This article looks into the process of searching for new forms of legitimacy among firms through corporate discourse. Through the analysis of annual sustainability reports, we have determined the existence of three types of rhetoric: (1) strategic (embedded in the scientific-economic paradigm); (2) institutional (based on the fundamental constructs of Corporate Social Responsibility theories); and (3) dialectic (which aims at improving the discursive quality between the corporations and their stakeholders). Each one of these refers to a different form of legitimacy (...) and is based on distinct theories of the firm analyzed in this article. We claim that dialectic rhetoric seems to signal a new understanding of the firm's role in society and a search for moral legitimation. However, this new form of rhetoric is still fairly uncommon although its use is growing. Combining theory and business examples, this article may help managers and researchers in the conceptualization of how firms make sense of their role in society and what forms of differentiation they strive for through their rhetoric strategies. (shrink)

In this paper, we use online search engines and archive collections to examine the popularity of socially responsible investing (SRI) in newspapers and academic journals. A simple content analysis suggests that most of the papers on SRI focus on financial performance. This profusion of research is somewhat puzzling as most of the studies used roughly the same methodology and obtained very similar results. So, why are there so many studies on SRI financial performance? We argue that the academic literature on (...) SRI is mostly data driven: the famous ‘looking for the keys under the lamppost’ syndrome. The question of the financial performance of the SRI funds is certainly relevant but maybe too much attention has been paid to this issue, whereas more research is needed on a conceptual and theoretical ground, in particular the aspirations of SRI investors, the relationship between regulation and SRI as well as the assessment of extra‐financial performances. (shrink)

In this paper, we use online search engines and archive collections to examine the popularity of socially responsible investing (SRI) in newspapers and academic journals. A simple content analysis suggests that most of the papers on SRI focus on financial performance. This profusion of research is somewhat puzzling as most of the studies used roughly the same methodology and obtained very similar results. So, why are there so many studies on SRI financial performance? We argue that the academic literature on (...) SRI is mostly data driven: the famous ‘looking for the keys under the lamppost’ syndrome. The question of the financial performance of the SRI funds is certainly relevant but maybe too much attention has been paid to this issue, whereas more research is needed on a conceptual and theoretical ground, in particular the aspirations of SRI investors, the relationship between regulation and SRI as well as the assessment of extra-financial performances. (shrink)

Firms engage in corporate social responsibility (CSR) because they consider that some kind of competitive advantage accrues to them. We contend that resource-based perspectives (RBP) are useful to understand why firms engage in CSR activities and disclosure. From a resource-based perspective CSR is seen as providing internal or external benefits, or both. Investments in socially responsible activities may have internal benefits by helping a firm to develop new resources and capabilities which are related namely to know-how and corporate culture. In (...) effect, investing in social responsibility activities and disclosure has important consequences on the creation or depletion of fundamental intangible resources, namely those associated with employees. The external benefits of CSR are related to its effect on corporate reputation. Corporate reputation can be understood as a fundamental intangible resource which can be created or depleted as a consequence of the decisions to engage or not in social responsibility activities and disclosure. Firms with good social responsibility reputation may improve relations with external actors. They may also attract better employees or increase current employees’ motivation, morale, commitment and loyalty to the firm. This article contributes to the understanding of why CSR may be seen as having strategic value for firms and how RBP can be used in such endeavour. (shrink)

The goal of this paper is to describe the link between financial performance and the level of sustainability. In a novel approach, the paper classifies firms based on past financial success to address a potentially reciprocal relationship. For the groups of better and worse performing firms and for the entire sample, the above link is then tested, also accounting for non-linearity in the relationship. We show that environmental management system (EMS) implementation as a proxy for a firm's sustainability level is (...) only positively associated with the financial performance of financially well-performing firms. Conversely, it has a negative association with the performance of less good firms. We show that this implies that firms cannot change from good to bad performance, and vice versa, solely through the implementation of an EMS, and also that the result remains when introducing non-linearity in the link. Based on this result, we discuss implications for the direction of causality. (shrink)

The goal of this paper is to describe the link between financial performance and the level of sustainability. In a novel approach, the paper classifies firms based on past financial success to address a potentially reciprocal relationship. For the groups of better and worse performing firms and for the entire sample, the above link is then tested, also accounting for non‐linearity in the relationship. We show that environmental management system (EMS) implementation as a proxy for a firm's sustainability level is (...) only positively associated with the financial performance of financially well‐performing firms. Conversely, it has a negative association with the performance of less good firms. We show that this implies that firms cannot change from good to bad performance, and vice versa, solely through the implementation of an EMS, and also that the result remains when introducing non‐linearity in the link. Based on this result, we discuss implications for the direction of causality. (shrink)

Corporate crises call for effective communication to shelter or restore a company's reputation. The use of corporate social responsibility (CSR) claims may provide an effective tool to counter the negative impact of a crisis, but knowledge about its effectiveness is scarce and lacking in studies that consider CSR communication during crises. To help fill this gap, this study investigates whether the length of company's involvement in CSR matters when it uses CSR claims in its crisis communication as a means to (...) counter negative publicity. The use of CSR claims in crisis communication is more effective for companies with a long CSR history than for those with a short CSR history, and consumer skepticism about claims lies at the heart of this phenomenon. (shrink)

The purpose of this study is to examine the relationship between the corporate social performance of an organization and three variables: the size of the organization, the financial performance of the organization, and the environmental performance of the organization. By empirically testing data from 1987 to 1992, the results of the study show that a firm's corporate social performance is indeed impacted by the size of the firm, the level of profitability of the firm, and the amount of pollution emissions (...) released by the firm. (shrink)

The purpose of this study is to examine the relationship between the corporate social performance of an organization and three variables: the size of the organization, the financial performance of the organization, and the environmental performance of the organization. By empirically testing data from 1987 to 1992, the results of the study show that a firm's corporate social performance is indeed impacted by the size of the firm, the level of profitability of the firm, and the amount of pollution emissions (...) released by the firm. (shrink)

Carroll (1991) encouraged researchers in Social Issues Management (SIM) to continue to measure Corporate Social Performance (CSP) from a variety of different perspectives utilizing a variety of different measures. In addition, Wolfe and Aupperle (1991) (and others) have asserted that there is no, single best way to measure CSP and that multiple measures and perspectives help develop the field. However, Pfeffer (1993) suggest that a lack of consistent measurement has constrained organization studies (and by implication, the field of social issues (...) management,) in its development as a field. It may be in the best interest of social issues management researchers to try to development a common body of measures and data. Recently, Kinder, Lydenberg and Domini & Co. (KLD — a social choice investment advisory firm) has made available their social performance database. The KLD data have potential to become a widely accepted set of CSP measures. The purpose of this paper is to present a construct validity study comparing the KLD data to other measures of CSP. (shrink)

This article examines the concurrent validity of the Kinder, Lydenberg, Domini Research & Analytics corporate social performance measures. Because KLD changed its evaluation methods to richer approaches, a new look at the concurrent validity of the indicators is necessary. To do this new look, the authors examine the new “Binary” and “Continuous” versions of the KLD and compare them with previous versions of KLD. The results suggest that the continuous scores provide better measurement characteristics than do the binary version. Overall, (...) the new versions of the KLD data demonstrate concurrent validity with the original version. (shrink)

As Louisiana and Cuba emerged from slavery in the late nineteenth century, each faced the question of what rights former slaves could claim. Degrees of Freedom compares and contrasts these two societies in which slavery was destroyed by war, and citizenship was redefined through social and political upheaval. Both Louisiana and Cuba were rich in sugar plantations that depended on an enslaved labor force. After abolition, on both sides of the Gulf of Mexico, ordinary people-cane cutters and cigar workers, laundresses (...) and labor organizers-forged alliances to protect and expand the freedoms they had won. But by the beginning of the twentieth century, Louisiana and Cuba diverged sharply in the meanings attributed to race and color in public life, and in the boundaries placed on citizenship. Louisiana had taken the path of disenfranchisement and state-mandated racial segregation; Cuba had enacted universal manhood suffrage and had seen the emergence of a transracial conception of the nation. What might explain these differences? Moving through the cane fields, small farms, and cities of Louisiana and Cuba, Rebecca Scott skillfully observes the people, places, legislation, and leadership that shaped how these societies adjusted to the abolition of slavery. The two distinctive worlds also come together, as Cuban exiles take refuge in New Orleans in the 1880s, and black soldiers from Louisiana garrison small towns in eastern Cuba during the 1899 U.S. military occupation. Crafting her narrative from the words and deeds of the actors themselves, Scott brings to life the historical drama of race and citizenship in postemancipation societies. (shrink)

We argue that corporate social performance (CSP) has become a legitimizing identity (brand) for researchers in the business and society field, but it has not developed into a viable theoretical or operational construct. Because measuring CSP is contingent on the operational setting (industry, issues, etc.), it is difficult to produce worthwhile comparisons across studies or generalizing beyond the boundaries of a specific study. The authors suggest that researchers remove the CSP label from their operational variables, and instead narrowly define their (...) studies in operational terms. They provide aworking example of the proposed research direction by examining the theory underlying the popular CSP–financial performance (FP) debate. In the authors’ conceptualization, stakeholder action provides the underlying logic connecting CSP-FP, and we recast the research question to investigate the conditions under which stakeholders will take action to influence the focal organization and when those actions will influence the CSP-FP link. (shrink)

A primary issue in the field of business and society over the past 25 years has been the relationship between corporate social performance and corporate financial performance. Recently, Griffin and Mahon (1997) presented a table categorizing studies that have investigated this relationship. Motivated by concerns with this table, as well as a desire to account for progress in research in this area, the authors reconstructed it. The authors present a portrait of this relationship that is (a) substantially different from that (...) shown in the Griffin and Mahon table and (b) more consistent with the latest research on the topic. (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.

A horseshoe is regarded as a lucky, perhaps even romantic, symbol of our industrial heritage. Why is it, then, that much of English literature, from Mandeville's ‘Grumbling Hive’ on, portrays business in a murky light? The paper begins with an analysis of this phenomenon and concludes that it is the institutionalisation and legitimisation of avarice and its consequential effects that gives rise to such a portrayal. A horseshoe has also been used as a convenient means of conceptualising an answer to (...) the questions this conclusion raises: ‘Who should control the corporation and for what ends?’ (Mintzberg 1985) and discussing recent developments in corporate social responsibility. Drawing on research evidence the paper demonstrates how corporations are simultaneously under pressure from society and responding to its concerns. The paper concludes that these current developments can at best ameliorate the situation, and that what is necessary is to rediscover the notion of corporate virtue, instead of putting virtue at the service of vice. (shrink)

There has been much theoretical debate on issues of business ethics during the last decades, but there has been little research which could concretise the content of these issues in terms of practical business. Although business life must frequently deal with concepts such as corporate social performance, business ethics and the acceptability of operations, the content and meaning of these concepts has remained flexible. In addition, rapid internationalisation and globalisation have introduced a number of new phenomena related to corporate social (...) performance. An attempt at defining the concepts more precisely and searching for a potential indicator was considered necessary in order to concretise the business environment facing corporations engaged in internationalisation and globalisation. The connection between corporate social performance and stakeholder theory provides a basis for the proposal put forward here that acceptability of operation could be employed as an indicator of corporate social performance. This approach was then applied to developing a model which could be used to assess corporate social performance. (shrink)

There has been much theoretical debate on issues of business ethics during the last decades, but there has been little research which could concretise the content of these issues in terms of practical business. Although business life must frequently deal with concepts such as corporate social performance, business ethics and the acceptability of operations, the content and meaning of these concepts has remained flexible. In addition, rapid internationalisation and globalisation have introduced a number of new phenomena related to corporate social (...) performance. An attempt at defining the concepts more precisely and searching for a potential indicator was considered necessary in order to concretise the business environment facing corporations engaged in internationalisation and globalisation. The connection between corporate social performance and stakeholder theory provides a basis for the proposal put forward here that acceptability of operation could be employed as an indicator of corporate social performance. This approach was then applied to developing a model which could be used to assess corporate social performance. (shrink)

The contribution of this work is a classification of corporate social action underlying the Social Ratings Data compiled by Kinder Lydenburg Domini Analytics, Inc. We compare extant typologies of corporate social action to the results of our exploratory factor analysis. Our findings indicate four distinct latent constructs that bear resemblance to concepts discussed in prior literature. Akey finding of our research is that positive and negative social action are both empirically and conceptually distinct constructs and should not be combined in (...) future research. Additionally, we recommend that some prior research results be reconsidered to determine whether these newly derived measures might clarify some previous findings. (shrink)

This study explores the research paradigms of contemporary business ethics research in 2001–2008. With citation data from the top two business ethics journals included in the Social Sciences Citation Index, this study conducts citation and co-citation analysis to identify the most important publications, scholars, and research themes in the business ethics area and then maps the intellectual structure of business ethics studies between 2001 and 2008. The results show that current business ethics studies cluster around four major research themes, including (...) morality and social contract theory, ethical decision making, corporate social responsibility, and stakeholder theory. This study helps profile the invisible network of knowledge production in business ethics and provides important insights on current research paradigms of business ethics studies. (shrink)

This study explores the research paradigms of contemporary business ethics research in 2001–2008. With citation data from the top two business ethics journals included in the Social Sciences Citation Index, this study conducts citation and co‐citation analysis to identify the most important publications, scholars, and research themes in the business ethics area and then maps the intellectual structure of business ethics studies between 2001 and 2008. The results show that current business ethics studies cluster around four major research themes, including (...) morality and social contract theory, ethical decision making, corporate social responsibility, and stakeholder theory. This study helps profile the invisible network of knowledge production in business ethics and provides important insights on current research paradigms of business ethics studies. (shrink)

This article extends earlier research concerning the relationship between corporate social performance and corporate financial performance, with particular emphasis on methodological inconsistencies. Research in this area is extended in three critical areas. First, it focuses on a particular industry, the chemical industry. Second, it uses multiple sources of data-two that are perceptual based (KLD Index and Fortune reputation survey), and two that are performance based (TRI database and corporate philanthropy) in order to triangulate toward assessing corporate social performance. Third, it (...) uses the five most commonly applied accounting measures in the corporate social performance and corporate financial performance (CSP/CFP) literature to assess corporate financial performance. The results indicate that the a priori use of measures may actually predetermine the CSP/CFP relationship outcome. Surprisingly, Fortune and KLD indices very closely track one another, whereas TRI and corporate philanthropy differentiate between high and low social performers and do not correlate to the firm's financial performance. (shrink)

We examine the occurrence of ethicsrelated terms in 10-K annual reports over 1994-2006 and offer empirical observations on the conceptual framework of Erhard et al. 2007). We use a pre-Sarbanes-Oxley sample subset to compare the occurrence of ethics-related terms in our 10-K data with samples from other studies that consider virtue-related phenomena. We find that firms using ethics-related terms are more likely to be "sin" stocks, are more likely to be the object of class action lawsuits, and are more likely (...) to score poorly on measures of corporate governance. The consistency of our results across these alternative measures of ethical behavior suggests that managers who portray their firm as "ethical" in 10-K reports are more likely to be systematically misleading the public. These results are consistent with the integrity-performance paradox. (shrink)

This article extends earlier research concerning the relationship between corporate social performance and corporate financial performance, with particular emphasis on methodological inconsistencies. Research in this area is extended in three critical areas. First, it focuses on a particular industry, the chemical industry. Second, it uses multiple sources of data-two that are perceptual based (KLD Index and Fortune reputation survey), and two that are performance based (TRI database and corporate philanthropy) in order to triangulate toward assessing corporate social performance. Third, it (...) uses the five most commonly applied accounting measures in the corporate social performance and corporate financial performance (CSP/CFP) literature to assess corporate financial performance. The results indicate that the a priori use of measures may actually predetermine the CSP/CFP relationship outcome. Surprisingly, Fortune and KLD indices very closely track one another, whereas TRI and corporate philanthropy differentiate between high and low social performers and do not correlate to the firm's financial performance. (shrink)

Rowley and Berman (2000) are tackling the right questions in their article. Three critical questions, in essence, are asked: What is corporate social performance (CSP)? What does it mean (i.e., CSP measures)? And, where does the future lie with CSP? In answering these questions, they are creating a CSP research agenda for the 21st Century. While agreeing, to a large extent, with their new set of questions, this paper questions their rationale for what is currently wrong with CSP and focuses (...) on extending future research directions. Specifically, this paper suggests that existing research in related disciplines can help accelerate our understanding of CSP. Marketing (i.e., customer-organization relations) and human relations (i.e., employee-organization relations) literatures, for example, already critically examine the conditions under which various organizational practices, policies, and procedures flourish. These boundary spanning functions provide newinsights that can lead to a broader, richer, and more systematic understanding of the complex CSP construct. (shrink)

The stakeholder view of the firm has been justified under instrumental and normative bases. Whereas the instrumental basis argues that “enlightened stakeholder management” is a necessary precondition to seek shareholders’ value maximization, the normative basis relies on the observance of ethical norms by managers and the notion that the stakeholders should be treated as “ends.” Some scholars argue that both views actually converge. However, this article provides empirical evidence of the negative effects of stakeholder management in shareholders’ value in the (...) short run and the positive effects over the long run, using a longitudinal database of 658 U.S. firms. Given the difficulties of anticipating the instrumental long-term financial effects of short-run decisions affecting the different stakeholders, the authors’ findings support the view of the normative basis for stakeholder theory based on ethics, norms, and heuristic criteria as a way to solve conflicts among the claims of different stakeholders. (shrink)

The empirical relationship between a firm’s social performance and its financial performance is still not well established in the literature. Despite more than 30 years of research and more than 100 empirical studies on the issue, the results are still mixed. We argue that the heterogeneous results found in previous studies are not due exclusively to problems related with the measurement instruments or the samples used. Instead, we posit that a more fundamental problem related with the endogeneity of social strategic (...) decisions could be driving most of the empirical findings. We show that, using a panel data of 658 firms from 1991 to 2005, how some of the results found in previous research change, and some are even reversed when endogeneity is properly taken into account. (shrink)

This article provides empirical results indicating that acting in a socially respon- sible and lawful manner is a necessary, though not sufficient, condition for increasing shareholder wealth. It meta-analyzes 27 event studies that have mea- sured the stock market's reaction to incidences of socially irresponsible and illicit behavior. It finds that for firms engaging in socially irresponsible and illicit behavior, the effect on shareholder wealth is negative (wealth decreases), statisti- cally significant (p <.001), and so substantial in size (D = (...) -.932) that the distribution of abnormal returns is shifted nearly a full standard deviation to the left (i.e., negatively) from their expected standard normal distribution. This result gives rationally self-interested firms a self-interested reason to act in a socially responsible and law-abiding manner. It also provides support for a moral position called enlightened self-interest, which prescribes that firms should act in a socially responsible manner to promote the shareholders' interests. (shrink)

This study starts from the observation that there are relatively few controversial issues in corporate social responsibility (CSR). Given its strong normative background, CSR is rather an atypical discipline, especially in comparison with moral philosophy or applied ethics. Exploring the mainstream CSR agenda, this situation was echoed by widespread consensus on what was considered to be "good practice": reducing pollution, shutting down sweatshops, discouraging tax evasion, and so on. However, interpretation of these issues through the lens of moral pluralism unveils (...) latent controversies. The moral appraisal of good practices within CSR depends on key moral concepts (such as harm, responsibility, intention, and consequences), which have various—and often incompatible—interpretations. In a nutshell, this article argues that from a moral pluralist standpoint, all CSR topics are potentially controversial. (shrink)

A major purpose of this book is to make the post-Hamblin work on fallacies available to a wider audience in a single, convenient volume.

This volume distinguishes between two main traditions in the philosophy of science - the aristotelian, with its stress on explanation in terms of purpose and intentionality, and the galilean, which takes causal explanation as primary. It then traces the complex history of these competing traditions as they are manifested in such movements as positivism, idealism, Marxism and contemporary linguistic analysis. Hempels's theory of scientific explanation, the claims of cybernetics the rise of an analytic philosophy of action and the revival of (...) hermenuetics are all discussed. The volume also deals with causal explanation, intentionality and teleological explanation, and explanation in history and the social sciences. The author concludes that explanation of human actions cannot be reduced to simple causality, and discusses the implications of this conclusion for the disciplines of history and sociology. (shrink)