Corporate Social Responsibility Programs in Small and Medium Enterprises – Food Industry in Taiwan

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(1)Corporate Social Responsibility Programs in Small and Medium Enterprises – Food Industry in Taiwan. by. Yu-Hsuan Chiu. A Thesis Submitted to the Graduate Faculty in Partial Fulfilment of the Requirements for the Degree of. MASTER OF BUSINESS ADMINISTRATION. Major: International Human Resource Development. Advisor: Chu-Chen Rosa Yeh, Ph.D.. National Taiwan Normal University Taipei, Taiwan. August, 2020.

(2) ACKNOWLEDGEMENT First of all, I would like to express my deepest appreciation to my thesis advisor, Dr. ChuChen Rosa Yeh. Writing thesis is not only a long journey but a big challenge for me; however, she always provides me constructive advices. Without her teaching and assistance, I could never have finished my thesis. Second, I would like to appreciate my committee members, Dr. Wei-Wen Chang and Dr. Mei-Tzu Huang. Thank them for reviewing my thesis and attended to my thesis proposal and defense. They also gave me many useful suggestions to improve my thesis quality and writing. Third, the staffs in IHRD office, Jessica, Tracy, and Steven, they also gave me plenty of assistance. Many times, I faced some administrative problems, they carefully solved my problems with enjoyable conversations. I really thank them for the caring these two years. Fourth, I would like to thank my IHRD classmate, they gave me a lot of psychological supports when I was struggling in my thesis. Annjil, who always talked to me when I got obstacles and spent time figuring out the solutions with me. Josie and Rita, they gave me lots of instructions about thesis writing. Without their assistance, I would not have accomplished the completion of my thesis. Lastly, I would like to thank the case companies of my thesis. They are all outstanding SMEs in Taiwan providing their expertise and contributing to make our society better. I learned many beneficial lessons from them which was not expected at the beginning of the research..

(3) ABSTRACT In Taiwan, after numerous cases of food safety and environmental pollution scandals, corporate social responsibility (CSR) has become a high concern of the public. Although it appeared that CSR had mostly been implemented only by large enterprises in Taiwan, in fact, small and medium enterprises can also conduct their CSR programs. Moreover, food is an essential part of our daily life that has a fundamental impact on our health; therefore, the food industry specifically should pay extremely high regard to their social responsibility. This research applied the multiple-case-study approach and explored the above-mentioned CSR issues in three outstanding Taiwanese SMEs in the food industry. Observations, semi-structured interviews, and other triangulation techniques were conducted to support the credibility of the research. The findings of the research are as follows. First, the definition of CSR is unclear among the SMEs in Taiwan. In this research, for some SMEs, CSR is a sort of specific activities; some even considered CSR is only for the large companies and are mandated by the government. Second, the will of the top management forms the company’s vision and mission and also influences the organizational culture. With a strong connection to the organizational culture, employees in the case companies possess high organizational identification which leads them to conduct CSR programs. Third, when implementing CSR program, the company’s lack of resources and the governmental regulations can be the challenges; while on the positive side, the flexibility to solve problems and the deep business expertise are the strength of SMEs and can be the opportunities. Lastly, positive outcomes for SMEs from the CSR program are increased customer loyalty, better performance in the market, diversified business partners, and the sense of achievement from the employees. Keywords: corporate social responsibility, small and medium enterprise, the food industry in Taiwan. I.

(4) TABLE OF CONTENTS ABSTRACT ............................................................................................... I TABLE OF CONTENTS ........................................................................ III LIST OF TABLES ................................................................................... V LIST OF FIGURES ............................................................................... VII CHAPTER I INTRODUCTION ............................................................ 1 Research Background .............................................................................................1 Statement of Problem ..............................................................................................3 Research Purposes...................................................................................................3 Research Questions .................................................................................................4 Significance of the Study ........................................................................................4 Definition of Terms .................................................................................................5. CHAPTER II LITERATURE REVIEW ............................................... 7 Definitions of Corporate Social Responsibility ......................................................7 Implementation of Corporate Social Responsibility ...............................................9 Corporate Sustainability and Corporate Social Responsibility .............................11 Corporate Social Responsibility in Business Enterprise .......................................12 Corporate Social Responsibility in Small and Medium Enterprises .....................13 Corporate Social Responsibility in Food Industry ................................................14 Development of Corporate Social Responsibility in Taiwan................................15. CHAPTER III METHODOLOGY ...................................................... 17 Research Apporach ...............................................................................................17 Research Framework.............................................................................................17 Research Quility ....................................................................................................18 Research Procedure .............................................................................................19 Research Participants and Critera .........................................................................21 Introduction of Case Companies ...........................................................................23 Data Collection .....................................................................................................26 II.

(5) Data Analysis ........................................................................................................30. CHAPTER IV FINDINGS & DISCUSSIONS ................................... 33 The Definition of CSR among SMEs in Taiwan ..................................................34 The Motivations of Conducting CSR Program .....................................................37 The Implementation of CSR Program ..................................................................41 Challenges of Conducting CSR Program ..............................................................48 Advantages of Conducting CSR Program ............................................................52 The Positive Outcomes of Conducting CSR Program ..........................................55 Discussions............................................................................................................60. CHAPTER V CONCLUSIONS & RECOMMENDATIONS ............ 63 Conclusion ............................................................................................................63 Implications ...........................................................................................................66 Limitations ............................................................................................................68 Recommendations for Future Research ................................................................69. REFERENCES........................................................................................ 71 APPENDIX A: INTERVIEW QUESTIONS ......................................... 77 APPENDIX B: EXAMPLES OF OPEN CODING BY MAXQDA ...... 83. III.

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(7) LIST OF TABLES Table 2.1. Defination of CSR .....................................................................................8 Table 3.1. Interviewees of A Company ....................................................................23 Table 3.2. Interviewees of B Company ....................................................................24 Table 3.3. Interviewees of C Company ....................................................................25 Table 3.4. Reeaerch Question and Interview Question ............................................27 Table 3.5. Example of the Coding Process ...............................................................31 Table 4.1. Outlines for Research Questions and Findings ........................................33. V.

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(9) LIST OF FIGURES Figure 3.1. Research framework ...............................................................................18 Figure 5.1. Research conclusion ...............................................................................63. VII.

(10) CHAPTER I. INTRODUCTION. This chapter provides the introduction of the research. The research background demonstrates the needs of SMEs to conduct CSR programs. The research purposes and questions are raised. Furthermore, the significance of the study is explained subsequently.. Research Background Corporate Social Responsibility (CSR) has become a growing social awareness in this century (De Clercq & Voronov, 2011) and also seems to be a kind of international private business self-regulation. Since the theory of Corporate Social Responsibility had appeared in the 1950s, a wide variety of definitions of CSR have been announced. The reason is that different kinds of organizations have their strategy and operations, therefore, CSR has been represented in different ways. As time passes, currently CSR practice has been considered as an essential part of corporate sustainability (CS). To follow the Triple Bottom Line Model (Elkington, 1998), maximizing the profit at the same time creating a balance between stakeholders and the environment is the responsibility of a business enterprise. Therefore, to improve their company image value and gain the most benefit for their stakeholders, business enterprises tend to conduct their own CSR strategy. Furthermore, the High-CSR firms had shown that they had better performance than the low-CSR firms during the 2008 Financial Crisis (Karl, Servaes & Tamayo, 2017). In 2015, several social issues including food safety and environmental pollution had appeared in Taiwan. These social issues had been highly concerned by the public, especially food safety. The reason is food safety can influence people’s health. As a result, CSR had become a token to judge whether a company is reliable or not. Besides, the Taiwanese Government had announced a series of regulations to promote the companies to implement their CSR practice. 1.

(11) Until now, CSR had mostly been implemented only for large enterprises. However, according to “2019 White Paper on Small and Medium Enterprises in Taiwan” published by SMEA (Small and Medium Enterprise Administration, Ministry of Economic Affairs R.O.C., 2019), the number of SMEs' enrollment constituted over 97% of the enterprises that had registered in Taiwan. Also, employees who worked in SME took up over 78% for the workforce in Taiwan, and they provided 30% of GDP in Taiwan. It shows that SMEs had a great contribution to economic development and creating job opportunities in Taiwan. On the other hand, a look at the food industry recently shows that, according to “2020 Status and Trends of Sustainability Report of Food Industry in Taiwan” published by CSRone (2020),about 6,000 companies registered in the food industry, but only 28 of them had published their sustainable report; additionally, only one of them is voluntary instead of being required by the regulation to publish the report. Even though it seems there are many steps for SMEs to go to consider their social responsibility, but there are still many opportunities for SMEs to integrate CSR into their core values and make CSR become a way they do things. Some of the SMEs in Taiwan had already built some contribution to their great CSR practice. This study tries to find the motives that make Taiwanese SMEs in the food industry to start to conduct their CSR practice and to give suggestions to other companies. Researchers Murillo and Lozano (2006) used multiple case studies to find out the similar result from different companies and found that the promoter of the CSR practices is often the founder of the company. They concluded that it is still far for SMEs to go if they are willing to conduct CSR. Furthermore, Liu (2016) had also researched the CSR in Taiwanese SMEs. These studies served as important reference and inspiration to the present study. This research will focus on Taiwanese SMEs in the food industry and try to find if there is any difference between them.. 2.

(12) Statement of Problem According to a reference from SMEA (Small and Medium Enterprise Administration, Ministry of Economic Affairs R.O.C., 2019), the Taiwanese government is currently practicing the transformation of SMEs. There are two purposes of this transformation: firstly, to improve the productivity and the competitiveness of SMEs, and secondly, to guide SMEs toward sustainable development. According to Lu and Xia (2009), in 2009, the Taiwan Environmental Information Association (TEIA) conducted a survey to explore the recognition of CSR among SMEs in Taiwan, and 388 SMEs participated in the survey.. The result shows, among the. participated SMEs, about 70 percent of them considered conducting CSR has positive influence on the company image; however, 50 percent of them did not have related knowledge about the implementation of CSR and would like to have some professional support. In addition, according to CSRone (2020), for the food companies which published CSR reports, most of them were large enterprises that were required by the regulation, and only one of them published voluntarily. Therefore, there is a need to increase the awareness and knowledge of the CSR practices among small and medium enterprises in the food industry. This study attempted to address this need by conducting multiple case studies on three SMEs which were recognized for their outstanding CSR programs. Two of the case companies are social enterprises and the other a traditional company. This research reveals what motivation for SMEs to start a CSR program were, and how SMEs in the food industry developed their CSR program.. Research Purposes The main purpose of this research is figuring out the motivations of Taiwanese SMEs in the food industry to conduct their CSR program. In addition, during the process, what can they do for the implementation. At the same time, to give some suggestions to the SMEs which are willing to start their CSR practice. This research proposes to build a contribution to two groups of people. 3.

(13) First, for the companies that do not have the common knowledge of CSR, to help them build the common knowledge; furthermore, to enable them to consider the opportunity for their social responsibility. Second, for those companies that would like to conduct CSR practice but do not know how to start it, the research will provide the experiences of other successful companies and the suggestions from the research.. Research Questions This research attempts to answer the following questions based on the research purpose. 1.. What motivates the SMEs to conduct CSR practices?. 2.. How do they manage the implementation and what are the challenges and the advantages for SMEs to conduct CSR programs?. 3.. What are the positive outcomes after the implementation of the CSR program?. Significance of the Study There are several issues that the research attempts to uncover. First, why should the SMEs implement CSR practices and what are the opportunities for them to adapt CSR into their business operation. Second, through the interview with the companies to find out the difficulties they may face in the beginning, also what can they do as the solutions. Third, what are the motivations for making them persist in their process? To improve the validity of the research, the researcher found three Taiwanese companies and conducted interviews with their stakeholders. Through the in-depth interviews, this research uncovered the details about their opinions on CSR and the practices they have devoted to, also how the results were. This research focuses on the CSR strategy of SMEs in Taiwan, to find the difficulties when they first started, also during the process, and how they continued their passion for the implementation. Additionally, what benefits they had gained after the implementation and also what others can learn from their experience. This study can encourage other SMEs to 4.

(14) consider their corporate responsibility and make the Taiwanese food industry more reliable by providing the experiences of other successful companies and the suggestions from the research. Consequently, through CSR, it is hoped that people in Taiwan will no longer need to worry about whether the food they eat is safe or not.. Definition of Terms Corporate Sustainability (CS) Corporate sustainability (CS) can be defined as fulfilling the demands of a company’s direct and indirect stakeholders including shareholders, employees, clients, pressure groups, communities, as well as without compromising its ability to fulfill the demands of future stakeholders (Dyllick & Hockerts, 2002).. Corporate Social Responsibility (CSR) In this study, CSR is how an organization concerns about all of its stakeholders, society, and the environment, and additionally, how they implement the concern of all the above into their culture and day-to-day operation. (Bowen ,1953; Carroll,1979, 1991; Eells & Walton, 1974). Small and Medium Size Enterprise (SME) According to the Small and Medium Enterprise Administration (2015), the definition of SME is present as follows. For the manufacturing, construction, mining, and quarry industry, the company has its investment capital less than NTD $80 million or total employees are lower than 200. For other industries, the company’s sales revenues are lower than NTD $100 million from last year and has less than 100 employees.. Social Enterprises According to United Kingdom government’s Department for Business, Energy and Industrial Strategy (2011), a social enterprise is a business with a social object and focus on the social purpose or the community rather than the maximum profit for shareholders.. 5.

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(16) CHAPTER II. LITERATURE REVIEW. This chapter aims to review the related literature of CSR. The research reviewed the literature including the definitions of CSR, the implementation of CSR, the relationship between CSR and Corporate Sustainability (CS), CSR implementation in SMEs and the food industry, and the CSR development in Taiwan.. Definitions of Corporate Social Responsibility The definition of Corporate Social Responsibility has a long and varied history, and is more related to the business community's concern for the society for centuries. The formal writings of CSR are an important product in the 20th century, especially in the past 50 years. Although there are a variety of definitions, generally the literature cited A. B. Carroll to be the one who had given the best definition of CSR. This study also agrees with his definition which pointed out that the corporation's sole responsibility was to provide a maximum financial return to shareholders (Carroll, 1991). Additionally, he mentioned that to characterize the company's CSR in different ways may be useful to those executives who wish to set shareholders' minds at rest about the obligations with those to other competing groups that claim legitimacy. He framed the discussion as a pyramid of CSR in his seminal article, “The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders”. In the early writing of CSR, it is more related to Social Responsibility (SR) rather than discussing Corporate Social Responsibility (CSR), the reason might be that during those days the discussion of the Corporations in the business sector was not prominent. As a result, there were many different definitions of CSR in scholarly writing, which the researcher had collected and shown in Table 2.1.. 7.

(17) Table 2.1. Definitions of Corporate Social Responsibility Definition. Source. That social responsibility refers to businesses' decisions and. Bowen, 1953, p.4. actions taken for reasons at least partially beyond the firm's direct economic or technical interest. On its broadest sense, corporate social responsibility represents a concern with the needs and goals of society which goes beyond. Eells & Walton, 1974, p. 247. the merely economic. For a definition of social responsibility to fully address the entire. Carroll. 1979, p. 499. range of obligations business has to society, it must embody the economic, legal, ethical, and discretionary categories of business performance. CSR, to be accepted as legitimate, had to address the entire. Carroll, 1991, p. 43. spectrum of obligations business has to society, including the most fundamental—economic. A concept whereby companies integrate social and. European. environmental concerns in their business operations and in. Communities, 2001,. their interaction with their stakeholders on a voluntary. p.11. basis. Context-specific organizational actions and policies that. Aguinis, 2011, p.855. take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance. Note. This table was compiled by the researcher for the purpose of this study. 8.

(18) These scholars had provided the fundamental definitions of CSR. Bowen (1953) mentioned that social responsibility impacts the organization's decisions and is acted for a reason beyond the firm's economy. Additionally, Eells and Walton (1974) proposed that CSR represents the concern with the needs and goals of society which goes beyond merely the economic. Carroll (1979, 1991) explained that the essence of CSR is the entire range of obligations of a business, which includes four categories, economic, legal, ethical, and discretionary. Based on the definitions by scholars above, in this research, CSR is defined as how an organization concerns about all of its stakeholders, society, and the environment, and additionally, how they implement the concern of all the above into their culture and day-to-day operation.. Implementation of Corporate Social Responsibility In the early period, the researchers were more interested in Social Responsibility (SR) than Corporate Social Responsibility (CSR), Keith Davis’ article titled “Understanding the social responsibility puzzle” (1967) stated that businesses by all kinds of groups in the system can influence each other; therefore, they must be socially responsible for their actions. Both society and social science were becoming interdependent, the business proposal is to make the profit as much as they can, at the same time, make the cost as low as they can. However, for the customer, they will hope to buy the products at the lowest price, therefore, determine the price is also the issue that businessmen should consider. Consequently, the balance between profit-making and quality maintenance is one of the social responsibilities. Yet, there are still many kinds of CSR. Carroll (1991) had distinguished CSR as the pyramid of Corporate Social Responsibility. He separated CSR into four different kinds of responsibility, including economic, legal, ethical, and philanthropic. Most of the following researches were based on this model. The first is the economic responsibility; since business, organizations have been created to produce goods and services. it had become a basic economy of our society. Therefore, to provide the consumer with good quality also the affordable price of goods and services is the 9.

(19) responsibility of the organization. In addition, if without economic responsibility, all other business responsibilities will become moot consideration. The second is a legal responsibility. Businesses are not only sanctioned to operate according to the profit motive, but also expected to follow the laws and the regulations and even the custom. The companies need to process their business with a framework abide by the laws. To find a balance between profitability and legality is what business organizations must do. The third is an ethical responsibility. Ethical responsibilities embrace some practices that are not codified into law. To protect moral rights and make sure what consumers, employees, shareholders, and communities regard as fair. Last but not the least, the philanthropic responsibility is a sense that firms respond to the society as a good citizen. Firms often devote themselves to some artworks, financial foundations, educational foundations, social serving foundations, or focus on dealing with some significant social issues. This sense is more about the moral and ethical aspects, and more related to sociologic activities rather than the business. So far these are the fundamental dimensions of CSR; furthermore, researchers started to consider the importance of the environment and count it into one of the dimensions of CSR. Moir (2001) had mentioned the issues CSR had covered are plant closures, employee relations, human rights, corporate ethics, community relations, and the environment. CSR Europe, an organization in which the members are the large firms across Europe, provided the guideline of CSR which included the following aspects, workplace (employees), marketplace (customers, suppliers), environment, community, ethics, and human rights. Branco and Rodrigues (2006) had also mentioned that CSR is an issue that relates to environmental protection, human resources management, health and safety at work, relations with local communities, and relations with suppliers and consumers. Dahlsrud (2008) analyzed 37 definitions of CSR in his literature and created a fivedimension model of CSR, which included the environmental dimension, social dimension, 10.

(20) economic dimension, stakeholder dimension, and voluntariness dimension. The environmental dimension includes all kinds of environment protection; social dimension deals with the relationship between the organization and the public, to integrate the social concern into their operation in order to contribute to a better society. The economic dimension refers to maximizing the profitability and the financial performance of the organization. The stakeholder dimension means the organization is responsible for all its stakeholders including employees, customers, suppliers, and the community. The voluntariness dimension includes all kinds of activities based on ethics and beyond the obligation.. Corporate Sustainability and Corporate Social Responsibility Corporate sustainability (CS) can be defined as fulfilling the demands of a company’s direct and indirect stakeholders, as well as without compromising its ability to fulfill the demands of future stakeholders (Dyllick & Hockerts, 2002). Elkington (1997) proposed the bottom line model to state that if a company attempts to reach this goal of sustainability, it should maintain and keep improving its economic (Profit), social (People) and environment (Planet), also known as the 3P model. A company which is economically sustainable can always keep their cashflow adequate, and make sure the return to shareholders is constantly above the average. Additionally, a company that is ecologically sustainable will only use the natural resources in a way to ensure the rate of reproduction is faster than consumption. Therefore, they do not involve in any activity that might harm the environment. Last but not the least, a company with social sustainability contributes to the community and make themselves to be of value in the society. Furthermore, some researchers started to differentiate CS and CSR. Linnanen and Panapanaan (2002) had proposed corporate sustainability as the ultimate goal, to keep the ability for the future at the same time reaching their needs. Kaptein and Wempe (2002) had also considered CS as the ultimate goal and placed CSR as the middle stage for the companies which 11.

(21) try to fulfill the Triple Bottom Line. In addition, European Commission (2001) also set a theme as CSR: a business contribution to Sustainable Development. However, many doubts that the differentiation of CS and CSR is too vague, for example, Van Marrewijk (2003) had recommended that it is necessary to keep even though only a small difference between CS and CSR. He associated CSR in the aspect of people and organization and CS as agency and principle. As a result, CSR is more related to actions such as transparency, stakeholder interaction, and sustainability reporting. Besides, CS is more related to multi-level of management such as value creation, and environmental management. Montiel (2008) had proposed that according to his analysis of the literature review of CS and CSR, although there is still a number of differences between CSR and CS, the conceptualizations and measures of CSR and CS tended to be converging. Therefore, we should consider if we need to distinguish more specifics of the difference between CSR and CS, or if we should combine them into a structure that includes all kinds of social and environmental issues in the management area. He suggested that if we combine some of the elements in CSR and CS, that might become a better direction for the firms to become a sustainable and socially responsible organization.. Corporate Social Responsibility in Business Enterprise The contemporary business enterprises often consider CSR as an important strategy of the company and will pay lots of effort into it. Aguinis and Cleves (2012) reported that more of the CSR literature originated from the fields of environmental issues, organization behavior, and human resource management. They focused more on how CSR is applied in organizational strategies. On the other hand, they also did the institutional level analysis according to Scott's (1995) three pillars of institutions, which is normative, cultural-cognitive, and regulative elements. For instance, articles about laws and standards are related to regulative elements and will be classified into CSR at the institutional level of analysis. Additionally, cultural-cognitive and 12.

(22) normative elements will include the construct shaped by externals to the firms such as the society and the consumers. In conclusion, the research of CSR in decades is more related to the business and the organization strategy, putting the theory into practice, and CSR as a major policy that has to be focused on, if the business enterprise or even any kind of organization wants to succeed.. Corporate Social Responsibility in Small and Medium Enterprises According to Standards for Identifying Small and Medium-sized Enterprises published by SMEA (Small and Medium Enterprise Administration, Ministry of Economic Affairs R.O.C., 2015), there are two categories to define SME in Taiwan. First is for the manufacturing, construction, mining, and quarry industry with investment capital from shareholders of NTD $80 million or less, otherwise has fewer than 200 employees. Second is the industries not mentioned above, which sales revenues are lower than NTD $100 million last year and have less than 100 employees. In most cases, the management in SME is the owners at the same time, and they assume multiple positions in the organization. Therefore, they often put their own value into the business strategy of the companies. Therefore, the motivation of top management is the most important approach for SMEs to conduct CSR programs (Lepoutre & Heene, 2006; Longenecker et al., 1989; Vyakarnam et al., 1997) Besides, Granovetter (1985) proposed that the business actions of SMEs were often embedded in social relations. The close interpersonal relationship helps to improve confidence and the relationship between stakeholders, to have a good reputation in the society, and finally to promote the importance of the company in the market. As a result, social network and the interpersonal relationship could be the factors that force SMEs to consider CSR (Lepoutre & Heene, 2006; Murillo, 2006).. 13.

(23) Corporate Social Responsibility in Food Industry The supply chain in the food industry is a quite complex network from agriculture to food processing, food retailers, and ultimately to the consumers. Throughout the supply chain, there are many complicated procedures when food is delivered to a consumer from the time it was produced. By the time researchers started to discuss CSR in the food industry, various issues have bloomed, which include animal welfare and food suppliers’ sustainable practices such as animal treatment (Ordonez, 2000), slaughter process being humane (Garber, 2005) also the use of antibiotics (Leung, 2003). Maloni and Brown (2006) developed a framework of CSR applications in the supply chain in the food industry. There are totally eight categories in their model, including animal welfare, biotechnology, community, environment, fair trade, health and safety, labor, and procurement.. Animal welfare The main propose of this category is that animals should not experience any unnecessary suffering, which includes humane approaches to handling, housing, transporting, and slaughtering.. Biotechnology Maloni and Brown (2006) stated that biotechnology is a rapidly emerging category of CSR food supply chains, and it includes recombing DNA, tissue growing outside the body, cloning, and growth stimulation. The attitude of consumers and the boycott of industry practices had made the retailers be threatened and set a more comprehensive standard.. Community The community aspect represents all kinds of supporting activities for the local community.. 14.

(24) Environment There are many environmental issues that influence the food industry, such as global warming and water pollution. Therefore, the supply chain needs to not only provide environmentally friendly products but also develop practices for protecting the environment.. Fair trade Fair trade is the idea that retailers should support the price for suppliers to keep them from poverty and keep the business sustainably developed.. Health and safety These are big challenges in the food industry that should be overcome, such as mad cow disease, foot and mouth disease, the safety of the biological products, and the famine in some countries.. Labor and human rights This aspect had already been discussed since the ‘‘sweatshop’’ issue had been exposed, the labor conditions of foreign manufacturers supplying US retailers such as NIKE and Wal-Mart (Emmelhainz & Adams, 1999). Therefore, companies are obligated to follow international labor standards.. Procurement Carter (2000) offered a review of examples about the ethical issues that should be avoided during the process of procurement such as favoritism, preferential treatment, bribery, gifts, obscure contract terms, and rebidding past deadlines.. Development of Corporate Social Responsibility in Taiwan According to the Corporate Social Responsibility Overview presented by Corporate Governance Center, Taiwan Stock Exchange (2019), Financial Supervisory Commission has launched the “Corporate Social Responsibility Best Practice Principles for Listed Companies” and the “Ethical Corporate Management Best Practice Principles for Listed Companies” in 2010, 15.

(25) in order to promote and guide the listed companies to implement CSR practices and to ensure integrity in corporate management for sustainable development. Besides, Financial Supervisory Commission (2014) also demanded the companies whose registered capitals are above ten billion NTD to publish their CSR report starting from 2014, and in 2017 the amount of registered capital was reduced to five billion NTD to include more companies into this reporting requirement. Nowadays, the operation of companies is under constant monitoring by the public, in order to fulfill the environment, social, and governance dimensions of CSR. (Liu, 2016) Not only the government is facilitating the CSR development in Taiwan, but some NGOs also devote themselves to promoting CSR in Taiwan. CommonWealth magazine and Global Views Monthly are two well-known social media companies in Taiwan. Both of them grant the CSR awards annually. The award can be seen as an honor to the company. According to CommonWealth (2019), the criteria of the competition are company governance, company commitment, social participation, and environmental protection. On the other hand, the standards of Global Views Monthly are environmental protection, company governance, and social participation. (Global Views Monthly, 2019) Furthermore, as requirements of the government and the clients, most of the large enterprises have their CSR reports and are willing to apply for the award by the resources they had disbursed. These awards seem like the competitions for the large enterprises; however, since 2015, CommonWealth magazine added a division called “little giant” which allowed companies with revenue below five billion to join the competition. This can be seen as the initial opportunity for SMEs, in order to recognize the SMEs which, contribute to the society even though the contributions are not comparable to the large enterprises. This is a way to prove that SMEs do indeed have sufficient ability to implement CSR and, in their words, build a contribution to the society. At the same time, this also encourages the rest of the SMEs who still have not started their CSR practices to begin considering their social responsibility. 16.

(26) CHAPTER III. METHODOLOGY. This chapter explains how the research was conducted and provides the details of the process. This chapter includes the research approach, research framework, research quality, research procedure, research participants and criteria, data collection, and data analysis. Research Approach This research adopted the qualitative research method with a multiple case study approach. Merriam (2009, p.23) mentioned “when the overall purpose is to understand how people make sense of their lives and experiences”, qualitative research is suggested. In order to go deep into the company’s practice and learned the experience from them, the case study is the research approach that was adopted in this study. Stake (2005) explained the case study drew attention to what we can learn through the cases. In addition, according to Yin (2003), when the focus of the study is to answer “how” and “why”, the case study should be used as the approach. Therefore, the case study approach was adopted in this research. In addition, multiple case studies can be compared to find the similarities between the cases. Semistructured interviews and document reviews were the sources of data for each of the cases.. Research Framework The framework of this research is presented in Figure 3.1. Since the research purpose is to figure out the motivations for SMEs to conduct CSR programs, what they should do and what can be the results for them after the implementation, these questions were asked: (a) what are the motivations for SMEs to conduct CSR program? (b) during the implementation process, what do they do for the implementation? How do they develop their own strategy? In addition, what are the reasons and how do they implement? Last, (c) what are the positive outcomes after the implementation? 17.

(27) Figure 3.1. Research framework. Research Quality The quality of a study is usually assessed by its validity and reliability. Lincoln and Guba (1985) had proposed a set of basic criteria to examine the trustworthiness of a study, which are credibility (internal validity), transferability (external validity), and dependability (reliability). In addition, Gibbert, Ruigrok, and Wicki (2008) brought forth four common criteria used to assess a case study, which are internal validity, construct validity, external validity, and reliability.. Internal Validity (Credibility) Internal validity means how the findings and the research purpose are related. There were a few steps adopted to ensure internal validity in this study. Firstly, the researcher formulated a clear research framework. Secondly, the research questions were developed from the research framework. Thirdly, the researcher ensured that the data collected were closely related to the research questions. Lastly, the data were analyzed according to the research framework.. Construct Validity Construct validity refers to the quality of the conceptualization or operationalization of the relevant concept (Gibbert, et al., 2008). Construct validity should be considered through the data collection phase, in order to extend the investigations of the study and with procedures that lead to accurate observation. According to Yin (1994), there are two steps to enhance construct validity. First, to establish a clear chain of evidence for the readers to have a full 18.

(28) understanding from the initial research questions to the conclusion. Second, to adopt different angles to interpret the same phenomenon. In this study, the researcher provided a clear chain of evidence by presenting the research framework, research questions, data collection methods, sources of data, and the verbatim quotes to support the findings. Second, to adopt different angles to interpret the same phenomenon, the data was collected through interviews with different stakeholders, and from relevant documents such as the case company’s CSR report.. External Validity (Transferability) External validity means how the findings of the study can be applied or measured on other occasions. According to Mertens (2005), transferability was determined by the readers instead of the researcher in qualitative research. In order to increase the transferability of the research, this study provided abundant details for the readers to judge whether the research findings can be applied to different situations.. Reliability (Dependability) According to Kimberlin and Winterstein (2008), “reliability is used to evaluate the stability of the research repeated at different times with the same researcher or different researcher using the same method” (p.2). Transparency and replication can be used to assess reliability. To enhance transparency and replication in this study, how the case study was conducted was written in detail with all the data been used in the case study.. Research Procedure The following will describe the ten steps which were included in this study.. Identify the Research Topic The researcher had an interest to focus on CSR, and also reviewed the literature and the news reports about CSR in Taiwan. The researcher ultimately decided to focus on CSR in Taiwanese SMEs, specifically the food industry. 19.

(29) Define Research Purpose and Questions Due to a lack of research in CSR in Taiwanese SMEs in the food industry, the research purpose is to focus on this topic and attempts to increase CSR awareness in the SMEs in Taiwan and examine how they implement it into their business operation. Research questions were developed based on the research purpose.. Decide the Research Method As the research purpose is to identify how to motivate Taiwanese SMEs in the food industry to conduct CSR practice and how can they implement their practice. In order to get deep into the CSR practices of Taiwanese SMEs, knowing what they do and how they do it, qualitative research with the multiple case study approach was adopted in this research.. Conduct a Literature Review This study reviewed the literature about CSR, the relationship between CSR and CS, CSR in SMEs, and CSR development in Taiwan.. Establish a Research Framework After conducting the literature review, the researcher developed the research framework based on the research purpose and the research questions.. Identify Case Companies As the research targets were the SMEs in the food industry who have conducted their own CSR practices, therefore, the SMEs which had been awarded by the social media for their CSR program were targeted as the case companies.. Design Interview Questions Interview questions were developed according to the research purpose and research questions, in order to fully recognize the value and the experience of the case companies.. 20.

(30) Conduct Interviews The interviews were used to obtain in-depth knowledge according to the research questions. The interviewees were the stakeholders of the selected companies including the management level, operational level, and the customers.. Analyze the Data Interview verbatim and the CSR reports from companies were all used for analysis. The interview verbatim was coded by the researcher in order to systematically analyze.. Comparative analysis of multiple cases This study compared the similarities between the cases in order to find a benchmark of the CSR practices in the food industry.. Conclude Research Findings According to the analysis, the researcher concluded the research and gave suggestions to other SMEs and for future research.. Research Participants and Criteria Since this research focuses on Taiwanese SMEs in the food industry; therefore, the case companies are three Taiwanese SMEs in the food industry. In addition, the interviews were conducted with multiple stakeholders of the companies.. Selection Criteria for Case Company Three Taiwanese SMEs in the food industry had been targeted as the case companies. There were two criteria for selecting the case companies. First, the case company should meet the definition of SMEs by the Taiwanese Government and should be in the food industry. Second, since the research attempted to provide experiences of successful CSR implementations from SMEs, the researcher targeted at the SMEs which had been awarded as the outstanding CSR companies by the two well-known Taiwanese magazines, CommonWealth and Global Views. Three companies fulfilled the sampling criteria. 21.

(31) Selection Criteria for Research Participants For the purpose of triangulation, the research participants were primarily stakeholders of each company above. They were separated into two groups, the first group was the stakeholders within the company, including employees at the management and operational level; the second group was the stakeholders outside the company, which were the customers. Management level employees were those who lead the CSR program, while operational level employees were the employees participating in the CSR program, and the customers were those who had bought their products and were willing to repurchase. The researcher first contacted the case companies through email and asked for a permission to interview. After the case companies accepted the interview, they provided the list of the stakeholders including the customers after confirming with their customers to protect their privacy.. 22.

(32) Introduction of Case Companies A Company A Company is a social enterprise that is founded by a veterinarian who is devoted to purchasing the milk at a reasonable price from the small-holding farmers. A Company also provides support for the small-holding farmers to encourage them to improve the quality of the products and the ranch environment. They provide the milk which has been strictly checked by veterinarians and use the certificate of origin for the customers to recognize where this milk is from. A Company has two purposes. First, they want to become a fair-trade platform for the cattle ranchers in Taiwan. Second, they attempt to increase the number of veterinarians to make the cattle to veterinarian ratio more balanced in Taiwan. In this way A Company improves not only the animal health but also the quality of milk. Table 3.1 shows the interviewees of A Company.. Table 3.1. Interviewees of A Company Participant. Connection with the company. Gender. Seniority. Sandy Ella Daisy Lee. Sales Director Customer Service Customer Customer. Female Female Female Female. 5 years 3 years N/A N/A. 23.

(33) B Company B Company is a traditional Chinese pastry company that was founded in 1890. Over one century, they have devoted themselves to provide exquisite handmade Chinese pastry. However, after a crisis of food safety in 2009, they reorganized the procedure of making their products in order to ensure the quality of the products and considered what they can do to improve not only themselves but also the community. The vision of B Company is to provide high-quality products for their customers to eat with ease and ensure the products are trustworthy. In addition, they also intend to pass down the traditional Han Bing (Chinese pastry) culture. They published their CSR report and participated in the competition of outstanding CSR performance companies; they got the award the first time they joined in the competition. Table 3.2 shows the interviewees of B Company.. Table 3.2. Interviewees of B Company Participant. Connection with the company. Gender. Seniority. Jennifer Joey Gillian Natalie. Executive Assistant Digital Marketing Customer Customer. Female Female Female Female. 6 years 1 year N/A N/A. 24.

(34) C Company C Company devotes to promoting the river basin recovery in the upstream of the river in Pinglin, New Taipei city. Pinglin is the location of the Feitsui Reservoir that provides the water resource for the Taipei Metro Area. In addition, it is also famous for Taiwanese tea products all around the world. They encourage the tea farmers in Pinglin to transform into a more environmental-friendly operation. In this case, they can improve the sustainability of both the industry and the environment. Moreover, C Company and the farmers maintain the diversity of the ecosystem in Pinglin, in order to protect the endangered animals. They hope people can remain living with all the animals and plants in the next ten or twenty years. The ultimate goal of them is to build an eco-village, providing a place for everyone to enjoy not only admiring the biodiversity but also protecting the environment in Taiwan. Table 3.3 shows the interviewees of C Company.. Table 3.3. Interviewees of C Company Participant. Connection with the company. Gender. Seniority. Ann Bill Damon Emily Annie. Chief Operational Officer Production Manager Assessment Specialist Customer Customer. Female male male Female Female. 5 years 3 years 2 years N/A N/A. 25.

(35) Data Collection Most of the data in this study was primary data collected through the face-to-face interviews and the secondary data were used to supplement the interview data. According to Jamshed (2014), when the respondents have to answer pre-set and open-ended questions, semistructured interviews will be applied. Secondary data was the CSR reports which had been published by the companies and the news reports on social media. The data were compared and analyzed during the analysis process.. Semi-Structured Interview A semi-structured interview is an in-depth interview with open-ended questions. According to Miles and Gilbert (2005), semi-structured interviews are useful to find out “Why” due to the flexibility. As the research purpose of this study was to find out why CSR is important to SMEs in the food industry, semi-structured interviews were suitable for this research. The case companies were Taiwanese SMEs; therefore, the interviews were conducted in Chinese. Before the interview, the interview questions were sent to the interviewees for their review. Under the permission of the interviewees, the interviews were recorded and then the researcher transcribed the recording verbatim. The questions were designed based on the research purposes and research questions, to figure out the motivation of SMEs in the food industry to conduct their CSR practices and the experience from the processes. The interview questions were designed from the research questions and included three parts, each of them was related to a specific research question. The interview questions were also separated into two versions, the first version was for the stakeholders in the company, and the second version was for the stakeholders outside the company.. 26.

(36) Table 3.4. Research Questions and Interview Questions Research Question 1.. Interview Question. What motivates the SMEs to. Stakeholders in the Company. conduct CSR practices?. 1. What does CSR mean to you? 2. Do you think CSR is important to the companies, and Why? 3. What are your motivations to conduct the CSR program? 4. During the process, what are the changes compared to the initial thought of the program? Stakeholders outside the Company 1. What does CSR mean to you? 2. Do you think CSR is important to the companies, and Why? 3. What do you think is the case company’s motivation to conduct the CSR program? (continued). 27.

(37) Table 3.4. (continued) Research Question 2.. How. do. Interview Question they manage. the. Stakeholders in the Company. implementation and what are the. 1. Which will be more appropriate when. challenges and the advantages. considering CSR programs in SMEs, a long-. for SMEs to conduct CSR. term program, or a short-term program?. programs?. 2. At the beginning of the process, what are the concerns about the budget or the resources that influence the program? 3. During the process, what are the issues or concerns you have faced? And how do you overcome them? 4. What are the advantages for SMEs to conduct their CSR programs? Stakeholders outside the Company 1. Which will be suitable when considering CSR programs in SMEs, a long-term program, or a short-term program? 2. What are the challenges for SMEs to conduct their CSR programs?. (continued). 28.

(38) Table 3.4. (continued) Research Question. Interview Question 3. What are the advantages for SMEs to conduct their CSR programs?. 3.. What are the positive outcomes. Stakeholders in the Company. after the implementation of the. 1. How do you review the results of the. CSR program?. program? 2. What are the positive outcomes for the companies after the implementation? 3. Based on the current progress, what are your future plans for the CSR program of your company? Stakeholders outside the Company 1. What are the reasons that you will repurchase their products? 2. What are the positive outcomes for the companies? 3. From a customer’s perspective, do you think a company with a CSR program will be your first option? Why? 4. What are the differences when an SME has a CSR program?. 29.

(39) Data Analysis In order to analyze the data of the research, every interview had been recorded and transcribed into verbatim by the researcher. After the verbatim was finished, the coding process was conducted. Open coding and axial coding (or analytic coding) were the two analysis techniques employed in the coding process. According to Merriam (2009), open coding is the process to identify every potential key term into notations from the data. After collecting the open codes from the data, the process to group them into categories is called analytic coding. Open coding was conducted at the beginning of the analysis process, to tag every potentially useful data into units. After finishing the open coding process, axial coding was conducted by grouping the coded units into categories according to the interpretation and reflection of the data from the open coding process. The data analysis phase was supported by the qualitative data analysis software MAXQDA. Table 3.5 showed an example of the coding process. The information collected from the coding process was reviewed with the CSR reports published by the companies and the news posted on social media. The analysis was organized into the research findings to draw the conclusions of the study.. 30.

(40) Table 3.5. Example of the Coding Process Original Data The previous farming style of the farmers might cause damage to the environment. Therefore, we promote the transformation of the farming style to protect the environment. There are things that we would like to do together. Open Coding. Category. Theme. Organizational Culture. because it is the right thing. We are working for the environment since we founded the company. And I don’t think the. Organizational Identification. purpose will change in the future. I was seeking an organization that is more sustainable and more directly conducting the protection. This company provides an opportunity for me to work for the environment. I think we are doing the right things and should keep promoting it. Furthermore, it can also link to our core values.. Connection with Organizational Culture. 31. Motivation.

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(42) CHAPTER Ⅳ. FINDINGS & DISCUSSIONS. The aim of this chapter is to present the findings of the research following the research framework, in order to answer the research questions. Last, the discussion of the connection between the findings and formal literature is also presented.. Table 4.1. Outlines for Research Questions and Findings Research Questions 1.. 2.. Finding. What motivates the Definitions of CSR SMEs to conduct CSR A. Return the profit to public practices? B. Represent core values in operations Motivations A. The intention of top management B. Organization identification of employees C. Make society better How do they manage the Implementation implementation and what. A. Developed through the business operation. Challenges are the challenges and the A. Resource restrictions advantages for SMEs to B. Specific regulations Advantages conduct CSR programs? A. Flexibility to solve problems B. Business expertise 3.. What are the positive A. Increase of customer loyalty outcomes after the implementation of the B. Better performance in the market CSR program?. C. Diversified business partners D. Sense of achievement from the employees E. Promotion of industrial development. 33.

(43) Table 4.1 presents the outlines of the main findings for each research question. The findings of the first research question are the definitions of CSR and the motivation of conducting CSR. The definitions of CSR are returning the profit to the public and representing core values in operation. Besides, the motivations of conducting CSR are the intention of top management, organization identification of employees, and making society better. The findings of the second research question include three parts which are the implementation of CSR programs, the challenges of conducting CSR programs, and the advantages of conducting CSR programs. The implementation of CSR programs is developed through the business operation, the challenges are resource restrictions and specific regulations, the advantages are the flexibility and business expertise. Last but not the least, the findings of the third research question are the positive outcomes after the implementation of CSR programs which include an increase of customer loyalty, better performance in the market, diversifying business partners, sense of achievement from the employees, and promotion of industrial development. The following sections present the explanations of the research findings in detail, which are supported by the data analysis.. The Definition of CSR among SMEs in Taiwan During the invitation process of the interviews, the researcher found that the definition of CSR is unclear among SMEs in Taiwan. Therefore, before discussing the motivations of conducting the CSR program, the definition of CSR to SMEs in Taiwan should be identified first. According to the replies from some targeted companies who are social enterprises, which means they were founded to solve a specific social issue, they thought CSR is a sort of specific activity. The other SMEs even considered CSR is only for large companies and is mandated by the government. An outstanding social enterprise that devotes to promoting fair-trade and environmental 34.

(44) protection had refused the interview with the reason that their operation did not include CSR; however, their vision and mission presented on their website show concerns to the environment and society. After the discussion about the definition of CSR, the customer service person of the company explained: Since our company is a social enterprise, every operation of our company is also based on the concepts of social enterprise. Therefore, we think that there are some differences between our operations and your research topic.. Furthermore, during the communications with another company, the customer service person of the company also raised suspicion about the relevance between social enterprise and CSR, the customer service person of the company mentioned: We are a social enterprise, so there are some differences between the topic of CSR. When we talk about CSR, we often suggest contacting some large companies such as listed or over-the-counter (OTC) companies. Because they would supposedly have implemented the so-called CSR.. However, there is still a similarity between the definitions of CSR between two of the three case companies. A Company and B Company thought under the premise that the company has profit and the operation of the company is stable, the company should return the profit to wherever they received the revenue, it could be the customers, employees, suppliers, environment, and even the society. On the other hand, C Company considered CSR is to represent its core values on all of the operations. The interpretations of the CSR of three case companies are as follows:. A Company The concept of CSR to A Company is very simple. For any business sector, the profit should return to where they gain it, the sales director of A Company mentioned: In our opinion, there is no doubt that if a company is seeking profit, and the revenue of the company is from the society, then we should do something as a return to the society. For us, the concept is quite simple, where we received the profit is also where we should use the profit. 35.

(45) B Company B Company also considered that return the profit to the society is the concept of CSR. The executive assistant Jennifer stated: We have been receiving lots of supports from our customers and the society for a long time; therefore, we determined that once we got the ability we should also support the society. That is the reason why one of our CSR practices is to keep supporting different charitable foundations.. C Company C Company considered that CSR seems like the self-regulation of the company. To ensure the company has fulfilled its core values in every business operation. The Chief Operation Officer (COO) of C Company, Ann, explained: We think the most important thing is whether the initial core values that we’re promoting has been implementing in the operations and our customer service. Or we can say to ensure we have integrated our core values in every process of producing and selling, is our corporate social responsibility.. C Company considered that the CSR concerns at the same time are also the fundamentals of the social enterprises running their business. Bill (production management manager) also explained: We considered to reach sustainable agriculture and retain the biodiversity in Pinglin is our company CSR concerns. Additionally, we have integrated the concerns into the corporate DNA. Our operation is as well the representative of our CSR concerns. Or you can say it has further become one of our core values. In my opinion, for a social enterprise like our company, the concerns I had mentioned above are the fundamentals of us.. 36.

(46) The Motivations of Conducting CSR Program Although the business operations and the CSR programs are different among three case companies, there is still one goal in common among three case companies in implementing CSR: they want to make our society better. This stems mostly from the will of the top management which forms the company’s vision and mission and also influences the organizational culture. With a strong connection to the organizational culture, employees in the case companies possess high organizational identification. Therefore, each of the three case companies determined its own mission for making a better society. Overall, the high organizational identification of employees is the motive that drives SMEs to conduct CSR programs and further integrates this concept in business operations. The motivation for conducting CSR programs in three case companies are presented as follows:. A Company Company mission formed through the will of top management. The initial purposes of the founder were very simple, he wants to give cattle ranchers a better treat and make the domestic dairy products more reliable to customers by providing clear information of the source. In the beginning, the employees of A Company concentrated on applying their expertise of veterinary into the support to the cattle ranchers. As time passes, they recognized these behaviors are so-called CSR, in addition, these kinds of operations are making good contributions to society; therefore, they should carry on these operations. It was formed as the culture of A Company. The sales director Sandy explained: The intention of the founder was very simple, he thinks we should not have any doubt about the food we ate. At the same time, he was also a veterinarian for big animals, so he knew how serious the cattle ranchers treat the cattle and how high the quality of their products they had provided; however, the consumer did not have the opportunity to realize how much effort the ranchers have 37.

(47) paid for producing the dairy products. Therefore, he considers our company as a bridge between the cattle ranchers and the customers. We make the whole production process transparent, in the case, the customers can purchase products that they have the detail information of the source, besides, the ranchers can receive the affirmation from the customers and the deserved rewards. Later on, we realized the thing we are doing is CSR and it was making good contributions to our society; therefore, we should continue these behaviors.. Organizational identification. With the approval of the founder’s purposes, the employees of A Company consider treating cattle ranchers better, and improving the dairy industry in Taiwan is their company mission. Furthermore, their culture is to collaborate with all company members and complete these company missions. It has formed a strong organizational identification, it’s also become a motivation for them to carry on their CSR program. The customer service of A Company, Ella, explained: We think treating cattle ranchers better and make the industry improved is very important to our company. And our culture is to cooperate with each member of our company. Therefore, the relationship between the employees in our company is very connected. We also think that it is very meaningful for us to support someone who needs help with our extra revenue.. The sales director Sandy also mentioned: In fact, we just wanted to treat cattle ranchers better, treat our employees better, and treat our society better. Later on, we realized that this is the CSR of our company. We think we should continue these behaviors because we are doing the right things and we are doing good things. Fortunately, our company members all give a lot of supports to this vision.. 38.

(48) B Company Company mission formed through the will of top management. As previously reported by Yeh and Chiu (2020), to promote the traditional Chinese pastry culture has been seen as the responsibility of B Company. It is also considered as the mission of B Company. In order to accomplish this mission, sustainable development is necessary for B Company to maintain competitiveness and influence in both customers and the community. The top management of B Company also considers implementing CSR into the business operation is one of its strategies to reach their corporate sustainability. Therefore, they formulated a complete CSR program based on the intention mentioned above. Simultaneously, the employees of B Company intensively identify the vision and mission of the company. It is the reason why B Company can persist in the implementation of its CSR program. Jennifer further explained: Since we have been making Han Bing (traditional Chinese pastry) for over a hundred years, we consider promoting the aesthetics and Han Bing culture is the goal of our company. To accomplish this goal, the sustainable development of our company is necessary. Conducting the CSR program is one of our strategies to reach our corporate sustainability (CS). In addition, the strong intention of promoting the Han Bing culture is also supporting us to insist on the implementation of the CSR program.. Organizational identification. Passing down the traditional Chinese pastry culture has been seen as the fundamental of B Company’s CSR program by the owner of B Company. In fact, the CSR activity of B Company can be traced back to more than ten years ago, they were trying to teach children about the Chinese culture through the collocation with the traditional pastry and the Chinese legendary story. This was also the prototype of B Company’s CSR program. also, increase the identification of the employees. Jennifer mentioned: Actually, we have been doing CSR for more than ten years. We have held the storytelling activity 39.

(49) for children at the Chinese festival such as New year, Mid-autumn, and the dragon boat festival. We would prepare so related desserts for them to let them know the connection between the HanBing and each specific festival. We are trying to pass down these cultures. These activities also increase the determination of our employees in participating in CSR issues.. C Company Company mission formed through the will of top management. The motive that drives C Company to conduct CSR program is very clear, which is also the initial purposes of the founder to establish the company, to facilitate an alternative farming style in Pinglin, called intensive and under-contract farming. They expect to reach sustainable agriculture and retain the biodiversity in Pinglin. Ann mentioned: The reason we established the company is to solve the issue about the restriction of tea farming caused by the construction of the Feitsui Reservoir. If we wish our water resource is reliable for drinking, we should pay attention to the water usage upstream of the river, and the farming style of the farmers should exclude chemical fertilizer and pesticides. Therefore, the core values of our company are to promote a non-chemical fertilizer and non-pesticide watershed, in order to ensure the environment is not been polluted. It is also our responsibility.. Organizational identification. A strong connection with the core values of the organization is the factor that keeps the high motivation for conducting CSR programs. Bill (production management manager) mentioned: I used to be interested in the issues related to environmental protection, my last job was more related to environmental education. However, I was seeking an organization that is more sustainable and more directly conducting the protection. This company provides an opportunity for me to work for the environment.. Damon (access management specialist) also mentioned: 40.

(50) In fact, environmental pollution might have existed for years. However, we are concentrating on the issues which are not focused on by others, and I think we are doing the right things and should keep promoting. Furthermore, it can also link to our core values.. The Implementation of CSR Program The decision-making phase and the implementation of the CSR program of three case companies are presented as follows.. A Company All of the CSR practices of A Company are decided base on the capacity of the company. Adapting its capacity for promoting the industry sustainability, fulfilling the needs of stakeholders, and reaching the common good for the society are the three keys to A Company’s CSR program implementation. They cannot do everything, but they can do what they are expert in. Sandy mentioned: We will only do the things that we are good at, For the cattle ranchers, we can ensure their revenue and provide the support that they may need. These can make the industry sustainable; therefore, these are the things that we are conducting. Besides, the employees’ benefit is also what we have focused on. Last, the common good of society is also what we are able to do, we have the ability to provide our products for someone who needs them.. Promote the sustainable industry. The sustainability of the dairy industry in Taiwan is the issue that A Company has been striving for since the company was established. There are two strategies to reach the goal: facilitating the fair-trade in the dairy industry and cultivating the talents of big animal veterinary in Taiwan? A Company purchases the raw milk from cattle ranchers who devote to optimize the pasture management with a higher price comparing to the market. The company intends to encourage other ranchers to improve their pasture management. Besides, A Company 41.

(51) also applies its expertise in veterinary, supporting the cooperating ranchers with veterinary knowledge in order to produce high-quality dairy products and assure animal welfare. In addition, the company also provides an internship for students studying in big animal veterinary with an allowance. The company hopes the shortage of big animal veterinarians can be minimized. Sandy explained: We should guarantee that they receive what they deserve. In fact, the milk source in Taiwan is not sufficient as other countries, and because of the cost considerations, the purchasing price of the large company might not be so high. Therefore, we provide the purchased price which is higher than the market to ensure the cooperating ranchers have higher revenue. Additionally, we also encourage them to upgrade the ranch management with our support. In addition, we apply our veterinarian knowledge to assist the ranchers to make sure the cattle are healthy in order to maintain the quality of the products; at the same time, we also guide the talents of big animal veterinary by providing the internships with an allowance in our cooperating ranches. We consider that once the students have more understanding of the industry, the opportunity for their retention is higher.. Fulfill the needs of stakeholders. The direct stakeholders of A Company are cattle ranchers, employees, and customers. As the treatment to the ranchers above, A Company also has the responsibility to treat employees and customers well. To employees, A Company is A Company that respects every employee’s opinions, employees in the company have many opportunities to fulfill their ideas. Most of the charitable activities are proposed by the employees periodically, and the management level gives a lot of support for the employees. In addition, employee welfare is one of the terms of the CSR program of A Company. The company attempts to build an amicable environment for employees. Ella explained: We call our company members as partners. Whenever any of our partners have discovered charitable activity that we are able to help, the partner will propose the idea to the management 42.