For four decades, research on the role and responsibilities of business in society has centered on the business case for corporate social responsibility (CSR) and an increasing number of studies on the corporate social performance (CSP)—corporate financial performance (CFP) link emerged leading to controversial results. Heeding the call for a deeper understanding of the mechanisms linking certain CSR efforts to certain performance outcomes, this study provides a stakeholder-based organizing framework rooted in an extensive review of existing literature on the link (...) between CSP and CFP. In so doing, we aim at guiding research and practice toward less simplistic understandings of the CSP–CFP connection, thus advancing the debate over the consequences of voluntary integrating CSR into business operations and into relationships with stakeholders. By disentangling specific drivers and outcomes of the CSP–CFP link, we underline the importance of setting clear boundaries and specifying levels of analysis to generate comparable results. (shrink)

This article examines whether the involvement of stakeholders in the design of corporate codes of conduct leads to a higher implementation likelihood of the code. The empirical focus is on Occupational Safety and Health (OSH). The article compares the inclusion of OSH issues in the codes of conduct of 30 companies involved in International Framework Agreements (IFAs), agreed upon by trade unions and multinational enterprises, with those of a benchmark sample of 38 leading Multinational Enterprises in comparable industries. It is (...) found that codes of the IFA group have a higher implementation likelihood in OSH than the codes of the benchmark group. Further, European firms, culturally more used to stakeholder involvement, score higher than their US and Japanese competitors, and hence are more capable of addressing the safety and health issues in international supply chains. The implementation likelihood of codes seems closely related to the type of corporate CSR approach. (shrink)

Extant research indicates a positive and significant relationship between corporate ethical values and employees’ job performance. Furthermore, past studies have empirically demonstrated that perceived fairness moderates the influence of corporate ethical values on employee performance. In other words, high congruity between employees’ and an organization’s ethical values will result in superior employee performance outcome. This research aims to develop a broader perspective on the complex relationship between CEV and employee outcomes. The article will first examine the direct influence of CEV (...) on organizational citizenship behaviors and alienation from work, and then the moderating role of perceived fairness. The researcher found a significant direct effect of CEV on both OCBs and AFW, but that perceived fairness does not moderate these relationships. A key implication of findings of this research is that although perception of fairness may suppress the impact of organizational ethical transgressions on employee performance in the short run, as earlier studies have demonstrated, but in the long term, implications of perceived fairness are multifold. (shrink)

Non-governmental organizations and pressure groups have taken up the mission of counterbalancing the huge power of the multinational corporations. Curiously, while most NGOs have a sincere ethical background and a genuine ethical motivation, the way some activist groups and NGOs themselves act does not always live up to the principles they advocate. Research using a multiple case study methodology is used to provide an illustration of various questionable practices followed by pressure groups revealing a range of tactics. The concerns, the (...) objectives and the legitimacy of NGOs and activist groups will be discussed, along with their strategies and tactics. A framework will be developed as a basis for analysing the ethical aspects of the various NGO actions. The analysis of the cases will reveal some worrisome inconsistencies between the demands and the practices of NGOs and activist groups. Should not the means employed by activists and NGOs be consistent with their own espoused or implied values? As power gives responsibility, NGOs should be seen as having corporate stakeholder responsibility. (shrink)

Stakeholder literature has acknowledged the need to complement the extant theory on stakeholder management by more dynamic perspectives. This article makes use of the recent terminology of stakewatcher and stakeseeker to illustrate the dynamic aspect of stakeholder theory transposed in the graphical representation of Freeman’s stakeholder model. Presenting a few selected case studies, it applies the scheme on the concept of value responsibility chain; it exemplifies the role of stakeseekers in various forms of activism, from shareholders, NGOs and government, in (...) the stakeholder mobilisation process. This article clarifies how stakewatchers and stakeseekers can profoundly affect stakeholder salience, especially in crises. The transposition and integration of the dynamic aspect of stakeholder theory into the graphical representation strengthen the forceful pedagogical value of the Freeman’s stakeholder graphical model. (shrink)

The private provision of security services has attracted a great deal of recent attention, both professional and popular. Much of that attention suggests the questioned moral legitimacy of the private vs. public provision of security. Linking the literature on moral legitimacy and responsibility from new institutional and stakeholder theories, we examine the relationship between moral legitimacy and responsible behavior by both private security companies (PSCs) and their stakeholders. We ask what the moral-legitimacy-enhancing responsibilities of both might be, and contribute to (...) both literatures and their managerial implications by detailing the content of those responsibilities, emphasizing the reciprocal nature of moral obligations. We suggest that the moral legitimacy of the industry depends upon responsible behavior by both PSCsandtheir stakeholders. (shrink)

Fair trade aims at humanising the capitalist economy by serving the community, instead of simply striving for financial profit. The current fair trade sector is an excellent example of an innovation where networks based on ethical principles can help to effectively serve this market. Our analysis is based on 48 interviews amongst fair trade innovators in France and illustrates the advent of a new type of entrepreneur, one that is grounded in the social and solidarity economy (SSE). Based on a (...) service-dominant logic, these innovators aim to construct a 'new world' centred on trade relationships by integrating the role of multiple-player networks into the creation of value in the market. (shrink)

The debate about the appropriate standards for upstream corporate social responsibility of multinational corporations has been on the public and academic agenda for some three decades. The debate originally focused narrowly on “contract responsibility” of MNCs for monitoring of upstream contractors for “sweatshop” working conditions violating employee rights. The authors argue that the MNC upstream responsibility debate has shifted qualitatively over time to “full producer responsibility” involving an expansion from “contract responsibility” in three distinct dimensions. First, there is an expansion (...) of scope from working conditions to human rights and social and environmental impacts broadly defined. Second, there is expansion in depth of this broader responsibility to the whole upstream supply chain without regard to contracting status. Upstream responsibility now includes all suppliers, including direct contractors and the chain of suppliers to such contractors. Finally, the change in CSR scope and depth has led to an evolution of CSR management practice. (shrink)

This paper examines the question of how to determine the extent of a multinational corporation ’s corporate social responsibility for actions by its suppliers. Drawing on three theories of power and influence from the organization and management literature—resource-dependence theory, social exchange theory and social network theory, this paper presents a conceptual framework for analysing the extent of power and influence of an MNC in a global supply chain based on a consideration of economic and non-economic exchanges and direct and indirect (...) exchanges in the MNC’s industry network. The paper also shows how the legal concept of complicity can be incorporated by considering the knowledge links of the MNC to other organizations in the industry network. Finally, the paper demonstrates how the concepts can be integrated to construct a power assessment grid which can be used to assess the extent of responsibility of an MNC for the actions of its suppliers and other parties in the industry, as well as a map of power and knowledge relationships between organizations in the industry which can be used for further analyses using social network analysis techniques. (shrink)

ABSTRACTThe private provision of security services has attracted a great deal of recent attention, both professional and popular. Much of that attention suggests the questioned moral legitimacy of the private vs. public provision of security. Linking the literature on moral legitimacy and responsibility from new institutional and stakeholder theories, we examine the relationship between moral legitimacy and responsible behavior by both private security companies and their stakeholders. We ask what the moral-legitimacy-enhancing responsibilities of both might be, and contribute to both (...) literatures and their managerial implications by detailing the content of those responsibilities, emphasizing the reciprocal nature of moral obligations. We suggest that the moral legitimacy of the industry depends upon responsible behavior by both PSCsandtheir stakeholders. (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)

Today, sustainable relations with a broad range of key stakeholders are not only important from a normative business ethics perspective, but also from an entrepreneurial viewpoint to allow and support the long-term survival of a firm. We will argue that the traditional conception of a firm’s corporate social responsibility does not reflect this view and that a comprehensive and dynamic conception of a firm’s responsibilities is necessary to map the reality of business practice and to manage the challenges implied by (...) sustainability. We think that distributive justice, that is the way in which firms involve their stakeholders in their wealth creation and dissemination processes, provides a comprehensive understanding of corporate responsibilities. Concerning procedural justice, we will discuss how firms involve stakeholders in their strategic processes according to their contribution to wealth creation. In the course of the article, we will propose a framework along with three design principles that can be used for shaping dynamic and comprehensive corporate responsibilities, and which thereby allow a sustainable procedure for changing business and non-business environments. (shrink)

In 2009, Greenpeace launched an aggressive campaign against Nestlé, accusing the organization of driving rainforest deforestation through its palm oil suppliers. The objective was to damage the brand image of Nestlé and, thereby, force the organization to make its supply chain more sustainable. Prominent cases such as these have led to the prevailing view that sustainable supply chain management is primarily reactive and propelled by external pressures. This research, in contrast, assumes that SSCM can contribute positively to the reputation of (...) an organization as a “good citizen” and, thereby, counter the impression that external stakeholder pressure is the only driver of SSCM. The study draws on Resource Dependence Theory in analyzing the three competing models of the potential stakeholder, SSCM and the corporate sustainability performance relationship. A dataset of 1,621 organizations allows the statistical comparison of these three models. Findings suggest that stakeholder pressure and SSCM both contribute to an organization’s sustainability performance. Thus, supply chain managers will perceive benefits from SSCM other than merely the reduction of risk from reputational damage through stakeholder activism. (shrink)

Although the characteristics and advantages of interorganizational governance models based on extensive collaboration are well established in the literature, inquiry has only recently extended to sustainable supply chain management, highlighting the potential benefits of combining the integration of social and environmental issues concerning the supply chain with governance models based on joint decision making and extensive cooperation. Yet, firms still differ in both the pervasiveness of such collaborative approaches along the value chain and the extent to which sustainability issues are (...) addressed to the advantage of all parties involved. In an attempt to predict variety in the governance models related to sustainability along the value chain, we propose a theoretical model that identifies and frames four sustainable supply chain governance (SSCG) models, resulting from combinations of supply chain network density and centrality of the focal organizations. We show how, as centrality increases, firms are able to exert influence over their network, coordinating integrated approaches along the value chain. Moreover, as high centrality combines with increasing interconnectedness of the actors within a supply chain network, instrumental approaches are progressively replaced by more relational attitudes aimed at joint value creation among partners. Conditions for SSCG models' success and the main benefits gained by firms in different structural contexts are also discussed. (shrink)

I apply stigma-management strategies to corporate scandals and expand on past research by (a) describing a particular type ofstigma management strategy that involves accepting responsibility while denying it, (b) delineating types of stigma that occur in scandals (demographic versus character), and (c) considering the moral implications of shifting stigmas that arise from scandals. By emphasizing the distinction between character and demographic stigma, I make progress in evaluating the moral implications of shifting different types of stigma.

Buyer–supplier relationships are often framed as principal–agent relationships, based on contractual arrangements that temporarily align the goals of both parties. The underlying notion is that the relationship between buyers and suppliers is adversarial in nature and that the supplier, acting in the role of the agent, will take advantage of the principal if not sufficiently controlled. We propose that there is empirically also another type of partnership which reflects the propositions of stewardship theory. According to this theory, suppliers are motivated (...) to work autonomously towards contractually agreed objectives. We analyse how the agency and stewardship theories differ regarding their descriptions of autonomy, motivation, identification, authority, stakeholder orientation and short- versus long-term collaboration. We analyse the case of a first-tier supplier and four second-tier suppliers situated in Turkey in the area of Istanbul which collaborate with the aim of improving their social and environmental performance. The results show that the relationship between the partners in this case has become more collaborative over time and can now be described in terms of stewardship theory rather than in terms of agency theory. We conclude that the distinction between agency and stewardship relationships is empirically meaningful in the context of supplier–buyer relationships and adds a new aspect to our understanding of how to achieve more sustainable supply chains. (shrink)

The buyer–supplier relationship is the nexus of the economic partnership of many commercial transactions and is founded upon the reciprocal trust of the two parties that participate in this economic exchange. In this article, we identify how six ethical elements play a key role in framing the buyer–supplier relationship, incorporating a model articulated by Hosmer (The ethics of management, McGraw-Hill, New York, 2008 ). We explain how trust is a behavior, the relinquishing of personal control in the expectant hope that (...) the other party will honor the duties of a psychological contract. Presenting information about six factors of organizational trustworthiness, we offer insights about the relationship between ethics and trust in the buyer–supplier relationship. (shrink)