This study examined the influence of corporate giving programs on the link between certain categories of corporate crime and corporate reputation. Specifically, firms that violate EPA and OSHA regulations should, to some extent, experience a decline in their reputations, while firms that contribute to charitable causes should see their reputations enhanced. The results of this study support both of these contentions. Further, the results suggest that corporate giving significantly moderates the link between the number of EPA and OSHA violations committed (...) by a firm and its reputation. Thus, while a firm's reputation can be diminished through its violation of various government regulations, the extent of the decline in reputation may be significantly reduced through charitable giving. (shrink)

This study of philanthropy among large Black-owned businesses provides insights into a sector of business giving which has not been studied. Results indicate that philanthropy and ethical justifications play a more important role in minority business enterprises than in non-minority firms studied previously.

This study investigates financial correlates of corporate philanthropy in Fortune 1000 companies using structural equation modeling. The results suggest that cash flow (one of the most discretionary types of organizational slack) has a significant impact on a firm’s cash donations to charitable causes, but monetary donations do not affect firm financial performance. These findings support the accepted view of corporate philanthropy as a discretionary social responsibility and the traditional thinking about firm giving in the business and society literature—that doing well (...) enables doing good. Contrary to some contemporary thinking, the findings imply no significant effect on profits from corporate generosity. (shrink)

This research note analyzes the relationship between indicators of corporate social and financial performance within a comprehensive theoretical framework. The results, based on data for 67 large U.S. corporations for 1982-1992, reveal no significant negative social-financial performance relationships and strong positive correlations in both contemporaneous and lead-lag formulations.

Using agency theory, this study empirically examined the relationship between board composition and corporate philanthropy. Generally, the ratio of insiders to outsiders, the percentage of insider stock ownership, and the proportion of female and minority board members were found to be positively and significantly associated with firms'' charitable contributions.

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)

In a departure from the traditional studies of corporate philanthropy that focus on board composition, advertising, and social networks, the authors investigate the financial correlates of corporate philanthropy. The research design controls for firm size and industry while observing firms from a variety of industries. The sample contains matched pairs of generous and less generous corporate givers. The authors find, as hypothesized, a positive relationship between a firm''s cash resources available and cash donations, but no significant relationship between corporate philanthropy (...) and firm financial performance, regardless of whether corporate philanthropy is measured as cash payouts or the aggregate contributions that charities actually receive, and regardless of whether financial performance is gauged using accounting measures or market measures. Whereas the link between available resources and corporate philanthropy is well accepted in the literature on corporate social responsibility, it has been rarely tested and never so definitively found as in this research. (shrink)

This paper investigates why some companies give to charity and others do not. The study uncovers a strong relationship between the personal attitudes of the charitable decision maker and the firm's giving behavior. This relationship indicates that the human element of personal attitudes may interact and play a very important role in a firm's decision to become involved with philanthropic activities. The study also shows that firms who have a history of giving to charity cite altruistic motives for their behavior. (...) On the other hand, firms that do not give to charity tend to use business reasons to explain their non-involvement. (shrink)

The authors argue that corporate philanthropy is far too important as a social instrument for good to depend on ethical egoism for its support. They claim that rule utilitarianism provides a more compelling, though not exclusive, moral foundation. The authors cite empirical and legal evidence as additional support for their claim.

In a previous paper (Moore, 2001), the headline findings from a study of social and financial performance over three years of eight firms in the UK supermarket industry were reported. These were based on the derivation of a 16‐measure social performance index and a 4‐measure financial performance index. This paper discusses the formulationof the indices and then reports on: discussions with two supermarket firms concerning the overall results; inter‐relationships between individual financial performance measures; inter‐relationships between individual social performance measures; stakeholder (...) group analysis; and inter‐relationships between turnover, age and gearing with social performance measures. The paper discusses these inter‐relationships, incorporating comments from the interviews with the two supermarket firms, and reports on both factor and cluster analysis. The interviews lend support for Preston and O’Bannon’s (1997) Available Funding Hypothesis in both its positive and negative form. The findings show that there are individual or combinations of related measures that could be used as surrogate measures for social and financial performance, instead of deriving a full index. However, the recommendation is that a full index continues to be used until there is further corroboration of these results. The findings also provide statistically significant support for the Negative Synergy Hypothesis (Preston and O’Bannon, 1997), show a statistically significant association between pre‐tax profits (both lagged and contemporaneous) with community contributions, and show that all statistically significant associations between individual social performance measures are positive – suggesting that they are mutually reinforcing. The association of size with social performance, noted in the previous paper, is also reinforced. Findings in relation to the proportion of women managers and the number of women on the Board and positive associations with other social and environmental performance measures raise interesting gender issues for business ethics. Factor analysis leads to no clear conclusions but cluster does show two or three clear clusters of firms, where size would seem to be the main but not sole factor. Further areas of research are noted. (shrink)

The comparison of corporate social performance with corporate financial performance has been a popular field of study over the past 25 years. The results, while broadly conclusive of a positive relationship, are not entirely consistent. In addition, most of the previous studies have concentrated on large-scale cross-industry studies and often with a single variable for corporate social performance, in order to produce statistically significant results. This weakens the richness of understanding that might be obtained from a single industry study with (...) multiple social variables, which would also allow investigation of inter-relationships between individual and sub-sets of social performance measures and between individual and sub-sets of social performance and financial performance measures. There have also been criticisms that the results lack a rigorous theoretical basis, and the paper demonstrates clearly how stakeholder theory must form the basis for this area of research. Following a review of the literature this paper presents the initial findings from a study of the U.K. Supermarket industry which suggest that contemporaneous social and financial performance are negatively related, while prior-period financial performance is positively related with subsequent social performance. Positive relationships between both age and size of the company with social performance are also found. (shrink)

In a previous paper (Moore, 2001), the headline findings from a study of social and financial performance over three years of eight firms in the UK supermarket industry were reported. These were based on the derivation of a 16‐measure social performance index and a 4‐measure financial performance index. This paper discusses the formulationof the indices and then reports on: discussions with two supermarket firms concerning the overall results; inter‐relationships between individual financial performance measures; inter‐relationships between individual social performance measures; stakeholder (...) group analysis; and inter‐relationships between turnover, age and gearing with social performance measures. The paper discusses these inter‐relationships, incorporating comments from the interviews with the two supermarket firms, and reports on both factor and cluster analysis. The interviews lend support for Preston and O’Bannon’s (1997) Available Funding Hypothesis in both its positive and negative form. The findings show that there are individual or combinations of related measures that could be used as surrogate measures for social and financial performance, instead of deriving a full index. However, the recommendation is that a full index continues to be used until there is further corroboration of these results. The findings also provide statistically significant support for the Negative Synergy Hypothesis (Preston and O’Bannon, 1997), show a statistically significant association between pre‐tax profits (both lagged and contemporaneous) with community contributions, and show that all statistically significant associations between individual social performance measures are positive – suggesting that they are mutually reinforcing. The association of size with social performance, noted in the previous paper, is also reinforced. Findings in relation to the proportion of women managers and the number of women on the Board and positive associations with other social and environmental performance measures raise interesting gender issues for business ethics. Factor analysis leads to no clear conclusions but cluster does show two or three clear clusters of firms, where size would seem to be the main but not sole factor. Further areas of research are noted. (shrink)

Many UK public companies invest considerable resources in charitable donations and community involvement. Using semi‐structured interviews with public company officers, the author sought to investigate the motivations behind this activity. Was it undertaken because of an expectation of commercial benefit, out of a sense of obligation, or for other reasons? It appeared that public companies were increasingly anxious to make connections between corporate activity in the community and business activities. Public companies linked with local communities clearly felt a sense of (...) connection with them. Corporate officers were constantly dealing with the management of reputation, which was seen as a valuable business asset, and community links made this task easier. (shrink)

Recent years have witnessed an escalation in corporate social reporting (CSR) by UK companies (Gray, Kouhy and Lavers 1995). Whilst some elements of CSR reporting are required by law, much of it represents voluntary reporting. By investigating the non‐mandatory reporting of two aspects of social responsibility, corporate community involvement (CCI) and environmental impact, this paper seeks to explore why companies choose to make such disclosures. It specifically asks whether companies are primarily motivated by the strategic need to manage their reputation (...) and legitimacy rather than by the recognition of their ethical accountability, which is the stated purpose of reports produced by cutting edge companies (Clarke 1998). (shrink)

Recent years have witnessed an escalation in corporate social reporting (CSR) by UK companies (Gray, Kouhy and Lavers 1995). Whilst some elements of CSR reporting are required by law, much of it represents voluntary reporting. By investigating the non‐mandatory reporting of two aspects of social responsibility, corporate community involvement (CCI) and environmental impact, this paper seeks to explore why companies choose to make such disclosures. It specifically asks whether companies are primarily motivated by the strategic need to manage their reputation (...) and legitimacy rather than by the recognition of their ethical accountability, which is the stated purpose of reports produced by cutting edge companies (Clarke 1998). (shrink)

The increasing demands placed on private welfare services and calls for business to fulfil its social responsibilities have heightened interest in corporate charitable donations in the United Kingdom. Adjustments to the corporation tax system have been made to encourage companies to give more. The article outlines the legal and fiscal background to company giving, examines its magnitude and reports on a survey of company practice.

This paper seeks to provide a practical theoretical setting for ethics in business. The perspective is that of the strategic practitioner rather than the moral philosopher. It seeks to take account of the currently dominant business influences of rapid technological development and globalisation and the resultant new form of stakeholder organisation.From this perspective it is clear that being perceived as trustworthy is seen as vital to long term business success. There are various corporate actions that are taken to ensure that (...) organisations are perceived in this way and this paper reports those which were identified during interviews with executives in leading UK companies.The research found little support for corporate philanthropy involving firms investing in ‘good works’ unrelated to their business activities. The main focus was on setting standards of behaviour and achieving a high degree of openness and transparency between stakeholders made subject to independent audit and report. These practical initiatives do not rest on any knowledge and understanding of moral philosophy. (shrink)