Amongst a backdrop of debate regarding Codes of Conduct and their raison d’etre this paper provides a detailed summary of the management systems used by multinational enterprises in the Code implementation process. It puts forth a framework for analysis based on the elements of – the creation of a vision, the development of understanding and ability, integration into operations and feedback, improvement and remediation – and then applies it across the sports footwear, apparel and retail sectors in order to firstly, (...) demonstrate the complexities of the Code implementation process and secondly, to provide useful examples and lessons-learned to companies, policy-makers and others interested in implementing their own Code of Conduct or who are actively involved in this field. (shrink)

The food industry faces many significant risks from public criticism of corporate social responsibility (CSR) issues in the supply chain. This paper draws upon previous research and emerging industry trends to develop a comprehensive framework of supply chain CSR in the industry. The framework details unique CSR applications in the food supply chain including animal welfare, biotechnology, environment, fair trade, health and safety, and labor and human rights. General supply chain CSR issues such as community and procurement are also considered. (...) Ultimately, the framework serves as a comprehensive tool to support food industry practitioners and researchers in the assessment of strategic and operational supply chain CSR practices. (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 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)

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)

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 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)

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)

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)

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)

In this theoretical paper, motives for CSR are considered. An underlying assumption is that the commercial imperative is not the sole driver of CSR decision-making in private sector companies, but that the formal adoption and implementation of CSR by corporations could be associated with the changing personal values of individual managers. These values may find expression through the opportunity to exercise discretion, which may arise in various ways. It is suggested that in so far as CSR initiatives represent individuals' values, (...) so the responsibility in evidence is less obviously corporate. Our emphasis on personal initiative is intended to counter a tendency to view the corporation as the agent, and may serve to remind us that individuals can, indeed, make a difference. (shrink)

Some argue that managers over-invest in corporate social responsibility (CSR) activities to build their personal reputations as good global citizens. Others claim that CEOs strategically choose CSR activities to reduce the probability of CEO turnover in a future period through indirect support from activists. Still others assert that firms use CSR activities to signal their product quality. We find that firms use governance mechanisms, along with CSR engagement, to reduce conflicts of interest between managers and non-investing stakeholders. Employing a large (...) and extensive sample of firms within Russell 2000, S& 500 and Domini 400 indices during the 1993-2004 period, we find that consistent with the conflict-resolution hypothesis, the CSR choice is positively associated with governance characteristics, including board independence, institutional ownership, and analyst following. In addition, after correcting for endogeneity of CSR engagement, our results show that CSR engagement positively influences operating performance and firm value, supporting the conflict-resolution hypothesis as opposed to the over-investment and strategic-choice arguments. We find only a weak support of the product-signaling hypothesis as a major motive of CSR engagement. (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)

Corporate social performance has been a prominent concept in the management literature dealing with the social role and impacts of the corporation; it has been promulgated as a unifying paradigm for the field. However, the concept of CSP is still lacking strong theoretical foundations and empirical validity, suggesting that the paradigmatic status of CSP might be lost. In this paper, the authors draw on Hirsch and Levin’s life cycle approach to explore the development of CSP as a concept, explain why (...) it has so recurrently failed to deliver on these dimensions, and offer possible routes for future research that may potentially ameliorate this problem. (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)

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)

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)

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)

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)

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)