The Utility of Social Obligations in the UK Energy Industry*

Abstract

The imposition of social obligations on the UK energy supply industry provides an important opportunity to examine how social responsibilities are construed by companies and how these constructions relate to perceptions of the role of regulation, specifically the scope for compromise and influence with the regulator. Our data suggest four templates for understanding this relationship: embracing social obligations, business as usual, management deliberation, and conflicts with commerce. First, embracing social obligations is based on competitive advantage and struggles for market leadership, and highlights informal mechanisms in attempts to influence the regulatory agenda. Second, business as usual reflects pre-existing standard operating procedures and a generalized approach to serving the broad consumer base in line with regulation as formal policing procedures. Third, management deliberation is a way of either reflecting upon or stalling progress on social issues, and suggests compromise and passivity in regulatory relations. Fourth, conflicts with commerce focuses on the inherent difficulties of reconciling social obligations with economic regulation and a profit orientation, so that meeting minimum standards or the risk of regulatory censure may be sensible strategies. Together these templates emphasize the subjective and multiple nature of social responsibility and of regulatory relationships, and demonstrate struggles for the strategic and operational meaning over the nature of public interest and competitive advantage.

Corporate Social Responsibility as a Dynamic Internal Organizational Process: A Case Study

“…Of course, an agreed definition of the corporate identity as a socially responsible company may be contested, and each stage of the process is open to disagreement and disruption as values collide and/or some powerful groups have more influence and resources to mobilize the process in different directions (Rodrigues and Child, 2008). Or, quite simply, senior managers' ''visions'' are re-interpreted by middle managers and employees as they are enacted on a day-to-day basis (Sharratt et al, 2007). Our aim, therefore, is not to offer an idealistic view of consensus within the CSR process, but to highlight that which is most frequently neglected in an examination of CSR -the important role of the employee as an internal stakeholder.…”

“…The energy industry has been at the forefront of CSR and sustainable development because of the ''nature of the business'' (Frynas, 2003;Sharratt et al, 2007). It attracts a great deal of attention and can be controversial in the ways that they exploit oil and gas production and the ways in which they potentially damage the environment in their pursuit of profit.…”

Energy savings obligations in the UK—A history of change

“…Its focus was very much on privatisation of the energy industry assuming that the benefits of this process would eventually reach all customers in form of cheaper energy prices (Sharratt et al 2007). …”

Strategizing and Organizing in Pluralistic Contexts

“…However, managers were also very aware of the legitimacy of the regulatory demands "You don't win anything by having a stand up argument with Ofgem so the best thing is to accommodate and compromise as best you can …". They noted the innately pluralistic strategizing demands upon their firms: "There's an inherent conflict therefore in asking a corporate profit driven organisation to include in its plan, if you like, non-profitable, socially targeted activity" 14 .…”