Swiss CSR-Driven Business Models – Extending the Mainstream or the Need for New Templates?

Abstract

PURPOSE: Many Swiss Small and Medium-sized Enterprises (SMEs) have highly sophisticated Corporate Social Responsibility (CSR) agendas embedded in corporate cultures that nurture a “raison d’etre” for CSR far beyond official policies or standards. Previous research culminated in the characterisation of this core logic as “L’EPOQuE” – the overarching SME business model making Switzerland, arguably, a hidden champion in CSR. This model is borne by a set of key features: the association of company ownership and government; the process of work socialisation; long-term relations to stakeholders; collaboration in networks; efficiency; and informal, flat organisations. This paper validates these idiosyncrasies and explores the model’s consistency with criteria of conventional business models and its power to be a prototype for CSR-oriented businesses. METHODOLOGY: The assessment on the consistency of L’EPOQuE as cluster of a conventional model is qualitative not quantitative. Accordingly, the key features of the Swiss model were attributed to the six key features of a popular business model. This allocation and the subsequent assessment of consistency was a matter of a two-stage Delphi process, firstly in a questionnaire, secondly, in a discussion.FINDINGS: The Delphi process encouraged slight modifications on the level of nomenclature of L'EPOQuE resulting in a revised version, L’EPOQuE 2.0. Further, it matched L'EPOQuE's features with key criteria of a conventional business model. The results show that the Swiss model is consistent with mainstream models. However, it found a specific niche and works best with social, long-termed relations and in networks, in the context of informal structures, abolished hierarchies, in convergence of business, mission and culture, and in many cases in oligopolistic markets.SOCIAL IMPLICATIONS: The way Swiss small businesses seem to combine psychological and economic features of trust with their business model, L’EPOQuE 2.0, provides a couple of advantages not only to them but also to societies they have “a social contract with”. Firstly, this establishes a certain ground level of trustworthiness among entities and induces incentives to imitate those practices. Secondly, seeing trust as an integrated part of business makes the concept of trust more tangible for standard economic analysis and approaches (e.g., the business case for CSR) without losing any of its facets or without making unrealistic or too idealistic assumptions.Seeing trust from that perspective, namely as a part of the “raison d’etre” or business model, can help to formulate hypothesis relative to reality and the levels of trust that can be expected under certain business, social, societal, and environmental circumstances. There may be further implications in other contexts. However, this seems to be especially important in the aftermath of financial crises and the irresponsibility of individuals that eroded trust in whole sectors. Thus, L’EPOQuE 2.0 as core logic for businesses might help in restoring trust and fostering this responsibility of individuals.Considering the above, the value of trust and personal ethics in corporate CSR was shown to be significant.PRACTICAL IMPLICATIONS: L’EPOQuE 2.0 is a portrait of the “raison d’etre” of successfully competing Swiss businesses that do this based on morale and ethics. It offers therefore a guide towards a socially and sustainably responsible, CSR-driven company that is based on the “creating shared value principle”.RESEARCH LIMITATIONS: This study sheds light on the issues related to business models as value driver for CSR. Arguably, business models in general are generic and each business will have its own emphasis and interpretation. If so, sector, region, and/or niche should play important roles in future research that might scrutinise such variations dependent on external factors.ORIGINALITY/VALUE: Conventional business models suit to conventionally formalised, hierarchical organisations, to liberal markets and mass production often aiming at short-term profits. The difficulties conventional models have in corresponding to informal contexts (e.g., in start-up, owner-led, and/or small companies) justify L’EPOQuE 2.0 as an extension of the mainstream and in particular as template for CSR-driven business models.