The United Nations Global Compact:
Engaging Implicit and Explicit CSR for
Global Governance
Jill A. Brown, Cynthia Clark & Anthony
F. Buono
Journal of Business Ethics
ISSN 0167-4544
J Bus Ethics
DOI 10.1007/s10551-016-3382-5
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DOI 10.1007/s10551-016-3382-5
ORIGINAL PAPER
The United Nations Global Compact: Engaging Implicit
and Explicit CSR for Global Governance
Jill A. Brown1 • Cynthia Clark1 • Anthony F. Buono1
Received: 1 December 2015 / Accepted: 6 November 2016
Ó Springer Science+Business Media Dordrecht 2016
Abstract This article analyzes the United Nations Global
Compact (UNGC) under the conceptual framework of
explicit versus implicit corporate social responsibility
(CSR) to better understand the operational and governance
challenges behind this voluntary global initiative. Using
institutional logics theory, we show how the UNGC is a
practice that embodies seemingly competing logics. We
suggest mechanisms to facilitate the interplay of
implicit/explicit CSR and the co-existence of logics that
might allow the UNGC to move forward while addressing
its critics. We argue that failure to conceptualize the
UNGC as a combination of explicit and implicit CSR
leaves the UNGC subject to criticism that might be better
directed toward organizations that fail to practice explicit
CSR. While viewing the UNGC through an integrated CSR
framework may not immediately reconcile its critics and
proponents, combining elements of both may provide
opportunities to posit collaborative solutions to improve
the quality, outcome, and legitimacy of UNGC initiatives.
Keywords United Nations Global Compact CSR Global
governance Institutional logics
& Jill A. Brown
[email protected]
Cynthia Clark
[email protected]
Anthony F. Buono
[email protected]
1
Bentley University, 175 Forest Street, Waltham, MA 02452,
USA
Introduction
The United Nations Global Compact (UNGC) has received
significant attention since its inception in 2000, with a
myriad of articles focused on its effectiveness and questions of legitimacy juxtaposed with arguments by both the
supporters and critics. The gist of a recent review of this
literature (Voegtlin and Pless 2014) is that despite this
extensive work, there is much research left to be done on
the design features that underscore the UNGC’s impact on
corporate social responsibility (CSR) as a model of selfregulatory global governance.
As a way of exploring these design features, we analyze
the UNGC within the conceptual framework of CSR. The
UNGC is presumed to be a vehicle for CSR because it provides global standards for business firms (Waddock 2008)
and facilitates progressive partnerships across the world
(Buono 2014). An underlying concern, however, is that the
CSR literature itself is highly fragmented, with different
disciplinary and conceptual lenses (Aguinis and Glavas
2012). Therefore, in order to examine the UNGC as a form of
CSR, it is important to adopt a framework that works for the
wide canvas of different global and institutional environments. Rather than adopting an umbrella term of CSR that
may not capture the expectations of different stakeholders,
we explore the UNGC under the framework of implicit
versus explicit CSR as defined by Matten and Moon (2008).
They introduced this concept to explain how CSR differs
among countries and argue that the global spread of explicit
CSR is due to the shifting nature of institutional frameworks.
Our analysis explicates this theory in the context of the
UNGC as a global voluntary initiative, to show how it can
integrate multiple logics associated with both explicit and
implicit CSR to provide opportunities to improve the outcomes of its initiatives.
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J. A. Brown et al.
Explicit CSR involves corporate policies that combine
social and business value to address issues perceived as
being part of the broader social role of a company.
Implicit CSR, in contrast, consists of the values and
norms that define the obligations of corporate actors in
‘‘collective rather than individual’’ terms (Matten and
Moon 2008, p. 409). These approaches differ by language (explicit = communicating specific policies/practices to stakeholders; implicit = little description of
activities) and intent (explicit = deliberate, voluntary,
and often strategic; implicit = reaction to/reflection of a
corporation’s environment). While both types of CSR
may have codified requirements, implicit CSR highlights
societal norms, networks, institutions, and rules rather
than the firm-driven practices and policies of explicit
CSR.
While advocates and critics wage battle over the credibility and legitimacy of the UNGC (Voegtlin and Pless
2014) and researchers and practitioners continue to define
its role (Kell 2013; Rasche 2009), looking at the UNGC
from an implicit/explicit CSR perspective might provide
nuanced insight into how the world’s largest voluntary
initiative becomes embedded into the scope of responsibility for corporations. Despite its characterization as
explicit CSR (Matten and Moon 2008), we suggest the
UNGC initiative can and should be viewed as the co-existence of explicit and implicit CSR. Drawing on an
institutional logics perspective (Thornton et al. 2012), our
premise is that since institutional logics can co-exist
(Kraatz and Block 2008) and facilitate collaboration among
participants (Seo and Creed 2002), they provide the basis
upon which the UNGC can support seemingly paradoxical
viewpoints.
In viewing the UNGC as the co-existence of explicit
and implicit CSR, one can perhaps better understand the
positions of UNGC proponents and critics, as well as the
way the UNGC promotes ‘‘the necessary reforms of the
UN system from within’’ (Rasche 2009, p. 532). In fact,
failures to consider the UNGC as an example of both
explicit and implicit CSR can lead to misunderstandings
and misinterpretations of its practices particularly from
critics who believe that the UNGC principles fail to
translate into meaningful practices (see, for example,
Sethi and Schepers 2014). Analyzing the UNGC under
this framework may also help to resolve an apparent
tension between those who solely define the UNGC as
an embedded, implicit CSR mechanism that crosses
cultural and institutional boundaries and those who see it
as an explicit mechanism directed by various institutions
for compliance. Additionally, although the literature on
the UNGC does not resolve (1) how firms should
respond to conflicting legitimacy claims from NGOs,
businesses, or unions (McCarthy et al. 2012) or (2) the
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salience of such claims (e.g., when environmental issues
take the place of labor issues; see Barkemeyer 2009), our
framework is designed to help understand how UNGCcommitted firms might respond to conflicting claims.
This issue has often been raised but mainly as a ‘‘future
research’’ and ‘‘discussion point’’ for UNGC research
(Rasche et al. 2012, p. 23), whereas our article makes it
a central aspect.
We introduce the lens of co-existing logics (Sewell
1992; Smith and Lewis 2011) to understand how the
UNGC is structured as a voluntary global governance
mechanism to effectively promote CSR. When viewed
through this theoretical framework, one can see that unless
UNGC principles evolve into specific CSR norms that are
clearly articulated by member companies and facilitate the
ability of firms to use their discretion to engage in firmspecific responsibilities, there is little opportunity for firms
to resolve conflicting claims or even assess the salience of
stakeholder claims against this backdrop. This perspective
addresses some of the frustration of critics like Sethi and
Schepers (2014) who see problems in the heterogeneity,
large number of participants, and overly broad initiatives
behind the UNGC as leading to less accountability, adverse
selection, and free-riding. Without conceptualizing the
UNGC as a combination of explicit and implicit CSR, the
Global Compact remains subject to criticism that might be
better directed towards organizations that fail to practice
explicit CSR—where voluntary corporate governance programs are couched and codified in CSR language that is
explicitly articulated by companies as their own initiatives.
Moreover, as recent research suggests, even firms that have
taken on a leadership role within the Global Compact face
challenges with regard to effectively translating core
principles into taken-for-granted practices (Junaid et al.
2015).
The paper is organized as follows: First, we discuss the
different conceptualizations of CSR that provide for comparative understanding, focusing on the implicit/explicit
categorizations of the Moon and Matten (2008) framework.
Second, we explore how the UN Global Compact is an
example of the co-existence of both CSR forms, drawing
on an institutional logics perspective that underscores the
possibility of harmonious co-existence. Third, we explain
how characterizing the UNGC as implicit–explicit CSR is
important to its future embeddedness in member organizations and the cultures they address. Finally, we show
how controversies over the performance of the UNGC may
become clearer, if not reconciled, through understanding
the UNGC in this way. While the Matten and Moon (2008)
framework is offered as a means to compare CSR initiatives across borders, we show how it can be used as a way
to understand how the UNGC crosses cultures as a voluntary governance mechanism.
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Implicit Versus Explicit CSR
Matten and Moon (2008) first introduced the concept of
implicit versus explicit CSR as a way to compare and
contrast the different forms of business responsibility to
society. Based on the idea that practices of CSR are diverse
across different settings and that CSR is an umbrella term
for a dynamic phenomenon, they developed a theoretical
framework of business responsibility consistent with contemporary institutional theory. They argue that national
business systems help to define the explicit versus implicit
nature of CSR because the government, corporations, and
markets that define the underlying institutional framework
organize the norms, incentives, and rules of CSR. As such,
the US-style CSR is explicit; it is embedded in a system
that provides incentive and opportunity for corporations to
assume and take responsibility for social interests through
voluntary programs and strategies to address issues considered to be the social responsibility of the company. The
intent of explicit CSR is also different in that it is deliberate, voluntary, and often strategic. In sum, explicit CSR
is reliant on firm-level discretion versus formal institutions
like the government.
In contrast, CSR in Europe is implicit in that corporations in Europe do not normally articulate their own CSR
agendas, rather, their institutional framework of norms,
values, and rules are the result of ‘‘coordinated approaches
to economic and social governance’’ (Matten and Moon
2008, p. 410) through largely government–led partnerships.
The intent of implicit CSR is not reflective of a corporate
decision; rather it is a reaction to, or reflection of, the
corporation’s institutional environment such that codified
norms, rules, and laws reflect broader societal interests.
Additionally, implicit CSR is reflective of the obligations
of corporate actors ‘‘in collective rather than individual
terms’’ (Matten and Moon 2008, p. 409).
While this framework was developed to offer comparisons of CSR across national settings, it is based on contemporary institutional theory, which allows for the
exploration of the CSR motivations of stakeholders across
other types of institutions as well. These include not just
the formal institutions of national systems, but also the
norms, incentives, and rules that define roles and actions
through, for example, multicentric institutions like the
United Nations. In fact, Matten and Moon (2008) point out
that their framework can be used (1) descriptively to
understand which perceptions of CSR companies seek to
live up to as well as (2) instrumentally in the way that
multinational companies choose to embark upon CSR
activities across different settings. The framework can also
be used normatively to ‘‘enable corporations to share in
coordinated social responsibility’’ (p. 420). They also
suggest that there can be movement in the conceptual
framework, and they provide the US/Europe contrast as an
example of how CSR in Europe has become more explicit
in nature. As such, it is appropriate to apply this framework
to the context of the public–private initiative of the UNGC,
which is reflective of the institutional foundations of the
UN and its recent social development agendas (Kell 2013).
The UN Global Compact
The Compact was launched in 2000 in response to then UN
Secretary General Kofi Annan’s call to business leaders to
work with the UN to ‘‘initiate a global compact of shared
values and principles, which will give a human face to the
global market’’ (ABIS and Ashridge Business School 2013,
p. 1). It was designed as a voluntary strategic policy initiative for businesses committed to aligning their operations and strategies with ten principles for responsible
business in the areas of human rights, labor, the environment, and anti-corruption. The underlying goal is to gain
commitments by the business community, which is seen as
a primary driver of globalization, to help ensure that its
basic activities—dealing with markets, commerce, technology, and finance—will move forward in ways that
benefit economies and societies around the world (UN
Global Compact 2015).
Beginning with an initial group of 44 firms, the Compact
has grown to over 8000 private sector and 4200 civil
society signatories from more than 165 countries around
the world. Although there are a number of multi-stakeholder, collaborative platforms for corporate sustainability
presently in existence, the UNGC remains the largest and
most globally comprehensive and the only such initiative
directly connected with the United Nations (Junaid et al.
2015).
Because the initiative begins with a CEO’s letter of
intent to commit to the Compact’s ten principles (UN
Global Compact 2015; Voegtlin and Pless 2014), it is easy
to see how the UNGC could be categorized as explicit in its
intent. Certainly, there are aspects of its language that
support this position. For example, the UNGC markets
itself as ‘‘a policy framework for organizing and developing corporate sustainability strategies’’ (UN Global Compact 2015), which seems strategic in nature. Similarly, the
mandatory Communication on Progress (COP) report,
designed to be a visible expression of a company’s transparency and commitment to sustainable practice, is publicly available to company stakeholders on each company’s
profile page—which is indicative of explicit CSR as a
pledge that is responsive (and perhaps even reactive) to
stakeholder expectations.
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It appears, however, the UNGC, in its mission and
principles-based approach (Rasche et al. 2012), is also
reflective of implicit CSR in many respects. Descriptively,
this is because the UNGC is generalist and universalist by
design intended to serve as a learning platform for continuous improvement (Voegtlin and Pless 2014), motivated
by a general consensus about the expectations of all participants captured in its ten guiding principles. Moreover,
the literature has identified the UNGC as a voluntary
governance mechanism for firms with a hypothetical
implicit contract (Jackson 2008). In asking firms to voluntarily adhere to predefined sets of norms and values
(Rasche and Esser 2006), the UNGC helps to establish
hypernorms that should apply across cultures (Laczniak
and Kennedy 2011). Again, by design, it was supposed to
be implicit, where companies subscribe to the UNGC
Principles not as a regulated tool, but rather as a voluntary
forum to foster dialog among like-minded, enlightened
participants (Arevalo and Aravind 2010; Rasche 2009;
Ruggie 2001).
As the latest evidence of the UNGC’s implicit nature,
the 2010 LEAD initiative was designed as a leadership
platform for companies with a strong history of engagement in both globally focused task forces and work streams
and UNGC Local Networks to advance sustainable performance as a universal norm (Gitsham and Page 2014;
Junaid et al. 2015). While LEAD signatories have ample
discretion as to which specific work streams and networks
they engage in—for example, from ‘‘Business Engagement
with Indigenous People’’ to ‘‘ESG Investor Briefings’’—it
is within a broader focus on common issues like ‘‘Sustainable Energy For All’’ and ‘‘UN-Business Partnerships’’
(see ABIS and Ashridge Business School 2013) and the
underlying goal of enhancing sustainable performance.
Institutional Logics and the UNGC as Implicit–
Explicit CSR
On the surface, it appears that the UNGC may invoke some
combination of implicit and explicit CSR. Why is this
distinction so important? It is important to understanding
how organizations are embedded within broader systems of
meaning (Jackall 1988) and to the organizational actions
that shape the logics underlying this process (Thornton and
Ocasio 2008). Institutional logics refer to the organizing
and guiding principles that translate into individual and
organizational values, beliefs, and behaviors (Thornton
et al. 2012)—in essence, the taken-for-grantedness that
guides organizational practice. It focuses on the role played
by various interests in the adoption of structures and
organizing platforms, often when there has been some sort
of transformation and change in logics both within and
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across organizations (Greenwood and Suddaby 2006;
Lounsbury 2007; Nigam and Ocasio 2010; Seo and Creed
2002). Institutional logics, for example, have been used to
address how governance structures shifted in the 1970s
because of the logic of shareholder value and agency theory issues in corporate governance practices (Davis 2009;
Davis and Thompson 1994; Useem 1993). It has also been
used to explain shifts in industry orientations by providing
a link between institutions and action (Thornton and Ocasio 1999).
Institutional logics theory is an appropriate framework
for understanding the UNGC as the co-existence of both
implicit and explicit CSR forms and their corresponding
logics, because it begins by conceptualizing society as an
inter-institutional system (Friedland and Alford 1991). It
views any context as potentially influenced by the multiple
logics of different societal actors; therefore, it can be used
to theorize and observe sources of heterogeneity and
agency in a global initiative like the UNGC (Thornton et al.
2012, p. 104).
The neo-institutionalist view holds that logics compete
and become dominant by displacing previously dominant
beliefs and practices (Friedland and Alford 1991; Lounsbury 2007; Seo and Creed 2002). This view holds that
institutional change occurs when an existing dominant
logic is replaced by a new, competing logic. In effect, one
of the dueling logics will ultimately ‘‘win’’ and the losing
logic will fade into the background until a next competing
logic emerges to begin a new round of competition. Recent
research, however, points to the idea of a co-existence of
logics. This research suggests that the process of institutional change may be more nuanced than the relatively
narrow view of logic contestation. Competing logics may
be able to co-exist either through a process of suppression
of one dominant logic over another (Reay and Hinings
2005) or through a more equal and continuous co-mingling
(Dunn and Jones 2010; Jarzabkowski et al. 2009; Lounsbury 2007; Smith-Doerr 2005). For example, Dunn and
Jones (2010) found that care and science logics in the
medical profession have persisted together over several
decades albeit with periods of balance and imbalance
between the two. Similarly, Lounsbury (2007) found that
two competing logics could co-exist within mutual fund
firms through geographical separation—where each geographic location was able to follow a particular (and
alternative) institutional logic. Further, two competing
logics have been noted to co-mingle for a period, without
any suppression or replacement (Smith-Doerr 2005).
There are elements of institutional logics that help to
explain the implicit and explicit CSR nature of the UNGC
and their seemingly competing logics. Beginning with a
focus on implicit CSR—its community logic, collective
identity, and structured attention through values
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identification by organizational decision makers—we show
how each of these logics shape organizational action
through the UNGC (Thornton and Ocasio 2008). Taken
together they point to the UN Global Compact as a voluntary initiative that is not merely a reaction to the perceived expectations of different stakeholders (i.e., explicit
CSR), but also a proactive stance to the legitimate expectations of society. These elements are then contrasted to the
elements of institutional logics that explain the UNGC’s
explicit CSR nature—its market logic, its ability to foster
firm-level identity, and the structured attention by members
through voluntary corporate activities. We find common
ground in the instrumental nature of the UNGC initiatives
that allow for additive and complementary logics between
the two types of CSR. This co-existence of logics, which
underlie both types of CSR practices, may also allow for a
periodic co-mingling (Smith-Doerr 2005) with an eye
toward the harmonious co-existence of both types. These
elements are captured in Fig. 1.
The Logics of the UNGC as Implicit CSR
There are three underlying logics pointing to the Global
Compact as an example of implicit CSR: its overarching
community logic, its collective identity, and the structured
attention through values identification.
It is easy to see how UNGC CSR practices can follow a
community logic, embedded in an inter-institutional system
that is not reliant on or reactive to the perceived expectations of stakeholders as one might see in explicit CSR.
Rather, as part of this community logic, the UNGC
attempts to address governance gaps in the rise of the
global economy (Cohen 2001), providing platforms for
collaboration (Jarzabkowski et al. 2009; Smith and Lewis
2011) and learning and discourse events that allow for the
sharing of information (Rasche 2012). Collectively, these
activities fall under implicit CSR by description, but they
also provide insight into the instrumental nature of the
UNGC agenda. The UNGC has been classified as a voluntary self-regulatory initiative that is both specific in code
provisions but weak as a governance structure (see the
debate in Voegtlin and Pless 2014). However, as implicit
CSR, the UNGC can be seen as a developmental initiative
with legitimate expectations for businesses to engage and
problem-solve for the benefits of civil society. As implicit
CSR, it is supported by a logic of cooperation and community that builds consensus for principles-based initiatives (Rasche et al. 2012) focusing on creating an inclusive
and sustainable global economy. The categorization of the
UNGC as implicit CSR therefore provides support for
arguments in defense of the UNGC as an effective platform
for the global spread and implementation of CSR standards
(Rasche and Waddock 2014).
The UNGC and Community Logic
The UNGC and Its Collective Identity
When organizations adopt CSR practices, conventional
institutional logics suggest that they will choose either
‘‘market logic’’ or ‘‘community logic’’ with structural
designs that align with the logic emphasized by the practice
(Glynn and Raffaelli 2013). A market logic perspective is
similar to the strategic view of CSR (McWilliams et al.
2006), where businesses are concerned with the transactional basis of organizational behavior and approach CSR
with a ‘‘market capitalism’’ focus (Thornton et al. 2012).
Organizations with this CSR emphasis will adopt structures
that are most concerned with strategic profit maximizing
goals and will structure accountability and responsibility
for CSR along functional lines in their organizations
(Glynn and Raffaelli 2013).
Community logic emphasizes the ideology and value
systems shared by a community, focusing less on the
economic health of the firm and more on its social fitness
(Marquis and Lounsbury 2007). Organizations that
approach CSR with this logic structurally embed their CSR
practices with a focus on ‘‘cooperative capitalism’’
(Thornton et al. 2012, p. 73). Community logic suggests
that the structural embeddedness of CSR is reflected in its
practices that go beyond mainline functional business units
(Glynn and Raffaelli 2013).
Institutional logics also highlight collective identity as a
source of differentiation in how logics shape organizational
action (Jackall 1988). Collective identity is the cognitive,
normative, and emotional connection members of a group
experience with their social groups (Polletta and Jasper
2001; Thornton and Ocasio 2008). When individuals or
organizations collectively identify with a group, they are
more likely to comply with norms and prescriptions (Kelman 2006). As collective identities become institutionalized, they create their own distinct institutional logic
(Jackall 1988), as seen in professional or industry associations, where members identify with the collective group
and adopt the prevailing institutional logics to determine
best practices (Haveman and Rao 1997; Lounsbury 2002).
Within the UNGC, the collective identity emerges from
each member’s commitment to a set of principles that do
not require further articulation by each company according
to their own version, as might be expected with explicit
CSR. In fact, the historic development of the UNGC has
been one where members commit to engaging in collaborative problem solving to establish worldwide standards
that reflect a new social contract between business, government, and society (Post 2013). This collective identity
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Fig. 1 The UNGC: engaging in
implicit and explicit CSR
The UNGC: Engaging in Implicit and Explicit CSR
Implicit CSR
Describes
corporations' role
within the wider
institutional
network for
society's interests
UNGC Logics
Community
Consists of
values, norms
and rules that
result in
requirements for
corporations
Motivated by the
societal
consensus on the
legitimate
expectations of
the roles and
contributions of
societal groups
UN principles
provide norms of
behavior
Collective
Identity
Market
Firm-Level
Identity
UNGC practices and
symbols are made
available for firms to
use fostering
collaboration
Explicit
CSR
Translates to
corporate
activities that
assume
responsibility
Structured
Attention
by Members
through
Value
Identification
UNGC service nature
guides its principles
and practice
Motivated by
the perceived
expectations of
different
stakeholders of
the corporation
Obligations of
actors are
addressed in
individual
terms
UNGC members
have partial autonomy
of the UNGC helps to define and describe the role of
corporations across the wider global community as an
implicit form of CSR.
This categorization has instrumental implications as
well. As implicit CSR, the UNGC can be assessed as a
forum for collaboration to identify and address the social
responsibilities of business—supporting the arguments by
Haack and Scherer (2014) that the Global Compact should
be evaluated under a ‘‘nurturant parent’’ ideal for institutionalization rather than a ‘‘strict father.’’ Additionally, as
implicit CSR, the Global Compact is supported by what
might be thought of as a logic of consensus in that the
collective identity of its members is built through discourse
and collaboration (Hardy et al. 2005), which is particularly
seen in the context of social movements (Polletta and
Jasper 2001). This logic also counters criticisms of the
UNGC as an initiative that is not conducive to cohesiveness among signatories (see Sethi and Schepers 2014).
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UNGC integrates
structural, normative
and symbolic
elements
UNGC Logics
Translates to
corporate
policies and
strategies
Obligations of
actors are
addressed in
collective terms
Corporations do
not articulate
their own
versions of
responsibilities
Co-Existing
Logics
Structured
Attention
by Members
through
Voluntary
Corporate
Activities
Corporations
use the
language of
CSR to
communicate
practices to
stakeholders
The UNGC and Structured Attention Through Values
Identification
Another way that institutional logics shape organizational
action is through the attention received by organizational
decision makers (Ocasio 1997; Thornton 2002). Institutions structure attention by generating values that prioritize
the legitimacy of issues and provide decision makers with
an understanding of their identities that motivate them to
action (Ocasio 1997). The structured attention to the
UNGC has shifted over the years of its development,
mirroring a shift in institutional logics toward more business engagement with civil society (Post 2013), as well as
increased political discourse and the development of an
operational infrastructure to support broader UN initiatives
(Kell 2013). Such a shift of attention has facilitated the
UNGC’s emergence as an embedded form of CSR in its
corporate signatories, building on the normative value of
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the UN commitment to human rights, labor practices,
environmental preservation, and anti-corruption. The
structured attention of signatories in UNGC initiatives over
time has further facilitated the institutionalization of
members’ formal corporate policies at the macro level as
they are translated to micro-level organizational practices
(Junaid et al. 2015). Again, these examples align both
descriptively and instrumentally with the tenets of implicit
CSR.
The Logics of the UNGC as Explicit CSR
Similar to the logics that illustrate the Global Compact as
an example of implicit CSR, there are three underlying
themes that point to its role as explicit CSR: the role of
market logic, firm-level identity, and the structured attention that emerges from voluntary corporate policies.
The UNGC and Market Logic
In addition to the pursuit of CSR practices that invoke a
community-based logic, companies also pursue CSR
practices that have a market-based logic (Glynn and Raffaelli 2013). Market logic embraces profit-oriented goals
and the efficiency of business, focusing on the economic
health of the firm. This orientation has been captured in the
CSR literature in its framing of CSR as ‘‘strategic,’’ or the
voluntary CSR actions that enhance a firm’s competitiveness and reputation (Orlitzky et al. 2011). The UNGC has
elements of this logic, expressed in its description of the
‘‘Value Driver Model,’’ which helps companies to quantify
the financial value of corporate sustainability (UNGC
2013). Revenue growth, resource productivity, and risk
management are the selling points the Global Compact
uses to motivate members. In fact, evidence suggests that
this logic has been successful in the recruitment of more
members. For example, in a study of UNGC adopters in
Spain, researchers found that, contrary to its earlier days,
economic gains were the primary motivator for newer
adopters of the UNGC principles, moderated by the possibility of image gains as well (Arevalo et al. 2013). The
effectiveness of the UNGC according to market logics has
been highly debatable, with critics suggesting there is a
lack of transparency related to companies’ compliance
(Hemphill 2005) and the inability to show better performance (Sethi and Schepers 2014). However, other evidence
suggests that these principles are an instrumental building
block, albeit modest, to industry-specific CSR programs
(Runhaar and Lafferty 2009).
The market logic of the UNGC equates to the principles
of explicit CSR because the UNGC combines both social
and business value as strategic goals of the organization. In
fact, the UNGC uses the term ‘‘shared value’’ in its
marketing (UNGC 2013, p. 4), perhaps capitalizing on the
well-embraced, albeit debatable, term coined by Porter and
Kramer (2006, 2011) in their series of Harvard Business
Review articles about integrating CSR into core business
strategy.
The UNGC and Firm-Level Identity
As we noted above, institutional logics may shape a firm’s
actions when the firm identifies collectively with a group or
an ideal. While we have explained above how this reconciles with the UNGC as implicit CSR, we also note that
CSR is a firm-level activity that requires attention to details
of resource allocation and cost/benefit analysis (McWilliams and Siegel 2001). Firms have shown a desire for the
ability to differentiate their CSR programs (Porter and
Kramer 2006, 2011), particularly when they are for
strategic purposes. Many see it as providing some ideal
benefit relative to cost (McWilliams et al. 2006) and
important to market competitiveness (Vilanova et al.
2009).
The importance of the UNGC as a firm-level initiative is
central to its structural embeddedness—the overall architecture by which firm behavior is determined by its ongoing system of inter-firm relations (Granovetter 1985).
Embedded in the UNGC’s principles and requirements,
there are elements of firm-level discretion that is both
practical from the standpoint of multinational firms but also
identity-driven as each firm attempts to put its own unique
stamp on CSR. For example, UNGC signatories are given
latitude to adopt Global Compact norms in their corporate
policies as they wish, submitting annual Communications
on Progress (COP) reports that are posted on the Global
Compact’s website. While critics have noted there is considerable variety in the depth and breadth of these reports
(Berliner and Prakash 2012), they also acknowledge that
the adoption of practices at the firm level is influenced by
government commitments to the UN (Bennie et al. 2007).
In sum, the firm-level identity of the UNGC, and its
embeddedness, is important to enabling or constraining
organizational decisions regarding how UNGC ideals
translate into practice (Glynn and Raffaelli 2013), which
are reflective of the UNGC as a form of explicit CSR.
The UNGC and Structured Attention Through Voluntary
Corporate Policies
Voluntary governance programs can be an important policy
tool that produces public benefits by changing members’
behaviors (Abbot and Monsen 1979; Barnett and Salomon
2012). Voluntary, firm-level corporate policies have been
the focus of the UNGC from its inception. Participation in
such programs produces reputational benefits that induce
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members to voluntarily go beyond what they might have
done unilaterally (Potoski and Prakash 2005). Moreover,
the voluntary nature of the initiative is what is expected
from global stakeholders as multinational firms, NGOs, and
governmental organizations partner together with flexible
governance structures to promote large-scale social change.
While the allocation of attention by UNGC member
firms to the ten principles has been a subject of debate, due
to the lack of accountability and inability to monitor for
compliance (Sethi 2011; Sethi and Schepers 2014), voluntary collaboration has been seen to be effective as a key
building block in the architecture needed to achieve global
social goals (Albareda 2013; Gitsham and Page 2014). For
example, we point to the LEAD initiative again, where
trust relationships were formed through the opportunity to
network and collaborate with other leading companies for
business engagement with indigenous people, integrated
social reporting, UN-business partnerships, and other sustainability programs. This voluntary and collaborative
dimension is perhaps the element that Matten and Moon
(2008) were referring to when they cited the UNGC as an
example of explicit CSR in its involvement with governmental and non-governmental organizations.
The Paradox
Firms are routinely confronted with the problem of how to
attend to competing demands simultaneously. We have
identified the interrelated, yet seemingly conflicting, logics
surrounding the UNGC as an integrated form of implicit
and explicit CSR. The UNGC, in fact, spans multiple
logics: markets and community, collective and firm-level
identity, and institutional values identification and firmlevel voluntary corporate activities as methods by which
members are attentive to its policies and programs. Together, these polarities point to the co-existence of multiple
logics that has traditionally made reconciling them difficult
(Seo and Creed 2002).
The conceptual framework presented in this paper also
explains some of the criticisms of the UNGC that revolve
around ‘‘bluewashing’’ and a lack of commitment on the
implicit side (Runhaar and Lafferty 2009) as well as a
promise–performance gap on the explicit side (Sethi and
Schepers 2014). In defining the UNGC as an ‘‘either/or’’
implicit/explicit CSR mechanism, the UNGC faces the
same conundrum of principles versus practice faced by
other contexts of global governance. These include, for
example, the dilemmas of compliance versus collaboration
faced by global supply chains in the implementation of
multi-stakeholder initiatives (Soundararajan and Brown
2015) as well as the endorsement of universalist moral
principles in localized MNC board governance (Clark and
Brown 2014). These contexts struggle with global broad-
123
based versus firm/country-specific governance mechanisms
and associated competing (albeit different) logics, just as
we see with the implementation of UNGC principle-based
initiatives (Rasche et al. 2012).
Co-existing Logics
Recent research suggests that dueling logics can be reconciled to the point of fostering collaboration and even
harmonization (Dunn and Jones 2010; Jarzabkowski et al.
2009; Lounsbury 2007; Smith-Doerr 2005; Smith and
Lewis 2011). As examples, Reay and Hinings (2005, 2009)
use process-based studies to show how competing logics
can be actively managed through collaborative relationships. Dunn and Jones (2010) illustrate how plural logics of
science and care in medicine became integrated and complementary through medical education over the years.
Tracey et al. (2011) explain how institutional entrepreneurs
combine for-profit and non-profit logics to create a new
organizational form that alters identities and provides
motivation for social entrepreneurs.
The basis for co-existing logics is that a ‘‘constellation
of logics’’ (Goodrick and Reay 2011) can exist such that
the presence of multiple logics in a field can have cooperative as well as contentious implications. In fact, within a
broader organizational intervention perspective, the idea of
realizing and managing such apparent tensions is becoming
a basic staple of effective management (Johnson
1992, 2014; Manderscheid and Freeman 2012). Therefore,
while the implicit/explicit nature of the UNGC’s CSR has
seemingly paradoxical elements as a dual structure that
enables members to enact different schemas (Sewell 1992),
it is possible they represent a set of expectations for
behavior in logics that can be cooperative as well. Goodrick and Reay (2011), for example, suggest two ways that
competing logics might be cooperative: (1) when the
relationship between logics is facilitative (i.e., when
changes in practices consistent with one logic encourage
changes consistent with an alternative logic); and (2) when
the relationship among logics is additive (i.e., when the
practice of the logic reflects the influence of more than one
logic (see also Waldorff et al. 2013).
As a practice that encompasses elements of implicit and
explicit CSR, the UNGC satisfies both conditions by which
seemingly competitive logics co-exist and become collaborative. With respect to Goodrick and Reay’s (2011) first
condition, one can look at the changes in the Global
Compact’s COP directives asking companies to report on
their implementation efforts at different levels of performance and disclosure (ranging from GC Active to GC
Advanced to Leadership levels). Since 2010, all members
are subject to potential de-listing for non-compliance
(Knudsen 2011), which codifies the requirements for
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The United Nations Global Compact: Engaging Implicit and Explicit CSR for Global Governance
corporations. This practice is consistent across implicit and
explicit CSR logics; the directives ensure monitoring and
compliance on the market logic side while providing consistency and fostering collaboration for reporting on the
community logic side. The UNGC introduced this monitoring mechanism to address the potential promise–performance gap as well as to enforce the de-listing of noncompliant signatories. Similarly, the development of the
LEAD initiative in 2010 was a change the UNGC introduced to highlight and share the best practices of leading
member firms, facilitating a change consistent across elements of firm level and collective identity logics. Finally,
while the UNGC was founded under the challenge of
joining a global compact of shared values and principles
(Annan 1999) to capture the attention of MNCs, there has
been a shift in focus to the voluntary (and discretionary)
aspects of UNGC practices, focusing signatories on the
ways in which the ten principles might translate into action
(Rasche 2009, p. 524).
For the second condition, we point to the additive nature
of UNGC logics—when practice reflects the presence of
more than one logic. Here, we point to the UNGC’s focus
on shared value (Fussler et al. 2004), combining market
and community logics, for the benefit of collaboration and
learning that can foster value for individual businesses as
well as society (Porter and Kramer 2011; UNGC 2013).
Reconciling collective identity and firm-level logics is also
practiced when UNGC members are called upon to develop
corporate strategies that advance inclusive economic
growth, social equity and progress, and environmental
protection. These strategies simultaneously contribute to
revenue growth, resource productivity, and the mitigation
of operational, legal, and reputational risks (UNGC 2013).
When firms come together with shared perceptions and a
conceptualization of themselves as part of a larger group,
they recognize generalized ties with other stakeholders.
This practice effectively enhances the firm’s stakeholder
management while also enhancing social value (Brickson
2007), although we acknowledge that this additive logic is
not without controversy in the context of the UNGC, as
many critics argue that business is becoming too influential
(Barkemeyer 2009; Thérien and Pouliot 2006). Finally, the
additive logic of members’ attention to both values and the
UNGC’s voluntary initiatives is reflected in the ‘‘platform
for dialogue and partnership projects’’ that translates values
into opportunities for cooperation among members, albeit
voluntarily (Voegtlin and Pless 2014, p. 187).
In sum, there are many opportunities for the cooperative
aspects of implicit/explicit CSR and their respective logics to
exist and co-mingle in the context of the UNGC (Smith-Doerr
2005). The question remains, however, as to what can be done
to facilitate this co-existence and help the UN continue to
develop this initiative—a question to which we now turn.
Facilitating Co-existence
Multiple logics can both constrain or enable action (Waldorff et al. 2013). The presence of an influential logic or the
pressure to satisfy too many demands can constrain actions
where facilitating or additive logics exist. In fact, this
potential tension has been identified in institutional logics
research when, for example, the influence of cultural logics
and behavioral positioning failed to change fundamental
institutional logics to generate changes in practices and
identities in the Alberta Oil Sands Case (Misutka et al.
2013). As another example, Nigam and Ocasio (2010)
point to the political logics that constrained a change in
logics regarding the health plan proposed under U.S.
President Clinton in 1993 and 1994.
In contrast, strengthening alternative logics, segmenting
logics, and facilitating logics can also enable actions
(Waldorff et al. 2013). Given the global, inter-institutional
nature of the UNGC, we focus on the last element here—
the ways the UNGC and its members facilitate relationships among different logics. We suggest three mechanisms that facilitate the interplay of implicit/explicit CSR
and the co-existence of logics that might allow the UNGC
to move forward while addressing its critics. These
mechanisms incorporate the structural, normative, and
symbolic elements of the UNGC that facilitate co-existence
(Thornton et al. 2012). While viewing the UNGC through
an integrated implicit/explicit CSR framework may not
reconcile its critics and proponents, combining elements of
both may provide opportunities to posit solutions that will
improve the quality and outcome of the UNGC initiatives.
Market/Community Logics
One of the ways that market/community tensions can be
resolved is by establishing expectations and norms of
behavior that cross explicit/implicit CSR with structural,
normative, and symbolic elements. When faced with an
apparent paradox, people often develop mindsets that discourage further thinking (Lewis 2000). However, through
true dialog—in essence, transformational conversations
that enable different parties to go beyond either/or thinking, letting go of fixed beliefs to find expanded meaning—
can lead to co-created understandings that are normative in
nature (Davidson 2016). The UNGC can facilitate this
process by creating structures and practices that cross
logics. Voegtlin and Pless (2014), for example, suggest that
stricter compliance and monitoring systems will increase
transparency and member engagement in CSR—combining
market and community logics. However, when these are
signaled to the global marketplace and couched in language
that points to the possibility of social innovation (Kanter
1999) or shared value (Porter and Kramer 2011), member
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firms might feel compelled to change, reinforce, and/or
redouble their practices to conform to institutional expectations (Thornton et al. 2012). UNGC principles that
become explicit in the introduction of language within
corporate policies can help to provide such norms. In fact,
this codification reflects the nebulous area of the
implicit/explicit CSR framework, where corporate activities, policies, programs, strategies, rules, and requirements
easily move between both types of CSR.
This area has probably been the biggest challenge for
the UNGC to date, where critics point to failures in
crossing over from principles to practice. In fact, even
leading signatory firms have found it challenging to institutionalize the Global Compact’s ideals into day-to-day
practice (Junaid et al. 2015). Proponents of the UNGC, like
Rasche and Waddock (2014), however, point to the complementary nature of regulatory and principles-based
norms in the global spread of CSR standards. One result
appears to be an emerging set of norms and expectations, to
the point of potential societal consensus, about how firms
should behave in different situations, creating a progressive
image of how MNCs as well as local area networks could
contribute to a more inclusive global economy.
Collective and Firm-Level Identities
Unlike other global social initiatives, the UNGC has a
collective membership that invites collaboration for change
(Buono 2014). In fact, one of the UNGC’s biggest advantages lies in the discretion of firms to define for themselves
how to build trusting relationships through the leadership
platform of the UNGC (Gitsham and Page 2014). It is this
CSR element where both explicit and implicit CSR intersect: when norms of practice are developed and communicated between stakeholder groups using the language or
symbols of CSR (i.e., explicit), but within the institutional
network behind the global organization (i.e., implicit).
However, supporting both collective and firm-level identities is conditioned upon maintaining the partial autonomy
of UNGC members—a structural element important to the
codification process that connects implicit to explicit CSR
logics.
Within this context, it is becoming increasingly apparent
that in order to fulfill the ideals of the Global Compact,
signatories will need to move beyond first-mover initiatives
(firm-level action) and embrace partnerships (collective
action) that draws together business and a broad array of
stakeholders—often for the first time (see UNGC 2013).
Such collaboration not only promises to help address
unmet needs in the quest of sustainable economic, social,
and environmental development, but it also presents
potential for firms to enter new markets and seek new
business opportunities. This has been successful, for
123
example, in other multi-stakeholder initiatives where trust
is built up between MNCs, local and national governments,
and local indigenous people through a multi-level dynamic
process involving emotions across individual and collective levels (Sloan and Oliver 2013).
Structured Attention to Values and Voluntary
Corporate Policies
Directing the attention of UNGC members to both institutional/values-driven ideals and firm-level/voluntary
activities, on the surface, should be relatively easy. Both
perspectives are supported by an overarching commitment
of UNGC members to a service logic in identifying and
spreading good corporate practice—and this is where the
additive nature of the structured attention by members may
be seen. Again, however, this is where critics will often
find an opportunity to argue the promise–performance gap
in the failure of signatory companies to enhance their CSR
efforts (Sethi and Schepers 2014). From an institutional
perspective, these critics might suggest that there is no
‘‘trickle down’’ effect of UNGC institutional values to firm
voluntary practices (Selznick 1957). Yet, institutional
logics suggest that wider societal developments will likely
become individual firm behavior when norms are embedded, when the internal political climate is conducive to the
new ideas, and when they do not deviate too much from an
already established practice (Greenwood and Hinings
1996; Haveman and Rao 1997; Lounsbury 2007; Strang
and Meyer 1994; Thornton and Ocasio 1999). Hence, with
a central logic of service, firms can put their own unique set
of mechanisms, policies, and practices into place while also
adhering to the societal norms of a particular region with
respect to voluntary or mandatory practices.
In sum, our exercise addressing the co-existence of
logics shows that the UNGC has evolved into an initiative
where multiple logics co-exist, and these logics can serve
to translate UNGC concepts into action. By extrapolating
the Matten and Moon (2008) framework beyond its current
use as a means to compare CSR initiatives across borders,
this paper shows how it can be used as a way to understand
how the UNGC crosses cultures as a voluntary governance
mechanism with co-existing logics. Important to the CSR
process is the UNGC continuing to encourage firm-level
initiatives that, while discretionary, offer enough structural,
symbolic, and normative elements to create action. The
increased collaboration between members should foster
more additive and facilitating logics to help UNGC activities span markets, communities, identities, and member
attention. In sum, the UNGC must be viewed as an
embedded form of CSR with both implicit and explicit
elements.
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The United Nations Global Compact: Engaging Implicit and Explicit CSR for Global Governance
Conclusion
This paper began by asserting the importance of situating
the UNGC in the framework of a CSR initiative that
facilitates both implicit and explicit CSR. This depiction is
important because the UNGC has been criticized for
problems in its design features, and many of the comments
against the UNGC’s design reflect problems in failures on
either the implicit or explicit side of CSR. We have identified part of the problem in that, as a global, multicentric,
voluntary initiative, the UNGC is supported by institutional
logics that on the surface seem competing or even irreconcilable. We have attempted to provide examples of how
UNGC logics co-exist with respect to three key aspects of
the initiative (i.e., market and community logics, collective
and firm-level identities, member attention to institutional
values/firm-level voluntary policies). In doing so, we
address the importance of the implicit nature of the UNGC
to embedding norms and values of behaviors within corporations. However, we also acknowledge the importance
of codifying behaviors through the explicit and even
strategic CSR practices of member companies.
Any discussion of the UNGC and its failures or successes has to be done in a multi-level context, taking into
account the prospects for collaborations between members
that cross countries, cultures, NGOs, governments, and
public/private partnerships. Our exercise supports the idea
that successful integration of multiple logics requires
institutional blending in building relationships with actors
across multiple domains (Rao and Giorgi 2006). To discuss
failures in lack of cohesiveness, conflicts between private
microeconomic interests versus public policy agendas and
other alleged elements of a ‘‘Faustian Bargain’’ in the
UNGC (Sethi and Schepers 2014, p. 199) seem to focus on
competing institutional logics without considering the
possibility of co-existing logics, including the development
of codified values and norms and collaborative relationships that might reconcile these issues. In this respect, we
answer the call for more research exploring not only coexisting logics but the idea that CSR is a cyclical process
involving a combination of activities, structures and norms
(Vidal et al. 2015).
The arguments in the paper have been developed by
uniquely explicating implicit and explicit CSR theory
(Matten and Moon 2008) from the national level of analysis to the level of the UNGC and its member firms. We
have argued that this conceptualization is appropriate,
given that the framework attests to the descriptive, instrumental, and normative elements of the relationship
between corporations and societal institutions (see Matten
and Moon 2008, p. 420). We also illustrate how this may be
explained and integrated through an institutional logics
framework (Thornton et al. 2012). In fact, our premise
aligns with Matten and Moon’s notion that explicit/implicit
CSR appears to reflect the reality that corporations also
shape, rather than simply reflect, institutional frameworks.
While our framework does not necessarily help to better
understand how firms should respond to conflicting legitimacy claims from NGOs, businesses, or unions (McCarthy
et al. 2012) or determine the salience of such claims
(Barkemeyer 2009), it can to help understand how UNGCcommitted firms might respond to conflicting claims. Firms
whose logics tend towards more implicit CSR, with its
respective CSR characteristics, might view conflicting
claims with an orientation towards legitimacy and societal
consensus regarding the expectations for the relationship.
Firms whose CSR characteristics tend toward more explicit
CSR may practice more active stakeholder management
and might view conflicting claims with some orientation
toward the legitimacy, urgency, and power of such claims
(Mitchell et al. 1997). However, we are cautious in
applying this framework too narrowly, keeping in mind
that as a multi-stakeholder initiative, UNGC claims would
also be influenced by the trust members have with their
partners (Sloan and Oliver 2013), the level of emotion in
such claims (Driscoll 1996), and the regions that the
partners operate in Matten and Moon (2008).
Of course, the future challenge for the UNGC offered in
our analysis will be to maintain some of the advantages of
both implicit and explicit CSR, including the discretion
afforded to firms, nations, NGOs, customers, labor unions,
and other civil society stakeholders to work together within
the wider net of society’s interests—the discretion central
to successful collaboration in multi-stakeholder initiatives.
However, perhaps in understanding the UNGC from both
CSR orientations, member signatories will come to work
together to facilitate the mindful behavior of its constituencies (Christensen et al. 2014) and find consensus on
the ethical norms that might guide the global economy
(Williams 2014).
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