This article presents a qualitative research about the way in which business leaders of a retail company gradually clarify the ethical responsibilities of their company – in an ongoing discussion of particular cases. It is based on 12 years of experience as an external member of the ethics committee. The aim of the article is not so much as to evaluate the different single decisions that were made and implemented to make the company meet high ethical standards, but rather to (...) focus on three issues and on how they relate to each other: (1) the shift from a communitarian Christian set of values to a broader secular framework of basic principles; (2) the way in which business people in a retailing company cope with issues that seem ethically troublesome, when reflected upon from a ethical point of view; and (3) how the process of ethical dialogue has led to a typology of the different levels of responsibility that retailers are willing to attribute to themselves according to the kind of problem at stake. The three issues together illustrate how a company that took the business ethics question head-on systematically moved into a particular ongoing collective learning process. (shrink)

A variety of stakeholders including investors, corporate managers, customers, suppliers, employees, researchers, and government policy makers have long been interested in the relationship between the financial performance of a corporation and its commitment to business ethics. As a subject of research, the relations between business ethics and corporate valuation has yet to be thoroughly quantified and investigated. This article is an effort to amend this inadequacy by demonstrating a statistically significant association between ethical commitment and corporate valuation measures. Consistent with (...) anecdotal evidence, we have found a significant association between the ethical commitment of Korean companies and their valuation on the Korean stock market. However, the result reveals that the association between ethical commitment and financial performance is not significantly supported. (shrink)

Previous studies in Western contexts have examined the relationships between various board characteristics and CSR, yet the relationships need to be re-examined in non-Western contexts given differential theoretical premises across contexts. We specifically propose that the effects of board characteristics on CSR in Korea should be patterned distinctively from Western-based existing literature, focusing on three important board characteristics, such as a board’s independence, social ties, and diversity. Using a panel dataset from large Korean firms, we found that various relationships between (...) board characteristics and CSR were non-linear, whereas most of the previous research on Western contexts found that the same relationships were linear. Specifically, curvilinear relationships were found between CSR and board independence, CEO-outside director social ties, and educational diversity. Our findings suggest that there is no universal feature of CSR-supportive board characteristics due to the unique characteristics of various institutional contexts. (shrink)

This paper briefly reviews the theories that seek to explain the phenomenon of corporate charitable donations and then provides a review of the empirical issues that have arisen in previous studies in this area. The findings of an analysis of charitable donations data from the entire U.K. FTSE index for the years 1985–2000 are then reported. These findings include the observation of a time-related increase in charitable donations, which is compared with an earlier study to give a 24 year history (...) of charitable donations in the U.K. The findings note little responsiveness of the monetary value of charitable donations to the economic performance of firms. An international comparison over time against U.S. trends is also reported and shows how U.S. corporations have traditionally been more generous than U.K. firms, but that the trend in the U.S. is downwards. Membership of a U.K.-based "tithing" club (the PerCent Club) is shown to be associated with higher profit performance against non-members. Members' charitable contributions against profit are shown to be higher than the FTSE mean although short of the 0.5% target figure in "cash" terms. The paper concludes with a brief discussion of these findings in relation to the theoretical positions advanced for corporate philanthropy. (shrink)

Corporate management is torn between either focusing solely on the interests of stockholders or taking into account the interests of a wide spectrum of stakeholders. Of course, there need be no conflict where taking the wider view is also consistent with maximising stockholder wealth. In this paper, we examine the extent to which a conflict actually exists by examining the relationship between a company's positive and negative corporate social responsibility activities and equity performance. In general, we find little evidence to (...) suggest that managers taking a wider stakeholder perspective will jeopardise the interest of its stockholders. However, our findings do suggest that the market is not only influenced by the independent CSR activities, but also the totality of these activities and that the facets that they value do vary over time. It seems that most recently, the market has valued most firms that satisfied minimum requirements in the areas of diversity and environmental protection but were most proactive in the area of employee-relations. (shrink)

One of the older questions in the debate about Corporate Social Responsibility (CSR) is whether it is worthwhile for organizations to pay attention to societal demands. This debate was emotionally, normatively, and ideologically loaded. Up to the present, this question has been an important trigger for empirical research in CSR. However, the answer to the question has apparently not been found yet, at least that is what many researchers state. This apparent ambivalence in CSR consequences invites a literature study that (...) can clarify the debate and allow for the drawing of conclusions. The results of the literature study performed here reveal that there is indeed clear empirical evidence for a positive correlation between corporate social and financial performance. Voices that state the opposite refer to outdated material. Since the beginnings of the CSR debate, societies have changed. We can therefore clearly state that, for the present Western society, "Good Ethics is Good Business.". (shrink)

This study examines the moderating effects of corporate social responsibility (CSR) on the association between market orientation and firm performance in the context of an emerging economy. The results from a sample of firms that operate in Dubai indicate that CSR has a synergistic effect on the impact of market orientation on business performance. The results of our research on the moderating effects of CSR on market orientation subsets reveal that although CSR moderates the association between customer orientation and business (...) performance, it does not moderate the association between competitive orientation and interfunctional coordination and performance. The results of this study are discussed, and implications for practitioners and researchers are presented. (shrink)

In recent years, a growing number of companies in Latin American have initiated specific programs oriented to socially respond to the communities in which they are established. Notwithstanding the importance of these programs and its benefits, it is interesting to note that Latin American countries are different from developed countries in which the trend for corporate social accountability has been initiated and developed. Noting this, the present study develops and tests several hypotheses regarding the effects of corporate social responsibility and (...) work environment on antecedents of company's performance. (shrink)

In recent years, development practice has seen that microfinance institutions are starting to consider their environmental bottom line in addition to their financial and social objectives. Yet, little is known about the characteristics of institutions involved in environmental management. This paper empirically identifies the characteristics of these MFIs for the first time using a sample of 160 microfinance institutions worldwide. Basing our analysis on various econometric tests, we find that larger MFIs and MFIs registered as banks tend to perform better (...) in environmental policy and environmental risk assessment. Furthermore, more mature MFIs tend to have better environmental performances, in particular in providing green microcredit and environmental non-financial services. On the other hand, financial performance is not significantly related to environmental performance, suggesting that ‘green’ MFIs are not more or less profitable than other microfinance institutions. (shrink)

Although the composition of the board of directors has important implications for different aspects of firm performance, prior studies tend to focus on financial performance. The effects of board composition on corporate social responsibility (CSR) performance remain an under-researched area, particularly in the period following the enactment of the Sarbanes-Oxley Act of 2002 (SOX). This article specifically examines two important aspects of board composition (i.e., the presence of outside directors and the presence of women directors) and their relationship with CSR (...) performance in the Post-SOX era. With data covering over 500 of the largest companies listed on the U.S. stock exchanges and spanning 64 different industries, we find empirical evidence showing that greater presence of outside and women directors is linked to better CSR performance within a firm’s industry. Treating CSR performance as the reflection of a firm’s moral legitimacy, our study suggests that deliberate structuring of corporate boards may be an effective approach to enhance a firm’s moral legitimacy. (shrink)

This paper offers an evaluation of corporate policy and practice in respect of corporate social responsibility (CSR) deriving from an analysis of qualitative data, obtained during semi-structured interviews with the representatives of 16 companies from a variety of UK sectors including retail, mining, financial services and mobile telephony. The findings of the empirical survey are presented in five sections that trace chronologically the process of CSR policy development. The first identifies the meaning attributed to CSR by the respondent companies followed (...) in the second section by the factors that are driving them to implement the CSR agenda. The third examines the use of the language of CSR and the concept’s role as either a substantive concept or simple label. The fourth identifies the criteria used for determining CSR policies and the objectives underlying them. The fifth and final section offers an analysis of the respondents’ predictions as to the future development of CSR. On the basis of the findings of the survey, this paper argues that, despite genuine attempts on the part of those responsible for CSR policy development to address stakeholder concerns, the context within which CSR has been implemented hinders its potential to offer stakeholders sufficient information by which to evaluate corporate performance in respect of CSR and the ability of CSR to operate as a meaningful and systematic constraint on corporate behaviour. (shrink)

We examine over 100 top performing Canadian firms in visibly polluting industries as we seek to answer four research questions: What specific environmental issues are firms addressing? How do these issues differ between industries? Are both symbolic and substantive actions financially beneficial? Does green-washing, measured as the difference between symbolic and substantive action, and/or green-highlighting, measured as the combined effect of symbolic and substantive actions, pay? We find that substantive actions of environmental issues (green walk) neither harm nor benefit firms (...) financially, but symbolic actions (green talk) are negatively related to financial performance. We also find that green-washing (discrepancy between green talk and green walk) has a negative effect on financial performance and green-highlighting (concentrated efforts of the talk and walk) has no effect on financial performance. In this article, we provide explanations of our findings and put forth future research directions. (shrink)

China is the world’s second largest economy and the largest emitter of carbon dioxide, yet we know little about environmental proactivity in the most populated country in the world. We address this gap through a survey of 161 Chinese companies with two respondents per firm (N = 322), where we seek to identify the antecedents and consequences of environmental proactivity. We identify two categorizations of environmental proactivity: Environmental operational improvements and environmental reporting. We find that ecological motivations and regulatory stakeholder (...) pressure are positively related to both types of environmental proactivity, and external stakeholder pressure is negatively related to environmental reporting. Furthermore, we find that (1) if a firm is environmentally proactive (as it relates to either measure) and they are ecologically motivated, there is a positive and significant cost advantage, and (2) if a firm makes use of environmental operational improvement and they are competitively motivated, there is a positive and significant reputation advantage. Implications for researchers, managers, and policy-makers in China are discussed. (shrink)

The goal of this paper is to describe the link between financial performance and the level of sustainability. In a novel approach, the paper classifies firms based on past financial success to address a potentially reciprocal relationship. For the groups of better and worse performing firms and for the entire sample, the above link is then tested, also accounting for non-linearity in the relationship. We show that environmental management system (EMS) implementation as a proxy for a firm's sustainability level is (...) only positively associated with the financial performance of financially well-performing firms. Conversely, it has a negative association with the performance of less good firms. We show that this implies that firms cannot change from good to bad performance, and vice versa, solely through the implementation of an EMS, and also that the result remains when introducing non-linearity in the link. Based on this result, we discuss implications for the direction of causality. (shrink)

The goal of this paper is to describe the link between financial performance and the level of sustainability. In a novel approach, the paper classifies firms based on past financial success to address a potentially reciprocal relationship. For the groups of better and worse performing firms and for the entire sample, the above link is then tested, also accounting for non‐linearity in the relationship. We show that environmental management system (EMS) implementation as a proxy for a firm's sustainability level is (...) only positively associated with the financial performance of financially well‐performing firms. Conversely, it has a negative association with the performance of less good firms. We show that this implies that firms cannot change from good to bad performance, and vice versa, solely through the implementation of an EMS, and also that the result remains when introducing non‐linearity in the link. Based on this result, we discuss implications for the direction of causality. (shrink)

One of the older questions in the debate about Corporate Social Responsibility (CSR) is whether it is worthwhile for organizations to pay attention to societal demands. This debate was emotionally, normatively, and ideologically loaded. Up to the present, this question has been an important trigger for empirical research in CSR. However, the answer to the question has apparently not been found yet, at least that is what many researchers state. This apparent ambivalence in CSR consequences invites a literature study that (...) can clarify the debate and allow for the drawing of conclusions. The results of the literature study performed here reveal that there is indeed clear empirical evidence for a positive correlation between corporate social and financial performance. Voices that state the opposite refer to out-dated material. Since the beginnings of the CSR debate, societies have changed. We can therefore clearly state that, for the present Western society, “Good Ethics is Good Business.”. (shrink)

We study the relationship between corporate social performance and financial performance by comparing the portfolio returns of firms with changes in corporate social responsibility (CSR) intensity. Using an extensive US sample from the MSCI ESG database, we find that improvement in the overall CSR is generally value enhancing. The relationship varies with CSR dimensions. More importantly, the relationship shifts differently for various CSR dimensions during the crisis period when trust in the society is low and financial resource is limited. Improvement (...) in environment, human rights, and product characteristics shows higher financial returns during the financial crisis period, whereas the value enhancement of improvement in employee relations is more pronounced during the non-crisis period. (shrink)

Proactive corporate social responsibility (CSR) involves business practices adopted voluntarily by firms that go beyond regulatory requirements in order to actively support sustainable economic, social and environmental development, and thereby contribute broadly and positively to society. This empirical study examines the role of the economic, social and environmental dimensions of proactive CSR on the association between three specific capabilities—shared vision, stakeholder management and strategic proactivity—and financial performance in small and medium enterprises (SMEs). Using quantitative data collected from a sample of (...) 171 Australian SMEs in the machinery and equipment manufacturing sector and employing structural equation modelling, we find that the adoption of practices in each CSR dimension by SMEs is influenced slightly differently by each capability, and affects financial performance differentially. The study also demonstrates the importance of the interaction between the three dimensions of proactive CSR in positively moderating the deployment of each individual CSR dimension to generate financial performance. Paying primary attention to the economic dimension of proactive CSR and selectively focusing on social and environmental elements of proactive CSR that drive and support the economic dimension are of key importance to sustainable long-term financial success for SMEs. (shrink)

Proactive corporate social responsibility (CSR) involves business strategies and practices adopted voluntarily by firms that go beyond regulatory requirements in order to manage their social responsibilities, and thereby contribute broadly and positively to society. Proactive CSR has been less researched in small and medium enterprises (SMEs) compared to large firms; and, whether SMEs are ideally placed to gain competitive advantage through such activity therefore remains a point of debate. This study examines empirically the association between three specified capabilities (shared vision, (...) stakeholder management and strategic proactivity), proactive CSR and financial performance in SMEs. Using quantitative data collected from a sample of 171 SMEs in the machinery and equipment sector of the Australian manufacturing industry, we find that all specified capabilities are positively associated with adoption of proactive CSR by SMEs, and that proactive CSR is, in turn, associated with an improvement in firm financial performance. Evidence of a fully mediating role for proactive CSR on the association between capabilities and financial performance presented in this study aligns with RBV theory that suggests adoption of value-creating strategies that make the most effective use of a firm’s capabilities is essential to financial success. The study contributes to the CSR literature by demonstrating a case for SMEs being able to maximise financial returns whilst proactively making progress towards CSR. (shrink)

Prior research suggests that participating in corporate social responsibility (CSR) activities can lead to higher future productivity. However, the empirical evidence is still scarce. The purpose of this study is to examine the relationship between CSR and future firm productivity in the U.S. chemical industry. Specifically, this study examines the relationship between CSR in year t and firm productivity in year (t + 1), (t + 2), and (t + 3). We use Data Envelopment Analysis, a non-parametric method, to measure (...) firm productivity. Results from the regression analysis support a significantly positive relationship between CSR and future firm productivity, suggesting that CSR can lead to higher productivity in the chemical industry. The findings add to the validity of the proposition in prior research. (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)

The relationship between social and financial performance (CSP – FP) has been a main objective in the literature on business management, as it would provide an economic justification for the social investment insofar as it contributes to the creation of value. This relationship has been empirically tested by several authors though without using a theoretical model that sustains this relationship. The aim of this article is to propose a theoretical model of the process of the creation of value from the (...) reputation generated by companies, integrating the factors that have been shown to be more relevant in this process from previous research, in such a way that hypotheses are put forward regarding the existence of this relationship and the factors that determine it. Finally, an empirical test is performed using the 100 most prestigious companies operating in Spain during 2004. (shrink)

In this article, we examine the effect of corporate social responsibility (CSR) on firms' financial performance (CSR-effect). Two competing hypotheses, social impact hypothesis and shift of focus hypothesis, are proposed to investigate this issue, where the former suggests that CSR has a positive relation with performance and the latter are opposite. In order to ensure the CSR-effect is not contaminated by other faeton or samples are randomly drawn, we employ four matching methods, Nearest, Caliper, Mahala and Mahala Caliper to match (...) the samples of CSR (CSR-firms) and without CSR (NonCSR-firms) with similar characteristics. Although four methods yield slightly different results, firms engaging in CSR activities tend to obtain significantly higher values on pretax income to net sales and profit margin, and adopting CSR at the very least not deteriorate the performance of firms, making our con clusion favors the social impact hypothesis and against shift of focus hypothesis in Taiwan. Thus, ambition and conscience are not conflicting with each other. (shrink)

>With assets of over US$1.0 trillion and growing, public pension funds in the United States have become a major force in the private sector through their holding of equity positions in large publicly traded corporations. More recently, these funds have been expanding their investment strategy by considering a corporations long-term risks on issues such as environmental protection, sustainability, and good corporate citizenship, and how these factors impact a companys long-term performance. Conventional wisdom argues that the fiduciary responsibility of the pension (...) funds trustees must be solely focused on their beneficiaries and, therefore, their investment criteria must be based strictly on narrowly defined financial measures. It is also asserted that well-established financial measurements of corporate performance already include long-term risk assessment through discounted present value of future flow of earnings. Consequently, all other criteria are contrary to the best interest of the pension funds beneficiaries. In this paper, we assert that, contrary to conventional wisdom, pension funds, and for that matter other mutual funds, must be concerned with the long-term survival and growth of corporations. These measures are generally referred to socially responsible investing (SRI) and when applied to corporations, it is termed socially responsible corporate conduct (SRCC). We demonstrate that current measurement of future risk assessment invariably understates, and quite often completely overlooks, these long-term risks because of the inherent bias towards short-run on the part of financial intermediaries whose compensation depends greatly on short-term results. Furthermore, there is ample evidence to suggest that these intermediaries have been engaging in self-serving practices and thus failing in their duties to serve their clients, i.e. pension funds, best interests. Because of their large holdings in the total market as well as individual companies, these funds cannot easily divest from poorly performing companies without destabilizing the companies stock and overall markets. Hence, they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long-term aspects of their operations in terms of their impact on environment, sustainability, and community welfare, to name a few. We argue that an exclusionary, and even a primary, focus on short-term financial criteria is no longer a viable option. It also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance. Thus socially responsible investing practices are not merely discretionary and desirable activities; they are a necessary imperative, which both the corporations and public pension funds, and other large institutional holders, will ignore at serious peril to themselves. Finally, the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities. It also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long-term corporate survival and growth in the context of a changing economic, environmental and socio-political dynamic. (shrink)

With assets of over US$1.0 trillion and growing, public pension funds in the United States have become a major force in the private sector through their holding of equity positions in large publicly traded corporations. More recently, these funds have been expanding their investment strategy by considering a corporation's long-term risks on issues such as environmental protection, sustainability, and good corporate citizenship, and how these factors impact a company's long-term performance. Conventional wisdom argues that the fiduciary responsibility of the pension (...) funds' trustees must be solely focused on their beneficiaries and, therefore, their investment criteria must be based strictly on narrowly defined financial measures. It is also asserted that well-established financial measurements of corporate performance already include long-term risk assessment through discounted present value of future flow of earnings. Consequently, all other criteria are contrary to the best interest of the pension funds' beneficiaries. In this paper, we assert that, contrary to conventional wisdom, pension funds, and for that matter other mutual funds, must be concerned with the long-term survival and growth of corporations. These measures are generally referred to "socially responsible investing" and when applied to corporations, it is termed "socially responsible corporate conduct." We demonstrate that current measurement of future risk assessment invariably understates, and quite often completely overlooks, these long-term risks because of the inherent bias towards short-run on the part of financial intermediaries whose compensation depends greatly on short-term results. Furthermore, there is ample evidence to suggest that these intermediaries have been engaging in self-serving practices and thus failing in their duties to serve their clients', i.e. pension funds', best interests. Because of their large holdings in the total market as well as individual companies, these funds cannot easily divest from poorly performing companies without destabilizing the companies' stock and overall markets. Hence, they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long-term aspects of their operations in terms of their impact on environment, sustainability, and community welfare, to name a few. We argue that an exclusionary, and even a primary, focus on short-term financial criteria is no longer a viable option. It also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance. Thus socially responsible investing practices are not merely discretionary and desirable activities; they are a necessary imperative, which both the corporations and public pension funds, and other large institutional holders, will ignore at serious peril to themselves. Finally, the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities. It also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long-term corporate survival and growth in the context of a changing economic, environmental and socio-political dynamic. (shrink)

Corporate social performance (CSP) has become a widely applied concept, discussed in most large firms’ corporate reports and the academic literature alike. Unfortunately, CSP has largely been employed as a way of demonstrating corporate social responsibility (CSR) in practice, or to justify the business case for CSR in academia by relating some measure of CSP to some measure of financial performance. In this article, we discuss multiple shortcomings to these approaches. We argue that (1) CSR activities need to be managed (...) and measured as projects and aggregated to the business or corporate level using a project portfolio; (2) appropriate measures need to be identified that move away from reporting the firm’s activities toward quantifying actual social outcomes achieved; and (3) given the types of projects prevalent in CSR, statistical evaluation methods common in other fields (ideally, pre-test post-test control group designs, such as used in medicine or propensity score matching for ongoing or past projects) should be employed to properly measure outcomes. We make a first, albeit imperfect, attempt at using such an approach with data collected on behalf of the Patrimonio Hoy project, a well-publicized CSR initiative carried out by Cemex in Mexico. We show that the results from this data reinforce concerns voiced earlier in this article. (shrink)

Although a number of studies have shown that corporate social responsibility (CSR) activities often lead to greater organisational performance in western developed economies, researchers are yet to examine the strategic value of CSR in emerging economies. Using survey data from 280 firms operating in Dubai, this study examines the link between CSR activities and organisational performance. The results show that CSR has a positive relationship with all three measures of organisational performance: financial performance, employee commitment, and corporate reputation. These results (...) reinforce the accumulating body of empirical support for the positive impact of CSR on performance and challenge the dominant assumption that, given the weak institutional framework in emerging economies, CSR activities drain resources and compromise firms’ competitiveness. (shrink)

The nature of the relationship between environmental performance and firm performance of corporations is a long standing and contentious issue in the literature. This study is intended to advance this debate by arguing for the existence of curvilinear relationship and empirically testing the same using survey data on UK manufacturing firms. FP is captured in terms of growth in sales and market share. Our results show evidence for a quadratic relationship—as firms improve their EP, they seem to achieve much higher (...) levels of FP. These results are consistent with the resource-based view of a firm; as firms engage in EP activities, they are able to gain inimitable knowledge that helps in further learning to further improve performance. Based on our results, we suggest that new studies focus on strategies to extend the period of increasing returns and maximizing the benefits of the positive association between EP and FP. (shrink)

The study here is a qualitative research based on multiple case studies of banking service providers to analyze the role of corporate social responsibility (CSR) in the definition of the corporate identity of these kinds of organizations. The results show that, although companies increasingly integrate CSR into their business strategies, there are some aspects of its management such as its communication or the measurement of its results that detract from its success. These results have important implications for those managers pursuing (...) an effective management of CSR policies and strategies in their organizations, especially as the information comes from 6 of the biggest and most important banking institutions in a European country, with a declared assets (loans) volume which represents 62.75% of the total assets in the national banking industry, and thus largely representing the possible heterogeneity of the market in terms of company size, location, legal status, and management styles. (shrink)

The purpose of this study is to extend prior research on this topic by investigating whether the impact of ownership concentration moderates the link between corporate social performance and financial performance. This study uses a set of unique, hand-collected pollution control data to measure CSP, based on a sample of Taiwanese listed companies during the period from 1996 to 2006. The results of the empirical analysis provide firm support for the idea that the divergence between control rights and the cash (...) flow rights of controlling owners negatively moderates the link between social and short- and long-run FP. (shrink)

This study examines the impact that research and development (R&D) intensity has on corporate social responsibility (CSR). We base our research on the resource-based view (RBV) theory, which contributes to our analysis of R&D intensity and CSR because this perspective explicitly recognizes the importance of intangible resources. Both R&D and CSR activities can create assets that provide firms with competitive advantage. Furthermore, the employment of such activities can improve the welfare of the community and satisfy stakeholder expectations, which might vary (...) according to their prevailing environment. As expressions of CSR and R&D vary throughout industries, we extend our research by analysing the impact that R&D intensity has on CSR across both manufacturing and non-manufacturing industries. Our results show that R&D intensity positively affects CSR and that this relationship is significant in manufacturing industries, while a non-significant result was obtained in non-manufacturing industries. (shrink)

This paper examines the influence of CEO career horizon problems on corporate social responsibility. We assume that as CEOs are getting older, they tend to disengage in CSR due to their shorter career horizons. We further argue that high levels of industry-level discretion and blockholder ownership amplify the negative effects of CEO age on CSR. Using a panel sample of US-based firms over 2004–2009, we do not find the main effect of CEO age on CSR, but find support for the (...) moderating effects, such that CEO age is negatively associated with CSR when there are high levels of ILD and blockholder ownership. Therefore, results suggest that CEO career horizon problems matter for CSR when CEOs have sufficient discretion over the firm’s strategic decisions and outside blockholders put more pressure on CEOs to engage in financial earning management. (shrink)

Relatively little research has examined the effects of ownership on the firms’ corporate social responsibility (CSR). In addition, most of it has been conducted in the Western context such as the U.S. and Europe. Using a sample of 118 large Korean firms, we hypothesize that different types of shareholders will have distinct motivations toward the firm’s CSR engagement. We break down ownership into different groups of shareholders: institutional, managerial, and foreign ownerships. Results indicate a significant, positive relationship between CSR ratings (...) and ownership by institutions and foreign investors. In contrast, shareholding by top managers is negatively associated with firm’s CSR rating while outside director ownership is not significant. We conclude that different owners have differential impacts on the firm’s CSR engagement. (shrink)

A horseshoe is regarded as a lucky, perhaps even romantic, symbol of our industrial heritage. Why is it, then, that much of English literature, from Mandeville's ‘Grumbling Hive’ on, portrays business in a murky light? The paper begins with an analysis of this phenomenon and concludes that it is the institutionalisation and legitimisation of avarice and its consequential effects that gives rise to such a portrayal. A horseshoe has also been used as a convenient means of conceptualising an answer to (...) the questions this conclusion raises: ‘Who should control the corporation and for what ends?’ (Mintzberg 1985) and discussing recent developments in corporate social responsibility. Drawing on research evidence the paper demonstrates how corporations are simultaneously under pressure from society and responding to its concerns. The paper concludes that these current developments can at best ameliorate the situation, and that what is necessary is to rediscover the notion of corporate virtue, instead of putting virtue at the service of vice. (shrink)

This paper develops a set of 16 criteria, divided into four groupings, for responsible business practice (RBP) in Small and Medium-Sized Enterprises (SMEs) drawn from the existing SME/RBP literature. The current lack of a general set of criteria against which such activity can be judged is noted and this deficit is redressed. In order to make an initial assessment in support of the criteria so derived, an exploratory feasibility study of RBP in U.K. Fair Trade organisations was conducted. The findings (...) from this study show that most but not all of the RBP criteria seem to be applicable to U.K. Fair Trade organisations but it is recommended that the complete set of criteria continues to be used in further research until such time as there is a general consensus as to which criteria are appropriate. Implications for RBP in small businesses in general, and for Fair Trade organisations in particular, are drawn out and suggestions for further research are identified. (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)

This article contributes to the general literature on the relationship between corporate social performance and corporate financial performance, as well as to the emerging HRM–CSR literature, by exploring the curvature of the relationship between HRM–CSP and CFP. We advance conceptual arguments in favor of an inverted U-shaped relationship. Our results demonstrate a significant quadratic relationship between HRM–CSP and CFP. We provide evidence that this relationship is not linear or S-shaped but rather inverted U-shaped.

Managers’ commitment to contribute to sustainable development holds the key to their long-term business success and may be a source of competitive advantage. The managerial perception of business ethics is influenced by the level of moral development and personal characteristics of managers. These perceptions are also shaped by forces existing in the environment of the firm, including available resources, societal expectations, sector, and regulations. The resource-based perspective can thus contribute to the analysis of ethical issues offering important insights on how (...) they can influence the environmental strategy of the firm. The findings of this study show that firm resources have a strong influence on business managers’ ethical attitudes. In addition, the application of resource-based rationales to ethical issues can be justified in the following several ways: it influences a managerial perception of natural environment as a competitive opportunity, it requires investments of financial and human resources, flexibility and speed in the adaptation to environmental changes, and it creates new resource-based opportunities through changes in prevention pollution technology, policy process, and market forces. (shrink)

In recent years, the stakeholder approach has been widely applied in the debate on corporate social responsibility (CSR). Although many authors of this approach have reviewed many elements of the model, they have unconditionally accepted several criteria assumed by Freeman ( 1984 ) to identify stakeholders. In general, stakeholder authors have assumed that (a) the company establishes dyadic relationships with other agents, and (b) decisions made by a company only have foreseen and direct effects on other agents. These criteria have (...) enabled researchers to understand simple processes. However, they have also prevented researchers from explaining how action comes about, and how responsibility is shared, in many complex processes taking place in contemporary societies. Such complex processes involve many agents, and each decision can generate unexpected effects which accumulate or disseminate. Furthermore, the normative structure governing these processes can affect and/or be affected by the actions of agents. In this study, we propose new criteria to expand the stakeholder model and facilitate the study of CSR in such processes. (shrink)

This study seeks to shed light on the effect of star CEOs on the environmental, social, and governance (ESG) performance of Chinese firms. Relying on the theoretical perspective of role identity and role constraints, we analyze data from 1222 Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges from 2006 to 2019. The results analyzed using the ordinary least squares estimate method reveal a positive effect of star CEOs' extreme confidence and legitimacy pressure mechanisms on ESG performance. We also (...) find that this positive relationship is negatively moderated by higher organizational slack but strengthened by a lower level of regional marketization, as the degree of firms' dependence on external stakeholders' resources differs significantly. Additionally, this study finds that ESG activities are less likely to be associated with firm performance if star CEOs pursue them to satisfy their need for star status. These findings supplement the early tests of the influence mechanism of star CEOs on organization-level results and expand the context discussion of role identity and role constraints theory in the Chinese institutional environment. (shrink)

This study empirically analyzes how corporate social responsibility performance feedback impacts CSR performance, focusing on the performance feedback perspective of behavioral theory of the firm. By performing generalized least squares regression analysis based on Korean company data from 2012 to 2019, we presented evidence that positive social and historical performance feedback had a positive effect on CSR performance. Our results provide evidence that firms with higher social and historical CSR performance than CSR aspiration may have higher CSR performance than those (...) that do not. (shrink)

This paper investigates whether corporate philanthropic decisions are associated with a firm’s listing status and business group affiliation. Analyzing a large sample of public and private firms in Korea, we find that public firms make more charitable contributions than private firms and business group-affiliated firms make more charitable contributions than non-affiliated firms. The results suggest that public firms, owing to greater public scrutiny, and business groups, owing to higher political costs, are encouraged to make more corporate charitable contributions. Further, we (...) find that greater corporate giving by public firms than private firms is more pronounced for business group-affiliated firms, compared with non-affiliated firms. The result is consistent with business groups’ strategic coordination of their affiliates’ philanthropic decisions to tunnel business group resources out to controlling shareholders who hold a larger portion of private affiliates than public affiliates. (shrink)

The authors explore the relation between the way different family firms are named, and the shareholder value impact of these firms’ new product introductions. Using an event study of 1,294 product introduction announcements of 107 publicly listed U.S. family firms, the authors find that the presence of the founding family’s name as part of a family firm’s name acts as a valuable firm resource, increasing the abnormal stock returns surrounding the firm’s new product introductions. Superior returns to family-named firms’ new (...) product introductions are partially mediated by these firms’ history of ethical product-related behavior: family-named firms, particularly those with corporate branding, and those wherein a founding family member holds the CEO or chairman position, are more likely to exhibit a history of avoiding such product-related controversies as product safety issues, and deceptive advertising. The authors highlight the managerial and theoretical contributions of this research. (shrink)

Western buying companies impose Supplier Codes of Conduct (SCC) on their suppliers in developing countries; however, many suppliers cannot fully comply with SCC and some of them even cheat in SCC. In this research, we link contract characteristics - price pressure, production complexity, contract duration - to the likelihood of supplier's commitment to SCC through a mediating process: how the buying companies govern their suppliers. Our structural equation model analysis shows that the hierarchy/relational norms governance is a perfect mediator of (...) contract characteristics' effects on the likelihood of supplier's commitment; the market governance, an insignificant one. The managerial implications are provided for successfully implementing SCC in global supply chains. (shrink)

Should CSR be approached only on a voluntary basis or should it be complemented with a compulsory regulatory framework? What type of government intervention is more effective in fostering CSR among companies? This paper is an attempt to answer these questions, reviewing the debate between proponents of the voluntary case and the obligatory case for CSR, and critically analysing current international government-led initiatives to foster CSR among companies, and national government-led initiatives in the EU area. Finally, the paper focuses on (...) the Spanish case, as an example of the failure of an exclusively voluntary approach. Despite the rapid uprise of CSR, Spain is still far behind late in CSR promotion strategies. Most action has been undertaken by companies themselves with no common guidelines, governmental support, or independent verification. The lack of a regulatory framework for CSR or ethical investment issues and the virtual absence of other indirect incentives, explains the misbalance between private, public and Third Sector initiatives. Based on the Spanish context which is quite similar to other non-OECD countries, the authors call for a more proactive government position in CSR related issues. The conclusions of the paper detail the features of this regulatory framework and other policies to promote CSR in Spain as well as in other OECD countries. (shrink)