Conclusion .......................................................................................................... 107
CHAPTER5: Findings and Discussion ............................................................108
5.1 Introduction......................................................................................................... 108
5.2 Transport Industry: Overall Findings ................................................................... 108
5.3 Environmental Domain........................................................................................ 111
5.3.1 Waste Management and the 3Rs (E6)............................................................ 112
5.3.2 Environmental Innovation (E10) ................................................................... 113
5.3.3 Energy Management (E4) ............................................................................. 115
5.3.4 Air Quality (E3)............................................................................................ 116
5.3.5 Working under Law and Compliance (E8) .................................................... 118
5.3.6 Noise and Vibration (E5) .............................................................................. 119
5.3.7 Organising Environmental Programs (E12) ................................................... 120
5.3.8 Environmental Conservation (E1) ................................................................. 121
5.3.9 Environmental Education for Employees (E9)............................................... 121
5.3.10 Participation of Environmental Programs (E11) .......................................... 122
5.3.11 Water and Material Use (E7)....................................................................... 123
5.3.12 Employee Rewards for Environmental Effort (E2) ...................................... 123
5.4 Marketplace Domain ........................................................................................... 124
5.4.1 Providing Public Safety (M9) ....................................................................... 125
5.4.2 Providing Better Product/Service (M6) ......................................................... 126
5.4.3 Customer/Passenger Engagement (M2) ......................................................... 126
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5.4.4 Corporate Transparency (M7) ....................................................................... 127
5.4.5 Responsible Procurement (M1) ..................................................................... 127
5.4.6 Providing Product/Service of Value (M5) ..................................................... 128
5.4.7 Engagement with Others (M8) ...................................................................... 129
5.4.8 Shareholder Engagement (M4) ..................................................................... 129
5.4.9 Management of Personal Information (M10)................................................. 130
5.4.10 Supplier Engagement (M3) ......................................................................... 130
5.5 Workplace Domain ............................................................................................. 131
5.5.1 Training and Development Programs (W3) ................................................... 132
5.5.2 Occupational Safety (W5) ............................................................................. 134
5.5.3 Career Planning and Flexible Work Practice (W6) ........................................ 134
5.5.4 Employee Communication (W1) ................................................................... 135
5.5.5 Diversity/Equal Opportunity for Positions and Promotion (W2) .................... 136
5.5.6 Health Management (W4) ............................................................................. 137
5.5.7 Recruitment (W7) ......................................................................................... 137
5.5.8 Fair and Equitable Work Environment (W10) ............................................... 138
5.5.9 Compensation and Rewards (W8) ................................................................. 139
5.5.10 Communications with Employees' Families (W9) ....................................... 139
5.6 Community Domain ............................................................................................ 140
5.6.1 Local Revitalization and Residential Environment (C7) ................................ 141
5.6.2 Organise Seminars, Events and Tours for the Public (C11)............................ 142
5.6.3 Corporate Sponsorship (C10) ........................................................................ 143
5.6.4 Employee Volunteering (C5) ........................................................................ 143
5.6.5 Global Corporate Citizen (C2) ...................................................................... 144
5.6.6 Educational Support/Grant (C4).................................................................... 144
5.6.7 Fundraising (C6)........................................................................................... 145
5.6.8 Community Welfare (C3) ............................................................................. 145
5.6.9 Charitable Donations (National) (C8)............................................................ 146
5.6.10 National Welfare (C1)................................................................................. 146
5.6.11 Charitable Donations (Global) (C9) ............................................................ 147
5.7 Conclusion .......................................................................................................... 147
CHAPTER 6: Discussion and Conclusion .......................................................148
6.1 Introduction......................................................................................................... 148
6.2 Research Question One ....................................................................................... 148
6.3 Research Question Two ....................................................................................... 149
6.4 Implication for Theory ........................................................................................ 152
6.4.1 Possible Drivers of CSR Activities in Japan .................................................. 152
6.4.2 Environmental Activities and Key Drivers .................................................... 154
6.4.3 Marketplace Activities and Key Drivers ........................................................ 155
6.4.4 Workplace Activities and Key Drivers .......................................................... 156
6.4.5 Community Activities and Key Drivers......................................................... 156
6.5 Implications for Policies and Practices ................................................................. 157
6.6 Limitations and Future Research.......................................................................... 159
6.7 Conclusion .......................................................................................................... 160
REFERENCES .................................................................................................162
vi
LIST OF FIGURES
vii
LIST OF TABLES
viii
ACKNOWLEDGEMENTS
First of all, I would like to thank my two supervisors who have supported me
through the completion of my thesis. As this was my first thesis, Dr Sukanlaya
Sawang, my principal supervisor, has attentively supported and guided me from a
beginner’s level, starting from ‘what is a thesis’, to the higher level of, ‘how to
improve a thesis to a professional level’. She was always available for me and
happy to discuss even small matters. I would also like to thank Dr Robin Price, my
associate supervisor. She provided me with invaluable knowledge, especially for
the qualitative research techniques. Her wide experience and abilities assisted me
through the difficult parts of my thesis. I am therefore deeply grateful and I believe
I was very lucky to have them as my supervisors.
I would also like to thank QUT academic professionals (lecturers and tutors) and
people who work at QUT. When I was an undergraduate QUT student, I didn’t
even think I could study at the level of a Research Higher Degree. My journey to
become a research student was long, due to work and other commitments, but very
rewarding. Everyone I met at QUT was kind, professional and very supportive. I
have heard many QUT students say that they do not wish to leave QUT. I am one
of these students. Thank you everyone.
I would also like to thank Prof Yukio Takagaki, author of The Stream of
Environmental Management Strategy. I read his research paper online prior to the
commencement of my thesis. When I made contact and then visited him at his
University in Japan, Prof Takagaki provided me with a wide range of information
for my thesis. His enthusiastic research support and the book he gave me inspired
me to continue studying.
ix
ABBREVIATIONS
x
CHAPTER 1: Introduction
In recent years, scholars and practitioners have devoted greater attention to the
topic of corporate social responsibility (CSR). The generally accepted idea of CSR
is that it exists in corporate activities where the firm goes beyond compliance and
engages in social benefits, beyond the interests of the firm and that which is
required by law. Similarly, there is a growing interest among scholars and
practitioners studying the determinants on attitudes towards CSR, especially by
executives at multinational companies, and the consequences of CSR activities.
However, the analysis of CSR is still nascent. Furthermore, existing CSR
frameworks developed for Western firms may not be able to be effectively applied
to Asian firms (McWilliams, Siegel, & Wright, 2006). As Japan’s post-war
industrial revolution is unique, this thesis focuses on Japanese firms by examining
their pattern of CSR activities and unpacking the influential factors behind these
activities. This chapter outlines the research background and problem statement,
discusses the significance and aims of this thesis, and concludes with a brief
description of the purpose of the remaining chapters.
There are now a growing number of large organisations reporting their CSR
activities either as a part of their annual report or via separate annual CSR reports.
Many organisations follow the guidelines prepared by international CSR initiatives
such as the Global Rating Initiative (GRI) and Business in the Community (BITC)
to report CSR practices. Western and Asian firms have both adopted CRS reporting
criteria (e.g., BITC and GRI) that were developed by Anglo-American and
European firms. This is due to the lack of a non-Western CSR reporting standard.
Without exception, Japanese firms have adopted Western-based CSR criteria.
However there are discrepancies between reporting behaviours and the adopted
criteria, which suggest that Japanese firms may have adapted and modified the
1
CSR criteria over time to suit their needs. To date, Japanese CSR activities and
proximal influential factors are an under-explored area in extant studies.
2. Are the patterns of CSR activities found in Japanese firms consistent across
time?
This thesis addresses the influence of Japanese socio-cultural aspects on the pattern
of CSR activities of Japanese firms. Activities at the firm-level will be used as the
unit of analysis to investigate this issue. The study will therefore attempt to unpack
the pattern of CSR activities across multiple timeframes. Further, this thesis
integrates an understanding of Japanese socio-cultural factors on CSR activities
across sectors in the Japanese transport industry.
First, this thesis discusses the uniqueness of Japanese socio-cultural aspects. While
Japan is well-known for having the most advanced energy efficient technologies in
the world (OECD, 2010a), it is also known for being well behind international
standards for gender equality in the workplace (refer to 3.6.2.1 Gender Equality).
Japan’s transition from the Shognate period, with rapid industrialisation,
environmental disasters, and technological innovations make it highly distinctive
(Euromonitor International, 2011a; Ohta, 2007). It is argued that Japan represents
an interesting case study for an ecological study as Japan is ‘the first industrialised
democracy with a post-industrial economy in the non-Western world’ (Barrett &
Fisher, 2005, p. 3). As environmental responsibility is the top issue for Japanese
2
corporations (Fukukawa & Moon, 2004), a sector that is the most vulnerable to
environmental issues was selected. Finally and most importantly, according to the
survey results from 30 industries in Japan, the managers of the transport industry,
particularly the air and the water transport industries, are most concerned with
taking urgent and serious environmental actions to address business sustainability
(Takagaki, 2010b).
Second, existing CSR models are discussed. This thesis provides an extensive
literature review not only on the concept of CSR in the past research, but also with
regards to the common CSR models that are widely used to explain organisational
motivations for CSR activities. This thesis integrates: (1) stakeholder theory; (2)
legitimacy theory; and (3) CSR values as theoretical framing devices. There are
two contrasting CSR motivations: normative case motivation for contributions to
society and business case motivation for the possible company economic success
(Branco & Rodrigues, 2006).
Finally, through document analysis and Japanese cultural evaluation, this thesis
identifies CSR activity patterns that have emerged among Japanese firms. Recent
academic studies indicate that Japanese firms have become more environmentally
proactive than ever before (Nishitani, 2008; Stanwick & Stanwick, 2006; Takagaki,
2010a, 2010b). As a result, Japanese firms discuss environmental issues in their
annual and/or CSR reports more often than issues from the workplace, marketplace
and community domains. This thesis demonstrates that, as Japanese firms have
adopted the Western criteria of CSR reporting, the patterns of Japanese firms’
reporting of CSR activities are somewhat different from what has been reported by
Western firms. This could be due to Japanese national cultural values that prioritize
environmental aspects over other interests and thereby drive the integration of the
environment in business and national policies (Barrett & Fisher, 2005).
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1.3 Research Significance
This thesis will approach its topic through empirical means, the methodology of
which will be explored in this section. There have been numerous studies
examining CSR disclosures that utilised quantitative analysis with large
populations in order to generalise findings (e.g. Chen & Bouvain, 2009; Holcomb,
Upchurch, & Okumus, 2007). This thesis focuses rather on achieving a deeper
understanding of CSR activities in a specific local culture from a relativist
viewpoint. Previous studies that have employed quantitative content analysis using
word-counts and reported frequencies of activity have done so in a context free
environment without the link to potentially explanatory factors, such as socio-
political aspects. This thesis extends previous studies by coding the documents
qualitatively (see 4.4.2 Qualitative Content Analysis). This research design aims to
extend existing knowledge through a detailed examination of CSR activities and
their relevant environmental, socio-economic and socio-political contexts.
While most of the existing CSR studies are cross-sectional (Aguinis & Glavas,
2012; Tsang, 1998), this thesis examines CSR practices longitudinally. This
longitudinal design provides opportunities to examine the different patterns of CSR
related activities over a period of five years. This thesis enhances existing
knowledge, based on a cross-sectional study that identifies how the patterns of CSR
activity vary over time.
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CSR practices within the transport sector. This longitudinal approach will assist
with understanding the factors that have contributed to the adoption factors of
environmental practices and the patterns that have emerged over time. For the first
time, this thesis examines longitudinal patterns in the transport industry.
This thesis contains six chapters. Chapter One describes the background to the
research, establishes the research problem, provides the justification for the
research and the methodology adopted in order to answer the research questions.
Chapter Two examines previous studies of CSR aiming to build a theoretical
foundation and to identify research gaps. The definitions of CSR are discussed;
CSR activities are explored and key drivers for reporting CSR activities are
reviewed through the lens of stakeholder, legitimacy and values theoretical
perspectives.
Chapter Three provides the background for a study examining Japanese business
practices. The recent history and current CSR practices are explored. After the
distinct cultural context of the Japanese government, firms, and corporate
governance are discussed, the CSR drivers for Japanese firms are examined. The
final section provides an overview of the particular concerns of the Japanese
transport industry with regard to environmental factors. Finally, the research
questions are introduced.
Chapter Four outlines the methodological approach selected for this research. It
explains why the selected research methods are the most suitable tools for this
thesis. Research paradigms and qualitative research is discussed, and research
design strategy is outlined and clarified. Finally, the four evaluation criteria:
credibility, transferability, dependability, and confirmability that were followed
throughout this research are provided with justifications.
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Chapter Five analyses the results derived from the qualitative content analysis.
First, an overview of the findings from the Japanese transport industry is presented.
Then the specific details of CSR activities in each of the four domains –
environment, marketplace, workplace and community – are investigated based on
reporting frequency, the changes in reporting frequency over time and the possible
drivers of CSR activities.
Chapter Six presents a summary of this research. The two research questions are
answered, and a proposed model for influential drivers of CSR activities in four
domains in Japanese transport companies is provided. The chapter further discusses
the implications for policies and practices and the final section acknowledges the
limitations of this study and suggests future research.
1.5 Conclusion
This chapter has summarised the foundations and structure of this thesis. Chapter
One provided background to the research that described the broad areas of extant
studies of corporate social responsibility and CSR reporting, then three research
questions for this thesis were introduced. The chapter also introduced the methods
adopted for this thesis and explained why they were most appropriate for this
research. The chapter then outlined the contributions of this thesis.
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CHAPTER 2: Literature Review
2.1 Introduction
Based on the rationale of Chapter One, this chapter will explore previous studies of
corporate social responsibility (CSR). This chapter has eight sections. Section 2.1
is the introduction, Section 2.2 reviews the definitions of CSR, Section 2.3
discusses CSR activities within the different frameworks, and Section 2.4 explores
previous studies of CSR reporting. Section 2.5 reviews studies of CSR reports that
have utilised content analysis, and Section 2.6 explores the different theoretical
perspectives on the drivers of CSR. Section 2.7 will move toward the Asian
approach of CSR from the Western perspective, followed by the conclusion.
CSR is a broad topic and there are many definitions. CSR was first mentioned in
1926 by Clark, who noted that ‘business has obligations to society’ (Freeman &
Hasnaoui, 2011, p. 420). The concept of a CSR context took shape in the 1950s and
scholars have developed CSR definitions that describe the term (Carroll, 2008).
Bowen (1953) said that CSR
Studies of CSR expanded during the 1960s and were developed particularly by
Keith Davis and William Frederick (Carroll, 1999). The definition of CSR
provided by Davis (1960) is more formalised and described what CSR means in
comparison to earlier, broader versions of term (Carroll, 2008). During the
Seventies, definitions of CSR began to proliferate (Carroll, 1999). Since the 1980s,
new alternative concepts such as Freeman’s Stakeholders Theory were developed
7
(Garriga & Melé, 2004), and CSR definitions based on stakeholder dimensions also
emerged. For example, Hopkins (1998 in Dahlsrud, 2008) introduced a CSR
definition that incorporates stakeholder dimension, but fails to describe how to
manage these phenomena:
Amongst the many CSR definitions, the most often cited is derived from Archie
Carroll’s work (Dahlsrud, 2008; Montiel, 2008). Carroll’s CSR definition was
somewhat different to the two definitions introduced previously. Carroll examined
how social activity by business can be classified and introduced four types of
socially responsible business activities:
CSR is defined differently in different contexts (Freeman & Hasnaoui, 2011; Sethi,
1975). Carroll (1999) identified 25 different ways to explain CSR (Godfrey &
Hatch, 2007), while Dahlsrud (2008) discovered 37 definitions from 27 authors.
O’Riordan and Fairbrass (2008) argued that definitions of CSR are dependent on
how individuals perceive their organisations’ role, as part of their responsibility or
obligation to society. Thus, there is no strong consensus (McWilliams, et al., 2006)
and there is not a single definition that is universally accepted (Freeman &
Hasnaoui, 2011). However, the absence of a single definition has not prevented
serious research into CSR. CSR remains an essential part of the business
environment and the institutionalisation of CSR has created a field of academic
research interest (Garriga & Melé, 2004; Siegel, Moon, Matten, McWilliams, &
8
Crane, 2008). Recently, scholars have been investigating the types of CSR
activities that firms undertake.
One way to understand what organisations are doing in their CSR activities is to
explore their CSR reports. In recent years, there has been growing pressure from
global initiatives and society for businesses to disclose their social and
environmental activities via public documents. International organisations such as
the Organisation for Economic Co-operation and Development (OECD) and the
United Nations (UN) Global Compact have been promoting their own CSR
principles to participating companies (Aras & Crowther, 2009). The OECD
introduced the Principles of Corporate Governance in 1999, which focused on how
corporations should run in the interest of shareholders (Lazonick & O'Sullivan,
2000). In 2008 the OECD published documents promoting sustainable
development that stated that linking economic, social and environmental goals
were essential for sustainable development worldwide (OECD, 2008c). This
change, and the corresponding voluntary UN Global Compact, sought to encourage
member countries to adopt universal principles of corporate citizenship
(Whitehouse, 2003). The UN Global Compact focuses on human rights, labour and
environment protections and anti-corruption measures (Williams, 2004). In
response to this, many businesses are more openly reporting the impact of their
CSR related activities (Chen, 2009). Nowadays, there are several well-known
global CSR reporting agencies and systems: the Global Reporting Initiatives (GRI)
and Business in the Community (BITC). These CSR agencies propose the types of
CSR activities that firms need to implement, and encourage their member firms to
publish CSR reports based on their guidelines (Chen & Bouvain, 2009).
The GRI guidelines are the most widely used CSR reporting guidelines (Isaksson
& Steimle, 2009). GRI was founded by the Coalition for Environmentally
Responsible Economies and the UN Environmental Programme. Its guidelines
9
encourage companies to prepare CSR and sustainability reports that combine an
assessment of the social, environmental and economic impacts of business
(Isaksson & Steimle, 2009). The current version of the guidelines contains
principles, reporting protocols and standard disclosures (what to report) (GRI,
2011b). The Standard Disclosures in the GRI Sustainability Reporting Guidelines
is the section that specifies the basic contents that companies need to disclose in
their report. There are three different types of disclosure: strategy and profile,
management approach, and performance indicators (GRI, 2011a).
10
The second type is a disclosure of management approach, which requires firms to
provide a brief overview of how the firm addresses a given set of topics in each
indicator category. This section should cover the full range of aspects under a given
category or group (GRI, 2011b). It also requires the firm to provide details of how
it manages the risks and opportunities around sustainability (GRI, 2011b).
The third type of disclosure relates to performance indicators that require a firm to
provide activity statements that include the assessment of social and environmental
impacts (Chen & Bouvain, 2009). Table 2.1 shows examples of performance
indicators that are generally reported in the business activities section.
11
The consensus on how companies should communicate their CSR reports has
changed over the years. For example, significant numbers of environmental reports
appeared in the early 1990s, but by the end the decade CSR/sustainability reports
were more common (Owen, 2003). This means that, in the early years, the
requirements for the reports were focused more on environmental issues, whereas
more recent versions contain more extensive information about sustainable futures
at both micro-business and global levels. How companies should communicate
their CSR reports also varies depending on the guidelines prepared by different
CSR agencies.
The WWI framework is a value statement. The performance indicators section has
five criteria: workforce, marketplace, environment, community and human rights.
In addition to the five criteria, the policy and process section also focuses on
purpose and values, and guiding principles. BITC recommends the use of impact
performance indicators when companies communicate what they have done for
environment and society (BITC, 2000).
12
Figure 2.1: BITC CSR Performance Indicators
13
2.3.3 International Organisation of Standardisation (ISO)
14
began reporting employee-related issues and charitable donations (Gray, Kouhy, &
Lavers, 1995a). During the 1970s, there were no common standards for reporting
(Tschopp, Wells, & Barney, 2012). During the 1980s, slowing economic growth
and rising unemployment meant that businesses focused on economic priorities
(Owen & O'Dwyer, 2006). Since the early 1990s another shift in reporting has
occurred. The focus of reporting is on: (1) the activities to prevent human rights
violations and environmental pollution, (2) supply-chain management due to
stakeholder pressures from globalisation, (3) corporate governance due to the
Enron and WorldCom scandals (Kolk, 2003), and the emergence of the socially
responsible investment (Tschopp, et al., 2012). These shifts in reporting were
triggered by increased public awareness (Sims, 2003), and demand for increased
business accountability (Vogel, 1992). Business activities are easily influenced by
the conditions that reside outside firms, thus businesses started to disclose
information according to social demand (Garriga & Melé, 2004). This increased
public interest in corporate CSR disclosure has prompted increased attention from
organisational scholars (Ghazali, 2007; Montiel, 2008)
15
The contents of CSR disclosures vary according to the cultural background of their
country. There are substantial national differences in the range of topics covered
(Baughn, Bodie, & McIntosh, 2007; Maignan & Ralston, 2002). Different values
and ethics as a result of different cultural norms for reporting priority have been
identified as a cause (Argandoña & von Weltzien Hoivik, 2009; Fukukawa &
Teramoto, 2009). The contextual background of unique local conditions both
geographical and societal was identified as an influential factor (Baughn, et al.,
2007). For example, in an Asian context, Japanese companies discuss
environmental programs and policies more frequently than social issues (Tanimoto
& Suzuki, 2005). Indian, Malaysian and Thai companies focus on community
involvement, while South Korean companies focus on production processes
(Chapple & Moon, 2005). In Western countries, US and UK companies are more
likely to discuss philanthropic programs and volunteerism, while French and Dutch
companies emphasise commitment to environmental management (Maignan &
Ralston, 2002). In addition to the culture and the country’s background, the type of
industry that the business is in also differentiates the topics disclosed in CSR
reports.
16
example, the hospitality and tourism industry focus on environmental concerns, use
of technology, and efficient use of energy (Holcomb, et al., 2007), while the
financial services industries more frequently discuss social and ethical
responsibilities (Holcomb, et al., 2007). Disclosing organisational values and CSR
related activities in stand-alone corporate responsibility reports is becoming a norm
among the world’s largest companies in various industries (Bebbington, Larrinaga-
Gonzalez, & Moneva-Abadia, 2008).
17
2.5 Previous Studies of CSR Reports Using Content Analysis
Stakeholder
engagement
Carroll’s
varies between
Tang & Li four
Website Various China Chinese owned
(2009) domains of
and foreign
CSR
owned firms in
China.
Similar websites
Morgan, within one
Mission
Grantham Pharma- industry.
and value Website US
& Vieira, ceutical Significant
statement
2008 interests in
philanthropy.
Frequency and
Khan Corporate Annual Commercial
Bangladesh content of issuing
(2010) governance report bank
are similar.
Maignan and Ralston (2002) and Chapple and Moon (2005) investigated the extent
and content of CSR reports published by companies from different countries.
18
Maignan and Ralston (2002) studied European companies and compared them with
US companies. The principles motivating firms to implement CSR were
categorised into three dimensions: value driven, performance driven, and
stakeholder driven, and they were coded from information provided on companies’
websites. CSR processes that describe different types of CSR activities such as
philanthropic programs, sponsorships, volunteerism, codes of ethics, quality
programs, health and safety programs, and management of environmental impacts
were also coded from companies’ websites. The results indicated that there are
differences between countries in presenting the principles motivating CSR and
CSR activities (Maignan & Ralston, 2002). Chapple and Moon (2005) studied
seven Asian countries to examine if there are differences between countries in CSR
website reporting, as there had been little focus on studying CSR reporting by
Asian companies. The study revealed that there were different patterns of CSR in
both the extent and content amongst the seven Asian countries due to different
public policies and national business systems. Therefore, it was found that style of
CSR reporting varied according to cultural and country backgrounds.
While some studies use multiple countries, some studies focus only on one country.
Tang and Li (2009), Morgan, Grantham, and Vieira (2009) and Khan (2010)
studied one nation. Tang and Li (2009) studied Fortune 100 Chinese companies
and global firms operated in China and compared the drivers and activities of CSR
information disclosed in website CSR reports. They did not find significant
differences between Chinese firms and global firms in China. Morgan et al. (2009)
and Khan (2010) studied one industry within the same country. For example,
Morgan et al. (2009) studied five pharmaceutical companies in the US and
identified that the firms in the same industry had similar communication
approaches focusing on the same types of stakeholders. Khan (2010) studied 30
private commercial banks in Bangladesh and investigated the level of CSR
reporting. The study identified that the frequency of CSR disclosures was similar
within the private commercial bank industry (Khan, 2010). These studies were able
19
to identify similar styles of reporting behaviours in the same industry but different
styles in different cultures.
While there are many benefits of using quantitative content analysis, there are
limitations too. While automated computerised content analysis is objective and
systematic, most software programs do not reveal the details of their measures
(Macnamara, 2005). Karake-Shalhoub (1999) also suggested that measuring CSR
disclosures by quantitative content analysis can indicate which specific item is
discussed, but not the details of what is discussed, as it only counts the number of
items. Gössling and Vocht (2007, p. 365) recognise the limitation of using content
analysis in studying CSR by stating ‘it is hardly possible to exactly define which
words refer to social responsibility’. Khan (2010) also recognises the limitation of
content analysis after studying CSR disclosures using quantitative content analysis
and stated that it is useful to identify whether or not and how many times specific
terms were mentioned; however, it is not possible to identify how many times the
same term was used in one CSR activity. For example, the overlapping coding
between categories - particularly philanthropic programs, sponsorship, and
volunteerism - were assumed to occur during the process of coding by quantitative
content analysis (Maignan & Ralston, 2002). This implies that quantitative content
analysis cannot tell us how many different CSR activities and what kinds of
activities were reported in CSR disclosures or the details of actual cultural specific
CSR activities.
Previous literature and studies have examined the extent of CSR reporting, relating
to what they were reporting by term, but not why companies were reporting
particular CSR activities, or what exactly they were doing. A qualitative
methodology is best suited to unpacking the details and idiosyncrasies of local
contexts beneath the numbers, thereby addressing a gap in the previous literature
(Bamberger, Rao, & Woolcock, 2010). The following section examines why
companies are reporting specific CSR activities.
20
2.6 Why Companies Report CSR activities
Moving from the companies’ activities disclosed through CSR reporting, this
section investigates institutional factors that drive or shape CSR activities and
reporting. The section explores the internal and external issues that drive
companies to implement, or not, particular CSR actions (1) and that prioritise what
to report and how much to report through the lens of the different theoretical
perspectives (2). Examples of the dialogues in the management literature include
stakeholder theory (1), legitimacy theory (2), and CSR values (3). There are two
contrasting CSR drivers: normative case motivations for contributions to society
and the business case motivation for the possible companies’ economic success by
paying attention to CSR practices (Branco & Rodrigues, 2006). The following
three theories will examine normative and business case drivers of reporting CSR
activities.
21
with ethical and acceptable behaviours create happy customers, employees and
owners (Devinney, 2009). Some scholars believe that increased attention to
stakeholder engagement is a reflection of the unethical corporate behaviours that
took place in the late 1900s and the early 2000s. Businesses nowadays are expected
to behave socially responsibly to all stakeholders as part of their ethical obligations
(Engle, 2007; Holcomb, et al., 2007).
The movement toward socially responsible investment (SRI) that has emerged
recently is seeking greater corporate accountability. With an expectation of
investment returns, Mackey, Mackey and Barney (2007) divided shareholders into
two types: (1) those whose primary aim is to maximise their wealth investing in
companies as a shareholder and (2) ethical investors who prefer to invest in socially
responsible companies. O’Rourke (2003) studied the trends towards shareholder
activism within CSR and identified increasing pressure from shareholders,
particularly NGOs, churches, and religious groups, who had proactively voted on
22
CSR issues at shareholder meetings. In the US, ‘securities laws govern a process by
which a shareholder has a right to introduce a formal proposal’ (O'Rourke, 2003, p.
232) thus, this has changed how firms concern themselves with socially responsible
actions (O'Rourke, 2003).
The number of ethical private investors is also growing rapidly (Carroll & Shabana,
2010; Parliament of Australia, 2011b). These investors have been putting pressure
on companies that take irresponsible actions (Sutantoputra, 2009). For example,
after the British Petroleum (BP) oil spill disaster in 2010, BP’s CEO Tony
Hayward said ‘The Gulf of Mexico is a very big ocean. The amount of volume of
oil and dispersant we are putting into it is tiny in relation to the total water volume’
(Norman & Delfin, 2012, para 17). BP’s shareholders reacted to this by nearly
halving the value of the stocks (Fletcher, Ebrahimi, & Wilson, 2010) as they did
not like the speech. In result, the share price of BP had almost halved straight after
the disaster in 2010. This incident provides evidence of the power of private
shareholders on companies’ financial market performance, so firms are
increasingly cautious about their private investors’ ethical concerns. Conversely,
when firms become known for their ethical stance, ethical shareholders are
attracted to the firm. This results in profitability not being the only measure of
performance that is valued (Joyner & Payne, 2002).
Recently, consumers have also been exerting influence on firms to behave ethically.
Smith (2011) emphasised that consumers are drivers for firms to implement CSR,
as recent ethical consumerism has driven companies to behave more socially
responsibly through CSR. Dawkins and Lewis’ (2003) study also reveals that most
companies listen to the customers and the public, and respond to public concerns
on social and environmental issues in order to reduce public cynicism and to
increase positive corporate reputations. For example, consumers’ opinions of
business behaviours have been shifting from economic perspectives to social
perspectives since 2000s (Dawkins & Lewis, 2003). Accordingly, consumers
23
nowadays expect businesses to focus on employees, community and environmental
issues rather than the traditional factors of product quality and financial
performance (Dawkins & Lewis, 2003; Maignan & Ferrell, 2000). Many
consumers reported by surveys that they purchase products made by companies
that have good reputations for environmental friendliness or companies that are
doing the right thing (Beckmann, 2007). Sprinkle and Maines (2010) believe that
due to the fact that CSR practices increase companies’ reputations, firms can reap
price premiums or increase their market share. On the other hand, Creyer (1997)
believes that consumers will still purchase from unethical companies, yet they will
pay lower prices to punish companies’ unethical behaviour. Joyner and Payne
(2002) discovered that 70% of the consumers prefer not to do business with a firm
with unethical behaviours, regardless of price. These studies evidenced that
consumers purchase products with a judgement of external attributes (Crouch,
2006). This means consumers are aware of and grateful for products and services
they obtain from ethical firms. Companies with business case motivations are
aware of reputational risks and future opportunities that could be brought to their
business through CSR actions (Dawkins, 2005). Not only are consumers evaluating
firms’ performances through a firm’s CSR disclosures, but also their current and
future employees well.
One of the most significant benefits of CSR practice is that it helps to recruit,
motivate, and retain employees (Branco & Rodrigues, 2006; Sprinkle & Maines,
2010). KPMG’s (2008) survey results revealed that companies issue CSR reports in
order for their employees to get involved with CSR practice. A study by the Centre
of Australian Ethical Research (CAER) in 2005 revealed that the main t arget
audience for CSR reports are their employees, in order for them to increase their
CSR motivations (Parliament of Australia, 2011a). In recent years, environment,
community relations, employee relations, diversity, and product issues have
become important criteria for job seekers to assess the quality of a company when
they apply for positions (Carroll, 2008). This is also reflected in the sort of jobs that
24
MBA graduates are seeking (Hess, Rogovsky, & Dunfee, 2002; Middleton, 2009;
Sprinkle & Maines, 2010).
One of the criticisms of CSR research based on the stakeholder perspective is that
companies may engage in CSR practices where their managers use CSR in order to
increase their own social, political, or career agendas at the expense of
shareholders; therefore it is not a moral case motivation (Friedman, 1970). Another
criticism is that although stakeholder management requires all stakeholders to be
treated equally, some stakeholders contribute to businesses’ particular goals more
than others (Phillips, 2003). This brings up another problem, as some business
managers respond less to progressive views of their stakeholders’ importance as
they believe that pleasing multiple stakeholders is inconsistent with profit
maximisation (McWilliams & Siegel, 2001). Therefore, balancing multiple
stakeholders’ interests is not easily achieved (Rodin, 2005). Further, stakeholder
theory does not account for the intervening moral obligation for businesses to obey
the law; it is difficult for managers in dealing with topics such as the environment
instead of human beings (Orts & Strudler, 2002). More importantly, stakeholder
theory does not tell us of the motivations behind CSR actions other than managing
stakeholders, like legitimacy theory does.
Both stakeholder and legitimacy theory are focused on concerns between the
company and its operating environment (Neu, Warsame, & Pedwell, 1998). While
stakeholder theorists focus on engagement with identified micro-level direct
stakeholders, legitimacy theorists are also concerned with indirect stakeholders in
the broader social context at macro or conceptual level (Moerman & Van Der Laan,
2005). Therefore social responsibility theorists have identified the strong link
between legitimacy and CSR (Mackey, et al., 2007).
Legitimacy theory is one of the most cited and widely used theories within the
social and environmental accounting research (Bebbington, et al., 2008;
25
O'Donovan, 2002; Patten, 1992; Tilling, 2004; Wilmshurst & Frost, 2000).
Legitimacy theory has much to offer as it helps to explain to what extent corporate
disclosure is interrelated and the reasons behind it (O'Donovan, 2002). Since the
aims of this thesis are to investigate the extent of companies’ CSR activities and
CSR drivers, legitimacy theory may help to answer the research questions. The
next section examines CSR drivers more closely through the lens of an
ethical/moral relativist that believes ‘what is regarded as good and bad in society
has a determining influence on CSR and has a way of raising the moral debate on
the subject’ (Lewis & Unerman, 1999, p. 521).
‘Legitimacy has long been recognised as a key and fundamental process in social
life and in organisations in particular’ (Johnson, 2004, p. 1). Legitimacy itself is an
intangible representation of the collective assessment of an institution (Tilling,
2004) that is pursued to ensure continuity and credibility (Suchman, 1995).
Legitimacy theory is based on the idea that organisation should act in a socially
responsible manner for long-term sustainability (O'Donovan, 2002) which is
crucial for organisational survival and growth (Palazzo & Scherer, 2006; Patten,
1992; Shocker & Sethi, 1973). Shocker and Sethi (1973) stated that in a dynamic
society, the power and resources of organisations are inconsistent; therefore
organisations need to meet the ever-changing expectations of society and their
approvals. Shocker and Sethi (1973) also suggested in order to survive and to grow,
organisations need to (1) deliver socially desirable ends to society, and (2)
distribute economic, social, or political benefits to groups from which it derives its
power. In broad terms, legitimacy can be described in CSR activities undertaken by
companies that are ‘appropriate and desirable within taken-for-granted system[s] of
norms, values, beliefs and definitions’ (Johnson, 2004, p. 10). From both the
evaluative and the cognitive dimensions, Suchman defined legitimacy as:
26
[a] generalized perception or assumption that the actions of an entity are
desirable, proper, or appropriate within some socially constructed system of
norms, values, and beliefs (Suchman, 1995, p. 574).
The central concern regarding legitimacy varies in different times and contexts.
Until the 1970s, economic performance was the only form of legitimacy attributed
to organisations; however, due to the adverse consequence of corporate growth,
corporate social performance has also become an important consideration for
gaining legitimacy (Patten, 1992, p. 471). The study of legitimacy by Brønn and
Vidaver-Cohen (2009) identified industry differences. They examined motives for
social initiatives in terms of legitimacy, sustainability or the bottom line. A cross-
sectional quantitative study that used questionnaires for 500 Norwegian firms
revealed that transport was the industry that most strongly relied on legitimacy
amongst four industries: transport, service, energy and tourism. Suchman (1995)
suggested that legitimacies rested on a different set of behavioural motivations.
Therefore, some industries take legitimacy more seriously than other industries.
Suchman (1995) categorised legitimacy into three types: pragmatic, cognitive and
moral legitimacy.
27
That is why Lewis and Unerman (1999) argue that a key role of CSR reporting is to
legitimise the actions of the firms.
28
2.6.2.2 Cognitive Legitimacy
29
Legitimacy explains why organisations seek to be isomorphic in their structure and
activity patterns present in their environment (Scott, 1995). These behaviours have
particular patterns and are largely influenced by cognitive features (Basu & Palazzo,
2008). Nowadays, many firms follow environmental policies as part of their moral
responsibility.
30
1995). Moral entrepreneurs are top-class businessmen who are also moral crusaders
(Franzese, 2009). Judgments about what constitutes the ‘right thing’ vary according
to socially constructed value systems (Suchman, 1995), therefore the thesis will
look at value systems in the next section.
Researchers who study why firms are likely to act in socially responsible ways
often explore the firm’s internal drivers and emphasise managerial discretion of
CSR value as drivers. Wood (1991, p. 698) believes that ‘managers are moral
actors. Within every domain of corporate social responsibility, they are obliged to
exercise such discretion as is available to them, toward socially responsible
outcomes’. The terms morals, ethics and value have been used interchangeably in
CSR research (Joyner & Payne, 2002). Whereas morals are principles of right and
wrong, ethics involves an entire system of moral issues (Turunen in Eastwood,
Lamsa, & Sakkinen, 2007), and values can be understood as ideals that are behind
actions (von Wright in Eastwood, et al., 2007). Rokeach (1968) defines a value as a
standard that serves a number of important purposes in our daily lives and directs
us in knowing how to act. Rokeach’s (1968) definition of value is the most cited
value definition in value research (Aadland, 2010), stated as
31
responsible ways but not others. Some researchers have further investigated
employees’ values as individual values and their impact on CSR performance.
However, Chatman (1989) argued that there are two completely different views of
individual behaviours within firms. They are (1) the individual difference approach,
which proposes that a person’s values, motives and abilities can be measured to
predict their behaviour; and (2) the situational approach, which emphasises that the
external characteristic of situations can drive people’s behaviours. An example of
the individual difference approach is that traditional profit maximizing managers
tend not to implement a socially responsible activity; because it may not be their
personal values, as they believe the majority of CSR practices do not generate the
firm’s cash flows (Mackey, Mackey, & Barney, 2008). In other cases, managers
proactively implement CSR policy as they know what has to be done for the good
of the company (Hine & Preuss, 2009). On the other hand, Carroll and Shabana
(2010) explained how the situational approach works within the free market
mechanism. They proposed that individuals are rewarded through CSR activities,
therefore individuals value the importance of CSR activities, whereas when there is
no free market mechanism, individuals in companies tend not to value socially
responsible activities.
CSR activities are the result of individual values. As individual managers’ personal
values are reasonably part of the organisational decision making process and
32
outcomes (Agle, Mitchell, & Sonnenfeld, 1999; Wood, 1991), their values also
contribute to the adoption of CSR concepts (Hemingway & Maclagan, 2004), and
actual CSR activities (Choi & Aguilera, 2009). Kabanoff and Daly (2002) also
discussed the importance of the manager’s personal values. Their study focused on
the measurement and comparison of espoused values from companies’ documents,
revealing that there are different types of espoused values that transformed over
time and these values reflected organisational practices (Kabanoff & Daly, 2002).
Therefore individual factors influence everyday ethical decision making in business.
Organisational values are basic shared beliefs within businesses (Rokeach, 1968;
Wiener, 1988) that serve as a guide for workforce decisions and behaviours
(Nelson & Gardent, 2011). Values ‘determine, regulate, and modify relations
between individuals, organisations, institutions, and societies’ (Agle & Caldwell in
Hemingway, 2002, p. 14), and organisations generate their own values (Levis,
2006), as values take a central part of behavioural process. Once values are rooted
in tradition, similar values pass on from one generation of organisational
membership to the next (Wiener, 1988). However, organisational values evolve
(Wiener, 1988) and change over time (Chatman, 1989; Kabanoff & Daly, 2002).
This is because organisations need to adopt different patterns of structures,
processes, and values, in order to meet the requirements for cohesion and
performance (Kabanoff, Waldersee, & Cohen, 1995).
33
1994). The previous literature argues that organisations respond to different CSR
concepts and practices by prioritising certain values when developing value
systems. A value system indicates a hierarchical arrangement of values (Rokeach,
1968). Value judgements attempt to ascribe value to actions, so the top-team of
firms can determine whether or not they should engage in certain actions (Joyner &
Payne, 2002). There was a study that established a model to examine what
perceived social responsibility is the most important to organisations.
The CSR Pyramid was introduced by Carroll in 1991. This model represents
perceptions of hierarchical importance that businesses owe to societies, with four
domains of CSR responsibilities (Carroll, 1991). Different companies have
different views of responsibilities on what their role in society should be (Gössling
& Vocht, 2007). The four domains of CSR Pyramid are economic, legal, ethical,
and philanthropic, all of which businesses need to perform for stakeholders and
society as a whole regardless of external environments (Carroll, 1991). This model
emphasises the importance of ethical requirements and discretionary/philanthropic
attitudes and practices implemented by business in favour of society (Melé, 2008).
This argument departed from shareholder value theory and has much in common
with the stakeholder perspective (McWilliams & Siegel, 2001). The economic
components all relate to what the business does for itself, whereas the legal, ethical,
and philanthropic components relate to what the business does for others (Carroll,
2008).
34
are the classical responsibilities of the business, ethical and philanthropic
responsibilities reflect the new, much broader societal contract between business
and society. It is often perceived that Carroll’s economic responsibilities reflect
shareholder value theory. Carroll (1991, p. 40) states that ‘it is important to be
committed to being as profitable as possible’. This mirrors Friedman’s view of
shareholder value theory to some extent. Milton Friedman (1970) contended that
shareholder wealth maximization is a social responsibility of business (Friedman,
1970; Holmes, 1976) thus; firms owe positive moral obligations only to their
shareholders (Friedman, 1970 cited in Rodin, 2005). This theory views owners as
the principals, and managers as the agents (Melé, 2008), thus managers have a duty
to align owners’ economic interests. Friedman (1970) argued that firms engaging in
CSR practices are examples of managers using CSR in order to increase their own
career agendas, social or legal responsibilities at the expense of shareholders.
35
well as the ongoing welfare crisis, globalisation, and the power of giant
multinational companies (Carroll, 1991; Melé, 2008).
The origin of the word philanthropic is derived from the Greek word of
‘philanthropos’ interpreted as man loving, meaning ‘a person or organisation
seeking to promote the welfare of others’ (Oxford Dictionaries, 2012 para. 2-4).
Carroll (1991) uses this word within CSR context and states that ‘philanthropy
encompasses those corporate actions that are in response to society’s desire that
businesses should be good corporate citizens’ (Carroll, 1991, p. 42) by giving back
to the community that supports the business (Carroll, 1999). This approach is
commonly called corporate citizenship. Corporate citizenship is ‘a metaphor for
business participation in society’ (Moon, Crane, & Matten, 2005). Recently, the
traditional Carroll’s definition to be a good corporate citizen, transformed to global
business citizenship (Logsdon & Wood, 2002). Carroll (1991, p. 42) described
philanthropic actions as ‘business contributions of financial resources or executive
time, such as contributions to the arts, education, or the community’. Matten (2006)
suggested philanthropic responsibilities by businesses are charitable donations, the
building of recreation facilities for employees and their families, sponsoring sports
events, and supporting community welfare. As more academics discuss the
36
importance of philanthropy than ever before (Chesters & Lawrence, 2008), several
studies were conducted to examine the CSR value priority utilising Carroll’s CSR
model.
Carroll’s four domains of CSR still remain a leading model of CSR in the social
context of the management arena (Schwartz & Carroll, 2003). Further, it is
probably the most well-known CSR model (Visser, 2006). There are a number of
studies that utilised Carroll’s CSR Pyramid and tested the usefulness and
applicability of four domains of responsibility. Table 2.3 shows the studies that
utilised the Aupperle team’s instruments to examine how individuals at
organisations or universities concern differently with the four domains of CSR.
37
Japan,
Sweden, and
Switzerland
Burton and
Students University n/a US
Hegarty (1999)
Burton et al. Undergrad- US and
University n/a
(2000) students Hong Kong
Under/post-
Smith et al.
grad business University n/a US
(2001) students
Ramasamy & Financial Financial
Students China
Yeung (2009) institutions institutions
Aupperle, Carroll and Hatfield (1985) developed the new instruments to assess
value priority. These forced-choice survey instruments were used to test Carroll’s
(1979) construct of CSR for the first time in 1985 to study CEOs’ value priority.
Since then, numerous studies have utilised them successfully and found them to be
valid (Edmondson & Carroll, 1999). The questionnaires ask respondents to allocate
their answers up to ten points among four statements (from four responsibilities) in
each of 20 sets or 40 sets of statements (Aupperle, et al., 1985; Ibrahim &
Angelidis, 1993). The strength of this technique allows researchers to determine
how respondents prioritise the different areas of responsibility (Strong & Meyer,
1992). O’Neill, Saunders and McCarthy (1989) investigated the corporate social
responsiveness orientation of board members from best managed companies in
various industries. The aim of this study was to identify the relationship between
corporate social responsiveness and profitability. O’Neill et al. (1989) strived to
compare their results to the results of Aupperle et al. (1985). The findings revealed
the board members from O’Neill’s study show more concerns about ethics and
legality than CEOs from the study by Aupperle et al. O’Neill et al.’s (1989) result
also revealed corporate social responsiveness and profitability are not related to
each other. These studies’ results only indicate respondents’ perceptions between
CSR and profitability, but not the actual performances and CSR actions.
38
Strong and Meyer (1992) used non-CEO managers from an executive MBA class
at a large university as samples in order to study managerial perceptions of
responsibility. Ibrahim and Angelidis (1993) also attempted to measure the
attitudes toward corporate social responsibility of top executives and business
students. The results of both studies support that their samples believe legal and
ethical issues are as important as economic performance.
The CSR orientation toward corporate citizenship perceived by the top managers at
foreign affiliates in US was measured by Pinkston and Carroll (1996). Pinkston and
Carroll (1996) insisted that the priorities of four domains are same regardless of the
firm’s country-of-origin, however there is an argument against their conclusio n.
Many studies of internationalisation confirm that the main driver of business
expansion outside their home countries is an expectation of additional profit
(Elango, 1998; Zucchella, Palamara, & Denicolai, 2007), not a host country’s
community support. The fact that the respondents highly prioritised economic
issues is a typical characteristic of expatriates, thus, the conclusion by Pinkston and
Carroll (1996) is not found to be valid. Therefore, people who live and work in
their home countries should be designated as a sample when investigating national
differences of managerial perceptions. Burton, Farh, and Hegarty (2000) have used
samples that live and work in their home countries to study cross-industry
difference.
Burton, Farh, and Hegarty (2000) utilised Aupperle team’s instruments aiming to
discover the differences of hierarchical order to the CSR value priority. They did
not find any significant differences between the US and Hong Kong students
compared to Carroll’s original study. Smith, Dennis, Harrington and Wokutch
(2001) studied graduate and undergraduate management students to examine how
students perceive CSR priorities from customers’ and employees’ perspectives.
The results suggested that, while there was a strong ethical orientation from the
customers’ perspective, economic issues are the greatest concerns from the
employees’ perspective. Ramasamy and Yeung (2009) evaluated consumer
perspectives of CSR and it was confirmed that Carroll’s CSR Pyramid can also be
39
applied in a Chinese context. As Carroll’s four-part construct suggested a
weighting of 4-3-2-1, several studies strived to observe the weights of four domains
of CSR. The following table is a summary of selected studies that tested Carroll’s
four-part construct.
Table 2.4 shows the results of the percentage weights of importance of economic,
legal, ethical and philanthropic domains by selected researchers. Higher numbers
indicate more importance for the respondents. Most of the studies revealed that
perceptions of importance within the four domains of CSR by their samples are
similar to the first empirical study conducted by Aupperle, Carroll and Hatfield in
1985. This means that Carroll’s Pyramid seems applicable to many studies.
However, a weakness of the empirical studies that utilised Aupperle team’s ten-
point forced-choice survey on Carroll’s pyramid is that these studies did not show
clear ‘empirical links between managers’ expressed values and their behaviours’
(Wood & Jones, 1994 cited in Karake-Shalhoub, 1999, p. 35). They only indicated
managerial perceptions but not on actual actions (Maignan & Ferrell, 2000). Some
researchers used the four domains of CSR in a more developed and sophisticated
40
way by identifying CSR values combined with CSR activities, or creating new
approaches. The following table is a summary of extended version of Carroll’s
Four Domains of CSR.
Edmondson and Carroll (1999) utilised Aupperle team’s survey to examine the
hierarchy of importance of four domains. The study also investigated the
companies’ participation in 18 types of community activities that were found from
the previous studies. The samples were the owners and the managers of black
owned businesses. This study allows readers to examine respondents’ motivations
on CSR as well as respondents’ actual activities. Gössling and Vocht (2007) used
CSR reports to investigate role conceptions of businesses, and to compare them
with social reputation. The results of the research show companies with wider
views of CSR responsibilities (three to four of the total domains) scored
significantly better off with social reputation than companies with narrower views
of responsibilities. The method used by this study was simply counting ‘the number
of times a word referring to social responsibility appears in the document’
(Gössling & Vocht, 2007, p. 365).
41
2.6.4 Limitations of Carroll’s CSR Pyramid
There are several limitations in Carroll’s CSR model. Schwartz and Carroll (2003)
recognised one such limitation when analysing CSR concepts, as the CSR Pyramid
does not explain the relationships within the four domains of the model. They gave
explanations stating that many values and actions cannot just be ‘purely economic’,
‘purely legal’, ‘purely ethical’, or ‘purely philanthropic’ (Schwartz & Carroll, 2003,
p. 520). They introduced seven CSR categories that are overlapping based on three
core domains of CSR. For example, ‘3M’s introduction of a waste-reduction
program could be considered ethical while providing indirect economic benefits’
(Schwartz & Carroll, 2003, p. 516). This model is flexible, as the different domains
of responsibilities are interrelated (Geva, 2008). However, the model may cause
practical problems for managers at an operational level due to facing complex
multiple objectives (Jensen, 2002).
There are criticisms of the philanthropic view of the CSR model. Galbreath (2006)
believes that being a good corporate citizen is just a part of the broader scope of
strategy that can offer tangible financial rewards and intangible reputational
rewards for firms. Godfrey (2005) believes that the philanthropic practices can,
under certain circumstances, generate positive moral capital, which provides the
firm with insurance-like protection for its relationship-based intangible assets in
collective society. For example, lists of socially responsible companies published
by CSR initiatives have become very popular in the media and society in recent
years. The Fortune Magazine regularly releases the ten most socially responsible
companies. The fast-food giant McDonald’s social activities - such as the
sponsorship of special events, sports, and various charities – have captured social
attention. The contributions that have been made by McDonald’s are the suggested
actions of Carroll’s and probably the expectations from the communities. In 2006,
McDonalds was selected as the third best corporate citizen in a list of socially
responsible companies by 30,000 consumers worldwide (Woolsey, 2006).
McDonalds’ charity programs are philanthropic, whether or not McDonalds is
doing for the positive image of company.
42
Chesters and Lawrence (2008) argued that philanthropic attitudes and practices
have been influenced largely by firm strategy, organisational culture and values
under the economic situations of the time. The study by Geva (2008) focused on
the conceptual structure of CSR. Responding to the new approach by Schwartz and
Carroll (2003), Geva (2008) described three CSR models of (1) the CSR Pyramid
that represents the hierarchy of separate responsibilities, (2) intersecting circles
(overlapping domains) that feature non-hierarchical sets of intersecting yet
interrelated domains, and (3) integration of responsibilities that share all domains
in a central core. There have been many arguments about what types of CSR
categories and their priorities from generalised views, and there are numerous
studies that argue that the concept of CSR varies by cultures.
43
strongly proposed that ‘one size does not fit all’ due to ‘different views of the
firm’s role in society’.
2.8 Conclusion
Chapter Two has covered the literature review and has visited the previous studies
of CSR aiming to build theoretical foundations and to identify research gaps. The
definitions of CSR were discussed, CSR activities generally reported on GRI and
BITC guidelines, and ISO standards were explored. Further, key drivers for
reporting CSR activities were discussed with stakeholder, legitimacy and values
points of view. The following chapter moves on from general CSR literature to the
Japanese context. The research gaps identified in Chapter Two will be further
investigated within the Japanese context, which will finally lead to the research
questions.
44
CHAPTER 3: The Japanese Context
3.1 Introduction
Based on the rationale of Chapter Two, Chapter Three will visit Japan. Section 3.2
will introduce Japan’s unique geographic conditions and environmental crisis, and
Sections 3.3, 3.4, and 3.5 will review Japanese government and policies, Japanese
businesses structures, and institutional change. Section 3.6 will further investigate
CSR drivers in Japanese firms from four domains: environmental, workplace,
community and marketplace - in order to understand what issues were raised and
why and how Japanese firms responded to these issues. Discussions will be
provided with previous studies of environmental CSR activities in Japan, and the
Japanese transport industry will be examined in Section 3.8. Section 3.9 will move
on to introduce research questions. As Japanese CSR values and practices closely
relate to the predominant Japanese religious beliefs of Shinto and Buddhism
(Poliszcuk & Sakashita, 2010), the next section starts from various aspects of
nature, culture and the people.
Japan is an island country of more than 3,600 islands and its steep mountains make
up over 80 per cent of the four main islands (Ashkenazi & Jacob, 2003). Around 37
per cent of all forest area has being nationally protected and its population of 128
million are living in small and limited areas (Euromonitor International, 2011a).
This is due to the cultural concerns. Japan is generally known for its unique
cultures that share both old traditions and new technologies. Japanese religious
beliefs have been about protecting sacred forests and trees as they have significant
roles preserving the atmosphere and the natural environment (Omura, 2004).
Cultural landscapes that formed from agriculture, forestry and fisheries are cultural
heritages and form a spiritual landscape in the hearts of the Japanese people, so
they are also associated with religiosity of the natural element (Agency for Cultural
Affairs (Japan), 2003, p. 6)
45
In tradition, Japanese people live on the same land for generations due to religious
concerns. The two major religions in Japan are Shintoism and Buddhism and most
people practice more than one religion (Shinomiya & Szepkouski, 2008, p. 143).
Shintoism concerns feelings that include reverence for nature, respect for ancestors,
and thankfulness (Childress, 1998). Shinto believes kami (god) lives in mountains,
trees and rivers. People believe kami controls natural phenomena such as lightning,
wind and rain (Childress, 1998), therefore there are many gods in Shintoism.
Traditionally, ancient Japanese people lived in agricultural village communit ies
(Hara, 2003). Ubusunagami (産土神) is a god that protects land thus protects nature
and creatures such as fauna and flora, rivers, and the people living on that land.
Shintoism Ujigami (氏神) is a worship of ancestors (god) that protects the family
members or clan. Therefore once a Ujigami shrine is built on their land, the family
or clan live on the same land for generations in order to protect the Ujigami and
Ujigami shrine (Sorina & Bogdan, 2007).
Fish-eating traditions are also associated with religious issues in Japan. Fish has
been a major source of protein for Japanese people since ancient times (Arakawa,
Yoshinaga, Okamura, Nakai, & Satoh, 2006). Since the sixth century, Buddhist
philosophy, laws and imperial edicts gradually eliminated eating of almost all flesh
of animals and fowl, therefore consumption of fish was encouraged (Kalland,
1995). Even now, 95 per cent of Japanese adults eat fish at least once a week (Iso et
al., 2006). As Japanese people eat raw or very fresh marine products, fish from
clean water has been vital for the Japanese culture. However during the periods of
economic development, due to Japan’s physical lack of space, factories were
operated next to residential areas. This led to high levels of air and land pollution
and serious diseases developed in the community, such as Minamata and Itai-itai -
diseases associated with contaminated fish (Nakata et al., 2008; Sumikura, 1998).
Hemingway and Maclagan (2004) suggest that social demands for CSR practices
are largely associated with religious beliefs. On the other hand, it is believed that
CSR can be driven by the principles of liberal democratic rights, justice, and
societal structures (Fukukawa & Teramoto, 2009). For example, due to the serious
46
diseases from pollution, anti-pollution movements mobilized in several prefectures
and the battles resulted in victories in Japan’s law courts, thus the Japanese
government had to respond in the form of stringent legislation (Avenell, 2006).
There is hardly a best answer to what drives CSR practices as it depends on the
context. The concept of CSR in Japan started in the late 1970s, when Western
companies started to deal with Japanese businesses. There are obvious differences
between the other Westernised nations and Japan in the various economic, legal,
social and cultural factors affecting their approach (Wokutch, 1990). While
Japanese has taken a quite different path in developing CSR, the social
environmental movement was the most significant societal movement that
influenced government to consider CSR concepts (Wokutch, 1990).
One party, the Liberal Democratic Party (LDP), has governed Japan consistently
since the end of the Second World War (Shiratori, 1995). However, due to repeated
political scandals and the unpopular consumption tax that was introduced in 1989,
the party virtually collapsed in 1993 (Kabashima & Steel, 2010). After LDP won
the 1996 election, the party responded to its citizens’ concerns. Several political
leaders and the party attempted to introduce new laws in order to keep
accountability alive and healthy (Kabashima & Steel, 2010). After several
unsuccessful attempts to introduce political reform, the Information Disclosure
Law was enacted in 1998, stipulating that the government must disclose official
documents, so that the public can monitor the process of government policy
making (Kabashima & Steel, 2010). The Decentralisation Promotion Law (DPL)
introduced in 1995 aimed to ‘promote revitalization of regional communities
throughout Japan’ (Barrett, 2000, p. 34), moving the administration of social policy
to the local level in order to enhance citizen participation and restore public trust.
During the LDP leadership, there have been many new policies reviewed and
introduced.
47
Social demand and public opinion brought about the central government’s New
Growth Strategy in 2009. Climate change and Japan’s ageing population were the
two key drivers of these strategies that focused on health and green energy
innovations. According to OECD (2011c) healthcare innovations targeted at
Japanese people who were living longer, healthier, and having more children,
created 2.8 million jobs in health-related sectors, upgraded the quality of childcare
centres and kindergarten, and created advanced universities to promote innovation.
Historically, Japanese industry and the Japanese government used to influence the
public’s perception of firms: as long as firms generated profit and performed well
financially, businesses met their responsibilities (Lewin, Sakano, Stephens, &
Victor, 1995). However, due to the strong public concerns about health and
environmental damages caused by unethical corporate operations in the 1990s, the
Japanese government had to introduce strict legislations to control further unethical
business conduct. The government had to encourage businesses to expand CSR
practices, especially in the areas of environmental and occupational pathologies to
meet social demands (Fukukawa & Moon, 2004).
48
million new jobs in the environment sector, encouraging Japanese firms to
participate in ‘eco-innovation’ projects. These projects comprised infrastructure,
entrepreneurship, business models, partnerships, technology and pricing
regulations, which aimed to change consumer behaviour and raise environmental
consciousness in society. One of the examples of cultural participation for both
consumers and corporations was Eco-point Incentive Program (EIP) by METI
(METI, 2009). This campaign promoted sales of home appliances with the
Japanese government providing strong monetary incentives to helping the
environment, so that consumers could save money as well as feel good at the same
time (Grossberg, 2011). Due to the action plan for achieving a low-carbon society,
the Japanese government also promoted scrapping old cars and replacing them with
eco-friendly innovative cars with high incentives (Sato, 2009).
49
Since Japanese firms try their best to obtain and retain trust from their stakeholders,
many Japanese firms cooperate with other firms and business partners in the same
industry, or work together with firms in the same business group under Keiretsu1.
Unlike the traditional US model of business relations, the Japanese partnering
model employs joint efforts to (1) solve needs and problems, (2) continuously share
information and assistance, and (3) employ numerous collateral bonds to build trust
(Henry & Mayle, 2002, p. 205). One example is that in order to improve eco-
efficiency, eight leading Japanese electronics firms collaborated to develop
guidelines, and standardised calculation methods of environmental impact and
product value (OECD, 2010a). As Japanese business performances have been
related to group orientations, ‘Japanese are motivated by a desire to see their work
group, their company and their nation succeed’ (Levine & Bartlett, 1984, p. 245).
Horizontal coordination through knowledge sharing and research and development
(R&D) activities such as technological exigencies are common in Japanese firms
(Aoki, 1990). Therefore one factor that differentiates Japanese firms is the degree
to which they collaborate with domestic competitors as group members.
1
‘Keiretsu refers to the Japanese form of corporate organisation that involves a grouping of family
of affiliated firms that form a tight-knit alliance and work to each other’s mutual benefit’ (Wankel,
2009, p. 2).
50
employees and their families, All Nippon Airways (ANA) (2005) provides housing,
recreational facilities, welfare and health examinations paid by firms. According to
Matten (2006), these activities for employees and their families are philanthropic
responsibilities for businesses.
With men working fewer hours, there are flow-on negative impacts on Japanese
society. Responding to working females claims that the declining Japanese birth
rate is due to their husband’s lack of participation in the care of their children, the
Japanese government has been ‘promoting men’s involvement with their children’
(Ishii-Kuntz, Makino, Kato, & Tsuchiya, 2004, p. 780). Many Japanese firms have
been offering flexible working systems for their male and female employees (ANA,
2007) so that they can spend more time with their families.
51
environment and nearly 66 per cent had solid plans on environmental activities
(MOE, 2004). Recent academic studies also indicated that Japanese firms have
become more environmentally proactive than before (Nishitani, 2008; Stanwick &
Stanwick, 2006; Takagaki, 2010a, 2010b). Corporate environmentalism - defined
as ‘the recognition and integration of environmental concerns into a firm’s
decision-making process’ (Banerjee, 2002) through linking environmental and
economic performance (Ambec & Lanoie, 2008) has become a key strategic factor
for Japanese businesses in recent years (Takagaki, 2010a). Table 3.1 is the
summary of selected studies in Japanese corporate environmentalism.
Stanwick and Stanwick (2006) and Nishitani (2008) studied Japanese firms using
longitudinal quantitative analysis. Stanwick and Stanwick (2006) used a sample of
52
30 Japanese firms from 13 different industries in order to investigate awareness of
the importance of environmental disclosure from reports published in 1997 and
2005. The results revealed Japanese firms have significantly increased their
awareness of the importance of environmental disclosures. Environmental policy,
zero emissions, pollution control, environmental management system,
environmental awards, sustainable development issues, social/community
involvement, environmental laws and regulations all increased significantly from
1997 to 2005. The study also revealed that environmental commitment, action
plans, product distributions, and environmental education and training showed a
moderate increase in reporting.
Nishitani (2008) also studied Japanese firms from various industries in order to
investigate why significant numbers of Japanese firms have obtained ISO
certificates, even though adopting ISO certification was not legally required in
Japan. The study investigated the Web pages of 433 manufacturing firms on the
data of ISO 14001 adoptions issued by the Japanese Standards Association in 1996,
1999, and 2004. The findings indicated that the determinants of initial ISO 14001
adoption types varied from different years. For example, initial adoption in 1996
indicated the larger firms with lower debt ratios were more likely to adopt
certifications. In 1999, firms that were involved with foreign customers and long-
term stockholders were more likely to adopt due to their customers’ environmental
preference/pressure. In 2004, the study did not find any determinants of initial ISO
14001 adoption. Nishitani (2008) concluded that stakeholder’s environmental
preferences/pressures and financial flexibility influence a firm’s decision for
obtaining ISO 14001 certificates. Although this quantitative study only analysed
numerical data (Amaratunga, David, Sarshar, & Newton, 2002), longitudinal
studies have enabled researchers to explore how determinants changed over the
years. However, it did not provide deep meanings (Rynes & Gephart, 2004).
On the other hand, Pratima and Kendall (2000) and Takagaki (2010a, 2010b) used
quantitative, qualitative and mixed methods approaches - interviews, observations,
archival and case studies - in order to gain comprehensive views of corporate
53
environmentalism. While Pratima and Kendall (2000) and Takagaki (2010b)
studied various industries, Takagaki (2010a) focused on a single industry:
electronics related companies. Pratima and Kendall (2000) included ten major
Japanese firms from auto manufacturing, oil, steel, chemicals, utilities, and
electronics in their studies amongst other firms from UK and Germany in order to
ensure diversity of practices and contexts. The study investigated three
motivations: competitiveness, legitimation, and social responsibility for corporate
ecological responsiveness using in-depth interviews, participant observations,
archival documents, and single case studies. The samples were from food retailers,
auto manufacturers, oil companies, ten major multinational Japanese firms, and
smaller firms. The results revealed that while multiple motivations strengthen
responsiveness, motivations of (1) competitiveness relate to process intensification,
green marketing and green products, (2) legitimation relate to regulatory
compliance, networking with environmental interest groups, impression
management, and (3) social responsibility relate to donations to environmental
causes, unpublicized initiatives, and lifecycle analysis. Pratima and Kendall (2000)
also identified that individual values for social belief by charismatic and powerful
managers influence responsiveness toward ecology. The mixed methods may have
cancelled out some of the disadvantages of certain methods (Creswell, Clark,
Gutmann, & Hanson, 2003). While mixed method enables researchers to gain
deeper meanings, the use of numerous companies from different cultures cannot
provide genuine meanings of motivations, as previous studies identified different
cultures have different values and approaches.
54
appeared are the same within the same industry. However, Takagaki proposed the
concept of a four-stage life-cycle of strategy formation.
Takagaki (2010b) also studied cross-industry difference in one culture. His findings
for corporate environmentalism from the surveys and the interviews from all
industries classified (refer to Figure 3.5: Levels of Environmental Decisions by
Industries) by the Japanese Standard Industrial Classification (JSIC) revealed that
(1) air and water transport industries, (2) non-ferrous metal manufacturing, (3)
petroleum and coal manufacturing, and (4) fishing, are the industries in which
firms are most committed to urgent environmental actions. The study also indicated
that while railway and land transport were identified as moderate urgency, future
CSR practice related to the environment are easier to implement within shorter
periods of time than some other industries such as petroleum and coal products and
iron and steel manufacturing.
Takagaki also discovered that moral leaders’ values and ethical norms largely
influenced and contributed to their CSR process. This finding is closely related to
personal legitimacy. The top leaders of Japanese firms are often directly in charge
of environmental issues and promote environmental management by providing
strong incentives (Ren, 2000). While these findings contributed to the academic
arena in studying corporate environmentalism, further studies of single cultures in a
single industry are worth investigating to understand greater details. As well as
environmental management, corporate governance has changed how Japanese
firms operate businesses.
Prior to the 1990s and the collapse of the Japanese economic bubble, Japanese
corporate governance was based on affiliated firms and banks (Yoshikawa, 2003).
According to Suzuki, Tanimoto and Kokko (2010), due to the collapse of the
bubble economy and globalisation, equity markets emerged since the 1990s, and
the proportion of cross-shareholding significantly dropped. The dissolution of
55
cross-shareholdings within the groups, which functioned as insurance-like
protection from foreign takeovers by providing financial support in troubled times
was weakened (Isobe, Makino, & Goerzen, 2006; Okabe, 2002). From the
shareholding perspective, ‘a group of companies linked by stable interoperate
shareholdings is called a Keiretsu’ (Morck & Nakamura, 1999, p. 320). After the
corporate governance reforms, Japanese firms have become increasingly exposed
to foreign capital markets (Yoshikawa, 2003).
The share of foreign investment rapidly increased between 1990 and 2005 in Japan
(Suzuki, et al., 2010). Foreign investors that have rights for voting generally expect
higher investment returns and thus the shareholder-oriented corporate governance
model has dramatically increased (Jackson & Moerke, 2005). As a result, Japanese
business systems are moving closer to the shareholder-centred American style
philosophy (Nakano, 2007). Suzuki, et al. (2010) studied 749 Japanese firms using
survey data for CSR that were conducted in 2005 by Toyokeizai Shinposha in order
to investigate relations between foreign investment and institutionalisation of CSR.
The result revealed that foreign investment has played a significant role in the
recent CSR movement in Japan (Suzuki, et al., 2010). Foreign investors, the
majority from the US, are short-term profitability investors however they also
expect businesses to embrace wider views of CSR activities (Suzuki, et al., 2010).
Firms’ active community participations have grown since the 1990s. As well as
pressure from foreign investors, the ageing population and recession resulted in
more community support (Yotsumoto, 2010). Moreover, during and after the 1995
Great Hanshin earthquake disaster, Japanese individuals had to support victims due
to the government’s lack of contributions (Yotsumoto, 2010). This triggered
Japanese people becoming more familiar with volunteer work and the subject of
good citizenship has received growing attention from a variety of institutions. In
1998, such strong social change influenced the government to introduce the Law to
Promote Specified Non-Profit Activities (‘the NPO Law’) and it resulted in an
increased number of NPOs - over 200,000 in 2012 (Tsukamoto & Nishimura,
2006). Large NPOs such as the Japan NPO Centre have members of corporations
56
and local government taking intermediary roles to establish strategic partnerships
between Japanese firms, the government, and society (Tsukamoto & Nishimura,
2006). CSR is defined as a company’s voluntary actions ‘designed to improve
social or environmental conditions’ (Mackey, et al., 2007, p. 818), and volunteer
work for local communities during employees’ paid work hours has also become a
part of companies’ CSR activities. As an example, in 1990, Sharp Co. started social
service leave that entitled employees to participate in volunteer work in social
service during their working hours. Therefore volunteering is now actively
supported by business, government and society. In order to understand the
underpinnings of the CSR related activities in Japan, the next section will
investigate possible CSR drivers from four different aspects: environmental,
workplace, community, and marketplace.
The previously mentioned studies identified that Japanese firms are more proactive
in environmental practices than workplace, community and marketplace practices.
When Japanese firms began to publish CSR reports around 2003, most of the
companies focused on environmental issues (Fukukawa & Moon, 2004). This is
because Japanese government, businesses and society believed the environment
was a critical issue for Japan’s future (Barrett & Fisher, 2005). As globalisation and
the global financial crisis drove large international CSR agencies to encourage
firms to adhere to international standards, the Japanese government introduced new
policies and regulations based on international standards and guidelines. As the
environment is considered a public good, ‘[the] government added power and
urgency to legitimacy by passing new laws and fining companies who failed to
comply’ (Gago & Antolin, 2004, p. 73). However, the study result by Weber and
Marley (2010, p. 635) for stakeholder salience for environmental issues revealed
that ‘coercive power, tools to inflict punishment, able to force control was not
emphasized by the study of stakeholder dialogue of corporate reports’. This may be
57
why the Japanese government has been promoting voluntary approaches in
environmental policies with strong incentives.
OECD 2008
UN 1997 OECD 2002
Eco-Innovation
Environmetally
Kyoto Protocol APEC 2009
Sustainable Transport
Growth Strategy
58
3.6.1.1 United Nations (UN): Kyoto Protocol in 1997
The Kyoto Protocol, adopted in 1997 and entered into force on 2005 in Japan, is an
international agreement linked to the United Nations Framework Convention on
Climate Change (United Nations Framework Convention on Climate Change,
2012). This agreement aims to reduce greenhouse gas (GHG) emissions, and in
1997 the Japanese government committed to a six per cent reduction of its GHG
emissions on average over the 2008-12 period compared with the 1990 level
(OECD, 2010a). Japanese industries and firms put efforts into achieving this target
by allocating significant expenditure (Takahashi & Nakamura, 2009) .
With the support of OECD member countries, the OECD introduced guidelines
toward Environmentally Sustainable Transport (EST) in 2002. The four operational
EST criteria (targets) were set out as follows:
• Noise reduction
• Manageing air quality through reducing air emissions (NOx)
• Minimise potential acidification and eutrophication2 through reducing
SOx/NOx
• Climate protection through stabilisation of GHG/ CO2 (OECD, 2002, p. 18)
Due to the global and local damage to ecosystems and human health caused by
transport related human activities, EST guidelines were prepared for OECD’s 30
member countries (OECD, 2002). The EST program differs to the current
conventional approach, as the EST approach has three criteria: environmental,
2
Eutrophication is caused by an excessive nitrogen and phosphorus loads coming from land-based
sources that lead agricultural areas and lake covered by algae. Larsson, M., & Granstedt, A. (2010).
Sustainable governance of the agriculture and the Baltic Sea — Agricultural reforms, food
production and curbed eutrophication. Ecological Economics, 69(10), 1943-1951.
59
social and economic rather than from one aspect (OECD, 2002), thus it is truly
aiming for the sustainable future. As a result of efforts to implement the EST
program, a large proportion of passengers have shifted from air and automobile
travel to rail travel in Japan (refer to Figure 3.2).
Source:(Lipscy, 2011)
Figure 3.2 shows that the ratios of railway travel passengers in Japan are much
higher than the other countries. In response to the government’s effort to promote
public railway transport, especially in the Tokyo metropolitan area, the number of
cars coming into Tokyo city reduced dramatically (OECD, 2010a). As a result, in
2005, 76 per cent of passengers travelled by rail in the 23 wards of Tokyo (Kanou,
2009).
60
arrangement (OECD, 2010a). Therefore, it aims to change socio-cultural norms and
institutional structures. The Japanese government promotes the concept of Eco-
innovation as ‘new field of techno-social innovations that focuses on the
environment and people’ (OECD, 2009b, p. 2). In Japan, the manufacturing
industry has heavily invested in Eco-innovation. For example, the Japanese
government has introduced numbers of tax incentives for cleaner vehicles through
green public procurement policy (OECD, 2010a). More discussion for Eco-
innovation will be presented in Section 3.6.1.10 Nippon Keidanren: Green
Innovation in 2009.
The Asia Pacific Economic Cooperation (APEC) Growth Strategy for the Asia-
Pacific region was prepared with strong support by Japan prior to Japan’s 2010
APEC host-economy (APEC, 2010b). The following five attributes for economic
growth were promoted for action (APEC, 2010a). In order to assess the progress of
the five growth-attributes, review reports are required by leaders in 2015 (APEC,
2010a).
• Balanced growth seeks growth across and within the economies through
macroeconomic policies and structural reforms;
• Inclusive growth seeks all the members’ citizen have the opportunity to
participated in, contribute to, and benefit from global economic growth;
• Sustainable growth seeks growth compatible with global efforts for protection
of the environment and transition to green economies;
• Innovative growth seeks to create an economic environment that promotes
innovation and emerging economic sectors;
• Secure growth seeks to protect the region’s citizens’ economic and physical
well-being and to provide the secure environment necessary for economic
activity (Asia Pacific Economic Cooperation, 2010a, para. 10-14).
61
3.6.1.5 MLIT: Energy Efficiency Standard, Revised in 1998
Responding to the OECD’s EST program, Japan introduced CO2 standards ‘aiming
at a reduction of 12 per cent of the average CO2 emissions per vehicle-kilometre of
heavy duty vehicles, between 2002 and 2015’, however Japan was the only country
that responded and introduced a new target (OECD, 2010b, p. 214). Japan
introduced various policies, such as taxes on the purpose and ownership of motor
vehicles at regional and national levels; meantime, tax breaks were introduced to
favour the purchase of more environment-friendly vehicles (OECD, 2010a).
The Japanese government believes that global warming, ozone depletion, acid rain,
deforestation and waste are the major causes of environmental degradation (MOE,
2005). Therefore, MOE has promoted A Sound Material-cycle Society through the
3Rs. The 3Rs refers to reducing waste, reusing and recycling resources and
products. MOE has developed four steps of 3Rs plan:
62
• Recycle things that cannot be reused as raw materials, and
• Recover energy from things unable to be materially recycled and having no
alternative but incineration (MOE, 2005, p. 2)
Waste management has been a serious issue to Japanese people. The past Japanese
environmental disasters caused rivers and seas to be polluted by contaminated
water from industrial sites. Further, due to the landfill shortage and dependence on
natural resource imports, Japan has shifted from waste management policy to an
integrated waste and material management approach (OECD, 2010a). In Japan,
central and local governments have been playing important roles for waste
management through economic and social incentives (MOE, 2005). For example,
the Japanese government subsidised 36 per cent of costs for business that invested
in innovative recycling projects (OECD, 2010a). From the fiscal period 2000-2007,
the total recycling rate (recycled and reused amount) increased by 3.5 per cent,
daily per capita garbage decreased by 8.1 per cent, and wastes from business
activities decreased by 16.1 per cent (MOE, 2010b). Therefore, since the
introduction of 3Rs strategy, local authorities, Japanese businesses and citizens
have implemented this concept successfully (OECD, 2010a).
After the 2008-09 financial crisis, METI adopted The New Growth Strategy in late
2009 (METI, 2009) in order to create new jobs for future growth (OECD, 2011b).
The basic policies and targeted outcomes for six strategic areas, comprising:
63
The Japanese government’s incentives through New Growth Strategies to support
consumers to purchase energy-efficient vehicles helped auto makers’ sales in 2010
increased by nearly 40 per cent compared to sales in 2009 (OECD, 2011b).
Each industry set its own target and emission reduction measures in the
Keidanren’s VAP in consultation with the government (OECD, 2010a). The energy
used from road transport makes up about 89% of total energy consumption from
the transport sector (OECD, 2010a), Japan has implemented a wide-range of
measures to achieve its targets for the transport industry. For example, in 2002,
Japan set a specific target for the transport sector: 250 Mt CO2/year by 2010. Mt
CO2 stands for Metric Tonne Carbon Dioxide Equivalent. As this is the standard
measurement of CO2 emissions, the target for Japan’s transport industry in 2002
was 250 reductions per year for CO2 emissions by 2010. Responding to the efforts,
since 2000, CO2 emissions from transport activities have remarkably started to
decrease (OECD, 2010a). The key contributions for this achievement were from (1)
improvement in the fuel efficiency of automobiles and appliances under Top
Runner standards and (2) improvement in freight transport efficiency. Therefore
the transport industry in Japan has achieved their target successfully.
64
3.6.1.10 Nippon Keidanren: Green Innovation in 2009
65
sector achieved 12 per cent reductions on GHG emissions between 2000 and 2008
(OECD, 2010a). Currently, Japan has a role of monitoring ambient air quality and
pollutant emission sources in order to avoid air pollution that is expected to pose a
serious problem in the near future across East Asia (Fukushima, 2005). For
example, photochemical smog which includes ozone, nitrogen oxides and
hydrocarbons derived from vehicle exhaust, factory smoke and other sources from
China, is blamed for killing pine trees in Japanese mountains.
Prior to the 1990s, Japan had the highest energy costs of any industrialised country
(Caldararo, 2004). According to the US Energy Information Administration
(2012a), Japan’s electricity consumptions are still 3rd highest after the US and
China in 2012 and the world’s third largest producer of nuclear power before the
Fukushima Daiichi nuclear power plant accident in 2011 (Energy Information
Administration, 2012b). In Japan there has been considerable public debate on
Japan’s energy self-sufficiency; the Japanese government was considering building
additional 20 nuclear power plants at the time of the Kyoto protocol (Barrett &
Fisher, 2005). In spite of their efforts to improve innovative energy management,
Japan relied on nuclear power to supply a third of its electricity until the 2011
tsunami disaster (OECD, 2011c). As energy efficiency is critical to Japan, its
government has been spending high public expenditures and employing larger
numbers of workers in energy efficiency agencies such as METI and the New
Energy and Industrial Technology Development Organisation (NEDO), compared
to other developed countries (Lipscy, 2011) (refer to Figure 3.3).
66
Figure 3.3: Energy Efficiency Spending and Employment by Government
67
3.6.1.13 Working Under Law and Compliance
There are various laws, compliances, and voluntary guidelines that relate to
environmental management. The most popular practice related to laws and
compliances that began in recent years for Japanese firms is the ISO standard.
Previous research consistently demonstrated that many manufacturing companies
in Japan obtain certificates such as ISO 14001 for environmental management
systems, in order to (1) participate in the green supply chain as they are part of
business groups (Nakamura, Takahashi, & Vertinsky, 2001; Nishitani, 2008, 2009;
Welch, Mori, & Aoyagi-Usui, 2002), (2) demonstrate their concerns with
environmental issues to the shareholders, and (3) reduce costs through green supply
chain practices (Darnall, 2006). Other drivers for adopting international standards
is the opportunity to obtain grants and incentives from the government (Branco &
Rodrigues, 2006). Therefore there have been many benefits for businesses to adapt
laws, compliances and voluntary guidelines. Despite Japanese transport companies’
urgent response toward environmental policies, their reaction to workplace related
policies were rather passive.
The way in which Japanese firms employ people is very different to the Anglo-
American view of contractual employment (Fukukawa & Moon, 2004). However,
recent slow economic growth and a rapid ageing population have been influencing
Japanese traditional workplace practices (OECD, 2011b). According to the
Ministry of Internal Affairs and Communications (Government of Japan) (MIAC)
(2011a), Japan’s population is ageing fastest in the world. The Ministry of Health,
Labour and Welfare (Government of Japan) (MHLW) announced that the Japanese
population will drop from 128 million in 2010 to below 90 million in 2055, and its
ageing population will exceed 40 per cent of the total population (MHLW, 2011a).
This ageing population (65 years older and above) has affected and will affect
significantly on workforce environment. Despite this, Japanese businesses have had
68
to adjust and adopt organisational structures and workplace practices according to
the new laws.
Changing attitudes toward gender equality in the workplace has been a recent issue
in Japan. The Japanese government has passed its first Equal Employment
Opportunity Act (EEOA) in 1986 (Fackler, 2007). This law prohibits gender
discrimination at work and aims for more labour market opportunities for women
(Edwards, 1988). More than 20 years after, in 2006, the Japanese government
recognised that revisions of the EEOA were needed for improvements (Nakakubo,
2007).
There are two different significant reasons for this change. One is to stabilise
labour relations that have been caused and will be exacerbated by the ageing
society due to fewer children (Fackler, 2007). The OECD reported that young
women are now equally or better educated than young men in OECD member
countries (OECD, 2011a). The OECD has recommended that Japan raises women’s
labour force participation, especially in managerial positions in order to raise
productivity in the workforce and strengthen competition in its sluggish economy.
In response to the current circumstances, the Cabinet office, Government of Japan
(2010) issued a detailed white paper, the Active Participation of Women and
Revitalization of Economy and Society. The paper emphasises the importance of
the female’s active participation in the workforce for a sustainable future. The
paper in 2010 also mentioned that the APEC Women Leaders Network meeting that
focuses on Women and Economy was going to be held in Tokyo in autumn of the
same year. This was the other reason for the EEOA revision in 2006. This pressure
from international agencies as well as the gender discrimination court-case drove
the Japanese government to eliminate gender inequalities and to promote equal
opportunities for women and men in all actions and policies (Courmadias,
Fujimoto, & Härtel, 2010).
69
Prior to the EEOA revisions, many Japanese firms had begun to employ a
considerable number of female graduates since 2005 (Keizer, 2009) for traditional
male-role positions (Fackler, 2007). Bisom-Rapp (1999) suggested that EEOA has
affected and changed the public perception of employee entitlement as well as
society’s expectations toward fair employment treatment. This cultural change in
society threatened the legitimacy of employers as they were required to
demonstrate that their firms are following compliances as well as efficiency at the
same time (Bisom-Rapp, 1999). It resulted in an increase of a career-focused
female population (Euromonitor International, 2011b). The industries where a
number of female employees recently increased were the medical and welfare
industries in Japan (Cabinet Office (Government of Japan), 2010). The Basic
Survey of Employment Management of Women by MHLW in 2010 revealed that
women’s share in assistant managerial posts in all industries show significant
increases since 2003 (MHLW, 2012a). Figure 3.4 indicates that Japanese females
who have positions of assistant manager have been significantly increasing since
2006.
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In spite of some positive workplace changes in gender inequality in Japan, there is
still a great amount of criticism from other countries (Starich, 2007). As Figure 3.4
also shows, the number of female section and general managers are significantly
lower than assistant managers. The UN (2009b) noted that, while the Japanese
EEOA was revised, circumstances for female workers are still under international
standards; that is why many women are quitting their jobs. Indeed, there is still a
wide wage gap between male and female employees in Japan (Ogiwara, Tsuda,
Akiyama, & Sakai, 2008). One piece of evidence for this inequality was from the
survey results based on the ‘gender empowerment measure and its components’
published by the UN Development Programme (2009a). The result of the
measurement indicated that, while Japan ranked 10th highest in human
development, it was also ranked 57th out of 109 in gender empowerment measures.
This implies Japan is still behind in gender equality issues. This slow pace of
change might be caused by its traditional culture. In Hofstede’s five dimensions of
culture Japan scores highest in masculinity (Crotts & Erdmann, 2000). It means
that the social implications of having been born as a boy or a girl are fundamentally
different to one’s future life (Minkov & Hofstede, 2011). An average Japanese
organisation is patriarchal with a hierarchal and male-dominant structure (Ogiwara,
et al., 2008). In Japanese customs, straight after graduation from high school or
two-year college, young, single females are hired with the expectation that they
will leave work when they marry or become a mother within a few years’ without
promotion (Steinhoff & Tanaka, 1993). When a Japanese female marries she stays
home. While a husband’s salary goes directly into the couple’s account, the wife
hands out husband his ‘pocket money’ after organising living costs. As Japanese
fathers spend much less time with their children than fathers do in Western
countries, there also is a focus for the Japanese government to promote male’s
childcare participation (Ishii-Kuntz, et al., 2004).
Long working hours are causing health and mental damage to many Japanese
workers. Following the Asian Financial Crisis in 1997 Japan showed the sharpest
71
rise in suicide rates, increasing since 2002 as many workers have been contributing
unpaid overtime that has been causing ‘Karoshi’ (sudden death from overwork)
(Kondo & Oh, 2010). While the incidence of Karoshi has decreased from 2009 to
2010 by 13.7 per cent, 767 claims for the death and 1,136 claims for mental illness
were reported in 2010, mostly among male workers (MHLW, 2010c). Long
working hours are a factor that contributes to occurrences of industrial accidents.
The Industrial Safety and Health Act was revised in 2006, enforcing a 40-hour
working week (MHLW, 2012b). Needless to say, as is traditional Japanese practice,
male employees have to work longer working hours; so Karoshi is more common
in male workers. However, many career-minded females who applied for
traditional male-role positions after the introduction of the Japanese Equal
Employment Opportunity Act (Steinhoff & Tanaka, 1993) had to leave management
jobs when they had children, due to the long working hours (Fackler, 2007).
Japanese firms therefore have been creating flexible working hours for both males
and females to improve working conditions for their employees (Keizer, 2009).
72
law required Japanese firms to take prompt action to provide continued
employment for existing employees who have reached and are approaching their
retirement age (Yamashita, 2007). In response to the law, from October 2006, 43.6
per cent of Japanese firms reacted by introducing a reemployment system (Conrad,
2010). Straight after the introduction of an amendment in 2007, Fujimoto (2008)
conducted a cross-industry study of the implementation of the Act Concerning
Stabilization of Employment of Older Persons. Fujimoto (2008) used the survey by
the MHLW on 5,000 firms with 300 or more employees in various industries,
which asked whether the firms had implemented this amendment. The result
showed that 93.7 per cent of firms from the transport industry had implemented
some form of employment security measures (Fujimoto, 2008). These studies
revealed that Japanese firms, particularly those in the transport industry, are still
keen to employ older people for a long period of time.
73
compared with the United States and the European Union. In some cases, with
Japanese government support, Japanese firms decided to retain their workers but let
their idle workers sweep the streets and pick up trash in the community, while
remaining on the payroll (Tabuchi, 2009). From a Japanese CSR viewpoint,
keeping employees during economic recession is a principle of a sustainable
society thus, a major responsibility to firms and contribution to community. The
activities for local vitalization are important for sustainable society during
recession. The Japanese government have been promoting strategies for promoting
a tourism-oriented nation and local revitalization through the 2009 New Growth
Strategy. From 2003, the Japanese government introduced its Visit Japan campaign
specifically for 2010 for overseas travellers coming to Japan (Euromonitor
International, 2011c). The Japanese government has been promoting beautification
of Japan by working with local governments and businesses. Many firms have been
participating in forestation and planting flowers as community activities.
According to Poliszcuk and Sakashita (2010), planting trees is a very common
practice for Japanese culture. Tokugawa Shogun started Tokugawa sustainable
forest management practice around 1700 in response to deforestation, and it
continued for the next 150 years (Poliszcuk & Sakashita, 2010). Since employee
volunteerism has increased in the beginning of the 1990s in Japan, planting tree
and flowers as firms’ volunteering work has become a common CSR practice by
Japanese firms (Aoki, 2004b).
Japanese consumers care about the quality of a product or service rather than just
the price. There was a study by Brammer, Williams and Zinkin (2007) that
explored the relationship between religious denomination and individual attitudes
toward CSR. The cross-sectional quantitative study used 2003 survey data of over
17,000 individuals in 20 countries. The demographics of the samples were
Buddhist, Hindu, Jewish, Muslim, Roman Catholic, other Christian, Russian
orthodox, and other agnostic. The findings revealed, as Japanese were coded as
74
Buddhist, they showed a clear preference for ethical and environmental business
behaviour compared to non-believers. Therefore this study posited that, in general,
Buddhism is perhaps the least economically oriented of the major faiths (Brammer,
et al., 2007). Therefore Japanese consumers care about services or quality of the
product more so than price. However, another study shows that price-conscious
comparative shoppers are emerging in Japan. McGowan and Sternquist (1998)
studied US and Japanese students aged between 21 to 25 years in order to
investigate dimensions of price for consumers. The finding revealed that Japanese
consumers do not lower their quality standards, thus they demand both good
quality and discounted prices. Mattila (2000) suggested that for the service industry,
good employee-customer interaction is required to serve Japanese customers and
Japanese travelers are least satisfied with in-flight service during international
flights. Therefore Japanese firms always make sure that their products and services
satisfy their customers.
In recent years, green purchasing has become a priority for firms’ responsible
procurement policies. As the Green Purchasing Law came into effect on 2001 in
75
Japan (Harada, 2006), many Japanese firms are concerned about responsible
procurement. The Green Purchasing Law has 17 categories: paper, stationery,
office furniture, office automation machines, home electronic appliances, air
conditioners, water heaters, lighting, vehicles, fire extinguishers, uniforms and
work, interior fixtures/bedding, work gloves, other fiber products, facilities, public-
works projects, and services (printing, cafeteria, automobile repair, and 4 other
items (Harada, 2006). While the Green Purchasing Law has been promoting green
procurement in Japan, basic policy is revised every year through the step by public
offering proposal, investigative commission by academic experts, public comment,
and cabinet decision (Yamada, 2007, p. 3).
76
Figure 3.5: Levels of Environmental Decisions by Industries
As shown in the top area of the map, the water and air transport industry
(numbered 25), manufacturing of non-ferrous metals and products (numbered 13),
fishing (numbered 2), and petroleum and coal (numbered 10) are all claimed to
77
present environmental problems that are serious and urgent. These industries
require urgent environmental actions demanded by the government and society.
It would be expected that given perceived threat involved with these industries, the
managers of the companies in these industries would be taking urgent actions.
However, the industries shown on the right side of Figure 3.4, such as petroleum
and coal products (numbered 10), manufacture of iron and steel (numbered 12) and
electricity, gas, heat supply and water (numbered 28), are facing numerous
environmental problems with different issues. Takagaki (2010b) stated that due to
the many serious and urgent environmental issues in the petroleum and coal
products industry (numbered 10); it is harder to implement environmental projects
and achieve desired outcomes, because of internal conflict. On the other hand, due
to the smaller number of urgent and serious problems associated with the transport
sub-sectors – water, air, railway and land – it is relatively easy to minimise
disagreements. Therefore, the transport industry is deemed to be the appropriate
case study in this thesis.
The aim of this thesis is to examine the common CSR practices reported by the
transport industry. Therefore, the study of transport companies that proactively
engage in CSR activities is suitable for this thesis. As a result, this thesis selects
78
Japanese firms within transport sector that provide regular CSR reports during the
period 2005-2009.
Japan’s economy was severely hit by the 2008-09 Global Financial Crisis (GFC)
and recession (OECD, 2010a) and its transport industry saw a significant decline in
international traffic during this period. The GFC was believed to be a cause of this
decline (MIAC, 2008c). As the large multinational corporations in high-income
economies had cuts in their operations across the globe due to the GFC (Nissanke,
2009), traffic volumes by freight transportation also declined (MIAC, 2008c).
Further, due to inconsistent business performance in the transport industry, there
has been a significant increase in part-time and casual workers (MIAC, 2008b). For
example, while 20 per cent of the workforce was employed as non-regular staff in
2007 (MIAC, 2008b), nearly 40 per cent was employed as non-regular staff in 2011
(MIAC, 2011b). The GFC that started middle of September in 2007 was claimed
for the increase of non-regular staff (OECD, 2011b). During these periods, Japan
had to promote economic growth and environmental conservation at the same time.
The MLIT which rules the Japanese transport industry generates different types of
laws and policies. As the main authority in charge of transport policy, some
policies such as Japanese emission standards for engines and vehicles and fuel
efficiency targets are jointly developed by multiple government agencies: Ministry
of the Environment (Government of Japan) (MOE), MLIT, and METI. Historically,
the Japanese transport sector has generated more pollution than other industries; a
lot of effort has been put into reducing CO2 emissions within the transport industry
(OECD, 2008a). The commitment from the Kyoto Protocol was the one of the
drivers that influenced transport companies to tackle environmental issues (OECD,
2010a). Since MLIT (2009a) believes that railways are an environmentally friendly
mode of transport, MLIT has been encouraging various stakeholders: multiple
governments, railway companies, bus and other transport operators, to work
79
together (1) to promote people to use more railways and (2) for existing commuters
to access transfers more smoothly (MLIT, 2012a). Recently, Park and Cycle Ride
Systems have become experienced a world-wide boom in places such as in Paris
(Ando, Yamazaki, Hara, & Izuhara, 2012), MLIT is also encouraging Japanese
citizens to shift their mode of transport from cars to bicycles or the combined use
of bicycle and railway for one trip (MLIT, 2012a). This program also aims to
improve railway stations as transport hubs (MLIT, 2012c). Traditionally, many
railway commuters used to utilise their own car between home and railway stations.
Railway-station-based community rental cycle systems encourage commuters to
join the program and use bicycles to park at stations with low cost (MLIT, 2012b).
These efforts resulted in Japanese transport companies to achieve the Business
Federation’s Voluntary Action Plan. While each sub-sector in the transport industry
in Japan faces different laws and policies, transport firms in all sub-sectors work
together to achieve same goal.
Figure 3.6 is a transport index by types of transportation between 2005 and 2009 by
Japanese transport companies. The index equals 100 in 2000. As shown in Figure
3.6, the business activities by the Japanese transport companies who cater for local
passengers and businesses (railways and multi-modal) have shown relative
consistency since 2000. Water transport and air transport that are involved in
international business declined in their business operations compared to 2000.
80
Figure 3.6: Transport Index by Types of Transportation
130
120
110
100
90
80
70
60
Multi Japan Private Dome. Dome.
Int. Sea Int. Air
mode Railway Railway Sea Air
2005 114 103 103 92 105 104 86
2007 121 107 107 86 113 106 81
2009 114 102 107 70 99 94 69
Air and water transport that deal with freight and business related passengers have
shown a significant drop. Kanou (2009, p. 1), the senior vice Minister of MLIT,
highlighted on his presentation at a conference on climate change and air pollution
in the transport sector, that while transport is important for economic development,
business activities from transport account for 23 per cent of world CO2 emissions
that are claimed to be a cause of climate change. So he believes that ‘all countries
should pursue a new development path toward low-carbon and low-pollution
transport’ (Kanou, 2009, p. 1). Although global air travel has fallen off due to the
GFC, there are numerous policies and regulations for transport companies. The
logistic business in Japan uses small trucks to deliver goods. However, due to
concerns of environmental problems related to road transport, Mitsui O.S.K. Lines
(MOL) has been promoting the higher energy efficiency of ocean shipping (MOL,
2009). OECD Guidelines towards EST encourages logistic companies to use less
polluting inland and coastal shipping vessels and rail transport. Logistic companies
are expanding their business operations from only road transport to multiple mode
transport (OECD, 2002). The recent changes of laws and regulations, safety
measures and disaster preventions, and slow economic recovery due to GFC, all
81
mean that Japanese transport firms need to adapt external environment while
striving to keep traditional values.
This chapter has reviewed historical informat ion of CSR practices in Japan.
Japanese companies have been participating in CSR reporting for the past decade.
According to KPMG’s International Survey of Corporate Responsibility Reporting
(2008), Japan is one of the top 100 countries in the world which continuously
publishes CSR reports. However, CSR reporting in Japan does not have
standardised guidelines, as used in Western countries. Many Japanese companies
have had to adapt a range of CSR guidelines developed by Western organisations,
thus there has been a lack of consistency on how companies manage their CSR
reporting. Therefore, there is a need to investigate and study common patterns of
CSR reporting in Japan. As outlined previously, Japanese firms are relatively
unique due to cultural values and distinctive organisational practices. There are a
handful of studies (Fukukawa & Teramoto, 2009; Kawashita et al., 2005;
Takahashi & Nakamura, 2009; Tanimoto & Suzuki, 2005) that have examined CSR
practices in Japan. The summaries of these studies are shown in Table 3.2.
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Table 3.2: Studies of Japanese CSR Related Issues
Investigated
Researchers Focus Method Samples Findings
year
Environmental
Extent and
Fukukawa & Quantitative analysis on aspect showed
character of Top 50 firms 2002
Moon (2004) internet reporting significant growth in
CSR
reporting
Quantitative analysis on 1,581 companies
Kawashita et al. Environmental was
OHS of CSR website, archival and listed first section of 2004
(2005) most common issue
promotional material the TSE
Firm size,
Largest (by the sales environment-
Tanimoto & Adoption figures) 300 relatedness, foreign
Suzuki patterns of GRI Quantitative analysis 2002
companies ownership and
(2005) Guidelines
overseas sales effect
adoption
13 Japanese
Understanding Culture largely
Fukukawa & Qualitative analysis by multinational
Japanese CSR 2006 influences CSR
Teramoto (2009) multiple interviews companies from top
practice management style
50 firms
Cost-minimizing and
Motivations for 879 plants belong to
Takahashi & risk-aversion are
seeking ISO Quantitative analysis manufacturing firms 2001
Nakamura (2010) major drivers for ISO
14001 listed in TSE
certification
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Fukukawa and Moon (2004), Kawashita et al. (2005), Tanimoto and Suzuki (2005)
and Takahashi and Nakamura (2009) studied a large number of Japanese
companies using quantitative analysis. For example, Fukukawa and Moon (2004)
studied 50 Japanese firms through internet reporting in 2002 in order to investigate
the extent and character of CSR in Japan. The study identified that environmental
aspects of CSR had significantly increased, community involvement nearly
doubled and employee relations increased nearly one third since 1991. The study
also revealed that guidelines, codes of conduct and corporate creeds and principles
have become increasingly important to Japanese CSR practices.
Kawashita et al. (2005) studied Japanese firms that were listed on the first section
of TSE using quantitative analysis. This cross-industry study, which focused on
occupational health and safety aspects of CSR, revealed a significant industry
difference in topics of CSR. The findings identified that issues regarding
environmental protection were the most frequently reported by all firms. Kawashita
et al. (2005) suggested that stakeholder engagement has become an important
management topic, as most of the companies mentioned for stakeholders’ health
and safety especially of mental illness, even though the term of mental illness is not
covered by the GRI guidelines. Tanimoto and Suzuki (2005) also used quantitative
analysis, but examined the characteristics of the Japanese adopters of the GRI
Guidelines against a Western approach. The study identified that Japanese firms do
not always adopt CSR Guidelines in the same way as Western companies do
(Tanimoto & Suzuki, 2005). As the contribution of the domestic ties was not
clearly identified due to the quantitative nature of the study, Tanimoto and Suzuki
suggested that further discussions are needed with more detailed analysis.
Fukukawa and Teramoto (2009), in contrast, interviewed their samples. This study
examined how managers of Japanese multinational companies adopted and manage
CSR. As Tanimoto and Suzuki (2005) suggested, Fukukawa and Teramoto (2009)
also identified that Japanese managers need to adapt some issues of CSR practice
as CSR is Western-led concept. As Fukukawa and Teramoto (2009) used
qualitative analysis, they were able to identify the links between the broader
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context of Japanese culture and business practices. Fukukawa and Moon (2004)
identified that environmental issues had grown from 1991 to 2002. However none
of the studies investigated industries that caused severe environmental damage.
Kawashita et al. (2005) identified that mental health issues were frequently
reported in a 2004 study. Tanimoto and Suzuki (2005) identified in a 2004 study
that Japanese firms do not always adopt the same methods that Western companies
do. Takahashi and Nakamura (2009) identified that the main reason for adopting
ISO14001 in their 2001 study was cost-minimization and risk-aversion. These
studies were conducted more than eight years ago. Therefore, it is important to
investigate how these issues have changed over time. Furthermore, none of these
studies selected one industry and investigated the deeper meaning of CSR links
between background and actual activities reported.
This research aims to extend the empirical research by focussing on Japanese firms
in the transportation industry that have been classified as having a complex
environmental problem that requires an urgent solution (Takagaki, 2010b). In order
to synthesise the discussions of the previous studies, and the use of Japanese
transport companies, qualitative studies are needed ‘to improve understanding of
the underlying mechanisms of CSR’ (Aguinis & Glavas, 2012, p. 954). The gaps,
inconclusive and contradictory results from the previous CSR studies leave several
possible research questions for this thesis. Accordingly, this research responded to
the following research questions:
Research question 1: What CSR activities are more frequently reported by Japanese
firms within the transport industry?
Research question 2: Are the patterns of CSR activities found in Japanese firms
within the transport industry consistent across time?
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3.10 Conclusion
Chapter Three, Japanese context, has visited current Japanese business practices
related to CSR in order to generate research questions that build on Chapters Two
and Three. As summaries, the background of Japanese context was introduced, and
then recent history and current practices related to this thesis were explored. The
specific character of Japanese Government, Japanese firms, and corporate
governance were discussed followed by the CSR drivers of Japanese firms. Further,
greater details of the Japanese transport industry particular with environmental
CSR activities were discussed, and then finally introduced research questions for
this thesis.
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CHAPTER 4: Methodology
4.1 Introduction
This chapter will outline the methodological approach that was employed in
conducting the research. Kazdin (2003, p. 9) describes methodology as the
‘overarching term that encompasses diverse principles, procedures, and practices
related to the conduct of research’. Marczyk, DeMatteo and Festinger (2005, p. 22)
stated ‘methodology should be thought of as encompassing the entire process of
conducting research’. Chapter 4 is structured in eight sections. Section 4.1 is an
introduction to this chapter, Section 4.2 will introduce research paradigms and
discuss research paradigms especially in regards to relativism, and Section 4.3 will
discuss why qualitative research approach was selected. Section 4.4 will focus on
explaining the research design strategy that fits the research methodology. Section
4.5 will discuss how the data was collected, the sampling strategy, and introduce
the qualitative software that was utilised. Section 4.6 will explain the deductive and
inductive thematic analysis employed and demonstrate the analytical procedures.
Section 4.7 will illustrate the evaluation criteria that followed throughout this
research and provide justification for this thesis. Finally, Section 4.8 will discuss
how limitations and delimitations were dealt with during the research process,
followed by conclusion in Section 4.9.
This section will introduce research paradigms and discuss ontology, epistemology,
and methodology especially with regard to relativist and realist views. Guba and
Lincoln (1985, p. 107) defined paradigms as ‘basic belief systems based on
ontological, epistemological, and methodological assumptions’. Sobh and Perry
(2006), then further described a paradigm as an overall conceptual framework for a
study includes three elements: (1) ontology as a nature of reality, (2) epistemology
as the relationship between that reality and the researcher, and (3) methodology as
the techniques deployed by the researcher to discover that reality. Guba and
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Lincoln (1994) classified four basic beliefs as positivism, post-positivism, critical
theory and constructivism. In terms of methodology, (1) positivism focuses on the
experimental/manipulative verification of hypotheses, (2) post-positivism tends to
use modified experimental/manipulative hypotheses or qualitative inquiry, while
(3) critical theory focuses on the transactional nature of inquiry between
investigators and the subjects of the inquiry, and (4) constructivism weighs the
interaction between and among investigators and respondents.
The different approaches were proposed by various researchers. Healy and Perry
(2000) have different classifications of research paradigms such as (1) positivism:
knowledge is statistically generalised, (2) relativism/constructivism: findings are
related to an individual’s views of the world, (3) critical theory: perceptions are
subjective and individual, and (4) realism: generalised to theoretical propositions.
From an epistemology perspective, positivism tends to ignore cultural, social,
political and economic factors when understanding the world, while favouring a
science that justifies logic (Staller, 2010). The relativist approach was adopted
because of the following reasons. Relativism believes that (1) all forms of
rationality, knowledge, values, and ethics are related to own local culture (Evanoff,
2004; Hammersley, 2009) and (2) multiple other cultures must be accepted as
legitimate in their own terms (Hammersley, 2009). Researchers such as Lewis and
Unerman (1999) believe that relativism could be an important cause of differences
in CSR practices, because what is regarded as good and bad in society vary relative
to cultural differences or individual beliefs. The realist approach that utilises
‘contextual thinking to assess the issues of for whom and in what circumstance’
(Pawson & Tilley, 2004, p. 7) suits this thesis methodology, as this thesis aims to
discover new findings from local Japanese case via CSR reports. However, realists
enter the field with prior theories (Sobh & Perry, 2006) which makes the process of
inquiry unworkable as CSR is nascent by history of theory (details are discussed in
3.4 Japanese Business). As Golafshani (2003, p. 603) suggested that ‘mixing
paradigms can be possible’, this thesis adopts a relativist ontological position with
contextual data such as that commonly utilised by a realist as the preferred
88
approach. This should is the best option to answer the research questions. As a
triangulation to increase the trustworthiness of the findings, the summary count and
frequencies of CSR activities are also available for readers to view.
Epistemological and ontological assumptions are translated into methodological
strategies (Krauss, 2005) and they are outlined in the next section.
There are two research methods appropriate for acquiring new knowledge:
quantitative and qualitative. The quantitative paradigm is based on positivism (Sale,
Lohfeld, & Brazil, 2002) and adopts a deductive process (Hyde, 2000) with a
statistical approach underpinned by systematically collecting and analysing
numerical data (Amaratunga, et al., 2002). The classic qualitative research inquirers
believe that findings are grounded in the data (Glaser & Strauss in Hyde, 2000).
Therefore their open-minded approaches seek possibilities of new discovery from
their data (Hyde, 2000). This approach assumes that reality is socially constructed,
and more than one story can be created from data (Corbin & Strauss, 2008),
therefore, important realities should be investigated by inductive processes
(Creswell & Miller, 2000; Pope, Ziebland, & Mays, 2000). For example,
quantitative researchers may conduct surveys with a large number of patients to
obtain generalisable views, while qualitative researchers will ask different
questions in order to assess whether their interpretations and the underlying issues
accurately represent respondents’ views. Qualitative research is therefore a much
more appropriate approach when the questions are exploratory and limited theory
exists. While strengths and weaknesses of research design exist for both
quantitative and qualitative theses, Poovey contends:
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This research adopts qualitative inquiry for a few reasons. First of all, the
methodology most often used by relativist ontology is a qualitative approach (Kidd,
2002). Second, qualitative design is suitable for studying social phenomena (B.
Johnson & Christensen, 2008; Marshall & Rossman, 2011). Findings from
qualitative research can provide insights that are hard to produce with quantitative
research (Rynes & Gephart, 2004) and are therefore suited to exploratory study.
Due to the challenge of adopting multiple paradigms, relativism and realism, the
flexible nature of qualitative design (Staller, 2010) will be more beneficial for this
thesis. Therefore, qualitative inquiry is the best fit for collecting and interpreting
data for this thesis.
In every research project there are design trade-offs. Scandura and Williams (2000,
p. 1249) stated that ‘any research method chosen will have inherent flaws and the
choice of that method will limit the conclusion that can be drawn’. It is therefore
important for new researchers to follow well-developed models that have been
already established as high quality research designs. This research project design is
based on the Methodological Fit Model (Table 4.1) suggested by Edmondson and
McManus (2007).
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yet there still is no specific theory that is accepted by scholars universally (Freeman
& Hasnaoui, 2011). Thus, the field of CSR should be treated as nascent. Table 4.1
summarises previously used research designs that fit the scope of this thesis. The
research design for this thesis used (1) company documents as a type of data that
have rich textual information that is able to be interpreted for a qualitative thesis,
(2) pattern identification for the goal of data analyses, and (3) thematic content
analysis with a coding process.
The term content analysis has been used in the quantitative description.
Quantitative content analysis that represents computerised coding with a word-
frequency count started around the 1960s (Franzosi, 2007). However, recently
many researchers have applied content analysis for a qualitative approach in order
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to obtain greater depths of interpretation (Graneheim & Lundman, 2004). In
qualitative content analysis, a human coder goes through the sentences while
coding (Hyde, 2000). Currently NVivo or ATLAS.ti are the most popular software
options used to support qualitative data analysis (Lewis, 2004).
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researchers to unobtrusively synthesise the values, intentions, and ideologies of top
managers of companies, which is generally difficult for researchers to access
(Morris, 1994). Therefore, this research uses qualitative content analysis.
Bureau Van Dijk’s Osiris database was used as the sampling frame. As the
population of this research consists of publicly listed companies in Japan, the Osiris
database was the most suitable to collect data. This database covers information of
around 70,000 listed and major unlisted/delisted companies worldwide (Bureau
Van DIJK, 2012). More importantly, the database has four times as much
information on Japanese companies than the World-cope database that is
commonly used for international studies (Bartram & Karolyi, 2006), so it is a
superior database. Furthermore, the raw data section of the Osiris database contains
detailed information, which taken directly from the companies’ annual reports; as
original data they are more trustworthy than World-cope (Glaum, Lichtblau, &
Lindemann, 2004). McColl et al., (2001) stated that selecting appropriate sampling
frame is important for collecting reliable, valid and unbiased data.
Since this thesis focuses on Japanese companies, extensive views of extant research,
in English and Japanese, was conducted. The study sample for this research was
recruited by employing a purposive sampling strategy. There are 229 Japanese
companies that publish CSR reports in English on the Osiris database, but given the
extent and urgency of the transport industry problems, this industry was selected to
focus on, with selected companies in the transportation industry as the studied
samples of five. For example, initially, there were ten companies listed on the
Osiris database in the transportation industry. These companies were from air,
water, rail transport and multi-modal services. Of these ten potential companies,
two companies did not report a wide range of CSR activities and other two only
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focused on the environmental activities. Further, one company only communicated
via website-based CSR disclosures in 2009. Therefore, the remaining five
companies were selected as the final sample. Due to the longitudinal research
design, 2005 was selected as the starting point. This is because one of the chosen
sample companies had been issuing CSR biannual reports, and 2005 was the first
year that all sample companies issued CSR reports.
A four-year longitudinal study with a two-year time frame was used for this thesis.
While most of the existing CSR studies are cross-sectional (Aguinis & Glavas,
2012; Tsang, 1998), this longitudinal study aimed to provide opportunities to
examine the different patterns of CSR related activities over the four years.
Fukukawa and Moon (2004) revealed that the most frequently communicated CSR
dimension was ‘environmental responsibility’ by the top 50 Japanese companies by
annual revenue in 2002, and as already noted, environmental activities in transport
industry are relatively easy to implement. Bearing this fact in mind, in regards to
the transport sub-sectors, the managers in air and sea transport companies are the
sample groups that perceived most urgent environmental actions were necessary
compared to the other sample groups in transport (Takagaki, 2010b). Therefore, it
was assumed that the different scope and extent of CSR activities are expected in a
short period of time. In order to provide a more detailed analysis, a two-year time
frame was selected.
For selecting the most appropriate data, initially over 1,300 reports from 229
Japanese companies were downloaded. This procedure was done for two reasons.
The first, to minimise the weakness of the document analysis, as ‘access-may be
deliberately blocked’, it is more protected when all documents are downloaded
before commencing the thesis. The second, to increase the quality of the study, the
trustworthiness of the Osiris database was assessed. In order to do so, the name of
the companies on the Osiris database and the number of the reports were compared
with the list of companies on the Japanese Government website. For this process, a
sample of 229 Japanese companies was categorised under 20 industries and further
subdivided into smaller classification in accordance with codes provided by Japan
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Standard Industrial Classification (JSIC) issued by the Japanese MIAC. According
to Japan Standard Industrial Classification (JSIC) by MIAC (2008a), the transport
industry is divided into smaller sub-industries: railway transport, road passenger
transport, road freight transport, water transport, air transport, warehousing,
services incidental to transport, and postal activities including mail delivery (MIAC,
2008a). There were ten transport companies classified by JSIC listed on the Osiris
database. In order to increase reliability, further examination was undertaken to
establish if other Japanese transport companies published English language CSR
reports on other websites. No further companies were found on the public website
in either English or Japanese. Therefore, the reliability of the Osiris database was
confirmed. In order to obtain validity of data source and minimise inconsistency of
the CSR reporting behaviours (refer to 2.4 Previous Studies of CSR Reporting),
reports that utilised only GRI guidelines were used. Table 4.2 lists the titles of the
reports and the categories utilised for CSR activities by the Japanese transport
companies. The final sample companies are highlighted in grey.
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Table 4.2: Companies and Reports Used in this Thesis
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4.6 Data Analysis
4.6.1 Thematic Analysis and Coding Data with NVivo Software
There are two types of thematic analysis processes: deductive and inductive.
Quantitative thematic analysis uses a deductive approach for counting words from
an a priori template of codes, while qualitative studies use an inductive approach
(Boyatzis, 1998; Muir-Cochrane & Fereday, 2006). However, Hyde (2000) argues
that a balance of deduction and induction is required in all research. This is because
extreme deduction may preclude the researcher from developing new theories,
while an extreme use of induction could remove the researcher from potentially
useful theoretical perspectives that may help to guide exploration of a phenomenon
(Hyde, 2000). This thesis used a hybrid technique of inductive and deductive
thematic analysis. This is justifiable as CSR theory is nascent.
The inductive approach was used as a pilot test prior to the adoption of a deductive
approach. An inductive approach is important when the concepts underpinning the
thesis are not clear (Hyde, 2000). For example, this thesis explored the new
phenomenon of CSR practices and there is no existing coding template prepared by
researchers. The six CSR reports that were previously collected were selected
randomly then imported into NVivo software. In order to develop a template, open
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coding was employed on reported activities. Open coding is a commonly used
inductive approach that creates code while reading documents (Elo & Kyngas,
2008), thus, researchers can immerse themselves in the data to allow new insight to
emerge (Hsieh & Shannon, 2005). The number of activities coded by the inductive
approach exceeded more than two hundred. After the open coding process, nodes
were grouped into codes/categories under higher order headings (refer to Table 4.3).
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Table 4.3: Themes and Activities
Providing a Product/service of
Providing standard level of product and service
Value
Providing Better Effort to provide better services, customer feedback
Product/service and customer satisfaction
Corporate Transparency Corporate transparency
Engagement with Others General stakeholder engagement
Provide Safety Customer safety programs (other than concept)
Manage Personal Information Privacy right
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Theme Code Main Activities Reported
Philanthropic activities: rescue for people from
National Welfare
natural disasters
Rescue, support for small local communities where
Community Welfare
firm operate
Education Support and Grant Educational support and grant
Employee Volunteering Employee volunteering through company
Fundraising Monetary fundraising
Community revitalization, effort to promote local
Community
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As Carroll’s CSR pyramid was cited and used in a large number of articles
(Schwartz & Carroll, 2003; Visser, 2005), the four domains of CSR were pretested
for the coding scheme. For example, economic, legal, ethical and philanthropic
were used as categories above the nodes that were identified inductively from the
CSR reports. However, many activities cannot be just ‘purely economic’, ‘purely
legal’, ‘purely ethical’ or ‘purely philanthropic’ (Schwartz & Carroll, 2003, p. 520).
Further, given the ambiguous connotations embedded between ethical and
philanthropic codes, there was no clear border between these two domains of CSR
activities for coding. In consequence, it was decided not to use Carroll’s four
domains as a coding scheme for this thesis. An alternative coding scheme is
identified in the next section.
The most often suggested and used categories for CSR activities were utilised for
the coding process. The categories suggested by BITC and GRI guidelines for
reporting, and the categories used by the previous studies such as Holcomb et al.,
(2007) and Furukawa and Moon (2004) and were taken into consideration for
selecting the categories.
The four terms of environment, workplace, community and marketplace were the
ones most frequently appearing in the CSR reports; therefore these four dimensions
were used as the categories above the 43 node-clusters at hierarchical level. These
four terms, in fact, integrate all the criteria from BITC and GRI. For example, the
43 nodes are classified into four categories: (1) the twelve nodes under
environment, (2) ten nodes under workplace, (3) eleven nodes under community
and, (4) ten nodes are under marketplace. Once the coding structure was developed
(based on the previous inductive approach), I then performed an analysis to meet
the objectives of the analysis according to Ryan (2005); that is exploration,
description, comparison model and theory testing as described in the next section.
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4.6.4 Analysis Objectives
4.6.4.1 Exploration
Explorations of CSR reports were conducted with a process of analysis. Since there
was no example of protocol for data exploration identified in previous literature,
the author of this thesis created her own rules as a new case (refer to Table 4.4).
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Since NVivo software applications did not allow entire CSR reports to be imported
(due to the large file size), CSR activities that are described in paragraph in the
main reporting area were selected and pasted to a word document. After all word
documents were coded, other parts of the CSR reports such as lists of activities in
tables, visions, values, graphics, types of words used and comments by employees
were thoroughly reviewed. For example, discussions about females in the
workplace were also found in other activity-sections through searching the words
of ‘woman’ and ‘female’. Whole reports were explored in order to understand what
kind of messages companies are trying to tell us about gender issues. Knowing the
kind of communication styles used and how these stories are communicated (eg.
picture of mother and her child) helps gauge an understanding at a deeper level.
The first round coding was based on the inductive approach as described in 4.6.2.
The next round was to triangulate the CSR activities with the BITC and GRI
criteria. The final stage developed thematic analysis of these CSR activities and
proposed four CSR themes/domains for Japanese firms as in Table 4.3.
4.6.4.2 Description
The overall themes and the patterns from the findings were briefly observed. To
make it easier to compare, both for the researcher and readers, the sentences related
to CSR activities collected from the coding were turned into numbers. For example,
the transport industry was sorted as one case and an individual company within a
sub-industry as another case across three different times. Then, the frequencies of
the occurrence are visually illustrated in graphs, so that the numbers and
proportions related to themes and the changes in the frequencies can tell us a brief
story. The research examined how four themes and 43 nodes by the transport
industry and the four sub-industries appeared in the results, and if there are
similarities and differences between them.
4.6.4.3 Comparison
In this phase, case, between cases, groups and timeframe were more precisely
looked at and the comparisons were made. For example, what themes were more
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frequently reported, what group (sub-sector) reported particular issues more
frequently than other groups. Further it was examined if there were increase or
decrease in reporting frequency in particular CSR activities by the year.
NVivo software was very useful to investigate the issues in more detail than by just
looking at the numbers and the patterns. For example when the elements of energy
management were inspected further, all paragraphs collected via NVivo software
under energy management were easily seen by pressing one button. This part was
one of the most important stages for interpreting the text in order to obtain the
deeper meaning behind it. Since CSR is a nascent theory, finally the cultural,
societal and historical background, were looked at for consideration via the
analysis through the lens of relativist. The discovered themes and the pattern, the
scores and Japanese context were all examined to see if there was any model or
theory that might fit to Japanese transport companies investigated in this study.
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4.7.1 Evaluation Criteria One: Credibility
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4.7.3 Evaluation Criteria Three: Dependability
Dependability is concerned with stability of the data over time (Guba & Lincoln,
1989). Instability occurs when data changes over time. Since the data were
downloaded prior to commencing the thesis, the content of the data remained the
same. Further several test-coding was conducted prior to the final coding, and there
were no alterations made during the analysis process.
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interpreted and analysed. Further experts opinions were sought when preparing
coding protocol and interpreting the data.
4.9 Conclusion
Chapter Four, Methodology, has described the methodology of data collection and
analysis that was used for answer the research questions. First of all, paradigm
adopted was introduced, and then explained why qualitative method was the best
method for this thesis, followed by the instruments used to collect data and analyse
data. This research then introduced its population and sampling frame, and
described the coding procedures for thematic analysis. After justifying the four
criteria for trustworthiness of the methodology, methodological limitations and
delimitations were discussed. The following chapter will present patterns of results
briefly according to the three research questions with the table and the figures.
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CHAPTER5: Findings and Discussion
5.1 Introduction
The previous four chapters have introduced the topic of this research, discussed
literature reviews related to the CSR activities and reporting in Western
perspectives and Japanese contexts, identified the research gaps from the previous
studies, and introduced research questions. The research demonstrated what
ontology and epistemology was adopted and the methods that were utilised, and
justified why they were most appropriate for this thesis. Chapter Five will explore
the patterns that are derived from the qualitative content analysis with discussions.
Section 5.2 will discuss overview of the transport industry in Japan with the
research findings. Sections 5.3, 5.4, 5.5, and 5.6 will further investigate reported
CSR activities in environmental, workplace, community, and marketplace domains
in greater detail, followed by the conclusion section.
This research examined the CSR reports published in 2005, 2007 and 2009 by
Japanese firms in the transport industry using manually coded qualitative content
analysis. In total 2,220 activities: 890 from environment, 474 from workplace, 277
from community, and 579 from marketplace were reported during the study period
(refer to Figure 5.1). There were different patterns identified in the range of topics
covered and reporting frequencies. The x axis of this graph shows the four different
themes of CSR activities while the number of activities reported appears on the y
axis. Looking at the y axis, it may be seen clearly that across the transport industry
some CSR activities were reported far more frequently than others.
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Figure 5.1: Transport Industry CSR Activities 2005-2009
350 322
Number of Activities Reported
293
300 275
250 219
203
200 182
157
139 153
150
101 92
84
100
50
0
Environment Workplace Community Marketplace
CSR Themes
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with voluntary participation of the top 350 FTSE companies – finds that across all
industry sectors, the spread of reported engagement in CSR activities is:
environment (89%); workplace (93%); communit y (86%); marketplace (88%)
(BITC, 2007). Within the British transport sector, reported engagement is:
environment (75%); workplace (89%); community (81%); marketplace (80%).
When the findings from Japanese transport firms are compared to the British firms,
it is apparent that British firms report proportionally less activity in the
environmental domain. This indicates, the findings from Japanese firms are more
environmentally proactive than other categories (Akiyama, 2010; Bird, Momenté,
& Reggiani, 2012; Nishitani, 2008; Stanwick & Stanwick, 2006; Takagaki, 2010a),
thus the environment was the most conspicuous dimension in CSR reports for
Japanese firms (Fukukawa & Moon, 2004). Several possible inferences can be
derived from this. It is possible that the British firms have already taken significant
environmental action and that this explains their current lack of focus in the
environmental domain, or conversely, British firms may have no pressure to take
action. Further investigation would be required to explain the difference, but this is
beyond the scope of this thesis.
The previous study for Japanese firms in 2002 revealed that community activities
were more frequently reported than workplace activities (Fukukawa & Moon,
2004). However, this research discovered that workplace issues are an emerging
domain 2005-2009 in Japan. This was an interesting finding because as discussed
in 3.9 Research Questions, from the 2004 study, stakeholder engagement for
employee’s health and safety - especially of mental illness - appeared to be an
emerging topic, although the term mental illness is not included in GRI guidelines
(Kawashita, et al., 2005). Another interesting finding appeared that while
environment, workplace and marketplace related activities reported constantly
increased in this period, community related activities decreased. This finding
corresponds with the study by Bird, Momenté and Reggiani (2012) that identified
that Japanese firms have strong support for internal stakeholders as well as external
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stakeholders in CSR activities. The themes and categories that are discussed in the
next section are prioritised in order of reported frequency.
53 54
4849 49
50
43 43
39
40 3534
32 31 2005
30 2525
2007
19
20 17 17 16
1314
1515
11 12 2009
10 9 10 9
10 7 7 6
2 3 1
0
E1 E2 E3 E4 E5 E6 E7 E8 E9 E10 E11 E12
Environmental Categories
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5.3.1 Waste Management and the 3Rs (E6)
This category was reported with the highest frequency (170 out of 890) within an
environment domain during the study period and showed consistent reporting
frequency within the whole industry. As discussed in 3.6.1.12 Energy Management,
central and local governments have been playing important roles for waste
management programs through economic incentives and social incentives as the
government believes these practices deliver economic benefits in the long run
(MOE, 2005). The main activities of waste management and 3Rs were the
introduction of new products or processes for recycling, more effort into using
products for a longer period of time, and reducing usage of the product and proper
disposal of waste. However, the firms from different sub-sectors applied this
practice in different ways to meet their own needs.
ANA reported that paperless e-tickets helped to reduce the 180 tons of paper usage
each year (ANA, 2007, 2009). ANA focused on reducing waste from in-flight
services by reusing in-flight magazines, timetables or business envelopes in other
operations (ANA, 2009). By reducing hazardous chemicals, ANA was complying
with PRTR law correctly (ANA, 2007, 2009).
Waste management practices for office buildings were also seriously implemented.
For example, MOL has been reducing the use of paper by double-sided printing
(MOL, 2005, 2007). N-Express promoted the proper treatment and recycling of its
waste by ensuring the separation of waste discharged from its offices and facilities,
including spent fluorescent lamps, power plant ash, effluent sludge and electronics
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(N-Express, 2005, 2007). N-Express focused on employee training and awareness-
raising of waste disposal (N-Express, 2005). There were also continuing efforts
into green purchasing, electricity and water conservation (N-Express, 2007). Other
type of 3Rs approach reported was that East Japan Railway reduced the usage of
herbicides to kill weeds around railway tracks (JR-East, 2007). Also, all companies
were implementing recycling activities based on laws for chemical substances such
as PCB and TBT, and proactively innovating the new ways of reducing waste,
increasing reuse and recycling.
This category was reported with the second highest frequency (146 out of 890)
within an environmental domain during the study period. ANA showed a moderate
increase from one activity in 2005 to eleven in 2007 and eight in 2009. MOL
showed a large frequency of this activity: 21 in 2005, ten in 2007 and 12 in 2009.
For the railway industry, while JR-East reported 12 in 2005, seven in 2007 and
increased to 15 in 2009, Tokyu was consistent: seven in 2005, six in 2007 and
seven in 2009. This means all companies reported environmental innovations
consistently. This must be because, business generally believes innovation is one of
the key drivers of organisational success (Schillewaert, Ahearne, Frambach, &
Moenaert, 2005). Sawang, Unsworth and Sorbello (2007) suggested that the
perceived positive benefits from implementing innovations leads to further
attitudes for adapting future innovations. Transport companies investigated for this
research also showed consistent efforts into innovations and adapting innovations
during the study period.
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has been investing seriously in R&D, as a result, Japan has become a leader in
climate-related innovations (OECD, 2010a).
The main activities reported under environmental innovation were product and
process innovations associated with environmental issues such as saving energy
and lowering emissions. There were two types of innovations identified in the data.
One is product and process innovations through company’s own creations and the
other was the adaption/adoption of innovative products and processes that were
invented by others. Product and process innovations were conducted by all
companies.
Adopting innovative products and processes deliver economic benefits for firm,
industry and the nation in the long term. MOL worked with Universal Shipbuilding
Corp. and Osaka University to develop energy-saving vessels with reduced wind
resistance for a new pure car/truck carrier design. MOL and MOL Group Company
installed a solar power generation system at Tokyo International Container
Terminal in 2007 and this joint study with NEDO has become a model for Eco-
terminals (MOL, 2007). JR-East introduced the world’s first diesel-powered,
electric-motor-driven hybrid railcars in resort areas, which reduce fuel
consumption by around ten per cent as well as reducing NOx exhaust emissions by
around 60 per cent compared to current trains (JR-East, 2009). As discussed
previously, the Japanese government has been providing financial supports for eco-
innovations; this may further encourage the companies to conduct a series of eco-
innovation activities. ANA adopted new an area navigation method called RNAV
that navigates aircraft by radio-guidance facilities such as distance measuring
equipment, satellites and onboard equipment (ANA, 2005, 2007). MOL has
adopted new methods of storing fuel tanks. While traditionally, fuel tanks are
located in the bottom of the hull, in the new method, 60 per cent of the fuel is
stored in the walls between cargo holds, thus this method reduces the risk of oil
leaking in the case of an accident (MOL, 2005, 2007).
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The companies investigated for this research seemed to work together with other
organisations and the government to invent products and adapt innovative methods.
The Japanese government has been providing financial support for both eco-
innovations and adapting eco-innovation, this may encourage companies to
conduct a series of eco-innovation activities and ease pressures same time.
This category was reported with the third highest frequency (140 out of 890) within
an environmental domain during the study period. There was little increase in
reporting for energy management related activities between 2005 and 2009 in the
transport industry. As sub-sectors, ANA showed a small change in reporting
frequency: eight in 2005, 13 in 2007, and 15 in 2009. MOL reported eleven
activities in 2005, ten in 2007, and six in 2009. This means reporting frequency
decreased over the years. In railway transport, while JR-East reported ten activities
in 2005 and 2007, and 15 activities in 2009, Tokyu reported six in 2005, nine in
2007 and seven activities in 2009. In multi-modal transport, N-Express showed a
slight decrease: eight activities in 2005, six in 2007 and 2009. Although reporting
energy efficiency improvements is not a core activity in either GRI guidelines or
BITC guidelines, Japanese transport companies seem very keen on reporting
energy efficiency. This may be because the reductions to energy were necessitated
by an amendment to the national Energy Conservation Law in 2006.
In the air transport industry, the prevailing energy sustainability strategies revolved
around making planes lighter, designs that involved less wind resistance and
replacing older engines with those that are more fuel efficient. For example, ANA
introduced the use of electronic flight bags (digitized flight manuals), stopping
some engines while taxiing, using ground power for longer rather than aircraft
power, reducing the size of beverages offered onboard, scrapping economy meals,
using lighter crockery in business class and online ticketing to reduce paper (ANA,
2007). These reductions through products or process were framed in the context of
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conservation of power and water, proper disposal of waste and efficient use of
energy (ANA, 2005), but conserving power also delivered economic benefits.
MOL introduced newly developed vessels and systems that reduced energy
consumptions. This new vessel was developed by MOL, Universal Shipbuilding
Corp. and Osaka University and reduces wind resistance, thus it also reduces
energy (MOL, 2005). In 2007, MOL announced the installation of solar power
generation systems at the Tokyo Port container terminal called Eco-terminal. This
system expects the reduction of dioxide emissions by 128 tons a year (MOL, 2007).
Within the railway sub-sector, JR-East produced its own electricity for its railways
and drew power from the grid and introduced energy saving railcars, lighter and
better designs to reduce wind resistance by trailing a hybrid railcar (JR-East, 2005).
In generating its own electricity for use on its rail network JR-East was somewhat
unusual in a global context as it has capacity to ensure more energy efficient
methods than in most other countries.
The energy efficiency measures were also taken seriously for the office buildings,
railway stations and in trains. While greening the rooftops of stations to reduce heat
and to absorb CO2 has been implemented by JR-East (JR-East, 2005, 2007, 2009),
Tokyu (2007) has been planting climbing plants to cover building surfaces. ANA
(2007) has been replacing fluorescent lights in offices and setting air-conditioning
systems at higher temperatures in summer and lower in winter. Tokyu (2009) set
air-conditioning temperature in trains one degree higher than previous years
between 1000 and 1600hrs. While some of these activities are driven by cost
reduction, JR-East (2009) reported that they are also a response to revisions in laws
and regulations.
This category was reported with a moderately high reporting frequency (101 out of
890) within an environmental domain during the study period and it was consistent
over the year. Air quality related activities showed a small decrease during the
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study period. As sub-sectors, air transport reported two in 2005, increased to 12 in
2007, and decreased to ten in 2009. MOL on the other hand, reported 14 in 2005
and decreased to nine in 2007 and eight in 2009. In railway transport, while, JR-
East reported nine in 2005 and 2007 and decreased to seven in 2009, Tokyu
reported just three in 2005, one in 2007 and two in 2009. N-Express reported seven
in 2005, decreased to three in 2007 and increased to five in 2009. Therefore there
was no consistency in reporting frequency across sub-sectors.
The main activities reported under air quality were related to air pollution and CO2
emissions. Across every sub-sector there were discussions of lowering emissions of
CO2. For example, ANA mentioned Eco-flying. One of the examples is the use of
continuous descent approach for operating aircraft (ANA, 2007). This approach
allows the aircraft flying its individual optimal vertical profile down to runway
threshold with engines operating at low-thrust power (Turgut, Usanmaz,
Canarslanlar, & Sahin, 2010), therefore it reduces pollution. MOL has been
studying how to minimize CO2 emissions and introduced Eco-sailing. The example
of this methods include lowering speed where appropriate, using top-quality
vessels, engines, equipment, and the use of wind resistance-reducing vessel designs
(MOL, 2005, 2007, 2009). Eco-driving was proactively discussed by N-Express.
N-Express uses the Izu Training Centre for providing practical instructions that
focus on the three points: accelerator use, clutch use, and braking time (N-Express,
2005, 2007, 2009). Therefore the applications of the ecological operating style
have been promoted on land, in the air, and in the sea.
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Island to small islands. As N-Express’s main business activities are on land, the
company has requested that MLIT subsidises the cost of experiments that study
how to reduce CO2 for road transport, with seven experiments out of 32 having
qualified (N-Express, 2005). Therefore, the modal-shift approach has been
supported by strong teamwork among government and transport companies from
different sub-sectors.
This category was reported with a moderate reporting frequency (89 out of 890)
within an environmental domain during the study period. Activities reported
showed a steady increase: 19 in 2005, 31 in 2007, and 39 in 2009. However there
were significant differences in the reporting frequency between firms over the
years. For example, while ANA, air transport showed fluctuations in reporting
frequencies: two in 2005, eight in 2007 and five in 2009, MOL, water transport
showed a very small increase: six in 2005 and eight in 2007 and 2009. In the
railway industry, JR-East showed a consistent increase: one in 2005, five in 2007
and eight in 2009. Tokyu showed fluctuations: eight in 2005, four in 2007 and
eleven in 2009. For multi-modal transport: N-Express showed an increase: two in
2005, six in 2007 and seven in 2009.
There were different types of laws, regulations, and compliances for t ransport
companies to apply for. ANA reported that although the company is subject to 23
laws and regulations at a total of 383 business facilities, the company did not
incurred any penalties in 2006 (ANA, 2007). However, this research identified that
the main activity focused by all companies was ISO 1400 certificates.
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through green supply chain practices (Darnall, 2006). These drivers must be
applied for Japanese transport companies, as all companies for this research belong
to either Keiretsu group or business group, at the same time, they proactively
reported ISO14001 certificates. In addition, as discussed in 2.6.2.2 Cognitive
Legitimacy, ISO clearly states that ‘using ISO 14001 can improve corporate image
among regulators, customers and the public’ (OECD, 2012a, p. 3). It was assumed
that the scope and extent of environmental concerns by the firms vary due to the
different laws, regulations and compliances across industries and sub-industries. It
is also found that Japanese transport companies tended to popularise and
standardise their operations by promoting taken-for-granted cultural accounts
through collective actions. The previous study by Pratima and Kendall (2000)
suggested that regulation and compliance for businesses significantly relate to
legitimation. In Japan relationships between business and business within the same
business group (Keiretsu) are very strong and important. To protect each other, the
Keiretsu group members are also expected to follow the group policies as well.
This category was reported with a moderate reporting frequency (76 out of 890)
within an environmental domain during the study period. Although overall noise
and vibration related activities increased, differences across industries for this
particular category were identified. For example, noise and vibration related
activities were mostly reported by air transport and railway transport, but not by
water transport nor by multi-modal transport. ANA reported two activities in 2005,
six in 2007 and seven in 2009. Most likely due to the nature of their business
activities, there was no noise and vibration related activity reported by MOL, as it
involves water transport. N-Express, multi-modal also did not mention noise and
vibration during the study period. Railway transport did mention several activities.
The main activities of reducing noise and vibration were through introductions of
new product or process to reduce noise and vibration.
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Due to the new regulation of noise standards, ANA introduced new aircraft, the
Boeing 787 series that generates much less noise than the current models of
B747LR and B747SR (ANA, 2005, 2007, 2009). Tokyu reported that the company
also has been studying the ways that they can reduce noise and vibration through
the company’s R&D division (Tokyu, 2007). From the CSR reports, it was
identified that both air transport and rail transport have been putting a lot of effort
into achieving less noise and vibration by examining and testing new products and
processes.
This category was reported with a small reporting frequency (62 out of 890) within
an environmental domain during the study period and showed a small increase:
from 12 in 2005, 25 in 2007 and 2009. As sub-sectors, ANA, air transport
increased reporting frequency: one activity in 2005, eight in 2007 and four in 2009.
MOL, water transport, reported one activity in 2005, four in 2007 and three in 2009.
In railway transport, while JR-East reported six in 2005, nine in 2007 and
decreased to six in 2009, Tokyu reported three in 2005, two in 2007 and increased
to ten 2009. Nippon Express only showed small reporting frequency: one in 2005
and two in 2007 and 2009. Therefore reporting frequency was not consistent
among all firms.
In 2007, MOL announced that the MOL Group launched the MOL Group
Environmental Target System that aimed for all 82 MOL group companies to set
their own environmental target under group environmental guidelines in order to
achieve their target (MOL, 2007). In 2009, the company announced two of its
environmental systems: MOL EMS21 for its operating vessels relation to acquiring
ISO 14001 certification and the MOL Group Environmental Target System that
promoted its business activities in line with the MOL Group Environmental Policy
Statement (MOL, 2009). Other than internal environment management type of
activities, there were environmental programs that did not directly relate to
companies’ business operations.
120
As an external environmental activity, the companies organised tree planting
programs. ANA launched a tree planting and maintaining program in the vicinity of
their airports for greening and prevention of global warming (ANA, 2005, 2007).
The employees of Tokyu and local residents plant flowers along the train track
once or twice each year (Tokyu, 2007, 2009). These examples showed that tree and
flower planting were the popular environmental programs that companies
organised as external activities.
This category was reported with a small reporting frequency (41 out of 890) within
an environmental domain during the study period. As periodical changes, reporting
frequency in 2007 were less than half of activities reported in 2005 and 2009.
Environmental conservation is a very broad scale, including actions such as
preservation of natural resources and wilderness, and marine ecosystems and
habitats. The main activities reported under environmental conservation by the
transport industry were marine conservations such as protecting coral and sea water
by sea transport, and tree planting. For example, ANA (2005) reported that the
company protect the global biodiversity that was based on the Japanese
environmental policy introduced in 1998. MOL also cooperates with wide range of
research projects such as study of surface water temperature and the oceanic water
circulation to better understand the sea (MOL, 2005). JR-East stated that the
company has been preserving railway trees that were planted during the Meiji
Period (1986-1912) (JR-East, 2007), and that they have also been organising
climate forestation projects in multiple areas (JR-East, 2009).
This category was reported with a small reporting frequency (40 out of 890) within
an environmental domain and showed a small decrease from 2007 to 2009 in
reporting frequency during the study period. As sub-sectors, ANA reported two in
2005, five in 2007 and two in 2009. MOL reported five activities in 2005, however,
stop mentioning from 2007. In railway transport, JR-East reported three in 2005,
121
five in 2007 and four in 2009. Tokyu reported one in 2005, three in 2007 and two
in 2009. Nippon Express reported four in 2005 and two activities in 2007 and 2009.
Therefore not all companies were proactive enough to report this category.
As the name of this category implies, activities reported in this category were
employee training and education associated with environment related topics. ANA
reported that the company has been providing employees with environmental
awareness seminars annually as well as with internet and intranet training (ANA,
2007). JR-East provided environmental educations to a total of 2,708 participant
employees during the fiscal year 2004 (JR-East, 2005). The topics of this education
include emergency response manuals for handling chemical and hazardous
substances (JR-East, 2005, 2007, 2009), basic environmental accident prevention
training and Eco-products training (JR-East, 2007). In 2009, JR-East reported that
the company offered environmental education to a large number of employees in
order to expand the scale of environmental activities (JR-East, 2009). MOL
reported that the company provided environmental protection training, especially
emergency oil spill response training (MOL, 2005). N-Express organised
environmental awareness-raising, waste disposal educations and fuel-efficient
driving training (N-Express, 2005, 2007, 2009). Tokyu (2005, 2007) reported that
79 employees in 2005, 98 employees in 2007, and 90 employees in 2009 acquired
environment-related qualifications.
This category was reported with a small reporting frequency (36 out of 890) within
an environmental domain during the study period. Activities reported showed a
small consistent increase: nine in 2005, eleven in 2007 and 16 activities in 2009.
As sub-sectors, while ANA, JR-East, Tokyu, and N-Express showed a small
increase in reporting frequency, MOL did not increase its reporting. Therefore not
all companies were proactive in reporting this category.
122
During the study period, ANA participated in several activities that include an Eco-
life Fair and coral planting in the seas near Okinawa (ANA, 2005, 2007, 2009).
The company also signed an agreement for Environmental Conservation and
Restoration to support forest, village and marine educations (ANA, 2005). While
the companies whose business activities are land-based participated with varieties
of tree planting programs, water-based companies focused on a different approach.
For example, N-Express joined with Green tourism by promoting the exchange
between urban areas and rural, mountain and fishing villages proposed by the
Japanese government, and the company has been participating in foresting projects
(N-Express, 2007).
This category was reported with a very small reporting frequency (25 out of 890)
within an environmental domain and showed a steadiness in reporting frequency
during the study period. While Tokyu and N-Express both mentioned only one time,
the other companies reported in every study-year. The main activities mentioned
under this category included efficient utilisation of water and raw material, wise
use of wood resources, and eco-friendly substitutes for hazardous materials.
This category was the least frequently reported (6 out of 890) within an
environmental domain during the study period. The three companies, ANA, JR-
East and Tokyu promoted this type of activity in 2005. However by 2007, JR-East
was the only company consistently reporting the activity of employees’ rewards for
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environment efforts. MOL, Nippon Express Co., Ltd (N-Express) and Tokyu did
not mention this type of activity at all. However, JR-East’s approach to
environmental management was somewhat different to other companies. In 2007
JR-East clearly mentioned that the company promotes participating in
environmental activities with employees, thus the company rewards people for
their outstanding environmental activities (JR-East, 2007).
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5.4.1 Providing Public Safety (M9)
Safety-related activity for the public was the most frequently reported marketplace
activity (187 out of 579) during the study period. This category, public safety, is
distinct from occupational health and safety for employees. This category is a core
domain on GRI sustainability reporting guidelines and JR-East and Tokyu reported
most of the activities since 2007. JR-East (2007) reported that the company should
follow new safety regulations, Railway Enterprise Law, that was revised in 2006.
Interestingly, while, JR-East and Tokyu included safety activities in the social
sections of their 2005 reports, the companies started to provide separate sections on
safety management since 2007 reports. The railway tracks of JR-East lies from
central Japan, Tokyo, to the northern part of Japan where a large earthquake
occurred in 2004. According to East Japan Railway (2007), while 44 fewer
accidents occurred in 2006 than in 2005; the company still experienced 92 railway
accidents in 2006. The highest possible level of safety is an important requirement
for the railway industry because it deals with a much higher number of passengers
daily than any of the other sub-sectors in transportation.
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5.4.2 Providing Better Product/Service (M6)
Railway transport companies have been proactively reporting their efforts to wards
better service. JR-East was focusing on female passengers in every CSR report. For
example, JR-East has been offering women-only carriages from 7.30 to 9.40 am, so
that female passengers feel comfortable even though they are in crowded trains
(JR-East, 2005, 2007, 2009). While the paragraphs describing the service were
rephrased, JR-East was consistently reporting the same service. While smoking
bans at train stations were being introduced by most railway companies by 2003
(Kamiya, 2009), JR-East finally prohibited smoking in the stations in Tokyo
Metropolitan area and in trains in 2009 (JR-East, 2009). Responding to feedback
from passengers, JR-East introduced a new barrier-free accessible train for persons
with vision impairments and has been reporting each year since (JR-East, 2005,
2007, 2009). There have been different types of activities that relate to providing
better service/products, most of which reflected customers’ demand.
This category was reported with a moderate reporting frequency (72 out of 468)
within a marketplace activity during the study period and it was consistent over
time. As sub-sectors, while airport transport showed a high rate, railway transport
showed moderate rates, and water and multi-modal transport showed a low
reporting frequency. Frequency pattern was not identified by sub-sectors from the
study period. The companies tended to engage with customers and passengers
through showing the efforts of product/service improvement.
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In 1995 Tokyu established Tokyu Customer Centre to collect and assess customer
feedback collected through telephone, fax, mail and the Internet (Tokyu, 2005,
2007, 2009). In 2004, Tokyu received 261 messages: 102 from customers (Tokyu,
2005). From 2009 onwards, Nippon Express started to mention customer
comments. The company reported that they were building a system called “Voice
of Customer Solution” (VOCS) that collects all customer inquiries, opinions and
complaints through websites, help desks and by email (N-Express, 2009).
Therefore these examples revealed that the main purpose of customer/passenger
engagement was to assess customers’ satisfactions levels and to obtain feedback for
future improvement.
This category was reported with a low to moderate frequency (52 out of 579)
within a marketplace activity during the study period and showed a small decrease
over the years. Two major types of corporate transparency were identified. One is
standard disclosure based on GRI index for environmental activities and the other
is financial information disclosure for all stakeholders.
From the 2007 CSR report, N-Express mentioned that they were disclosing female
employment in its report (N-Express, 2007, 2009). While a low to moderate
reporting frequency was found from the results, GRI guidelines requirement, CEO
statement, is an important transparency of firms’ vision for sustainable
development (Reynolds & Yuthas, 2008).
This category was reported with a small reporting frequency (40 out of 579) within
a marketplace activity during the study period, however, some companies have
been consistently reporting. The Law on Promoting Green-Purchasing enacted
since 2000 aimed to focus on the purchase of green products (Zhu, Geng, Fujita, &
Hashimoto, 2010) has been thoroughly implemented by several companies.
127
JR-East also mentioned 56 per cent of items in 2005 report, 51 per cent of items in
2007 report, and 56 per cent of items in 2009 report, were related to green
purchasing (JR-East, 2005, 2007, 2009), however, this report did not mention
whether the specific year achieved these ratios. MOL has been reporting different
items each year. For example, in 2005, the company reported on the use of CFC
refrigerant substitute in existing air-conditioning systems and Halon fire-
extinguishing equipment and paint containing tributyltin (TBT) that harmed human
health, in 2007 they reported on limiting the use of disposable meal boxes and in
2009, they reported onboard waste disposal practices (MOL, 2005, 2007, 2009).
The companies had different focuses on responsible procurement, yet they
proactively reported their responsible purchasing efforts.
This category was reported with a very small reporting frequency (23 out of 579)
within a marketplace activity during the study period. The main activities reported
were the standard level of service and product that may be based on the
requirement of new laws and regulations or the purpose of retaining business.
MOL reported that the company transported aid supplies donated by NPOs,
businesses and individuals around the world to global companies, however they did
not mentioned whether the company transported them free of charge as charity or
as a part of normal business. Tokyu also mentioned that the company’s philosophy
is to deliver quality services to the community and public with close relationships,
the company will provide high-quality services to maintain positive image as well
as to protect company brand. These statements only indicate the companies deliver
basic services or services to improve their image and brand name rather than for
the community or the public.
128
Required regulatory level activities expected by the government were also reported.
For example, ANA reported wheelchairs for all domestic aircraft had been
provided to passengers based on the Barrier-Free Law 3 (ANA, 2005). Further,
ANA reported their aircrafts feature special functions for disabled people, although
aircrafts were not designed by the company but required by the laws.
This category was reported with a small reporting frequency (20 out of 579) within
a marketplace activity during the study period. This category included a wide range
of business communications with stakeholders other than just customers,
employees, suppliers or shareholders.
Palazzo and Scherer (2006) stated that in order to gain pragmatic legitimacy,
companies often invite stakeholders to participate in meetings or organise events so
that companies can manipulate stakeholders’ perceptions of companies. The
readers of JR-East sustainability reports (JR-East, 2007), the readers of MOL
Group book and the viewers of MOL’s company website (MOL, 2005, 2007) were
also reported as stakeholder engagement. While activities reported under this
category were briefly mentioned, the companies were clearly informing that they
were communicating with varieties of stakeholders through various ways.
This category was reported with a very small reporting frequency (14 out of 579)
within a marketplace activity during the study period. ANA reported that the
company publishes ANA Vision for shareholders on a quarterly basis on its website
so that shareholders and investors within and outside Japan can have access to
information from anywhere at any time (ANA, 2005).
3
Barrier-Free refers to universal design that are inherently accessible to both people without
disabilities and people with disabilities
129
MOL (2007, 2009) listed the importance of issues that they communicate with
shareholders and investors. According to the reports, the company has been
focusing on providing information from mid- to long-term viewpoints, disclosing
information that shareholders ask for with easy-to-understand formats, and
listening closely to their opinions via two-way communication (MOL, 2007, 2009).
CSR reports are a good tool to assess a company’s social activities for ethical
investors but may not be a common tool to communicate with shareholders and
investors, as many transport companies provide a whole section for shareholders in
their annual report and websites that provide detailed financial information (ANA,
2005; MOL, 2007).
This category was reported with a very small frequency (7 out of 579) within a
marketplace activity during the study period. While ANA and Tokyu reported the
activities from this category, MOL, JR-East and Nippon Express did not mention
this activity.
Tokyu has established a set of regulations for handling and protecting personal
information (Tokyu, 2005). The company appointed a personal information
management director and assigned personal information management supervisors.
This low reporting frequency was unexpected, as The Act for the Protection of
Personal Information was enforced in 2005 in Japan (Ozawa et al., 2011). The
importance of protecting personal information has been raised as a considerable
issue by medical and health professionals in Japan (Ozawa, et al., 2011; Tatsumi,
Mitani, Haruki, & Ogushi, 2001), therefore the low reporting frequency by
transport companies might be an industry specific difference.
This category was the least frequently mentioned (five out of 468 activities) within
a marketplace domain during the study period. As sub-sectors, the air transport and
130
JR-East by railway transport industries claimed twice. The water and multi-modal
transports, and Tokyu by railway transport did not claim at all.
ANA reproduced the same statement each year. As JR-East complies with its
Green Procurement Guidelines, the company encouraged suppliers to select
materials with a low environmental impact, and to reuse materials in order to
reduce waste (JR-East, 2005). This category was also not common activities for
Japanese transport companies to disclose in CSR reports.
131
Figure 5.4: Transport Industry CSR Activities: Workplace
34 35
35 32
28
30
25
25 2005
19
20
14 15 15 16 16 2007
15 11 12 11 12 11
10 10 10 10
10
9 9
8 2009
5 5 5
3 3
5
0
W1 W2 W3 W4 W5 W6 W7 W8 W9 W10
Workplace Categories
This category was the most frequently reported under the workplace domain (115
out of 474 workplace activities) and showed a small but consistent increase from
34 activities in 2005 to 45 activities by 2009. Air transport showed steady
reporting: seven activities in 2005, six in 2007, and six in 2009; water transport
showed a small increase from 12 in 2005 to 16 in 2007, then showed s small
decrease to ten in 2009. While Tokyu (in railway transport) showed a significant
increase from one activity in 2005 to nine activities in 2009, JR-East mentioned
nine activities in 2005, decreased to four in 2007, and then increased to eleven by
2009. Multi-mode transport shows a decrease from five in 2005 to two in 2007, and
then slightly increased from two in 2007 to nine in 2009. Therefore, there was no
clear trend: upwards or downwards, across the sub-sectors identified.
132
to be consistent across all companies. The current GRI guidelines suggest that
education, training and counselling are the core subjects for labour practices and
decent work performance indicators (GRI, 2011b). CSR performance indicators by
BITC also suggest training and development provided to staff demonstrated a
commitment by company to its employees (BITC, 2000). The topics of training and
seminars varied, but across the board Japanese transport companies seemed very
proactive in educating their employees. Amongst the different training mentioned,
mental health related training and development was mentioned by all companies.
This implies that companies are taking action in response to the high number of
suicides and mental illness problems occurring in Japanese firms (Kawashita, et al.,
2005).
Within the sub-sector, railway companies focused on safety training programs (JR-
East, 2005, 2007, 2009; Tokyu, 2005, 2007, 2009). This could be due to the fact
that, while passenger trains serve large numbers of people, there have been many
railway accidents in Japan. For example, while the number of railway accidents by
JR-East in 2006 reduced by 44 compared to 2005, the company still experienced 92
accidents in 2006 (JR-East, 2005). Since Japanese National Railways was
privatised in 1987 into one freight company and six passenger companies that
include JR-East, Japan’s railway companies - especially in large cities – compete
for fares and to improve speed and comfort as well as diversifying business
operations and community development along their lines (Saito, 1997). All these
factors might contribute as to why passenger railway companies put lots of effort
into conducting training and seminars in order to improve services and trust.
133
also been conducting a series of group training workshops and consultations to
prevent discriminatory treatment at workplace.
This category was reported with the second highest reporting frequency (76 out of
474) within a workplace activity. Twenty-five activities in 2005, 19 in 2007, and
32 in 2009 were reported. By sub-sector, MOL mentioned occupational safety most
frequently among all firms, and JR-East was second highest. ANA and Tokyu
mentioned occupational safety less frequently. Therefore, there was no consistency
for reporting frequency among firms. The most common occupational safety
related activities were participation in the national industrial safety and health
convention (ANA, 2005), on-board health and safety committees on vessels (MOL,
2005), corporate safety guidelines (JR-East, 2005; N-Express, 2005; Tokyu, 2005)
and safety training (JR-East, 2005).
This category was reported with the third highest reporting frequency (61 out of
474) within a workplace activity during the study period. As a total number
combined within five companies, this was the only category in the workplace
domain that showed a rapid increase during the study period: ten activities in 2005,
16 in 2007 and rising to 35 in 2009. The most frequently reported activity under
this category was flexible working practices. There are two focuses of the flexible
134
work practice: long working hours and female’s active participation in the
workplace.
As long working hours have been causing severe health and mental problems for
many Japanese workers (Ogura, 2009), the companies have been tackling the
challenge of reducing long working hours. As Japanese fathers spend much less
time with their children than fathers in Western countries (Ishii-Kuntz, et al., 2004),
it has been an increasing focus for the Japanese government to promote fathers’
childcare participations as a part of flexible work practices. ANA reported that the
company has been responding to the long working hours by reducing
approximately six per cent on hours of work in all relevant divisions in 2009
compared with previous years (ANA, 2009). ANA has also extended the eligibility
of shorter working hours for employees with preschoolers in 2006 (ANA, 2007).
MOL also reported maternity and child-care leave, refresh leave4 (extra holidays
after 15 years) and mandatory paid-leave systems (MOL, 2005, 2007, 2009).
Therefore Japanese firms are becoming parent-friendly in order to retain talented
workers (Hadley, 2006) .
This category was reported with a small frequency (48 out of 474) within a
workplace activity during the study period. However, activities mentioned in 2007
were second highest (28) in all categories in 2007. This is due to the fact that air
transport and rail transport by Tokyu showed a strong emphasis on reporting
employee communication in 2007. ANA has been communicating with employees
through ANA’s Virtual Hollywood which encourages employees in any position to
participate to develop project ideas and events in each year. ANA has been very
proactively reporting this activity since 2007. For example, ANA organised the
‘praising’ of fellow workers by introducing a ‘good job’ card, and they also
4
Refresh leave refers to long service leave that allocates employees extra holidays after 15 years
and 25 years of continuous service
135
conducted employee satisfaction surveys, encouraging employees to talk directly
with management, and set-up free conversation rooms for new ideas, as well as
offering the ANA welfare plan, to help promote a comfortable work environment.
Tokyu has been conducting employee surveys every second year since 2001 in
order to assess employees’ morale, values and satisfaction of the company, and in
2007 they conducted interviews to obtain detailed feedback for better
understanding employees’ expectations (Tokyu, 2009). Both ANA and Tokyu have
been proactive with employee communications since 2007.
This category was reported with a small reporting frequency (39 out of 474) within
workplace activity during the study period. Fourteen activities were claimed in
2005 and this decreased to ten in 2007, and then increased to 15 in 2009. By sub-
sector, this category shows a small increase from two to six activities in air
transport, a decrease from five to one in water transport and a small increase from
one to three in multi-modal transport. Therefore, there was no consistency in
reporting frequency found across industries.
136
Interestingly, in the same year (2007), Unyu Roren, All Japan Federation of
Transport Workers’ Unions, announced that due to the declining birth rate, a sharp
decline in the number of truck drivers will be expected in large city areas, therefore,
securing a labour force will be a future problem facing the transport industry (Unyu
Roren, 2007). Therefore, it was not clear that N-Express started to consider female
employees due to the lack of male workers or for a purpose of achieving gender
equality at work. These reported examples clearly revealed that while reporting
frequency was still small, Japanese transport companies have been reporting
gender/diversity programmes since the revised EEOA in 2006. This must reflect
responsiveness to the changing expectation of organisational behaviours by
‘potential/employees and rating agencies and investors, but also civil society and
governmental organisations’ (Grosser & Moon, 2008, p. 194).
Although this category was reported with a small reporting frequency (38 out of
474) within a workplace activity, all companies mentioned physical and mental
health management. Fifteen activities were claimed in 2005, twelve in 2007 and
eleven activities in 2009. Due to the small numbers of activities were mentioned,
reporting frequency was consistent over the year. As long working hours are still
causing health and mental damages to many Japanese workers, small reporting
frequency identified was an unexpected result.
This category was reported with a small reporting frequency (36 out of 474
workplace activities) during the study period. There were revisions of laws and
137
legislations for employment related issues during the study period. Therefore all
companies consistently reported each year.
While University graduates were mentioned, female university graduates were not
particularly mentioned by MOL (2005). This was an unexpected result because, as
discussed in 3.6.2.1 Gender Equality, other studies identified that many Japanese
firms have started to employ a considerable number of female graduates since 2005
(Keizer, 2009) for traditional male-role positions (Fackler, 2007). This could be
because Japanese companies use specialised websites for recruitment purpose
(Fukukawa & Moon, 2004). People with disabilities (ANA, 2007; JR-East, 2007,
2009; N-Express, 2007, 2009; Tokyu, 2005, 2007, 2009) was also mentioned.
Only a small reporting frequency (31 out of 474) within workplace activities was
identified with small changes during the study periods The main activities included
sexual harassment, disabled people’s rights, human dignity and gender equality.
The low level of attention given to creating a fair and equitable work environment,
despite the revisions of the 2006 EEOA, indicated that gender equality still hardly
reached minimum international standards in Japan (Courmadias, et al., 2010).
Some companies were more proactive than others. ANA categorised human rights
as social roles, therefore the company mounted a group-wide campaign (ANA,
138
2005). ANA has established the human rights awareness room in ANA’s personnel
department that employs staff who develop plans associated with human rights
awareness as well as CSR promotion (ANA, 2009). MOL has been promoting
equal opportunities in the workplace by suggesting all employees have a right to
debate and suggest their ideas and opinions at meeting regardless of their
occupational title (MOL, 2005). JR-East and N-Express attempted to raise human
rights through a newsletter for employees and their families. JR-East offered
seminars for managers to understand the importance of female workers (JR-East,
2005). The only activity reported by Tokyu was the introduction of a sexual
harassment consultation service. While the reporting frequency was low, these
companies provided activities related to fair and equitable work environment to
some degree.
This category was reported with a very small frequency (17 out of 474) within a
workplace activity. There were three activities in 2005, five in 2007, and nine in
2009. Among that small number of activities, six activities were claimed by Tokyu
in 2009. The five activities reported in 2007 and in 2009 were exactly the same
issues, but with slightly different phrases. The special compensation and support
for work-life balance which appeared in 2009 included enhancement of income
compensation while on maternity leave and while babysitting sick children,
extended periods for childcare leave, and retention of unused holiday pay to the
following year (Tokyu, 2009).
The least frequently reported category (13 out of 474 activities) under workplace
responsibility was communications with employees’ families. In total, five
activities were reported in 2005, three activities in 2007, and five activities in 2009.
Due to the nature of the roles required by water transport, such as workers being
away from home for eight consecutive months (MOL, 2005); companies in this
sector need to support employees’ families more than companies in other sub-
139
sectors. MOL from water transport proactively made extra effort to assist seagoing
employees and their families by providing a counselling and aid centre as well as
by organising regional gatherings for employees and their families (MOL, 2005,
2007, 2009). One of the most significant benefits of CSR reporting is to attract
future employees (Branco & Rodrigues, 2006; Sprinkle & Maines, 2010) and
companies in the water transport sector may be utilising CSR reports to
demonstrate MOL cares for its employees and their families at home. Therefore,
although this category was the least frequently mentioned in total, it appears to be
very important to water transport companies and seems to be a sub-sector specific
issue.
This section investigates if companies proactively disclose their support for local
and global community in their CSR reports. From the analysis, eleven categories
frequently recur under community in the CSR reports (refer to Figure 5.5). As well
as significant differences in reporting frequency identified across categories, there
were some categories that showed dramatic decreases other categories that were
consistently reported. A much smaller number of activities were reported in the
community compared to activities from other three themes: environment,
workplace and marketplace. There were high fluctuations in the reporting
frequency according to the categories and studied year.
140
Figure 5.5: Transport Industry CSR Activities: Community
24
25
21
20
17 17
16 16 16
15
15 13
2005
12 12
9
10 10
9
10 2007
10
7 7
6 6 2009
4
5 3 3
2 2 2 2 2
1 1 1 1
0
0
C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11
Community Categories
This category was reported with the highest frequency (52 out of 277) within a
community activity during the study period. As the nature of the activity for this
category is based on the companies’ operational area, the companies in the railway
industry most proactively mentioned local revitalization and residential
environment during the study period. While water transport did not mention
activity under this category at all, air transport mentioned it four times in total.
Tokyu was the most active and it was the only company in the samples that
increased its reporting frequency. More specifically, the company promoted the
beautification of the towns and along the railway track where the business operated.
There could be several reasons for this active participation in the community. As
previously discussed in 3.6.1.11 Air Pollution and Climate Change, in 2006, TMG
introduced the Tokyo Big Change initiative that aimed to reduce air pollution that
threatened the health of the residents of Tokyo. As part of this project, firms in
141
Tokyo have put lots of effort into reducing heat mitigation through various projects
such as rooftop gardens and planting flowers to provide a cleaner environment (JR-
East, 2005).
As a part of the 2009 New Growth Strategy that promoted a tourism and local
revitalization, transport companies have been working together with the
government to accomplish these plans. JR-East operates its business from Tokyo
central district to the northern part of Japan. Therefore the company has been
organising free eco-tours in northern regional areas from Tokyo by collaborating
with local residents and rural train lines to promote the attractiveness of the areas
and the local culture along the line (JR-East, 2007, 2009). The government has
been investing into infrastructure for airport, port, roads and other infrastructure in
order to improve aesthetics of the urban and rural landscape (METI, 2009). JR-East
also assisted the designing and constructing bridges and stations with government
(JR-East, 2005, 2007, 2009). JR-East has been organising Railway Line Forestation
Programs with local governments and planting trees every year with local
volunteers since 1992 (JR-East, 2005, 2007, 2009). Tokyu recently developed
estates along the railway regions and put effort into creating beautifications around
the areas. According to Chen and Bouvain (2009), environmental friendly
development has become common practice in real estate development due to
market demands as well as climate change concerns. Therefore Tokyu’s
participation in the beautifications must be from the multiple purposes.
5.6.2 Organise Seminars, Events and Tours for the Public (C11)
This category was reported with the second highest frequency (45 out of 277)
within a community activity. This result was above average and there was only a
small change in reporting frequency over the study period. Many activities under
this category were involved with educational tours for small children. For example,
ANA organised aviation classes for elementary and junior high school students
(ANA, 2005).
142
While JR-East regularly held tours at railcar factories (JR-East, 2005, 2007), in
2007 JR-East Culture Foundation in Saitama City opened a new railway museum
(JR-East, 2007). N-Express stated that the majority of its company’s activities that
involved with community were school activities that included traffic safety classes
for school children and handicapped children. These activities followed Carroll’s
suggestions of philanthropic actions. As Carroll described, part of philanthropic
activities are that business contributes executive’s (employee’s) time to the
community on educational programs (Carroll, 1991).
This category was reported with a high frequency (44 out of 277) within a
community activity during the study period. ANA showed a small decrease, JR-
East increased activities slightly and Tokyu increased five activities in 2005 to ten
activities in 2007. MOL reported four activities each year.
This category was reported with a moderate frequency (32 out of 277) within a
community activity during the study period. The activities related to this category
were the highest reported (16 out of 277) in 2005, then decreased to ten activities in
2007, and then further decreased to only six for all companies. As well as annual
volunteering events, ANA and MOL responded to the 2004 Mid Niigata Prefecture
Earthquake. In addition to natural disaster rescue, tree planting (forestation) was
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another very popular volunteering activity by ANA, JR-East, Tokyu and N-Express.
Due to the nature of the water transport industry, MOL focused on marine related
volunteering activities such as beach clean-up projects (MOL, 2005, 2007), oil spill
response skill training (MOL, 2005, 2007, 2009) and maritime education for pupils
(MOL, 2007).
This category was reported with a moderate frequency (31 out of 277) within a
community activity and was consistently reported during the study period. As sub-
sectors, the water industry and railway industry reported more frequently than air
and multi-modal transport industries. For example, JR-East was very proactive in
providing its railway technology and know-how to foreign companies and
governments (JR-East, 2007). JR-East hosted overseas visitors by offering lectures,
on-site inspections and seminars covering cutting-edge technologies (JR-East, 2005,
2007, 2009). Tate, Ellram and Kirchoff (2010) stated the global firms show strong
concerns for local communities where the firms’ operations are based. MOL
supported seafarer education and training in the Philippines where MOL recruits
seafarers. Therefore most of the global activities reported were related to their
business operations or the areas firm’s operations are based.
This category was reported with a small frequency (16 out of 277) within a
community activity during the study period. Across sub-sectors, most of the
activities were reported by Tokyu from the railway industry. Tokyu has established
its own scholarship schemes since 1975, and has been supporting international
students who study in Japan (Tokyu, 2005, 2007, 2009). Since its establishment in
1975, by 2006 Tokyu had assisted more than 700 international students from 28
countries (Tokyu, 2005). ANA also established the International Scholarship
Foundation in 1990 and has supported many scholars from China and other Asian
countries (ANA, 2005, 2007, 2009). While the number reported for this category
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was small, Tokyu and ANA have been consistently offering their scholarship
program for a long time.
This category was reported with a small frequency (13 out of 277) within a
community activity during the study period. Although, the six activities mentioned
in 2005 by air transport was the highest, only one activity was reported in 2007 and
2009. Of those six activities in 2005, five activities were related to the Mid Niigata
Prefecture Earthquake and the Sumatra Earthquake in 2005. The earthquakes of
Niigata and Sumatra were not mentioned in the ANA 2007 and 2009 report. These
earthquakes caused devastating impacts on human life, economy and environment
(Moe & Pathranarakul 2006). Therefore it appeared that this category was reported
as a disaster response.
This category was reported with a very small frequency (10 out of 277) within a
community activity during the study period. The main activity of community
welfare was to help local people and areas where the companies performed
business activities. While seven activities were mentioned in 2005, this decreased
to one activity, and then increased to two. Of these seven activities in 2005, five
activities were reported by ANA. As ANA’s one of the six course of actions on
corporate philosophy is to ‘contribute to society’ (ANA, 2005, p. 12), ANA was the
most proactive in community welfare activities when natural disaster occurred. As
Japanese central government has created a Ministry of Children and Families and
integrated the implementation divisions of central and local governments aiming to
reduce number of children on waiting lists to enter kindergartens and nursery
schools (METI, 2010b). JR-East, has been cooperating with local governments and
operating nursing schools and nursing care along its railway lines (JR-East, 2007).
The New Growth Strategy has influenced ways that Japanese operates business,
community and society.
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5.6.9 Charitable Donations (National) (C8)
Domestic charitable donations were reported with a very small frequency (9 out of
277) within a community activity and decreased year by year during the study
period. Therefore it was identified that this category was not a popular community
activity during the study period. In 2005, six activities were mentioned, two in
2007, and then only one activity was mentioned in 2009. One explanation for this
decline may be that when the Niigata Prefecture Earthquake struck on October in
2004, many Japanese firms voluntarily provided rescue-services and monetary
donations in late 2004 and early 2005, however, in later years no domestic natural
disasters occurred. An example of this is that responding to the Mid Niigata
Prefecture Earthquake, ANA shipped supplies and organised financial aids and
donations raised by ANA’s employees (ANA, 2005).
This category showed a very small frequency (6 out of 277) within a community
activity during the study period. The main national welfare activity reported was
rescuing people or areas from natural disasters; the company response reflected
their geographical operational areas. ANA was the most proactive in this category.
In 2005, ANA mentioned rescuing the victims from 2004 Mid Niigata Prefecture
Earthquake and other national welfare programs. In 2009, due to the reopening the
Miyakejima airport after the volcanic eruption on the island in 2000, ANA
organised the project to plant 1,000 trees of native species. As ANA’s business
146
operations areas are geographically wide, the company is capable to access to
disaster area using their aircraft.
This category was the least frequently reported (5 out of 277) within a community
activity during the study period. The water transport industry reported most of the
activities. This is an interesting finding: while environment and workplace related
activities reported by water transport decreased year after year, the number of
global donations reported by the same sector increased. Air and water transport
reported aid activities and cash donations by the firms as well as donations
collected by their employees for victims for 2004 Sumatra Earthquake (ANA,
2005; MOL, 2005), tsunami victims resulting from 2004 Indian Ocean Earthquake
(MOL, 2005), 2006 central Java Indonesia Earthquake (MOL, 2007), 2008 Great
Sichuan earthquake in China (MOL, 2009), victims from 2008 Cyclone Nargis in
Myanmar (MOL, 2009).
5.7 Conclusion
Chapter Five, findings and discussions, has introduced CSR activities according to
the four themes of environment, workplace, community and marketplace. Then,
CSR activities from four themes were discussed with greater details based on range
of topics covered, level of coverage, reporting frequency, the changes in reporting
frequency over the years, and possible drivers of CSR activities that were discussed
in literature reviews and Japanese context. The findings revealed that while themes
and topics reported were mostly followed by the large organisations’ guidelines
such as GRI, the actual activities reported were related to local cultural activities
and local policies. The following concluding chapter will provide a summary of
this research and conclude the two research problems. The chapter will further
discuss the implication for theory, policies and practices, and then finally suggest
future research with acknowledgement of the limitations of this study.
147
CHAPTER 6: Discussion and Conclusion
6.1 Introduction
This chapter will summarise the major findings. Research questions one and two
will be answered. The implications for theory will be explained by proposing a new
framework that explains key factors that influenced Japanese transport companies
to act and report on CSR according to the four categories: environment,
marketplace, workplace, and community domains. After the introduction of the
proposed framework, finally, the thesis will discuss the implications for policies
and practices, the limitations of this research and suggestions for future research.
What CSR activities are more frequently reported by Japanese firms within the
transport industry?
In total 2,220 activities: 890 from environment, 579 from marketplace, 474 from
workplace, and 277 from community were reported during the study period 2005-
2009. This indicates that the environmental domain was the most noticeable theme
for this research. In general, firms have internal and external pressures from
various stakeholders as to what CSR activities to implement and what to disclose in
their CSR reports. Previous studies identified who and what matters to CEOs/top-
managers (Agle, et al., 1999; Wood, 1991) and the most important stakeholders
(Engle, 2007; Holcomb, et al., 2007). Amongst numerous activities, firms prioritise
the most important/useful activities to disclose in accordance with their own
concerns/values. Through the inductive process with open coding utilised in this
research, 43 categories as coded were identified. Looking at all the categories of
CSR activities from across the four domains, providing public safety (187
activities) from the marketplace domain; waste management and the 3Rs (170
activities) and environmental innovation (146 activities) from the environmental
domain were the top three most frequently reported CSR activities. Therefore, the
148
findings indicate that these three activities were treated as the most important
issues for the investigated firms.
Are the patterns of CSR activities found in Japanese firms within the transport
industry consistent across time?
Despite the fact that significant patterns or consistency in reporting frequency were
not discovered, this longitudinal research identified three categories with
remarkable growth over a four-year period (refer to Figure 6.1).
149
Figure 6.1: Japanese Transport Industry Reporting Trend 2005-2009
90
Transport Industry Reporting Trend
E1
M9, 85 E2
E3
80 E4
E5
E6
E7
M9, 72 E8
70 E9
E10
E11
E12
W1
60 W2
W3
Number of Activities Reported
W4
W5
W6
50 W7
W8
W9
W10
C1
40 C2
E8, 39
C3
C4
W6, 35
C5
E8, 31 C6
30 M9, 30 C7
C8
C9
C10
C11
20
E8, 19 M1
M2
W6, 16
M3
M4
M5
10 W6, 10
M6
M7
M8
M9
M10
0
2005 2007 2009
150
At a glance the three categories (numbered M9, E8, and W6) showed consistent
increases over a four-year period. However, when proportional changes in total
figures within each domain were measured, this provided a more nuanced
indication of growth. Table 6.2 shows how the reporting frequency of the three
categories changed.
‘Providing public safety’ showed significant growth between 2005 and 2007,
which was maintained in 2009. As discussed in Section 5.4.1, both railway
companies added new ‘safety’ sections in their CSR reports from 2007. This was
in response to frequent railway accidents and the Revision of Railway Enterprise
Law discussed in Section 3.6.4.2. ‘Career planning and flexible work practice’
showed a remarkable increase between 2007 and 2009. In 2006 two laws - EEOA
revision and the Industrial Safety and Health Act for 40-hour working week – were
revised. ‘Working under law and compliance’ showed a moderate but steady
increase. The main activity reported under this category was ISO certificates. The
ISO 14000 series was released in 1996 and revised in 2004 (Nishitani, 2009), thus
it was not an urgent issue during the study period. Looking at proportional change,
(1) ‘providing public safety’ and working under law and compliance’ doubled, and
(2) ‘career planning and flexible work practice’ almost tripled over the four-year
period. These results revealed that while Japanese transport companies followed
various laws, they responded to the safety related laws more promptly than
workplace related laws. However, ‘career planning and flexible work practice’ was
the focus of activity in 2009 within the workplace domain. In the next section, this
thesis will discuss the influential drivers of CSR activities and possible institutional
151
motivations behind reporting priority according to the four domains: environment,
marketplace, workplace, and community and synthesise this discussion with extant
CSR literature.
Although it was decided not to use Carroll’s four domains as a coding scheme for
this thesis, due to identified problems with the framework (eg, Geva, 2008;
Schwartz & Carroll, 2003), the findings of this research support the existence of
four domains of the CSR. For example, (1) economic responsibilities were the
basis of the financial component of business sustainability for marketplace,
environmental and workplace issues, (2) legal responsibilities were heavily
reported as environmental and workplace issues, (3) ethical responsibilities were
discussed on environment and workplace issues, and (4) philanthropic
responsibilities were mainly stated as community issues. Further, Carroll’s (1991)
model identifies that philanthropic contributions are the least prioritised, and the
numerical results of this research correspond with this finding. This thesis also
identified internal institutional motivations drawn from three theories: stakeholders,
legitimacy and values, and external factors which acted as influential drivers.
The CSR process, for Japanese transport companies, was influenced by the urgent
demands of stakeholders and this dictated the timeliness with which activities were
implemented and disclosed. In response to the Japanese government’s
commitment to the Kyoto Protocol, the Transport industry association set their own
targets to reduce GHG emissions in 1997. As required by Keidanren’s Voluntary
Action Plan, Japanese transport companies started to speed up their own
environmental activities. It was obvious that the most significant change for
corporate social disclosure in 1985-1986 to 2002 was the rapid increase of
environmental responsibility reporting (from 11% to 90.2%) (Fukukawa & Moon,
2004). In the case of the Japanese transport industry, management in transport
companies showed strong concerns for urgent action towards environmental issues,
152
and these concerns were their core values at that time. Mitchell, Ale, and Wood
(1997) also believe companies are highly time sensitive to stakeholder responses
particularly with environmental issues and disasters/accidents. Therefore, urgent
stakeholder demands are one of the probable explanations for Japanese companies’
prompt actions.
Influential external drivers that enhanced the activities and reporting intensity of
CSR were identified in this research. The companies set their own rules, policies,
standards and immediate responses based on: (1) international bodies such as
OECD, APEC UN and ISO; (2) the actions of the Japanese government at central
and local-level; (3) industry self-regulatory bodies that pursue collective
rulemaking at industry-level (Omarova, 2011); (4) the global financial crisis; (5)
153
natural disasters; (6) the firm’s social and economic position; and (7) public
concern.
Figure 6.2 is a new framework developed from this thesis. The findings and the
author’s triangulation with the secondary data sources such as the government
policies documents identifies the following as the most influential external drivers
of CSR activities for the four domains.
Environment
Reporting International Bodies Japanese Government
Intensity Industry Self-regulatory Bodies Firms
(High)
Marketplace
Workplace
Community
(Low)
Natural Disasters Public Firms
154
2004). As previously discussed, Kolk (2003) identified that Japanese companies
carefully followed the Japanese government’s environmental reporting
requirements, which corresponds to the findings of this thesis.
Figure 3.1 illustrated that International bodies such as UN, OECD and APEC
influenced the Japanese government as environmental regulators. Then the
transport industry acted as industry-wide self-regulator, and finally firms set their
own policies, compliances and strategies. Linking to theories discussed in Section
2.6.1, Stakeholders as Key Driver, the driver of CSR is for companies to create
value by satisfying stakeholders. As with Hoffman’s (2001) twelve field-level
drivers of corporate environmental practice, this thesis has ascertained that
regulatory agencies (acting for or on behalf of a government) were the focus of
Japanese transport management in establishing strong stakeholder relationships.
As further suggested in Section 2.6.2, transport was the industry that most strongly
relied on legitimacy: (1) to improve its image (2) and to be recognized for its moral
leadership. Therefore, following government requirements for environmental
practices it was ranked highly in the hierarchical arrangement of values and
perceived social responsibility, by senior management of Japanese transport
companies, during the study period.
155
that the category of providing a better product/service was the second most
proactively reported within the marketplace domain. ANA acknowledges the
competitive environment and reported that they strived to establish a distinctive
company image to retain customers for future business sustainability. Therefore, it
was concluded that while following regulations and compliances, Japanese
transport companies had to keep improving their performances to meet social
demands that led to customer loyalty and standing-out amongst competitors. This
also corresponds with the extant literature that suggests that transport companies
rely on legitimacy, for possible image improvement and for recognition for moral
leadership (Brønn & Vidaver-Cohen, 2009).
Japanese cultural values are still embedded within workplace practices. With the
discussion in Section 3.6.2.1 Gender Equality, EEO laws have affected how firms
deal with gender equality issues in order to maintain legitimacy, and the findings
revealed all firms that were investigated have been reporting most current standards
such as equal opportunity and flexible working hours. However, the findings
revealed that Japanese transport companies have been adopting gender equality,
very slowly. One possible explanation is the fact that Japan scores the highest in
masculinity in Hofstede’s five dimensions of culture (Crotts & Erdmann, 2000).
However in terms of age discrimination, Japanese firms adopted reemployment
schemes for senior citizens almost immediately after the law was introduced.
Therefore it can be said that the Japanese still respect and try to keep their
traditional cultural values alive in the workplace.
Most community activities were driven by the values of decision makers. The
differences in terms of legal aspects between the community domain and the
environment/workplace domains were that there were no strict new laws or
regulations for community-related issues in Japan during the study period.
Therefore, most of the community activities reported were reactions to disasters,
156
(such as earthquakes) related rescues and support. The victims’ and their families’
calls for help forced business firms to react promptly. This may be because ‘when
a firm lags behind the societal expectations of its time, beyond a critical point, the
firm will lose organisational legitimacy’ (Zyglidopoulos, 2003, p. 77). For
example, in relation to local disasters/accidents, the firms were highly time
sensitive to stakeholders’ responses (Mitchell, Agle, & Wood, 1997). This
suggests that CSR activities and reporting were influenced by the social values of
senior management, at that time.
In general, social values remain strongly embedded in Japanese culture, yet the
evidence of philanthropic activities (such as donations) was not highlighted in the
CSR reports. From a Japanese context, this result does not indicate that managers
of Japanese firms were less likely to be concerned good corporate citizens. Rather,
the cognitive perceptions of what should be considered as social contributions (not
only donations) may be different to Western approaches. Charitable donations
could be seen as a contractual obligation, and less likely to be seen as philanthropic
to Japanese society. Therefore, either Japanese firms focus on other types of
philanthropic activities, or firms many not report them even though donations are
present. This is an area that requires further investigation.
Regardless of the fact that CSR reporting was a voluntary activity rather than
compulsory for Japanese companies; they were proactive in the disclosure of their
CSR activities. The theoretical contributions of this thesis conclude that while the
priority to implement and report CSR activities was externally enforced by
government interventions institutional legitimacy and decision makers’ values were
internally motivated.
As far as policy implications go, the findings identified in this research may not be
universally applicable as Japan has a unique culture that ‘is fundamentally not
copiable’ (Glisby & Holden, 2003, p. 35). However, understanding what Japanese
157
firms are reporting in CSR reports and understanding the mechanisms behind the
activities is very important for non-Japanese organisations. Most activities reported
in the CSR reports were found in the GRI guidelines; however, activities such as
‘energy efficiency’ were not included in the guidelines provided by CSR agencies.
This research coded these inductively into appropriate categories. It might be that,
as an Anglo-American (Fukukawa & Moon, 2004) framework, the GRI guidelines
may not be suitable to the Japanese context. However, the GRI is the dominant
framework used in Japan for GRI-based sustainability reporting (Tanimoto &
Suzuki, 2005). This suggests that the GRI requires updating and expanding in order
to be more widely applicable. Therefore this research may contribute to updating
the GRI framework.
The findings revealed that each firm has its own themes and categories for
reporting, even though the firms broadly use the GRI guidelines. These categories
were influenced by what has happened in the local environment and what firms
believe appropriate. Therefore, this research identified that much of the content
reported by the Japanese transport firms was not included in the GRI guidelines.
This means researchers who use quantitative content analysis may not realise that
Japanese firms were reporting high priority activities outside of the GRI guidelines.
These activities may not be in researchers’ initial search categories and would
therefore not be reported. For example, especially for the area of philanthropic
activities for communities and society, previous studies concluded that Japanese
firms prioritise internal stakeholders over external stakeholders. Therefore, these
studies concluded that Japanese firms were not community or society oriented.
Three of the five firms investigated in this research discussed employees under the
‘society’ section in 2009. This indicates that Japanese firms recognise that
employees are members of the society, thus looking after their employees is part of
a societal contribution (Fukukawa & Moon, 2004). This means employees are
internal as well as external stakeholders. Therefore, researchers who use
quantitative content analysis to study CSR report need to remain aware of this issue.
158
6.6 Limitations and Future Research
This research only used five transport companies in Japan. These companies are
large in size, have overseas investors, and have been publishing CSR reports
annually. This implies their CSR involvement might be more active than
companies that were not used in this thesis. Therefore, this sampling strategy might
have influenced the findings and the outcome of the study.
Further, this research only examined the businesses’ perspective, not societies’ side
of the story. Japanese females are being encouraged to stay at work and to balance
their career and mothering life. However, again it is unknown if these females and
their husbands are happy to accept the new way, and whether they are succeeding
or failing in achieving work-life balance. Further, it is also unknown whether
businesses truly prefer to employ talented Japanese females or to employ average
male workers. Firms may simply be reporting these work-related issues to global
stakeholders. Therefore, what they are reporting does not necessarily mean that this
is what they want to do. Further research would be required to unpack these
complex issues.
The prevalence and importance of individual values was not able to be assessed
due to the nature of the methodology utilised. Pratima and Kendall (2000) and
Takagaki (2010b) identified that individual values for social belief by charismatic
and powerful managers influence responsiveness towards ecological issues. Further,
Kabanoff and Daly (2002) revealed that different types of espoused values
transform over time in response to changes in what senior managers want their
159
organisations to be. Therefore, this study was not able to capture the ‘value level’
of CSR activities. Future study needs to examine this by conducting in-depth
interviews or surveys at the level of individual within companies.
6.7 Conclusion
Chapter One summarised the foundations and structure of this research, the
background to the research, two research questions, introduced the adopted
methods, and justified the contributions, limitation and delimitations. Chapter Two
visited the previous studies in CSR, aiming to build theoretical foundations and to
identify research gaps. The definitions of CSR were discussed, CSR activities were
explored, and key drivers for reporting CSR activities were discussed with
stakeholder, legitimacy and values points of view. Chapter Three visited Japanese
business practices related to CSR activities and reporting in order to build research
questions that were based on Chapters Two and Three. The background of the
Japanese context was introduced, and recent history and current practices related to
CSR were explored. After distinct characters of the Japanese government, firms,
and corporate governance were explored, CSR drivers of Japanese firms were
examined. The Japanese transport industry’s environmental CSR activities were
discussed, and finally research questions were introduced.
Chapter Four described the methodology of data collection and analysis used to
answer the research questions. First of all, the reasons why a relativist approach as
a research paradigm was adopted and why qualitative methods can make important
contributions to this research more than quantitative method were justified. After
the introduction of the research design strategy, the instruments used to collect and
analyse data were discussed. The paper then introduced the population and
sampling frame, and described coding procedures for thematic analysis. Finally the
four criteria for trustworthiness of the methodology, methodological limitations
and delimitations were discussed. Therefore Chapter Four justified how the
designed methodology was able to discover implications of phenomena that this
research was aiming to answer.
160
Chapter Five explored an overview of CSR activities in the transport industry in
Japan. The coded CSR activities that were derived from the qualitative content
analysis were based on the four themes: environment, workplace, community and
marketplace were discussed with the bar charts. Then, CSR activities from the four
themes were further grouped into four reporting patterns: upward, downward,
upward and downward, and downward and upward. Discussion provided greater
details based on reporting frequency, the changes in reporting frequency over the
years, the contents covered, and possible drivers of these CSR activities.
The final chapter answered the two research questions, discussed implications for
theory based on the findings in environmental, marketplace, workplace and
community domain. Implications for policies and practices were discussed. Finally,
the limitations of the research are outlined and directions for future research were
given.
161
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