The natural based view of the firm using Hart (1995) is applied to firm responses in the Carbon Disclose Project (CDP) database. A large cross sectional sample(n=573) of North American and European firms is divided into 3 categories of proactivity to the climate change issue using 8 indicators of four resource domains. Results are presented along geographic and size dimensions.

When faced with the threat of negative reputation spillover from an alliance partner accused of environmental misconduct, the focal firm must decide whether to adopt a supportive or non-supportive response. We argue that this decision denotes a commitment escalation dilemma, but that factors previously found to increase escalation tendencies lead to de-escalation in our crisis contagion context. Specifically, we derive four hypotheses from this reverse effect proposition, and test these using a policy-capturing survey targeting Norwegian CEOs. We found that (...) firms are more likely to select an adversary response when the alliance is of high strategic importance and has high termination costs. Conversely, firms are more likely to select an advocacy response when the alliance is of low strategic importance and has low termination costs and when the CEO was not involved in the formation of the alliance. Overall, our study answers a call for a more nuanced understanding of commitment escalation and the theory’s boundary conditions by introducing reputation spillover crisis as a contextual influencer of escalation behavior. It also extends the reputation literature and provides new evidence that reputation concerns can instigate ethical decision-making. (shrink)

When an employee’s off-duty conduct generates mass social media outrage, managers commonly respond by firing the employee. This, I argue, can be a mistake. The thesis I defend is the following: the fact that a firing would occur in a mass social media outrage context brought about by the employee’s off-duty conduct generates a strong ethical reason weighing against the act. In particular, it contributes to the firing constituting an inappropriate act of blame. Scholars who caution against firing an employee (...) for off-duty conduct have thus far focused primarily on due process related issues or legal concerns pertaining to free speech, lifestyle discrimination, and employment at-will. However, these concerns amount to only a partial, and contingent, diagnosis of what is at issue. I argue that even when due process considerations are met, firings in these contexts can be unjustified. Moreover, even if a business is not concerned with the unethical conduct per se, but is rather strictly concerned with PR, the argument I advance nevertheless provides one important ethical reason that counts against firings in mass social media outrage contexts. Given that managers are often under significant pressure to respond swiftly in cases where an employee is at the center of mass social media outrage, it is especially important that scholars begin to clarify the normative issues. This article builds on the burgeoning philosophical literature on the ethics of blame and provides a novel account of a distinctive ethical concern that arises with firings in mass social media outrage contexts. (shrink)

This article examines the relationships between disaster type and firms’ disaster responses. We draw on a unique dataset of 2,164 press releases related to the occurrence of 206 natural disasters over a 10-year period to analyze how firm responses are shaped by the type of disaster it faces. Firms play an increasingly important role in disaster response. We find that firms engage in more anticipatory responses when the type of disaster a firm faces exhibits even (...) impact dispersion and high expected recurrence, and provides substantial warning. Our study draws a relationship between physical geography, disaster type, and more anticipatory firm responses which can improve how firms and communities respond to the risks posed by different types of natural disasters. The article concludes by outlining an agenda for future research on firm responses to natural disasters. (shrink)

We explore how the Sarbanes–Oxley Act of 2002 created pressure for firms to take more visible and costly corrective action following the announcement of an earnings restatement. Building on theory about focusing events, the institutional effects of legislative change, and the agenda-setting role of the media, we propose that Sarbanes–Oxley created reactive normative pressure on firms that announce earnings restatements, increasing the likelihood of CEO replacement in their aftermath. We theorize that Sarbanes–Oxley changed the meaning—and therefore the impact—of media coverage (...) of earnings restatements. Our findings show that firm behavior after Sarbanes–Oxley did change in ways that are consistent with the intent of the legislation: to increase executives’ accountability for the reliability of their firms’ financial statements. Moreover, we show this change is a result both of the direct effect of the legislation on increasing CEO accountability as well as through intensifying the effect of the media spotlight on misconduct. (shrink)

Protests that target firms’ socially irresponsible behavior are increasingly organized via digital media. This study uses two methods to investigate the effects that online protests and mitigating firm responses have on shareholders’ and consumers’ evaluation. The first method is a financial analysis that includes an event study which measures the effect of online protests on the target firm’s share price, as well as an investigation of the boundary effects of protest characteristics. The second method is an online (...) experiment that assesses the effect of an online protest campaign on consumers’ perception and purchase intention, as well as any mitigating effects that a firm’s response may have. Contrary to recent studies suggesting that participation in online protests is only token support without any substantive effects, our results show that online protests do hurt. Firms can expect to suffer financial, reputational, and sales damage when an online protest campaign mobilizes consumers successfully. We also show that online protests are more likely to take firms by surprise than offline protests. Firms can exacerbate or reduce the damage by their response. We find that although firms may repair the damage to consumers’ purchase intentions, the negative effects on a brand’s image are harder to rectify. The results have valuable implications for protest organizers and managers faced with the task of responding. (shrink)

Protests that target firms’ socially irresponsible behavior are increasingly organized via digital media. This study uses two methods to investigate the effects that online protests and mitigating firm responses have on shareholders’ and consumers’ evaluation. The first method is a financial analysis that includes an event study which measures the effect of online protests on the target firm’s share price, as well as an investigation of the boundary effects of protest characteristics. The second method is an online (...) experiment that assesses the effect of an online protest campaign on consumers’ perception and purchase intention, as well as any mitigating effects that a firm’s response may have. Contrary to recent studies suggesting that participation in online protests is only token support without any substantive effects, our results show that online protests do hurt. Firms can expect to suffer financial, reputational, and sales damage when an online protest campaign mobilizes consumers successfully. We also show that online protests are more likely to take firms by surprise than offline protests. Firms can exacerbate or reduce the damage by their response. We find that although firms may repair the damage to consumers’ purchase intentions, the negative effects on a brand’s image are harder to rectify. The results have valuable implications for protest organizers and managers faced with the task of responding. (shrink)

This article examines whether the charitable giving amount and likelihood of firm response to catastrophic events relate to firms’ ownership type using a unique dataset of listed firms in China, where state ownership is still prevalent. Based on the data of Chinese firms’ response to the 2008 Sichuan earthquake, we find that the extent of corporate contributions for state-owned firms following this disaster is less than that for private firms. State-owned firms are also less likely to respond in␣this disaster (...) compared to private firms. The results also␣reveal that firm size, profitability, geography, cash resource available, and leverage affect firms’ philanthropic disaster response behavior in China. (shrink)

This discussion paper explores the explanations and implications of defensive response strategies used to manage organizational crises. Current research is highlighted and future research directions are proposed. Key areas for future research include investigating long-term repercussions of defensive strategies, examining multistakeholder perspectives, and exploring ethical questions related to being defensive.

Firms may find competitive adjustment difficult because they are hamstrung by rigid labor market rules. However, such difficulties may also be caused by conflicts between strategic choices in the management of human capital and the opportunities and limitations created by a given regulatory framework. This latter possibility has been almost totally ignored in the debate regarding the urgency and content of labor market reforms in countries whose labor market institutions have been labeled as “rigid” by international experts. This article uses (...) the results of qualitative interviews with Spanish employers to suggest that strategic choices may be far more important in determining the consequences of labor market institutions than is generally recognized. I show that these choices are often the result of beliefs about how labor market institutions should work. These findings suggest that supposedly “neutral” calls for greater efficiency in labor market institutions are really arguments about the relative appropriateness of different expectations regarding how firms should pursue adjustment, expectations that are directly related both to the relative balance of power between employers and workers and to the structure of their relationship. In other words, the phrase “politics of labor market reform” should be understood to refer not only to the political consequences of reforms but also to the inherently political nature of the reforms themselves. (shrink)

While a significant body of literature has highlighted the moral obligations of companies regarding the sustainable use of common pool resources, business activities that contribute to the sustenance of common pool resources remain embryonic. Studies in this area have largely focused on environmental stimuli rather than on the complex motivational structures that drive or hinder businesses’ contributions to common pool resources. We explore the different motives and behaviors of businesses and their contributions to common pool resources, and propose four roles (...) by which companies’ motives and behaviors toward common pool resources can be categorized—namely, free riders, followers, believers, and altruists. We shift the focus from moral reasoning to Platt’s :641–651, 1973) notion of social trapping and his “ways out” as Platt’s “ways out” include propositions that address not only environmental stimuli but also companies’ motives. Both types of propositions are important for businesses to be able to respond rapidly to the scarcity of certain common pool resources and to use and maintain common pool resources in a sustainable way. Based on our categorization and Platt’s typology of social traps and “ways out,” we propose a theoretical framework by which companies and other stakeholders are provided with a differentiating perspective that allows for propositions addressing the complex nature of motivational structures and common pool resources. Our framework helps business leaders, institutions, and policy makers decide on actions that can contribute to the sustainability of common pool resources and that differ from actions that solely serve organizational self-interests. (shrink)

Firm–employee relationships are dependent on the wider societal context and on the role business plays in society. Changes in institutional arrangements in society affect the perceived responsibilities of firms to their personnel. In this study, we examine mass media discussions about firm–employee relationships from a social responsibility perspective via a longitudinal study in Romanian society. Our analysis indicates how the expected responsibilities of firms towards employees have altered with the changing role of firms in society since the early (...) 1990s. These transformations correspond to the ideological developments, from communist to market-based thinking, which have taken place in post-communist Eastern Europe. More specifically, our study shows how the diminishing expectations of corporate social responsibility (CSR) are linked in mass media to increasingly important talk of human resource management (HRM). HRM is a modern business approach believed to address personnel needs and organisational objectives simultaneously. The congruency of goals in HRM may mistakenly lead to the conclusion that organisations are inherently responsible toward their personnel. We argue that this may not necessarily be the case. HRM, matching well the new free-market ideology in post-communist Eastern Europe, was eagerly embraced in that it defined firm–personnel relationships. In this study, we question whether this was an adequate theoretical perspective for Romanian firms to adopt as it lacks sufficient ethical grounding. We also call for a higher awareness concerning the role of mass media in the management literature, since its current role in constructing the ‘rightness’ and ‘wrongness’ in firm–personnel relationships is hardly considered. (shrink)

Research on corporate social responsibility has traditionally focused on managerial discretion and stakeholders’ influence. This study extends current research by addressing the effect of family firms and institutional owners on CSR performance, namely, CSR strengths and concerns. Based on stewardship theory and the socioemotional wealth perspective, we propose that family firms are more likely to value CSR performance. Next, drawing from multiple agency theory, we predict that institutional owners, unlike family owners, will influence a firm’s CSR performance differently. We (...) tested our hypotheses using a sample of 153 firms from 1994 to 2006 and found general support for our hypotheses. A higher percentage of family owned equity and the presence of a family CEO are found to increase CSR strengths, whereas transient institutional owners have an opposite effect. The presence of a family CEO and founding family are found to reduce CSR concerns. Contrary to our predictions, dedicated institutional owners are positively associated with CSR concerns. (shrink)

On the background of voluntary assurances made by corporations in line with the assertions in their corporate social responsibility disclosures, we investigate which types of firms will obtain an independent certification of their corporate social responsibility disclosures. The study is based on firms listed on the Johannesburg Stock Exchange (JSE) from 2015 to 2019. Deviating from traditional regression approaches, we employ machine learning techniques and show that machine learning techniques obtain superior performance compared to traditional logistic regression at predicting the (...) likelihood of corporate social responsibility assurance by a corporation. The result also shows that large firms with high CSR score, independent board, highly leveraged and belonging to finance industry are the most likely to assure their CSR disclosures. (shrink)

The existing literature provides conflicting results on the association between firm performance and corporate social responsibility (CSR) disclosure. This paper empirically examines the effect of firm performance on CSR disclosure in terms of disclosure frequency and quality among Chinese listed firms and the possible mediating effect of corporate ownership on the relationship between firm performance and CSR disclosure. Our findings show that better-performing firms are more likely than worse-performing ones to disclose CSR information and to produce higher (...) quality CSR reports. In addition, the link between firm performance and CSR disclosure is found to be weaker among state-owned enterprises compared with non-state-owned ones. (shrink)

: Background: In responsible research and innovation (RRI), innovation is seen as a way in which humankind finds solutions for societal issues. However, studies on commercial innovation show that firms respond in a different manner and at a different speed to the same societal issue. This study investigates what role organizational motives play in the product innovation processes of firms when aiming for socially responsible outcomes. Methods: This multiple-case study investigates the motives of food firms for healthier product innovation by (...) interviewing firms about the organizational motives behind product reformulation and innovation. Results: This study highlights the importance of having both instrumental and moral motives in the innovation process when aiming for socially responsible outcomes, and how both these motives interact and contribute to responsible innovation in industry. Furthermore, the study results question the nature of relational motives as a separate category from the other two categories of motives, as suggested by corporate social responsibility (CSR) scholars. Conclusions: If commercial innovation needs to contribute to solutions for societal issues, the importance of moral motives has to be stressed without annihilating the instrumental objectives of firms. Both motives contribute to the success factors of responsible product innovation in industry. (shrink)

To address substandard working conditions in global value chains, companies have adopted private regulatory systems governing worker rights. Scholars agree that without onsite factory audits, this private regulation has limited impact at the point of production. Companies, however, audit only a subset of their suppliers, severely restricting their private regulatory attempts. Despite the significance of the placement of suppliers inside or outside firms’ “responsibility boundaries” and despite scholars’ having called for more research into how firms prioritize what suppliers to audit, (...) few, if any, systematic studies have examined the topic. This is problematic, as the placement of firms’ responsibility boundaries determines what suppliers and workers are included in firms’ private regulatory attempts. Based on a study of 12 Swedish firms and the theory of moral disengagement, this paper starts to fill this research gap by exploring how firms’ responsibility boundaries are placed. The paper illustrates how firms’ responsibility boundary placement is best described as a patchwork with firms defining and delimiting their responsibilities differently. The paper also demonstrates that three supplier types are particularly likely to be placed inside firms’ responsibility boundaries, while a fourth type is likely be placed outside. (shrink)

Small and medium-sized firms form 90% of the worldwide population of businesses. However, it has been argued that given their smaller scale of operations, resource access constraints and lower visibility, smaller firms are less likely to participate in Corporate Social Responsibility (CSR) initiatives. This article examines the different economic motivations of firms with varying combinations of visibility, resource access and scale of operations. Arguments are presented to propose that in terms of visibility, resource access and operating scale, very small and (...) very large firms are equally motivated to participate in CSR. However, the motivational bases for CSR participation are likely to be different. Medium-sized firms are the least motivated. This suggests a U-shaped relationship between firm size and CSR participation. This study contributes towards resolution of the long-standing debate on the effects of firm size on CSR participation, and highlights the importance of considering configurations of firm characteristics in the study of CSR outcomes. In conclusion, cautions are raised against the broad categorization of firms, without adequate attention to the underlying dimensions of such categorizations. (shrink)

Using a large sample of 3,040 U.S. firms and 16,606 firm-year observations over the 1991–2010 period, we find strong evidence that firm internationalization is positively related to the firm’s corporate social responsibility rating. This finding persists when we use alternative estimation methods, samples, and proxies for internationalization and when we address endogeneity concerns. We also provide evidence that the positive relation between internationalization and CSR rating holds for a large sample of firms from 44 countries. Finally, we (...) offer novel evidence that firms with extensive foreign subsidiaries in countries with well-functioning political and legal institutions have better CSR ratings. Our findings shed light on the role of internationalization in influencing multinational firms’ CSR activities in the U.S. and around the world. (shrink)

This paper describes an exploratory study of corporate responsibility, corporate reputation, and stakeholder support in Norway, Sweden and Denmark—countries recognized worldwide as providing an institutional climate uniquely conducive to responsible business practice. Conducting a secondary analysis of Scandinavian data from Reputation Institute’s extensive global research on corporate reputation and responsibility, we examine four key questions: First, do Scandinavians agree with external observers that firms in their countries demonstrate superior levels of corporate responsibility? Second, relative to other reputation drivers, to what (...) extent does corporate responsibility predict corporate reputation for the countries in our dataset? Third, to what extent does corporate responsibility predict stakeholder intent in these countries to engage in supportive behavior toward the firm? Finally, are stakeholder perceptions of and responses to corporate responsibility sufficiently similar across Norway, Sweden, and Denmark to justify claims for a monolithic “Scandinavian approach” to CSR? Previous research examining the relationship of corporate responsibility to corporate reputation and stakeholder support is reviewed, analytical methods are described, results presented, and implications discussed. The article concludes with analysis of study limitations and directions for future research. (shrink)

This paper explores the commitment to corporate citizenship on the part of the largest U.S.-based multinationals in the emerging market region of Latin America. The websites of the largest U.S.-based firms - according to the 2007 Fortune 500 list - are reviewed and their CSR efforts in Latin America are noted. The firms' positions on corporate citizenship in Latin America are mapped onto a three-by-three matrix in which firms' commitment to corporate citizenship ranges from profitmaking motivations to a more holistic (...) approach where support for non-profit causes is embraced by the entire firm and implemented at all levels, 9-26, 2000). The largest U.S.-based multinationals were selected for this study because of their leadership role and the fact that other firms within their respective industries may seek to emulate the firms' level of commitment to corporate citizenship. While the matrix can be used to evaluate corporate citizenship efforts in any market - or globally - the emphasis in this study is on Latin America, a region of interest for two reasons: because of the paucity of research on this particular emerging market region as it relates to CSR, and because there is some evidence to suggest that philanthropic initiatives by the region's wealthy individuals lag behind individual philanthropic efforts in other world regions. If this is the case, this study aims to identify whether companies are picking up the slack. (shrink)

Family firms are ubiquitous and play a crucial role across all world economies, but how they differ in the disclosure of social and environmental actions from non-family firms has been largely overlooked in the literature. Advancing the discourse on corporate social responsibility reporting, we examine how family influence on a business organization affects CSR reporting. The arguments developed here draw on institutional theory, using a rich body of empirical evidence gathered through a content analysis of the CSR reports of 98 (...) large- and medium-sized Italian firms. The grounded theory analysis informs and contextualizes several differences in the type and content of corporate social responsibility reports of family and non-family firms. Our findings show that in comparison to non-family firms, family firms disseminate a greater variety of CSR reports, are less compliant with CSR standards and place emphasis on different CSR topics. We, thus, contribute to the family business and corporate social responsibility reporting literatures in several ways, offering implications for practice and outlining promising avenues for future research. (shrink)

This study revisits the relation between corporate performance and corporate social responsibility in the context of a major shift in firms’ credit risk status. Relying on corporate credit rating as a performance indicator, we examine whether firms under the scrutiny of rating agencies trade-off CSR engagement for credit quality improvement. To explore whether firms adjust their CSR engagement after a focal rating change, we focus on the investment–speculative grade threshold because of its importance in accessing the public debt market. We (...) find that firms that lose the investment grade rating subsequently increase CSR engagement. We also uncover that improving CSR engagement helps firms restore their credit ratings ex post. Our findings support the view of CSR engagement as a valuable risk management strategy. (shrink)

This investigation is motivated by the lack of scholarship examining the content of what firms are communicating to various stakeholders about their commitment to socially responsible behaviors. To address this query, a qualitative study of the legal, ethical and moral statements available on the websites of Forbes Magazine''s top 50 U.S. and top 50 multinational firms of non-U.S. origin were analyzed within the context of stakeholder theory. The results are presented thematically, and the close provides implications for social responsibility among (...) managers of global organizations as well as researchers interested in business ethics. (shrink)

This study examines whether corporate social responsibility (CSR) towards primary stakeholders influences the financial and the non-financial performance (NFP) of Indian firms. Perceptual data on CSR and NFP were collected from 150 senior-level Indian managers including CEOs through questionnaire survey.Hard data on financial performance (FP) of the companies were obtained from secondary sources. A questionnaire for assessing CSR was developed with respect to six stakeholder groups - employees, customers, investors, community, natural environment, and suppliers. A composite measure of CSR was (...) obtained by aggregating the six dimensions. Findings indicate that stock-listed firms show responsible business practices and better FP than the non-stock-listed firms. Controlling confounding effects of stock-listing, ownership, and firm size, a favorable perception of managers towards CSR is found to be associated with increase in FP and NFP of firms.Such findings hold good when CSR is assessed for the six stakeholder groups in aggregate and for each stakeholder group in segregate. Findings suggest that responsible business practices towards primary stakeholders can be profitable and beneficial to Indian firms. (shrink)

The main concern of this paper is the moral responsibility of the firm, as well as of the individuals in a firm, to uphold environmental protection. Much of the business ethics literature defines corporate social responsibility in terms of stakeholder relationships, and the emphasis is frequently on collective as opposed to individual responsibility. This paper has three objectives. The first is to clarify the nature of moral responsibility, and the distinction between legal and moral responsibility. The second objective (...) is to steer academicians and others towards a new vision of the firm. We argue that a firm is not just a singular legal entity but also a collectivity of morally responsible individuals who are liable for immoral acts of the firm. By expanding the boundary of responsibility of action from an intangible collectivity – the firm, to all the individuals within it, this vision moves beyond the typical emphasis on the firm as being the only moral agent responsible for corporate actions. The paper emphasizes not simply the responsibility of top echelon managers, but of every employee across ranks. The third goal of this paper is to examine the circumstances where application of moral responsibility becomes crucial, for instance, in the context of protection of the natural environment by a firm and its employees. (shrink)

While support for corporate political activity (CPA) is well echoed in the literature, little has been done to empirically examine its ethicality. Moreover, existing ethical CPA frameworks assume normative and rational leanings that are insufficient to provide a comprehensive account of CPA ethicality. Utilizing the Ghanaian context, adopting a multiple case study design involving 28 Directors from 22 firms, and employing a grounded theory approach, I explore how the ethicality of CPA is determined in weak institutional environments. The findings reveal (...) that business executives evaluate ethics at three levels (i.e. context, organizational and strategy) using three principles (i.e. utilitarianism, justice and institutions). Leveraging this knowledge, I present an eclectic framework that bridges the long-standing gap between normative ethical prescriptions and lived ethical realities. In doing so, I move away from abstraction to give “voice” to the actors involved in CPA. I also present a model that shows how the ethical judgement process is influenced by managerial intuition and interactive personal and organizational experiences. This article has important theoretical and practical implications for ethical business-government relations in developing countries. (shrink)

While doing good things, enterprises may also be subject to subjective or unintentional behaviors of doing bad things, and corporate performance is comprehensively affected by its dual social responsibility. Using data from A-share listed companies from 2010 to 2020, this paper, grounded in signaling theory, legitimacy theory, and stakeholder theory, analyzes the dual-path effects, comprehensive effects, and boundary effects of corporate social responsibility (CSR) and corporate social irresponsibility (CSIR) on corporate performance. It innovatively introduces innovation efficiency as a mediating variable (...) to examine its transmission mechanism and pathways in the influence of dual social responsibility on corporate performance. The study finds that CSR and CSIR have independent and heterogeneous effects on corporate performance, with the former exhibiting an inverted U-shaped relationship with corporate performance and the latter consistently exerting a negative impact. The coexistence and interaction of CSR and CSIR have a comprehensive effect on corporate performance, where CSR performance can mitigate the negative impact of CSIR, and there exists a threshold effect. CSR has a nonlinear impact on innovation efficiency, and innovation efficiency plays a significant mediating role in the process of CSR and CSIR affecting corporate performance. The industrial environment competition plays a moderating role in the relationship between a company's dual social behavior and its performance. The higher the industrial environment competition, the more it will accelerate and intensify the negative impact of CSIR on corporate performance. Additionally, it will steepen the inverted U-shaped curve of CSR influencing corporate performance and shift the inflection point to the left. This study not only extends the boundaries of research on the impact of CSIR on corporate performance but also provides insights for corporate social responsibility governance and ethical decision-making in business. (shrink)

Implementing corporate social responsibility (CSR) in supply chains is not a trivial task. In fact, many firms in recent years have publicly proclaimed that in order to keep their CSR commitments, they had to reduce reliance on external suppliers by vertically integrating their operations. Our aim in this article is to examine whether there is truly a relationship between a firm’s CSR performance and its level of vertical integration. Drawing on a multi-industry sample of 2,715 firm-year observations, and (...) after addressing endogeneity concerns, we demonstrate that firms with higher CSR performance tend to vertically integrate more (or, outsource less). We also demonstrate that this tendency is weaker for firms that have higher degrees of asset specificity or international diversification. Our core conclusion is that CSR performance and outsourcing are at odds, but firms can reconcile this tension by deepening their collaborations with suppliers. (shrink)

Green technology innovation (GTI) has been increasingly adopted by firms worldwide to promote sustainable development, whereas its potential downsides have been largely overlooked. Drawing on moral licensing theory, we devise a framework to reveal the potential dark side of firms’ GTI on corporate social responsibility (CSR). We argue that with the global eco-awakening, GTI has been an efficient means for firms to meet their stakeholders’ expectations and environmental legitimacy. This may cause a moral licensing effect for senior executives’ ethical strategic (...) decision-making, due to their belief that existing GTI could balance the firm’s subsequent moral neglect, thereby minimizing firms’ CSR. Using the Chinese listed manufacturing firms as a sample, we find empirical support for our prediction. In addition, we investigate how firms’ environmental awards and honors may exacerbate the negative impact of GTI on CSR, whereas the presence of women executives may mitigate the relation. Our findings can trigger firms’ reflections on GTI’s downsides, and contribute to research and practice in comprehensively understanding firms’ GTI consequences, CSR decisions, and moral balance. (shrink)

This paper investigates the effect of corporate social responsibility (CSR) on firm value and seeks to identify the source of that value, by disaggregating the effects on forecasted profitability, long-term growth and the cost of capital. The study explores the possible risk (reducing) effects of CSR and their implications for financial measures of performance. For individual dimensions of CSR, in general strengths are positively valued and concerns are negatively valued, although the effect is not universal across all dimensions of (...) CSR. We show that these valuation effects are principally driven by CSR performance associated with better long run growth prospects, with an additional minor contribution made by a lower cost of equity capital. (shrink)

This study examines corporate publications of U.K. firms to investigate the nature of corporate social responsibility disclosure. Using a stakeholder approach to corporate social responsibility, our results suggest a hierarchical model of disclosure: from general rhetoric to specific endeavors to implementation and monitoring. Industry differences in attention to specific stakeholder groups are noted. These differences suggest the need to understand the effects on social responsibility disclosure of factors in a firm's immediate operating environment, such as the extent of government (...) regulation and level of competitiveness in the industry. (shrink)

Non-governmental organizations increasingly hold firms responsible for harm caused in their supply chains. In this paper, we explore how firms and NGOs talk about cosmopolitan claims regarding supply chain responsibility. We investigate the language used by Apple and a group of Chinese NGOs as well as Adidas and the international NGO Greenpeace about the firms’ environmental responsibilities in their supply chains. We apply electronic text analytic methods to firm and NGO reports totaling over 155,000 words. We identify different conceptualizations (...) of cosmopolitanism in this discourse: a legalistic approach to cosmopolitanism for Apple and a group of Chinese NGOs and a moralistic approach for Adidas and Greenpeace. We argue that these differences connect to the roles that the firms are expected and perhaps willing to take in SCR: legalistic discourse connects to a governmental function of rule development and enforcement; in contrast, moralistic discourse connects to a citizenship function that focuses on doing good to the global community. We discuss implications for companies’ non-market strategies and future research. (shrink)

The instrumental benefits of firm’s CSR activities are contingent upon the stakeholders’ awareness and favorable attribution. While social media creates an important momentum for firms to cultivate favorable awareness by establishing a powerful framework of stakeholder relationships, the opportunities are not distributed evenly for all firms. In this paper, we investigate the impact of CSR credentials on the effectiveness of social media as a stakeholder-relationship management platform. The analysis of Fortune 500 companies in the Twitter sphere reveals that a (...) higher CSR rating is a strong indicator of an earlier adoption, a faster establishment of online presence, a higher responsiveness to the firm’s identity, and a stronger virality of the messages. Incidentally, the higher CSIR rating is also found to be associated with the stronger virality. Our findings also suggest that socially responsible firms can harvest proactive stakeholders’ participation without investing more resources. As the first study that conceptualizes the social media as a proponent of CSR, this paper contends that “being socially responsible” makes more practical sense for firms with the rise of social media. (shrink)

The literature on the interplay between geographic communities and organizations has largely ignored the role of individual residents. In adopting a meso-perspective, we examine a potentially vital relationship between corporate conduct and pro-social behavior demanding sacrifice from individuals. Drawing on Weber ), we theorize that organizations in a community legitimize personal social conduct in three ways—by serving as role models, imparting norms and values, and routinizing forms of interaction. We study the relationship between corporate social responsibility behavior by local firms (...) and the social distancing of citizens in US counties during the Covid-19 pandemic, a core ethical outcome. We argue and find that the residents of communities in which firms exhibit higher levels of CSR engaged in more SD during the Covid-19 pandemic. This was true when firms were long-established, isomorphic in their CSR, and major employers and vendors. Moreover, CSR relating to the treatment of employees as well as positive and negative extremes in CSR bore especially strong relationships with SD. Implications are drawn for the study of business ethics, as modeled by CSR, as a force for ethical personal behavior and public health in communities. (shrink)

The impact of smaller firm size on corporate social responsibility (CSR) is ambiguous. Some contend that small businesses are socially responsible by nature, while others argue that a smaller firm size imposes barriers on small firms that constrain their ability to take responsible action. This paper critically analyses recent theoretical and empirical contributions on the size–social responsibility relationship among small businesses. More specifically, it reviews the impact of firm size on four antecedents of business behaviour: issue characteristics, (...) personal characteristics, organizational characteristics and context characteristics. It concludes that the small business context does impose barriers on social responsibility taking, but that the impact of the smaller firm size on social responsibility should be nuanced depending on a number of conditions. From a critical analysis of these conditions, opportunities for small businesses and their constituents to overcome the constraining barriers are suggested. (shrink)

This study intended to examine the effect of information technology (IT) investment and corporate governance mechanism on the performance of the Saudi telecommunication sector with mediating role of corporate social responsibility (CSR). A survey method was used to collect data from the targeted Saudi telecom firm. Results show that corporate governance practices, i.e., internal audit, internal audit committee, and internal board size, have a significant and positive relationship with firm performance. Furthermore, IT investment positively affects the performance of (...) Saudi telecommunication firms. Moreover, CSR mediates the relationship among internal audit, internal audit committee, internal board size, IT investment, and firm performance. This study contributes to the body of knowledge regarding IT investment, corporate governance mechanism, corporate social responsibilities, and firm performance of telecommunication firms in emerging markets. Furthermore, this study will help the top management of the telecom firms to improve corporate governance and IT investment, which will be beneficial to enhance firm performance. (shrink)

This paper examines the proposition that adopting a socially responsible, or philanthropic, management posture is not antithetic to the capitalist business model but rather can be seen as a sound approach to the development of long-term sustainability in business in a modern business environment, wherein a strand of corporate social responsibility is one core aspect of the composite utility function of the modern business. We suggest further that for many of the prominent/significant examples of the successful adoption of a policy (...) of informed benevolence in the management of employees that policy seems to be faith rooted – be that faith Christian, Buddhist, Jewish, Muslim or other. Indeed, even if one observed an organisation subject to an humanist or even atheistic based socially responsible management, one could see that as being rooted in that organisation’s ‘non-faith’ faith, or ethical bubble. Our argument also gives the lie to the proposition, in currency in some circles, that the term ‘business ethics’ is an oxymoron. To underpin the argument we cite examples (/set out mini-cases, or a mixture of these) from a range of faith based traditions including, Buddhism, the Quaker-Christian tradition, Judaism and Islam. (shrink)

The question of how an individual firm's social and environmental performance impacts its firm risk has not been examined in any empirical UK research. Does a company that strives to attain good environmental performance decrease its market risk or is environmental performance just a disadvantageous cost that increases such risk levels for these firms? Answers to this question have important implications for the management of companies and the investment decisions of individuals and institutions. The purpose of this paper (...) is to examine the relationship between corporate environmental performance and firm risk in the British context. Using the largest dataset assembled so far, with community and environmental responsibility (CER) rankings for all rated UK companies between 1994 and 2006, we show that a company's environmental performance is inversely related to its systematic financial risk. However, an increase of 1.0 in the CER score is associated with only a 0.028 reduction in its β. (shrink)

The state plays a major role in corporate social responsibility in emerging and transitional economies and often influences firms through political connection, and hence knowing how firms respond to the state’s CSR initiatives can inform policy making and has important implication on the sustainability of society and environment. However, existent studies show conflicting results on politically connected firms’ CSR participation. We examine the relationship between political endorsement and firms’ engagement in different types of CSR simultaneously. Using a representative sample of (...) more than 1,000 private firms in the early 2000s, we find that politically endorsed firms engage more in philanthropic donation, but less in environmental practices, which impose higher costs and constraints than philanthropy. This is consistent with our explanation that they attempt to maintain legitimacy and discretion through selective engagement in CSR. Our study contributes to research on CSR in transitional economies by reconciling conflicting findings about the CSR engagement of politically connected firms, provides a new lens to illuminate firms’ strategic response in CSR, and has important policy implications. (shrink)

Based on the findings of a qualitative empirical study of corporate social responsibility (CSR) in Swiss MNCs and SMEs, we suggest that smaller firms are not necessarily less advanced in organizing CSR than large firms. Results according to theoretically derived assessment frameworks illustrate the actual implementation status of CSR in organizational practices. We propose that small firms possess several organizational characteristics that are favorable for promoting the internal implementation of CSR-related practices in core business functions, but constrain external communication and (...) reporting about CSR. In contrast, large firms possess several characteristics that are favorable for promoting external communication and reporting about CSR, but at the same time constrain internal implementation. We sketch a theoretical explanation of these differences in organizing CSR in MNCs and SMEs based on the relationship between firm size and relative organizational costs. (shrink)

This study examines the determinants of corporate social responsibility (CSR) and its implications on firms’ investment policy, organizational strategy, and performance. First, we find that firms with better performance, higher R&D intensity, better financial health, and firms in new economy industries are more likely to engage in CSR activities, while riskier firms are less likely to do so. We also find U-shaped relation between firm size and CSR, indicating that either very small or very large firms exhibit high levels (...) of CSR strengths and concerns. Next, we find that firms’ CSR strengths relate favorably with their investments, organizational strategy, and performance, whereas CSR concerns and firm attributes are by and large negatively related. Using a 2SLS procedure, we verify that the CSR–performance relation is robust to corrections for endogeneity through reverse causation and/or biases introduced by time varying omitted variables. Finally, we find that the CSR–firm attributes relation is strengthened when the CEO’s incentives are below the sample median, suggesting that CSR participation is especially important when monetary incentives are lower than benchmark levels. (shrink)

The idea that business firms qualify as group moral agents offers an attractive basis for understanding corporate moral responsibility. However, that idea gives rise to the “corporate autonomy problem” (CAP): if firms are moral agents, then it seems we must accept the implausible conclusion that firms have basic moral rights, such as the rights to life and liberty. The question, then, is how one might retain the fruitful idea of firms as moral agents, yet avoid CAP. A common approach to (...) avoiding CAP appeals to specific features of human embodiment, such as vulnerability to pain, as the basis for attributing moral rights to human persons but not to firms. But that response has less purchase in a Kantian framework, which does not ground moral status in such particularities of human embodiment, but rather in the rational nature that humans share with other rational beings. To avoid CAP while retaining a (broadly) Kantian framework, one does better to rely on features of firms as cooperative, compositionally derivative moral agents, created for the pursuit of specific ends. As derivative agents, firms do not qualify as Kantian ends in themselves, and thus are not appropriate bearers of basic moral rights. To further clarify the level of consideration we owe to firms, I draw on Darwall’s distinction between recognition respect and moral esteem, arguing that we should not respect firms as unconditional ends in themselves, but rather esteem morally autonomous firms as collective achievements of their human members. (shrink)

The executives of listed firms play an important role in the fulfillment of corporate social responsibility. Based on behavioral consistency theory, this study examines the association of CSR performance among multiple firms for the same executive served at different times. By tracking the movement of executives across Chinese listed firms over the period 2010–2019, we find that there is a significantly positive association between the predecessor and the successor firm’s CSR performance for the same executive, implying that an individual’s (...) value and preference for CSR maintain consistency within a certain period of time. We also find that a longer employment gap and lower internal control effectiveness will damage the association of CSR performance between the predecessor and the successor firm. Our results are robust to testing in subsamples and controlling the endogeneity problems. Our conclusion provides a new perspective to understand the influence mechanism of CSR performance in the context of inter-firm executive mobility and provides empirical evidence for listed firms to improve their decision-making in hiring and evaluating executives. (shrink)

Whether firms can be said to be moral agents and to have the capacity for moral responsibility has significant practical consequences. In most legal systems in the world, business firms are recognized as persons with the ability to own property, to maintain and defend lawsuits, and to self-organize governance structures. To recognize that these business persons can also act morally or immorally as organizations, however, would justify the imposition of other legal constraints and normative expectations on organizations. In the criminal (...) law, for example, the idea that an organized firm may itself have criminal culpability is accepted in many countries (such as the United States) but rejected in others (such as Germany). This book collects new contributions by leading business scholars in business ethics, philosophy, and related disciplines to extend our understanding of the moral responsibility of firms. (shrink)

The objective of this article is double: first, to analyze, using a descriptive analysis, the main differences in the level and components of social behaviour between European and North American firms and, second, to contrast empirically, using a multiple linear regression model, whether the motives behind corporate social behaviour are different depending on the region or country of the firm. With this aim, an indicator of social behaviour (termed effort in sustainability) has been constructed by aggregating the firm's (...) social effort with customers, employees, community and environment for a sample of the 40 European and North American companies most highly reputed in the years 2003 and 2004. The results obtained indicate that the region or country of the firm influences the level, components and motivation of its social behaviour. (shrink)

In this study, we examine the relation between corporate environmental responsibility and risk in U.S. public firms. We develop and test the risk-reduction, resource-constraint, and cross-industry variation hypotheses. Using an extensive U.S. sample during the 1991–2012 period, we find that for U.S. industries as a whole, CER engagement inversely affects firm risk after controlling for various firm characteristics. The result remains robust when we use firm fixed effect or an alternative measure of CER using principal component analysis (...) or downside risk measures. To address the concern of endogeneity bias, we use a system equations approach and dynamic system generalized methods of moment regressions, and continue to find that environmentally responsible firms experience lower risk. These findings support the risk-reduction hypothesis, but not the resource-constraint hypothesis, along with the notion that the top management in U.S. firms is generally risk averse and that their CER engagement facilitates their risk management efforts. Our cross-industry analysis further reveals that the inverse CER-risk association mainly comes from the manufacturing sector, whereas in the service sector, CER tends to increase firm risk. (shrink)