Corporate social responsibility in finland origins, characteristics, and trends

Creatively mixing analy- sis, interviews and cases, they provide an authoritative, contextualized, complex and compelling assessment of the state of corporate social responsibility in Fi

Corporate Social

Responsibility in Finland

Origins, Characteristics, and Trends

Laura Olkkonen

Anne Quarshie

“In the face of increasingly urgent sustainability challenges, the Nordics provide inspiration Olkkonen and Quarshie deliver a thorough and timely exploration of the Finnish approach to business responsibility and stakeholder thinking that will serve as a foundational building block for the growing global attention to sustain- ability in the Nordics This is a must read for everyone with an interest in the Sustainable Vikings!”

—Robert Strand, Executive Director and Lecturer, University of California- Berkeley, USA, and Associate Professor, Copenhagen Business School, Denmark

“From the early days of industrialization of the country to the future challenges faced by Finnish business, Olkkonen and Quarshie nail it Creatively mixing analy- sis, interviews and cases, they provide an authoritative, contextualized, complex and compelling assessment of the state of corporate social responsibility in Finland.”

—Arno Kourula, Associate Professor of Strategy, University of Amsterdam

Business School, The Netherlands

Corporate Social Responsibility in Finland

Laura Olkkonen • Anne Quarshie Corporate Social Responsibility in

Finland

Origins, Characteristics, and Trends

ISBN 978-3-030-17434-7 ISBN 978-3-030-17435-4 (eBook)

The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information

in this book are believed to be true and accurate at the date of publication Neither the lisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institu- tional affiliations.

pub-Cover illustration: Pattern © John Rawsterne/patternhead.com

This Palgrave Pivot imprint is published by the registered company Springer Nature Switzerland AG.

The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

LUT University Lappeenranta, Finland

We would like to thank all our interviewees who each provided valuable insights on Finnish and Nordic CSR. Our special thank you goes to FIBS network for their cooperation in this project We further warmly thank our editors, Madeleine Holder and Gabriel Everington, for all their practical help and support Two research assistants, Elina Silvola and Jaan-Pauli Kimpimäki, deserve our thanks for prompt assistance when the process was most intense Furthermore, we appreciate the friendly assistance we got from the UPM Archives Our thanks also go out to our reviewers, col-leagues, and family members, whose positive feedback has encouraged us

on with this project Finally, Anne Quarshie gratefully acknowledges research funding from Liikesivistysrahasto (Foundation for Economic Education)

Acknowledgments

2 Finnish Paternalism at the Start of the Industrial

Part II Characteristics of Finnish CSR Context 35

contents

9 Positioning the CSR Performance of Finnish Companies 77

Fig 2.1 The town of Valkeakoski was largely built for the purposes of

the factory community In the picture are workers’ houses in

Fig 4.1 Re-illustration of Eric Rhenman’s conceptualization of the

stakeholders (originally “intressent”) from 1964  in Swedish and 1968  in English (adapted from Rhenman 1964, 1968;

Fig 4.2 Re-illustration of Juha Näsi’s conceptualization of stakeholders

as members of internal and external coalitions (adapted from

Fig 4.3 Re-illustration of the organization chart of Yhtyneet

Paperitehtaat head offices in the 1960s (adapted from Raiskio 2012) 29 Fig 5.1 Finland’s position in innovation and competitiveness rankings 39 Fig 10.1 Finnish companies’ estimations of the importance and resources

Fig 10.2 Established CSR practices in Finland (FIBS 2018) 87 Fig 11.1 CSR management practices in Finnish companies (FIBS 2018) 97 Fig 11.2 Position of CSR expertise and CSR professionals in Finnish

Table 7.1 Professional associations advancing CSR and sustainability in

Finland 59 Table 9.1 Ranking of the Nordic countries in sustainability-related

indices 78 Table 9.2 Top five companies on the Global 100 Most Sustainable

Corporations in the World Index 2018 and all Nordic

Table 9.3 Top five companies on the most socially reputable companies

list of tAbles

Abstract This chapter provides background information on Finland as a

country and discusses the Nordic traditions, such as the welfare state tem, as shapers of the institutional and cultural context for CSR in Finland The three central elements of the book, origins, characteristics, and trends

sys-of CSR in Finland are introduced Furthermore, the meaning sys-of CSR in the Finnish context and in the Finnish language is shortly reviewed

Keywords Finland • Corporate social responsibility • Nordic countries

This is a combination that few, if any, other countries can match.

(Witoszek and Midttun 2018 , p. 3)

The above quotation is a conclusion of how the Nordic countries rank in global comparisons of economic and social prosperity Nordic countries—Iceland, Denmark, Finland, Norway, and Sweden—are small and remotely located European countries (Fellman et al 2008), yet they rank dispro-portionally high in terms of their corporate social responsibility (CSR) performance in global comparison (Midttun 2018; Strand and Freeman

2015; Strand et al 2015) Furthermore, the Nordic countries routinely land top positions when measuring competitiveness (World Economic Forum 2018a), trust (Eurobarometer 2017), transparency (Transparency International 2018)—and happiness (Helliwell et al 2018) The Nordics

are also well known for their welfare state systems—the “Nordic mula”—that include joint promotion of social responsibility by the state, businesses, and civil society, and characteristics such as a vibrant civil soci-ety and culturally strong traditions for collaboration (Midttun 2018,

for-p. 193) Furthermore, the Nordics are celebrated for their structures and policies that support equality between genders and social groups, as well

as their top-performing public education systems (OECD 2016; European Institute for Gender Equality 2017; World Economic Forum 2018b) For these reasons and more, the Nordic countries serve as examples and inspi-ration for many

Finland, the focus of this book, is a country with a population of 5.5  million The neighboring countries are Sweden, Norway, and Russia, of which especially Sweden has influenced the institutional and cultural history Finland is scarcely populated, as the population density

is only about a half of the OECD average, with approximately 30% of people living in the capital area in the South (OECD 2016; Statistics Finland 2018) The level of education is high and the average yearly salary is approximately 43,000 EUR—with tax rates that are among the highest in the world, the total tax revenue being 43,3% in 2017 (OECD

2018) Typically, for Nordic countries, the income distribution is among the fairest in the world, as indicated by a low Gini coefficient

Since gaining independence in 1917, Finland started to establish fare policies and structures, especially through the 1960s, 1970s, and 1980s These structures include progressive taxing, public education, uni-versal health care, and generous parental leaves, as well as economic poli-cies that were steered to support innovation and globalization (Karisto

wel-et al 1999; OECD 2017) Especially due to the welfare tradition, business organizations have been well involved in social issues for a long period of time in Finland, significantly longer than the clashes over environmental issues around the 1980s that are often referred to as a starting point for a broader global CSR discussion However, as in many other countries, early practices of social responsibility date even to the beginning of the industrial era In Finland, the first acts of social responsibility emerged as the first industrial companies, especially in rural Finland, took active roles

in building the local communities, educating the citizens of the emerging nation state, and offering a wide array of social benefits to secure a viable workforce for their expanding operations (e.g., Juholin 2004a; Mäkinen and Kourula 2014; Karonen 2004)

L OLKKONEN AND A QUARSHIE

The early industrial history sets the background for CSR in Finland, which is addressed in the first part of the book, along with a broader back-ground of CSR and stakeholder thinking in the Nordic welfare states The second part explores the country-specific context of “doing” CSR in Finland—the public sector and institutional infrastructures that set the hard laws and influence soft law regulation, the private sector where sev-eral traditional industries still reign but newer startup activities and the digitalization boom shape the game for CSR, the nonprofit sector and civil society, which confront as well as collaborate with companies around CSR issues, and the media and communication environment where CSR is communicated and publicly scrutinized The third part focuses on trends and challenges of CSR in Finland, as it discusses the current state of Finnish CSR performance, diffusion of global trends, increasing profes-sionalism of CSR in Finland, and the most pressing CSR challenges for Finnish companies now and in the future To map the terrain of trends and challenges, the third part draws on recent analyses and reports, most importantly the yearly survey of FIBS (Finnish Business & Society), a lead-ing CSR network with over 300 member organizations Since 2013, FIBS has surveyed roughly 200 Finnish companies yearly, focusing particularly

on practices, challenges, and future trends related to CSR. The dents, consisting of CEOs, CSR directors, and managers, represent mainly large and medium-sized companies, from different industrial sectors (FIBS 2018)

respon-While Finland and Finnish companies are parts of global (CSR and other) initiatives, networks and systems, this book aims to identify and address some of the characteristics that are distinctive specifically for the Finnish context While we readily explore the intersections of Finnish, Nordic, and international CSR, it is worth noticing that CSR can mean different things to individuals and organizational actors operating in dif-ferent cultural, political, and industrial settings (Matten and Moon 2008)

In principle, the book follows the definition of corporate social bility as “the responsibility of enterprises for their impacts on society”

under-stood as both negative and positive, and they can vary depending on the industry or even depending on an organization The cultural and political context can further influence what is acknowledged as an impact—how far-reaching those impacts can be—and what kind of policies, regulations, guidelines, and expectations there are for companies to address those impacts Moreover, companies often actively influence the composition

1 INTRODUCTION

and understanding of what CSR entails by making their own tions of CSR (cf Czarniawska and Sevón 1996)

interpreta-The Finnish term for CSR has traditionally been yhteiskuntavastuu

(e.g., Juholin 2004b), which translates to “societal responsibility” as

yhteiskunta means society and vastuu means responsibility This choice of

words is perhaps not surprising, especially from the perspective of the fare state tradition, where business is expected to take part in societal development in active interaction with the public sector and the civil soci-

wel-ety Interestingly, the term yhteiskuntavastuu does not entail the word

“corporation” or “company”, although it is quite commonplace to see the

term extended to yritysten yhteiskuntavastuu—companies’ societal sibility Notably, however, the Finnish term yhteiskuntavastuu is not lim-

respon-ited to business actors, as it is not unusual to see the term attached to actors such as public sector organizations, nonprofit organization, and even individuals (e.g., Karonen 2004) Again, this use of the term can be considered logical from the perspective of the Nordic traditions of col-laboration and joint responsibilities (Midttun 2018; Midttun et al 2015) Although the use of CSR terms has varied over the years (e.g., Timonen and Luoma-aho 2010), Finnish companies currently tend to talk less

about yhteiskuntavastuu and more about yritysvastuu (corporate bility), vastuullisuus (responsibility), or kestävyys (sustainability) (see, e.g.,

responsi-FIBS 2018)

Finnish CSR is a multifaceted and constantly evolving phenomenon that is grounded in specific cultural and political developments While this book only scratches the surface of Finnish CSR, it aims to do so compre-hensively by painting a picture that extends from the early industrial days

to the current pressing trends, and presents a collection of different ments that shape and define CSR in Finland The following chapters, and the cases and expert interviews included in them, provide insights and takeaways on the origins, characteristics, trends, as well as possible future developments of Finnish CSR

ele-RefeRences

Czarniawska, B., & Sevón, G (Eds.) (1996) Translating organizational change

Berlin: De Gruyter.

Eurobarometer (2017) National reports Finland.

L OLKKONEN AND A QUARSHIE

European Commission (2011) A renewed EU strategy 2011–14 for corporate social responsibility Retrieved from https://eur-lex.europa.eu/legal-content/ EN/TXT/?uri=CELEX:52011DC0681

European Institute for Gender Equality (2017) Gender equality index 2017 report: Measuring gender equality in the European Union 2005–2015 Vilnius,

Lithuania: European Institute for Gender Equality.

Fellman, S., Iversen, M.  J., Sjögren, H., & Thue, L (Eds.) (2008) Creating Nordic capitalism: The business history of a competitive periphery Hampshire:

Palgrave Macmillan.

FIBS (2018) Sustainability in Finland 2018 Helsinki: Finnish Business & Society Helliwell, J.  F., Layard, R., & Sachs, J.  (2018) World Happiness Report 2018

New York: Sustainable Development Solutions Network.

Juholin, E (2004a) For business or the good of all? A Finnish approach to

corpo-rate social responsibility Corpocorpo-rate Governance: The International Journal of Business in Society, 4(3), 20–31.

Juholin, E (2004b) Cosmopolis: Yhteiskuntavastuusta yrityskansalaisuuteen

(Eds.), Limits of globalization: National borders still matter Copenhagen:

Copenhagen Business School Press.

Matten, D., & Moon, J.  (2008) “Implicit” and “explicit” CSR: A conceptual framework for a comparative understanding of corporate social responsibility

Academy of Management Review, 33(2), 404–424.

Midttun, A (2018) Civilising global capitalism: Aligning CSR and the welfare

state In N. Witoszek & A. Midttun (Eds.), Sustainable modernity: The Nordic model and beyond (pp. 187–203) Abington and New York: Routledge.

Midttun, A., Gjølberg, M., Kourula, A., Sweet, S., & Vallentin, S (2015) Public policies for corporate social responsibility in four Nordic countries: Harmony

of goals and conflict of means Business & Society, 54(4), 464–500.

OECD (2016) OECD economic surveys: Finland Paris: OECD Publishing.

OECD (2017) OECD reviews of innovation policy: Finland 2017 Paris: OECD

Strand, R., & Freeman, R. E (2015) Scandinavian cooperative advantage: The

theory and practice of stakeholder engagement in Scandinavia Journal of Business Ethics, 127(1), 65–85.

Strand, R., Freeman, R. E., & Hockerts, K (2015) Corporate social responsibility

in Scandinavia: An overview Journal of Business Ethics, 127(1), 1–15.

Timonen, L., & Luoma-aho, V (2010) Sector-based corporate citizenship

Business Ethics: A European Review, 19(1), 1–13.

Transparency International (2018) Corruption Perception Index Retrieved from https://www.transparency.org/news/feature/corruption_perceptions_ index_2017

Witoszek, N., & Midttun, A (2018) Sustainable modernity and the architecture

of the “well-being society”: Interdisciplinary perspectives In N. Witoszek &

A.  Midttun (Eds.), Sustainable modernity: The Nordic model and beyond

(pp. 1–17) Abington and New York: Routledge.

World Economic Forum (2018a) Global Competitiveness Index 2017–2018 Retrieved from http://reports.weforum.org/global-competitiveness- index-2017-2018/

World Economic Forum (2018b) The global gender gap report 2018 Cologny/

Geneva: World Economic Forum.

L OLKKONEN AND A QUARSHIE

PART I

Origins of Finnish CSR

Abstract This chapter introduces the roots of Finnish CSR in the start of

the industrial revolution Some of the distinctive characteristics of Finnish industrialization are presented, such as the long coexistence of agrarian and industrializing societies, the simultaneous building of an independent nation state, and the strong role of the emerging forest industry especially

in the rural areas Furthermore, the industrialization phase is discussed as the era of the owner-managers that were central figures in the emerging factory communities Especially in these roles, the owner-managers engaged in some of the earliest activities of social responsibility that pro-vided the communities of workers with housing, schools, hospitals, librar-ies, and public infrastructure

Keywords Industrialization • Paternalism • Factory communities •

Forest industry • Owner-managers

Industrialization is often taken as the starting point of modern business practices, as it was a revolution that shaped societies profoundly both eco-nomically and socially In many ways, Finland has followed other European countries in their early economic development and industrialization Before industrial manufacturing, the most influential companies in Finland were often run by merchant families or artisans that did not employ sig-nificant numbers of people, whereas the industrial revolution brought

about a previously unseen scope of business influence on communities and social structures (Karisto et al 1999; Karonen 2004) However, the indus-trial revolution started later in Finland than in many other European countries and it was a relatively slow process (Karisto et al 1999; Karonen

2004) Furthermore, industrialization in Finland was tangled in the try’s process of becoming an independent nation state, which makes Finland somewhat unique even in the Nordic context

coun-While the industrial revolution was in full speed in many parts of Europe already in the early 1800s, it was not until the 1820s that Finland wit-nessed the establishment of the first factories that utilized industrial pro-duction rather than artisanship such as in the ironworks of the seventeenth and eighteenth centuries (Karisto et al 1999; Karonen 2004) The grad-ual progress of industrialization—driven predominantly by the forest industry—took until the turn of 1860s and 1870s to reach a scale that started to significantly shape the way of living in Finland (Karisto et al

1999) Masses of people started to move from the countryside to the first urban cities, but the agrarian ways of living co-existed in Finland for unusually long alongside industrialization This meant that people could choose between a life in the city and a life in the countryside—especially as the forestry industry needed plenty of local mills and saws in the rural areas, and provided extra income for the farmers who sold wood to the factories (Karisto et al 1999)

As the agrarian communities remained vibrant, the earliest industrial factories had to genuinely attract workers by offering them benefits This applied both to the factories that were established within the emerging cities, as well as to the factories of the burgeoning forestry industry in rural areas, strategically located near a continuous supply of wood and water (e.g., Juholin 2004; Karisto et al 1999; Mikkilä et al 2015) Rather than the vicinity of urban infrastructures, the quickly expanding forest industry relied on lakes, rivers, and rapids, which was why the history of several Finnish cities starts from somewhat isolated communities that first con-sisted of factory workers, and then started to attract services needed by both the industry and the communities (Tuuri 1999) Typically, the facto-ries attempted to recruit workers from close by peasant servants who were seeking a more independent position than what was offered by the agrar-ian landowners (Alapuro 1994)

It was especially in the rural settings of gradually industrializing Finland, where some of the first social activities of factory owners emerged In prac-tice, the owner-managers of (often) family-owned companies—and heads of

L OLKKONEN AND A QUARSHIE

the rural factory communities—voluntarily organized and paid for their workers’ living arrangements, often extending the benefits to the workers’ family members (Alapuro 1994; Juholin 2004; Mikkilä et al 2015; Tuuri

1999) This approach has been defined as paternalistic or patriarchal agement, which includes aspects such as protecting and “fatherly” caring,

man-as interaction between the factory owner and the workers wman-as often bman-ased

on very personal relations (Nielsen 2000; Karisto et al 1999; Koiranen

2003) Paternalistic arrangements played an important role especially in rural industrial communities, as the workers relied on the factory owners

on virtually all aspects of their lives: housing, health care, schools for their children, hospitals, libraries, and public infrastructure such as roads—even police and fire departments could have been organized either partly or entirely by the factories (Karonen 2004; Mäkinen and Kourula 2014) Viewpoint 2.1 presents an example of social responsibility practices from the early history of UPM, which is currently listed as the third most suc-cessful company in Finland (measured by net profit, see Kauppalehti 2018)

Viewpoint 2.1 Factory Communities in Rural Finland

UPM is one of the largest Finnish forest industry firms, currently employing more than 19,000 people in 12 countries (UPM Corporate Website 2018) The corporation is a result of a large merger in 1995, but the origins of the company extend to about one hundred previously independent companies that have been fused together in different phases (UPM 2015) The first factories of the corporation were established in the early 1870s, during the golden and heavily expanding era of industrialization in Finland (UPM

2015) In various locations in rural Finland, UPM’s companies were involved in forming factory communities that turned into towns and some eventually into cities Valkeakoski, currently a small town in southwest Finland, is an example of an area that was virtually born after the establishment of a factory that attracted not only workers, but also different services for the factory and the workers (Fig. 2.1)

In 1883, the factory opened a school for the workers’ children, and eventually organized many different forms of childcare for the work-ers families, such as clubs, playschools, and summer camps (Raiskio

2012; Tuuri 1999) In 1898, the community witnessed the start of

a health care system for the workers and their families, with a cant proportion of funding from the factory (Tuuri 1999) The

signifi-2 FINNISH PATERNALISM AT THE START OF THE INDUSTRIAL REVOLUTION

In practice, the factory owners often needed to build both the factories and the local communities to secure the success of their business (cf Nielsen 2000) As a result, Finnish factory owners became very central figures in their communities, commonly referred to as “masters” (Mäkinen and Kourula 2014) or “patrons” (in Finnish, patruunat) that often acted

as representatives of their communities—unofficially as spokespersons or officially as selected representatives in  local or state politics (Karonen

2004) Especially in formal representative positions, the factory owners

workers services further included an element of social security as those workers that would become unable to work due to illness or an accident would receive a daily allowance that equaled to half of their salary (Tuuri 1999) The paternalistic management tradition lasted for exceptionally long in Valkeakoski—until the 1960s—and social issues were well-integrated into the company’s formal management system for several decades (Raiskio 2012)

Fig 2.1 The town of Valkeakoski was largely built for the purposes of the

factory community In the picture are workers’ houses in the 1950s (UPM Central Archive)

L OLKKONEN AND A QUARSHIE

influenced the development of their surrounding societies and acted as caretakers of the local communities that had legitimized their positions (Karonen 2004) While they were perceived as philanthropists in the sense that they advanced the wellbeing of the communities in actions that were external to their business endeavors, the patrons also benefitted from the representative roles, as they were able to seek political support and benefits for their own ventures (Karonen 2004) However, the actions were also very engaging—they were not philanthropic donations to have someone else take care of the workers’ issues, but actions organized firsthand by the company and often also well integrated into company structures (Mikkilä

et al 2015; see also Chap 4)

While the benefits offered by early industrial companies were much broader than what was obliged based on existing Finnish laws or regula-tions, they did not necessarily secure proper living or working conditions Moreover, the paternalistic management practices have been criticized for their sense of superiority and control (Karisto et al 1999; Koiranen 2003) While personal relations between management and workers meant that the owner often knew each employee by name, it also meant that terms and wages were often negotiated individually, and that the masters’ influ-

Moreover, the motives to provide social benefits might, in reality, deal not that much with human caring but with securing one critical component of production—a viable workforce (Nielsen 2000) In practice, people lived

in small houses or apartments and worked for long days, sometimes in dangerous working conditions (Karisto et  al 1999) As the number of people working in industrial jobs started to rapidly increase in the late nineteenth century, the living and working conditions became, as in many other countries, the topic of the first responsibility-related debates in Finland The workers started to demand better working conditions and shorter daily work and, importantly, started to organize into labor unions and associations (Karisto et al 1999)

Notably, the early industrial period in Finland was a time of establishing

an independent nation state Between 1809 and 1917, Finland was an autonomous Grand Duchy of the Russian empire, after which Finland declared independency from Russia in conjunction to the Russian revolu-tion Therefore, Finland makes an exception among the Nordic countries,

as the national movement in Finland resembled rather Eastern European than other Northern European examples, yet with a distinction that Finland was politically but not economically dependent on the ruling

2 FINNISH PATERNALISM AT THE START OF THE INDUSTRIAL REVOLUTION

empire (Alapuro 1979) While under the Russian rule, Finland had its own currency which was less volatile than the Russian ruble, and the leg-islations and institutions that were set under the preceding Swedish rule remained intact (Fellman 2008) Especially the economic independence has been considered as one of the key reasons why the process of declaring independence was an exceptionally steady process for Finland—although the internal clashes between unequal social classes resulted in a civil war right after (Alapuro 1979)

What becomes important for the early stages of industrialization in Finland is that issues such as building a strong manufacturing sector and raising the level of education were matters of national interest and identity during the nineteenth century, and they specifically aimed for building an independent state (Harle and Moisio 2000; Juholin 2004; Karisto et al

1999) The political and cultural tradition originated from the Swedish rule and they did not change significantly during the autonomous era, which resulted in an unusual form of nationalist mobilization: the upper class, among them factory owners, were typically Swedish speaking, while the peasants and the factory workers were typically Finnish speaking—while neither identified themselves with the empire that ruled them (Alapuro 1979) In addition, Finland witnessed some very advanced polit-ical developments—although not yet an independent country—namely being the first European country to give women a right to vote and run for the parliament in 1906

Due to the untypical situation as a duchy of the eastern empire of Russia, but with simultaneously strong Nordic traditions, the upper classes had a key role in initiating nationalism in Finland, known as the Fennoman movement Many early business leaders were involved not only in local but also in national politics, and they supported Finnish language and culture, for example, by donating funds to associations, libraries, churches, schools, universities, and museums (Karonen 2004) The public role of factory owners could even exceed their role as business leaders, as due to their high political engagement, business managers “were by and large patrons

of culture, great philanthropists, farmers, and in some cases even cians” (Karonen 2004, p. 350) As such, early factory owners often had multiple roles and influence that extended well beyond their factory walls.After Finland gained independence, the nature of business leadership started to change Specifically, personal wealth and elite background were

politi-no longer the predominant routes for becoming a manager, but leadership positions became more commonplace and ownership was separated from

L OLKKONEN AND A QUARSHIE

management—a development which also happened relatively late in

Together with the emergence of labor unions, paid managers marked the end of paternalistic, personal employee-employer relations, which became matters of tripartite regulation between employee unions, labor unions, and the state, a distinct characteristic of Nordic welfare states (see Chap

3) Moreover, as the Nordic welfare model rests on providing universal public services, many tasks that were previously taken by (paternalistic) employers, became central tasks for municipalities and the state, which significantly changed the expectations and the practices of CSR in Finland

RefeRences Alapuro, R (1979) Nineteenth century nationalism in Finland: A comparative

perspective Scandinavian Political Studies, 2(1), 19–29.

Alapuro, R (1994) Suomen synty paikallisena ilmiönä 1890–1933 Helsinki: Tammi.

Fellman, S (2008) Growth and investment: Finnish capitalism, 1805–2005 In

S. Fellman, M. J Iversen, H. Sjögren, & L. Thue (Eds.), Creating Nordic talism: The business history of a competitive periphery (pp. 139–217) Hampshire:

capi-Palgrave Macmillan.

Harle, V., & Moisio, S (2000) Missä on Suomi? Kansallisen identiteettipolitiikan historia ja geopolitiikka Jyväskylä: Vastapaino.

Juholin, E (2004) For business or the good of all? A Finnish approach to

corpo-rate social responsibility Corpocorpo-rate Governance: The International Journal of Business in Society, 4(3), 20–31.

Karisto, A., Takala, P., & Haapola, I (1999) Matkalla nykyaikaan: Elintason, elämäntavan ja sosiaalipolitiikan muutos Suomessa Helsinki: WSOY.

Karonen, P (2004) Patruunat ja poliitikot: Yritysjohtajat taloudellisina ja tisina toimijoina Suomessa 1600–1920 Helsinki: Suomalaisen

poliit-Kirjallisuuden Seura.

Kauppalehti (2018) Yritykset: Menestyjät Retrieved November 23, 2018, from https://www.kauppalehti.fi/yritykset/menestyjat/tuloksentekijat

Koiranen, M (2003) Understanding the contesting ideologies of family business:

Challenge for leadership and professional services Family Business Review, 16(4), 241–250.

Mäkinen, J., & Kourula, A (2014) Globalization, national politics and corporate social responsibility In R. Tainio, S. Meriläinen, J. Mäkinen, & M. Laihonen

(Eds.), Limits of globalization: National borders still matter (pp.  219–235)

Copenhagen: Copenhagen Business School Press.

Mikkilä, M., Panapanaan, V., & Linnanen, L (2015) Corporate social bility in Finland: From local movements to global responsibility In S. O Idowu

responsi-2 FINNISH PATERNALISM AT THE START OF THE INDUSTRIAL REVOLUTION

et al (Eds.), Corporate social responsibility in Europe: CSR, sustainability, ethics

& governance (pp. 209–228) Cham: Springer.

Nielsen, N. J (2000) Industrial paternalism in the 19th century: New or old?

Ethnologia Europaea, 30(1), 59–75.

Raiskio, K. J (2012) Henkilöstön johtaminen Valkeakosken tehdasyhteisössä Rudolf

ja Juuso Waldenin aikakaudella 1924–1969 (Jyväskylä Studies in Humanities

193) Jyväskylä: University of Jyväskylä.

Tuuri, A (1999) UPM-Kymmene: Metsän jättiläisen synty Helsinki: Otava.

UPM (2015) UPM – Metsäteollisuutta pitkällä perinteellä Retrieved October

18, 2018, from pitkalla-perinteella/

https://www.upmbiofore.fi/upm-fi/upm-metsateollisuutta-UPM (2018) About us: UPM in numbers Retrieved October 18, 2018, from https://www.upm.com/About-us/Pages/default.aspx

L OLKKONEN AND A QUARSHIE

Abstract This chapter discusses the Nordic welfare state as a specific

con-text that influences CSr in Finland After gaining independence, the state

of Finland took full control of social and economic policies, and started to introduce welfare systems such as public healthcare and equal opportuni-ties to education Setting up strong public institutions meant high and progressive taxes that turned the role of companies from providers of social benefits to taxpayers that supported the society by offering employ-ment and making investments While CSr in Finnish companies has tradi-tionally been rather implicit, especially domestically, CSr became important early on from the point of view of Finnish state-level goals on competitiveness and innovation

Keywords  Nordic welfare state • The Nordic model • Nordic CSR • 

Implicit CSr

After gaining independence, the state of Finland was able to take full trol of policies and legislation that guide national social and economic practices especially after the world wars, the Finnish welfare state started

con-to develop fast As in other Nordic countries, the industrial boom was soon accompanied with ethos of care and partnerships, which can be explained by the countries’ small size, low hierarchy, and a certain type of Nordic humanism that has its origins in a pragmatic and cooperative

tradition of Christian enlightenment (Witoszek and Midttun 2018) The ideals of the welfare model—equality, universalism, and wellbeing—are sometimes criticized as a utopia and for trading off efficiency for equality; yet the Nordic model is proven to result in economic growth and social stability, which attracts constant international interest (Kangas and Kvist

2018; Midttun 2018; Midttun et al 2015)

A feature often regarded as central to the Nordic countries is how nomic policy is formed in tripartite negotiations that take place between business, trade unions, and the state (Midttun 2018) This “economic tripartitism” or “partnered governance” aims to support businesses in seeking profit, but within boundaries that maintain employment, decent wages, and working conditions, as well as environmentally sound opera-tions (Midttun 2008, 2018; Midttun et al 2015; Witoszek and Midttun

eco-2018) In Finland, employers’ organizations, trade unions, and the state have made nation-wide agreements about significant labor market condi-tions, such as minimum wages, paid leaves, and retirement in tripartite negotiations regularly since the 1960s, although in recent decades the trend has been toward less extensive individual agreements (Bergholm and Bieler 2013)

By establishing strong public sectors, the Nordic welfare states have aimed to level inequalities by, for example, securing universal access to education and social services As a concrete start for the welfare system, the Finnish state took over many of the responsibilities previously held by companies, and established them as state and municipality level policies (harju 2009; Karisto et al 1999) For example, the education system was taken under strong state control and the duration of compulsory school-ing was extended, and importantly, the same principles applied for all chil-dren regardless of their socio-economic status (Sahlberg 2011) Finland also introduced progressive taxing in 1920, although the early forms still favored the rich, and hence, the system took some time to develop (Karisto

et al 1999) As a significant change to paternalistic thinking, companies’ main responsibility turned from directly offering and organizing living conditions and benefits to supporting them by paying Nordic level taxes (Juholin 2004; Mäkinen and Kourula 2014) Consequently, the previ-ously close and personal relationships between employers and employees turned from personal to detached, especially as paid managers started to

be more commonplace, and many previously family-owned companies turned into (fewer) consolidated corporations (Juholin 2004; Karonen

L OLKKONeN ANd A QuArShIe

making investments became the main social responsibilities for Finnish companies, as they were means to keep the welfare system running (Mäkinen and Kourula 2014) In Viewpoint 3.1, professor Atle Midttun from the BI Norwegian Business School shares some of his thoughts on the historical developments of the Nordic welfare states and CSr

Viewpoint 3.1 CSR in the Welfare States: An Interview with

Professor Atle Midttun (BI Norwegian Business School)

Q: How does the welfare state tradition influence CSR in the Nordic countries?

A: The Nordic welfare state model is not about the middle ground between competition and collaboration but it is the ambidextrous ability to create highly advanced competition on one hand and highly advanced collaboration on the other, and combining them so that they work together Compared to mainstream europe we are rather egalitarian societies and we have a culture that encourages collabora-tion This capacity draws on a historical legacy that goes back to past social arrangements and institutions The relative absence of feudal-ism, the existence of a free and literate peasantry and the strong posi-tion of community law before the consolidation of the state together created an important societal basis for broadly inclusive participation

in the construction of society To these structural conditions, we have to add a shared founding tradition, which Nina Witoszek has called the “Nordic pastoral enlightenment” It is largely thanks to the common legacy of the Christian enlightenment that Nordic modernity has been a relatively socially sustainable formation In the early twentieth century, the labor movement, allied with the free peasantry, succeeded in harnessing the cooperative ethos into an extraordinary productivity under industrial modernity and orienting

it toward a macro-collaborative project: the welfare state

Q: How do the Nordic countries combine CSR with the welfare state?

A: While maneuvering as small players in the difficult terrain of the international economy, the Nordics have been pragmatic and agile One of their creative initiatives has been their ability to com-bine their strong welfare state tradition with neoliberal CSr. The CSr tradition, we recall, originated in the neoliberal, Anglo-

3 The NOrdIC WeLFAre STATe AS A BACKdrOp FOr CSr

As discussed in Chap 2, Finland’s transformation from an agrarian society to an industrial economy was a slow process Yet, the final disrup-tion was rapid, as the number of agrarian jobs dropped from 50% to 15%

in roughly 25  years in Finland, while the same transition took about

50 years in Sweden and 80 years in Norway (Karisto et al 1999) As such, although Finland was a latecomer, it was able to jump-start to the most recent technology, which allowed Finnish companies to significantly increase their productivity (Karisto et al 1999) especially since the 1980s, economic policy in Finland has been strongly orienting on competitive-ness and innovation (Kaitila and Kotilainen 2008), which have been the central elements for how CSr has been approached by many Finnish com-panies: as means to increase international competitiveness (Midttun

2018) Importantly, strengthening competitiveness by innovativeness—

American context and emphasizes corporate discretion, voluntarism, and market-based policy solutions In a Nordic welfare state tradi-tion—based on universal rights and duties, extensive state engage-ment in the economy and negotiated agreements to regulate labor relationships—one would think adopting CSr would be a tall order however, in line with their ambidextrous flexibility, the Nordics have found a way to use CSr abroad, and to their advantage In their perspective, the increased role of CSr internationally may fill a regu-latory gap in the global market economy, where the Nordics have not had the power to win through in international political negotia-tions hence, the Nordic countries have pragmatically aligned CSr with the Nordic political engagement for a social and environmental upgrading of the global economy

Q: What explains the Nordic success in CSR?

A: In line with their tradition for pragmatic ambidexterity, CSr in the Nordic context has become a joint project promoted by industry and the state alike, a partnered governance for economic upgrading The Nordic governments have engaged in CSr to advance policy agendas alongside Nordic firms that hold front-runner positions in the global economy This formula has apparently worked Studies of Nordic companies’ CSr performance show that the Nordics—alongside with Swiss and followed by the uK and the dutch—are top scorers

L OLKKONeN ANd A QuArShIe

primarily those relating to technology—became one of the most tant political goals for Finland, affecting not only trade but also educational targets and systems (Kaitila and Kotilainen 2008, see also Chap 5).The Nordic public institutions address social inequalities on a wide range and, significantly, aim not only in alleviating poverty and securing labor market stability, but to establish systems that provide equal skills and abilities across different socio-economic backgrounds—and between gen-ders (Kangas and Kvist 2018) The Nordic countries are known to have, for example, a high level of education for both men and women, high female participation in working life, public daycare, and paid parental leaves for both parents (e.g., ILO 2016; OeCd 2018) equality is pur-sued also between different geographical regions, and here the state’s actions can include, for example, regional distribution of state investments

impor-by locating state companies in areas where employment would otherwise

be low (Fellman 2008; Midttun 2018) State ownership can be considered

as one of the typical characteristics of Nordic business history—one that has direct links to social responsibility as state ownership ties with regional politics (Ojala et al 2008)

Alongside strong states, the Nordic countries typically have strong civil societies that are considered as balancing forces to the public and private sector (Midttun 2018) This is visible in Finland not only in the trade unions’ role in tripartite negotiations but in Finns’ unusually high involve-ment in nonprofit organizations such as clubs and associations (Siisiäinen and Kankainen 2009) Some civil society organizations, such as environ-mental organizations and movements are known to confront private com-panies for their impacts—most notably the forest sector that has had visible impacts on the natural surroundings in which they operate (harju 2009; Mikkilä et al 2015) Furthermore, as the welfare model has been argued

to have seen its peak sometime in the 1980s and the 1990s due to lenges arising from globalization, inequalities, and increasing diversity (Kangas and Kvist 2018), the role of civil society in performing tasks relat-ing to social responsibility has been expanding in Finland (see Chap 7)

chal-As a distinct social and political context, the Nordic welfare state tradition provides a unique background to CSr, especially when com-pared to the Anglo-American context Significantly, CSr in the Nordic context is not considered as an action where “corporations run the show alone” as in the neoliberal Anglo-American tradition, but the state has a fundamental role in securing social and environmental wellbeing (Midttun 2018, p. 193) due to the tradition of strong public institutions,

3 The NOrdIC WeLFAre STATe AS A BACKdrOp FOr CSr

corporate philanthropy usually does not have a significant role in Nordic countries (Kourula 2010) Moreover, CSr in the Nordics has much less

to do with adopting voluntary responsibility based on self-regulation than

it has with taking part in collaborative initiatives and negotiations that aim for societal betterment (Midttun 2018) Therefore, while the aims of the welfare state are likely to be compatible with those of CSr in liberal tradi-tions, the means to achieve those goals can differ significantly (Midttun

2018; Midttun et al 2015) As such, CSr in Nordic companies has tionally developed as what Matten and Moon (2008) define as implicit, while visible and explicit (promotional) CSr programs have traditionally been rare in Finnish companies (Mäkinen and Kourula 2014) however, the current direction of eu-level regulation and global initiatives have acted as drivers that shift CSr thinking in Nordic countries from implicit

tradi-to explicit (Gjølberg 2010) The most recent developments and trends of CSr in Finland are discussed especially in part III

RefeRences Bergholm, T., & Bieler, A (2013) Globalization and the erosion of the Nordic

model: A Swedish–Finnish comparison European Journal of Industrial Relations, 19(1), 55–70.

Fellman, S (2008) Growth and investment: Finnish capitalism, 1805–2005 In

S. Fellman, M. J Iversen, h. Sjögren, & L. Thue (eds.), Creating Nordic talism: The business history of a competitive periphery (pp. 139–217) hampshire:

capi-palgrave Macmillan.

Gjølberg, M (2010) Varieties of corporate social responsibility (CSr): CSr meets

the “Nordic Model” Regulation & Governance, 4(2), 203–229.

harju, A (2009) Finnish civil society helsinki: KVS Foundation.

ILO (2016) Women at work trends 2016 Geneva: International Labour

Organization.

Juholin, e (2004) For business or the good of all? A Finnish approach to

corpo-rate social responsibility Corpocorpo-rate Governance: The International Journal of Business in Society, 4(3), 20–31.

Kaitila, V., & Kotilainen, M (2008) Not just Nokia: Finland In C. edquist &

L.  hommen (eds.), Small country innovation systems: Globalization, change and policy in Asia and Europe (pp.  355–402) Cheltenham: edward elgar

Mäkinen, J., & Kourula, A (2014) Globalization, national politics and corporate social responsibility In r. Tainio, S. Meriläinen, J. Mäkinen, & M. Laihonen

(eds.), Limits of globalization: National borders still matter (pp.  219–235)

Copenhagen: Copenhagen Business School press.

Matten, d., & Moon, J.  (2008) “Implicit” and “explicit” CSr: A conceptual framework for a comparative understanding of corporate social responsibility

Academy of Management Review, 33(2), 404–424.

Midttun, A (2008) partnered governance: Aligning corporate responsibility and

public policy in the global economy Journal of Corporate Governance, 8(4), 406–418.

Midttun, A (2018) Civilising global capitalism: Aligning CSr and the welfare

state In N. Witoszek & A. Midttun (eds.), Sustainable modernity: The Nordic model and beyond (pp. 187–203) Abington and New York: routledge.

Midttun, A., Gjølberg, M., Kourula, A., Sweet, S., & Vallentin, S (2015) public policies for corporate social responsibility in four Nordic countries: harmony

of goals and conflict of means Business & Society, 54(4), 464–500.

Mikkilä, M., panapanaan, V., & Linnanen, L (2015) Corporate social bility in Finland: From local movements to global responsibility In S. O Idowu

responsi-et al (eds.), Corporate social responsibility in Europe: CSR, sustainability, ethics

& governance (pp. 209–228) Cham: Springer.

OeCd (2018) OeCd Better Life Index: Finland retrieved from http://www oecdbetterlifeindex.org/countries/finland/

Ojala, J., Lamberg, J.-A., & Melander, A (2008) From state ownership to MNC: The path of enso-Gutzeit to Stora-enso In S.  Fellman, M.  J Iversen,

h. Sjögren, & L. Thue (eds.), Creating Nordic capitalism: The business history

of a competitive periphery (pp. 218–237) hampshire: palgrave Macmillan Sahlberg, p (2011) Finnish lessons New York and London: Teachers College press.

Siisiäinen, M., & Kankainen, T (2009) Järjestötoiminnan kehitys ja udennäkymät Suomessa Teoksessa Suomalaiset osallistujina Katsaus suomal-

tulevaisu-aisen kansalaisvaikuttamisen tilaan ja tutkimukseen Oikeusministeriön Julkaisuja, 5, 91–138.

Witoszek, N., & Midttun, A (2018) Sustainable modernity and the architecture

of the “well-being society”: Interdisciplinary perspectives In N. Witoszek &

A.  Midttun (eds.), Sustainable modernity: The Nordic model and beyond

(pp. 1–17) Abington and New York: routledge.

3 The NOrdIC WeLFAre STATe AS A BACKdrOp FOr CSr

Abstract This chapter introduces a Nordic perspective to the evolution of

CSR thinking, which differs especially from the Northern American text and tradition The characteristics of Nordic management are reflected

con-on, along with some early Nordic examples and conceptualizations of stakeholder thinking and community engagement Finally, the impact of Nordic institutional and cultural traditions on business culture is discussed

Keywords Nordic management • Scandinavian management •

Stakeholder thinking

The Nordic countries are often referred to as a leading region in CSR, with reference to their historical roots that couple community-orientation and joint interest in business ideology and entrepreneurship (Juholin

2004; Panapanaan et al 2003; Midttun et al 2015; Strand and Freeman

2015; Strand et al 2015) If one was to describe typical traits of Nordic management, one might encounter characterizations such as consensus building and cooperation, humility, as well as organizational flatness and informality (e.g., Andreasson and Lundqvist 2018; Grenness 2003; Morsing et al 2007) It is exactly these roots that have been argued to constitute an early foundation for Nordic or Scandinavian CSR that dates much earlier than the environmental debates of the 1970s and 1980s that

are often considered as a starting point for (global) CSR debate (Strand and Freeman 2015; Strand et al 2015) Additionally—and notably—the Nordic tradition of economic tripartitism between the state, companies, and civil society can be viewed as a joint effort to build social wellbeing that aligns well with the central goals of (explicit) CSR, although the actual CSR actions of Nordic companies have often been implicit: publicly low-profile and not always labeled specifically as CSR (Mäkinen and Kourula 2014; Midttun 2018)

Nordic researchers were active in developing some of the foundational conceptualizations of CSR, namely in the area of stakeholder thinking While the notion of stakeholders—groups or individuals who affect or are affected by an organization—was made globally famous by R.  Edward

Freeman in his seminal book Strategic Management: A Stakeholder

Approach (1984), the term was first mentioned in a memorandum of

Stanford Research Institute in 1963 and first academically conceptualized

by a Swedish scholar Eric Rhenman in 1964 (Rhenman 1964, 1968, see also Rhenman and Stymne 1965; Strand and Freeman 2015) These early definitions served as an inspiration for Freeman’s work (Freeman 1984,

2009) Rhenman (1964) originally referred to the stakeholder with the Swedish word “intressent” that can be translated to “someone who has an interest” Furthermore, Rhenman (1964) defined “intressent” as some-one who depends on the firm or on whom the firm depends This term strongly correlates with Freeman’s later conceptualization (Freeman

1984) Notably, the possible “intressent” groups were presented much broader than customers and shareholders, including groups such as local authorities, suppliers, and the state, each of which was drawn as part of the first-ever stakeholder map (Rhenman 1964, 1968), re-illustrated

in Fig. 4.1

Rhenman’s work was based on empirical studies on Scandinavian trial managers, which further provides evidence that acknowledging the interests of groups beyond the owners was a part of Nordic business think-ing from early on (Strand and Freeman 2015) It is worth noting that

indus-Rhenman’s book was titled “Industrial democracy and industrial

manage-ment” (emphasis added), which gives an inkling of the extent to which business practices reflected the welfare ideals It is also noteworthy how

Rhenman places the stakeholders partly within the company, as opposed

to Freeman’s (1984) later illustration Furthermore, Nordic scholars took

L OLKKONEN AND A QUARSHIE

management students—even as the dominant theory (Näsi 1995a, see also Carroll and Näsi 1997; Näsi 1995a, ) In addition to Rhenman’s original work, Finnish management students soon utilized also a Finnish volume to stakeholder thinking by Ahlstedt and Jahnukainen (1971) Consequently, the idea of stakeholder management became diffused into business prac-tices such as planning and reporting in Finnish companies during the late 1969s and 1970s (Näsi 1995b) As observed by Takala (1989), Finnish business rhetoric shifted from the 1930s to the 1970s, moving from a tra-ditional, profit-oriented rhetoric to a modern rhetoric that acknowledged responsibilities toward the employees, environment, and consumers (for a recent review on Finnish managers’ CSR attitudes see Kujala et al 2017).

Fig 4.1 Re-illustration of Eric Rhenman’s conceptualization of the stakeholders

(originally “intressent”) from 1964 in Swedish and 1968 in English (adapted from Rhenman 1964 , 1968 ; Strand and Freeman 2015 )

4 THE DAWN OF STAKEHOLDER THINKING IN NORDIC COUNTRIES

Of Finnish scholars, Juha Näsi was especially influential in developing the emerging scholarship on stakeholder thinking early on, and was

Archie B. Carroll (e.g., Carroll 2010; Carroll and Näsi 1997), both well known for mainstreaming the stakeholder approach in the U.S. In 1979, Näsi presented a stakeholder map in his study of an advertising agency, acknowledging not only the existence of different stakeholder groups, but dividing them based on whether they were part of the internal or external coalitions, as illustrated in Fig. 4.2 (Näsi 1979; see also Näsi 1995b; Strand

2015) During his career, Näsi took active part in developing the field and organized several international meetings on stakeholder thinking in Finland (see, e.g., Carroll 2010; Näsi 1995a, )

Industry-Customers

of the customer Owners

EXTERNAL COALITION

INTERNAL COALITION

Fig 4.2 Re-illustration of Juha Näsi’s conceptualization of stakeholders as

mem-bers of internal and external coalitions (adapted from Näsi 1979 , 1995b )

L OLKKONEN AND A QUARSHIE

The Nordic influence on the early developments of stakeholder ing can be linked back to Nordic management style, where social respon-sibility is often argued to be a historic component of company culture, especially in relation to responsibility to local communities (Morsing et al

think-2007) As discussed in Chap 2, especially companies operating in rural Finland were strongly embedded in the communities in which they were founded—or rather that many companies actually were the starting forces that founded the communities

As an example of how embedded some Finnish companies actually were

in the local communities, Fig. 4.3 presents the head office chart of Yhtyneet Paperitehtaat (now formally part of UPM) from the 1960s As shown in the figure, one of the departments working directly under the CEO was the department of “social and finance” (Raiskio 2012) The department of social and finance was part of the official head offices chart and was responsible for several activities that would nowadays count as public social services, such as housing and health care for the workers and the pensioners—even house calls that specifically aimed to proactively pre-vent different health and social problems of the workers (Raiskio 2012) Another aspect in the chart worth noticing is the department of technical and professional education As discussed in Chap 2, raising the level of education was partly a matter of national pride, but it was also a practical matter, as the companies needed skilled workers and managers However, the spillover effects to the local communities were often significant—in the case of Yhtyneet Paperitehtaat, for example, the educational activities

Teknillinen ja ammattikas- vatusosasto

Department

of construction

osasto

Rakennus-Department

of accounting

osasto

Kirjanpito-United International Ltd.

Oy United International

asiainosasto

Ships

Laivat

Valkeakoski Print Ltd.

Valkeakosken

Fig 4.3 Re-illustration of the organization chart of Yhtyneet Paperitehtaat head

offices in the 1960s (adapted from Raiskio 2012)

4 THE DAWN OF STAKEHOLDER THINKING IN NORDIC COUNTRIES

included not only occupational training, but also direct and indirect port to local schooling, as well as scholarships to higher education to employees and their children (Raiskio 2012)

sup-When compared to how the early practices of CSR evolved in North

influenced by charity-thinking and religion (Juholin 2004), the origins of the Nordic model have argued to be strongly in what is currently defined

as stakeholder thinking (Strand and Freeman 2015) and shared value (Strand et al 2015) In the tripartite negotiations introduced in Chap 3

companies routinely interacted in collaboration with the state and the labor unions, which provided them with the “CSR-skills” that focused attention beyond profit making to broader societal goals and concerns (Midttun 2018, p. 194) Furthermore, the tripartite system supported the idea of “stakeholdership”, defined by Midttun (2018, p. 201) as “collab-orative upgrading of work conditions running in parallel to improvements

in efficiency and quality production” Thus, the Nordic model was able to rather highlight the fruitfulness of collaboration instead of juxtaposition-ing business against the state and/or civil society As a result, both busi-ness and societal goals were simultaneously advanced

As described above, the Nordic countries are considered to have tutional and culturally embedded traditions that encourage good CSR performance (Strand et al 2015) These traditions highlight stakeholder dialogue and stakeholder engagement—even democratic elements of stakeholder involvement and consensus building (Strand et  al 2015) The Nordics are also known for promoting gender and societal equality, which can translate to business practices such as employee representation

insti-in company decision-makinsti-ing, mandatory percentage of women insti-in boards

of directors, or overall flatter organizational and pay structures (Ihlen and

Nordic traditions are argued to go strongly against CSR thinking, cially in the liberal sense when CSR is seen as a complement or substitute

espe-to state actions, consisting predominantly of voluntary actions of the business sector and controlled mainly by market mechanisms (Gjølberg

2010; Midttun 2018; Midttun et al 2015) Hence, although in practice the Nordic countries uphold strong traditions for creating (shared) soci-etal and environmental values, the means for attaining them differ in the Nordics when compared to other cultural settings Most prominently, the Nordic model includes means such as state orchestration for social responsibility, extensive rights and privileges of trade unions, and overall

L OLKKONEN AND A QUARSHIE

skepticism (even by the business actors themselves) for voluntary actions (Gjølberg 2011; Midttun et al 2015) As a result, on the one hand, the Nordic countries effortlessly adopt many global CSR initiatives such as the Global Compact and OECD guidelines, but on the other hand they make their own translations (cf Czarniawska and Sevón 1996) of CSR for their national settings—that is, they make adoptions and interpreta-tions, some of which take normative forms and focus on conveying Nordic values across global (business) partnerships, while some are more pragmatic and focus on CSR as a competitive advantage on the interna-tional markets (Midttun 2018; Midttun et al 2015; see also Chap 3)

To conclude, Strand et  al (2015) describe the Nordic traditions as

outside-in strategic management that naturally places business in society

and is willing to build on shared goals, as opposed to inside-out thinking where business is viewed as something detached from the (rest of the) society, interested foremost in its own interests Although especially the early forms of Nordic CSR were rather implicit than explicit, Nordic coun-tries have some distinct societal and institutional foundations that have supported action in the line of CSR thinking, despite these actions often not being labeled as such until the 1980s or the 1990s (Strand et  al

2015) The implicitness of Nordic or Scandinavian CSR is a cultural trait mentioned by several scholars (e.g., Morsing et  al 2007; Strand et  al

2015; Strand and Freeman 2015; Vidaver-Cohen and Brønn 2015), and some even argue that as the explicit form is imported, it does not suit Nordic companies and might in fact diminish the impact of their CSR actions (Gjølberg 2010; Vidaver-Cohen and Brønn 2015) However, as Rhenman’s (1964, 1968) work shows, shared interests and engagement between companies and their “intressent” were documented early on in the practices of Nordic companies (Strand and Freeman 2015; Strand

et al 2015), and according to several global listings, Nordic countries’ CSR performance is consistently of high level (see Chap 9)

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4 THE DAWN OF STAKEHOLDER THINKING IN NORDIC COUNTRIES