Measuring and managing the social value created by a diverse construction business

Abstract

Corporate Social Responsibility (CSR) broadly describes the environmental, social and ethical business practices of an organisation, and has evolved from the superfluous extravagance of wealthy businessmen to a societal expectation of all organisations. Within the UK construction industry CSR is a public sector procurement criterion of such importance that how a contractor engages with CSR could ultimately be the difference between success and failure. Despite this, agreements on defining CSR are still heavily debated, resulting in both conflicting definitions, and conflicting approaches as to how CSR should be interpreted, which has arguably held back development of this important concept. Against the backdrop of these ongoing debates, contractors are now expected to communicate their CSR strategy and practices as well as measure the resulting social value. To help meet this expectation a variety of different social value measurement tools have been introduced with each offering a different interpretation of social value. This subjectivity however, adds further conflict and tension to existing CSR debates and potentially restricts the wide adoption of any single measurement tool, hindering meaningful benchmarking between organisations. The tools that have gained the most stakeholder awareness, and traction within the industry, have tended to reduce social value to monetary variables in an effort to be widely adopted. However, by doing so the wider, nuanced, and difficult to measure aspects of social value can be missed. The increasing CSR demands placed upon contractors include the need to develop strategies, practices, and effective communication techniques to satisfy disparate stakeholders, often simultaneously, in order to remain competitive and even survive as an organisation. However, such demands are not easy to meet, especially when each client has their own interpretation and expectation of CSR. The problem therefore exists that contractors with finite resources may be unsure which CSR practices to pursue, how to measure the resulting social value, and how to effectively communicate such practices to satisfy often-competing stakeholder demands. This problem manifests itself in both unsuccessful procurement attempts resulting from contractors not fully understanding client specific CSR needs, and CSR practices being undertaken that result in little social value generated. This is a specific problem in the construction industry identified by Willmott Dixon (WD), the sponsoring organisation. As part of a tender process for a high value public sector framework WD are expected to have in place a tool to effectively measure and communicate social value. The role of the researcher is to find a workable solution for WD to engage with the ambiguous and nebulous concept of CSR in a tangible and practical way. WD s social value needs to be measured and evidenced to ensure their practices are effective and to increase the likelihood of a successful public sector framework tender. The aim of this research is to explore how the concept of CSR can be operationalised and the resulting social value be measured and communicated to multiple stakeholders. The objectives include exploring the conceptualisation and measurement of CSR, establishing how CSR is communicated and understood, examining how different stakeholder interpretations can be made to align, and operationalising a tool to measure and communicate social value. Due to both the subjective nature of CSR amongst stakeholders and the objective nature in the way CSR is expected to be measured and communicated this research project is split into two main research packages. The first of which consists of an extensive literature review that informs the use of qualitative semi-structured interviews conducted with both clients and contractors, as well as a Qualitative Content Analysis (QCA) of contractor CSR reports. The second research package is focussed upon how CSR can be practically engaged with, and building upon the findings and understandings of the first research package, concentrates on the development, piloting and implementation of a social value measurement tool. The findings of the first research package include understanding how CSR is communicated internally and externally, and how it is understood, practiced and measured by multiple stakeholders. The first research package successfully led to the publication of four research papers (appendices 1.0 - 4.0) and informed the second research package in the development and operationalisation of a social value measurement tool, named mi|career. Mi|career is now rolled out across WD s multiple business units and played a small but positive role in the successful procurement of the £2billion public sector framework. The main contributions of this research are twofold. The first, the development of an effective social value measurement tool to fulfil WD needs. The second, a contribution to contemporary debates on CSR and social value, including an understanding of how contractors and clients make sense of CSR differently, why public sector bodies are increasingly using CSR and social value criterion in procurement, and the unanticipated negative ramifications of the introduction of the Social Value Act. Additionally. The research also contributed to the understanding of how ambiguous language use by contractors to communicate CSR with disparate stakeholders simultaneously sustains CSR (as a corporate metric and driver) and undermines it (in being viewed as a rhetorical device). This allows contractors who only symbolically engage with CSR to masquerade as those who substantially engage, and forces those who substantively engage to obfuscate the additional benefits they bring in order to be understood by clients. The EngD attended to this theoretical issue by helping to inform WD s CSR strategies, with social value measurement viewed as a method of evidencing substantial CSR engagement without the need to obfuscate their CSR communications. The research has also helped understand how the theoretical lenses of sensemaking, stakeholder theory and legitimacy theory can be successfully mobilised to develop further understandings within the field of construction management.