Small town multinational : CSR and the institutionalization of diversity as an organizational value at Cummins Inc.

Abstract

Corporate social responsibility (CSR) has become an important research theme in academia; however, little research has been done on the maintenance of such practices. Although rooted within management strategy, scholars propose that the concept of diversity has the potential to achieve social change (Ahmed, 2007). Cummins Inc. has a history of over six decades in the area of diversity management making it an ideal corporation to study how a CSR value like diversity can be maintained beyond initial adoption and implementation. A global company with a small town origin, Cummins has continually linked the value of diversity to its founding identity of providing for the community. This study therefore inherently examines the impact Cummins' progressive values have had on the communities and institutions with which it works. Throughout its history, Cummins has engaged in hotly debated diversity related initiatives ranging from pulling out of apartheid South Africa to lobbying for gay marriage in the U.S. Sometimes these initiatives have been to the short-term detriment of the company’s bottom line and reputation making them a difficult "sell" to employees. This study suggests that relying on organizational identity rather than business case or moral arguments can help management justify socially responsible practices in a weak institutional environment. In contrast, in a strong institutional environment it is more difficult to claim that a behavior which society expects can be part of a company's unique identity. The data from Cummins suggests that in a strong institutional environment, employees are most convinced by arguments that the practice is "the right thing to do" as well as that there is a business case. This combination of morality and fiscality allows for the careful nuance that the practice is in the "self-interest, not selfish interest" of the company (Cummins, 2004, p. 47-48). By adapting strategies based on the strength of the institutional environment, the evidence suggests that a company can better maintain a socially responsible practice.