Stories of firms that exceed local compliance requirements in their environmental performance appear routinely. However, we have limited theoretical explanations of what propels these firms to exceed compliance. Our theory suggests that global competitive and institutional pressures lead multinational firms to develop highlevel, environmental management systems (EMS) that make them more competitive. For economic and other reasons, select firms make the choice to rationalize their collective environmental performance to the highest common denominator rather than the lowest. Regulations around the world (...) differ widely and are a moving target in many settings. The need to comply with such myriad, shifting rules leads to firms creating EMS to help stay ahead of regulations worldwide. Using institutional and internationalization theories as our basis, we offer a propositional model concerning global competitive/institutional pressures and their effects on corporate environmental performance. We conclude the paper with a discussion of the implications of the model. (shrink)

The vast majority of extant empirical research examining the relationship between corporate social performance and financial performance selects samples of only those firms which are observed engaging in CSP. In this study, the authors assert that firms’ efforts to pursue CSP and subsequently their appearance in social-choice investment advisory firms’ ranking databases are non-random. Studying the CSP–FP link using selected samples of only those firms whose social performance is ranked by SIA firms introduces a sample-selection bias which limits generalization of (...) results to a population of all firms, and at worst provides alternate explanations for observed relationships. The authors test these assertions on a large sample of public corporations in the United States over 6 years and find a sample-selection bias. Upon correction of this bias, this study confirms the positive impact of CSP on FP. (shrink)

This article suggests that due to the value-laden nature of social issues, managerial values, as a framework or schema, play an important role in the social issues evaluation process. Our data show that there is clearly a relationship between the issues managers evaluate as important and the values of those managers, with values being defined according to the Carroll typology—economic, legal, ethical, and philanthropic. It was apparent that the values held by the managers sampled determined how various sets of issues—community, (...) political, and regulatory—were evaluated in terms of importance. This result suggests that the issues evaluation process, which should be objective, is not. (shrink)

We examine the role of managers in controlling the positive impact of stakeholder management (SM) on firm financial performance (FP) in the long term. We develop and test competing hypotheses on whether managers act as “good citizens” or engage in “self‐dealing” when allowed greater discretion. We test our assertions using dynamic panel data analysis of a sample of 806 U.S. public firms operating in 34 industries over 5 years (2005–2009). Our results indicate a nuanced influence of managerial discretion contexts on (...) the SM‐FP relationship. We infer that given more latitude in decision making, as long as the “going is good” managers act as good citizens, but otherwise they revert to managerial self‐dealing. In light of our results, firms designing governance mechanisms to encourage managers to balance the needs of both shareholders and stakeholders must remain cognizant of contextual contingencies. (shrink)