In this single industry study, the authors examine relationships between forest products companies in Maine and their stakeholders. The research question, why do firms work with stakeholders, is examined from both instrumental and normative perspectives. Specifically, it is hypothesized that stakeholder power and corporate social responsiveness affect the degree to which firms have working relationships with stakeholders. The study found support for the impact of the firm’s perception of stakeholder power on the strength of its relationships with stakeholders. Most notably, (...) it also found support for the firm’s corporate social responsiveness on the strength of its stakeholder relations, indicating that firms do work with stakeholders from both instrumental and normative bases. (shrink)

This study examines the influence of women in business using a sample of firms on Fortune's “100 Best Companies to Work For” list and is an extension of Bernardi et al.'s work. We use the data from Bernardi et al. to determine whether a higher representation of women on a board signals an increased commitment of a firm to a quality environment and employment characteristics necessary to establish the firm on Fortune's “100 Best Companies to Work For” list. Our findings (...) include a significant increase in the number of female directors on Fortune 500 companies between 1977 and 2001. The initial analysis of the 27 firms appearing on both Fortune's “100 Best Companies to Work For” list and the Fortune 500 in 2001 indicates a positive correlation between the number of female directors and a company's appearance on the “100 Best Companies to Work For” list. (shrink)

A number of companies allocate ownership rights to stakeholders different from shareholders, despite the fact that the law attributes these rights to the equity holders. This article contributes to an understanding of this evidence by developing a contingency model for the allocation of ownership rights. The model sheds light on why companies, despite pressures from the law, vary in their allocation of ownership rights. The model is based on the assumption that corporations increase their chance to survive and prosper if (...) the stakeholders supplying “critical contributions” receive the ownership rights. According to the model, “critical” contributions involve (1) contractual problems due to specific investments, long-term relationships, and low measurability; (2) the assumption of the uncertainty resting on the company; and (3) the supply of scarce and valuable resources. The model is dynamic because it also provides a basis for understanding why the allocation of ownership rights changes with time. Finally, the article presents the strategies companies can use to realize an efficient distribution of ownership rights among their stakeholders. (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)

Organizations are exposed to increasing pressures from their constituents to integrate corporate social responsibility (CSR) principles into their ongoing business practices. But accepting new and potentially open-ended commitments is not a harmless exercise, and companies may well expose themselves to serious risks when embracing such principles. To identify these risks, we conducted two naturalistic studies: one exploratory, the other corroborative. The results show that CSR adoption is associated with at least seven different business risks, ranging from failing strategy implementation to (...) legitimacy destruction. To alleviate these risks, we discuss a set of managerial mitigation strategies that have the potential to realign companies’ CSR activities with their strategic objectives. (shrink)

Firms engage in corporate social responsibility (CSR) because they consider that some kind of competitive advantage accrues to them. We contend that resource-based perspectives (RBP) are useful to understand why firms engage in CSR activities and disclosure. From a resource-based perspective CSR is seen as providing internal or external benefits, or both. Investments in socially responsible activities may have internal benefits by helping a firm to develop new resources and capabilities which are related namely to know-how and corporate culture. In (...) effect, investing in social responsibility activities and disclosure has important consequences on the creation or depletion of fundamental intangible resources, namely those associated with employees. The external benefits of CSR are related to its effect on corporate reputation. Corporate reputation can be understood as a fundamental intangible resource which can be created or depleted as a consequence of the decisions to engage or not in social responsibility activities and disclosure. Firms with good social responsibility reputation may improve relations with external actors. They may also attract better employees or increase current employees’ motivation, morale, commitment and loyalty to the firm. This article contributes to the understanding of why CSR may be seen as having strategic value for firms and how RBP can be used in such endeavour. (shrink)

While stakeholder theory has traditionally considered organization’s interactions with stakeholders in terms of independent, dyadic relationships, recent scholarship has pointed to the fact that organizations exist within a complex network of intertwining relationships [e.g., Rowley, T. J.: 1997, The Academy of Management Review 22(4), 887–910]. However, further theoretical and empirical development of the interactions between stakeholders has been lacking. In this paper, we develop a framework for understanding and measuring the effects upon the organization of competing, complementary and cooperative stakeholder (...) interactions, which we refer to as stakeholder multiplicity. We draw upon three forms of fit (i.e. fit as matching, fit as moderation, and fit as gestalts; Venkatraman, N.: 1989) to develop a framework for understanding stakeholder multiplicity based upon the direction, strength, and synergies of the interacting claims. Additionally, we draw upon the theory of stakeholder identification and salience of Mitchell et al. (1997), which we argue provides a more relevant and significantly more illustrative explanation of the nature and effects of stakeholder interactions upon the organization than the network approach of Rowley (1997). Furthermore, we ground our framework through reference to three stakeholder groups (i.e. governments, customers, and employees) and the stakeholder issue of concern for the natural environment. We propose a hierarchy of the multiplicity strength of influence of these three stakeholder groups. Potential measurement and implications are discussed. (shrink)

Anecdotal evidence often suggests that multinational enterprises operating in developing countries “exploit their multinationality” to avoid paying taxes to host governments. This article explores the concept of “responsible tax” as a corporate social responsibility issue for MNEs, based on the notion that MNEs face considerable variation in the extent, monitoring, and application of tax laws internationally. This variation creates a “moral free space” as to which tax payments to make. Using firm-level data from three important sectors in India, the authors (...) explore whether foreign MNE subsidiaries pay higher taxes than local firms, and whether, in the case of MNEs, there are differences between subsidiaries of MNEs with and without a reputation for CSR. The results show that MNEs pay considerably higher effective tax rates than do local firms, and MNE subsidiaries known for CSR pay more tax than do MNE subsidiaries less known for CSR. This set of findings suggests that MNEs operating in India see taxation in developing countries in relation to CSR. (shrink)

Corporate community responsiveness relates to business activities that are integral parts of a firm’s operations and are designed to benefit the firm through benefiting the local communities. Using data from commercial banks in the United States between 1997 and 2000, the authors measured banks’ corporate community responsiveness by their Community Reinvestment Act (CRA) lending activities and their performance ratings by CRA examiners. The authors developed and tested eight hypotheses on the influence of contextual (community income, minority population, and competition) and (...) organizational (age, profitability, risk, institutional ownership, and mergers and acquisitions) factors on the two measures of corporate community responsiveness. The authors found a negative effect for minority population; a positive effect for banks’ profitability; and partial support for community income, competition, and risk factors. The results show no effects for institutional ownership or mergers and acquisitions. The implications of these results for the instrumental aspect of stakeholder theory are discussed. (shrink)

Theoretical evidence suggests that corporate social irresponsibility (CSI) should produce long-lasting negative influences on firm performance. Yet, little empirical evidence exists in the literature to support this time-embedded research frame. This research was conducted by collecting a large set of firm data and by employing a series of vector autoregressive models to map out the longitudinal dynamic relationships between CSI and firm value under high versus low levels of two external factors, environmental dynamism and competition intensity, and one internal factor, (...) firm capability. The results show that CSI’s negative influences endure in scenarios such as high dynamism, high competition intensity, and low capability, but it has only a short-term impact on low-dynamism markets and does not produce significant effects on firm value under low-competition or high-capability conditions. These findings yield useful implications for CSI, resource-based theory, and environment theories as well as for managerial effectiveness of coping with social negativities. (shrink)

This article presents a conceptual exploration of public opinion (PO) from the point of view of corporate social responsiveness (CSR2). The proposed PO-CSR2 framework encompasses four complementary means of framing public opinion: the philosophy of measurement of the market view (PO1); the action theory of the mobilization view (PO2); the negative, constraining mode of the social control view (PO3); and the proactive stance of the strategic enactment view (PO4). The article unfolds the particular characteristics of these four views and shows (...) how they, individually and in conjunction, can serve as useful tools for understanding and analyzing corporate social responsiveness. Far from being a narrow concept that focuses attention mainly on the popular—and, some would say, superficial—aspects of responsiveness, the author argues that public opinion is a concept that embodies variety and provides a multifaceted point of departure for reflections on the relationship between business and society. (shrink)

Three characteristic problems in the measurement of corporate social performance (CSP) center around the need to measure three “metrics”: the metric of performance evaluation (M1), the metric of performance measurement (M2), and the metric of performance perception and belief (M3). The central issues in each metric are commitment, revelation, and belief, respectively. This article discusses each metric and provides sets of theoretical propositions under M2 and M3 describing behavior in those contexts. Some of the propositions inM2form an explicit partial theory (...) of factors affecting the likelihood of CSP measurement. Those under M3 are developed from more general ones in the theory of testaments. (shrink)

This paper presents the 'rationality-of-ends/market-structure grid'. With this grid, the article contrasts, in economic terms, different approaches to business ethics and addresses the question how far and what type of business ethics is feasible. Four basic scenarios for business ethics are outlined that imply different conceptualizations of business ethics. The grid interrelates a rationality-of-ends dimension with a market-structure dimension. The rationality-of-ends dimension ranges from opportunism and self-interested egoism to self-interested altruism and ultimately to authentic altruism. The market-structure dimension ranges from (...) perfect competition/no information problems/perfectly dispersed market power to imperfect competition/high information problems/concentrated power. Rather than presenting economic, legal, ethical and discretionary issues in a hierarchical fashion, the grid interrelates these issues. Conclusions are spelled out regarding the empirical observance of business ethics and the programmatic, 'theoretical' positions that are behind empirical observations. Practical implications for managers and public policy makers are outlined. (shrink)

This article studies the idea of Corporate Social Performance (CSP) from a critical perspective using empirical elements derived from analysis of year 2000 ARESE data. ARESE is the French first mover social rating agency providing quantified data about the Social Performance of French companies. The paper starts out by reviewing leading CSP models and discussing problems inherent to the measurement of this construct before going on to present and analyse ARESE data - whose suitability for existing models will be discussed.

This article describes a multilevel theoretical framework that examines the multiple causes of corporate social responsibility (CSR) reporting in the social environment of business. We argue that substantive and/or symbolic reporting flows from individual‐, aggregate‐, organizational‐, and institution‐level phenomena, and is thus a complex outcome of CSR and corporate social performance (CSP). Theoretical lenses range from reinforcement theory at the microlevel to legitimacy and stakeholder theories at the macrolevel, and include a discussion of the emergence of lower‐level CSR‐relevant characteristics to (...) higher level constructs. Our goal is to clarify how this behavior develops from microlevel, mesolevel, and macrolevel processes with a view toward assisting corporations to better enact CSR reporting, and their stakeholders to effectively promote substantive reporting behavior. (shrink)

As more and more multi-national companies expand their operations globally, their responsibilities extend beyond not only the economic motive of profitability but also other social and environmental factors. The objective of this article is to examine the impact of national culture and geographic environment on firms’ corporate social performance (CSP). Empirical tests are based on a global CSP database of companies from 49 countries. Results show that the Hofstede’s cultural dimensions are significantly associated with CSP. In addition, European companies are (...) found to out-perform other regions and countries in CSP. (shrink)

This theoretical paper takes an agency-theoretic approach to questions of corporate social responsibility (CSR). A comparison of various extant frameworks focusses on how CSR agency emerges in complex multi-agent and multi-sector stakeholder networks. The discussion considers the respective capabilities and relevance of these frameworks – culminating in an integrative CSR practice model. A short literature review of the evolution of CSR since the 1950’s provides the backdrop for understanding multi-agent cross-sectoral stakeholder coalitions as a strategic determinant of today’s organizational behavior. (...) The paper turns to Werhane’s coupling of moral imagination and systems thinking and forging stakeholder coalitions in problem contexts that were traditionally deemed intractable by for-profit organizations. However, it identifies the problem that the systems approach treats macro-agents (organizations, stakeholders) as given (“black-boxed”) and shies away from more radically re-imagining the possibilities of reassembling agency from the bottom up. Actor Network Theory (ANT) provides such a method, which strictly commits to treating organizational behavior as a product of technological, human and environmental micro-processes. ANT, however, is lacking a genuine moral deliberative stance in designing complex CSR coalitions. In an attempt to capitalize on the respective strengths of these frameworks (Systems thinking and ANT) the paper tends to a recent iterative series of “situational transactive” models that are rooted in the US pragmatist tradition and seek to capture intelligent planning processes in complex problematic contexts. The contribution proposes a new CSR practice model, which assigns specific roles to the theoretical contributions of ANT, system thinking and pragmatism in complex deliberation processes. This model can be industry-tested in a future study. (shrink)

This research examines the relationship between corporate social responsibility (CSR) and company stock valuation across three regions of the world. After a brief introduction, the article gives an overview of the evolving definition of CSR as well as a discussion of the ways in which this construct has been operationalized. Presentation of the potential impact of corporate social performance on firm financial performance follows, including investor characteristics, the rationale behind their choices, and their influence on the marketplace for securities worldwide. (...) The unique method used to select socially responsible investments is then provided that also includes a description of the quantitative techniques employed in the analyses. Results are offered subsequently, and the close describes implications for global enterprises as socially responsible investments. (shrink)

Corporate social performance (CSP) has been a prominent concept in the management literature dealing with the social role and impacts of the corporation; it has been promulgated as a unifying paradigm for the field. However, the concept of CSP is still lacking strong theoretical foundations and empirical validity, suggesting that the paradigmatic status of CSP might be lost. In this paper, the authors draw on Hirsch and Levin’s (1999) life cycle approach to explore the development of CSP as a concept, (...) explain why it has so recurrently failed to deliver on these dimensions, and offer possible routes for future research that may potentially ameliorate this problem. (shrink)

This paper examines some of the paradoxes and dilemmas facing firms in the extractive sector when they attempt to take on a more stakeholder-responsive orientation towards issues of environmental and social responsibility. We describe the case of Shell and the Ogoni and attempt to draw out some of the lessons of that case for more sustainable operations in the developing world. We argue that firms such as Shell, Rio Tinto and others may well exhibit increasingly stakeholder-responsive behaviours at the corporate, (...) strategic level. However for reasons of strategy, lack of competency or institutional will this increasing level of corporate responsiveness may not be mirrored effectively in dealings between subsidiary business units and their most important direct stakeholders: for example local communities and in the developing world. We contrast the struggles of Shell to replicate its corporate stakeholder-responsiveness at the local level in Nigeria with the experiences of other firms that seem to have developed managerial capabilities at a somewhat deeper level throughout the firm with consequent benefits both for stakeholders and the business. (shrink)

This paper presents the ‘rationality‐of‐ends/market‐structure grid’. With this grid, the article contrasts, in economic terms, different approaches to business ethics and addresses the question how far and what type of business ethics is feasible. Four basic scenarios for business ethics are outlined that imply different conceptualizations of business ethics. The grid interrelates a rationality‐of‐ends dimension with a market‐structure dimension. The rationality‐of‐ends dimension ranges from opportunism and self‐interested egoism to self‐interested altruism and ultimately to authentic altruism. The market‐structure dimension ranges from (...) perfect competition/no information problems/perfectly dispersed market power to imperfect competition/high information problems/concentrated power. Rather than presenting economic, legal, ethical and discretionary issues in a hierarchical fashion, the grid interrelates these issues. Conclusions are spelled out regarding the empirical observance of business ethics and the programmatic, ‘theoretical’ positions that are behind empirical observations. Practical implications for managers and public policy makers are outlined. (shrink)

In a recent systematic review of the Sustainability Balanced Scorecard literature in this journal, we developed a typology of architectures as a basis for the process of SBSC design, implementation, use, and evolution. This paper addresses a comment by Hahn and Figge designed to stimulate further research. We argue that the existing literature demonstrates that the SBSC management tool can play an important role in corporate sustainability. The SBSC architectures—as representations of goals and priorities—form an integral and iterative part of (...) the corporate sustainability strategy-making process and therefore cannot be isolated from it. However, the concept as such should not be overloaded. In this paper, we first reflect on the potentials and constraints of the SBSC in relation to radical or transformational change and measuring performance outcomes on the level of human–earth systems. Second, we discuss the importance of SBSC architecture concerning how it enables the integration of sustainability into business organisations; how both strictly hierarchical cause-and-effect chains and less hierarchical designs can allow companies to seek inclusive profits; and the contingency-based use of generic architectures in contrast to its use as a diagnostic tool. (shrink)

This article adopts an issues management approach to corporate social responsibility implementation. Issues evaluation, which is an integral component of issues management, can be conducted by using the concept of three expectational gaps. However, the concept of expectational gaps suffers from an ambiguity that limits its application to issues evaluation. The legitimacy gap concept is used in this article to clarify the ambiguity surrounding expectational gaps. The study thus develops a four-gap framework for conducting a quantitative issues evaluation. This framework (...) is applied to six social and six environmental issues in the context of the forest products industry in the Northwest United States by means of a survey of 278 society and 94 industry respondents. Results empirically demonstrate the existence of expectational gaps and also provide insights into the nature of misalignment between societal and business perceptions along these social and environmental issues. Appropriate managerial responses are suggested to narrow or bridge different types of gaps. (shrink)