This article examines the relationship between corporate social responsibility and locality in the small business context. This issue is addressed by studying the interplay between small businesses and local community based on the embeddedness literature and using the concept of social proximity. On the basis of 25 thematic interviews with owner-managers a typology is constructed which illustrates the owner-managers’ perceptions of the relationship between the business and the local community. The findings emphasize the importance of reciprocity as it is suggested (...) that corporate social responsibility in relation to locality is constructed as a response to the interpretations of reciprocal community support between small business owner-managers and local community. (shrink)

Downsizing has become a significant public issue that has not yet been significantly studied by business ethicists. It is proposed that reasonable social and psychological contracts bound the moral free space of managers contemplating downsizing; the degree of constraint is also dependent on the organization's resource munificence. A framework for considering the extent of managerial moral free space and implications thereof for managerial practice are offered.

Downsizing has become a significant public issue that has not yet been significantly studied by business ethicists. It is proposed that reasonable social and psychological contracts bound the moral free space of managers contemplating downsizing; the degree of constraint is also dependent on the organization's resource munificence. A framework for considering the extent of managerial moral free space and implications thereof for managerial practice are offered.

While downsizing has been widely studied, its connection to firm ownership status and the reasons behind it are missing from extant research. We explore the relationship between downsizing and family ownership status among Fortune 500 firms. We␣propose that family firms downsize less than non-family firms, irrespective of performance, because their relationship with employees is based on normative commitments rather than financial performance alone. We suggest that their actions are related to employee- and community-friendly policies. We find that family businesses do (...) downsize less irrespective of financial performance considerations. However, their actions are not related to their employee- or community-friendly practices. The results raise issues related to the motivations of large multinationals to␣downsize and the drivers of their stakeholder management practices. (shrink)

Business Ethics: A European Review, EarlyView.

This paper advances stakeholder salience theory from the viewpoint of small businesses. It is argued that the stakeholder salience process for small businesses is influenced by their local embeddedness, captured by the idea of social proximity, and characterised by multiple relationships that the owner-manager and stakeholders share beyond the business context. It is further stated that the ethics of care is a valuable ethical lens through which to understand social proximity in small businesses. The contribution of the study conceptualises how (...) the perceived social proximity between local stakeholders and small business owner-managers influences managerial considerations of the legitimacy, power and urgency of stakeholders and their claims. Specifically, the paradoxical nature of close relationships in the salience process is acknowledged and discussed. (shrink)

This paper investigates the layoff behavior, a typical people dimension of corporate social performance, of family firms from a place-based perspective. We theorize that a place-based culture within family firms ensures that all organizational members share a deep sense of connection with the place of operations which makes them inherently care about their impact on society. Using data on layoffs of 2000 largest US firms between 1994 and 2007, we find that family firms do indeed exhibit a lower tendency to (...) lay off employees in comparison to non-family firms; this relationship is particularly strong in ‘places’ with low population where the negative social externalities related to layoffs tend to be higher. Further post hoc analyses indicate that family firms have a strong place-based culture which can provide resource-based competitive advantages. (shrink)

Within the context of employee rights and management social responsibility, this paper identifies and explores three ethical dimensions of downsizing. Using ANOVA and Scheffe post-hoc statistical techniques, groups involved in the downsizing decision making process were compared with groups affected by the process on each ethical dimension. Results indicated that those affected by the process attached greater ethical significance to these dimensions than those who were involved in formulating and implementing/communicating downsizing decisions.

We investigate if private family firms have a greater environmental performance focus than nonfamily firms, and if this relationship is moderated by the strength of the firms’ social embeddedness. We empirically test these issues using a representative sample of 1452 private Australian small and medium-sized enterprises. Contrary to prevailing assumptions and previous indicative findings in the public firm context, our results show that family firms have a lower environmental performance focus than nonfamily firms. However, in cases where the firm is (...) highly embedded in the social community, we find that family firms have a higher environmental performance focus. We explain our unexpected results by considering the role of financial risk in publicly held family firms. Accordingly, we posit that prior findings in the public firm context may be evidence of families expropriating wealth from nonfamily shareholders rather than altruistic pro-environmental behavior. (shrink)

In a weak economy, both managers and scholars may seek an ethical framework to guide decisions about layoffs and downsizing. Agency and stakeholder theories offer limited practical guidance about ethical norms. This paper looks to the Talmud, an ancient compilation of law, legend, and critical analysis for insights into the modern employment relationship. In its method of analysis and in its specific discussion of the treatment of employees, the Talmud provides an approach and a framework for assessing the ethical standing (...) of particular layoff decisions. The article introduces readers to elements of Talmudic analysis and then applies that framework to particular kinds of corporate downsizing decisions. (shrink)

Extending the dialogue on corporate social performance as descriptive stakeholder management, we examine differences in CSP activity between family and nonfamily firms. We argue that CSP activity can be explained by the firm’s identity orientation toward stakeholders. Specifically, individualistic, relational, or collectivistic identity orientations can describe a firm’s level of CSP activity toward certain stakeholders. Family firms, we suggest, adopt a more relational orientation toward their stakeholders than nonfamily firms, and thus engage in higher levels of CSP. Further, we invoke (...) collectivistic identity orientation to argue that the higher the level of family or founder involvement within a family firm, the greater the level of CSP toward specific stakeholders. Using social performance rating data from 1991 to 2005, we find that family and nonfamily firms demonstrate notable differences in terms of social initiatives and social concerns. We also find that the level of family and founder involvement is related to the type and frequency of a family firm’s social initiatives and social concerns. (shrink)

We provide new evidence that the prosocial attitudes of local residents play a significant role in determining a firm’s corporate social responsibility engagement. We show that firms are more likely to engage in CSR initiatives when they are headquartered in areas with large senior citizen populations and where a large fraction of the population makes charitable donations. In contrast, we find that firms are less likely to engage in CSR initiatives when they are headquartered in areas with large religiously affiliated (...) groups. After establishing the local demographic roots of CSR demand, we then examine the relationship between the firm’s CSR activities and its market valuation. Our results suggest that CSR initiatives create value when they are properly aligned with local residents’ prosocial attitudes. Overall, our study stresses the role of local residents’ CSR preferences in mediating the relationship between CSR and market valuations. (shrink)