Business research and teaching institutions play an important role in shaping the way businesses perceive their relations to the broader society and its moral expectations. Hence, as ethical scandals recently arose in the business world, questions related to the civic responsibilities of business scholars and to the role business schools play in society have gained wider interest. In this article, I argue that these ethical shortcomings are at least partly resulting from the mainstream business model with its taken-for granted basic (...) assumptions such as specialization or the value-neutrality of business research. Redefining the roles and civic responsibilities of business scholars for business practice implies therefore a thorough analysis of these assumptions if not their redefinition. The taken-for-grantedness of the mainstream business model is questioned by the transformation of the societal context in which business activities are embedded. Its value-neutrality in turn is challenged by self-fulfilling prophecy effects, which highlight the normative influence of business schools. In order to critically discuss some basic assumptions of mainstream business theory, I propose to draw parallels with the corporate citizenship concept and the stakeholder theory. Their integrated approach of the relation between business practice and the broader society provides interesting insights for the social reembedding of business research and teaching. (shrink)

Business research and teaching institutions play an important role in shaping the way businesses perceive their relations to the broader society and its moral expectations. Hence, as ethical scandals recently arose in the business world, questions related to the civic responsibilities of business scholars and to the role business schools play in society have gained wider interest. In this article, I argue that these ethical shortcomings are at least partly resulting from the mainstream business model with its taken-for granted basic (...) assumptions such as specialization or the value-neutrality of business research. Redefining the roles and civic responsibilities of business scholars for business practice implies therefore a thorough analysis of these assumptions if not their redefinition. The takenforgrantedness of the mainstream business model is questioned by the transformation of the societal context in which business activities are embedded. Its value-neutrality in turn is challenged by self-fulfilling prophecy effects, which highlight the normative influence of business schools. In order to critically discuss some basic assumptions of mainstream business theory, I propose to draw parallels with the corporate citizenship concept and the stakeholder theory. Their integrated approach of the relation between business practice and the broader society provides interesting insights for the social reembedding of business research and teaching. (shrink)

In recent years, firms have greatly increased the amount of resources allocated to activities classified as Corporate Social Responsibility (CSR). While an increase in CSR expenditure may be consistent with firm value maximization if it is a response to changes in stakeholders' preferences, we argue that a firm's insiders (managers and large blockholders) may seek to overinvest in CSR for their private benefit to the extent that doing so improves their reputations as good global citizens and has a "warm-glow" effect. (...) We test this hypothesis by investigating the relation between firms' CSR ratings and their ownership and capital structures. Employing a unique data set that categorizes the largest 3000 U. S. corporations as either socially responsible (SR) or socially irresponsible (SI), we find that on average, insiders' ownership and leverage are negatively related to the firm's social rating, while institutional ownership is uncorrelated with it. Assuming that higher CSR ratings is associated with higher CSR expenditure level, these results support our hypothesis that insiders induce firms to over-invest in CSR when they bear little of the cost of doing so. (shrink)

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.

Connecting influence and leadership, the professor of business ethics assumes a sacred moral vocation. Directed towards the student's role in the marketplace, the business ethics course enjoins consideration of the values of social responsibility for the human community in its political, economic, and familial manifestations.

Recent downward trends in corporate giving have renewed interest in the factors that shape corporate philanthropy. This paper examines the relationships between charitable contributions, firm size and industry. Improvements over previous studies include an IRS data base that covers a much broader range of firm sizes and industries as compared to previous studies and estimation using an instrumental variable technique that explicitly addresses potential simultaneity between charitable contributions and profitability. Important findings provide evidence of a cubic relationship between charitable giving (...) and firm size and evidence of strong industry effects. The plus-minus-plus regression coefficient sign pattern for the cubic firm size model suggests that small and large firms give more relative to total receipts with lower giving ratios among medium size firms. One interpretation for this finding is that small firms are close to the communities they serve while high visibility creates a need for large firm philanthropy. Strong industry effects provide evidence of inter-industry differences in giving culture and/or different public relations requirements across industries. (shrink)

This study examines the relation between firms' corporate philanthropic giving and their performance in three other social domains - employee relations, environmental issues, and product safety. Based on a sample of 384 U.S. companies and using data pooled from 1998 through 2000, we find that worse performers in the other social areas are both more likely to make charitable contributions and that the extent of their giving is larger than for better performers. Analyses of each separate area of social performance, (...) however, indicate that the relation between giving and negative social performance only holds for the environmental issues and product safety areas. We find no significant association between corporate philanthropy and employee relations concerns. In general, these findings suggest that corporate philanthropy may be more a tool of legitimization than a measure of corporate social responsibility. (shrink)

This study explored several proposed relationships among professional ethical standards, corporate social responsibility, and the perceived role of ethics and social responsibility. Data were collected from 313 business managers registered with a large professional research association with a mailed self-report questionnaire. Mediated regression analysis indicated that perceptions of corporate social responsibility partially mediated the positive relationship between perceived professional ethical standards and the believed importance of ethics and social responsibility. Perceptions of corporate social responsibility also fully mediated the negative relationship (...) between perceived professional ethical standards and the subordination of ethics and social responsibility. The results suggested that professions should develop ethical standards to encourage social responsibility, since these actions are associated with enhanced employee ethical attitudes. (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)

This study examines the relation between firms’ corporate philanthropic giving and their performance in three other social domains – employee relations, environmental issues, and product safety. Based on a sample of 384 U.S. companies and using data pooled from 1998 through 2000, we find that worse performers in the other social areas are both more likely to make charitable contributions and that the extent of their giving is larger than for better performers. Analyses of each separate area of social performance, (...) however, indicate that the relation between giving and negative social performance (cited concerns) only holds for the environmental issues and product safety areas. We find no significant association between corporate philanthropy and employee relations concerns. In general, these findings suggest that corporate philanthropy may be more a tool of legitimization than a measure of corporate social responsibility. (shrink)

In this article, we examine the link between board composition and an enterprise strategy outcome, stakeholder relations. Because a firm’s enterprise strategy is set at the highest level of the organization, we expect the presence of stakeholder directors (suppliers, customers, employees, and community representatives) to be positively associated with stakeholder performance.Results from an analysis of 3,268 board members representing 250 firms are discussed in the context of both corporate governance and stakeholder management literatures.