Building on earlier work on the relationship between corporate social performance (CSP) and a firm’s financial performance, this integrative empirical study supports the theoretical argument that the higher a firm’s CSP the lower its financial risk. Specifically, the relationship between CSP and risk appears to be one of reciprocal causality, because prior CSP is negatively related to subsequent financial risk, and prior financial risk is negatively related to subsequent CSP. Additionally, CSP is more strongly correlated with measures of market risk (...) than measures of accounting risk. Of all CSP measures, reputation for social responsibility appears to be the most important one in terms of its risk implications. (shrink)

This paper analyzes the determinants of corporate reputation within a sample of large UK companies drawn from a diverse range of industries. We pay particular attention to the role that philanthropic expenditures and policies may play in shaping the perceptions of companies among their stakeholders. Our findings highlight that companies which make higher levels of philanthropic expenditures have better reputations and that this effect varies significantly across industries. Given that reputational indices tend to reflect the financial performance of organizations above (...) other factors (Fryxell, G. E. and J. Wang: 1994, Journal of Management 20, 1–14) and that elements of the literature emphasise that discretionary aspects of social responsibility, including corporate donations, may not be in the financial interests of organizations (e.g. Friedman, M.: 1970, “The Social Responsibility of Business is to Increase its Profits”, New York Times Magazine, September 13), this is a significant finding. It suggests that philanthropic expenditures may play a significant role in stakeholder management and may, in particular, lead to stakeholders holding more positive impressions of philanthropic corporations. (shrink)

Prior studies have advanced our knowledge of the individual determinants of corporate philanthropy; however, little empirical research has been conducted on how these determinants combine to influence giving. In this study, the authors develop and test an integrated model of the relationship between firm resources and corporate philanthropy as mediated by managerial discretion and managerial values. In addition, the authors offer organizational slack as an alternative measure of organizational resources. As predicted, the results show that firm resources have a positive (...) effect on corporate philanthropy. This effect is fully mediated by managerial discretion and partially mediated by managerial values. (shrink)

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)

The concept of corporate social responsibility (CSR) is being supplanted by a new term—corporate citizenship (CC). For many reasons, it’s not a bad idea to replace the CSR term. But the core content of CSR is also gradually being replaced in a significant portion of the literature by a narrower, voluntaristic concept of corporate community service. This is not a viable replacement for the broad ethics-based and problem-solving norms of social reciprocity that are represented by CSR. A more legitimate successor-term (...) is needed so that corporate community relations and philanthropy take their rightful place among the larger set of rights, duties, stakeholder relationships, and opportunities accruing to business organizations.Therefore, we develop a working theory of business citizenship (BC), a more palatable term, and a concept designed to capture the core moral and social content of CSR. In this article we extract and synthesize several key ideas about individual citizenship that have evolved over several thousand years. We then transpose these ideas from the level of individual members of a polity to the level of organizations within society. In a companion article, we extend the business citizenship concept from its single-polity boundaries to the institutional and global levels of analysis. This approach allows a view of business citizenship that accommodates strong moral guidance, structural and institutional realities, and the flexibility necessary to respond to the structures and dynamics of particular company-stakeholder relationships. (shrink)

We address the issue of UK firms relatively poor record of corporate community contributions (CCCs) by subjecting them to formal comparison with those of US firms. To this end, we employ data on the top 100 UK, and top 100 US, contributors in 2001. Cross-country differences are described and discussed with reference to a stakeholder perspective on corporate social responsibility, and CCCs in particular. In this connection, we evaluate the role played by the sectoral composition of activities, as well as (...) national, cultural and institutional factors. Our findings highlight a number of significant cross-country differences in the pattern of CCCs and suggest that UK and US firms operate within significantly different stakeholder environments. (shrink)