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Companies Contributing to the Common Good
An Empirical Study about the Common Good Approach
in Entrepreneurial Practice
Dissertation
zur Erlangung des akademischen Grades
Doktorin der Philosophie (Dr. phil.)
am Fachbereich
Erziehungswissenschaft und Psychologie
der Freien Universität Berlin
vorgelegt von
Dipl. Psych.
Jasmin Christine Wiefek
Berlin, 2021
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Erstgutachterin: Dr. Kathrin Heinitz
Zweitgutachter: Prof. Dr. Rudolf Kerschreiter
Tag der Disputation: 16. Juli 2021
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Abstract
The Economy for the Common Good (ECG) is a social movement that claims that all
economic activity should serve the common good. The common good balance sheet (CGB)
developed by the movement is a corporate social responsibility (CSR) management tool that
tracks the socio-ecological commitment of a company in a comparable way. Addressing the
lack of research on the common good approach in entrepreneurial practice and its potential
impacts on macro and micro levels, I surveyed 332 employees from companies that joined
the ECG and conducted eleven interviews with ECG company representatives. Our results
show that in their management practices, the companies are guided by values such as
transparency, democracy, diversity, independence, cooperation, fairness, and ecological
sustainability. This is exemplified by a high degree of corporate transparency, democratic
ownership and decision-making structures, cooperative trade relations, the redistribution of
surpluses and a preference for local and socio-ecological suppliers. The common good
orientation is intrinsically motivated and part of the core business. In single owner companies
it is anchored in a top-down direction via a delegation system, while it is implemented
bottom-up in a company’s self-conception as a socio-ecological collective. The companies
studied are willing to accept profit setbacks in order to implement their socio-ecological
principles. Among the companies, I identified examples of sufficiency-oriented practices.
Some companies in my sample do not aim to grow, while others consider further company
growth to be necessary. Due to the interaction of their re-evaluation in values,
reconceptualisation, restructuration and relocalisation of corporate structures and business
practices, redistribution of power and reduction of their environmental impact they bear the
potential to contribute to a societal transition towards degrowth. The more common good-
oriented a company acts, the more CSR is perceived by employees, and the more satisfied
employees declare themselves with their jobs. With increasing fair distribution of work and
higher workplace quality, employees experience fewer job demands. Furthermore, workplace
quality positively influencees the perceived support from the company. While the fair and
transparent distribution of income has a correlation on pay level satisfaction, I could not
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prove an effect between the public welfare-oriented investment of profits on pay level
satisfaction. The value and social impact of products and services is related to the perceived
meaningfulness of work, but has no influence on the extent to which employees identify with
their companies. However, employees in companies with high transparency and co-
determination identify better with their companies. I also found that employees are more
willing to take on tasks that are not part of their official job description but serve the company
if the company is cooperative with other companies. However, the outward cooperative
behaviour of the company has no influence on whether employees behave cooperatively with
each other. The scoring of the CGB so far includes only few aspects that explain differences
in job satisfaction between the companies; a circumstance that should be remedied in the
further development of the CGB. Overall, I conclude from my study that the ECG has the
potential to promote the sustainability transformation of the economy, as it connects,
strengthens and makes visible pioneers of socio-ecological change.
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Zusammenfassung
Die Gemeinwohl-Ökonomie (GWÖ) ist eine soziale Bewegung, die fordert, dass alle
wirtschaftlichen Aktivitäten dem Gemeinwohl dienen sollen. Mit der Gemeinwohl-Bilanz hat
sie ein Managementinstrument für Corporate Social Responsibility (CSR) entwickelt, welches
das sozial-ökologische Engagement von Unternehmen vergleichbar erfasst. Der
Gemeinwohl-Ansatz in der unternehmerischen Praxis und seine möglichen Auswirkungen
auf der Makro- und Mikroebene sind bislang weitgehend unerforscht. Um diesem Defizit zu
begegnen, habe ich eine Befragung mit 332 Mitarbeiter*innen und elf Interviews mit
Vertreter*innen aus GWÖ-Unternehmen durchgeführt. Unsere Ergebnisse zeigen, dass sich
die Unternehmen in ihrer Managementpraxis an Werten wie Transparenz, Demokratie,
Vielfalt, Unabhängigkeit, Kooperation, Fairness und ökologischer Nachhaltigkeit orientieren.
Dies drückt sich in einem hohen Maß an Unternehmenstransparenz aus, an demokratischen
Eigentums- und Entscheidungsstrukturen, kooperativen Handelsbeziehungen, einer
Umverteilung von Gewinnen und einer Bevorzugung lokaler und sozial-ökologischer
Lieferanten. Die Gemeinwohlorientierung ist intrinsisch motiviert und gehört zum
Kerngeschäft. In Unternehmen mit Einzeleigentümer*innen ist sie top-down über ein
Delegationssystem verankert oder wird über das Selbstverständnis des Unternehmens als
sozial-ökologisches Kollektiv bottom-up implementiert. Die untersuchten Unternehmen sind
bereit, Gewinneinbußen in Kauf zu nehmen, um ihre sozial-ökologischen Prinzipien
umzusetzen. Auch Beispiele für suffizienzorientierte Praktiken ließen sich feststellen. Einige
Unternehmen in meiner Stichprobe streben kein Wachstum an, während andere selbiges als
notwendig erachten. Begründet durch das Zusammenspiel ihrer Werteorientierung, der
Neukonzeption, Restrukturierung und Relokalisierung von Unternehmensstrukturen sowie
Geschäftspraktiken, der Umverteilung von Macht und der Reduzierung ihrer
Umweltauswirkungen haben die Unternehmen das Potenzial, zu einem gesellschaftlichen
Wandel in Richtung Degrowth beizutragen. Je gemeinwohlorientierter ein Unternehmen
wirtschaftet, desto mehr CSR wird von den Mitarbeiter*innen wahrgenommen und desto
zufriedener erklären sie sich mit ihren Jobs. Mit zunehmender fairer Verteilung der Arbeit und
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höherer Arbeitsplatzqualität erleben die Mitarbeiter*innen weniger Belastungen am
Arbeitsplatz. Zudem wirkt sich die Arbeitsplatzqualität positiv auf die wahrgenommene
Unterstützung durch das Unternehmen aus. Während die faire und transparente Verteilung
der Einkommen in einem Zusammenhang mit der Einkommenszufriedenheit steht, konnte
ich keinen Effekt zwischen der gemeinwohlorientierten Investition der Gewinne und der
Einkommenszufriedenheit nachweisen. Sinn und die gesellschaftliche Wirkung der Produkte
und Dienstleistungen stehen in einem Zusammenhang mit der erlebten Sinnhaftigkeit der
Arbeit, haben jedoch keinen Einfluss darauf, inwiefern sich die Mitarbeiter*innen mit ihren
Organisationen identifizieren. In Unternehmen mit hoher Transparenz und Mitbestimmung
hingegen identifizieren sich die Mitarbeiter*innen stärker mit ihren Unternehmen. Ich konnte
auch nachweisen, dass Mitarbeiter*innen eher bereit sind Aufgaben zu übernehmen, die
nicht Teil ihrer offiziellen Stellenbeschreibung sind, aber dem Unternehmen dienen, wenn
sich das Unternehmen kooperativ mit anderen Unternehmen verhält. Das kooperative
Verhalten nach außen hat jedoch keinen Einfluss darauf, ob sich die Mitarbeiter*innen
untereinander kooperativ verhalten. Das Scoring der Gemeinwohl-Bilanz schließt bisher nur
wenige Aspekte ein, die Unterschiede in der Arbeitszufriedenheit in den Unternehmen
erklären können; dieser Umstand sollte der bei der Weiterentwicklung der Gemeinwohl-
Bilanz behoben werden. Insgesamt schließe ich aus meiner Studie, dass die GWÖ das
Potenzial hat, die Nachhaltigkeitstransformation der Wirtschaft zu befördern, da sie Pioniere
des sozial-ökologischen Wandels vernetzt, stärkt und sichtbar macht.
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Table of Contents
Abstract ................................................................................................................................ 3
Zusammenfassung ............................................................................................................... 5
Table of Contents ................................................................................................................. 7
Abbreviations ..................................................................................................................... 12
List of Figures .................................................................................................................... 14
List of Tables.. .................................................................................................................... 15
Companies and the Sustainability Transformation of the Economy .............................. 16
The Economy for the Common Good ................................................................................ 17
The Economy for the Common Good and the Degrowth Movement ................................. 19
The Role of Companies in Socio-Ecological Transformations ........................................... 20
The Common Good Approach as a CSR Strategy ............................................................ 24
Employees’ Reactions to Perceived CSR ......................................................................... 25
The Significance of Values in the Economy for the Common Good and Organisational
Theory .............................................................................................................................. 25
Questions Posed by the Dissertation ................................................................................ 27
Structure of the Dissertation .............................................................................................. 29
Understanding and Classification of the Dissertation ........................................................ 31
References ....................................................................................................................... 34
Study 1: The Common Good Approach in Entrepreneurial Practice .............................. 43
Background: The Economy for the Common Good and the Common Good Approach in
Business Theory and Practice .......................................................................................... 44
Sample & Methods............................................................................................................ 48
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Results .............................................................................................................................. 50
Issues of Interest of Common Good-Oriented Companies ............................................ 50
Embedding the Common Good Orientation within the Company ................................... 54
Common Good Commitment, Profits and the Core Business ........................................ 56
How to Contribute to the Common Good? Who are the Addressees of the Common
Good Commitment? ...................................................................................................... 61
Discussion ........................................................................................................................ 65
Conclusion ........................................................................................................................ 73
References ....................................................................................................................... 75
Study 2: Common Good-Oriented Companies: Exploring Corporate Values,
Characteristics and Practices That Could Support a Development Towards Degrowth
............................................................................................................................................. 80
Background: Post-Growth Companies in the Literature ..................................................... 82
Research Object & Objective ............................................................................................ 84
The Economy for the Common Good ............................................................................ 84
Latouche’s Circle of Eight ‘R’s ....................................................................................... 85
Sample & Methods ........................................................................................................... 86
Results .............................................................................................................................. 88
Re-evaluate ................................................................................................................... 88
Reconceptualize ............................................................................................................ 92
Restructure ................................................................................................................... 96
Relocalize ..................................................................................................................... 97
Redistribute ................................................................................................................... 98
Reduce, Re-Use & Recycle ........................................................................................... 98
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Discussion ........................................................................................................................ 99
Conclusion ...................................................................................................................... 102
References ..................................................................................................................... 104
Study 3: The Common Good Balance Sheet and Employees’ Perceptions, Attitudes
and Behaviours ............................................................................................................... 108
The Common Good Balance Sheet ................................................................................ 109
Review of the Literature .................................................................................................. 112
Employees’ Reactions to CSR .................................................................................... 114
Research Desiderata & the Aim of Our Study ............................................................. 116
Constructs & Hypotheses ................................................................................................ 117
Perceived CSR............................................................................................................ 117
Job Satisfaction ........................................................................................................... 118
Job Demands & Perceived Organisational Support ..................................................... 118
Pay Level Satisfaction ................................................................................................. 120
Meaningful Work ......................................................................................................... 122
Organisational Identification ........................................................................................ 123
Organisational Citizenship Behaviours ........................................................................ 125
Methods .......................................................................................................................... 126
Materials ..................................................................................................................... 126
Data & Sample ............................................................................................................ 131
Procedure ................................................................................................................... 133
Results ............................................................................................................................ 134
Perceived CSR & Job Satisfaction .............................................................................. 134
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Job Demands & Perceived Organisational Support ..................................................... 134
Pay Level Satisfaction ................................................................................................. 138
Meaningful Work ......................................................................................................... 139
Organisational Identification ........................................................................................ 139
Organisational Citizenship Behaviours ........................................................................ 141
Discussion ...................................................................................................................... 142
Perceived CSR............................................................................................................ 143
Job Satisfaction ........................................................................................................... 144
Job Demands & Perceived Organisational Support ..................................................... 156
Pay Level Satisfaction ................................................................................................. 146
Meaningful Work ......................................................................................................... 147
Organisational Identification ........................................................................................ 148
Organisational Citizenship Behaviours ........................................................................ 149
Limitations ................................................................................................................... 150
Conclusion ...................................................................................................................... 152
References ..................................................................................................................... 154
The Transformative Potential of the Common Good Approach
in Entrepreneurial Practice .............................................................................................. 163
The Common Good Approach in Entrepreneurial Practice (Résumé Study 1) ................ 163
Corporate Values, Characteristics and Practices That Could Support a Development
Towards Degrowth (Résumé Study 2) ............................................................................ 165
The Common Good Balance Sheet and Employees’ Perceptions, Attitudes and
Behaviours (Résumé Study 3) ........................................................................................ 168
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Overall Discussion .......................................................................................................... 169
Shared Values as Common (Good) Ground ................................................................ 169
Cooperation for the Common Good ............................................................................. 171
Transparency as an Opportunity for Improvement ....................................................... 174
Offering Ownership and Co-determination .................................................................. 176
Products AND Processes for a Better World ............................................................... 178
Profit Satisficing Instead of Profit Maximising ............................................................. 181
Transforming the Field ................................................................................................ 184
Limitations and Future Directions .................................................................................... 186
Conclusion ...................................................................................................................... 190
References ..................................................................................................................... 193
Acknowledgements (Danksagung) ................................................................................. 201
Author’s Contribution (Beiträge der Autorin) ................................................................. 202
Declaration of Originality (Eigenständigkeitserklärung) ............................................... 204
Curriculum Vitae ............................................................................................................... 205
Publications ...................................................................................................................... 206
Appendix ........................................................................................................................... 211
Appendix A: Interview Guideline (Study 1 and 2) ............................................................ 211
Appendix B: Employee Survey Questionnaire (Study 3) ................................................. 213
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Abbreviations
Ba
cf.
Bakery
Confer [compare to]
CST
Catholic Social Teaching
CGB
Common Good Balance Sheet [Gemeinwohl-Bilanz]
CgoC
Common good-oriented company
ClC
Conventional large corporation
cm
Clothing manufacturer
CSR
Corporate social responsibility
ecc
Elder care center
ECG
Economy for the Common Good [Gemeinwohl-Ökonomie]
ed
Service provider for event design
ef
EMAS
Engineering firm
EcoManagement and Audit Scheme
e.g.
Exempli gratia [for example]
fa
GIVUN
GRI
Farm
Gemeinwohl-Ökonomie im Vergleich unternehmerischer
Nachhaltigkeitsstrategien [Common Good Economy in a Comparison With
Entrepreneurial Sustainability Strategies]
Global Reporting Initiative
i.e.
id est [that is]
ISO
International Organisation for Standardisation
ma
Media agency
mc
NEC
Media company
Norbert Elias Centre for Transformation Design & Research
p.
Page
par.
Paragraph
13
pc
Printing company
SDGs
Sustainable Development Goals
SMEs
Small and medium-sized enterprises
SNCs
Successful non-growing companies
ws1
Wholesaler for organic food I
ws2
Wholesaler for organic food II
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List of Figures
Figure 1: Small Niche Actors and Market Incumbents on Their Way to a Sustainability
Transformation of the Economy ............................................................................................ 22
Figure 2: Common Good Balance Sheet (Matrix 4.1) ........................................................ 111
Figure 3: Research Model of the Study ............................................................................. 127
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List of Tables
Table 1: Descriptive Statistics of Scores in the Common Good Balance Sheets ................ 131
Table 2: Study Sample....................................................................................................... 132
Table 3: Descriptive Statistics and Correlations of Variables ............................................. 135
Table 4: Results from Multiple Linear Regression Testing Hypothesis 1 ............................ 136
Table 5: Results from Multiple Linear Regression Testing Hypothesis 2 ............................ 136
Table 6: Results from Multiple Linear Regression Testing Hypothesis 3…….…................. 137
Table 7: Results from Multiple Linear Regression Testing Hypothesis 4 ............................ 137
Table 8: Results from Multiple Linear Regression Testing Hypothesis 5 ............................ 138
Table 9: Results from Multiple Linear Regression Testing Hypothesis 6 ........................... 139
Table 10: Results from Multiple Linear Regression Testing Hypothesis 8 .......................... 140
Table 11: Results from Multiple Linear Regression Testing Hypothesis 10 ........................ 141
Table 12: Results from Multiple Linear Regression Testing Hypothesis 11 ........................ 142
Table 13: Small Business Owner-Managers’ Operation Frames ....................................... 182
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Companies and the Sustainability Transformation of the Economy
When people hear a term, they usually have an image of it in their mind. When
people talk about companies, they typically think of large corporations. Privately held small to
medium-sized enterprises (SMEs) have significantly less visibility when compared to large
publicly traded firms or multinational corporations (Stubblefield Loucks et al., 2010). This
phenomenon also becomes apparent when we consider the extent to which a company
cares about the well-being of its internal and external stakeholders; this is defined as
corporate social responsibility (CSR) (see Glavas & Kelley, 2014). In the academic CSR
debate, large companies have been the main topic of discussion for a long time, whereas
SMEs have been neglected (Elford & Daub, 2019). This is surprising, because SMEs
constitute 99 percent of all businesses in the European Union, offer two in every three jobs,
and are responsible for half of Europe’s gross domestic product (European Union, 2020).
The impact of SMEs on society is therefore underestimated (Lepoutre & Heene, 2006).
The research literature also notes that CSR management tools used by companies to
document and communicate their CSR, such as EcoManagement and Audit Scheme
(EMAS) or Global Reporting Initiative (GRI), were developed with large companies in mind,
with the intention of then scaling them down to smaller companies (Jenkins, 2004). However,
small companies are not simply large companies on a smaller scale; SMEs differ from large
firms in terms of their structural, social and functional characteristics (Spence, 2016; Spence
& Rutherfoord, 2001; Spence & Schmidpeter, 2003). SMEs therefore claim they have
difficulties applying established CSR standards (Elford & Daub, 2019; Johnson &
Schaltegger, 2016). A CSR tool that has found favour among small and medium-sized
companies in German-speaking countries is the Common Good Balance Sheet (CGB). The
CGB was created by the civic social movement Economy for the Common Good (ECG).
In this introduction, I first present the ECG and its relation to the degrowth movement
as well as the importance of companies in a socio-ecological transformation of the economy.
I then explain the common good approach as a CSR strategy and briefly discuss how
employees react when their companies engage in socio-ecological activities. Furthermore, I
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present the importance of values in the business context and finally introduce the questions
of this dissertation. In the last part of this introduction, I explain the structure of the
dissertation and give hints on how to understand and classify my research.
The Economy for the Common Good
In 2008, a small group of entrepreneurs came together with the Austrian Attac activist
and writer Christian Felber to discuss Felber’s ideas from his book New Values for the
Economy (Gemeinwohl-Ökonomie, 2018). They agreed on the notion that the main purpose
of all economic activity should be to contribute to the common good and that profits should
merely serve as a means to an end in this context. This is how the social movement of the
Economy for the Common Good (ECG) originated. In a democratic, participative and open-
ended process, their supporters aim to establish an economic system in which the common
good comes first (Felber, 2018).
The core instrument is the CGB, which is an assessment tool to determine whether a
company’s behaviour is in accordance with the ECG’s core values. According to the CGB
matrix 4.1, these values are human dignity, cooperation and solidarity, ecological
sustainability, social justice, and co-determination and transparency. For each value
category, the CGB formulates standards for how a company would ideally treat their
stakeholders. The latter are, according to the CGB, a company’s suppliers, investors,
employees and business owners, customers and business partners as well as the social
environment (Gemeinwohl-Ökonomie, 2013). The matrix 4.1 was replaced by the revised
version 5.0 in May 2017. There are no fundamental differences between the two versions in
terms of content; the differences, rather, consist in some restructuring and conceptual
adaptations for the sake of greater logical consistency and clarity, and in tying in more
closely with the standards in the European Union guidelines on non-financial reporting
(Gemeinwohl-Ökonomie, 2017). In my dissertation, I primarily refer to matrix 4.1, since the
companies I have investigated for this study compiled their CGBs using this version.
All actions a company undertakes in the service of the formulated values and above
today’s legal minimum standard score positive points in the CGB, whereas, for example,
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hostile takeovers, blocking patents or the prevention of a works council reduce the score
(Felber, 2018). The comparability of the results in the CGBs is ensured by peer-review
processes or through an external audit (Gemeinwohl-Ökonomie, 2020d). One prominent
requirement by the ECG is that publishing a CGB should be a legal obligation for all
companies and that companies with better scores should be granted easier access to bank
loans and given preference in public procurement processes (Felber, 2018).
To date, the ECG is active in over 20 countries all over the world: 18 unions have
been founded; around 100 regional groups exist; and the webpage counts over 9,500
supporters, consisting of individuals, politicians and more than 2,000 companies
(Gemeinwohl-Ökonomie, 2020c). Several municipalities in Germany and other European
countries, as well as 400 companies, have compiled a CGB (e.g., Gemeinde Klixbüll, 2018;
Sanchis et al., 2018). The largest companies that have published a CGB are currently Leben
und Wohnen, a municipal company within the elderly care and housing sector in the state
capital of Stuttgart with almost 1,000 employees, the training provider WBS Training AG with
around 900 employees, the sensor technology supplier elobau with over 800 employees, the
Sparda Bank in Munich with over 750 employees, and the outdoor outfitter VAUDE with just
under 500 employees in Germany (valid as of: December 2020; Gemeinwohl-Ökonomie,
2020a). The ECG is therefore a movement supported by SMEs.
The ECG has also recorded some political successes; in 2015, the European
Economic and Social Committee recommended that the ECG model be integrated into the
European as well as into national legal frameworks (Europäischer Wirtschafts-und
Sozialausschuss [EWSA], 2015). In subsequent years, the ECG ideas were incorporated into
the coalition agreements of various state governments in Germany. The ruling coalition of
Baden-Württemberg incorporated support for the ECG idea into its coalition agreement and
decided to prepare a balance sheet for a state-owned company’s contribution to the common
good (BÜNDNIS 90/DIE GRÜNEN Baden-Württemberg & CDU-Landesverband Baden-
Württemberg, 2016). The coalitions in Hessen and Bremen aim to support companies that
wish to compile a CGB (CDU Hessen & Bündnis 90/Die Grünen Hessen, 2018;
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Sozialdemokratische Partei Deutschlands Landesorganisation Bremen et al., 2019). In 2019,
several members of the Bundestag and the parliamentary group BÜNDNIS 90/DIE GRÜNEN
brought forward a motion for a pilot project on the CGB of at least two companies co-owned
by the German government (Göring-Eckardt et al., 2019). The ECG is therefore not only a
vision of a theoretical nature but is already catching on in practice.
The Economy for the Common Good and the Degrowth Movement
The ECG is allied with the degrowth movement (Giselbrecht & Ristig-Bresser, 2017).
The degrowth movement is a social movement which, over the past few years, has brought
together a multitude of discussions and projects on the theme of alternative economic activity
(Burkhart et al., 2017). The core idea of degrowth is achieving global social and ecological
justice for the well-being of all, whilst, at the same time, preserving the ecological basis of
life. The actors within the movement question the prevailing growth paradigm and share the
view that the economic and social guiding principle of higher, faster, further leads to
acceleration, overloading, exclusion and the destruction of ecosystems (Burkhart et al., 2017;
Jackson, 2009; Kallis et al., 2015; Sommer & Welzer, 2014). They therefore call for
fundamental changes in modes of production and ways of life as well as a comprehensive
cultural transformation. They believe that this transformation should be based on the values
of mindfulness, solidarity and cooperation (Burkhart et al., 2017).
In 2020, the COVID-19 pandemic shaped both public and private life worldwide and
led to a massive setback in economic performance. The German and the worldwide average
gross domestic product decreased in real terms by four percent in comparison with the
previous year (Janson, 2020; Statistisches Bundesamt, 2020). Even though this
development represents a parallel to the demands of the degrowth movement, the changes
over the past few months cannot be equated with the idea of a degrowth transformation:
“Despite observations that pollution and emissions have reduced, the sudden, un-planned,
and chaotic downscaling of social and economic activity due to COVID-19 is categorically not
degrowth. Instead, it’s an example of why degrowth is needed” (The degrowth.info Editorial
Team, 2020).
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Advocates of degrowth argue that, in contrast to the processes of change initiated by
the COVID-19 pandemic, the degrowth transformation must proceed intentionally and
democratically. Furthermore, there must be a long-term commitment to reducing the level of
production and consumption as well as to shaping society differently and more fairly. Unlike
the COVID-19 pandemic, the degrowth transformation should not therefore have a
disproportionately negative effect on the weakest members of society, rather it should lead to
more fairness and equality between rich and poor (The degrowth.info Editorial Team, 2020).
In addition, degrowth advocates point out, the pandemic demonstrates two things: on the one
hand, the unsustainability and fragility of current ways of life, and on the other hand, that
degrowth is possible, because society and states have proven to be able to radically change
the modus operandi (The degrowth.info Editorial Team, 2020).
The Role of Companies in Socio-Ecological Transformations
Scholars’ interest in the role of companies with regard to socio-ecological
transformation concepts like degrowth has increased recently. Posse (2015) stresses that
entrepreneurial responsibility goes beyond profit maximisation and that companies have the
potential to take action to contribute to societal transitions. Scholl and Mewes (2015, p. 16)
outline in a set of theses that “socio-ecological transition will not succeed without
transformative companies, because they act from within the economy and stand for the
feasibility of a consistently sustainable economy”.
Companies who are forerunners in matters of sustainability are ascribed a particular
role in the sustainability transformation of the economy. Typically, these are the small
companies and new start-ups that initiate disruptive sustainability innovations in a sector
(Hockerts & Wüstenhagen, 2010). Often, the actors remain in a niche with their socio-
ecological products and practices, but there are also examples of these niche actors being
able to initiate changes in the direction of more sustainability within their sector. Examples of
these are organic food and fair trade markets (Hockerts & Wüstenhagen, 2010; Kny et al.,
2015).
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As soon as the niche actors are able to record a certain growth, the large, market-
leading actors― the incumbents―take up the trend by offering the trend as a line extension
(Hockerts & Wüstenhagen, 2010). Although the niche actors do intend to make a profit, they
are significantly motivated by the desire to promote socio-ecological transformation, whereas
the incumbents’ intention is to capitalise on the growing trend (Hockerts & Wüstenhagen,
2010; Kny, 2020). The fact that the incumbents assimilate the sustainability innovation and
make it available to the mass market contributes to the distribution of the more sustainable
product or practice; the consequence, however, of the incumbents being primarily cost-driven
is that the sustainability criteria are reduced within the new trend (Hockerts & Wüstenhagen,
2010). The incumbents externalise costs in order to gain a competitive advantage (see
Scherhorn, 2008). This, in turn, puts the niche actors under pressure, with the result that
they, too, are forced to give up at least some of their ideals in order to remain competitive
(Hockerts & Wüstenhagen, 2010). The Fair Trade Labelling Organisation, for example,
slackened some of its standards as a reaction to pressure from the Rainforest Alliance
Label―which was adopted by the multinational Kraft (Hockerts & Wüstenhagen, 2010).
Based on these considerations, I conclude that to achieve a sustainability
transformation of the economy, the market share of sustainable actors must grow while the
market share of non-sustainable incumbents decreases and their socio-ecological
performance simultaneously increases (see Figure 1). The incumbents will not in themselves
be drivers of socio-ecological transformation, for their behaviour is primarily reactive and
considerably dependent on external factors (Kny, 2020). Companies that are already
engaged in socio-ecological economic management could be drivers of transformation as
change agents (see Wissenschaftlicher Beirat der Bundesregierung Globale
Umweltveränderungen, 2011). I suppose that more transparency in this transformation
process could possibly help prevent a decline in sustainability standards as once established
by the niche players.
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Figure 1
Small Niche Actors and Market Incumbents on Their Way to a Sustainability Transformation
of the Economy
Note. Adapted from “Transformation towards a Sustainable Economy by Davids and
Goliaths? An Actors-Based Reconstruction of the (Proto-) Regimes for Sustainable Business
Practices in Socio-Ecological Pioneer Companies vs. Incumbents”, by K. Stumpf, B.
Sommer, J. Kny, and J. Wiefek, 2017, SustEcon Conference: The Contribution of a
Sustainable Economy to Achieving the SDGs, Berlin. Based on “Greening Goliaths versus
Emerging Davids—Theorizing about the Role of Incumbents and New Entrants in
Sustainable Entrepreneurship”, by K. Hockerts and R. Wüstenhagen, 2010, Journal of
Business Venturing, 25(5), p. 488, (https://doi.org/10.1016/j.jbusvent.2009.07.005).
23
Schneidewind et al. (2012, p. 498) exemplify how companies could contribute to a
sustainability transition by using business strategies that go beyond an orientation towards
efficacy and make sufficiency a business case. The central element of the sufficiency
approach is the question of ‘when do we have enough?’, which aims at reducing the absolute
amount of production and consumption (Huber, 1995). For a long time now, the sufficiency
strategy has been discussed in sustainability research as a necessary complement to
efficiency and consistency measures (see Huber, 1995). Schneidewind et al. (2012, p. 512)
describe a sufficiency orientation as a targeted and particularly effective form of resource
conservation. It is particularly significant against the background of so-called rebound effects,
i.e. where, for example, resource conservation is compensated in the course of process
optimisation through increases in turnover or increased usage so that the absolute
consumption of resources continues to increase despite efficiency and consistency
measures (Heidbrink et al., 2018).
The ECG, too, requires sufficiency measures from companies. Companies are called
upon to promote sufficient, i.e. moderate, consumption through information but also through
reusability, durability and reparability as well as particular services. Conversely, planned
obsolescence, i.e. the intentional shortening of product lifespan, is negatively evaluated and
allotted minus points (Gemeinwohl-Ökonomie, 2013). The fact that the CGB addresses
efficiency, consistency as well as sufficiency strategies is another unique characteristic of the
CGB (Heidbrink et al., 2018).
The ECG addresses the idea that a sufficiency orientation contradicts the growth
paradigm, yet is nonetheless something to strive for (Gemeinwohl-Ökonomie, 2013). In
practice, this means that companies are called upon to refrain from striving for a maximum in
profits and growth. Scholars discuss business concepts that are not reduced to the
maximisation of turnover, profits and growth using buzzwords such as social businesses
(Yunus, 2007), sustainable entrepreneurship (Schaltegger et al., 2015), transformative
companies (Pfriem et al., 2015), successful non-growing companies (Liesen et al., 2015),
growth-neutral (Deimling, 2017; Liesen et al., 2013) and post-growth companies (Mewes &
24
Gebauer, 2015). However, since growth-critical concepts are transferred into practice by
niche actors only and these concepts are hardly accepted in business economics and other
disciplines (Liesen et al., 2015; Posse, 2015), little is known about the characteristics and
practices of such companies.
The Common Good Approach as a CSR Strategy
One of the basic ideas of the ECG is that companies orient their economic
management towards contributing to the common good. There is, in general, no explicit
definition of the concept of the common good (Heidbrink et al., 2018; Sulmasy, 2001). Even
the ECG itself does not put forward a substantial concept of the common good. Instead, it
states that a democratic process is needed in order to flesh this concept out (Felber, 2018).
Garriga and Melé (2004) regard the orientation of entrepreneurial activity towards the
common good as one of the ethical CSR theories. The ethical CSR theories are based on
the principle of doing what is right or necessary for a good society (Garriga & Melé, 2004).
The concept of the common good is a historical concept, the roots of which go back to the
ancient world of Aristotle (Garriga & Melé, 2004; Heidbrink et al., 2018). In modern times, the
concept of the common good has played a role as a key reference in the business ethics of
Catholic social thought (Garriga & Melé, 2004). According to the common good approach,
the economy―like any other social group or individual―is obliged to contribute to the
common good because it is part of society (Garriga & Melé, 2004).
Along with ethical CSR theories there are also, inter alia, instrumental theories, in
which CSR is understood as a strategic tool for achieving entrepreneurial goals and
increasing profits (Garriga & Melé, 2004). The most well-known approach in this group of
CSR approaches is probably that of maximising shareholder value. According to this
approach, a company’s responsibility consists in maximising profits for shareholders within
the legal framework and the ethical conventions of the respective country. Following the
shareholder value approach, all entrepreneurial decisions are oriented towards the goal of
maximising profits (Figge & Schaltegger, 1999; Garriga & Melé, 2004).
25
Employees’ Reactions to Perceived CSR
Theoretical explanations (Castel, 2008; Sennett, 2010) as well as empirical studies
(Dörre, 2005; Schultheis & Schulz, 2005) are available which demonstrate the operational
consequences of following the principle of maximising profits and shareholder value―for
employees in particular. There is also an increasing number of studies on the effects of
perceived CSR on stakeholders (Glavas, 2016; Gond et al., 2017; Wang et al., 2020) Along
with customers and jobseekers, employees are one of the groups that has received the most
attention in the field of these micro-CSR studies (Jones, 2019).
If employees perceive that their company is concerned with the well-being of its
internal and external stakeholders, this feeds into a number of positive attitudes towards the
company on their part. For example, the results of a meta-analysis consisting of 65 studies
show that employees who perceive the CSR activities of their companies regard their
companies as having greater external prestige, have greater trust in their companies, are
able to identify better with their companies, rate their organisations as behaving more fairly,
feel more obligated to their companies, and are, on the whole, more satisfied with their jobs
(Wang et al., 2020). In addition, the perception of CSR leads to better job performance and
greater commitment among employees (Wang et al., 2020). By way of qualifying these
results, it must be pointed out that the studies in the fields of both CSR and micro-CSR have
primarily focused on large companies (Elford & Daub, 2019). One of the research desiderata
in these areas are therefore studies focused on small and medium-sized companies (Glavas,
2016). With its hitherto exclusively small and medium-sized companies, the ECG offers an
empirical field to fill this research gap.
The Significance of Values in the Economy for the Common Good and Organisational
Theory
The CGB distinguishes itself from other CSR tools not only through its firmly political
ambitions but also through its particularly broad scope both in thematic terms and along the
stations of the value creation chain (Heidbrink et al., 2018). In addition, it sets itself apart
from the mere transparency requirements of other tools, such as the German Sustainability
26
Code (Deutscher Nachhaltigkeitskodex, DNK) or the Sustainable Reporting Standard of the
Global Reporting Initiative (GRI), through comparatively strong normative requirements in
terms of content (Heidbrink et al., 2018; Kny, 2020; Scheffler & Lieber, 2018). Another
peculiarity of the ECG is the explicit reference to values (Scheffler & Lieber, 2018).
Companies that have published a CGB report that they see their own values reflected in the
values represented by the ECG and that this motivates them to join the ECG (Heidbrink et
al., 2018). Indeed, ethical-social values are one of the main motives for SMEs following CSR
(Jenkins, 2006; Santos, 2011). These are more frequently referred to than the goals of
improving the reputation of the company or increasing customer loyalty through CSR, i.e.
goals that prioritise company turnover (European Commission, 2002).
In Schein’s (2010) organisational theory, espoused beliefs and values form the
second out of three levels of an organisation’s culture. The beliefs and values shared within
an organisation primarily guide the actions of management personnel, and if following or
implementing these leads to the desired success, they are transformed into shared
assumptions (Schein, 2010). If the success cannot be recorded objectively, this process can
also take place by means of consensus through social validation (Schein, 2010). Similarly,
because the link between performance and strategy often cannot be explicitly verified,
organisational goals and aspirations may also fall into the category of shared beliefs and
values (Schein, 2010). The values that are officially pursued may also be different to those
that guide actions in the everyday life of the company (Schein, 2010). This is why it is
necessary to carefully distinguish between those beliefs and values that are congruent with
the underlying assumptions and that actually determine the performance, and those that are
part of the company ideology, philosophy or rationalisation and are only aspirations for the
future (Schein, 2010).
The basic underlying assumptions are unconscious, taken-for-granted beliefs and
values that determine the perception, feeling, thinking and behaviour of each individual
member of the organisation (Schein, 2010). They represent the first level of the
organisational culture according to Schein (2010) theory. The third level of this culture is
27
represented by the artefacts. The artefacts include the architecture of the physical
environment, the language spoken, the technology used and the products offered, artistic
creations, the group’s style as embodied in clothing, manners of address and emotional
displays, the group’s myths and stories told about the organisation, observable rituals and
ceremonies celebrated within the organisation, and also its published values (Schein, 2010).
Any group’s culture can be studied at these three levels (Schein, 2010).
Because thus far companies have voluntarily compiled their CGBs, by publishing a
CGB, companies profess to the ideas and values of the ECG. Under Schein’s (2010) model,
therefore, published CGBs come under the category of artefacts. In the CGB, a company’s
contribution to the common good is measured using the values human dignity, cooperation,
solidarity, ecological sustainability, social justice, co-determination and transparency
(Gemeinwohl-Ökonomie, 2013). This does not necessarily mean, however, that these
espoused values are also the values that guide the actions of the company as underlying
assumptions (see Schein, 2010). To explore these, we would need to consider the
organisational structures and the organisational culture but also the entrepreneurial practices
and the modes of behaviour of the individual employees (see Schein, 2010), which is one
subject of this dissertation.
Questions Posed by the Dissertation
Just as the concept of the common good is not clearly defined, neither is there a clear
answer to the question of how companies can contribute to the common good. According to
the ECG, a company’s economic management should serve the common good by its
orientation towards the values set out in the CGB (Felber, 2018). Garriga and Melé (2004,
p. 62) believe that the economy contributes to the common good by creating prosperity,
providing goods and services efficiently and fairly, and at the same time respecting the
dignity and rights of the individual. Dyllick and Muff (2016) go a step further, arguing that a
company serves the common good if it goes beyond merely trying to reduce its negative
impact and actively makes a positive contribution to solving sustainability issues. Companies
28
that consider this their main purpose are understood to be truly sustainable businesses
within the business typology proposed by Dyllick and Muff (2016).
However, there is a lack of knowledge around what these truly sustainable
businesses look like and how they function in practice (Muff & Dyllick, 2014). Thus far, there
have been no studies that show what entrepreneurial practice looks like when a company
pursues the goal of orientation towards the common good, and what effects this has on the
employees. That is why Muff and Dyllick (2014, p. 12) consider it “of critical importance to
identify best practice examples” and to describe what “real life examples of such [truly
sustainable] companies look like” (p. 16).
In the present dissertation, I pick up on this call and consider the common good-
oriented economic management of companies in the ECG from an empirical perspective. I
focus first of all on the organisational characteristics and practices of the companies.
Specifically, my first step is to take a qualitative approach to answering the questions of
which values guide the behaviour of ECG companies in practice, how the common good
orientation of a company is reflected in entrepreneurial structures and practices, and the
nature of the relationship between profit and socio-ecological commitment.
Furthermore, I am interested in the possible effects of common good-oriented
economic management on the macro- and micro-level. The ECG is sympathetic to the
degrowth movement (Giselbrecht & Ristig-Bresser, 2017), and the CGB requires that the
companies introduce measures intended to support moderate consumption and achieve an
absolute reduction in resource consumption (Sommer et al., 2016). But what kind of business
characteristics and practices can actually be found among ECG companies that could
support a development towards degrowth? Are there any overlaps between the values of
these companies and those of the degrowth movement? These as yet unanswered questions
form the point of departure for the second part of my qualitative analyses.
After focusing my research on the organisational level in the first two studies, I turn in
the third study to the individuals in the ECG companies, and here I use quantitative methods.
It is the individuals who embody the values within their organisations. Thus far, however, it is
29
unclear to what extent the employees from the ECG companies even perceive the common
good orientation of their companies. With this in mind, I explore the question of whether
employees from companies with a higher common good orientation and therefore higher
scores in the CGB perceive more CSR than employees from companies with a lower
common good orientation and therefore lower scores in the CGB. In addition, I investigate
what effects a company’s common good orientation may have on the attitudes and behaviour
of employees.
My investigations are therefore focused on the companies and employees who are
part of the ECG movement. Because thus far only small and medium-sized companies have
joined the ECG, my research enriches the CSR and micro-CSR discourse―which is strongly
focused on large companies―by bringing in a new perspective. My study empirically
underpins the concept of the common good approach as a CSR approach and highlights
(potential) effects on the micro- and macro-level. The ECG is a relatively new movement that
has grown constantly over the past few years (Heidbrink et al., 2018) and has already had
some political successes. In a comprehensive discussion of my results, I aim to explore the
question of what contribution the common good-oriented economic management of ECG
companies can make to a sustainability transformation of the economy.
Structure of the Dissertation
The ECG endeavours to be “a catalyst for change on an economic, political and
social level”, with the aim of achieving a good life for all living creatures and protecting the
planet (Gemeinwohl-Ökonomie, 2020b, no page). In this dissertation, my aim is to illuminate
the transformative potential of the common good approach in entrepreneurial practice.
Overall, I intend to explore the question of how the ECG may support a sustainability
transformation of the economy. In this regard, I take an empirical approach. I examine
common good-oriented economic management at the organisational level using both
qualitative and quantitative methods. Furthermore, I explore the possible effects of common
good-oriented economic management on the micro- and macro-level.
30
The following first chapter contains a 2019 contribution to the Journal for Business,
Economics & Ethics entitled “The Common Good Approach in Entrepreneurial Practice”. The
contribution was written as part of the dissertation. In this paper for the special issue
“Economy and Common Good”, I explore the question of how a common good-orientation is
reflected in entrepreneurial practice. I present the organisational values, characteristics and
practices of common good-oriented companies and discuss these in contrast with the
economic management of conventional large companies. In terms of a methodology, my
results are taken from an interview study involving eleven companies with a published CGB. I
conducted the interviews as a research assistant on the project “Gemeinwohl-Ökonomie im
Vergleich unternehmerischer Nachhaltigkeitsstrategien (GIVUN)” [Common Good Economy
in a Comparison With Entrepreneurial Sustainability Strategies], which was funded by the
German Federal Ministry of Education and Research. The GIVUN project was led by Prof.
Harald Welzer and Dr. Bernd Sommer at the Europa-Universität Flensburg and implemented
in cooperation with Prof. Ludger Heidbrink at the Christian-Albrechts-Universität zu Kiel.
The interviews were also the basis for the second manuscript I have integrated here,
entitled “Common Good-Oriented Companies: Exploring Corporate Values, Characteristics
and Practices That Could Support a Development Towards Degrowth”. I wrote this article as
part of my dissertation and published it in 2018 in a special issue on “Post-Growth
Organisations” in Management Revue. In the article, I explore the question of how
companies with common good-oriented economic management can potentially contribute to
the development of a degrowth society. The eight principles formulated by the prominent
degrowth theorist Serge Latouche form the starting point for the analysis. These are the
principles that, according to Latouche, must be followed in order to develop a degrowth
society. The study highlights the extent to which these principles are implemented or
supported in the eleven companies under focus.
The third contribution to this dissertation is the manuscript “The Common Good
Balance Sheet and Employees’ Perceptions, Attitudes and Behaviours”, which is re-
submitted after first peer reviews with minor revisions to the open access journal
31
Sustainability as a contribution to the special issue “Sustainable Economy for the Common
Good”. In this study, I focus on the micro-level in companies with a published CGB. I answer
the question of the extent to which employees perceive the socio-ecological commitment of
their companies. I also investigate whether there are any correlations between the
performance in the CGB and employees’ work-related attitudes and behaviours. I am
interested in how satisfied employees are with their jobs and pay (job and pay level
satisfaction), the extent to which employees feel either overburdened by their jobs (perceived
job demands) or supported by their companies (perceived organisational support), the extent
to which employees identify with their companies (organisational identification), and to what
extent they experience their work as meaningful (work meaningfulness). Furthermore, I
investigate the correlations between the CGBs and the employees’ particular modes of
behaviour (corporate citizenship behaviours). I conducted an employee survey with a total of
332 participants in eight German ECG companies, and this formed the basis for the study
results.
In the final chapter of the dissertation I collate the results from the three studies and
discuss these with a focus on the overall research objective: determining the transformative
potential of the common good approach in entrepreneurial practice and how the ECG may
support a sustainability transformation of the economy.
Understanding and Classification of the Dissertation
From a disciplinary perspective, this study can be classified under research on the
psychology of work and organisations which investigates the correlations between people’s
experience and behaviour and the structural, process and target characteristics of
organisations (Schuler, 1995, p. V). I join the debate about the significance of values in the
business context, and I offer new insights into the characteristics and practices of socio-
ecological pioneer companies in the field of CSR research, as well as into the correlations
between entrepreneurial socio-ecological commitment and employees’ perceptions, attitudes
and behaviours in the field of micro-CSR research.
32
The dissertation has been significantly influenced by my years as a research
assistant at the Norbert Elias Centre for Transformation Design & Research (NEC) at the
Europa-Universität Flensburg as well as by my current research work at the Institute for
Advanced Sustainability Studies in Potsdam. From 2015 to 2018, within the GIVUN project at
the NEC, I discussed the characteristics of the ECG and its companies, as well as the
transferability of the ECG approach to large companies, in a team with experts from
sociology, social psychology, futurology, environmental sciences, philosophy and ethics (see
Heidbrink et al., 2018). This dissertation ties in with the GIVUN project, thereby reflecting, to
a certain extent, an interdisciplinary approach. Even though I approached the dissertation as
a psychologist and my ideas have been informed by a degree course in the understanding of
psychology from a natural sciences perspective, I reference studies from, for example,
sociology, business ethics, sustainability management and transformation research. The
study therefore goes beyond a psychological focus on human experience and behaviour.
At the same time, the dissertation also represents a contribution to socio-ecological
sustainability research. As a piece of transformative research this study endeavours to play a
part in shaping society: it aims to promote and support transformation processes by helping
people understand and implement practical approaches to solutions in the name of large-
scale transformation (Wissenschaftlicher Beirat der Bundesregierung Globale
Umweltveränderungen, 2011). It does so by focusing on the pioneers of change, primarily
the socio-ecological pioneer companies and the grass roots movement of the ECG
supported by them. By describing the characteristics of pioneer companies and the ECG as
niche actors, the study creates systemic knowledge in a descriptive sense (Nanz et al., 2017;
Vilsmaier & Lang, 2014). It analytically determines the possible transformation potential,
offering insights that can be understood as transformation knowledge (Nanz et al., 2017;
Vilsmaier & Lang, 2014). The study can therefore be classified, to a certain extent, under
transformative research (which promotes large-scale transformation in practice) as well as
under what is often understood as its complement, transformation research (which is
concerned with the characteristics, mechanisms and causes of social transformation
33
processes; see Wissenschaftlicher Beirat der Bundesregierung Globale
Umweltveränderungen, 2011). The two theoretical research approaches overlap within the
structure of the study: by describing the behaviour of the actors and analytically determining
the transformation potential of a practical approach originating from the civil society, the
study could have a transformative effect based on the systemic and transformation
knowledge acquired.
In this sense, the ECG functions both as a specific proposal for, and approach to,
change, one that is understood as a “proxy”, surrogate or blueprint for a socio-ecological
transformation vision and strategy. On the one hand, the specific features and practices of
socio-ecological pioneer companies that support the ECG and represent examples of
common good-oriented economic management are of interest in this regard. On the other
hand, the ECG is interesting because it is a social movement which, by formulating targets
for social transformation and offering the CGB as a CSR management tool, is able to provide
orientational knowledge (Nanz et al., 2017; Vilsmaier & Lang, 2014). This does not mean,
however, that the ideas and objectives of the ECG should be adopted uncritically. My aim,
rather, is to take an open-minded and inquisitive approach to the ECG in the context of
reflecting on my own personal values and my role in the research process, whilst maintaining
a certain distance between myself and the object of research (see Grunwald, 2018).
34
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Study 1: The Common Good Approach in Entrepreneurial Practice*
* After double-blind expert review this manuscript was published at Journal for Business,
Economics & Ethics: Wiefek, J., & Heinitz, K. (2019). The Common Good Approach in
Entrepreneurial Practice. Journal for Business, Economics & Ethics, 20(3), 320–345.
https://doi.org/10.5771/1439-880X-2019-3-320
The members of the social movement of the Economy for the Common Good (ECG)
agree about that the main purpose of all economic activity should be the contribution to the
common good, while profits should merely serve as a means in this context. In a democratic,
participative and open-ended process, they want to establish an economic system in which
the common good comes first. A core instrument is the Common Good Balance Sheet
(CGB), which assesses a company’s contribution to the common good. One prominent claim
of the ECG is that publishing a CGB shall be legally obligatory for all companies and that
companies with better scores should benefit from easier access to bank loans and
advantages in public procurement processes (Felber, 2018). Since the ECG´s foundation in
2010, the ECG has spread over 20 countries all over the world. Among their supporters are
municipalities, universities, individuals, and 2,000 small and medium-sized enterprises
(SMEs), of which 250 have published a CGB (Giselbrecht & Ristig-Bresser, 2017). Thus,
businesses play a major role in this fast growing movement. After the concept of the common
good has scarcely received any attention in the fields of organisational theory, business
ethics and corporate social responsibility (CSR) (Argandoña, 2009), newer studies turn to
this approach again (see Pittz et al., 2019, Retolaza et al., 2019). Nevertheless, up to date,
there has hardly been research on the common good approach in business practice.
Likewise, there is only little scientific research on the ECG yet (Gemeinwohl-Ökonomie,
2018). However, after the CSR debate has long focused on large companies, there is a
slightly growing body of literature on CSR practice and reporting in SMEs (Gutiérrez-Diez et
al., 2019; Jenkins, 2006; Perrini et al., 2007). And since the companies involved in the ECG
44
are companies with a maximum of 900 employees and more often much less, we can refer to
this literature.
In this paper, we will first give a short insight how the concept of the common good
relate to the ECG und how the ECG distinguish from other CSR concepts and instruments. In
order to contribute to this discourse, we conducted interviews with companies participating in
the ECG. We present findings regarding the following questions: How is the common good
orientation of a company reflected in entrepreneurial practices, and what is the relationship
between profit orientation and socio-ecological commitment in common good-oriented
companies (CgoC)? We discuss our empirical observations with those from research on
CSR in SMEs and findings on large companies´ CSR practices from another module of our
research project. Further, we highlight why the ECG is an attractive CSR instrument for
SMEs.
Background: The Economy for the Common Good and the Common Good Approach
in Business Theory and Practice
In general, several definitions of the common good exist (Sulmasy, 2001). Thus, it is
recognised to be difficult to adopt the common good as a concrete principle for action
(Frémeaux & Michelson, 2017). According to Garriga and Melé´s (2004, p. 62) mapping of
CSR theories, the common good approach is a “group of approaches, […] [which] holds the
common good of society as the referential value for CSR […]. Business contributes to the
common good in different ways, such as creating wealth, providing goods and services in an
efficient and fair way, at the same time respecting the dignity and the inalienable and
fundamental rights of the individual. Furthermore, it contributes to social well-being and a
harmonic way of living together in just, peaceful and friendly conditions, both in the present
and in the future”. The ECG does not introduce a substantial concept of the common good,
but refers to a ‘formal’ one: its content can only be defined through a democratic process
(Felber, 2018). In the CGB, the common good is operationalised through the values of
‘human dignity’, ‘solidarity & social justice’, ‘environmental sustainability’, and ‘transparency
45
& co-determination’. According to the ECG, a company will serve the common good if it acts
in accordance with the formulated values and creates value for all its ‘contact groups’
(suppliers, owners, equity- and financial service providers, employees, customers, business
partners, the social and ecological environment; matrix 5.0, Felber, 2018). Thus, among
other things, the ECG differs from other CSR approaches by its explicit reference to a group
of values. The importance of values related to CSR in SMEs is increasingly recognized
(Elford & Daub, 2019; Jansson et al., 2017; Jenkins, 2006). As Murillo and Lozano (2006)
state, the values represented by the owners resp. managers of a company constitute a key
factor when trying to understand the reasons behind a given CSR practice in SMEs. In fact,
the identification with the values of the ECG is one of the companies’ motives for joining the
ECG (Mischkowski et al., 2018; Scheffler & Lieber, 2018)
As Garriga and Melé (2004) note for the common good approach in general, the ECG
approach has much in common with both the concept of sustainable development and the
stakeholder approach. With regard to the connection between the common good and
sustainability, Dyllick and Muff (2016; 2014; Muff & Dyllick, 2014) state that to serve the
common good means to contribute to overcoming sustainability issues. According to their
business sustainability typology, to serve the common good is the main purpose of a truly
sustainable business. They define creating value for the common good as that which benefits
society and the planet as a whole. Hence, the values created change from addressing the
triple bottom line to the common good, which they see in contrast to the private good of
individuals or groups (Dyllick & Muff, 2016). The ECG does not regard the contribution to the
private good of individuals and groups as a contrast to the common good, but explicitly
demands that a company is committed to its direct stakeholders (i.e., groups and individuals
such as owners, employees, customers etc.) as well as to the global ecological environment
and present plus future societies as a whole (Felber, 2018). Sustainability issues therefore
play a central role in the ECG’s common good approach. The comprehensive understanding
of the ECG of a company’s ‘contact groups’ is similar to the view of Argandoña (1998,
p. 1099) who states that “all the company’s relationships will carry an element of common
46
good. We therefore have to extend the list of stakeholders to include customers and
suppliers, banks and unions, the local community, the authorities (at different levels), interest
groups, competitors, and so on, until it encompasses all men of all times”. Here, the common
good approach and the stakeholder theory are similar: It is the notion that a company’s
responsibility is more than maximising shareholder value. In this sense, O’Brien (2009, p. 25)
states that the common good should help “to correct the distorted prioritization of the
maximization of profit in every business decision, recognizing businesses have a multitude of
rights and responsibilities, and the common good reminds us that the first of these is not
always profitmaking”. The ECG claims for a connection of profits and the common good in
the way that economic activity should serve the common good, and that profits are a mean in
this context (Felber, 2018). Companies´ aspiration of profit and growth maximisation is seen
critically by the ECG (Giselbrecht & Ristig-Bresser, 2017). Rather, the CGB explicitly names
and calls for changes in corporate action towards sufficiency. Companies are demanded to
promote moderate consumption through information as well as the, longevity, reusability and
reparability of their products. Additionally, under the rubric ‘ethical customer relations’, the
companies are explicitly asked to explain how the customer’s benefit is prioritised over the
company’s sales orientation. At the same time, the CGB addresses the fact that a
(costumer’s) sufficiency orientation objects to the growth paradigm, but nevertheless that the
companies should support a moderate consumption (Heidbrink et al., 2018). As previous
research shows, SMEs are quite willing to accept financial losses for socio-ecological
commitment (Spence & Rutherfoord, 2001). Although there are certainly entrepreneurs, for
whom the profit always comes first, it is an overriding misconception that owner-managers
are overwhelmingly pursuing profit maximisation. Instead, the profit maximisation priority is
only one out of four frames (besides subsistence or social priority as well as enlightened self-
interest) which businesses can adopt (Spence & Rutherfoord, 2001). That is because the
reasons for running a business are far more complex, and socially motivated, than purely
financially driven (Spence & Rutherfoord, 2001). It is not denied that “each firm would need
47
to make a certain amount of profit in order to survive” (Spence & Rutherfoord, 2001, p. 129)
and that it must be regarded that “in order to create value for the common good commercial
businesses have to find ways to do this in an economical way” (Dyllick & Muff 2016, p. 166).
But the difference should be considered “whether profit earned should be the maximum
possible, or whether a self-determined ‘reasonable’ alternative was acceptable” (Spence &
Rutherfoord 2001, p. 131).
The concept of the common good was developed mainly in Catholic Social Teaching
(CST; Argandoña, 1998). Since the first industrial revolution, CST has been addressing the
issue of corporate information disclosure in this regard. According to CST, “any stakeholder
has the right to know whether the firm’s activities support the common good instead of the
personal interests of a restricted group, such as top management and shareholders”
(Vaccaro & Sison, 2011, p. 22). Further, the CST argues for the individuals’ right to be
informed about a company’s activities and its related contribution to the common good,
because proper information about these issues is seen as a necessary prerequisite for
making conscious decisions. Entrepreneurial transparency should serve customers, who
should be able to consciously decide which company they buy products from, as well as to
employees, which should use these information to choose which company they want to work
for (Vaccaro & Sison, 2011). Dyllick and Muff (2016) emphasise the need for transparency
and metrics to ensure effectiveness and efficiency of business contributions to overcome
sustainability challenges―which constitutes the common good contribution of a company.
With regard to decisions and actions taken by companies, transparency is required in order
to evaluate, compare, and improve business sustainability. However, it also relates to the
effects and impacts of the actions taken (Dyllick & Muff, 2016). Transparency is one of the
ECG’s core values. Through the CGB, the ECG aims to achieve comprehensive corporate
transparency (Felber, 2018). But the CGB is not just about transparency, the ECG also
formulates comparatively strong normative requirements in terms of entrepreneurial
measures that should be taken. In this, the ECG differs from mere transparency
requirements of other CSR instruments (Heidbrink et al., 2018; Scheffler & Lieber, 2018). In
48
addition, ccompared to other CSR instruments, the CGB has a particularly broad scope both
in thematic terms and along the stages of the value chain (Heidbrink et al., 2018). These two
features of the CGB─being far more than a transparency standard and depicting the
entrepreneurial sustainability in all areas comparable across industries─make the CGB
particularly attractive to the ECG´s companies (Scheffler & Lieber, 2018). Although the effort
required to create a CGB is similar to the effort of reporting according to Global Reporting
Initiative or Deutscher Nachhaltigkeitskodex (Scheffler & Lieber, 2018), so far, only SMEs
have published a CGB. This is especially notable against the backdrop that antecedent
research shows that SMEs are less inclined than big companies to implement formal
measures and procedures when pursuing social-ecological business practices (Elford &
Daub, 2019; Steinhöfel et al., 2019). Instead, SMEs prefer personal relationships to
stakeholders and dialogue strategies to foster such practices (Elford & Daub, 2019). This
refers to the culture of SMEs with a focus on informal structures, measures and procedures.
In line with their informal approach, SMEs tend to not communicate their CSR efforts, in
comparison to the formal and publicly released CSR strategies of larger corporations (Elford
& Daub, 2019). Further, Baumann-Pauly et al. (2013) propose “that small firms possess
several organizational characteristics that are favorable for promoting the internal
implementation of CSR related practices in core business functions, but constrain external
communication and reporting about CSR. In contrast, large firms possess several
characteristics that are favorable for promoting external communication and reporting about
CSR, but at the same time constrain internal implementation.” Thus, considering that the
focus of CSR practices and reporting has mainly concerned large companies, further
research on SMEs and their CSR strategies is still needed (Elford & Daub, 2019).
Sample & Method
The results presented in this paper are drawn from the research project Gemeinwohl-
Ökonomie im Vergleich unternehmerischer Nachhaltigkeitsstrategien (GIVUN) which was
undertaken from 2015 to 2018 at the Europe-University of Flensburg und University of Kiel in
49
Germany. In addition to other questions, the project examined the common-good practices of
companies active in the ECG─which are small and medium size companies─and the
transferability of the ECG approach to large corporations which are not part of the ECG. The
selection of the common-good oriented companies for the study followed the guidelines of
the generic purposive sampling (Bryman, 2012), a non-probability form of sampling.
Companies participating in the ECG with a published CGB were selected with respect to their
size and field of action. Trying to reach a maximum variation (Bryman, 2012), the study
therefore includes individual entrepreneurs as well as companies with around 500 employees
in their home country (which are Germany and Austria). The companies are drawn from all
three major economic sectors (primary, secondary, tertiary; Beckert, 2007). Their legal
structures include, besides the individual entrepreneurs, (non-profit) limited liability
companies (in German: (g)GmbH), unlisted stock companies (in German: AG) or registered
cooperatives (in German: eG). The group of 11 businesses consists of privately held
businesses as well as collectively-owned companies. The sample includes an organic farm
(fa), a bakery (ba), a printing company (pc), a clothing manufacturer (cm), two wholesalers
for organic food (ws1, ws2), an engineering firm (ef), a media agency (ma), a media
company (mc), a service provider for event design (ed), and an elder care centre (ecc). A
detailed description of the sample can be found in Heidbrink et al., 2018.
The research group developed an interview guideline with help of the S²PS²-method
(Kruse, 2014, p. 231). Thematically, the guideline covers the company’s self-image, the
interviewee’s or interviewees’ personal evaluation(s) of the work of the company, the
company’s understanding of common good, the company’s motives in engaging in the ECG,
the company’s experiences with the ECG and CGB, an assessment of the boundaries of the
ECG’s impact and the ECG’s future, the operational implications of common good-oriented
management, the general status of the company and the (societal/political) framework
conditions for common-good oriented management (the interview guideline can be found in
Appendix A). In 2015, eleven semi-standardized (group) interviews with representatives from
the companies were conducted. Most of the interviewees held executive positions. Initially,
50
the analysis of the interview material followed the principles of Grounded Theory (Strauss &
Corbin, 1990). This initially free approach to the material allowed us to discover aspects of
the material that might have gone undetected if research questions were pursued more
rigorously. At a later stage we focused more on Thematic Analysis (Braun & Clarke, 2012).
Accordingly, we coded the first three interviews openly. The developed codes were sorted
and structured; the resulting code tree served to code the remaining eight interviews.
According to the Thematic Analysis, the coding now mainly followed the interest to find
answers to the specific research questions. In addition to the interviews, we worked through
the CGBs of the companies which supplemented the material. For more details regarding the
methodical approach in the study see Heidbrink et al., 2018. The interviews were conducted
in German, and the citations in the following section have therefore been translated into
English by the authors.
Results
As became apparent in the sampling compilation, a broad diversity of companies
joins the ECG: They are of small to medium size, have different legal forms and ownership
models and are active in various fields of business. Accordingly, as our study reveals, their
common good orientation is reflected in diverse characteristics and business practices.
Despite their differences, the companies share some common characteristics. The diversity
as well as the commonalities detected are presented in this section. This includes a depiction
of the relationship between profit orientation and socio-ecological commitment.
Issues of Interest of Common Good-Oriented Companies
In the interviews, the company representatives bring up specific concerns their
companies care about. The range of topics is illustrated by a quote from an employee from a
small media agency. With respect to the question which issues the company considers to be
relevant regarding the common good, our interviewee explains that different employees from
the largely non-hierarchically organised company emphasise different topics: “I have a
stronger focus on social issues […], on distribution issues, social justice, and I would include
51
financial justice here, be it wealth creation, pension systems, such questions; also co-
determination in the company. And others certainly have more of a focus on ecology or on
human rights issues. Depending on who you ask here, you will get different answers” (ma,
par. 61). Thus, while some of the employees emphasise social issues in relation to the
common good, for others ecology matters. Indeed, we could observe that all the common-
good oriented companies studied do stress a concern about ecological as well as social
concerns. The following examples show how the emphasis can be different in the individual
companies.
One executive director of an organic bakery is an advocate for questions of
environmental protection. He states that “the ultimate common good is the Earth. And for me
the top priority is always to preserve it. […] So, before any social criteria, first the Earth has
to be preserved. First, we have to survive or keep it viable. And then we can think about how
to make any profit or undertake any social projects” (ba, par. 147). Thus, the interviewee puts
questions of environmental sustainability in first place. In his role as an executive director, he
sets down environmental protection as a principle that needs to be systematically followed.
For instance, he implemented an eco-management system in the company. Furthermore, the
interviewee reports that the other executive director “was always ecologically convinced,”
too. But according to our interview partner, the other executive manager is also “socially
convinced and for him the diet, healthy food, was always very important. […] He has the food
side on his agenda and the social side and I`m rather coming from the ecological field” (ba,
par. 11). Thus, the bakery has a strong ecological orientation, but is socially engaged at the
same time.
Environmental issues are also a concern for the media company surveyed. The
interviewee reports that “part of our genes are in the environmental movement. […] Climate:
[regarding this topic; J.W.] we are especially networked and also have our own magazine
[...]. We have also made a climate balance sheet [...] Well, we try to do a lot ecologically and
fairly, staying along these lines. So our shop merchandising products and stuff are like that.
[…] Of course, our new building will have standards somehow that will be impressive.” (mc,
52
par. 84). However, ecological goals are less consistently pursued than in the bakery as in the
media company there “are no corporate governance regulations which, for example, demand
compliance with ecological standards” (mc, par. 165). An ecological orientation lays―as the
interviewee puts it―in the genes of the company. But institutionally anchored are other
principles. The cooperative is characterised by the fact that it is a self-managed company
with a flat hierarchy and a low degree of organisation in which the relevant corporate
decisions are not made by the owners, but by its employees: “with diversity, it has a brand
essence that is structurally safeguarded through the diversity of the ownership structure.
Fifteen thousand five hundred members, each of whom has one vote, no matter how many
shares he or she owns. But at the same time, the constitution states that the consumer-
members have no say against the employees, so the editorial departments have the utmost
structural protection against any kind of interference. […] This is// of course, a brand
essence: independence, diversity” (mc, par. 20). So, although the company shows
commitment to ecological concerns, the company emphasises the diversity within the
personnel, their democratic decision-making process and ownership structures, and how
they are upholding their independence. This stands in contrast to, for example, the bakery
where democratic decision-making and ownership structures are of less interest.
It emerges from the previous illustrations that the companies stick to specific values
they identify with and that significantly guide how they conduct their business (see also
Wiefek & Heinitz, 2018). In doing so, most companies of the sample focus on explicit topics
more than on others. In sum, however, we could observe a certain joint correspondence with
the value system propagated by the ECG. The ECG calls for human dignity, solidarity and
social justice, environmental sustainability, transparency and co-determination (Felber,
2018). One company representative describes the congruence of their corporate values and
the values of the ECG as follows: “In large parts it also corresponds to the mission statement
we have developed for ourselves. So our values reappear there [in the ECG´s values]. […]
So there is a lot of what was important to us before we knew it” (ws2, par. 143). Thus, the
53
companies studied were holding up the values propagated by the ECG already before they
got to know the ECG. The interviewees report that their companies traditionally deal with
sustainability and common-good issues, and that they are pursued out of an intrinsic
motivation. A representative puts it this way: “So the niche of the company has been since
years the environmental, sustainability topic and the way how to do business […] This is a
story of the company which― we can safely say that―comes from intrinsic motivation, [...].
It's not something that's new now, marketing, political correctness or something that has
been added, but that's really grown here” (pc, par. 13). As mentioned in the quote above, the
common-good oriented companies operate as socio-ecological pioneers within a niche apart
from the big mass market. Within this niche, the companies strive for fairness regarding their
relationships to suppliers, employees, customers and that they work on relationships of
cooperation with other like-minded companies on the market. A representative of a printing
company explains that they cooperate “also with competitors, so in fact, to expand even
more cooperation, because cooperation is an essential part of this common-good orientation.
You don’t nuke the others, but instead you try to figure out how both of you can survive” (pc,
par. 53). Therefore, the companies deliberately resist the usual market thinking of
unrestrained competition.
Another outstanding attribute of the common-good oriented companies is the degree
of transparency they provide. By publishing a CGB, the companies grant the public insights
into almost all areas of their business. They “get naked” (fa, par. 109), as the farmer puts it.
The bakery states that “the common good is also transparency” (ba, par. 148), and justifies
its statement that transparency is needed to disclose what is truly sustainable. The company
representative argues that transparency is an important element in being able to act in a
manner that is oriented towards the common good, both for the companies and the
customers. Only when sufficient transparency is given by the companies the consumers are
able to “to make reasonable own decisions” (ba, par. 148). With the same reasoning, one
wholesaler from the sample initiated a transparency initiative in 2014. The company reports
that they “not only deal with products and criteria, but also look,[…] at where the products
54
come from, […] how the people are paid locally—so we really look deeply, and then we give
it to our customers in its entirety” (ws2, par. 188). That this is far from normal is illustrated by
the wholesaler’s description of the accessibility of such information: “So one challenge is also
[...] getting the relevant information from the manufacturers. And, of course, they’re not at all
used to suddenly sharing information […] on what they pay their employees or how they treat
the environment. Maybe they’re more likely to if they do it well, […] Or photos from the
production facility that you want to publish and// So sometimes it is hard work to convince
them to do it” (ws2, par. 352; see also Wiefek & Heinitz, 2018). As the media company states
“it’s rare to find as much transparency as you find here” (mc, par. 132), and like almost all
companies of our study it points out that it provides full information on all areas of the CGB.
The companies also provide transparency on sensitive issues such as, for instance, salary
dispersion and salary criteria. But in some cases, the approach of full transparency gets
rejected. For example, one company has a high in-house wage transparency based on a
standard wage, but it communicates its amount only to certain stakeholders. Due to its low
salary level, it is afraid of a public debate about self-exploitation.
To sum up, the CgoCs studied are characterised by their strive for ecological
sustainability as well as for fairness and cooperation in the relations to their stakeholders.
Some deal intensively with questions of diversity and co-determination within the company
and how to keep their independence. All companies are characterised by an outstanding
degree of transparency. Thus, the CgoCs operate with a specific value system which shows
a significant congruence with the values propagated by the ECG.
Embedding the Common Good Orientation within the Company
Within the companies, the establishment of this common-good oriented value system
seems to depend significantly on the ownership and management structure of the specific
company. Therefore, the “anchoring” of the common-good orientation differs in the
companies. In the owner-managed companies, the common-good orientation is mainly
determined by the personal value orientation of the owners―which are sole proprietors or
55
family entrepreneurs. Within the corporation, they establish particular socio-ecological
principles top down through a delegation system. There is a difference between a vertical
and a horizontal anchorage. Vertically embedded, a certain person or a whole separate
department that acts as a commissioner for the socio-ecological principles and certain
guidelines for action are used to ensure the company-wide implementation as well as
compliance with socio-ecological standards. Horizontally anchored, however, a CSR team is
responsible of developing and establishing sustainability-related criteria. The team is made
up of people from departments throughout the company. The team members usually also
have a non-sustainability-related function within their departments. The team meets regularly
as a specialist committee and their members discuss environmental and social issues. As
the team member goes back to his or her “regular job”, he or she takes their sustainability-
related recommendations with him/her. For example, one member of the CSR team is
responsible for production management in her department and “for the whole quality and for
the delivery dates et cetera; so for this very sober production topic, which at first should not
have so much to do with CSR, in terms of personnel. It is also responsible for the social
standards. So, wherever there is a core issue, so to speak, we have integrated CSR
responsibility into the equation” (cm, par. 144).
By contrast, in the self-governing, collectively owned companies the adhering to
socio-ecological principles is less institutionalized. As we have already learned about the
media company, for example, they have “no corporate governance regulations here that, for
example, claim compliance with ecological standards” (mc, par. 165). Moreover, the
interviewee states that “the articles of association―how is it constituted, how is it lived? And
you notice that controls itself. There is no one who can actually enforce environmental
standards/directives as such” (mc, par. 167). Although the media company considers an
institutionalisation of socio-ecological principles to be reasonable for certain companies, it
perceives itself―in this regard―to be “already somewhat ahead” (mc, par. 175) since the
collective has internalised socio-ecological principles: “a lot of this is already internalised
collectively, which, in my opinion, should be sought in some companies in the first place, and
56
where control mechanisms make sense to create and sharpen awareness at all…which
works here by itself” (mc, par. 179). Thus, the common-good orientation of the company is
borne by the business running collective; it is set up bottom-up as it relies on the intrinsic
motivation of all (or at least most of) the individual co-workers in the organization.
While the common-good orientation of the collectively-owned and managed
companies builds on the bulk of the co-workers, in the privately held companies it depends
on the attitude of the owners resp. management. Part of the privately held companies with
top-down anchoring problematises this fact and therefore seek legal forms to ensure the
common-good orientation of the company in the future, regardless of the current
management in charge. The bakery explains that it is thinking about transferring the
company into a foundation. The farmer considers transferring the farm into a kind of citizen
share company (in German: Regionalwert AG, a model to finance farms through citizens and
other local small-scale investors, see Hiß, 2014).
In the implementation of socio-ecological principles co-owners or financiers who have
a fundamentally different value orientation can be restrictive. One company owner talks
about the different mind-set of the other shareholders of the company: “they think a lot more
in a conventional economic manner than we do. And it's always a challenge then to portray
certain aspects of what's important to us, so that it's to someone who, in fact, only looks at
the numbers” (ws2, par. 344). Thus, the interviewee considers the possibility of asserting a
profile as a CgoC only if the company can simultaneously prove that it can master its
business successfully. In the eyes of his “conventional business partners”, this can ultimately
be judged by the economical success of the company. How the CgoCs handle the
relationship between the common-good commitment and the core business will be discussed
in more detail in the following section.
Common Good Commitment, Profits and the Core Business
Even CgoCs cannot refute one clear fact: “you have to make money” (pc, par. 14).
The companies studied report that they have to generate surpluses for their self-
57
preservation, for example, because investments in new machines are necessary. “We
reinvested, meaning we renewed the machines and technology […] To do that you have to
save up money and [you need to do it] if you want to keep up technologically” (pc, par. 14)
reports the printing company. Some companies also emphasise that economic success is of
great importance in order to show that a common-good oriented management is a feasible
management method in this day and age and, thus, other companies will follow suit.
Regarding this argument the event designer states: “yes, and that's why CSR is very much
connected with economic success. If I succeed to manage and live that, and at the same
time have commercial success, then it is a model of success. Yes, because then […] others
will also emulate me” (ed, par. 144). Thus, also CgoCs strive to achieve certain surpluses.
However, the CgoCs studied are characterised by the fact that they do not aim to maximise
profit at any price. Instead, they accept reduced profits in favour of socio-ecological
principles. The elderly care centre, like other companies in the sample, justifies this attitude
with an awareness of their corporate responsibility: “I do not think that [...] we benefit
economically. No, we consciously invest in this field// [it is] an added value because we
believe that we have a social obligation as a company” (ecc, par. 708). As a result, profits
lose importance as a success indicator for most of the companies in the sample, or they take
on a different status when it comes to performance measurement. One wholesaler reports
that they discussed the meaning of striving for profits when they first reached the profit zone:
“And then it has changed in the regard that we did not say any more that the company's
purpose is to make a profit, to work towards making a profit. But now the question of
meaning was a completely new one: what are we doing with the money now? Only
accumulating more money is not really what we imagine for ourselves” (ws, par. 124). The
socio-ecological commitment of the companies does not exist right alongside a profit-
oriented core business in order to create further opportunities for growth and profit. Instead,
the common-good orientation is part of the corporate core, intrinsically motivated (see
above), and it fundamentally influences their business practices. And while profit
maximisation is not the goal, companies are using their socio-ecological commitment to
58
define their corporate image as a green and social company. The clothing manufacturer
describes the directional change towards these principles, which the company went through
a few years ago, as follows: “It has been always the case that we were involved in the field of
ecology and social affairs, but in subprojects, in subprojects in addition to the actual
business. Back then, we said that we definitely wanted to continue in this manner, but it does
not work out this way; it has to be either all or nothing [...]. And that's why we decided [...] to
become a thoroughly sustainable company regarding everything we do” (cm, par. 13). In this
example, the interviewee brings up an issue that has also been addressed by other
interviewees: The companies face the big challenge of keeping the balance between running
their production―baking bread, trading food, printing documents and so on―and investing
the time and other resources in, for example, social development processes within the
company. These include developing the company´s mission statement or salary structure
jointly with the employees, implementing transparent and participative decision-making
structures, publishing a CGB and so on. One wholesaler describes the reaction of the
employees when the management asked the employees to participate in the just-mentioned
processes as follows: “So there was a bit of an annoyance to see in some places over the
last four years, because a lot was introduced. So we have the salary model and the mission
statement and the ECG and the holocracy so to speak. And a lot of energy went into the
‘How do we change the company?’ and not so much in the actual action, i.e., in the business
purpose” (ws2, par. 333). Analogously, the companies have to decide, weighing the
additional costs for ecological alternatives versus the economic profitability: “if there is a
more ecological or energy-saving option, then we take it. In principle yes, but of course we
always have to look, can we also pay for it and, therefore, to always find a good and
balanced measure for certain decisions” (ws2, par. 332). So it may be that certain measures
are not consistently implemented, but only first steps are taken in this direction; or, if the
financial situation of the company is better, more is done, and in economically depressed
times measures are restricted again. An example of this is provided by the elderly care
59
centre regarding the food supply of the residents: “And organic is still more expensive and
that's why you cannot change that completely, but only partially” (ecc, par. 383). Thus, the
common-good commitment is only acted upon as far as the financial situation allows it. In
addition to reduced profits, other concrete disadvantages may arise for the companies due to
their common-good orientation. One example is given by a wholesaler: “In this [common
good; J.W.] balance, we got a very high score at the point Internal Income Spread, because
the spread is very low here. […] And that is also a problem, […]because it is hard to attract
qualified professionals, if you offer such a low salary” (ws1, par. 322). One interview partner
puts it in a nutshell: “Not everything that is good for the common good is good for the
functioning of the firm” (ws1, par. 324). In their decisions, companies must undergo a
process of weighing their value orientation, which is beyond profit-oriented thinking, and
economic compatibility.
The fact that the companies are willing to forego economic gains in favour of their
adherence to social and ecological principles is also expressed by some companies in the
fact that they are pursuing sufficiency-oriented measures. According to our analysis, these
can be observed in two ways: On the one hand, there is the promotion of moderate
consumption. This happens, for example, through a repair service offered for their products,
as the clothing manufacture provides. This enables the consumers to use their products as
long as possible without having to replace them with new acquisitions. This approach,
therefore, aims to change the customers’ behaviour. On the other hand, some companies
show a sufficiency orientation regarding their own business practice. One example is the
avoidance of printing advertising and packaging material by the printing company. Instead,
the company prefers to produce high-quality, long-lasting print products. The company
makes a decision about what kind of products it wants to produce with respect to ecological
criteria. However, it is also an example of the fact that the company makes a selection of the
customer base it would like to serve. If they ask for a durable product, they are served; if they
want a disposable product, they probably will go home with empty hands. In a similar
manner, the media company explicitly states that it selects its customers according to
60
specific criteria. The company emphasises its identification with the values of the ECG and
“these are the values we live by and work for, and we like to put our resources in. If you're
heading that way, then you're right with us, and if not, you might want to look for someone
else” (ma, par. 14). Thus, the socio-ecological value orientation weighs so heavily that
customers with a different value orientation are rejected. The company waives possible
additional sources of revenue. Also, the bakery deliberately refrains from maximising profits.
The company representative explains that they could certainly take higher prices for their
bread. Doing so they would probably sell less bread but still achieve a higher profit, the
interviewee tells. Since the bakery takes it as a mission to allow access to high-quality food
products to as many people as possible, it has decided not to go down this road. At the same
time, they do not want to sell their bread as cheaply as possible, because this would put
other organic bakeries under pressure which cannot (yet) produce as efficiently and
inexpensively as the bakery from our sample. As the interviewee tells us, the bakery has
found a way of pricing their products in a solidarity manner in order to solve this problem. In
the open market, they offer their bread at a relatively low price (but not as cheaply as they
could), and at the same time they give special conditions for social institutions with a limited
budget: “we have to be careful because we do not want to ruin the bakery industry here [...].
And that's why we have considered [...] that we try to get into the public catering, so [...] old
people's homes, hospitals, kindergartens, schools [...] and that we may use this buffer we
have, not to reduce the normal sales prices, but we use it for conditions for such structures,
[...] without jeopardising the bakery industry here…” (ba, par. 240). In this example, the
principle of solidarity is therefore higher than the maxim to maximise profits.
Based on the shared condition that they do not maximise profits at all costs, the
CgoCs take very different paths on how they contribute to the common good and who the
addressees of their common good commitments are. See more on this in the following
section.
61
How to Contribute to the Common Good? Who are the Addressees of the Common
Good Commitment?
For the sampling compilation we were able to find CgoC in all sectors. As we can
see, the companies' approaches how or with what they strive to contribute to the common
good are characterized by their self-image. But it is also largely determined by their field of
activity, their size and their financial leeway. For some of the companies in the sample, the
expression of the common good contribution is about their product, respectively service, as
well as how they do business. For example, the organic bakery explains that their main
environmental and social impact stems from the fact that the raw materials (the grain etc.) for
their production processes are of the highest ecological quality level, the Demeter Standard.
The interviewee reports that the organic cultivation of leguminous crops (green manure) and
the use of biodynamic as well as rare old grain types contribute to the conservation of
biodiversity. In addition, according to the interviewee the Demeter principles allow no
additives and everything within the production process is craftsmanship. This has a double
social impact. On the one hand, this creates healthy food; on the other hand, a traditional
craft is preserved. Thus, in this case, the common good contribution lies in both, the
production method and what is actually contained within the product. Another example in this
category is the media company. The representatives from this company hold the opinion that
journalism is a case sui generis, which is categorically serving the public good, “because it is
just so special in promoting democracy and promoting group life” (mc, par. 46). With its
output, which are online and offline media products, the media company, according to this
view, makes a contribution to the common good per se. But the interviewee sees the
common good contribution not only in the product, but also in the way the collective works
together. He states that “"an editorial collective, which depicts in a constant discussion
process the cultures and the realities of life or even tries to move them, that is a value of its
own. I interpret that as being exclusively common-good oriented, […] actually, [this company]
is the mother of all common-good oriented companies” (mc, par. 55). The interviewee sees a
particular common-good orientation in the way in which the company members work
62
together, namely collectively and, as we have already seen above, with a focus on diversity
and independence. The common good contribution in this case also consists of the product /
service and the way they do their business.
In contrast, especially for companies that offer very resource-intensive services or
products such as the printing company, the clothing manufacture or the event designer, the
main common good effect is embodied not so much within the product resp. service, but lays
primarily in the way of doing business. For instance, the clothing manufacture is well aware
that its production in Asia is linked to social problems and that the production process
comprises “many […] pitfalls concerning the ecology” (cm, par. 12). To improve the situation,
they are always trying to make the economic process “even more ecological, social,
democratic and transparent” (cm, par. 135). To give another example, we quote the event
designers that improve the ecological impact of the events they equip technically. They
report that investing in energy-saving equipment reduces the power consumption at an event
many times over: “A medium sized event may consume the amount of power of a // of a
small town. […] I believe that would be thirty-five single-family homes. [...] Through the use of
LED technology and a few other tricks we get down to five houses, four houses” (ed, par.
39). The product or service is therefore produced as ecologically as possible, but the product
itself does not lie at the heart of the expression of the common good contribution. Rather, the
common good contribution is about how the product or service is produced. Other
approaches the companies are pursuing with regard to ‘how do we produce and work’ are:
offering ecological nutrition to their employees and customers, implementing programs for
the promotion of environmentally-friendly mobility for their employees and having fair
partnership relations with their suppliers. With a view to the company's common good
contribution, the interviewee from the printing company also emphasises the comprehensive
eco-management system which leads to lower environmental burdens within the production
process. At the same time, she comprehensively explains that the internal organisational
structure of this worker collective puts a great deal of importance on the personal
63
responsibility of the individual members. The company is always taking on new apprentices
to be trained at different levels: “I think we are a learning space for personality, for personal
development. [...] we have always trained, always had young people here [...] and also got
them with this idea: learning space for self-government and, yes, personality and also the
profession” (pc, par. 17). In the self-image of the company they are “not only” a green
printing company, but the firm is a school for individuals who should be trained professionally
and to be promoted in their personal development by learning to take on responsibility within
the self-governmental structures.
In the case of the printing company just portrayed, first addressees of the common
good contribution are the members of the collective. The company offers them individual
education opportunities when working in the firm: “For years, the firm has been like some
sort of flow heater for education. People come in here, they get educated and they leave
educated” (pc, par. 30). Indeed, all companies in the sample address their own firm members
and direct stakeholders such as suppliers and customers with their common good
commitment. These should benefit from the companies´ approach of fair, cooperative
relations, the promotion of diversity and co-determination, as well as the transparency within
the company and within the supply chains. Moreover, the companies studied want to have a
positive impact on society. Through their ecological commitment, they contribute, for
example, to the preservation of biodiversity, as well as to resource and general
environmental protection (see also Sommer et al., 2016). Other examples for having
influence in society are the provision of public education opportunities or the participation or
creation of (new) networks in order to empower socio-environmental actors. Where and how
a company can have influence depends on its field of activity. The interviewee of the media
company supposes that they have a much larger sphere of influence with their nationwide
daily newspaper and online media than a locally-producing medium-sized company: “The
dairy farm, they just have a limited regional reach. But [the media company] here, that is
something else. Because the scope is simply much larger” (mc, par. 52). Of course, the
influence that the media company actually has is not measurable and is therefore not
64
comparable. The influence a medium-sized company with several hundred employees can
have is illustrated by an example of the event designer. They use their (limited) market power
for socio-ecological standardisation in the industry: “I went to our supplier, and I said:
‘Everything we buy in wood needs to be certified.’ And it was not available. So we said:
‘Okay, we buy twenty-four kilometres of wood from you, within one year. I cannot accept this
answer; I will give you eight weeks because we like working with you. If you do not make it
until then, we will have to look for a different supplier.’ It took exactly, I believe, six weeks and
then they were able to provide us with what we needed. Since that time we have introduced
FSC-certified theatre planks in the […] region. These were originally relatively expensive.
Because we introduced them here, others followed suit” (ed, par. 36). The company is thus
actively working to create the practical and institutional prerequisites for a common-good
oriented management for itself and others (“stretch and transform empowerment”, see also
Stumpf et al., 2017).
This example also illustrates the influence of the size of a company and thus its
market power on the expression and scope of the common-good oriented practice. The
event designer can only enforce his claim regarding ecological certification because of his
large purchasing quantity. In addition, the financial situation of a company also determines
the way of its common-good commitment and how it is fulfilled. The bakery is in a good
financial situation due to no external debt, a consolidated market position and sufficient
demand. It can afford expensive practices such as subsidising the wages of a service
provider working for them, which paid extremely low wages before the minimum wage was
introduced in Germany. The representative from the printing company explains that the
possibilities for common-good oriented practices are limited when there is limited financial
leeway: “We cannot do that much because we do not have the money. Of course, we could
build super facilities for something, or we could make all our employees happy with certain
actions if we had any money to do that…We can momentarily only do it in our mind's eye”
(pc, par. 28). However, as has been shown in this section: Even though the financial margins
65
are small, a company can contribute to the common good. In the case of the printing
company, this includes, among other things, their self-image as a special learning space, the
collective ownership, as well as the participatory organisational and decision-making
structures. It is also characterised, like all CgoCs studied, through the fact that it rejects profit
maximisation in favour of fair and cooperative dealings, which includes transparency in the
company and beyond, as well as a striking ecological commitment.
Discussion
As depicted in the results section, CgoCs are characterised by an outstanding
commitment to environmental and social issues. At the same time, they strive to generate
surpluses necessary for their self-preservation. In doing so, they have to balance the
additional costs of their socio-ecological engagement with the economic stability of the
company. Thus, it may happen that economic reasons weigh more heavily in some decisions
than social or ecological arguments (see above), because the self-preservation of the
company is generally given priority. This observation fits well to Spence and Rutherfoord
(2001) empirical work, in which they found four ethical frames after which owner resp.
manager align their actions (1. profit maximisation priority, 2. subsistence priority, 3.
enlightened self-interest, 4. social priority). Following this frame approach, the CgoCs studied
can be assigned to the 'profit satisfication perspective' in which the companies change
between the related ‘subsistence’ vs. ‘social priority frame’ depending on their financial
situation (vs. the ‘profit maximising perspective’, which includes the ‘profit maximisation
priority frame’ and the ‘enlightened self-interest frame’). This also confirms the advantages of
frame analysis over a fixed typology, since the frame approach allows owner-managers may
simultaneously represent their firm’s priorities through a number of different frames (see
Spence & Rutherfoord, 2001). In adopting the ‘subsistence priority frame’, the CgoCs, which
are small to medium in size, do not differ from conventional large corporations (ClCs), which
we scrutinised in another module of our research project. We studied four enterprises from
different fields with tens of thousands of employees each, with respect to the question of the
scalability of the ECG approach (see Heidbrink et al., 2018). In case of doubt, both the
66
CgoCs and the ClCs, are disposed to subordinate the pursuit of socio-ecological goals to the
self-preservation of the company. Unlike the ClCs however, the CgoCs are clearly more
willing to accept losses in profits in favour of socio-ecological principles─what according to
Spence and Rutherfoord (2001) would be a take on of the ‘social priority frame’. The ClCs
occasionally also accept lower profit margins to engage socio-ecologically, but generally they
strive for profit maximisation and are characterized by short-term economical oriented
thinking. For them, profitability is of paramount importance and socio-ecological issues are
subordinate to this (Heidbrink et al., 2018). Thus, they follow the ‘profit maximisation priority’
frame under the ‘profit maximising perspective’ described by Spence and Rutherfoord
(2001). Further, some of the CgoCs are promoting sufficiency-oriented consumer behaviour,
and show a sufficiency orientation regarding their own business practices, e.g. by rejecting to
serve certain customers (see above). In doing so, the CgoCs consciously forego
opportunities for growth and sales increases in favour of their social and ecological values
(‘social priority frame’). This behaviour clearly differs from that of the ClCs. The ClCs reason
that due to the high level of competitive pressure they face, it is not possible to pursue a
sufficiency orientation in product design and sales without “getting swept out of the market”
(Heidbrink et al., 2018, p. 49). They regard a sufficiency orientation for their own business as
excluded unless additional profitable business results (Heidbrink et al., 2018). Thus, the ClCs
continue to search for the win-win effects of socio-ecological commitment (improvements
regarding sustainability concerns and increases in profits, market share or the like), which
have been long emphasised in the CSR debate (Porter & Kramer, 2011), and which
characterises the ‘enlighted self-interest frame’ under the ‘profit maximising perspective’ (see
Spence & Rutherfoord, 2001). In contrast, the CgoCs are willing to invest in socio-ecological
measures without the expectation that it will pay off economically (see above). Thus, for
CgoCs profit maximisation is subordinate to other goals. With reference to Dyllick and Muff
(2016), with this the CgoCs leave the one-dimensional traditional business perspective
behind, which only focuses on economic concerns. Rather, the CgoCs are characterised by
67
a multi-dimensional sustainability approach, which addresses social, environmental and
economic issues. Unlikely within the dominant current economic paradigm, the purpose of
their businesses is not merely to create economic value. Their perspectives are broader and
try to balance economic value, environmental value and social value. The beneficiaries of the
businesses are not only its owners, but with their socio-ecological engagement the CgoCs
address their direct stakeholders (e.g. employees, suppliers, customers) as well as
stakeholders who are only indirectly affected by their business activities (e.g. society as a
whole, the eco-system). Thus, in an abstract sense they serve the common good. Dyllick and
Muff (2014; 2016; Muff & Dyllick, 2014) describe this approach of multidimensional
sustainability concerns and creating value for the common good as some characteristics of
‘truly sustainable businesses’.
CgoCs operate in the primary, secondary and tertiary sectors. Therefore, the decision
to manage a company in a common good oriented way does not depend on the sector. In the
results section, however, we highlighted the significance of the financial situation regarding
the style of common good engagement. The financial situation, on the other hand, seems to
be related to one characteristic of the industry in which the company is active. In our sample,
the financial situation of the companies which operate within an industry with an established
environmental niche market tends to be better than that of the companies which act within a
market without a (social-) ecological niche sector. The organic farmer, the organic bakery,
the wholesalers for organic food, and the clothing manufacturer (with production of outdoor
equipment) supply a niche market with an explicit demand on green goods. They are
financially better off than, for example, the printing company and media agency, in which we
assume, the demand for organic products is generally lower. Thus, the existence of an
established socio-ecological niche within the market may be a factor that defuses the tension
between profit orientation and socio-ecological commitment. Further research in this direction
is needed.
Focusing on organisational perspectives, Dyllick and Muff (2016) regard the
embedding of sustainability throughout the organisation as of key importance for integrating
68
sustainability into business. They follow other authors who “argue that simple bolt-on
sustainability will not suffice to effectively manage the sustainability risks and opportunities
for a company” (Dyllick & Muff, 2016, p. 161). In the case of the CgoCs the common good
orientation is anchored within the organisation from the bottom-up due to the intrinsic
motivation of the business running collective or top-down through a delegation system set up
by the board of management. Either way, socio-ecological principles have a significant
influence on the companies´ strategies and operations, governance and management
processes, organisational structures and culture, as well as reporting. In sociological theory,
modernity is commonly described as a process of social differentiation characterised by an
increasing division of labour and function (Durkheim, 1996; Elias, 1997, both cited after Kny
et al., 2015). At the actor level, this increasing specialisation corresponds to a differentiation
in roles (Goffman, 2003, cited after Kny et al. 2015). In accordance with this logic of social
differentiation, modern societies are reacting to environmental problems by developing new
subsystems, functions and roles. At the organisational level, companies appoint sustainability
officers or CSR departments. Conventional companies delegate sustainability issues to
these, while the other departments continue to operate according to primarily economic
criteria (Kny et al., 2015). We illustrated the example of the clothing manufacturer who
anchors sustainability issues through a CSR team. The team consists of employees from all
departments of the company where they hold a non-sustainability-related function. In this
case, we observe a break with the differentiation into specialised functions and roles typical
for modern societies. There is no differentiation between a sustainability specialist and an
employee from, for example, the procurement department. Instead, the procurement
employee becomes an expert in sustainable sourcing. Through this system sustainability
issues are interwoven into the daily business of the employees all over the company. Thus, it
seems to be a particularly promising approach with respect to the claim for embedding
sustainability throughout the organisation. Nevertheless, integrating sustainability throughout
the organisation does not replace a systematic performance control, which ensures the
69
application of socio-ecological criteria. Critical in this regard is the attitude of the media
company we studied, in which the idea of sustainability is―according to the statements of
our interview partner―firmly anchored bottom-up by the intrinsic motivation of the collective,
but which lacks a set of regulations to implement (social-) ecological standards
systematically and track adherence to these. Thus, no objective assessment can be made
and there is a risk that the company overestimates its de facto (socio-) ecological
engagement and results.
In sum, the CgoCs have in common that they pursue social, environmental and
economic concerns (input side: what?), they anchor the concept of sustainability throughout
the organisation (process side: how?), and their value creation serves the common good
(output side: what for?; input-process-output perspective with reference to Dyllick & Muff,
2016). However, we observe differences in how or with what the companies pursue their
contribution to the common good. For one group of CgoCs, the common good contribution
consists of the product/service and the way they do their business. As we depicted, in the
case of the bakery and the media company their products play an important role for their
common good contribution. That is, because the bakery meets the need for a basic need
(food), and the media company makes a necessary contribution to the democratic order of
society (to provide information). In addition, certain common good effects only come to
fruition due to the manner in which they conduct or organise their business. Because the
bakery only works with grain that was cultivated according to the Demeter standard, they
support the preservation of an old craft and contribute to the protection of biodiversity. It is
necessary that the media company pays attention to the diversity and independence of its
editorial board, so they make sure that the news is diverse and independent. For some
CgoCs like the event designer, the printing company as well as the clothing manufacturer
(which mainly produces functional clothing and outdoor equipment) the common good effect
even lies primarily in the question of how they are doing business; in this regard the product
or service offered is incidental. This may be because they operate in fields in which the
production or provision of their product/service is linked to a comparably high amount of
70
negative environmental impact and/or social problems. Thus, as described by the event
designer using the example of LED technology, the potential to achieve significant
improvements regarding the environmental impact through (technological) optimisation in the
process is comparatively high. Another reason might be that the need for large concerts,
printing products and functional clothing may be more debatable than for a product meeting a
basic need or being obviously necessary to keep up the democratic order of society.
As we have pointed out, the companies´ common good oriented engagement is not
economically driven and thus externally motivated, but is pursued due to an intrinsic
motivation. The intrinsic motivation is based on a value system that strives for fairness and
cooperation in the relationships with their stakeholders, which emphasises the diversity and
independence of and within the company, claims democracy and transparency, and sees
ecological sustainability as a value in itself. In the results section, we have seen that this set
of values largely coincides with the value system of the ECG.
The ECG differs from other CSR tools by explicitly referring to a set of values. The
identification with these values motivates companies to join the ECG and to give report about
their social-ecological commitment (Mischkowski et al., 2018; Scheffler & Lieber, 2018). So
far, only SMEs have published a CGB. This is remarkable, as SMEs are characterized by
implicit CSR engagement and tend not to communicate explicitly about their social-ecological
efforts (Elford & Daub, 2019). SMEs struggle to adapt standards like EMAS, ISO 14001 and
GRI to their internal processes as well as to manage the required documentation of such
standards (Elford & Daub, 2019; Steinhöfel et al., 2019); the modified versions of this CSR
standards adapted to SMEs are also poorly accepted (Elford & Daub, 2019). The ECG thus
closes the following gap: It serves SMEs as an identification and communication tool for
CSR–which so far worked with the established CSR standards for large companies only.
Thus, like Scheffler and Lieber (2018, p. 98), we assume that "especially SMEs without a
formal CSR strategy, but with quiet, intrinsically motivated social responsibility [...] see in the
CGB their opportunity to make their responsibility and value orientation transparent". The
71
reasons for this are probably manifold: The ECG was initiated by SMEs. Likewise, the CGB
was designed "bottom-up" and is developed continuously by entrepreneurs from SMEs and
other ECG activists. Thus, as conventional CSR standards seem to be too complex for SMEs
to implement (Elford & Daub, 2019), the CGB may meets SME´s requirements regarding a
CSR instrument better given the influence they have on its development. As the CgoCs
emphasize the identification with the ECG´s values as a driving factor for joining the ECG
(Mischkowski et al., 2018; Scheffler & Lieber, 2018), we support Murillo and Lozano´s (2006)
claim that more attention should be given to the values and cultures of SMEs if we want to
understand SME´s motivation for social-ecological commitment. The shared identification
with the ECG´s values creates mutual trust between the companies, which open doors for
cooperation. Collaboration between companies as well as between companies and other
organizations is an important step towards more business sustainability. In collaboration
processes, companies can learn from each other, share responsibility, risks and resources,
overcoming scale disadvantages and deal better with the formal requirement of CSR
reporting (Lepoutre & Heene, 2006). Research demonstrated that many small businesses
perceive the impact of their efforts to improve their impact on the natural environment to be
negligible and thus may not be motivated to engage in such behavior despite their abstract
concern about society or the environment (Lepoutre & Heene, 2006). The ECG´s character
of a social movement may be helpful to overcome this obstacle for SME´s engagement in
CSR activities as the SMEs are likely to feel more effective in their social-ecological efforts
as part of a movement. In addition, the ECG´s network character may also favor the SMEs´
preferred pathway to learn through networking and their peers (Jenkins, 2006). This could be
another reason for the ECG´s attractiveness. Further research on the question how the ECG
motivates SMEs to make their social-ecological commitment explicit, and thus how the ECG
accomplishes something that previous CSR instruments failed to do, seems worthwhile.
In our study on the scalability of the ECG approach, we observed that the value
orientation of the ClCs is altogether different (Heidbrink et al., 2018). For the ClCs, the
profitability of measures is the basic strategy behind their enterprise action. Corporate
72
cultures dominate which exclude certain claims of the ECG (Heidbrink et al., 2018). We
illustrate this with the example of transparency. While the CgoCs provide comprehensive
transparency into their businesses and their business relationships, the ClCs widely reject
any transparency that goes beyond the legal requirements they are subject to, but which fall
well short of the expectations of the ECG. They are not willing to provide internal visibility of
salaries and other relevant data for all employees, transparent pricing, and differentiated data
on the company`s environmental consumption (Heidbrink et al., 2018). Transparency´s
crucial role for a company´s common good contribution as well as business sustainability has
been illuminated by Vaccaro and Sison (2011), respectively Dyllick and Muff (2016). And it is
the CgoCs that exploit this potential, which in contrast to the ClCs are not legally obliged to
report about non-financial issues (compare to Deutscher Bundestag, 2017). The CgoCs are
thus characterised by a proactive attitude to use opportunities for sustainability
improvements. Furthermore, as depicted in detail in the results section, CgoCs actively work
on the creation of possibilities for a common good oriented management for themselves and
also for other companies: relatively large CgoCs are using their (limited) market power to
increase social and environmental standards in their industries (see also Stumpf et al.,
2017). The ClCs, however, adopt a more passive attitude. They do not see themselves in a
position to demand higher socio-ecological standards in their industry. Although much bigger
than the CgoCs, the ClCs argue that they perceive themselves to be too small within their
industry, that the price as well as the competitive pressure are too high, or stress their limited
influence due to their intermediate position in the value chain. Thus, they assume that they
can only react to the existing supply of the suppliers (Heidbrink et al., 2018). With this
attitude, they miss out on opportunities to make businesses more sustainable. Other
restrictions to pursue socio-ecological goals result from their ownership structure. The big
stock corporations from our sample operate such as to maximise profits, because their
shareholders primarily have expectations of profitability. In addition, according to the current
legal situation, the management board of a stock corporation is obliged to act in this way in
73
order to avoid claims for damages (Ekardt, 2015, cited after Heidbrink et al., 2018). The
CgoCs have a variety of different legal forms and ownership structures. They are privately
held owner-managed companies (including family businesses) or collectively held
enterprises (including employee companies). None of the companies is traded on the capital
market. As illustrated above, the pressure to be financially successful also exists for CgoCs.
However, as a result of their ownership structure, they are able to give priority to socio-
ecological principles over profit maximisation. This is also the case in the family-controlled or
owner-managed ClCs, albeit they do so to a much lesser extent than the CgoCs (Heidbrink
et al., 2018). However, in owner-managed companies the common good orientation depends
on the attitude of the owners or acting managing directors. Thus, this orientation might not be
secured in the long term. To set the company up as, for example, a benefit-corporation or
choose another non-profit legal form―so that the pursuit of socio-ecological goals is formally
established―may remedy this problem.
In sum, the CgoCs give good examples of how a common good orientation can be
incorporated into a company and how it can be expressed in entrepreneurial practice. As our
study shows, it is the small and medium-sized companies in particular, which are at the
forefront of socio-ecological engagement. Therefore, they should be given more attention in
business sustainability studies.
Conclusion
Our empirical study reveals that CgoCs are not a homogenous group, but that the
ECG movement unites a wide variety of companies (in terms of size, industry, organisational
models, etc.). However, common core characteristics can be identified, i.e., an intrinsic
motivation of the company owners to strive for fairness and cooperation in relations to their
stakeholders, as well as ecological sustainability. Additionally, some companies intensively
address questions of diversity and co-determination within the organisation and the
preservation of the company’s independence. The common good orientation is anchored
either top-down or bottom-up throughout the organisation; especially the example of a CSR
team with members from all company departments seems to be a promising approach to
74
embed sustainability issues in daily business. In any case, rather than the pursuit of profit
maximisation, the aim of the companies is to adhere to socio-ecological principles through
addressing multi-dimensional sustainability concerns. From a management perspective, the
CgoCs adopt a ‘profit satisficing perspective’. In general they are socially active (‘social
priority frame’), unless they face absolute financially restrictions (‘subsistence priority frame’).
Adopting the profit satisficing perspecitve widens the scope for practices that do not follow a
primarily economic logic. For example, customers with a fundamentally different value
orientation are rejected and moderate consumption is promoted. CgoCs are characterised by
a voluntarily high degree of transparency in their reporting with which they exploit potentials
for more business sustainability. The ECG serves SMEs as an identification and
communication tool for CSR and thus fills in the gap that SMEs have so far had little
systematic reporting on their social-ecological commitment. The way companies determine to
contribute to the common good, and which stakeholders they specifically address, depends
on their corresponding area of activity, financial situation and size. On the one hand, for
example, it is possible for larger CgoCs to achieve higher industry standards and, thus,
facilitate common good management practices for themselves and other companies. On the
other hand, CgoCs might have a more inward-looking perspective, for example, by
understanding themselves as educational incubators. Regardless of the means, all the
companies examined actively seek to shape an economy that primarily focuses on the
common good.
75
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Study 2: Common Good-Oriented Companies: Exploring Corporate Values,
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Within the academic context, discussion of the concept of degrowth has increased in
recent years (Kallis, Demaria, & D’Alisa, 2015; Burkhart, Eversberg, Schmelzer, & Treu,
2017). In their anthology, Degrowth. A Vocabulary for a New Era, D’Alisa, Demaria and Kallis
(2015) summarize the various contributions on degrowth under the following definition:
“Degrowth is a rejection of the illusion of growth and a call to repoliticize the public debate
colonized by the idiom of economism. It is a project advocating the democratically-led
shrinking of production and consumption with the aim of achieving social justice and
ecological sustainability” (first page, no page number). However, there is no homogenous
definition of degrowth; instead, “degrowth has multiple interpretations” (D’Alisa et al., 2015, p.
xx).
1
One of the best-known authors on degrowth (Kallis et al., 2015) is the economic
anthropologist Serge Latouche. In his book, Farewell to Growth, Latouche (2009) describes
eight goals which, he claims, should trigger a development towards degrowth. He calls for a
1
The heterogeneity within the discourse is characterized, among other things, by the various
concepts surrounding the growth critique. Thus, in the German academic debate, the term
“Postwachstum” (post-growth) is most commonly used, while “degrowth” is a concept used within the
international movement (also Burkhart et al., 2017, p. 116). In this paper, we use the terms “degrowth”
and “post-growth” synonymically, as we take account of contributions which use different terms but
have the same objective.
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societal reorientation concerning values such as altruism, cooperation and self-
determination. He expects this shift in values to lead to a transformation of production
structures and modes, and of the conceptual understanding of prosperity. Restructuring, in
turn, is intended to accompany a redistribution of prosperity and access to natural goods
(Latouche, 2009). Latouche makes no reference to the role of companies in this process.
Overall, the degrowth debate has so far largely neglected the role of companies in a
transformation towards degrowth (Posse, 2015). The discussion focuses instead on macro-
economic developments, political approaches and questions of individual lifestyle
(Pennekamp, 2011). However, regarding the role of companies in societal transformation
processes, Posse (2015) observes overlaps with discourses on the solidarity economy,
social entrepreneurship and the Economy for the Common Good (ECG). Indeed, the ECG
social movement, in which companies play an important role, states that it sees itself as
connected to the concept of degrowth (Giselbrecht & Ristig-Bresser, 2017). The ECG claims
that the purpose of business should be to contribute to the common good. This contribution
should be assessed by the way in which a company complies with the values of human
dignity, solidarity and social justice, ecological sustainability, transparency and co-
determination on the part of the company’s stakeholders (Gemeinwohl-Ökonomie, 2017).
Business profits, meanwhile, are seen as mere means which should not serve the interests
of external investors (Felber, 2010). Felber and Hagelberg (2017) state that this should bring
about a situation in which “companies are no longer forced to expand and grow. This opens
up a myriad of new opportunities to design business to improve the quality of live [sic] and
help safeguard the natural world. Mutual appreciation, fairness, creativity, and cooperation
can better thrive in such a working environment” (p. 4). To date, over 2,000 companies—
most of them situated in Austria and Germany—have declared their support for the ECG
(Giselbrecht & Ristig-Bresser, 2017).
The aim of our paper is to address the research gap on those company
characteristics and practices that could support a socio-economic development towards
degrowth. Below, we briefly review the existing literature on the characteristics of post-growth
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companies. We then introduce the ECG, as well as Latouche’s circle of eight ‘R’s, in more
detail. In the following section, we use Latouche’s eight ‘R’s to analyse common good-
oriented companies’ characteristics and practices. We explore those company values,
concepts, structures and practices that should, according to Latouche (2009), lead to a
societal transformation in the direction of degrowth.
Background: Post-Growth Companies in the Literature
So far, little is known about the characteristics of companies which are responding to
the limits of growth. Posse (2015) observes that “business economics and other disciplines
deal intensively with questions of sustainability in companies, but without considering post-
growth issues” (p. 15). As a consequence, “little [sic] efforts have been undertaken to
translate concepts of post-growth to the company level with view to business models,
strategies or management concepts” (Liesen, Dietsche, & Gebauer, 2015, p. 5).
Nevertheless, the existing literature does identify companies which have the potential to
contribute to overall economic degrowth. Liesen et al. (2015) introduce the concept of
“Successful Non-Growing Companies” (SNC), stating “We define these companies as SNCs
as they are not aiming for a maximisation of traditional management indicators such as
sales, market share, profit or employee numbers, but want remain [sic] roughly constant in
‘size’” (p. 4). The description of the characteristics of post-growth companies provided by
Mewes and Gebauer (2015) does not exclude enterprise growth generally. Their definition
instead stresses a company’s critical reflection on the limits to growth, a proactive approach
to this topic and an aspiration to change its approach to doing business within the market
(Mewes & Gebauer, 2015, p. 27). In addition to the discussion of growth issues, the authors
identify the companies’ endeavours to shape societal change processes as characteristic of
post-growth companies. Schubring, Posse, Bozsoki, and Buschmann (2013, with reference
to Sekulova et al., 2013) emphasize that, among post-growth companies, the generation of
profits plays a subordinate role. They state that, for post-growth companies, “the
maximization of profits is not the driving force, but the goal of a positive and meaningful role
in society in which the human being with its needs is at the center” (p. 19). In the same
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manner, the term “growth-neutral company” refers to companies which “do not operate their
business on the basis of business parameters, such as turnover, profit or number of
employees. […] Rather, these companies are targeting alternative goals, such as process
and product quality, resource efficiency, and quality of life” (Liesen, Dietsche, & Gebauer,
2013, p. 10). Deimling (2017) describes the purpose of growth-neutral companies as solving
social problems, increasing the common good, creating meaningful products and addressing
the concerns of all of the parties involved, while also constantly taking into account all of the
social and ecological effects of their business (also Gebauer, Mewes, & Dietsche, 2015). In
sum, a common characteristic of non-growing, post-growth and growth-neutral companies is
that their understanding of value creation does not primarily focus on growth.
During the transition towards a degrowth society, (certain) companies will have to
grow, although not endlessly (Bocken & Short, 2015; Gebauer & Mewes, 2015; Posse,
2016). Possible reasons for growth are, on the one hand, the fact that post-growth
companies could grow to push non-sustainable companies out of the market or force them to
change their practices (Bocken & Short, 2015; Gebauer & Mewes, 2015; Posse, 2016). On
the other hand, post-growth companies may see themselves as being forced to grow in
certain situations in order to secure their self-preservation (Gebauer & Mewes, 2015). The
term ‘post-growth company’ therefore encompasses more than just non-growing companies.
Indeed, it makes no direct references to the specific growth ambitions of a company. At the
same time, the growth prospects of a company are not necessarily indicative of a company’s
degrowth contributions. A company that is not growing is not automatically contributing to a
societal transformation towards degrowth. Rather than question a company’s current growth
ambitions, it therefore seems more important to explore the intended use of potential
company growth which ultimately depends on the company’s values and objectives. Besides
the limitation of the company’s size, Deimling (2017) highlights two other key strategies
through which a company can contribute to a reduction in economic growth: the creation of
durable, functional, repairable commodities, and the development of alternative usage
systems, propertyless services and business models which promote sufficiency.
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In conclusion, the term ‘post-growth company’ refers to a company which does not
primarily focus on growth in their understanding of value creation. This ultimately depends on
the values and objectives of the company and the way in which they are put into practice.
The limitation of the company’s size is one possible way in which a company can contribute
to a reduction in economic growth. Nevertheless, during the development towards a
degrowth society, certain post-growth companies will have to grow, although not endlessly
(Bocken & Short, 2015; Gebauer & Mewes, 2015; Posse, 2016). Thus it seems important to
explore corporate values and practices―also of currently growing companies―which bear
the potential to promote both a societal and an intra-company transition in the direction of
degrowth.
Research Object & Objective
In the search for business characteristics and practices that could support a societal
transformation in the direction of degrowth, we will now more closely examine the companies
which are part of the ECG movement and which thus aim to contribute to the common good
through their business activities. In the following section, we first shed further light on the
ECG and then introduce Latouche’s (2009) circle of eight ‘R’s, which we use to analyse the
companies’ characteristics and practices.
The Economy for the Common Good
The ECG is a relatively new social movement. The core idea of the ECG is to
promote an alternative economic model that identifies the common good as the main
purpose of all economic activity. Monetary profits are seen as a mere means; common good
requires that everyone’s welfare is addressed. According to the ECG, common good serves
as an umbrella term encapsulating the most important values of a democratic society within a
constitutional objective. The specific meaning of its individual components should be defined
in a democratic process (Felber, 2012). Since the ECG’s foundation in 2010, 9,000 entities
including companies, associations, universities, municipalities and individuals all over the
world have affiliated themselves with the movement. About 250 small and medium-sized
companies—mainly from Germany and Austria—have compiled and published a Common
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Good Balance (CGB) (Giselbrecht & Ristig-Bresser, 2017). The CGB delivers an account of
the degree to which an organization acts in correspondence with the ECG’s core values:
human dignity, solidarity and social justice, ecological sustainability, transparency and co-
determination (matrix 5.0) (Gemeinwohl-Ökonomie, 2017). These values are assessed in
relation to central stakeholders such as suppliers, investors, employees, business owners,
customers, business partners and the ‘social environment’ (referring to civil society, future
generations and nature). At present, compiling a CGB is voluntary. In the long term, the
movement aims to secure a legal obligation for companies to report on their common good
performance as a counterpart to providing their financial balance sheet.
Some critics reject the ECG as socialist (Amon, 2012; Rodenstock, 2015), and
believe that the ECG would create no incentives for entrepreneurship (die junge wirtschaft,
2013). Academic discussion of the ECG is quite rare. Several theses exist which focus on
the individual effects of the CGB with respect to economic success (Frasch, 2013) or
management innovations (Hensel, 2013), or which compare the CGB with other Corporate
Social Responsibility (CSR) instruments (Behrens-Scholvin, 2013; Nowakowski, 2014).
Latouche’s Circle of Eight ‘R’s
The ECG strives for a realignment of business according to values as part of a
societal transformation. Latouche (2009) asserts that a societal change in values is the
starting point for a development towards degrowth. In his utopia of a “de-growth revolution”,
Latouche (2009, p. 31) describes eight interdependent changes which reinforce one another
and could trigger a (societal) transformation towards degrowth. According to Latouche
(2009), the goals of this “virtuous circle of eight R’s” (p. 33) are: re-evaluate, reconceptualize,
restructure, redistribute, relocalize, reduce, re-use and recycle. Re-evaluation refers to a
change in values. For instance, “altruism should replace egotism” (Latouche, 2009, p. 34),
and “competition should give way to cooperation” (Latouche, 2009, p. 34). Latouche (2009,
p.34.) calls for “the appreciation of good craftsmanship over productivist efficiency”. Citing
Belpomme (2007), Latouche (2009) claims that “a sense of justice, responsibility, respect for
democracy, the celebration of differences, the duty of solidarity […] are the values we must
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win back at all cost” (p. 34). He also states that “the most important thing is to get away from
the belief that we must dominate nature and try to live in harmony with it” (Latouche, 2009, p.
35). Furthermore, a change in values would facilitate processes of reconceptualization.
Without going into detail at this point, Latouche (2009) states, for example, that there is a
need to redefine the concepts of wealth and poverty. Furthermore, “restructuring means
adapting the productive apparatus and social relations to changing values” (Latouche, 2009,
p. 36; emphasis added). Furthermore, Latouche (2009) calls for a redistribution of power,
wealth and access to natural resources. According to Latouche (2009, p. 37), relocalization
could be implemented by local factories financed on a local basis through collective savings.
A process of degrowth also means a reduction of the impact of our consumption and
production habits on the biosphere, including through the principles of re-use and recycling
(Latouche, 2009, p. 38-41).
By using Latouche’s eight ‘R’s to conduct a guided analysis of common good-oriented
companies’ (CgoCs) characteristics and practices, we aim to answer the following question:
what business characteristics and practices can we identify among CgoCs that should,
according to Latouche (2009), support a development towards degrowth? Seeking to
elucidate this question, we researched the dominant values of CgoCs and the ways in which
these are expressed in the companies’ structures, practices and corporate concepts (e.g., of
business relations).
Sample & Methods
In 2015, interviews were conducted with representatives of eleven companies from
Germany and Austria, all of which have published a CGB. The companies were selected on
the basis of “generic purposive sampling” (Bryman, 2012, p. 422). According to this method,
participants are systematically chosen on the basis of theoretical considerations. The criteria
set for selection at the beginning of the study were enterprise size (in numbers of employees)
and field of activity. The selection followed the strategy of “maximum variation” (Bryman,
2012, p. 419), the goal being to achieve the largest possible variation in these criteria. The
study therefore includes individual entrepreneurs as well as companies with around 500
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employees in their home country. The companies are drawn from all three major economic
sectors. Three companies are collective businesses: a media company (mc), a printing
company (pc), and one wholesaler for organic food (ws1). They were founded in the 1970s
and 1980s respectively. One organization has its origins in the Catholic Church: over 150
years ago, a pastor founded a hospital for elderly people, and from it emerged what is now
an elder care centre (ecc). Seven of the eleven companies are “traditional” owner-managed
or family businesses: a bakery (ba), a clothing manufacturer (cm), an engineering firm (ef), a
farm (fa), a media agency (ma), a service provider for event design (ed) and another
wholesaler for organic food (ws2). They were founded or taken over between 1981 and 2013
respectively. Hence, the sample represents a highly diverse selection of CgoC.
Nevertheless, the reader should bear in mind that purposive sampling is a non-probability
form of sampling that cannot be generalized to a population. For the interviews, we asked to
meet with those people from the companies who were most actively involved in the process
of conducting the CGBs. Most of the interviewees held executive positions in their
companies. They were interviewed as representatives of their organizations: in the “Results”
part of this paper, statements made by individual interviewees are therefore attributed to their
company as a whole.
The development of the interview guideline was based on the S²PS² procedure
(Kruse, 2014, p. 231-240). Thematically, the guideline covers the company’s self-image, the
interviewee’s or interviewees’ personal evaluation(s) of the work of the company, the
company’s understanding of common good, the company’s motives in engaging in the ECG,
the company’s experiences with the ECG and CGB, an assessment of the boundaries of the
ECG’s impact and the ECG’s future, the operational implications of common good-oriented
management, the general status of the company and the (societal/political) framework
conditions for common-good oriented management (the interview guideline can be found in
Appendix A). The semi-structured guideline and open questions aim to ensure an unbiased
course of conversation. This approach allows the interviewees to bring in those subject-
related topics which are most relevant from their point of view. With this method, however, it
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is not possible to collect comprehensive information on all subject-related topics from all
participants. The reader should bear this in mind when considering information in the
“Results” section about the number of companies which addressed a specific topic in the
interviews. All interviews were transcribed and then analysed with the use of MAXQDA©
(version 11.1.2). In addition to the interviews, the CGBs of the companies were also viewed.
The analysis mainly followed the principles of thematic analysis (Braun & Clarke, 2012). The
interviews were conducted in German, and the citations in the following section have
therefore been translated into English by the authors.
Results
In the following section, we present the findings of our empirical analysis. The
presentation is structured by Latouche’s (2009) eight ‘R’s. In order to assess the businesses’
characteristics and practices, and their possible connections to a process of degrowth, we
refer not only to Latouche—who at times remains unspecific in his remarks—but also to the
current degrowth debate.
Re-evaluate
As explained above, Latouche (2009) appeals for a change in values in the direction
of e.g., altruism, cooperation, justice, responsibility, democracy, diversity, and solidarity. In
the following section, we describe the values that our analysis of CgoCs identified. We
discuss whether these corporate value orientations are in line with Latouche’s idea of a “de-
growth revolution” (2009, p. 31) and thus, according to Latouche, would enable a
transformation towards degrowth.
Fairness & Cooperation. The printing company in our sample declares that
“cooperation is an essential part of this common good orientation” (pc, par. 53). Indeed,
cooperation is a commonly-shared value among the companies in our sample. The
engineering firm stresses its intention to conduct “fair interactions” (ef, par. 19) and the event
designer states that they wish to have “partner-like relationships” (ed, par. 144) with their
customers, suppliers and other companies. They “do not want predatory competition or to
play off our suppliers against each other” (ed, par. 76) or to “bamboozle” anyone (ed, par. 76;
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ma, par. 44), for example with their prices: “I want to pay fairly, but I also want to be paid
fairly” (ed, par. 237). Several companies (ef, ma, ws2, pc) report that they even strive for
cooperation with their competitors: “In fact, also with competitors […]. You don’t nuke the
others, but instead you try to figure out how both of you can survive” (pc, par. 53).
“Degrowth stands for a transformational path towards forms of business [...] in which
the welfare of all is at the centre and the ecological basis of life is preserved. […] The
common values of the desired transformation are mindfulness, solidarity and cooperation”
(Burkhart et al., 2017, pp.108-109). A consideration of the values of fairness and cooperation
(in contrast with competition) places the actual needs of every person at the centre of the
entrepreneurial activity. How this is implemented in practice, for example by redesigning the
structure of trade relations, is explained below, under Restructure.
Diversity, Independence & Democracy. Instead of delegating the shaping of the
economy and society to a few, the degrowth movement calls for a democratization which
includes the participation of all (Burkhart et al., 2017). This requires open discussion
processes in which different voices are heard: something which can begin on a smaller
scale, within the company. The media company in the sample stresses diversity as a core
value of the company: “We are very pluralistic in our constitution. That means that you don’t
have a line that you somehow push through […] This is// of course, a brand essence:
independence, diversity. […] There was once an intern who said he has never seen an
editorial department that is so disunited. […] In every detail, there will be a fight to the finish”
(mc, par. 20). Under Restructure, we illustrate how this aspiration to independence and
diversity is reflected in the ownership structure of the company. Under Redistribute we
describe the fact that democratic decision-making processes play an important role, for
instance, for the wholesaler (ws2). Nevertheless, the value of democracy does not play such
a fundamental role for all of the companies studied. The bakery explains: “With regard to
democracy, we want to improve. But we don’t intend to make consensus-oriented decisions
here. […] Our company’s proprietor comes from that approach. They tried it. […] And so then
there was, there was nothing but discussion, or a lot of discussion. And at the time that was
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possible, because you could sell anything as being ‘eco’, even bricks. But that’s no longer
possible today. […] We’re in a completely different market now. […] But, as I said, a lot of
decisions are made by the community” (ba, par. 230).
Transparency. By publishing a CGB, the companies grant the public insights into
almost all areas of their business. As the farmer puts it, they “get naked” (fa, par. 109). This
means a re-evaluation of their approach to doing business, from opaque to transparent.
Whereas the media company states that “it’s rare to find as much transparency as you find
here” (mc, par. 132), and points out that it provides full information on all areas of the CGB,
the printing company and the clothing manufacturer reject the idea of unrestricted
transparency. They do not provide any details about their turnover. Because of its low
wages, the media company is afraid of a debate about self-exploitation, and the clothing
manufacturer does not want key accounts and producers to be able to see which role they
play in its business. One example of how transparency could be put into practice is a
transparency initiative initiated by one of the wholesalers (ws2) in 2014. The company
reports that “We not only deal with products and criteria, but also look, so to speak, at where
the products come from, who produces them, how the people are paid locally—so we really
look deeply, and then we give it to our customers in its entirety” (ws2, par. 188). That this is
far from normal is illustrated by the wholesaler’s description of the accessibility of such
information: “So one challenge is also [...] getting the relevant information from the
manufacturers. And, of course, they’re not at all used to suddenly sharing information […] on
what they pay their employees or how they treat the environment. Maybe they’re more likely
to if they do it well, so if they// Or photos from the production facility that you want to publish
and// So it sometimes it is hard work to convince them to do it” (ws2, par. 352).
Although transparency is not a degrowth-specific aspect (transparency in the supply
chain also plays an important role in the overall CSR discussion), a shift in values in this
direction is equally important for a development towards degrowth. The creation of
transparency in the supply chain makes it possible for companies to recognize, and then
remediate, social and ecological problems. Transparent reporting and communication, which
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emphasizes socio-ecological business performance, could help to push less sustainable
providers out of the market or force them to make changes to the way they do business
(Posse, 2016).
Ecological Sustainability. The Degrowth Vocabulary places ecological sustainability
alongside social justice as the aims of degrowth (D’Alisa et al., 2015). The protection of the
environment, the climate and natural resources are guiding principles for all of the companies
in the sample. The bakery declares that “The ultimate common good is the Earth, and for me
the top priority is always to preserve it. […] So, before any social criteria, first the Earth has
to be preserved. First, we have to survive or keep it viable. And then we can think about how
to make any profit or undertake any social projects, somehow” (ba, par. 147). The bakery’s
concept of sustainability therefore corresponds with a decisive element of the concept of
strong sustainability: the framework for sustainable development is defined by planetary
boundaries (Ott & Döring, 2004). The farmer also believes their greatest chance to influence
the future lies in ecological questions: “I did not inherit the farm from my parents, I borrowed
it from my children. So, for me, this is my maxim: I must ensure the farm continues to exist in
the future [...]. And for that to happen, the most important issue is ecology, that// we are
absolutely convinced of that, […] also for agriculture as a whole, in order for it to remain
viable at all” (fa, par. 31). While ecology plays an extremely important role for the bakery and
the farm, ecological issues are not a top priority at the media company: “Well, we try to do a
lot ecologically and fairly and along those lines” (mc, par. 84). However, this goal is less
consistently pursued: “There are no corporate governance regulations which, for example,
demand compliance with ecological standards” (mc, par. 165).
In sum, we observe that the companies invoke the values of fairness, cooperation,
diversity, independence, democracy, transparency, and ecological sustainability. While they
generally share all of these values, different companies set different priorities. For instance,
the media company deals more with issues of democracy than with ecological issues and, in
the case of the bakery, precisely the opposite is true. According to Latouche (2009), and with
reference to the current degrowth literature, this value orientation should lay the foundation
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for a development towards degrowth. In the following section, we will explore the extent to
which these values are accompanied by corporate processes of reconceptualization,
restructuring, relocalization and redistribution, as well as reduction, re-use and recycling. The
companies studied also mentioned the values of responsibility, humanity, respect and trust.
A detailed examination of these more abstract values is, however, beyond the scope of this
paper.
Reconceptualize
According to Latouche (2009), a change in values would trigger a process of
redefining concepts. In the same manner, the ECG movement claims that the alignment of
companies with values such as cooperation and sustainability should be used to redefine the
concept of business success (see above). In the following section, we provide a summary of
our observations regarding the relevance of traditional success indicators, such as growth
and profits, for the CgoCs studied.
The Relevance of Company Growth. The companies in our sample attach varying
degrees of importance to corporate growth. First, we will examine those companies which
have decided to stop growing. When it had about 40 employees, the printing company
decided not to grow any further. It assumed that further growth would be incompatible with its
understanding of how it wanted to be organized as a collective: “The factory, at the time it
was growing, we actually realized that forty is the tipping point, and then we had the non-
growth discussion […]. During that time we realized that our system of manageability, of
traceability—just like we want it, so that it’s workable for us—if there was a further
enlargement and fragmentation of delegation and so on, that we would lose sight of the big
picture. […] The way we want to be organized, it makes no sense to grow” (pc, par. 14).
Today, the situation is different. The printing company is currently downsizing, however, not
by choice. The company explains that its industry is breaking up into growing, industrial
companies and small, niche actors. Because it is unable to compete on price against the big
companies, it has to “downsize the company from a medium size to a smaller, more niche-
like production” (pc, par. 9). The engineering firm, an individual entrepreneur, states that
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“You cannot grow the family and the company simultaneously” (ef, par. 15). The engineer
adds, “In fact, I don’t want to grow. Well, it’s fine like this, and anything I don’t like to do or
[…] I’m not able to do I would buy for this purpose. […] Why do you have to grow, anyway?
Individual entrepreneurs are needed to shape the economy, too” (ef, par. 87). The farmer
reports that they have changed their mind on the growth issue: “A few years ago, I would
have thought that, too: yes, we have to acquire more land again. No: instead, less land!” (fa,
par. 33). They are currently considering downsizing at some point in the future and
orientating themselves towards “more diversified cultivation” (fa, par. 33). The bakery claims
that it is relatively big for an organic manufacturer and therefore is already of a size which is
“quite competitive” (ba, par. 239). In addition, it has a high equity ratio and no external debts,
so it “has no need to grow in order to repay debts” (ba, par. 239).
Degrowth represents a path of transformation which includes “overcoming the
capitalist mode of production with its pressure to grow, compete and generate profits”
(Burkhart et al., 2017, p. 109). Non-growing companies are a prerequisite for a reduction in
macroeconomic growth (Deimling, 2017). As we can see from the example of the printing
company, limiting a company’s growth can also be necessary in order to maintain democratic
decision-making structures. The engineer makes a connection between limiting the
company’s growth and maintaining their work-life balance. The farmer wishes to focus on
diversified cultivation (which can contribute to the preservation of biodiversity), rather than on
growth. Thus, for them, growth is of reduced importance, and other concepts instead have
come to define successful business operations. As we learn from the bakery, good
conditions for a renunciation of the growth paradigm are having a high equity ratio and no
external debts, and the company having found a size at which it is competitive. These
requirements, however, are not met by most companies in our sample, with the result that
they consider further growth to be necessary.
For example, the clothing manufacturer justifies growth as an important factor in
running the company efficiently and “pushing things forward” (cm, par. 277). It believes that
achieving greater market strength through corporate growth is necessary for at least two
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(related) reasons: firstly, to survive in a field that is dominated by takeovers; secondly, in
order to be able to produce more cost-effectively and thereby be competitive and
compensate for the additional costs which result from their social and ecological measures.
The company believes that, one day, it may reach its perfect size and “then, some day, we
may not have to grow like that any more, or at least not at full speed” (cm, par. 280). The
event designer describes how, as “an extremely fast-growing company” (ed, par. 34), they
face the challenge “of remaining sustainable despite the growth” (ed, par. 178), even though,
in their opinion, “growth, for us, does not necessarily mean consuming more. Instead, it
means managing what we do more sensibly and better” (ed, par. 181). As a company, they
want to reach a size that allows them “to pay reasonable salaries and to work efficiently” (ed,
par. 181). Degrowth does not mean the general prohibition of growth, at least for sustainable
companies (Posse, 2016). However, in order to be compatible with a development towards
degrowth, ambitions to grow should not serve as an end in themselves, or serve purely to
increase profits (with the aim of distributing revenues to external parties), nor should that
growth last indefinitely.
Meaning of Profits. As with the question of growth, the importance placed on profits
varies within our sample. For the event designer, economic success is still a decisive
success factor. They make the point that “living common good” is, from their point of view,
strongly connected to “economic thinking”: “CSR [is] very, very strongly linked to economic
success. If I succeed in managing it and living it and being economically successful, then it
will be a successful model. Yes: because then others will emulate me” (ed, par. 144). For
other companies in our sample, however, making a profit is less important. Let us first
consider the example of the printing company: “To not grow, as we do here, as is our internal
business policy, it actually has the following effects: we don’t generate profits, never have
done […]. Well, we’ve had long periods in which we generated revenues. Then we
distributed them [...] to the people, or we bought the kitchen and […] hired a chef who cooked
for everyone here in the morning, at lunchtime, in the evening […] or we reinvested, meaning
we renewed the machines and technology […] To do that, you have to save up money and, if
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you want to keep up technologically, you have to make money” (pc, par. 14). So, the printing
company states that generating revenues plays an important role, with any surplus
generated flowing directly back into the company. The company therefore does not declare
any profits. In the same manner, the elder care centre argues that, as a non-profit
organization, the company’s only obligation is to the common good, and it therefore does not
pursue monetary interests. The company is instead interested in “reaching the well-known
black zero [breaking even]” (ecc, par. 24). It therefore strives to make enough money to pay
its salaries and other expenses.
The clothing manufacturer explains that “We are a commercial enterprise that is, of
course, to some extent oriented towards profits. We need them in order to ensure the
existence of our company” (cm, par. 139). The assertion of being profit-oriented “to some
extent” means that generating profits is a significant objective for the company, but it does
not operate with a view to maximizing profits at all costs. Moreover, it operates profitably
while also taking into account social and ecological standards. The company does not
subscribe to the idea that it would be contributing to the common good were it to maximize
profits at all costs: “I am always very sceptical of philanthropic models, […] successful
American entrepreneurs who have a great business, are incredibly successful and then, in
the end, at their end of their life, they start big philanthropic projects. And I think to myself: if
you had had your whole supply chain under control right from the start […] then it would have
been fairer and more honest” (cm, par. 76). The bakery also adopts a similar approach. It
stresses that it could make larger profits if it raised prices. But, because the stated purpose
of the bakery is to produce high-quality food and to make it as accessible as possible, it
intentionally keeps prices relatively low in order to ensure as many people as possible can
afford to buy its bread. At the same time, it does not lower prices—as it says it theoretically
could do—in order “to not threaten the local organic bakery industry” (ba, par. 240). Instead,
it uses these “buffers” (ba, par. 240) to supply public institutions such as schools and
hospitals which operate on restricted budgets. In sum, generating profits plays an important
role for these two example companies—but it is not an aim in itself. The goal of these two
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companies is to create value for their stakeholders through a fair and responsible approach
to doing business. For them, generating profits is therefore also of reduced importance as an
indicator of success.
Restructure
Restructuring the productive apparatus in accordance with changing values is one
part of Latouche’s (2009) “road to a degrowth society” (p. 36). Examples that we identified in
this area relate to ownership structures as well as trade relations.
Ownership Structures. Above, we described the media company’s orientation
towards the values of independence, democracy and diversity. These values are also
reflected in its ownership structure: “And through this diversity, however, a profile emerges.
On the one hand, it’s structural: with diversity, it has a brand essence which is structurally
safeguarded through the diversity of the ownership structure. Fifteen thousand, five hundred
members, each of whom has one vote, no matter how many shares he or she owns. But at
the same time, the constitution states that the consumer-members have no say against the
employees, so the editorial departments have the utmost structural protection against any
kind of interference” (mc, par. 20). In the context of degrowth, this kind of democratic
ownership structure represents a best practice, as Burkhart et al. (2017) call for “an
expansion of democratic decision-making, also in the area of the economy, to enable real
political participation” (p. 110). Nevertheless, at present, most businesses in our sample are
(almost entirely) in the possession of the company bosses or, rather, families. Some of them,
however, envisage that this may change in the future. The bakery explains that, at present,
no one except the company boss holds shares, because it is considering transferring the
company into a foundation to ensure that it will “stay the same as it is right now” (ba, par.
209). The farmer states that he is considering transferring the farm into a kind of citizen stock
company (in German: Regionalwert AG, a model through which farms are financed by
citizens and other small-scale, local investors. Further information: Hiss, 2014). Similarly, the
clothing manufacturer reflects on ideas about how to involve its employees in the family
business and states that the company “surely will, one day, move to some extent in the
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direction of profit participation bonds [in German: Genussscheine]” (cm, par. 211). These
kinds of developments would support Latouche’s (2009) proposal that “local factories” should
be “financed on a local basis by collective savings” (p. 37), and support the idea of
redistributing power.
Cooperative Direct Procurement. An emphasis on the value of cooperation and
striving for partner-like relationships with its stakeholders laid the foundations for a
restructuring of the bakery’s relationships with its suppliers. The bakery regularly meets the
farmers who supply it at so-called round tables to directly agree on grain prices. “Several
times” (ba, par. 14) during this process, which is based on trust and a long-term perspective,
the farmers have lowered their prices. In this process, world market prices based on the
stock exchange are disregarded. Instead, the focus lies on the actual needs of the local
actors: an idea which is central to degrowth (Burkhart et al., 2017). This example also entails
a redistribution of market power.
Relocalize
Relocalization is not only one of the ‘R’s of Latouche’s (2009, p. 33) “virtuous circle”,
but also a central topic within the degrowth debate. The degrowth movement calls for “locally
anchored but interconnected and open economic cycles. Because international trade is
deepening social divisions and preventing ecological sustainability, the goal is to de-globalize
economic relations” (Burkhart et al., 2017, p. 111).
Preferring Local Suppliers. One way in which a company can contribute to the
relocalization of economic processes is to give preference to local suppliers. The bakery, for
instance, favours grain from local farmers. From an ecological point of view, however, the
bakery explains that purchasing grain from a more distant region—one with more nutrient-
rich soil and higher crop yields—would in fact be preferable. The company therefore faces a
kind of conflict of interests between ecological and social issues, in which it has decided in
favour of the local farmers “in order to strengthen social structures and to maintain local
agriculture” (ba, par. 189). Other practices which contribute to a relocalization of the
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economy are abandoning growth as a company aim and establishing collective ownership
structures (see above under Ownership Structures).
Redistribute
A development towards degrowth should include the redistribution of power and
incomes (Latouche, 2009; Burkhart et al., 2017). Within our sample, we found examples of
practices which support the reallocation of both.
Developing Salary Models Democratically. One wholesaler (ws2) reconceived its
salary model together with its employees. In this process, the company and its employees
not only discussed criteria for the different salary brackets, such as degree of responsibility
or level of education, but also decided democratically whether to disclose employees’
salaries. Since “no one wanted complete disclosure” (ws2, par. 153), they instead decided to
only disclose the criteria classifying employees into the respective salary brackets. This is an
example of re-evaluation as it strengthens democracy. It also restructures corporate
development and decision-making processes and redistributes power from the management
to the employees.
Raising Salaries. Within the bakery, salaries are above average in comparison with
other ecological bakeries. Furthermore, in 2011, the bakery initiated a process to improve the
incomes of people employed by the distribution company which delivers the bread to its
sales outlets. In 2012, they agreed that the transport company would pay its employees at
least 8.50 euros per hour (this was prior to the introduction of a statutory minimum wage in
Germany in 2015). The additional cost of the pay rise was borne by the bakery. These
subsidies, along with investing profits in salary increases, as the wholesaler (ws2) did (see
above under Meaning of Profits), are examples of the redistribution of profits.
Reduce, Re-Use & Recycle
Degrowth calls for a “reduction of raw material, resource and land consumption as
well as waste volumes and emissions of rich countries to a level which is sustainable in the
long term and allows the countries of the South equal opportunities for development”
(Burkhart et al., 2017, p. 109). The production practices of the companies studied include
99
various examples of re-use and recycling. Generally, the companies produce their goods or
offer their services according to high ecological standards. For a comprehensive list of all
measures, see Sommer, Kny, Stumpf, & Wiefek (2016). A discussion of all of these
measures is beyond the scope of this paper. Instead, we will therefore conclude with a quote
from the event designer: “We look at everything that we use and we ask: are there other,
ecological alternatives? If not, how can I recycle the material? If I can’t, how can I manage to
keep it in circulation for as long as possible?” (ed, par. 37).
Discussion
The degrowth movement calls for the “democratically-led shrinking of production and
consumption with the aim of achieving social justice and ecological sustainability” (D’Alisa et
al., 2015, first page, no page number). Addressing the research gap on companies´
characteristics and practices that bear the potential to support a societal transformation
towards degrowth, we conducted interviews with CgoCs. We examined the values,
companies’ structures, corporate concepts and practices of CgoCs as they relate to
Latouche’s (2009, p. 33) “virtuous circles of eight ‘R’s”. Latouche (2009) claims that a value
change towards cooperation, democracy and respect for nature, accompanied by a
redefinition of the concept of wealth, an adaptation of the productive apparatus in line with
these values, a redistribution of power and wealth, a relocalization of economic cycles, and a
reduction of our impact on the biosphere—for instance, through an increase in re-use and
recycling measures—would trigger movement in the direction of degrowth.
In sum, we observed that the CgoCs we studied uphold values such as fairness,
cooperation, diversity, independence, democracy, transparency, and ecological
sustainability. Even if they are all generally committed to these values, priorities among the
companies do vary. For instance, for the media company, independence and diversity are
very important concerns, as established in its ownership structure. The company also
pursues ecological goals, but these are not included in its corporate governance. By contrast,
the bakery prioritizes ecological issues above all else, and wants to see its actions
embedded within ecological boundaries. In practice, however, the question of whether
100
ecological or social (or economic) motives lead to entrepreneurial action seems to be
decided on a case-by-case basis: the company preferentially purchases grain from farmers
in its own region in order to strengthen local agriculture—despite the fact that, according to
its own references, purchasing from regions further afield would be more sensible from an
ecological point of view.
Transparency was the only value mentioned by the companies that was not explicitly
referenced by Latouche (2009) in his call for a shift in values. However, Posse (2016) asserts
that transparent reporting offers the possibility of enforcing changes in less sustainable
enterprises. Since the CgoCs are pioneers in socio-ecological issues and are willing to
provide in-depth insights into their businesses by compiling a CGB, and considering the
increasing number of companies joining the ECG, we believe it would be desirable to
examine this assumption more closely. Doing this and creating a link to the CSR debate, in
which transparency in the supply chain is also discussed, seems reasonable.
For the companies studied, it is essential to operate profitably so they can cover their
expenses. Nonetheless, for most companies in our sample, profits are of reduced importance
as an indicator of success. Profit maximization is not the aim of their operations: this is
reflected, for example, in the bakery’s solidarity price policy. Several interviewees stated that
they do not profit economically from their social and ecological engagement. The companies’
understandings of the purpose fulfilled by their engagement therefore differ from those in the
CSR discourse. The latter emphasizes the presumed win-win effect of CSR: CSR measures,
it is believed, should go hand-in-hand with the company’s increased economic success
(Müller-Christ, 2014).
Whereas one part of the companies studied didn´t want to grow anymore and one
company was in a process of downsizing―though not by choice―, for some companies
corporate growth was (still) an important issue. So to speak, these companies are not in an
operational degrowth process. But the limitation of the company’s size is just one possible
way in which a company can contribute to a reduction in overall economic growth (Deimling,
2017). Furthermore, the development towards a degrowth society comprises the growth of
101
certain (post-growth) companies (Bocken & Short, 2015; Gebauer & Mewes, 2015; Posse,
2016). With reference to Latouche (2009) and the current degrowth literature, we observed
overlaps of the companies’ values, corporate structures and practices with claims from the
degrowth movement. In addition to a change in values and reduced significance of profits as
an indicator of success, we could observe democratic ownership and decision-making
structures, cooperative trade relations, a preference for local suppliers and a redistribution of
surpluses, as well as measures of re-use and recycling. Thus, we assume that the
entrepreneurial behaviour of the companies studied has the potential to contribute to a
development towards degrowth.
However, the approach of growing as sustainable companies and thereby pushing
non-sustainable companies out of the market is not necessarily proving effective. As we can
see from the example of the printing company, business growth is not always compatible
with democratic organizational and decision-making structures. Since the company holds
these principles dear, it is unable to compete on price with large enterprises. The company is
therefore situated in a niche sector in which it serves only a particular clientele. It remains to
be seen whether collective and democratic organizational structures are suitable only for
small and medium-sized companies, or whether large enterprises may also develop more
democratic structures.
Furthermore, our results reveal a contradiction between the companies’ pursuit of
cooperative business-to-business relationships and the aim of growth. On the one hand, the
companies do not wish to have predatory relationships with their competitors. However,
some of the companies do intend to grow. This means that those companies are, indeed, in
competition with other companies on the market, and this may contradict their desire for
cooperative relationships. This contradiction may be partially resolved if the CgoCs focus on
jointly gaining shares of the market at the expense of less sustainable companies.
The companies in our study undertake various measures to reduce their
environmental impact and strive for fair interactions with their stakeholders. Dyllick and Muff
(2016) point out that there is a general disconnect between CSR and the achievement of
102
global sustainability goals. A corporation’s engagement does not necessarily result in
improvements in its stakeholders’ situation, even if the engagement is well documented.
Further research should therefore explore what impact CgoCs and other post-growth
organizations’ practices indeed have on their stakeholders (including the natural
environment).
It should be remarked, that the results are specific to our analysed case group and,
due to the low number of cases, are not generalizable to all CgoCs. Since some of the
interviews were conducted with only one representative from a company, it was particularly
important to look at the interviewees’ statements in conjunction with the actual characteristics
and practices of their companies, as well as the CGB, in order to distinguish between the
possible personal preferences of the interviewee and the “actual” value orientation of the
company.
Conclusion
In their management practices, the CgoCs studied are guided by values such as
fairness, cooperation, diversity, independence, democracy, transparency, and ecological
sustainability. These values are also emphasized by the degrowth movement and, according
to Latouche (2009), could trigger a transformation towards degrowth. Our study reveals
company characteristics and practices which comply with Latouche’s claims and are
exemplified by democratic ownership and decision-making structures, cooperative trade
relations, a preference for local suppliers and a redistribution of surpluses, as well as
measures of re-use and recycling. Meanwhile, although operating profitably is important for
the self-preservation of all of the companies in our sample, profits are increasingly losing
relevance as a success indicator. Even so, some of the companies assert that they are
striving for growth—in order, for example, to be able to hold their own in the market.
Nonetheless, we conclude, that the CgoCs from our sample―due to their compliance with
Latouche’s strategies for a development towards degrowth―bear the potential to support a
societal transition towards degrowth. However, further research is necessary to explore the
103
extent to which the companies’ compliance with Latouche´s eigth ‘R´s is indeed contributing
to a societal transition towards degrowth.
104
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Study 3: The Common Good Balance Sheet
and Employees’ Perceptions, Attitudes and Behaviours*
* After single-blind expert review this manuscript was accepted for publication at journal
Sustainability: Wiefek, J., & Heinitz, K. (2021). The common good balance sheet and
employees’ perceptions, attitudes and behaviours, Sustainability, 13(3), 1592.
https://doi.org/10.3390/su13031592
In 2015, the United Nations summit in New York adopted the 2030 Agenda for
Sustainable Development. With the 2030 Agenda, the United Nations has set itself 17
Sustainable Development Goals (SDGs) in order to tackle globally poverty, inequality,
injustice and climate change. Goal number eight consists in the requirement to “make sure
that financial progress creates decent and fulfilling jobs while not harming the environment”
(The Global Goals, 2020, no page). Companies, too, are therefore required to contribute to
achieving the SDGs. Companies can use corporate social responsibility (CSR) management
tools such as the SDG Compass, the EcoManagement and Audit Scheme (EMAS), the
Global Reporting Initiative (GRI) or the International Organisation for Standardisation (ISO)
norms in order to document and communicate their social and ecological commitment.
For a long time, the focus in CSR research was on large companies, which is also
why many of the CSR theories were developed with large companies in mind (Jenkins,
2004). The development of many of the CSR management tools was also therefore focused
on large companies, although it was assumed that the tools could be downscaled so that
they would also be suitable for small and medium-sized enterprises (SMEs) (Jenkins, 2004).
However, the idea of downscaling is based on particular assumptions that do not necessarily
apply to the SMEs (Jenkins, 2004). In practice, SMEs have had difficulty adapting CSR
management tools such as EMAS, ISO 14001 and GRI to their internal processes, as well as
problems with managing the required documentation of such standards (Elford & Daub,
2019; Heras & Arana, 2010; Steinhöfel et al., 2019). In addition, the modified versions of the
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CSR standards adapted to SMEs are hardly used in practice (Elford & Daub, 2019; Johnson
& Schaltegger, 2016).
In contrast to the established CSR management tools, the Common Good Balance
Sheet (CGB) developed by the Economy for the Common Good (ECG) is a tool that works
primarily for small and medium-sized companies (Wiefek & Heinitz, 2019). With the aid of the
CGB, the SMEs can systematically record their otherwise implicit social and ecological
commitment, and communicate this both internally and externally. The ECG regards the
contribution to the common good, operationalised through socio-ecological practices, as the
primary purpose of all business activity. The aim of the ECG is to use the CGB to translate
companies’ common good commitment into comparable figures in order, for example, to
award public contracts or credits depending on performance in the CGB. The aim is to
ensure the comparability of the results in the CGBs through peer review processes or
external auditing (Felber, 2018).
But what do the figures from the CGBs really say about everyday working life in the
companies? To what extent does what is documented formally, and mostly at management
level, extend into the workforce? Our study aims to explore these aspects. We therefore ask
the following questions: a) Do employees from ECG companies perceive their companies’
common good orientation?, and b) Do companies’ CGB scores correlate with employees’
attitudes, such as work and pay level satisfaction, work demands, perceived organisational
support, organisational identification, meaningfulness of work, and employees’ organisational
citizenship behaviours?
The Common Good Balance Sheet
The social movement of the ECG advocates an economic system based on values
that promote the common good; its aim is to be a catalyst for change on the economic,
political and social level (Gemeinwohl-Ökonomie, 2020c). It was founded by a small group of
entrepreneurs together with the activist and writer Christian Felber in Austria in 2010
(Gemeinwohl-Ökonomie, 2020a). In 2015, the European Economic and Social Committee
(EESC) recommended the ECG model be integrated into the legal framework at both
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European and national level (Europäischer Wirtschafts-und Sozialausschuss [EWSA], 2015).
In Germany, some state governments then took the decision to implement a CGB within
individual state-owned companies or to support companies in compiling a CGB (BÜNDNIS
90/DIE GRÜNEN Baden-Württemberg & CDU-Landesverband Baden-Württemberg, 2016;
e.g., CDU Hessen & Bündnis 90/Die Grünen Hessen, 2018). In 2019, a motion was
proposed at federal level for a pilot project in which a CGB would be implemented in at least
two companies wholly or partially owned by the German federal government (Göring-Eckardt
et al., 2019).
According to ECG data, 2,000 companies support the ECG and around 400
companies are either a member or have already compiled a CGB (as of March 2020,
Gemeinwohl-Ökonomie, 2020b). Common good-oriented companies (CgoCs) operate within
the framework of ‘profit satisficing’; this means their objective is not profit maximisation,
which leaves scope for pursuing socio-ecological principles (Wiefek & Heinitz, 2019). In the
CGB, the contribution to the common good is measured using the value groups of human
dignity, solidarity and cooperation, ecological sustainability, social justice, democratic co-
determination and transparency. In their documentation, the companies make reference to
their suppliers, their investors, their employees, their customers, and businesses in the same
field, as well as to the environment and the social environment (CGB version 4.1, see Figure
2). Version 5.0 of the CGB is now available. In our study, however, we will work with version
4.1 because the companies we have investigated have compiled their CGBs using this
version.
The CGB consists of 17 indicators. Each indicator formulates particular aims and
requirements of the ECG, asks thought-provoking questions, and describes what the
implementation of these requirements within companies might look like. The extent to which
a company is fulfilling the requirements is captured by a percentage or score. The scores
from the individual indicators are added together to produce an overall score. In the CGB 4.1,
it is possible to achieve values between -2,350 and 1,000 points if negative criteria are
included (Gemeinwohl-Ökonomie, 2013).
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Figure 2
Common Good Balance Sheet (Matrix 4.1)
Note. From “Handbuch zur Gemeinwohl-Bilanz”, by Gemeinwohl-Ökonomie, 2013,
https://www.ecogood.org/media/filer_public/c9/cd/c9cd687a-60fc-433e-a7c4-
beae86541902/handbuch_v41_cc_release.pdf
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In a factor-analytical study, the measurement model on which the CGB 5.0 is based
did not prove to be valid and reliable (Ejarque & Campos, 2020; Felber et al., 2019).
Ejarque and Campos (2020) identified items that need to be removed in order for the model
to hold. However, further research is still needed to redefine them and retest the
measurement model with the redefined items (Ejarque & Campos, 2020). Therefore, the
development of the CGB is not completed, but an ongoing process.
Review of the Literature
In the first few years of the ECG, the publications on the ECG were mainly bachelor’s
and master’s theses and shorter informal studies. Since around 2016, longer publications
and articles have appeared in scientific journals (Kny, 2020). Kny (2020) concludes from a
synopsis of the literature that, in comparison with prevalent CSR approaches, the standards
the ECG sets with a view to socio-ecological change are thematically and normatively
extensive. The ECG’s work-related values can be summarised as the desire to avoid
discrimination and boost quality of employment, to encourage the sharing of information and
worker participation, and to promote beneficial psycho-social factors at work, including
flexible working hours, work-life balance, task clarity and variety of tasks, scope and
autonomy (Ollé-Espluga et al., 2019).
Ollé-Espluga et al. (2019) conducted a descriptive analysis of reported work and
employment conditions in 59 CGBs from German and Austrian companies and compared
their results to the quality of jobs in the Austrian and German economies overall. According
to their results, CgoCs provide more favourable conditions in terms of training and control
over daily working time and tasks. Furthermore, the possibility of working part-time and at
home is more prevalent in CgoCs, and more CgoCs report the existence of direct
participation practices instead of representative participation forms. However, when
compared to the Austrian and German economies overall, CgoCs stand out for their higher
prevalence of works councils. Moreover, CgoCs report limited use of precarious employment
arrangements, and almost half of CgoCs provide full-time salaries higher than or equal to the
reference value for “living wages” in Austria and Germany. Comparison data with the
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German and Austrian economies overall was not available at the time of the study. Contrary
to expectations, Ollé-Espluga and colleagues (2019) observed a slightly greater wage
inequality between the highest and the lowest income in CgoCs than in the Austrian and
German economies overall.
In an explorative interview study, Meynhardt and Fröhlich (2017) investigated how a
CGB can contribute to the development of companies from the perspective of the companies
themselves. The company representatives reported, for example, an increased awareness
around interacting with employees, awareness creation around reducing workload, women in
leadership roles, workplaces with disabled access, and diversity of opinion, as well as the
introduction of behavioural codes and a re-examination of ownership structures. In addition,
the CGB increased transparency for both internal and external stakeholders (Meynhardt &
Fröhlich, 2017).
Sanchis et al. (2018) conducted a quantitative questionnaire study among 206
European companies in order to assess the impact of the ECG model at the organisational
level. Some companies reported, for example, improvements in cooperation strategies
among businesses and better relations with suppliers, improved participation and better
communication with employees and leadership as well as improvements in employees’
commitment and better levels of employee motivation and satisfaction since conducting their
first CGB. However, the study was not able to establish conclusively whether all these
improvements were attributable to the production of the CGBs (Sanchis et al., 2018). This
may be due to the fact that most of the companies – as we also found out from our own
interviews with CgoCs – were already socio-ecologically committed before the CGB, so the
CGB served, to a certain extent, as a tool for documentation and communication rather than
as a driver of change (Heidbrink et al., 2018).
In terms of the effect on employees, we may assume, based on the results of a
qualitative interview study by Mischkowski et al. (2018), that the CGB is having a positive
impact on employee retention. Here, Mischkowski et al. (2018) emphasise the aspects of
participation and co-determination within companies, as well as the establishment of a clear
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value basis, which also creates a point of orientation for interactions both within the company
and with external stakeholders. Thus far, there have been no other studies on the effect of
the common good commitment on employees within CgoCs. Within CSR research, however,
there have already been studies on the effects of socio-ecological commitment on
employees.
Employees’ Reactions to CSR
According to Glavas and Kelley (2014) definition of CSR, CSR means a company
caring for the well-being of its employees and other key stakeholders, including the social
and natural environment, with the aim of also creating value for the business. CSR is
manifested in corporate strategies and operating practices (Glavas & Kelley, 2014).
Therefore, we understand a company’s common good contribution, as the ECG defines it, as
a form of CSR. Perceived CSR refers to the extent to which employees perceive the
development and implementation of CSR strategies and practices within their company as
well as the CSR’s impact on the well-being of all key stakeholders and the natural
environment (Glavas & Godwin, 2013; Lee et al., 2013).
For a long time, there was very little focus on the employee level within scientific CSR
research, but over the past few years the number of micro-CSR studies has increased
significantly (Glavas, 2016; Gond et al., 2017). Here, micro-CSR means “the study of the
effects and experiences of CSR (however it is defined) on individuals (in any stakeholder
group) as examined at the individual level” (Rupp & Mallory, 2015, p. 216). According to a
review of 268 articles by Gond et al. (2017), most of the studies on micro-CSR published
thus far can be divided into three streams of research: (a) drivers of CSR engagement, which
relates to the predictors of, motives for, or forces that trigger employees’ CSR engagement;
(b) evaluations of CSR, which means how employees perceive, experience and judge their
employers’ CSR practices; and (c) reactions to CSR, which concerns the individual-level
reactions to CSR and the underlying mechanisms and individual-level boundary conditions
involved.
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In a meta-analysis of 65 studies from 67 samples, Wang et al. (2020) have studied
the reactions to perceived CSR from a summative perspective. They come to the conclusion
that “perceived CSR is positively correlated with employees’ positive attitudes and
behaviours, and negatively correlated with employees’ negative attitudes and behaviours”
(Wang et al., 2020, p. 18). The results indicate, for example, that perceived CSR is positively
correlated with employees’ positive beliefs and attitudes, such as perceived external prestige
(rc = .378), perceived organisational support (rc = .699), organisational identification
(rc = .515), organisational trust (rc = .532), organisational commitment (rc = .538),
organisational justice (rc = .551), work engagement (rc = .515) and job satisfaction
(rc = .520). In addition, perceived CSR is positively correlated with employees’ positive
behaviours, such as job performance (rc = .483) and organisational citizenship behaviour
(rc = .405) (Wang et al., 2020).
If we distinguish, for example, between internal CSR (CSR directed at employees)
and external CSR (CSR directed at external stakeholders), Wang et al. (2020) report that
perceived internal CSR correlated significantly and positively with employees’ organisational
identification (rc = .575) and work engagement (rc = .787), but that the correlation with job
satisfaction was not significant (rc = .264, ns.). With respect to perceived external CSR, they
found positive correlations with employees’ organisational identification (rc = .489), work
engagement (rc = .727) and job satisfaction (rc = .589) (Wang et al., 2020). Moreover, the
meta-analysis showed that perceived CSR towards the public and environment is positively
correlated with employees’ organisational trust (rc = .272), job satisfaction (rc = .427) and
organisational citizenship behaviour (rc = .410) (Wang et al., 2020). However, the
relationships between organisational identification and perceived CSR towards employees
(rc = .421, ns.) and the environment (rc = .318, ns.) were not significant (Wang et al., 2020).
The Role of Sex and Age in Reactions to CSR. Wang and colleagues (Wang et al.,
2020) have also highlighted the role of sex and age in relation to the reactions to CSR.
Although they assume, on the basis of previous studies, that the impact of perceived CSR on
employees’ attitudes and behaviours tend to be more evident among females (Del Alonso‐
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Almeida et al., 2017; Kahreh et al., 2014), the results of their study contradict this hypothesis.
When the proportion of males in the sample was increased, the relationship between
perceived CSR and attitudinal variables such as external prestige (β = -1.136, p < .001) and
work engagement (β = -1.441, p < .05) was weakened, whereas the relationship between
perceived CSR and behavioural variables such as employees’ job performance (β = .807, p <
.05) and organisational citizenship behaviour (β = .416, p < .001) was strengthened (Wang et
al., 2020). Also, Islam et al. (2018) and Ko et al. (2018) found the relationship between
employees’ perceptions of CSR and organizational identification to be stronger among men
than women. Hence, there is evidence on the role of sex in relation to reactions to CSR,
though the exact directions of correlations still need to be clarified.
With respect to age, Wang et al. (2020) found the relationships between perceived
CSR and organisational trust (β = .037, p < .05), job satisfaction (β = .024, p < .01) and
organisational deviance (β = .060, p < .01) to be more significant among older employees,
while the relationships between perceived CSR and employees’ work engagement (β =-.038,
p < .01), job performance (β = -.025, p < .05) and creativity (β = -.058, p < .001) are more
significant among younger employees. The moderating effect of average age on the
relationship between perceived CSR and employees’ organisational identification and
organisational commitment was not significant (Wang et al., 2020). Thus, influences of age
on reactions to CSR should be taken into account when conducting micro-CSR studies.
Research Desiderata & the Aim of Our Study
Thus far, there has been relatively little research on theories and empirical studies of
CSR and work meaningfulness (Glavas, 2016). Rosso et al. (2010) assume that companies’
emphasis on their contribution to the common good may have positive implications for
employees’ experience of meaningfulness. Furthermore, Aguinis and Glavas (2019) point out
that CSR could be used to create corporate cultures that are caring and compassionate.
They join other scholars in calling for more research on caring and compassionate
organisational cultures in order to shift away from the predominant focus on management in
cultures marked by aggressiveness, competitiveness and rigid norms. Due to the relational
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nature of CSR, future research ought to explore how creating caring relationships, such as
caring for the well-being of stakeholders, has an impact on employees (Glavas, 2016). At the
same time, Glavas (2016) observes that there are still too few studies on micro-CSR in
SMEs.
Thus far, only SMEs have published a CGB, which means our study on micro-CSR in
CgoCs is helping to fill a research gap. The aim of the ECG is to establish an economy
based on cooperation and solidarity. Accordingly, these values must be reflected not only in
business dealings with external stakeholders but also within the company cultures
themselves. This is another respect in which our study on the ECG fills a research gap.
Studies conducted thus far on the effects of a common good orientation (CGO) at the
organisational level are of an exploratory nature and merely capture the opinions and
perspectives of individual people from the respective companies. Often, the individuals
consulted for the purpose of the studies are those who are involved in compiling the CGB.
Interviews with 11 CgoCs for an earlier study of ours show that these individuals are
frequently directors or employees with a managerial role (Wiefek & Heinitz, 2018). The aim of
our study is to clarify, for the first time, if employees perceive the CGO of their companies. In
addition, we aim to establish whether there is any relationship between the companies’ CGO
and employees’ work-related attitudes and organisational citizenship behaviours. In so doing,
we also look at aspects of work meaningfulness.
Constructs & Hypotheses
Below, we introduce the constructs used in our study and the hypotheses tested.
Perceived CSR
The scores from the CGBs serve as comparable indicators of the extent of CGO
within a company. In general, CSR measures can only have an influence on the attitudes
and behaviour of employees to the extent these employees perceive and evaluate the CSR
engagement (Gond et al., 2010). The CgoCs either implement their CGO top-down via a
delegation system or take a less institutionalised approach, allowing CGO to be implemented
bottom-up by the collective; this is primarily the case with collectively owned companies
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(Wiefek & Heinitz, 2019). If CGO is anchored within the company, the CSR commitment
connected with it is also part of the company’s daily operations, and every employee should
come into contact with this in some capacity (see Aguinis & Glavas, 2013). Because a higher
score in the CGB is supposed to be an indicator of greater CGO, we may assume that an
increasing score correlates with an increase in perceived CSR. We therefore propose the
following hypotheses:
Hypothesis 1. The total score achieved in the CGBs is positively related to perceived
CSR.
Job Satisfaction
A widely used definition of job satisfaction is one proposed by Locke (Locke, 1976,
p. 1304): “a pleasurable or positive emotional state resulting from the appraisal of one’s job
or job experiences”. Ollé-Espluga et al. (2019, p. 4) attest to “a widespread presence of
elements of good quality of work” within CgoCs. According to relationship management
theory, CSR practices are an effective tool in improving the relationship between companies
and their employees (Dhanesh, 2014; Rupp & Mallory, 2015). Bauman and Skitka (2012)
explain how CSR may provide employees with a sense of security with regard to their
material needs being met, self-esteem that stems from a positive social identity, as well as
feelings of belongingness and meaningfulness at work, all of which may improve employees’
job satisfaction. This is why we believe that job satisfaction is higher in companies with a
higher score in the CGB. We therefore propose this hypothesis:
Hypothesis 2. The total score achieved in the CGBs is positively related to overall
job satisfaction.
Job Demands and Perceived Organisational Support
Job demand is measured in the CGB with the indicator “C2―Just distribution of
labour”. The relevant figures are the proportion of all-inclusive work contracts, the overtime
worked per employee, the proportion of part-time employees in the company, the number of
new appointments, and the number of employee surveys on working hours and working time
models. The background to the indicator is the ECG’s ambition for a “just” distribution of
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workload among all people capable of employment, as well as a reduction in regular weekly
working hours (Gemeinwohl-Ökonomie, 2013).
The indicator “C1―Workplace quality and affirmative action” encourages companies
to investigate and reflect on employee-oriented organisational cultures and structures, the
promotion of health and safety in the workplace, work-life balance and flexible working hours,
as well as equal opportunities and diversity. The relevant figures are, inter alia, the take-up of
workplace offerings related to physical and mental healthcare, as well as the number of
occupational accidents, employees on long-term sick leave and employees who have taken
early retirement as a result of inability to work (Gemeinwohl-Ökonomie, 2013).
The aims of the two indicators are to keep the workplace demands on the employees
as low as possible. Hence, we may assume that work-related demands should be reduced if
a company scores highly in indicators C2 and C1. We therefore propose the following
hypotheses:
Hypothesis 3. The scores achieved in indicator “C2― Just distribution of labour” are
negatively related to job demands.
Hypothesis 4. The scores achieved in indicator “C1―Workplace quality and
affirmative action” are negatively related to job demands.
The extent to which employees perceive that their companies value the employees’
contributions and pay attention to their well-being is defined as “perceived organisational
support” (POS) (Rhoades & Eisenberger, 2002). Thus, POS should be shaped by the way a
company treats the employees (Eisenberger et al., 1986). POS has been found to be
positively related to CSR (Glavas & Kelley, 2014). Similarly, a positive correlation between
perceived CSR and POS was found in the meta-analysis by Wang et al. (2020). Thus, we
hypothesise that POS should improve with increasing scores in indicator C1:
Hypothesis 5. The scores achieved in indicator “C1―Workplace quality and
affirmative action” are positively related to perceived organisational support.
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Pay Level Satisfaction
The ECG’s aim is to ensure a “just” and transparent distribution of pay and profits
within companies, based on the standards it sets out. The aim of the indicator “C4―Just
income distribution” is to measure the income distribution across a company. The
compensation should be based on the employee’s performance, the labour and responsibility
involved in the role, the risks associated with the workplace, and the necessity of the role.
The ECG enquires into the lowest and highest wages within the company, the median
income, and whether the company’s internal compensation system is transparent. According
to ECG standards, an internal income distribution of maximum 1:4 is the ideal. Companies
with a distribution of 1:12 are heading in the right direction. The minimum income should
adequately meet the living costs of the respective country and region in which the company
is engaging the employees (Gemeinwohl-Ökonomie, 2013).
The aim of the indicator “E4―Investing profits for the Common Good” is to measure
the extent to which the profits made by a company are distributed or reinvested as fairly and
meaningfully as possible, as well as in ways that promote the common good (Gemeinwohl-
Ökonomie, 2013). According to the ECG, incomes should in principle be connected with
performance, and capital ownership should not represent any claim to an income. The ECG
makes an exception in the case of a “company founder pension”, which the founders of a
company could receive for a period of time equal to the time they had spent actively building
up the company (Gemeinwohl-Ökonomie, 2013).
The extent to which employees are, or are not, satisfied with their pay is described as
pay satisfaction. Pay satisfaction encompasses the “amount of overall positive or negative
affect (or feelings) that individuals have toward their pay” (Miceli & Lane, 1991, p. 246). “Pay”
is understood here as all forms of remuneration, including therefore direct cash payments
such as salary, but also indirect, non-cash payments such as benefits. The construct of pay
satisfaction also includes the amount of pay rises and the process by which the
compensation system is administered (Williams et al., 2006). According to Williams et al.
(2006), different authors have suggested replacing this broad definition of pay satisfaction
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with a multidimensional conceptualisation of pay satisfaction. One dimension of pay
satisfaction is pay level satisfaction, defined as “an individual’s satisfaction with his or her
base pay” (Miceli & Lane, 1991, p. 245).
According to the models of pay satisfaction, the pay level should have a direct
influence on pay satisfaction and work satisfaction (Judge et al., 2010). However, in a meta-
study with 115 correlations from 92 independent samples, Judge et al. (2010) found that pay
level only modestly correlated with job satisfaction (ρ = .15) and pay satisfaction (ρ = .23).
Hence, the absolute pay level has only “little potential to satisfy” (Judge et al., 2010, p. 164).
In Lawler’s discrepancy model of pay satisfaction, it should be the case that employees are
satisfied with their pay when their perception of the pay received is equal to the amount they
perceive they should be receiving (Shapiro & Wahba, 1978). If it is the employees’
perception that they are receiving less pay than they believe they are entitled to, they
become dissatisfied. On the other hand, if they receive more pay than they believe is
appropriate, they may develop feelings of guilt, inequity and discomfort (Shapiro & Wahba,
1978). Hence, satisfaction with payment is primarily determined by perception and the
fulfilment of expectations. Processes of social comparison in relation to the perceived pay of
referent others also have a role to play in the model. The perception of one’s own pay is
influenced by what others are being paid and what others are being paid in relation to their
input. Lawler assumes that the more one perceives what others receive, the less one
perceives what one receives oneself and the more dissatisfied one becomes with one’s own
salary. Also, the greater the salary one perceives others to receive, the greater the
expectation will be of what one should receive oneself (Shapiro & Wahba, 1978).
The ECG’s goal is a “just” and transparent distribution of income and profits. If we
assume that the ECG’s concepts of fairness correspond to those of the employees, pay level
satisfaction in companies with higher values in indicators C4 and E4 should increase. We
therefore propose the following hypotheses:
Hypothesis 6. The scores achieved in indicator “C4― Just income distribution” are
positively related to pay level satisfaction.
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Hypothesis 7. The scores achieved in indicator “E4― Investing profits for the
Common Good” are positively related to pay level satisfaction.
Meaningful Work
In indicator “E1―Value and social impact of products and services”, the ECG
describes one of its goals as ensuring that global pro