How and why stakeholders join forces to address moral crises

Research Highlight How and why stakeholders join forces to address moral crises

When institutions and organizations are faced with ‘moral’ crises, that do not threaten their very existence but affect disadvantaged social groups, what spurs them into action, and how are they encouraged to work together? Cross-country, comparative research of the work integration field uncovers mechanisms that may improve the institutional ability to cope with crises.

For the past few decades, the world seems to have been staggering from one crisis to another, from financial crashes to the Covid-19 pandemic, not to mention floods, nuclear disasters and waves of desperate migrants landing on European shores after arduous escapes from war and misery.

Because these unexpected, threatening events have a high impact, they tend to provoke change in organizations and institutions. As such, they have received ample attention from researchers. Yet so far, the literature has adopted a rather instrumental approach, often examining how effectively organizations deal with the adversity by which crises affect them. Therefore, we know a lot about the structures and practices that allow companies or public bodies and their members to bounce back.

‘Moral’ crises: when action is a matter of ethics, not survival

But much less is known about how institutions manage to cope with crises, institutions being understood in the wider sense of a collective of diverse actors (public, private and/or nonprofit) that constitute a field or an industry.

This is why Gorgi Krlev decided to investigate institutional resilience, i.e. the ability to deal with adversity that occurs at the level of fields or industries. In an article published in the Journal of Business Ethics, he states that this may help “derive implications for more systemic responses to crises.”

In addition, he explains that crises are such complex problems – by sheer definition – that they require multistakeholder collaborations: organizations must join forces (the title of Gorgi Krlev's article, actually) to respond to such large-scale trouble and increase institutional resilience.

In consequence, he chose to adopt a normative approach to wide-spanning crises, such as the economic crisis of 2008 and the refugee crisis of 2015. These foremost represent moral crises, he argues, especially in advanced economies. While natural disasters, accidents or even major corporate scandals are emergencies that force organizations to react immediately, simply because livelihoods are in peril, moral crises are of a different nature. In these situations, organizational survival is not at stake; only “(disadvantaged) groups in society (…) are under high and material adversity,” he points out, meaning “organizations may or may not feel responsible to act and meet the adversity.”

The work integration fields in three EU countries: a case study

To understand how institutions cope with moral crises and how and why organizations collaborate to increase resilience, the researcher examined the work integration field, i.e. the institutional arrangements meant to integrate disadvantaged groups into the labour market. He specifically studied multistakeholder partnerships (MSPs) as a new, integrated response to skilling, educating and employing people, in the context of the economic crisis and the refugee crisis.

The moral character of these crises meant that “public, private and nonprofit actors choose to engage or not to engage out of a sense of responsibility.” It also provided an opportunity “to advance the business ethics discourse as to when, why and how organizations choose to act on challenges where these challenges do not inhibit them in a direct way.” He does highlight the fact that a lot of the action, in this case, is driven by public perceptions and media reporting, including moral evaluations.

Professor Krlev carried out his research from 2015 to 2017 within a large EU-funded project involving a research consortium. He based his work on 44 expert interviews and data from published reports, and compared processes at the nexus of moral crises, institutional resilience and multistakeholder partnerships.

The countries he selected for comparison were France, Germany and Spain. In Germany, the nonprofit sector is an important provider of work integration programs, but the field is strongly state-dominated. In France, cooperation between the state and the nonprofit sector has traditionally been high. By contrast, the Spanish state has a relatively low involvement in active employment policies and lets the market shape the field, while the nonprofit sector is traditionally strong to compensate for cases of market failure.

Multistakeholder partnerships and institutional resilience

Because each of the three countries had different institutions at the beginning, they were affected by the crises, and responded to them, in different ways. These differences depended on what the researcher termed ‘nested contingencies’: the first contingency (or relation between two variables) existing between the capacity of existing institutions to deal with crises and the level of adversity; the second existing between traditions in the field and the direct/indirect influence of the crises on existing institutions (like controversial public discourse for example).

Professor Krlev detailed his findings: “In France, the adversity created by the crises was relatively low, compared to Spain (substantial economic downturn) or Germany (politization) (...) in Germany the primary adversity arose not because the moral crisis exacerbated the work integration challenges to a degree that the state could not handle them, but mainly because it strongly polarized political and public discourse” around the integration of refugees. As a result, France's existing institutions stayed in a “default position,” being resilient enough to deal with the new challenges, whereas institutions in Germany and Spain “departed from the status quo and embraced MSPs” in new and also distinct ways. In Spain, low state involvement and capacity left firms to take the lead in MSPs who became the orchestrators of a network composed of far more than 1000 organizations: “the moral character of the economic crisis in combination with the additional momentary inhibition of the government, and the concomitant material aggravation of the situation for vulnerable groups, spurred solidarity action at scale.” By contrast, German businesses became more active only once they felt they had to take a stance against xenophobia, so that public administration (in the studied exemplary case the State Senate of Berlin) and local civic organizations took the lead. 

The researcher concluded by encouraging policymakers to purposefully initiate multistakeholder collaboration to vamp up resilience by anticipatory action, while stakeholders themselves should more proactively explore innovative forms of collaboration, rather than “waiting for these [MSPs] to be coerced as crises occur.”