Stakeholder Dissonance: Corporate Social Responsibility Versus Regulation. A Study of a Trust-Recovery Process

After the recent financial crisis issues of trust-breakdown in various business sectors and the public sector have occurred. The question of whether corporate social responsibility can be used as a link of trust between business and society is the issue that this paper wants to explore. This paper investigate how trust in businesses and institutions can be recovered and which role if any corporate social responsibility plays in it. A study of a process from trust1 breakdown to trust1recovery in the Danish water sector from 2003 till 2013 is revealed, which can be used to inform other kinds of trust-recovery processes in the aftermath of the financial crisis. From this study trust-recovery is found to depend on stakeholders’ mutual engagement with each other and their willingness to share knowledge and learn from each other’s professional and institutional cultures and languages. An alignment of vocabularies of motives between regulation and voluntary corporate social responsibility is found viable for building trust between the conflicting parties. The findings have prospects reaching out of its local context and can be used in processing trust1recovery in other sectors that suffers from severe trust-breakdowns in the aftermath of the global economic crisis such as governance systems in both the public and private sector.