Instead of the currently prevailing competitive model, a more collaborative strategy is needed to address the concerns related to the unsustainability of today’s business. This article aims to explore collaborative approaches where enterprises seek to build long-term, mutually beneficial relationships with all stakeholders and want to produce sustainable values for their whole business ecosystem. Cases here analyzed demonstrate that alternative ways of doing business are possible. These enterprises share more democratic ownership structures, more balanced and broader governance systems, and a (...) more comprehensive view of organizational goals and performance – which goes beyond the narrow concept of financial bottom line and into a stronger and systematic care of the needs and requirements of the different stakeholder groups. Thanks to this evidence and different theoretical and empirical contributions, we suggest that the strength and sustainability of enterprises come from their ability to fit into the environmental, social, and cultural context in which they operate. By creating values for all stakeholders, enterprises can involve them and gain deep support based on their commitment. This may lead to superior performance from a multiple-bottom-line perspective. (shrink)

Corporate social responsibility (CSR) continues to gain attention atop the corporate agenda and is by now an important component of the dialogue between companies and their stakeholders. Nevertheless, there is still little guidance as to how companies can implement CSR activity in order to maximize returns to CSR investment. Theorists have identified many company-favoring outcomes of CSR; yet there is a dearth of research on the psychological mechanisms that drive stakeholder responses to CSR activity. Borrowing from the literatures on meansend (...) chains and relationship marketing, we propose a conceptual model that explains how CSR provides individual stakeholders with numerous benefits (functional, psychosocial, and values) and how the type and extent to which a stakeholder derives these benefits from CSR initiatives influences the quality of the relationship between the stakeholder and the company. The paper discusses the implications of these insights and highlights a number of areas for future research. (shrink)

This paper investigates the link between the consumer perception that a company is socially oriented and the consumer intention to buy products marketed by that company. We suggest that this link exists when at least two conditions prevail: (1) the products sold by that company comply with ethical and social requirements; (2) the company has an acknowledged commitment to protect consumer rights and interests. To test these hypotheses, we conducted a survey among the clients of retail chains offering Fair Trade (...) products. The results show that socially oriented companies can successfully leverage their reputation to market products with high symbolic values. (shrink)

In this article, we will outline the principles of stakeholder capitalism and describe how this view rejects problematic assumptions in the current narratives of capitalism. Traditional narratives of capitalism rely upon the assumptions of competition, limited resources, and a winner-take-all mentality as fundamental to business and economic activity. These approaches leave little room for ethical analysis, have a simplistic view of human beings, and focus on value-capture rather than value-creation. We argue these assumptions about capitalism are inadequate and leave four (...) problems in their wake. We wish to reframe the narrative of capitalism around the reinforcing concepts of stakeholders coupled with value creation and trade. If we think about how a society can sustain a system of voluntary value creation and trade, then capitalism can once more become a useful concept. (shrink)

I argue in this article that responsible leadership (Maak and Pless, 2006) contributes to building social capital and ultimately to both a sustainable business and the common good. I show, first, that responsible leadership in a global stakeholder society is a relational and inherently moral phenomenon that cannot be captured in traditional dyadic leader–follower relationships (e.g., to subordinates) or by simply focusing on questions of leadership effectiveness. Business leaders have to deal with moral complexity resulting from a multitude of stakeholder (...) claims and have to build enduring and mutually beneficial relationships with all relevant stakeholders. I contend, second, that in doing so leaders bundle the energy of␣different constituencies and enable social capital building. Social capital can be understood as actual or potential resources inherent to more or less institutionalized relationships of mutual recognition (Bourdieu 1980). By drawing on network analysis I suggest, third, that responsible leaders weave durable relational structures and ultimately networks of relationships which are rich in ties to otherwise unconnected individuals or groups. Against this background I argue, fourth, that responsible leadership may result in the creation of value networks (Lord and Brown, 2001) of multiple stakeholders, which enhance social capital and thereby contribute to both a sustainable business and the common good. (shrink)

Although the academic interest in ethical mutual fund performance has developed steadily, the evidence to date is mainly sample-specific. To tackle this critique, new research should extend to unexplored countries. Using this as a motivation, we examine the performance and risk sensitivities of Canadian ethical mutual funds vis-à-vis their conventional peers. In order to overcome the methodological deficiencies most prior papers suffered from, we use performance measurement approaches in the spirit of Carhart (1997, Journal of Finance 52(1): 57–82) and Ferson (...) and Schadt (1996, Journal of Finance 51(2): 425–461). In doing so, we investigate the aggregated performance and investment style of ethical and conventional mutual funds and allow for time variation in the funds’ systematic risk. Our␣Canadian evidence supports the conjecture that any␣performance differential between ethical mutual funds and their conventional peers is statistically insignificant. (shrink)

We understand responsible leadership as a social-relational and ethical phenomenon, which occurs in social processes of interaction. While the prevailing leadership literature has for the most part focussed on the relationship between leaders and followers in the organization and defined followers as subordinates, we show in this article that leadership takes place in interaction with a multitude of followers as stakeholders inside and outside the corporation. Using an ethical lens, we discuss leadership responsibilities in a stakeholder society, thereby following Bass (...) and Steidelmeier’s suggestion to discuss “leadership in the context of contemporary stakeholder theory” (1999: 200). Moreover, from a relational and stakeholder perspective we approach the questions: What is responsible leadership? What makes a responsible leader? What qualities are needed? Finally, we propose a so-called “roles model” of responsible leadership, which gives a gestalt to a responsible leader and describes the different roles he or she takes in leading stakeholders and business in society. (shrink)

Combining principles of individual rational choice with a sociological conception of collective action, James Coleman recasts social theory in a bold new way. The result is a landmark in sociological theory, capable of describing both stability and change in social systems. This book provides for the first time a sound theoretical foundation for linking the behavior of individuals to organizational behavior and then to society as a whole. The power of the theory is especially apparent when Coleman analyzes corporate actors, (...) such as large corporations and trade unions. He examines the creation of these institutions, collective decision making, and the processes through which authority is revoked in revolts and revolutions. Coleman discusses the problems of holding institutions responsible for their actions as well as their incompatibility with the family. He also provides a simple mathematical analysis corresponding to and carrying further the verbal formulations of the theory. Finally, he generates research techniques that will permit quantitative testing of the theory. From a simple, unified conceptual structure Coleman derives, through elegant chains of reasoning, an encompassing theory of society. It promises to be the most important contribution to social theory since the publication of Talcott Parsons' Structure of Social Action in 1936. (shrink)

There is an impressive history associated with the evolution of the concept and definition of corporate social responsibility (CSR). In this article, the author traces the evolution of the CSR construct beginning in the 1950s, which marks the modern era of CSR. Definitions expanded during the 1960s and proliferated during the 1970s. In the 1980s, there were fewer new definitions, more empirical research, and alternative themes began to mature. These alternative themes included corporate social performance (CSP), stakeholder theory, and business (...) ethics theory. In the 1990s, CSR continues to serve as a core construct but yields to or is transformed into alternative thematic frameworks. (shrink)

This paper argues that research on the business case for corporate social responsibility (CSR) must account for the path dependent nature of firm-stakeholderrelations, and develops the construct of stakeholder influence capacity (SIC) to fill this void. SIC helps to explain why the effects of CSR on corporate financial performance (CFP) vary across firms and across time, therein providing a missing link in the study of the business case. This paper distinguishes CSR from related and confounded corporate resource allocations and from (...) corporate social performance (CSP), then incorporates SIC into a model that explains how acts of CSR are transformed into CFP through stakeholder relationships. This paper also develops a set of propositions to aid future research on the contingencies that produce variable financial returns to investments in CSR. (shrink)

A number of companies allocate ownership rights to stakeholders different from shareholders, despite the fact that the law attributes these rights to the equity holders. This article contributes to an understanding of this evidence by developing a contingency model for the allocation of ownership rights. The model sheds light on why companies, despite pressures from the law, vary in their allocation of ownership rights. The model is based on the assumption that corporations increase their chance to survive and prosper if (...) the stakeholders supplying “critical contributions” receive the ownership rights. According to the model, “critical” contributions involve (1) contractual problems due to specific investments, long-term relationships, and low measurability; (2) the assumption of the uncertainty resting on the company; and (3) the supply of scarce and valuable resources. The model is dynamic because it also provides a basis for understanding why the allocation of ownership rights changes with time. Finally, the article presents the strategies companies can use to realize an efficient distribution of ownership rights among their stakeholders. (shrink)

As a number of high profile companies have found to their cost, corporate reputations can be significantly affected by firms' management of sustainability issue, including those that are outside their direct control, such as the environmental and social impacts of their supply networks. This paper begins by examining the relationship between corporate social responsibility, reputation, and supply network conditions. It then looks at the effectiveness of one tool for managing supply network sustainability issues, ethical sourcing codes of conduct, by examining (...) how the characteristics of three supply networks branded clothes, DIY wood products and branded confectionary affects the implementation ethical sourcing codes of conduct. It ends by setting out conclusions on why implementation of such codes has been so much more successful in some sectors than others and recommendations on effective approaches to managing sustainability issues in supply networks. (shrink)

Abstract:The term stakeholder is a powerful one. This is due, to a significant degree, to its conceptual breadth. The term means different things to different people and hence evokes praise or scorn from a wide variety of scholars and practitioners. Such breadth of interpretation, though one of stakeholder theory’s greatest strengths, is also one of its most prominent theoretical liabilities. The goal of the current paper is like that of a controlled burn that clears away some of the underbrush of (...) misinterpretation in the hope of denying easy fuel to the critical conflagration that would raze the theory. We aim to narrow its technical meaning for greater facility of use in management and organizational studies. By elaborating a number of common misinterpretations – critical and friendly – of the theory, we hope to render a stronger and more convincing theory as a starting place for future research. (shrink)

This article examines whether the involvement of stakeholders in the design of corporate codes of conduct leads to a higher implementation likelihood of the code. The empirical focus is on Occupational Safety and Health (OSH). The article compares the inclusion of OSH issues in the codes of conduct of 30 companies involved in International Framework Agreements (IFAs), agreed upon by trade unions and multinational enterprises, with those of a benchmark sample of 38 leading Multinational Enterprises in comparable industries. It is (...) found that codes of the IFA group have a higher implementation likelihood in OSH than the codes of the benchmark group. Further, European firms, culturally more used to stakeholder involvement, score higher than their US and Japanese competitors, and hence are more capable of addressing the safety and health issues in international supply chains. The implementation likelihood of codes seems closely related to the type of corporate CSR approach. (shrink)

Abstract: In this article, I offer a proposal to clarify what I believe is the proper relation between value maximization and stakeholder theory, which I call enlightened value maximization. Enlightened value maximization utilizes much of the structure of stakeholder theory but accepts maximization of the long-run value of the firm as the criterion for making the requisite tradeoffs among its stakeholders, and specifies long-term value maximization or value seeking as the firm’s objective. This proposal therefore solves the problems that arise (...) from the multiple objectives that accompany traditional stakeholder theory. I also discuss the Balanced Scorecard, which is the managerial equivalent of stakeholder theory, explaining how this theory is flawed because it presents managers with a scorecard that gives no score—that is, no single-valued measure of how they have performed. Thus managers evaluated with such a system (which can easily have two dozen measures and provides no information on the tradeoffs between them) have no way to make principled or purposeful decisions. The solution is to define a true (single dimensional) score for measuring performance for the organization or division (and it must be consistent with the organization’s strategy), and as long as their score is defined properly, (and for lower levels in the organization it will generally not be value) this will enhance their contribution to the firm. (shrink)

In the mid-1990s, global labour standards emerged as a new and important are of concern for socially responsible investors, especially with respect to investments in the "problematic" footwear, apparel, and toy industries. In this paper, I elucidate the primary areas of concern for investors and discuss a framework for evaluating firms'' labor standards performance. In addition, I argue that today''s sweatshop debates follow closely those of centuries ago, with the standard economic defense of low wage manufacturing on the one hand, (...) and the activists'' protests against poor conditions and wages on the other. An examination of this historical context reveals a promising middle ground in this ongoing debate. (shrink)

The Corporate Social Responsibility (CSR) field presents not only a landscape of theories but also a proliferation of approaches, which are controversial, complex and unclear. This article tries to clarify the situation, mapping the territory by classifying the main CSR theories and related approaches in four groups: (1) instrumental theories, in which the corporation is seen as only an instrument for wealth creation, and its social activities are only a means to achieve economic results; (2) political theories, which concern themselves (...) with the power of corporations in society and a responsible use of this power in the political arena; (3) integrative theories, in which the corporation is focused on the satisfaction of social demands; and (4) ethical theories, based on ethical responsibilities of corporations to society. In practice, each CSR theory presents four dimensions related to profits, political performance, social demands and ethical values. The findings suggest the necessity to develop a new theory on the business and society relationship, which should integrate these four dimensions. (shrink)

An integrity-based approach to ethics management combines a concern for the law with an emphasis on managerial responsibility for ethical behavior. Though integrity strategies may vary in design and scope, all strive to define companies’ guiding values, aspirations, and patterns of thought and conduct. When integrated into the day-to-day operations of an organization, such strategies can help prevent damaging ethical lapses while tapping into powerful human impulses for moral thought and action. Then an ethical framework becomes no longer a burdensome (...) constraint within which companies must operate, but the governing ethos of an organization. (shrink)

Heeding the call for a deeper understanding of how cross-sector social partnerships can be managed across different contexts, this article integrates ideas from institutional theory with current debate on cross-boundary collaboration. Adopting the point of view of business actors interested in forming a CSSP to address complex social problems, we suggest that “appropriateness” needs shape business approaches toward partnering for social change, exerting an impact on the benefits that can be gained from it. A theoretical framework is proposed that identifies (...) and frames four CSSP styles, as resulting from combinations of dominant institutional orientations in a field and its general level of coherence. We show how, depending on prevailing institutional logics, intervention models underlying the CSSP have to emphasize either the business soundness of the initiative or its social value, together with a consistent leadership style. Moreover, while directive approaches based on concentrated governance structures aimed at setting the rules of the game are shown to prevail in fields characterized by low level of institutional coherence, participative models emerge in more established fields, with CSSP’s promoter playing an integrative role through distributed governance structures. The article concludes with a summary and implications of an institutional-based view of CSSPs. (shrink)

While corporate social responsibility (CSR) is becoming a mainstream issue for many organizations, most of the research to date addresses CSR in large businesses rather than in small- and medium-sized enterprises (SMEs), because it is too often considered a prerogative of large businesses only. The role of SMEs in an increasingly dynamic context is now being questioned, including what factors might affect their socially responsible behaviour. The goal of this paper is to make a comparison of SME and large firm (...) CSR strategies. Furthermore, size of the firm is analyzed as a factor that influences specific choices in the CSR field, and studied by means of a sample of 3,680 Italian firms. Based on a multi-stakeholder framework, the analysis provides evidence that large firms are more likely to identify relevant stakeholders and meet their requirements through specific and formal CSR strategies. (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)

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)

The concept of corporate social responsibility is becoming integral to effective corporate brand management. This study adopts a multidimensional and cross-country perspective of the concept and analyses consumer perceptions of behaviour of four leading consumer products manufacturers. Data was collected from consumers in two countries - Spain and the UK. The study analyses consumers' degree of interest in corporate responsibility and its impact on their perception about the company. The findings here suggest a weak impact of company-specific communication on consumers' (...) perception. The implications of this study are relevant to companies for strengthening their social responsibility associations with the consumers. (shrink)

Owing to the growing academic and practitioner’s interest in the field of Corporate Social Responsibility, there is a need to do a comprehensive assessment and synthesis of research activities. This article addresses this need and examines the academic literature on Corporate Social Responsibility and Performance using a paradigmatic and methodological lens. The objective of this article is fourfold. First, it examines the status of CSR research from its beginning especially after 1970 to year 2008 in leading academic journals and reports (...) to assess the focus areas of research on CSR so far. Second, it analyzes the research paradigms adopted in these research articles using the Operations Research Paradigm framework. Third, it compares and contrasts various kinds of research articles, methodologies, and research designs used in various researches in literature. Finally, it uncovers the implications of this study and directions for future research. (shrink)

This article explores how the diversity of board resources and the number of women on boards affect firms' corporate social responsibility (CSR) ratings, and how, in turn, CSR influences corporate reputation. In addition, this article examines whether CSR ratings mediate the relationships among board resource diversity, gender composition, and corporate reputation. The OLS regression results using lagged data for independent and control variables were statistically significant for the gender composition hypotheses, but not for the resource diversitybased hypotheses. CSR ratings had (...) a positive impact on reputation and mediated the relationship between the number of women on the board and corporate reputation. (shrink)

The recent proliferation of International Accountability Standards (IAS) has attracted significant academic interest, but the extent of their adoption and integration by global firms remains underinvestigated.Capitalizing on institutional theory and the typology of strategic responses to institutional pressures proposed by Oliver (Acad Manage Rev 16(1): 145-179, 1991), this article uses an interpretive research methodology to analyze a sample of MNC practitioners' views regarding IAS, and derive some insights in relation to expected patterns of strategic responses to these new institutional pressures. (...) The article also presents relevant remarks relating to the usefulness of institutional theory in the context of research relating to IAS. The findings suggest patterns of engagement combining elements of both conformity and resistance, although the answers correspond most closely to a decoupling or symbolic conformity strategic response. The findings are fleshed out and their implications delineated/assessed. (shrink)

"Social capital" can be considered to be the product of co-operationbetween various institutions, networks and business partners. It haspotential as a useful tool for business ethics. In this article weidentify categories pertinent to the measurement of social capital insmall and medium sized enterprises (SMEs). By drawing on three differentsectors, one business-to-business service, one business-to-customerservice, and one manufacturing, we have enabled the consideration ofsectoral differences. We find sector to play an important part inrelation to business practices and social capital. Our inclusion (...) of SMEsfrom Germany and the United Kingdom has called attention to cultural,institutional and economic aspects of two regions of Europe and how theycan influence SME social capital. Social capital is found to beinfluenced by context and, in particular, institutional arrangements. Inanalysing the data we note particular areas of interest from the pointof view of SMEs and social capital as being: formal engagement,networking within sectors, networking across sectors, volunteerism andgiving to charity, and finally a focus on why people engage. We concludethat there is a considerable amount of further research needed on socialcapital, SME''s and business ethics. (shrink)

The concept of corporate social responsibility (CSR) has been widely investigated, but a generally accepted theoretical framework does not yet exist. This paper argues that the idiosyncrasies of large firms and SMEs explains the different approaches to CSR, and that the notion of social capital is a more useful way of understanding the CSR approach of SMEs, whereas stakeholder theory more closely addresses the CSR approach of large firms. Based on the extant literature, we present a comparison of large firm (...) and SME idiosyncrasies suggesting that both consolidated and emerging strategic orientations toward responsible behaviours exist. Idiosyncrasies of large firms and SMEs are also discussed to provide an assessment of the firm’s strategic CSR orientation, suggesting the key drivers upon which CSR strategies must be based. A twofold consideration emerges. First, the CSR–SME relationship could be better explained if the notion of social capital is taken into account, but this should also be accompanied by a stakeholder view of the SME; second, social capital and stakeholder theory should be taken as alternative ways of explaining CSR in both large firms and SMEs. (shrink)

Recent research on corporate social responsibility (CSR) suggests the need for further exploration into the relationship between small and medium-sized enterprises (SMEs) and CSR. SMEs rarely use the language of CSR to describe their activities, but informal CSR strategies play a large part in them. The goal of this article is to investigate whether differences exist between the formal and informal CSR strategies through which firms manage relations with and the claims of their stakeholders. In this context, formal CSR strategies (...) seem to characterize large firms while informal CSR strategies prevail among micro, small, and medium-sized enterprises. We use a sample of 3,626 Italian firms to investigate our research questions. Based on a multistakeholder framework, the analysis provides evidence that small businesses* use of CSR, involving strategies with an important impact on the bottom line, reflects an attempt to secure their license to operate in the communities; while large firms rarely make attempts to integrate their CSR strategies into explicit management systems. (shrink)

Technological advancements in information systems over the past few decades have enabled firms to work with the major suppliers and customers in their supply chain in order to improve the performance of the entire channel. Tremendous benefits for all parties can be realized by sharing information and coordinating operations to reduce inventory requirements, improve quality, and increase customer satisfaction; but the companies must collaborate effectively to bring these gains to fruition. We consider two alternative methods of managing these interfirm supply (...) chain relationships in this article. The first, which we have named “dictatorial collaboration,” occurs when a dominant supply chain entity assumes control of the channel and forces the other firms to follow its edicts. We compare and contrast this method with “sustainable collaboration,” in which the parties share resources and engage in joint problem solving to improve the performance of the system as a whole. We use a virtue ethics lens to describe these methods of relationship management to suggest that sustainable collaboration is preferable to dictatorial collaboration both operationally and ethically in the long run. (shrink)

Many transnational corporations and international organizations have embraced corporate social responsibility to address criticisms of working and environmental conditions at subcontractors' factories. While CSR 'codes of conduct' are easy to draft, supplier compliance has been elusive. Even third-party monitoring has proven an incomplete solution. This article proposes that an alteration in the supply chain's governance, from an arms-length market model to a collaborative partnership, often will be necessary to effectuate CSR. The market model forces contractors to focus on price and (...) delivery as they compete for the lead firm's business, rendering CSR observance secondary, at best. A collaborative partnership where the lead firm gives select suppliers secure product orders and other benefits removes disincentives and adds incentives for CSR compliance. In time, the suppliers' CSR habit should shift their business philosophy toward pursuing CSR as an end in itself, regardless of buyer incentives and monitoring. This article examines these hypotheses in the context of the athletic footwear sector with Nike, Inc. and its suppliers as the specific case study. The data collected and conclusions reached offer strategies for advancing CSR beyond the superficial and often ineffectual 'code of conduct' stage. (shrink)

A critical and notoriously elusive issue in Corporate Social Responsibility (CSR) research is the impact of Corporate Social Performance (CSP) on the bottom line. Instead of looking for direct correlations between social and financial performance, we hypothesize that the first result of CSR activities is the creation of trust among the stakeholders. A survey conducted on consumers of organic products provided support for our hypothesis, showing that CSP influences consumer trust and that that trust in turn influences consumers' subsequent actions. (...) The findings further suggest that intermediate variables between CSP and Corporate Financial Performance (CFP) may best support a business case for CSR. (shrink)

A corporate culture strengthened by ethical values and other positive business practices likely yields more favorable employee work responses. Thus, the purpose of this study was to assess the degree to which perceived corporate ethical values work in concert with group creativity to influence both job satisfaction and turnover intention. Using a self-report questionnaire, information was collected from 781 healthcare and administrative employees working at a multi-campus education-based healthcare organization. Additional survey data was collected from a comparative convenience sample of (...) 127 sales and marketing employees working for a variety of firms operating in the south-central United States. The results indicated that group creativity and corporate ethical values were positively related, and that both variables were associated with increased job satisfaction. Conversely, corporate ethical values and job satisfaction were associated with decreased turnover intention. Sales managers should create work cultures that precipitate increased ethical values and group creativity, and suggestions about how they may institutionalize these factors are provided. (shrink)

Although Fair Trade has been in existence for more than 40 years, discussion in the business and business ethics literature of this unique trading and campaigning movement between Southern producers and Northern buyers and consumers has been limited. This paper seeks to redress this deficit by providing a description of the characteristics of Fair Trade, including definitional issues, market size and segmentation and the key organizations. It discusses Fair Trade from Southern producer and Northern trader and consumer perspectives and highlights (...) the key issues that currently face the Fair Trade movement. It then identifies an initial research agenda to be followed up in subsequent papers. (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)

A firm’s social performance can shape the impressions of key stakeholders, such as employees, customers, suppliers, and investors, that influence subsequent decision making and relationships to the firm. To test this notion, we examine how a firm’s public recognition for exemplary social performance can serve as a positive signal of the firm’s business performance to shareholders. We conduct an event study of firms named to Working Mothermagazine’s list of “Most Family- Friendly Companies” for the first time between 1989 and 1994. (...) We find statistically significant, positive, abnormal returns for such firms, in particular for firms whose shares are traded on the NASDAQ stock exchange. (shrink)

The concept of corporate social responsibility is becoming integral to effective corporate brand management. This study adopts a multidimensional and cross-country perspective of the concept and analyses consumer perceptions of behaviour of four leading consumer products manufacturers. Data was collected from consumers in two countries – Spain and the UK. The study analyses consumers’ degree of interest in corporate responsibility and its impact on their perception about the company. The findings here suggest a weak impact of company-specific communication on consumers’ (...) perception. The implications of this study are relevant to companies for strengthening their social responsibility associations with the consumers. (shrink)

The concept of corporate social responsibility is becoming integral to effective corporate brand management. This study adopts a multidimensional and cross-country perspective of the concept and analyses consumer perceptions of behaviour of four leading consumer products manufacturers. Data was collected from consumers in two countries – Spain and the UK. The study analyses consumers’ degree of interest in corporate responsibility and its impact on their perception about the company. The findings here suggest a weak impact of company-specific communication on consumers’ (...) perception. The implications of this study are relevant to companies for strengthening their social responsibility associations with the consumers. (shrink)

Although trustworthiness has been described as a source of competitive advantage, its value extends to organizational governance and wealth creation. We identify the importance of the commitment—compliance continuum in the decision to trust and note that trustworthiness is a subjective perception viewed through each person's mediating lens. That lens and each person's interpretation of the social contract impact one's commitment to cooperate. We suggest five propositions that integrate trustworthiness, governance, and wealth creation.

Stakeholder theory has gained currency in the business and society literature in recent years in light␣of its practicality from the perspective of managers and scholars. In accounting for the recent ascendancy of␣stakeholder theory, this article presents an overview of␣two traditional conceptualizations of corporate social␣responsibility (CSR) (Carroll: 1979, ‹A Three-Dimensional Conceptual Model of Corporate Performance', The Academy of Management Review 4(4), 497–505 and Wood: 1991, ‹Corporate Social Performance Revisited', The Academy of Management Review 16(4), 691–717), highlighting their predominant inclination toward providing (...) static taxonomic CSR descriptions. The article then makes the case for a stakeholder approach to CSR, reviewing its rationale and outlining how it has␣been integrated into recent empirical studies. In light of this review, the article adopts a stakeholder framework – the Ethical Performance Scorecard (EPS) proposed by Spiller (2000, ‹Ethical Business and Investment: A Model For Business and Society', Journal of Business Ethics 27, 149–160) – to examine the CSR approach of a sample of␣Lebanese and Syrian firms with an interest in CSR␣and␣test relevant hypotheses derived from the CSR/stakeholder literature. The findings are analyzed and implications drawn regarding the usefulness of a stakeholder approach to CSR. (shrink)

This article presents an integrative conceptual framework for linking corporate social performance, stakeholders, and quality of management, then tests this framework empirically. Results provide strong support for the hypothesis that perceived quality of management can be explained by the quality of performance with respect to specific primary stakeholders: owners, employees, customers, and (marginally) communities, but treatment of ecological environmental considera- tions is not a significant factor.

Several researchers have suggested that a talented, quality workforce will become a more important source of competitive advantage for firms in the future. Drawing on social identity theory and signaling theory, the authors hypothesize that firms can use their corporate social performance (CSP) activities to attract job applicants. Specifically, signaling theory suggests that a firm’s CSP sends signals to prospective job applicants about what it would be like to work for a firm. Social identity theory suggests that job applicants have (...) higher self-images whenworking for socially responsive firms over their less responsive counterparts. The authors conducted an experiment in which they manipulated CSP and found that prospective job applicants are more likely to pursue jobs from socially responsible firms than from firms with poor social performance reputations. The implications of these findings for academicians and practitioners alike are discussed. (shrink)

According to the Green Paper presented by the European Commission in July 2001, corporate social responsibility (CSR) is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (Commission of the European Communities, 2001b, p. 6). On this basis, in 2002, the Italian Government, and especially the Italian Ministry of Welfare, launched an initiative called CSR-SC (social commitment) in order to foster the proactive social role of (...) Italian enterprises, with great attention on SME involvement. The technical partner of the Italian Ministry of Welfare for this initiative is Bocconi University. The goal of this contribution is to present the main results of CSR–SC research project developed by Bocconi University. The paper provides a detailed picture of the general scheme designed to carry out the research project and a review of the different methodologies used to support the solutions proposed. (shrink)

This paper presents the findings of a study of purchasing and supply management professionals in India conducted to identify the key ethical issues they face in carrying out their work related responsibilities as well as to determine the extent to which various factors appear to be helpful or to present challenges to their efforts to act ethically in the course of their work. The Indian findings are then compared to those for studies conducted among purchasing and supply management professionals in (...) the United States, United Kingdom and Canada. Key findings for the four studies are summarized and implications for business and the professions are presented. (shrink)

The relationship between corporate executives and shareholders has riveted the attention of business ethicists since the inception of the field. Most ethicists agree that corporate executives owe their investors the duties of loyalty, candor, and care. These fiduciary duties undergird the promises made to shareholders at the time of incorporation, placing on executives moral obligations to engage in fair dealing and to avoid conflicts of interest.We concur that executives owe all of their existing shareholders both promise-keeping and fiduciary duties and (...) argue that some corporateexecutives violate these responsibilities by attempting to withhold information from or limit information to some shareholders while courting others. We analyze the ethical implications of six techniques and tools that executives use to attract certain types of shareholders while deterring others. We conclude with recommended structural and behavioral changes to these current managerial and investor practices. (shrink)

Based on the assumption that consumers will reward firms for their support of social programs, many organizations have adopted corporate social responsibility (CSR) practices. Drawing on social identity theory, a model of influence of CSR on loyalty is developed and tested using a sample of real consumers. Results demonstrate that CSR initiatives are linked to stronger loyalty both because the consumer develops a more positive company evaluation, and because one identifies more strongly with the company. Moreover, identity salience is shown (...) to play a crucial role in the influence of CSR initiatives on consumer loyalty when this influence occurs through consumer-company identification. A strong identifier is not necessarily in a constant state of salience, but activating identity salience of a particular consumer social identity (a company) will affect consumer reactions to product stimuli, increasing consumer loyalty. (shrink)