3-4 pragraphs

Read 

Managing Responsibility: What Can Be Learned From the Quality Movement?

 Discuss the following questions in light of the article:

• What does this article tell us about quality and responsibility management and how we can integrate this into organizational processes?
• What can we ascertain from the reading that does not appear value added?
• What company can improve responsibility management by improving quality management? How can this be done?

Provide examples and research to support your thinking.

Managing Responsibility:
WHAT CAN BE LEARNED FROM
THE QUALITY MOVEMENT?

Sandra Waddock
Charles Bodwell

S
ince the 1980s, competitive pressures and widespread consumer
attention to quality have meant that companies cannot compete
successfully without paying close attention to the quality of their
products and services. Today, demands for enhanced corporate

responsibility1 come from corporate critics, social investors, activists, and, in-
creasingly, customers who claim to assess corporate responsibility when making
purchasing decisions. These demands go beyond product/service quality to focus
on areas such as labor standards, environmental sustainability, financial and
accounting reporting, procurement, supplier relations, environmental practices,
and supply chain management.

Further, the recent corporate scandals have generated significant public
concern about corporate responsibility, transparency, and accountability. Exter-
nal critics raise the specter of reputational damage, as Nike, Levis, Gap, Adidas,
and other global brands found in the 1990s when activists focused attention on
abusive labor and human rights practices in developing nation suppliers.2 These
global brands were forced to adopt new systems for managing supply chain com-
panies, auditing them to ensure that they live up to Nike’s own code of conduct.
Most large brand-name companies are adopting internal responsibility manage-
ment systems to avert similar criticisms.3

Corporate responsibility is defined as the ways in which a company’s
operating practices (policies, processes, and procedures) affect its stakeholders
and the natural environment.4 External and internal demands for changes in
company practices can provide an opportunity for organizational learning.5

25CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 2004

The responsibility for opinions expressed in this article rests solely with the authors, and publication
does not constitute an endorsement of these opinions by Boston College or the International Labour
Office.

Managing stakeholder relationships and natural resources is quickly becoming
a more significant part of the modern corporate landscape, much as managing
quality did in the early 1980s.6 While some progressive managers are paying
attention to it, many still believe explicit responsibility management is not nec-
essary.7 Despite similar reservations in the history of the quality movement, by
the end of the 1980s, total quality management (TQM) had become a business
imperative for most major corporations. From early skepticism, managers gradu-
ally realized that quality was important to customers. The quality movement
was boosted by major European Union companies requiring suppliers to meet
ISO quality standards.8

There are significant signs that responsibility management is following a
similar trajectory and could conceivably become the new business imperative9 of
the early 2000s. The recent scandals in the U.S. further these pressures by creat-
ing a public policy context in which there is specter of greater regulation of cor-
porate responsibility. Clear differences exist in the extent to which companies in
different parts of the world and different industries emphasize their corporate
responsibilities. Many companies with brand names to protect now recognize
that there are multiple stakeholders who can and will exert pressures on them
for greater responsibility if they do not take voluntary action.

Managing responsibility, however, is more complex than managing qual-
ity. First, the borders of responsibility can be extremely difficult to define. Who is
responsible for the working conditions in a firm supplying only one subcompo-
nent of a product, where the buyer represents only one of dozens of customers?
Who is responsible for the working conditions of that supplier’s suppliers? Man-
aging quality starts with customer demands, which is a simple task compared to
determining responsibility objectives that must satisfy a range of stakeholders
with incompatible goals.

Demands to manage responsibly are increasing.10 Much as quality man-
agement once offered competitive advantage for early movers, so today can
responsibility management provide a similar basis for competitive advantage.

In comparing emerging total responsibility
management (TRM) approaches with exist-
ing total quality management (TQM)
approaches, we focus on initial responses
to managing quality, skepticism about
responsibility management approaches,
and common values underlying both
quality and responsibility management
systems.11 Research undertaken by the
International Labour Office illustrates that
companies that appear to be in the lead in

adopting integrated responsibility management approaches are those managing
long supply chains. These companies have been subjected to much anti-corpo-
rate activism, e.g., footwear, apparel, and sports equipment companies whose
brand names are readily recognizable.

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 200426

Sandra Waddock is Professor of Management at
Boston College’s Carroll School of Management
and Senior Research Fellow at the Center for
Corporate Citizenship at Boston College.

Charles Bodwell is the Chief Technical Advisor
(Project Manager) of the Factory Improvement
Programme, a project of the International Labour
Organization under Swiss and US funding that
links good management and good labor practices
in global supply chains.

TRM approaches12 start with a vision that includes the company’s respon-
sibilities to stakeholders and the natural environment. The company must then
manage those responsibilities by articulating them explicitly and developing a
code of conduct with specific standards. The responsibility vision represents an
effort to achieve management commitment throughout the corporation and to
create a set of benchmarks to which stakeholders can hold the firm and its sup-
pliers accountable. Vision also involves determining which values provide the
appropriate foundation for a company’s stakeholder-related practices and perfor-
mance, frequently expressed in company-specific statements of values, aspira-
tions, or codes of conduct or by adherence to international standards (such as
the principles of the UN Global Compact).13 Companies inform their visions and
obtain feedback about their operating practices through interaction with relevant
stakeholders. They then incorporate this feedback into operating practices and
performance improvement strategies. One company in the lead on such activity
is Royal Dutch/Shell through its “Tell Shell” web site.14

Just as with TQM, TRM includes continuous innovation and improvement
processes that are extended to all stakeholder and environmental management
systems. These processes allow for remediation where necessary and create a
feedback loop so that the company can learn from past mistakes. Innovation and
improvement mean designing responsibility objectives for each of the company’s
core stakeholders and establishing appropriate goals and indicators to measure
performance. For example, audit systems could be created to ensure external
supplier compliance with the company’s code. Audits in turn can lead to correc-
tive action plans that provide suppliers with objectives for improvement.

The Quality/Responsibility Analogy

Managing responsibility is not new. Managers already manage responsi-
bility, just as they were already managing quality when the quality revolution
began. Responsibility is already being managed when, for example, employee
policies are developed, when customer relationship strategies are implemented,
and when supply chains are managed.15 The more explicit responsibility man-
agement approaches emerging in many multinational companies16 help firms
manage those practices that affect stakeholder relationships and the natural
environment openly and directly. Responsibility management systems can be
compared to quality management systems along multiple dimensions.

Multiple Meanings
Multiple definitions of quality management have evolved during the past

quarter century. Juran’s definition of quality is “fitness for use,” which has two
elements: product (or service) performance that results in customer satisfaction;
and freedom from product/service deficiencies, which avoids customer dissat-
isfaction.17 Other definitions focus on superiority or excellence of the product/
service by some reasonably abstract criteria, specific, measurable variables associ-
ated with the product/service, or on user-based criteria associated with what the

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 2004 27

end user desires.18 Another definition emphasizes particular values (e.g., a value
to usefulness criterion that compares one product or service to another), while
other definitions emphasize adherence to product specifications.19 Quality asso-
ciations and many companies have come to use a simple criterion, according
to the leading textbook on quality: “Quality is meeting or exceeding customer
expectations,”20 putting much of the rationale for quality management into the
customer relationship.

Like quality, responsibility can have multiple meanings. In one sense,
responsibility means taking blame or accepting accountability for activities and
actions, which assumes that the impacts of those activities are negative. How-
ever, accepting responsibility can also mean taking charge of something. Respon-
sibility also implies having the capacity for making morally acceptable decisions
and being accountable for actions and impacts. This latter connotation provides a
rationale for creating positive visions and constructive values as key ingredients
of responsibility management, much as meeting customer expectations implies
creating products that provide value(s) and satisfy real customer needs. Manag-
ing responsibility thus sets a fairly high standard of performance with respect to
the relationships that a company develops with its stakeholders through its
strategies and operating practices.21

Satisfying Stakeholders

Achieving customer satisfaction is a cornerstone of the quality revolution.
In the words of the management guru Tom Peters, leading companies put in
place “systems that focus unmistakably on building long-term customer loy-
alty.”22 To achieve that objective, companies need to understand what customers
want and provide it, using employees’ loyalty, productive capabilities, and skills.
Similarly, responsibility management systems help companies deal with the
demands and expectations of stakeholders, including customers and employees.

Responsibility management approaches incorporate processes of mutual
engagement and dialogue with relevant stakeholders on issues of concern,
using processes termed “stakeholder engagement” or “stakeholder dialogue.”23

Engagement can involve a trade union representing a factory’s workers in a
process of collective bargaining on pay levels, or it can involve meeting with
community leaders on access to local resources.

From a company’s perspective, managing responsibilities with stakehold-
ers makes increasing sense. Given the rapidity of communication across the
Internet, the likelihood is that certain (especially activist) stakeholders will be
critical of the company unless (and sometime even if) they are constructively
engaged with it. Without greater transparency24 (and engagement) on the part
of the company, such critics can diminish the company’s reputation.

Measuring the “Unmeasurable”

Measurement is a cornerstone of the quality movement. Quality guru
W. Edwards Deming was famous for his efforts at reducing or even eliminating
variation through a process of continuous improvement that depended on

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 200428

statistical process control. As with quality, determination of responsibility
requires a measurement and assessment system that provides a basis of under-
standing, accountability, and information for stakeholders. With effective
measurement of responsibility-related practices, a company can: improve its
stakeholder-related performance; determine where opportunities for innovations
lie and where remediation is needed; and account for its stakeholder and envi-
ronmental impacts, practices, and outcomes.

In the early days of the quality movement, there were concerns about
how to measure quality—and some even debated whether it could be measured
at all. Similarly, many managers today believe that “you can’t measure this
responsibility stuff,” and therefore it is unmanageable. Yet recent advances in
social auditing25 (including the balanced scorecard,26 strategic audits,27 holistic
performance assessment,28 and the Global Reporting Initiative (GRI)29) contra-
dict this assessment. For example, social auditing processes can help companies
identify where environmental resources are being wasted or where discontented
employees are wasting time, absent, or leaving the firm and taking their knowl-
edge and skills with them. Balanced scorecard tools can help companies develop
a set of objectives that relate to specific stakeholders (especially customers and
employees) to determine their satisfaction with the company’s products and
services and ultimately to maintain their loyalty. The GRI provides a structure
for companies reporting on stakeholder and environmental issues that is more
holistic and standardized in its external reporting structure than internally gen-
erated reports (which are often inconsistent). Some integral responsibilities
(such as human rights, labor rights, and animal rights) require qualitative rather
than quantitative assessment that are derived from the perspectives of stake-
holders (such as activists and workers).

Measurement techniques help companies align their responsibilities with
their practices. For example, techniques that some companies are using include:
performing external audits on supply chain companies (e.g., companies in the
Fair Labor Association); monitoring customer reactions to products and services;
engaging critical NGOs in dialogue to explore concerns (e.g., Shell with its stake-
holder engagement); and assessing resource usage through environmental man-
agement systems.

Making a Business Case

In the early days of the quality movement, many managers questioned
whether there was a business case for quality. It is now clear, of course, that
quality products and services are demanded by customers if the company is to
keep its franchise. Similar questions arise about the business case for responsibil-
ity management. It is not always clear to managers what the benefits of respon-
sible employee or labor practices are, whether savings can accrue from more
environmentally sound approaches, or why deceptive practices might hurt a
company’s long-term profitability. Yet improving the responsibility of company
practices can sometimes generate positive effects on both productivity and
quality. For example, improving worker management relations through the

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 2004 29

strengthening of social dialogue, eliminating discriminatory practices that block
promoting the most suitable employees, and improving health and safety condi-
tions at the factory level can benefit productivity.30 One company, where
responsibility management systems have been put in place, illustrates the link-
age between improving working conditions at the factory level and increasing
productivity:

For getting companies to realize the value of doing things the right way, top man-
agement has to be made aware that eventually it will benefit the company. Safe
workplaces are more productive. . . . We improved the ventilation in [a produc-
tion area] and this resulted in defects falling to 2% from 7 or 8%, while produc-
tivity went up 20%. We improved airflows, which resulted in a two-degree
temperature drop. This along with other changes resulted in, according to our
estimate, an increase in productivity of 10 to 15 percent while cutting defect rates
by 75%.31

Assurance Personnel

There are structural similarities between TRM and the quality movement.
In the early days of quality control, companies created a separate quality struc-
ture, incorporating a quality check by a quality assurance person at the end of
the production process. Similarly, in their own early days, responsibility man-
agement systems are implemented in supply chains when companies appoint
corporate responsibility officers charged with “assurance” that the code of con-
duct, principles, or values of the firm are being upheld in practice.32 Some firms
appoint small compliance teams charged with enforcing corporate codes of con-
duct, often operating under the responsibility of the legal department, separate
from manufacturing or purchasing.

It was not until quality was considered an essential responsibility of
everyone involved in production that it truly became part of the production
processes. Very likely, only when responsibility is truly considered integral to all
company practices will responsibility management be considered a core element
of business practice, rather than just an add-on.33 An example of a company’s
vision that incorporates its understanding of responsibility is Johnson & John-
son’s famous Credo, which articulates its stakeholder responsibilities explicitly.

TQM/TRM as Frameworks for
Systemic Management Processes

Certainly, no single approach represents the concept of quality manage-
ment, just as there is no single responsibility management approach, no “one-
size fits all” methodology. However, there are general frameworks for managing
both quality and responsibility systemically, as shown in Table 1.

Table 1 compares the major processes involved in responsibility manage-
ment with those used in quality management through three widely accepted
frameworks of evaluation—the Baldrige Quality Award, the Deming Prize
(Japan), and the European Quality Award. These frameworks provide an

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 200430

overview of the critical elements of quality management at the firm level to
guide firms in implementation. All include leadership, as does the TRM frame-
work. Similarly, each of the systems links quality with strategy or planning,
as does TRM. Stakeholder orientations are evident in all, with the quality
approaches focusing predominantly on customers and employees, while TRM
approaches also emphasize attention to (and engagement with) additional exter-
nal and internal stakeholders.

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 2004 31

TABLE 1. Schematic Comparison Principles and Processes in TRM, the Baldrige Award,
Deming Prize, and European Quality Award

Total
Responsibility
Management

Inspiration Processes

1. Responsibility Vision,
Values

2. Leadership Built on
Foundational Values

3. Stakeholder
Engagement

Integration Processes

4. Strategy

5. Human Resource
Responsibility

6. Integration into
Management Systems

7. Responsibility
Measurement Systems

Innovation and
Improvement Processes

8. Improvement:
Remediation,
Innovation, and
Learning

9. Results: Performance,
Stakeholder, and
Ecological Outcomes
and Responsibility

10. Transparency and
Accountability

Baldrige
Quality Awarda

1. Leadership

2. Strategic Planning

3. Customer and Market
Focus

4. Information and
Analysis

5. Human Resource
Focus

6. Process Management

7. Business Results

Deming Prizeb

(Major Criteria
Only Listed)

1. Top Management
Leadership,Vision,
Strategies

2. TQM Frameworks

3. Quality Assurance
System

4. Management Systems
for Business Elements

5. Human Resources
Development

6. Effective Utilization of
Information

7. TQM Concepts and
Values

8. Scientific Methods

9. Organizational Powers
(Core Technology,
Speed,Vitality)

10. Contribution to
Realization of
Corporate Objectives

European
Quality Awardc

1. Leadership and
Constancy of
Purpose

2. Customer Focus

3. People Development
and Involvement

4. Continuous Learning,
Innovation and
Improvement

5. Management by
Processes and Facts

6. Par tnership
Development

7. Public Responsibility

8. Results Orientation

a. Source: 2001 Criteria for Performance Excellence, Baldrige National Quality Program.
b. Source: Deming Prize Criteria, Ichiro Kotsuka, 2000, JUSE.
c. Source: European Foundation for Quality Management .

These frameworks represent optimal approaches for quality management.
Each approach relies on measurement and information to develop a results ori-
entation. Similarly, TRM approaches add measurement and indicators to the
multiple-stakeholder orientation. All approaches represent holistic management
systems. Finally, all four build in feedback loops and continuous improvement as
core elements.

Responsibility management practices can be extensively observed in
the modern supply chain management practices of major global brands and
retailers,34 partly as a response to notoriety that these companies received for
such practices since the early 1990s. Thus, though the TRM framework is not
new in its fundamental design, it does provide an explicit focus on managing
responsibilities, values, and stakeholder (and environmental) practices and
impacts, emphasizing the arenas of primary responsibility.35

Resistance to Managing Quality/Responsibility

Some managers strenuously resisted managing quality early on, just as
some managers today resist managing responsibility. Indeed, it took more than
30 years from the time that Deming sold his ideas to Japanese managers before
the importance of quality to competitive success was finally fully impressed on
U.S. companies,36 and even longer before the ISO quality standards became
accepted practice in Europe. Among the reasons for initial resistance to quality
management were incomplete information, the persistence of misguided beliefs
despite evidence to the contrary, the need for managers to make difficult cogni-
tive leaps,37 and perceptions that quality was unimportant and the cost of qual-
ity would be high. Additionally, when quality was first introduced, management
norms did not legitimate learning from the Japanese, solutions were framed in
ways that inhibited learning, and poor judgment created inadequate responses,
all of which was combined with what one observer terms “heavy doses of arro-
gance.”38

Managing responsibility includes everything from doing nothing (or,
worse, doing the wrong things) to the full integration of responsibility into the
range of processes across the organization. At either extreme company manage-
ment has made a decision, consciously or unconsciously, on how to deal with
labor, the environment, integrity, and other issues that involve impacts on
and relationships with key stakeholders. Of course, sometimes added costs are
incurred to manage responsibility, as when a new auditing system is put in place
or stakeholders are brought together in focus groups. One perspective holds
that there is a necessary trade-off between “doing well and doing good,” i.e.,
between responsible practice and strong financial performance. However, a
growing body of evidence shows that this trade-off is mostly mythical. Indeed,
more responsible practice may be synonymous with the good management that
actually leads to positive financial performance. Evidence from research on
social and financial performance39 and the social investment movement40 sug-
gests that there is either no difference in the performance of share prices of more

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 200432

responsible firms or that these firms may actually slightly outperform those of
less responsible firms.

The perspective that managing responsibly costs more than not doing so
contains an assumption similar to the one that underpinned much of the initial
resistance to quality management: that higher quality would add unrecoverable
costs.41 In part, the problem with TQM, as defined by Robert Cole, was that as
long as quality was solely associated with outcomes (the product and its attrib-
utes), managers had a difficult time conceiving of improving quality while
actually lowering cost. The transition to understanding that low cost and high
quality could co-exist took years to make. It required a mindset shift towards a
process orientation and the dismantling of a second assumption that continual
improvement could not be cost-effective.42 We can expect a similar evolution
with respect to managing responsibility.

Responsibility management approaches can potentially provide for a solid
basis of competitive advantage, especially for early movers. They can more easily
recruit and retain talented employees, keep existing customers (less costly than
gaining new customers),43 attract social/ethical investors, improve community
relations by becoming neighbors of choice, and even improve productivity.44

Benefits can come because employees and management are not distracted by
external attention from day-to-day business operations. The potential for com-
petitive advantages thus derives from the possibility that better stakeholder rela-
tionships will have positive long-term performance implications. For example,
improved employee relations have provided significant evidence of better pro-
ductivity, despite that some costs might be incurred in implemented relationship
management systems.45 Further, numerous studies now indicate that companies
with better responsibility management outperform their competitors.46

Consumers are becoming increasingly sophisticated about how, where,
and under what conditions their goods are made.47 Yet since the costs associated
with irresponsible corporate behaviors are often hidden or unrecognized, the
apparent benefits of cutting corners may sometimes seem obvious to managers,
at least until the reputational costs related to customers, investors, and employ-
ees become obvious.

What Is Different about Responsibility Management?

There are several elements in responsibility management approaches that
differ from quality management systems. Managing responsibility makes implicit
responsibilities explicit.48 Responsibility management demands open articulation
of the values that underpin corporate practices, demonstrated integrity in living
up to those values, and reports on performance with respect to implementation
of those values. Quality approaches provide explicit attention to values associ-
ated primarily with employee participation and customer satisfaction, while
responsibility management has the considerably more complex task of negoti-
ating among the values and expectations of a wide array of stakeholders.

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 2004 33

The measurement and assessment task for responsibility management is
also more complex than for quality. Thus, some of the approaches being devel-
oped for social auditing tend to involve stakeholder perceptions and input, while
others encompass more readily measurable factors such as safety violations,
resource usage, and measurable aspects of working conditions and pay. Because
multiple stakeholders’ interests are involved in responsibility management, cur-
rent measurement and reporting systems (such as the Global Reporting Initia-
tive) are still being criticized for their complexity of application. In addition,
stakeholders can differ on what constitutes responsible performance as is often
reflected in the social screening undertaken by the social investment commu-
nity. Some stakeholders question whether animal testing should be allowed at
all, while others believe it is the only way to advance human progress; some
believe that military contracting is inherently irresponsible, while others believe
that self-defense is necessary to national security and should be supported as a
responsible activity. Unfortunately, the reality of managing responsibility for
multiple stakeholder impacts and relationships suggests that this complexity is
unlikely to diminish.

The business case for responsibility management is also more subtle than
the case for quality management. Poor customer relationships resulting from
poor quality standards means lost revenue, a direct linkage. When social
investors choose not to invest in a company, when customers avoid purchasing
because a company has a reputation for using sweatshop labor, or when talented
potential employees choose another company because of a poor responsibility
reputation, the impacts are much less obvious or direct.

Further, companies using responsibility management approaches need to
be open to input from stakeholders on some actions, decisions, and impacts that
typically occur behind closed corporate doors. Unlike the quality management
process, which is largely internally generated, the stakeholder engagement
process involved in responsibility management opens the company up to out-
siders. The engagement process means that company managers need to be will-
ing to make internal changes to satisfy concerns of external stakeholders. It
requires a willingness to be in a give-and-take power-sharing relationship with
stakeholders that is atypical of many current management strategies.

Finally, because external demands for greater transparency and corporate
accountability have been growing rapidly and are likely to continue to do so,
responsibility management means being transparent in reporting out results to
stakeholders. Transparency signifies accountability. Initiatives such as the Global
Reporting Initiative49 are providing new means for companies to report out their
social, ecological, and economic results consistently. Implementing explicit sys-
tems for managing responsibility can provide a basis for improved stakeholder
relationships, better stakeholder-related corporate practices, and—in the end—
more competitive advantage.

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 200434

Going Forward

Many managers and employees have been through hours of TQM train-
ing, thus they can readily understand the systems approach that TQM entails.
Responsibility management expands this systems approach to all of a company’s
important stakeholders, moves values from theory into practice, and emphasizes
the importance of stakeholder relationships. Both quality and responsibility
management rely on linking the overall vision of the company to implementa-
tion of that vision through specific standards. By now, quality standards in most
industries have become obvious. Responsibility, transparency, and accountability
standards are less clear.

There is as yet no global standard for responsibility, no global code of con-
duct that is universally accepted, no standard reporting system for social, ecolog-
ical, and economic (so-called triple bottom line) reporting, and no generally
accepted monitoring mechanisms. There are still many companies for whom
responsibility management and external accountability (other than financial
accountability) remain a distant and even unidentified target. Many brand name
companies have suffered significant reputational damage from lack of attention
to important issues related to corporate responsibility and have made changes.
For other companies, it is possible that it will take mandated rather than vol-
untary action to move them forward. Just as European Union companies
demanded that suppliers meet ISO quality standards, thereby moving quality
to the center of corporate life, so might it take a similar action to move respon-
sibility to the fore. Indeed, the ISO organization made just such a move in 2004
when it announced that it would be developing (voluntary) corporate responsi-
bility standards.

Notes

1. Here we use the term corporate responsibility in lieu of the older term corporate social
responsibility, which carries with it connotations of explicitly doing good for society and can,
in that usage, tend to overlook the integral responsibilities associated with day-to-day busi-
ness practices that are implied by the more generic term corporate responsibility.

2. There is a great body of literature in the academic and general press discussing labor prac-
tices and global production chains. For example, see Debora L. Spar, “The Spotlight and the
Bottom Line” Foreign Affairs, 77/2 (March/April 1998): 7-12; also, for contrasting views on
the corporate social responsibility/supply chain debate, see Richard Wokutch, “Nike and its
Critics: Beginning a Dialogue” Organization & Environment, 14/2 (June 2001): 207-237.

3. For detailed analysis and insights, see Ivanka Mamic, Implementing Codes of Conduct: How Firms
Use Management Systems for Social Performance (Sheffield, UK: Greenleaf, forthcoming).

4. See Sandra Waddock, Leading Corporate Citizens: Vision, Values, Value Added (New York, NY:
McGraw-Hill, 2002).

5. Peter Senge, The Fifth Discipline (New York, NY: Free Press, 1990).
6. Sandra Waddock, Charles Bodwell, and Samuel B. Graves, “Responsibility: The New Busi-

ness Imperative,” Academy of Management Executive, 16/2 (May 2002): 132-148.
7. For an instructive look at the mental models that prevented managers from adopting quality

management in the early days, see Robert E. Cole, “Learning from the Quality Movement:
What Did and Didn’t Happen and Why?” California Management Review, 41/1 (Fall 1998):
43-62.

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 2004 35

8. A detailed analysis of the evolution of the quality movement, on which this paragraph is
based, can be found in James R. Evans and William M. Lindsay, The Management and Control
of Quality, 4th edition (New York, NY: West, 1999).

9. Waddock, Bodwell, and Graves, op. cit.
10. See Waddock, Bodwell, and Graves, op. cit.
11. The TRM framework is derived from research undertaken by the International Labour

Office’s Management and Corporate Citizenship Programme, and reported in Ivanka Mamic,
Implementing Codes of Conduct: How Firms Use Management Systems for Social Performance
(Sheffield, UK: Greenleaf, forthcoming). For explicit introduction of the TRM framework,
see Waddock, Bodwell and Graves, op. cit.; Sandra Waddock and Charles Bodwell, “From
TQM to TRM: Emerging Responsibility Management Approaches,” Journal of Corporate Citi-
zenship, 7 (Autumn 2002): 113-126.

12. Waddock, Bodwell and Graves, op. cit.; Waddock and Bodwell, op. cit.
13. See for further background.
14. See, for example, Philip H. Mirvis, “Transformation at Shell: Commerce and Citizenship,”

Business and Society Review, 105/1 (2000): 63-84; Ann T. Lawrence, “The Drivers of Stake-
holder Engagement: Reflections on the Case of Royal Dutch/Shell,” in Jörg Andriof, Sandra
Waddock, Bryan Husted, and Sandra Rahman, eds., Unfolding Stakeholder Thinking: Theory,
Responsibility and Engagement (Sheffield, UK: Greenleaf, 2002), pp. 185-200.

15. Recognizing that the natural environment is not a stakeholder per se, we nonetheless use
the term stakeholder to reflect a company’s treatment of both its human stakeholders and
the natural environment to simplify the language. As one reviewer pointed out to us, this
definition of responsibility relates to consequences vs. more of a duty-based standpoint.
Here, we take a relatively instrumental perspective on the morality of managing responsibil-
ity, recognizing that sometimes it is simply important to do the right thing for its own sake.

16. For a detailed analysis of these systems, see Mamic, op. cit.
17. Cited in Evans and Lindsay, op. cit.
18. Evans and Lindsay, op. cit., pp. 11-12.
19. Evans and Lindsay, op. cit., pp. 12-13.
20. Evans and Lindsay, op. cit., p. 13.
21. Waddock, op. cit.
22. Thomas J. Peters, “The Simple Truth,” Office Systems, 12/4 (1995): 78.
23. See Mamic, op. cit.; also, Jerry M. Calton and Steven L. Payne, “Coping With Paradox:

Multistakeholder Learning Dialogue as a Pluralist Sensemaking Process for Addressing
Messy Problems,” Business and Society, 42/1 (March 2003): 7-42; Stephen L. Payne and Jerry
M. Calton, “Towards a Managerial Practice of Stakeholder Engagement: Developing Multi-
Stakeholder Learning Dialogues,” in Jörg Andriof, Sandra Waddock, Bryan Husted, and
Sandra Rahman, eds., Unfolding Stakeholder Thinking: Theory, Responsibility and Engagement
(Sheffield, UK: Greenleaf, 2002), pp. 121-136.

24. Of course, some things are likely to remain proprietary and therefore undisclosed, but
demands for greater transparency with respect to operating practices are clearly on the rise.

25. Kim Davenport, “Social Auditing: The Quest for Corporate Social Responsibility,” in James
Weber and Kathleen Rehbein, eds., Proceedings of the International Association of Business and
Society, 1997, pp. 197-207.

26. Robert S. Kaplan and David P. Norton, “The Balanced Scorecard—Measures that Drive
Performance,” Harvard Business Review, 70/1 (January/February 1992): 71-79.

27. Timothy Bell, Frank Marrs, Ira Solomon, and Howard Thomas, Auditing Organizations
Through a Strategic-Systems Lens: The KPMG Business Measurement Process, KMPG Peat Marwick,
1997.

28. Patsy Lewellyn and Maria Sillanpää, “Holistic Performance Model,” presented at the Inter-
national Association of Business in Society Annual Meeting, March 2001, Sedona, AZ, 2001.

29. Global Reporting Initiative, see .
30. See Mamic, op. cit.
31. These quotes are from managers in the same study reported by Mamic, op. cit., undertaken

by the International Labour Office.
32. Waddock and Bodwell, op. cit.
33. See also N. Craig Smith, “Corporate Social Responsibility: Whether or How?” California

Management Review, 45/4 (Summer 2003): 52-76.
34. Mamic, op. cit.; Waddock and Bodwell, op. cit.; Waddock, Bodwell, and Graves, op. cit.

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 200436

35. Lee E. Preston and James E. Post, Private Management and Public Policy (New York, NY: Pren-
tice-Hall, 1975).

36. Cole, op. cit.
37. Ibid.
38. Ibid.
39. The definitive study, summarizing nearly 130 empirical papers (many of which have signifi-

cant methodological problems), is by Joshua Margolis and James P. Walsh, “Misery Loves
Companies: Rethinking Social Initiatives by Business,” Administrative Science Quarterly, 48/2
(June 2003): 268. This meta-analysis is based on their book People and Profits? The Search for a
Link between a Company’s Social and Financial Performance (Mahwah, NJ: Lawrence Erlbaum
Associates, 2001). See also M. Orlitzky, F.S. Schmidt, and Sara L. Rynes, “Corporate Social
and Financial Performance: A Meta-Analysis,” Organization Studies, 24/3 (2003): 403-441.

40. David Diltz, “The Private Cost of Socially Responsible Investing,” Applied Financial Economics,
5/2 (April 1995): 69-77.

41. Cole, op. cit.
42. Cole, op. cit., pp. 50-52.
43. One study shows that satisfied customers tell six people while dissatisfied customers tell 22

of their experience with a company. See Armand V. Feigenbaum, “Changing Concepts and
Management of Quality Worldwide,” Quality Progress, 30/12 (December 1997): 45-48.

44. See, for example, Jeffrey Pfeffer and John F. Veiga, “Putting People First for Organizational
Success,” Academy of Management Executive, 13/2 (May 1999): 37-48. Also see Gary Dessler,
“How to Earn Your Employees’ Commitment,” Academy of Management Executive, 13/2 (May
1999): 58-67.

45. See Pfeffer and Viega, op. cit.; Jeffrey Pfeffer. The Human Equation: Building Profits by Putting
People First (Boston, MA: Harvard Business School Press, 1998).

46. See Margolis and Walsh, op. cit., who state: “A clear signal emerges from these 95 studies.
There is a positive association, and certainly very little evidence of a negative association
between a company’s social performance and its financial performance. The question about
this empirical relationships seems to be answered.” (Margolis and Walsh, 2003, op. cit.,
p. 10, on manuscript). These authors also note the sometimes significant methodological
and measurement problems besetting many of these studies, and they note that the causal
relationship remains uncertain, e.g., do more profitable companies simply invest more in
corporate responsibility activities.

47. See, for example, R.T. Rust, V.A. Zeithaml, and K.N. Lemon, Driving Customer Equity: How
Customer Lifetime Value is Reshaping Corporate Strategy (New York, NY: Free Press, 1999);
Charles Fombrun, Reputation: Realizing Value from the Corporate Image (Boston, MA: Harvard
Business School Press, 1996).

48. Thanks to an anonymous reviewer for this wording suggestion.
49. See .

Managing Responsibility: What Can Be Learned from the Quality Movement?

CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 2004 37