Integrated Corporate Social Innovation: Unmasking a Values-based Corporate Sustainability Framework for the Management of Corporate Sustainability Tensions in Financial Institutions in sub-Saharan Africa

Abstract

Moral failure to address the management of multiple corporate sustainability tensions (CSTs) has made firms face difficulties in trying to balance social and business goals. Previous scholars have tackled this antinomy by focusing on one form of tension using instrumental logic, but little has been done to address multiple CSTs that impede corporate sustainability. The failure by corporations to manage social and business goals simultaneously is a major factor in rising poverty and inequalities in sub-Sahara Africa (SSA). The purpose of this thesis was to explore, using integrative logic, an analytical tool for managing multiple CSTs in order to achieve corporate sustainability. This study was carried out in Kenya and it involved 21 semi-structured interviews of senior managers. Out of the 21 interviewees, eleven were from corporations in the financial services sector, six from non-profit organisations (NPOs) and four were sustainability experts. The research explored how financial institutions in SSA are managing CSTs. The results showed that values-based governance, business to non-profit (B2N) partnerships and institutional arrangements are key pillars of an integrated corporate social innovation (ICSI) framework for the management of CSTs leading to social innovations with blended value. The ICSI framework is an outcome of rigorous analysis of empirical data, which showed that effective management of tensions could lead to corporate sustainability. Specifically, in SSA where 68% of the world's poor live, there is increasing public demand for corporations to address social issues alongside profit making. However, most corporations view these demands as a trade-off between financial and societal goals and rationally favour financial goals while treating social issues as externalities to the firm. Nonetheless, this research applying the principles of the African communitarian ethic, Ubuntu, and the social contract theory, build a normative values-based business management theory that restores innovation processes that benefit both business and society. First, the findings confirm that economic systems are influenced by cultural values of a given cultural context. However, the concept of a values-based governance system as a mediating logic for CST management is novel and responsible for the pursuit of common good. Second, B2N partnership is an intervening factor between values-based governance and social innovation leading to value co-creation. Third, corporations as persons are driven by self-interest. As such, they need an incentive in form of an institutional arrangement to pursue collective interest.The study contributes to both scholarship and practice. First, by applying the social constructionist lens, the study reveals how practitioners in a collectivist society construct their own reality of CST and confirms the context sensitivity of CST management, which hitherto had not been explored. Second, the study makes a contribution to the construction, reform and assessment of organisations that play a role in poverty alleviation in SSA.