Low and High‐Hanging Fruit:  

A Framework for Characterizing CSR Issues 

 

 

 

Faculty of Economics and Business Administration 

VU University, Amsterdam   

 

 

 

 

 

 

by Sean Filidis, June 2015 

Student Number: 2513408 

Correspondence: seanfilidis@gmail.com 

 

Thesis Supervisor: Prof. C.M.J. Wickert 

Second Reader: Prof. A.C. Guldemond 

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Executive Summary 

Corporate social responsibility (CSR) is becoming an increasingly important topic both in

business and in academia. Consumers are increasingly concerned with issues such as human rights

and environmental standards when they make purchasing decisions, and as a result of this

corporations are taking a more proactive approach to CSR. At the same time public skepticism around

CSR is on the rise as more consumers see CSR as nothing more than a self-serving attempt by

companies to whitewash their reputation while doing little of real benefit for society. Part of the

reason for this skepticism is that firms, in their eagerness to obtain the status of “socially responsible

company,” tend to focus on easy CSR issues for which they may also gain some benefit, while

ignoring more difficult ones—ones that are difficult to justify due to the lack of incentives. Many

observers ask whether these “easy” CSR activities which also profit firms should be called socially

responsible at all. There is a need to distinguish between firms who do this and firms who address

more difficult and pressing issues.

This distinction between “easy” CSR and “difficult” CSR—or what this paper metaphorically

refers to low- and high-hanging fruits—is still quite ambiguous. While various authors have used the

language of low- and high-hanging fruit in passing, nothing has been written to really solidify the idea

and ground it in theory. In order to answer the question of why companies are eager to engage in

certain CSR activities and not in others, this work aims to create a new theoretical framework which

will allow us to characterize CSR issues according to their relative difficulty. The framework

examines how the potential for profit, the influence of powerful stakeholders and the presence of

institutional pressures act as factors which incentivize companies to engage in CSR. The degree to

which a CSR activity can be said to be “easy” or “difficult” is then determined by the number of

factors present, and the intensity to which they affect the issue.

While the potential for profit is the most obvious incentivizing factor in determining whether

a given issue is a low- or high-hanging fruit, it is far from the whole picture. Many socially beneficial

activities that companies engage in are not necessarily profitable in the short term, but may still be

necessary for firm survival. By incorporating stakeholder theory we see that when CSR issues

represent the interests of powerful stakeholders, firms are incentivized to address these issues in order

to placate stakeholders regardless of the immediate profitability involved. Institutional theory further

informs the framework by showing us that the degree to which a particular CSR issue has been

institutionalized by society will govern the extent that firms are incentivized to address them in order

to maintain legitimacy. The resulting model allows us to look beyond only profitability and determine

what other benefits a firm derives from its CSR undertakings. Making the distinction between low-

and high hanging fruits more concrete will have implications as to how we assess a company’s true

level of social responsibility.   

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Contents  

Executive Summary ...................................................................................................................................... 2 

Introduction .................................................................................................................................................. 4 

Defining CSR ................................................................................................................................................. 7 

Literary Context ............................................................................................................................................ 7 

What We Already Know ............................................................................................................................. 10 

Table 1: Socially Beneficial Activities & Profitability ............................................................................... 12 

Karpoff’s Matrix ......................................................................................................................................... 13 

Figure 1: Karpoff’s Matrix ....................................................................................................................... 13 

Table 2: Karpoff’s Activities as Low or High‐Hanging Fruit ..................................................................... 14 

Stakeholder Theory .................................................................................................................................... 16 

Applying Stakeholder Theory to CSR ...................................................................................................... 17 

Figure 2: Mitchell’s Stakeholder Typology .............................................................................................. 18 

Table 3: CSR Issues Reflecting Stakeholder Interests ............................................................................. 20 

Institutional Theory .................................................................................................................................... 21 

Applying Institutional Theory To CSR ...................................................................................................... 22 

Table 4: CSR Issues Affected by Isomorphism ........................................................................................ 25 

A New Model .............................................................................................................................................. 26 

Table 5: Classifying CSR Issues & Activities ............................................................................................. 26 

Figure 3: Model for Classifying CSR Issues According to Their Difficulty ................................................ 27 

Applying the Model ................................................................................................................................. 28 

Discussion & Further Research .................................................................................................................. 31 

References .................................................................................................................................................. 32 

 

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Introduction 

Today, one would be hard-pressed to find a company headquartered in the Global North that

does not have a substantive corporate social responsibility (CSR) policy statement prominently

displayed on their website. For large multinational companies, especially those who have endured

criticism in the past such as Nike or Shell, an argument could be made that being seen as socially

responsible has become a crucial and central element in managing their brand images owing to the

fact that CSR accounts for a large part of how consumers form opinions about companies (Parguel et

al., 2011; Dawkins & Lewis, 2003). Such large firms often devote an entire section of their website to

CSR and produce extensive reports on the topic. But even small and medium sized businesses are

jumping on the bandwagon realizing that CSR initiatives can be a source of competitive advantage

and that consumer demands for ethical products and services is only expected to grow (Princic, 2003).

While CSR is a growing trend both in academic work and in the public sphere, the idea that

business entities have certain obligations related to the welfare of the communities in which they

operate is not at all new (Dawkins & Lewis, 2003; Carroll, 1999). The prevalence of many high-

profile corporate scandals, the media attention that they have received and growing consumer

awareness of issues related to human rights and the environment have been major factors in causing

the concept to be widely popularized in the last couple decades (Wagner et al., 2009). Simply

perusing through business related magazines, blogs or Twitter feeds reveals the immense attention the

topic is currently receiving. The very names of popular and relatively recent academic journals such

as Corporate Social Responsibility and Environmental Management and the Journal of Management

and Sustainability reveals the same trend in the world of academia. No attentive person can avoid

noticing the many “trending” terms in today’s printed or online media; terms such as sustainability,

fair trade, carbon footprints, carbon neutral, ethical sourcing, green, renewable resources and equal

pay—to name a few.

At the same time, much public skepticism has arisen about this trend (Wagner et al., 2009;

Skarmeas & Leonidou, 2013). Alleged practices of “greenwashing,” or promoting the perception that

their policies are more eco-friendly than they actually are, has become problematic as companies

strive to meet the demands of increasingly environmentally-conscious consumers (Parguel et al.,

2011). “Bluewashing” is another term used to criticize companies who flout their supposed

commitment to socially responsible or humanitarian practices but who do so for public relations and

economic gains, often not meeting these commitments in practice, or doing so only superficially

(Runhaar & Lafferty, 2009; Berliner & Prakash, 2015). To further fuel the skepticism, despite the

apparent increase in responsible business practices it seems that the rate of corporate scandals and

revelations of human rights abuses is only increasing in frequency (Wagner et al., 2009; Skarmeas &

Leonidou, 2013). Thus we are confronted with what appears to be a paradox: companies are

increasingly acknowledging and addressing their social responsibilities by adopting CSR practices,

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but despite this the global situation does not seem to be improving—or at least there are competing

narratives as to whether or not certain situations are improving. The most recent annual review of the

United Nations Global Compact shows that while membership has been growing steadily, many

issues—such as the disclosure of sustainability information and lobbying activities, attention to

human rights and the development and evaluation of sustainability goals at management level—

remain at depressingly low levels (UNGC, 2012).

Looking more specifically at the actual activities companies engage in helps to explain the

discrepancy between the apparent positive trend in CSR and the seemingly unimproved global

situation; and it also helps to illuminate the reason for much of the skepticism. In their eagerness to

obtain the status of “socially responsible company,” firms tend to focus on easy CSR issues for which

they may gain some benefit, while ignoring difficult ones (hence the accusations of blue and

greenwashing) (Berliner & Prakash, 2015). “Easy” CSR issues are typically understood to involve

activities for which a business case can be made; they directly or indirectly improve financial

performance and thus incentivize firms to take action (Carroll & Shabana, 2010). “Difficult” CSR

issues, on the other hand, do not present companies with sufficient incentives for action and are

therefore largely left unaddressed. It is important to note that when speaking of “difficult” we are not

referring here to activities that are operationally difficult, such as going to the moon or other activities

that are hard to implement because the company lacks the necessary means. Rather, we are referring

to activities which are plausible, but which the company has a difficult time justifying due to a lack of

incentives. These issues are difficult to address because they typically require some amount of

sacrifice and their potential for improving the firm’s bottom line is doubtful.

Some writers have described this situation using the metaphor of low- and high-hanging fruit

(Kourula et al., 2015); companies always tend to go after the low-hanging fruits because it presents

them with the biggest reward for the least amount of effort. An example of such a low-hanging CSR

issue might be a coffee vendor switching to recycled paper cups. Doing so would be beneficial for

society because of its positive impact on the environment, but it would also be beneficial for the

vendor in that it may attract more environmentally-conscious customers. In contrast, a high-hanging

fruit might be responding to the possible use of forced labor on the farms from which the vendor buys

its coffee. Addressing such a situation would be costly, complicated and yield uncertain results. The

low-hanging fruits of CSR issues have typically already been widely addressed by companies and are

often acted on through similar activities. The high-hanging fruits are issues that few companies have

addressed and are issues for which innovative solutions are still required.

Given the understanding that companies will generally go after easy CSR issues—ones from

which they might derive some benefit—while ignoring more difficult ones, leads us to some

important philosophical questions. For example, should a firm’s pursuit of “easy” CSR activities in

order to realize gains actually be called socially responsible? Does our concept of CSR and the

language we use to describe it need to be refined in order to differentiate between firms who do this

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and firms who address more difficult and pressing CSR problems? How should this distinction affect

the way we evaluate the social performance of a firm? Rather than attempting to definitively answer

these philosophical questions here, the aim of this paper is to help carry this discussion forward by

making the distinction between “easy CSR” and “difficult CSR” less ambiguous and more measurable

through the application of theory. Thus, the objective of this work is to examine what it is exactly that

makes certain CSR issues more difficult than others, and then to develop a model for classifying these

issues according to their difficulty. More specifically, we will explore how the potential for profit, the

influence of powerful stakeholders and the presence of institutional pressures each act as incentives or

deterrents for companies in deciding which CSR issues to address and which not to. Based on these

factors, a framework will be proposed that will help us to characterize and differentiate between the

low- and high-hanging fruit of CSR, thus making the difference between “easy” and “difficult” less

ambiguous. This framework will be helpful for managers in assessing the costs and benefits of

different CSR activities. But it will also be helpful for researchers to better understand what benefits

must be attached to an issue to sufficiently incentivize companies to address it. And finally, by

making the distinction between easy and hard CSR more concrete, it will also serve the public as a

way for the social performance of companies to be better evaluated.

In the following section we will look at how corporate social responsibility has been defined

by others, and based on this, present a working definition that will serve as a guide for the rest of the

paper in determining which socially beneficial activities can be considered CSR and which cannot.

Then, there will be a brief review of the literature on CSR including frameworks which others have

proposed while also attempting to classify CSR issues. This review will serve to contextualize the

current discussion into the larger academic discourse, and it will also reveal the gap in the literature to

which this paper seeks to contribute.

 

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Defining CSR 

There is nothing new about the basic idea that business in its pursuit of profit also carries a

responsibility towards the community in which it operates. Some claim this idea has existed for

centuries (Carroll, 1999). However, corporate social responsibility—the current term that

encompasses this idea—first appeared in academic literature in the 1950s (Rahman, 2011). While the

definition has evolved over the decades and a complete consensus has never been reached, the basic

understanding is more or less summed up by Jones when he refers to “the notion that corporations

have an obligation to the constituent groups in society other than stockholders and beyond that

prescribed by law or union contract…” (Jones, 1980). In other words, companies and businesses have

a responsibility for the welfare of society at large that extends beyond the mere generation of profit or

adherence to the rule of law. Business leaders most often articulate this as extending a company’s

responsibility beyond only its shareholders to its various stakeholder groups (Dawkins & Lewis,

2003).

To build upon Jones’ definition, for the purpose of this paper corporate social responsibility

will specifically refer to programs or activities that a company engages in (or refrains from) that go

beyond mere economic requirements (e.g. producing profit, proper management), beyond mere legal

requirements, and that by doing so produce some intentional social benefit. Note that this definition

does not exclude activities that are both profitable and socially beneficial, but it does exclude

activities that companies are obligated to perform—in other words, this definition requires that they

be of a voluntary nature.

Literary Context 

A great deal of academic literature has been written on the topic of corporate social

responsibility. To begin with, there has been debate over whether or not CSR is even a legitimate and

worthwhile practice or if it is (and should remain) capitalism itself that is the driving force behind

social prosperity. Friedman (1962) famously wrote, “There is one and only one social responsibility

of business–to use its resources and engage in activities designed to increase its profits so long as it

stays within the rules of the game, which is to say, engages in open and free competition without

deception or fraud.” Other more recent authors have echoed this sentiment, e.g. Henderson in his book

Misguided Virtue: False notions of corporate social responsibility. Despite this debate, there is a

wider acknowledgment of the reality that CSR is of growing importance to firms and is therefore the

subject of continuing research. Much of this research has focused on testing and explaining the

relationship between a company’s CSR profile and their corporate financial performance (CFP).

McWilliams & Siegel (2000) found there to be a neutral relationship between corporate social

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performance (CSP)—a proxy for measuring CSR effectiveness—and firm profitability. They also

theorized that CSR could be reduced to a supply and demand function and that managers could use

cost-benefit analyses to determine optimal levels of CSR activities (McWilliams & Siegel, 2001).

This, according to them, is what accounts for the long-standing disagreement in literature about the

CSR-profitability link. Other researchers, however, have found evidence supporting a positive

relationship between CSR activities and a firm’s future profitability (Waddock & Graves, 1997;

Orlitzky et al., 2003; Godfrey, 2005). Mackey and Barney (2005) used a similar supply and demand

model for CSR, but this time gave evidence that investing in socially responsible activities could

maximize the market value of a firm (if not necessarily increase the present value of cash flows).

Other research has focused on the reasons why companies engage in socially responsible

activities. Aguilera, Rupp, Williams & Ganapathi (2007) argued that the debate over the CSR-CFP

link was now “settled” and that it was time to turn attention towards what “catalyzes” organizations to

pursue CRS activities. They developed a model of CSR antecedents in which they described three

types of motives that lead actors at different levels to pressure companies into engaging in CSR:

instrumental (driven by self-interest), relational (concerned with relationships between actors or group

members) and moral (concerned with ethical standards and moral principles). Additionally, literature

has focused on how consumers perceive companies who engage in CSR and what effect

communication about CSR activities has on company reputations (e.g. Wagner et al., 2009).

Regarding the characterization and categorization of CSR related issues—which is the aim of

this paper—the literature is less informative. Researchers have tried to create broad categories to

better understand the differences between CSR activities. An example of this would be Carroll’s CSR

pyramid (1991) in which a firm’s responsibilities are represented on a tier basis. At the bottom of the

pyramid are economic requirements placed upon the firm such as “being profitable,” further up are

legal requirements, above that are ethical “expectations,” and finally at the top of the pyramid are

philanthropic “desired” activities. One of the problems with this model is that it does not capture the

interrelatedness of these (often conflicting) responsibilities. Also, by placing philanthropy as a

separate component on the top of the pyramid it fails to integrate the concern for human welfare as a

fundamental principle in CSR—rather it depicts it as merely an add-on activity that corporations may

engage in if they happen to have the resources. Schwartz & Carroll (2003) introduce another model in

which CSR elements are represented in a Venn diagram depicting three domains: ethical, economic

and legal. This model is an improvement because it helps to explain the interrelatedness of issues by

the overlapping of different domains, and it also enables us to account for socially irresponsible

actions (activities that fall only in the economic domain). It does not, however, help in categorizing

CSR issues according to their difficultly. Another more recent model developed by Karpoff (in

Jackson, 2015), takes a simpler approach by producing a two-by-two matrix with 4 quadrants that

represent types of activities a firm can engage in. On the horizontal axis activities are divided into

profitable and not-profitable, and on the vertical axis activities are divided into socially beneficial and

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not socially beneficial. Karpoff relates activities that are both profitable and socially beneficial to

Adam Smith’s concept of the invisible hand, and activities that are neither profitable nor socially

beneficial as examples of bad management. The other two quadrants represent what he calls “grey

areas:” activities that are socially beneficial but not profitable and activities that are profitable but

socially detrimental. This model is helpful but incomplete because it looks at profitability only in a

very broad sense and at social benefit as a one-dimensional construct.

None of these previous models creates a sufficient framework allowing us to characterize and

differentiate between low- and high-hanging fruits or to identify and thoroughly explain the reasons

why various issues fall into different categories. Therefore, using Karpoff as a starting point, this

paper will attempt to address this deficiency in the literature and expand upon his model. Stakeholder

theory and institutional theory will be drawn upon to complement the matrix by shedding further light

on what particular CSR issues are difficult, why they are difficult and why companies often ignore

them. This will allow us to begin to classify CSR issues and examine the factors that characterize low-

and high-hanging fruit; and consequently help us begin to discuss the philosophical questions above

in a more meaningful way.

In the following section we will further discuss what we already know regarding which types

of CSR activities are commonly practiced by firms, which ones are avoided, and what we know about

some of the obvious reasons for this. Then, Karpoff’s matrix will be introduced and explained more

fully, pointing out its merits, but also explaining why it is insufficient for fully understanding the

conceptual problem. Afterwards, stakeholder theory and institutional theory will be introduced into

the discussion and we will see how they can help to explain why companies engage in some CSR

activities while ignoring others. Finally, the main contribution of this paper will be to suggest a new

model in which the various theories discussed are brought together to serve as a framework for

categorizing CSR issues. The paper will end with a discussion of some of the implications and also

suggestions for further research.

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What We Already Know 

Before introducing the various theories into this discussion, we will look at what is already

known about why businesses engage in some socially beneficial behavior and not in others. This will

include a brief examination of how business in general has played a beneficial role in society through

the generation of wealth. This is essential to understand because many of the reasons why companies

engage in (or refrain from) socially beneficial activities requires no further explanation than to

demonstrate that they are byproducts of regular business activities (e.g. Conerly, 2015). This leads us

to first address the obvious cases of low- and high-hanging fruits—CSR issues for which

categorization poses no problem.

As the 18th century economist Adam Smith noted in his classic The Wealth of Nations,

business has been benefiting society long before the idea of corporate social responsibility was

mentioned in literature. This fact is obvious when considering that if we, as consumers, did not benefit

from the products or services that a business generated, we would not patronize them and they would

go out of business. A restaurant where nobody enjoys eating (where nobody derives a benefit) will not

stay in business long. Given this understanding, many of the activities which firms of all sizes engage

in today might be called “socially beneficial” whether or not they were intentionally undertaken to

create some kind of social benefit; and virtually all businesses can be said to be socially beneficial in

one way or another.

But the social gains created by business go even further than benefiting only the consumer.

Business also produces social benefit in less direct ways. As firms conduct business, wealth is also

created—and not only for the owners of the business, but for many parties involved. This is what

Smith spoke of when he described the concept of the Invisible Hand: much of what companies do in

order to gain profits through trade and manufacturing also unintentionally benefits society at large

(Smith, [1776] 1963). Take, for example, a consumer buying a new car. Those directly involved in the

transaction—the consumer and the car manufacturer—are not the only parties who derive some sort

of benefit. Many other actors benefit indirectly as well, including (to name only a few) the employees

of the car manufacturer whose salaries depend on the sale of the car; the salesmen at the dealership

who earns a commission; the companies that mine the ore and other raw materials which go into the

making of the car; even those who make the roads which are necessary as a result of the demand for

cars. All of these parties benefit from the demand the consumer brings, and the firm’s business of

meeting that demand. In short, business is good not only for its owners, but for society in general as it

creates wealth, jobs and even innovations which will benefit others in the future.

Socially beneficial activities firms engage in that are simply the result of doing business as

usual are the no-brainers of CSR. These are activities which companies will pursue because they are

profitable—the fact that they also benefit society is merely the mechanism of the market. In fact, it is

only because of the recent popularization of CSR as a concept that companies have begun to highlight

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the fact that many of their regular business operations happen to create social benefits (Grafström &

Windell, 2011).

On the other hand, there are many problems in the world today that have emerged as a result

of companies pursuing regular profit-seeking activities. The widespread public health problems

caused by smoking are an example of this; tobacco companies, in their pursuit of economic gain, are

(to a large degree) responsible for this socially undesirable reality. Additionally, companies are often

in a position to help to alleviate various societal problems, but for obvious reasons do not. It would

clearly be detrimental for a pesticide manufacturing company, as an example, to voluntarily launch

campaign encouraging people to buy only organically grown food. While such a move would

probably be socially beneficial (for the environment and, arguably, for public health), it would also be

in direct conflict with the company’s obligation to make a profit. Many such examples exist and

illustrate why some socially beneficial activities companies have no interest in engaging in.

Considering all of this, many of the reasons why companies engage in certain socially

beneficial activities and not in others are obvious—they are simply the result of business as usual and

the pursuit of profit. Applying this understanding to the issue at hand—characterizing CSR issues—

we arrive at the first factor that will help us differentiate between low- and high-hanging fruit:

potential profitability. On one hand we have easy CSR issues: these involve profitable business-as-

usual activities which companies would engage in regardless of whether any public scrutiny existed

and benefit society by way of Smith’s Invisible Hand. And on the other hand, we have difficult CSR

issues: these involve activities which a firm would not voluntarily engage in because it runs contrary

to their main objective—making profit.

It should also be noted that socially beneficial activities which are also profitable can be

broken down into two categories: 1) activities in which a company is already engaged as part of its

primary economic obligation to be profitable, and are now being advertised as socially responsible as

an opportunistic marketing-driven response to growing consumer awareness about CSR issues. And

2) new activities in which a company voluntarily engages in response to opportunities that have

emerged because of the popularization of CSR—activities that might not have been profitable a

couple decades ago but now are. According to the definition of CSR at the outset of this paper, only

the latter activity here can be considered a CSR activity because it involves a voluntary undertaking.

Thus, it is important to note that not all socially beneficial activities a firm engages in can be

classified as socially responsible. Table 1 below summarizes the difference between low- and high-

hanging fruits based on the factor of potential profitability.

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Table 1: Socially Beneficial Activities & Profitability 

Factor  High‐hanging fruits  Low‐hanging fruits  Not CSR 

Potential

Profitability

Activities which a firm would not

voluntarily engage in because it runs

contrary to their main objective—

making profit.

Profitable new business activities

undertaken in response to

opportunities created by the

popularization of CSR.

Profitable business-as-usual activities

which companies would engage in

regardless of whether any public

scrutiny existed, and then are dressed

up as CSR.

Besides these obvious situations where business activities benefit society through the overall

generation of wealth and innovation, or where societal problems are not addressed by companies who

consider the problems either contrary to their objective or outside of their domain, there is a whole

myriad of other situations and activities that are not so easily explained. Other factors come into play

besides general profitability, some of which we will address in later sections. In the next section we

will examine Karpoff’s matrix in more detail as he uses the concept of profitability and the Invisible

Hand to create his categories of firm activities. We will see that this model is useful, but that it is still

inadequate in that it fails to incorporate stakeholder issues and institutional theory, and it does not

investigate enough factors to allow us to categorize CSR issues according to their difficulty. 

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Karpoff’s Matrix 

Karpoff begins by asserting that the concept of the Invisible Hand works well for many types

of firm activities but not for all. The way he puts it is that “profitability and social desirability are not

perfectly correlated” (Karpoff [in Jackson], 2015). His reason for why there are areas in which the

Invisible Hand does not work well is that there are many socially beneficial activities which are not

profitable—and therefore firms do not engage in them; and there are many profitable activities that

firms engage in which are not socially beneficial—or may be downright detrimental to society. By

placing social desirability and profitability on two axis, he creates a matrix with four quadrants onto

which all firm activities can be mapped.

Source: Jackson, G., Brammer, S., Karpoff, J., Lange, D., Zavyalova, A., Harrington, B., Partnoy, F., King, B., Deephouse, D. (2014). Grey areas: irresponsible corporations and reputational dynamics. Socio-Economic Review, 12, 153-218

Activities that fall into quadrant I of his matrix are the types of business activities that we

defined in the previous section as low-hanging fruit. They are activities firms engage in because they

are profitable, and the fact that they produce social benefit is a bonus. Again, a distinction should be

made (and Karpoff fails to do this) between the two types of profitable, socially-beneficial activities

that can exist. Many of these activities are merely firms continuing to do what they have always done,

expressing their economic obligation to be profitable, and then perhaps dressing them up as CSR

Figure 1: Karpoff’s Matrix

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activities; whereas other activities are actually voluntary (chosen from among alternatives) and

produce profit only because there is a growing market for socially responsible products and services.

According to our definition, only the latter can really be considered CSR, and thus not all activities

which fall into quadrant I are really examples of corporate social responsibility.  

Quadrant III activities, according to Karpoff, are also related to the correlation between

profitability and social benefit which we discussed in the previous section—only this represents the

opposite situation. These are activities which neither produce profit nor benefit society at large. These

types of activities could be summarized as bad business practices. We can refer back to the example

of the restaurant where no one wants to eat (presumably because of poor products or services). In its

failure to provide social benefits the restaurant will not generate profits and eventually go out of

business. Again, we see the Invisible Hand at work in that what is profitable is often also socially

beneficial, but here we see the negative side—what produces no social benefit also produces no profit.

Quadrant II includes activities that would represent a social benefit, but firms do not engage

in them because they are unprofitable. We already mentioned this scenario in the previous section

with the example of the pesticide company. It would make no economic sense for a business to

engage in socially beneficial activities if they produced no profit, or worse, actually hurt their bottom

line. Engaging in such activities would go contrary to a firm’s economic obligations, and thus far

(with profitability still being our only factor) we sweepingly identified such activities as high-hanging

fruits.

Quadrant IV introduces us to something we have not yet discussed: situations in which firms

are able to generate a profit by doing something that is socially undesirable. The examples Karpoff

gives of such activities include fraud, bribery and pollution. By rephrasing the activities in quadrant

IV, we can add them to Table 1 as another example of high-hanging fruits—we need only refer to

them as profitable activities which a firm must stop engaging in in order to make them socially

beneficial. Thus, we have a second type of activity for which profitability is the main factor in making

it a difficult issue. By placing Karpoff’s activities into Table 1, we obtain the following:

Both quadrants II and IV run contrary to the general link between profitability and social

benefit that we established in the previous section. In both of these cases certain socially beneficial

activities are left unaddressed—either because they are unprofitable to engage in or because they

would be unprofitable to cease—and thus Karpoff’s model goes further in its ability to explain high-

Table 2: Karpoff’s Activities as Low or High‐Hanging Fruit 

Factor  High‐hanging fruits  Low‐hanging fruits  Not CSR  Potential Profitability

Quadrant II Quadrant IV

Quadrant I

Quadrant III

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hanging fruit than only Smith’s Invisible Hand could. However, there is also much that this model

does not help to explain. As mentioned before, the potential for profit is not the only factor that comes

into play in determining which CSR issues firms address. If quadrant IV activities such as fraud or

bribery are profitable, then why do firms not always engage in these activities? If quadrant III

activities (which might include charitable donations) are not profitable, then why is corporate

philanthropy on the rise (Kozlov, 2014)? In addition, potential profitability is not such a simple thing

to evaluate. While some socially beneficial activities may not directly produce profits, they may still

contribute towards a company’s competitive advantage and indirectly increase profitability in the long

run—particularly for companies pursuing a differentiation strategy (Jones, 1999)—and this is

something that is difficult to account for using the matrix. Also, as mentioned before, this matrix

looks at social benefit as only a one-dimensional construct. But what about activities that are

beneficial to certain members of society but detrimental to others? How do firms manage competing

and conflicting interests from society, and how can this be accounted for in a framework?

Clearly, there are other important factors besides potential profitability worth exploring in our

attempt to understand why certain CSR activities are more difficult than others. Karpoff lists some of

the determining factors apart from profitability himself, namely laws and regulations, management

morality and firm reputation. Some of these factors can be incorporated and accounted for by

introducing stakeholder theory and institutional theory into our discussion, and this will be the

objective of the following sections.

16  

Stakeholder Theory 

Stakeholder theory has become an important way of viewing corporations and has found an

important place in management literature ever since the book by Freeman, Strategic Management: A

Stakeholder Approach (1984) was published. The idea is that it is important for firms to give

consideration to the many other constituent groups that influence, or are influenced by a corporation

other than only its shareholders. Freeman defines stakeholders with a wide definition, “any group or

individual who can affect or is affected by the achievement of the organization's objectives”

(1984:46). And also with a more narrow definition, “those groups who are vital to the survival and

success of the firm” (in Bowie, 2013:98). Some of the most common stakeholders mentioned in

literature include customers, suppliers, investors, employees, governments, associations, interest

groups and communities (e.g. Roberts, 1992). This is different than the “conventional” view of the

firm which concerned itself only with inputs and outputs, and the generation of profit for a firm’s

shareholders. Whereas in the conventional view, suppliers, investors and employees contribute inputs

into the firm, and customers realize the majority benefits of the firm’s activities in transforming inputs

to outputs; stakeholder theory introduces many more actors into the equation and demonstrates that

the relationships they have with a firm are not necessarily one-way because all constituents

participating in the firm’s activities are also benefactors (Donaldson & Preston, 1995).

Stakeholder management involves the investment of time and resources into the management

of stakeholder interests, a departure from the more traditional view of management which formerly

concerned itself only with shareholder value maximization in its decision making (Freeman & Reed,

1983). In the stakeholder view, the corporation should be managed for the benefit of its stakeholders,

and the rights of groups who have interests or “stakes” in a company should be ensured (Evan &

Freeman, 1988). Consequently, with the increased acceptance by business leaders that firms have

responsibilities to groups other than its shareholders, additional management complications have

emerged. In making decisions, managers must now take into account the huge variety of differing

(and often competing) interests of its stakeholders and learn how to balance them. Given Freeman’s

original definition of “any group that can affect or is affected by,” stakeholders can be just about

anybody in society, making managing their interests a complex task. Thus the primary challenge for

management related to stakeholder theory is being able to identify, prioritize and balance stakeholder

claims (Mitchell et al., 1997; O’Riordan & Fairbrass, 2014).

Stakeholder theory is closely related to corporate social responsibility. Both of these ideas

present the firm as having responsibilities that extend beyond the economic obligation to make profit

and increase shareholder wealth. In fact, it could be said that the operationalization of CSR is the

responsible or ethical management of stakeholders because every CSR issue (whether environmental,

ethical, legal or related to human rights) is represented by the interests of some stakeholder group.

This interrelatedness can also be seen in various CSR definitions such as that by the United Nations

17  

Industrial Development Organization (UNIDO): “Corporate Social Responsibility is a management

concept whereby companies integrate social and environmental concerns in their business operations

and interactions with their stakeholders.” While CSR inevitably involves stakeholder management, it

is not always true that stakeholder management activities necessarily result in CSR—in other words,

the terms are not synonymous. For example, many of the activities in which firms engage to appease

stakeholder interest groups are necessitated by laws and regulations (e.g. the reporting of annual

financial statements are often required by law). Given the definition of CSR as requiring voluntary

action that goes beyond legal requirements, these types of activities could not be called CSR.

However, it is possible for a firm to go above and beyond legal requirements by, for example,

providing more detailed financial reports than are legally required with the aim of placating certain

stakeholders (in this case its shareholders and perhaps other interest groups with whom it considers its

corporate reputation important). In this case, such activities would fall into the domains of both

stakeholder management and CSR.

This interrelatedness makes the inclusion of stakeholder theory essential as an element in any

model that seeks to better understand and categorize CSR issues. Understanding the needs,

expectations and pressures that stakeholder groups place upon organizations can help us to understand

why firms find it easy (or difficult) to engage in certain CSR activities and not in others. For example,

Ullmann (1985) predicted that stakeholder power (the degree to which certain stakeholders control

key resources) is significantly related to a firm’s corporate social performance, especially in regards to

financial disclosure—and Roberts (1992) later verified this through empirical research.

Other stakeholder attributes besides power have been identified and used to classify

stakeholders by their influence on organizations. Mitchel et al. (1997) created a framework that

attempted to classify stakeholders according to three dimensions (power, legitimacy and urgency) in

an attempt to aid management in answering the question of “Who or What Really Counts.” We will

draw on his framework to help us understand how stakeholder issues affect firms’ decisions about

whether or not to engage in CSR activities and to help us further in developing a model for the

categorization of CSR issues.

 

Applying Stakeholder Theory to CSR 

According to the stakeholder typology developed by Mitchell et al. (1997), three overlapping

dimensions can be used to classify stakeholder groups and determine their salience, which they define

as “the degree to which managers give priority to competing stakeholder claims.” A stakeholder with

a high degree of salience is more likely to receive managerial attention and there will often be some

type of formal mechanisms—such as corporate policies, practices and guidelines—in place for

managing their interests (Mitchel et al., 1997). Stakeholders with a lower degree of salience are less

likely to be given priority in the case of competing claims. The three dimensions included in the

18  

typology are 1) power, which they define by stating, “a party to a relationship has power, to the extent

it has or can gain access to coercive, utilitarian, or normative means, to impose its will in the

relationship” (Mitchel et al., 1997); 2) legitimacy, which they define using Suchman’s definition: “a

generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate

within some socially constructed system of norms, values, beliefs, and definitions” (1995: 574); and

3) urgency, which they define as “the degree to which stakeholder claims call for immediate

attention” (Mitchel, et al., 1997). They depict these dimensions using a Venn diagram upon which

stakeholders can be mapped into 7 categories and their salience can be determined (see figure 2

below). Stakeholder groups in which only one of the three attributes are present have low salience,

whereas groups with 2 and 3 attributes have higher salience, respectively. With the understanding that

managers and the corporations that they represent have limited time, energy and resources available to

attend to stakeholder claims, this typology helps us to predict which stakeholder groups—and thus,

which related CSR issues—are more likely to be addressed than others.

Stakeholder groups where only one dimension of salience is perceived to be present by

managers are less likely to receive attention than are stakeholders where two or three dimensions are

perceived to be present (Mitchell et al., 1997). Therefore, logically speaking, wherever claims or

Figure 2: Mitchell’s Stakeholder Typology 

Source: Mitchell, R., Agle, B., Wood, D. (1997). Toward a Theory of Stakeholder Identification and Salience: Defining the

Principle of Who and What Really Counts. The Academy of Management Review, 22(4), 853-886

19  

interests by these low-salience stakeholders represent CSR issues, these too will receive less attention

than CSR issues represented by high-salience stakeholders. Among stakeholders with only one

attribute of salience, those with only power or only urgency are not relevant in this discussion because

in order for a stakeholder’s interests to represent a CSR issue those interests must be legitimate, as

according to Suchman’s definition above. Discretionary stakeholders (ones that possess only the

attribute of legitimacy), however, are of particular interest regarding CSR in that they possess

legitimate claims upon firms, but because they lack both power and urgency there is no pressure upon

firms to address them. Stated another way, where power and urgency are absent there exist insufficient

incentives for a firm to act in regards to a stakeholder’s interests. It therefore follows that when a

claim by a discretionary stakeholder represents a CSR issue, it should be classified as a high-hanging

fruit. This is because—as stakeholder theory shows—such stakeholders are unlikely to receive

priority amidst competing claims and thus the CSR issues which they represent will remain

unaddressed.

An example of a CSR issue related to discretionary stakeholders whose interests are often not

addressed—one that is particularly relevant in our increasingly globalized economy—are laborers in a

company’s supply chain who are victims of exploitation. While such groups certainly have a

legitimate claim upon the firm, they often receive scant attention from management because their

salience is low; they lack the power to exercise their will in the relationship. Only in cases where the

public is made aware of such situations do these stakeholder groups become salient, in that they

inherit the additional attribute of power (when an advocacy or legal group becomes involved), and

then firms are inclined to act in order to avoid consequences by more salient stakeholders (see for

example DeTienne & Lewis’ [2005] paper on the Nike case).

We have established that stakeholder claims in which legitimacy is the only salient attribute,

and where those claims represent CSR issues, should be classified as high-hanging fruit because firms

have little incentive to address them. Stakeholders whose claims are legitimate and also urgent,

however, are not necessarily in a better position. Mitchel et al. (1997) define these stakeholder groups

as “dependent stakeholders” because they rely on other, more powerful stakeholders such as advocacy

groups or governments for the power necessary to enforce their will. Returning to the case of

exploited workers making shoes for Nike, for many of them their claims were urgent—in some cases

workers did not have access to clean water—but it was not until their plight was described by a New

York Times journalist on a front-page story that Nike took action (DeTienne & Lewis, 2005). In this

case, the media, and afterwards advocacy groups adopted the urgent claims of the exploited workers

and moved them into a position of salience.

Dominant stakeholders (those with both legitimacy and power) and definitive stakeholders

(those with all three attributes), on the other hand, are very likely to have their claims addressed by

management (Mitchell et al., 1997). Probably the most obvious example of such stakeholders are

governments or other regulatory bodies. In the previous section, we posed the question that if fraud

20  

and bribery are profitable, why do companies not always engage in such activities? Stakeholder

theory gives us one clear answer: regulatory bodies such as governments have both the legitimacy and

the power to exert their will on a company (they have high salience), and therefore firms are very

responsive to their claims by acting in a responsible, law abiding way. Just as we see that CSR issues

which are represented by low-salience stakeholder claims receive little attention, here we see that

CSR issues represented by high-salience stakeholder claims are high on management’s list of

priorities.

An example of a CSR issue represented by another high-salience stakeholder group is

financial creditors who are concerned about social responsibility. Because creditors have control over

financial resources that are necessary for a company’s continued operation (they have power),

companies have a strong incentive to go above and beyond what is merely required by law in order to

satisfy their interests. Both Ullmann (1985) and Roberts (1992) postulated that the greater degree to

which a company relies on debt financing, the more they respond to creditor expectations to disclose

social responsibility information. Therefore, we see that where power and legitimacy exist together,

there are sufficient incentives for a firm to act in regards to a stakeholder’s interests; and if those

interests represent a CSR issue, then these should be classified as low-hanging fruit.

In this section we have established that salience—and more specifically, the presence of

power—will govern the priority given to a stakeholder’s legitimate claims. In other words, power acts

as a deciding factor as to whether certain stakeholder issues will be addressed. Therefore, the question

of whether a particular CSR issue is a low- or a high-hanging fruit is determined, in part, by whether

the connected stakeholder possesses power over the firm—whether it be economic power (as in

creditors), legal power (as in governments) or even the power to affect a firm’s reputation (as in the

media).

Table 3: CSR Issues Reflecting Stakeholder Interests 

Factor  High‐hanging fruits  Low‐hanging fruits  Not CSR  Stakeholder power

CSR issues that affect stakeholders whose claims are legitimate (and possibly urgent) but are lacking in the attribute of power.

CSR issues that affect stakeholders whose claims are legitimate (and possibly urgent) and who also possess the attribute of power.

Stakeholder interests where the attribute of power and/or urgency is present, but whose claims are not legitimate.

21  

Institutional Theory 

The Oxford English Dictionary (2015) defines an institution as “an established law, custom,

usage, practice, organization, or other element in the political or social life of a people; a regulative

principle or convention subservient to the needs of an organized community or the general ends of

civilization.” Business literature adds to this in describing it as a rule or expectation that is either

taken for granted, or enforced through public opinion or law  (Commons, 1950; Starbuck 1976).

According to Meyer & Rowen (1977), these societal rules have power to influence the structure and

practices of an organization. Their institutional perspective of the firm describes all organizations as

existing within an institutional environment, and postulates that this reality must be taken into account

in order for organizations to maintain legitimacy and ensure long-term survival. Furthermore, they

argue that many of the practices and structural elements that organizations adopt do not necessarily

exist to improve organizational performance, but are “rationalized myths” inherited from the

institutional context. They write, “organizations are driven to incorporate the practices and procedures

defined by prevailing rationalized concepts of organizational work and institutionalized in society.

Organizations that do so increase their legitimacy and their survival prospects, independent of the

immediate efficacy of the acquired practices and procedures” (Meyer & Rowan, 1977). In other

words, it makes sense for a firm to align itself to the institutionalized norms of the society in which it

is embedded and to adopt the prevailing practices which are important to the social environment in

which it operates—even if these do not directly contribute towards the economic goals of the firm—

for by doing so the firm can maximize its societal legitimacy, strengthen its support by acting in what

is considered a socially acceptable manner and help to secure its survival by protecting it from public

scrutiny.

Coupled with this idea is that of isomorphism, or the tendency of organizations in an

institutional environment towards homogenization (DiMaggio & Powell, 1983). Because society

places pressures and expectations upon organizations that govern their structures and practices, it

follows logically that as a field becomes more established, organizations within that field will begin to

resemble one another. Paraphrasing Schelling (1978), one could describe the process as organizations

responding to other organizations within an institutional context who are themselves responding to an

environment of organizational responses. DiMaggio & Powell (1983) write, “Organizations compete

not just for resources and customers, but for political power and social legitimacy, for social as well as

economic fitness.”

This continual competition by firms to act on collectively held values and be seen by society

as legitimate is helpful in explaining why firms often engage in some similar activities and not in

others. Two particular forms of isomorphism described by DiMaggio & Powell (1983) that are of

particular interest to the current discussion are 1) coercive isomorphism, which results from external

pressures and influences placed upon firms through either formal (e.g. governments or regulatory

22  

bodies making laws) or informal (e.g. specific cultural expectations) means; and 2) mimetic

isomorphism, which describes the process of firms imitating the practices of other firms whom they

perceive as being successful in a given area.

Applying Institutional Theory to CSR 

Jones (1999) connects the ideas of corporate social responsibility and institutional theory by

arguing that the degree to which social responsibility and stakeholder management takes place is

contingent on the extent to which the discourse of social responsibility exists in the sociocultural and

national contexts (among others) in which a firm operates. According to this argument, a society’s

dominant conceptualization of capitalism, for example, as either a system that is inherently

individualistic and should aim for owner profit maximization (the typical Friedman view), or a system

in which business and society are interrelated and corporations ought to minimize negative

externalities for their stakeholders (the typical Freeman view), will determine the incidence of

corporate social responsibility.

As this paper has argued at the outset, social responsibility is increasingly being perceived by

the public as an important factor for corporations to take into account in their business dealings (e.g.

Dawkins & Lewis, 2003). Stated in terms of institutional theory, it can be said that CSR is becoming

increasingly taken for granted by the public—that it is becoming an institutionalized norm within

Western society (see Bondy et al., 2012). To the extent that this is true, it can be expected that the

mechanism of coercive isomorphism will create increasingly more pressure upon corporations to

adopt CSR practices, and that the direction of a firm’s CSR activities will be governed by

institutionalized norms. And this can indeed be seen in simple fact that as consumer awareness about

CSR issues has increased, so have corporate efforts to give the impression of engaging in such issues,

either through meaningful action or at least by devoting large sections of their websites to CSR. Given

this understanding (the idea of CSR becoming an institutionalized norm and therefore creating more

pressure for corporations to adopt CSR practices in general), the relevant question then involves

determining which types of CSR activities are most encouraged by the effects of isomorphism, and

which types of CSR activities resist this effect.

Many socially beneficial activities firms engage in are never considered CSR because the

norms they reflect are taken for granted (they are “rationalized myths” which have taken their place in

the corporate structure). The number of hours employees are expected to work in a single day is an

example of such an issue where coercive isomorphism has quietly pressured firms to adopt certain

socially responsible behaviors. Campbell (2007) uses this example in his explanation of how the idea

of socially responsible behavior has changed throughout history. While it may have been normal

during the time of the Industrial Revolution for companies to expect their employees to work 10-14

hours per day, today this would typically be seen as inappropriate (and perhaps exploitative) firm

23  

behavior. As institutional theory dictates, the fact that most members of today’s Western societies

consider it normal for employees to be required to work no more than 8 hours in a single day places

the expectation upon firms not to exceed this norm. In other words, the 8-hour working day has

become institutionalized, and through the mechanism of isomorphism most firms accept this norm as

a socially responsible practice to uphold, even though it may not necessarily be optimal for

organizational performance. If a firm were to deviate from this institutionalized norm by increasing

obligatory daily working hours for the sake of increased performance, it would risk losing its

legitimacy in society.

This brings us to our first criteria for a low-hanging fruit from an institutional perspective:

any CSR issue that reflects an institutionalized norm which places a clear expectation on the firm by

society, and whereby departing from the norm would cause the firm to risk losing legitimacy, should

be considered a low-hanging fruit. The risk of losing legitimacy, in other words, provides sufficient

incentives for companies to voluntarily engage in socially beneficial behavior. Karpoff et al. (2007)

highlights the high costs incurred by firms when their corporate reputations (a proxy for legitimacy)1

are damaged because of deviating from social norms. Of course, this incentive is contingent on the

degree to which a company can expect to be caught and apprehended.

It should also be noted here that in most countries there are laws which govern the number of

hours employees are allowed to work and the additional compensation they should receive in the case

of overtime (and indeed, many of the issues that represent institutionalized norms are governed by

laws). When corporate policy merely extends far enough to comply with these laws, it can still be

attributed to coercive isomorphism (laws are institutions which place pressure upon the firm), but it

can no longer be considered CSR according to our definition because it does not involve voluntary

action. To the extent which socially beneficial corporate policy goes beyond requirements set by law

in order to satisfy societal expectations, it can be considered CSR. Examples of this also include

adhering to industry self-regulation and non-government organizations that establish “soft-law”

reflecting public discourse. Adhering to such non-obligatory but expected standards should be

considered socially responsible and the result of institutional isomorphism.

There are also CSR issues for which the effects of isomorphism do not prove sufficient in

prompting corporations to take enough action for the issue to be adequately addressed. Modern day

slavery is an example of an issue that, despite being universally condemned, manages to persist as a                                                              

 

1 Legitimacy can be closely related to reputation, and firm activities aimed at maintaining and increasing its legitimacy are closely related to its activities aimed at improving its reputation. King and Whetton (2008) connect the two concepts when they write, “Legitimacy and reputation are both perceptions of approval of an organization's actions. Legitimacy is a perception that organizations conform with taken-for-granted standards. Reputation is a perception that organizations are positively distinctive within their peer group.” Thus, losses to legitimacy would be assumed to be as severe or more than losses to reputation. 

24  

global problem—and in many cases is fueled by corporate rent-seeking activities (Crane, 2013).

According to the United Nations, there are currently an estimated 21 million victims of forced labor

worldwide (United Nations, 2014). Many of these cases of forced labor have been linked to the

supply chains of companies headquartered in Europe and the United States (e.g. Roberts, 2003).

Institutional theory would suggest that as the practice of slavery has come to be seen as an illegitimate

business practice by virtually all members of society, it should disappear. Given that this is not the

case, there must be some counter-effect that works against the principle of isomorphism and allows

organizations that profit by violating institutionalized norms to survive.

Crane (2013), gives us an answer in what he calls “institutional deflection,” a mechanism that

protects firms from isomorphic pressures in certain situations. He presents a complex model that

describes and explains many factors that contribute to the persistence of modern day slavery and its

resistance to the effects of isomorphism, including socioeconomic factors such as unemployment and

poverty, geographical factors such as distance and political isolation, regulatory factors such as the

strength of local governments and their susceptibility to corruption, and also local cultural factors

such as traditions and religious beliefs, all of which work against the established institutionalized

norms and enable slavery. He convincingly demonstrates that the issue is enormously complex and

that there are many more forces at work than merely isomorphism. He writes, “One implication of this

analysis is that pressures to conform to market or institutional pressures are not absolute and that

resistance to isomorphism, even in the face of quite overwhelming legitimacy challenges, is possible

given certain external and internal contingencies. Contrary to the predictions of institutional theory,

illegitimate practices can persist over time in the interstices of prevailing regulative, normative, and

cultural-cognitive systems” (Crane, 2013).

Another factor that can contribute to institutional deflection in complex CSR issues is that it is

often difficult for society to establish exactly who is to blame. Jackson (2015) highlights the problem

of what he calls “corporate culpability,” in which companies are often able to distance themselves

from issues by offering competing narratives and explanations. Additionally, he notes that companies

who are violating institutionalized norms in one area are often also pursuing other activities aimed at

producing social benefit, and thus the public is faced with a “conflicting bundle of good and bad

contributions” by which they have difficulty evaluating a firm’s legitimacy (Jackson et al, 2015).

This example of modern day slavery offers us a strong criteria for identifying high-hanging

fruits from an institutional perspective: any CSR issue that is highly complex, involves many actors

and/or factors and for which culpability is difficult to establish, is often prone to intuitional deflection

(the resistance to isomorphism) and should therefore be classified as a high-hanging fruit. Such CSR

issues do not provide firms with sufficient incentives to take extensive action because they are

protected from the scrutiny that would arise if clear culpability could be established.

Finally, the mechanism of mimetic isomorphism should be considered as well. When firms

want to move forward in a certain area but face challenges for which solutions are ambiguous or

25  

unclear, it is often advantageous to simply observe and mimic what other firms are already

successfully doing (DiMaggio & Powell, 1983). This also holds true in the domain of CSR. If a firm

is faced with a variety of CSR alternatives from which it must choose and no other pressures play

upon the decision (i.e. they each have an equal potential for profitability and the powerful

stakeholders are indifferent to the decision), then it will generally be easier for a firm to imitate what

other companies are already successfully doing than to invent something new. Innovation entails

uncertainty. Thus, in the absence of other incentives firms will most likely choose what has already

been tried and proven. This tendency for companies to imitate others who have well-established

solutions helps to explain why some CSR issues are addressed in similar ways by many actors, and

other issues receive little attention—precisely because those CSR issues for which clear, effective and

imitable activities already exist are easier to adopt than are CSR issues for which there are none.

Therefore we can say, those CSR issues for which proven and imitable solutions already exist should

be considered low-hanging; and those that have no clear solution but still require certain innovations

should be considered high-hanging. Table 4 below summarizes the difference between low- and high-

hanging fruits based on the factor of isomorphic pressure.

In this section we have established that CSR is becoming increasingly institutionalized as a

societal norm and that the mechanism of isomorphism will pressure more firms to adopt more socially

responsible practices in general. The question of whether specific CSR issues are either low- or high-

hanging fruits is, in part, governed by the degree to which activities related to the issue are subject to

the effects of either (coercive or mimetic) isomorphism or institutional deflection. These effects will

act alongside potential profitability and stakeholder power as incentivizing factors in deciding

whether or not a firm will pursue specific CSR activities.

Table 4: CSR Issues Affected by Isomorphism

Factor  High‐hanging fruits  Low‐hanging fruits  Not CSR  Isomorphic pressure

CSR issues that are too complex for isomorphism to govern and for which culpability is difficult to establish; CSR issues which are subject to institutional deflection. CSR issues that have no tried and proven solution but require further innovation.

CSR issues that reflect an institutionalized norm which places a clear expectation on the firm by society, and whereby departing from the norm would cause the firm to risk losing legitimacy. CSR issues for which clear, effective and imitable solutions already exists.

Corporate activities that are governed by coercive isomorphism but that do not extend further than what the law requires.

26  

A New Model 

It has been demonstrated throughout this paper that the potential profitability of engaging in a

particular corporate social responsibility activity is an important factor, but that by itself is not

sufficient to categorize it as a low- or high-hanging fruit. Additional considerations come into play

when firms decide which CSR issues to address and which not to; namely, whether or not issues are

represented by stakeholders who have power over the firm and the degree to which institutional

pressures are present around the particular issue. The presence or absence of these factors in regards

to any given issue—their individual effects and also the interplay between them—incentivize firms in

various ways and serve as indicators as to the likelihood firms will address them. The more incentives

that an issue presents, the more likely a firm will act and the easier the issue can be said to be. Table 5

below compiles the information from the previous tables and summarizes the factors that we have so

far established as playing a role in determining the relative difficulty of a given CSR issue. Below the

table a new framework will be introduced which seeks to incorporate these different factors and

provide us with the ability to classify any CSR issue according to its difficulty.

Table 5: Classifying CSR Issues & Activities 

Factor  High‐hanging fruits  Low‐hanging fruits  Not CSR  Prospect of profit Stakeholder power Isomorphic pressure

Activities which a firm would not voluntarily engage in because it runs contrary to their main objective—making profit. CSR issues that affect stakeholders whose claims are legitimate (and possibly urgent) but are lacking in the attribute of power. CSR issues that are too complex for isomorphism to govern and for which culpability is difficult to establish; CSR issues which are subject to institutional deflection. CSR issues that have no tried and proven solution but require further innovation.

Profitable new business activities undertaken in response to opportunities created by the popularization of CSR. CSR issues that affect stakeholders whose claims are legitimate (and possibly urgent) and who also possess the attribute of power. CSR issues that reflect an institutionalized norm which places a clear expectation on the firm by society, and whereby departing from the norm would cause the firm to risk losing legitimacy. CSR issues for which clear, effective and imitable solutions already exists.

Profitable business-as-usual activities which companies would engage in regardless of whether any public scrutiny existed, and then are dressed up as CSR. Stakeholder interests where the attribute of power and/or urgency is present, but whose claims are not legitimate. Corporate activities that are governed by coercive isomorphism but that do not extend further than what the law requires.

Any particular CSR issue or activity can be affected by any number of the factors that we

have discussed in this paper: potential profitability, stakeholder power and isomorphic pressure. In

other words, the factors are not mutually exclusive, but often exist simultaneously. A corporation

might decide to undertake a specific CSR activity both because it presents them with a good business

opportunity and because of isomorphic pressures from society; or it might decide to undertake an

activity both because of isomorphic pressures and because the issue is of concern to powerful

27  

stakeholders, and so on. The degree to which a CSR activity can be said to be “easy” or “difficult” is

then determined by the number of factors present, and the intensity to which they affect the issue.

Thus, rather than speaking of only two categories—low- and high-hanging fruits—we must speak of

these issues as existing along a continuum of low to high, or easy to difficult. The most difficult CSR

issues (or the highest hanging fruits) are ones where none of the factors discussed in this paper are

present at all; and the easiest issues (the lowest hanging fruits) are ones where all three of the factors

are intensely present. The best way to visually depict this is with a Venn diagram where CSR issues

that are closest to the center are easiest and issues furthest from the center are the most difficult. The

overlapping bold circles in the diagram below illustrate the possibility of multiple factors being

present at once, and the thin rings that resemble topography lines on a map are intended to depict the

distance from the center of the diagram and illustrates that these factors exist with differing levels of

intensity.

Figure 3: Model for Classifying CSR Issues 

According to Their Difficulty 

This two-dimensional visual model is, of course, not a perfect depiction of the real interplay

between these issues. For example, by looking at this model it would appear that if an issue is

extremely sensitive to isomorphism, it would move closer to the center of the diagram and thus

automatically inherit the attributes of profitability and stakeholder power as well. This, however,

would be an incorrect interpretation. Rather, the diagram should serve to illustrate that an issue which

is perfectly subject to isomorphism (i.e. the pressure from society to address an issue could not be

more strong) is still not as “easy” as an issue that is also affected by the other two factors. In other

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words, the combination of factors will always make an issue easier than a single factor on its own.

Similarly, an issue that presents an extremely profitable business opportunity (and thus would tend

towards the center of the diagram) does not automatically imply the presence of isomorphism or

stakeholder power. Instead, the diagram illustrates that an issue which is extremely profitable and is

affected by isomorphism and/or the interests of powerful stakeholders will always be a more “easy”

issue than one that was only extremely profitable. The more factors that are present, and the more

intensely present they are, the more they incentivize firms to act and thus the easier an issue can be

said to be.

Applying the Model 

The issues in the very middle of the diagram are the lowest hanging fruits of CSR. They

involve activities for which a strong business case can be made, they are issues that represent the

interests of powerful stakeholders and they are issues for which there is strong institutional pressure

from society to address. Thus, a corporation has a plethora of incentives on multiple levels to take

action: it is incentivized by the potential for profit, the need or desire to placate important stakeholders

and the need to manage its perceived legitimacy. New and increased efforts by BP to ensure the safety

of drilling operations in the aftermath of the Deepwater Horizon accident is an example of socially

responsible behavior that falls in this category (see BP.com, n.d.). Such efforts strongly reflect the

expectations of an increasingly critical public and help BP maintain (and in this case recover)

legitimacy. They also take into account the interests and demands of powerful stakeholders such as

employees, regulators and environmental groups. And they also present a good business case in that

increased safety will help to prevent costs incurred by potential accidents in the future. These efforts

should therefore be considered an “easy” CSR activity because all three determining factors are

strongly present.

The issues that are a bit further from the center, but that appear in the overlapping section of

two bold circles, represent CSR that are only slightly less “easy” than issues described in the previous

paragraph. Corporations still have strong incentives to address such issues stemming either from the

combination of profitability and isomorphism, profitability and powerful stakeholders, or

isomorphism and powerful stakeholders. Issues that fall in the latter category—ones that represent the

interests of powerful stakeholders and also represent institutionalized norms that put pressure on the

firm—call for activities that may not be profitable but still may be necessary for the firm to ensure its

survival. An example of such a CSR activity is the efforts by tobacco companies to combat youth

smoking (see for example, PMI.com, n.d.). Considering profit alone, there is nothing for a firm to gain

from discouraging such a large segment of the population from using its products. However, this

activity can be justified and explained by considering the pressures of isomorphism and powerful

stakeholders. Tobacco companies already have difficulty maintaining legitimacy in a society that is

29  

becoming increasingly aware of the health risks of smoking, and therefore any activity which may

help solidify their legitimacy and ensure their survival can be justified as a rational business move

(Apollonio & Malone, 2010). In addition, by voluntarily choosing to combat youth smoking, powerful

stakeholders such as governments might be placated and additional unwanted legislation might be

forestalled (Landman et al., 2002; Apollonio & Malone, 2010). Such activities should therefore be

considered moderately easy; while they may not directly produce profit, they help to ensure firm

survival.

Finally, issues that are closest to the edge of the diagram, and most specifically ones that do

not fall in any of the bold circles at all, are the highest-hanging fruits of CSR—they are not profitable,

the stakeholders whose interests they represent do not possess power over the firm and institutional

deflection protects the firm from external isomorphic pressures. In the absence of economic or

relational incentives, the reasons why any corporation would take action on such issues are limited to

the moral and ethical dispositions of managers (Aguilera et al., 2007). The presence of modern day

slavery in an industry’s supply chain is an example of such a CSR issue. As has been discussed above,

the mechanism of institutional deflection and the difficulty in establishing corporate culpability tends

to buffer individual firms from the institutional pressures of having to deal with this issue directly.

While it has become more common for firms to acquire fair trade labels, or other certifications which

are issued by third parties to verify that certain products are ethically produced, such efforts do more

to bolster the reputation of the individual firm than to actually end the practice of slavery in the larger

industry context (Crane, 2013). Additionally, without the intervention of advocates, victims of slavery

are in no position to exert their will upon corporations and therefore their legitimate claims are left

unaddressed. Financially, corporations have little incentive to help identify and eradicate slavery in

their industry, not only because such an undertaking would be costly, but also because they benefit

from the lower prices that forced labor provides.

Another example of a difficult CSR issue is in regards to whether a firm should stop doing

business in or with nations or regimes that are accused of human rights abuses or other infringements

of international law. While some may consider it socially responsible for a firm to end business

dealings in such a scenario, it is unlikely that this will produce sufficient incentives for a firm to do so.

Financially speaking, forcing an end to a contract with a counterparty is unlikely to be profitable

assuming that the contract was negotiated with maximum profitability in mind in the first place. There

will thus be little financial incentive to take action unless an equal or more profitable alternative is

readily available. Also, prematurely ending a contract may have reputational ramifications as other

salient stakeholders may be less inclined to trust that the firm will hold itself to future contracts.

Institutional pressure is also likely to be mixed. As is the case in all political situations, there will be

competing narratives and alternate perspectives; culpability will therefore be difficult to establish and

there is little chance that the firm will experience a loss in legitimacy unless the situation is

overwhelmingly clear in the eyes of the public. In both of these examples, none of the three

30  

determining factors are present and firms have little incentive to take action, therefore such CSR

issues should be classified as very difficult.

This new model goes a step further than Karpoff’s matrix in helping us to understand why

firms engage in some CSR activities and not in others. His matrix is useful in that it visually depicts

the link between social benefit and profitability, but it fails to account for other factors that also

incentivize firms to engage in (or refrain from) certain CSR activities. Because the correlation

between profitability and social benefit is not exactly linear, as Karpoff himself states, there exists two

“grey areas” in his model which contain firm activities that are more difficult to explain. For activities

that fall in these two areas, the potential for profit does not provide sufficient incentive for a firm to

engage in (or cease) the activity. Our new model helps to “clear up” these grey areas by including two

additional factors.

To illustrate the increased explanatory power of this model, consider a socially beneficial

activity that is not profitable but is subject to strong isomorphic pressure. An example of this could be

a pharmaceutical company making an urgently needed vaccine available during an epidemic at

discounted price. While, potentially, a strategic business case could be made for this, let us imagine

for the sake of illustration that this represents an undertaking for which no positive financial returns

are expected and is done only in response to societal pressure. If such an activity were mapped onto

the matrix it would fall into quadrant II and thus—considering profit alone—we would classify it as a

high-hanging fruit. With our new model, however, we can take isomorphic pressure into account as a

strong incentive to act even in the absence of potential profit and, consequently, we can see that such

an activity is not such a high-hanging fruit after all. In sum, this model allows us to take any CSR

issue or activity and assess its relative difficulty by determining the presence and intensity of the

determining factors we have established.

 

   

31  

Discussion & Further Research 

This paper has helped to make the distinction between “easy CSR” and “difficult CSR” more

concrete by creating a framework with which we can analyze the number and intensity of factors

present that incentivize firms to address any given issue. Being able to distinguish between low- and

high-hanging fruits of CSR helps us to assess a company’s CSR profile and answer some of the

philosophical questions posed at the beginning of this paper. For example, we asked if companies that

pursue CSR activities in order to realize gains should really be considered socially responsible. The

findings of this paper appear to reveal that virtually every CSR activity that companies engage in is

done out of self-interest—whether economic self-interest or relational self-interest. In every example

we analyzed, at least one of the incentivizing factors was present; the prospect of economic gain,

external isomorphic pressure or the prospect of placating stakeholders. In other words, corporations

typically always go after low-hanging fruits. But does the fact that companies almost always benefit

from their CSR activities undermine their legitimacy? Should we stop calling them CSR? Dawkins

and Lewis (2003) found that most consumers really do not mind if companies also derive benefit from

their CSR undertakings. Therefore, it does not seem realistic to sweepingly revoke the CSR label from

all activities which benefit both society and the firm. Instead, given that almost all CSR activities can

be expected to benefit the firm, and given the fact that consumers don’t really mind, we should direct

our efforts towards measuring to what degree a company is pursuing either easy or difficult CSR

issues when we consider whether or not they are truly socially responsible.

It is impossible to establish a definitive threshold, but generally speaking, companies that

pursue only easy CSR issues from which they gain many benefits must be distinguished from

companies that also pursue more difficult CSR issues from which they gain fewer benefits. The

failure to establish this distinction in the past is possibly a major cause for CSR skepticism. A

company’s CSR profile should be judged based on the degree to which they engage in CSR activities

on the more difficult end of the spectrum. The model proposed in this paper serves as a tool with

which we can begin to make these judgements based on solid theoretical determinants.

Further research should be directed towards verifying the accuracy of this new theoretical

model and statistically determining whether potential profitability, powerful stakeholder interests and

isomorphic pressures do indeed serve as good indicators for predicting the likelihood that a

corporation will address a particular issue. Additional exploratory research could be done to further

refine these factors and/or discover other factors that may have a bearing on the relative difficulty of

CSR issues. And finally, further research should focus on what incentivizes firms to pursue high-

hanging fruits, and what can be done by governments, regulators and society in general to encourage

such behavior.

 

32  

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