Sustaining the Financial Value of Global CSR: Reconciling Corporate and Stakeholder Interests in a Less Regulated Environment

In this article we examine the association between corporate social responsibility (CSR) and firm value. This line of research is important since firms continue to invest in CSR even though past studies reveal a limited linkage between financial value and CSR. However, the business case for CSR or “doing good while making a profit,” appears to be advancing within the business ethics literature as a preferred conception of CSR. We conjecture that the greater unification and refinement of both profit maximization and stakeholder interests through corporate acts, not statements alone, will sustain the financial value of CSR in a less regulated global business environment. We study the triangle of what companies say, what companies do, and firm financial performance. We analyze Fortune 250 firms and find a positive association between what companies do based on KLD Research and Analytics, Inc. (KLD) ratings, and what companies state about ethics in their CSR statements. We then employ regression analysis and find that companies’ socially responsible acts are positively associated with overall firm value and financial performance. Yet we do not find a statistically significant association between what companies say regarding ethics in their CSR statements and their financial outcomes. These results suggest that firm value and financial performance is associated with what companies do and not what they say. Our results seem to be driven by multinational corporations (MNCs) and not by non‐MNCs. This is possibly because MNCs generally operate in a less regulated global business environment that often necessitates strong ethical corporate leadership to further stakeholder interests. Overall, these results help reconcile corporate and stakeholder objectives since evidence of a link between financial performance and doing good sustains global CSR.     

CSR signaling in controversial and noncontroversial industries: CSR policies,governance structures,and transparency tools

Corporate social responsibility (CSR) initiatives are signals used by organizations to reduce information asymmetries within the market and to make their commitment to sustainability observable. The present study aims at investigating the hypothesis that responsible companies operating in controversial industries (i.e., companies whose core business or production processes are perceived as questionable by society given current environmental, social, or/and ethical issues) are likely to be more active in using different types of CSR signals. Through ANCOVA, we assess how firms belonging to both controversial and non-controversial industries differ in the way they manage CSR signals. The empirical results show that companies in controversial sectors are significantly more focused on developing CSR policies and transparency tools since they expect these signals to be really visible and distinctive to stakeholders. However, companies in controversial industries seem to be similar to non-controversial companies in signaling CSR governance, suggesting that organizations expect receivers to attribute little relevance to the least visible signals. Therefore, these signals do not grant a sufficiently large reputational payoff, discouraging firms from taking advantage of the implementation of CSR governance structures. The study supports the idea that firms, in designing different types of CSR signals, take into account the peculiarities of different receivers. At the same time though, this could make firms underestimate the receivers’ ability to decode the signals and to generate countersignals, thus failing in assessing properly the expected return from their CSR signaling.     

A review of the theories of corporate social responsibility: Its evolutionary path and the road ahead

This study aims to trace the conceptual evolutionary path of theories on corporate social responsibility (CSR) and to reflect on the implications of the development. The retrospection has revealed that the trend has been a progressive rationalization of the concept with a particular focus on tighter coupling with organizations’ financial goals. Rationalization involves two broad shifts in the conceptualization of CSR. First, in terms of the level of analysis, researchers have moved from the discussion of the macro‐social effects of CSR to organizational‐level analysis of CSR's effect on profit. Next, in terms of theoretical orientation, researchers have moved from explicitly normative and ethics‐oriented arguments to implicitly normative and performance‐oriented managerial studies. Based on the retrospection, the limitations of the current state of CSR research that places excessive emphasis on the business case for CSR are outlined, and it is suggested that future research needs to refocus on basic research in order to develop conceptual tools and theoretical mechanisms that explain changing organizational behavior from a broader societal perspective.     

The Dark Side of Stakeholder Reactions to Corporate Social Responsibility: Tensions and Micro‐level Undesirable Outcomes

With a review of literature on corporate social responsibility (CSR) and its micro‐level impacts, this paper proposes an integrative framework to map undesirable relational outcomes of CSR activities on internal (employees) and external (customers) stakeholders. By adopting a paradox‐based perspective, the authors determine that unexpected, adverse stakeholder reactions to CSR are driven primarily by either performing or belonging tensions, related to exchange‐ and identity‐based stakeholder concerns, respectively. Specifically, contextual and personal influences can trigger and explain undesirable relational outcomes of CSR. On this basis, this paper offers a research agenda for developing a more refined understanding of CSR‐related tensions and a more nuanced perspective on the business case for CSR.     

Financial Returns of Corporate Social Responsibility,and the Moral Freedom and Responsibility of Business Leaders

A number of theorists have proposed mechanisms suggesting that corporate social responsibility produces better financial results. Others subscribe to the theory that, realistically, less ethical means are necessary. This article contains an analysis of these perspectives drawing on observations from evolutionary game theory and nature. Based on these analyses, it is concluded that the financial returns of corporate social responsibility and irresponsibility (CSR and CSI) are equal on average. The explanation is that CSR and CSI aredriven to a state of equilibrium, because if one or the other were to offer higher profits, it would attract more players who would compete for the best opportunities until there was no difference in average profit. Existing empirical research generally shows a positive correlation between CSR as measured and corporate financial performance. It is argued that what is actually causing that finding is probably not CSR but management skill. More skillful managers, whether actually responsible or irresponsible, are able to obtain both higher profits and greater credit in imperfect measures of CSR. Next it is shown that this theory of equal returns implies greater moral freedom and therefore responsibility for business leaders. It is concluded that this insight can intensify the interest of decent business leaders in vigorously championing CSR.     

Corporate Social Responsibility in Developing Countries as an Emerging Field of Study

Given the rising interest in corporate social responsibility (CSR) globally, its local expressions are as varied as they are increasingly visible in both developed and developing countries. This paper presents a multilevel review of the literature on CSR in developing countries and highlights the key differentiators and nuanced CSR‐related considerations that qualify it as a distinctive field of study. This review entails a content analysis of 452 articles spanning two‐and‐a‐half decades (1990–2015). Based on this comprehensive review, the authors identify the key differentiating attributes of the literature on CSR in developing countries in relation to depictions of how CSR is conceived or ‘CSR Thinking’ and depictions of how CSR is practiced and implemented or ‘CSR Doing’. The authors synthesize from there five key themes that capture the main aspects of variation in this literature, namely: (1) complex institutional antecedents within the national business system (NBS); (2) complex macro‐level antecedents outside the NBS; (3) the salience of multiple actors involved in formal and informal governance; (4) hybridized and other nuanced forms of CSR expressions; and (5) varied scope of developmental and detrimental CSR consequences. The paper concludes by accentuating how the nuanced forms of CSR in the developing world are invariably contextualized and locally shaped by multi‐level factors and actors embedded within wider formal and informal governance systems.     

Organizational Antecedents of a Mining Firm's Efforts to Reinvent Its CSR: The Case of Golden Star Resources in Ghana1

This article reports a case study of how organizational antecedents, specifically leadership choices, decisions, culture, and organizational learning, impact and construct the corporate social responsibility (CSR) initiatives of a Canadian mid‐tier mining firm operating in Ghana. The primary objective of the article is to demonstrate, through an in‐depth study of a single case, that organizational‐ and firm‐level antecedents are a powerful tool for understanding how ethical, socially responsible, and community‐relevant behaviors of a mining firm in a developing area come to be constructed. The article thus contributes to the conceptual and applied literatures on CSR by suggesting that much as the voice of moral suasion, advocacy, and critical censure have been important motive forces behind CSR efforts, it seems that the sustainability and community relevance of CSR efforts are linked to identifiable internal response mechanisms that dispose or enable firms to behave in responsible ways.     

Governance Choices for Corporate Social Responsibility: to Contribute,Collaborate or Internalize?

Within a competitive business environment where resources are limited, it is increasingly important for senior management to make every investment count. Measuring ‘return on investment’ occurs at every level of operations—so why not also in the arena of Corporate Social activity? Until now, much research has focused on finding the link between corporate social responsibility (CSR) and increased business performance. Researchers have not examined the cost implications associated with the different forms of governance utilized by companies to implement their CSR activities, e.g., outsourcing through charitable contributions, developing an in-house program, or creating a more collaborative model, which benefits both the company and the partner nonprofit organization. Careful examination and evaluation of these costs will help senior management choose the governance structure that will maximize the benefits they reap from CSR activities.Drawing upon insights from organizational economics, this article develops a framework to compare the alternative modes of CSR governance and identifies the key drivers that affect governance choice, including associated costs. Most importantly, it provides a decision-making tool that can guide senior management in this vital choice as a way to contribute to the competitive advantage of the firm.     

Should Firms Go “Beyond Profits”? Milton Friedman versus Broad CSR1

When attempting to articulate the nature and scope of corporate social responsibility (CSR), a variety of opinions emerge. The primary CSR issue appears to be: Should firms go “beyond profits”? In order to address this normative question, this article will explore the theoretical underpinnings of CSR and its practical application. Part one of the paper begins by discussing common CSR definitions. Part two outlines the CSR debate in terms of the “narrow view” of CSR (as represented by Milton Friedman) versus the “broad view” (i.e., beyond profits). Part three applies both the narrow and broad approaches to CSR in analyzing two classic business and society cases: (1) the Ford Pinto; and (2) Merck's river blindness pill. The article concludes with a proposed synthesis of the CSR approaches discussed.     

Is CSR the panacea for SMEs? A study of socially responsible SMEs during economic crisis

There is increasing research attention as to how SMEs might realize corporate social responsibility opportunities. Most studies focus on the pursuance of responsible business strategies that result in favourable business outcomes. This study investigates SMEs who actively participate in CSR activities in a south-eastern European country during the economic crisis of the Eurozone. Data collected reveals that stakeholder salience and proximity moderate the relationship between CSR and financial performance. The context of this study is important as it addresses the paucity of research carried out in countries during economic crisis and sheds light on the positive aspects of CSR practices adopted during crisis.     

Discourses about Righting the Business ← → Society Relationship

This article engages the question—what is the right business‐society relationship? We consider three perspectives that seek to address the relationship: corporate social responsibility (CSR), social entrepreneurship (SE), and conscious capitalism (CC). We take a macroapproach considering how commentary about these approaches establishes a direction for corporate practice and its relationship to key stakeholder groups. We argue that these perspectives are ‘D'iscourses that provide arguments for and articulations about the direction of corporate practice and the business‐society relationship. To organize our review of each perspective, and focus our critique, for each we highlight (a) drivers and influencers, (b) core assumptions and defining features, and (c) approaches and exemplars. Although distinct, all emphasize effective business practices as key to meeting social needs. CSR suggests legitimizing business practice; SE relocates business practices; and CC seeks to reimagine/rehabilitate business for social good. Ultimately, we conclude that these Discourses lack a clear communicative focus in terms of decision making within these organizations. We attend to this and other implications, and offer avenues for further research.     

Corporate Social Responsibility through Cross‐sector Partnerships: Implications for Civil Society,the State,and the Corporate Sector in India

Corporations are increasingly forced to widen their agendas to include social and environmental concerns, or corporate social responsibility (CSR). This development has been recorded in the current academic debate, and the views regarding its implications for business, the state, and civil society diverge. However, there is agreement within the CSR and corporate governance literatures that there is a lack of thorough empirical studies of these effects. Based on a case study of the multinational wind energy company Suzlon Energy's CSR projects in rural India, this article contends that CSR projects implemented through cross‐sector partnerships can help to build the capacities of civil society organizations (CSOs). Although the risk of corporate steering of the civil society agenda is reduced when CSR prioritizes community needs over business imperatives, CSOs tend to bear the highest costs in partnerships, through credibility losses and insecurity concerning project terms and funding, reinforcing the importance of critical cooperation and complementary core competencies in cross‐sector partnerships. The results have implications for the strategies of corporations, CSOs, and governments as well as for the planning of national and international development aid.     

媒体关注下的CSR信息披露与企业财务绩效关系研究及启示——基于我国A股上市公司CSR报告的实证研究

企业社会责任(CSR)及信息披露已成为当前社会各界共同关注的热点问题。本文利用独立机构发布的我国A股上市公司CSR报告的评级数据,验证了当前时代背景下我国企业社会责任信息披露与企业财务绩效的关系,以及作为信息传递媒介和"公众日程设置者"的媒体的关注对于二者关系的影响作用。研究发现,高水平披露社会责任信息的企业的绩效明显高于低水平企业,但是这种作用关系是在媒体关注度这一变量的完全中介作用之下实现的。这一新发现不仅丰富和拓展了企业社会责任及信息披露的理论研究框架,对于基于战略性CSR思维制定相关战略的企业管理者也深具启发意义。     

Corporate social responsibility reporting and firm performance: evidence from China

A series of product safety and child labor scandals in the mid-2000s aroused global concerns over business ethics and corporate social responsibility (CSR) in China. The general public expects companies to be socially responsible and to look beyond the maximizing of profits. In this study, we examine the relationship between the issuance of CSR reports and performance, in terms of accounting income, market return, and growth by firms listed in China in 2008–2009. We find that the historical performance of firms has significant and positive effects on the issuance of standalone CSR reports. There is also a positive correlation between current CSR disclosures and subsequent performance. Finally, we find that corporate donations are positively associated with improved performance in the following year. Our results support the view that CSR is a useful business strategy even in a developing country such as China. We call for government authorities in emerging markets to advocate CSR practices and for the market participants to change their perception of and attitude towards CSR.     

Business–NGO Interactions in a Multi‐Stakeholder Context

The main purpose of this paper is to contribute to our understanding of the conditions under which Business–nongovernmental organization (NGO) interactions lead to improvements in corporate social responsibility (CSR), by assessing the role that the stakeholder context of the firm plays in the processes. As a case study it takes an interaction process between one NGO and one company with both collaborative and confrontational traits, spanning eight years and two issue fields, palm oil and soy, which are characterized by varying stakeholder contexts. The analysis demonstrates that the business–NGO interaction induced a change from a direct to an indirect corporate responsibility, and clarifies how interdependencies between the company and other stakeholders than the NGO influenced the interaction. The stakeholder interdependencies vary per issue field: In some issue fields, the stakeholder context allows for effective, collaborative interaction between business and NGO, while in another issue field, characterized by different stakeholder interdependencies, collaborative, constructive interactionbetween the same business and the same NGO is not feasible and, in addition, less effective in terms of CSR than confrontational interaction.     

We Are the Corporation: Dispersive CSR

We contend that the current trend of emphasis on corporate social responsibility (CSR) serves to divert the public's attention from the real ethical issues facing business and society. We extend the scope of social responsibility beyond business corporations to include a range of institutions. We also propose that CSRs be reconceptualized in terms of the ways that managers enable stakeholders to hold themselves and each other responsible for the ways their actions affect each other as they conduct business through the firm. In this article, we propose a new view of corporations and responsibility that reconstrues behavior currently referred to as CSR. Starting with an overview of theories of the firm, we show that the way in which a firm is conceived yields different views on CSR. A shortcoming of the theory of the firm approach to CSR is that it leads us to focus excessively on business corporations at the expense of a broader analysis of other institutional players. These theories also tend to emphasize the obligations of corporations to people rather than of people to each other. We propose that social responsibility be viewed through a systems theory paradigm instead. We then argue that corporations should be construed in terms of the people who impact them. We advance a different conception of business responsibility that is more comprehensive, inclusive, and systemic.     

Dealing with Ethical Dilemmas in Organizational Change Processes

Several theories exist on how managers think aboutethical responsibilities in a business environment.Some stress the economic way of thinking and explainwhy there is no space for moral reasoning in abusiness environment. Others claim that in a businessenvironment also moral considerations can play animportant role. In this article, we will explore theway managers have actually dealt with potentialdilemmas in organizational change processes,especially changes with drastic consequences foremployees. Do managers consider moral arguments? Dothey feel a moral responsibility towards theiremployees? And in what way do they include a moralresponsibility in the decision process and itsoutcomes? These questions were investigated throughcase studies in two organisations and interviews withsix managers in other companies. The framework whichis used in the research will be described and the mainresults of the field-research will be presented. Wedid find that managers actually strived to some extentfor fair and morally responsible solutions in dilemmasituations, but in another way then we expectedbeforehand. Managers did not base their acting onmoral arguments. Instead they used a more pragmaticapproach wherein acting in a morally responsible wayis based on strategic arguments, such as the positiveeffects for the organisation in the long run.     

Ethical Room for Maneuver: Playground for the Food Business

In a world of glossy corporate social responsibility (CSR) reports, the shallowness of the actual CSR results may well be its counterpart. We claim that the possible gaps between aspirations and implementations are due to the company's overrating abilities to deal with the irrational and complex moral world of business. Many academic approaches aim to lift business ethics up to a higher level by enhancing competences but will fail because they are too rationalistic and generalistic to match the pluralistic and situational practice constituted by the mosaic of values and set of constraints. This is demonstrated by describing and analyzing the CSR development of the multinational caterer Sodexo and in particular its Dutch branch. We explain what they do and why they are not successful. We present a new tool named Ethical Room for Maneuver that centers experiences and concrete situations in a playground of inquiry and experiment to enhance abilities to operate in themoral world and to meliorate business and society with more effectiveness.     

The Social Dimensions of Business Excellence

In an era of dynamic markets, globalisation, telecommunication and volatile stock markets, the board of directors of listed companies have grown familiar with the pressure of shareholders. Nowadays CEO's discus corporate responsible behaviour and sustainability more often. They feel the pressure of external stakeholders. They are aware of the increasing vulnerability of their corporate reputation, an increasing number of financial institutions start demanding social and environmental criteria — and it is more and more difficult to attract new talented people and at the same time, keeping existing employees satisfied. These developments make companies aware of the social dimensions of their organisation, their corporate identity, their role within society and their duty towards future generations.The business environment is beginning to accept that prosperity, profitability and shareholder value alone do not represent the value of the company. The companies’ ability to grow and to improve continuously is also determined by its social competences, ethical responsibility and environmental contributions. This shift of focus leads to a reorientation of the concept of business excellence. At first, quality management focused on the quality improvement of products and services, later on the processes providing these products. Quality was renamed into business excellence when corporations oriented themselves on the quality of the organisation and the chain (or network or hub) in which it operates. With the present challenges at hand, companies are beginning to focus on the quality of society while taking care of their core businesses, an objective that transcends and includes the former quality orientations.This article first introduces the European Business Excellence Model (EFQM model), which have facilitated the transformation toward an integral management approach, including openings to corporate social responsibility (CSR). We will than elaborate on the cultural context of companies engaged in CSR and social responsible investing (SRI) activities. We will end this article with an overview of CSR activities, structured according the EFQM model.     

Calling in a Debt: Government's Role in Creating the Capacity for Explicit Corporate Social Responsibility

Before the field of business and society can adequately analyze the relationship between governmental policies and corporate social responsibility (CSR), either as a reality or an ideal, it is first necessary to understand exactly how governments nurtured the development of the autonomous corporation. The roles assigned to government by the economics and management literatures—regulator, standard setter, protector, and adjudicator—ignore the crucial part played by state violence and government expenditures in the rise and sustained success of the corporate economy. An examination of the history of the American case, crucial for the development of the modern corporation as well as the “explicit” form of CSR that eventually followed it, highlights these roles: the willingness of the state to intervene with force in labor conflicts bolstered the managerial autonomy that defined the large corporation, and the way government expenditures promoted innovation and firm success. Acknowledging how corporations depended on government assistance in their development is a necessary step for both assessing the responsibilities owed stakeholders and for advancing the theoretical development of the field.