Building on prior research in Confucianism and business, the current study examines

the effects of Confucianism on consumer trust of government involvement with

products and company brands. Based on three major ideas of Confucianism -
meritocracy, loyalty to superior, and separation of responsibilities - it is
expected that consumers under the influence of Confucianism would perceive products
from government- involved enterprises to have more desirable attributes and show
preference for their company brands. Findings from an empirical study in the
Chinese automobile market support the hypotheses. The results suggest that small
firms doing business in China would especially benefit from some association with
the government. These results also provide managerial implications for enterprises
in other countries with a Confucian cultural background.
Backdating of stock options is an example of an agency problem. It has emerged
despite all the measures (i.e., new regulations and additional corporate governance
mechanisms) aimed at addressing such problems? Beyond such negative controlling
measures, a more positive empowering approach based on ethics may also be
necessary. What ethical measures need to be taken to address the agency problem?
What values and norms should guide the board of directors in protecting the
shareholders' interests? To examine these issues, we first discuss the role values
and norms can play with respect to underlying corporate governance and the proper
role of directors, Such as transparency, accountability, integrity (which is
reflected in proper mechanisms of checks and balances), and public responsibility.
Second, we discuss various stakeholder approaches (e.g., government, directors,
managers, and shareholders) by which conflicts of interest (i.e., the agency
problem) can be addressed. Third, we assess the practice of backdating stock
options, as an illustration of the agency problem, in terms of whether the practice
is legally acceptable or ethically justifiable. Fourth, we proceed to an analysis
of good corporate governance practice involving backdating options based on a
series of ethical standards including: (1) trustworthiness; (2) utilitarianism; (3)
justice; and (4) Kantianism. We conclude that while executive compensation schemes
(e.g., stock options) were originally intended to help remedy the agency problem by
tying together the interests of the executives and shareholders, these schemes may
have actually become "part of the problem," and that the solution ultimately
depends upon whether directors and executives accept that all of their actions must
be based on a set of core ethical values.
This study examines how directors make decisions that involve shareholders and
other stakeholders. Using vignettes derived from seminal court cases, we construct
an index of directors' shareholderism as a general orientation on this issue. In a
survey of the entire population of directors and CEOs in public corporations in one
country, we find that directors' personal values and roles play an important part
in their decisions. Directors and CEOs are more pro-shareholder the more they
endorse entrepreneurial values-specifically, higher achievement, power, and self-
direction values and lower universalism values. While employee representative
directors exhibit a lower baseline level of shareholder orientation, they
nonetheless often side with shareholders. Copyright. (C) 2011 John Wiley & Sons,
Ltd.
It has been argued that servicizing business models, under which a firm sells the
use of a product rather than the product itself, are environmentally beneficial.
The main arguments are as follow. First, under servicizing the firm charges
customers based on the product usage. Second, the quantity of products required to
meet customer needs may be smaller because the firm may be able to pool customer
needs. Third, the firm may have an incentive to offer products with higher
efficiency. Motivated by these arguments, we investigate the economic and
environmental potential of servicizing business models. We endogenize the firm's
choice between a pure sales model, a pure servicizing model, and a hybrid model
with both sales and servicizing options; the pricing decisions; and the resulting
customer usage. We consider two extremes of pooling efficacy, i.e., no pooling
versus strong pooling. We find that under no pooling servicizing leads to higher
environmental impact due to production but lower environmental impact due to use.
In contrast, under strong pooling, when a hybrid business model is more profitable,
it is also environmentally superior. However, a pure servicizing model is
environmentally inferior for high production costs because it leads to a larger
production quantity even under strong pooling. We also examine the product
efficiency choice and find that the firm offers higher efficiency products only
under servicizing models with strong pooling.
We study the problem faced by a supplier deciding how to dynamically allocate
limited capacity among a portfolio of customers who remember the fill rates
provided to them in the past. A customer's order quantity is positively correlated
with past fill rates. Customers differ from one another in their contribution
margins, their sensitivities to the past, and in their demand volatilities. By
analyzing and comparing policies that ignore goodwill with ones that account for
it, we investigate when and how customer memory effects impact supplier profits. We
develop an approximate dynamic programming policy that dynamically rationalizes the
fill rates the firm provides to each customer. This policy achieves higher rewards
than margin-greedy and Lagrangian policies and yields insights into how a supplier
can effectively manage customer memories to its advantage.
Based on the proposition that leasing is environmentally superior to selling, some
firms have adopted a leasing strategy and others promote their existing leasing
programs as environmentally superior to "green" their image. The argument is that
because a leasing firm retains ownership of the off-lease units, it has an
incentive to remarket them or invest in designing a more durable product, resulting
in a lower volume of new production and disposal. However, leasing might be
environmentally inferior because of the direct control the firm has over the off-
lease products, which may prompt the firm to remove them from the market to avoid
cannibalizing the demand for new products. Motivated by these issues, we adopt a
life-cycle environmental impact perspective and analytically investigate if leasing
can be both more profitable and have a lower total environmental impact. We find
that leasing can be environmentally worse despite remarketing all off-lease
products and greener than selling despite the mid-life removal of off-lease
products. Our analysis also provides insights for environmental groups and entities
that use different approaches to improve the environmental performance of business
practices. We show that imposing disposal fees or encouraging remanufacturing,
under some conditions, can actually lead to higher environmental impact. We also
identify when educating consumers to be more environmentally conscious can improve
the relative environmental performance of leasing.
Management scholars have paid close attention to the construct of organizational or
corporate reputation (CR), particularly in the applied business ethics and
corporate social responsibility (CSR) fields. Extant research demonstrates that CR
is one of the key mediators between CSR and important organizational outcomes,
which ultimately improve organizational performance. Yet, hitherto the research
focused on CR construct has been plagued by multiple definitions, conflicting
conceptualizations, and unclear operationalizations. The purpose of this article is
to provide theoretical ground for positioning of CR as an assessment construct that
is modeled as a second-order factor affecting individual first-order dimensions
(having a reflective nature), and to provide methodological and empirical support
toward such conceptualization. We assert that intangible, socially complex, and
causally ambiguous CR (latent construct) can be accurately estimated through its
individual measurable dimensions. Using survey data from Peru, we empirically test
the hypothesized second-order reflective model within a hierarchy of nested and
non-nested models, and compare its model fit and predictive power (nomological
validity) with alternative conceptualizations. Modeling CR as a second-order
reflective construct relies on a set of theoretical propositions and yields several
methodological advantages, including strong conceptual interpretability and
parsimony when tested within a nomological context. We explicitly demonstrate
positive organizational outcomes of CR: customer trust, corporate identification,
in-role behavior, and extra-role behavior. Then, we demonstrate that the shorter
scales of CR can be used as a good proxy for the full construct measure. The paper
concludes by highlighting theoretical insights, and methodological and managerial
implications of the findings.
Drawing on the natural-resource-based view (NRBV), we propose that employee
stakeholder integration is linked to environmental performance through firms'
proactive environmental strategies, and that this link is contingent on shared
vision. We tested our model with a cross-country and multi-industry sample. In
support of our theory, results revealed that firms' proactive environmental
strategies translated employee stakeholder integration into environmental
performance. This relationship was pronounced for high levels of shared vision. Our
findings demonstrate that shared vision represents a key condition for advancing
the corporate greening agenda through proactive environmental strategies. We
discuss implications for the CSR and the environmental management literatures, with
a particular focus on the NRBV and stakeholder integration debates.
Buyer-supplier relationships are often framed as principal-agent relationships,
based on contractual arrangements that temporarily align the goals of both parties.
The underlying notion is that the relationship between buyers and suppliers is
adversarial in nature and that the supplier, acting in the role of the agent, will
take advantage of the principal if not sufficiently controlled. We propose that
there is empirically also another type of partnership which reflects the
propositions of stewardship theory. According to this theory, suppliers are
motivated to work autonomously towards contractually agreed objectives. We analyse
how the agency and stewardship theories differ regarding their descriptions of
autonomy, motivation, identification, authority, stakeholder orientation and short-
versus long-term collaboration. We analyse the case of a first-tier supplier and
four second-tier suppliers situated in Turkey in the area of Istanbul which
collaborate with the aim of improving their social and environmental performance.
The results show that the relationship between the partners in this case has become
more collaborative over time and can now be described in terms of stewardship
theory rather than in terms of agency theory. We conclude that the distinction
between agency and stewardship relationships is empirically meaningful in the
context of supplier-buyer relationships and adds a new aspect to our understanding
of how to achieve more sustainable supply chains.
The challenges presented by sustainable development are broadly accepted, yet
resource use increases unabated. It is increasingly acknowledged that while
technical solutions may play a part, a key issue is behaviour change. In response
to this, there has been a plethora of studies into how behaviour change can be
enabled, predominantly from psychological and sociological perspectives. This has
resulted in a substantial body of knowledge into the factors that drive behaviour
change and how they can be manipulated to achieve desired social goals. In this
paper, we describe a study that draws on this body of knowledge to design an
intervention to drive behaviour change across the hairdressing sector, and by the
process of diffusion, across the vast social networks of this occupational group to
influence domestic hair-care practices. The intervention was successful:
hairdressers indicated positive intentions to adopt more sustainable practices
within their salons and pass them onto their customers. The customer survey (N =
776) confirms this: customers surveyed after their hairdresser attended the Green-
Salon-Makeover intervention were significantly more likely to report that
environmental issues had been considered in their salon visit and that they
themselves would consider such issues in their hair-care practices at home than
customers who were surveyed before the intervention.
Market basket analysis (MBA), also known as association rule mining or affinity
analysis, is a data-mining technique that originated in the field of marketing and
more recently has been used effectively in other fields, such as bioinformatics,
nuclear science, pharmacoepidemiology, immunology, and geophysics. The goal of MBA
is to identify relationships (i.e., association rules) between groups of products,
items, or categories. We describe MBA and explain that it allows for inductive
theorizing; can address contingency (i.e., moderated) relationships; does not rely
on assumptions such as linearity, normality, and residual equal variance, which are
often violated when using general linear model-based techniques; allows for the use
of data often considered unusable and messy in management research (e.g., data not
collected specifically for research purposes); can help build dynamic theories
(i.e., theories that consider the role of time explicitly); is suited to examine
relationships across levels of analysis; and is practitioner friendly. We explain
how the adoption of MBA is likely to help bridge the much-lamented micro-macro and
science-practice divides. We also illustrate that use of MBA can lead to insights
in substantive management domains, such as human resource management (e.g.,
employee benefits), organizational behavior (e.g., dysfunctional employee
behavior), entrepreneurship (e.g., entrepreneurs' identities), and strategic
management (e.g., corporate social responsibility). We hope our article will serve
as a catalyst for the adoption of MBA as a novel methodological approach in
management research.
This study aims to analyze what drives and prevents the purchasing of eco-friendly
products across different consumer groups and develops a conceptual model embracing
the positive altruistic (care for the environmental consequences of purchasing),
positive ego-centric (green self-identity and moral obligation), and negative ego-
centric (perceived personal inconvenience of purchasing eco-friendly products)
antecedents of eco-friendly product purchase intention and behavior. We empirically
validate the conceptual model for green (n = 453) and non-green (n = 473) consumers
(i.e., consumers who engage in a set of pro-environmental behaviors for
environmental reasons versus consumers who do not engage in these behaviors). Data
are analyzed using structural equation modeling and multi-group analysis of the two
groups. The results confirm the relevance of the determining factors in the model
and show significant differences in eco-friendly product purchasing patterns
between green and non-green consumers. Altruistic motives are more important for
green than for non-green consumers. Negative ego-centric motives affect the
purchase intentions of non-green consumers more than the intentions of green
consumers, whereas the impact of negative motives on behavior is stronger for green
than for non-green consumers. The first contribution of this paper is the
development and testing of a parsimonious model of eco-friendly products purchasing
that embraces both positive (altruistic and ego-centric) and negative (ego-centric)
antecedents, which have been theoretically suggested in the past but have rarely
been empirically tested together. The second contribution of this study is that it
develops insight into the specific antecedents of eco-friendly products purchasing
for green and non-green consumers to assess potential similarities and differences
in eco-friendly products purchasing process, the hypothesized antecedents, their
impact on eco-friendly products purchase intention and behavior, and the intention-
behavior relation.
The rise in ethical and social responsibility awareness in contemporary businesses
has led to assumptions that the associated behaviours would enable competitive
advantage to be attained as a firm distinguishes itself from its competitors
through such practices. This paper reports on a study conducted on the prevalence
of such practices among entrepreneurial ventures in an emerging economy (Malaysia),
and the effect of such practices on both financial and non-financial performance. A
sequential inter-method mixing design was employed in which during stage 1, a
series of semi-structured interviews with ten Malaysian SME founder-owners were
conducted. Stage 2 involved a survey in which a total of 212 usable questionnaires
were received. The results of the first phase of the research (qualitative) found
evidence that entrepreneurial ventures in Malaysia do generally engage in both
ethical and socially responsible practices. The subsequent model testing using SEM,
however, revealed that while ethical practices were positively associated with
venture performance, socially responsible practices were not. This may indicate
that while entrepreneurial ventures in emerging economies like Malaysia become
quickly aware of the more serious consequences of not adopting ethical practices,
the concern for social issues may still be lacking, i.e., in terms of motivations,
they may be closer to the profitable end of the philanthropy versus profitability
spectrum. While the findings may be equivocal, we believe that the paper makes the
following two significant contributions: (1) it provides an empirical test of the
importance of ethical and socially responsible practices to entrepreneurial venture
performance and (2) it furthers understanding of how and why this may be different
in an emerging economy context.
The accuracy of corporate mission statements has not been well explored. In this
study, the authors investigate the relationship between mission statement content
and stakeholder management actions. Findings indicate that although social issues
such as the environment and diversity are less frequently included, their mention
in mission statements is significantly associated with behaviors regarding these
issues. The study found no relationship between firms with mission statements that
mention specific stakeholder groups (employees, customers, and community) and
behaviors regarding these stakeholders. This suggests that the inclusion of
specific stakeholder groups in missions is likely the result of institutional
pressures, while specifying social issues in missions is related to policy
decisions.
This paper compares the financial and environmental performance of two revenue
models for the online retailing of groceries: the per-order model, where customers
pay for each delivery, and the subscription model, where customers pay a set fee
and receive free deliveries. We build a stylized model that incorporates (i)
customers with ongoing uncertain grocery needs and who choose between shopping
offline or online and (ii) an online retailer that makes deliveries through a
proprietary distribution network. We find that subscription incentivizes smaller
and more frequent grocery orders, which reduces food waste and creates more value
for the customer; the result is higher retailer revenues, lower grocery costs, and
potentially higher adoption rates. These advantages are countered by greater
delivery-related travel and expenses, which are moderated by area geography and
routing-related scale economies. Subscription also leads to lower food waste-
related emissions but to higher delivery-related emissions. Ceteris paribus, the
perorder model is preferable for higher-margin retailers with higher-consumption
product assortments that are sold in sparsely populated markets spread over large,
irregular areas with high delivery costs. Geographic and demographic data indicate
that the subscription model is almost always environmentally preferable because
lower food waste emissions dominate higher delivery emissions.
During the last decade and a half, Estonia has concentrated predominantly on
economic development in its narrowest sense. Currently, the emphasis is gradually
moving towards a broader approach, including an increasingly social agenda. The
research question here concerns the awareness of corporate social responsibility
among Estonian owners and managers. Empirical research in Estonia indicates that
there has been a shift towards recognizing the importance of social responsibility,
but this primarily concerns the "lower layers" of social responsibility,
recognizing the importance of economic responsibility and in some respects also
public responsibility. Responses in interviews show a certain amount of personal
initiative, but these are single examples rather than a general trend and are not
enough to change the overall picture. Still, in any assessment of the current
situation regarding social responsibility in Estonia, emphasis should be laid on
the fact that changes are taking effect and will continue to do so. In transition
economies, including Estonia, we should not overlook the fact that, at least in the
early years of transition, the focus is on a rapid economic development where the
social side will inevitably be left in the background and economic development will
take place at the expense of social and environmental development.
Outsourcing in many industries has advanced beyond simple component supply to
encompass manufacturing of entire products, often by suppliers in emerging
economies. Understanding the evolving role and capabilities of suppliers in global
supply chains is thus a pressing strategic issue for suppliers and customers alike.
We analyze a novel panel dataset of supply relationships in the mobile
telecommunications industry to answer the following questions: What factors
contribute to a supplier's ability to build technological and market capabilities?
Does it matter to whom the firm supplies? Is involvement in product design
important, or is manufacturing the key to learning? Do the same types of
relationships that support technological innovation also facilitate successful
introduction of own-brand products, or does this require a different locus of
learning? Copyright (c) 2013 John Wiley & Sons, Ltd.
This research extends previous findings related to the positive influence of
company credibility on a social Cause-Brand Alliance's (CBA) persuasion mechanism.
This study analyzes the mediating role of two dimensions of company credibility
(trustworthiness and expertise) with regard to the influence of altruistic
attributions and two types of brand-cause fit (functional and image fit) on
corporate social responsibility image. A structural equation model tests the
proposed framework with a sample of 299 consumers, and the results suggest that (1)
image fit and altruistic attribution are cues that consumers use to evaluate
company trustworthiness when linking to a social cause; (2) functional fit
significantly influences perceived company expertise but not trustworthiness; and
(3) trustworthiness has more weight than expertise in judgments about corporate
social responsibility.
Although the political and consumer consciousness has turned increasingly green,
many firms continue to resist the adoption of environment-friendly technological
innovations-even in the face of higher costs, negative health effects, and stricter
government oversight. This article examines how business owners weigh the trade-
offs associated with environment-friendly innovations by examining the role of
prosocial motivation in their decision-making process. We use primary data to
overcome a common restriction in studying environmental innovations-the scarcity of
relevant data-to analyze how business owners' expectations, perceptions, and
motivations affect innovation in organizational processes and, consequently, the
level of environmental friendliness of their products or services. We found that
prosocial motivation had a significant negative impact on innovation adoption and
that it is expressed differently under high and low levels of customer
compatibility-possibly because business owners have a larger number of competing
social objectives and priorities. Our results further showed that the innovation's
ability to satisfy downstream customer demands has the greatest impact on
environment-friendly innovation adoption decisions by business owners. This study
enhances our understanding of how business owners make innovation decisions based
on competing business, environmental and social objectives and provides a
foundation for future research in this area.
This article examines perceptions of tax partners and non-partner tax practitioners
regarding their CPA firms' ethical environment, as well as experiences with ethical
dilemmas. Prior research emphasizes the importance of executive leadership in
creating an ethical climate (e.g., Weaver et al., Acad Manage Rev 42(1):41-57,
1999; Trevino et al., Hum Relat 56(1):5-37, 2003; Schminke et al., Organ Dyn
36(2):171-186, 2007). Thus, it is important to consider whether firm partners and
other employees have congruent perceptions and experiences. Based on the responses
of 144 tax practitioners employed at CPA firms, the results show that tax partners
rate the ethical environment of their firms as stronger than non-partner tax
practitioners, particularly among those who describe a self-identified ethical
dilemma. Tax partners also report having encountered more of the common examples of
researcher-provided ethical dilemmas than non-partner tax practitioners, although
non-partners perceive that certain ethical dilemmas occur at a higher rate than
partners do. Overall, this study provides evidence of a disconnect between tax
partners and non-partner tax practitioners with respect to perceptions of
organizational ethics. Suggestions for potential remedies are offered.
Research shows that commitment-based interventions are among the most effective
strategies to encourage pro-environmental behaviors, but methods to elicit
commitments from a large number of individuals (i.e., door-to-door or phone
campaigns) are often costly and unrealistic. Predictions requests-a commitment-type
strategy-are an effective mass-communication strategy and have the potential to
influence pro-environmental behavior among large audiences. This research is the
first to demonstrate that prediction requests in a consumer behavior context
influence preference for environmentally friendly products. In addition, this
research examines the role of individual and contextual factors in influencing the
efficacy of prediction requests. Study 1 shows that exposure to an advertisement
with a prediction request leads to increased preferences for environmentally
sustainable (vs. traditional) household cleaning products, compared to a control
advertisement, and that this effect is greater when the prediction request is
paired with an audience cue (vs. prediction request only). Study 2 indicates that
the effect of prediction requests on preference for sustainable products is greater
for individuals with interdependent (vs. independent) self-construal. Substantive
implications and directions for future research are discussed.
The aim of this research is to develop and validate a measurement scale for
consumer's perceptions of corporate social responsibility (CSRConsPerScale) using
the three-dimensional social, environmental and economic conceptual approach as a
theoretical basis. Based on the stages of measurement scale creation and validation
suggested by DeVellis (Scale development: theory and applications, 1991) and
supported by Churchill Jr.'s (J Mark Res 16(1):64-73, 1979) suggestions, five
different empirical studies are developed expressly and applied to consumers of
tourist services. This research involves 1147 real tourists from 24 countries in
two different cultural and geographical contexts. A three-dimensional 18-item scale
is proposed for measuring consumer perceptions of corporate social, environmental
and economic responsibilities. This paper presents the complete development of the
scale, as well as the implications and limitations of the main findings and the
managerial implications.
Corporate social responsibility (CSR) is increasingly becoming a popular business
concept in developed economies. As typical of other business concepts, it is on its
way to globalization through practices and structures of the globalized capitalist
world order, typified in Multinational Corporations (MNCs). However, CSR often sits
uncomfortably in this capitalist world order, as MNCs are often challenged by the
global reach of their supply chains and the possible irresponsible practices
inherent along these chains. The possibility of irresponsible practices puts global
firms under pressure to protect their brands even if it means assuming
responsibilities for the practices of their suppliers. Pressure groups understand
this burden on firms and try to take advantage of the situation. This article seeks
to challenge the often taken-for-granted-assumption that firms should be
accountable for the practices of their suppliers by espousing the moral (and
sometimes legal) underpinnings of the concept of responsibility. Except where
corporate control and or corporate grouping exist, it identifies the use of power
as a critical factor to be considered in allocating responsibility in firm-supplier
relationship; and suggests that the more powerful in this relationship has a
responsibility to exert some moral influence on the weaker party. The article
highlights the use of code of conducts, corporate culture, anti-pressure group
campaigns, personnel training and value reorientation as possible sources of
wielding positive moral influence along supply chains.
Shareholder activism has been largely neglected in the few available studies on
corporate governance in sub Saharan Africa. Following the recent challenges posed
by the Cadbury Nigeria Plc, this paper examines shareholder activism in an evolving
corporate governance institutional context and identifies strategic opportunities
associated with shareholders' empowerment through changes in code of corporate
governance and recent developments in information and communications technologies
in Nigeria; especially in relation to corporate social responsibility in Nigeria.
It is expected that the paper would contribute to the scarce literature on
corporate governance and accountability in Africa.
Sustainability is concerned with the impact of present actions on the ecosystems,
societies, and environments of the future. Such concerns should be reflected in the
strategic planning of sustainable corporations. Strategic intentions of this nature
are operationalized through the adoption of a long-term focus and a more inclusive
set of responsibilities focusing on ethical practices, employees, environment, and
customers. A central hypothesis, that we test in this paper is that companies which
attend to this set of responsibilities under the term superior sustainable
practices, have higher financial performance compared to those that do not engage
in such practices. The target population of this study consists of the top 100
sustainable global companies in 2008 which have been selected from a universe of
3,000 firms from the developed countries and emerging markets. We find significant
mean sales growth, return on assets, profit before taxation, and cash flows from
operations in activity sectors of the sample companies compared to the control
companies over the period of 2006-2010. Furthermore, our findings show that the
financial performance of sustainable companies has increased and been sustained
over the sample. Notwithstanding sample limitation, causal evidence reported in
this paper suggests that, there is bi-directional relationship between corporate
social responsibilities practices and corporate financial performance.
Data obtained from monthly Gallup/UBS surveys from 1998 to 2007 and from a special
supplement to the Michigan Surveys of Consumer Attitudes and Behavior, run in 22
monthly surveys between 2000 and 2005, are used to analyze stock market beliefs and
portfolio choices of household investors. We show that the key variables found to
be positive predictors of actual stock returns in the asset-pricing literature are
also highly correlated with investor's subjective expected returns, but with the
opposite sign. Moreover, our analysis of the microdata indicates that subjective
expectations of both risk and returns on stocks are strongly influenced by
perceptions of economic conditions. In particular, when investors believe
macroeconomic conditions are more expansionary, they tend to expect both higher
returns and lower volatility. This is difficult to reconcile with the canonical
view that expected returns on stocks rise during recessions to compensate household
investors for increased exposure or sensitivity to macroeconomic risks. Finally,
the relevance of these investors' subjective expectations is supported by the
finding of a significant link between their expectations and portfolio choices. In
particular, we show that portfolio equity positions tend to be higher for those
respondents that anticipate higher expected returns or lower uncertainty.
A longitudinal study of 308 white-collar U.S. employees revealed that feelings of
hope and gratitude increase concern for corporate social responsibility (CSR). In
particular, employees with stronger hope and gratitude were found to have a greater
sense of responsibility toward employee and societal issues; interestingly,
employee hope and gratitude did not affect sense of responsibility toward economic
and safety/quality issues. These findings offer an extension of research by
Giacalone, Paul, and Jurkiewicz (2005, Journal of Business Ethics, 58, 295-305).
In recent years the benefit corporation has emerged as a new organizational form
dedicated to legitimizing the pursuit of corporate social responsibility (CSR).
Eschewing traditional governmental authority, the benefit corporation derives its
moral legitimacy from the values of its owners and the oversight of a third party
evaluator. This research identifies the benefit corporation as a new type of gray
sector organization (GSO) and applies extant theory on GSOs to analyze its design.
In particular, it shows how the theory of GSO accountability can be used to assess
the potential of benefit corporations for enhancing CSR. This research first
examines the statutes that have established benefit corporations in five states in
the US, along with bills in other states, to show how legislation defines their
specific public benefits and holds them accountable for delivering these benefits.
It then compares the accountability of the benefit corporation with that of other
corporate-centric GSOs, e.g., GSOs that closely resemble traditional corporations.
It concludes with significant design-based concerns about the utility of the
benefit corporation as an effective organization for implementing CSR.
Religion is considered a cornerstone of business ethics, yet the values held dear
by a religion, when professed by business organizations serving heterogeneous
market segments in secularized societies, can generate conflict and resistance. In
this paper, we report findings from a study of stakeholder reactions to the
renaming of an Italian public hospital. After the construction of new facilities,
the hospital was renamed for the recently canonized Roman Catholic Pope John XXIII.
Contrary to expectations, we found no evidence of public criticism surrounding the
name change. A fine-grained analysis of a sample of 734 respondents belonging to
different stakeholder groups revealed that consumers (patients and citizens)
predominantly supported the name change, while employees were often critical and
concerned about possible religious influences on medical practice and scientific
research. Moving beyond our empirical setting, we propose a process model of brand-
religion alignment inspired by McCracken's (J Consum Res 13(1): 71-84, 1986)
meaning transfer model, which considers both the alignment process and its
reception by relevant audiences. The study also presents managerial implications
useful for those brand managers who wish to create effective, respectful links with
religion.
Achieving exploitation and exploration enables success, even survival, but raises
challenging tensions. Ambidextrous organizations excel at exploiting existing
products to enable incremental innovation and at exploring new opportunities to
foster more radical innovation, yet related research is limited. Largely
conceptual, anecdotal, or single case studies offer architectural or contextual
approaches. Architectural ambidexterity proposes dual structures and strategies to
differentiate efforts, focusing actors on one or the other form of innovation. In
contrast, contextual approaches use behavioral and social means to integrate
exploitation and exploration. To develop a more comprehensive model, we sought to
learn from five, ambidextrous firms that lead the product design industry. Results
offer an alternative framework for examining exploitation-exploration tensions and
their management. More specifically, we present nested paradoxes of innovation:
strategic intent ( profit-breakthroughs), customer orientation (tight-loose
coupling), and personal drivers (discipline-passion). Building from innovation and
paradox literature, we theorize how integration and differentiation tactics help
manage these interwoven paradoxes and fuel virtuous cycles of ambidexterity.
Further, managing paradoxes becomes a shared responsibility, not only of top
management, but across organizational levels.
A significant body of research concludes that stable beliefs of perceived consumer
effectiveness lead to sustainable consumption choices. Consumers who believe that
their decisions can significantly affect environmental and social issues are more
likely to behave sustainably. Little is known, however, about how perceived
consumer effectiveness can be increased. We find that feelings of guilt and pride,
activated by a single consumption episode, can regulate sustainable consumption by
affecting consumers' general perception of effectiveness. This paper demonstrates
the impact that guilt and pride have on perceived consumer effectiveness and shows
how this effect rests on the ability of these emotions to influence perceptions of
agency. After experiencing guilt or pride, consumers see themselves as the cause of
relevant sustainability outcomes. The process of causal attribution associated with
these emotions influences consumers' use of neutralization techniques. Through the
reduction in consumers' ability to neutralize their sense of personal
responsibility, guilt and pride positively influence perceived consumer
effectiveness. The inability to rationalize-away their personal responsibility,
persuades consumers that they affect sustainability outcomes through their
decisions. The research advances our understanding of sustainable consumption and
identifies a new avenue for the regulation of individual consumer behavior that has
significant implications for the development of sustainable marketing initiatives.
Firm-employee relationships are dependent on the wider societal context and on the
role business plays in society. Changes in institutional arrangements in society
affect the perceived responsibilities of firms to their personnel. In this study,
we examine mass media discussions about firm-employee relationships from a social
responsibility perspective via a longitudinal study in Romanian society. Our
analysis indicates how the expected responsibilities of firms towards employees
have altered with the changing role of firms in society since the early 1990s.
These transformations correspond to the ideological developments, from communist to
market-based thinking, which have taken place in post-communist Eastern Europe.
More specifically, our study shows how the diminishing expectations of corporate
social responsibility (CSR) are linked in mass media to increasingly important talk
of human resource management (HRM). HRM is a modern business approach believed to
address personnel needs and organisational objectives simultaneously. The
congruency of goals in HRM may mistakenly lead to the conclusion that organisations
are inherently responsible toward their personnel. We argue that this may not
necessarily be the case. HRM, matching well the new free-market ideology in post-
communist Eastern Europe, was eagerly embraced in that it defined firm-personnel
relationships. In this study, we question whether this was an adequate theoretical
perspective for Romanian firms to adopt as it lacks sufficient ethical grounding.
We also call for a higher awareness concerning the role of mass media in the
management literature, since its current role in constructing the 'rightness' and
'wrongness' in firm-personnel relationships is hardly considered.
The development of the certified Fair Trade market was initiated by a group of
indigenous communities in Mexico. Over time, their vision of Fair Trade as a
different type of market has become increasingly marginalized by an emphasis on
poverty reduction. This article presents their understanding of what Fair Trade
should and should not be. It presents the key principles of the Fair Trade market
as effectiveness, ecological sustainability, social sustainability, and more direct
producer-consumer relationships. The key challenges that confront Fair Trade in
living up to these principles are the need to democratize the formal structures of
Fair Trade so as to give a greater voice to small producers and to link with other
social movements to confront the dominant neo-liberal trade regime.
Over recent years, there has been a focus in corporate activity upon the concept of
corporate social responsibility (CSR) and one of its central platforms, the notion
of sustainability, and particularly sustainable development. We argue in this
article that the use of such a term has the effect of obfuscating the real
situation regarding the effect of corporate activity upon the external environment
and the consequent implications for the future. One of the effects of persuading
that corporate activity is sustainable is that the cost of capital for the firm is
reduced as investors are misled into thinking that the level of risk involved in
their investment is lower than it actually is. We analyse the effects of this
misrepresentation and argue for a fuller debate about sustainability.
When Caja de Pensiones para la Vejez y de Ahorros, "la Caixa,'' was created in
1905, it was not only the transient response to a serious social, political, and
economical problem, but also provided a permanent solution by creating a long-
lasting social welfare institution. In addition, its founder understood the
responsibility of social welfare institutions not as an isolated responsibility for
each institution, but as part of a harmonious whole that is a real moral entity
with a socio-economic character, with autonomy and unity of nature, purpose, and
form. The purpose of this article is to show how the corporate social
responsibility conception of Francesc Moragas, the founder of "la Caixa,'' informed
the activities of the new institution in a variety of dimensions, including its
service to the customers, its economic strengths, the social work, and its
participation in the creation of the public system of social security in Spain.
Corporate social responsibility is often framed in terms of opposing constructions
of the firm. These reflect, respectively, different accounts of its obligations:
either to shareholders or to stakeholders (who include shareholders). Although
these opposing constructions of corporate responsibility are diametrically opposed,
they are also much more fluid and mobile in certain contexts, since they can act as
discursive resources that are deployed and brought into play in the struggle over
shaping what responsibility means. They are less the fixed, ideological "signposts"
they might appear, and more like "weathervanes" that move alongside changing
rhetorical currents. To show this, we analyse the Securities and Exchange
Commission consultation process, and legislation, relating to the provenance of
"conflict minerals". We identify two dialectically opposed camps, each seeking to
influence final legislation and with end goals in keeping with the
shareholder/stakeholder dichotomy. One camp lobbied for firms to scrutinize their
entire supply chain, constructing the firm as a "global citizen" with very wide
social responsibilities. The second camp lobbied for a lighter touch approach,
constructing the firm as a "trader", with much narrower social responsibilities. We
analyse the complex interplay between these two opposed camps, our contribution
being to show how both deploy competing conceptions of the corporation as
discursive resources.
The Corporate Social Performance (CSP) model (Wood, Acad Manag Rev 164:691-718,
1991) assesses a firm's social responsibility at three levels of analysis-
institutional, organizational and individual-and measures the resulting social
outcomes. In this paper, we focus on the individual level of CSP, manifested in the
managerial discretion of a firm's principles, processes, and policies regarding
social responsibilities. Specifically, we address the human resources management of
employees as a way of promoting CSR values and producing socially minded outcomes.
We show that applying the humanist philosophy to the managerial discretion of a
business organization leads to the creation of an "autonomy supportive work
environment"aEuro"as defined by the self-determination theory-which in turn,
facilitates the internalization of social values, citizenship behaviors, and
cooperation. The objective of promoting self-determination at work (i.e., the core
of a humanist management) fits well with the ontology of social responsibility
since autonomy and consideration of individuals as moral actors are central tenets.
Furthermore, we show that applying humanistic management philosophy to the
discretion of managers can lead to socially responsible outcomes. First, intra-
organizational stakeholders (e.g., employees) are treated with respect and focus is
put on their well-being, satisfaction, and self-actualization at work. Second, as
employees' need of self-determination is addressed by managers, it is likely that
pro-social behaviors toward other stakeholders of the organization will be adopted,
leading to socially responsible outcomes for extra-organizational stakeholders
(Gagn,, Motiv Emot 77:58-75, 2003). Thus, this paper ultimately posits that
humanistic management applied to the HRM can be a solution for developing and
maintaining socially responsible outcomes as determined at the individual level of
the CSP model, through managerial discretion.
Using a worldwide sample, we examine whether corporate social responsibility (CSR)
performance has an impact on the value of cash holdings. We find that investors
assign a higher value to cash held by firms that have a high CSR rating. This
result is consistent with the idea that CSR policies are a means for managers to
act in the shareholders' interests by mitigating conflicts with stakeholders.
Finally, we reveal that CSR performance has a positive impact on the value of cash
holdings only for firms which operate in countries where shareholders are well
protected from expropriation by managers and in countries where the institutional
quality is high.
Firms routinely decide whether to make essential inputs themselves or buy the
inputs from independent suppliers. Conventional wisdom suggests that a firm will
not buy an input for a price above its in-house cost of production. We show that
this is not necessarily the case when a monopolistic input supplier also serves the
firm's retail rival. In this case, the decision to buy the input (and thus become
one of the supplier's customers) can limit the incentive the supplier would
otherwise have to provide the input on particularly favorable terms to the retail
rival. Thus, a retail competitor may pay a premium to outsource production to a
common supplier in order to raise its rivals' costs.
P>This study contributes to the limited established empirical research on the
impact and relevance of corporate social responsibility (CSR) in the capital
markets of emerging economies. We conducted an event study to demonstrate how the
timing of CSR announcements by firms that have aligned their strategies to newly
instituted social regulations in South Africa influenced stock prices. Using a
unique dataset of publicly listed South African enterprises that undertook CSR
initiatives during the ten year period from 1996 to 2005, we found that investor
reactions to CSR announcements concluded during the late phase of institutional
reforms are viewed positively by investors. Furthermore, CSR announcements of
substantive monetary value result in significantly higher shareholder returns.
We used data obtained from customer contact employees in the People's Republic of
China to test a moderated mediation model of the processes through which core self-
evaluations (CSE) influence voice behavior. Specifically, we examined personal
control and approach/avoidance motivation as psychological pathways and procedural
justice perceptions as a moderator of the CSE-voice behavior relationship. As
predicted, our results revealed that CSE related to employee voice behavior
indirectly through personal control and approach motivation but not avoidance
motivation. Furthermore, and consistent with our prediction, results showed that
procedural justice perceptions moderated the mediated influence of both personal
control and approach motivation on the CSE-voice behavior relationship such that
this relationship is stronger when procedural justice perceptions are high but not
low. We discuss the implications of these findings in terms of explanatory
frameworks for understanding the documented effects of CSE on employee work
outcomes.
This paper examines the economic impact of implementing Corporate Social
Responsibility (CSR) in the supply chain operations of multinational corporations
(MNC). Because they have global supply chains in emerging markets, MNCs face
certain operational challenges. For example, unethical operations often result in a
huge loss to MNCs in the long run, even though their initial cost seems to be low.
In this paper, we extend the Bullwhip Effect theory in supply chain management to
the ethical operations context, and define and evaluate a special Bullwhip Effect
due to Unethical Operations (BEUO). Using economic data from various sources
including Ford, Toyota, and GM in the auto industry, we first estimate the indices
of BEUO for the three companies and demonstrate the economic necessity for MNCs to
incorporate CSR with supply chain operations. We then propose a coherent approach,
blending what we term the bottom-up and proactive methods, to achieve such an
outcome. The bottom-up approach requires MNCs to switch their focus on
stakeholders, shifting from shareholders to consumers and workers, and on decision
levels from public relationships to supply chain operations. The proactive approach
recommends initializing specific CSR operations to mitigate the negative impact of
BEUO. Both theoretical analysis and case studies are conducted to evaluate our
developed propositions that MNCs adopting the proposed CSR operations will in the
long run achieve better economic performance. Recommended actions for
implementation, based on best practices, are also presented.
While the importance of employee initiatives for improving the environmental
practices and performance of organizations has been clearly established in the
literature, the precise nature of these initiatives has rarely been examined
(particularly the issue of their discretionary or mandatory nature). The role of
organizational citizenship behaviour in environmental management remains largely
unexplored. The main objectives of this paper were to propose and validate an
instrument for measuring organizational citizenship behaviour for the environment
(OCBE). Exploratory (Study 1, N = 228) and confirmatory (Study 2, N = 651) analyses
were conducted to examine the factor structure of OCBEs. The factor structure that
emerged from Study 1 indicated that the three main types of OCBEs were eco-
initiatives, eco-civic engagement and eco-helping. The factor structure found in
Study 1 was confirmed by Study 2. Analysis of the three types of OCBEs highlighted
the complexity of discretionary initiatives for the environment in the workplace
and points to a number of avenues for further research.
This study provides evidence on the relationship between corporate social
responsibility (CSR) and firms' credit ratings. We find that credit rating agencies
tend to award relatively high ratings to firms with good social performance. This
pattern is robust to controlling for key firm characteristics as well as
endogeneity between CSR and credit ratings. We also find that CSR strengths and
concerns influence credit ratings and that the individual components of CSR that
relate to primary stakeholder management (i.e., community relations, diversity,
employee relations, environmental performance, and product characteristics) matter
most in explaining firms' creditworthiness. Overall, our results suggest that CSR
performance conveys important non-financial information that rating agencies are
likely to use in their evaluation of firms' creditworthiness, and that CSR
investments-particularly those that extend beyond compliance behavior to reflect
what is desired by society-can lead to lower financing costs resulting from higher
credit ratings.
Nearly all studies of consumers' willingness to engage in ethical or socially
responsible purchasing behavior is based on unconstrained survey response methods.
In the present article we ask the question of how well does asking consumers the
extent to which they care about a specific social or ethical issue relate to how
they would behave in a more constrained environment where there is no socially
acceptable response. The results of a comparison between traditional survey
questions of "intention to purchase" and estimates of individuals willingness-to-
pay for social attributes in products reveal that simple survey questions are too
"noisy" to provide operationally meaningful information and overstate intentions to
a considerable extent.
This article makes two related contributions to stakeholder theory and corporate
governance theory. First, the authors seek to advance firm-level characterization
of the emerging stakeholder model of corporate governance by analyzing two relevant
dimensions of this model: the corporate social responsibility (CSR) function at the
board level and stakeholder engagement. Second, the authors intend to examine the
relationship between conformance to the stakeholder model of corporate governance
and firm financial performance, taking into account the differences between
countries, by using an international sample of large companies. The findings
suggest that the traditional distinction between shareholder-centered and
stakeholder-centered corporate governance systems also has importance for the CSR
strategy.
Developing countries have recently experienced a burgeoning of small-scale
individual entrepreneurs (SIEs) - who range from petty traders to personal service
workers like small street vendors, barbers and owners of small shops - as a result
of market-based reforms, rapid urbanisation, unemployment, landlessness and
poverty. While SIEs form a major part of the informal workforce in developing
countries and contribute significantly to economic growth, their potential is being
undermined when they engage in irresponsible and deceptive business practices such
as overpricing, sale of underweight or substandard products, or attempts to hoard
goods, to name a few. Despite the growing interest in corporate social
responsibility (CSR) initiatives of small businesses in developing countries, the
SIEs have received almost no attention. To address this void in the literature, we
explore the reasons for the less than optimal level of social responsibility
demonstrated by some SIEs in developing countries. We do so by drawing upon the
existing literature to develop a comprehensive framework of social responsibility
of SIEs highlighting their unique characteristics and the different contextual
factors that they encounter in developing countries. Based on this framework, we
then present a set of propositions specifying the influence of these contextual
factors such as business environment, cultural traditions, socio-economic
conditions, and both international and domestic pressures on the business practices
of SIEs. The framework offers an explanation for the lack of responsible
entrepreneurship of SIEs and has important implications for promoting sustainable
business practices in developing countries where businesses are striving hard to
survive and compete.
In recent years there have been ever-growing concerns regarding environmental
decline, causing some companies to focus on the implementation of environmentally
friendly supply, production and distribution systems. Such concern may stem either
from the set of beliefs and values of the company's management or from certain
pressure exerted by the market - consumers and institutions - in the belief that an
environmentally respectful management policy will contribute to the transmission of
a positive image of the company and its products. Sometimes, however, ethics and
market rules are not enough to deal with this situation and specific laws must be
considered. This is the case when companies base their activity on the 'ethics of
self-interest' concentrating their efforts on projecting an adequate image - e.g.
environmental respect - rather than fundamentally behaving in environmentally
respectful ways. This article, taking as reference the SME context, discusses the
reasons for implementing environmentally friendly systems. Both ethics and business
seem to be relevant and, therefore, a certain balance between market and
interventionism seems to be necessary.
This article examines how employees form their perceptions of managerial
responsibility in a concrete organizational setting. Drawing on negotiated order
theory, it shows that these perceptions are the result of complex processes of
social construction and negotiation, rather than the application of predetermined
ethics models or norms. Employees' perceptions appear to be unstable; they are
subject to constant alterations, fluctuating with the organizational circumstances,
and are likely to create considerable organizational perturbations, especially when
managers make complex and ambiguous decisions. This process is illustrated through
an ethnographic study that analyzed the evolution of employee perceptions during a
three-year crisis-one that led managers to repeatedly postpone salary payments to
save jobs. The process approach adopted by the study highlights important dynamics
that traditional business ethics approaches overlook, such as the fragility of the
construct of managerial responsibility, which cannot be coherent unless it is
constantly renegotiated among an organization's various employee groups.
This article analyzes the evolution of best practices in the maquiladora industry
in Mexico. Since the mid-1960s, the maquiladora has been understood as a simple
assembly activity based on cheap labor, with low added value, and limited linkage
with local suppliers. However, the maquiladora industry has evolved since the early
1980s as a consequence of the adoption of best practices in the productive
processes and industrial organization. The best practices examined in this article
are increases or improvements in complex activities, capabilities, just-in-time,
continuous improvement, environmental performance, and job safety. The data come
from three surveys administered in major U.S./Mexico border cities in 1990, 2002,
and 2006. Based on an analysis of these surveys, there has been a broad diffusion
of the best organizational practices since the 1960s.
Using firm-level data from the U.S. manufacturing industry, this paper examines the
relationship among inventory leanness, structural strategies for supply chains, and
the carbon intensities of a firm and its suppliers. We formulate hypotheses on and
empirically test whether this internal characteristic (inventory leanness) and
these two structural strategies can influence the intensities of firm-level and
supply chain environmental impacts. We examine inventory leanness because it not
only reflects a manufacturer's operational efficiency but also markedly influences
manufacturers' financial performance. We also focus on two closely related
structural strategies (outsourcing and product diversification) that can influence
the scope and ownership of the supply chain process, resulting in changes in
emission allocation and, more importantly, how resources are utilized and shared in
a firm. Based on multi-year carbon inventory data from U.S. manufacturing firms, we
find that manufacturers with greater inventory leanness and a parsimonious process
structure (i.e., a high level of outsourcing but low product diversification) tend
to attain lower firm-level and supply chain carbon intensities.
Recent product introductions such as the Xbox 360, Sony Playstation 2, and PT
Cruiser have been characterized by shortage of these products. Some experts have
suggested that such scarcity can be a deliberate strategy for making the product
more desirable. In this paper, we empirically examine the relationship between
introductory inventory levels and consumer preference in the U. S. automobile
industry and show that relative scarcity of a car at the time of introduction is
associated with higher consumer preference for the product. Furthermore, we perform
an empirical test of alternative theories about the rationale for introductory
product scarcity. Specifically, we consider two theories of supplier-induced
scarcity, namely the buying frenzy theory and the signaling theory, and an
alternative theory that suggests that demand uncertainty causes introductory
product scarcity. We find more support for the signaling theory of supplier-induced
scarcity than the buying frenzy theory or the demand uncertainty theory in our
analysis of the automobile market.
In the literature, Fair Trade (FT) goods are usually associated with other products
differentiated by process attributes such as organic food, genetically modified
(GM) food or child labour-free clothing. All of these products are regarded as
credence goods. This classification refers to the simplified definition of credence
goods, which describes product attributes which consumers cannot evaluate, even
after having consumed the good. Focusing on the characteristics of FT goods, this
article proposes a reassessment of the link between FT goods and credence
properties as defined by Darby and Karni. We first demonstrate that (1) the usual
classification masks important particularities of FT goods compared to other goods
with process attributes and (2) the full definition of credence goods may even
provide a better description of the quality of FT goods. However and this is our
second theoretical contribution the lack of consensus among experts concerning FT
standards and their level of efficiency encourage us to consider FT goods as
indeterminate goods as defined by Lupton. This result leads us to suggest a new
typology of product attributes summarized in an innovative diagram. It sheds light
on how competition between the different FT approaches works and why the FT market
is still confined to a niche, if not threatened with collapse. We mainly illustrate
our theoretical analysis with observations relating to the French FT market and
institutions.
Using the emerging technology of large-scale textual analysis, this study examines
the use of the term 'customer satisfaction' and its variants in the annual reports
issued by publicly traded U.S. corporations and filed with the Securities and
Exchange Commission as Form 10-K. We document the frequency of the term's
occurrence in 10-Ks over the 1995-2013 period and the differences in usage across
industries. We then relate the term's usage in 10-Ks to subsequent scores from the
American Customer Satisfaction Index (ACSI) to determine whether management's
discussion of customer satisfaction in financial disclosures is credible. The
commitment of management to shareholders versus, more broadly, stakeholders is a
central question in business ethics, and the integrity of management communication
is a fundamental construct in the American Marketing Association's Statement of
Ethics. We document a complex relation between management's discussion of customer
satisfaction and subsequently reported satisfaction. We find that the general use
of customer satisfaction (and similar terms) in 10-K documents is negatively
correlated with subsequent ACSI scores. However, for retail firms, when the phrase
is located near words indicating measurement or monitoring of the phenomenon, the
empirical relation is reversed and becomes positive.
As it has become more and more urgent to solve the problems of environmental
protection, we consider it necessary to conduct multilevel studies to examine the
impact of business strategy on both employees' and firms' performances in
environmental protection. Synthesizing the perspectives of strategic orientation,
corporate strategy, and firm performance, we propose a comprehensive theoretical
model linking market orientation and environmental performance. Based on a survey
of 134 matched chief executive officers, senior marketing managers and frontline
workers from Chinese firms, we found that market orientation positively affects
environmental strategy which, in turn, influences both environmental product
quality and employees' environmental involvement. These latter two variables
consequently have a positive influence on environmental performance. At the same
time, environmental commitment moderates the link between market orientation and
environmental strategy.
The current study examined employee outcomes associated with customer mistreatment,
conceptualizing customer mistreatment as signaling failure regarding employees'
pursuit of task and social goals at work. We argue that employees make internal
attributions when experiencing customer mistreatment and are likely to engage in
rumination because of this perceived goal failure. The goal of this article was to
test this conceptualization and examine the outcomes of customer mistreatment-
induced rumination as well as emotional labor strategies as potential protective
mechanisms against customer mistreatment. Findings from time-lagged data collected
from 737 call-center customer representatives indicated that cognitive rumination
mediated the relationship between customer mistreatment and supervisor-rated job
performance, customer-directed sabotage, employee well-being, and emotional
exhaustion. The second mediator, social sharing of negative events, mediated the
relationship between customer mistreatment and emotional exhaustion only. As
expected, cognitive rumination was positively related to customer sabotage and
emotional exhaustion and negatively related to job performance and well-being.
Social sharing of negative events was positively related to both well-being and
emotional exhaustion. Finally, we found that deep acting, but not surface acting,
buffered the effects of customer mistreatment on cognitive rumination and social
sharing. Limitations, future research directions, and managerial implications are
discussed.
We examine the effect of a firm's relations with its nonfinancial stakeholders,
including its employees, suppliers, customers, and communities, on the persistence
of both superior and inferior financial performance. In particular, integrating and
extending the resource-based view of the firm and stakeholder management
literatures, we develop the arguments that good stakeholder relations not only
enable a firm with superior financial performance to sustain its competitive
advantage for a longer period of tune, but more importantly, also help poorly
performing firms to recover from disadvantageous positions more quickly. The
arguments are supported by the analysis of a series of first-order autoregressive
models. Our findings further suggest that the positive effect of good stakeholder
relations oil the persistence of superior performance is not as strong as that of
some other firm resources, such as technological knowledge, but it is the
only,factor examined that promises to help a firm recover from inferior
performance. Therefore, the role of positive stakeholder relations in helping
poorly performing firms recover is found to be more critical than its role in
helping superior firms sustain their performance advantage. Copyright (C) 2008 John
Wiley & Sons, Ltd.
Research on the antecedents of consumers' ethical beliefs has mainly examined
cognitive variables and has (with a few exceptions) neglected the relationships
among affective variables and consumer ethics. However, research in moral
psychology indicates that moral emotions have a significant role in ethical
decision-making (Haidt, Handbook of affective sciences, 2003). Thus, the ability to
experience, perceive and regulate emotions should influence consumers' ethical
decision-making. These abilities, which are components of emotional intelligence
(Davies et al., J Person Soc Psychol, 1998), are examined as antecedents to
consumers' ethical beliefs in this study. Five hundred Australian consumers
participated in this study by completing an online questionnaire that included
measures of emotional intelligence, consumers' ethical beliefs and personal moral
philosophies (idealism and relativism, Forsyth, J Person Soc Psychol, 1980).
Results demonstrate that the ability to appraise and express emotions in oneself is
directly negatively related to beliefs regarding actively benefiting from illegal
actions as a consumer, passively benefiting at the expense of the seller and
actively benefiting from questionable but legal actions as a consumer. The ability
to appraise and express emotions in oneself is directly positively related to
beliefs regarding 'doing-good' (pro-social) actions. The ability to appraise and
recognise emotions in others is also directly positively related to beliefs
regarding 'doing-good' actions as well as pro-environmental buying actions. The
effects of the different components of emotional intelligence on consumers' ethical
beliefs are (in most cases) mediated by personal moral philosophies. This study
demonstrates the relationship between emotional intelligence and consumer ethics
and highlights the interplay of affect and cognition in consumers' ethical
decision-making.
This longitudinal field experiment compares two different for-profit market entry
strategies with a philanthropic strategy in terms of how each influences consumer
behavior in base-of-the-pyramid communities. We analyze reactions to a water
purification product offered at three price points (moderate discount, deep
discount, and free) in rural Malawi. We find that those who paid the deeply
discounted price remain more likely to re-obtain and use the product than do those
who paid the moderate price or who took it for free. Copyright (c) 2014 John Wiley
& Sons, Ltd.
In recent years, firms have greatly increased the amount of resources allocated to
activities classified as Corporate Social Responsibility (CSR). While an increase
in CSR expenditure may be consistent with firm value maximization if it is a
response to changes in stakeholders' preferences, we argue that a firm's insiders
(managers and large blockholders) may seek to over- invest in CSR for their private
benefit to the extent that doing so improves their reputations as good global
citizens and has a "warm-glow" effect. We test this hypothesis by investigating the
relation between firms' CSR ratings and their ownership and capital structures.
Employing a unique data set that categorizes the largest 3000 U.S. corporations as
either socially responsible (SR) or socially irresponsible (SI), we find that on
average, insiders' ownership and leverage are negatively related to the firm's
social rating, while institutional ownership is uncorrelated with it. Assuming that
higher CSR ratings is associated with higher CSR expenditure level, these results
support our hypothesis that insiders induce firms to over-invest in CSR when they
bear little of the cost of doing so.
I propose an ethnographic study on the incremental transformation of identity.
Through an analysis of managerial perceptions of stakeholder influence, I suggest
that identity is adaptive rather than enduring and that, to explain adaptive
identity, group identity is more appropriate than an organizational identity
perspective. The case study uses qualitative data collected in organizations
manufacturing flavors and fragrances for the large consumer goods industries. The
analysis reveals that attributes shared with clannish stakeholders gradually
replace attributes of a claimed identity, and that, when confronting hostile
stakeholders, organizations act in solidarity with clannish stakeholders. The
discussion elaborates on the porosity of identity boundaries and the mobility of
attributes, two important mechanisms that have emotional, behavioral, and strategic
consequences.
Firms face a great deal of pressure to engage in the heightened debate about
climate change policies and practices. Building on the corporate political strategy
literature, the authors evaluate how firms choose to influence those policies when
faced with pressure from shareholders and activists. The authors triangulate firms'
choice of corporate political activity (CPA) with their environmental performance
to draw out whether performance affects the firm's choice of engagement level in
CPA. The authors find that firms in the S&P 500 use a form of constituency-building
(CB) more often than a financial-incentive (FI) tactic and that environmental
performance moderates this choice. To date, there is little research connecting
corporate political activity and climate change policies and performance. This
research is intended to contribute to this literature gap.
Company support for employee volunteerism (CSEV) benefits companies, employees, and
society while helping companies meet the expectations of corporate social
responsibility (CSR). A nationally representative telephone survey of 990 Canadian
companies examined CSEV through the lens of Porter and Kramer's (2006, 'Strategy
and society: the link between competitive advantage and corporate social
responsibility', Harvard Business Review, 78-92.) CSR, model. The results
demonstrated that Canadian companies passively support employee volunteerism in a
variety of ways, such as allowing employees to take time off without pay (71%) or
adjusting their work schedules (78%). These Responsive CSR efforts contribute to
the company's value chain by enhancing employee morale, a perceived CSEV benefit.
More active forms of support requiring company time or money are less common; for
example, 29% allow time off with pay. Companies perceive that support for employee
volunteering enhances their public image, a Responsive CSR strategy when employed
to ameliorate a damaged reputation or a Strategic CSR strategy when contributing to
a competitive position. A minority perceive challenges like covering the workload.
Many companies target and/or exclude particular causes and link CSEV efforts with
other philanthropic donations, suggesting a Strategic CSR application of CSEV.
Where programs exist, they frequently are neither tracked nor evaluated, suggesting
that companies are not using these programs as strategically as they might.
The presumption is that a broker executing a stock trade for a retail investor will
get the investor the best possible price execution for the transaction. In fact,
the broker often sells the retail investor's trade to an intermediary for cash
payment. The broker's motivation to generate dealer profits seems to overcome the
broker's fiduciary responsibility to obtain the best execution price for the
customer, raising ethical questions. Purchasers and internalizers of order flow in
the market may cause prices quoted on the NYSE to deteriorate, making all investors
worse off.
This article makes first use of a set of databases that are authoritative,
independent, and consistent to examine an old research question: do firms hurt
their financial performance by damaging stakeholder interests? The databases are US
government on-line listings of fines for environmental breaches, unsafe workplaces,
fraudulent accounting standards, and product recalls. These measures are assumed to
proxy for signals to stakeholders of the environmental, social, and governance
(ESG) risks in transacting with the firm and appear to have fewer biases than
conventional measures of stakeholder standards. Using a sample of all non-financial
S&P 500 firms during the most recent 1998-2003 full cycle in the market, after
controlling for firm-specific differences, sales margins of firms fell by 0.8% if
they announced a product recall and by 0.4% if cited by OSHA for an unsafe
workplace; and shareholder return was significantly reduced by an EPA or SEC
prosecution. This study links the risk of transaction uncertainty, information
signaling theory, and the resource-based view of the firm to company financial
performance. Results support the normative assumption that a firm's sales margin
will be damaged by unethical treatment of stakeholders as evidenced by ESG
breaches, presumably because risk-averse customers and suppliers are alert to
signals of counterparty risk.
The World Bank recently noted: "Social license to operate has traditionally
referred to the conduct of firms with regard to the impact on local communities and
the environment, but the definition has expanded in recent years to include issues
related to worker and human rights" (World Bank 2013. In this paper, we examine a
factor that can influence the kind of work conditions that can facilitate or
obstruct a firm's attempts to achieve the social license to operate (SLO).
Specifically, we examine the empirical association between a company's employee
practices and the religiosity of its local community by investigating their fixed
and endogenous effects. Using a large and extensive U.S. sample, we find a positive
association between the "employee friendly" practices of a firm and the religiosity
of the local community after controlling for several firm characteristics. In
addition, after mitigating endogeneity with the dynamic panel system generalized
method of moment and after employing several other econometric tests, we still find
a robust positive association between the religiosity of the local community and
employee-friendly practices. Since recent research has shown that the firm's
treatment of its stakeholders is a key to achieving an SLO, and since employees
constitute a highly significant stakeholder group, we interpret our results as
supporting the view that religion is an important influence on the kinds of
employee practices that can increase the likelihood that a firm will acquire the
SLO.
This study investigates the relationship between strong firm environmental
performance and board characteristics that capture boards' monitoring and resource
provision abilities during an era when the natural environment and the related
strategic opportunities have increased in importance. The authors relate the proxy
for strong environmental performance to board characteristics that represent
boards' monitoring role (i.e., independence, CEO-chair duality, concentration of
directors appointed after the CEO, and director shareholding) and resource
provision role (i.e., board size, directors on multiple boards, CEOs of other firms
on the board, lawyers on the board, and director tenure). The authors provide
evidence consistent with both theories of board roles. Specifically, consistent
with their agency theory-driven predictions, the authors find evidence of higher
environmental performance in firms with higher board independence and lower
concentration of directors appointed after the CEO on the board of directors.
Consistent with resource dependence theory, they show that environmental
performance is higher in firms that have larger boards, larger representation of
active CEOs on the board, and more legal experts on the board. Their findings are
generally robust to a number of sensitivity analyses. These findings have
implications for managers, firms, shareholders, and regulators who act on behalf of
shareholders, if they are interested in influencing environmental performance.
Little is known about how and why corporate social responsibility (CSR) emerged in
lesser developed countries. In order to address this knowledge gap, we used Chile
as a test case and conducted a series of in-depth interviews with leaders of CSR
initiatives. We also did an Internet and literature search to help provide support
for the findings that emerged from our data. We discovered that while there are
similarities in the drivers of CSR in developed countries, there are distinct
differences as well. In particular, we found that different sectors drive CSR in
Chile. In contrast to other geographies where consumer demand and government
regulation provided the impetus for CSR efforts, multinational companies (MNCs) and
non-governmental organizations (NGOs) are key actors in Chile. MNCs imported their
CSR beliefs, skills, and processes into Chile. Their efforts resulted in a virtuous
cycle. Once large domestic firms felt pressured by their MNC rivals, they too
adopted CSR initiatives. The ability to manage relationships with multiple
stakeholders and perceptions of authenticity were also critical to the success of
CSR in Chile. Using network theory as a lens, we suggest that network density and
centrality largely determine whether CSR efforts will be authentic. Based on these
contentions, we suggest avenues for future research.
The main aim of this study is to undertake a critical examination of the ethical
and developmental performance of an Islamic bank as communicated in its annual
reports over a period of 28 years (1983-2010). Islami Bank Bangladesh Limited's
(IBBL hereafter) ethical performance and disclosures are further analyzed through
interviews conducted with the bank's senior management. The key findings include an
overall increase in ethical disclosures during the study period. However, the focus
on various stakeholders' needs has varied over time reflecting the evolving nature
of the Islamic finance industry over the last three decades. Based on a secular
economy, IBBL focused in the first two decades on the "Particular" Shariah
compliance disclosure as a way of establishing its reputation and differentiating
itself from conventional banks in a dual banking system. Post 2005, the ethical
performance and disclosure shifted to more "Universal" disclosures such as
sustainability, charity, employees, and community related disclosures signaling
responsible conduct and the bank's adoption of a "wider stakeholder approach."
However the bank is still failing to provide full disclosure on certain significant
categories such as sources and uses of disposable income, thereby contradicting the
principles of full and comprehensive disclosure and accountability. In addition,
the structure of IBBL's investment portfolio reveals an overreliance on debt-based
financial instruments and a shortcoming in fulfilling the developmental and social
objectives of Islamic finance. This is evidenced by the "qualified" Shariah
Supervisory Board reports that the bank consistently received. This research
provides further evidence that Islamic banking and Finance in its current practices
reflect the "global" and the "local" influences in an era dominated by global
conventional finance.
We investigate if private family firms have a greater environmental performance
focus than nonfamily firms, and if this relationship is moderated by the strength
of the firms' social embeddedness. We empirically test these issues using a
representative sample of 1452 private Australian small and medium-sized
enterprises. Contrary to prevailing assumptions and previous indicative findings in
the public firm context, our results show that family firms have a lower
environmental performance focus than nonfamily firms. However, in cases where the
firm is highly embedded in the social community, we find that family firms have a
higher environmental performance focus. We explain our unexpected results by
considering the role of financial risk in publicly held family firms. Accordingly,
we posit that prior findings in the public firm context may be evidence of families
expropriating wealth from nonfamily shareholders rather than altruistic pro-
environmental behavior.
The authors explore to what extent there is persistence in, and interrelation
between, alliance strategies with different partner types (customers, suppliers,
competitors). In a panel data set of innovation-active firms in the Netherlands
from 1996 to 2004, the authors find persistence in alliance strategies with all
three types of partners, but customer alliance strategies are more persistent than
supplier alliance strategies and competitor alliance strategies. A positive
interrelation between customer and supplier alliance strategies and a high
persistence of joint supplier and customer alliance strategies are consistent with
the advantages of value chain integration in innovation efforts. Prior engagement
in horizontal (competitor) alliances increases the propensity to engage in vertical
alliance strategies, but this effect occurs only with a longer lag. Overall, the
authors' findings suggest that alliance strategies with different partner types are
both heterogeneous in persistence and (temporally) interrelated. This suggests that
intertemporal relationships between different types of alliances may be as
important as their simultaneous relationship in alliance portfolios.
This paper analyzes how economic deregulation impacts firm strategies and
environmental quality in the electric utility industry. We find evidence that the
deregulation introduced to this historically staid industry has stimulated
environmental differentiation. Differentiation is most likely to appear where its
point of uniqueness is valued bY customers, and we confirm this relationship in our
sample. Specifically, utilities that served customers who exhibited higher levels
of environmental sensitivity generated more 'green' power. The tendency for firms
to differentiate in this way is lessened if they are relatively more dependent On
coal-fired generation or relatively more efficient. Thus, there is evidence that
firms sort themselves into either differentiation or low-cost strategies as the
competitive realities of a deregulated world unfold. Deregulation and the ensuing
environmental differentiation illustrate how utilities exploited formerly unmet
customer demand for green power. The result has been greater levels of renewable
generation and, hence, a cleaner environment. Copyright (c) 2007 John Wiley & Sons,
Ltd.
In this empirical study, we present two new models that are corporate ethics based.
The first model numerically quantifies the corporate value index (CV-Index) based
on a set of predefined parameters and the second model estimates the market-to-book
values of equity in relation to the CV-Index as well as other parameters. These
models were applied to Canadian companies listed on the Toronto Stock Exchange
(TSX). Through our analysis, we found statistically significant evidence that
corporate values (CV-Index) positively correlated with firm performance. The
results are even more significant for firms with low market-to-book values. Our
empirical findings suggest that corporate ethics is vital for management,
employees, shareholders, stakeholders, and the community at large. In addition, we
have tested and confirmed five hypotheses that are used to illustrate corporate
ethics behavior and performance.
This study examines the moderating effects of corporate social responsibility (CSR)
on the association between market orientation and firm performance in the context
of an emerging economy. The results from a sample of firms that operate in Dubai
indicate that CSR has a synergistic effect on the impact of market orientation on
business performance. The results of our research on the moderating effects of CSR
on market orientation subsets reveal that although CSR moderates the association
between customer orientation and business performance, it does not moderate the
association between competitive orientation and inter-functional coordination and
performance. The results of this study are discussed, and implications for
practitioners and researchers are presented.
Research summary: While research has shown that good stakeholder relations increase
the value of a firm, less is known about how specific types of stakeholder
governance affect firm value. We examine the value of one such governance
mechanismcommunity benefits agreements (CBAs) signed by firms and local
communitiesintended to minimize social conflict that disrupts access to valuable
resources. We argue that shareholders evaluate more positively CBAs with local
communities with strong property rights and histories of institutional action and
extra-institutional mobilization because these communities are more likely to cause
costly disruptions and delays for a firm. We evaluate these arguments by analyzing
the cumulative abnormal returns associated with the unexpected announcement of 148
CBAs signed between mining companies and local indigenous communities in
Canada.Managerial summary: With firms across many industries facing escalating
costs associated with social conflict, new tools are emerging to help firms
mitigate these risks by seeking the support of the local communities in which they
operate. Community benefits agreements (CBAs) are contracts in which a community
provides consent for a new investment in return for tangible benefits, such as
local hiring and revenue sharing. We argue that although CBAs are costly for the
firm, they are particularly valuable when communities can cause costly disruptions
and delays for a firm. Our study of investor reactions to the announcement of 148
CBAs signed between mining companies and local indigenous communities in Canada
shows that investors value more CBAs signed with communities with strong property
rights and histories of protest. Copyright (c) 2017 John Wiley & Sons, Ltd.
In recent years, the public sector in many countries has had difficulty keeping
abreast of social problems due to restricted financial resources and limited
organizational capacities. As a consequence, entrepreneurs have started to address
social welfare issues that the public sector has been unable to tackle with an
innovative approach called social enterprise. The authors present research on the
future prospects of social enterprise as a sustainable business model for
industrialized countries. As there is a lack of historical and current data, the
authors aim to contribute to and structure the debate about the potential of the
concept. Therefore, the authors provide initial data from a Delphi survey on the
future development of social enterprise in a multistakeholder environment. Experts
from academia, business, nongovernmental and governmental organizations, social
enterprise investors, and social entrepreneurs evaluated 16 projections for the
year 2030. Based on these results, the authors present comprehensive scenarios of
four different possible developments of the future of social enterprise in Germany.
Public procurement provides an excellent window into the shaping of corporate
social responsibility of companies contracted by the government. To this emerging
scholarly realization, we want to add that public procurement provides also the
opportunity to examine corporate social responsibility (CSR) as practiced by public
sector organizations. This opportunity enables the investigation of the conditions
under which public sector organizations endorse CSR guidelines, adherence to which
demonstrates accountability for their service providers' legal, employment-related
practices. Our study examined the possibility that public sector organizations' CSR
is enhanced by maintenance managers' role dissonance emerging in response to an
ethical mismatch between them and their organizations' official stance concerning
whether unethical employment practices of service providers should be sanctioned.
We analyzed interviews with 13 managers in charge of contract administration in the
area of cleaning and maintenance. Our findings suggest that the role dissonance
that emerges in cases of mismatch in ethical orientation rarely enhances more
responsible treatment of cleaning employees. We introduce a model indicating the
conditions supporting this incident.
In this article, we extend the streams of research on the capital structure of
socially responsible firms by investigating the impact of corporate social
responsibility (CSR) on firm debt maturity. Using a large sample of US firms, we
provide evidence that high CSR firms significantly reduce their debt maturity. In
particular, our results suggest that diversity and community are the dimensions
that matter the most in explaining debt maturity. In additional analyses that use a
seemingly unrelated regression approach, our results show that CSR decreases the
extent to which investments are financed with long-term debt and increases the
extent to which investments are financed with short-term debt and shareholders'
equity. Overall, these findings support the view that high CSR firms use debt
maturity to manage CSR overinvestment problems and to signal their high quality and
their access to the debt market.
'Learning to be job ready' (L2BJR) was a pilot scheme involving 16 long-term
unemployed people from a range of backgrounds being offered a 6-month paid
placement within the care department of a city council in Northern England. The
project was based on a partnership with the largest college in the city
specialising in post-16 education and training for residents and employees. The
college targeted people as potential candidates for the programme through their
prior attendance on or interest in care courses at the college, rather than the
council employing more traditional methods of recruitment. Surveys, focus groups
and interviews were utilised to capture the views and experiences of the
participants, project workers and line managers, and also evidence of the project's
impact on service delivery in the care department. The article adds to our
conceptual and practical knowledge of corporate social responsibility (CSR) in the
public sector in three distinct ways. From a social and business perspective, the
findings of the research highlight a potentially more robust strategy for matching
long-term unemployed citizens to training and job opportunities in the public
sector than is otherwise possible through the more conventional route of the job
centre. Secondly, through this approach and with appropriate pre-training, a
greater understanding of and empathy for the service users can be developed in the
new organisational members, strengthening the subsequent ethical delivery and
quality of the service. Finally, a re-conceptualisation of Carroll's influential
model of CSR, which also specifically incorporates the ethical and social inclusion
duties of public sector organisations not only as service providers but also as
potential employers, offers a more tailored paradigm for understanding this unique
yet under-researched element of CSR theory and practice.
In the superannuation/pension industry, ordinary investors entrust their retirement
savings to the trustees of the superannuation plan. Investors rely on the trustees
to ensure that ethical business and risk management practices are implemented to
protect their retirement savings. Governance practices ensure the monitoring of
ethical risk management (Drennan, L. T.: 2004, Journal of Business Ethics 52, 257-
266). The Australian superannuation industry presents a unique scenario.
Legislation requires employers to contribute a minimum of 9% of the employees wage
to retirement savings. However, there are no legislated governance standards,
although there are standards of recommended governance practices. In this article,
we examine the level of voluntary adoption of governance practices by the trustees
of Australian public sector and industry superannuation funds. We also assess
whether superannuation governance practices are associated with performance and
volatility/riskiness of returns. Survey results show that the majority of
superannuation plans adopt recommended governance practices supporting the concept
of ethical management of the member's retirement savings. The examination of
governance principles that impact returns and risk shows that board size and
regular review of conflicts are positively associated with return. Superannuation
plans with higher volatility in returns meet more frequently.
In a society where the ideology of shareholder value maximization (SVM) prevails,
how do evaluators make appraisal and bonus decisions when corporate social
responsibility (CSR) measures and financial measures in the balanced scorecard
(BSC) point in different directions? To explore this question, we conducted two
studies to develop and test a conceptual framework. Participants were asked to
evaluate the performance of two managers, using a case we wrote about a commercial
bank. We found that (1) evaluators are more willing to drop CSR performance
measures than financial measures from the evaluations; (2) perceived CSR relevance
is influenced by where evaluators stand in regard to CSR ("stakeholder view" in the
"Perceptions of the Role of Ethics and Social Responsibility" or PRESOR scale) and
also by where evaluators believe shareholders stand (shareholder support); and (3)
there is a financial bias in appraisal and bonus decisions when CSR measures are
used in the BSC, consistent with SVM ideology. We conclude by discussing the
implications of the influence of SVM ideology on the use of CSR measures in terms
of business research, practice, and education.
This paper investigates under what conditions a good corporate social
responsibility (CSR) can compensate for a relatively poor corporate ability (CA)
(quality), and vice versa. The authors conducted an experiment among business
administration students, in which information about a financial services company's
CA and CSR was provided. Participants indicated their preferences for the company's
products, stocks, and jobs. The results show that for stock and job preferences, a
poor CA can be compensated by a good CSR. For product preferences, a poor CA could
not be compensated by a good CSR, at least when people thought that CA is
personally relevant to them. Furthermore, a poor CSR could be compensated by a good
CA for product, stocks, and job preferences.
This paper critically examines the claim made by previous research that companies
exercise corporate social responsibility (CSR) by responding to stakeholder
interests. It is based on a field study of the events following the announcement of
collective redundancies at a Swedish high-tech company. Although more than 10,000
workers were dismissed, the company was accepted as being socially responsible. The
study reveals that this outcome was the result of a process whereby corporate
representatives managed to enrol and mobilize a network of actors into being
faithful to, and defending, their definition of social responsibility. This
indicates that a company can assume an active role in the construction of the same
network of actors that it is asked to respond to and impose upon other actors its
own definition of what it means to be socially responsible. As a result, the
translation of CSR within the network of actors may reinforce the powerful position
of the company, rather than curb it.
This paper analyzes the antecedents of corporate reputation as a dynamic
commensuration process in which management fashions influence audiences as they
attempt to quantify corporate reputation. Using the context of Fortune reputation
rankings over multiple decades, we find evidence consistent with our hypotheses
that when asked to quantify corporate reputation, audiences rely heavily on
traditional as well as emerging nontraditional measures of financial performance as
they become more fashionable indicators of superior financial performance. However,
audiences have recently begun to assess companies' reputations based on indicators
of social performance. We also examine how audience attention to these indicators
is itself influenced by business press discourse.
Given the growing importance of Socially Responsible Investing (SRI), it is
surprising that there is no consensus of what the term SRI means to an investor.
Further, most studies of this question rely solely on the views of investors who
already invest in SRI funds. Our study surveys a unique pool of approximately 5,000
investors that contains both investors who have used SRI criteria in investment
decisions and those who have not, and involves a broad array of criteria associated
with SR investing. Our findings offer new insight into the SRI debate. For both
sets of investors, environmental and sustainability issues dominate as the major
category associated with SR investing. We find strong agreement in the ranking of
the relative importance of various SRI factors despite differences between these
two groups in their opinion of their overall importance. We also find that
investors prefer to consider the SRI question in more holistic terms rather than
using the exclusionary format favored by most SRI funds. Investors seem to prefer
to reward firms who display overall positive social behavior rather than to exclude
firms on the basis of certain products or practices. These findings can help
providers of SR investment vehicles to improve the SRI products that they offer to
the general investor, thus both encouraging the initial adoption of SR criteria by
investors and increasing overall investment in SR choices.
What motivates manufacturing companies to make costly investments in producing in
an environmentally clean manner? The traditional argument is that such behaviour is
value reducing, and that therefore, firms must be forced by regulation to invest in
"green" production processes. A counter-argument is that firms have an incentive to
make environmental investments in an attempt to attract "green" consumers and
investors, hence gaining competitive advantage over their rivals. In this paper, we
employ a game-theoretic approach that demonstrates that competing firms' incentives
to make voluntary investments in environmental "clean-up" are affected by the size
of the investment costs and the extent of consumer and investor "green" awareness.
We argue that an increase in green behaviour can be induced by a combination of
governmental subsidies for firms that invest in environmentally clean production
processes, together with an education program that promotes "green" awareness
amongst consumers, investors and the managers themselves.
Business networks, which include joint ventures, supply chains, industry and trade
associations, industrial districts, and community business associations, are
considered the signature organizational form of the global economy. However, little
is known about how they affect the social performance of their members. We utilize
institutional theory to develop the position that business social performance has
collectivist roots that deserve at least as much scholarly attention as
owner/manager characteristics and business attributes. Hypotheses are tested using
multilevel analysis on data gathered from 898 members of twenty-nine business
associations. Support is provided for institutional theory's explanation for
business social performance. Members of business associations are likely to conform
to the pattern of social performance prevailing in their association, but not
necessarily to the articulated values of the association. The potential of business
associations to influence members' social performance should be considered by
agencies that start and support them as mechanisms for regional and local economic
development.
Textile is one of the largest export and source of foreign exchange in Pakistan.
For the last two decades, Textile sector is serving as the backbone for Pakistan
economy. Several foreign retailers including Target, Jessie Penny, Wal-Mart, and
Kohl's are outsourcing textile and garments from Pakistan. Along with the quality,
these retailers are highly concerned with the ethical and social issues of their
suppliers, including child labor, forced labor, compensation, working hours and
environment health, and safety. My current study is an applied research, based on
the problem, regarding the working hours and its proper management in textile
factories, mismanagement of which lead to serious issues during social and ethical
standard audits. Repetition of which may consequent in termination of business with
suppliers and factories. The research hypothesis is that working off the clock will
lead to overtime premium not paid and double book record keeping. As far as ethical
and social compliance (SC) is concerned both overtime premiums not paid and double
book records are critical issues during SC audit. A sample of 40 suppliers
(factories SC audit reports) of Pakistan was randomly selected working with foreign
buyers. Secondary data were used to verify the findings based on Audits finding
conducted by different third party during a period of 2 years, i.e. Feb., 2010 to
Jan., 2012. The results and research findings reflect that during the last 2 years
(Nov., 2010 to Oct., 2012) out of 40 factories audit reports 25 factories (62.5 %)
were found having working off the clock that also lead to overtime premium not
paid. However, double book records were not witnessed in all 40 factories SC audit
reports as parallel (falsified) records were not maintained by any factories. The
above findings will help the suppliers, factories, and buyers to develop a
proactive approach (on buyers end) and proper production planning (on suppliers and
factories end) to avoid critical issues and smooth business activities.
In this paper we reconsider Adam Smith's ethics, what he means by self-interest and
the role this plays in the famous "invisible hand." Our efforts focus in part on
the misreading of "the invisible hand" by certain economists with a view to
legitimizing their neoclassical economic paradigm. Through exegesis and by
reference to notions that are developed in Smith's two major works, we deconstruct
Smith's ideas of conscience, justice, self-interest, and the invisible hand. We
amplify Smith's insistence, through his notions of the virtues, that as human
beings, and by analogy, organizations, we are intrinsically social, rather than
selfish and or egoistically self-centered. Thus, we have responsibilities to and
because of others. We conclude that such a managerialist preoccupation with
shareholder value is challenged, if not completely refuted, by taking seriously the
social character of Smith's complex vision of commerce.
This study utilizes hierarchical regression analysis to explore how environmental
management systems (EMSs) influence financial performance through customer
satisfaction and customer loyalty, and the moderating effects of switching cost.
The originality of the present research is to unpack the "black box" through which
a firm can profit from EMSs. The empirical results indicate that EMSs have positive
and significant impacts on customer satisfaction, customer loyalty, and financial
performance. In addition, switching cost negatively and significantly moderates the
relationship between EMSs and customer satisfaction, but does not significantly
moderates the relationship between EMSs and customer loyalty. The results also
demonstrate that customer satisfaction and customer loyalty partially mediate the
relationship between EMSs and financial performance. Our findings highlight that
customer satisfaction, customer loyalty, and switching cost play important roles
for a firm to profit from EMSs.
Employees can build their careers either by moving into a new job within their
current organization or else by moving to a different organization. We use matching
perspectives on job mobility to develop predictions about the different roles that
those internal and external moves will play within careers. Using data on the
careers of master of business administration alumni, we show how internal and
external mobility are associated with very different rewards: upward progression
into a job with greater responsibilities is much more likely to happen through
internal mobility than external mobility; yet despite this difference, external
moves offer similar increases in pay to internal, as employers seek to attract
external hires. Consistent with our arguments, we also show that the pay increases
associated with external moves are lower when the moves take place for reasons
other than career advancement, such as following a layoff or when moving into a
different kind of work. Despite growing interest in boundaryless careers, our
findings indicate that internal and external mobility play very different roles in
executives' careers, with upward mobility still happening overwhelmingly within
organizations.
How does managers' pursuit of their own intraorganizational interests affect
decisions about what work to outsource and how to contract with vendors? I study
this question using a qualitative study of outsourcing in the information
technology department of a large financial services firm. Traditional transaction
cost-based theories argue that decisions about which transactions to outsource
should reflect the characteristics of those transactions, yet I find only a weak
link between transaction characteristics and outsourcing decisions. Qualitative
evidence suggests that managers' pursuit of their own intraorganizational interests
helps to explain why outsourcing decisions were often divorced from transaction
characteristics. I found that the consequences of outsourcing projects were
consistent with the assumptions of transaction cost and capabilities-based
theories: managers had less authority over outsourced projects than internal ones,
those projects were subject to weaker administrative controls, and outsourced
vendors provided different capabilities than internal suppliers. However, the way
that those consequences were evaluated often reflected managers' own interests
rather than those of the organization. I highlight three aspects of organizational
structure that affected how managers evaluated outsourcing: the nature of
differentiated goals and responsibilities, the administrative controls that
managers faced, and the pressures caused by interdependent workflows within the
organization. I also show how the distribution of authority and other resources
shaped which projects were outsourced. The analysis highlights the value of
understanding make-or-buy decisions as an endogenous consequence of the structure
in which those decisions take place, rather than as isolated decisions that are
maximized regardless of their context.
Microfinance institutions (MFIs) are alternative financial providers offering
financial services to people typically excluded from the standard banking sector.
While most MFIs are active in developing countries, there is also a young and
developing microfinance sector in Europe; however, very little literature exists on
this MFI segment. In this paper, we analyze the environmental performance of 58
European MFIs. Our results suggest that the size of the MFI, investor concern for
environmental performance and, to a lesser extent, donor interest, are closely
related to the institution's environmental performance. Moreover, providing loans
larger than microcredits is linked to better environmental performance. This could
suggest that the additional revenues generated from these loans, also called cross-
subsidies, could help MFIs to strengthen their environmental bottom line. Finally,
no evidence suggests that profit status explains environmental performance.
We examined which IT workers take jobs as independent contractors. Contracting
offers less job security and less employer-provided training than regular
employment. We base our predictions of which workers contract on how their
preferences and resources match such jobs. Using career history data, we found that
the likelihood of contracting increases with skill levels and presence of negative
cues, and falls (for men) with family responsibilities. Contracting is more likely
among workers whose careers are either just beginning or well advanced; the latter
group also remains in contracting longer. These findings have implications for
benefits, skills development, and income security policies.
Using golf play as a measure of leisure, we provide direct evidence that some CEOs
shirk their responsibilities to the detriment of firm shareholders. CEOs with lower
equity-based incentives play more golf and those that golf the most are associated
with firms that have lower operating performance and firm values. Numerous tests
accounting for the possible endogenous nature of these relations support a
conclusion that CEO shirking causes lower firm performance. New CEOs and those at
firms with more independent boards are more likely to be replaced when they shirk,
but those with long tenures or less independent boards appear to avoid discipline.
Recent cases in retailing reflect that ethics have a major impact on brands and
performance, in turn, demonstrating that brand owners, employees, and consumers
focus on ethical values. In this study, we analyze how various sources of social
power affect corporate ethical values, retailer's commitment to the retail
organization, and ultimately sales and service quality. Multi-source data based on
a sample of 225 retailers indicated a strong link between power, ethics, and
commitment and that these affected output performance.
This essay examines a special program developed by the international Canadian
mining firm, Placer Dome, to help recently laid-off workers find remunerative work
in southern Africa. Shortly after it bought a 50% interest in the Deep South gold
mine in South Africa, the mine laid off nearly 2600 workers. The firm gave
redundant miners token severance pay and offered them opportunity to participate in
training and counseling services at the mine site. Overwhelmingly, the miners came
from homes all over southern Africa at great distance from the mine to which homes
they chose to return. In addition, many had become ill from the HIV virus. Placer
Dome soon realized that something more was required, given the very high rates of
unemployment in the region. After securing grants from USAID and CIDA, and working
with NGOs representing both the unions and mining companies in South Africa, the
firm developed Project CARE. The project contacted workers where they lived and
offered them or another proxy member of their households a variety of training,
coaching, and consultative services. Within 2 years 65% of those contacted had
either found new employment or started their own business. The project helped those
households with HIV-affected ex-miners care for their affected family members.
While describing the case, the essay raises more general ethical questions about
the responsibilities of mining firms in particular for their redundant workers.
Corporate management is torn between either focusing solely on the interests of
stockholders (the neo-classical view) or taking into account the interests of a
wide spectrum of stakeholders (the stakeholder theory view). Of course, there need
be no conflict where taking the wider view is also consistent with maximising
stockholder wealth. In this paper, we examine the extent to which a conflict
actually exists by examining the relationship between a company's positive
(strengths) and negative (concerns) corporate social responsibility (CSR)
activities and equity performance. In general, we find little evidence to suggest
that managers taking a wider stakeholder perspective will jeopardise the interest
of its stockholders. However, our findings do suggest that the market is not only
influenced by the independent CSR activities, but also the totality of these
activities and that the facets that they value do vary over time. It seems that
most recently, the market has valued most firms that satisfied minimum requirements
in the areas of diversity and environmental protection but were most proactive in
the area of employee-relations.
Recent research has focused on business as a mediating institution that can
influence society while engaging in the traditional profit-making and value
generation functions. This work includes Professors Fort's and Schipani's arguments
about how business may be able to play a role in promoting more peaceful societies,
and other research addressing how businesses might serve a role in reducing
violence in society and the workplace. Although there is a significant body of
scholarship on the role of business in reducing violence in society, there is
little research on concrete steps for businesses to take to achieve this goal. This
article attempts to begin to fill that void. As identified by Fort and Schipani,
business may promote more peaceful societies by encouraging a sense of community.
We argue that one way to reach that goal is for business to provide what we denote
as complementary alternative benefits (CABs), to its workforce. In this article, we
advocate for businesses to offer CABs which focus on sustaining the health,
reducing the stress, and improving the camaraderie of its workforce. We argue that
business can use these benefits to promote a healthy, less-stressed, and collegial
workforce that is less prone to resolve conflicts by violence. Further, we examine
the role business plays in promoting more peaceful societies and how employer-
initiated stress reduction programs are consistent with both business ethics and
peace-building principles. Finally, using case studies we demonstrate how CABs may
also reduce costs related to absenteeism and turnover, and thus improve the bottom
line.
Corporate mission statements are ubiquitous, but their relationship to
organizational practices, especially those noted for their high quality, remains a
subject of debate. We use the case of work-life practices in publicly traded
financial services firms to illustrate an innovative method for studying this
issue. Overall, we find variation in the mission statements of firms in the same
organizational field. We also find relationships between these statements and high-
quality investment in work-life practices, as recognized by Working Mother magazine
and Kinder, Lydenberg, and Domini. The mission statements of firms recognized for
their work-life initiatives were more likely than those of competitors to emphasize
the value of employees and less likely to stress shareholder value. We identified
four types of mission statements, a pattern which may reflect the dual influences
of distinctive organizational commitments and pressure from institutional actors.
We discuss the implications of our findings for the literatures on work-life
initiatives, strategic implementation, and organizational theory.
This study investigates the effects on organization's financial performances of,
first, the extent to which the organizations are involved in controversial business
activities, and second, their level of social performance. These companies can be
considered non-socially responsible given the harmful nature of the activities they
are involved in. Managers of these companies may still have incentives to pursue
socially responsible actions if they believe that engaging on those actions will
help them to achieve legitimacy and improve investors' perception about them. We
develop a comprehensive methodology to investigate these corporate social
performance (CSP)-related effects in a complex but specific setting. To this end,
we analyze a sample of 202 US firms for the period 2005-2008 using a novel method
in this area: partial least squares. Our results indicate that, contrary to the
general findings in prior literature, companies involved in controversial business
activities which engage in CSP do not directly reduce the negative perception that
stakeholders have about them. Instead, we found evidence of a positive mediation
effect of CSP on financial market-based performance through innovation.
The effect of the financial sector on climate change remains largely
underestimated. Banks can steer investments of their customers in low-emission
technologies and adjust the conditions of loans that they provide to greenhouse gas
intensive sectors. However, the authors' research shows that few banks take such
substantive action when they implement their climate strategy. The authors analyze
114 listed banks around the world and find evidence for deflective decoupling. This
evidence means that banks that implement a climate strategy often decouple it from
their main value creating processes such as lending and investment. Those banks
that engage in more substantive action still combine it with symbolic activities
which may facilitate the strategic change process. This study contributes to the
literature on organizations and the natural environment as the authors specify
which kind of banks implement substantive climate strategies. This research holds
important implications for policy makers and managers who aim to implement a
climate strategy in organizations that create value through information and
financial flows but not with a physical transfer of goods.
Using a sample of multinational firms in Germany, we develop and empirically
examine a model to test the effects of ethical climate and its antecedents on
purchasing social responsibility (PSR). Our results show different effects of
benevolence dimensions of ethical climate on PSR: employee-focused climate has no
effect, but community-focused climate is a significant driver of PSR. The results
also show that top management ethical norms and code of conduct implementation
impact PSR directly as well as indirectly through ethical climate.
With increasing awareness of environmental issues, there has been rising demand for
environmental-friendly business practices. Prior research has shown that the
implementation of environmental management practices is influenced by existing and
potential stakeholder groups in the form of external pressures from legislators,
environmental groups, financial institutions and suppliers, as well as internally
by employees and owner/manager attitudes and knowledge. However, it has been
reported that despite business owner/managers having strong "green" attitudes, the
level of implementation of environmental-friendly practices is low. In order to
explore the connection between pressures for improved practices and the management
actions taken, this article examines how influence from various stakeholders is
related to awareness of environmental issues, and how this awareness relates to
actions taken within the businesses to reduce the environmental impact of their
operations. The results indicate that legislation does result in general
environmental awareness, and that organizations are then willing to change their
business processes and environmental strategies. However, despite their actions
they have little awareness of the benefits that might arise from cost reductions
from their environmental-friendly practices. Those influenced by their suppliers
act to reduce waste, but do not put into place formal environmental management
systems, or use environmental messages to market their goods or services.
Nevertheless, it can be argued that they have a real commitment to environmental
issues, as evidenced by a willingness to voluntarily contribute to environmental
organizations.
Intermediaries, such as accountants, lawyers, and bankers, are gatekeepers, which
are parties whose cooperation is necessary for corporations to function and who, by
withholding cooperation, are able to prevent significant corporate misconduct. The
recent scandals at Enron and other corporations were due, in part, to failures by
gatekeeper institutions. However, intermediaries exist primarily to provide for-fee
services and not specifically to detect and deter misconduct. insofar as these
institutions are gatekeepers or guardians, they serve reluctantly. Hence the
question: What is the responsibility of intermediaries to act as gatekeepers? This
article argues that the appropriate moral, as well as legal, principle for
justifying responsibility in a gatekeeper role is cost effectiveness. This
conclusion is reached by means of a hypothetical exercise called the investors'
bargain in which investors-who bear the costs and receive the benefits of
intermediaries' gatekeeper role-are asked to choose the best means of protecting
their interests.
The United Nations Global Compact (UNGC) is a Global Public Policy Network
supporting ten universal principles in the areas of human rights, labor standards,
environmental protection, and anticorruption. Networks such as the UNGC are an
organizational form with distinct structural properties and specific requirements
regarding coordination. Relationships among network partners are typically complex,
reciprocal, and trust based. Despite the relevance of trust for a successful
coordination of networks, the literature on the UNGC remains relatively silent when
it comes to this phenomenon. The conditions and mechanisms that contribute to the
constitution of trust in the UNGC are poorly understood. Based on research in
network theory, the authors argue that the trust of participants and other
stakeholders supporting the UNGC is a key precondition to enhance collaboration and
to further develop the initiative. Against this background, the aim of this article
is to develop a systematic approach to foster the constitution of trust in the
UNGC. A thorough investigation of the connection between trust and the UNGC may
help identify concrete measures for increasing the scale and scope of collaboration
between stakeholders and stimulating not only collective learning but also the
implementation of the Global Compact's ten principles.
One of the key challenges for firms is to manage sustainability along the supply
chain. To extend sustainability to suppliers, organizations have developed
different governance mechanisms. The aim of this paper is to analyze the
effectiveness of two different mechanisms (i.e., supplier assessment and
collaboration with suppliers) to improve one dimension of sustainability:
environmental performance. Structural Equation Modeling and cluster analysis were
used to analyze the relationships between supplier assessment, collaboration with
suppliers, and environmental performance. The results suggest that (1) both
mechanisms, supplier assessment and collaboration with suppliers, have a positive
and synergistic effect on environmental performance, and (2) assessment acts as an
enabler of collaboration. Finally, the paper also contributes to the literature by
providing a framework of sustainability governance mechanisms.
The few studies that analyze the impact of a combined strategy of innovation and
corporate social responsibility (CSR) on firm performance mostly focus on financial
performance. In contrast, the current study considers the simultaneous impact of
technological innovations (product and process) and CSR on firm growth, which
provides a measure of medium-term economic performance. With a sample of 213 firms
and a two-step procedure, this study reveals the differentiated effects of
strategic versus responsive CSR behavior on the two technological innovation types,
as well as the effects of the two innovation types on growth. The findings thus
indicate that firms with strategic CSR achieve growth through both their product
and their process innovations.
Contemporary consumer markets are characterized by both a heightened need for
sustainability and an increasingly cosmopolitan lifestyle. This article bridges
these two trends and studies two untapped questions: (1) How do cosmopolitan
consumers relate to sustainable behavior? and (2) How should environmental messages
be framed to successfully target cosmopolitan consumers? Four studies in three
countries show that high-cosmopolitan consumers demonstrate environmental concern
and engage in sustainable behavior. To successfully target this promising segment
with sustainable products or messages to promote sustainable behavior, marketers
and public policymakers should highlight the benefit of these products/behaviors
for the global (rather than the local) environment. However, the findings also show
that high-cosmopolitan consumers can be successfully targeted to support local
environmental initiatives when activating their local identification. The article
offers implications for businesses, non-government organizations, and public
policymakers in designing effective messages to promote sustainable behavior.
This study investigated whether employee perceptions of corporate social
responsibility (CSR) were associated with the presence of Corporate Psychopaths in
corporations. The article states that, as psychopaths are 1% of the population, it
is logical to assume that every large corporation has psychopaths working within
it. To differentiate these people from the common perception of psychopaths as
being criminals, they have been called "Corporate Psychopaths" in this research.
The article presents quantitative empirical research into the influence of
Corporate Psychopaths on four perceptual measures of CSR and three further measures
of organizational commitment to employees. The article explains who Corporate
Psychopaths are and delineates the measures of CSR and organizational commitment to
employees that were used. It then outlines the research conducted among 346
corporate employees in Australia in 2008. The reliability of the instrument used is
commented on favorably in terms of its statistical reliability and its face and
external validity. Results of the research are described showing the highly
significant and negative influence of Corporate Psychopaths on all of the measures
of CSR and of organizational commitment to employees used in the research. When
Corporate Psychopaths are present in leadership positions within organizations,
employees are less likely to agree with views that: the organization does business
in a socially desirable manner; does business in an environmentally friendly manner
and that the organization does business in a way that benefits the local community.
Also, when Corporate Psychopaths are present in leadership positions within
organizations, employees are significantly less likely to agree that the
corporation does business in a way that shows commitment to employees,
significantly less likely to feel that they receive due recognition for doing a
good job, to feel that their work was appreciated and to feel that their efforts
were properly rewarded. The article argues that academics and researchers in the
area of CSR cannot ignore the influence of individual managers. This is
particularly the case when those managers have dysfunctional personalities, or are
actually psychopaths. The article further argues that the existence of Corporate
Psychopaths should be of interest to those involved in corporate management and
corporate governance because their presence influences the way corporations are run
and how corporations affect society and the environment.
Although stakeholder theory is widely accepted in environmental disclosure
research, empirical evidence about the role of stakeholders in firms' disclosure is
still scarce. The authors address this issue for a setting of carbon disclosure.
Our international sample comprises the Carbon Disclosure Project (CDP) Global 500,
S&P 500, and FTSE 350 reports from 2008 to 2011, resulting in a total of 1,120
firms with 3,631 firm-year observations. The authors apply Tobit regressions to
analyze the relationship between carbon disclosure and the relevance of the
following stakeholder groups: government, general public, media, employees, and
customers. Our results confirm that in addition to carbon performance, all
stakeholders are associated with carbon disclosure. Only one stakeholder group
(government) acts as a moderator for the relationship between carbon performance
and carbon disclosure. Furthermore, the authors find that carbon performance but
not the affiliation to a carbon-intensive industry acts as a moderator between
stakeholder relevance and carbon disclosure.
Oceania is a diverse region consisting of 29 countries, all of which are islands;
its total population is approximately 379 million people. Business Ethics is firmly
established as an academic field in the region's two OECD countries, Australia and
New Zealand, and in Singapore, is still developing in a dozen other countries, but
no development at all has been found in half of the region's countries, including
each of those that has no higher education institutions. A major task for Business
Ethics in this region is to seed the development of the field in countries in which
development has not yet begun, and to assist development where it is nascent. The
key change to the focus of academic business ethics in this region over the past 15
years has been a shift in focus from the organisation and its employees, to
business' impact on the natural environment and external stakeholders.
The knowledge-based view of the firm has led to greater theoretical interest in how
organizations integrate knowledge resources embedded in their employees' expertise.
We examine the knowledge-integration problem in geographically dispersed
professional organizations in which experts work in project teams. From
consideration of coordination costs and local ties, we argue that (1) the
organization will develop specialized expertise within local sites, (2) managers
avoid crossing geographic boundaries to staff a project unless bringing on a
distant expert helps meet customer requirements, (3) cross-site connections help
less-needed members participate in dispersed projects, and (4) dispersed projects
that have a better match of expertise generate higher net earnings. We tested these
hypotheses using archival data and interviews in a geographically dispersed
professional service organization. We examined how managers staffed 493 local and
dispersed projects over a five-year period, and the financial outcomes of these
projects. Managers created dispersed projects comparatively rarely; they did so
when scarce expertise from other sites was needed to match customers' project
requirements. Dispersed projects garnered higher net earnings than local projects
when there was a better match of scarce expertise to project requirements. However,
a curvilinear relationship was observed, such that a very high percentage of
dispersed experts on a project increased coordination costs and reduced net
earnings. Our study extends the knowledge-based view by showing how considerations
of coordination costs and social ties affect knowledge integration in the
geographically dispersed organization. The study also shows, empirically, the
managerial trade-offs that encourage or discourage dispersed collaboration.
abels certify that a product meets some standard for quality, but often consumers
are unsure of the exact standard that the label represents. Focusing on the case of
ecolabels for environmental quality, we show how even small amounts of uncertainty
can create consumer confusion that reduces or eliminates the value to firms of
adopting voluntary labels. First, consumers are most suspicious of a label when a
product with a bad reputation has it, so labels are often unpersuasive at showing
that a seemingly bad product is actually good. Second, label proliferation
aggravates the effect of uncertainty, causing the informativeness of labels to
decrease rather than increase. Third, uncertainty makes labeling and nonlabeling
equilibria more likely to coexist as the number of labels increases, so consumers
face greater strategic uncertainty over how to interpret the presence or absence of
a label. Finally, a label can be legitimitized or spoiled for other products when a
product with a good or bad reputation displays it, so firms may adopt labels
strategically to manipulate such information spillovers, which further exacerbates
label confusion. Managers can reduce label confusion by supporting mandatory
labeling or by undertaking investments to make certain labels "focal."
This article tracks Corporate Social Responsibility (CSR) as an emergent
organizational process that places the employee at its center. Predominantly,
research on CSR tends to focus on external pressures and outcomes leading to a
neglect of CSR as a dynamic and developing process that relies on the involvement
of the employee as a major stakeholder in its co-creation and implementation.
Utilizing case study data drawn from a study of a large multinational energy
company, we explore how management relies on employees' interaction with CSR as the
process of initiation -> implementation -> maturation develops. Employee
involvement grows from a minor element in the CSR initiation stage to a vital
contributory factor in CSR's success in the later stages of the process. The
article offers new insights into a processual and interactional approach to CSR
that accounts for the actions of different actors involved at each stage. Most
unusually, it also recognizes the dual impact this has on broader issues concerning
the management and involvement of employees through CSR actions, and gaining
legitimacy in the eyes of not only external stakeholders but internal too.
Adopting a multifoci approach to psychological contract breach (i.e., breach by the
organization referent and breach by the supervisor referent), the authors propose a
trickle-down model of breach. Results from three studies show that supervisor
perceptions of organizational breach are negatively related to supervisor
citizenship behaviors toward the subordinate, resulting in subordinate perceptions
of supervisory breach. Subordinate breach perceptions are, in turn, negatively
related to subordinate citizenship behaviors toward the customer and, ultimately,
customer satisfaction. The findings demonstrate the interconnected nature of social
exchange relationships at work and draw attention to the effects of breach for
other employees and customers.
In line with the current trend toward sustainability and CSR, organizations are
pressured to assume extended responsibility. However, taking such a responsibility
requires serious and challenging efforts as it appears to involve a wider range of
issues and increased need for close interaction between actors along commodity
chains. Using a qualitative case study approach, the present article focuses on
Swedish public and private procurement organizations with attention paid to
textiles and chemical risks. It focuses on two crucial aspects of buyers'
relationships with suppliers in their efforts to advance environmental
responsibility-taking-monitoring and trust-as well as how they intersect. The aim
is to demonstrate, both theoretically and empirically, the limits and possibilities
of monitoring and trust for developing extended upstream responsibility. The
article demonstrates the problems with, on one hand, simple ritualistic monitoring
and, on the other, simple trust, and explores potentially constructive pathways to
extended upstream responsibility at the intersection of monitoring and trust. In
connection with the findings, the article argues that theories on responsible and
sustainable supply chain management must also take the enormous variety of
organizations into account: not only large, private, transnational companies, which
the literature has until now been preoccupied with.
This study examines whether and how female board directors may affect corporate
social performance (CSP) by drawing on social role theory and feminist ethics
literature. The empirical analysis, based on a sample of 126 firms drawn from the
S&P500 group of companies over a 5-year period, suggests that board gender
diversity (BGD) significantly affects CSP. However, this impact depends on the
social performance metric under investigation. In particular, more gender diverse
boards exert stronger influence on CSP metrics focusing on 'negative' business
practices, such as the 'concerns' dimension of the Kinder Lydenberg Domini, Inc.
(KLD) ratings. This is because such CSP ratings have the potential to induce higher
levels of 'empathic caring', which strongly appeals to female directors. Hence,
this study reveals further hidden connections in the BGD-CSP link which have
important implications for managers, nongovernmental organisations and socially
responsible investors.
Previous research on the impacts of global trade on Mexican companies showed that
the family remained the basic institutional model. Since then, however, Mexico's
economy has become the most open economy in Latin America with a rising percentage
of university-educated workers. As a middle-income country unable to provide the
cheapest labor in the world, Mexico may yet benefit from globalization by entering
the global knowledge economy. In semi-structured interviews with eight university-
educated knowledge workers from Cuernavaca, Mexico, this exploratory study looked
for evidence of change and adaptation. The interviews raised questions about
factors that may prolong or curtail the future pervasiveness of patriarchal
business practices. It was hypothesized that merit-based hiring and promotion have
become highly valued, while the social responsibility of nepotism is being
questioned. The article presents several additional hypotheses about the changes
that may be taking place in Mexican business practices.
We propose and test a multilevel model that positions trait curiosity as a key
individual difference during the revision and evaluation stages of the creative
process. Using a sample of T-shirt designers, their creative drafts, and the
questions and comments that feedback seekers and providers posted to an online
workshop, we find curiosity acts as a bridge connecting creative workers with their
feedback providers in novel ways. We advance pliable guidance as a theoretical
umbrella to describe how feedback seekers and providers in creative work find a
balance between the direction that makes feedback informative and the freedom to
explore that infuses new ideas in their work. Our findings show that more curious
individuals seek feedback by asking more open questions, which allows them to
obtain more feedback. We also find that ambivalent feedback is more likely to lead
to feedback acceptance and design revision. Finally, our results suggest that
curiosity is an important moderator of how creative workers respond to ambivalent
feedback. Our research highlights the pivotal role curiosity plays in drawing
individuals into a collaborative process when developing their creative ideas, one
that is guided and inspired by the social environment.
Labelling schemes are practical arrangements aimed at making 'ethical' products
widely available and visible. They are crucial to expanded development of ethical
markets and hence to the addition of moral dimensions to the normally amoral
behaviour linking consumers and retail and production businesses. The study
reported here attempts to assess the contribution of UK ethical, social and
environmental certification and labelling initiatives to 'sustainable' consumption
and production. The research sought to assess the overall potential of initiatives
to inject human values into the supply-distribution chains, through a qualitative
survey of 15 of the 26 main UK initiatives: in social justice, animal welfare and
environmental sustainability from the agriculture, food processing, timber,
aquaculture, textiles and personal care sectors. By analysing the basic
characteristics and concepts of these labels and investigating the emergence of
labelling initiatives, we assess whether labels help add an ethical dimension, or
whether, in some respects, they also reduce such missions to the technical
management of adding only another 'utility' to a product. The analysis assesses
whether the gradual 'mainstreaming' of ethical initiatives such as 'Fairtrade'
risks subsuming ethical goals within business participants' competitive and profit-
oriented logics. However, the contrasting perspectives revealed between rival
labelling initiatives show that the scope and functions of labelling projects go
beyond the manifest ones of information communication between consumers and
producer and actually introduce elements of socio-political regulation. These are
essential for more sustainable and ethical business practices and are an integral
part of any humanisation of business involvement.
The present paper explores, theoretically, and empirically, whether compliance with
the International Code of marketing of breast-milk substitutes impacts on financial
performance measured by stock markets. The empirical analysis, which considers a
20-year period, shows that stock markets are indifferent to the level of compliance
by manufacturers with the International Code. Two important issues emerge from this
result. Based on our finding that financial performance as measured by stock
markets cannot explain the level of compliance, the first issue refers to what
alternative types of mechanisms drive manufacturers who comply the least with
voluntary codes such as the International Code. Conversely, from our finding that
stock markets do not reward the most compliant, the second issue raised is an
inherent weakness of stock markets to fully incorporate social and environmental
values.
This paper investigates the effectiveness of a new traceability label on consumer
willingness to buy the labelled product and whether the effect is mediated by moral
affective evaluations of the product. A between-subjects factorial design was used
to test (a) the effect of a new traceability label on willingness to buy a
chocolate bar, while controlling for different product features (health disclaimer,
product quality) and (b) whether this effect was mediated through the consumer's
moral affective evaluations of the product. A broad sample of 1,064 ordinary Danish
consumers was recruited for the study from the panel of an online sample provider
(667 women, 397 men), age range 18-80 (M = 46.39, SD = 13.17). We found that the
traceability label has a significant impact on consumer willingness to buy a
chocolate bar. This impact is mediated by moral affective evaluations of the
chocolate bar. Based on the dual process models of persuasion (HSM and ELM), we
conclude that consumers mainly process the traceability label in a heuristic way,
through a peripheral route, making a fast and frugal, affect-based judgment, rather
than one based on elaborate reasoning. Being one of the first empirical studies on
the impact of a traceability label on consumer willingness to buy a product, it
provides valuable insights for businesses on the effects of a traceability label on
consumer behaviour. In addition, it provides new insights on the process through
which an ethical label influences consumer evaluations and purchase behaviour. This
study is, to the best of our knowledge, the first to show that an ethical label
influences consumer decision-making through activating a holistic moral affective
evaluation of the offering, rather than through strengthening the consumer's
knowledge base for a more qualified reasoning process.
Global Corporate Citizenship (GCC) continues to become increasingly popular in
large corporations. However, this concept has rarely been considered in small and
medium size enterprises (SMEs). A case study of a Norwegian clothing company
illustrates how GCC can be also applied to small companies. This case study also
shows that SMEs can be very innovative in exercising corporate citizenship, without
necessarily following the patterns of large multinational companies. The company
studied engages as partner in some voluntary labor initiatives promoted by the
government, employs people in marginal situations, and exerts influence for the
adoption of good working conditions in its supply chain. Environmental issues and
actions of solidarity are also considered within a global scope. Ethics of care and
concern for specific aspects of the common good seem crucial as GCC drivers in this
company, as do personal values, character, and leadership of the owner-manager of
the firm.
Brand scholarship traditionally resides within the marketing literature and focuses
on organizations' external relationships with customers. However, increasing
critical attention in organization studies has focused on the brand in order to
understand its impact on the internal dynamics of employment relations in
contemporary organizations. Drawing on an ethnography of frontline service work in
an IT consultancy call centre, we explore the brand as an internal organizational
resource sustaining the process of employee meaning-making activities. Documenting
the work of the brand', we outline what the brand offers both employees and
employers and, in doing so, we theorize the brand at work as a connecting mechanism
between processes of identity formation/re-formation and regulation. While
employees are encouraged to internalize particular brand meanings (in this case
prestige, success and quality), we found that they often willingly buy into these
intended brand meanings as a palliative to cope' with mundane work. In this way
brand meanings are central to producing a self-disciplining form of employee
subjectivity.
This study explores the relevance of corporate social responsibility (CSR) as an
element of the corporate identity of Spanish financial institutions. Specifically,
it aims to analyze the CSR actions developed by financial entities through the
analysis of all the available information disclosed in their websites. A content
analysis applied to 82 banking institutions, followed by different quantitative
analyses, reveals the multidimensionality of CSR. Findings show that, while the
number of entities institutionalizing CSR values as core elements of their
identities is still reduced, most organizations disclose CSR information to
construct communicated identities and legitimate behaviours. Besides, these
dimensions are classified depending on the stakeholder the action is aimed to, and
that entities favour the generation of distinctive identities through the
implementation and communication of more visible CSR actions like those involving
their customers or the community. In any case, results indicate that organizations
with certain characteristics are more likely to construct distinctive identities
through CSR activities and to establish ethical and social values within their
corporate statements and cultures.
Although consumers are increasingly engaged with ethical factors when forming
opinions about products and making purchase decisions, recent studies have
highlighted significant differences between consumers' intentions to consume
ethically, and their actual purchase behaviour. This article contributes to an
understanding of this 'Ethical Purchasing Gap' through a review of existing
literature, and the inductive analysis of focus group discussions. A model is
suggested which includes exogenous variables such as moral maturity and age which
have been well covered in the literature, together with further impeding factors
identified from the focus group discussions. For some consumers, inertia in
purchasing behaviour was such that the decision-making process was devoid of
ethical considerations. Several consumers manifested their ethical views through
post-purchase dissonance and retrospective feelings of guilt. Others displayed a
reluctance to consume ethically due to personal constraints, a perceived negative
impact on image or quality, or an outright negation of responsibility. Those who
expressed a desire to consume ethically often seemed deterred by cynicism, which
caused them to question the impact they, as an individual, could achieve. These
findings enhance the understanding of ethical consumption decisions and provide a
platform for future research in this area.
The bullwhip effect is the amplification of demand variability along a supply
chain: a company bullwhips if it purchases from suppliers more variably than it
sells to customers. Such bullwhips (amplifications of demand variability) can lead
to mismatches between demand and production and hence to lower supply chain
efficiency. We investigate the bullwhip effect in a sample of 4,689 public U. S.
companies over 1974-2008. Overall, about two-thirds of firms bullwhip. The sample's
mean and median bullwhips, both significantly positive, respectively measure 15.8%
and 6.7% of total demand variability. Put another way, the mean quarterly standard
deviation of upstream orders exceeds that of demand by $20 million. We decompose
the bullwhip by information transmission lead time. Estimating the bullwhip's
information-lead-time components with a two-stage estimator, we find that demand
signals firms observe with more than three-quarters' notice drive 30% of the
bullwhip, and those firms observe with less than one-quarter's notice drive 51%.
From 1974-1994 to 1995-2008, our sample's mean bullwhip dropped by a third.
This article fleshes out a recently introduced and empirically grounded framework
of organizational identity orientation, which refers to the nature of assumed
relations between an organization and its stakeholders as perceived by members. I
suggest that individualistic, relational, and collectivistic orientations engender
distinct patterns of relations with external and internal stakeholders and provide
unique potential to advance certain forms of social value. I pay particular
attention to relationships with customers. nonprofits, and employees. This
framework may advance stakeholder theory and research on interorganizational
relationships, the employment relationship, and intraorganizational relationships.
This article investigates stakeholder expectations associated with corporate
environmental disclosure. Several articles have studied the effect that stakeholder
pressure has on environmental disclosing strategies. In this article, we extend
previous research to an examination of the influence of external, internal, and
intermediary stakeholder groups or constituencies in turn to clarify the demands of
multiple stakeholders as to firms' disclosure of sufficient and adequate
environmental information. The sample comprised Taiwanese firms listed on the
Taiwan Stock Exchange. Our results show that the level of environmental disclosure
is significantly affected by stakeholder groups' demands. External stakeholder
groups, such as the government, debtors, and consumers, exert a strong influence
over management intentions regarding the extent of environmental disclosure.
Internal stakeholder groups, such as shareholders and employees, impose additional
pressures on firms to disclose environmental information. As for intermediate
stakeholder groups, environmental protection organizations, and accounting firms,
these can greatly influence managerial choices regarding their environmental
disclosure strategies.
While much has been written on specificity (e.g., in texts on new institutional
economics, agency theory, and team production theory), there are still some
insights to be learnt by business ethicists. This article approaches the issue from
the perspective of team production, and will propose a new form of corporate
governance: enlightened corporate governance, which takes into consideration the
specific investments of employees. The article argues that, in addition to
shareholders, employees also bear a residual risk which arises due to their
specific investments. This residual risk presents a valid and legitimate basis for
residual claims. In this way, employees can be seen as residual claimants due to
the fact that their income depends upon a hazardous quasi rent. Therefore, this
article will call on the fiduciary duty of board members to protect those employees
who are exposed to such residual risks and may thus be vulnerable as a result. This
leads to a fundamental change of perspective on the "theory of the firm" - a change
which will adopt the theories of new institutional economics, agency theory, and
team production theory in order to promote business ethics research. Against this
background, enlightened corporate governance aims to follow the criterion of
specific investments as a legitimate basis for residual claims. Furthermore, it
seeks to understand the consequences for board members, and to promote the sharing
of control and ownership. The article will close with some discussion of the
implications and future prospects for business ethics.
Using one of the largest samples of litigation data available to date, we examine
whether the political culture of a firm determines its propensity for corporate
misconduct. We measure political culture using the political contributions of top
managers, firm political action committees, and local residents. We show that firms
with a Republican culture are more likely to be the subject of civil rights, labor,
and environmental litigation than are Democratic firms, consistent with the
Democratic ideology that emphasizes equal rights, labor rights, and environmental
protection. However, firms with a Democratic culture are more likely to be the
subject of litigation related to securities fraud and intellectual property rights
violations than are Republican firms, whose party ideology stresses self-reliance,
property rights, market discipline, and limited government regulation. Upon
litigation filing, both types of firms experience similar announcement reaction,
which suggests that the observed relationship between political culture and
corporate misconduct is unlikely to reflect differences in expected litigation
costs.
In a world of limited resources, it could be argued that companies that aspire to
be good corporate citizens need to focus on making best use of resources. User
value and environmental harm are created in supply chains and it could therefore be
argued that company business ethics should be extended from the company to the
entire value chain from the first supplier to the last customer. Starting with a
delineation of the linkages between business ethics, corporate sustainability, and
the stakeholder concept, this article argues that supply chains generally have a
great innovation potential for sustainable development. This potential could be
highlighted with system thinking and the use of change management knowledge,
promoting not only innovations within technology but also within organizational
improvement. We propose process models and performance indicators as means of
highlighting improvement potential and thus breaking down normative business
ethics' requirements to an opertionalizable corporate level: Good business ethics
should focus on maximizing stakeholder value in relation to harm done. Our results
indicate that focusing on supply chains reveals previously unknown innovation
potential that seems to be related to limited system understanding. The assumption
is that increased visibility of opportunities will act as a driver for change.
Results also highlight the importance of focusing on sustainability effects of the
core business and clearly relating value created to harm done.
Securitization is considered to be one of the biggest financial innovations of the
last century. It is also regarded as both a catalyst and a solution to the 2008
financial crisis. Once a popular method of financing the mortgage and consumer
credit markets, aspects of the global securitization market are now struggling to
revive. In this paper, I discuss the role that ethics played in securitization
prior to the 2008 financial crisis and find that it is not an obvious story of
moral failures, but rather that it lies in more subtle elements of the financial
system. The ethics uncertainty role in the securitization story is one of flawed
incentives and the shifting of responsibility for handling risk. The role of
securitization and the ethics of risk transfer have rarely been discussed
explicitly in the literature. The historical origins of securitization and lessons
learned from previous flawed uses of the process are also provided. I also detail
the various global institutional reform proposals that have taken place. Moving
forward, it is crucial to understand the causes, consequences, and ethical
implications of securitization in the financial crisis so as to help individuals
and managers better assess risk, align incentives, and design appropriate policy
responses.
This study examines the variations in corporate social orientations (CSOs) across
developed and developing countries in the context of a legitimacy threat.
Conceptualizing CSO as signals, the author develops and validates a seven-code
index of CSO that identifies executive orientations toward multiple stakeholders.
Using this index on CEO shareholder letters from the United States, Germany, and
India, the author finds that firms signal a multi-stakeholder image toward
employees, communities, and environment during good times to enhance their social
license to operate, and yet such signals are not carried through during the threat
period. This disconnect in signaling in the wake of a legitimacy threat is
indicative of decoupling in corporate orientations and exposes the multi-
dimensionality of the CSO concept. By adding a cross-national and temporal
dimension, this research contributes toward better understanding the complexity
behind CSOs and opens new areas for future research.
We investigate whether organizations can create value by introducing visual
transparency between consumers and producers. Although operational transparency has
been shown to improve consumer perceptions of service value, existing theory posits
that increased contact between consumers and producers may diminish work
performance. Two field and two laboratory experiments in food service settings
suggest that transparency that (1) allows customers to observe operational
processes (process transparency) and (2) allows employees to observe customers
(customer transparency) not only improves customer perceptions but also increases
service quality and efficiency. The introduction of this transparency contributed
to a 22.2% increase in customer-reported quality and reduced throughput times by
19.2%. Laboratory studies revealed that customers who observed process transparency
perceived greater employee effort and thus were more appreciative of the employees
and valued the service more. Employees who observed customer transparency felt that
their work was more appreciated and more impactful and thus were more satisfied
with their work and more willing to exert effort. We find that transparency, by
visually revealing operating processes to consumers and beneficiaries to producers,
generates a positive feedback loop through which value is created for both parties.
The development of women's entrepreneurship has positive implications for societal
and economic growth. In this study, we examine the effects of culture and, more
specifically, collectivism on women's businesses. With a mixed-method and
multilevel approach, we conducted a quantitative country-level analysis followed by
a qualitative study of women entrepreneurs. Our results indicate that collectivism
at the in-group level (family and close friends and colleagues) is a particularly
important predictor of women's business ownership. Furthermore, it is a balance of
both collectivism and individualism at the in-group level that is most conducive to
women's business ownership. Institutional collectivism (at the societal level) acts
as a background condition that influences the way in which in-group collectivism
directly affects women's business ownership. More specifically, when engaging in
business development, women are primarily influenced by their in-groups. The
freedom to pursue individual goals, combined with support from the in-group,
provides the most beneficial environment for women to develop businesses,
especially in societal-level cultures at the extreme ends of the collectivism
spectrum-highly collectivistic or highly individualistic. A better understanding of
these cultural factors should help with designing better business development
training programs for women entrepreneurs and properly advising policy makers.
This paper examines the effects of employer social responsibility on the wages
workers demand through randomized field experiments in two online labor
marketplaces. Workers were recruited for short-term jobs and I manipulated whether
or not they received information about the employer's social responsibility. I then
observed the payment workers were willing to accept for the job. In the first
experiment, information about the employer's social responsibility marginally
reduced prospective workers' wage requirements on average and had a significant
effect on the highest performers, who were willing to give up the wage differential
they would otherwise demand. In the second, prospective workers submitted 44% lower
wage bids for the same job after learning about the employer's social
responsibility. This paper provides causal empirical evidence of a revealed
preference for social responsibility in the workplace, and of a greater preference
among the highest performers. More broadly, it provides evidence that workers value
purpose and meaningfulness at work, and it demonstrates that workers are willing to
give up pecuniary benefits for nonpecuniary benefits. It furthermore highlights
heterogeneity in worker preferences for nonpecuniary benefits by worker performance
type.
In many parts of the world, homework is a form of labour characterised by
precariousness, lack of regulation, and invisibility and lack of protection of the
workers who are often amongst the world's poorest and most exploited. Homework is
spreading, due to firm practices such as outsourcing. The analysis and
understanding of complex corporate networks may assist with the identification and
protection of those most at risk within the supply chain network. It can also
expose some of the key ethical issues and dilemmas of supply chain management and
corporate social responsibility (CSR). Based on a case-study of the Australian
FairWear Campaign (FWC), this article identifies an ethical network that aims to
increase corporate accountability (CA) via greater transparency in corporate supply
chains and improve work conditions for homeworkers and increase their recognition
in the supply chain.
Corporate social responsibility orientation (CSRO) remains an important topic of
researchers. However, one aspect of CSRO that has not been well researched is how
it relates to behaviors and goals of managers. In this article, the authors explore
that relationship, testing whether emphasis on a particular domain of social
responsibility affects time spent dealing with specific stakeholder groups and
whether firm size affects that relationship. Results from a survey of small
business owners indicate that the emphasis a manager places on a domain does affect
behavior and that firm size has little impact on this relationship. Implications of
these findings are discussed.
We examine market reactions to publicly held multinational firms announcing their
affiliation with the United Nations Global Compact (UNGC). The UNGC is a voluntary
initiative to support four areas of United Nations viz. Human Rights, Labor,
Environmental, and Anti-Corruption. Because firms must file annual Communication on
Progress (COP) reports toward these initiatives, we argue this creates a
differentiating transparency of interest to stakeholders. Using a sample of 175
global firms, we find support to the theory for joining the UNGC. Returns differ
markedly, however, between multinational firms headquartered in the United States
(negative) and Europe (positive). We also find that failing to complete the annual
COP generates a negative market reaction.
Business ethicists should examine not only business practices but whether a
particular type of business is even prima facie ethical. To illustrate how this
might be done I here examine the contemporary U.S. defense industry. In the past
the U.S. military has engaged in missions that arguably satisfied the just war
self-defense rationale, thereby implying that its suppliers of equipment and
services were ethical as well. Some recent U.S. military missions, however,
arguably fail the self-defense rationale. At issue, then, is whether a business
supporting these latter missions may not be circumstantially unethical. No it is
not, say defense industry advocates, for two principal reasons. For one, this
business benefits society at large in numerous ways. And, for another, the
organizer of these military missions is a superpower which by its very nature is
not subject to the ethical constraints of the self-defense rationale. I dispute
both reasons, argue against the second, and conclude that the U.S. military-
industrial complex (MIC) is circumstantially unethical.
In this study, we examine the extent to which employees recognize the importance of
information technologies and systems (IT/S) in developing and implementing
environmental initiatives. To address this question, we first review past research
on this topic and draw on a framework for examining environmental motivating
forces, strategies, and employee environmental orientations. We then analyze
qualitative data based on in-depth interviews with employees in financial services
organizations. Our aim is to develop a richer understanding of how employees
currently view IT/S issues in relation to environmental sustainability and if
similarities exist between different types of financial institutions. We also
assess the extent to which these employee perceptions align with both actual
organizational practices, as captured in interviews with information technology
managers, and practices espoused by organizations, as reflected on their corporate
websites. Our findings suggest that organizations are still in the infancy stage of
awareness and adoption of "Green" IT/S. As a result, we identify four types of
gaps: knowledge gaps, practice gaps, opportunity gaps, and knowing-doing gaps. We
suggest that future research should draw on absorptive capacity, organizational
learning, and social marketing theories to help align employees' attitudes,
cognitions, and behaviors and to drive environmental changes.
Socialization theory has focused on enculturating new employees such that they
develop pride in their new organization and internalize its values. We draw on
authenticity research to theorize that the initial stage of socialization leads to
more effective employment relationships when it instead primarily encourages
newcomers to express their personal identities. In a field experiment carried out
in a large business process outsourcing company in India, we found that initial
socialization focused on personal identity (emphasizing newcomers' authentic best
selves) led to greater customer satisfaction and employee retention after six
months than socialization that focused on organizational identity (emphasizing the
pride to be gained from organizational affiliation) or the organization's
traditional approach, which focused primarily on skills training. To confirm
causation and explore the mechanisms underlying the effects, we replicated the
results in a laboratory experiment in a U.S. university. We found that individuals
working temporarily as part of a research team were more engaged and satisfied with
their work, performed their tasks more effectively, and were less likely to quit
when initial socialization focused on personal identity rather than on
organizational identity or a control condition. In addition, authentic self-
expression mediated these relationships. We call for a new direction in
socialization theory that examines how both organizations and employees can benefit
by emphasizing newcomers' authentic best selves.
Agency theory highlights losses in productivity that may occur when the interests
of owners and employees are imperfectly aligned. Pay for performance has been
proposed as a solution to this problem. Using a real-effort laboratory experiment
with salient incentives, we compared pay-for-performance and fixed-salary
compensation. The former achieved significantly higher firm productivity through
both sorting and incentive effects. In particular, more productive employees
selected pay for performance, and employees on average, regardless of their
preferred compensation scheme, produced more under it. However, more risk-averse
individuals were less likely to select pay for performance and less responsive to
its incentives.
Some institutional investors (e.g., pensions, universities, and religious,
charitable, and not-for-profit institutions) are exposed to social norms and public
scrutiny. Prior research indicates that these norm-constrained institutions engage
in negative screening and invest less in firms operating in 'sin' industries. We
examine whether social norms also motivate these institutions to engage in positive
screening-where they invest more in firms with better corporate social
responsibility (CSR) performance- and CSR-related activism-where they promote
improvements in the CSR of existing investees. We find that firms with superior CSR
performance have greater ownership by norm-constrained institutions, consistent
with positive screening, and we use a natural experiment to establish causality. We
also find that increases in the shareholdings of norm-constrained institutions are
associated with subsequent improvements in CSR, consistent with activism. Further,
we rule out an alternative explanation for our results where the positive screening
and activism are 'profit-driven' rather than driven by social pressure. Thus, our
results suggest that the influence of social norms on stock markets is more
pervasive than documented in the prior literature.
We empirically examine the impact of corporate social responsibility (CSR) on CEO
compensation using a large sample of the US firms from 1996 to 2010. We develop and
test two hypotheses, the overinvestment hypothesis based on agency theory and the
conflict-resolution hypothesis based on stakeholder theory. We find that the lag of
CSR adversely affects both total compensation and cash compensation, after
controlling for various firm and board characteristics. Our estimates show that an
interquartile increase in CSR is followed by a 4.35% (2.78%) decrease in total
(cash) compensation. We also find an inverse association between lagged employee
relations and CEO compensation. Our results are robust to the correction for
endogeneity using instrumental variable approach. Taken together, our results
support the conflict-resolution hypothesis, but not the CSR overinvestment
argument.
We investigate the optimal market entry and original equipment manufacturer (OEM)
decisions of a firm facing a market in which firms' brands can be horizontally
differentiated and products can be vertically differentiated. The entrant might
sell under its own brand and compete with an incumbent, become a supplier to the
incumbent, or both. Findings reveal that when consumers perceive the firms are
horizontally and vertically differentiated, the entrant profits by simultaneously
entering the market and establishing an OEM arrangement with the incumbent. In such
competitive scenarios, both buyer and seller increase profits by agreeing on
wholesale prices that are not too low, which softens both horizontal and vertical
conflict between the firms. Findings also show that the incumbent may prefer to pay
high wholesale prices to the entrant even if the incumbent had the option to source
the product independently at a lower marginal cost. When firms have the capability
of producing each other's product lines, supply relationships between them can
still happen in equilibrium. In this case, an interesting result is that firms may
optimally select to differentiate production and, because of the OEM relationship,
sell the same product qualities to consumers. The reason for this outcome is that
the OEM arrangement with differentiated production causes a strategic effect that
reduces the firms' aggressiveness when competing for consumers. Under certain
conditions, the OEM arrangement can completely nullify the horizontal and vertical
conflict between the firms.
Why do consumers who profess to be concerned about the environment choose not to
buy greener products more regularly or even at all? This study explores how
consumers' perceptions towards green products, consumers and consumption practices
(termed green perceptions) contribute to our understanding of the discrepancy
between green attitudes and behaviour. This study identified several barriers to
ethical consumption behaviour within a green consumption context. Three key themes
emerged from the study, 'it is too hard to be green', 'green stigma' and 'green
reservations'. There is currently a perception, based on a number of factors, that
it is too hard to be green, which creates a barrier to purchasing green products.
Furthermore, some consumers were reluctant or resistant to participate in green
consumption practices due to their unfavourable perceptions of green consumers and
green messages. This article suggests that green perceptions may influence
consumers' intention to purchase green products. Accordingly, it discusses the
implications, and suggests avenues for future research.
This article examines the effect of social shareholder activism on one of the most
visible aspects of corporate social behavior, namely corporate pollution management
practice. Social shareholder activism is a distinct form of social movement that
engages firms "in the suites." We theorize the effect of social shareholder
activism using three social movement mechanisms: (a) disruption of routines, (b)
reframing of issues using extant institutional logics, and (c) mobilization of
relevant third-party constituents. Our empirical analysis using 13-year panel data
of 58 public corporations strongly confirm the positive effect of environmental
shareholder resolutions on the targeted firm's pollution management practice. We
have also found that certain firms targeted by social shareholder activism are more
likely to respond positively to the demands than others. In particular, firms that
can potentially incur higher disruption costs and are more dependent on reputation
for critical resources such as larger firms as well as firms in industries that are
closer to end-user consumers are more likely to concede to the demands from
shareholder activists.
This study empirically examines whether firms' environmental capital expenditures
impact institutional investors' investment decisions in the Chinese market. We
particularly examine the impact of ownership type on the relationship of
environmental capital expenditures and the behavior of different types of
institutional investors by classifying institutional investors into two categories,
short-term and long-term investors. In addition, this study further investigates
whether environmental capital expenditures related to ownership type increase firm
value. We find that long-term institutional investors tend to invest in state-owned
firms (SOEs) making environmental capital expenditures. Results also indicate that,
with governmental backing and encouragement, the market value of SOEs making more
environmental capital expenditures is likely to increase. However, no similar
results are found for non-SOEs.
This article aims to analyze the factors influencing the adoption of green
practices in Chinese logistics industry. The determinant factors are composed of
technological, organizational, and environmental dimensions. A questionnaire survey
on the green practice adoption of Chinese logistics companies was conducted, and
322 samples were analyzed. Research results reveal that relative advantage and
compatibility of green practices, organizational support, quality of human
resources, regulatory pressure, and governmental support have significantly
positive influences on the adoption of green practices for Chinese logistics
companies. Environmental uncertainty and green practice's complexity have
significantly negative influences on green practice adoption. However, the
influence of customer pressure is not significant for Chinese logistics companies.
This article also suggests implications and opportunities for future research.
The monitoring role performed by the board of directors is an important corporate
governance control mechanism, especially in countries where external mechanisms are
less well developed. The gender composition of the board can affect the quality of
this monitoring role and thus the financial performance of the firm. This is part
of the "business case" for female participation on boards, though arguments may
also be framed in terms of ethical considerations. While the issue of board gender
diversity has attracted growing research interest in recent years, most empirical
results are based on U.S. data. This article adds to a growing number of non-U.S.
studies by investigating the link between the gender diversity of the board and
firm financial performance in Spain, a country which historically has had minimal
female participation in the workforce, but which has now introduced legislation to
improve equality of opportunities. We investigate the topic using panel data
analysis and find that gender diversity - as measured by the percentage of women on
the board and by the Blau and Shannon indices - has a positive effect on firm value
and that the opposite causal relationship is not significant. Our study suggests
that investors in Spain do not penalise firms which increase their female board
membership and that greater gender diversity may generate economic gains.
Many service systems use case managers, servers who are assigned multiple customers
and have frequent, repeated interactions with each customer until the customer's
service is completed. Examples may be found in healthcare (emergency department
physicians), contact centers (agents handling multiple online chats simultaneously)
and social welfare agencies (social workers with multiple clients). We propose a
stochastic model of a baseline case-manager system, formulate models that provide
performance bounds and stability conditions for the baseline system, and develop
two approximations, one of which is based on a two-time-scale approach. Numerical
experiments and analysis of the approximations show that increasing case throughput
by increasing the probability of case completion can lead to much greater waiting-
time reductions than increasing service speed. Many systems place an upper limit on
the number of customers simultaneously handled by each case manager. We examine the
impact of these caseload limits on waiting time and describe effective, heuristic
methods for setting these limits.
Micro and small businesses contribute the majority of business activity in the most
developed economies. They are typically embedded in local communities and therefore
well placed to influence community wellbeing. While there has been considerable
theoretical and empirical analysis of corporate citizenship and corporate social
responsibility (CSR), the nature of micro-business community responsibility (mBCR)
remains relatively under-explored. This article presents findings from an
exploratory study of mBCR that examined the approaches, motivations and barriers of
this phenomenon. Analysis of data from 36 semi-structured interviews with micro-
business owner-operators in the Australian city of Brisbane revealed three mBCR
approaches, suggesting an observable mBCR typology. Each mBCR type was at least
partly driven by enlightened self-interest (ESI). In addition to a pure ESI
approach, findings revealed ESI combined with philanthropic approaches and ESI
combined with social entrepreneurial approaches. The combination of doing business
and doing good found amongst participants in this study suggests that many micro-
business owner-operators are supporters of their local communities and, therefore,
driven by more than profit. This study provides a fine-grained understanding of
micro-business involvement in community wellbeing through a lens of responsible
business behaviour.
In the wake of corporate ethical scandals that have harmed millions of employees
and investors, there has been an increase in the number of works written in the
last decade, which aim to answer one apparently simple question: what causes
unethical behavior, and what can we do, if anything, to prevent similar
transgressions in the future? The extensive research around this question is the
best proof of its real complexity as the challenge of disentangling the background
of ethical behavior has obvious academic and practical interest. This study aims to
take a further step toward that goal. Much research has noted the impact of
multiple aspects of organizational contexts on individuals' ethical behavior.
However, studies that analyze the impact of organizational learning capability
(OLC) on employees' ethical behavior are few and far between. This was the first
aim of this study. The second centered on gaining a deeper understanding of the
relationship between OLC and ethical behavior by analyzing the mediating role of
employability and organizational commitment. We tested our hypotheses through a
structural equation methodology applied to a sample of 641 workers from 166 Spanish
consultancy firms and found a positive, direct relationship between OLC and
employability, OLC and organizational commitment, employability and organizational
commitment, and organizational commitment and ethical behavior.
In attempting to explain or deal with negative workplace behaviours such as
workplace bullying, the notion of 'workplace psychopaths' has recently received
much attention. Focusing on individual aspects of negative workplace behaviour is
at odds with more systemic approaches that recognise the contribution of
individual, organisational and societal influences, without seeking to blame a
person(s) for their behaviour or personality disorder. Regarding a coworker as a
psychopath is highly stigmatising, and given the relatively low prevalence of
psychopathy in the community, is likely to be incorrect. Sources promoting the
notion of workplace psychopathy provide lists of diagnostic criteria and appear to
encourage the perception that it is common. This research examines how lay persons
use behavioural criteria consistent with psychopathy and the label 'psychopath' in
relation to a coworker. 307 Australian workers completed an online survey
concerning their experience of workplace bullying, which also asked them to rate a
coworker's behaviour on a range of scales to assess perceptions of psychopathy.
Rates of psychopathy, when using labels and behavioural criteria, were found to be
much higher than scientific estimates of prevalence, for both participants who had
been bullied and those who had not. A higher proportion of non-bullied participants
classified a coworker as a psychopath when using the label 'psychopath', compared
to when using behavioural criteria. The notion that there are psychopaths in every
workplace should be treated with caution to ensure that the potential for
'misdiagnosis' and stigmatisation do not cause further harm in situations of
unacceptable workplace behaviours.
Favourable organizational status and prestige has a substantial role in shaping
constituents' attitudes and actions. The status and prestige of an organization is
often a reflection of its achievements or performance. In the present study, we
investigate the role of organizational performance or achievement (as assessed by
organizational members) in evoking employees' identification, adjustment, and job
performance. The results of this study indicate that two forms of organizational
performance (labelled as perceived social responsibility and development and
perceived market and financial performance) are associated with organizational
identification. However, when compared to perceived market and financial
performance, perceived social responsibility and development had a larger effect on
organizational identification, which in turn resulted in enhanced employees' work
outcomes - adjustment and job performance.
Research summary: This article examines the role of competitive shocks in creating
opportunities for new firm foundings. I argue that the sudden dissolution of rival
firms may release resources that create opportunities for firm formation,
particularly among employees facing impediments to capturing value in their current
organizations. Analyzing microdata from the legal services industry, I use
unexpected deaths of solo-practicing attorneys as quasi-exogenous sources of rival
dissolution. Results indicate that these shocks increase the odds of founding by
about 30%, with stronger effects among attorneys with weaker social connections or
higher competition for promotion. The article thus highlights the role that
founders play in reallocating dissolved rivals' resources while demonstrating that
founding may be an important outlet for blocked employees to capture value from
opportunities. Managerial summary: This article finds that the shutdown and
dissolution of a rival organization may spur employees to found new firms. As a
consequence, managers may find it valuable to pay attention to employees' turnover
intentions following the dissolution of a rival. Findings suggest that employees
who are having trouble advancing in the firm may be the most likely to found a new
organization when a rival dissolves, so managers may want to focus retention
efforts on these individuals. To the extent that managers wish to capture
customers, employees, and other resources that were formerly attached to a
dissolved rival, managers may wish to be aware that they could be in competition
with their own employees for these resources and opportunities. Copyright (c) 2017
John Wiley & Sons, Ltd.
Research examining the impacts of employee mobility on interfirm relationships
suggests that firms earn positive "relational spillovers" when their former
employees, or alumni, depart to join other organizations. Drawing on the theory of
relational advantage, we extend this line of work by examining how a supplier firm
is affected when a buyer hires alumni from the supplier's competitors. Using
detailed data on mobility involving patent law firms and their Fortune 500 clients,
we find that supplier firms receive less outsourced business when buyers hire
employees from the focal supplier's competitors. Further, this negative effect
decreases when the focal supplier has its own alumni already working for the buyer
firm and increases when the buyer firm has higher turnover or hires locally from
competing suppliers. The article thus underscores the importance of firm alumni in
the competition for valuable business relationships and highlights a form of
"talent war" waged through the placement of and relationships with former
employees.
There has been limited coverage of the corporate responsibility (CR) practices of
small and medium-sized enterprises (SMEs) in the mainstream CR literature.
Furthermore, there has been no systematic analysis of the responsibilities of the
high value jewellery industry and jewellery SMEs in particular. This study explores
the potential for harm and value creation by individual stakeholders in fine
jewellery production. Using the harm chain and institutional theory to frame our
investigation, we seek to understand how small businesses within the fine jewellery
industry respond to the economic, social and environmental challenges associated
with responsible jewellery production, and to investigate how they perceive and
negotiate the tensions between responsibility and the resistance derived from the
operational norms of secrecy and autonomy within the industry. Our exploratory
research provides illustrative examples of how complex harm networks operate within
and across the fine jewellery industry, and demonstrates the inter-relationships
that exist across the different stages of the fine jewellery harm chain. Findings
suggest that institutional forces are coalescing towards a more responsible agenda
for the fine jewellery industry. Moreover, while CR is a tool to disrupt harmful
institutional norms and practices within such an industry, it requires the co-
creation of new transformative business models and multi-stakeholder involvement
including firms (SMEs and MNEs), trade associations, non-governmental organisations
and consumers. Solutions include national and international legislation, price
adjusted certification routes for small firms, harmonisation of industry CR
standards to reduce overlap in certification and regulation and gem and precious
metal "track and trace" schemes.
Just as socially irresponsible organizational behavior leaves a punitive legacy on
society, socially responsible organizations can foster curative change. This
article examines whether small organizations can foster societal change toward more
sustainable modes of living. We contend that consumption is deeply intertwined with
social relations and norms, thus making individual behavioral change toward
sustainability a matter of facilitating change in individual behavior, as well as
in social norms and relations between organizations and consumers. We argue that it
is in this facilitation process that small firms can play a major role, by adopting
upstream and downstream approaches to diffuse behavioral change. By synthesizing
four key strands of literature - small businesses and corporate social
responsibility, ethical consumption, community social marketing, and the diffusion
of innovation - and using the exemplar case of Modbury, the iconic "plastic bag-
free'' town, we demonstrate how responsible small firms can influence communities,
and the individuals therein, to encourage environmentally sustainable practice to
diffuse and support change in society.
As the functional capabilities of high-tech medical products converge, supplying
organizations seek new opportunities to differentiate their offerings. Embracing
product sustainability-related differentiators provides just such an opportunity.
This study examines the challenge organizations face when attempting to understand
how customers perceive environmental and social dimensions of sustainability by
exploring and defining both dimensions on the basis of a review of extant
literature and focus group research with a leading supplier of magnetic resonance
imaging (MRI) scanning equipment. The study encompasses seven hospitals and one
private imaging center in the Netherlands and identifies five social aspects that
cover 11 indicators. The authors conduct 22 customer perception interviews with key
decision-making stakeholders involved in purchasing MRI scanning equipment.
Respondents find environmental and social sustainability dimensions personally
relevant but professionally secondary to cost, performance, and ability to use the
equipment in their organizations' physical infrastructure. Finally, incorporating a
product's environmental and social credentials within the marketing of MRI scanning
equipment enhances the perception of the product offering in decision-making
stakeholders' minds and provides a means of differentiation.
Research summary: This article uses item response theory (IRT) to advance strategic
management research, focusing on an application to corporate social responsibility
(CSR). IRT explicitly models firms' and individuals' observable actions in order to
measure unobserved, latent characteristics. IRT models have helped researchers
improve measures in numerous disciplines. To demonstrate their potential in
strategic management, we show how the method improves on a key measure of corporate
social responsibility and corporate social performance (CSP), the KLD Index, by
creating what we term D-SOCIAL-KLD scores, and associated estimates of their
accuracy, from the underlying data. We show, for instance, that firms such as Apple
may not be as good as previously thought, while firms such as Walmart may perform
better than typically believed. We also show that the D-SOCIAL-KLD measure
outperforms the KLD Index and factor analysis in predicting new CSR-related
activity.Managerial summary: Corporate social responsibility (CSR) continues to
grow in importance among the press, political activists, managers, analysts, and
investors, yet measurement techniques have not kept up. We show that the most
common approach for measuring CSRadding up observable traitsis fundamentally
flawed, even if these traits accurately capture CSR-related behavior. We introduce
an improved measurement technique that treats these traits as test questions that
are differentially weighted, so that hard CSR activities affect a company's score
more than easy CSR activities. This approach produces a measure that offers a more
reliable comparison of firms than standard measures. Our approach has a number of
additional advantages, including differentiating firms that receive identical
scores on an additive scale and accounting for how CSR-related behavior has evolved
over time. Anybody who cares about CSR should consider using our measure (available
at ) as the basis for analyzing firms' CSR. Copyright (c) 2015 John Wiley & Sons,
Ltd.
Servant leadership is a leadership philosophy which addresses the concerns of
ethics, customer experience, and employee engagement while creating a unique
organizational culture where both leaders and followers unite to reach
organizational goals without positional or authoritative power. With employees
viewed as one of the greatest assets for organizations, maintaining loyal,
productive employees while balancing profits becomes a challenge for leaders, and
drives the need to understand employee engagement drivers. Thus, the purpose of
this study was to qualitatively explore servant leadership from the perspective of
employees. Participants were 11 employees from a servant leadership led restaurant
who took part in two focus groups. The modified van Kaam method (Moustakas 1994)
contributed to data analysis, which examined employee responses for comparison and
assessment. Several themes emerged including servant leader experience, servant
leader traits, the impact of servant leadership, the application of servant
leadership, and limited employee attrition. The themes revealed servant leadership
positively influences employee engagement while contributing to employee loyalty to
the workplace. Based on the servant leader experience, participants were more
committed, built healthy work relationships, and actively participated in achieving
organizational goals. Findings are discussed in light of current research and
practical applications are provided.
One key responsibility of leaders involves crafting and communicating two types of
messages-visions and values-that help followers understand the ultimate purpose of
their work. Although scholars have long considered how leaders communicate visions
and values to establish a sense of purpose, they have overlooked how these messages
can be used to establish a shared sense of purpose, which is achieved when multiple
employees possess the same understanding of the purpose of work. In this research,
we move beyond the traditional focus on leader rhetoric and individual cognition to
examine leader rhetoric and shared cognition. We suggest that a specific
combination of messages-a large amount of vision imagery combined with a small
number of values-will boost performance more than other combinations because it
triggers a shared sense of the organization's ultimate goal, and, in turn, enhances
coordination. We found support for our predictions in an archival study of 151
hospitals and an experiment with 62 groups of full-time employees. In light of
these Bindings, we conducted exploratory analyses and discovered two dysfunctional
practices: leaders tend to (1) communicate visions without imagery and (2) over-
utilize value-laden rhetoric.
Despite considerable debate as to what corporate social responsibility (CSR) is,
consumer social responsibility (CnSR), as an important force for CSR (Vogel in
Calif Manag Rev 47(4):19-45, 2005), is a term that remains largely unexplored and
under-theorized. To better conceive the role consumers play in activating CSR, this
paper provides a multi-level, multi-agent conceptualization of CnSR. Integrating
needs-based models of decision making with justice theory, the article
interpretively develops the reasons (instrumental, relational, and moral) why
variously positioned agents leverage consumers as a force for corporate social
responsibility. The paper theoretically expands currently limited conceptions of
CnSR by exploring the levels at which diverse agents engage with CnSR (Who and
What?) and the needs driving these agents (Why?). The paper suggests that the so-
called "consumer side of CSR" (Devinney et al. in Stanf Soc Innov Rev:29-37, 2006)
is contingent upon the presence, absence, and varying intensities of underlying
agent needs. Academic and managerial implications are drawn in the paper's
conclusion.
his article examines the role of corporations in constructing the nature meaning
and implications of 'consumer responsibility'. It draws on a theoretical framework
that elaborates how objects, subjects and concepts are configured in organizational
discourse. Using critical discourse analysis, it reveals how consumer
responsibility is organized into meaningful cultural knowledge through corporate
communications. he findings suggest that such communications rely on strategic
juxtapositions that offer a morally unconflicting concept of consumer
responsibility that is facilitative of market choice.
In recent years, there have been several high-profile recalls of hybrid products
(those where organizations in multiple countries take part in the design, component
sourcing, manufacturing, and marketing of a product). If consumers perceive a
global firm to be responsible for the recall, then it will reduce their brand
equity. Therefore, global firms may respond in ethically questionable ways to
justify themselves to important stakeholders and avoid blame. Understanding how
stakeholders attribute blame for crises involving hybrid products is important to
shed light on the unethical manner in which global firms might avoid blame in such
situations. The research reported here shows that in a hybrid product crisis,
consumers show a bias in favor of the brand company and against the manufacturing
company. This bias is more pronounced when the country of manufacture has an
unfavorable image or when consumers lack familiarity with the recalled brand.
Ambiguous recall announcements by companies that fail to provide a specific and
clear reason for the product defect prompt consumers to assume that a manufacturing
flaw caused the product defect. As a result, consumers reduce their attribution of
blame for the brand company, and thus its brand equity is maintained.
In this research, we evaluate the response of Brazilian consumers to corporate
social responsibility (CSR) initiatives accompanied by a price increase We
demonstrate that the extent to which Brazilian consumers perceive a company to be
socially responsible (i e, their CSR perceptions) is related to both the basic
transactional outcome of purchase intentions as well as two relational outcomes the
likelihood to switch to a competitor and to complain about the CSR-based price
increase More interestingly, we find that these relationships are jointly mediated
by the consumers' perceptions of price fairness and feelings of personal
satisfaction Perhaps most interesting, we find that these mediating effects vary
with consumer purchasing power, the mediating effect of price fairness on purchase
intention is stronger for lower Income than for higher income consumers, whereas
the mediating effects of personal satisfaction on switching and complaining
intentions are stronger for higher Income than for lower income consumers
We investigate the impact of trade secret legal protection on firm market value in
the context of acquisitions. On one hand, market value may increase because trade
secret assets become better protected from rivals. On the other hand, market value
may decrease because trade secret protection reduces information about the target
and its competitors available to potential buyers, increasing uncertainty about its
value. Buyers will discount their offers in expectation of being compensated for
riskier deals. Using a sample of private equity investments in the United States,
we find that trade secret protection has a positive effect in industries with high
mobility of knowledge workers, but a negative effect in industries with (1) high
resource-value uncertainty and (2) high poor-investment risk. Managerial summary:
We argue that an increase in trade secret legal protection might not unequivocally
benefit firm owners when selling their business. A stronger trade secret protection
increases the market value of firms in industries with high workers' mobility, but
it decreases the market value of firms in industries with uncertain resource value
and/or high risk of poor-acquisition investments. Based on the contingent effect of
trade secret protection, companies may want to adjust their strategic decisions,
including where to locate or relocate, based in part on whether they will derive
benefits or suffer losses when trade secrets are better protected. Finally, our
study should help policymakers understand more fully the economic impact of
government policies associated with trade secrets. Copyright (C) 2016 John Wiley &
Sons, Ltd.
Urban communities in 21st century America are facing severe economic challenges,
ones that suggest a mandate to contemplate serious changes in the way America does
business. The middle class is diminishing in many parts of the country, with
consequences for the economy as a whole. When faced with the loss of its economic
base, any business community must make some difficult decisions about its proper
role and responsibilities. Decisions to support the community must be balanced
alongside and against responsibilities to owners, shareholders and relevant
"stakeholders" in a relatively new context. Corporations in urban communities
"hollowed out" by white flight or urban sprawl must decide what level of support
they can and should provide. This paper examines corporate decisions within the
emerging urban prosperity initiatives, using the framework of integrative social
contract theory proposed by Donaldson and Dunfee. We suggest that urban prosperity
initiatives present a mandate on corporations sufficiently strong as to qualify as
an authentic norm. Further, we argue that strict adherence to a corporate bottom
line approach or "corporate isolationism" is not congruent with contemporary
community standards.
This research note presents data concerning the community engagement activities of
2,096 Swiss companies as reported by a single company respondent in an online
survey. Switzerland affords an interesting opportunity to compare engagement
activities in a single country with multiple culture systems across companies
varying in size from large to small and medium enterprises (SMEs). Study results
show that 78% of the surveyed firms pursue some community engagement activities.
While engagement is mostly practiced in traditional forms (e.g., donations), more
active forms (e.g., supporting employees' private volunteering) are not uncommon.
The main motivating factor is a concern for the communities in which the firms
operate. Engagement activities are mostly employed independent of financial
considerations and are conducted flexibly to serve personal interests of the firms'
decision makers. Swiss firms' reported environmental assessment activities show no
specific patterning. Perceiving engagement to be on the rise globally and in
Switzerland is associated with a greater likelihood to be involved. Accordingly,
knowing other engagement pursuing firms increases the individual firm engagement
probability. The German speaking part of Switzerland is more active in engagement
than the French and Italian speaking parts. Bigger companies pursue engagement
activities more intensively and strategically than do SMEs.
A lthough a sizable literature suggests that firms benefit from vulnerability to
takeovers because it reduces agency problems, the threat of takeovers can also
impose ex ante costs on firms by adversely affecting relationships with important
stakeholders, such as major customers. We find that when firms have corporate
customers as important stakeholders, an exogenous reduction in the threat of
takeovers increases their ability to attract new customers and strengthens their
relationships with existing customers, resulting in improvement in operating
performance. The positive effect on operating performance is greater for suppliers
that are likely to offer unique and durable products to their customers. Our
results suggest a beneficial aspect of protection from takeovers when stakeholder
relationships are important.
Consumers are increasingly facing product evaluation and choice situations that
include information about product sustainability, i.e., information about a
product's relative environmental and social impact. In many cases, consumers have
to make decisions that involve a trade-off between product sustainability and other
valued product attributes. Similarly, product and marketing managers need to make
decisions that reflect how consumers will respond to different trade-off scenarios.
In the current research, we study consumer responses across two different possible
trade-off scenarios: one in which consumers face a trade-off between product
sustainability and hedonic value, and another in which they must trade-off between
product sustainability and utilitarian value. Our results suggest that, overall,
consumers are more likely to trade-off hedonic value (e.g., esthetics) for
sustainability than to trade-off utilitarian value (e.g., functional performance)
for sustainability. In Studies 1A and 1B, we presented participants with a product
choice task and also measured their anticipatory emotions as they contemplated
their options. The results suggest that given a trade-off, consumers are more
likely to choose a sustainable product when they have to trade-off hedonic value
than when they have to trade-off utilitarian value. Further, these studies provide
some insight into the emotions underlying this effect. In Study 2, we use a
different consumer response measure, relative purchase likelihood, and investigate
the effect of trade-off type across categories that vary in the degree to which
hedonic and utilitarian attributes are perceived to be important (referred to as
'product type'). Our results suggest that the effect of trade-off type still holds,
yet is moderated by product type such that consumers' greater willingness to trade-
off hedonic value (vs. utilitarian value) for sustainability is attenuated as the
relative importance of hedonic (vs. utilitarian) attributes increases. In addition
to building on our theoretical understanding of decision making given trade-offs
with moral attributes, this research is also intended to support managers as they
define and choose among various strategic, product development, and marketing
promotion options.
Two environmental accidents in the mining industry provide the context for this
study of the Mitchell, Agle, and Wood (1997, The Academy of Management Review 22,
853-886) analysis of stakeholder salience. I examine the reactions of two
stakeholder groups: shareholder response is examined in terms of changing share
returns and risk; management response through change in disclosure. I find the two
decision-makers reacted at different times. Management responded to the first
accident, though not the second. Shareholders responded to the second accident
alone. My findings support the Mitchell, Agle, and Wood (MAW) assertion that
stakeholder status is impermanent, and determined through the eyes of the decision-
maker.
This article examines corporate social disclosures (CSD) in an African developing
economy (Mauritius) as provided in the annual reports of listed companies from 2004
to 2007. Informed by the country's social, political and economic context and
legitimacy theory, we hypothesise that the extent and variety of CSD themes
(social, ethics, environment and health and safety) will be enhanced post-2004 and
will be influenced by profitability, size, leverage and industry affiliation. We
find a significant increase in the volume and variety of CSD, although information
in relation to social activities remains the most prominent form of disclosure.
This is in contrast to previous studies which reported on the primacy of employee
disclosures in developing countries. Using a pooled regression analysis, we also
observe that size does explain variations in overall CSD and social disclosures,
whilst leverage is positively related to changes in environmental and health and
safety disclosures. There is no profitability relationship, and the effects of
industry affiliation on CSD are non-significant or contrary to expectations.
Overall, we assert that legitimacy, as a strategic and managerially driven approach
favouring symbolic actions, is the prevailing motivation underlying the progression
of CSD in Mauritius.
While the literature on the effective management of business and natural
environment interfaces is rich and growing, there are still two questions regarding
which the literature has yet to reach a definitive conclusion: (1) what is the
interactive effect between internal and external drivers on a proactive
environmental strategy (PES)? and (2) does a PES influence firm's performance?
Drawing on the resource-based view for the internal drivers' perspective and
institutional and legitimacy theories for the external drivers' perspective, this
study suggests that the effect of entrepreneurial orientation on a PES is moderated
by the intensity of government regulations and customers' sensitivity to
environmental issues. The authors also examine the relationship between the PES and
a firm's performance in terms of sales and profit growth. Implications are
discussed regarding the role of a PES in achieving a competitive advantage in the
marketplace.
The value-based approach to strategy argues that a firm's ability to capture value
depends on the extent of its added value. In this paper, I empirically test the
link between added value and value capture using a longitudinal dataset of United
Kingdom law firm performance, capabilities, and client relationships. In this
setting, competitors relevant for defining a firm's added value are those that
share a client with the firm. Further, within a client relationship, value
creation, and hence added value, can be decomposed in two parts: product-line
capability and client-specific scope economies. I find that added value, measured
at the level of each buyer-supplier relationship, is a driver of relationship
stability and supplier profitability. This suggests that suppliers with similar
capabilities might enjoy different economic returns depending on the composition of
their set of relevant competitors. These findings shed light on the conditions
under which firms can appropriate returns from their capabilities. They indicate
that concepts from cooperative games can be fruitfully applied to empirical studies
of firm performance and to the elaboration of insights from the resource-based view
of the firm. Copyright (C) 2010 John Wiley & Sons, Ltd.
We develop and apply a new set of empirical tools consistent with the tenets of
value-based business strategies, leveraging the principle that "no good deal comes
undone" and the methods of revealed preferences, to empirically estimate drivers of
value creation. We demonstrate how to use these tools in an analysis of value
creation in buyer supplier relationships in the UK corporate legal market. We show
that our approach can uncover evidence of subtle mechanisms that traditional
methods cannot easily distinguish from each other Furthermore, we show how the
estimates can be used as parameters of blform Danes for out-of-sample analyses of
strategic decisions. With readily available data on relationships between firms,
this approach can be applied to many other contexts of interest to strategy
researchers. Managerial summary: Managers need to understand the drivers of value
creation for customers in order to make competitive positioning decisions and
understand when they can capture value under competition. However, estimates of the
relative importance of each driver are typically difficult to obtain. In this
article, we help remedy this problem by demonstrating a novel method that obtains
estimates of the contribution of various drivers of value creation from commonly
available data of buyer supplier relationships. These estimates can then be used to
inform the strategy-making process. Copyright (C) 2017 John Wiley & Sons, Ltd.
Research summary: In knowledge-based industries, continuous human capital
investments are essential for firms to enhance capabilities and sustain competitive
advantage. However, such investments present a dilemma for firms, because human
resources are mobile. Using detailed project-level operational, financial, and
human capital data from a leading multinational firm in the global IT services
industry, this study finds that deliberate investments in improving general human
capital can help firms develop superior capabilities and maintain high profits.
This paper identifies two types of capabilities essential for success in this
industry-technological and business-domain capabilities-and provides empirical
evidence justifying such investments. Theoretical and practical implications of
capability-seeking general human capital investments are discussed. Managerial
summary: The primary managerial implication of this research is that capability-
seeking investments in developing general human capital through strategic learning
( training and internal certifications) can enhance firm performance. Although
investing in general human capital is risky, the firm considered this a strategic
necessity in order to thrive in the fast paced IT services industry. By leveraging
general technological skills in combination with business-domain knowledge to
address customer's business problems firms can earn and sustain higher profits. Our
study also demonstrates how a developing-country firm responded to strong
competitive challenge from global rivals possessing superior capabilities by
upgrading the capabilities of its employees through internal development. In doing
so the firm was able to narrow the capability gap vis-a-vis its foreign peers and
expand its business globally. Copyright (C) 2016 John Wiley & Sons, Ltd.
Research summary: Raters of firms play an important role in assessing domains
ranging from sustainability to corporate governance to best places to work.
Managers, investors, and scholars increasingly rely on these ratings to make
strategic decisions, invest trillions of dollars in capital, and study corporate
social responsibility (CSR), guided by the implicit assumption that the ratings are
valid. We document the surprising lack of agreement across social ratings from six
well-established raters. These differences remain even when we adjust for explicit
differences in the definition of CSR held by different raters, implying the ratings
have low validity. Our results suggest that users of social ratings should exercise
caution in interpreting their connection to actual CSR and that raters should
conduct regular evaluations of their ratings.Managerial summary: Ratings of
corporate social responsibility (CSR) guide trillions of dollars of investment, but
managers, investors, and researchers know little about whether these ratings
accurately measure CSR. In practice, there are examples of highly rated firms
becoming embroiled in scandals and the same firm receiving sharply different
ratings from different rating agencies. We evaluate six of the leading raters and
find little overlap in their assessments of CSR. This lack of consensus suggests
that social responsibility is challenging to measure reliably and that users of
these ratings should be cautious in drawing conclusions about firms based on this
data. We encourage the rating agencies to regularly validate their data in an
effort to improve the measurement of CSR. Copyright (c) 2015 John Wiley & Sons,
Ltd.
While many rating systems seek to help buyers overcome information asymmetries when
making purchasing decisions, we investigate how these ratings also influence the
companies being rated. We hypothesize that ratings are particularly likely to spur
responses from firms that receive poor ratings, and especially those that face
lower-cost opportunities to improve or that anticipate greater benefits from doing
do. We test our hypotheses in the context of corporate environmental ratings that
guide investors to select 'socially responsible,' and avoid 'socially
irresponsible,' companies. We examine how several hundred firms responded to
corporate environmental ratings issued by a prominent independent social rating
agency, and take advantage of an exogenous shock that occurred when the agency
expanded the scope of its ratings. Our study is among the first to theorize about
the impact of ratings on subsequent performance, and we introduce important
contingencies that influence firm response. These theoretical advances inform
stakeholder theory, institutional theory, and economic theory. (C) Copyright 2010
John Wiley & Sons, Ltd.
The pressure on companies to practice corporate social responsibility (CSR) has
gained momentum in recent times as a means of sustaining competitive advantage in
business. The pharmaceutical industry has been acutely affected by this trend.
While pharmaceutical product recalls have become rampant and increased dramatically
in recent years, no comprehensive study has been conducted to study the effects of
announcements of recalls on the shareholder returns of pharmaceutical companies. As
product recalls could significantly damage a company's reputation, profitability
and brand integrity, this paper investigates the effect on shareholder wealth and
the extent to which the adoption of CSR practices by pharmaceutical companies in
the United Kingdom (U.K.) and the United States (U.S.), the two largest markets for
pharmaceutical products in the world, affected market reactions surrounding product
recall announcements. The analysis of product recall announcements from 1998 to
2004 compiled from The Pharmaceutical Journal and U.S. Food and Drug Administration
enforcement reports revealed marked differences in the way market participants in
the two countries responded to news of product recalls. U.S. investors penalised
firms according to the severity of product defects while U.K. investors were
indifferent. While U.K. investors rewarded product recalls by firms which were not
usually CSR-active, U.S. investors punished non-CSR active firms that performed
recalls. These observations could pose strategic challenges to pharmaceutical firms
operating in both countries.
This field study investigated the relationship between strategic human resource
management, internal environmental concern, organizational citizenship behavior for
the environment, and environmental performance. The originality of the present
research was to link human resource management and environmental management in the
Chinese context. Data consisted of 151 matched questionnaires from top management
team members, chief executive officers, and frontline workers. The main results
indicate that organizational citizenship behavior for the environment fully
mediates the relationship between strategic human resource management and
environmental performance, and that internal environmental concern moderates the
effect of strategic human resource management on organizational citizenship
behavior for the environment.
This conceptual article applies the customer value (CV) concept in the context of
green marketing aiming to provide insights on the factors that motivate and/or
hinder the development of consumer-green brand relationships. The article draws
upon existing literature on the streams of CV, relationship marketing and
environmental behaviour and synthesises relevant findings to propose an integrated
conceptual framework entailing all identified types of value and cost,
psychographic characteristics, as well as dimensions of relationship quality (RQ)
and loyalty. Furthermore, it addresses existing questions on the links among
constructs and proposes several relationships that may lead to a better
understanding of consumer behaviour towards green brands. Through the here-proposed
conceptual model, the article initiates the process of empirically examining the
consumer adoption of and relationship development with green brands. The CV
framework adopted here may provide practitioners with knowledge on the value and
sacrifice factors, as well as the dimensions of RQ that are the most important in
targeting green consumers and designing relationship marketing strategies. The
article also fulfils an identified gap in the literature, as it is the first that
brings together and applies research findings from CV and relationship marketing
fields in the green marketing context and proposes an integrated approach to
understanding consumer-green brands relationships.
This study examines the relation between firms' corporate philanthropic giving and
their performance in three other social domains - employee relations, environmental
issues, and product safety. Based on a sample of 384 U.S. companies and using data
pooled from 1998 through 2000, we find that worse performers in the other social
areas are both more likely to make charitable contributions and that the extent of
their giving is larger than for better performers. Analyses of each separate area
of social performance, however, indicate that the relation between giving and
negative social performance (cited concerns) only holds for the environmental
issues and product safety areas. We find no significant association between
corporate philanthropy and employee relations concerns. In general, these findings
suggest that corporate philanthropy may be more a tool of legitimization than a
measure of corporate social responsibility.
Does the payment scheme have an effect on inventory decisions in the newsvendor
problem? Keeping the net profit structure constant, we examine three payment
schemes that can be interpreted as the newsvendor's order being financed by the
newsvendor herself (scheme 0), by the supplier through delayed order payment
(scheme S), and by the customer through advanced revenue (scheme C). In a
laboratory study, we find that inventory quantities exhibit a consistent decreasing
pattern in the order of schemes 0, S. and C, with the order quantities of scheme S
being close to the expected-profit-maximizing solution. These observations are
inconsistent with the expected-profit-maximizing model, contradict what a regular
or hyperbolic time-discounting model would predict, and cannot be explained by the
loss aversion model. Instead, they are consistent with a model that underweights
the order-time payments, which can be explained by the "prospective accounting"
theory in the mental accounting literature. A second study shows that the results
hold even. if all physical payments are conducted at the same time, suggesting that
the framing of the payment scheme is sufficient to induce the prospective
accounting behavior. We further validate the robustness of our model under
different profit conditions. Our findings contribute to the understanding of the
psychological processes involved in newsvendor decisions and have implications for
supply chain financing and contract design.
Companies that source from emerging economies often face supplier responsibility
risks, namely, financial and reputational burdens that the companies have to bear
when their suppliers' engagement in noncomplying labor and environmental practices
becomes public. To mitigate such risks, companies can invest in screening
mechanisms and design incentive schemes in sourcing contracts. Common mitigation
instruments include supplier certification, process audits, and contingency
payments. The interactions of these instruments are often not well understood. We
first note that the effectiveness of any mitigation instrument depends on how it
changes the economic trade-offs faced by a supplier in compliance to social and
environmental standard, and hence we develop a model that explicitly captures such
trade-offs. As a result, our model endogenizes the supplier's noncompliance
probability and connects it with various factors, including the supplier's
intrinsic ethical level that is unobservable to the buyer. We then study the
buyer's optimal contracting problem under different mitigation instruments. We find
that although the process audit and contingency payment instruments can directly
lower supplier responsibility risk, they, acting alone, are not as effective as the
supplier certification instrument in screening suppliers with different ethical
levels. Nevertheless, these instruments are all complementary to each other; when
used jointly, they make supplier screening more effective and result in lower
sourcing cost. These findings provide explanations for some of the observed
practices used in industry to mitigate supplier responsibility risks.
We study a supply chain with one supplier and many retailers that face exogenous
end-customer demands. The supplier and the retailers all try to minimize their own
inventory-related costs. In contrast to the retailers' newsvendor-type ordering
behavior (under which retailers may place orders freely in every period), we
propose two scheduled ordering policies: the scheduled balanced ordering policy
(SBOP) and the scheduled synchronized ordering policy (SSOP). Under both the SBOP
and SSOP, retailers are allowed to order freely only in one period of an ordering
cycle, and receive fixed shipments in other periods. Retailers take turns to order
freely under the SBOP, while under the SSOP all retailers order freely in the same
period. With the average supply chain cost per period as the performance measure,
we identify mathematical conditions under which scheduled ordering policies
outperform the newsvendor-type ordering. Through a large-scale numerical study, we
find that scheduled ordering policies are most effective when (i) the supplier's
holding and expediting costs are high and the retailer's backorder cost is small,
(ii) the end-customer demand variance and correlation are high, and (iii) the
supplier's capacity is high. In addition, we observe that the behavior of the SSOP
often complements that of the SBOP. Whereas the SBOP is better than SSOP when the
supplier's capacity is low and when the end-customer demand correlation level is
high, the SSOP is better when the opposite conditions prevail.
Consumers' concerns for the environment have led to the creation of niche markets,
quality certifications and labelling systems. Built by activists and NGOs, these
systems were adopted by agribusiness. Such firms try to capture consumers and react
to opinion campaigns, whilst appropriating the conservation (or 'fair') discourse.
This leads to the rise of new forms of third-party certifications of food
production based on private standards and, hence, to new forms of contract
relations between producers and buyers. The nature of these relationships is not
always evident in these new labels or in the discourse built to justify them. This
is particularly so in the case of goods produced in the South to be traded and sold
in the North, as the case of Starbucks illustrates. By the end of the 1990s,
Starbucks, operating through an NGO called Conservation International (CI), arrived
at the region of El Triunfo, in Chiapas, and contacted the producers' cooperatives
that were trying to find a market for their product. Cl promoted Starbucks
standards to raise the coffee quality and won the control over the production
system. Meanwhile, the producers forced to sell their coffee through the largest
trade company (AMSA) against whom the cooperatives were created, lost the control
over their own organization. When some cooperatives refused the deal, they suffered
divisions but could survive thanks the Fair Trade (FT) network in Chiapas.
Recent findings in experimental philosophy have revealed that people attribute
intentionality, belief, desire, knowledge, and blame asymmetrically to side-effects
depending on whether the agent who produces the side-effect violates or adheres to
a norm. Although the original (and still common) test for this effect involved a
chairman helping or harming the environment, hardly any of these findings have been
applied to business ethics. We review what little exploration of the implications
for business ethics has been done. Then, we present new experimental results that
expand the attribution asymmetry to virtue and vice. We also examine whether it
matters to people that an effect was produced as a primary or side-effect, as well
as how consumer habits might be affected by this phenomenon. These results lead to
the conclusion that it appears to be in a businessperson's self-interest to be
virtuous.
We consider a supply chain with a single supplier and two retailers. The retailers
choose their orders strategically, and if their orders exceed the supplier's
capacity, quantities are allocated proportionally to the orders. We experimentally
study the capacity allocation game using subjects motivated by financial
incentives. We find that the Nash equilibrium, which assumes that players are
perfectly rational, substantially exaggerates retailers' tendency to strategically
order more than they need. We propose a model of bounded rationality based on the
quantal response equilibrium, in which players are not perfect optimizers and they
face uncertainty in their opponents' actions. We structurally estimate model
parameters using the maximum-likelihood method. Our results confirm that retailers
exhibit bounded rationality, become more rational through repeated game play, but
may not converge to perfect rationality as assumed by the Nash equilibrium.
Finally, we consider several alternative behavioral theories and show that they do
not explain our experimental data as well as our bounded rationality model.
Over the last 20+ years, multinational corporations (MNCs) have been confronted
with accusations of abuse of market power and unfair and unethical business conduct
especially as it relates to their overseas operations and supply chain management.
These accusations include, among others, worker exploitation in terms of unfairly
low wages, excessive work hours, and unsafe work environment; pollution and
contamination of air, ground water and land resources; and, undermining the ability
of natural government to protect the well-being of their citizens. MNCs have
responded to these accusations by creating voluntary codes of conduct which commit
them to specific standards for addressing these issues. These codes are created at
both the industry-wide and the individual company level. Unfortunately, these codes
have generated little credibility and public trust because their compliance claims
cannot be independently verified, and they lack transparency and full public
disclosure. In this article, we present a case study of the voluntary code of
conduct by Mattel, Inc., the world's largest toy company. The code, called the
Global Manufacturing Principles (GMP), confronts the general criticism leveled
against voluntary codes of conduct by (a) creating detailed standards of
compliance, (b) independent external monitoring of the company's compliance with
its code of conduct, and (c) making full, and uncensored public disclosure of the
audit findings and company's response in terms of remedial action. We present a
detailed account of how Mattel's voluntary code of conduct was created,
implemented, and ultimately abandoned over 9 years. We provide an evaluative
analysis of the company's GMP compliance throughout its life span, which suggests a
bell-shaped curve, where early top management commitments were met with pockets of
resistance from operational groups, who were concerned about balancing GMP
compliance efforts with traditional performance criteria. The early stage response
from Mattel's top management was quick and supported with the requisite resources.
As a result, the compliance process accelerated, becoming increasingly more robust
and effective. The success of code compliance and increased transparency in public
disclosure energized field managers with a sense of professional satisfaction and
publicly recognized accomplishments. The decline in GMP compliance was equally
steep. When all the easily attainable targets had been reached at the company-
operated plants, addressing vendor plants' compliance presented a new set of
challenges, which taxed corporate resources and management commitment. It would
seem that value-based and ethics-oriented considerations, i.e., doing the right
thing for the right reason, were no longer the driving force for Mattel's
management. Mattel did not see any economic benefit from its proactive stance, when
competitors did not seem to suffer adverse consequences for not following suit. The
final contributing factor to the code's abandonment was a widely publicized series
of product recalls which absorbed top management's attention.
This article sets out to undertake a thorough, point-by-point examination of the
theory postulated by Campbell (2007), in which an attempt is made to specify the
conditions under which corporations may or may not act in socially responsible
ways. In order to ensure the overall reliability of our study, and to attempt to
provide a new understanding of, and greater insights into, whether corporate social
responsibility (CSR) is affected by financial and institutional variables, we
empirically investigate a total of 520 financial firms in 34 countries, between the
years 2003 and 2005. Our empirical findings are: (i) firms with larger size are
more CSR minded, and the financial performance and CSR are not related; (ii) firms
would actually act in more socially responsible ways to enhance their competitive
advantages when the market competitiveness is more intense; (iii) financial firms
in countries with stronger levels of legal enforcement tend to engage in more CSR
activities; however, interestingly and rather strikingly, those firms in countries
with stronger shareholder rights tend to engage in less CSR activities; and (iv)
self-regulation within the financial industry has a significantly positive effect
on CSR, with firms being found to act in more socially responsible ways in those
countries which have more cooperative employer-employee relations, higher quality
management schools, and a better macroeconomic environment.
To many, recent allegations of accounting fraud (or earnings management; EM) at
Enron, coupled with similar ones at many other corporations, are a strong
indication of a serious decay in business ethics. In academics, this raises the
concern between EM and corporate social responsibility (CSR). Since it has neither
been documented, nor globally tested whether CSR mitigates or increases the extent
of EM, three kinds of EM are studied: earnings smoothing, earnings aggressiveness,
and earnings losses and decreases avoidance. The extents to which financial
characteristics and institutional variables have an impact on the extent to which
companies conduct EM are also tested. Our study investigates whether the CSR-
related features of 1,653 corporations in 46 countries had a positive or negative
effect on the quality of their publicly released financial information during the
1993-2002 period. There is no question that with a greater commitment to CSR, the
extent of earnings smoothing is mitigated, that of earnings losses and decreases
avoidance is reduced, but the extent of earnings aggressiveness is increased.
The global corporate scandals such as Enron, Worldcom and Global Crossing have
raised fundamental issues of business ethics as well as economic, social and
anthropological questions concerning the nature of business competition and global
capitalism. The purpose of this conceptual paper is to introduce the concept of ''
welfare exchange '' to the existing notions of economic, social and anthropological
notions of business and exchange in markets and society in the 21st century. Global
competition and business success in the 21st century continue to raise the nature
of economic value and the interaction among diverse actors in international
markets, institutions and society. We believe that the nature of such exchange
between consumers and organizations, which can also be termed social marketing,
need to increasingly take into account a welfare and ethical component. In this
paper, we introduce our concept of welfare exchange to emphasize the importance of
such welfare and ethical issues in the global business environment of the 21st
century.
Over the last 20 years, organizations have attempted numerous innovations to create
more openness and to increase ethical practice. However, adult students in business
classes report that managers are generally bureaucratically oriented and averse to
constructive criticism or principled dissent. When organizations oppose dissent,
they suffer the consequences of mistakes that could be prevented and they create an
unethical and toxic environment for individual employees. By distinguishing
principled dissent from other forms of criticism and opposition, managers and
leaders can perceive the dissenter as an important organizational voice and a
valued employee. The dissenter, like the whistleblower, is often highly ethically
motivated and desires to contribute to the organization's wellbeing. Recognizing
and protecting principled dissent provides the means of transforming organizations.
By restoring dignity to the individual, organizations gain more productive and
loyal employees, and they create an environment that promotes critical thinking,
learning, and a commitment to ethics.
The lack of attention to sustainability, as a concept with multiple dimensions, has
presented a developmental gap in green marketing literature, sustainability, and
marketing literature for decades. Based on the established premise of customer-
corporate (C-C) identification, in which consumers respond favorably to companies
with corporate social responsibility initiatives that they identify with, we
propose that consumers would respond similarly to companies with sustainability
initiatives. We postulate that consumers care about protecting and preserving
favorable economic environments (an economic dimension of sustainability) as much
as they care about natural environments. Thus, we investigate how two
sustainability dimensions (i.e., environmental and economic) and price can
influence consumer responses. Using an experimental method, we demonstrate that
consumers favor sustainability in both dimensions by giving positive evaluations of
the company and purchase intent. In addition, consumers respond more negatively to
poor company sustainability than to high company sustainability. In comparison,
consumers respond more negatively to the company's poor commitment to caring for
the environment than to the company's poor commitment to economic sustainability.
We also find that consumers do not respond favorably to low prices when they have
information about the firm's poor environmental sustainability. Finally, we find
support for an interaction effect between consumer support for sustainability and
corporate sustainability; that is, consumers evaluate a company more favorably if
the company shares the consumers' social causes. Overall, we conclude, from our
empirical study, support for the idea that consumers do respond to multiple
dimensions of sustainability.
A variety of stakeholders including investors, corporate managers, customers,
suppliers, employees, researchers, and government policy makers have long been
interested in the relationship between the financial performance of a corporation
and its commitment to business ethics. As a subject of research, the relations
between business ethics and corporate valuation has yet to be thoroughly quantified
and investigated. This article is an effort to amend this inadequacy by
demonstrating a statistically significant association between ethical commitment
and corporate valuation measures. Consistent with anecdotal evidence, we have found
a significant association between the ethical commitment of Korean companies and
their valuation on the Korean stock market. However, the result reveals that the
association between ethical commitment and financial performance is not
significantly supported.
Our study of 267 U.S. firms shows that improved environmental risk management is
associated with a lower cost of capital. Our findings provide an alternative
perspective on the environmental-economic performance relationship, which has been
dominated by the view that improvements in economic performance stem from better
resource utilization. Firms also benefit from improved environmental risk
management through a reduction in their cost of equity capital, a shift from equity
to debt financing, and higher tax benefits associated with the ability to add debt.
These findings help build better theory regarding the outcomes of strategic
improvements in environmental risk management. Copyright (C) 2008 John Wiley &
Sons, Ltd.
The objective of this article is double: first, to analyze, using a descriptive
analysis, the main differences in the level and components of social behaviour
between European and North American firms and, second, to contrast empirically,
using a multiple linear regression model, whether the motives behind corporate
social behaviour are different depending on the region or country of the firm. With
this aim, an indicator of social behaviour (termed effort in sustainability) has
been constructed by aggregating the firm's social effort with customers, employees,
community and environment for a sample of the 40 European and North American
companies most highly reputed in the years 2003 and 2004. The results obtained
indicate that the region or country of the firm influences the level, components
and motivation of its social behaviour.
Despite the increasing significance of corporate ethics, few studies have explored
the intermediate mechanisms that explain the relationship between corporate ethics
and firm financial performance. Drawing on institutional theory and strategic human
resource management literature, the authors hypothesize that the internal
collective processes based on employees' collective organizational commitment and
organizational citizenship behavior (OCB) mediate the ethics-performance
relationship at the organizational level. The authors' hypotheses are tested using
data collected from 3,821 employees from 130 Korean companies and the respective
companies' financial performance data. The results indicate that collective
organizational commitment and interpersonal OCB are meaningful intervening
processes that connect corporate ethics to firm financial performance. To
complement prior studies that identify a firm's reputation and external relations
as mediators between corporate ethics and performance, the present study highlights
the need to examine microprocesses occurring within the organization to account for
the ethics-firm performance relationship. Moreover, the present demonstration of
collective organizational commitment and OCB as meaningful predictors of a firm's
objective performance indicates the significance of these employee processes in
explaining organizational-level outcomes.
Industrial pollution is of both national and international concern in the context
where one country's emissions contribute to the problem of global warming. Existing
studies have focused on government and regulations rather than on employees. The
context of this study is in respect of 472 workers in seven Chinese energy
companies in Shanxi province in China, one of the biggest coal mining regions and a
region most responsible for environmental pollution. The key findings are two-fold:
first, employees' values were positively correlated with attitudes toward the
environment, which also correlates with perceived corporate citizenship; second,
the ownership type of the firm had a significant influence on corporate
citizenship, employee values and their attitudes toward environment. Contrary to
existing beliefs, State-owned enterprises in China have much poorer ratings on all
the three constructs compared to privately owned companies. The results highlight
the role of the government and policy makers in shaping employees' attitudes toward
the environment, and in turn the corporate citizenship of the Chinese energy
industry.
Increasing numbers of brands position having corporate social responsibility (CSR)
as their founding ideology. This article examines what makes ethical consumers
develop a loyalty to CSR-led brands, using a questionnaire survey of The Body Shop
consumers. Contrary to some existing work in marketing, the consumer self-brand
congruence on the ethical character did not have a significant impact on brand
identification, with the exception of the empathy virtue character. The structural
equation modeling of the data confirms that the citizenship image of the brand is
influenced by brand identification, which in turn is influenced by the empathy
virtue congruence. Ironically, in the case of The Body Shop, while the empathy
congruence is the most important indicator for consumer identification and
citizenship image, the gap on the empathy virtue was the largest. If customers with
a high-empathy character see a CSR-led brand lacking empathy, consumer loyalty will
be reduced. The managerial implications of the findings are discussed.
This paper offers the first large-scale empirical study of organizational virtue as
perceived by both internal and external stakeholders (employees and customers,
respectively) and of the links between these virtues and organizational outcomes
such as identification, satisfaction, and distinctiveness. It takes a strategic
approach to virtue ethics, one that differs from a more traditional Aristotelian
concept of virtue and from Alasdair MacIntyre's manner of distinguishing between
internal and external goods. The literature review compares three different
perspectives on the empirical study of organizational virtues, taken by virtue
theorists, POS scholars, and strategy scholars. The main study describes an
empirical research undertaking that involved the analysis of 2548 usable
questionnaires administered to employees and customers of seven organizations in
the U.K. A structural equation model was used to test the linkages of the six
dimensions of organizational virtue (empathy, warmth, integrity, conscientiousness,
courage, and zeal) to satisfaction, identification, and distinctiveness. All the
links were significant, with the strongest between virtue and identification. For
employees, identification (with a firm) was driven most significantly by integrity,
whereas customers' identification was principally influenced by empathy. The
empirical finding also sounds an alarm bell to the global firms who focus on
creating a differentiated image based on CSR in the hope that it will lead to
satisfaction. The results lead to a discussion of how companies might build
favorable stakeholder perceptions of key dimensions of virtue that most shape their
identification and differentiation in the marketplace.
This paper investigates the stock market reaction to the announcement that a firm
has been included in the UK FTSE4Good index of socially responsible firms. We use
the announcement of firm inclusion in the index to estimate the stock market
reaction to a firm being classified as socially responsible. This is an important
test of whether investors view the undertaking of socially responsible activities
by firms as a value increasing or value decreasing initiative by management. We do
not find strong evidence in favour of a positive market reaction. However, there is
a large cross-sectional variation in the market reaction to this announcement.
Investors appear to be reacting to this event and there are a number of firm
characteristics that are well-established proxies for CSR that can explain the
market reaction.
Facing an increasing number and variety of issues with social salience, firms must
determine how to engage with issues that likely have a significant impact on them.
Integrating issues management (IM) and salience theories, the authors find that
firms engage with socially contested issueswhere there is a high degree of societal
disagreementin a different manner from issues that have social consensus, or high
agreement. Examining social issue resolutions filed by shareholders from 1997 to
2009 (3,887 total observations), the study finds that socially contested issues, as
well as those issues with social consensus, are both likely to result in engagement
by the firm. For social issues with consensus, a firm is more likely to opt for a
low level of shareholder engagement whereas resolutions regarding contested issues
lead to engaging shareholders at a higher level. These findings shed new light on
the IM and issue salience literature streams that have suggested firms will react
differently to these types of issues, even while they remain largely untested.
Finally, firms become less engaged with perennial issues over time. rather than
more, providing new guidance to researchers, shareholder activists, and firms
alike. To the authors' knowledge, such fined-grained insight into expected levels
of firm engagement with social issue salience has not been put forth previously.
While downsizing has been widely studied, its connection to firm ownership status
and the reasons behind it are missing from extant research. We explore the
relationship between downsizing and family ownership status among Fortune 500
firms. We propose that family firms downsize less than non-family firms,
irrespective of performance, because their relationship with employees is based on
normative commitments rather than financial performance alone. We suggest that
their actions are related to employee- and community-friendly policies. We find
that family businesses do downsize less irrespective of financial performance
considerations. However, their actions are not related to their employee- or
community-friendly practices. The results raise issues related to the motivations
of large multinationals to downsize and the drivers of their stakeholder management
practices.
The continued advance of global value chains as the mode of production for an
increasing number of goods and services has impacted considerably on the economies
and societies both of the developed world and the emerging economies. Although
there have been many efforts at reform there is evidence of unresolved dilemmas of
human rights, environmental issues and ethical dilemmas in the operation of the
global value chain. This paper focuses on the role and performance of Apple Inc in
the global value chain in Asia. Apple is the most successful corporation on earth
measured in financial terms and yet has failed to find a solution to recurrent
employment and environmental problems occurring in plants manufacturing Apple
components. This analysis informs the current theoretical debate on the development
of the global value chain and the continuing institutional failure that leaves
employees vulnerable and the environment neglected.
Since the early 1980s, employment in the United States has undergone significant
transformation as the large corporations that once safeguarded employees with
stable jobs and rewards for loyalty have replaced these employment relationships
with ones based on cost containment and flexibility. One important consequence of
these developments is that firms have abdicated their role as a critical risk
bearer in society. Although evidence suggests that firms have increasingly shifted
market risks onto their workforce, to date, there have been few detailed analyses
exploring what factors have driven this phenomenon. This study adds to our
understanding of why firms have transferred risk to their employees by examining
the decline of a highly institutionalized practice wherein large U.S. firms used to
bear retirement risk: the defined benefit (DB) pension plan. Through a detailed
analysis, I show that variance in the presence, power, and interests of
shareholders and employees at the firm level differentially affect a firm's
willingness to shift the risk of retirement onto its workers. Specifically, I
demonstrate empirically that different types of shareholders have differential
effects on a firm's retirement practices, suggesting that the changing equity
ownership structure of large U.S. firms has played a key role in how risk is
allocated between workers and firms. Declines in employee power have also played a
role because firm levels of unionization positively affect rates of DB
participation for both unionized and nonunionized workers.
The value relevance of corporate social responsibility (CSR) performance
disclosures for financial markets participants remains uncertain despite advances
in the literature and the recent proliferation of CSR disclosures around the world.
Using an experimental approach involving MBA students at universities in the United
States and Lebanon, we study the value relevance of CSR disclosures by testing
whether they affect participants' personal portfolio management investment
decisions. We also examine whether the degree to which the CSR disclosures affect
these decisions is influenced by corporate governance quality. To examine these
issues, we examine the effect of environmental performance on investment decisions
in Experiment 1, and the effect of labor performance on investment decisions in
Experiment 2. Results from both experiments show that investment decisions are
affected by CSR performance. Analysis shows that governance strength exerts a
marginal effect on the investment decision only when CSR performance is strong.
Lebanese participants appear to be more sensitive to weak performance (both CSR and
governance) than U.S. participants. Overall, our findings extend the CSR
disclosures literature by documenting the value relevance of CSR performance for
financial markets participants' decision making. These findings also extend the
governance literature by documenting that consistent with attribution theory, the
effects of governance quality are contingent upon the information and decision
context, and that efforts to decontextualize governance may be counterproductive.
This paper studies government subsidies for green technology adoption while
considering the manufacturing industry's response. Government subsidies offered
directly to consumers impact the supplier's production and pricing decisions. Our
analysis expands the current understanding of the price-setting newsvendor model,
incorporating the external influence from the government, who is now an additional
player in the system. We quantify how demand uncertainty impacts the various
players (government, industry, and consumers) when designing policies. We further
show that, for convex demand functions, an increase in demand uncertainty leads to
higher production quantities and lower prices, resulting in lower profits for the
supplier. With this in mind, one could expect consumer surplus to increase with
uncertainty. In fact, we show that this is not always the case and that the
uncertainty impact on consumer surplus depends on the trade-off between lower
prices and the possibility of underserving customers with high valuations. We also
show that when policy makers such as governments ignore demand uncertainty when
designing consumer subsidies, they can significantly miss the desired adoption
target level. From a coordination perspective, we demonstrate that the
decentralized decisions are also optimal for a central planner managing jointly the
supplier and the government. As a result, subsidies provide a coordination
mechanism.
When manufacturers do not have sufficient capacity to meet demand and cannot
increase prices, they have to determine other methods to allocate goods among
retailers. A common allocation mechanism is based on a retailer's sales history: a
retailer that has ordered larger quantities in the past should get a greater
allocation than a retailer that has historically ordered smaller quantities. This
mechanism, known as a turn-and-earn allocation rule, is commonly used in many
industries such as automobiles, microprocessors, video game consoles, etc. The
existing literature has considered the effect of turn-and-earn allocation rules
when a manufacturer sells a single product. However, when we consider a product
line, it is not clear whether the manufacturer is better off basing its allocation
on the sales history of the entire product line or solely on the sales history of
the product in short supply. In particular, a shortage of one product can lead
retailers and consumers to move toward other products in the line. This, in turn,
can have an effect on the manufacturer's optimal allocation mechanism. We examine
this issue by developing a model of a supplier selling two substitutable goods
through two retailers. Within this setup, we introduce a general turn-and-earn
allocation rule that allows the entire sales history to influence allocation
levels. Counter to previous work, we show that certain turn-and-earn rules not only
help the manufacturer but can also help the retailer and increase total supply
chain profits.
With the expansion of multinational corporations (MNCs), the alarming upsurge in
widely publicized and notable corporate scandals involving MNCs in emerging markets
has begun to draw both academic and managerial attention to look beyond home market
practices to the pressing concern of CSR in emerging markets. Previous studies on
CSR have focused primarily on Western markets, reserving limited discussions in
addressing the issue of MNC attitudes and CSR practices in their emerging host
markets abroad. Despite this incongruity in academic response to CSR in emerging
markets, managers of multinational companies continue to face mounting and most
often conflicting pressures to weigh among multiple strategic CSR responses in
emerging markets. Such a task is often further complicated by the complexity of
varying business norms and standards, regulatory environments, and stakeholder
demands for CSR across national boundaries. With such a challenge in mind, I
attempt to examine the explanatory factors in leading MNCs, otherwise recognized
for accountability and integrity in their home markets, to employ inconsistent or
negligent practices under CSR pressure in Chinese emerging economy. Preliminary
findings reveal that discrepancies exist in how MNCs perform in CSR in home
countries versus in host countries. While MNCs do have much to improve, the
institutional environment in the emerging market, including the legal framework and
the ethical culture, also needs to be improved by the host country governments, the
industry associations, and local firms. Meanwhile, media interest and journalists,
NGOs, third party monitors, industry stakeholders as well as consumer advocacy
groups can raise the visibility of MNC's contradictory practices between their
origin nations and countries with emerging economies and offer the pressures and
incentives for MNCs to amend their ethical shortcomings. This article also suggests
implications for both theory and practice.
We investigate the extent to which perceptions of the authenticity of supervisor's
personal integrity and character (ASPIRE) moderate the relationship between
people's love of money (LOM) and propensity to engage in unethical behavior (PUB)
among 266 part-time employees who were also business students in a five-wave panel
study. We found that a high level of ASPIRE perceptions was related to high love-
of-money orientation, high self-esteem, but low unethical behavior intention (PUB).
Unethical behavior intention (PUB) was significantly correlated with their high
Machiavellianism, low self-esteem, and low intrinsic religiosity. Our
counterintuitive results revealed that the main effect of LOM on PUB was not
significant, but the main effect of ASPIRE on PUB was significant. Further, the
significant interaction effect between LOM and ASPIRE on unethical behavior
intention provided profoundly interesting findings: High LOM was related to high
unethical behavior intention for people with low ASPIRE, but was related to low
unethical intention for those with high ASPIRE. People with high LOM and low ASPIRE
had the highest unethical behavior intention; whereas those with high LOM and high
ASPIRE had the lowest. We discuss results in light of individual differences,
ethical environment, and perceived demand characteristics.
Management researchers have long been concerned with the antecedents and
consequences of managerial compensation. More recently, scholarly and popular
attention has turned to the gap in pay between workers at the highest and lowest
levels of the organization, or pay dispersion. This study investigates the
performance implications of pay dispersion on a longitudinal (10-year) sample of
publicly traded firms from multiple industries. We combine explanations based on
tournament theory and equity theory to develop a model wherein pay dispersion has
opposing effects on a firm's short-term performance and their trend in performance
over time. We also show that ownership is a key antecedent of pay dispersion.
Specifically, transient institutional investors (who have short time horizons and
equity stakes in a wide variety of firms) positively influence pay dispersion
whereas dedicated institutional investors (who have longer investment time horizons
and equity stakes in fewer firms) negatively influence pay dispersion. We discuss
the wide-ranging implications of these findings for scholars, managers, and policy
makers alike.
Research summary: Drawing on theory about signaling, sensemaking, and the romance
of leadership, we extend inquiry on investors' perceptions of CEO succession
following misconduct. Whereas past studies have treated misconduct monolithically,
we examine failures of integrity and competence separately. Using a policy
capturing methodology that isolates investors' decision making from potential
confounds, we find that, following an integrity failure, investors perceive outside
and interim successors positively but inside successors negatively. Following a
competence failure, investors perceive outside successors positively but are
ambivalent toward inside and interim successors. Our findings indicate that whether
an act of misconduct was an integrity failure or a competence failure, and what
type of successor the firm chooses, are important considerations when using CEO
succession as a means to restore investor confidence.Managerial summary: Business
headlines regularly feature episodes of organizational misconduct, such as product
safety problems, environmental violations, employee mistreatment, and securities
lawsuits, and their aftermath. In such scenarios, shareholders demand answers from
the people at the top, even if those people were not directly responsible for the
problem. As a result, companies often fire the CEO as a means to restore investor
confidence. Does this work? It depends on the type of misconduct and who is the
CEO's successor. Following a competence failure, investors welcome the appointment
of an outsider, but they are indifferent to inside and interim successors.
Following an integrity failure, shareholders greet outside and interim CEO
successors favorably while frowning on the promotion of insiders. Copyright (c)
2015 John Wiley & Sons, Ltd.
As more and more instances of corporate hypocrisy become public, consumers have
developed an inherent general skepticism towards firms' corporate social
responsibility (CSR) claims. As CSR skepticism bears heavily on consumers'
attitudes and behavior, this paper draws from Construal Level Theory to identify
how it can be pre-emptively abated. We posit that this general skepticism towards
CSR leads people to adopt a low-level construal mindset when processing CSR
information. Across four studies, we show that matching this low-level mindset with
concrete CSR messaging works to effectively mitigate the negative effects of
inherent CSR skepticism on consumers' attitudes, purchase intentions, and word of
mouth. The resulting construal-mindset congruency strengthens the favorability of
consumer responses through increased positive elaboration and perceptions of CSR
message credibility. Furthermore, this congruency effect is shown to persist over
time in skeptical domains but to dissipate in less skeptical domains.
Companies often encourage consumers to engage in sustainable behaviors using their
services in a more environmentally friendly or green way, such as reusing the
towels in a hotel or replacing paper bank statements by electronic statements.
Sometimes, the option of green service is implied as the default and consumers can
opt-out, while in other cases consumers need to explicitly ask (opt-in) for
switching to a green service. This research examines the effectiveness of choice
architecture and particularly the different default policies-i.e., the alternative
the consumer receives if he/she does not explicitly request otherwise-in engaging
consumer green behavior. In four experiments, we show that the opt-out default
policy is more effective than the opt-in, because it increases anticipated guilt.
This effect is stronger for consumers who are less conscious for the environment
(Study 1).We also show that a forced choice policy, in which the consumer is not
automatically assigned to any condition and is forced to choose between the green
and the non-green service option, is more effective than the opt-in policy and not
significantly more effective than the opt-out policy (Study 2). Finally, we show
that the role of defaults is weakened (enhanced), if a negotiated (reciprocal)
cooperation strategy is used (Study 3). The article contributes to the literature
of defaults and provides managerial and public policy implications for the design
of green services.
We use an event study to capture the investor reaction to the first Newsweek Green
Rankings in September 2009, a notable, multi-dimensional recent development in the
rating of corporate environmental CSR performance. Drawing on stakeholder theory,
we develop hypotheses about (a) market investor reaction to the disclosure of new,
relevant corporate environmental performance in both the short and longer (6-12-
month) term, (b) whether market investors' reaction reflects industry context, and
(c) whether firm-level contextual variables representing firm size, and market
legitimacy significantly impacts the investor reaction. We find that, for the
sample of the largest 500 US firms ranked by Newsweek, investors react positively
both to the raw and within-industry rankings of green performance in terms of both
short-term and longer-term (up to 12 months) returns. Moreover, the investor
reaction is significantly influenced by contextual variables such as firm size and
firm market legitimacy. Our results are compatible with the inference that rating
agencies like Newsweek serve a valuable information dissemination function such
that investors in better ranked firms anticipate larger future cash flows due to
more positive reactions from key stakeholders such as environmentally-conscious
customers, employees, NGOs, regulators, and thus reward these firms with stock
price increases. Finally, larger, more visible firms benefit more, while firms
which have more market legitimacy (represented by past financial performance)
benefit less. We believe these findings will be of considerable interest to
scholars of environmental corporate social responsibility.
This study focuses on the prediction of the engagement of small- and medium-sized
enterprises (SMEs) in environmental management practices, based on a random sample
of 689 SMEs. The study finds that several endogenous factors, including tangibility
of sector, firm size, innovative orientation, family influence and perceived
financial benefits from energy conservation, predict an SME's level of engagement
in selected environmental management practices. For family influence, this effect
is found only in interaction with the number of owners. In addition to empirical
research on SMEs' environmental behavior, this article draws on the ecological
modernization literature as well as the theory of planned behavior.
This paper evaluates the contribution of the energy industry (oil, gas and
electricity) to the Millennium Development Goals (MDGs) in three countries
(Argentina, Colombia and Mexico). To build this international benchmark, a tool was
built (the MDG-Scorecard), by drawing on theoretical frameworks and guides on how
businesses can contribute to the MDGs. Results show that companies are making
efforts to contribute to the environment, human rights, employment creation and
labour rights. However, their effort is close to nil for the Goals with the weakest
links with their core business. Findings also suggest that there is no coordinated
and consistent strategy to achieve the MDGs either intra-company or inter-
companies.
In this article, we contend that due to their size and emphasis upon addressing
external social concerns, the corporate relationship between social enterprises,
social awareness and action is more complex than whether or not these organisations
engage in corporate social responsibility (CSR). This includes organisations that
place less emphasis on CSR as well as other organisations that may be very
proficient in CSR initiatives, but are less successful in recording practices. In
this context, we identify a number of internal CSR markers that may be applied to
measuring the extent to which internal CSR practices are being observed. These
considerations may be contrasted with the evidence that community based CSR
activities is often well developed in private sector small to medium sized
enterprises (SMEs) (Observatory of European SMEs, 2002), a situation which may be
replicated in social enterprises especially those that have grown from micro-
enterprises embedded in local communities. We place particular emphasis upon the
implications for employee management. Underpinning our position is the
Aristotelian-informed capabilities approach, a theory of human development and
quality of life, developed by Sen (1992; 1999) and Nussbaum (1999) which has been
developed further, in an organisational context, (e.g., Cornelius, 2002); Cornelius
and Gagnon, 2004; Gagnon and Cornelius, 1999; Vogt, 2005. We contend that the
capabilities approach offers additional insights into CSR in social enterprises in
general and internal CSR activity in particular. Our article concludes with
proposals for future research initiatives and reflections upon social enterprise
development from a capabilities perspective.
We develop a structural model of credit risk in a network economy, where any firm
can lend to any other firm, so that each firm is subject to counterparty risk
either from direct borrowers or from remote firms in the network. This model takes
into account the role of each firm's cash management. We show that we can obtain a
semiclosed form formula for the price of debt and equity when cash accounts are
buffers to bankruptcy risk. As in other structural models, the strategic bankruptcy
decision of shareholders drives credit spreads, and differentiates debt from equity
Cash-flow risk also causes credit-risk interdependencies between firms. Our model
applies to the case where not only financial flows but also operations are
dependent across firms. We use queueing theory to obtain our semiclosed form
formulae in steady state. We perform a simplified implementation of our model to
the U.S. automotive industry, and show how we infer the impact on a supplier's
credit spreads of revenue changes in a manufacturer or even in a large car dealer.
We also obtain prices for first-to-default and second-to-default basket credit
default swaps.
In spite of its commercial importance and signs of clear concern in public policy
arenas, trade credit has not been subjected to systematic, extended analysis in the
business ethics literature, even where suppliers as a stakeholder group have been
considered. This paper makes the case for serious consideration of the ethics of
trade credit and explores the issues surrounding slow payment of debts. It
discusses trade debt as a kind of promise, but-noting that not all promises are
good ones-goes on to develop an analysis of the ethics of trade credit grounded in
an understanding of its fundamental purpose. Making a distinction between
"operating" trade credit and "financial" trade credit, the paper provides an
account of the maximum period for which it is appropriate for one company to delay
payment to another from which it has purchased goods or services. The concern of
commentators and policy makers that companies should not take too long to pay their
debts is affirmed, but the understanding of what timely payment means is
significantly finessed, with one conclusion being that, if debts have not already
been settled according to acceptable standard terms of trade, cash should pass
quickly back along the supply chain once the customer in the final product market
has paid. The analysis has implications not only for companies that take credit but
also for external parties that seek to rate companies or set regulations according
to speed of payment-an approach that is shown to be misleadingly simplistic, albeit
well intentioned. A corresponding important responsibility for suppliers, not to
extend excessive credit (and thus act as a quasi-bank), also follows from the
analysis developed. Having provided a novel analysis of an important business
problem, the paper then discusses some of the related practical issues and makes
suggestions for further research.
This study examines the relationship between pension fund ownership of companies
and corporate social performance using a unique database of more than 500 publicly
listed U. K. companies. The empirical analysis emphasizes the heterogeneous
character of pension fund holdings and the multidimensional nature of corporate
social performance. The results highlight that the characteristics of pension fund
management are significant drivers of preferences for social performance and that
employee-related aspects of social performance are preferred by pension funds.
This study examines overseas investing by U. S.-domiciled pension plans. The
authors explore whether U. S. pension plans invest based on corporate social
performance (CSP) in a core overseas market, the United Kingdom. As a guide to
social investing opportunities available to U. S. pension funds in the United
Kingdom, their investments are compared to U. K.-domiciled pension plan domestic
investments. U. S. labor union plan portfolios have a positive relationship with
workplace practices, and U. S. private plan portfolios, with CSP's community
dimension. U. S. state and foundation plan portfolios have no relationship with
CSP. Other than union plans, U. S. pension plans stress corporate financial
performance in their U. K. investments. U. K. union plan portfolios have a positive
relationship with workplace practices, and U. K. state, foundation, and private
plan portfolios with environment.
This study examines the extent to which corporate responsibility influences the
demand for shares by institutions. The study follows Bushee (Account Rev 73(3):305-
333, 1998) in categorising institutions as dedicated or transient. The demand for
shares is organised according to three factors: a long-term factor, corporate
responsibility; a short-term factor, market liquidity; and a time-independent
factor, portfolio theory. The rank and importance of the factors for the different
types of institutional investor are analysed. For one of two types of dedicated
institution, corporate responsibility is as important as portfolio theory in
influencing the demand for shares. For all dedicated institutions, corporate
responsibility influences the demand for shares more than market liquidity. For two
of the three types of transient institution, market liquidity is the most important
factor in share selection. For all transient institutions, the least important
factor is corporate responsibility. Findings suggest that corporate responsibility
positively and significantly influences the demand for shares by dedicated
institutions. The discussion considers the extent to which these trends are
constitutive of significant shifts in ethicality within the context of
institutional investment. Looking at this from within a highly institutionalised
Anglo market model, dedicated institutions' commitment to broader and longer-term
concerns could be interpreted as a small but significant step towards a more
axiologically informed ethical business practice. Such a form of engagement calls
for sensitive attention to a fuller range of features deemed to be relevant to
investment decisions, as opposed to more narrow reliance on legislation, codes of
practice and fiduciary principles.
Central to the United Nations Framework setting out the human rights
responsibilities of corporations proposed by John Ruggie is the principle that
corporations have a responsibility to respect human rights in their operations
whether or not doing so is required by law and whether or not human rights laws are
actively enforced. Ruggie proposes that corporations should respect this principle
in their strategic management and day-to-day operations for reasons of corporate
(enlightened) self-interest. This paper identifies this as a serious weakness and
argues that identifying the responsibility to respect human rights as an explicitly
ethical obligation to be respected for that reason would provide a much stronger
justificatory foundation for respecting the principle seen from a corporate
perspective, given that corporations are accountable to their shareholders for
their deployment of the firm's financial resources.
In recent years, issues of childhood obesity, unsafe toys, and child labor have
raised the question of corporate responsibilities to children. However, business
impacts on children are complex, multi-faceted, and frequently overlooked by senior
managers. This article reports on a systematic analysis of the reputational
landscape constructed by the media, corporations, and non-government organizations
around business responsibilities to children. A content analysis methodology is
applied to a sample of more than 350 relevant accounts during a 5-year period. We
identify seven core responsibilities that are then used to provide a framework for
enabling businesses to map their range of impacts on children. We set out
guidelines for how to identify and manage the firm's strategic responsibilities in
this arena, and identify thea constraints pound that corporations face in meeting
such responsibilities.
The growth of socially responsible investment (SRI) on public financial markets has
drawn considerable academic attention over the last decade. Discarding from the
previous literature, this article sets up to analyze the Private Equity channel,
which is shown to have the potentiality to foster sustainable practices in unlisted
companies. The fast integration of the environmental, social and governance issues
by mainstream Private Equity investors is unveiled and appears to have benefited
from the maturation of SRI on public financial markets and the impetus of large
conventional actors. Hypotheses on the characteristics and drivers of this movement
are proposed and tested on a unique database covering the French Private Equity
industry in 2011. Empirical findings support that Private Equity socially
responsible investing is characterized by investor engagement and strategically
driven by a need for new value creation sources, increased risk management and
differentiation. In particular, results show that independent funds, which need to
attract investors, are more likely than captive funds to develop socially
responsible practices. Evolution of the movement and future research paths are
proposed.
This article analyses whether benefits arising for human resource management from
environmental management activities drive environmental management system
implementation. Focusing on employee satisfaction and recruitment/retention, it
tests this for German manufacturing firms in 2001 and 2006 and incorporates a rare
longitudinal element into the analysis. It confirms positive associations of the
benefit levels for both variables with environmental management system
implementation on a large scale. Also it provides evidence that increasing levels
of environmental management system implementation result from higher economic
benefits in the human resource domain. In doing so the article supplies needed
quantitative evidence on important aspects of how sustainability relates to human
resource management.
Research summary: The efforts of multinational corporations to be socially
responsible do not always engender positive evaluations from overseas stakeholders.
Drawing on attribution theory, we argue that two heuristics guide stakeholders in
evaluating firms' social performance: foreignness and the valence of firms' social
responsibility. We provide evidence from a field study of secondary stakeholders
and an experimental study involving 129 non-governmental organizations. Consistent
with attribution theory, the liability of foreignness is minimized when firms
engage in "do-good" social responsibility (focused on proactive engagement creating
positive externalities) but is substantial when firms engage in "do-no-harm" social
responsibility (focused on attenuating negative externalities). In online
supporting information, Appendix S1, we demonstrate that these evaluations have
consequences for whether stakeholders subsequently cooperate, or sow conflict, with
firms. Managerial summary: There is no guarantee that efforts to be socially
responsible will improve multinational corporations' relations with overseas
stakeholders, such as customers, governments, and activists. In a field study and
an experiment, we unpack when foreign firms suffer from harsh stakeholder
evaluations. Foreign firms especially suffer from harsh evaluations when they
conduct "do-no-harm" CSR rather than "do-good" CSR. Stakeholders attribute the
motive for foreign firms' do-no-harm CSR to managerial interests and shareholder
pressures, perceiving a wedge between managers and owners (who may be unmotivated
to reduce the negative impacts of their business activities) and local stakeholders
(who bear the social costs). A practical implication is that foreign firms gain
more from highlighting do-good rather than do-(no)-harm CSR initiatives. Copyright
(C) 2015 John Wiley & Sons, Ltd.
We theoretically discuss and empirically show how CEO power based on environmental
expertise and formal influence over executives and directors, in the absence and
presence of shareholder activism, spurs firms toward greener strategies. Our
results support the idea that CEOs with informal power, grounded in expertise,
reduce corporate environmental impact and this relationship is amplified when the
CEO also enjoys formal power over the board of directors. Additionally, we found
that any source of CEO power, whether informal or formal, is a good catalyst for
transforming shareholder activism into corporate greening. However, in the absence
of such activism, only CEOs' informal environmental expert power acts as a
determinant of firm environmental performance.
Corporate governance scholars are increasingly interested in firms' social and
environmental performance. Empirical research in this area, however, has moved
forward in an uncoordinated fashion, producing fragmented and contradictory
results. Our paper seeks to address this situation by adopting a fact-based
research approach that comprehensively explores the link between corporate
governance and environmental performance. Specifically, we aim to understand how
the relationships between and among the firms' owners, managers, and boards of
directors influence environmental performance. We are particularly interested in
understanding the interactions among these three key sets of actors. In the end, we
offer some observations about governance practices and discuss the implications for
theory. Copyright (c) 2012 John Wiley & Sons, Ltd.
Despite the recognition of the importance of philosophy-based management in recent
Japanese management practices, there has been little effort to systematically
examine this topic from a normative view. With a sample of 152 electrical machinery
companies, this study attempts to identify the underlying value orientations
incorporated in the normative statement of corporate management philosophy and
furthermore examines the complex relationships between corporate value orientations
and various performance indexes. The article shows that although the adoption of a
corporate management philosophy does not contribute to corporate financial
performance directly, some value orientations might contribute to non-financial
performance and long-term performance potentials. Especially, CSR environmental
performance might be contributed by customer orientation and harmony; human
resource management performance is associated with partner orientation and harmony;
growth potential might be related with global orientation, entrepreneurship, and
honesty. Furthermore, the negative relationship between increase of sales effort
and CSR environmental performance also implies that it deserves careful
consideration and attention for a company to balance the interests of various
stakeholders.
This study integrates the resource dependence perspective and the stakeholder
perspective to analyze local Chinese suppliers' environment strategies in response
to environmental requirements of different types of customers. With a sample of
1,215 local Chinese manufacturing suppliers, we examine the impact of export
intensity and environmental requirements of multinational enterprises (MNEs) on
local Chinese suppliers' environment strategies. The results show that local
Chinese suppliers with high levels of export intensity are more likely to adopt
positive environment strategies to reduce environmental risks. In addition, local
Chinese suppliers respond actively to environmental requirements of MNE customers
but not to those of local customers. The linkage between MNE customers'
environmental requirements and local Chinese suppliers' environment strategies
remains significant, even after we control for the impact of export intensity.
Implications of the findings conclude the article.
Following the financial crisis and recent recession, the center of gravity of
global economic growth and competitiveness is shifting toward emerging economies.
As a leading and increasingly influential emerging economy, China is currently
attracting the attention of academics, practitioners, and policy makers. There has
been an increase in research interest in and publications on issues relating to
China within high-quality international academic journals. We therefore organized a
special issue conference in conjunction with the Journal of Business Ethics (JBE)
in Lhasa, Tibet, on May 19-20, 2014, on Business Ethics in Greater China: Past,
Present and Future. The papers for the special issue focused on the intersection of
ethics and finance, and fit within one of the three themes: environment and
sustainability, corporate social responsibility, and fraud. Within these themes,
issues of intellectual capital protection, gender equality, political connections,
regional development, investor protection, corporate stewardship, trust and
corruption, and corporate transparency each play a significant role. In this paper,
we survey these studies and the related literature to provide a comprehensive
coverage of business ethics and finance issues that affect China.
The study investigated the effects of three cultural variables - country of
employment, race/ethnicity and religion - on managerial views of profit and 15
other business priorities. In total, 203 responses were obtained (120 randomly and
83 by quota) from executives and managers belonging to either of two race/ethnic
groups (Caucasian and Chinese) and three religious denominations (Christian,
Buddhist and Malay Muslim) located in three different countries (Australia,
Singapore and Malaysia). Findings indicated that these three different cultural
variables affected (to varying degrees) the attitudes of managers towards profit
and other related business concerns. Managers working in Malaysia, the Malay
Muslims and Caucasians in particular, had the highest regard for profit whilst
those employed in Australia were found, on the whole, to be the most (socially)
considerate toward their employees, customers and environment. This study pointed
to the need for cultural ethics as a complementary function in business.
This research analyses the influence of the perception of Corporate Social
Responsibility (CSR image) on consumer-company identification (C-C identification).
This analysis involves an examination of the influence of CSR image on brand
identity characteristics which provide consumers with an instrument to satisfy
their self-definitional needs, thereby perceiving the brand as more attractive.
Also, the direct and mediated influences (through their effect on brand attitude),
of CSR-based C-C identification on purchase intention are analysed. The results
offer empirical evidence that CSR generates more C-C identification because it
improves brand prestige and distinctiveness; brand coherence is also a powerful
antecedent of brand attractiveness in the context of CSR communication. Finally,
CSR-based C-C identification is able to generate directly better attitude towards
the brand and greater purchase intention.
This article explains the rationale for study of the governance challenges of
corporate political activity. The topic is important, especially in light of the
U.S. Supreme Court's 2010 Citizens United decision, but understudied to date. The
authors review the literature bearing on this topic. The authors separate
consideration of the topic into macro-level and micro-level issues. The macro level
concerns the societal perspective. At this level, key research questions concern
whether corporate political activity be allowed, and how it should be regulated.
The micro level covers managerial and shareholder control over corporate political
activity. At this level, key research questions include concern whether the firm
should practice political activity and how to regulate practice through
professional self-regulation, ethical guidelines, and corporate governance systems
control. The remainder of this article contains focused summaries of the articles
selected for this Special Issue. Each article is introduced and evaluated against
the key research questions at the macro or micro levels of analysis.
This article examines the ethical implications of the growing integration of
consumption into the heart of the employment relationship. Human resource
management (HRM) practices increasingly draw upon the values and practices of
consumption, constructing employees as the 'consumers' of 'cafeteria-style'
benefits and development opportunities. However, at the same time employees are
expected to market themselves as items to be consumed on a corporate menu. In
relation to this simultaneous position of consumer/consumed, the employee is
expected to actively engage in the commodification of themselves, performing an
appropriate organizational identity as a necessary part of being a successful
employee. This article argues that the relationship between HRM and the
simultaneously consuming/consumed employee affects the conditions of possibility
for ethical relations within organizational life. It is argued that the underlying
'ethos' for the integration of consumption values into HRM practices encourages a
self-reflecting, self-absorbed subject, drawing upon a narrow view of
individualised autonomy and choice. Referring to Levinas' perspective that the
primary ethical relation is that of responsibility and openness to the Other, it is
concluded that these HRM practices affect the possibility for ethical being.
This study investigates how ownership concentration in European multinational firms
is associated with these firms' corporate social responsibility (CSR). We employ
factor analysis on responsibility data from EIRiS and use a regression analysis.
Using firm-level data for almost 700 European firms, we find that shareholder
concentration is significantly related to such policies. That is, more concentrated
ownership goes hand in hand with poorer CSR policies. In our analysis, we control
for size, leverage, profitability, industry, and country of origin. We use several
indicators for ownership concentration. We also find that with more concentrated
ownership, CSR of the firm gets worse. We suggest that especially with large
shareholders, CSR would need to be included in their performance assessment.
This article discusses moral issues raised by defined contribution retirement
plans, specifically 401(k) plans in the United States. The primary aim is to defend
the claim that the federal government ought to require 401(k) plans to include a
range of socially responsible investment (SRI) options. The analysis begins with
the minimal assumption that corporations engage in behavior that imposes morally
impermissible harms on others with sufficient regularity to warrant attention.
After motivating this assumption, I argue that individual investors typically share
in the responsibility for the harms imposed by corporations in which they invest,
and that they therefore have a moral obligation to incorporate considerations of
social responsibility into their investment decisions, when possible, to avoid
being complicit in morally impermissible corporate behavior. I further argue that
individuals are subject to substantial institutional and structural pressures that
create a powerful incentive to invest in 401(k) plans, even though such plans
typically lack any SRI options. To eliminate this pressure to commit indirect harm
in the process of saving for retirement, I recommend that the federal government
requires 401(k) plans to incorporate a range of SRI options, and I defend this
proposal from several possible objections.
This article reports the results of research aimed at developing and validating a
multi-item scale to measure consumers' agreement with three main justifications for
not engaging in socially responsible consumption (SRC) behaviours, namely the
'economic rationalist argument' founded on the idea that the costs of SRC are
greater than its benefits, the 'economic development reality argument' based on the
idea that ethical and moral aspirations are less important than the economic
development of countries, and the 'government dependency argument' grounded in the
premise that government inaction demonstrates the legal character and the banality
of unethical consumption behaviours. The scale items were generated on the basis of
a multi-country qualitative study of consumers (Eckhardt et al., 2006, 'Why Don't
Consumers Behave Ethically'. DVD Document, AGSM). The content validity of the scale
was assessed in the first study. The second study was a survey of 157 Canadian
adult consumers in which the three-dimensional scale and other scales measuring
relevant concepts were administered. The survey results showed that the 28-item
resulting scale is reliable and generally behaves as one would theoretically
expect. Implications for consumption ethics researchers and policy makers are
proposed.
We study relationships between shareholder proposal activism, managerial response,
and corporate social performance (CSP). We find that shareholder proposal activism
reduces CSP. We infer that rather than pressuring firms to improve CSP, activism
may engender diversion of resources away from CSP into political activities used by
managers to resist external pressures and retain discretion. We also find that
managers are more likely to settle proposals filed by 'salient' shareholders (i.e.,
those with power, legitimacy, and urgency). Settlement with salient shareholders,
however, also reduces CSP, suggesting that managers' responses are symbolic; i.e.,
they settle with salient shareholders to demonstrate conformance but continue to
resist making the substantive changes to core policies that may compromise their
discretion. Copyright (c) 2007 John Wiley & Sons, Ltd.
Prior work on the performance consequences of corporate diversification has treated
all powerful owners as seeking the same benefits from diversification (i.e, higher
profit rather than growth) and therefore limiting value appropriation by other
stakeholders such as employees and managers. In contrast, we distinguish between
domestic "relational" owners and foreign "transactional" owners in Japanese
corporations. Although transactional owners do indeed prioritize profitability when
diversifying, relational owners primarily seek growth rather than profits from
diversification. Furthermore, relational owners also allow managers and employees
to appropriate more of the rents arising from diversification than do transactional
owners.
Links between the reputation of organizations and their financial performance are
intuitively attractive to assume, but often difficult to demonstrate convincingly.
Gaps between employee and customer perceptions of corporate reputation have
traditionally been associated with poor performance. In the context of service
business and applying assimilation-contrast theory, we hypothesize that the nature
of such gaps will, in reality, have a differential effect on future revenue
depending on the size and valence of the gap. The effects of small gaps should be
assimilated by customers, but larger ones have a greater potential of creating a
contrast effect resulting in significant increases or decreases in subsequent
sales. In businesses where employees have a more positive view of the company
reputation than customers, we hypothesize a growth in future sales, and where they
have a relatively more negative view, a decline. We test the effects of what we
label as reputation gaps in 56 business units drawn from nine service organizations
and confirm our hypotheses. Among the implications of our findings are that
managing reputation by elevating employee perceptions of a company's reputation
above those perceived by its customers holds the potential to enhance future sales.
Copyright (C) 2009 John Wiley & Sons, Ltd.
This article integrates theory and concepts from the business and society, business
ethics, and labor relations literatures to offer a conceptualization of labor union
social responsibility that includes activities geared toward three primary
objectives: economic equity, workplace democracy, and social justice. Economic,
workplace, and social labor union stakeholders are identified, likely issues are
highlighted, and the implications of labor union social responsibility for labor
union strategy are discussed. It is noted that, given the breadth of labor unions
in a global work environment, labor union social responsibility also has
implications for NGOs, corporations, and how corporate social responsibility is
viewed going forward. This article concludes by noting that the nexus of labor
relations and corporate social responsibility warrants more attention in management
and labor relations literatures.
Social responsibility is addressed to corporations, but can also be applied to
other powerful organizations. This study tests the impact of labor union social
responsibility on key measures of labor union attachment. After developing a scale
of labor union social responsibility, craft union apprentice workers were surveyed
and their responses analyzed with structural equation modeling. Labor union social
responsibility was directly and positively related to union commitment and job
satisfaction. Union commitment and job satisfaction fully mediated the negative
relationship between labor union social responsibility and propensity to withdraw
from the union, and the positive relationship between labor union social
responsibility and union participation. The results suggest that labor union social
responsibility can enhance union attachment and inform union strategy.
The Po de A double dagger A(0)car Group was a pioneer in food retailing in Brazil
and is now one of the largest Brazilian retailers. Working in a pulverized market
characterized by small players, the Group produces US$ 20.4 billion in gross sales.
It has become the largest employer in the country with 140,000 of employees working
in over 1,800 stores, in 18 of the 25 states in Brazil, and covering a sales area
of over 2,800,000 m(2) (Grupo Po de A double dagger A(0)car, GPA Consolidado.
Resultados 3T12. So Paulo, Brazil, p. 2. November, 1, 2012). The objective of this
article is to analyze a business inclusion strategy of the Po de A double dagger
A(0)car Group. The Caras do Brasil Program (Faces of Brazil) was created in 2002,
by the Group directors as an effective initiative, aiming to develop a new sales
channel for sustainably handling products. The Program opens opportunities for
small suppliers, not only in the Po de A double dagger A(0)car chain but also among
competitors and in other industries. The Program established some requirements for
the producer to become a supplier, aiming to adapt the products to a regular
commercialization with the Group. In this way, small producers can now rely on a
complete business process, while beforehand the goods were sold mostly through
small channels.
The rise of Internet-mediated communication poses possibilities and challenges for
organisation studies, also in the area of corporate social responsibility (CSR) and
business and society interactions. Although social media are attracting more and
more attention in this domain, websites also remain an important channel for CSR
debate. In this paper, we present an explorative study of activist groups' online
presence via their websites and propose a combination of methods to study both the
structural positioning of websites (hyperlink network analysis) and the meanings in
these websites (semantic co-word maps). We focus on the websites of SOMO, the
Centre for Research on Multinational Corporations, and of one of its campaigns,
makeITfair, concerned with labour conditions in the IT industry worldwide. This
allows us to show how this combination of methods can further our understanding of
the way activist networks' online presence can provide insights into the tactics
these networks apply to achieve institutional change on CSR issues. Meanwhile, we
identify some notable differences between styles and word use in the two
organisations' websites. We conclude with a set of suggestions for future research.
The purpose of socially responsible investing (SRI) is to: (1) allow investors to
reflect their personal values and ethics in their choices, and (2) encourage
companies to improve their ethical, social, and environmental performance. In order
to achieve these ends, the means SRI fund managers employ include the use of
negative screening, or the exclusion of companies involved in "sinful" industries.
We argue that there are problems with this methodology, both at a theoretical and
at a practical level. As a consequence, current SRI offerings cannot accurately
reflect the values and ethical beliefs they propose to represent. Moreover, the use
of a priori criteria is potentially misleading, as we show by discussing examples
of glue and wine making. Applying this flawed approach SRI funds fail to influence
the direction of the firms they deem most in need of redirecting. Rather than
engaging in the simple a priori assumption that some industries are "saints" while
others are "sinners" (Freeman, 2007) we suggest a new framework upon which the SRI
screening methodology could be grounded. Embracing the philosophical tradition of
American pragmatism, we suggest that SRI methodology could be improved by engaging
in an analysis based on (1) the actual impacts of the company's products and
services, (2) the company's relationships with its specific, real stakeholders, and
(3) the contingent environment (social, economic, political, legal, and cultural)
in which the business operates.
This article uses the Swedish example to illustrate how corporate social
responsibility (CSR) is understood and interpreted when it enters a welfare state
context where social issues have traditionally been the domains of the state and of
politicians. Among the implications one finds a relative scepticism of
traditionally strong actors on the labour market, such as the state, trade unions
and employers. This relative scepticism is primarily explained by an enduring idea
of the role of business in society which stands in contradistinction to the idea
expressed in the corporate centred idea of CSR. Still, CSR gains a foothold in the
welfare state context, mainly because of the flexibility of the concept which
allows for 'escape routes' - an understanding of CSR that focusses on issues at
arm's length from the traditional welfare context. CSR also benefits from being
codified in soft regulation, thereby becoming a legitimate supernational point of
reference for all relevant actors. The possibility of developing new global arenas
for espousing ideals partly in conflict with traditional ones also explains why CSR
has become an established concept. In Sweden, such arenas have been created through
the activities of multinational corporations, NGOs, investors, the media,
consultants and other actors.
Several studies have focused on the effects of corporate social responsibility
(CSR) fit on external stakeholders' evaluations of CSR activities, attitudes
towards companies or brands, and behaviors. The results so far have been
contradictory. A possible reason may be that the concept of CSR fit is more
complicated than previously assumed. Researchers suggest that there may be
different types of CSR fit, but so far no empirical research has focused on a
typology of CSR fit. This study fills this gap, describing a qualitative content
analysis of the congruence between six organizations and their various CSR
activities. Ten annual reports and CSR reports were analyzed, and 102 specific CSR
activities were identified. The results show that two levels of fit must be
distinguished: based on the means for and the intended ends of the CSR activity.
Furthermore, six different types of fit were found, focusing on (1) products and
services, (2) production processes, (3) environmental impact, (4) employees, (5)
suppliers, and (6) geographical location. Considering the above variety of fit
possibilities, the findings emphasize the role of CSR communication as a means of
creating fit perceptions.
Little is known about employees' responses to their organizations' initiatives in
corporate social responsibility (CSR). Academics have already identified a few
outcomes regarding CSR's impact on employees' attitudes and behaviours; however,
studies explaining the underlying mechanisms that drive employees' favourable
responses to CSR remain largely unexplored. Based on organizational identification
(OI) theory, this study surveyed 155 employees of a petrochemical organization to
better elucidate why, how and under which circumstances employees might positively
respond to organizations' CSR initiatives in the controversial oil industry sector.
Findings first support that perceived CSR (i.e. environmental CSR) positively
relates to employees' OI which is known as an important antecedent of employees'
outcomes (Riketta, J Vocat Behavior, 66(2): 358, 2005). Furthermore, results
highlighted that the relationship between perceived CSR and employees' OI is
mediated by organizational trust. Finally, this study also revealed that some
contingency factors such as employees' attributions of self-centred motives to
their organization's investment in environmental issues can moderate the
relationship between perceived CSR and organizational trust. Based on these
findings, it is argued that CSR initiatives can support organizations' efforts to
maintain a strong relationship with their employees, and gain their support even in
a controversial industry sector.
Despite the increasing attention to corporate social responsibility (CSR) in the
management literature, little is known about the mechanisms and boundary conditions
explaining employees' responses to CSR. Drawing on social identity and cue
consistency theory, we develop a mediated moderation model that explains how and
under which conditions perceived CSR affects employees' organizational
identification. We test the model by carrying out a three-wave longitudinal study
on employees of an international utility company. The findings indicate that
perceived CSR interacts with overall justice to predict organizational
identification through the successive mediation of perceived external prestige and
organizational pride. The study clarifies and advances some of the theoretical
foundations surrounding the micro-level approach of CSR and has key implications
for management research and practice.
Considerable research evidence has accumulated indicating that there is an
increased likelihood for illness and injury among employees working in long-hour
schedules and schedules involving unconventional shift work (e.g., night and
evening shifts). In addition, studies show that fatigue-related errors made by
employees working in these kind of demanding schedules can have serious and adverse
repercussions for public safety. As the result of these concerns, new protective
legislation is being advocated in the United States, for instance, to restrict the
hours of work among nurses and other health-care professionals. This article
reviews the history of concerns about long working hours and the cur-rent
scientific evidence regarding their effects on workers' health. The ethical
implications of unconventional shift work and long work-hour schedules are
considered. Relevant ethical considerations involve mandatory or unpaid overtime
and the possibility of employer coercion, the political basis for government
regulation of working hours, potential limits on voluntary assumption of risk,
societal benefits accruing from the equitable distribution of available working
hours, gender-based inequities related to working hours, and employer
responsibilities for protecting individuals who are not employees from the
spillover effects of demanding work schedules.
In this article, we explore the implicit conceptions of business ethics and social
responsibility of owners-managers of small and medium enterprises (SME) in
Cameroon. While using a hermeneutical approach, our main objective is to clarify
how Sub-Saharan African business people themselves understand and define corporate
responsibility in their particular economic and political environment. Our aim is
not to deliver an empirical study of business practices and management behavior in
SMEs. We wish to discuss which responsibilities they themselves judge to be
relevant and which can legitimately be attributed to them by third parties.
Secondly, we relate our findings to other empirical work on SMEs, in Africa and
elsewhere. It is shown that there are similarities with the way in which SMEs in
Europe interpret their responsibility, but also striking differences. Further, we
relate our findings to some theoretical controversies around corporate social
responsibility (CSR) in SMEs, to questions about evaluation tools for CSR in the
SME context, and to the role of CSR with respect to poverty alleviation in
developing countries.
The response of consumers to a firm's ethical behavior and the underlying factors
influencing/forming each consumer's response outcome is analyzed in this article
based on information obtained through interviews. The results indicate that, in the
Chinese context, the responding outcome can be boiled down to five types, namely,
resistance, questioning, indifference, praise, and support. Additionally,
consumers' responses were mainly influenced by the specific consumer's ethical
consciousness, ethical cognitive effort, perception of ethical justice, motivation
judgment, institutional rationality, and corporate social responsibility-corporate
ability (CSR-CA) belief. Based on these results, a generalized framework of
consumer's ethical responses is developed which provides a number of insightful
suggestions upon how to motivate a consumer's support of a firm's ethical behavior
and to transfer this kind of support into truly positive purchasing behavior.
In order to explore the mechanism of consumer responses to corporate social
responsibility (CSR), this paper constructs a research framework including CSR,
consumer-company identification (CCI), consumer responses, and fit, and tests the
framework using a scene-questionnaire survey. Empirical results demonstrate that
CSR not only has positive influence on consumer purchase intention, recommend
intention, and loyalty directly, but also has indirect positive influence on
consumer purchase intention and recommend intention through CCI. The influencing
process of CSR on CCI is moderated by fit and the moderating direction is different
owing to product types. For the products whose association preference is positive,
fit can positively moderate the relationship between CSR and CCI, while for
products whose association preference is negative, the moderating role will be
negative.
Within stakeholder literature, much attention has been given to which stakeholders
"really count." This article strives to explain why organizational theorists should
abandon the pursuit of "Who and What Really Counts" to challenge the assumption of
a managerial perspective that defines stakeholder legitimacy. Reflecting on the
paucity of employee rights and protections in marginalized work environments, I
argue that as organizational researchers, we must recognize and take responsibility
for the impact of our research models and visions. By confronting and rethinking
the foundational assumptions of stakeholder theory, business and society scholars
can identify and pursue research questions that more effectively address
contemporary social challenges.
Globalization has increased the economic power of the multinational corporation
(MNC), engendering calls for greater corporate social responsibility (CSR) from
these companies. However, the current mechanisms of global governance are
inadequate to codify and enforce recognized CSR standards. One method by which
companies can impact positively on global governance is through the mechanism of
Global Public Policy Networks (GPPN). These networks build on the individual
strength of MNCs, domestic governments, and non-governmental organizations to
create expected standards of behaviour in such areas as labour rights,
environmental standards, and working conditions. This article models GPPN in the
issue area of CSR. The potential benefits of GPPN include better overall
coordination among industry and government in establishing what social expectations
the modern MNC will be expected to fill.
This research investigates the influence that consumers' perceptions of retail
business ethics have on their responses (trust and loyalty) when retailers either
create social discount spaces (integrated or collaborative) or do not. Using
scenarios to imply these social practices and structural equation modeling to test
the hypotheses among a sample of 689 respondents, the authors find that consumers'
perceptions of retail business ethics have positive effects on consumer loyalty,
both directly and through consumer trust, as well as positive, strong influences on
the retailer's corporate social responsibility and corporate reputation.
Furthermore, consumers' perceptions of retail business ethics exert a stronger
effect on consumer trust in integrated social discount spaces, though social
discount practices do not affect the link between such perceptions and loyalty.
Compared with when the retailer does not offer discount space, collaborative and
integrated social discount spaces have weaker effects on trust and loyalty to the
retailer. These findings have several notable theoretical and practical
implications
Drawing on constructionist theory, this study examines how the media portrayed five
public reporting events initiated by the Fair Labor Association (FLA), considering
whether the coverage encourages or discourages companies from undertaking a
reporting initiative as part of their ethical management. Media coverage was
limited but generally favorable across all five events. Coverage frequently
included claims made by FLA spokespersons and provided basic facts about the
organization and its activities. Extensive detail about labor violations found by
monitors was often included. Additional media coverage centered around themes of
public reporting and transparency, an assessment of the FLA's work, brand
accountability and responsibility of corporations with regard to working conditions
and labor standards, and specifics about the factory monitoring and partnering with
factories and NGOs that is necessary to achieve change. Counter-claims brought
question to the FLA's efforts. Explanations about why the social condition exists
were fairly limited, and thus, provided little insight into how the problems might
be resolved. We discuss managerial implications regarding public reporting
initiatives and media coverage, particularly regarding the countering effects of
positive coverage and diminishing news stories.
The present investigation explored how emotional display rules at work differed as
a function of discrete emotions and specific work targets. Display rules for the
positive emotion of happiness were most likely to involve expressing the emotion as
felt or expressing it with less intensity than is felt. Display rules for the
negative emotions of sadness and anger were equally likely to involve showing
nothing of the emotion or showing the emotion with less intensity that? is felt. In
contrast, display rules for fear, disgust, and contempt were most likely to involve
showing nothing of the emotions. Furthermore, display rules differed across
organizational targets, with the most control over emotional displays occurring for
customer targets and the least control occurring for coworker targets. In sum,
emotional display rules at work appear to be much more complex and nuanced than has
been shown in previous organizational research.
Although organizations appear to learn from obvious failures, we argue that it is
harder for them to learn from "near-misses"-events in which chance played a role in
averting failure. In this paper, we formalize the concept of near-misses and
hypothesize that organizations and managers fail to learn from near-misses because
they evaluate such events as successes and thus feel safer about the situation. We
distinguish perceived ("felt") risk from calculated statistical risk and propose
that lower levels of perceived risk encourage people with near-miss information to
make riskier subsequent decisions compared to people without near-miss information.
In our first study, we confirm the tendency to evaluate near-misses as successes by
having participants rate a project manager whose decisions result in either (a)
mission success, (b) near-miss, or (c) failure. Participants (both students and
NASA employees and contractors) give similar ratings to managers whose decisions
produced near-misses and to managers whose decisions resulted in successes, and
both ratings are significantly different from ratings of managers who experienced
failures. We suggest that the failure to hold managers accountable for near-misses
is a foregone learning opportunity for both the manager and the organization. In
our second set of studies, we confirm that near-miss information leads people to
choose a riskier alternative because of a lower perceived risk following near-miss
events. We explore several alternative explanations for these findings, including
the role of Bayesian updating in processing near-miss data. Ultimately, the
analysis suggests that managers and organizations are reducing their perception of
the risk, although not necessarily updating (lowering) the statistical probability
of the failure event. We speculate that this divergence arises because perceived
risk is the product of associative processing, whereas statistical risk arises from
rule-based processing.
This study tests the hypothesis that lean manufacturing improves the social
performance of manufacturers in emerging markets. We analyze an intervention by
Nike, Inc., to promote the adoption of lean manufacturing in its apparel supply
chain across 11 developing countries. Using difference-in-differences estimates
from a panel of more than 300 factories, we find that lean adoption was associated
with a 15 percentage point reduction in noncompliance with labor standards that
primarily reflect factory wage and work hour practices. However, we find a null
effect on factory health and safety standards. This pattern is consistent with a
causal mechanism that links lean to improved social performance through changes in
labor relations, rather than improved management systems. These findings offer
evidence that capability-building interventions may reduce social harm in global
supply chains.
Corporations are spending a substantial and increasing amount of money on corporate
social responsibility (CSR). However, little is known about the effects on key
stakeholders of these activities. This study investigates if CSR activities have an
effect on employees' affective commitment (AC). Two models test to what extent
employees' CSR perception, involvement in decision processes, and demographic
variables are related to their AC relative to their perception of positive
organizational support (POS). The analysis is based on a sample of 512 employees
from 4 Scandinavian companies; 3 Norwegian and 1 Swedish, randomly selected from a
population of 6,710 mostly Norwegian and Swedish employees in those 2 countries.
The results indicate that CSR perception is a significant predictor of AC, although
how employees feel that the company cares about them (POS) has stronger explanatory
power on AC. Contrary to the few other studies addressing AC and CSR, gender was
not found to be a significant variable in the model.
Libertarianism and the shareholder model of corporate responsibility have long been
thought of as natural bedfellows. In a recent contribution to the Journal of
Business Ethics, Brian Schaefer goes so far as to suggest that a proponent of
shareholder theory cannot coherently and consistently embrace any moral position
other than philosophical libertarianism. The view that managers have a fiduciary
obligation to advance the interests of shareholders exclusively is depicted as
fundamentally incompatible with the acknowledgement of natural positive duties -
duties to aid others that have not been acquired by some prior commitment or
transaction. I argue that Schaefer is mistaken. Positive duties are incompatible
with the shareholder model only if we must contribute to their fulfilment in the
corporate context; only if we have some reason to think that it is not possible or
not permissible to discharge these obligations entirely in our private lives or
through our various other roles and capacities. But we have no good reason to
accept this. I argue that individuals are presumptively free to decide how and when
to discharge their positive duties, and that buying shares does not cause this
presumption to lapse. Hence a non-libertarian moral theory can be held without
incoherence by a proponent of the shareholder model.
A consensus has emerged in the burgeoning literature on corporate social
responsibility (CSR) that "virtuous" firms are often rewarded by the marketplace.
Unfortunately, the mechanisms through which those rewards materialize are not well
understood. Furthermore, it is difficult for managers and investors to know whether
a company is actually engaged in responsible behavior. Thus, many stakeholders rely
on institutional assessments of a firm's social practices to inform their own
judgments about that company's CSR reputation. In this article, we draw on
institutional theory and research on reputation and legitimacy to investigate the
relationship between institutional endorsements ( and repudiation) of CSR and firm
financial performance. Our empirical results indicate that institutional
intermediaries influence market assessments of a firm's social responsibility and
highlight the importance of the legitimacy-conferring function of expert bodies in
understanding the relationship between social and financial performance. Our
findings also illustrate the delicate interplay among different social performance
assessments, reputation, and measures of financial and operating performance such
that operating performance may serve as an advanced indicator of social performance
and one type of social performance assessment may temper market reactions to
another.
The role of responsible leadership-for each leader and as part of a leader's
collective actions-is essential to global competitive success (Doh and Stumpf,
Handbook on responsible leadership and governance in global business, 2005; Maak
and Pless, Responsible leadership, 2006a. Failures in leadership have stimulated
interest in understanding "responsible leadership'' by researchers and
practitioners. Research on responsible leadership draws on stakeholder theory, with
employees viewed as a primary stakeholder for the responsible organization
(Donaldson and Preston, Acad Manag Rev 20(1):65-91, 1995; Freeman, Strategic
management:a stakeholder approach, 1984; Mitchell et al., Acad Manag Rev 22:853-
886, 1997; Phillips and Freeman, Stakeholder theory and organizational ethics,
2003. We define and operationalize responsible leadership from the perspective of
employees and their views of the actions of their leaders. Drawing on a
comprehensive survey of 28 Indian and global organizations operating in India, we
report the results from 4,352 employees on the relationship between responsible
leadership, their pride in and satisfaction with their organization, and retention
1 year later. Strong associations were found among these variables suggesting that
responsible leadership-employee perceptions of the support they receive from
managers, the HR practices, and corporate socially responsible actions-may be an
overarching construct that connects them to the organization.
Two sets of self-transcendence values - universalism and benevolence - act as a
source of motivation for the promotion of the welfare of the other rather than the
self. This article sought to determine the exact nature of the interaction between
these sets of values and the consumption of fair trade products. In an earlier
study, universalism values were found to have a significant influence on fair trade
consumption whereas benevolence values did not, despite their shared goal and
values theory. Additionally, there was supporting evidence in the extant literature
that benevolence values should influence fair trade consumption behavior. This
study took a closer look at the individual values that make up the value categories
universalism and benevolence to better understand and describe this universalism-
benevolence distinction in fair trade consumption. It was established that perhaps
group membership has an influence on the decision to buy fair trade products.
Specifically, it seems that an overriding sense of responsibility to one's own
group - the in-group - prevents some consumers from identifying with, empathizing
with, and subsequently sharing resources with fair trade producers; members of out-
groups in far-flung corners of the globe. It appears that the universalism-
benevolence distinction in fair trade consumption might also be described as an in-
group-out-group distinction.
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.
The paper develops a critique of the prevailing essentialist and homogenizing
approach to business ethics that dominates the field with regard to Islam and
proposes a constructivist perspective to the study of religion. It demonstrates the
possibilities of this approach with the study of hizmet, a community business
network from Turkey that has established itself in over 130 countries over the last
20 years. The implications for business ethics from the study of this movement is
that the notion of corporate social responsibility needs to be adjusted in order to
accommodate the hizmet approach but that there are limits to this adjustment due to
gender and labor rights considerations. The paper sees itself as a contribution to
an alternative approach for Islamic business ethics very much in need of further
development and encourages further research along these lines.
This article investigates how the mean variance efficient frontier defined by
sovereign bonds of 20 developed countries is affected by the consideration of
socially responsible indicators for countries in investment decision-making. For a
global rating of socially responsible performances, we show that it is possible to
build portfolios with an increased average rating without significantly harming the
risk/return relationship. This result differs when considering sub-ratings related
to the environment, social concerns and public governance. The results are good
news for responsible investors and suggest that socially responsible portfolios of
sovereign bonds can be built without a significant loss of mean variance
efficiency.
This research builds on the complementary corporate social responsibility (CSR)
literatures in strategy and marketing to provide insight into the efficacy of CSR
as a challenger's competitive weapon against a market leader. Through an
investigation of a real-world CSR initiative, we show that the challenger can reap
superior business returns (i. e., more positive attitudinal and behavioral
outcomes) among consumers who had participated in its CSR initiative, relative to
those who were merely aware of the initiative. Specifically, participant consumers
demonstrate the desired attitudinal and behavioral changes in favor of the
challenger, regardless of their affective trust in the leader, whereas aware
consumers' reactions become less favorable as their affective trust in the leader
increases. Furthermore, participant consumers, but not aware ones, form a communal,
trust-based bond with the challenger.
This paper examines how employees react to their organizations' corporate social
responsibility (CSR) initiatives. Drawing upon research in internal marketing and
psychological contract theories, we argue that employees have multi-faceted job
needs (i.e., economic, developmental, and ideological needs) and that CSR programs
comprise an important means to fulfill developmental and ideological job needs.
Based on cluster analysis, we identify three heterogeneous employee segments,
Idealists, Enthusiasts, and Indifferents, who vary in their multi-faceted job needs
and, consequently, their demand for organizational CSR. We further find that an
organization's CSR programs generate favorable employee-related outcomes, such as
job satisfaction and reduction in turnover intention, by fulfilling employees'
ideological and developmental job needs. Finally, we find that CSR proximity
strengthens the positive impact of CSR on employee-related outcomes. This research
reveals significant employee heterogeneity in their demand for organizational CSR
and sheds new light on the underlying mechanisms linking CSR to employee-related
outcomes.
This study extends previous literature on the association between corporate social
responsibility and corporate financial behavior by investigating the influence of
corporate environmental performance on the cost of debt. Using a sample of Chinese
private-owned firms, we document strong and consistent evidence to show that
corporate environmental performance is significantly negatively associated with the
interest rate on debt-the proxy for the cost of debt. The findings suggest that
lenders applaud better environmental performance. Moreover, internal control
attenuates the negative association between corporate environmental performance and
the interest rate on debt, implying substitutive effects between corporate
environmental performance and internal control on the reduction of interest rates
on debt. The results are robust to various sensitivity tests and are still valid
after controlling for the potential endogeneity between corporate environmental
performance and the interest rate on debt.
Social movement theory has recently paid a lot of attention to the diversity of
strategies used by social movements to pressurize companies, and has spawned an
abundant literature on the combined perspective of social movement studies and
market organization studies. This paper adopts a rather different perspective,
drawing on market theories from the economic sociology of evaluation to assess a
specific strategy developed by a number of groups within the environmental social
movement, which relies on the market's capacity to mediate their claims. The
literature has widely considered why some environmental social movement
organizations (SMOs) choose to address consumers, even though it is not in their
tradition to do so and even though their objective is not directly related to
consumption issues. I seek to contribute to this debate by analysing the how'
rather than the why', by highlighting a specific social movement strategy which is
mediated by market mechanisms. The paper provides an in-depth analysis of a
strategy consisting of attempts to change the most prevalent valuation criteria
within the market by introducing principles of worth that rely on products'
environmental performance. This involves activist organizations suggesting new
product valuation criteria, and then seeking to convince firms that consumers'
preferences are changing. Their assumption is that firms will see new business
opportunities, which will prompt them to adopt more eco-friendly practices. This
market mediation strategy is designed to encourage firms to shift towards more eco-
friendly supply practices, by creating business opportunities for them. It shows
how SMOs, in order to directly shape consumers' preferences, urge them to introduce
eco-friendly principles of worth into their valuation of products by providing them
with market devices to help in their purchasing choices. By applying these
strategies, SMOs seek to shape the market and create business opportunities for
firms. Their intention is to make companies see the value of changing some of their
practices by introducing new eco-friendly features in their products, because
consumers have been convinced by SMOs of the value of such features. SMOs must then
pursue two important objectives: one is to shape consumers' preferences for that
kind of valuation category on the market by convincing them of their
responsibilities and their role as agents of change; and the other is to convince
companies that a real shift in consumers' preferences is taking place in the
market, so that they see it as an interesting opportunity to benefit from the SMOs'
shaping of the market.
We investigate the effect of corporate sustainability on organizational processes
and performance. Using a matched sample of 180 U. S. companies, we find that
corporations that voluntarily adopted sustainability policies by 1993-termed as
high sustainability companies-exhibit by 2009 distinct organizational processes
compared to a matched sample of companies that adopted almost none of these
policies-termed as low sustainability companies. The boards of directors of high
sustainability companies are more likely to be formally responsible for
sustainability, and top executive compensation incentives are more likely to be a
function of sustainability metrics. High sustainability companies are more likely
to have established processes for stakeholder engagement, to be more long-term
oriented, and to exhibit higher measurement and disclosure of nonfinancial
information. Finally, high sustainability companies significantly outperform their
counterparts over the long term, both in terms of stock market and accounting
performance.
Research summary: We show that frictions in labor and capital markets can be a
source of competitive advantage for affiliates of corporate groups over stand-alone
firms in environments where benefits from internal markets' flexibility are high.
We argue that the advantage of flexibility in changing labor inputs is related to
how difficult it is to change capital inputs. We predict that if substituting labor
with capital is difficult, the group advantage of flexibly changing labor would be
stronger in countries with high levels of financial development. Consistent with
this prediction, we find a stronger competitive advantage for group affiliates in
countries with rigid labor markets but flexible capital markets. In these
environments, group affiliates are more prevalent and outperform stand-alone firms
in terms of growth and profitability. Managerial summary: This research shows that
the capacity to redeploy workers across internal units of the firm can be a source
of competitive advantage in countries that impose strict employment protection
laws. We show that the strategic advantage of labor flexibility is affected by how
difficult it is to change capital inputs and that labor flexibility is a stronger
source of competitive advantage in countries where developed financial markets
allow for more flexible capital adjustment. In these settings, strategies designed
to lower costs of internal mobility (e.g., locations of greater geographic
concentration between units and in regions with less competitive external markets),
development of corporate culture supportive of frequent change, and personnel
development through internal rotation can result in substantial financial payoffs.
Copyright (C) 2015 John Wiley & Sons, Ltd.
Does private regulation of workers' rights in global value chains improve working
conditions on the factory floor? Drawing on one of the first systematic
longitudinal studies of supplier compliance with multinational corporation (MNC)
codes of conduct, this paper finds-in contrast to previous research-substantial
improvements over time. While in 2004, the four examined Chinese toy suppliers
violated most of the evaluated code of conduct criteria and consciously decoupled
the code of conduct policy from actual practices, by 2009 they had recoupled policy
and practice and complied with nearly all examined criteria (except working hours).
The paper contributes to the private regulation literature by challenging previous
research claims, identifying factors that could make private regulation effective,
and outlining a research method for empirically studying the effects of codes of
conduct over time. The paper also contributes to new institutional theory by
discussing how recoupling could be influenced by two factors not identified in
previous research: (i) trusting relationships between the organization and the
stakeholder exerting pressure and (ii) factors unrelated to main external pressures
leading to "accidental" recoupling.
To address substandard working conditions in global value chains, companies have
adopted private regulatory systems governing worker rights. Scholars agree that
without onsite factory audits, this private regulation has limited impact at the
point of production. Companies, however, audit only a subset of their suppliers,
severely restricting their private regulatory attempts. Despite the significance of
the placement of suppliers inside or outside firms' "responsibility boundaries" and
despite scholars' having called for more research into how firms prioritize what
suppliers to audit, few, if any, systematic studies have examined the topic. This
is problematic, as the placement of firms' responsibility boundaries determines
what suppliers and workers are included in firms' private regulatory attempts.
Based on a study of 12 Swedish firms and the theory of moral disengagement, this
paper starts to fill this research gap by exploring how firms' responsibility
boundaries are placed. The paper illustrates how firms' responsibility boundary
placement is best described as a patchwork with firms defining and delimiting their
responsibilities differently. The paper also demonstrates that three supplier types
(i.e., the worst, morally justified, and immediate suppliers) are particularly
likely to be placed inside firms' responsibility boundaries, while a fourth type
(i.e., disregarded suppliers) is likely be placed outside.
Codes of conduct are the main tools to privately regulate worker rights in global
value chains. Scholars have shown that while codes may improve outcome standards
(such as occupational health and safety), they have had limited impact on process
rights (such as freedom of association and collective bargaining). Scholars have,
though, only provided vague or general explanations for this empirical finding. We
address this shortcoming by providing a holistic and detailed explanation, and
argue that codes, in their current form, have limited impact on trade union rights
due to (i) buyers paying lip service to trade union rights, (ii) workers being
treated as passive objects of regulation in codes of conduct, (iii) auditing being
unable to detect and remediate violations of trade union rights, (iv) codes
emphasizing parallel means of organizing, (v) suppliers having limited incentives
for compliance, and (vi) codes being unable to open up space for union organizing
when leveraged in grassroots struggles. Our arguments suggest that there is no
quick fix for codes' limited impact on trade union rights, and that codes, in their
current form, have limited potential to improve trade union rights. We conclude by
discussing ways in which codes of conduct, and private regulation of worker rights
more generally, could be transformed to more effectively address trade union
rights.
Despite the growing public awareness of social sustainability issues, little is
known about what drives firms to emphasize social criteria in their supplier
management practices and what the precise benefits of such efforts are. This is
especially true for relationships with international suppliers from the world's
emerging economies in Asia, Latin America, and Eastern Europe. Building on
stakeholder theory, we address the issue by examining how pressures from customers,
the government, and employees as primary constituencies of the firm determine the
extent to which firms consider social aspects in the selection of emerging economy
suppliers. Further, we analyze how such socially sustainable supplier selection
relates to the capabilities of the firm's suppliers, its market reputation, and the
learning in its supply management organization. We test the developed research
framework empirically using data from 244 U.S. and German corporations. Our
findings, consistent with our hypothesized model, suggest that middle-level supply
managers as internal stakeholders play a major driving role for firms' socially
sustainable supplier selection, and that strong positive links exist between that
selection and the investigated outcomes.
Drawing on transaction cost theories and the resource-based view of a firm, we
posit that the value of corporate social responsibility (CSR) initiatives is
greater in countries where an absence of market-supporting institutions increases
transaction costs and limits access to resources. Using a large sample of 11,672
firm year observations representing 2445 unique firms from 53 countries during
2003-2010 and controlling for firm-level unobservable heterogeneity, we find
supportive evidence that CSR is more positively related to firm value in countries
with weaker market institutions. We also provide evidence on the channels through
which CSR initiatives reduce transaction costs. We find that CSR is associated with
improved access to financing in countries with weaker equity and credit markets,
greater investment and lower default risk in countries with more limited business
freedom, and longer trade credit period and higher future sales growth in countries
with weaker legal institutions. Our findings provide new insights on non-market
mechanisms such as CSR through which firms can compensate for institutional voids.
This empirical study investigates the effects of nine ethical climate types (self-
interest, company profit, efficiency, friendship, team interest, social
responsibility, personal morality, company rules and procedures, and lastly laws
and professional codes) on employee work satisfaction. The ethical climate typology
developed by Victor and Cullen (in W. C. Frederick (ed.) Research in Corporate
Social Performance and Policy, 1987; Administrative Science Quarterly 33, 101-125,
1988) is tested on a sample of staff and managers from 62 different
telecommunication firms in Turkey. The results obtained from the 1174 usable
questionnaires confirm the existence of nine different ethical climate types
observed in western cultures in the present sample context, which is a developing
Muslim country. Regarding the effects of ethical climatic factors on employee work
satisfaction, self-interest climate type appears to negatively influence work
satisfaction, whereas team interest, social responsibility and law and professional
codes climate types are found to have positive impacts. Managerial and further
research implications of the findings are discussed.
This study explores the discursive positioning of managers involved in inter-
organizational relationships (IORs) within industrial supply chains. In closely
examining a series of interviews, we find a number of interpretive repertoires of
boundary construction used in IOR managers' identity discourse. Our analysis of
these repertoires suggests that, although the development of IORs apparently
signals the emergence of 'widening circles of identification', distinction drawing
and boundary setting is as much a part of managers' IOR talk as boundary
transcendence. IOR managers can thus be seen as 'boundary bricoleurs' who
discursively mark different self/other boundaries that varyingly position
themselves, and their colleagues, competitors, customers and suppliers, as 'inside'
or 'outside' the organization, the market, the relationship or their field of
expertise. In this tensile positioning, they forestall closure on their identity by
constantly shifting identifications, sometimes within the same stretch of talk.
Oscillating between an inclusive and an exclusive 'us', and thus articulating
embracing yet distinctive identities vis-a-vis other network actors, enables IOR
managers to navigate through their complex and dynamic inter-organizational field,
maintaining multiple inter-firm relationships while at the same time preserving
their own organizational and professional status within these relationships.
This article explores the ways in which employers' organizational networks, as
shaped by the emergence of the contract state and related changes in the legal
environment, affect employment practices. The classic analysis of the ways in which
the legal environment benefits elites has successfully been applied to large
organizations. Here, from a microsociological perspective, the authors researched
how within an ambivalent legal context small and medium size cleaning companies
interact with members of their organizational network. Semistructured interviews
with cleaning subcontractors illustrate a specific type of standardization process
by which the Finance Ministry's administrative guidelines encourage cleaning
companies to ignore workers' rights and develop illegal employment practices which
are then transferred from contracts with state agencies to contracts with private
firms purchasing services. The possibility to interpret this process as a form of
state power is discussed.
Corporate codes of conduct are a practical corporate social responsibility (CSR)
instrument commonly used to govern employee behavior and establish a socially
responsible organizational culture. The effectiveness of these codes has been
widely discussed on theoretical grounds and empirically tested in numerous previous
reports that directly compare companies with and without codes of conduct.
Empirical research has yielded inconsistent results that may be explained by
multiple ancillary factors, including the quality of code content and
implementation, which are excluded from analyses based solely on the presence or
absence of codes. This study investigated the importance of code content in
determining code effectiveness by examining the relationship between code of
conduct quality and ethical performance. Companies maintaining high quality codes
of conduct were significantly more represented among top CSR ranking systems for
corporate citizenship, sustainability, ethical behavior, and public perception.
Further, a significant relationship was observed between code quality and CSR
performance, across a full range of ethical rankings. These findings suggest code
quality may play a crucial role in the effectiveness of codes of conduct and their
ability to transform organizational cultures. Future research efforts should
transcend traditional comparisons based on the presence or absence of ethical codes
and begin to examine the essential factors leading to the effective establishment
of CSR policies and sustainable business practices in corporate culture.
This study uses data from the National Basketball Association to explore
organizational mechanisms that affect the division of firm surplus in human-
capital-intensive activity. It builds on the idea that reciprocal interdependence
among team members creates the potential for complementarity. Complementarity, in
turn, translates into higher firm surplus. The division of this surplus is subject
to bargaining between the firm owner and labor. We argue that when complementarity
increases, the firm owner's share of surplus will grow if interdependence among
team members is symmetric. Furthermore, we identify three levers that make
complementarity amenable to managerial design: the nature of interaction among team
members, the relative dominance of team members, and the composition of a team. We
find that greater interaction among team members and higher recruitment of team-
oriented individuals are associated with increased complementarity, whereas
dominant team members are associated with reduced complementarity. The study
contributes to the literature on organization design by extending its implications
to the division of surplus in human-capital-intensive activity.
Recent perspectives on corporate social responsibility (CSR) have called for
increased research on how CSR affects individuals. Research is needed to examine
whether individual differences affect the relationship between CSR and individual
reactions to CSR. In response, this experimental study examined how perceptions of
corporate citizenship influence job applicant attraction and work role definitions.
Personal values and education concerning CSR are considered as interactive factors
affecting the influence of perceptions of corporate citizenship. Results indicate
that perceived corporate citizenship had a greater impact on job applicant
attraction for those individuals who received prior education regarding CSR and for
those who were higher in other-regarding value orientation. Furthermore, perceived
corporate citizenship had a positive impact on the extent to which participants
defined CSR as a personal work role responsibility. The authors also discuss the
practical implications of these results for job applicant attraction and employee
socialization.
In this study, we explore the role of Chief Executive Officers' (CEOs') incentives,
split between monetary (based on both bonus compensation and changes in the value
of the CEO's portfolio of stocks and options) and non-monetary (career concerns,
incoming/departing CEOs, and power and entrenchment), in relation to corporate
social responsibility (CSR). We base our analysis on a sample of 597 US firms over
the period 2005-2009. We find that both monetary and non-monetary incentives have
an effect on CSR decisions. Specifically, monetary incentives designed to align the
CEO's and shareholders' interests have a negative effect on CSR and non-monetary
incentives have a positive effect on CSR. The study has important implications for
the design of executive remuneration (compensation) plans, as we show that there
are many levers that can affect the CEO's decisions with regard to CSR. Our
evidence also confirms the prominent role of the CEO in relation to CSR decisions,
while also recognizing the complexity of factors affecting CSR. Finally, we propose
a research design that takes into account endogeneity issues arising when examining
compensation variables.
Research summary: In this article, we study how a firm's stakeholder orientation
affects the performance of its corporate acquisitions. We depart from prior
literature and suggest that orientations toward employees, customers, suppliers,
and local communities will affect long-term acquisition performance both directly
and through its interactions with process characteristics, such as preacquisition
relatedness and postacquisition integration. Analyses of data on a sample of 1884
acquisitions show overall a positive association between acquirers' stakeholder
orientation and acquisition performance. In addition, we find support for a
positive moderation of business relatedness on the performance impacts of
stakeholder orientation. Structural integration has a similarly positive moderation
effect only for some of the stakeholder categories.Managerial summary: Does
collaboration with stakeholders during an acquisition pay off in terms of
performance? The results of this research show that it is worth engaging
stakeholders during the M&A process, but that the efficacy of involvement practices
may depend on the type of stakeholders and the characteristics of the acquisition.
While acquiring firms that take account of suppliers and local communities
consistently overperform in their acquisitions, the inclusion of employees might be
not beneficial (and even harmful) when the target firm operates in a dissimilar
business or when managers do not plan to maintain it as a separate entity.
Copyright (c) 2017 John Wiley & Sons, Ltd.
As corporate managers interact with non-shareholder stakeholders, potential
tradeoffs emerge and questions arise as to how these interactions impact
shareholder value. We argue that this shareholder-stakeholder debate is an
important issue within the overall corporate governance and corporate policy domain
and examine one such stakeholder group - employees - by studying labor-friendly
corporate practices. We find that announcements of labor-friendly policies are
associated with positive abnormal stock returns. Labor-friendly firms also
outperform otherwise similar firms, both in terms of long-run stock market returns
and operating results. In addition, we find that the probability and benefits of
labor-friendliness increase with the demand for highly skilled labor. Our analysis
of excess executive compensation suggests that top management derives no pecuniary
benefits from labor-friendly practices. We interpret our results as consistent with
a genuine concern for employees translating into higher productivity and
profitability, which in turn facilitate value creation. It appears that the
benefits of labor-friendly practices significantly outweigh the costs and that what
is good for employees is good for shareholders.
What is the responsibility of multinational enterprises in international value
chain networks in countries with inadequate institutions? In this article, we
present an ethical framework that allows for evaluation of institutions at the
macro, mezzo, and micro levels. This framework is used to analyze the case of
Telenor in Bangladesh. Telenor is a telecommunications company based in Norway. It
is the majority owner (62%) in Grameenphone in Bangladesh. The minority owner is
Grameen Telecom, which is part of the Grameen group created by the pioneer of micro
finance, Nobel Prize winner Dr. Mohammad Yunus. The case of Telenor in Bangladesh
is one of many examples of international value chain networks that span different
jurisdictions. The case focuses on relevant issues in the value chain networks: the
institutions in Norway and Bangladesh, the owners, suppliers, and customers. We
highlight the responses made by the major actors in the value chain, and conclude
the article by analyzing the responsibility, or "ability to respond" of these major
actors.
China has long enjoyed its position as the world's cheapest production country.
However, this position is being shaken due to the increasingly rising costs in
China in pace with China's rapid economic development. China's New Labour Contract
Law which took effect from 1 January 2008 has further pushed the labour costs in
China in general. The purpose of this article is to arrive at an in-depth
understanding of why foreign firms conduct sourcing in China where sourcing is
becoming increasingly expensive. The experiences of four Swedish companies in the
textile and clothing industry (TCI) conducting sourcing in China are presented. Our
findings show that sourcing in China is becoming both cost- and strategy-driven.
Companies purely chasing the cheapest production would most probably consider
leaving China, whereas companies with a long-term strategic intent and a high level
of business ethics and corporate social responsibility (CSR) practices will retain
all or most of their sourcing activities on the Chinese soil despite the rising
costs.
Unlike previous studies that examine the direct effect of employees' perceived
corporate social responsibility (CSR) on affective organizational commitment (AOC),
this article examines a mediated link through organizational trust and
organizational identification. Social exchange and social identity theory provide
the foundation for predictions that the primary outcomes of CSR initiatives are
organizational trust and organizational identification, which in turn affect AOC.
The test of the research model relies on data collected from 378 employees of local
and multinational companies in South Asia, as well as structural equation modeling
to test the postulated relationships. Both organizational trust and organizational
identification fully mediate the CSR-AOC link. However, the identification
mechanism is significantly stronger than the trust mechanism in terms of building
AOC from CSR. Out of four CSR components, CSR toward employees is the strongest
predictor of employees' trust, identification, and AOC, followed by CSR toward
community, whereas CSR toward the environment has no effect. Finally, CSR toward
community and employees are more associated with social exchange, whereas CSR
toward consumers relates more to the social identity process.
In this paper, we use a social identity theory perspective to study the mechanisms
through which internal and external corporate social responsibility (CSR) influence
employee identification and its subsequent outcomes, as well as the boundary
conditions on these effects. We posit that CSR actions focusing on external
stakeholders enhance perceived prestige whereas CSR actions focusing on employee
welfare enhance perceived respect-both of which are argued to influence employee
organizational identification but differentially impact different forms of employee
citizenship. These relationships were predicted to vary in strength, however, due
to individual differences in social (local vs. cosmopolitan) and cultural
(individualist vs. collectivist) orientations. Data are presented from 408
employees of a fast-moving consumer goods conglomerate operating in South Asia
(Study 1) and from 415 employees spanning nine companies in two culturally distinct
regions (France and Pakistan, Study 2). The results, which largely support our
theoretical framework, are discussed in terms of their implications for both our
understanding of the psychology of CSR as well as social identity theory more
generally.
Stakeholder literature has acknowledged the need to complement the extant theory on
stakeholder management by more dynamic perspectives. This article makes use of the
recent terminology of stakewatcher and stakeseeker to illustrate the dynamic aspect
of stakeholder theory transposed in the graphical representation of Freeman's
stakeholder model. Presenting a few selected case studies, it applies the scheme on
the concept of value responsibility chain; it exemplifies the role of stakeseekers
in various forms of activism, from shareholders, NGOs and government, in the
stakeholder mobilisation process. This article clarifies how stakewatchers and
stakeseekers can profoundly affect stakeholder salience, especially in crises. The
transposition and integration of the dynamic aspect of stakeholder theory into the
graphical representation strengthen the forceful pedagogical value of the Freeman's
stakeholder graphical model.
Stakeholder theory advocates that firms bear responsibility for the implications of
their actions. However, while a firm affects or can affect stakeholders,
stakeholders can also affect the corporation. Previous stakeholder theorising has
neglected the reciprocal nature of responsibility. The question can be asked
whether-in a spirit of reciprocity, loyalty and fairness-stakeholders should treat
the corporation in a fair and responsible way. This study based on different
definitions of stakeholders argues that various stakeholder attributes differ for
different categories of stakeholders. This analysis presumes that the attribute of
stakeholder reciprocity can probably be restricted to real stakeholders, labelled
stakeowners: genuine stakeholders with a legitimate stake, the loyal partners who
strive for mutual benefits. Stakeowners own and deserve a stake in the firm.
Stakeholder reciprocity could be an innovative criterion in the corporate
governance debate as to who should be accorded representation on the board.
Corporate social responsibility should imply corporate stakeholder responsibility.
This research advances our understanding of the manifestation of tensions and
ethical issues in entrepreneurial finance. In doing so, we offer an overview of
ethics in entrepreneurship and finance, delineating the curious paucity of research
at their intersection. Using twelve vignettes, we put forward the asymmetries
between entrepreneurs and investors and discuss a set of ethical problems that
arise among key actors centring on the dynamics of venture partner entry and exit,
applying the multiple-lens ethical perspective to analyse these issues. This
analysis culminates in the introduction of a general classification scheme for
ethical problems across venture partners. Our analysis highlights the moral
dimension inherent in the entry and exit of venture partners and the importance of
considering moral judgement, as well as intention in future analysis of any
decision-making. Our study also points to the moral responsibility in finance,
especially to the mutual moral responsibilities of investors and entrepreneurs. By
integrating ethics into finance, this research also demonstrates that in the case
of venture partner exit, an ethical approach and decent governance go beyond
compliance to the law. We conclude with implications for practitioners,
specifically with some proposals for a solution to the problem of blocked and
forced exit. Together, we make several contributions to the literature by
integrating ethics, finance and entrepreneurship, and we call for future research
to stimulate a growing body of research within this presently overlooked area.
Fortis, the leading Benelux financial group, had been a success story of successive
mergers of bank and insurance companies, with leadership in corporate social
responsibility (CSR). One year after the acquisition of the major Dutch financial
conglomerate ABN AMRO, the global financial crisis caused the collapse of the
Fortis group. The purpose of this article is to use the case study of Fortis's
recent fall as a basis for reflective considerations on the financial crisis, from
stakeholder and ethical perspectives. A selected number of key events of the
history of the dramatic crisis at Fortis will be analysed from different ethical
frameworks. Special consideration will be given to fairness of communication,
shareholder activism and conflicts of interests of CEO's mergers opportunities. A
confrontation between the CSR policy and the reality raises the fundamental
questions why the powerful CSR guidelines and ethical principles did not help in
the assessment of the risks.
Recent academic articles point to an increased vagueness and overlap in concepts
related to business ethics and corporate responsibility. Further, the perception of
these notions can differ in the small-business world from the original academic
definitions. This article focuses on the cognition of small-business owner-
managers. Given the impact of small-business owner-managers on their ventures,
corporate responsibility and ethical issues can take a different route in SMEs. The
small-business owner-manager is able to shape the corporate culture and to enact
values other than profit. Adopting a cognitive perspective, we have identified how
the small-business owner-manager makes sense of notions linked to corporate social
responsibility (CSR) and business ethics. The concept of sensemaking has recently
been applied to CSR (Basu and Pallazzo, 2008; Cramer et al., 2006). Applying a
cognitive perspective to small-business owners may help in explaining specific
phenomena found within small-business ownership. For this research, the Repertory
Grid Technique (RGT) is used, a method that has not previously been widely applied
in the business and society field. Our findings to an extent invalidate the
confusion in terminology found in the academic literature. Small-business owner-
managers, pragmatically and rather clearly, differentiate among the various
concepts related to corporate responsibility and business ethics but, at the same
time, they recognise the interrelationships and interdependencies of these
concepts. These findings contribute to a better understanding of how small-business
owners think and integrate corporate responsibility and ethical issues into their
decision-making.
As a contribution to the emerging field of corporate social responsibility (CSR)
cognition, this article reports on the findings of an exploratory study that
compares SME owner-managers' mental models with regard to CSR and related concepts
across six European countries (Belgium, Italy, Norway, France, UK, Spain).
Utilising Repertory Grid Technique, we found that the SME owner-managers' mental
models show a few commonalities as well as a number of differences across the
different country samples. We interpret those differences by linking individual
cognition to macro-environmental variables, such as language, national traditions
and dissemination mechanisms. The results of our exploratory study show that
nationality matters but that classifications of countries as found in the
comparative capitalism literature do not exactly mirror national differences in CSR
cognition and that these classifications need further differentiation. The findings
from our study raise questions on the universality of cognition of academic
management concepts and warn that promotion of responsible business practice should
not rely on the use of unmediated US American management terminology.
The purpose of this study is to identify the elements that can be implemented to
achieve an ethical infrastructure, in small and medium enterprises (SMEs). The
ethical infrastructure is considered as a set of formal and informal systems,
leadership, climate and culture, related to ethical issues. The research was
carried out through interviews and focus groups with managers from 28 companies in
Madrid, all signatories to the Global Compact. The identified key elements in SMEs
are leadership, informal managerial and formal communication. This study also
explores different factors that influence the effectiveness, implementation, and
sustainability of the ethical infrastructure in SMEs, discovering some factors that
can act as both accelerators and barriers such as pressure from customers.
Additional findings regarding the concepts of ethics and corporate social
responsibility in SMEs, dilemmas and characteristics of the culture and climate are
also presented.
Transparency is a quality of corporate social responsibility communication that
enhances the relationship between the investors and the company. The objective of
this paper is to analyze if the transparency of the sustainability reports is
affected by the relationship of companies in different industries with their
stakeholders. If this were the case, it would indicate that the pressure of
significant stakeholders determines the required level of transparency of the
reports. We find that the pressure of some groups of stakeholders (customers,
clients, employees, and environment) improves the quality of transparency of the
reports. We extend previous research by studying the effect of stakeholder group
pressure on transparency when reporting sustainability. Our results show that
transparency is affected by ownership, along with size and global region.
There is currently much debate in the economic literature about whether ethical
investment involves a financial sacrifice or premium. One of the most common
methods of testing this compares the financial performance of ethical investment
funds with that of other funds not considered "socially responsible" or ethical.
The majority of these research studies evaluate the performance of the ethical
funds according to classic measures, whereby different financial markets, in
different countries and for different periods of time serve as reference for
evaluation. The ultimate conclusion of all of these studies is that there are no
significant differences between the performance results of one type of funds and
the other. In Spain, ethical investment funds are still an incipient sector of
investment. To date, the Spanish market has not been included in any type of
analysis of these characteristics. Therefore the main objective of this article is
to compare the financial performance of ethical investment funds to that of other
funds in the Spanish retail market. We propose the aggregate type of analysis as
the Spanish ethical investment funds have experienced a weaker development in
comparison to those of other developed countries. In the first step we suggest the
financial performance to be compared by style analysis since the asset distribution
of the Spanish Social Return Investment (SRI) funds differs from the European
trend. In particular, we use the multifactor regression model with style
benchmarks. We found that their financial performance is in all cases superior or
similar to that achieved by the rest of the funds. In the second step, to achieve a
more robust and homogeneous comparison, we used the bootstrap method, comparing
ethical and non-ethical fund subsamples by homogeneous groups. No significant
differences between these two types of funds have been found. Thus, if we assume
the positive o neutral effect of ethical investment on investor utility in the
retail Spanish market the financial and social performance (FSP) of ethical funds
will be, in aggregate, superior to the FSP achieved by conventional funds. In
conclusion, the financial performance of ethical mutual funds in Spain is no
sacrifice.
The relationship between ownership and family involvement in small businesses is
not altogether clear because empirical studies have not distinguished among family
ownership, family management, and owner-management in composing their samples. In
the present study, a large sample of small private firms is parsed into sub-samples
with distinctly different types of owners in order to isolate the effects of locus
of ownership. The results show that firms with different locus of ownership behave
differently with respect to the extent of involvement by the CEO's relatives as
employees, key managers, advisors, and board members. Although owner-managers and
sole-proprietors would seem to have more authority than other CEOs to involve
family members in the operations of the business, the findings indicate that these
self-owned firms have significantly less family involvement than firms owned
entirely by relatives of the CEO.
It has long been recognized that accountants practicing in business settings have a
dual role: (1) as employees, they are bound to the organization, and (2) as
professionals, they are bound by the profession's code of ethical conduct (Westra,
Journal of Business Ethics 5(2): 119-128, 1986). These two roles highlight the need
to recognize and consider both the ethical and economic implications of their
decisions. Practicing industry accountants are commonly involved in a broad range
of their firm's business practices and decision making, and are increasingly
exposed to the commercial aspects of their companies. Also, during their education,
they were trained on their professional responsibilities. However, in general, this
education was not recent and may not have been reinforced. By contrast, accounting
students have been recently and repeatedly exposed to and have knowledge about
their professional responsibilities as an accountant, but limited, if any, exposure
to the commercial aspects of business. Consequently, our first hypothesis predicts
that the ethical sensitivity of practicing industry accountants will be lower than
that of accounting students. We find limited support for this hypothesis. Second,
we also examine company reward structure and predict that ethical sensitivity will
be lower for those in a company with a reward structure narrowly focused only on
financial goals as compared to those in a company with a broad reward structure
(e.g., including rewards for both financial and non-financial goals). Third, we
predict that the difference in ethical sensitivity levels between those in a
company with a narrow reward structure as compared to those in a company with a
broad financial reward structure will be higher for practicing industry accountants
compared to accounting students. Results from our study generally support these
last two predictions. Ethical sensitivity is lower for those in a company with a
reward structure narrowly focused only on financial goals as compared to those in a
company with a broad reward structure, suggesting that companies may be able to
increase ethical awareness in their organizations by including non-financial goals
in their reward structures.
We investigate the regulatory sanctions imposed on independent directors for their
firms' financial frauds in China. These regulatory sanctions are prima-facie
evidence of significant lapses in business ethics. During the period 2003-2010,
302-person-time independent directors were penalized by the regulator (the China
Securities Regulatory Commission-the CSRC), and the two stock exchanges. We find
that the independent directors with accounting experiences are more likely to be
penalized by the CSRC, though they do not suffer more severe penalties than do the
other sanctioned independent directors. We also find that independent directors
suffer less severe penalties than do the insider directors. These results are
consistent with the hypothesis that the sanctions on independent directors are tied
to their assumed ethical and legal responsibilities. Following a regulatory
sanction, penalized independent directors experience a significant decline in the
number of other board seats held. However, they can gain board seats in better
quality firms. We find that interlocked firms that share penalized independent
directors with the fraud firm do not suffer from a valuation decline. Overall, our
results suggest that regulatory sanctions have not triggered further sanctions on
the penalized directors in the labor market but they have, instead, created a
disincentive for these directors to serve on the company boards of high-risk firms.
This multi-level study analyses the 'black box' of HRM in an Australian cinema
chain, a standardized service environment. Management's espoused goals for the
casual workers who run the cinema service include attempts to build customer-
oriented behaviour, both directly and via empowerment, and also efforts to ensure
compliance with company policies and to enhance employee commitment. Our analysis
of an employee survey and supervisory performance ratings shows that it is
behavioural compliance that is positively associated with rated performance rather
than customer-oriented behaviour. While customer service is an important value, it
is willing engagement with a highly scripted, efficiency-oriented work process that
makes it happen, not a more empowering form of work design. On the other hand, the
management process also fosters a level of employee commitment, which has some
value in a tight labour market. The study demonstrates the way in which actual
models of HRM can contain a complex and 'contradictory' set of messages, consistent
with critical accounts of the labour process and suggesting that notions of
'internal fit' need to recognize such tensions. It underlines the importance of
identifying the multiple goals in management's espoused theories of HRM and then
assessing their links via managerial behaviour and employee responses to
performance outcomes.
This study examines whether shareholders are sensitive to corporations'
environmental footprint. Specifically, I conduct an event study around the
announcement of corporate news related to environment for all US publicly traded
companies from 1980 to 2009. In keeping with the view that environmental corporate
social responsibility (CSR) generates new and competitive resources for firms, I
find that companies reported to behave responsibly toward the environment
experience a significant stock price increase, whereas firms that behave
irresponsibly face a significant decrease. Extending this view of "environment-as-
a-resource," I posit that the value of environmental CSR depends on external and
internal moderators. First, I argue that external pressure to behave responsibly
towards the environment-which has increased dramatically over recent decades-
exacerbates the punishment for eco-harmful behavior and reduces the reward for eco-
friendly initiatives. This argument is supported by the data: over time, the
negative stock market reaction to eco-harmful behavior has increased, while the
positive reaction to eco-friendly initiatives has decreased. Second, I argue that
environmental CSR is a resource with decreasing marginal returns and insurance-like
features. In keeping with this view, I find that the positive (negative) stock
market reaction to eco-friendly (-harmful) events is smaller for companies with
higher levels of environmental CSR.
This study examines the effect of shareholder proposals related to corporate social
responsibility (CSR) on financial performance. Specifically, I focus on CSR
proposals that pass or fail by a small margin of votes. The passage of such "close
call" proposals is akin to a random assignment of CSR to companies and hence
provides a quasi-experiment to study the effect of CSR on performance. I find that
the adoption of close call CSR proposals leads to positive announcement returns and
superior accounting performance, implying that these proposals are value enhancing.
When I examine the channels through which companies benefit from CSR, I find that
labor productivity and sales growth increase after the vote. Finally, I document
that close call CSR proposals differ from non-close proposals along several
dimensions. Accordingly, although my results imply that adopting close call CSR
proposals is beneficial to companies, they do not necessarily imply that CSR
proposals are beneficial in general.
In this study, we assess the causal impact of stakeholder orientation on
innovation. To obtain exogenous variation in stakeholder orientation, we exploit
the enactment of state-level constituency statutes, which allow directors to
consider stakeholders' interests when making business decisions. Using a
difference-in-differences methodology, we find that the enactment of constituency
statutes leads to a significant increase in the number of patents and citations per
patent. We further argue and provide evidence suggesting that stakeholder
orientation sparks innovation by encouraging experimentation and enhancing
employees' innovative productivity. Finally, we find that the positive effect of
stakeholder orientation on innovation is larger in consumer-focused and less eco-
friendly industries.
Research summary: This study examines whether companies employ corporate social
responsibility (CSR) to improve employee engagement and mitigate adverse behavior
at the workplace (e.g., shirking, absenteeism). We exploit plausibly exogenous
changes in state unemployment insurance (UI) benefits from 1991 to 2013. Higher UI
benefits reduce the cost of being unemployed and hence increase employees'
incentives to engage in adverse behavior. We find that higher UI benefits are
associated with higher engagement in employee-related CSR. This finding suggests
that companies use CSR as a strategic management tool-specifically, an employee
governance tool-to increase employee engagement and counter the possibility of
adverse behavior. We further examine plausible mechanisms underlying this
relationship. Managerial summary: This study examines whether companies employ
corporate social responsibility (CSR) to improve employee engagement and mitigate
adverse behavior at the workplace (e.g., shirking, absenteeism). We find that
companies react to increased risk of adverse behavior by strategically increasing
their investment in employee-related CSR (e.g., work-life balance benefits, health
and safety policies). Our findings have important managerial implications. In
particular, they suggest that CSR may help companies motivate and engage their
employees. Hence, companies dealing with employees that are unmotivated, regularly
absent, or engage in other forms of adverse behavior, may find it worthwhile to
design and implement effective CSR practices. Further, our findings suggest that
CSR can be used as employee governance tool. Accordingly, managers could benefit
from integrating CSR considerations into their strategic planning. Copyright (C)
2015 John Wiley & Sons, Ltd.
P>Arguments based on labour market theory suggest that there may be CEO behavioural
issues related to pay deviations from the labour market rate for CEO pay; however,
few studies examine this phenomenon. This study attempts to address such
behavioural issues by examining the influence of relative CEO underpayment on
reductions in R&D spending, the differences in this relationship between firms in
high R&D intensive versus low R&D intensive industries, and the moderating affect
of ownership structure on the CEO underpayment and R&D spending relationship.
Results suggest that relative CEO underpayment is associated with reductions in R&D
spending in low R&D intensive industries and increases in R&D spending in high R&D
intensive industries. Also, greater relative CEO underpayment leads to greater
reductions in R&D spending in manager-controlled organizations as compared to
owner-controlled organizations. This study provides evidence that pay deviations
may, in fact, affect certain CEO behaviours, specifically relating to innovation.
We build upon previous work on the effects of deviations in CEO pay from labor
markets to assess how overcompensation or undercompensation affects subsequent
voluntary CEO withdrawal, firm size, and firm profitability, taking into account
the moderating effect of firm ownership structure. We find that CEO underpayment is
related to changes in firm size and CEO withdrawal, and that the relationship
between CEO underpayment and CEO withdrawal is stronger in owner-controlled firms.
We also show that when CEOs are overpaid, there is higher firm profitability; a
relationship that is weaker among manager-controlled firms. We then discuss the
implications that these findings have for Mitre research. Copyright (C) 2010 John
Wiley & Sons, Ltd.
Recent work links entrepreneurship to the economic theory of the firm, using the
concept of entrepreneurship as judgment introduced by Frank Knight. When judgment
is complementary to other assets, it makes sense for entrepreneurs to hire labour
and to own assets. The entrepreneur's role, then, is to arrange or organize the
human and capital assets under his or her control. We extend this Knightian concept
of the firm by developing a theory of delegation under Knightian uncetainty. What
we call original judgment belongs exclusively to owners, but owners may delegate a
wide range of decision rights to subordinates, who exercise derived judgment. We
call these employees 'proxy-entrepreneurs', and ask how the firm's organizational
structure-its formal and informal systems of rewards and punishments, rules for
settling disputes and renegotiating agreements, means of evaluating performance and
so on - can be designed to encourage forms of proxy entrepreneurship that increase
firm value while discouraging actions that destroy value. Building on key ideas
from the entrepreneurship literature, Austrian economics and the economic theory of
the firm, we develop a framework for analysing the trade-off between productive and
destructive proxy entrepreneurship. We link this analysis to the employment
relation and ownership structure, providing new insights into these and related
issues in the economic theory of the firm.
The notion that firms can improve their innovativeness by tapping users and
customers for knowledge has become prominent in innovation studies. Similar
arguments have been made in the marketing literature. We argue that neither
literatures take sufficient account of firm organization. Specifically, firms that
attempt to leverage user and customer knowledge in the context of innovation must
design an internal organization appropriate to support it. This can be achieved in
particular through the use of new organizational practices, notably, intensive
vertical and lateral communication, rewarding employees for sharing and acquiring
knowledge, and high levels of delegation of decision rights. In this paper, six
hypotheses were developed and tested on a data set of 169 Danish firms drawn from a
2001 survey of the 1,000 largest firms in Denmark. A key result is that the link
from customer knowledge to innovation is completely mediated by organizational
practices.
This article explores why companies choose some Corporate Responsibility
initiatives over others. The focus is on competing voluntary programs to oversee
and protect labor standards. These programs may differ with regard to two aspects:
the governance of the program and the financial and managerial responsibility for
compliance. These aspects are crucial to distinguish "socializing" or "privatizing"
types of voluntary labor regulation. The article explores the conditions under
which companies in apparel production choose different types of governance and
responsibility, based on qualitative and quantitative evidence of the European
industry. The study shows that corporate preference for multi-stakeholder governed
programs is positively affected by societal pressure orchestrated by NGOs, through
both public campaigns and informal efforts, together with pressures from consumers
and media. Second, the position of the firm in the value chain affects preference
for taking financial and managerial responsibility for compliance.
We use a detailed operational and clinical data set from a maternity hospital to
investigate how workload affects decisions in gatekeeper-provider systems, where
the servers act as gatekeepers to specialists but may also attempt to serve
customers themselves, albeit with a probability of success that is decreasing in
the complexity of the customers' needs. We study the effect of workload during a
service episode on gatekeepers' service configuration decisions and the rate at
which gatekeepers refer customers to a specialist. We find that gatekeeper-
providers (midwives in our context) make substantial use of two levers to manage
their workload (measured as patients per midwife): they ration resource-intensive
discretionary services (epidural analgesia) for customers with noncomplex service
needs (mothers with spontaneous onset of labor) and, at the same time, increase the
rate of specialist referral (physician-led delivery) for customers with complex
needs (mothers with pharmacologically induced labor). The workload effect in the
study unit is surprisingly large and comparable in size to those for leading
clinical risk factors: when workload increases from two standard deviations below
to two standard deviations above the mean, noncomplex cases are 28.8% less likely
to receive an epidural, leading to a cost reduction of 8.7%, while complex cases
are 14.2% more likely to be referred for a physician-led delivery, leading to a
cost increase of 2.6%. These observations are consistent with overtreatment at both
high and low workload levels, albeit for different types of patients, and suggest
that smoothing gatekeeper workload would reduce variability in customer service
experience.
This paper provides an analysis of the fair trade network in the North through a
comparative assessment of two distinctly different fair trade certified roasters:
Planet Bean, a worker-owned co-operative in Guelph, Ontario; and Starbucks Coffee
Company, the world's largest specialty roaster. The two organizations are assessed
on the basis of their distinct visions of the fair trade mission and their
understandings of "consumer sovereignty". It is concluded that the objectives of
Planet Bean are more compatible with the moral mission of fair trade, even while
the network has become increasingly dependent on the market-reach of corporations
like Starbucks, raising difficult prospects for the future of fair trade.
Ethical leadership has become a thriving research field. However, on reviewing
previous research, we argue that several fundamental questions remain unclear and
need further investigation. (1) Ethical leaders are defined as behaving
'normatively appropriate[ly]' (Brown et al., Organ Behav Hum Decis Process
97(2):117-134, 2005), but it remains unclear what this entails. What specific
behaviours does an ethical leader show? (2) To date, ethical leadership has focused
primarily on leader behaviour towards employees. Which stakeholders apart from
employees are important to the ethical leader, and what kind of ethical behaviour
does the ethical leader show towards them? (3) What are further antecedents and
consequences of ethical leadership? We addressed these questions by qualitatively
analysing interviews with 17, mostly Swiss, executive ethical leaders. The results
indicate that executive ethical leaders care not only about employees but also
about other stakeholders, such as customers, suppliers, owners of companies, the
natural environment and society. Additionally, this study identified a broad range
of executive ethical leaders' behaviours towards these stakeholders, and,
therefore, may function as a useful resource for future quantitative studies.
Furthermore, we identified several antecedents of executive ethical leadership, for
example ethical role models, business strategy and owner's values, and consequences
such as effects on other stakeholders than employees. Finally, our results shed
more light on the processes of ethical guidance of employees. Managerial
implications and avenues for further research are discussed.
Corporate responsibility (CR) communication has risen dramatically in recent years,
following increased demands for transparency. One tendency noted in the literature
is that CR communication is organised and structured. Corporations tend to
professionalise CR communication in the sense that they provide information that
corresponds to demands for transparency that are voiced by certain stakeholders.
This also means that experts within the firm tend to communicate with professional
stakeholders outside the firm. In this article, a particular aspect of the
organisation of CR communication is examined, a phenomenon that we refer to as the
'filtration effect'. By comparing CR communication in parent companies and their
subsidiaries, we show empirically that there is considerably less CR communication
on the subsidiary level compared to the parent level. We see filtration as a sign
of conscious organising of CR communication that implies particular attention to
certain stakeholder groups with clearly defined demands and expectations on
companies. The strong filtration effect noted in the study suggests that CR
communication does not seem to be very much adapted to customers, which may be
problematic both from a communicative and ethical perspective. The study covers
Sweden's 206 largest retail firms.
Various explanations are offered to explain why employees increasingly work longer
hours: the combined effects of technology and globalization; people are caught up
in consumerism; and the "ideal worker norm," when professionals expect themselves
and others to work longer hours. In this article, we propose that the processes of
employer recruitment and selection, employee self-selection, cultural
socialization, and reward systems help create extended work hours cultures (EWHC)
that reinforce these trends. Moreover, we argue that EWHC organizations are
becoming more prevalent and that organizations in which long hours have become the
norm may recruit for and reinforce workaholic tendencies. Next, we offer spiritual
leadership as a paradigm for organizational transformation and recovery from the
negative aspects of EWHC to enhance employee wellbeing and corporate social
responsibility without sacrificing profitability, revenue growth, and other
indicators of financial performance. Finally, we will offer suggestions for future
theory, research, and practice.
Companies have a moral responsibility to treat customers fairly. One way for
companies to do so is to allow their employees to exercise reasonableness in their
interactions with customers. We define reasonableness as a latitude or space that
exists around expectations in the delivery of service. In this paper, we explore
the concept of reasonableness from a customer's perspective (i.e., perceived
reasonableness) and the role that the morals of service personnel play in
customers' perceptions of reasonableness. First, through an open-ended survey on
customers' unreasonable service experiences, we identify themes of perceived
reasonableness. We also discuss the role that the morals of service personnel play
within these themes. Second, in order to identify the relationships between these
themes, we create a cognitive map and discuss the implications of the identified
relationships. Finally, we provide directions for future research on
reasonableness.
This article presents the results of an empirical study which argues that ethical
judgment is not sufficient, by itself, to explain ethically questionable behavior
in consumption. The study adopts Ajzen's Theory of Planned Behavior and presents
results from a self-completion survey questionnaire covering five scenarios
describing ethical consumer dilemmas. Confirmatory factor analysis was used to
assess measurement structures, and the proposed model was estimated using logistic
regression. Three antecedents, namely Social Norm (an extension of the construct of
Subjective Norm), Perceived Behavioral Control, and Perceived Unfairness are found
to have a significant and positive impact on intention to engage in ethically
questionable behavior. The finding that Perceived Unfairness has a significant
impact is of particular interest, implying that the perception of an unfair
relationship with a supplier will increase the probability that a consumer would
consider behaving unethically. The results also suggest that intentions to engage
in ethically questionable behavior vary across different situations. Firms seeking
to proactively broach discourses with stakeholders will inevitably need and want to
understand further the whole range of consumer perceptions toward business. In
other words, to take note not only of what consumers believe in, but equally what
they do and choose to act upon.
This paper examines how Japanese multinational companies manage corporate social
responsibility (CSR). It considers how the concept has come to be framed within
Japanese business, which is increasingly globalized and internationally focused,
yet continues to exhibit strong cultural specificities. The discussion is based on
interviews with managers who deal with CSR issues and strategy on a day-to-day
basis from 13 multinational companies. In looking at how CSR practice has been
adopted and adapted by Japanese corporations, we can begin to see what implications
arise from the fact that CSR is a Western-led concept, so opening up critical
questions about the future development and evolution of CSR practice within a
global context. In being exposed to the concept of CSR as practiced vigilantly in
western countries, Japanese multinational company managers have certainly come to
re-evaluate aspects of business likely to need rectifying (with potential concerns
being gender inequalities, discrepancies in employee conditions, and issues over
human rights and supply chains). Japan can be thought to be lagging behind in its
understanding and adoption of CSR, in part because corporations do not necessarily
state their policies as formally as might be expected. Yet, by analyzing more
deeply the kinds of responses gained from CSR managers in Japan (and by placing
their remarks within a broader context of Japanese culture and business practices)
a far more subtle and revealing picture becomes apparent, not least a more complex
picture of the local/global interaction of the frames of reference of corporate
responsibility.
Emotional labor has been described as a dynamic self-regulatory process that
unfolds over the course of customer interactions, with employees continuously
monitoring and adjusting their felt and expressed emotions via two emotion
regulation strategies: surface acting and deep acting. Despite dynamic theory on
the topic, empirical tests have largely ignored within-episode variability in
emotional labor, relying on assessments of emotional labor focused on the person,
day, or interaction level of analysis. The current study elaborated on theory
pertaining to within-episode emotional labor dynamics, utilizing a call center
simulation to examine how shifts in customer incivility impacted on continuous
measures (captured every 200 milliseconds) of participants' felt emotions, surface
acting, deep acting, and vocal tone during a single interaction. Results provided
evidence that customer behavior causally influences within-episode changes in
emotions, emotion regulation, and vocal tone, and that these key emotional labor
variables significantly relate to each other at the momentary level of analysis.
Further, by modeling lagged effects, we were able to gain insight into the causal
direction in the relationships among these continuously measured variables.
Moreover, we showed for the first time that surface acting and deep acting are used
simultaneously to manage emotional labor demands.
Although managers invest in new technology to improve performance, often the
benefits sought are elusive while the costs incurred far exceed expectations. The
literature offers insights to help explain this phenomenon. Evidence suggests that,
while carefully considering the purchase cost, managers often underestimate the
costs and planning necessary for proper implementation. Consequently, short-term
problems arise and long-term benefits are not realized. A model is introduced that
integrates workforce knowledge management with the technology upgrade decision. The
manager upgrades technology or pursues general training of the workforce in
response to depreciation in the ability of each resource to drive net income over
time. Depreciation occurs because of changes in consumer preferences and
competition. Although adding to technology capability, an upgrade makes a portion
of workforce knowledge obsolete. The manager invests in preparatory training prior
to the upgrade to reduce obsolescence. Whereas general training is pursued to
respond to depreciation by enhancing the ability of the workforce to improve
existing products or create new products, preparatory training is technology-
specific and focused on preparing for a technology upgrade. We find that the rates
of preparatory and general training follow entirely different paths over time.
Conditions are given where a manager uses one training strategy as a substitute for
or complement to the other. We show that training strategies are not only impacted
by learning phenomena such as the rate of forgetting, but also by the rates of
technology depreciation and advancement. We show how workforce learning phenomena
impact the technology upgrade decision.
Addressing ESG issues has become a point of interest for investors, shareholders,
and governments as a risk management concern, while for firms it has become an
emerging part of competitive strategy. In this study, a database from an
independent ratings agency is used to examine, longitudinally, how Australian
Securities Exchange (ASX) 300 firms are responding to ESG issues. Following
institutional theory predictions, ASX300 firms are improving ESG performance over
the 2002-2009 timeframe. Furthermore, over this timeframe, performance on the
governance dimension improved at a greater rate than environmental or social
performance, as predicted. Lastly, high impact industries are predicted to
demonstrate overall improved ESG performance relative to medium or low impact
industries over the timeframe, but this hypothesis was not confirmed. Results are
discussed along with implications and future research directions.
Innovation has traditionally been seen as the province of producers. However,
theoretical and empirical research now shows that individual users-consumers-are
also a major and increasingly important source of new product and service designs.
In this paper, we build a microeconomic model of a market that incorporates demand-
side innovation and competition. We explain the conditions under which firms find
it beneficial to invest in supporting and harvesting users' innovations, and we
show that social welfare rises when firms utilize this source of innovation. Our
modeling also indicates reasons for policy interventions with respect to a mixed
user and producer innovation economy. From the social welfare perspective, as the
share of innovating users in a market increases, profit-maximizing firms tend to
switch "too late" from a focus on internal research and development to a strategy
of also supporting and harvesting user innovations. Underlying this inefficiency
are externalities that the producer cannot capture. Overall, our results explain
when and how the proliferation of innovating users leads to a superior division of
innovative labor involving complementary investments by users and producers, both
benefitting producers and increasing social welfare.
The empirical relationship between a firm's social performance and its financial
performance is still not well established in the literature. Despite more than 30
years of research and more than 100 empirical studies on the issue, the results are
still mixed. We argue that the heterogeneous results found in previous studies are
not due exclusively to problems related with the measurement instruments or the
samples used. Instead, we posit that a more fundamental problem related with the
endogeneity of social strategic decisions could be driving most of the empirical
findings. We show that, using a panel data of 658 firms from 1991 to 2005, how some
of the results found in previous research change, and some are even reversed when
endogeneity is properly taken into account.
Salespeople have long been considered unique employees. They tend to work apart
from each other and experience little daily contact with supervisors and other
organizational employees. Additionally, salespeople interact with customers in an
increasingly complex and multifunctional environment. This provides numerous
opportunities for unethical behavior which has been chronicled in the popular press
as well as academic research. Much of the research in sales ethics has relied on
conceptual foundations which focus on individual and organizational influencers on
ethical decision making. While significant, contributors to this research suggest
that alternative theoretical perspectives and methods of investigation should be
utilized and call for more research on the status of professional selling as a
whole. We answer this call by exploring an alternative and complementary
perspective based on the theory of occupational choice, social learning, and work
groups to gain insight on how the sales profession evolves as its own subculture
that extends beyond individual and organizational boundaries. First, we discuss the
characteristics of the sales profession and empirically examine the relationship
between typical individual and organizational factors and sales professionals'
perceptions of ethical behavior. Second, we offer a theoretical explanation that
our findings may be due to how salespeople choose and are socialized into the
subculture of the sales profession. Third, we examine this theoretical perspective
via qualitative in-depth interviews with experienced sales professionals. Results
and implications are discussed in terms of a sales profession code of ethics and
future research directions.
Most employees personalize their workspaces with photos, memorabilia, and other
items-even in the face of constraints such as rules prohibiting personalization.
This prevalent use of objects likely reveals much about intrapersonal and
interpersonal processes at work. By analyzing employee interviews and workspace
inventories and observations, we discover that the objects with which employees
personalize their workspaces (and even the absence of such objects) symbolize who
they are and who they want to be. Through their symbolic representations of self,
they find common, ground (often through shared nonwork experiences), establish a
common understanding of employees' work roles, and share personalistic information
about the self-all of which contribute to relationship development among employees
and their coworkers, customers, and clients. With, symbolic representations of self
that offer an optimal amount of stimulation, they focus their attention on their
goals and values and establish a desired boundary or integration between work and
nonwork-both of which contribute to employees' self-regulation. Our findings
support the importance of examining micro-level processes related to the physical
work environment, as we find that employees shape their work environment in ways
that affect both their relationships at work and their self-regulatory functions.
Lateral hiring is the intentional action of one employer to identify, solicit, and
hire an individual or group of employees currently employed by another firm, a
practice often pejoratively labeled "poaching." We use the method of critical
genealogy to demonstrate that the norms that discourage lateral hiring are
constructions used by powerful employers to control the turnover of their
employees, making them subjects of their employer's power rather than free and
autonomous people in their own right. We suggest instead that ethical
responsibility for entertaining or rejecting lateral hiring offers rests with the
focal employee(s). We conclude that the form and symmetry of loyalty between
employees and their current employers are the determinants of the appropriateness
of an employee's decision to entertain and accept outside offers. These conclusions
imply responsibilities for employers to forge (and employees to honor) symmetrical
relational loyalty in the workplace, but not for alternate employers to refrain
from making lateral hiring offers.
Research summary: We investigate why Japanese firms have adopted executive stock
option pay, which was developed with shareholder-oriented institutional logic that
was inconsistent with Japanese stakeholder-oriented institutional logic. We argue
that Japanese managers have self-serving incentives to leverage stock ownership of
foreign investors and their associated institutional logic to legitimize the
adoption of stock option pay. Our empirical analyses with a large sample of
Japanese firms between 1997 and 2007 show that when managers have elite education,
high pay inequality with ordinary employees, and when firms experience poor sales
growth, foreign ownership is more likely associated with the adoption of stock
option pay. The study shows the active role of managers in facilitating the
diffusion of a new governance practice embodying new institutional logic.
Managerial summary: Why have Japanese firms adopted stock option pay for
executives? Inconsistent with Japanese stakeholder-oriented tradition in corporate
governance, such pay has been believed to prioritize managerial attention to the
interests of shareholders over those of other stakeholders. However, to the extent
that shareholders' interests are legitimate in the Japanese context, executives who
have self-serving incentives to adopt such pay can leverage the need to look after
shareholders' interest in their firms to legitimize their decisions. In a large
sample of Japanese firms, we find that foreign ownership (representing
shareholders' interests) is more likely to be associated with the adoption of stock
option pay when managers are motivated to receive such pay, such as when they have
elite education, high pay inequality with ordinary employees, or poor sales growth.
Copyright (C) 2015 John Wiley & Sons, Ltd.
The burgeoning literature on global value chains (GVCs) has recast our
understanding of how industrial clusters are shaped by their ties to the
international economy, but within this context, the role played by corporate social
responsibility (CSR) continues to evolve. New research in the past decade allows us
to better understand how CSR is linked to industrial clusters and GVCs. With
geographic production and trade patterns in many industries becoming concentrated
in the global South, lead firms in GVCs have been under growing pressure to link
economic and social upgrading in more integrated forms of CSR. This is leading to a
confluence of "private governance" (corporate codes of conduct and monitoring),
"social governance" (civil society pressure on business from labor organizations
and non-governmental organizations), and "public governance" (government policies
to support gains by labor groups and environmental activists). This new form of
"synergistic governance" is illustrated with evidence from recent studies of GVCs
and industrial clusters, as well as advances in theorizing about new patterns of
governance in GVCs and clusters.
This paper extends the job characteristics model (JCM) to address virtual work
design. We argue that the effects of critical job characteristics (task
significance, autonomy, and feedback) on psychological states (experienced
meaningfulness, responsibility, and knowledge of results) differ depending on two
important elements of virtuality and their interactions with important social
mechanisms: individual experiences of electronic dependence and its interaction
with intimacy and the interaction of copresence with identification. Findings
across 177 workers from a variety of settings varying in industry, size, and
structure supported several moderating effects of virtuality and three-way
interactions that included intimacy and identification, suggesting important
modifications of the JCM. In addition, effects were not uniformly parallel for both
elements of virtuality, emphasizing the need to differentiate between the effects
of electronic dependence and copresence. We discuss the implications of these
findings for theory and practice.
Models of moral responsibility rely on foundational views about moral agency. Many
scholars believe that only humans can be moral agents, and therefore business needs
to create models that foster greater receptivity to others through ethical dialog.
This view leads to a difficulty if no specific person is the sole causal agent for
an act, or if something comes about through aggregated action in a corporate
setting. An alternate approach suggests that corporations are moral agents
sufficiently like humans to be treated as persons, which leads to questions of
intentionality and the organizational structure required to support the claim. In
this article, I make an intermediate claim combining Goodpaster and Matthews'
(60:132-141, 1982) view that a corporation may have a moral culture which affects
subjective choices, with those of PainterMorland (17(3):515-534, 2007) who points
out that we should move from a model that posits discrete persons acting on each
other to one where morality comes about through shared experience between agents
who participate in each other's lives. I argue that the discussion has been trapped
in traditional dichotomies, and is better served by language that more accurately
represents the dynamic interplay between organization and individual. I underwrite
this claim by looking at recent changes in British and American legal approaches to
corporate responsibility. These provide greater incentives for owners and business
leaders to encourage employees to discuss the reflexive nature of legal and moral
responsibility in business, facilitate workers to voice their moral concerns, and
create structures and processes that allow those concerns to be heard.
This article explores the influence that an organisation's corporate values have on
employees' behaviour and values both within and outside the work environment. In
particular, it focuses on the impact of these values on the personal buying
behaviour of employees. The empirical research was undertaken within a case study
organisation that produces wine in Spain and involved interviews with senior
management, an analysis of company documentation, as well as group discussions with
employees supported by an employee survey. The article argues that an
organisation's corporate values influence not only its employees' behaviour within
the work environment, but also impacts on their global values system outside of the
work environment. In particular, this was evident within the employees' buying
behaviour practices in relation to supplier loyalty and environmental concern. This
has implications for business ethics as an organisation's value system may go
beyond the purely business context. Organisations need to be aware of their impact
on employees' behaviour outside of the work environment; this is particularly the
case for multinational companies working across many cultures.
This paper investigates whether an employee's perception of customer wealth affects
his likelihood of engaging in illegal behavior. We propose that envy and empathy
lead employees to discriminate in illicitly helping customers based on customer
wealth. We test for this hypothesis in the vehicle emissions testing market, where
employees have the opportunity to illegally help customers by passing vehicles that
would otherwise fail emissions tests. We find that for a significant number of
inspectors, leniency is much higher for those customers with standard vehicles than
for those with luxury cars, although a smaller group appears to favor wealthy
drivers. We also investigate the psychological mechanisms explaining this wealth-
based discriminatory behavior using a laboratory study. Our experiment shows that
individuals are more willing to illegally help peers when those peers drive
standard rather than luxury cars, and that envy and empathy mediate this effect.
Collectively, our results suggest the presence of wealth-based discrimination in
employee-customer relations and that envy toward wealthy customers and empathy
toward those of similar economic status drive much of this illegal behavior.
Implications for both theory and practice are discussed.
Social and environmental ratings provided by social rating agencies are
multidimensional. The first goal of our paper is to identify a small number of
independent and relevant socially responsible (SR) dimensions reflecting a firms'
coherent posture toward social issues. We put forward that these dimensions are not
exactly the same as the ESG ones (Environment, Social, and Governance). Using the
six sub-ratings provided by the Vigeo rating agency, we perform a principal
component analysis and we highlight three main independent SR dimensions related to
(1) business stakeholders (employees, customers, and suppliers), (2) societal
stakeholders (environment and society), and (3) financial stakeholders
(stockholders and debt holders). The second objective of our paper is to explore
the link between stock returns and these three SR dimensions. Our most notable
finding is that for each SR dimension, investors ask for an additional risk premium
when they accept to hold non-socially responsible stocks. The cost of equity is
thus lower for SR firms. The average premium over the period 2003-2010 is larger
for the components "business stakeholders" and "financial stakeholders" than for
the component "societal stakeholders." The premium for this last component has only
existed since the end of 2008. Since that time, environment and community
involvement have become important risk factors strongly considered by investors.
For the three dimensions, investors notably penalize large non-social firms and
reward small social firms.
We describe a hybrid relational bureaucratic form with structures that embed three
processes of reciprocal interrelating-relational coproduction, relational
coordination, and relational leadership-into the roles of customers, workers, and
managers. We show how these role-based relationships of shared goals, shared
knowledge, and mutual respect foster participants' attentiveness to the situation
and to one another. enabling the caring, timely, and knowledgeable responses found
in the relational form, along with the scalability, replicability, and
sustainability found in the bureaucratic form. Through these role-based
relationships, relational bureaucracy promotes universalistic norms of caring for
particular others.
A recent preoccupation in scholarly research is the capacity of firms in developing
country industrial clusters to comply with international corporate social
responsibility (CSR) policies and codes of conducts. This research is at an early
stage and draws on several-often quite distinct-scholarly traditions. In this
paper, we argue that future work in this area would benefit from a more explicit
examination of the connection between cluster firms and human rights defined
according to the 1948 Universal Declaration of Human Rights and subsequent
covenants and treaties. We argue that cluster firms' adoption of CSR policies,
often indiscriminately imposed by global buyers, should be differentiated from
firms' actual human rights practices. Based on this distinction, we elaborate a
typology of industrial clusters (low-road, window-dressing, rights-oriented) and
identify a set of factors likely to influence their practice. Against this
background, we discuss an agenda for future research and elaborate on the potential
methodological intricacies related to research on the interface between industrial
clusters and human rights.
Over the past two decades, the phenomenon of socially responsible investing has
become more widespread. However, knowledge about the individual socially
responsible investor is largely limited to descriptive and comparative accounts.
The question of "why do some investors practice socially responsible investing and
others don't?'' is therefore still largely unanswered. To address this shortcoming
in the current literature, this paper develops a model of the decision to invest
socially responsibly that is grounded in the cognition literature. The hypotheses
proposed in the model are tested with an experimental survey. The results indicate
that the framing of the investing situation influences the likelihood of engagement
in socially responsible investing and how much return the individuals are willing
to sacrifice when choosing socially responsible over conventional investments. The
study does not find support for a relationship between expectations about corporate
social responsibility and the likelihood of engagement in socially responsible
investing.
Drawing on social identity theory and organizational identification theory, we
develop a model of the impact of perceived corporate social responsibility on
employees' organizational identification. We argue that employees' perceptions of
their company's social responsibility behaviors are more important than
organizational reality in determining organizational identification. After defining
perceived corporate social responsibility (PCSR), we postulate how PCSR affects
organizational identification when perception and reality are aligned or
misaligned. Implications for organizational practice and further research are
discussed.
We explore the impact on employee attitudes of their perceptions of how others
outside the organization are treated (i.e., corporate social responsibility) above
and beyond the impact of how employees are directly treated by the organization.
Results of a study of 827 employees in eighteen organizations show that employee
perceptions of corporate social responsibility (CSR) are positively related to (a)
organizational commitment with the relationship being partially mediated by work
meaningfulness and perceived organizational support (POS) and (b) job satisfaction
with work meaningfulness partially mediating the relationship but not POS.
Moreover, in order to address limited micro-level research in CSR, we develop a
measure of employee perceptions of CSR through four pilot studies. Employing a
bifactor model, we find that social responsibility has an additional effect on
employee attitudes beyond environmental responsibility, which we posit is due to
the relational component of social responsibility (e.g., relationships with
community).
The privatization of France Telecom (FT) in 1997 led to the implementation of a
profit-oriented financialization strategy. An unforgiving work environment was
developed, which has unsettled many employees. Between February 2008 and October
2011, 69 employees took their own life. Many left notes blaming management for
having privileged the interests of shareholders over those of employees. Through
interviews with employees and professional practitioners associated with FT, we
reveal that employees strongly resented the company's use of financialization
policies to maximize shareholder value. Pursuit of such policies led to the de-
institutionalization of socially prescribed norms that were applied commonly in
Continental European workplaces. Feelings of anomie, disgrace, futility and
isolation ensued among employees. This case highlights an important effect of a
modern corporation's adoption of financialization policies. It points to the need
to improve workplace sensitivities and the ethical dispositions of companies and
their managers.
Corporate social responsibility (CSR) is a tortured concept. We review the current
state of the art across a number of academic disciplines, from accounting to
management to theology. In a world that is increasingly global and pluralistic,
progress in our understanding of CSR must include theorizing around the micro-level
processes practicing managers engage in when allocating resources toward social
initiatives, as well as refined measurement of the outcomes of those initiatives on
stakeholder and shareholder interests. Scholarship must also account for the
influence of diverse, and even mal-adaptive, stakeholders as well as more fully
incorporate non-Western philosophical and economic perspectives. Based on this
review, we pose five questions that scholars from each of these disciplines should
address as the CSR field moves forward. We hope our questions provoke deeper
thinking and greater rigor and attention to detail in this important area of
business research.
Do shareholders gain when managers disperse corporate resources through activities
classified as corporate social responsibility (CSR)? Strategy scholars have
recently developed a theoretical model that links such activities to shareholder
value when a firm suffers a negative event; we test key portions of this theory of
the 'insurance-like' property of CSR activity. We posit that Such activity leads to
positive attributions from stakeholders, who then temper their negative judgments
and sanctions toward firms because of this goodwill. We extend the risk management
model by theorizing that some types of CSR activities will be more likely to create
goodwill and offer insurance-like protection than other types. We delineate several
firm and event specific and of characteristics that we expect to influence the link
between CSR activities and an insurance effect. We then test our model using an
event study of 178 negative legal/regulatory actions against firms throughout the
11 years from 1993-2003. We find that participation in institutional CSR
activities-those aimed at a firm's secondary stakeholders or society at large-
provides an 'insurance-like' benefit, while participation in technical CSRs-those
activities targeting a firm's trading partners-yields no such benefits. We conclude
by considering the implications of our findings for future theorizing and research
into the economic value of CSR engagement. Copyright (c) 2008 John Wiley & Sons,
Ltd.
This study challenges the implicit assumption of homogeneity in national
institutional environments made in past studies of firm performance persistence. We
propose that home-country institutions matter. We focus on the impact of formal
institutions in the product, financial, and labor markets, arguing that they affect
the size of pools of exchange partners and the types of exchanges allowed and
condoned. Ultimately, these restrictions affect competitive intensity among firms,
and firm performance persistence. Using data for over 10,000 firms from 33
countries over a 10-year time frame, we show that antitrust law strength, a product
market institution designed to prevent collusion among firms, is associated with
decreases in performance persistence. Unskilled labor market flexibility, a labor
market institution that reduces legal constraints imposed on residual claimants
(managers and owners) to take necessary actions to maintain or enhance
profitability, is associated with increases in performance persistence. Product
liability law effectiveness, another product market institution, and corporate
control market development, a financial market institution, are positively
associated with performance persistence only in the case of MNEs. The two remaining
financial and labor market institutions, public equity market development
(respectively skilled labor market availability) have a positive (respectively
negative) impact for domestic firms only. Journal of International Business Studies
(2010) 41, 1119-1140. doi:10.1057/jibs.2010.3
The purpose of this article is to investigate how Human Resources (HR) contributes
to responsible leadership. Although Corporate Social Responsibility (CSR) practices
have been embraced by many corporations in recent years, the specific contributions
of HR professionals, HR management practices and employees to responsible
leadership have been overlooked. Relying on the analysis of interviews with 30 CSR
and HR corporate executives from 22 corporations operating in France, we specify
the HR contributions to responsible leadership at the functional, practical, and
relational levels of analysis. We analyze whether and how HR support employees'
involvement in CSR, and highlight areas of collaboration and tension between HR and
CSR functions around emerging practices of responsible leadership. Our findings
uncover the multiple yet often implicit roles of HR in responsible leadership as
well as the interrelation between functional, practical and relational dimensions
of these roles. Finally, this study suggests that the organization of the HR-CSR
interface can enable or undermine the HR contributions to responsible leadership
and points to underlying cognitive factors that shape the HR-CSR interface.
This article analyzes the process of organizing collective action by studying the
role of the organizational platform provided by the United Nations-backed
Principles for Responsible Investment (PRI) initiative in supporting institutional
investors' collaborative engagement with corporations on environmental, social, and
governance issues. The authors combine stakeholder and collective action theory to
explain how institutional investors influence corporations through collective
engagement. A unique access to data from the PRI secretariat on two cases of
collaborative campaigns allows evaluation of our framework. The findings clarify
how investors enhance their sources of power, legitimacy, and urgency and attract
managers' attention through collaborative engagement, and show how they manage
these attributes to reshape the legitimacy and urgency of their claims in the eyes
of managers. Our data suggest that "enabling organizations" such as the PRI
initiative facilitate the emergence of collective action by lowering barriers to
entry and providing a mobilizing structure, support collaborative efforts by adding
their own legitimacy, normative power, and persistence to the collaborative
engagement, and create conditions for a lasting dialogue between investors and
managers by providing a hybrid organizational space.
Smith defines the business enterprise primarily as the endeavor of an individual
who remains fully embedded in the broader society and subject to its moral demands.
For him, the conceptions of the local community and its normative framework, of the
enterprise, and of the individuals within it need to be aligned with each other and
developed together. Over time, four processes have, however, led to a widening gap
between the business world and the local community. These are (1) the dissemination
of the corporate model, (2) the transformation of the entrepreneurial role toward
an agency role, (3) changes in the ownership structure, and (4) changes in the
relation to the local community. This article presents Smith's integrative
conception of business and its contributions to the development of integrative
theories of organizations and of business-society relations in the twenty-first
century. Among others, it discusses the necessity to develop a normative-relational
dimension of organizations that addresses the relations between the organization,
its members (e.g., owners and managers), and the normative framework of the local
community. This integrative approach of business-society relations challenges
current business ethics research which often suggests that solutions to the current
scandals lie either within the framework, the organization, or the individuals.
The primacy of shareholder demands in the traditional theory of the firm has
typically excluded marginalised stakeholder voices. However, shareholders involved
in social shareholder engagement (SSE) purport to bring these voices into corporate
decision-making. In response to ethical concerns about the legitimacy of SSE, we
use the lens of discourse ethics to provide a normative analysis at both action and
constitutional levels. By specifying three normative questions, we extend the
analysis of SSE to identify a political role for shareholders in pursuit of the
common good. We demonstrate the desirability for SSE to promote
regulatory/institutional change to guarantee marginalised stakeholders a voice in
corporate decisions that affect them. The theory of SSE we propose thus calls into
question the stark separation of the political and economic spheres and reveals an
underlying tension, often overlooked, within the responsible investment literature.
Research summary: Shareholder activism has become more widespread, yet the role of
corporate governance as antecedent to shareholder activism remains equivocal. We
propose a new conceptual model that characterizes the stochastic of observable
shareholder activism as a compound product of two latent components representing
(1) shareholder activists' propensity to target a company and (2) executives'
propensity to settle activists' demands privately. Our model explicitly decouples
corporate governance expectations for the two latent components embedded in
activism process, and thus allows us to relax assumptions of homogenous shareholder
interests and constrained managerial discretion where corporate managers are
expected to negotiate privately and settle only value-creating activist demands.
Bayesian analysis of zero-inflated Poisson regression reveals that corporate
governance relationships with activism vary across shareholder demands and private
settlements. Managerial summary: Increasing shareholder activism has generated
debates as to whether activism promotesmanagerial accountability and responsibility
or instead encourages managerial short-termism. Our research model allows for
heterogeneous interests among a company's shareholders. We theorize and empirically
investigate a broader role of corporate governance: governance mechanisms need to
ensure that executives are not (1) ignoring activists' value-increasing demands or
(2) accommodating activists' value-decreasing demands in a private, opaque manner
that disenfranchises other shareholders. Our results indicate that corporate
governance implications differ for visible shareholder demands in contrast with
private activism. A plausible application of our model is that it provides
estimates of the probability of the numbers of shareholder demands to be received
by a firm and the probability of privately settling a demand. Copyright (C) 2015
John Wiley & Sons, Ltd.
We provide evidence that the presence of technical expertise in firm governance
structure reduces reliance on contractual incentives to control the potential
agency problem for executives whose responsibilities require specialized knowledge.
Specifically, we find that firms with financial expertise in the form of a board
finance committee, or a chief executive officer with a financial background, tend
to use lower levels of incentive-based compensation for their chief financial
officers. Our findings suggest financial experts provide stronger oversight and/or
direction with regard to firm financial policies and strategies, thereby allowing
firms to reduce reliance on incentive compensation. Our study provides insight into
the role of technical expertise and board committees in firm governance, and into
the benefits of common functional expertise within top management teams. Copyright
(C) 2010 John Wiley & Sons, Ltd.
Starting from MacIntyre's virtue ethics, we investigate several codes of conduct of
banks to identify the type of virtues that are needed to realize their mission.
Based on this analysis, we define three core virtues: honesty, due care, and
accuracy. We compare and contrast these codes of conduct with the actual behavior
of banks that led to the credit crisis and find that in some cases banks did not
behave according to the moral standards they set themselves. However, although
banks and the professionals working in them can be blamed for what they did, one
should also acknowledge that the institutional context of the free market economy
in which they operated made it difficult to live up to the core values lying at the
basis of the codes of conduct. Given the neo-liberal free market system, innovative
and risky strategies to enhance profits are considered desirable for the sake of
shareholder's interests. A return to the core virtues in the financial sector will
therefore only succeed if a renewed sense of responsibility in the sector is
supported by institutional changes that allow banks to put their mission into
practice.
This article explores the role of calculative technologies, such as taxation,
accounting and actuarial practices, in constructing age' in contemporary society.
It argues that retirement income programs built on these technologies attempt to
construct specific relations not just between the individual and other generations,
but between the individual and herself at other stages of life. Retracing the
series of Canadian attempts to secure income for the elderly over the course of the
20th century, the paper shows how calculative technologies have been used to
connect responsibility for the elderly to the political rationalities of the day.
This genealogy allows us to recognize how the present Canadian retirement income
system, with its public and private programs addressing different subsets of the
population, is contingent on neoliberal rationalities of governance. These demand
the alignment of the individual with the goals of the capital markets, and seek to
achieve this through a distributed agency that encourages the investment of
individual savings in retirement income products. The paper argues that this
distributed agency is perpetually incomplete, and that uncertainty is necessary in
order that the individual be constantly remade as an investor.
In this paper, we study a decentralized assembly system consisting of a single
assembler who buys complementary components from independent suppliers under two
contracting schemes: push and pull. In both schemes, the component suppliers are
allowed to freely form coalitions (or alliances) among themselves to better
coordinate their pricing or production decisions. We show that the sole driver of
the inefficiency in a push system, which is due to horizontal decentralization of
suppliers, is the number of alliances that were formed. Specifically, it is shown
that in a push system, the assembler's profit, the total profit of all suppliers
and the consumers' surplus are all decreasing in the number of coalitions, and are
thus maximized when the grand coalition is formed. We further carry out a stability
analysis of coalition structures to verify to what extent suppliers can reduce or
eliminate the inefficiency due to their decentralization by forming alliances. We
show that in a push system with more than two suppliers and a power demand
distribution, myopic suppliers would act independently, resulting with a least
efficient channel, which makes all channel members, as well as the end consumers,
worse off. On the other hand, we prove that farsighted suppliers would form the
grand coalition and thus be able to completely eliminate the inefficiency stemming
from their decentralization. Finally, it is shown that, in contrast to a push
system, in a pull system the suppliers can easily coordinate their production
quantities to eliminate the inefficiency due to their decentralization.
The increasing visibility and elevated status of musicians has become prominent in
contemporary society as a consequence of technological advances and the development
of both mass and specialized targeted audiences. Consequently, the actions of
musicians are under greater levels of scrutiny and fans demand more from musicians
than 'just' music. If the industry demands corporate social responsibility
practices in a similar vein to how corporations promote themselves; a further
question then remains regarding how the increasing prominence of such activities by
musicians influences music consumers and fans of individual bands and artists. The
current research provides a foundation upon which to better understand the role
that social responsibility plays for consumers of music. Consequently, the research
has practical implications for promoting socially responsible consumption
practices. The various public spaces (concerts, festivals, retail outlets, social
events, and social media) that music consumption encompasses represent great
opportunities in which ethical consumption practices can be promoted. We identify a
number of factors (level of expectations, authenticity and escapism) that
ultimately determine when socially responsible engagement in the music industry is
supported, ignored, or even becomes the focus of consumer backlash.
Previous research demonstrates that consumers support firms' CSR activities, and
increasingly demand socially responsible products and services. However, an
implicit assumption in the extant literature is that the purchaser and the consumer
of the product are the same person. The current research focuses on a unique form
of socially responsible consumption behavior: gift-giving. Through 30 depth
consumer interviews, we develop a typology of consumers based on whether consumers
integrate CSR-related information into purchases, and whether the purchases are for
themselves or for others (i.e., gifts). We find that in some instances, consumers
actively avoid purchasing products from socially responsible organizations and do
so with the intention of managing their impressions with the gift recipient. This
is counter to previous research that suggests consumers often choose to make
socially responsible consumption decisions in efforts to satisfy self-presentation
concerns. In addition, the decision to engage in socially responsible consumption
for oneself but not for others was motivated by a variety of factors including the
role of the recipient and a concern over the credibility of socially responsible
gifts. Finally, some participants who do not incorporate CSR into their own
personal consumption chose gifts based on a variety of CSR activities in an effort
to build awareness for socially responsible organizations.
Understanding the effects of ownership upon organizational performance is a well-
established theme in organization theory, but comparison across ownership forms has
been neglected. We develop hypotheses comparing public corporations, private
corporations and partnerships and test them in a sample of large management
consultancies. We find that private corporations and partnerships outperform public
corporations. We attribute this difference to increased monitoring by owners and
greater motivation by professional workers seeking ownership stakes. Contrary to
Durand and Vargas (2003), we find that organizational complexity has neither a
direct nor a moderating effect.
This paper investigates the effect of corporate social responsibility (CSR) on firm
value and seeks to identify the source of that value, by disaggregating the effects
on forecasted profitability, long-term growth and the cost of capital. The study
explores the possible risk (reducing) effects of CSR and their implications for
financial measures of performance. For individual dimensions of CSR, in general
strengths are positively valued and concerns are negatively valued, although the
effect is not universal across all dimensions of CSR. We show that these valuation
effects are principally driven by CSR performance associated with better long run
growth prospects, with an additional minor contribution made by a lower cost of
equity capital.
This paper argues the case that tests of how investors value corporate social
performance (CSP) based upon realised stock market returns are liable to be weak
tests if markets are efficient and firms change CSP policies infrequently. We
provide a theoretical explanation of why this will be the case using examples to
illustrate. Subsequently, we set out an alternative theoretical framework for the
purposes of investigating whether markets place a positive, or a negative,
valuation on CSP, and show why this is superior to tests based upon Tobin's Q.
Using US KLD data, we demonstrate that, as theorised, markets place a positive
value on CSP that is not detected by conventional returns-based tests. Our
conclusion is that researchers who are interested in the question of whether
engagement with a corporate social responsibility agenda is a value-enhancing
activity for a company (as argued by some stakeholder theorists) or value
destructive (as argued by Friedman, The social responsibility of business is to
increase its profits, The New York Times Magazine, 1970), need to look beyond
returns-based tests to answer the research question posed.
This special issue of Business & Society explores how institutions and actors
influence organizational choices regarding corporate responsibility (CR)
initiatives and mechanisms. Assuming CR reflects strategic choices made by firms,
the authors seek to move discussions from why aspects to aligning the why with the
what/how aspects of CR. The articles in this special issue examine CR initiatives
at multiple levels (the firm, industry, national, and global) as well as CR
mechanisms ranging from "go-it-alone" unilateral activities to collaborative
partnerships. The study goals are twofold. First, the authors focus on firms'
attempt to create and manage a portfolio of corporate responsibilities-social,
political, environmental, and economic. These responsibilities involve
relationships with a range of stakeholders (investors, employees, consumers,
suppliers, and distributors as well as its multiple communities), often
simultaneously, and recognizing that the corporation can devote limited resources
to manage stakeholder expectations in this regard. Second, the authors seek to
understand how institutional and competitive contexts matter in shaping specific CR
choices to provide tangible evidence of managing responsibly. The authors suggest
that consciously aligning CR initiatives (what) with appropriate mechanisms (how)
will allow the corporations to efficiently and effectively pursue their CR
objectives and arguably create sustained impact.
We show that cognitive ability influences mutual fund choice: high-IQ investors
avoid funds with high management fees. Two competing stories can explain this
phenomenon. One is that high-IQ consumers benefit less from costly services, as
they find it easier to make informed financial decisions without external help. The
alternative story is that these investors are less likely to overpay for the
services they receive because they are either better judges of value or more
capable of discerning the price charged for these services. A comprehensive data
set of Finnish males' fund holdings supports both stories: consistent with the
first story, high-IQ investors tend to avoid funds sold via expensive service-
intensive channels and prefer a mix of equity and bond funds to expensive readily
packaged balanced funds. Consistent with the alternative story, IQ and fees are
inversely correlated, even after controlling for many fund services, including any
operating at the fund family level.
Social responsibility is typically examined at the firm level, yet there are
instances in which consumers' social responsibility perceptions of the firm's
product brands differ from social responsibility perceptions with regard to the
firm [i.e., corporate social responsibility (CSR)]. This article conceptualizes
brand social responsibility (BSR) and delineates it from CSR. Following the
development of a BSR scale (Study 1), this research demonstrates variations in
consumers' social responsibility perceptions across product brands even if they are
owned by the same corporation and compete in the same product category (Study 2).
BSR is distinct from CSR (Studies 3a-3c), and better predicts consumers' responses
to product brands compared to corporate level measures (Study 4). Consistent with
the conceptual distinction, this research demonstrates the unique contribution of
BSR and CSR in predicting product brand and corporate outcomes, respectively (Study
5). From a theoretical viewpoint, this research is one of the few to examine
differences between product brand and CSR. From a managerial viewpoint, the
consideration of social responsibility at the product brand level facilitates the
assessment of social responsibility perceptions across brands in brand portfolios
managed under a mixed-branding or house-of-brands strategy.
In this research, we extend emotional labor theories to the customer domain by
developing and testing a theoretical model of the effects of employee emotional
labor on customer outcomes. Dyadic survey data from 285 service interactions
between employees and customers show that employees' emotional labor strategies of
deep and surface acting differentially influence customers' service evaluations and
that customers' accuracy in detecting employees' strategies can intensify this
impact. We also investigate the potential moderating effects of service type on the
relationship between emotional labor and customer outcomes but find no support for
such an effect.
Corporate social responsibility (CSR) has emerged as an effective way for firms to
create favorable attitudes among consumers. Although prior research has addressed
the direct influence of proactive and reactive CSR on consumer responses, this
research hypothesized that consumers' perceived organizational motives (i.e.,
attributions) will mediate this relationship. It was also hypothesized that the
source of information and location of CSR initiative will affect the motives
consumers assign to a firms' engagement in the initiative. Two experiments were
conducted to test these hypotheses. The results of Study 1 indicate that the nature
of a CSR initiative influences consumer attribution effects and that these
attributions act as mediators in helping to explain consumers' responses to CSR.
Study 2 suggests that the source of the CSR message moderates the effect of CSR on
consumer attributions. The mediating influence of the attributions as well as the
importance of information source suggests that proper communication of CSR can be a
viable way to inculcate positive corporate associations and purchase intentions.
In accordance with societal norms and values, consumers readily indicate their
positive attitudes toward sustainability. However, they hardly take sustainability
into account when engaging in exchange relationships with companies. To shed light
on this paradox, this paper investigates whether defense mechanisms and the more
specific concept of neutralization techniques can explain the discrepancy between
societal norms and actual behavior. A multi-method qualitative research design
provides rich insights into consumers' underlying cognitive processes and how they
make sense of their attitude-behavior divergences. Drawing on the Ways Model of
account-taking, which is advanced to a Cycle Model, the findings illustrate how
neutralization strategies are used to legitimize inconsistencies between norm-
conforming attitudes and actual behavior. Furthermore, the paper discusses how the
repetitive reinforcement of neutralizing patterns and feedback loops between
individuals and society are linked to the rise of anomic consumer behavior.
As a public director of a NASDAQ stock exchange listed public corporation, I have
seen how quickly the reforms in corporate governance imposed by the Sarbanes-Oxley
Act have changed procedures and policies in public corporations. In areas such as
transparency of financial records and other financial matters including
compensation of top executives and conflict of interest policies affecting both
corporate boards of directors and employees of the corporation the reforms of this
new federal law have quickly changed corporate practices in many corporations. Many
persons who have studied this new law believe that these changes will benefit the
public, shareholders, employees, and other stakeholders in the modern corporation
by increasing the reputation of these organizations for integrity and transparency.
Stock exchanges such as NASDAQ and the New York Stock Exchange now require all
listed companies to have (after a transition time) a majority of independent
directors on their boards of directors. Only independent directors may serve on the
audit, nominating and compensation committees of boards in most cases. Some
exceptions are made to these rules for foreign and domestic issues of companies
where a majority of the voting power is held by one person. According to Morrison &
Foster LLP, Corporate Board Advisory March , 2004, NASDAQ requires that the board
of directors of a listed company determine that an independent director does not
have a relationship that would "interfere with the exercise of independent
judgment" in carrying out the responsibilities of a director.
Corporate social reporting, while not mandatory in most countries, has been adopted
by many large companies around the world and there are now a variety of competing
global standards for non-financial reporting, such as the Global Reporting
Initiative and the UN Global Compact. However, while some companies (e. g., Henkel,
BHP, Johnson and Johnson) have a long standing tradition in reporting non-financial
information, other companies provide only limited information, or in some cases, no
information at all. Previous studies have suggested that there are, country and
industry-specific, differences in the extent of CSR reports (e. g., Kolk et al.:
2001, Business Strategy and the Environment 10, 15-28; Kolk: 2005, Management
International Review 45, 145-166; Maignan and Ralston: 2002, Journal of
International Business Studies 33(3), 497-514). However, findings are inconclusive
or contradictory and it is often difficult to compare previous studies owing to the
idiosyncratic methods used in each study (Graafland et al.: 2004, Journal of
Business Ethics 53, 137-152). Furthermore, previous studies have relied mainly on
simple measures, such as word counts and page counts of reports, to compare the
extent of reporting that may not capture significant differences in the content of
the reports. In this article, we seek to overcome some of these deficiencies by
using textual analysis software and a more robust statistical method to more
objectively and reliably compare the CSR reports of firms in different industries
and countries. We examine a sample of leading companies in four countries (US, UK,
Australia, and Germany) and test whether or not membership of the Global Compact
makes a difference to CSR reporting and is overcoming industry and country specific
factors that limit standardization. We conclude that GlobalCompact membership is
having an effect only in certain areas of CSR reporting, related to the environment
and workers, and that businesses from different countries vary significantly in the
extent to which they promote CSR and the CSR issues that they choose to emphasize
in their reports. These country differences are argued to be related to the
different institutional arrangements in each country.
Three decades ago, planned obsolescence was a widely discussed ethical issue in
marketing classrooms. Planned obsolescence is topical again today because an
increasing emphasis on continuous product development promotes shorter durables
replacement and disposal cycles with troublesome environmental consequences. This
paper offers explanations of why product obsolescence is practiced and why it
works. It then examines the ethical responsibilities of product developers and
corporate strategists and their differing responses to this problem. Pro-
environment product design and marketing practices and innovative government
policies may alleviate the problem over time. However, given the current lack of
understanding about consumer replacement and disposal behavior, it is questionable
as to whether these practices and policies will be sufficiently informed to be
effective. Thus, marketing scholars have a significant opportunity to contribute to
sustainable durables product development.
Although work-family conflict is highly relevant for both families and businesses,
scarce attention has received from business ethics perspective. This article
focuses on the latter, presenting a set of relevant insights from Catholic Social
Teaching (CST). After reviewing the foundations and principles presented by CST
regarding work-family relationships, a set of normative propositions are presented
to develop work-family policies and for a correct personal work-family balance. It
is argued that business responsibility with employees' family should be considered
as a part of Corporate Social Responsibility. In addition, the applications of
these principles and propositions can lead to a mutual enrichment of both business
and family.
We analyze the sourcing decision of a buyer choosing between two supplier types:
responsible suppliers are costly but adhere to strict social and environmental
responsibility standards, whereas risky suppliers are less expensive but may
experience responsibility violations. A segment of the consumer population, called
socially conscious, is willing to pay a higher price for a product sourced from a
responsible supplier and may not purchase in the event of a responsibility
violation from a risky supplier. We identify four possible sourcing strategies that
a buyer might employ: low cost sourcing (sourcing from the risky supplier), dual
sourcing, responsible niche sourcing (sourcing from a responsible supplier and
selling only to socially conscious consumers), and responsible mass market sourcing
(sourcing responsibly and selling to all consumers). We determine when each
strategy is optimal and show that efforts to improve supply chain responsibility
that focus on consumers (by increasing their willingness to pay for responsibility
or increasing the number of consumers that are socially conscious) or increasing
supply chain transparency may lead to unintended consequences, such as an increase
in risky sourcing. Efforts that focus on enforcement and penalizing the buyer,
however, never backfire and always lead to more responsible sourcing and less risky
sourcing.
Research summary: Why do firms vary so much in their stances toward corporate
social responsibility (CSR)? Prior research has emphasized the role of external
pressures, as well as CEO preferences, while little attention has been paid to the
possibility that CSR may also stem from prevailing beliefs among the body politic
of the firm. We introduce the concept of organizational political ideology to
explain how political beliefs of organizational members shape corporate advances in
CSR. Using a novel measure based on the political contributions by employees of
Fortune 500 firms, we find that ideology predicts advances in CSR. This effect
appears stronger when CSR is rare in the firm's industry, when firms are high in
human capital intensity, and when the CEO has had long organizational
tenure.Managerial summary: Why do firms vary in their stances toward corporate
social responsibility (CSR)? Prior research suggests that companies engage in CSR
when under pressure to do so, or when their CEOs have liberal values. We introduce
the concept of organizational political ideology, and argue that CSR may also
result from the values of the larger employee population. Introducing a novel
measure of organizational political ideology, based on employees' donations to the
two major political parties in the United States, we find that liberal-leaning
companies engage in more CSR than conservative-leaning companies, and even more so
when other firms in the industry have weaker CSR records, when the company relies
heavily on human resources and when the company's CEO has a long organizational
tenure. Copyright (c) 2016 John Wiley & Sons, Ltd.
In the quest to build truly sustainable corporations and supply chains, we propose
(a) the moral responsibility theory of corporate sustainability and (b) the moral
responsibility theory of sustainable supply chain. Built from morality literature
in philosophy, the view of corporations as moral agents in law, and analyses of
corporate hypocrisy and its role in an organization's and its members' behaviors,
our theories show how a truly sustainable corporation and its external supply chain
could emerge. At the core, we believe that without a sense of moral responsibility
businesses throughout the supply chain will not be truly sustainable. In today's
highly globalized and fragmented business environments, corporations do businesses
with external supply chain partners, and without the truly sustainable supply chain
partners, they may not be able to achieve sustainability goals. Moreover, for such
a supply chain to be truly sustainable, each member of the supply chain must also
be truly sustainable. For each member of the supply chain to be truly sustainable,
the individuals who work in a corporation must be truly sustainable as well. That
is, a truly sustainable supply chain cannot be established without its member
corporations' and employees' commitment to and successes in sustainability. This
paper shows how business moral responsibility and corporate sustainability are
closely intertwined. How these theories could be applied in the corporate and
supply chain settings are discussed, and future research opportunities are
presented.
In this introductory article, we discuss the need for a rethinking of the
theoretical foundations of management and the practice of business strategy in view
of a range of social, environmental and ethical challenges that highlight the
limits of 'business as usual'. Calls for a reconsideration of current approaches
have come to the fore in the fields of management, accounting, marketing and
finance and we briefly review them here. We then introduce the four papers included
in this special issue, each of which answers previously unechoed calls from
different field of business research. We highlight how each paper contributes to
novel perspectives on a future for business - perspectives that more adequately
reflect the challenges faced today by both the private sector and society at large.
Areas for further research are indicated as well.
Internationalization deals with expansion across space and time. Researchers have
framed internationalization as market growth and expansion through foreign direct
investment (FDI). We use narrative theory to frame a bigger, richer picture. Using
Mikhail Bakhtin's typology of nine space time conceptions and directed observations
of McDonald's Corporation, we show how multinational enterprises (MNEs) create
narratives of internationalization to mitigate the risks of FDI. Competing space
time conceptions in consumers', authors' and societies' stories interact with
managerial narratives to affect international product and task environments. We
increase awareness of MNEs' storytelling by offering a typology of stakeholders'
stories across space and time.
Since the attack on the World Trade Center in New York, and on the Pentagon in the
United States, concerns over security issues have been at an all-time high in this
country. Both state and federal governments continue to discuss legislation on
these issues amid much controversy. One key concern of both employers and employees
is the extent that employers, espousing a "need to know" mentality, continue to
expand their capability and implementation of surveillance of employees in the
workplace. With the technology typically growing faster than the speed of
legislation, protective or permissive, the management and legal issues involved in
electronic monitoring of employee communications in the workplace, are and well
should be on the agenda for discussion of every management and legal team in
American business today. Companies have a legitimate right to protect their trade
secrets from disclosure by disgruntled employees. Similarly, companies also have a
duty to protect their good names and reputations from unauthorized employee
communications with outside parties, and even other employees, that may damage
them. It is also a prime duty of management to ensure, in their direction of their
workforces, that the employees execute their responsibilities by working full time
on their stated objectives. In this regard, any management that fails to oversee
its workforce to ensure that employees are not expending valuable company time, for
which they are being compensated, on personal business, including unauthorized
communications, is remiss in its responsibilities to its shareholders. The company
may see a reduction of the price of its shares in the marketplace if it does not
protect the economic interests of its shareholders.
The authors discuss the consistency of transnational companies in their home, as
well as in less developed host countries, concerning ethics, values and social
responsibility. Ethical behavior offers good reputation, credibility and tradition
to the corporation. It leads to corporate social, environmental and economic
responsibilities, cooperating to the desired sustainability. This paper analyzes
the inversion of values that corporate governance systems have suffered. The
meaning and implication of the corporate social responsibility is investigated and
discussed. A "pyramid of values" is built upon individual ethical values at the
basis. Over them, the organizational ethical values should indicate the limits of
operations, so that the corporate social responsibility can be sustained, in the
top. The authors comment that ethical values no longer lead the organization. Its
communication with the stakeholders, specifically through reports, has been
gradually replacing the code of ethics and corporate values. These reports have
taken the basis of the pyramid leading the organizations to socially irresponsible
and unethical behavior. They do not guarantee transparency or communicate the needs
of the society. It appears that transnational companies do not behave the same way
in their home country as they do in host countries, particularly in less developed
regions like Latin America and Africa. Lack of communication and transparency may
induce employees to unethical decisions and transform the reporting system into a
marketing instrument. In order to guarantee compliance with the codes, transparency
and ethical responsibility, communication within the organization is essential.
Corruption within the private sector has often not been dealt with in Brazil.
Organizations may find corrupt acts in its operations or practices, but specific
concepts and programs to avoid them are neither concrete nor clear. Some Brazilian
stockholders have become aware of the risks involved in unethical procedures and
are adopting the Best Practices of Corporate Governance initiative. International
agencies have intensively supported organizations and governments in an effort to
define policies that inhibit illegal or corrupt cultural habits throughout the
world, but Brazilian practitioners show insufficient response. Skepticism may
indicate a lack of understanding about how an ethical leadership can guide
employees, setting high standards for the organizational culture and climate,
clearly defining limits of correct behavior, and creating appropriate codes of
ethics. Transparency still has to be discovered as a significant tool to encourage
professionalism in performance and reporting of data in Brazilian companies. In
this article, we analyze the ethical behavior of the purchasing department of a
multinational company in its host country, Brazil. It focuses specifically on the
supplier-buyer relationship. The results indicate that despite the negative
reputation Brazilians have in business ethics, a company can still develop a
positive and ethical relationship with its stakeholders. Communication,
transparency, compliance with the company's code of conduct as well as the
supplier's awareness of the buyer's code of conduct are the factors which influence
the supplier-buyer relationship. Transparency can be used as a tool to reduce
corruption, thereby increasing ethical behavior and company image. Good ethical
behavior can help to build up a company's image.
This paper explores how men who perform intimate labour negotiate perceptions of
themselves and their work through complex intersections of masculinity, proximity
and propriety. Its focus is on the ways in which embodied organizational
negotiations are shaped by gendered perceptions of bodily propriety in three
examples of physically, sexually and/or emotionally intimate forms of labour: male
massage therapists; men who work in sex shops; and men working as Santa Claus
performers. While ostensibly quite different forms of work, each is shaped by the
expectation that a quality' interaction with customers or clients will be based
upon the nurturance of a close physical, sexual and/or emotional bond between the
service provider and recipient, at the same time as maintaining appropriate bodily
boundaries and professional distance. Mediating both imperatives requires a careful
negotiation of being appropriately close while at the same time understanding that
social perceptions of their work, themselves as workers, and their interactions
with customers and clients mean that they are frequently under heightened scrutiny,
requiring constant vigilance on their part. Drawing on insights from
phenomenological writing on embodiment, specifically Merleau-Ponty's (2002 [1945])
Phenomenology of Perception, the analysis considers the ways in which intersections
between masculinity, propriety and proximity are perceived and negotiated in
intimate forms of labour, reflecting on instances when a touch becomes too much'.
It considers what these instances reveal to us about gendered experiences of
embodiment within organizations and the importance of perception in understanding
embodied negotiations of workplace intimacy.
Corporate social responsibility (CSR) and its action-oriented offspring Corporate
Citizenship (CC) currently trigger an intensifying debate on ethics, role and
behavior of companies within civil society. For companies, CSR raises the question
of what may be the "good reason(s)" for acting responsible towards its members,
customers or society. In order to answer this question, we face the debate on CSR
and its strategic engagement drivers on the levels of corporate culture, social
innovation, and civil society. In this article, we provide a conceptual framework
based on the analytic distinction of legitimation and sensemaking. The conceptual
framework developed in this article can serve as a basis to develop a company's CSR
strategy. It provides measures and instruments to make complex CSR processes more
visible and manageable.
This research investigated the factors that influence a decision that is often
faced by employees who have made a transition from one organization to another: the
decision about whether to protect secrets of their former employer or to share them
with their new co-workers. A total of 111 employees from two high-tech companies
participated in interviews. Their comments were analysed and, based on both
relevant literature and the results of that analysis, a theory of the factors that
influence newcomers' protect vs. share decisions was developed. According to that
theory, newcomers first decide whether or not information is a trade secret of
their former employer by considering (1) whether the information is part of their
own knowledge, and (2) whether the information is publicly available, general, and
negative (about something that did not work). If newcomers decide the information
is a trade secret, they then evaluate (1) the degree to which their obligations are
biased towards their former or new employer, and (2) the degree to which they
identify more strongly with their former or new employer. Newcomers whose
obligations and identifications are biased towards a new employer are more likely
to share secrets. If these obligations and identifications are balanced, newcomers
may share information in a way that allows them to believe they are fulfilling
their responsibilities to both their former and their new employers.
Existing research on the formation of employee ethical climate perceptions focuses
mainly on organization characteristics as antecedents, and although other
constructs have been considered, these constructs have typically been studied in
isolation. Thus, our understanding of the context in which ethical climate
perceptions develop is incomplete. To address this limitation, we build upon the
work of Rupp (Organ Psychol Rev 1:72-94, 2011) to develop and test a multi-
experience model of ethical climate which links aspects of the corporate social
responsibility (CSR), ethics, justice, and trust literatures and helps to explain
how employees' ethical climate perceptions form. We argue that in forming ethical
climate perceptions, employees consider the actions or characteristics of a complex
web of actors. Specifically, we propose that employees look (1) outward at how
communities are impacted by their organization's actions (e.g., CSR), (2) upward to
make inferences about the ethicality of leaders in their organizations (e.g.,
ethical leadership), and (3) inward at their own propensity to trust others as they
form their perceptions. Using a multiple-wave field study (N = 201) conducted at a
privately held US corporation, we find substantial evidence in support of our
model.
Research on corporate social responsibility (CSR) has tended to focus on external
stakeholders and outcomes, revealing little about internal effects that might also
help explain CSR-firm performance linkages and the impact that corporate marketing
strategies can have on internal stakeholders such as employees. The two studies (N
= 1,116 and N = 2,422) presented in this article draw on theory from both corporate
marketing and organizational behavior (OB) disciplines to test the general
proposition that employee trust partially mediates the relationship between CSR and
employee attitudinal and behavioral outcomes. Both studies provide evidence in
support of these general relationships. Theoretical and practical implications of
these findings are discussed in the context of CSR and corporate marketing
research.
On the basis of an interdisciplinary approach linking taxation, marketing, and
corporate social responsibility, the present research investigates the effects of
media reports on aggressive and responsible corporate tax strategies (CTSs) on
corporate success with consumers. By means of two laboratory experiments (N = 150,
360), we analyze the effects of the CTSs on corporate reputation, consumer purchase
intention, and the consumer's willingness to pay. Our results suggest that
aggressive CTSs diminish corporate success with consumers, whereas responsible CTSs
enhance it. Nevertheless, consumers are not willing to pay a price premium for
products sold by responsible tax-planning companies, but rather punish aggressive
tax-planning companies through a slightly lower willingness to pay. Finally,
consumers' tax morale and their attitude toward tax avoidance are important
moderating variables. Given the growing level of media interest in taxation, our
findings are crucial for assessing consumer-related non-tax costs and the benefits
of different CTSs.
This study examines the relation between corporate social responsibility (CSR) and
institutional investor ownership, and the impact of this relation on stock return
volatility. We find that institutional ownership does not strictly increase or
decrease in CSR; rather, institutional ownership is a concave function of CSR. This
evidence suggests that institutional investors do not see CSR as strictly value-
enhancing activities. Institutional investors adjust their percentage of ownership
when CSR activities go beyond the perceived optimal level. Employing the path
analysis, we also examine the mediating effect of institutional ownership on the
relation between CSR and stock return volatility. We find that CSR decreases stock
return volatility at a decreasing rate through its effect on institutional
ownership. Our results remain robust under several different CSR measures and
estimation methods.
This study examines the impact of board diversity on firms' corporate social
responsibility (CSR) performance. Using seven different measures of board diversity
across 1,489 U.S. firms from 1999 to 2011, the study finds that board diversity is
positively associated with CSR performance. Board diversity is associated with a
greater number of areas in which CSR is strong and a fewer number of areas in which
CSR is a concern. These findings support the stakeholder theory and are consistent
with the view that board diversity enhances firms' ability to satisfy the needs of
their broader groups of stakeholders. We find that gender, tenure, and expertise
diversities seem to be the driving factors of firms' CSR activities. Furthermore,
we find that board diversity significantly increases CSR performance by increasing
CSR strengths and reducing CSR concerns for firms producing consumer-oriented
products and firms operating in more competitive industries. Our results remain
robust using different measures of CSR performance, different estimation methods,
and different samples.
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.
Do firms respond to changes in economic growth by altering their corporate social
responsibility programs? If they do respond, are their responses simply neglect of
areas associated with corporate social performance (CSP) or do they also cut back
on positive programs such as profit sharing, public/private housing programs, or
charitable contributions? In this paper, we argue that because CSP-related actions
and programs tend to be discretionary, they are likely to receive less attention
during tough economic times, a result of cost-cutting efforts. However, the various
CSP performance areas vary in terms of their resource requirements and their
influence on financial performance (short- and long-term), which suggests that
firms may respond differently depending on area. Consequently, in addition to
examining CSP concerns separately from positive actions and programs (CSP
strengths), we also examine the influence of economic growth across the five areas
of diversity, employee relations, the environment, product quality/safety, and the
community. Based on data from 837 firms over 15 years, our results suggest that
firms neglect some areas associated with CSP during economic downturns, resulting
in increased concerns about community and employee relations, product
safety/quality, and the environment. However, this relationship does not apply to
positive actions and programs. Instead, firms tend to increase their positive CSP
programs in areas such as diversity, employee relations, and the environment during
periods of slow economic growth and reduce them when the economy picks up. We offer
potential explanations for our findings and discuss their importance to research on
CSP.
Through a critique of existing financial theory underlying current accounting
practices, and reapplication of this theory to a broad group of stakeholders, this
paper lays a normative foundation for a revised perspective on the responsibility
of the public accounting profession. Specifically, we argue that the profession
should embrace the development of standards for reporting information important to
a broader group of stakeholders than just investors and creditors. The FASB has
recently moved in the opposite direction. Nonetheless, an institution around
accounting for stakeholders continues to grow, backed by a groundswell of support
from many sources. Based on institutional theory, we predict that this institution
and the forces supporting it will cause changes in the public accounting
profession, even if through coercion. We also provide examples of stakeholder
accounting, building from the premise that a primary responsibility of accounting
is to provide information to address the risk management needs of stakeholders.
Workforce diversity has received increasing amounts of attention from academics and
practitioners alike. In this article, we examine the empirical association between
a firm's workforce diversity (hereafter, diversity) and the degree of religiosity
of the firm's management by investigating their unidirectional and endogenous
effects. Employing a large and extensive U.S. sample of firms from the years 1991-
2010, we find a positive association between a measure of the firm's commitment to
diversity and the religiosity of the firm's management after controlling for
various firm characteristics. In addition, after controlling for endogeneity with
the dynamic panel generalized method of moment, we still find a positive
association between the firm's diversity and management's religiosity. We interpret
these results as supportive of the religious motivation explanation that views the
firm as a human community and considers religion as a factor that influences
managers to more positively embrace diversity. Our results, however, provide no
support for the resource-constraint hypothesis that views the firm as a nexus of
contracts and sees managers as aiming to maximize shareholder returns under
resource constraints that force them to invest only in projects that have a
positive net present value (NPV) and reject diversity initiatives since these do
not have a positive NPV.
The political shift toward an economic liberalism in many developed market
economies, emphasizing the importance of the marketplace rather than government
intervention in the economy and society (Dorman, Systematic Occupational Health and
Safety Management: Perspectives on an International Development, 2000; Tombs,
Policy and Practice in Health and Safety 3(1):24-25, 2005; Walters, Policy and
Practice in Health and Safety 03(2):3-19, 2005), featured a prominent discourse
centered on the need for business flexibility and competitiveness in a global
economy (Dorman, 2000; Tombs, 2005). Alongside these developments was an increasing
pressure for corporate social responsibility (CSR). The business case for CSR -
that corporations would benefit from voluntarily being socially responsible - was
increasingly promoted by governments and corporations as part of the justification
for self-regulation. The aim of the article is to examine more closely the
proposition that self-regulation is effective, with particular reference to the
business case for workplace equality and safety. Based on a comprehensive
literature review and documentary analysis, it was found that current predominant
management discourse and practice focusing on diversity and safety management
systems (OHSMS) resonate well with a government and corporate preference for the
business case and self-regulation. However, the centrality of individual rather
than organizational factors in diversity and OHSMS means that systemic
discrimination and inherent workplace hazards are downplayed, making it less likely
that employers will initiate structural remedies needed for real change. Thus,
reliance on the business case in the argument for self-regulation is problematic.
In terms of government policy and management practice, the business case needs to
be supplemented by strong, proactive legislation, and worker involvement.
The multi-disciplinary interest in social responsibility on the part of individuals
and organizations over the past 30 years has generated several descriptors of
corporate social responsibility (CSR) and employee social responsibility (ESR).
These descriptors focus largely on socially responsible behavior and, in some
cases, on socially responsible identity. Very few authors have combined the two
concepts in researching social responsibility. This situation can lead to an
oversimplification of the concept of CSR, thereby impeding the examination of
congruence between employees and organizations with regard to social
responsibility. In this article, we connect two dimensions of social
responsibility-identity and behavior-to build a Social Responsibility Matrix
consisting of four patterns for classifying the social responsibility of employees
and employers: Low Social Responsibility, Identity-based Social Responsibility,
Behavior-based Social Responsibility, and Entwined Social Responsibility. The
positioning of employers and employees on the same matrix (as determined by
internal, relational, and/or external factors) is vital for assessing the level of
congruence between employers and employees with regard to social responsibility and
for discussing the possible outcomes for both parties. These identity and behavior-
based patterns, determinants, and levels of congruence connecting employees and
employers form the foundation for the multi-dimensional, dynamic ESR-CSR Congruence
Model, as exemplified in a case study. This contribution enhances the existing
literature and models of CSR, in addition to improving the understanding of
employee-employer congruence, thereby broadening the array of possibilities for
achieving positive organizational outcomes based on CSR.
The end of the traditional management career has been heralded with supporting,
albeit largely anecdotal, data. The old career was set within internal labour
markets in large organizations and characterized by long-term stability. The new
arrangements have apparently shifted responsibility from employer to employee, with
careers being developed across organizations. Such change is premised on new
organizational forms and is often associated with a growing sense of employee
insecurity. We explore the reality of this new scenario through interpretation of
in-depth semi-structured interviews conducted with middle and senior human
resources managers in large firms in Japan, the UK, and USA. The data indicate that
most of our case study organizations had downsized and delayered, with hybrid
structural forms emerging. Career prospects were diminished, with fewer vertical
promotions and a greater emphasis on lateral development; middle managers were
generally resentful of such factors and forces. Although not directly reflective of
Anglo-American business practice, similar changes to career trajectories were
witnessed in Japan as in the UK and USA.
This article examines the mediation effect of brand identification and the
moderating effect of service quality (SQ) on the effects of corporate social
responsibility (CSR) association on service brand performance. A survey of
customers of mobile telecommunications services was conducted. The study finds,
first, that both CSR and SQ have direct effects on brand identification and
customer satisfaction and indirect effects on customer satisfaction (via brand
identification) and on service brand loyalty (via customer satisfaction and via
"brand identification/customer satisfaction"). Second, SQ enhances the effect of
CSR on brand identification. This study contributes to the literature by
incorporating three perspectives of service brand performance - CSR association,
SQ, and brand identification - into one general framework that stresses (a) the
mediating role of brand identification in predicting customer satisfaction and
service brand loyalty; and (b) the interactive effect of CSR and SQ in predicting
brand identification.
This study comparatively examines the dividends behavior in state-controlled firms
versus family-controlled firms. With the sample of large industrial firms listed on
the Main Board of Hong Kong Stock Exchange, we investigate the dividends payment
rates, stability of dividends payment, the effects of firm size, profitability and
growth opportunity on likelihood to pay dividends, as well as the concentration of
dividend in state-controlled versus family-controlled firms. Based on the findings,
we derive some ethical implications of dividends policy regarding the differences
in business ethical behavior, corporate social responsibility, corporate
governance, business sustainability, and shareholder activism in state-controlled
versus family-controlled firms, as well as the improvement in these respects
through cross-listing in Hong Kong.
While organizations and researchers have traditionally conceptualized customers as
consumers of their services and products, there is a growing recognition that
organizations need to develop more collaborative relationships with clients. In
this research, I explore one implication of this shift-how employees respond to
client conflicts. In a multi-method qualitative study, I studied patient advocates,
hospital employees who mediate conflicts between patients, families, and staff. I
develop a process model that shows how mediators construct a web of discrete social
interactions that, over time, enables them to develop an empathetic account of the
conflict. They then selectively deploy the account to engage in sensegiving. The
process model integrates research on emotions and sensemaking in novel ways. I
identify how emotion work triggers emotion dynamics in interactions that facilitate
or disrupt sensemaking and sensegiving. I show how plausible accounts are developed
over the course of social interactions and that mediators pivoted from sensemaking
to sensegiving when the account was characterized by empathy. Overall, this
research shows how mediators actively generate, interpret, and influence their own
and others' emotions, and that mediators' emotion work contributes to the success
of collective sensemaking.
Institutional investors and corporations increasingly recognize that extra-
financial determinants of business performance can both create value and uncover
significant risks within a business or investment portfolio. For companies that
invest in, develop, own, or operate commercial real estate assets, this awareness
of extra-financial impacts has led to a significant interest in what has been
called "responsible property investment (IUD". Within the field of RPI, green real
estate - real estate investment and management that seeks to reduce the
environmental impacts of building construction and operations has begun to receive
attention. This attention has been extended over the past decade to community
property development projects, where both social and environmental considerations
related not only to the building, but also the project site and surrounding
community are integrated into management and investment decisions. Some examples of
these projects include affordable and workforce housing, urban revitalization and
brownfield redevelopment. More social-focussed issues such as labour and workplace
considerations are also key components of responsible property investing, yet to
date labour issues have received little attention in the RPI literature and
workplace considerations are reflected indirectly through environmental
considerations in the green building literature. This paper explores responsible
real estate investment in Canada by taking an integrated approach in examining both
environmental and social factors and their potential impact on such investments. A
series of semi-structured interviews are conducted with key stakeholders in Canada
to gain insight into how using environmental and social factors may influence long-
term risk and financial returns in real estate investment in Canada with particular
emphasis on institutional investors engaged in these practices. Data is used to
analyse the impact that ESG considerations have on financial performance of these
assets. Jantzi-Sustainalytics ESG ratings are used along with the stock price
changes of fourteen real estate companies and REITs to interrogate this question.
We examined whether and how various biases may influence customers' satisfaction
evaluations and produce discriminatory judgments for minority and female service
employees. We argue that customer satisfaction evaluations are biased because they
are anonymous judgments by untrained raters that usually lack an evaluation
standard. Laboratory and field samples provide disturbing evidence generally
confirming our arguments and suggesting that the presence of nonwhite and women
service employees may produce lower aggregated customer satisfaction evaluations
that may ultimately hurt individuals and organizations financially.
The PRIME Institute of the College of Pharmacy, University of Minnesota, recently
released preliminary research findings indicating a trend of extraordinary
pharmaceutical industry pricing of drug products in the United States (U.S.).
According to researchers at the PRIME Institute, such extraordinary price increases
are defined as any price increase that is equal to, or greater than, 100% at a
single point in time. In some instances, PRIME Institute researchers found that
drugs exhibiting extraordinary price increases are categorized as "orphan drugs"
(or blood-related biologic treatments) and often life-saving or life-sustaining for
treating the cause or symptoms of diseases affecting fewer than 200,000 people in
the U.S., or where there is prevalence of less than 5 per 10,000 people afflicted
with a disease or symptoms in the community. Because of extraordinary price
increases for orphan drugs - some exceeding 1000% at a single point in time - this
article addresses two interrelated questions: Are extraordinary orphan drug price
increases socially responsible behavior? If so, are the pharmaceutical industry's
policies providing orphan drug access to American consumers in dire need of
available life-sustaining and life-enhancing pharmaceuticals considered "socially
responsible" behavior? The author concludes, after an interdisciplinary analysis of
the legal, economic, sociopolitical, and ethical dimensions of orphan drug pricing,
that they are not socially responsible - unless justified by cost and availability
of health care marketplace/patient options. Furthermore, the author recommends a
socially responsible industry strategic approach to insure that patients ultimately
receive - regardless of cost - timely access to life-saving and life-sustaining
orphan drugs.
The Global Economic Ethic Manifesto ("Manifesto") is a moral framework/code of
conduct which is both interactive and interdependent with the economic function of
the main institutions of the economic system: markets, governments, civil society,
and supranational organizations, which lays out a common fundamental vision of what
is legitimate, just, and fair in economic activities. The Manifesto includes five
universally accepted principles and values: the principle of humanity; the basic
values of non-violence and respect for life; the basic values of justice and
humanity; the basic values of honesty and tolerance; and the basic values of mutual
esteem and partnership. We posit that the Manifesto provides an ethical foundation
for explicitly assisting multinational enterprise's ("MNE") executive management
and boards of directors to meet the moral failures criticisms associated with the
expansion of global capitalism, and similarly how the U.N. Global Compact
("Compact") is focused on addressing complimentary market and institutional
failures. In this article, we argue how the Compact and the Manifesto complement
each other, explaining how the policies and guidelines of the Compact can now be
implemented at the organizational/individual level through a comprehensive human
resource management (HRM) plan supporting the ethical framework of the Manifesto.
Finally, we have described how the Manifesto completes a comprehensive managerial
framework (consisting of both the Compact and the Manifesto) for what we term an
"MNE Moral Values-Based Corporate Governance Model." Ultimately, further research
is needed in understanding how much impact external and internal influences make on
creating a sustainable ethical culture in MNEs.
It is not uncommon for advertisers to present required product disclaimers quickly
at the end of advertisements. We show that fast disclaimers greatly reduce consumer
comprehension of product risks and benefits, creating implications for social
responsibility. In addition, across two studies, we found that disclaimer speed and
brand familiarity interact to predict brand trust and purchase intention, and that
brand trust mediated the interactive effect of brand familiarity and disclaimer
speed on purchase intention. Our results indicate that fast disclaimers actually
reduce brand trust and purchase intention for unfamiliar brands, suggesting that
there are both economic and social responsibility reasons to use less rapid
disclaimers for unfamiliar brands. Conversely, disclaimer speed had no negative
effects on brand trust and purchase intention for highly familiar brands,
presenting ethical tensions between economic interests (e.g., an efficient use of
advertisement time) and social responsibility. We discuss the implications of our
framework for advertising ethics, for corporate social performance, and for
corporate social responsibility.
In this paper, I analyze the moral responsibilities that companies have with regard
to the development of their sector, especially when there are path dependences that
can lead sectors on more or less morally acceptable paths, e.g., with regard to
market access for disadvantaged groups. The interdependencies between companies in
a sector are underexplored in the literature on corporate social responsibility
(CSR). Reflections on the normative status of profit-seeking and on the normative
bases of CSR, however, provide us with reasons for seeing sector-related
responsibilities as an important component of CSR. Based on a case study of a
financial institution, I analyze various morally relevant ways in which the
strategic decisions of companies relate to those of other companies in their
sector. I argue that companies have a co-responsibility to contribute to the
development of the moral dimensions of their sectors, especially when they deal
with vulnerable customers.
This paper examines the interactive effects of apology source (i.e., whether an
apology is given by a chief executive officer or employee) and apology components
(i.e., acknowledgment, remorse, and compensation) on forgiveness. Results revealed
a significant source by component interaction. A remorseful employee apology was
more successful than a remorseful CEO apology because consumers felt more empathy
for the employee. Furthermore, a compensatory CEO apology was more effective than a
compensatory employee apology because CEOs could significantly affect consumer
perceptions of justice. No significant differences were found between apology
source and the apology component of acknowledging violated rules and norms.
This research examines the relationship between corporate social responsibility
(CSR) and company stock valuation across three regions of the world. After a brief
introduction, the article gives an overview of the evolving definition of CSR as
well as a discussion of the ways in which this construct has been operationalized.
Presentation of the potential impact of corporate social performance on firm
financial performance follows, including investor characteristics, the rationale
behind their choices, and their influence on the marketplace for securities
worldwide. The unique method used to select socially responsible investments is
then provided that also includes a description of the quantitative techniques
employed in the analyses. Results are offered subsequently, and the close describes
implications for global enterprises as socially responsible investments.
This paper presents a study that identifies a stakeholder-defined concept of
Corporate Responsibility (CR) in the context of a UK financial service organisation
in the immediate pre-credit crunch era. From qualitative analysis of interviews and
focus groups with employees and customers, we identify, in a wide-ranging
stakeholder-defined concept of CR, six themes that together imply two necessary
conditions for a firm to be regarded as responsible-both corporate actions and
character must be consonant with CR. This provides both empirical support for a
notable, recent theoretical contribution by Godfrey (in Acad Manag Rev 30:777-798,
2005) and novel lessons for reputation management practice.
In the wake of the most recent financial crisis, corporations have been criticized
as being self-interested and unmindful of their relationship to society. Indeed,
the blame is sometimes placed on the corporate legal form, which can exacerbate the
tension between duties to shareholders and interests of stakeholders. In
comparison, the Benefit Corporation (BC) is a new legal business entity that is
obligated to pursue public benefit in addition to the responsibility to return
profits to shareholders. It is legally a for-profit, socially obligated, corporate
form of business, with all the traditional corporate characteristics combined with
societal responsibilities. Considering the history and perception of shareholder
primacy in United States law, it is argued that this new business structure is an
ethical step toward empowering socially committed commercial entities. The
contribution of this research is to provide a fundamental base of knowledge about
the new legal form of business, the BC, upon which further study may rely. First,
the legal history of the corporation is briefly reviewed in order to provide
context to the relationship of the corporate form to society, including exploration
of the premise that shareholder wealth maximization is its best and only purpose.
Second, the BC is described in detail, and state statutes are compared. Third, the
BC is placed within the context of corporate social responsibility. Finally,
opportunities for future research are discussed.
A disconnect remains between theories about responsible management and application
in real-life organizations. Part of the reason is due to the complexity and
holistic nature of the field, and the fact that many of the benefits of aligning
business objectives with changing societal conditions are of an intangible nature.
Human resource management is an increasingly important part of the field with
benefits including talent retention, higher levels of motivation, and improvements
in organizational cohesion. This paper sets out an experiment run at a large
Spanish university to try to analyze the impact on worker productivity of a
responsible management stance by an employer. Based on the Corporate Social
Performance model, the paper examines the issue from the point of view of
responsibilities, responsiveness, and outcomes, and considers the cost/benefit
effect of incorporating a social responsibility variable into the wage structure to
measure the impact on productivity.
Recently, there has been much talk of impact investing. Around the world,
specialized intermediaries have appeared, mainstream financial players and
governments have become involved, renowned universities have included impact
investing courses in their curriculum, and a myriad of practitioner contributions
have been published. Despite all this activity, conceptual clarity remains an
issue: The absence of a uniform definition, the interchangeable use of alternative
terms and unclear boundaries to related concepts such as socially responsible
investment are being criticized. This article aims to contribute to a better
understanding of impact investing, which could help foster this specific investment
style and guide further academic research. To do so, it investigates a large number
of academic and practitioner works, highlighting areas of similarity and
inconsistency on three levels: definitional, terminological, and strategic. Our
research shows that, on a general level, heterogeneity-especially definitional and
strategic-is less pronounced than expected. Yet, our research also reveals critical
issues that need to be clarified to advance the field and increase its credibility.
First and foremost, this includes the characteristics required of impact investees,
notably whether they need to be (social sector) organizations that prioritize their
non-financial mission over the business side. Our results indicate that there may
be different schools of thoughts concerning this matter.
The alliance of pure market economies with democratic polities has traditionally
been a problematic one. It is argued that orthodox theoretical conceptualizations
of market behaviour and the application of such theory to our communal lives have
entrenched an incoherent alliance. In particular, the reductive mechanism
characteristic of both neo-classical economic theory and its deployment in our
socio-economic order has severely undermined the required for the autonomy or self-
rule definitive of an authentic democratic order. Such reduction is observed to
function through the disabling of the cognitive capacity of consumers and by
disempowering the agency of workers such that coercion is misconceived as freely
agreed contract.
Moral stress is an increasingly significant concept in business ethics and the
workplace environment. This study compares the impact of moral stress with other
job stressors on three important employee variables-fatigue, job satisfaction, and
turnover intentions-by utilizing survey data from 305 customer-contact employees of
a financial institution's call center. Statistical analysis on the interaction of
moral stress and the three employee variables was performed while controlling for
other types of job stress as well as demographic variables. The results reveal that
even after including the control variables in the statistical models, moral stress
remains a statistically significant predictor of increased employee fatigue,
decreased job satisfaction, and increased turnover intentions. Implications for
future research and for organizations are discussed.
We draw on Lacan's notion of language to study employee subjectivity in a public
sector organization (Publica) in the Netherlands. Our main contribution lies in
using Lacan's theorization of language and subjectivity as a basis for a detailed
textual analysis of how local organizational discourses shape and inform the
subjectivities of employees. We situate our approach within the literature on
subjectivity, language and power in work organizations before describing how we
carried out interviews to elicit interviewees' accounts of performance management.
The mechanisms of metonymy and punctuation, two central features of a Lacanian
conceptualization of language, are analysed by means of a relational analysis of
key performance signifiers that we identify in the interview texts. We show how the
signification of performance in Publica is pinned down by a central empty signifier
which can be understood as a 'quilting point' and serves as a site for employee
desire and identification. Finally, we show how desire and identification are
channelled in specific ways to activate employee self-regulation in achieving the
devolvement of responsibility and labour intensification.
Modularity in product design and flexible supply chains is increasingly common in
buyer-supplier relationships. Although the benefits of supply chain flexibility and
component modularity for end-product manufacturers are accepted, little is known
about their impact on suppliers. We advance the literature on modularity by
exploring how three aspects of a supplier's relationships with its customers affect
the supplier's survival: duration of buyer-supplier relationships, autonomy from
customers, and links to prominent buyers. We compared the effects of these aspects
of buyer-supplier relationships for low- and high-modularity components. Using data
on U.S. carburetor and clutch manufacturers from 1918 to 1942, we found that
suppliers of high-modularity components benefited more from autonomy provided by
potential customers, whereas suppliers of low-modularity components benefited more
from ties to higher status customers. Both benefited from autonomy generated by
existing customers. Thus, relationships that require trust and extensive sets of
interfirm routines, as do those for low-modularity components, led to both greater
relationship benefits and greater constraints.
In this article, we explore the world's response to the increasing impact of carbon
emissions on the sobering threat posed by global warming: the carbon offset market.
Though the market is a relatively new one, numerous offset providers have quickly
emerged under both regulated and voluntary regimes. Owing to the lack of technical
literacy of some stakeholders who participate in the market, no common quality or
certification structure has yet emerged for providers. To the contrary, the media
warns that a relative "cowboy" atmosphere prevails in the current environment, and
that there are "widespread instances of people and organizations buying worthless
credits that do not yield any reductions in carbon emissions" (Harvey and Fidler,
Financial Times, 2007). At this point in the evolution of the market, only a
handful of offset provider-rating schemes exist; and, even these systems leave
consumers with few answers when they seek to find a means by which to ensure that
the said systems are having their intended impact. The purpose of this article is,
first, to provide a grounded understanding of the nature of the offset market, a
tendency toward carbon neutrality as a possible point of equilibrium, and the
ethical tensions that surround it from the perspective of the consuming public.
Second, we outline the standards environment for offset providers to illustrate
most effectively the need for a single set of criteria among providers that is
readily understandable by the common consumer stakeholder. We then explore the
differences among the providers and articulate the specific criteria upon which
providers may be evaluated by this particular stakeholder constituency, by bringing
together best practices based on currently available analyses. Finally, we share
the results of preliminary data collection in connection with 117 offset providers
and highlight early findings. These findings allow us comparing providers
effectively and efficiently on a common scale that services both providers, who
thereby have greater guidance for self-assessment purposes, as well as consumer
stakeholders, who then have the ability to make useful and more informed choices
about carbon emission reduction in the future.
Corporate social responsibility (CSR) is a dramatically expanding area of activity
for managers and academics. Consumer demand for responsibly produced and fair trade
goods is swelling, resulting in increased demands for CSR activity and information.
Assets under professional management and invested with a social responsibility
focus have also grown dramatically over the last 10 years. Investors choosing
social responsibility investment strategies require access to information not
provided through traditional financial statements and analyses. At the same time, a
group of mainstream institutional investors has encouraged a movement to
incorporate environmental, social, and governance information into equity analysis,
and multi-stakeholder groups have supported enhanced business reporting on these
issues. The majority of research in this area has been performed on European and
Australian firms. We expand on this literature by exploring the CSR disclosure
practices of a size- and industry-stratified sample of 50 publicly traded U.S.
firms, performing a content analysis on the complete identifiable public
information portfolio provided by these firms during 2004. CSR activity was
disclosed by most firms in the sample, and was included in nearly half of public
disclosures made during that year by the sample firms. Areas of particular emphasis
are community matters, health and safety, diversity and human resources (HR)
matters, and environmental programs. The primary venues of disclosure are mass
media releases such as corporate websites and press releases, followed closely by
disclosures contained in mandatory filings. Consistent with prior research, we
identify industry effects in terms of content, emphasis, and reporting format
choices. Unlike prior research, we can offer only mixed evidence on the existence
of a size effect. The disclosure frequency and emphasis is significantly different
for the largest one-fifth of the firms, but no identifiable trends are present
within the rest of the sample. There are, however, identifiable size effects with
respect to reporting format choice. Use of websites is positively related to firm
size, while the use of mandatory filings is negatively related to firm size.
Finally, and also consistent with prior literature, we document a generally self-
laudatory tone in the content of CSR disclosures for the sample firms.
When investigating the impact of organizational ethical context on individual
ethical decision-making, past work has reported mixed results, with some studies
indicating that a strong ethical work environment is associated with increased
ethical reasoning, and other studies indicating that such an environment has little
to no influence on the way ethical issues are addressed. Given these contradictory
findings, we utilize multiple theoretical perspectives to assess the degree to
which employees' perceptions of ethical values, ethical culture, and corporate
social responsibility moderate the relationship between their ethical issue
recognition and ethical judgments. Data obtained from employees of a financial
services firm located primarily in the Midwestern United States supported the
research hypothesis, with organizational ethical context weakening the recognition-
judgment linkage. Results are compared to prior studies, and the managerial and
research implications of the findings are discussed, along with the study's
limitations and suggestions for future inquiry.
We link the corporate governance literature in financial economics to the agency
cost perspective of corporate social responsibility (CSR) to derive theoretical
predictions about the relationship between corporate governance and the existence
of executive compensation incentives for CSR. We test our predictions using novel
executive compensation contract data, and find that firms with more shareholder-
friendly corporate governance are more likely to provide compensation to executives
linked to firm social performance outcomes. Also, providing executives with direct
incentives for CSR is an effective tool to increase firm social performance. The
findings provide evidence identifying corporate governance as a determinant of
managerial incentives for social performance, and suggest that CSR activities are
more likely to be beneficial to shareholders, as opposed to an agency cost.
In this article, we explore the relationship between corporate social
responsibility (CSR) and earnings management (EM). Our CSR index, using KLD data,
incorporates information from the following issue areas: the community, corporate
governance, diversity, the product, employee relations, the environment, and human
rights. Results show that more socially responsible firms have higher quality
accruals and less activity-based EM, both of which impact financial reporting
quality.
Information disclosure is a common regulatory tool designed to influence business
behavior. A belief is that transparency can provoke learning and also positive
institutional change by empowering private watchdogs to monitor and pressure
business leaders to alter harmful behavior. Beginning in the late 1990s, a private
movement emerged that pressured corporations to disclose the identify of their
global supplier factories. These activists believed that factory disclosure would
lead to greater accountability by corporations for the working conditions under
which their products are made, which in time would improve labor practices. In
1995, Nike and Levi-Strauss (Levis) surprised the business community by publishing
their supplier lists. This paper describes case studies of Nike and Levis, tracking
the evolution from resistance to supply chain transparency through to the decision
to be industry leaders in factory disclosure. The paper evaluates the contribution
of factory disclosure and proposes that other companies should be urged to move
toward supply chain transparency.
Prior research shows that mutual fund investors are often aware of up-front charges
like sales loads, but they are less mindful of annual operating expenses, even
though both types of fees lower overall performance. This study documents the
historical trend and recent abuse of annual mutual fund expenses. As the industry
becomes more adept at segmenting customers by level of investment sophistication,
we claim that load mutual fund companies take advantage of this ability and charge
higher expenses to their target customer: the less-knowledgeable investor. No-load
fund companies, which tend to attract the more sophisticated investor, offer lower
expenses. For example, over 2000-2004 the average annual expense ratio of load
equity funds was 50 basis points higher than no-load equity funds. We show evidence
of this widening cost disparity since the early 1990s among new and existing
equity, bond, and index funds. We also document a growing abuse of sales
distribution or 12b-1 fees among funds that are closed to new investors, almost all
of which are load funds. Thus, load fund investors are more susceptible to paying
higher expenses and receiving lower returns over time.
In 2004, the United States Sentencing Commission amended the Federal Sentencing
Guidelines to allow firms that create "effective compliance and ethics programs" to
receive better treatment if prosecuted for fraud. Effective compliance and ethics,
however, appear to be limited to activities focused on complying with the firms'
internal legal and ethical standards. We explored a potential connection between
the firms' external corporate social responsibility (CSR) behaviors and internal
compliance: Is there an organizationally valid relationship between these two firm
activities? That is, when organizations demonstrate CSR with behaviors external to
the firm, such as employee volunteerism, are their employees more likely to
demonstrate uncompromised legal and ethical compliance behavior internally? We
collected data from 164 working professionals enrolled in a top-tier MBA program in
the southeastern United States regarding their employer-sponsored volunteer
activities and their intentions to comply in various organizational compliance
vignettes. We found that employer-sponsored volunteerism is associated with
uncompromised compliance choices in one of the three vignettes. This finding
indicates preliminary support for further inquiry into the relationship within the
firm between external CSR behaviors and policies regarding organizational
compliance. Post hoc analyses suggest that employer-sponsored volunteerism is
strongly associated with a positive organizational identity, but organizational
identity is not associated with the significant compliance vignette. This evidence
suggests that the underlying mechanism that connects external CSR behaviors and
internal compliance intentions is complex and requires future study.
We examine how a firm's bankruptcy affects the bank financing costs of its key
suppliers. We do so by using an extensive, hand-collected data set that captures
the supply chain relationships of bankrupt firms over the time period 1990-2009.
Looking at a sample of more than 2,000 loan contracts, we compare the average
borrowing cost of suppliers in the two years prior to the bankruptcy of a key
customer to the average cost in the two years following the announced bankruptcy.
We find the average loan spreads increase by roughly 20% following the customer's
announced bankruptcy. These effects are even stronger if the bankrupt firm is
operating within a distressed industry or when there is a strong supplier-customer
relationship. We also find that the structure of lending agreements significantly
changes in the aftermath of a client bankruptcy. More specifically, we find that
the number of covenants increases and the lead banker(s) take an increasingly
important role in the period following the client's bankruptcy. Taken together, the
results of this study provide new insights into the financial implications of
supply chain changes.
Managers have a unique fiduciary responsibility to shareholders of a firm that
implies a set of ethical obligations. At a minimum, managers are required to
protect shareholder's interests when other stakeholders are unaffected by their
decision. This ethical imperative has been established in the literature. in cases
of conflicts of interest between managers and shareholders, the board of directors
of the firm has an ethical obligation to shareholders. The structure of the board
can affect its ability to fulfill this obligation. Two specific cases where
managerial actions have been argued to be unethical are the adoption of classified
boards and poison pills. In this study, we empirically analyze the role of board
structure in protecting shareholder rights in the specific case of antitakeover
provisions. We test this question on a sample of firms whose shareholders have
voted to remove antitakeover provisions and find that independent, focused boards
are more likely to accede to shareholder resolutions than are less independent
boards. Board size is also important and related to other board structures. We draw
implications of this finding for future research on the ethics of board governance.
How can firms extract value from already-implemented information technologies (IT)
that support the work processes of employees? One approach is to stimulate
employees to engage in post-adoptive extended use, i.e., to learn and apply more of
the available functions of the implemented technologies to support their work. Such
learning behavior of extending functions in use is ingrained in a process by which
users make sense of the technologies in the context of their work system. This
study draws on sensemaking theory to develop a model to understand the antecedents,
contingencies, and consequences of customer service employees' extended use of
customer relationship management (CRM) technologies. The model is tested using
multisource longitudinal data collected through a field study of one of the world's
largest telecommunications service providers. Our results suggest that employees
engage in post-adoptive sensemaking at two levels: technology and work system. We
found that sensemaking at both of these levels impacts the extended use of CRM
technologies. Employees' sensemaking at the technology level is influenced by
employees' assessment of technology quality, whereas employees' sensemaking at the
work system level is influenced by customers' assessment of service quality.
Moreover, in the case of low technology quality and low service quality, specific
mechanisms for employee feedback should be conceptualized and aligned at two
levels: through employee participation at the technology level and through work
system coordination at the work system level. Such alignment can mitigate the
undesirable effect of low technology quality and low service quality, thereby
facilitating extended use. Importantly, we found that extended use amplifies
employees' service capacity, leading to better objective performance. Put together,
our findings highlight the critical role of employees' sensemaking about the
implemented technologies in promoting their extended use of IT and improving their
work performance.
In a series of articles, Thomas Dunfee defended the view that managers are
permitted and at times, required, to utilize corporate resources to alleviate human
misery even if this is at the expense of shareholder interests. In this article, I
summarize Dunfee's defense of this view, raise some questions about his account and
propose ways in which to answer these questions. The aim of this article is to
highlight one of Dunfee's contributions to the debate about corporate governance
and corporate responsibility.
Interest in the important role that ethical leaders play in organizations has
expanded in recent years because of several high-profile corporate ethical
breakdowns and the increased responsibility placed upon corporate leaders as a
result. In the present study, we introduce a new outcome of ethical leadership:
group ethical voice. We further theorized and tested two mediating mechanisms
linking ethical leadership with group ethical voice. Using two field studies and
one experimental study, we found support for our assertion that ethical leadership
was positively associated with group ethical voice. We also found support for most
of our hypothesized mediating mechanisms (ethical culture and group ethical voice
efficacy) linking ethical leadership with group ethical voiceexcept for the
indirect effect of upper-level ethical leadership on group ethical voice via group
ethical voice efficacy. We further found that group ethical voice positively
influenced ethical performance (significant for the sales groups, marginally
significant for the customer service groups). Contributions to both ethical
leadership and voice literature are discussed along with the limitations of the
current study and directions for future research.
We study the alliance formation strategy among suppliers in a framework with one
downstream firm and n upstream suppliers. Each supplier faces an exogenous random
shock that may result in an order default. Each of them also has access to a
recourse fund that can mitigate this risk. The suppliers can share the fund
resources within an alliance, but they need to equitably allocate the profits of
the alliance among the partners. In this context, suppliers need to decide whether
to join larger alliances that have better chances of order fulfillment or smaller
ones that may grant them higher profit allocations. We first analytically
characterize the exact coalition-proof Nash-stable coalition structures that would
arise for symmetric complementary or substitutable suppliers. Our analysis reveals
that it is the appeal of default risk mitigation, rather than competition
reduction, that motivates cooperation. In general, a riskier and/or less fragmented
supply base favors larger alliances, whereas substitutable suppliers and customer
demands with lower pass-through rates result in smaller ones. We then characterize
the stable coalition structures for an asymmetric supplier base. We establish that
grand coalition is more stable when the supplier base is more homogeneous in terms
of their risk levels, rather than divided among a few highly risky suppliers and
other low-risk ones. Going one step further, our investigation of endogenous
recourse fund levels for the suppliers demonstrates how financing costs affect
suppliers' investments in risk-reducing resources and, consequently, their
coalition formation strategy. Last, we discuss model generalizations and show that,
in general, our insights are quite robust.
Organizations depend on experts to oversee and execute complex tasks. When faced
with pressures to reduce their dependence on experts, managers encounter a control
paradox: they require experts to explicate the very knowledge and discretionary
approaches that are the basis of their control for the purpose of undercutting this
control. Experts rarely consent to such a situation; therefore, attempts to reduce
dependence on experts and control their work are more often aspirational than
actual. Drawing on an ethnography of an organization that was required by a
government agency to transfer the work responsibilities of experts to employees
throughout the organization, this paper describes how a network of actors developed
a discursive, political process to renegotiate control of expert work practices.
Through censure episodes, long-standing and largely successful expert practices
were examined one by one and relabeled as problematic in relation to established
goals. The constructed breaches opened expert practices to evaluation, questioning,
and eventual delegitimation within the organization. This process depended on the
introduction of new roles that revised dependencies and generated new resources.
This paper contributes to the understanding of control in organizations by
theorizing how the emergent, symbolic work of censure episodes are a means of
gradually subverting expert control. Further, these struggles are reconceptualized
as multiple-role negotiations rather than bilateral manager-expert struggles.
This study proposes two identification cuing factors (i.e., CSR associations and
CSR participation) to understand how corporate social responsibility (CSR) relates
to employees' identification with their firm. The results reveal that a firm's CSR
initiatives increase employee-company identification (E-C identification). E-C
identification, in turn, influences employees' commitment to their company.
However, CSR associations do not directly influence employees' identification with
a firm, but rather influence their identification through perceived external
prestige (PEP). Compared to CSR associations, CSR participation has a direct
influence on E-C identification. On the basis of these findings, it is argued that
CSR performance can be an effective way for companies to maintain a positive
relationship with their employees.
The purpose of this study is to investigate the relationships among corporate
social responsibility (CSR), corporate brand credibility, corporate brand equity,
and corporate reputation. Structural equation modeling analysis provided support
for the hypotheses from a sample of 867 consumers in South Korea. The results
showed that CSR has a direct positive effect on corporate brand credibility and
corporate reputation. In addition, the results indicate that corporate brand
credibility mediates the relationship between CSR and corporate reputation.
Moreover, corporate brand credibility mediates the relationship between CSR and
corporate reputation. Finally, the relationship between CSR and corporate brand
equity is sequentially and fully mediated by corporate brand credibility and
corporate reputation. The theoretical and managerial implications of the results
and limitations are discussed, and future research directions are suggested.
We present results from a study about women and employee-elected board members, and
fill some of the gaps in the literature about their contribution to board
effectiveness. The empirical data are from a unique data set of Norwegian firms.
Board effectiveness is evaluated in relation to board control tasks, including
board corporate social responsibility (CSR) involvement. We found that the
contributions of women and employee-elected board members varied depending on the
board tasks studied. In the article we also explored the effects of the esteem of
the women and employee-elected board members, and we used creative discussions in
the boardroom as a mediating variable. Previous board research, including research
about women and employee-elected directors, questions if the board members
contribute to board effectiveness. The main message from this study is that it may
be more important to ask how, rather than if, women and employee-elected board
members contribute, and we need to open the black box of actual board behavior to
explore how they may contribute.
Research summary: Building on economic geography and institutional theory, we
develop and test theory relating geographic variables to the strength of corporate
social responsibility (CSR) engagement and the cost of equity capital. For a large
sample of U.S. firms over the period 1998-2009, we find strong and robust evidence
that firms located in areas characterized by high levels of local CSR density score
higher in CSR engagement. In addition, firms located close to major cities and
financial centers exhibit higher CSR engagement compared to firms located in more
remote areas. Moreover, the effect of CSR engagement on reducing equity financing
costs is even greater for firms in high CSR density areas than for firms in low CSR
density areas.Managerial summary: Does the location of CSR engagement by firms
affect the strength of CSR engagement by their neighbors? Does the geography of
engagement have an impact on financial performance? Our findings show that a firm's
CSR engagement increases in areas where there is dense CSR engagement and when it
is located near large cities. In these areas, norms, values, and knowledge related
to CSR are transmitted to firms through face-to-face meetings and frequent social
interactions with groups such as peers, labor unions, news media, universities, and
community organizations, which tend to be concentrated in large cities. Our
findings further highlight that CSR engagement reduces equity financing costs for
firms in areas where CSR is widely practiced. Copyright (c) 2015 John Wiley & Sons,
Ltd.
We explore the impact of local legitimacy on the imitation of certification by
subsidiaries of foreign multinational enterprises and domestic firms. We propose
that MNE (multinational enterprise) subsidiaries and domestic firms differ in their
propensity to imitate geographically proximate firms when deciding whether to adopt
national vs global CSR (corporate social responsibility) certifications for two
reasons. First, there are differences in the legitimacy they can expect to gain in
different communities from adopting these certifications. Second, there are
differences in their knowledge about the local legitimacy of these certifications.
We test our hypotheses by studying the decisions of automotive suppliers in Mexico
to certify either to ISO 14001, a global certification, or to Clean Industry, a
national certification. We find that geography matters: MNE subsidiaries imitate
national certifications by geographically proximate firms to overcome a liability
of foreignness, while domestic firms imitate global certifications by proximate
firms to overcome the disadvantages of localness. We explore the implications of
our findings for institutional theory and future research.
The call for business practices that create benefits for companies, customers, and
society is getting louder. This article analyzes a new implementation of such a
win-win-win approach: the carrotmob. Activists and managers jointly organize a
shopping flashmob in which consumers collectively purchase the products of a target
company to reward its intent to act more socially responsible. Given that
carrotmobs are only efficient if they are supported by a critical mass of
consumers, a survey study of 337 young consumers explores the critical drivers of
carrotmob participation. Accordingly, object-oriented, personal, and social motives
jointly determine carrotmob participation with social motives having the strongest
impact.
Based on Whitley's "national business systems" (NBS) institutional framework, we
theorize about and empirically investigate the impact of nation-level institutions
on firms' corporate social performance (CSP). Using a sample of firms from 42
countries spanning seven years, we construct an annual composite CSP index for each
firm, based on social and environmental metrics. We find that the political system,
followed by the labor and education system, and the cultural system are the most
important NBS categories of institutions that impact CSP. Interestingly, the
financial system appears to have a relatively less significant impact. We discuss
implications for research, practice and policymaking. Journal of International
Business Studies (2012) 43, 834-864. doi: 10.1057/jibs.2012.26
The challenge of developing a business ethics in China in response to today's
increasing demands of Corporate Social Responsibility (CSR) is examined within the
context of recent business scandals, food scare, labor issues, and environmental
degradations the country is now experiencing. Two surveys on CSR are reported. This
paper reports the recent CSR development in China and outlines the profile of a
prospective business ethics for China. The formal constraints and substantive
components of this business ethics are proposed against the background of China's
cultural and ideological heritage.
It is well known that flexibility can be created in manufacturing and service
operations by using multipurpose production sources such as cross-trained labor,
flexible machines, or flexible factories. We focus on flexible service centers,
such as inbound call centers with cross-trained agents, and model them as parallel
queueing systems with flexible servers. We propose a new approach to analyzing
flexibility arising from the multifunctionality of sources of production. We create
a work sharing (WS) network model for which its average shortest path length (APL)
metric can predict the more effective of two alternative cross-training structures
in terms of customer waiting times. We show that the APL metric of small world
network (SWN) theory is one. simple deterministic solution approach to the complex
stochastic problem of designing effective workforce cross-training structures in
call centers.
Research summary: This article reviews structural change in the automotive sector
from 1997 to 2007. We find that, following internal framing contests, Original
Equipment Manufacturers (OEMs) led efforts to change their sector's architecture,
starting from both strong and weak competitive positions and working with suppliers
to advocate a new vision based on modularity and outsourcing. As the risks and
costs of this vision became apparent, OEMs were able to reverse course and reaffirm
their hierarchical control on the sector, taking advantage of structural features
that weren't salient ex ante. We consider why certain OEMs initiated this status-
quo challenging change, and identify how sector structure mediated their (and
suppliers') efforts to implement it. We document the complex change process, driven
by agency, structure, and heterogeneity in firms' understanding of their sector's
architecture.Managerial summary: We study the industry architecture (i.e., division
of labor and profit) of the automotive sector. During the late 1990s, Original
Equipment Manufacturers (OEMs) embraced a new vision, based on
Modularity+Outsourcing, inspired by an analogy with Personal Computers (PCs). This
seems puzzling since such a change was hard to implement and could have led to OEMs
relinquishing strategic control of the sector. The misstep was caused by internal
framing contests and the agendas and influence of suppliers, consultants, and
academics. We also consider why OEMs were able to partially reverse these changes,
and document the role of structural features that let them control their sector and
retain value: managing the customer experience, acting as guarantors of quality,
and preserving hierarchical supply chains in which they functioned as system
integrators. Copyright (c) 2015 John Wiley & Sons, Ltd.
This paper aims to examine the role(s) that the various vehicles of marketing
communications can play with respect to communicating, publicising and highlighting
organisational CSR policies to its various stakeholders. It will further endeavour
to evaluate the impact of such communications on an organisation's corporate
reputation and brand image. The proliferation of unsubstantiated ethical claims and
so-called 'green washing' by some companies has resulted in increasing consumer
cynicism and mistrust. This has made the task of communicating with, and more
importantly convincing, an organisation's stakeholders vis-A -vis its CSR
credentials even more difficult. This paper argues that marketing communications
tools can play a major role in conveying a company's CSR messages and communicating
a more socially responsible image.
Corporate social responsibility (CSR) is a comprehensive concept that aims at the
promotion of responsible business practices closely linked to the strategy of
enterprises. Although there is no single accepted definition of CSR, it remains an
inspiring, challenging and strategic development that is becoming an increasingly
important priority for companies of all sizes and types, particularly in Europe.
Promotion of well-being at work is an essential component of CSR; however, the link
between CSR, working conditions and work organisation is still found to be
unfamiliar to stakeholders. As CSR is strategic and is regarded by many companies
and corporate leaders as an important development, it offers opportunities for
psychosocial risk management, an area that is currently among the top priorities in
working environment and well-being at work debates. However, the link between CSR
and psychosocial risk management has not been addressed clearly before. This paper
aims to explore the potential role of CSR in promoting well-being at work through
the development of a framework for the management of psychosocial risks. As part of
the research, key stakeholders [including the World Health Organization (WHO), the
International Labour Organization (ILO), the European Agency for Safety and Health
at Work (EU-OSHA), the European Commission (EC), employers' associations, trade
unions and other policy experts] across Europe participated in a survey, interviews
and focus groups to assess and clarify the link between CSR and psychosocial risk
management. On the basis of the findings, a CSR-inspired approach to the management
of psychosocial issues at work is proposed. Such an approach can be a useful tool
in contexts where, up until now, expertise and tradition in dealing with
psychosocial issues have been lacking.
Research summary: In this paper, we theorize and empirically investigate how a
long-term orientation impacts firm value. To study this relationship, we exploit
exogenous changes in executives' long-term incentives. Specifically, we examine
shareholder proposals on long-term executive compensation that pass or fail by a
small margin of votes. The passage of such "close call" proposals is akin to a
random assignment of long-term incentives and hence provides a clean causal
estimate. We find that the adoption of such proposals leads to (1) an increase in
firm value and operating performance-suggesting that a long-term orientation is
beneficial to companies-and (2) an increase in firms' investments in long-term
strategies such as innovation and stakeholder relationships. Overall, our results
are consistent with a "time-based" agency conflict between shareholders and
managers. Managerial summary: This paper shows that corporate short-termism is
hampering business success. We show clear, causal evidence that imposing long-term
incentives on executives-in the form of long-term executive compensation-improves
business performance. Long-term executive compensation includes restricted stocks,
restricted stock options, and long-term incentive plans. Firms that adopted
shareholder resolutions on long-term compensation experienced a significant
increase in their stock price. This stock price increase foreshadowed an increase
in operating profits that materialized after two years. We unpack the reasons for
these improvements in performance, and find that firms that adopted these
shareholder resolutions made more investments in R&D and stakeholder engagement,
especially pertaining to employees and the natural environment. Copyright (C) 2016
John Wiley & Sons, Ltd.
This study examines corporate stakeholder orientation (CSO) across industries and
over time prior to the introduction of mandatory CSR. We argue that CSO is a
legitimacy signal consciously employed by firms to demonstrate their shareholder
and specific non-shareholder orientations in the midst of institutional pressures
emerging from country and industry contexts. Using a 7-code index of CSO on CEO-
shareholder communications from India, we find that in general large firms in India
exhibit a pre-dominant, significant and rising trend of pro-shareholder orientation
in the six-year period immediately preceding the CSR law. Yet, we uncover
significant industry differences in CSO potentially driven by four key factors: the
degree of competitive dynamics, nature of products and services, extent of negative
externalities and social activism, and exposure to international markets. Our
findings support the view that while some minimum threshold of regulatory
intervention is required to balance the interests of business with society,
legislation raises questions in relation to the usefulness of a uniform one-size-
fits-all CSR across all industries.
This article examines joint action initiatives among small- and medium-sized
enterprises (SMEs) in the manufacturing industries in developing countries in the
context of the ascendancy of corporate social responsibility (CSR) and the
proliferation of a variety of international accountability tools and standards.
Through empirical fieldwork in the football manufacturing industry of Jalandhar in
North India, the article documents how local cluster-based SMEs stay coupled with
the global CSR agenda through joint CSR initiatives focusing on child labor.
Probing further, however, also reveals patterns of selective decoupling in relation
to core humanitarian and labor rights issues. Through in-depth interviews with a
wide range of stakeholders involved in the export-oriented football manufacturing
industry of Jalandhar in North India, the article highlights the dynamics of
coupling and decoupling taking place, and how developing country firms can gain
credit and traction by focusing on high visibility CSR issues, although the plight
of workers remains fundamentally unchanged. The authors revisit these findings in
the discussion and concluding sections, highlighting the main research and policy
implications of the analysis.
In recent years, the concepts of charity and development aid have changed
significantly. Present concepts combine direct money transfer with co-production,
knowledge sharing and the development of products and services designed for the
need of developing and transition economies. The concept of micro-financing is a
financial service which has proven to allow for entrepreneurs in the respective
countries to start up their businesses. A relatively new financial product for
these countries is micro-insurance. This article deals with the question whether
consumers in the Netherlands are willing to donate micro-insurances and which
factors influence this willingness to contribute to the non-profit micro-insurance
approach of an insurance company. The data were collected with questionnaires among
a sample of the Dutch population (N = 504). The data have been processed in a one-
way between-groups ANOVA, a paired sample t test and an ordinal regression
analysis. The results show that approximately half of the Dutch consumers are
willing to pay an additional amount on their insurance premium for the donation of
micro-insurances. The amount of the insurance premium did, however, not affect the
willingness to donate (WTD). If consumers could choose the beneficiary less people
are willing to donate, yet those people are willing to donate more money. In
conclusion, there is readiness among consumers to contribute to micro-insurance via
an insurance company that assists in setting up micro-insurance projects. This
indicates a possible role for companies to act as an intermediary between
philanthropic acts and consumers.
Consumer surveys repeatedly suggest that corporate social responsibility (CSR) and
products' social, environmental, or ethical attributes enhance consumers' purchase
intentions. The realization that CSR still has only a minor impact on consumers'
actual purchase decisions thus represents a puzzling paradox. Whereas prior
literature on consumer decision making provides valuable insights into the factors
that impede or facilitate consumers' socially responsible consumption decisions,
such elements may be only the tip of the iceberg. To gain a fuller understanding of
the CSR-consumer paradox, this study proposes investigating the phenomenon through
additional theoretical lenses, namely, a clinical psychology, an evolutionary
psychology/biology, a social psychology, and an economic and economic psychology
lens. From these four unique theoretical lenses, the authors derive an integrative
framework and draw several propositions for further research.
The notion of "responsible luxury" may appear as a contradiction in terms. This
article investigates the influence of two defining characteristics of luxury
products-scarcity and ephemerality-on consumers' perception of the fit between
luxury and corporate social responsibility (CSR), as well as how this perceived fit
affects consumers' attitudes toward luxury products. A field experiment reveals
that ephemerality moderates the positive impact of scarcity on consumers'
perception of fit between luxury and CSR. When luxury products are enduring (e.g.,
jewelry), a scarce product is perceived as more socially responsible than a more
widely available one and provokes positive attitudes. However, this effect does not
appear for ephemeral luxury products (e.g., clothing). The perceived fit between
luxury and CSR mediates the combined effects of scarcity and ephemerality on
consumers' attitudes toward luxury products. This study provides valuable insights
that luxury brand managers can use to design their CSR and marketing strategies.
Labor codes have been voluntarily adopted and used by manufacturers in emerging
economies for the past two decades as a means of ensuring minimally acceptable or
core labor standards for workers. However, far too little is known of the potential
benefits from the voluntary adoption of labor codes to the manufacturer, and prior
human resource management research has been virtually silent on the business
implications of their use for emerging economy manufacturers participating in
global supply chains. Drawing on previous work across multiple disciplines and
proposing a framework that extends human resource management theory more explicitly
and rigorously to the context of emerging economy manufacturing, I theorize and
demonstrate that the voluntary adoption of a labor code can constitute an effective
human resource investment in emerging economies in improving establishment-level
employee outcomes and operational and financial performance. The hypotheses are
tested using longitudinal data on a sample of apparel manufacturing plants in Sri
Lanka. Implications of this study include providing insight into how to expand the
scope and relevance of human resource management theory to better understand
research and practice in emerging economies.
The growing popularity of outsourcing and offshore-partnering activities raises the
issue of what strategies are appropriate for firms to successfully manage customer-
supplier relationships in the international context. Little has been written about
how information technology (IT) systems may impact on international exchange
relationships. In the present study, we report on how suppliers use IT as a
strategic resource to govern their international exchange relationships with
multinational enterprise customers. Taking the supplier's perspective, we propose
that two types of IT resources - IT advancement and electronic integration - create
value for suppliers with respect to innovativeness and market performance. We argue
that this value creation process is mediated by three specific forms of governance:
cooperativeness, output monitoring, and behavior monitoring. To test these
arguments, primary data, obtained from 240 Taiwanese electronics suppliers, are
used for hypothesis testing.. The survey results provide evidence that suppliers'
IT resources enable them to work effectively with their international key
customers. Importantly, of the three governance mechanisms, cooperativeness has the
strongest impact on supplier performance, owing to supplier electronic integration.
Post-hoc analysis revealed that cultural distance does not play a role in
moderating the relationship between IT resources and governance mechanisms in
international exchange. Journal of International Business Studies (2010) 41, 1218-
1239. doi:10.1057/jibs.2010.4
In this research, we examine the effects that customer perceptions of employee
deception have on the customers' attitudes toward an organization. Based on
interview, archival, and observational data within the international airline
industry, we develop a model to explain the complex effects of perceived dishonesty
on observer's attitudes and intentions toward the airline. The data revealed three
types of perceived deceit (about beliefs, intentions, and emotions) and three
additional factors that influence customer intentions and attitudes: the players
involved, the beneficiaries of the deceit, and the harm done by the perceived lie.
We develop a model with specific propositions to guide organizations with respect
to apparently deceitful behavior of their employees. Implications and directions
for future research are provided, focusing on the question of whether organizations
should consistently encourage honesty or train their employees to be effective
liars.
This study examines relationships among high-performance work systems (HPWS), job
control, employee anxiety, role overload, and turnover intentions. Building on
theory that challenges the rhetoric versus reality of HPWS, the authors explore a
potential dark side of HPWS that suggests that HPWS, which are aimed at creating a
competitive advantage for organizations, do so at the expense of workers, thus
resulting in negative consequences for individual employees. However, the authors
argue that these consequences may be tempered when HPWS are also implemented with a
sufficient amount of job control, or discretion given to employees in determining
how to implement job responsibilities. The authors draw on job demands-control
theory and the stress literatures to hypothesize moderated-mediation relationships
relating the interaction of HPWS utilization and job control to anxiety and role
overload, with subsequent effects on turnover intentions. The authors examine these
relationships in a multilevel sample of 1,592 government workers nested in 87
departments from the country of Wales. Results support their hypotheses, which
highlight several negative consequences when HPWS are implemented with low levels
of job control. They discuss their findings in light of the critique in the
literature toward the utilization of HPWS in organizations and offer suggestions
for future research directions.
This study examines how the reference-point effect and sunk-cost fallacy interact
with stakeholder theory and influence how investors evaluate corporate social
performance. We propose that ex-ante (pre-IPO) corporate social performance
influences ex-post (post-IPO) perceived riskiness and that this relationship is U-
shaped. We also evaluate how CEO duality and company age moderate this U-shaped
relationship. Using young and newly public entrepreneurial firms in China, and
focusing on stock returns in the secondary market, empirical results and robustness
tests provide strong support for our hypotheses.
There is a distinct lack of research into the relationship between corporate
governance and corporate social responsibility (CSR) in the banking sector. This
paper fills the gap in the literature by examining the impact of corporate
governance, with particular reference to the role of board of directors, on the
quality of CSR disclosure in US listed banks' annual reports after the US sub-prime
mortgage crisis. Using a sample of large US commercial banks for the period 2009-
2011 and controlling for audit committee characteristics, board meeting frequency,
and banks' profitability, size and risk, we find evidence that board independence
and board size, the two board characteristics usually associated with the
protection of shareholder interests, are positively related to CSR disclosure. This
indicates that, with regard to CSR disclosure, more independent boards of directors
and larger boards are the internal corporate governance mechanisms which promote
both shareholders' and other stakeholders' interests. Contrary to our expectations,
CEO duality also impacts positively on CSR disclosure. From an agency-theoretical
viewpoint, this suggests that powerful CEOs may promote transparency about banks'
CSR activities for their private benefits. While this could indicate that powerful
CEOs are under particular pressure to appease stakeholders' concerns that they
might abuse their power by providing a high degree of CSR disclosure, it could also
be a sign of managerial risk aversion or managers' private reputational concerns.
This study investigates the effects of internal and external corporate governance
and monitoring mechanisms on the choice of corporate social responsibility (CSR)
engagement and the value of firms engaging in CSR activities. The study finds the
CSR choice is positively associated with the internal and external corporate
governance and monitoring mechanisms, including board leadership, board
independence, institutional ownership, analyst following, and anti- takeover
provisions, after controlling for various firm characteristics. After correcting
for endogeneity and simultaneity issues, the results show that CSR engagement
positively influences firm value measured by industry-adjusted Tobin's q. We find
that the impact of analyst following for firms that engage in CSR on firm value is
strongly positive, while the board leadership, board independence, blockholders'
ownership, and institutional ownership play a relatively weaker role in enhancing
firm value. Furthermore, we find that CSR activities that address internal social
enhancement within the firm, such as employees diversity, firm relationship with
its employees, and product quality, enhance the value of firm more than other CSR
subcategories for broader external social enhancement such as community relation
and environmental concerns.
In this article, we examine the empirical association between corporate governance
(CG) and corporate social responsibility (CSR) engagement by investigating their
causal effects. Employing a large and extensive US sample, we first find that while
the lag of CSR does not affect CG variables, the lag of CG variables positively
affects firms' CSR engagement, after controlling for various firm characteristics.
In addition, to examine the relative importance of stakeholder theory and agency
theory regarding the associations among CSR, CG, and corporate financial
performance (CFP), we also examine the relation between CSR and CFP. After
correcting for endogeneity bias, our results show that CSR engagement positively
influences CFP, supporting the conflict-resolution hypothesis based on stakeholder
theory, but not the CSR overinvestment argument based on agency theory.
Furthermore, firms' CSR engagement with the community, environment, diversity, and
employees plays a significantly positive role in enhancing CFP.
In this article, we examine the association between ethics and disclosure and the
impact of this association on the long-term, post-issue performance of seasoned
equity offerings (SEOs). We argue that firms with extensive disclosure are less
likely to face information problems, and more likely to lead to an active
shareholder monitoring, and therefore, engage in fewer unethical activities, such
as aggressive earnings manipulation, and have better long-term, post-issue
performance. Consistent with these predictions, this study presents evidence that
disclosure is negatively related to unethical earnings manipulation and positively
associated with long-term, post-issue performance. In particular, we find that
long-term, post-issue SEO underperformance is significantly less for firms with
extensive disclosure and conservative earnings management than firms with less
disclosure and aggressive earnings management. We interpret this evidence to mean
that over the long run, the capital market values ethical financial reporting and
corporate efforts to incorporate social responsibility into their decision-making
processes, for example, by enhancing information transparency through voluntary
disclosure.
Research on employee recruitment has shown that an organization's corporate social
performance (CSP) affects its attractiveness as an employer, but the underlying
mechanisms and processes through which this occurs are poorly understood. We
propose that job seekers receive signals from CSP that inform three signal-based
mechanisms that ultimately affect organizational attractiveness: job seekers'
anticipated pride from being affiliated with the organization, their perceived
value fit with the organization, and their expectations about how the organization
treats its employees. We hypothesized that these signal-based mechanisms mediate
the relationships between CSP and organizational attractiveness, focusing on two
aspects of CSP: an organization's community involvement and pro-environmental
practices. In an experiment (n = 180), we manipulated CSP via a company's web
pages. In a field study (n = 171), we measured CSP content in the recruitment
materials used by organizations at a job fair and job seekers' perceptions of the
organizations' CSP. Results provided support for the signal-based mechanisms, and
we discuss the implications for theory, future research, and practice.
Our paper examines how field structures moderate the effect of the business press
on organizational outcomes. Prior research suggests that the business press shapes
organizational outcomes, but the question of how these effects depend on
organizations' positions in a field has attracted limited attention. We address
this theoretical limitation in an analysis of how mutual funds in Sweden were
affected by periods when the business press increased its negative coverage of
mutual fund fees. First, we expect that negative coverage influences the way
customers evaluate mutual funds. Second, banks have long occupied a dominant
position in this market, and we thus expect banks to be less affected by the
negative coverage of fees than other mutual fund managers. We find support for our
argument in a longitudinal quantitative analysis of financial net flows into mutual
funds. The findings indicate the value of contextualizing media effects and
considering how field positions moderate the effects of cultural processes.
We investigate the benefits of migrating from a call center, where all agents are
pooled and customers are treated indifferently by any agent, toward a call center
where customers are grouped into clusters with dedicated teams of agents. Each
cluster is referred to as a portfolio. Customers of the same portfolio are always
served by an agent of the corresponding team. There is no specialization involved
in this organization in the sense that all customer portfolios as well as all agent
teams have (statistically) identical behaviors. The reason for moving to this
organization is that dealing with teams of limited size allows a much better
workforce management than the situation usually encountered in large call centers.
The purpose of this paper is to examine how the benefits of moving to this new
organization can outweigh the drawbacks. The drawbacks come from the fact that
there is less of a pooling effect in the new organization than in the original one.
The benefits come from the better human resource management that results in a
higher efficiency of the agents, both in terms of speed and quality of the answers
they provide to customers. Our analysis is supported by the use of some simple
queueing models and provides some interesting insights. In particular, it appears
that for some reasonable ranges of parameters, the new organization can outperform
the original organization. We then extend the analysis to the case where, in
addition to the identified customer portfolios, there is an additional flow of
calls called out-portfolio flow. It is shown that this feature makes the new
organization even more efficient.
Using two firm-level datasets in Korea, we analyzed the effects of corporate social
responsibility (CSR) on employment relations. We propose that participation in
corporate social activity may not necessarily reflect an ethical commitment to do
"the right thing," but instead can be associated with mobilizing internal resources
to offset the costs imposed by external CSR involvement undertaken because of
social pressure. Analysis of the two datasets showed similar results. The results
demonstrate that socially responsible actions facilitate employer tendency to use
performance-based pay and efficiency-based work practices. We also find that CSR
has a negative association with employment growth and increased labor flexibility
through contingent employment. These findings shed light on the internal impact of
CSR involvement on a firm's employment policies with respect to resource
allocation.
This paper investigates the impact of diversity on corporate philanthropy. Compared
to previous studies that have considered the influence of board diversity and CEO
gender on corporate philanthropy, this study introduces the concept of operational
diversity, which is the implementation of diversity programs at management,
employee, and supply chain levels, and further, it explains why operational
diversity influences corporate philanthropy, by using the premises of resource
dependence theory. Second, this study also investigates the influence of board
diversity on corporate philanthropy. Third, this study uses a large sample of U.S.
firms over the period of 1991-2009 and tries to mitigate possible omitted variables
and endogeneity problems that are often overlooked in previous research. We
demonstrate that firms with operational diversity programs are likely more
dependent on a broad variety of resources and give more to community as a strategic
maneuver; hence, operational diversity is a better indicator for predicting future
corporate giving than board diversity alone. However, having a woman or a member of
a minority as a company's chief executive officer is not sufficient to impact its
charitable giving. A battery of robustness tests support our conclusion and confirm
that our results are not driven by a firm's general corporate social responsibility
(CSR) score, gender or independence of board members, or firm ownership. This paper
will assist researchers, practitioners, and other stakeholders in deepening their
understanding of the predictors of corporate giving.
One central business activity that companies increasingly outsource is the
information systems (IS) function. Previous research has shown that outsourcing of
back-office IS generally has a positive effect on shareholder value of the
outsourcing firm. Much less is known about the performance implications of
outsourcing of another important IS function, namely, front-office customer
relationship management (CRM) systems, where the vendor uses its own personnel and
software to perform several CRM tasks. Previous, largely anecdotal evidence shows
that the performance implications of outsourcing CRM range from very negative to
very positive. To address this unsatisfactory state of knowledge, we provide and
empirically test a contingency perspective on the performance implications of
outsourcing CRM processes. We do so using the event-study methodology. The results
are largely consistent with our contingency model. CRM outsourcing is more
beneficial to firms that are high on information technology capabilities and low on
marketing capabilities, and less beneficial when it concerns presales CRM.
Similarly, although vendor economic distance has a positive influence on the
outsourcing firm's shareholder value, vendor cultural distance has a negative
influence. These effects are in turn significantly moderated by the type of CRM
process outsourced.
This article is the final one in a series of four papers investigating the
stakeholder approach to running businesses. It argues that the optimally viable
version of that approach is one in which employees have a co-equal status as
stakeholders with shareholders (the maximum allowed for under stakeholder theory)
while other groupings only have a minimal status as stakeholders and are generally
restricted to just customers, suppliers, and lenders. This version is argued for on
the grounds that it both overcomes the implementation problems attendant upon
having to serve the interests of a range of groupings and is justified in terms of
stakeholder membership being confined to those groupings with a claim on the
services of a business in virtue of directly contributing to its economic
functioning. The ranking of non-shareholder stakeholders in the recommended version
and, in particular, the maximal ranking granted to employees is argued to reflect
the scale of the various contributions as measured by the degree to which making it
exposes those stakeholders to both financial risk and a non-financial "work-
related" risk peculiar to employees. It is concluded that although this is the best
available version of the stakeholder approach it may not be the best of all
possible ways of running a business.
Exploring the tension between theory and practice regarding complexity and
performance in contract design is especially relevant. The goal of this paper is to
understand why simpler contracts may commonly be preferred in practice despite
being theoretically suboptimal. We study a two-tier supply chain with a single
supplier and a single buyer to characterize the impact of contract complexity and
asymmetric information on performance and to compare theoretical predictions to
actual behavior in human subject experiments. In the experiments, the computerized
buyer faces a newsvendor setting and has better information on end-consumer demand
than the human supplier. The supplier offers either a quantity discount contract
(with two or three price blocks) or a price-only contract, contracts that are
commonplace in practice, yet different in complexity. Results show that, contrary
to theoretical predictions, quantity discounts do not necessarily increase the
supplier's profits. We also observe a more equitable distribution of profits
between the supplier and the buyer than what theory predicts. These observations
can be described with three decision biases (the probabilistic choice bias, the
reinforcement bias, and the memory bias) and can be modeled using the experience-
weighted attraction learning model. Our results demonstrate that simpler contracts,
such as a price-only contract or a quantity discount contract with a low number of
price blocks, are sufficient for a supplier designing contracts under asymmetric
demand information.
Since the collapse of Japan's bubble economy in the early 1990's, the Japanese
economy has only recovered slightly. This has direct implications for employment.
Both the seniority wage system and the lifetime employment system, which were
popular during the period of economic growth in Japan, unavoidably changed to an
outcome-wage system. Now there is greater mobility in employment, increased use of
non-regular employees, and diversed working patterns. The problem of karoshi - a
potentially fatal syndrome resulting from long work hours - has been known since
the early 1980s. This problem has become more serious in recent years. The purpose
of this article is to provide an overview of the economic and employment conditions
in Japan, as well as to examine the working lifestyle of Japanese men and its
connection to "karoshi." It is argued that (1) the long work hours are not the
preference of individuals, but rather the result of the adaptation to the work
environment, and; (2) solving this problem requires re-conceptualization of
workers' human rights on the part of both companies and the society as a whole.
We examine the contingencies that sway independent noncore directors of S&P 500
firms to heed the norms of the corporate elite or the disciplining forces of the
efficient directorial labor market in the context of executive entrenchment. We
find support for the corporate elite perspective as the number of independent
noncore directors is positively associated with an entrenchment index score.
However, the positive association is moderated by contextual factors that influence
whether these directors reflect the expectations of the corporate elite or the
efficient directorial labor market. Specifically, this study shows that the
association becomes more positive when these directors are highly embedded in the
corporate elite network or have shorter board tenure but less positive when
independent chief executive officer directors' equity ownership is high. We also
found a crossover interaction effect where the association is negative (positive)
when firm performance is low (high). These results shed light on an underexplored
group of independent directors that play an increasing role in the effective
governance of publicly listed firms.
Do CEOs nearing retirement attempt to boost short-term firm performance or do they
care more about what type of legacy they will leave behind? The two opposing
predictions about the behavior of CEOs upon retirement suggest that retiring CEOs'
decisions about certain long-term investment items may be more complex than
suggested in the literature. In search of an answer to this question, we examine
the relationship between CEO retirement and the level of firm commitment to
corporate social responsibility (CSR). The results show that CEO retirement has a
negative effect on firm commitment to CSR. However, we found that the negative
effect becomes weaker when CEOs retire at relatively older ages or are retained on
the board of directors of their own firms. Our finding suggests that CEOs who face
weaker pressure from the labor market for corporate directors may pay more
attention to preserving their legacy. Copyright (C) 2014 John Wiley & Sons, Ltd.
Do unobservable CEO characteristics predict corporate social performance (CSP) and
are they significantly correlated with CEO compensation? How meaningful is stock-
based CEO compensation as a predictor of CSP? To answer these questions, the author
empirically examines the relationship between stock-based CEO compensation and CSP
while accounting for unobservable CEO characteristics. This study finds that CEO
fixed effects (CEO dummies) account for a significant variance in CSP and that
these fixed effects are correlated with CEO compensation variables in a
statistically significant manner. The findings suggest that unobservable CEO
characteristics should be accounted for when examining the effect of CEO
compensation variables on CSP. The findings also highlight the usefulness of stock-
based compensation instruments for shareholders and other stakeholders who care
about CSP and intend to promote CEO attention to social and ethical issues.
Developing trust in a company is a significant part of building the company-
consumer relationship. Previous studies have sought to identify the positive
consequences of trust such as loyalty and repurchase, but the question of what
builds trust remains largely unanswered. To answer the question, we developed a
model that depicts the relationships among transparency, social responsibility,
trust, attitude, word-of-mouth (WOM) intention, and purchase intention. An online
survey was conducted with a US nationwide sample of 303 consumers, and the data
were analyzed using the structural equation modeling method. The results indicated
that consumers' perceptions of a corporation's efforts to be transparent in the
production and labor conditions and to be socially responsible by giving back to
the local community directly affected these consumers' trust and attitudes toward
the corporation, and indirectly affected their intentions to purchase from and
spread positive WOM about the corporation. Theoretical and practical implications
are discussed.
Recent, well-publicized accounting scandals have shown that the penalties outsiders
impose on those found culpable of earnings management can be severe. However, less
is known about how colleagues within internal labor markets respond when they
believe fellow managers have managed earnings. Designers of responsibility
accounting systems need to understand the reputational costs managers impose on one
another within internal labor markets. In an experimental study, 159 evening MBA
students were asked to assume the role of a manager in a company and respond to a
scenario in which another manager (the target manager) has the opportunity to
engage in earnings management. Participants provided causal attributions, assessed
the morality of the target manager, and indicated whether they would change their
judgments about the target manager's reputation. The study manipulated three
between-subjects factors: (1) whether the target manager chose to engage in
earnings management, (2) whether the company's budgetary control system was rigid
or flexible, and (3) whether the target manager's work history was average or above
average. We found that causal attributions are affected more by the budgetary
systems when the target did not manage earnings than when the manager did. We also
found that morality judgments were significantly associated with the target
manager's behavior, but not with the budgetary system. In addition, participants'
judgments about the target manager's reputation were more strongly associated with
morality judgments than with causal attributions. We discuss implications of the
role of reputation in management control systems design.
This study investigates the financial effects of additions to and deletions from
the most well-known social stock index: the MSCI KLD 400. Our study makes use of
the unique setting that index reconstitution provides and allows us to bypass
possible issues of endogeneity that commonly plague empirical studies of the link
between corporate social and financial performance. By examining not only short-
term returns but also trading activity, earnings per share, and long-term
performance of stocks that are involved in these events, we bring forward evidence
of a 'social index effect' where unethical transgressions are penalized more
heavily than responsibility is rewarded. We find that the addition of a stock to
the index does not lead to material changes in its market price, whereas deletions
are accompanied by negative cumulative abnormal returns. Trading volumes for
deleted stocks are significantly increased on the event date, while the operational
performances of the respective firms deteriorate after their deletion from the
social index.
Many organisations, both public and private, have established framework agreements
with selected suppliers to benefit from purchasing synergies. Compliance to such
contracts throughout the organisation is crucial to achieve the expected benefits.
Yet, in most organisations, the purchasing of goods and services is carried out not
just by the purchasing department, but by many individuals dispersed throughout the
organisation. Such a situation of scattered responsibilities can easily set the
scene for different types of non-compliant behaviours in terms of an organisation's
purchasing policies. Very little research has been conducted on non-compliant
purchasing behaviour, also known as "maverick buying". In this article, we use a
systematic literature review to identify different forms of maverick buying,
ranging from unintentional maverick buying to straightforward sabotage. We validate
these different forms of maverick buying and enrich our understanding of underlying
reasons through a series of in-depth interviews with purchasing professionals. We
bring forms and reasons together in a conceptual framework and propose avenues for
future research.
The current interest in organizational culture, identity, image and reputation and
in organizational discourse points towards the pressure on contemporary
organizations to focus attention on the symbolic dimensions of their activities.
The phenomenon of branding, while originally portrayed as a marketing tool, can
also be understood as an exercise in management of meaning. Branding does not only
inform external stakeholders, such as customers and investors, about the values of
the organization. It also potentially instructs and directs organizational members.
In this sense, branding can be viewed as a management and leadership practice.
Drawing on a longitudinal case study, this paper illustrates how these practices
are played out in the particular context of a management consulting firm and
explores the relationship between branding and organizational identity and
identification. The study highlights the shortcomings of the strategic marketing
perspective on brands and the need for further empirical studies that examine the
role of branding from different perspectives and in different empirical contexts.
Family firm leaders acting as stewards of a close-knit enterprise may attempt to
build a positive atmosphere of trust, clarity, and cohesiveness in the firm's
operation. Yet, conditions unique to family firms may lead some family members to
develop a heightened sense of entitlement and weaker bonds to the organization.
This creates conditions for a Fredo effect, where a family member's incompetence,
opportunistic behaviors, and/or ethically dubious actions can impede the firm's
success, potentially resulting in a scandal that could lead to the firm's demise
and negative economic impact on employees, customers, and other stakeholders.
Surveying 147 family-firm members, we examine the role that linkages among
perceptions of family harmony norms, distributive fairness, role ambiguity, and
relationship conflict play in the emergence of a family member who acts as an
impediment to the firm, which can be manifested in damaging unethical behaviors. As
hypothesized, family harmony norms and fairness perceptions are negatively related
to family impediment, while role ambiguity is positively related to family
impediment. However, relationship conflict mediates these connections, underscoring
the potential damage this type of conflict can create in a family firm, even if
leaders of the firm attempt to establish conditions that reflect a stewardship
approach to firm governance. We discuss how these findings impact the development
of an ethical climate in the family firm and the implications for family business
survival or scandal.
Corporate social responsibility (CSR) has become of great interest to both
researchers and practitioners alike with much discussion on whether the costs
outweigh the performance implications. CSR has become a firm strategic tool (not
only an ethical concept) as firms recognize that the customer value proposition and
CSR is integrated with the focus on how to differentiate the firm from the view of
the customer. We utilized market orientation (MO) theory as our foundation for our
research as it explains how organizations adapt to their customer environment to
develop competitive advantages. With the current customer focus on CSR, MO assists
the field in identifying a possible firm differentiation. Our research found that
firms that ranked high on CSR correlated positively to performance. We also found
our theoretically developed constructs of firm customer orientation (CO) and firm
market orientation correlated with the firm adopting CSR. The results also
indicated that CSR positively mediates CO and MO to firm performance. As past
research had mixed results over the direct relation of MO to performance, our
research suggests that CSR may be the missing variable to explain the
MO/Performance relationship.
Drawing on a multilevel model of motivation in work groups and a functionalist
perspective of citizenship and socially responsible behaviors, we developed and
tested a multilevel model of voluntary workplace green behavior that explicates
some of the reasons why employees voluntarily engage in green behavior at work. For
a sample of 325 office workers organized into 80 work groups in three firms, we
found that conscientiousness and moral reflectiveness were associated with the
voluntary workplace green behavior of group leaders and individual group members.
Furthermore, we found a direct relationship between leader green behavior and the
green behavior of individual subordinates as well as an indirect relationship
mediated by green advocacy within work groups. Our theory and findings shed new
light on the psychological and social conditions and processes that shape voluntary
workplace green behavior in organizational settings and suggest implications for
organizations striving to improve their social responsibility and environmental
sustainability.
Research summary: The importance of firm-stakeholder relationships is gaining
increasing attention. Although a theory of the drivers and consequences of
stakeholder pressure has been developing, it focuses on pressures from organized
stakeholders such as shareholders, NGOs, and activists, and does not incorporate
the emerging possibility that individual voices may matter. By exploring corporate
Twitter, which facilitates movement of individual stakeholders such as customers to
a higher stakeholder class by providing them with a greater sense of power and
urgency, we study the circumstances under which customer voices significantly
affect analyst stock recommendations. We find that favorable reactions to firm-
initiated messages matter, directly or indirectly, depending on the messages'
growth implications. Customer-initiated negative messages have a significant impact
only with high volume and formal institutions that support customer
opinions.Managerial summary: Social media is increasingly used by firms for
disclosing information and engaging stakeholders. Yet, we know little about whether
and how social media usage matters. We show how corporate Twitter usage may
influence analyst stock recommendations. Our interviews of securities analysts
suggest that social media is not institutionalized yet, but increasingly used as a
source of channel checks, especially for vibes, validations, and so on. Our
analyses of corporate Twitter accounts show that both firm-initiated and customer-
initiated tweets can have significant impact on analyst recommendations under
certain conditions. For firm-initiated tweets, the extent of retweets is an
important factor, along with the content of tweets, in particular, growth
implications. For customer-initiated tweets, negative tweets matter, but only with
high volume and regulatory structure that supports customer protection. Copyright
(c) 2017 John Wiley & Sons, Ltd.
In this study, we examine the determinants of corporate environmental
responsibility (CER), as well as the relationship between legal systems and CER as
measured by a unique set of global environmental cost data. Results of our analyses
show that firms' legal origins affect CER, which requires a long-term management
perspective. Specifically, our results indicate that civil law firms exhibit
significantly higher levels of CER than common law firms. In addition, results of
an auxiliary test suggest that manager shareholding has a significant, nonlinear
relationship with CER. The association between a firm's legal origin and its CER
performance remains robust after controlling for the effects of managerial
ownership and issues related to endogeneity. Our findings imply that although the
majority of corporate law studies in the past few decades provide support for the
common law system emphasizing the maximization of shareholder value and investor
protection, the civil law system stressing the maximization of stakeholder wealth
and the importance of CER may become more influential in the coming decades as CER
becomes central to firms' operations.
This study proposes two identification cuing factors (i.e., CSR associations and
CSR participation) to understand how corporate social responsibility (CSR) relates
to employees' identification with their firm. The results reveal that a firm's CSR
initiatives increase employee-company identification (E-C identification). E-C
identification, in turn, influences employees' commitment to their company.
However, CSR associations do not directly influence employees' identification with
a firm, but rather influence their identification through perceived external
prestige (PEP). Compared to CSR associations, CSR participation has a direct
influence on E-C identification. On the basis of these findings, it is argued that
CSR performance can be an effective way for companies to maintain a positive
relationship with their employees.
Company-cause fit has been one of the major issues in the domain of corporate
social responsibility. This study tries to expand the perspective from company-
cause to company-non-profit organization (NPO) fit, and it gives implications to
firms looking for long-term collaboration with an NPO. Specifically, it suggests
three types of fit, i.e., familiarity, business, and activity fit and investigates
the potential effects of these fits in social alliances between companies and the
partnering NPOs on consumer attributions of the firms' motives for the alliances.
An experiment that used scenarios revealed that consumers perceive high-fitted
alliances on the dimensions of the familiarity and activity fit as being more
public-serving than low-matched ones. However, the consumers' attribution of the
motive is not different between the high and low business fit. The implications of
the research results are discussed from an academic and practical standpoint.
This study viewed students majoring in public relations as prospective public
relations practitioners and explored their perceptions about corporate social
responsibility (CSR) as their job attraction condition. The results showed that the
students perceived CSR to be an important ethical fit condition of a company. One
of the significant findings is that CSR can be an effective reputation management
strategy for prospective employees, particularly when a company's business is
suffering. In examining the effect of CSR efforts on attitudinal and behavioral
outcomes, person-organization (P-O) fit appeared to serve as a mediator between CSR
performances and organizational attractiveness.
Using a survey of 393 employees who were natives and residents of China, Japan, and
South Korea, we examined the extent to which employees from different countries
within East Asia experience distributive justice when they perceived that their
work outcomes relative to a referent other (i.e., someone with similar "inputs"
such as educational background and/or job responsibilities) were (1) equally poor,
(2) equally favorable, (3) more poor, or (4) more favorable. As predicted, we found
that when employees perceived themselves relative to a referent other to be
recipients of more favorable outcomes (i.e., pay, job security), Chinese and Korean
employees were less likely than Japanese employees to experience distributive
injustice. We also found that these differences were partially mediated by
employees' level of materialism. Theoretical and practical implications of our
findings are discussed.
This study examines consumer reactions to the food industry's environmental
corporate social responsibility (CSR) by varying levels of CSR and price as CSR
tradeoffs. Findings reveal that proactive CSR programs generate more favorable
attitudes toward and stronger intent to purchase from the company compared to
passive CSR programs. Supportive communication intention also increases with CSR
level in the low price condition. Regarding the impact of price, respondents showed
more positive attitudes toward a company that charges cheaper prices in general.
However, when a company demonstrates proactive initiatives, respondents did not
distinguish between prices and showed generally positive intent to support and
intent to purchase from the company. When a company practices passive CSR and
offers cheaper products, respondents showed the weakest supportive and purchase
intentions.
Proponents of corporate environmental responsibility argue that corporations
shortchange shareholders by investing too little in environmental responsibility.
They claim that corporations can improve their financial performance by increasing
their investment in environmental responsibility. Opponents of corporate social
responsibility argue that corporations shortchange shareholders by investing too
much in environmental responsibility. They claim that corporations can improve
their financial performance by reducing their investment in environmental
responsibility. Yet, others claim that corporations serve their shareholders well
by investing just enough in social responsibility, not too little and not too much.
If so, corporations increase their investment in environmental responsibility when
an increase improves financial performance and reduce their investment in
environmental responsibility when a decrease improves financial performance. Our
evidence is consistent with this last claim. We find that the behavior of
corporations is consistent with the claim that they act in the interest of
shareholders, increasing or decreasing their investment in environmental
responsibility as necessary to improve their financial performance.
This article explores how corporate governance processes and structures are being
used in large Australian companies to develop, lead and implement corporate
responsibility strategies. It presents an empirical analysis of the governance of
sustainability in fifty large listed companies based on each company's disclosures
in annual and sustainability reports. We find that significant progress is being
made by large listed Australian companies towards integrating sustainability into
core business operations. There is evidence of leadership structures being put in
place to ensure that board and senior management are involved in sustainability
strategy development and are then incentivised to monitor and ensure implementation
of that strategy through financial rewards. There is evidence of a willingness to
engage and communicate clearly the results of these strategies to interested
stakeholders. Overall, there appears to be a developing acceptance amongst large
corporations that efforts towards improved corporate sustainability are not only
expected but are of value to the business. We suggest that this is evidence of a
managerial shift away from an orthodox shareholder primacy understanding of the
corporation towards a more enlightened shareholder value approach, often
encompassing a stakeholder-orientated view of business strategy. However, strong
underlying tensions remain due to the insistent market emphasis on shareholder
value.
This paper explores the intersection between three processes associated with
globalisation. First, the rise of emerging economies like China, Brazil and India,
the so-called 'Rising Powers', and their potential to define the contours of
globalisation, global production arrangements and global governance in the twenty-
first century. Second, the importance of corporate social responsibility (CSR)
goals in the shaping of global trade rules and industrial practices. Third, the
significance of small firm clusters as critical sites of industrial
competitiveness. Some of the most significant examples of successful, innovative
and internationally competitive small firm clusters from the developing world are
located in the 'Rising Powers' and cluster promotion is a core element of national
industrial policy in some of these countries. There is also evidence of engagement
by clustered actors with corporate social responsibility goals around labour and
environmental impacts. While these three processes have been separately studied
there has been no attempt to explore their intersections. This paper addresses this
gap through a comparative analysis of secondary data, and a detailed reading of the
literature, on CSR and clusters in Brazil, China and India. It assesses the
evidence on small firm clusters in the Rising Power economies and considers how
these Rising Power clusters engage with CSR goals pertaining to labour, social and
environmental standards. It argues for a greater focus on the formal and informal
institutional context, termed the 'social contract', in explaining divergent
experiences and practices observed across these countries. This raises important
questions for future academic and policy research on clusters, CSR and the Rising
Powers. The paper concludes by outlining a research agenda to explore the local and
global consequences of the relationship between Rising Power clusters and
international labour and environmental standards.
Multinational corporations (MNCs) have come under pressure to adopt private
regulatory initiatives such as supplier codes of conduct in order to address poor
working conditions in global supply chain factories. While a well-known literature
explores drivers and outcomes of such monitoring schemes, this literature focuses
mainly on large firms and has ignored the growing integration of small- and medium-
sized enterprises (SMEs) into global supply chains. Furthermore, the literature on
corporate social responsibility (CSR) in SMEs primarily emphasizes domestic
initiatives and not global challenges. Focusing on the Business for Social
Compliance Initiative (BSCI), this article examines the positions of private
actors, who demand and supply private regulation as well as the positions of those
firms, who are the targets of such schemes. As the BSCI has grown its membership,
MNCs increasingly request that SMEs meet BSCI requirements in global supply chains
even though compliance is a "mission impossible" for many smaller firms. As a
result of this development, the private regulatory system is facing growing strain.
This paper advances the risk management perspective that superior social
performance enhances firm value by serving as an ex ante valuable insurance
mechanism. We posit that good social performance is more valuable as an insurance
mechanism for firms with higher litigation risks. Moreover, value generation of
corporate social performance (CSP) depends on whether a firm has gained pragmatic
legitimacy (i.e., a firm's financial health) and moral legitimacy (i.e., whether or
not a firm operates in a socially contested industry) among its stakeholders. We
find that the value of CSP as insurance against litigation risk is practically
significant, adding 2 to 4 percent to firm value. But CSP is less likely to create
value if the firm is in financial distress or is operating in socially contested
industries. Copyright (c) 2013 John Wiley & Sons, Ltd.
Online workplaces such as oDesk, Amazon Mechanical Turk, and TaskRabbit have been
growing in importance over the last few years. In such markets, employers post
tasks on which remote contractors work and deliver the product of their work
online. As in most online marketplaces, reputation mechanisms play a very important
role in facilitating transactions, since they instill trust and are often
predictive of the employer's future satisfaction. However, labor markets are
usually highly heterogeneous in terms of available task categories; in such
scenarios, past performance may not be an accurate signal of future performance. To
account for this natural heterogeneity, in this work, we build models that predict
the performance of a worker based on prior, category-specific feedback. Our models
assume that each worker has a category- specific quality, which is latent and not
directly observable; what is observable, though, is the set of feedback ratings of
the worker and of other contractors with similar work histories. Based on this
information, we provide a series of models of increasing complexity that
successfully estimate the worker's quality. We start by building a binomial model
and a multinomial model under the implicit assumption that the latent qualities of
the workers are static. Next, we remove this assumption, and we build linear
dynamic systems that capture the evolution of these latent qualities over time. We
evaluate our models on a large corpus of over a million transactions ( completed
tasks) from oDesk, an online labor market with hundreds of millions of dollars in
transaction volume. Our results show an improved accuracy of up to 25% compared to
feedback baselines and significant improvement over the commonly used collaborative
filtering approach. Our study clearly illustrates that reputation systems should
present different reputation scores, depending on the context in which the worker
has been previously evaluated and the job for which the worker is applying.
Cross-sector social partnerships are often studied from a macro and meso
perspective, also in an attempt to assess effectiveness and societal impact. This
article pays specific attention to the micro perspective, i.e. individual
interactions between and within organizations related to partnerships that address
the 'social good'. By focusing on the potential effects and mechanisms at the level
of individuals and the organization(s) with which they interact, it aims to help
fill a gap in research on partnerships, including more insight into the process of
interaction. We conceptually explore micro level interactions, and how partnership
effects may 'trickle down' (e.g. from management to employees), or 'trickle up'
(from employees to management) or 'trickle round' (e.g. between employees). Based
on the literature from various disciplines, we discuss how more generic theories on
social exchange and contagion, social learning and attraction-selection-attrition
can help shed light on micro level interactions in a partnership, considering in
particular transmission mechanisms via employees, top and middle management, and
customers. In this way, partnerships can have wider benefits, as individuals have
multiple roles and effects at the micro level can spread to the meso and macro
levels as well. Implications for research and practice are outlined.
The growing body of literature on partnerships has paid most attention to their
implications at the macro level, for society, as well as the meso level, for the
partnering organisations. While generating many valuable insights, what has
remained underexposed is the micro level, i.e. the role of managers and employees
in partnerships, and how their actions and interactions can have an effect on the
spread and potential effectiveness of collaborative efforts. This article uses a
case-study approach to empirically explore the patterns and potential boundary
conditions of so-called 'trickle effects' of partnerships among individual actors
within and outside partnering companies, which have thus far only been proposed
conceptually. Based on interviews with employees from three different companies, we
found an evidence of trickle-down and trickle-up effects with higher and lower
management, as well as trickle-round effects with colleagues, family, friends and
customers. The article discusses several partnership characteristics that seem to
play a role, and notes implications for research and practice.
In both their external and internal communications, organizations tend to present
diversity management (DM) approaches and corporate social responsibility
initiatives as a kind of morally 'good' organizational practice. With regard to the
treatment of employees, both concepts largely assume equality to be an indicator
(as well as a goal) of organizational 'goodness', e.g. in terms of equal treatment,
or affording equal opportunities. Additionally, research on this issue
predominantly refers to prescriptive and imperative moralities that address the
initiatives themselves, and values them morally. Schopenhauer opposes these
moralities by conceptualizing morality as exclusively being based on the incentives
of acting instead of the actions themselves. He identifies egoism, compassion, and
malice as the sole incentives for every human action, whereby only those actions
solely motivated by compassion can be ascribed genuine moral worth. In this
context, this article shows that from a Schopenhauerian perspective, CSR and DM
initiatives only have a genuine moral worth in so far as the individuals who have
initiated or supported their implementation were exclusively motivated by
compassion. Stressing the narrative of a business case, if utilized as a fa double
dagger ade for true compassion that attaches economic legitimacy to these
initiatives, does not necessarily harm their moral worth. The approach and the
findings developed in this paper contribute to the discourse on the ethical
behavior of organizations, as well as to the discourse on CSR and DM.
Though corporate social responsibility (CSR) is on the agenda of most major
corporations, corporate executives still largely support the view that corporations
should maximize the returns to their owners. There are two lines of defence for
this position. One is the Friedmanian view that maximizing owner returns is the
social responsibility of corporations. The other is a position voiced by many
executives, that CSR and profits go together. This article argues that the first
position is ethically untenable, while the latter is not supported by empirical
evidence. The implication is that there may be good reason for firms to deviate
from a maxim of profit maximization.
The concept of value is held dear by strategy theorists and practitioners alike as
they share a concern about value creation, value propositions, value add, value
chains, shareholder value and a plethora of other value constructs. Yet, despite
its centrality, the concept of value has attracted limited attention in strategy
scholarship. Most commonly, notions of value as profit or utility, inherited from
economic theory, are assumed rather than analyzed. This paper advances the
discussion of value in the strategy discourse by conceptualizing value as a
correlate of valuation practices. Following this view, value is neither understood
as the property of an object nor as a subjective preference; rather, values are
constituted through valuation practices including rankings, ratings, awards,
reviews and other valuation mechanisms that bestow values upon things in the first
place. The paper explores this idea through analyzing valuation practices and their
constitutive mechanisms; and it exploits this idea for the conceptualization of
rivalry and strategic agency. The learnings are two-fold: because goods are
ordered, hierarchized and appreciated by consumers, critics, competitors and others
through mediating valuation practices, it follows that (1) rivalry takes place at
the level of valuation practices as they constitute the spaces in which accounts of
worth are constructed and contested; and that (2) strategic agency may be
understood in relation to an actor's capacity to cope with and influence these
valuation practices.
Exploration of the political roles firms play in society is a flourishing stream
within corporate social responsibility (CSR) research. However, few empirical
studies have examined multiple levels of political CSR at the same time from a
critical perspective. We explore both how the motivations of managers and internal
organizational practices affect a company's choice between competing CSR
approaches, and how the different CSR programs of corporate and civil society
actors compete with each other. We present a qualitative interpretative case study
of how a French children's clothing retailer develops CSR practices in response to
accusations of poor working conditions and child labor in its supply chain. The
company's CSR approach consists of superficial practices, such as supplier audits
by a cooperative business-organized nongovernmental organization (NGO) and
philanthropic activities, which enable managers to silence more radical alternative
models defended by other NGOs, activists, and trade unions. By this approach, the
core business model based on exploitative low-cost country sourcing remains intact
through self-regulated CSR. Through the case study, we develop a framework of
dynamism in competing CSR programs. We discuss the implications of our study for
CSR researchers, company managers, and policy makers.
W e derive explicit solutions to life-cycle utility maximization problems involving
stock and bond investment, perishable consumption, and the rental and ownership of
residential real estate. Prices of houses, stocks and bonds, and labor income are
correlated. Because of a positive correlation between house prices and labor
income, young individuals want little exposure to house price risk and tend to rent
their home. Later in life the desired housing investment increases and will
eventually reach and exceed the desired consumption, suggesting that the individual
should buy his home-and either additional housing units (for renting out) or house
price-linked financial assets. In the final years, preferences shift back to home
rental. The derived strategies are still useful if housing positions are only reset
infrequently. Our results suggest that markets for real estate investment trusts or
other house price-linked contracts lead to nonnegligible welfare gains.
Agency theory-grounded research on boards of directors and firm legitimacy has
historically viewed CEO power as de-legitimating, often taking this fact for
granted in theorizing about external assessors' evaluations of a firm. With few
exceptions, this literature has focused exclusively on capital market participants
(e.g., investors, securities analysts) as the arbiters of a firm's legitimacy and
has accordingly assumed that legitimate governance arrangements are those derived
from the shareholder-oriented prescriptions of agency theory. We extend this line
of research in new ways by arguing that customers also externally assess firm
legitimacy, and that firms potentially adjust their governance characteristics to
meet customers' norms and expectations. We argue that the cultural-cognitive
institutions prevalent in customers' home countries influence their judgments
regarding a firm's legitimacy, such that firms competing heavily in high power
distance cultures are more likely to have powerful CEOs, with CEO power a source of
legitimacy-rather than illegitimacy-among customers. We also argue that the more
dependent a firm is on its customers and the more salient cultural power distance
is as a demand-side institutional norm, the greater this relationship will be. Data
from 151 U.S. semiconductor and pharmaceutical firms over a 10-year period
generally support our predictions.
The number of firms carrying a cause-related product has significantly increased in
recent years. We consider a duopoly model of competition between firms in two
products to determine which products a firm will link to a cause. We first test the
behavioral underpinnings of our model in two laboratory experiments to demonstrate
the existence of both a direct utility benefit to consumers from cause marketing
( CM) and a spillover benefit onto other products in the portfolio. Linking one
product in a product portfolio to a cause can therefore increase sales both of that
product and, via a spillover effect, of other products in the firm's portfolio. We
construct a CM game in which each firm chooses which products, if any, to place on
CM. In the absence of a spillover benefit, a firm places a product on CM if and
only if it can increase its price by enough to compensate for the cost of CM. Thus,
in equilibrium, firms either have both products or neither product on CM. However,
with the introduction of a spillover benefit to the second product, this result
changes. We show that if a single firm in the market links only one product to a
cause, it can raise prices on both products and earn a higher profit. We assume
each firm has an advantage in one product and show that there is an equilibrium in
which each firm links only its disadvantaged product to a cause. If the spillover
effect is strong, there is a second equilibrium in which each firm links only its
advantaged product to a cause. In each case, firms raise their prices on both
products and earn higher profits than when neither firm engages in CM. We also show
that a firm will never place its entire portfolio on CM. Overall, our work implies
that, by carrying cause-related products, companies can not only improve their
image in the public eye but also increase profits.
Research summary: Firms founded by foreign entrepreneurs constitute an influential
and growing part of the world economy. Yet, the existing research has given little
consideration to the strategies of foreign entrepreneurs beyond their decisions to
start a firm. In this article, we address this gap by examining how foreign
entrepreneurs may bring value to their firms as firm managers. We argue that
foreign owner-managers may benefit their firms by having access to home-country
resources. We demonstrate that, compared to hired local managers, foreign owner-
managers reduce firms' operating costs by disproportionately hiring home-country
labor when this labor is more cost-efficient. This effect is larger for labor-
intensive industries and for entrepreneurs from less wealthy countries. Managerial
summary: Foreign entrepreneurs represent an important part of the world economy.
Yet, we know little of how foreign entrepreneurs manage their firms. In this
article, we examine whether foreign entrepreneurs and domestic managers hire
different employees. We find that when foreign entrepreneurs manage their firms
personally, they hire a larger number of foreign workers, and such workers are
cheaper and more productive than the local labor. Conversely, domestic managers
tend to hire local employees, despite their higher relative wages. Foreign owner-
managers are particularly valuable in labor-intensive industries and when their
home-country labor is inexpensive. Copyright (C) 2015 John Wiley & Sons, Ltd.
I develop the thesis that in related diversified firms, the core business (in my
analysis, the largest business) may provide benefits such as scope economies to a
related segment, but it may also exert power and constrain the segment to act in
its interests in various internal and external transactions. This enables the core
business to shift productivity gains toward itself from the segment, which could
lead to various inefficiencies within the related diversified firm. Using
input/output flow data and a multilevel model with the segment as the unit of
analysis, I first show that a segment's productivity is lower compared with a
single-business firm when it shares backward and forward complementarity (i.e.,
when it shares transactions with common suppliers and customers) with the core
business. Correspondingly, I show that as a mirror image, the core business's
productivity is enhanced when the business shares backward and forward
complementarity with segments and when segments are backward integrated with it
(i.e., when the core business provides outputs to segments). These shifts in
productivity and the attendant inefficiencies do not seem to be destroying the
entire value from related diversification. Overall, the findings support the
argument that the power and influence exerted by the core business-and
concomitantly, the subsidization of the core business by related segments-is an
important source of costs borne by segments in a related diversified firm.
Relations between non-governmental organizations (NGOs) and companies have been the
subject of a sharply increasing amount of publications in recent years within
academic business journals. In this article, we critically assess this fast-
developing body of literature, which we treat as forming a 'business and society
discourse' on NGO-business relations. Drawing on discourse theory, we examine 199
academic articles in 11 business and society, international business, and
management journals. Focusing on the dominant articulations on the NGO-business
relationship and key signifiers they rely on, we analyze the problem-settings of
articles in order to reveal the statements that are acceptable and appropriate
within this field. Our threefold aim is to (1) identify dominant articulations of
NGO-business relations in business and society discourse, (2) expose those
articulations that are silenced or suppressed by these dominant articulations, and
(3) critically assess possible power effects of these discursive dynamics in the
field of discursivity. While business and society discourse on NGO-business
relations overall remains open to many different articulations, we also find that
those articulations that focus on NGO-business partnerships and governance
initiatives tend to privilege collaborative and deliberative ways of engaging and
marginalize more adversarial subject positions. We call for more recognition of the
potentially constructive role that can be played by conflict.
Despite the emergence of corporate social responsibility, the impact of CSR efforts
on customer relationships remains decidedly unclear. Moreover, previous studies
have examined CSR in cross-sectional, experimental, and/or artificial settings.
Through field survey data collected at both the beginning (n = 750) and conclusion
(n = 469) of the 2007-2008 NBA season, the authors investigate linkages between
customers' perceptions of the CSR performance of an NBA team and the strength of
their relationship with this same organization. With all respondents of the latter
survey participating in both samples, the authors assess how CSR performance
impacts customer relationships over time. The findings show how a firm that engages
in CSR initiatives may reap rewards by building trusting and committed customer
relationships which, in turn, help forge desirable customer behaviors. The results
also demonstrate how CSR's influence strengthens over the course of the tested
business cycle, thus yielding revealing insights to academics and practitioners
when it comes to understanding the real-world impact of CSR performance for
strengthening customer relationships.
This article examines the relationship between corporate social responsibility and
locality in the small business context. This issue is addressed by studying the
interplay between small businesses and local community based on the embeddedness
literature and using the concept of social proximity. On the basis of 25 thematic
interviews with owner-managers a typology is constructed which illustrates the
owner-managers' perceptions of the relationship between the business and the local
community. The findings emphasize the importance of reciprocity as it is suggested
that corporate social responsibility in relation to locality is constructed as a
response to the interpretations of reciprocal community support between small
business owner-managers and local community.
In this article, the researchers explore the following question. Can corporate
social responsibility (CSR) and the corporate reputation of a firm lead to its
brand equity in business-to-business (B2B) markets? This study discusses CSR from
customers' viewpoints by taking the sample of industrial purchasers from Taiwan
small-medium enterprises. The aims of this study are to investigate: first, the
effects of CSR and corporate reputation on industrial brand equity; second, the
effects of CSR, corporate reputation, and brand equity on brand performance; and
third, the mediating effects of corporate reputation and industrial brand equity on
the relationship between CSR and brand performance. Empirical results support the
study's hypotheses and indicate that CSR and corporate reputation have positive
effects on industrial brand equity and brand performance. In addition, corporate
reputation and industrial brand equity partially mediate the relationship between
CSR and brand performance.
This article describes a survey among Finnish business students to find answers to
the following questions: How do business students define a well-run company? What
are their attitudes on the responsibilities of business in society? Do the
attitudes of women students differ from those of men? What is the influence of
business education on these attitudes? Our sample comprised 217 students pursuing a
master's degree in business studies at two Finnish universities. The results show
that, as a whole, students valued the stakeholder model of the company more than
the shareholder model. However, attitudes differed according to gender: women
students were more in favor of the stakeholder model and placed more weight on
corporate ethical, environmental, and societal responsibilities than their men
counterparts - both at the beginning and at the end of their studies. Thus, no
gender socialization effect of business school education could be observed in this
sense. Business school education was found to shape women and men students'
attitudes in two ways. Firstly, valuation of the shareholder model increased and,
secondly, the importance of equal-opportunity employment decreased in the course of
education. This raises the question whether the educational context is creating an
undesirable tendency among future business professionals. The results further
suggest that the sociocultural context can make a difference in how corporate
social responsibility is perceived. The article also discusses possible ways to
influence the attitudes of business students.
The goal of this paper is to investigate the ethical implications of emerging forms
of control that have developed along with the use of ubiquitous information
technology (IT). Because it can be exerted at a distance, almost anytime and
anywhere, IT-based control has become more subtle, indirect, and almost invisible,
with many negative side effects. Yet the issues raised by this new form of control
have rarely been interpreted, treated, and framed as ethical issues in business
ethics literature. Thus, a more comprehensive inquiry rooted in ethical concerns is
necessary to improve understanding of this more subtle form of control, its ethical
consequences, and the way ethical considerations can be taken into consideration
and acted on by management. This article addresses this goal with a qualitative,
exploratory case study of a telecommunications company, in which salespeople have
been equipped with ubiquitous technology. The findings specify the characteristics
and consequences of ubiquitous IT-based control, thereby inviting a rethinking of
the ethical issues related to the privacy, autonomy, human dignity, and health of
salespeople. In particular, this article highlights four ethical issues raised by
the use of ubiquitous IT at work: the ambivalence of this use of ubiquitous IT at
work, the subtlety of the control exerted by ubiquitous IT, the invasiveness of
ubiquitous IT, and the self-reinforcement of ubiquitous IT-based control. Such
issues are not often taken into account, suggesting that ethical considerations
fail to enter into managerial decision making. This study directly raises questions
about the intentions, responsibilities, and divisions across different categories
of organizational members who participate in such control systems. It also provides
useful insights into employees' perceptions and offers guidance to managers who
want to apply a professional code of ethics to the uses of ubiquitous IT.
Green consumers are those who seek to fulfill economic responsibility with their
choices of environment-friendly products. Previous research found that it is not
easy to identify green consumers by using traditional demographic or psychographic
measurements due to the instability of moral attitude and actual behavior. The
frontal theta brain waves of 19 right-handed respondents were recorded and analyzed
in a choice task between an environment-friendly (green) product and a conventional
product. Product information, which was provided to the respondents, included
written descriptions as well as the price of each product without visual depiction.
Based on the respondents' choice, they were classified into two groups: green (GR)
consumers who chose an environment-friendly product option and non-green (Non-GR)
consumers who chose the option of a conventional product. While processing the
green product message, we discovered that frontal theta activations were
significantly higher among GR consumers than Non-GR consumers. On the contrary, the
frontal theta waves of GR consumers were not differentiated from Non-GR consumers
while processing the price information. Therefore, theta activations in the frontal
area may potentially be a unique neural indicator of GR consumers' cognitive
engagement with environment-friendly product messages.
This paper studies outsourcing decisions for a two-level service process in which
the first level serves as a 1 gatekeeper for a second level of experts. The
objective of the system operator (the client) is to minimize the sum of staffing
costs, customer waiting costs, and mistreatment costs due to unsuccessful attempts
by a gatekeeper to solve the customer's problem. The client may outsource all or
part of the process to a vendor, and first-best contracts exist when the client
outsources only gatekeepers or experts. When the client outsources the entire
system as a two-level process, a client-optimal contract may not exist unless the
exogenous system parameters satisfy a particular (and unlikely) coordination
condition. In addition, optimal incentive-compatible contracts exist when the
vendor's structure choice (one level or two levels) can deviate from the client's
preference. Finally, we numerically examine how vendor structure choice and labor
cost advantages influence the client's optimal outsourcing option.
This dissertation abstract and reflection commentary presents the work of Dr. Jegoo
Lee. The dissertation addresses collaboration networks among social investors
seeking to influence responsible corporate management. The dissertation abstract
explains the research questions, setting, and methods. The reflection commentary
discusses the author's views of research process as a junior scholar.
In this study of the U.S. automobile industry, we highlight the way the division of
innovative labor across firms in the supply chain can be influenced by a particular
form of digital innovation known as "digital control systems." Digital control
systems are becoming ubiquitous in complex products, and these digital innovations
integrate other components across a product structure and introduce a level of
indeterminacy and unpredictability in the organization of the interfirm division of
innovative labor. Much of organizational scholarship holds that accompanying a
shift toward increasingly modular product structures, component suppliers are
engaging in relatively more design and invention around the components that they
supply. We find that the evolution of digital controls may reverse this pattern,
because in the wake of a major shift in the digital. controls technology, suppliers
actually engage in relatively less component innovation in comparison with their
large manufacturing customers. To explain this shift, we characterize complex
product structures in terms of two distinct product hierarchies: the inclusionary
and the digital control hierarchy. In using this distinction to analyze the
evolution of automotive emission control systems from 1970 to 1998, we reconcile
two competing views about the interfirm division of innovative labor.
Research summary: We provide evidence that founder chief executive officers (CEOs)
of large S&P 1500 companies are more overconfident than their nonfounder
counterparts ("professional CEOs"). We measure overconfidence via tone of CEO
tweets, tone of CEO statements during earnings conference calls, management
earnings forecasts, and CEO option-exercise behavior. Compared with professional
CEOs, founder CEOs use more optimistic language on Twitter and during earnings
conference calls. In addition, founder CEOs are more likely to issue earnings
forecasts that are too high; they are also more likely to perceive their firms to
be undervalued, as implied by their option-exercise behavior. We provide evidence
that, to date, investors appear unaware of this "overconfidence bias" among
founders. Managerial summary: This article helps to explain why firms managed by
founder chief executive officers (CEOs) behave differently from those managed by
professional CEOs. We study a sample of S&P 1500 firms and find strong evidence
that founder CEOs are more overconfident than professional CEOs. To date, investors
appear unaware of this overconfidence bias among founders. Our study should help
firm stakeholders, including investors, employees, suppliers, and customers, put
the statements and actions of founder CEOs in perspective. Our study should also
help members of corporate boards make more informed decisions about whether to
retain (or bring back) founder CEOs or hire professional CEOs. Copyright (C) 2016
John Wiley & Sons, Ltd.
With over 2 billion people lacking medicines for treatable diseases and 14 million
people dying annually from infectious disease, there is undeniable need for
increased access to medicines. There has been an increasing trend to benchmark the
pharmaceutical industry on their corporate social responsibility (CSR) performance
in access to medicines. Benchmarking creates a competitive inter-business
environment and acts as incentive for improving CSR. This article investigates the
corporate feedback discourses pharmaceutical companies make in response to
criticisms from benchmarking reports. It determines whether these responses are
part of a healthy process in increasing access to medicines or a barrier to
improvement. A qualitative analysis on the feedback the industry provided was
performed, and the responses seen in these statements were grouped by analysing the
language used, the ideas portrayed and atti- tudes of the companies. Increasing
transparency through benchmarking is a powerful tool which reveals the industry's
shortfalls to the public, affects the decisions of socially responsible investors,
and is a risk to their financial bottom line. This article demonstrates the
importance of benchmarking and transparency in creating inter-business competition
and the translation of these responses to actual access to medicine practices.
We examine how organizations that suffer core stigma - disapproval for their core
attributes - survive. We explain how men's bathhouses avoid negative attention and
minimize the transfer of stigma to their network partners, including customers,
suppliers, and regulators, through careful management of their business activities.
Using observational, archival, and interview data across different institutional
environments, we find that, in response to suffering core stigma, men's bathhouses
use a variety of strategies to shield their partners depending, in part, on the
level of hostility that they face in their environment. Our work contributes to the
emerging literature on organization-level stigma, especially by focusing on how
core-stigmatized organizations are able to survive and by drawing attention to the
special problem of stigma transfer. Our findings also focus attention on the use of
legitimacy in organization studies and call for further examinations of core-
stigmatized and other illegitimate organizations to expand our theoretical domain
to the fullest range of organizational processes and outcomes.
This paper examines how good management can repair fractured relationships within
organisations, addressing problems that if left unattended will threaten the future
existence of many of these companies. It analyses why there is a mood for change in
management thinking, and what direction that change can take. Part of the challenge
is how managers can best satisfy the objectives of corporate social responsibility
initiatives, and repair organisational and fractured community relationships. A
possible role for management is to examine alternative ways of thinking about the
potential benefits for the organisation that can be achieved by enhancing employee
relationships. In this regard, this paper offers strategies to examine management's
adverse affects on workers' life-plans. The art of interpretation is used to expose
how bureaucratic logic ignores workers' rights and potentially damages the
corporation's longevity. Interpretation, as opposed to procedure, suggests that
organisations are not simply profit mechanisms, but active and dynamic civil
societies. By better understanding the facilitating processes of administrative and
management thinking, it is possible that we can develop alternative strategies that
empower individuals to circumvent the negative consequences of instrumental
rationality and enable them to act more responsibly in the public interest.
Consumer skepticism of corporate environmental activities is on the rise. Yet
research on this timely, intriguing, and important topic is scarce for both
academics and practitioners. Building on attribution theory, we develop and test a
theoretically anchored model that explains the sources and consequences of green
skepticism. The study findings reveal that consumers' perceptions of industry
norms, corporate social responsibility, and corporate history are important factors
that explain why consumers assign different motives to corporate environmental
actions. In addition, the results show that while intrinsic motives exert a strong
negative effect on green skepticism, extrinsic motives have no discernible effect.
Furthermore, the findings indicate that green skepticism prompts consumers to seek
more information about the products, sparks negative word of mouth to friends and
acquaintances, and forestalls purchase intentions. The study offers several
implications for corporate and public policy makers and presents fruitful research
directions.
International business (IB) research has predominantly relied on value constructs
to account for the influence of societal culture, notably Hofstede's cultural
dimensions. While parsimonious, the value approach's assumptions about the
consensus of values within nations, and the generality and stability of cultural
patterns of behavior are increasingly challenged. We review two promising
alternatives the constructivist approach centering on schemas and the
intersubjectivist approach centering on norms and the evidence that demonstrates
their usefulness in accounting for international differences in the behavior of
managers, employees, and consumers. We propose a situated dynamics framework,
specifying the role of values, schemas, and norms in accounting for cultural
differences, and delineating conditions under which each causal mechanism is
operative. Values play a more important role in accounting for cultural differences
in weak situations where fewer constraints are perceived; schemas play a more
important role when situational cues increase their accessibility and relevance;
and norms play a more important role when social evaluation is salient. Directions
for future research based on this integrative framework and its implications for
the measurement of culture and application in IB are discussed.
This paper attempts to investigate how and why organisations in Macao's gambling
industry engage in corporate social responsibility (CSR). It is based on an in-
depth investigation of Macao's gambling industry with 49 semi-structured
interviews, conducted in 2011. We found that firms within the industry were
emphasising pragmatic legitimacy based on both economic and non-economic
contributions, in order to project positive images of the industry, while glossing
over two domains of adverse externalities: problem gambling among visitors, and the
pollution and despoliation of the environment. By engaging symbolically rather than
substantively in CSR, the gambling firms were diverting attention away from issues
of moral legitimacy, in order to be allowed to continue to pursue "business as
usual" as a means of obtaining substantial financial returns in a social, cultural
and sociopolitical context that was exerting relatively little public pressure to
improve corporate social and environmental performance. We conjecture that the
gambling firms were feeding on borrowed time.
The effective holding awl management of liquid assets is critical to success in
research-intensive industries. The primary output of invention is new knowledge.
However, because of its 'sticky' characteristics, knowledge may not easily diffuse
to external shareholders, leading to knowledge assymetries between
managers/employees and external suppliers of capital. Main, valuable R&D projects
may thus fail to attract external financing, limiting a firm's ability to invest in
R&D. In this study, we examine how the cash flow and signaling properties of a
firm's patents and certain aspects of its alliance strategy can attenuate such
problems. Specifically, we suggest that a firm's R&D investments positively predict
the level of its liquid asset holdings. This is due to the fact that invention-
induced knowledge asymmetries increase the firm's cost of accessing external liquid
capital. However, holding cash entails opportunity costs. hi this regard, we also
find that patent production and certain alliance activities provide important
signaling mechanisms, which reduce knowledge asymmetries between the firm and
capital markets, and consequently lower the firm's need to hold liquid assets.
Empirical tests were conducted using a sample of 108 U.S-based biotechnology firms.
Copyright (C) 2009 John Wiley & Sons, Ltd.
As Socially Responsible Investment (SRI) enters the mainstream of professional and
institutional investment practice, some perplexities arise. Some SRI market
participants are well schooled in finance but are hesitative as to how to apply
non-financial criteria in the management of portfolios. Governments too are giving
SRI more attention and, in some countries, are discussion whether and how to
regulate the SRI market. Advocacy groups are targeting SRI projects through media
campaigns using political discourse. Many of the pertinent questions that come with
these perplexities are of the philosophical or ethical type and concern
legitimisation, demarcation of responsibilities, interpretation of norms and policy
formulation. The inclusion of non-financial criteria into investment decision-
making leads to a 'puzzle in SRI' for which this article offers a solution. The
puzzle arises when the day-to-day implementation of an SRI-policy coincides with
the process of administering justice. Three questions make up that puzzle: (1) what
should an investor do when allegations arise about a corporation, (2) what should
an investor do when a corporation is brought before a court, (3) what should an
investor do when a corporation is found guilty by a court. This article argues, by
distinguishing between the rationality of the investor and that of the judge, that
allegations, court cases or court verdicts should not be reasons to disinvest from
a corporation. This article offers examples from investor practice and points out
in which way allegations, court cases and court verdicts make sense for investor
behaviour.
In this article, we investigate the resourcebased mechanism underlying the
relationship between political skill and salespersons' work outcomes. Specifically,
we propose that political skill influences salespersons' sales performance and job
satisfaction through organizational resources and salesperson-customer (s-c)
guanxi, which serve as their internal and external resources. To examine our model,
we collected data from 203 salespersons working at a large financial services
institution in China. The findings reveal that both access to resources and build-
up of s-c guanxi mediate the effect of political skill on salespersons' work
outcomes. Moreover, access to resources and build-up of s-c guanxi interact to
predict salespersons' sales performance and job satisfaction. Implications and
future research directions are discussed.
Companies increasingly rely on open collaboration communities to create knowledge
and organize work. Open collaboration communities are unique in that every consumer
of the content created by the community is also a potential contributor. We show
that consumption and contribution in open collaboration communities positively
reinforce each other, but that the state of the content regulates that feedback
loop. As content becomes more developed, it attracts more consumers, but these
consumers are less likely to become future contributors. We exploit the abundant
data available in our research setting to investigate the heterogeneity in these
factors across different types of open collaboration communities. Our results have
implications for both researchers and practitioners by suggesting that the feedback
between consumption and contribution in an open collaboration community changes
over its life span, that the productive life span of these communities may be
finite, and that the type and state of the content the community creates may partly
determine that life span.
Prior research suggests that ownership structure is associated to corporate social
responsibility (CSR) in developed countries. This article examines whether and how
ownership structure affects CSR in emerging markets using Chinese firms' social
responsibility ranking. Our empirical evidences show that for non-state-owned
firms, corporate ownership dispersion is positively associated to CSR. However, for
state-owned firms, whose controlling shareholder is the state, this relation is
reversed. We attribute the reversed relationship to political interferences and
further test this hypothesis by demonstrating that regional economic development is
negatively related to CSR for state-owned firms due to decreased political
interference in more developed areas. This study is the first to directly examine
the relationship between the dispersion of corporate ownership and CSR in emerging
markets, and our results depict that it is important to consider ownership type in
assessing CSR in emerging market where state ownership is still prevalent such as
China. The results also reveal that firm size, profitability, employee power,
leverage, and growth opportunity affect CSR in China.
Social media platform owners often choose to provide tighter integration with their
own complementary applications (i.e., first-party applications) as compared to that
with other complementary third-party applications. We study the impact of such
integration on consumer demand for first-party applications and competing third-
party applications by exploring Facebook's integration of Instagram, an application
in its photo-sharing application ecosystem. We find that consumers obtain
additional value from Instagram after its integration with Facebook, leading to a
large increase in the use of Instagram for Facebook photo sharing. Further, we find
that the growth of Instagram's user base has a positive spillover effect on big
third-party applications and a negative spillover effect on small third-party
applications in Facebook's photo-sharing ecosystem. As a result, while small third-
party applications face reduced demand after integration, big third-party
applications experience a small increase in demand. Thus, the overall demand for
the entire photo-sharing application ecosystem actually increases, which suggests
that Facebook's integration strategy benefits the complementary market overall. Our
results highlight the role of platform integration for first-party applications and
the application ecosystem overall, and they have implications for strategic
management of first-party applications in the presence of third-party applications.
PowerPoint has come to dominate organizational life in general and strategy making
in particular. The technology is lauded by its proponents as a powerful tool for
communication and excoriated by its critics as dangerously simplifying. This study
takes a deeper look into how PowerPoint is mobilized in strategy making through an
ethnographic study inside one organization. It treats PowerPoint as a technology
embedded in the discursive practices of strategic knowledge production and suggests
that these practices make up the epistemic or knowledge culture of the
organization. Conceptualizing culture as composed of practices foregrounds the
"machineries" of knowing. Results from a genre analysis of PowerPoint use suggest
that it should not be characterized simply as effective or ineffective, as current
PowerPoint controversies do. Instead, I show how the affordances of PowerPoint
enabled the difficult task of collaborating to negotiate meaning in an uncertain
environment, creating spaces for discussion, making recombinations possible,
allowing for adjustments as ideas evolved, and providing access to a wide range of
actors. These affordances also facilitated cartographic efforts to draw boundaries
around the scope of a strategy by certifying certain ideas and allowing document
owners to include or exclude certain slides or participants. These discursive
practices-collaboration and cartography-are part of the "epistemic machinery" of
strategy culture. This analysis demonstrates that strategy making is not only about
analysis of industry structure, competitive positioning, or resources, as assumed
in content-based strategy research, but it is also about how the production and use
of PowerPoint documents that shape these ideas.
In a sample of 961 employees working in 71 restaurants of a moderately sized
restaurant chain, we investigated a key tenet of servant leadership theory that
servant leaders guide followers to emulate the leader's behavior by prioritizing
the needs of others above their own. We developed and tested a model contending
that servant leaders propagate servant leadership behaviors among followers by
creating a serving culture, which directly influences unit (i.e., restaurant/store)
performance and enhances individual attitudes and behaviors directly and through
the mediating influence of individuals' identification with the unit. As
hypothesized, serving culture was positively related both to restaurant performance
and employee job performance, creativity, and customer service behaviors, and
negatively related to turnover intentions, both directly and through employee
identification with the restaurant. Samesource common method bias was reduced by
employing five sources of data: employees, restaurant managers, customers, internal
audits by headquarters staff, and external audits by a consulting firm.
Research summary: Using a productivity technique (VCA model), we estimate the
economic value created by a firm and appropriated by its stakeholders in two
specific empirical contexts. In the first application, we use publicly available
data from the U.S. airline industry to illustrate how the VCA model can be used
with multiple stakeholder groups. In the second application, we provide estimates
for three global automobile companies (GM, Toyota and Nissan), showing how the
model can be reformulated using value added. In both industries we find substantial
heterogeneity among firms in the creation and distribution of value. We discuss
strengths and limitations of the VCA model and implications for strategic
management research.Managerial summary: Firms create value not only for
shareholders, but also for other stakeholders, including employees, customers and
suppliers. This article applies a method to quantify the new economic value created
by a firm over an interval of time; the method also reveals the distribution of
that value among the stakeholders. The proposed method gives managers some means to
assess changes in the economic value created and distributed. We find that the
creation and distribution of value has varied greatly among major U.S. airlines and
global automakers in recent decades. Moreover, returns to shareholders typically
accounted for only a small proportion of firms' total value creation and often had
little relation to broader changes in the magnitude and distribution of value.
Copyright (c) 2016 John Wiley & Sons, Ltd.
Although in core business practice most leaders are aware of the fact that
information needs to be acquired from a wide range of sources, decision makers in
corporate enterprises seem to forget this and all they do, in most cases, is ask
their consumers and potential customers in the course of planning their CSR
(Corporate Social Responsibility) activities. There are only few companies where
managers refer to ethical principles as an argument for social contribution and the
connection between CSR and sustainability is being rarely explored. This article is
based on research (interviews and questionnaires), observations and continuous
action research carried out by the Kurt Lewin Foundation. The study focuses on the
communication of social responsibility since according to our experience in most
cases companies undertake causes in order to improve their own image and for
marketing reasons. This article concludes that the reason for difficulties in
finding the best CSR solutions for enterprises and creating the commitment of their
employees for the undertaken cause is that they do not think of CSR as a
consequence of ethical core business process, but rather as a separate task they
try to complete aiming at short-term results and maximum benefits.
This study investigates the efficacy of three corporate social responsibility (CSR)
initiatives-sponsorship, cause-related marketing (CRM), and philanthropy-on
consumer-company identification (C-C identification) and brand attitude and, in
turn, consumer citizenship behaviors. CSR reputation is proposed as the moderating
variable that affects the relationship between CSR initiatives, C-C identification,
and brand attitude. A conceptual model that integrates the hypothesized
relationships and the moderating effect of CSR reputation is used to frame the
study. Using a between-subjects factorial designed experiment, the results showed
that all three CSR initiatives have a significant effect on C-C identification and
brand attitude. The level of that influence, however, varied according to a firm's
CSR reputation. Managerial implications of these findings are also discussed.
Many transnational corporations and international organizations have embraced
corporate social responsibility (CSR) 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.
This article sheds light on the ongoing employment stagnation in the United States
by investigating the links between the rise of finance and firm employment dynamics
during the 1982-2005 period. I argue that the rise of finance marginalized the role
of labor in revenue generating and sharing processes, which led to employment
stagnation among the largest nonfinancial firms in the United States. Evidence
suggests that increasing investment in financial assets depresses the workforce
size. The growing dependence on debt reprioritizes the order of distribution,
heightening the need for workforce reduction. The increasing rewards for
shareholders generate a downsize-and-distribute spiral, in which labor expense
becomes a primary target of cost-cutting strategies. Further analysis indicates
that production and service workers are more vulnerable to shifts associated with
the rise of finance than managers and professionals.
The provision of responsible labor standards along the entire value chain poses
considerable challenges for corporations. In particular, management shortcomings
and institutional deficits-which are partly related to cultural issues-frequently
impede the realization of responsible business practices in emerging and developing
countries. It is widely established in theory that industry self-regulation
constitutes a particularly promising approach for overcoming these challenges.
Nonetheless, it is still an open question as to whether industry initiatives
effectively promote responsible standards in practice. This contribution aims to
enrich the current discussion about the power of industry self-regulation to ensure
responsible labor standards in factories in emerging and developing countries. For
this purpose, we analyze the ICTI CARE Process (ICP), the self-regulation
initiative of the international toy industry, that aims to promote responsible
business practices in Chinese toy factories. The assessment of the ICP shows that
corporations' buying behavior is decisive in order for industry self-regulation to
become an appropriate means of improving labor standards. Based on the insights
from the study and from theoretical reasoning, we develop a framework for effective
industry self-regulation that integrates the perspective of factories.
Firms are spending billions annually in the name of corporate social responsibility
(CSR). Whilst markets are increasingly willing to reward good and responsible
firms, they lack the instruments to measure corporate social performance (CSP). To
convince investors and other stakeholders, firms invest heavily in building a
reputation for good corporate behaviour. This article argues that reputations for
CSP are often unrepresentative of true CSP and investigates how differences in
aEuro(1)perceived' and aEuro(1)actual' - as measured by the Fortune and KLD
databases, respectively - can partly be explained by firm characteristics. Amongst
other things, it finds that overrated firms are more likely to be relatively big,
profitable, operating in non-polluting but competitive industries and with no
history of wrong doings to their primary stakeholders. They will also typically
spend a lot of effort satisfying the claims of their secondary stakeholders. Above
all, the results emphasise the need for researchers to recognise that the databases
measure different phenomenon and are not interchangeable.
This study investigates the ethical climate types presented in the Korean tourism
industry, the differences in the perceptions of these ethical climate types based
on individual/organizational characteristics, and the influence of ethical climate
types based on job satisfaction/organizational commitment. Empirical findings of
this study identify six ethical climate types and demonstrate significant
difference and significant influence of the proposed relationships. This research
contributes to the existing body of academic work by using empirical data collected
from 820 respondents across 14 companies within the Korean tourism industry, to
demonstrate the relationship between actual ethical climate types and ethical
climate related factors. The findings of this study identify the new factor 'moral
caring,' which describes an environment characterized by decisions that maximize
collective interest, but based on an individual employee's personal values and
ethics. Such a factor has important implications for the service industry, where
face-to-face encounters typify the relationship between employee and consumer.
The corporate social responsibility literature devotes relatively little attention
to the strategic role played by employee voluntary activities (EVAs) in social
alliances. Using the resource-based perspective of the organization to frame the
data collection and the analyses, this article investigates: (1) the role of EVAs
in the development of corporate and non-profit organizations (NPOs) competitive
assets and (2) the management approaches to how both parties can develop their own
resources by combining them with the shared resources with the purpose of enhancing
its competitive advantage in its own sector. The database is composed of 70
specifically designed interviews with managers of UK-based firms and NPOs. The
analyses suggest, among other things, that the majority of corporate and non-profit
managers find that EVAs generate substantial tangible and intangible benefits for
their respective organisations, creating genuine synergies. We also find evidence
of a general preference for the management approaches of such programmes in both
types of organisation.
The purpose of cause-related marketing (CRM) is to publicise and capitalise on a
firm's corporate social performance (CSP) by enhancing its legitimacy in the eyes
of its stakeholders. This study focuses on the firm's internal stakeholders - i.e.
its employees - and the extent of their involvement in the selection of social
campaigns. Whilst the difficulties of managing a firm that has lost or damaged its
legitimacy in the eyes of its employees are well known, little is understood about
the extent to which managers and their social partners listen to and involve their
employees in the legitimation process. Through telephone interviews with non-profit
organisations and senior managers of service sector firms, the extent of employee
involvement in CRM campaigns and the perceived benefits of doing so are
investigated. Amongst other things, we find that (i) the extent of employee
participation varies significantly across firms; (ii) larger CRM campaigns tend to
be managed centrally with relatively less employee participation than smaller ones
and (iii) financial services firms are more likely to make CRM decisions centrally,
with relatively less employee participation than retail services firms.
Strategic human capital research has emphasized the importance of human capital as
a resource for sustained competitive advantage, but firm investments in this
intangible asset vary considerably. This article examines whether and how external
pressures on firms from capital markets influence their human capital strategy.
These pressures have increased over the past three decades due to banking
deregulation, technological innovation, and the rise of institutional investors and
new financial intermediaries. Against this backdrop, this study examines whether a
firm's capital structure as measured by share turnover, shareholder concentration,
and financial leverage is associated with firm investment in strategic human
capital. Based on survey and objective financial data from 221 establishments in
the United States and Canada, our analysis indicates that firms with greater share
turnover, higher shareholder concentration, and higher levels of financial leverage
are less likely to invest in human resource systems that create strategic human
capital. Differences in national financial systems also lead to differential
effects for U.S. and Canadian firms.
Upward channel decentralization occurs when firms choose to not manufacture
products by themselves and procure products from upstream suppliers. Current voices
from marketing scholars and practitioners have predominantly focused on the cost
benefits when production is outsourced to lower-cost upstream suppliers. In this
paper, we study the effects of upward channel decentralization where competing
firms can outsource their production to upstream suppliers who do not have any
advantages on production costs. We show how downstream firms can still benefit from
upward channel decentralization provided their product positioning is endogenous.
Thus, we provide a new theory on the strategic benefits of upward channel
decentralization. We also use this framework to show a new benefit to manufacturers
selling through downstream retailers rather than directly. We examine the
implications of our theory for consumer and social welfare, and also draw
managerial implications.
This article explores the transition to integrated reporting by a customer-owned
bank (referred to as Goodbank) and identifies the drivers of this transition,
thereby providing insights for other businesses seeking to engage in such
reporting. Practice theory provides a theoretical lens for this study. A case study
approach encompassing in-depth interviews and documents analysis enabled the data
to be collected for this research. This study finds that a customer-owned business
context enables innovative approaches to reporting. An understanding of reporting
and recognition of the potential value of integrated reporting, basic guidelines
for such a practice, and organisational ethical values and goals based on a
combination of economic, social and environmental considerations matched by an
organisational structure that embeds economic, social and environmental
responsibilities rather than treating these as separate silos, enabled Goodbank to
transition to integrated reporting and differentiate itself from its competitors
and other organisations.
Shareholder resolutions filed by socially concerned investors are a rich and
underused source of data for research in social issues in the business and society
field. This article examines how shareholder activists use the resolution process
to advocate for issues related to social justice and corporate activities. After
briefly reviewing the justice and shareholder activism literatures, the authors
report the results of a study of 1,719 shareholder resolutions filed during the
1999-2005 period by members and affiliates of the Interfaith Center on Corporate
Responsibility, a coalition of approximately 275 religious organizations and other
partners that seeks to use their investments to achieve social change. Among the
findings is that the majority of justice-related resolutions dealt with employment
and economic development issues. The authors conclude with a discussion of
implications for corporate managers, shareholder activists, and management
researchers.
The popular view of shareholder activism focuses on shareholder resolutions and the
shareholder vote via proxy statements at the annual meeting, which is treated as a
"David vs. Goliath'' showdown between the small group of socially responsible
investors and the powerful corporation. This article goes beyond the popular view
to examine where the real action typically occurs - in the Dialogue process where
corporations and shareholder activist groups mutually agree to ongoing
communications to deal with a serious social issue. Use of the capitalized word
"Dialogue'' is intended to distinguish this formal process between corporations and
shareholders from all the other forms of dialogue or two-way communication
exchanged between a corporation and its stakeholders. The phenomenon of Dialogue
between a corporation and dissident shareholders has not been analyzed in the
academic literature or in the popular press because it occurs behind the scenes and
out of sight from media scrutiny. Yet this is where a great deal of social change
initiated by shareholder activists is negotiated. This article contributes both
theoretically and empirically to the study of Dialogues between shareholder
activists and corporations. We explain how Dialogues occur in the context of the
shareholder resolution process and examine two Dialogues that focus on
international labor issues in two industries. Then data on Dialogues during the
period, 1999-2005, from the Interfaith Center on Corporate Responsibility are
analyzed. This research contributes to knowledge about the Dialogue process and the
emerging literature on corporation-stakeholder engagement.
This paper explores the managerial context surrounding fairness promotion using a
multi-method examination that employs interviews and a survey of practicing
managers. The results of these examinations describe how managers tend to focus
their efforts to promote fairness on fairly allocating rewards and responsibilities
(i.e., promoting distributive fairness), accurately and consistently applying
organizational policies (i.e., promoting procedural fairness) and providing
representation and understanding to their subordinates around key organizational
issues (i.e., promoting informational fairness and voice). Analyses of the
interview and survey data show how managers' efforts to promote employee
development, enact managerial propriety, and demonstrate moral leadership mediate
relationships between their fundamental desires to develop positive working
relationships with their subordinates and the efforts they make to promote
fairness. This paper concludes with a discussion about how this work refines and
extends research on how and why managers promote fairness.
As firms continue to abandon pensions in favor of employee-managed retirement
plans, tremendous demands are being placed on the decision-making proficiency of
future retirees. As reflected in the equity premium puzzle, individual investors
tend to hold overly conservative portfolios that provide meager payoffs over time.
Consequently, there is growing concern that the vast majority of retirement
accounts might be insufficiently funded when employees reach retirement. Given that
most retirement plans can now be managed online, a potential solution lies in
designing a Web-based decision support system (DSS) that helps future retirees make
more-profitable portfolio management decisions. This paper reports the results of a
study in which 159 retirement plan participants were asked to use an experimental
website to manage a portfolio of retirement investments over a simulated 30-year
period. Using a psychological approach toward designing the DSS, myopic loss
aversion is put forth as a theoretical explanation for the psychological mechanisms
that encourage investors to hold overly conservative portfolios. Armed with this
knowledge, three design features-information horizon, system restrictiveness, and
decisional guidance-are implemented as part of an overarching design strategy
targeted at increasing investors' willingness to take calculated risks. The results
indicate that investor conservatism diminishes when the DSS presents prospective
probabilities and payoffs over long time horizons. In contrast, short-term
information horizons constitute a major stumbling block for investors. However,
when confronted with short-term information horizons, risk aversion can be
successfully counteracted by configuring a DSS to either restrict the frequency of
decisions or to suggest a relatively aggressive portfolio allocation. These
findings carry important implications for theory and practice.
This article addresses the question whether companies benefit from their commitment
to corporate social responsibility (CSR). The authors argue that firms which score
high on CSR activities build investor confidence and find evidence that they
benefit from lower information asymmetry. The authors measure information asymmetry
by insider trading, which is defined as the trading of a company's shares by
corporate insiders who have an information advantage with the aim to reap gains or
avoid losses. Using a sample of U.S. firms listed in the MSCI World Index during
the period 2004 to 2013 and the firm- and industry-level CSR rating from Global
Engagement Service (GES), the authors show that insider transactions in firms with
a high score on CSR activities lead to lower abnormal returns. This investigation
extends current literature on the business case for CSR by explaining the influence
of CSR activities on asymmetric information.
Performance-based contracting is reshaping service support supply chains in
capital-intensive industries such as aerospace and defense. Known as ''power by the
hour'' in the private sector and as ''performance-based logistics'' (PBL) in
defense contracting, it aims to replace traditionally used fixed-price and cost-
plus contracts to improve product availability and reduce the cost of ownership by
tying a supplier's compensation to the output value of the product generated by the
customer (buyer). To analyze implications of performance-based relationships, we
introduce a multitask principal-agent model to support resource allocation and use
it to analyze commonly observed contracts. In our model the customer (principal)
faces a product availability requirement for the ''uptime'' of the end product. The
customer then offers contracts contingent on availability to n suppliers (agents)
of the key subsystems used in the product, who in turn exert cost reduction efforts
and set spare-parts inventory investment levels. We show that the first-best
solution can be achieved if channel members are risk neutral. When channel members
are risk averse, we find that the second-best contract combines a fixed payment, a
cost-sharing incentive, and a performance incentive. Furthermore, we study how
these contracts evolve over the product deployment life cycle as uncertainty in
support cost changes. Finally, we illustrate the application of our model to a
problem based on aircraft maintenance data and show how the allocation of
performance requirements and contractual terms change under various environmental
assumptions.
Religious organisations are major investors with sometimes substantial investment
volumes. An important question for them is how to make investments in, and to earn
returns from, companies and activities that are consistent with their religious
beliefs or that even support these beliefs. Religious organisations have pioneered
responsible investment. Yet little is known about their investment attitudes. This
article addresses this gap by studying faith consistent investing. Based on a
survey complemented by interviews, we investigate religious organisations'
attitudes towards responsible investment including opinions, practices and the
impediments for implementing faith consistent investing. Although our results
cannot be generalised because of the non-random character of our sample, six main
characteristics of faith consistent investing are drawn: investing is not perceived
as being in contradiction with religious values, religious values are important
drivers, there is a strong community around faith consistent investing, religious
investors are pioneering impact investing, implementing faith consistent investing
is not without difficulties, and practices vary across regions. The survey also
reveals that faith consistent investing has many commonalities with secular
responsible investors.
The Sarbanes-Oxley Act of 2002 (SOX) requires company executives to certify
financial statements and internal controls as a means of reducing fraud. Many
companies have operationalized this by instituting a sub-certification process and
requiring lower-level managers to sign certification statements. These lower-level
organizational members are often the individuals who are aware of fraud and are in
the best position to provide information on the fraudulent act. However, the sub-
certification process may have the effect of reducing employees' intentions to
report wrongdoing. We suggest that subordinates with knowledge of a superior who
committed a fraudulent act and certified that there is no fraud will feel less
personal responsibility to report the act, thus, decreasing reporting intentions.
Additionally, we suggest that if the fraud is discovered subsequent to the reports
being filed with the Securities and Exchange Commission (SEC), employees will
perceive lower management responsiveness to investigate the fraud, which will
reduce intentions to report. Using an experimental approach, we manipulate two
between-participant variables: (1) the presence or absence of sub-certification by
the transgressor and (2) the timing of fraud discovery, either before or after the
reports have been filed with the SEC. We find that when sub-certification is
present, perceived personal responsibility and intentions to report were diminished
compared to when sub-certification is absent. Timing of the discovery of the
fraudulent act did not influence perceived management responsiveness or reporting
intentions. Supplemental analysis shows that personal responsibility partially
mediates the relationship between sub-certification and reporting intentions. Our
findings suggest that audit committees and senior executives may want to carefully
consider the costs and benefits of the sub-certification process.
China now manufactures or assembles over 50% of the world's products. However, the
world has been reeling from daily accounts of defective "Made in China" products.
China has been at the forefront of growing concern, not only about its products and
enterprises, but also about its business ethics. This article analyzes recent
events connected with the Made in China label from the perspective of evolving
Chinese business ethics. Part 1 analyzes three of these events. Part 2 details and
analyzes the state of business ethics in China today. Part 3 concludes by exploring
the future of business ethics in China. The main conclusion is that business ethics
in China faces two kinds of ethical challenges: how to restrict the lawless in as
short a period of time as possible and how to protect and advance the interests of
employees, investors, and the public through corporate management and public
administration.
By integrating insights from two seemingly disparate literatures - economics and
organizational justice - within the general agency framework, we advance
propositions that suggest a fine-grained explanation of agency costs at family
firms. In so doing, we account for the differential effects of the controlling
owners' self-control (i.e. the governance mechanisms they adopt and how they
administer those mechanisms) on the justice perceptions of the family and non-
family employees. Our integrative view allows us to strike a realistic balance
between the overly optimistic views about family firm governance that have been
expressed by agency scholars and the overly pessimistic views expressed by
management scholars in the past few years.
Firms that rely on functioning mission-critical equipment for their businesses
cannot afford significant operational downtime due to system disruptions. To
minimize the impact of disruptions, a proper incentive mechanism has to be in place
so that the suppliers provide prompt restoration and recovery services to the
customer. A widely adopted incentive mechanism is performance-based contracting
(PBC), in which suppliers receive compensation based on realized system uptime. A
key obstacle is that disruptions occur infrequently, making it very expensive for a
supplier to commit the necessary resources for recovery because they will be idle
most of the time. In this paper, we show that designing a successful PBC creates
nontrivial challenges that are unique to this environment. Namely, because of the
infrequent and random nature of disruptions, a seemingly innocuous choice of
performance measures used in contracts may create unexpected incentives, resulting
in counterintuitive optimal behavior. We compare the efficiencies of two widely
used contracts, one based on sample-average downtime and the other based on
cumulative downtime, and identify the supplier's ability to influence the frequency
of disruptions as an important factor in determining which contract performs
better. We also show that implementing PBC may create high agency cost when
equipment is very reliable. This counterintuitive situation arises because the
realized downtimes from which the customer might intuit about the supplier's
capacity investment are highly uncertain when there are not many samples of
downtimes, i.e., when disruptions occur rarely.
We outline the drivers, main features, and conceptual underpinnings of the
compliance paradigm. We then use a similar structure to investigate the drivers,
main features, and conceptual underpinnings of the cooperative paradigm for working
with CSR in global value chains. We argue that the measures proposed in the new
cooperation paradigm are unlikely to alter power relationships in global value
chains and bring about sustained improvements in workers' conditions in developing
country export industries. After that, we provide a critical appraisal of the
potential and limits of the cooperative paradigm, we summarize our findings, and we
outline avenues for research: purchasing practices and labor standard
noncompliance, CSR capacity building among local suppliers, and improved CSR
monitoring by local resources in the developing world.
This article provides a review of what we know, what we do not know, and what we
need to know about the relationship between industrial clusters and corporate
social responsibility (CSR) in developing countries. In addition to the drivers of
and barriers to the adoption of CSR initiatives, this study highlights key lessons
learned from empirical studies of CSR initiatives that aimed to improve
environmental management and work conditions and reduce poverty in local industrial
districts. Academic work in this area remains embryonic, lacking in empirical
evidence about the effects of CSR interventions on the profitability on local
enterprises, workers, and the environment. Nor do theoretical frameworks offer
clear explanations of the institutionalization and effects of CSR in local
industrial districts in the developing world. Other key limitations in this
research stream include an excessive focus on export-oriented industrial clusters,
the risk that CSR becomes a form of economic and cultural imperialism, and the
potential for joint-action CSR initiatives in clusters of small and medium-sized
enterprises to offer a new form of greenwashing. From this review, the authors
develop a theoretical model to explain why CSR has not become institutionalized in
many developing country clusters, which in turn suggests that the vast majority of
industrial clusters in developing countries are likely to engage in socially
irresponsible behavior.
A recent concern in the debate on corporate social responsibility (CSR) in
developing countries relates to the tension between demands for CSR compliance
found in many global value chains (GVCs) and the search for locally appropriate
responses to these pressures. In this context, an emerging and relatively
understudied area of interest relates to small firm industrial clusters. Local
clusters offer the potential for local joint action, and thus a basis for improving
local compliance on CSR through collective monitoring and local governance. This
article explores the interrelationship between global governance, exercised through
GVC ties, and local governance, via cluster institutions, in ensuring compliance
with CSR pressures. It undertakes a comparative analysis of two leading export-
oriented football manufacturing clusters in South Asia that have both faced common
challenges on child labour. The article shows that both forms vertical and
horizontal governance have played a part in shaping the response of the two
clusters on child labour. Moreover, these two distinct forms of governance have
also led to quite differentiated outcomes in terms of forms of work organization
and child labour monitoring. This raises broader questions on how global CSR
demands can locally be better embedded and the conditions under which football
stitchers labour in these new work forms.
While the direct influence of CEO tenure on firm performance has been examined in
the strategy literature, the underlying channels of influence have remained largely
unexplored. This article draws upon the career seasons paradigm, learning
perspectives, and marketing literature to examine whether firm-employee and firm-
customer relationships are the pathways through which CEO tenure influences firm
performance. Results from the analysis of a large data set reveal that: (1) CEO
tenure has a positive and linear association with firm-employee relationship
strength but an inverted U-shaped association with firm-customer relationship
strength; (2) industry uncertainty intensifies these associations; and (3) firm-
employee and firm-customer relationship strength mediate the effects of CEO tenure
on firm performance. These findings have implications for a more balanced and
nuanced view of CEO tenure. Copyright (c) 2013 John Wiley & Sons, Ltd.
This study posits that security analysts heed corporate social performance
information and factor it into their recommendations to general investors. In
particular, as corporate social performance is often uncertain and ambiguous to
general investors, analysts may serve as the informational pathway connecting
corporate social performance to firm stock returns. Thus, we argue that analyst
recommendations mediate the relationship between corporate social performance and
firm stock returns. On the basis of not only a qualitative study with literature
searches and interviews of stock analysts but also a quantitative study with two
longitudinal samples of large firms, we find support for these arguments. Our
findings uncover an information-based underlying mechanism for the link between
corporate social performance and financial performance. Copyright (c) 2013 John
Wiley & Sons, Ltd.
This study provides a general overview of contemporary business ethics research of
the last 10 years (1997-2006) and discusses potential future research directions in
business ethics based on the overview. Using citation and co-citation analysis,
this study examined the citation data of journal articles, books, and other
publications collected in the Social Sciences Citation Index (SSCI), wherein key
research themes in business ethics studies in 1997-2006 and correlations between
these themes were explored. The results show that major research themes in business
ethics have shifted in the last decade from research on ethical decision making and
on the relationship between corporate social responsibility and corporate
performance to research on stakeholder theory in business ethics and on the
relationship between consumer behavior and corporate social responsibility. The
results of this study help map the invisible network of knowledge production in
business ethics research and provide important insights on future business ethics
research.
In this article we pursue two objectives. First, we refine the concept of
responsible leadership from an upper echelon perspective by exploring two distinct
styles (instrumental and integrative) and thereby further developing the
understanding of the newly emerging integrative style. Second, we propose a
framework that examines the micro-foundations of political corporate social
responsibility (CSR). We explicate how the political CSR engagement of
organizations (in social innovation and multi-stakeholder initiatives) is
influenced by responsible leadership styles and posit that most CEOs tend to
espouse either instrumental or integrative responsible leadership approaches, based
on perceived moral obligations toward shareholders or stakeholders. We examine the
moderating effects of societal- and organizational-level factors (such as power
distance and corporate governance), and individual-level influences (such as
cognitive and social complexity). We discuss both approaches with respect to their
effectiveness in dealing with political CSR challenges in a complex environment and
conclude that an instrumental responsible leadership style may be effective in
relatively stable settings with strong institutional arrangements, while the
complex and unstable context of a post-national constellation with weak
institutions calls for an integrative responsible leadership style. The latter can
be expected to be more effective in dealing with political CSR challenges in a
global world, contributing to closing governance gaps and producing sustainable
outcomes for societies.
In this article, we examine an important but relatively under-researched form of
corporate social responsibility, namely, employer support for employee voluntary
activity. Using Canadian data, we examine two questions. First, we analyze the
impacts of employer support on the total number of hours volunteered and on the
voluntary activities which are undertaken. Second, we examine how employer support
is distributed between male and female employees. Our results indicate that
employer support is associated with a greater amount of volunteer activity by both
men and women employees and in a wide range of voluntary activities. However, we
also find that women are less likely to receive employer support than men and are
less likely to receive support in the form of flexible work hours and time-off.
These results are puzzling given that women typically face more binding time
constraints than men. We conclude the paper by discussing how employer policies
might be changed to address this finding.
Stakeholder theory suggests a relationship between corporate social responsibility
(CSR) and corporate financial performance (CFP) because certain stakeholders reward
certain types of CSR. This argument assumes that stakeholders attend to firms' CSR
activitiesan assumption that has yet to be examined. We fill this gap by extending
stakeholder theory to the context of stakeholder attention to firm CSR and
exploring the antecedents and consequences of stakeholder attention to corporate
disaster relief CSR. We test the resulting hypotheses on a sample of public
companies that engaged in natural disaster relief efforts, finding that stakeholder
attention partially mediated the relationship between disaster relief and CFP and
that stakeholder attention to corporate disaster relief was driven by the
legitimacy, urgency, and enactment of disaster relief CSR initiatives. Copyright
(c) 2014 John Wiley & Sons, Ltd.
Since its inception in 2006, the United Nations-backed Principles for Responsible
Investment (PRI) have grown to over 1300 signatories representing over $45
trillion. This growth is not slowing down. In this paper, we argue that there is a
set of attributes which make the PRI salient as a stakeholder and its claim to sign
the six PRI important to institutional investors. We use Mitchell et al.'s (Acad
Manag Rev 22: 853-886, 1997) theoretical framework of stakeholder salience, as
extended by Gifford (J Bus Eth 92: 79-97, 2010). We use as evidence confidential
data from the annual survey of signatories carried out by the PRI in a 5-year
period between 2007 and 2011. The findings highlight pragmatic and organizational
legitimacy, normative and utilitarian power, and management values as the
attributes that contribute most to the salience of the PRI as a stakeholder.
Market liberalization in emerging-market economies and the entry of multinational
firms spur significant changes to the industry/institutional environment faced by
domestic firms. Prior studies have described how such changes tend to be disruptive
to the relatively backward domestic firms, and negatively affect their performance
and survival prospects. In this paper, we study how domestic supplier firms may
adapt and continue to perform, as market liberalization progresses, through catch-
up strategies aimed at integrating with the industry's global value chain. Drawing
on internalization theory and the literatures on upgrading and catch-up processes,
learning and relational networks, we hypothesize that, for continued performance,
domestic supplier firms need to adapt their strategies from catching up initially
through technology licensing/collaborations and joint ventures with multinational
enterprises (MNEs) to also developing strong customer relationships with downstream
firms (especially MNEs). Further, we propose that successful catch-up through these
two strategies lays the foundation for a strategy of knowledge creation during the
integration of domestic industry with the global value chain. Our analysis of data
from the auto components industry in India during the period 1992-2002, that is,
the decade since liberalization began in 1991, offers support for our hypotheses.
Journal of International Business Studies (2012) 43, 368-395. doi:
10.1057/jibs.2012.4
Within corporate social responsibility (CSR), the exploration of the political role
of firms (political CSR) has recently experienced a revival. We review three key
periods of political CSR literature-classic, instrumental, and new political CSR-
and use the Rawlsian conceptualization of division of moral labor within political
systems to describe each period's background political theories. The three main
arguments of the paper are as follows. First, classic CSR literature was more
pluralistic in terms of background political theories than many later texts.
Second, instrumental CSR adopted classical liberalism and libertarian laissez-faire
as its structural logic. Third, new political CSR, based on a strong globalist
transition of responsibilities and tasks from governments to companies, lacks a
conceptualization of division of moral labor that is needed to fully depart from a
classical liberalist position. We end by providing a set of recommendations to
develop pluralism in political CSR.
This study assesses the causal relationship between corporate social performance
(CSP) and financial performance ( FP). We perform our empirical analyses on a
sample of 179 publicly held Canadian firms and use the measures of CSP provided by
Canadian Social Investment Database for the years 2004 and 2005. Using the "Granger
causality" approach, we find no significant relationship between a composite
measure of a firm's CSP and FP, except for market returns. However, using
individual measures of CSP, we find a robust significant negative impact of the
environmental dimension of CSP and three measures of FP, namely return on assets,
return on equity, and market returns. This latter finding is consistent, at least
in the short run, with the trade-off hypothesis and, in part, with the negative
synergy hypothesis which states that socially responsible firms experience lower
profits and reduced shareholder wealth, which in turn limits the socially
responsible investments.
The aim of the paper is to investigate the effects of the corporate governance
model on social and environmental disclosure (SED). We analyze the disclosures of
the 100 U.S. Best Corporate Citizens in the period 2005-2007, and we posit a series
of simultaneous relationships between different attributes of the governance system
and a multidimensional construct of corporate social performance (CSP). We consider
both the extent and the quality of SED, with the purpose of identifying increasing
levels of corporate commitment to stakeholders and shedding some light on whether
SED is used as a signal or rather as a legitimacy tool. Our empirical evidence
shows that the stakeholders' orientation of corporate governance is positively
associated with CSP and SED. On the other hand, we do not find support for the
monitoring intensity of corporate governance being negatively associated with
social performance. We also find that CSP in the "product" dimension is positively
associated with the extent and quality of SED whilst CSP in the "people" dimension
is negatively associated with the extent and quality of SED. At a time when
shareholders and stakeholders share more common aspects in their relationships with
firms, this is a significant area to explore and this research fills an important
lacuna in this respect.
Although research on corporate social responsibility (CSR) has grown steadily,
little research has focused on CSR at the individual level. In addition, research
on the role of environmental friendly organizational citizenship behaviors (OCBs)
within CSR initiatives is scarce. In response to this gap and recent calls for
further research on both individual and organizational variables of employees'
environmentally friendly, or green, behaviors, this article sheds light on the
influence of these variables on three types of green employee behaviors
simultaneously: recycling, energy savings, and printing reduction. An initial
theoretical model identifies both individual (employees' general environmentally
friendly attitudes and the importance of an organization's environmentally friendly
reputation to the employee) and organizational (perceived environmental behavior of
an organization and perceived incentives and support from an organization)
variables that affect different types of green behaviors as a stepping stone for
further research. The results reveal managerial implications and future research
directions on the design of effective social marketing interventions that motivate
different types of OCBs in the workplace. In particular, the results suggest that
creating separate interventions for each type of environmental behavior, as well as
for each organization, sector, and type of organization (public vs. private), is
necessary. In addition, this research illustrates patterns of attitudes,
perceptions, and behaviors by exploring individual and organizational variables and
behaviors across seven different organizations belonging to different sectors.
Despite the increased attention to corporate social responsibility (CSR) and
regulatory changes in recent years, little is known about how apparel companies are
implementing and communicating CSR practices to their stakeholders. To fill the
gap, this study investigated the range and strategies of leading apparel specialty
retailers' CSR practices as communicated on their websites over a longitudinal
period of 1 year. In total, 17 apparel specialty retailers were included in the
analysis. The companies' websites were content-analyzed in-depth using the coding
criteria focusing on labor and environmental issues developed for this study. The
initial data were collected in November 2011 and the study was replicated in
December 2012 to examine any changes in the CSR practices. As of 2011 only nine
companies addressed CSR issues on their websites at different degrees despite their
leadership positions in the industry. Environmental issues were addressed by only
five companies, with different ranges of practices. In 2012, all 17 companies
addressed labor issues on their websites with varying degrees of specificity. In
terms of environmental issues, six companies (an increase of one company from 2011)
addressed environmental initiatives on their websites with wider ranges of
practices. Discussed are problems and opportunities, as well as the role of the
government and stakeholders, for the effective communications of CSR policies and
initiatives for the apparel industry.
Under what conditions does a collective strategy exist among organizational
members? Where should a scholar look for one? To offer one way to start solving
these puzzles I propose a view of organizational strategy as a language game that
governs the use of strategy labels at the level of the organization. Organizational
strategy exhibits a division of linguistic labour, where responsibility for key
concepts is assigned to particular individuals or organizational functions. Such
linguistic experts oversee the proper use and maintenance of strategy language. The
language-based view helps to understand linkages between institutional, network,
organizational, and micro level views on strategy. It also problematizes widely
held intuitions regarding the relationship between strategy and organizational
outcomes.
According to Arrighi and Silver, the United States faces a crisis of declining
hegemony historically characterized by stagnating wages, hypertrophy of the
financial sector, and the shifting of production overseas. Previous cycles suggest
that the fate of workers within the hegemonic core depends in part on their
political and organizational response. For a generation, organized labor in the
United States has sought ways to exercise influence over private and public pension
funds. As a result, union staffers have become sophisticated shareholder activists.
Recent financial scandals have created a new opening for these activists, who have
responded by forming coalitions to reform executive pay. The recent dismissal of a
California Personnel Employees Retirement System official implies limits to this
investor "pluralism," but the situation is hardly settled. Another economic
downturn might move the interests of investors and workers closer together, and
shareholder activists could play a role settling the resulting conflicts over the
distribution of income.
Prior research has found attributions to mediate the relationship between the
elements of corporate social responsibility (CSR) activities and consumer responses
to firms; however, the question of what variables determine consumer attributions
of CSR remains partially unaddressed. This article analyzes why consumers make
attributions of CSR that are either positive (values-driven or strategic motives),
or negative (stakeholder-driven or egoistic motives). The results obtained from two
empirical studies (n = 197, n = 222) indicate that company-cause fit, corporate
ability, and interpersonal trust have a positive influence on the motives that
consumers attribute to CSR, whereas corporate hypocrisy has a negative effect. This
research contributes to our understanding of the psychological mechanisms
underlying impactful consumer judgments and provides guidance for organizations in
responding to such evaluations.
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.
Recent scholarship in philosophy, law, and information systems suggests that
respecting privacy entails understanding the implicit privacy norms about what,
why, and to whom information is shared within specific relationships. These social
contracts are important to understand if firms are to adequately manage the privacy
expectations of stakeholders. This paper explores a social contract approach to
developing, acknowledging, and protecting privacy norms within specific contexts.
While privacy as a social contract-a mutually beneficial agreement within a
community about sharing and using information-has been introduced theoretically and
empirically, the full impact on firms of an alternative framework to respecting the
privacy expectations of stakeholders has not been examined. The goal of this paper
is to examine how privacy norms develop through social contract's narrative, to
redescribe privacy violations given the social contract approach, and to critically
examine the role of business as a contractor in developing privacy norms. A social
contract narrative dealing specifically with issues of privacy is an important next
step in exploring a social contract approach to privacy. Here, the narrative is
used to explain to analyze the dynamic process of privacy norm generation within
particular communities. Based on this narrative, individuals within a given
community discriminately share information with a particular set of obligations in
mind as to who has access to the information and how it will be used. Rather than
giving away privacy, individuals discriminately share information within a
particular community and with norms governing the use of their information. Similar
to contractual business ethics' impact on global commerce in explaining how and why
norms vary across global contexts, the social contract approach to privacy explains
how and why norms vary across communities of actors. Focusing on agreements around
privacy expectations shifts the responsibility of firms from adequate notification
to the responsibility of firms as contractors to maintain a mutually beneficial and
sustainable solution.
Economic and social activities are undergoing radical changes, which can be
labelled as 'knowledge economy and/or society'. In this sense, intellectual capital
(IC), or knowledge assets, as the fourth factor of production, is replacing the
other ones - job, land and capital. This article tries to offer the origins and
nature of the firm's IC that can be labelled as 'An Intellectual Capital-Based View
of the Firm Competition'. This framework tries to highlight the strategic role of
different intangible assets like talented and committed workers, cultural values,
or long-term relationships among the firm and its stakeholders - customers, allies,
suppliers and society in general - in gaining and sustaining competitive
advantages, being the management of IC a key issue in the management agenda.
We highlight how Corporate Social Responsibility (CSR) can be strategically used
against the negative perception from earnings management (EM). Using international
data, we analyse the effect of CSR and EM on the cost of capital and corporate
reputation. Results confirm that CSR strategy is positively valued by investors and
other stakeholders. Contrary to EM, CSR has a positive effect on corporate
reputation and lowers the cost of capital. In addition, we also find that the
favourable effect of CSR on cost of capital is consistently more intense in firms
that show signs of EM indicating that the market does not identify when CSR
practices are used as a strategy to mask EM. We also demonstrate how institutional
factors influence the above relationship.
Current research on corporate social responsibility (CSR) illustrates the growing
sense of discord surrounding the 'business of doing good' (Dobers and Springett,
Corp Soc Responsib Environ Manage 17(2):63-69, 2010). Central to these concerns is
that CSR risks becoming an over-simplified and peripheral part of corporate
strategy. Rather than transforming the dominant corporate discourse, it is argued
that CSR and related concepts are limited to "emancipatory rhetoricaEuro broken
vertical bar defined by narrow business interests and serve to curtail interests of
external stakeholders." (Banerjee, Crit Sociol 34(1):52, 2008). The paper addresses
gaps in the literature and challenges current thinking on corporate governance and
CSR by offering a new conceptual framework that responds to the concerns of
researchers and practitioners. The limited focus of existing analyses is extended
by a holistic approach to corporate governance and social responsibility that
integrates company, shareholder and wider stakeholder concerns. A defensive stance
is avoided by delineating key stages of the governance process and aligning profit
centred and social responsibility concerns to produce a business-based rationale
for minimising risk and mainstreaming CSR.
Neoclassical and Austrian/evolutionary economic paradigms have different
implications for integrating corporate social responsibility (corporate
citizenship) and competitive strategy. Porter's "Five Forces" model implicitly
rests on neoclassical theory of the firm and is not easily reconciled with
corporate social responsibility. Resource-based models of competitive strategy do
not explicitly embrace a particular economic paradigm, but to the extent their
conceptualization rests on neoclassical assumptions such as imperfect factor
markets and profits as rents, these models also imply a trade-off between
competitive advantage and corporate social responsibility. Differences in
Austrian/evolutionary economic model's assumptions about equilibrium, profits, and
other economic concepts allow this paradigm to embrace alternative views of
strategy such as the activities or dynamic capabilities views. These alternative
views of strategy focus on learning and adaptation; they align more easily with
corporate social responsibility. In practice this alignment comes about because
social engagement facilitates the learning and adaptation that are a source of
competitive advantage. Among the many business arguments for CSR such as improved
employee morale/productivity or brand differentiation, this view prioritizes
innovation.
We propose service attributes as boundary conditions of the relationship between
service climate and customer satisfaction. Drawing on service climate theory and
research, the customer contact model of service delivery, typologies of service
attributes, and relational coordination theory, we hypothesized that customer
contact frequency, service intangibility, and service employee interdependence
moderate the positive link between service climate and customer satisfaction so
that the relationship is more positive when those three variables are at high
levels. Using a sample of 129 supermarket departments, we collected data from three
unique sources (service employees, executives, and customers). Analyses revealed
support for the hypotheses.
Whereas; capability differences are known to impact governance decisions, what
drives heterogeneity in firm capabilities? We propose that capability differences
may arise from governance choices related to the focal activity and study how firms
accumulate capabilities in the firm-specific, industry-specific, and occupational
human capital necessary to perform knowledge work. We theorize that prior
outsourcing decisions influence the development of firm- and industry-specific
human capital and that buyer-supplier differences in the management of skilled
employees can produce systematic differences in capabilities based on occupational
human capital. Additionally, we explore some contingencies in the development of
these types of human capital and their impacts on outsourcing knowledge work. These
propositions are tested with a unique data set on the outsourcing of legal work
involved in filing patents (i.e., patent prosecution).
Difficult customer interactions cause service employees to experience negative
emotions and to engage in emotional labor. The present laboratory study examined
whether social sharing (i.e., talking about an emotionally arousing work event with
one's coworkers) can attenuate the residual anger lingering after a taxing service
episode. Participants assumed the role of customer service representatives for a
fictitious technical support hotline and encountered either neutral or difficult
service interactions. After fielding three easy or three difficult calls,
participants were given the opportunity to engage in social sharing by talking
about (a) the facts that just transpired, (b) the feelings aroused by the
encounters, or (c) the positive aspects of the experience, or they were asked to
complete a filler task. Results from quantitative data revealed that participants
who engaged in difficult (vs. neutral) customer interactions reported more surface
acting and felt more anger. Engaging in social sharing was beneficial: All three
types of social sharing were effective in reducing the anger aroused by handling
demanding customers. Findings from qualitative analyses suggested that different
mechanisms might have contributed to the effectiveness of the three types of social
sharing. Future research directions and implications for practice are discussed.
Agglomeration research investigates the benefits that firms receive from locating
in close geographic proximity. Despite a substantial surge in interest in this
topic over the past 20 years, a lack of distinction among unique manifestations of
spatial concentrations of similar firms threatens continuing progress in this
stream of research. We argue that agglomerations of related firms that draw
benefits from the supply-related externalities of increased access to specialized
labour, specialized inputs, and knowledge spillovers are fundamentally different
from those that draw benefits from heightened demand realized through reduction in
consumer search costs. Extending agglomeration theory, we explicate the differences
between these distinct phenomena, discuss how the nature of key theoretical
relationships varies across these agglomeration types, and demonstrate significant
implications for research. We discuss how the differences affect a host of
theoretical relationships and empirical research decisions.
We investigate determinants of the competitive behaviour of satisficing, non-
profitmaximizing pricing. Taking a behavioural approach, we argue that pricing
decisions are motivated by fairness objectives as well as the desire to achieve
economic objectives. We draw from the attention-based view to build our theoretical
model explaining the contextual conditions that are most likely to be associated
with attention to fairness relative to attention to achieving maximum profits when
setting prices. Our hypothesized predictors of satisficing pricing decisions
encompass the institutional context in which the firm is embedded, the exchange
context with customers and suppliers, and the context internal to the firm.
Hypotheses are tested with survey data of over 3000 firms from 15 countries. We
find that the decision to set prices at a satisficing level is remarkably common,
and its prevalence is associated with contextual factors that are consistent with
greater attention to fairness concerns.
What types of relational and institutional mechanisms shape knowledge flows and the
upgrading capabilities of emerging-market firms in the face of economic
liberalization? We analyze the Argentine autoparts sector to distinguish the
relative impact of different types of network relationships on a firm's process and
product upgrading. A few social ties to international assemblers appear to be most
beneficial for local suppliers, although they may be insufficient to compensate
fully for the negative effect of being located in a lower tier. Supplier-customer
relationships that are part of regular, disciplined discussions for product and
process improvements appear to be especially beneficial for upgrading. Journal of
International Business Studies (2010) 41, 308-329. doi:10.1057/jibs.2009.7
Extending insights from Cox's interactional model of cultural diversity [Cox, T.
H., Jr. 1994. Cultural Diversity in Organizations: Theory, Research and Practice.
Berett-Koehler, San Francisco], we examine the influence of diversity climate on
customer satisfaction, a key business-unit outcome. In addition, we explore service
climate and minority and female representations as boundary conditions of the
diversity climate-customer satisfaction relationship. Utilizing longitudinal data
from 59,592 employees and 1.2 million customers of 769 store units of a large U. S.
national retail organization, the results reveal that, as hypothesized, diversity
climate is positively and significantly related to customer satisfaction measured a
year later. Moreover, the diversity climate-customer satisfaction relationship is
most strongly positive in predominately minority, highly pro-service store units,
whereas female representation exhibits null moderating effects. These findings have
important research and practical implications.
Management has a large effect on the productivity of medium and large firms. But
does management matter in micro and small firms, where the majority of the labor
force in developing countriesworks? We develop 26 questions that measure business
practices in marketing, stock-keeping, record-keeping, and financial planning.
These questions have been administered in surveys in Bangladesh, Chile, Ghana,
Kenya, Mexico, Nigeria, and Sri Lanka. We show that variation in business practices
explains as much of the variation in outcomes-sales, profits, and labor
productivity and total factor productivity-in microenterprises as in larger
enterprises. Panel data from three countries indicate that better business
practices predict higher survival rates and faster sales growth. The association of
business practices with firm outcomes is robust to including numerous measures of
the owner's human capital. We find that owners with higher human capital, children
of entrepreneurs, and firms with employees employ better business practices.
Despite recognizing the importance of developing authentic corporate social
responsibility (CSR) programs, noticeably absent from the literature is
consideration for how employees distinguish between authentic and inauthentic CSR
programs. This is somewhat surprising given that employees are essentially the face
of their organization and are largely expected to act as ambassadors for the
organization's CSR program (Collier and Esteban in Bus Ethics 16:19-33, 2007). The
current research, by conducting depth interviews with employees, builds a better
understanding of how employees differentiate between authentic and inauthentic CSR
programs, and how these judgments influence their perceptions of the organization.
We find that employees rely on two different referent standards to form
authenticity judgments-the extent to which the image put forth in the CSR program
aligns with the organization's true identity and the extent to which the CSR
program itself is developmental. To assess the former, employees draw on cues about
resource commitment, alignment between elements of the organization's CSR program,
emotional engagement, justice, and embeddedness. The latter assessments are based
on the extent to which the organization adopts a leadership role with regards to
its CSR initiatives. We also find that perceived authenticity can lead to positive
outcomes such as organizational identification and employee connections. This study
contributes to the broad literatures on both CSR and authenticity, as well as more
specifically adding to the conversation on authenticity as a potentially valuable
lens for enriching business ethics theorizing.
As corporations are going global, they are increasingly confronted with human
rights challenges. As such, new ways to deal with human rights challenges in
corporate operations must be developed as traditional governance mechanisms are not
always able to tackle them. This article presents five different views on
innovative solutions for the relationships between business and human rights that
all build on empowerment, dialogue and constructive engagement. The different
approaches highlight an emerging trend toward a more active role for corporations
in the protection of human rights. The first examines the need for enhanced
dialogue between corporations and their stakeholders. The next three each examine a
different facet of empowerment, a critical factor for the respect and protection of
human rights: empowerment of the poor, of communities, and of consumers. The final
one presents a case study of constructive corporate engagement in Myanmar (Burma).
Altogether, these research projects provide insight into the complex relationships
between corporate operations and human rights, by highlighting the importance of
stakeholder dialogue and empowerment. All the five projects were presented during
the Second Swiss Master Class in Corporate Social Responsibility, held in Lausanne,
Switzerland on December 12, 2008. The audience for this conference, which examined
business and human rights, was composed of researchers, governmental
representatives, and business and non-governmental organization practitioners.
In a variety of industries ranging from agriculture to electronics and oil,
procurement takes place through a combination of bilateral fixed-price contracts
and open market trading among supply chain participants, which allows them to
improve supply chain performance by utilizing new demand and cost information. The
strategic behavior of the participants in these markets interacts with the way
fixed-price contracts are formulated and significantly affects supply chain
efficiency. In this paper, we develop a strategic model that allows endogenous
price formation in an industrial spot market where supply chain participants have
private information. Utilizing the model, we analyze the equilibrium of a dynamic
game between a single supplier and multiple manufacturers who first contract with
the supplier at a fixed price and then trade on a spot market. We study how such
trading affects supply chain performance and show that it does not eliminate fixed-
price contracting even though the fixed price is determined under inferior
information. We find that it reduces prices, increases the quantities produced, and
improves supply chain profits and consumer surplus. However, depending on the
information structure of the supply chain, spot trading may make either the
supplier or the manufacturers worse off. Our results show how the informational
regime affects the profitability of supply chain participants and the allocation of
quantities between the procurement venues. We show that beyond a threshold level,
the effect of increasing supply uncertainty, or decreasing either the demand
uncertainty or the information asymmetry among the manufacturers, is to increase
the percentage procured on the spot market as well as the overall quantity procured
and sold, and to decrease prices. As the number of manufacturers increases,
procurement shifts from fixed-price contracting to spot trading and in the limit,
the supply chain is both fully coordinated and informationally efficient. We also
show that in many cases, the supplier may gain strategic advantage by sharing some
of her cost information with the manufacturers.
The question of whether corporate social responsibility (CSR) has a positive impact
on firm value has been almost exclusively analysed from the perspective of the
stock market. We have therefore investigated the relationship between the valuation
of Euro corporate bonds and the standards of CSR of mainly European companies for
the first time in this article. Generally, the debt market exhibits a considerable
weight for corporate finance, for which reason creditors should basically play a
significant role in the transmission of CSR into the valuation of financial
instruments. Given that socially responsible firms are often regarded as
economically more successful and less risky, they should have lower risk premia.
The results of the empirical analysis, however, reveal that based on an extensive
data panel the risk premium for socially responsible firms - according to the
classification by SAM Group - was ceterius paribus higher than for non-socially
responsible companies. However, only one case of the models investigated was weakly
significant. Thus, largely the relationship has to be classified as marginal; so
CSR has apparently not yet been incorporated into the pricing of corporate bonds.
Corporate social responsibility (CSR) was historically a business-oriented idea
that companies should voluntarily improve their social and environmental practices.
More recently, CSR has increasingly attracted governments' attention, and is now
promoted in public policy, especially in the European Union (EU). Conflicts can
arise, however, when advanced welfare states introduce CSR into public policy. The
reason for such conflict is that CSR leaves key public welfare issues to the
discretion of private business. This voluntary issue assignment contrasts starkly
with advanced welfare states' traditions favoring negotiated agreements and strong
regulation to control corporate conduct. This article analyzes the conflicts and
compatibilities arising when advanced welfare states introduce CSR, focusing on how
the two traditions diverge and on how conflicts are reconciled. Empirically the
study focuses on four Nordic countriesDenmark, Finland, Norway, and Swedenwidely
recognized as the most advanced welfare states, and increasingly as leaders in CSR
public policy. From interviews of 55 officials of government ministries,
nongovernmental organizations (NGOs), labor unions, and employer associations, the
authors conclude that tension indeed exists between CSR public policies and
advanced welfare state traditions in all four countries. Whereas CSR's aims are
compatible with Nordic institutional traditions, the means promoted in CSR is in
conflict with such Nordic traditions as corporatist agreements and rights-based
welfare state regulation of social and environmental issues. There is harmony of
goals, but conflict in means between the four Nordic countries studied.
In this article, our aim is to examine the difference between the corporate social
responsibility (CSR) practice of the multinational companies (MNCs) and of the
domestic companies operating in Serbia, as well as the influence of internal self-
regulations such as statements of corporate values and codes of conduct, and
external self-regulations such as the implementation of the ISO 9001 and ISO 14001
standards on CSR practice. The CSR practice is observed in five CSR areas: employee
relations, customer relations, environmental practice, community and social
involvement, and transparency in business activity. The findings indicate that the
CSR practice of the MNCs is significantly different in comparison to domestic
companies only in the area of employee relations. Furthermore, the overall results
suggest that internal self-regulations have more influence on CSR practice than the
implementation of generic management system standards. However, the existence of
transparent corporate values, codes of conduct and implemented management systems
according to ISO 9001 and ISO 14001 standards does not prove to be strong
predictors of CSR performance.
Existing research on the financial implications of corporate social responsibility
(CSR) for firms has predominantly focused on positive aspects of CSR, overlooking
that firms also undertake actions and initiatives that qualify as negative CSR.
Moreover, studies in this area have not investigated how both positive and negative
CSR affect the financial risk of firms. As such, in this research, the authors
provide a framework linking both positive and negative CSR to idiosyncratic risk of
firms. While investigating these relationships, the authors also analyze the
moderating role of financial leverage of firms. Overall, analysis of secondary
information for firms from multiple industries over the years 2000-2009 shows that
CSR has a significant effect on the idiosyncratic risk of firms, with positive CSR
reducing risk and negative CSR increasing it. Results also show that the reduction
in risk from positive CSR is not guaranteed, with firms having high levels of
financial leverage witnessing lower idiosyncratic risk reduction.
This study examines whether corporate social responsibility (CSR) towards primary
stakeholders influences the financial and the non-financial performance (NFP) of
Indian firms. Perceptual data on CSR and NFP were collected from 150 senior-level
Indian managers including CEOs through questionnaire survey. Hard data on financial
performance (FP) of the companies were obtained from secondary sources. A
questionnaire for assessing CSR was developed with respect to six stakeholder
groups - employees, customers, investors, community, natural environment, and
suppliers. A composite measure of CSR was obtained by aggregating the six
dimensions. Findings indicate that stock-listed firms show responsible business
practices and better FP than the non-stock-listed firms. Controlling confounding
effects of stock-listing, ownership, and firm size, a favorable perception of
managers towards CSR is found to be associated with increase in FP and NFP of
firms. Such findings hold good when CSR is assessed for the six stakeholder groups
in aggregate and for each stakeholder group in segregate. Findings suggest that
responsible business practices towards primary stakeholders can be profitable and
beneficial to Indian firms.
Based on social exchange and customer relationship marketing theory, this study
examines how ethical leadership contributes to inter-organizational conflict
management (task conflict (TC) and relationship conflict), and the moderating role
of task interdependence in these relationships. Data was collected from 81
suppliers and 45 corresponding managers of a large group company in China. Results
show that ethical leadership is negatively associated with the levels of inter-
organizational conflict, whether task or relationship. Task interdependence
significantly moderates the relationship between ethical leadership and TC.
Managerial implication in terms of creating sound buyer-supplier relationship
through an ethical perspective is discussed.
Mergers and acquisitions (M&A) and organic growth are two common strategies to
achieve horizontal growth. In this study, we disentangle two distinct sources of
firm performance corresponding to different theoretical perspectives on firm size:
firms' bargaining power with respect to suppliers and customers, and operating
efficiency arising from scale economies. We conceptually argue and empirically show
that relatively, M&A enhance bargaining power in the short term while organic
growth enhances operating efficiency over the long term. In order to disaggregate
these effects, we use accounting rather than financial or managerial data and test
our predictions in the global retail industry over a 20-year period. We examine
implications of these results for sustainability of size-based competitive
advantages. Copyright (c) 2014 John Wiley & Sons, Ltd.
While private sector investment plays a key role in fostering sustainable economic
development in developing countries, respect for internationally recognized worker
rights is also a vital component. The paper presents a methodology to assist
investors in large-scale private infrastructure and other industry sector projects
to utilize internationally recognized core labor rights and related standards for
fostering sound labor management. The methodology involves due diligence or
analysis of labor conditions and subsequent supervision and monitoring of
performance and promotes the use of best practices to complement existing minimum
requirements. Case study examples are presented and challenges in applying the
approach are discussed.
Debates about the ethics of executive compensation are dominated by familiar
themes. Many writers consider whether the amount of pay CEOs receive is too large-
relative to firm performance, foreign CEO pay, or employee pay. Many others
consider whether the process by which CEOs are paid is compromised by weak or self-
serving boards of directors. This paper examines the issue from a new perspective.
I focus on the duties executives themselves have with respect to their own
compensation. I argue that CEOs' fiduciary duties place a moral limit on how much
compensation they can accept, and hence seek in negotiation, from their firms.
Accepting excessive compensation leaves the beneficiaries of their duties (e.g.,
shareholders) worse off, and thus is inconsistent with observing those duties.
The UN Framework on Human Rights and Business comprises the State's duty to protect
human rights, the corporate responsibility to respect human rights, and the duty to
remedy abuses. This paper focuses on the corporate responsibility to respect. It
considers how to overcome obstacles, arising out of national and international law,
to the development of a legally binding corporate duty to respect human rights. It
is argued that the notion of human rights due diligence will lead to the creation
of binding legal duties and that principles of corporate and tort law can be
adapted to this end. Furthermore, recent legal developments accept an "enlightened
shareholder value" approach allowing corporate managers to consider human rights
issues when making decisions. The responsibility to respect involves adaptation of
shareholder based corporate governance towards a more stakeholder oriented approach
and could lead to the development of a new, stakeholder based, corporate model.
Out-group trust is a crucial driver of international business performance. However,
employees from different countries vary in their levels of out-group trust. The aim
of this study is therefore to capture national forces driving out-group trust.
Based on Kramer's theorizing on the multiple bases of trust, we argue that, at the
societal level, dispositional, categorization-based and rule-based trust influence
employees' out-group trust. In particular, we argue for dispositional and rule-
based societal trust to increase, and for categorization-based societal trust to
decrease employees' out-group trust through different types of socialization. Using
data on 25,622 employees from 42 countries, we find partial support for the
coexistence of these bases of societal trust. Disentangling trust-forming and
trust-impeding models, we find support for dispositional and rule-based societal
trust as drivers of employees' out-group trust, and for categorization-based
societal trust as impeding employees' out-group trust. In a combined model,
however, rule-based trust is not significantly related to employees' out-group
trust. Considering the coexistence of trust and distrust, employees' out-group
trust develops through socialization effects conveying general trust in others
(i.e., high dispositional trust) and the equality of social groups (i.e., low
categorization-based trust).
Ethical maturity is a great concern to all educators, firms, and investors across
the globe. This research surveyed 448 citizens, managers and employees in Iran to
measure their Personal Business Ethics Scores (PBES) to see if age, education,
management experience, and government work experience make a difference in making
more ethical decisions. This study contributes to the theory of moral development
across the Iranian culture as it is the first known study using this method. The
results suggest that education and more years of government work experience make a
difference in the moral maturity of respondents. This study confirms that the
ethical maturity of respondents is enhanced either through the authoritarian regime
or socialization with Islamic values. Kohlberg's moral development theory regarding
ethical maturity is partially supported since those with more years of experience
in government and more formal education have higher business ethics scores.
Implications are discussed.
Although interest in Corporate Social Responsibility (CSR) in emerging markets has
increased in recent years, most research still focuses on developed countries. The
scant literature on the topic, which traditionally suggested that CSR was
relatively underdeveloped in emerging markets, has recently explored the context
specificity, suggesting that it is different and reflects the specific social and
political background. This would particularly apply to local companies, not so much
to foreign subsidiaries of multinationals active in emerging markets. Thus far,
empirical research that systematically documents a range of CSR activities of local
companies and their performance has been scarce. This paper reports the results of
a survey conducted among companies in the Mexican auto industry. CSR performance
was investigated across three dimensions: environmental, labor, and community,
using measures from existing research and global, 'Western' standards of practice,
to identify the type of CSR activities and the level of CSR performance that
exists, if at all, in the emerging-market context. Results show that local
companies do engage in the type of CSR activities commonly associated with CSR in
developed countries. To the extent that comparisons could be made, our findings
also indicate that CSR activities and levels among the sample are comparable to
what is known about CSR in developed-country settings. Moreover, six of the nine
CSR dimensions are intercorrelated, which suggests that CSR in the Mexican auto
parts industry is more structural than incidental.
P>The literature on corporate social performance (CSP) is largely split between
approaches that consider CSP to be extrinsically driven and those that consider it
to be intrinsically driven. While the management literature has paid attention to
drivers of both types, the relationship between the two remains largely unstudied,
particularly in the international setting. Meanwhile, the international business
(IB) literature has addressed the international dimension of CSP more directly, but
focuses largely on extrinsic pressures. Our paper links the management and IB
literatures by addressing intrinsic drivers (management commitment to ethics) in
conjunction with extrinsic (trade-related) drivers for both foreign- and
domestically-owned firms in a single-market setting. Using survey data from 121
auto parts suppliers in Mexico, we find that management commitment to ethics is a
dominant driver of CSP among both foreign and domestic firms. More importantly,
management commitment to ethics interacts positively with trade-related pressures
in raising CSP levels.
Recent research suggests that philanthropy's value to the firm is largely mediated
by contextual factors such as managers' assumed motives for charity. Our article
extends this contingency perspective using a "sensegiving" lens, by which external
actors' interpretations of organizational actions may be influenced by the way in
which the organization communicates about those actions. We consider how
sensegiving features in philanthropy-related press releases affect whether
investors value those donation decisions. For the empirical investigation in this
study, we analyze abnormal returns to announcements by U.S. Fortune 500 firms
documenting their donations to Hurricane Katrina disaster relief in 2005. We expect
that in general, donation decisions would be controversial given the uncertainty
surrounding the hurricane's economic effects at the time. However, we also propose
that announcements emphasizing employee involvement in the donation send investors
positive signals about the firm's ability to bounce back from the disaster's
adverse effects. We find empirical support for the proposed hypotheses, and discuss
the implications for theory and practice.
Research on corporate philanthropy typically focuses on organization-external
pressures and aggregated donation behavior. Hence, our understanding of the
organization-internal structures that determine whether a given organization will
respond philanthropically to a specific human need remains underdeveloped. We
explicate an attention-based framework in which specific dimensions of
organization-level attention focus interact to predict philanthropic responses to
an emergent human need. Exploring the response of Fortune Global 500 firms to the
2004 South Asian tsunami, we find that management attention focused on people
inside the organization (employees) interacts with both attention for places
(countries in the tsunami-stricken region) and attention for practices (corporate
philanthropy in general) to predict the likelihood of charitable donations. Our
research thus extends beyond the prevailing institutional perspective by
highlighting the role of attention focus in corporate responsiveness to emergent
societal issues.
Prevailing perspectives on corporate philanthropy are predominantly rational and
limit decision making to the executive suite. Recently, however, recognition has
grown that employees are also important drivers of corporate philanthropy efforts
and that their motives may be more empathic in nature. Integrating arguments from
affective events theory, intergroup emotions theory, and affect infusion theory, we
develop a framework in which organization members' collective empathy in response
to the needs of unknown others infuses executives' decisions, thereby affecting the
likelihood, scale, and form of corporate philanthropy. Our theory has implications
for research on emotions in organizations, as well as for our understanding of the
role of organizations in society.
In this article I present brand-centred control as a new form of normative control
and examine the ways in which it affects employees. To do so, I draw on the results
of a qualitative case study of a consumer products company with a strong corporate
culture and brand, and examine internal branding as an extension of culture
management. The key insights of the case study show that brand-centred control -
unlike traditional normative control that typically works inside the company - also
engages an external audience (customers, fans, and the wider public) as an
additional source of normative control. As employees internalise the brand image of
this external audience, they turn into brand representatives even in absence of
face-to-face interactions with others and in their private lives. Brand-centred
control thus blurs the boundaries between work and employees' private lives in
unprecedented ways. I discuss the ways in which employees respond to and resist
brand-centred control and point to further research on brand-centred control as a
significant new form of normative control.
It is well known that transaction-specific investments (TSIs) made in customers by
account managers makes them vulnerable to opportunism by customers (i.e., the
targets of the investments). The present research shows that TSIs made in customers
by account managers can also lead them to be concerned about internal opportunism
by nontargets of the investments (e.g., information technology or finance
specialists in their own teams). Furthermore, it shows that concern about internal
opportunism leads account managers to engage in internal blocking of their own team
members (i.e., restricting their access to customers and to customer information) 1
which results in lower performance with customers. This phenomenon is a conundrum
in that account managers interested in stronger performance with customers appear
to block the very functional specialists who can help them attain better
performance. This research also identifies two types of continuities (account
manager-customer continuity and specialist-customer continuity) that moderate the
relationship between TSIs and concern about internal opportunism. Building on the
literature in economics and organization theory, our research suggests that cross-
functional teams that are designed to bring different functional areas together are
more complex to manage than previously believed.
The globally generated concepts of environment and sustainability are fast gaining
currency in international business discourse. Sustainability concerns are
concurrently becoming significant to business planning around corporate social
responsibility and integral to organizational strategies toward enhancing
shareholder value. The mindset of corporate managers is a key factor in determining
company approaches to sustainability. But what do corporate managers understand by
sustainability? Our study explores discursive meaning negotiation surrounding the
concepts of environment and sustainability within business discourse. The study is
based on qualitative interpretive research drawing from symbolic interactionism
(Blumer, Symbolic interactionism: perspective and method. Prentice-Hall, Englewood
Cliffs, 1969) which postulates that meaning in discourse is an essentially
contested domain dependent upon negotiation in the Habermasian tradition of
mutually respectful dialogue (Habermas, The theory of communicative action:
lifeworld and system: a critique of functionalist reason. Beacon Press, Boston
1987). Data from semi-structured intensive interviews of a small sample of senior
corporate managers was analyzed to examine how corporate elites in India frame
their approach to sustainability issues and respond to external pressures for
deeper corporate responsibility. The findings point to the existence of a
distinctively local narrative with strong potential for the discursive negotiation
of personal and collective understanding of ethical and socio-cultural values that
may help internalize broader sustainability considerations into corporate decision-
making processes.
Recent years have featured a leap in academic and public interest in Corporate
Social Responsibility (CSR) activities and related corporate reporting. Two main
themes in this literature are the exploration of management incentives to engage in
and disclose this information, and of the use and value of this information to
market participants. We extend the second theme by examining the interest that
specific investor classes have in the use of CSR information. We rely on feminist
intersectionality, which suggests that gender intersects with other identities to
yield different values, experiences, and opportunities that can lead to gender-
based preferences for CSR information. Based upon a survey of 750 US-based retail
investors, we find that female retail investors have a greater interest in the use
of CSR information, relative to male retail investors. Women express greater
anticipated future demand for this information than do men. Further, the magnitude
of the increase from current use to anticipated future demand is greater for women
than men. Age is a significant modifying factor in that the discrepancy between
women of any age and older men is greater than that between women and younger men.
Finally, women also exhibit greater demand for streamlining of the information
flow, consistent with pressures induced by time poverty. It appears that current
disclosure practices provide a less than optimal match with the needs of the
information consumers that are primarily interested in using this information. This
mismatch may result in a systematic disenfranchisement of female investing classes
which suggests an ethical need to level the playing field.
This case explores a Canadian mining corporation, Barrick Gold Corporation
(Barrick), and the way it engages with the local communities that surround its
mining activities in the Lake Victoria Zone, Tanzania. Following recent organized
tensions within several local communities and heightened criticism from those
communities [examples of recent discontent from local communities and workers at
Barrick Gold Corp in Tanzania: http://www.protestbarrick.net/article.php?id=214;
http://www.protestbarrick.net/article.php?list=type &
http://www.reuters.com/article/marketsNews/idUSN1247233520081212;
http://www.corpwatch.org/article.php?id=15263;
http://www.miningwatch.ca/index.php?/Tanzania_en/What_Really_Happened; (accessed
February 25, 2009)], as well as from local media, social lobbyists, and local not-
for-profit organizations (NFOs), the case examines the way Barrick has responded to
this situation by implementing global corporate social responsibility (CSR)
policies in an attempt to strike a balance between its international business
capabilities and its localization strategies. In spite of these efforts, tension
between Barrick and the local communities within the company's zone of operations
has not abated. This issue has left Barrick's senior management wondering what more
the company could reasonably do to resolve the situation.
Using stock price reactions to sudden deaths of top executives as a measure of
expected contribution to shareholder value, we examine the relationship between
executive pay and managerial contribution to shareholder value. We find, first,
that the managerial labor market is characterized by positive sorting: managers
with high perceived contributions to shareholder value obtain higher pay. The
executive pay-contribution relationship is stronger for professional executives and
for executives with high compensation. We estimate, second, that an average top
executive (chief executive officer) appears to retain 71% (65%) of the marginal
rent from the firm-manager relationship. We examine, third, how the executive pay-
contribution relationship varies with individual, firm, and industry
characteristics. Overall, our results are informative for the ongoing discussion
about the level of executive compensation.
The growing literature on corporate responsibility (CR) has drawn attention to how
different CR practices complement each other and interact in the form of
configurations. This study investigated CR patterns associated with high financial
performance for 466 firms in Mainland China, Hong Kong, and Taiwan. We applied a
set-theoretic approach using qualitative comparative analysis to identify
similarities and differences across these three societies in configurations of CR
practices relating to customer, employee, investor, community, and environmental
stakeholder groups. The extent to which the financial benefits of various
configurations of CR practices are attributable to institutional factors is
examined.
A growing body of theory has focused on privacy as being contextually defined,
where individuals have highly particularized judgments about the appropriateness of
what, why, how, and to whom information flows within a specific context. Such a
social contract understanding of privacy could produce more practical guidance for
organizations and managers who have employees, users, and future customers all with
possibly different conceptions of privacy across contexts. However, this
theoretical suggestion, while intuitively appealing, has not been empirically
examined. This study validates a social contract approach to privacy by examining
whether and how privacy norms vary across communities and contractors. The findings
from this theoretical examination support the use of contractual business ethics to
understand privacy in research and in practice. As predicted, insiders to a
community had significantly different understandings of privacy norms as compared
to outsiders. In addition, all respondents held different privacy norms across
hypothetical contexts, thereby suggesting privacy norms are contextually understood
within a particular community of individuals. The findings support two conclusions.
First, individuals hold different privacy norms without necessarily having
diminished expectations of privacy. Individuals differed on the factors they
considered important in calculating privacy expectations, yet all groups had robust
privacy expectations across contexts. Second, outsiders have difficulty in
understanding the privacy norms of a particular community. For managers and
scholars, this renders privacy expectations more difficult to identify at a
distance or in deductive research. The findings speak directly to the needs of
organizations to manage a diverse set of privacy issues across stakeholder groups.
This article addresses the growing industry of retail socially responsible
investment (SRI) profiled mutual funds. Very few previous studies have examined the
final consumer of SRI profiled mutual funds. Therefore, the purpose of this study
was to, in an exploratory manner, examine the impact of a number of pro-social,
financial performance, and socio-demographic variables on SRI behavior in order to
explain why investors choose to invest different proportions of their investment
portfolio in SRI profiled funds. An ordinal logistic regression analysis on 528
private investors revealed that two of the three pro-social variables had a
positive impact on how much the consumer invested in SRI profiled funds. Moreover,
there was proof of a non-altruistic motive for investing in SRI as consumers who
perceive that financial return of SRI is equal or better than "regular" mutual
funds, invested a greater proportion of their portfolio in SRI profiled mutual
funds. Furthermore, the results showed that women and better-educated investors
were more likely to invest a greater proportion of their investment portfolio in
SRI. Overall, the findings indicate that both financial perceptions and pro-social
attitudes are connected to consumer investment in SRI.
P>This paper investigates the relationship between flexible human resource (HR)
practices and innovativeness. Testing the research model in a sample of first-tier
automotive suppliers indicates that internal flexibility practices are positively
related to innovativeness. Regarding external flexibility, the association depends
on the type of contingent employee: negative association for 'short-term hires' and
positive association for 'consulting/contracting firms'. The relationships to
innovativeness for practices associated with knowledge transfer are moderated by
environmental dynamism, but the non-knowledge related practices are not. Firms in
highly dynamic environments can benefit more from flexible HR practices than firms
in less dynamic environments.
We model the effect of external financing on a firm's ability to maintain a
reputation for high-quality production. Producing high quality is first best.
Defecting to low quality is tempting because it lowers current costs while revenue
remains unchanged because consumers and outside investors cannot immediately
observe the defection. However, defection to low quality impairs the firm's
reputation, which lowers cash flows and inhibits production over the long term.
Financing via short-term claims discourages defection to low quality because the
gains from defection are mostly captured by outside investors through an increase
in the value of their claims. Therefore, if the firm relies on short-term external
financing, it is more likely to produce over the long run, produce high-quality
goods, and enjoy high profitability. The aggregate results from a laboratory
experiment generally accord with these predictions.
Organizational practice theorists have convincingly argued that the social and
material, subjects and objects, are inextricable and co-emerge as the outcomes of
practices or networks, My article engages with the debate in this field by
explaining how, within these assumptions, discrete categories or actors are brought
into being. The ethnographic fieldwork from call centres initially shows how
customer service operatives and computers are entangled and inseparable in carrying
out the practice of customer service calls. The findings then show how meaningful
boundaries around actors are established through temporal delineations, or cuts,
within practices. My study thus exposes the multiplicity of how employees make
sense of surrounding technology. This contributes to organization studies by
explaining the dynamics and fluidity that underlie the categories and actors which
are taken for granted in contemporary workplaces. This also contributes to our
appreciation of a labour process beyond dualisms.
Recent cases in retailing reflect that ethics have a major impact on brands and
performance, in turn, demonstrating that brand owners, employees, and consumers
focus on ethical values. In this study, we analyze how various sources of social
power affect corporate ethical values, retailer's commitment to the retail
organization, and ultimately sales and service quality. Multi-source data based on
a sample of 225 retailers indicated a strong link between power, ethics, and
commitment and that these affected output performance.
There is an unresolved paradox concerning the role of corporate social
responsibility (CSR) in consumer behavior. On the one hand, consumers demand more
and more CSR information from corporations. On the other hand, research indicates a
considerable gap between consumers' apparent interest in CSR and the limited role
of CSR in purchase behavior. This article attempts to shed light on this paradox by
drawing on qualitative data from in-depth interviews. The findings show that the
evaluation of CSR initiatives is a complex and hierarchically structured process,
during which consumers distinguish between core, central, and peripheral factors.
This article describes these factors in detail and explains the complexity of
consumers' assessment of CSR. These insights then serve as a basis for discussing
the theoretical and managerial implications of the research findings. To this end,
the article contributes to a better understanding of the role of CSR in consumption
decisions.
Researchers and companies are paying increasing attention to corporate social
responsibility (CSR) programs and the reaction to them by consumers. Despite such
corporate efforts and an expanding literature exploring consumers' response to CSR,
it remains unclear how consumers perceive CSR and which "Gestalt" consumers have in
mind when considering CSR. Academics and managers lack a tool for measuring
consumers' perceptions of CSR (CPCSR). This research explores CPCSR and develops a
measurement model. Based on qualitative data from interviews with managers and
consumers, the authors develop a conceptualization of CPCSR. Subsequently, model
testing and validating occurs on three large quantitative data sets. The
conceptualization and the measurement scale can assist companies to assess CPCSR
relative to their performance. They also enable managers in identifying
shortcomings in CSR engagement and/or communication. Finally, the paper discusses
implications for marketing practice and future research.
This study investigates corporate social responsibility (CSR) of sinful firms,
which refer to ones that are operating in controversial industries, including the
production and distribution of alcohol, tobacco, gambling, adult entertainment,
firearm, military, and nuclear power. We attempt to answer two questions in this
study: (1) Do these sinful firms actively advertise their CSR engagements compared
to non-sinful firms? And (2) do their advertising efforts really yield increased
financial performance? Positing that advertising not only can make sinful firms'
good deeds visible, but also can highlight the contradiction between these firms'
stigma and their prosocial activities, we claim that sinful firms are likely to
advertise their CSR engagement to overcome their stigmatized firm image, but these
advertising activities will make the firms' performance vulnerable by inducing
skepticism from stakeholders. Using KLD database in conjunction with COMPUSTAT and
Center for Research in Security Prices from 1991 to 2010, where 337 firms are
involved in the controversial sinful industries, namely tobacco, alcohol, gaming,
firearms, military, and nuclear power, we examine the effect of advertising
spending of sinful firms' CSR engagement on performance vulnerability, which is
instantiated with idiosyncratic risk. The empirical results indicate that sinful
firms increase their advertising expenditure when they engage in CSR programs, but
these efforts for advertising CSR tend to increase idiosyncratic risk. This finding
indicates that even though sinful firms can benefit from engaging in socially
responsible initiatives, advertising their CSR efforts may backfire.
Ethics is a significant issue among those in leadership positions, especially since
the ethical corporate scandals of the 1970s followed by corporate scandals in the
1980s and the S&L scandals of the 1980s and 1990s and most recently the global
financial crisis of 2006-2009. The purpose of this research was to measure the
perceived leadership integrity in today's manufacturing environment, since the
global financial crisis, as perceived by their employees. This study included 7,233
manufacturing employees in the United States. A total of 66 surveys were used to
calculate data for this study. The Perceived Leader Integrity Scale (PLIS) was used
to collect data from respondents that included demographic questions. The research
addressed the following question: To what degree are leaders in the manufacturing
industry considered "low ethical," "moderate ethical," and "high ethical" on the
PLIS?.
The extant literature has examined the effects of ownership structures on corporate
social responsibility (CSR), yet it has overlooked the non-linear and interactive
effects among major shareholder groups. In this study, we examine the non-linear
effects of insider and institutional ownerships on CSR. We also examine whether it
is necessary to have both incentive alignment and monitoring mechanisms
(complementary view) or it is sufficient to have either mechanism (substitutive
view) to promote CSR. Using a sample of the U.S. Fortune 1000 firms, our results
suggest that insider and institutional ownerships have non-linear effects on CSR.
We also find support for the complementary mechanisms view, in that the highest CSR
rating is observed when both ownership levels are high. Therefore, firms need to
maintain strong governance structures to realize synergistic effects in promoting
CSR. Our findings provide a more in-depth understanding of the relationships
between ownership structures and corporate social outcomes.
Relatively little research has examined the effects of ownership on the firms'
corporate social responsibility (CSR). In addition, most of it has been conducted
in the Western context such as the U. S. and Europe. Using a sample of 118 large
Korean firms, we hypothesize that different types of shareholders will have
distinct motivations toward the firm's CSR engagement. We break down ownership into
different groups of shareholders: institutional, managerial, and foreign
ownerships. Results indicate a significant, positive relationship between CSR
ratings and ownership by institutions and foreign investors. In contrast,
shareholding by top managers is negatively associated with firm's CSR rating while
outside director ownership is not significant. We conclude that different owners
have differential impacts on the firm's CSR engagement.
Firms typically present a mixed picture of corporate social performance (CSP), with
positive and negative indicators exhibited by the same firm. Thus, stakeholders'
judgments of corporate social responsibility (CSR) typically evaluate positives in
the context of negatives, and vice versa. Building on social judgment theory, we
present two alternative accounts of how stakeholders respond to such complexity,
which provide differing implications for the financial effects of CSP: reciprocal
dampening and rewarding uniformity. Echoing notable findings on strategic
consistency, our US panel study finds that firms that exhibit uniformly positive or
uniformly negative indicators in particular dimensions of CSP outperform firms that
exhibit a mixed picture of positives and negatives, which supports the notion that
stakeholders' judgments of CSR reward uniformity.
Theorists have long argued that a process of individualisation is inherent in
conditions of late modernity. Whilst individualisation has been acknowledged in the
business ethics literature, studies have often overlooked the processes by which
individuals are given greater responsibility for ethical decision making and the
personal and institutional effects of this responsibility. This article develops a
notion of 'ethical individualisation' to help one understand and explore how and
why ethical responsibility is being devolved to employees in the UK consulting
industry. The article argues that an individualised ethics is incapable of
preventing malpractice in the face of institutional conflicts of interest.
Digitally networked voluntary associations such as free software projects and
Wikipedia can be distinguished from capitalist firms in two respects. First, their
predominant logic is ethical'. Participation is primarily motivated by self-
fulfilment and validated by a community of peers, rather than by earning wages.
Second, their governance is modular', understood in a design sense (decomposable
blocks sharing a common interface), but also in political economy terms:
participants oppose restricted ownership and control by individually socializing
their works into commons. In recent years capitalist-centralized firms have
increasingly engaged with ethical-modular organizations, in some cases paying wages
to participants (such labour is thus both alienated' or sold, and communal', as
workers freely cooperate to produce commons). This article reviews the literature
dealing with the relationship of these two organizational types. It argues that the
manner in which scholars approach a central characteristic of ethical-modular
organizations - participants relinquish exclusive property rights over the resource
they have created - leads to highly diverse interpretations. Four hypotheses are
presented. A panoptic' view overlooks the abjuration of exclusive property rights,
so that ethical-modular organizations can be defined as a variant of the evolution
of capitalist firms into post-bureaucratic networks. Skeptics' view this abjuration
as irrelevant, and ethical-modular organizations as increasing worker exploitation.
In contrast, activists' celebrate the abjuration of exclusive property rights, and
present ethical-modular organizations as key actors in a historical process leading
to the disappearance of capitalism and hierarchy. Finally reformists' suggest that
the co-optation of communal labour by firms will benefit business practices and
society. The article examines the analytical focus of each hypothesis in terms of
labour, loss of control by firms over workers, and societal impact. Where
appropriate, it raises questions and objections. The conclusion addresses communal
labour's effective dependence on capitalist-centralized firms and suggests factors
which may contribute to its emancipation.
Corporate responsibility (CR) has often been criticised as a decoupled
organisational phenomenon: a publicly espoused rule that is not followed in daily
organisational practices. We argue that a crucial reason for this criticism arises
from the dominant in-house assumption of CR literature, which mitigates tensions
and contradictions in organisational life by claiming that integrated rules result
in coupled practices. We aim to provide new insights by problematising this in-
house assumption and by examining how members of two organisations discursively
make sense of CR, as a daily rule-bound practice, via three strategies:
integration, differentiation and fragmentation. We elaborate the contemporary
literature on CR as a daily organisational practice by examining the significance
of discursive sensemaking for organisational rules for further development and
learning regarding CR. We then discuss the significance of our results for
understanding CR as a coupled/decoupled phenomenon.
The question of what drives corporate social performance (CSP) has become a vital
concern for many managers and researchers of large corporations. This study
addresses this question by adopting a multilevel, multistakeholder, and multimethod
approach to theorize and estimate the relative influence of macro (national
business system and country), meso (industry), and micro (firm-level) factors on
CSP. Applying three different methods of variance decomposition analysis to an
international sample of 2060 large public companies over a time span of 5 years,
our results show that firm-level factors explain the largest proportion of variance
in aggregate CSP as well as CSP oriented toward communities, the natural
environment, and employees. These results support our hypotheses according to which
CSP is not primarily driven by macrolevel or mesolevel factors, except for
shareholder-oriented CSP, which is relatively more influenced by country-level
factors. As a whole, our findings also point to the value of subdividing CSP into
its stakeholder-specific components as this disaggregation allows for a more
careful examination of distinct drivers of distinct aspects of CSP.
Industrial production output is generally correlated with the state of the economy.
Nonetheless, during times of economic downturn, some industries take the biggest
hit, whereas at times of economic boom they reap most benefits. To provide insight
into this phenomenon, we map supply networks of industries and firms and
investigate how the supply network structure mediates the effect of economy on
industry or firm sales. Previous research has shown that retail sales are
correlated with the state of the economy. Since retailers source their products
from other industries, the sales of their suppliers can also be correlated with the
state of the economy. This correlation represents the source of systematic risk for
an industry that propagates through a supply chain network. Specifically, we
identify the following mechanisms that can affect the correlation between sales and
the state of the economy in a supply chain network: propagation of systematic risk
into production decisions, aggregation of orders from multiple customers in a
supply chain network, and aggregation of orders over time. We find that the first
effect does not amplify the correlation; however, the latter two intensify
correlation and result in the amplification of correlation upstream in supply
networks. We demonstrate three managerial implications of this phenomenon:
implications for the cost of capital, for the risk-adjusted valuation of supply
chain improvement projects, and for supplier selection and risk.
Corporate social responsibility (CSR) is a relatively undeveloped concept despite
its increasing importance to corporations. One difficulty is the possible
inexactness of CSR. Another is the apparent reluctance by regulatory authorities
and policy makers to intervene in the area. This is largely a result of inhibitions
created by traditional approaches to company law with emphasis on shareholder
protection and financial disclosure. The consequence is the stultification of
independent development of CSR by tying social issues to financial performance.
This attitude might not be unconnected to the theoretical and practical challenges
in justifying CSR and defining its scope. The underlying impediment is a factual
and theoretical failure to distinguish 'instrumental' and 'pure' (ethical) CSR.
This article demonstrates that ethical CSR highlights the role of regulation, and a
principal stance is that regulation is neither incompatible nor irreconcilable with
ethical CSR. The article argues that cognizance of the intrinsic moral
justification of 'pure' CSR is required for delineating the scope of CSR as well as
for clarifying the desirability and extent of its regulation. It argues that the
dynamic history and visage of multinational corporate corruption illuminates the
fluidity of the regulation-CSR relationship. The current and widening backlash
against transnational corporate corruption is, arguably, a demonstration of the
position that regulation and CSR are not mutually exclusive and absolute concepts.
This article submits that recognition and application of this 'ethical' and
'instrumental' CSR distinction is fundamental to the development of CSR and
resolution of connected questions of regulation.
The purpose of this empirical study is to investigate the effect of paternalistic
leadership (PL) on ethical climate and the moderating role of trust in leader.
Convenience sampling is used as a sampling procedure and the data were obtained
from 227 Turkish employees. The findings indicated that PL had some effect on
ethical climate. Furthermore, partial support was found for the moderating effect
of trust in leader on the relationship between PL and ethical climate. The results
of the study showed the importance of PL on employees in following company rules
and procedures and showing a sense of responsibility and care to customers,
community, and others in the organization.
Whether and how trust and trustworthiness differ between a collectivist society, e.
g., China, and an individualistic one, e. g., the United States, generates much
ongoing scientific debate and bears significant practical values for managing
cross-country transactions. We experimentally investigate how supply chain members'
countries of origin-China versus the United States-affect trust, trustworthiness,
and strategic information sharing behavior in a cross-country supply chain. We
consider a two-tier supply chain in which the upstream supplier solicits demand
forecast information from the retailer to plan production; but the retailer has an
incentive to manipulate her forecast to ensure abundant supply. The levels of trust
and trustworthiness in the supply chain and supplier's capability to determine the
optimal production quantity affect the efficacy of forecast sharing and the
resulting profits. We develop an experimental design to disentangle these three
aspects and to allow for real-time interactions between geographically distant and
culturally heterogeneous participants. We observe that, when there is no prospect
for long-term interactions, our Chinese participants consistently exhibit lower
spontaneous trust and trustworthiness than their U. S. counterparts do. We quantify
the differences in trust and trustworthiness between the two countries, and the
resulting impact on supply chain efficiency. We also show that Chinese individuals
exhibit higher spontaneous trust toward U. S. partners than Chinese ones, primarily
because they perceive that individuals from the United States are more trusting and
trustworthy in general. This positive perception toward U. S. people is indeed
consistent with the U. S. participants' behavior in forecast sharing. In addition,
we quantify that a Chinese supply chain enjoys a larger efficiency gain from
repeated interactions than a U. S. one does, as the prospect of building a long-
term relationship successfully sustains trust and trustworthiness by Chinese
partners. We advocate that companies can reinforce the positive perception of
westerners held by the Chinese population and commit to long-term relationships to
encourage trust by Chinese partners. Finally, we also observe that both populations
exhibit similar pull-to-center bias when solving a decision problem under
uncertainty (i.e., the newsvendor problem). Data, as supplemental material, are
available at http://dx.doi.org/10.1287/mnsc.2014.1905.
This paper examines how industrial buyers' attributions of their suppliers' actions
of corporate social responsibility (CSR) are related to both the brand advocacy and
brand equity. Using a sample of 173 questionnaires gathered in Taiwan, we find that
CSR perceptions of industrial buyers are more strongly and positively related to
brand advocacy and brand equity when industrial buyers interpret CSR activities of
their suppliers as driven more by intrinsic motives and less by extrinsic motives.
Furthermore, brand advocacy mediates the interactive effects of CSR and CSR
attribution on industrial brand equity.
This study examines the notion of aEuro(1)spirituality' as a dimension of human
self, and its relevance and role in management. Major thesis of this research is
that spirituality of employees is reflected in work climate. This may in turn
affect the employees' service to the customers. In the first part of the study a
Spiritual Climate Inventory is developed and validated with the data from
manufacturing and service sector employees. In the later part, hypothesis of
positive impact of spiritual climate on customers' experience of employees' service
is examined and found to be substantiated empirically.
The business case for social responsibility (BCSR) is one of the most widely
studied topics in the business and society literature that focuses on large firms.
This attention is understandable because large firms have an obligation to
shareholders who, as commonly assumed, seek to maximize returns on their
investments, in turn, pressing corporate managers to show that firms' expenditures
in social engagement would pay off. Small firms, on the other hand, rarely face
such pressures, yet the BCSR logic is increasingly applied to small firms as well.
Our primary objective in this paper is to examine whether and how much do small
firm owners' perceptions of BCSR affect the firm's social engagement. In finding a
fine-grained answer to those questions, we consider BCSR as a two-dimensional
construct consisting of tangible and intangible benefits, and also integrate the
BCSR perspective with the slack resource perspective to offer a motivation-capacity
lens to examine firm's social engagement. Drawing on a multi-industry sample of 478
small firms in the US, we find that while small firm owners' perceptions about
potential tangible benefits of social engagement are not related to the firm's
social engagement, perceptions about potential intangible are positively related.
Firm's financial performance is also positively related to its social engagement,
but there is no interaction between potential benefits and financial performance.
This study contributes to an improved understanding about small firms' social
engagement, which still remains an understudied area. Our results are in line with
studies which argue that firms' social engagement is a response to institutional
factors.
In the context of the growing popularity of the ethical consumer movement and the
appearance of different types of ethical collective communities, the current
article explores the meanings drawn from the participation in Responsible
Consumption Cooperatives. In existing research, the overriding focus has been on
examining individual ethical consumer behaviour at the expense of advancing our
understanding of how ethical consumers behave collectively. Hence, this article
examines the meanings derived from participating in ethical consumer groups. A
qualitative multi-method approach is adopted to increase the validity of findings.
This includes focus groups, in-depth interviews, observation and document analysis.
Results show that ethical consumption in a group project offers a greater sense of
effectiveness and control when compared to individual actions. Furthermore, these
groups facilitate the creation of a social circle and encourage new learning as a
result of the social interaction that takes place in the ethical community of the
cooperative.
Two major perspectives can be construed in the literature concerning the nature of
family owned businesses (FOBs). The first implies that these enterprises have
unique characteristics of stewardship. FOB owners are said to care deeply about the
long-term prospects of the business, in large part because their family's fortune,
reputation and future are at stake. Their stewardship is said to be manifested by
unusual devotion to the continuity of the company, by more assiduous nurturing of a
community of employees, and by seeking out closer connections with customers to
sustain the business. The second perspective is less flattering. It proposes that
FOBs are unusually subject to stagnation: they are said to face unique resource
restrictions, embrace conservative strategies, eschew growth, and be doomed to
short lives. This paper develops and examines the merits of the two perspectives,
neither of which has been systematically articulated or researched. It does so in
an empirical study of only small firms that are owned and managed by their founder.
Within this sample, it compares firms that are FOBs, that is, family owned and
managed, with non-FOBs, that is, owned and managed by a founder with no other
relative involved in the business. The findings show significant support for all
three aspects of the stewardship perspective of FOBs, and no support for any
elements of the stagnation perspective.
Of the many ethical corporate marketing practices, many firms use corporate social
responsibility (CSR) communication to enhance their corporate image. Yet,
consumers, overwhelmed by these more or less well-founded CSR claims, often have
trouble identifying truly responsible firms. This confusion encourages
'greenwashing' and may make CSR initiatives less effective. On the basis of
attribution theory, this study investigates the role of independent sustainability
ratings on consumers' responses to companies' CSR communication. Experimental
results indicate the negative effect of a poor sustainability rating for corporate
brand evaluations in the case of CSR communication, because consumers infer less
intrinsic motives by the brand. Sustainability ratings thus could act to deter
'greenwashing' and encourage virtuous firms to persevere in their CSR practices.
This project investigates salient stakeholder forces of socially responsible supply
chain orientation (SRSCO) in the apparel and footwear sector focusing on fair labor
management issues. SRSCO was conceptualized as a composite of internal
organizational direction and external partnership for a creation and continuation
of fair labor conditions throughout the supply chain. Primary stakeholders
identified were consumers, regulation, industry, and media. A total of 209 mail
survey responses from sourcing managers of U. S. apparel and footwear companies
were analyzed. Two dimensions of SRSCO were confirmed: internal direction and
external partnership. Consumer and industry peer pressures were found significantly
related to internal direction, while industry peers and media were significantly
related to the external partnership. Regulation was not significantly related to
either internal direction or external partnerships. Lack of regulation forces to
govern labor issues and roles of consumers, industry peers, and media in promoting
fair labor management are discussed in this article.
In this paper, we critique the emergent international normative framework of growth
- the knowledge economy. We point out that the standardized character of knowledge
economy's flagship - intellectual property rights (IPRs) - has an adverse impact on
women in emerging economies, such as India. Conversely, this impact on women, a
significant consumer segment, has a feedback effect in terms of market growth.
Conceptually, we analyze the consequences of knowledge economy and standardized IPR
through a feminist lens. We extend the analyses by pointing to various
contradictions surrounding growth norms; for example, there are inherent
contradictions between established "formal" legalistic interpretation of IPR, "soft
law" norms of corporate social responsibility, a fluid situation of moral claims of
human rights, and different institutional capabilities at the international and
domestic level. Consequently, we are able to demonstrate how standard IPR laws fail
to deliver equity for all. We argue our case through exploring the growth aspects
of the agricultural sector in India and the adverse impact of standard biopatenting
on women farmers' rights (as producers and consumers) and preservation of
environment. We suggest that desired gendered equity is better achieved when there
is a constellation of actors - private-sector business, the state, and civil-
society leaders - working together to ensure a balanced development through
tailoring of IPR to local needs.
Former U.S. Secretary of Labor Robert Reich, in his recent book Supercapitalism:
The Transformation of Business, Democracy, and Everyday Life (2007), rejects
outright the call for increased corporate social responsibility. He believes that
social responsibility advocates are wasting resources and efforts on a doomed
project. This article suggests that while Reich raises several interesting concerns
in his counter-intuitive book, especially about the rise in corporate political
power, ultimately his argument is unconvincing. Worse yet, a careful reading
suggests that Reich does not contemplate fully what it is he is asking business and
society to give up in his call to jettison corporate social responsibility. The
notion of corporate social responsibility is itself an extremely, valuable, and
hard-won social asset. It is a vehicle for promoting transparency, more nuanced
accountability, integrity, better communication, mutually beneficial exchange, and
sensible development. In providing a language and vocabulary to critique business
from both inside and outside its boundaries, it has becomes a necessary condition
for business ethics and modern capitalism. It is especially important in a world of
increasing global economics. Nevertheless, it is an extremely fragile asset. Books,
like Reich's Supercapitalism, that dismiss corporate social responsibility in such
a facile way, are dangerous and risky in ways that perhaps even the authors
themselves are unaware.
The corporate social responsibility literature has emphasized the importance of
both economic and ethical domains of corporate behavior. Analyzing unprecedented
survey data from investors in a socially responsible (SR) mutual fund, this article
considers how economic and ethical concerns shape shareholder investment behavior.
In particular, this article analyzes levels of investor fund loyalty, defined as
the continued investment in a mutual fund despite the belief that one is earning a
lower return on investment. Building upon existing research that shows SR fund
assets are more stable than conventional fund assets, this article leverages within
respondent comparisons to clarify that dual investors (i.e., those who invest in
both SR and conventional funds) are more loyal to their SR fund than to their
conventional fund. This suggests that a corporation's ethical behavior attracts
more patient investment capital, an important consideration for any corporation
that is deciding to what degree it should engage in corporate social
responsibility. In addition, this article empirically demonstrates that economic
motivations reduce SR fund loyalty and that ethical motivations induce SR fund
loyalty. This evidence that ethical motivation is associated with fund loyalty
advances research on morality in the market by yielding empirical evidence to a
largely theoretical debate.
The purpose of this study is to extend prior research on this topic by
investigating whether the impact of ownership concentration moderates the link
between corporate social performance (CSP) and financial performance (FP). This
study uses a set of unique, hand-collected pollution control data to measure CSP,
based on a sample of Taiwanese listed companies during the period from 1996 to
2006. The results of the empirical analysis provide firm support for the idea that
the divergence between control rights and the cash flow rights of controlling
owners negatively moderates the link between social and short- and long-run FP.
The authors describe the intensity and orientation of the corporate social
responsibility (CSR) reporting in four Spanish industries and explore the
relationship that exists between both concepts and an independent measurement of
reputation for CSR (CSRR). The results demonstrate that the CSR reporting is
especially relevant and useful in the finance industry. Finance companies report
significantly more CSR information than most industries in Spain, and this
reporting is more closely linked to their CSRR than the CSR reporting of basic,
consumer goods and services industries.
Although research on the corporate social responsibility (CSR) dimension of
corporate image has notably increased in recent years, the definition and
measurement of the concept for academic purposes still concern researchers. In this
article, literature regarding the measurement of CSR image from a customer
viewpoint is revised and areas of improvement are identified. A multistage method
is implemented to develop and to validate a reliable scale based on stakeholder
theory. Results demonstrate the reliability and validity of this new scale for
measuring customer perceptions regarding the CSR performance of their service
providers. With regard to this, CSR includes corporate responsibilities towards
customers, shareholders, employees and society. The scale is consistent among
diverse customer cohorts with different gender, age and level of education.
Furthermore, results also confirm the applicability of this new scale to structural
equation modelling.
Because previous scholars have offered few comprehensive models to understand the
benefits of corporate social responsibility image in terms of customer behaviour,
the authors of this paper propose a hierarchy of effects model to study how
customer perceptions of the social responsibility of companies influence customer
affective and conative responses in a service context. The authors test a
structural equation model using information collected directly from 1,124 customers
of banking services in Spain. The findings demonstrate that corporate social
responsibility image influences customer identification with the company, the
emotions evoked by the company and satisfaction positively. Identification also
influences the emotions generated by the service performance and customer
satisfaction determines loyalty behaviour. The findings have significant
implications for service managers because they demonstrate that there are two paths
to explain the satisfaction and loyalty of service customers. The first path is
composed of the beliefs and emotions generated by the company at the institutional
level. The second path is composed of the thoughts, attitudes, emotions and
feelings generated by the company's services.
Despite its increasing popularity across management disciplines, stakeholder theory
holds an important shortcoming in terms of its guidance for understanding the
heterogeneity of stakeholder interests, claims, and behavior toward firms.
Specifically, scholars note the inadequacy of generic categories of stakeholders
(e.g., customers, employees, shareholders, and suppliers) in providing a realistic
portrait of the groups and individuals that interact with the firm, opening the
theory to much criticism for a 'simplistic' and 'meaningless' stakeholder concept.
In face of this challenge, recent research is pointing to social identity as a
mechanism to refine our understanding of stakeholders as names-and-faces, however
we argue that despite the advancements offered by the social identity approach, it
too presents limitations in its ability to guide managers in prioritizing
stakeholder claims. Building on these nascent efforts to offer much needed nuance
to a theory of stakeholder identification and prioritization, this paper draws from
new advances in the management literature and offers status as an attribute that
helps explain and predict how managers accord attention to their various
constituents. We set forth five propositions connecting stakeholder status to the
attention stakeholders receive from managers. We argue that status is a superior
attribute of stakeholder identification and prioritization because it (1) accounts
for groups and individuals' uniqueness within broad categories of stakeholders in a
dynamic way, (2) reconciles the dual nature of stakeholders as holding
simultaneously a social and an economic identity in their claim toward the firm,
and (3) provides a plausible explanation of, and intuitive guidance to, how
managers accord attention to their firm's stakeholders. Implications and future
directions for research complete this article.
With complex buyer-driven global production networks and a labour-intensive
manufacturing process, the fashion industry has become a focal point for debates on
the social responsibility of business. Utilising an interview methodology with
influential actors from seven export garment manufacturers in Sri Lanka, we explore
the situated knowledge at one nodal point of the production network. We
conceptualise factory management perspectives on the implementation of corporate
social responsibility (CSR) in terms of the strategic balancing of ethical
considerations against the commercial pressures of cost and lead time. Factory
managers framed CSR in terms of compliance, rather than going above and beyond
regulatory requirements; seeing it as a strategic competitive imperative and less a
developmental mechanism. Sri Lankan manufacturers maintain that they have
benefitted from a unique combination of factors, including strict national labour
laws, an educated workforce, the characteristics of the garments produced,
industrial upgrading, and long-term non-adversarial buyer-supplier relationships,
which they argue has supported the establishment and maintenance of CSR practices.
The paper thus provides managerial implications that relate CSR activities to CSR
outcomes which include both reputational and production benefits. Such insights
will be of strategic relevance for lead retail buyers as well as apparel producers
keen to invest in CSR to partly mitigate against increasing price-based
competition.
We sought to clarify the relationship between virtuality and social loafing by
exploring two work-family moderatorsfamily responsibility and dissimilarity in
terms of family responsibilityand two mediatorscohesion and psychological
obligationin two studies. We expected that busy teams (i.e., comprising similar
individuals with many family responsibilities) would exhibit the strongest positive
virtuality-social loafing relationship, and teams comprising similar individuals
with few family responsibilities would experience a weaker virtuality-social
loafing relationship. We expected that individuals working with dissimilar others
would report consistently high levels of social loafing regardless of virtuality.
Furthermore, we expected cohesion and psychological obligation to one's teammates
would mediate these effects. Similar individuals in teams indeed exhibited
different virtuality-social loafing relationships in both studies, suggesting that
the flexibility provided by virtuality might be more effective in teams comprising
similar people with few family responsibilities. Study 2 further revealed that
cohesion and obligation may mediate these effects, such that high levels of these
mediators were associated with low levels of social loafing in similar teams
comprising people with few family responsibilities. We discuss contributions to the
virtual work and social loafing literatures, as well as the work-family and team
literatures. We also suggest several specific actions managers can take on the
basis of these findings, including for employees with few versus many family
responsibilities.
This article presents the results of a study that analysed whether social
responsibility had any bearing on the decision making of institutional investors.
Being that institutional investors prefer socially aligned organizations, this
study explored to what extent the corporate actions and/or social/environmental
investments influenced their decisions. Our results suggest that there are specific
variables that affect the perceived value of the organization, leading to decisions
to not only invest, but whether to hold or sell the shares, and therefore having a
consequential impact on the capital market's valuation.
In the academic world, research has indicated that "good ethics is good business.
"Such research seems to indicate that firms, which emphasize ethical values and
social responsibilities, tend to be more profitable than others. Generally, the
profitability is credited to the firm's positive relationships with its customers,
reduced costs of attempting to rebuild a tarnished image, ease of attracting
capital, etc. The research conducted in this study evaluated salespeople's
perceptions of the ethics of businesses in general, their employer's ethics, their
attitudes as consumers, and the relationships existing between these perceptions
and the sale force's job satisfaction and turnover intentions. The results show a
positive relationship existing between salesperson perceptions of business ethics,
his/her employer's ethics, consumer attitudes, and the salesperson's job
satisfaction and reduced turnover intentions.
This paper argues that consumer demand for unethical behavior such as fraud can
impact employee turnover through market and psychological forces. Widespread
conditions of unethical demand can improve career prospects for employees of
unethical firms through higher income and stability associated with firm financial
health. Similarly, unethical employees enjoy increased tenure from the financial
and psychological rewards of prosocial behavior toward customers demanding corrupt
or unethical behavior. We specifically examine the well-documented unethical demand
for fraud in the vehicle emissions testing industry, and its impact on employee
tenure. We use data from tests conducted by several thousand licensed inspectors to
demonstrate that fraudulent employees and employees of fraudulent firms enjoy
longer tenure. These results suggest further work to separate the multiple
psychological and economic mechanisms likely driving our findings.
While ethical and moral issues have been widely considered in the general areas of
marketing and sales, similar attention has not been given to the impact of
strategic account management (SAM) approaches to handling the relationships between
suppliers and very large customers. SAM approaches have been widely adopted by
suppliers as a mechanism for managing relationships and partnerships with dominant
customers - characterized by high levels of buyer - seller inter-dependence and
forms of collaborative partnership. Observation suggests that the perceived moral
intensity of these relationships is commonly low, notwithstanding the underlying
principles of benefiting the few ( large, strategic customers) at the expense of
the many ( smaller customers and other stakeholders), and the magnitude of the
consequences of concessions made to large customers, even though some such
consequences may be unintended. Dilemmas exist also for executives implementing
strategic account relationships regarding such issues as information sharing,
trust, and hidden incentives for unethical behaviour. We propose the need for
greater transparency and senior management questioning of the ethical and moral
issues implicit in strategic account management.
We investigate the emergence of socially responsible (SR) production through
consumer decisions. Our experimental treatments vary market competitiveness and
consumers' information on social responsibility in production. We show that-
irrespective of consumers' information-SR production reduces monopolistic
supplier's profit and is therefore unlikely to emerge. With supplier competition,
SR production positively influences consumers' buying decisions and suppliers
offering SR products achieve significantly higher profits, as long as their price
is not too high. Our results yield valuable insights into the possibilities and
limitations of promoting SR production through consumer behavior, and they provide
evidence for positive effects of competition on moral behavior.
This paper applies insights from behavioral economics and nudge theory to foster
sustainable and responsible investment (SRI). SRI provides an opportunity to
express and promote ethical values via choice of financial instruments. While
policy-makers have tried to encourage greater participation in SRI, the majority of
retail investors retain a conventional approach to investment. I develop a
conceptual framework to improve the effectiveness of SRI policy-making. The first
part of the framework comprises a transmission mechanism which emphasizes the role
of SRI as a driver for sustainable development. The second part is a model of the
individual decision for or against SRI. The framework suggests that low SRI demand
is a case of behavioral market failure, and that nudging is a suitable tool for
dismantling behavioral barriers to SRI. A specific example of smart choice
architecture is used to illustrate the framework's potential in the design of an
SRI nudge. Assuming the nudge stands up to the rigors of empirical testing, it may
well provide a feasible alternative for policy-makers.
I consider two influential arguments for employee participation in firm decision
making: what I call the "interest protection argument" and the "autonomy argument."
I argue that the case for granting participation rights to some other stakeholders,
such as suppliers and community members, is at least as strong, according to the
reasons given in these arguments, as the case for granting them to certain
employees. I then consider how proponents of these arguments might modify their
arguments, or views, in response to this conclusion.
Corporate Social Responsibility (CSR) programs are increasingly popular corporate
marketing strategies. This paper argues that CSR programs can fall along a
continuum between two endpoints: Institutionalized programs and Promotional
programs. This classification is based on an exploratory study examining the
variance of four responses from the consumer stakeholder group toward these two
categories of CSR. Institutionalized CSR programs are argued to be most effective
at increasing customer loyalty, enhancing attitude toward the company, and
decreasing consumer skepticism. Promotional CSR programs are argued to be more
effective at generating purchase intent. Ethical and managerial implications of
these preliminary findings are discussed.
This paper explores the interface of employee orientation and the Customer
Relationship Management (CRM) process based on an in-depth case study of a leading
firm in the UK automotive services sector. Employee orientation is embedded in the
Organizational Culture (OC) of the firm and manifested through its key elements,
notably assumptions, values, behaviours and artefacts. CRM consists of four
organizational activities: strategic planning, information, value creation, and
performance measurement sub-processes. Based on the case study evidence, the widely
postulated link between CRM success and employee orientation is empirically
supported and the mechanisms underlying this association elucidated.
This paper investigates the impact of e-waste regulation on new product
introduction in a stylized model of the electronics industry. Manufacturers choose
the development time and expenditure for each new version of a durable product,
which together determine its quality. Consumers purchase the new product and
dispose of the last-generation product, which becomes e-waste. The price of a new
product strictly increases with its quality and consumers' rational expectation
about the time until the next new product will be introduced. "Feeupon-sale" types
of e-waste regulation cause manufacturers to increase their equilibrium development
time and expenditure, and thus the incremental quality for each new product. As new
products are introduced ( and disposed of) less frequently, the quantity of e-waste
decreases and, even excluding the environmental benefits, social welfare may
increase. Consumers pay a higher price for each new product because they anticipate
using it for longer, which increases manufacturers' profits. Unfortunately,
existing "fee-upon-sale" types of e-waste regulation fail to motivate manufacturers
to design for recyclability. In contrast, "fee-upon-disposal" types of e-waste
regulation such as individual extended producer responsibility motivate design for
recyclability but, in competitive product categories, fail to reduce the frequency
of new product introduction.
Corporate volunteering (CV) is known to be an effective employee engagement
initiative. However, despite the prominence of corporate social responsibility
(CSR) in academia and practice, research is yet to investigate whether and how CV
may influence consumer perceptions of CSR image and subsequent consumer behaviour.
Data collected using an online survey in Australia show perceived familiarity with
a company's CV programme to positively impact CSR image and firm image, partially
mediated by others-centred attributions. CSR image, in turn, strengthens affective
and cognitive loyalty as well as word-of-mouth. Further analysis reveals the
moderating effect of perceived leveraging of the corporate volunteering programme,
customer status and the value individuals place on CSR. The paper concludes with
theoretical and managerial implications, as well as an agenda for future research.
The most prevalent form of training call center agents is via classroom instruction
coupled with roleplays. Role-play training has a theoretical base in behavior
modeling that entails observation, practice, and feedback. Emerging simulation-
based technologies offer enhancements to behavior modeling that are absent in role-
play training. This study evaluates the effectiveness of simulation-based training
(henceforth, simulation training) as a behavior modeling technique vis-a-vis role-
play training in a real-world call center environment across tasks of different
levels of complexity. We collaborate with call centers at two Fortune 50 firms and
examine on-job performance metrics to evaluate the effectiveness of simulation
training. The performance measures of interest are call accuracy and call duration
because these are two important factors that influence customer satisfaction and
productivity in call center operations. After controlling for factors such as
trainee's learning and technology orientation, age, education, and call center
experience, results show that simulation training outperforms role-playing-based
training in terms of both accuracy and speed of processing customer calls. Further,
the relative superiority of simulation training improves at higher levels of task
complexity.
As a reflection of the values and ethics of firms, corporate social responsibility
(CSR) has received a large amount of research attention over the last decade. A
growing area of this research is the CSR-consumer relationship. Results of
experimental studies indicate that consumer attitudes and purchase intentions are
influenced by CSR initiatives - if consumers are aware of them. In order to create
this awareness, business is increasingly turning to 'prosocial' marketing
communications, but such campaigns is met with scepticism and their effectiveness
are therefore uncertain. Consequently, researchers in the field (for example,
Maignan, 2001; Mohr et al., 2001) have called for empirical studies to determine
the level of actual consumer awareness of CSR initiatives. This study examines the
Australian banking sector, which engages in and promotes its CSR activities, to
help fill this gap. Results from our qualitative study with bank managers, and our
quantitative study with consumers, indicate low consumer CSR awareness levels.
Consumer understanding of many of the social issues banks engage with is also low.
While CSR is effective in eliciting favourable consumer attitudes and behaviour in
theory, CSR has not proven its general effectiveness in the marketplace. The low
consumer awareness of the various social issues in which firms engage with their
CSR programs suggests that firms may need to educate consumers, so they may better
contextualise CSR initiatives communicated. However, better context may amount to
little if claimed CSR initiatives are perceived as inconsistent with other facets
of the business that reflect its values and ethics.
The purpose of this study is to investigate whether the availability of financial
bounties and anonymous reporting channels impact individuals' general reporting
intentions of questionable acts and whether the availability of financial bounties
will prompt people to reveal their identities. The recent passage of the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010 creates a financial bounty
for whistle-blowers. In addition, SOX requires companies to provide employees with
an anonymous reporting channel option. It is unclear of the effect of these
provisions as they relate to whistle-blowing. Our results indicate that a financial
bounty has the potential to increase participants' propensity to report
questionable acts and their willingness to reveal their identities when reporting,
but the availability of an anonymous reporting channel does not affect
participants' propensity to report questionable acts. These findings could
potentially help corporate management, government policy makers and accounting
researchers to assess the effectiveness of their internal compliance programs and
help determine if financial bounties in the private sector could encourage whistle-
blowing.
The focus of this paper is employee ownership, specifically the role of employee
ownership in value creation. Based on a sample of 163 French companies, we have
measured the impact of employee share ownership on value creation for both
shareholders and stakeholders. Only companies with a sustained employee ownership
policy over a 5-year period (from 2001 to 2005), as defined by the French
Federation of Employee and Former Employee Shareholders (FAS), have been
considered. The results indicate that employee share ownership plans have no effect
on shareholders' or stakeholders' value creation.
In today's world, the corporate image of the largest companies is closely linked to
their performance in the field of corporate social responsibility and the
disclosure of information on that topic, specifically, on climate change. Since the
Board of Directors is the body responsible for this process, the aim of this
article is to show the role that companies' Boards of Directors play in the
accountability process vis-A -vis stakeholders in relation to one specific aspect
which has enormous significance in environmental information: practices used to
monitor greenhouse gas emissions. In order to achieve this, we shall verify certain
business characteristics, in addition to the size and activity of the Board of
Directors, and we shall take different dependence models into consideration. These
models will include variables related to the level of independence and diversity of
the Board of Directors, which interact with dummy variables representing the
company's litigation risks regarding environmental behavior and the institutional
macro-context of the organization's country of origin. The results make it clear
that Boards of Directors are basically focused on the traditional responsibility of
creating economic value, instead of dealing with today's broader business world
concepts, which include social responsibility. This focus, therefore, does not
favor the accountability process before other stakeholders, if this makes it more
difficult to protect the interests of shareholders.
Codes of conduct have become the perhaps most often used tool to manage corporate
social responsibility (CSR). Researchers have primarily analysed such documents at
company-wide or trans-company levels, whereas there is a dearth of studies into the
use of codes for particular corporate functions. Hence, this article will examine
one particular group of sub-company level codes, namely codes of conduct that
stipulate CSR criteria for suppliers. Examining such ethical sourcing policies
adopted by the FTSE100 corporations, the article draws out what environmental,
social and economic issues large corporations perceive to be important in the
management of their supply chains. At an aggregate level, the coverage of CSR
issues is rather extensive, yet at the level of the individual corporation a degree
of selectivity in the issues that are addressed becomes noticeable. The code
content analysis furthermore confirms the business case and public pressure to be
the most important drivers of CSR. Finally, the study highlights the role of
isomorphic processes in the adoption of CSR tools.
The extant literature on cross-national differences in approaches to corporate
social responsibility (CSR) has mostly focused on developed countries. Instead, we
offer two inter-related studies into corporate codes of conduct issued by
developing country multinational enterprises (DMNEs). First, we analyse code
adoption rates and code content through a mixed methods design. Second, we use
multilevel analyses to examine country-level drivers of differences in code
contentspecifically, elements of a country's National Business System (NBS). We
find that DMNEs are much more likely to adopt a code of conduct than their domestic
counterparts; however, this does not translate into greater code comprehensiveness.
We also find support for the substitute view' of CSR in developing countries, i.e.
that MNEs from poorer countries and from countries with lower governance
effectiveness tend to express more comprehensive commitments. However, this dynamic
does not extend to a country's labour system; instead, CSR appears here to match
the efficiency of a country's labour market, thus reflecting the mirror view' of
CSR.
Studies into corporate social responsibility (CSR) in small and medium-sized
enterprises (SMEs) have suggested that small businesses are different to the large
companies on which CSR research usually focusses. Extending this argument, this
article raises the question what differences in approaches to CSR there are within
the SME category. Analysing the CSR strategy and performance of a medium-sized
fashion retailer in the United Kingdom through manager interviews as well as
customer and employee surveys, the article develops an analytical framework of CSR
in small, medium and large firms. The argument is developed that medium-sized firms
occupy a transition stage, where some CSR features that are reminiscent of small
enterprises are still important but get overlaid with aspects that are more typical
of large companies.
The restructured globalized economy has provided women with employment
opportunities. Globalisation has also meant a shift towards self-regulation of
multinationals as part of the restructuring of the world economy that increases
among others things, flexible employment practices, worsening of labour conditions
and lower wages for many women workers around the world. In this context, as part
of the global trend emphasising Corporate Social Responsibility (CSR) in the 1980s,
one important development has been the growth of voluntary Corporate Codes of
Conduct to improve labour conditions. This article reviews from a feminist
interdisciplinary perspective the broad academic literature on women workers,
covering the more classical debate on women workers in the industrialization
process and entering into women workers in the global supply chains and women
workers and corporate codes of conduct. The main argument is that this research on
women workers is crucial to frame the issues of business ethics and in particular
CSR and Codes of Conduct in the context of women in the global political economy.
When this crucial knowledge is ignored, then the ethical policies of the companies
also ignore the real situation of the women workers at the bottom of their supply
chains.
Drawing on stakeholder theory and the concept of enlightened self-interest, we
argue that firms that actively engage in corporate philanthropic giving also tend
to demonstrate greater concern for investors' interests by providing more
transparent financial information and avoiding corporate misconduct. Moreover, the
relationships between corporate giving, financial information transparency, and
corporate misconduct vary significantly according to the firm's ownership type,
which affects the fundamental motivations for corporate philanthropy. In a sample
of Chinese publicly listed firms from the 2003-2009 period, we find a positive
relationship between corporate giving and financial transparency, and note that the
relationship is stronger for non-state-owned enterprises (non-SOEs). We also find a
significantly negative association between corporate giving and corporate
misconduct for non-SOEs, but not for SOEs. Taken together, these findings suggest
that responsibility to both stakeholders and shareholders is a vital part of
building trust and reputations in China's non-SOE sector.
According to the Dutch Ministry of Economic Affairs (2001), transparency by means
of Sustainability Reporting should lead to better Corporate Social Responsibility
(CSR) performance of companies. Sustainability Reporting should also give consumers
the information they need to purchase the most sustainable products available
(Dutch Ministry of Economic Affairs, 2004). This article analyses the driving
factors influencing CSR and Sustainability Reporting at seven breweries in the
Netherlands. It also gives a better understanding of organizational behaviour with
reference to CSR and the reasons breweries have for Sustainability Reporting. The
Dutch government has no intention of forcing organizations to publish a
sustainability report, since it is trying to diminish the volume of legislation.
Rather, the government prefers to rely on the willingness and initiatives of
organizations to make CSR a success. In 2006, the Dutch Ministry of Economic
Affairs will evaluate the effect of its CSR policy. But is it a success already?
During our research, breweries appeared to find CSR more important than
Sustainability Reporting. Sustainability reporting is, for most breweries, not the
way to reach stakeholders. Most stakeholders have their own means for receiving
information e.g. annual reports, meetings, public statements and press releases.
Although small breweries think CSR is very important, they feel no pressure from
outside to publish a sustainability report. For them it is very complex and
expensive to publish a sustainability report. Large breweries feel pressure from
many stakeholders to be transparent, but not on a regular basis. We conclude from
this research that CSR does not stimulate Sustainability Reporting, but neither
does Sustainability Reporting stimulate CSR.
The role of a corporation is often debated as a mutually exclusive choice between
economic responsibility to shareholders and social responsibility to society. An
evolving viewpoint embraces an integrated approach focused on long-term value
creation for shareholders which benefits other stakeholders. Maximizing long-term
shareholder value as a corporate objective can be compatible with stakeholder
theory when an enlightened shareholder maximization strategy is embraced. Firms
implementing an enlightened shareholder maximization strategy are expected to make
decisions and use resources which achieve long-term value-creating outcomes.
However, critics of enlightened shareholder maximization as a corporate goal
contend this strategy conflicts with maximizing shareholder value. This study
explores whether firms which embrace a balanced enlightened shareholder
maximization strategy indeed create long-term value which does not sacrifice
shareholder wealth.
Developing countries need to reform legislation to ensure the global supply firms
in ready-made garment (RMG) industry is adequately addressing obligations of social
responsibility. Literature typically focuses on strategies for raising responsible
standards in global buying firms within the RMG industry, but fails to focus on
implementing strategies for suppliers in developing countries. This article
addresses this gap by specifically focusing on the RMG industry in Bangladesh, the
home of the third largest RMG supplier in the world. It concentrates on analysing
how and to what extent the law can assist in developing social responsibility
performance of the RMG manufacturing firms in developing countries. It ultimately
concludes that a new governance approach in laws can effectively increase the
social responsibility practice standards of an industry where global buying firms
are profit-driven and governmental agencies are either inadequate or corrupt.
This study investigates the social-psychological mechanisms leading individuals in
organizations to engage in environmental citizenship behaviors, which entail
keeping abreast of, and participating in, the environmental affairs of a company.
Informed by the corporate greening and organizational behavior literature, we
suggested that an employee's level of involvement in the management of a company's
environmental impact was the overt manifestation of his or her discretionary sense
of commitment to environmental concerns in the work context, and that such
commitment developed through the interplay of individual, organizational, and
supervisory factors. Our general findings support the idea that when environmental
protection is valued and encouraged by the company and line managers, organization
members are more likely to experience a volitional sense of attachment and
responsibility to corporate environmental goals and values, which is enacted
through citizenship behaviors. We also expected that individual ecological beliefs
would strengthen the environmental commitment of employees via identification with,
and adherence to, the socially responsible cause embodied by the organization and
its managerial staff. But it did not. On the contrary, the data indicated that
corporate environmental policy is more likely to influence an employee's level of
environmental commitment when he or she holds weak versus strong personal
ecological beliefs. Theoretical and managerial implications of our findings are
discussed.
This paper sequentially addresses a conceptual and an empirical goal. Our
conceptual goal was to develop a globally relevant model of the relationship
between work role stressors and strain using conservation of resources (COR) theory
as our foundation. Stressors included in the model are role conflict and role
ambiguity, with three resources - mastery, optimistic orientation, and self-esteem
- as moderators on the stressor-strain relationship. With this conceptual framework
developed, we explored our empirical goal, a test of the model using both societal-
level and individual-level indicators. First, we pan-culturally tested the model
across our seven-society sample. Next, we split these societies into high and low
gross national income categories. Likewise, we split the respondents in our sample,
regardless of their country, into high and low idiocentrism/individualism and
allocentrism/collectivism categories and tested at these group levels. Our findings
showed that personal resources - mastery, optimistic orientation, and self-esteem -
generally served to buffer the experienced strain due to work role ambiguity and
conflict. This study provides specific information that can assist the global
business community in understanding how stress pervades their workforces. Overall,
our findings offer substantial evidence that a global model of stress is truly
viable, providing direction for future research on stress in the global workforce.
Journal of International Business Studies (2010) 41, 652-670.
doi:10.1057/jibs.2009.68
Why do firms exist? What is their function? What do managers do? What is the role,
if any, of social motivation in the market? In this paper, we address these
questions with a new theory of the firm, which unites some major themes in
management, principal-agent theory, and economic sociology. We show that although
the market is a superior incentive mechanism, the firm has a comparative advantage
with respect to social motivation. We then show that the market is efficient in
environments that favor the provision of incentives, such as when subjective risk
is low and performance is easy to measure. The firm is efficient in other
environments where incentives are costly and/or ineffective. We compare our model
and results with the views of Durkheim (Durkheim, E. 1984. The Division of Labor in
Society. Free Press, New York) and Granovetter (Granovetter, M. 1985. Economic
action and social structure: The problem of embeddedness. Amer. J. Sociol. 91(3)
481-510).
The findings of this article increase our understanding of corporate social
responsibility from the consumers' perspective in a Chinese setting. Based on
primary data collected via a self-administered survey in Shanghai and Hong Kong and
results of similar studies conducted in Europe and the United States, we provide
evidence to show that Chinese consumers are more supportive of CSR. We also show
that Carroll's pyramid of responsibilities can be applied in China. We evaluated
the importance placed by Chinese consumers on the four responsibilities of firms -
economic, legal, ethical and philanthropic - and find that economic
responsibilities are most important while philanthropic responsibilities are of
least importance. The nature of these differences is important for firms intending
to use corporate social responsibility for strategic purposes.
Ethical behavior among businesses has gained significant prominence in recent
years. Survey evidence shows that Asian consumers demand for greater social
responsibility among businesses. Thus, a deeper understanding of the factors that
contribute to such a demand is useful. This study examines the influence of
religiosity and values on corporate social responsibility (CSR) support among
consumers in Hong Kong and Singapore. Primary data collected among consumers in
these cities point to a significant direct relationship between religiosity and CSR
support. In Hong Kong, this attitude is due both to altruistic as well as for
egotistical (or face saving) reasons. In Singapore, this is mainly due to the
latter. The results imply that different motivations should guide CSR strategies in
these two cities.
This study examines the relationship between corporate social responsibility and
financial performance by analyzing the intra-industry wealth impact of additions
and deletions to the Domini Social 400 index. Results from the event study analysis
indicate that additions to the index generate a positive share price response for
the announcement firm and a negative response by rival firms. The opposite reaction
is observed for index deletions. Additionally, the share price response is more
pronounced for informationally opaque industries. Our study highlights the
importance of external monitoring agencies in providing meaningful information that
helps resolve investor uncertainty regarding the quality of a firm's relationships
with its primary stakeholders. Copyright (C) 2011 John Wiley & Sons, Ltd.
Dynamic service settings-characterized by workers who interact with customers to
deliver services in a rapidly changing, uncertain, and complex environment (e.g.,
hospitals)-play an important role in the economy. Organizational learning studies
in these settings have largely investigated autonomous learning via cumulative
experience as a strategy for performance improvement. Whether induced learning
through the use of deliberate learning activities provides additional performance
benefits has been neglected. We argue that the use of deliberate learning
activities offers performance benefits beyond those of cumulative experience
because these activities counter the learning challenges presented by rapid
knowledge growth, uncertainty, and complexity in dynamic settings. We test whether
there are additional performance benefits to using deliberate learning activities
and whether the effectiveness of these activities depends on interdisciplinary
collaboration in the workgroup. We test our hypotheses in a study of 23 hospital
neonatal intensive care units (NICUs) involved in a quality improvement
collaborative. We find that using deliberate learning activities is associated with
better workgroup performance, as measured by NICUs' risk-adjusted mortality rates
for 2159 infant patients, but only after two years. In the shorter term, using
these activities is associated with worse performance. By the third year, the
positive impact of using deliberate learning activities is similar to the benefit
of cumulative experience (18% and 20% reduction in odds of mortality,
respectively). Contrary to prediction, interdisciplinary collaboration mediates,
rather than moderates, the relationship between using deliberate learning
activities and workgroup performance. Thus, our data suggest that using deliberate
learning activities fosters interdisciplinary collaboration.
Drawing on institutional theory, this study examines the question of how host
country institutions affect corporate social responsibility (CSR) adoption by
multinational enterprises (MNEs). I propose that CSR encompasses a set of practices
that MNEs draw on to signal legitimacy in different kinds of institutional contexts
- contexts that vary in how they shape issue salience and stakeholder power in a
given issue field. Building on ideas related to field opacity and the managerial
implications of CSR, I study why MNEs adopt two distinct types of CSR policies:
standards-based CSR in response to contexts marked by issue salience, and rights-
based CSR in response to contexts marked by stakeholder power. To test these
hypotheses, I use subsidiary and firm-level data from a sample of 540 Western
European MNEs in the issue field of labor rights. Results show that MNEs
strategically adopt these CSR policies related to their presence in distinct
institutional contexts. The study offers implications for how MNEs manage the
legitimacy of their global operations and how CSR, as a form of private governance,
can emerge as both a substitute and complement to regulatory institutions.
This paper develops two new measures of labor tax avoidance (LTAV) based on social
contribution expenses reported in financial statements and tests them and their
determinants within a sample of 224 Italian firms defined as legally registered
Mafia firms (LMFs) due to having been confiscated at some point by judicial
authorities, in relation to alleged connections with Italian organized crime.
Overall, our results reveal that before confiscation LMFs engage more in LTAV than
lawful firms do, whereas after confiscation there is no significant difference
between both types of firm. Furthermore, we find that several factors have a
significant influence on the probability of engaging in such a practice. This study
can enhance further research on the effectiveness of our measures and on the
determinants of LTAV in other contexts and for other types of firms. Moreover,
these measures can be added to the other direct and indirect methods commonly
employed to measure and detect undeclared work representing a primary means of
LTAV. Finally, our study allows inferring conclusions on the relation between
corporate social responsibility and tax avoidance, suggesting that socially
irresponsible firms, such as LMFs, are more likely to adopt this practice.
Through a qualitative approach (via semi-structured interviewing), we explore the
perspective of 72 CEOs of companies operating in Portugal about the definition of
corporate sustainability (CS) and its facilitators, and obtain four main findings.
First, most CEOs equate CS with the company's continuity/viability. Second, the
relevance ascribed to different stakeholders differs considerably: while more than
50 % of CEOs cited shareholders/profits, and more than 40 % mentioned the natural
environment and employees, very few mentioned customers, society, suppliers, the
State, or competitors. Third, the management practices considered as most important
to develop CS are (a) the organization's strategic alignment with a long-term
orientation, and (b) developing and energizing people within a positive
organizational climate characterized by trust and ethics. Fourth, the leadership
characteristics and behaviors considered as most important to foster CS are
scrutinizing the future and leading people through a mobilizing vision; energizing
and developing employees; and leading by example. While the whole picture is
largely consistent with the "sustainable strategic management'' (SSM) approach
suggested by Stead and Stead (2014) and with recent CS integrative approaches, the
great majority of CEOs who participate in the study have not embraced such
integrative and coevolutive perspectives.
Through a convenience sample of 260 employees, the study shows how employees'
perceptions about corporate citizenship (CC) predict their affective commitment.
The study was carried out in Portugal, a high in-group and low societal
collectivistic culture. Maignan et al.'s (1999, Journal of the Academy of Marketing
Science 27(4), 455-469) construct, including economic, legal, ethical, and
discretionary responsibilities was used. The main findings are: (a) contrary to
what has been presumed in the literature, the discretionary dimension includes two
factors: CC toward employees and toward community; (b) perceptions of CC explain
35% of unique variance of affective commitment; (c) the best predictors are
perceptions of economic and legal CC and, mainly, perceptions of discretionary CC
toward employees; (d) the perceptions of discretionary CC toward employees are
significantly better predictors of affective commitment than are perceptions of
economic, ethical, and discretionary CC toward the community; (e) perceived
inconsistency of the several CC dimensions is detrimental to employees' affective
commitment. The study questions the four-dimensional model of the CC construct as
operationalized by Maignan et al., suggests that culture should be included as a
moderating variable in future research, and stresses that affective commitment may
decrease when employees perceive that their organizations act upon the several
areas of CC inconsistently.
The article suggests that the four-factor model of corporate citizenship (CC:
economic, legal, ethical, and discretionary responsibilities) does not fairly
represent all pertinent dimensions of employees' CC perceptions. Based on an
empirical study with a sample of 316 employees, we show that, at least in some
contexts, individuals distinguish seven CC dimensions: (1) economic
responsibilities toward customers; (2) economic responsibilities toward owners; (3)
legal responsibilities; (4) ethical responsibilities; (5) discretionary
responsibilities toward employees; (6) discretionary responsibilities toward the
community; and (7) discretionary responsibilities toward the natural environment.
We do not suggest that this seven-factor model represents all of the (more)
relevant CC dimensions in the employees' minds. We aim to share evidence showing
that the four-factor model proposed by Maignan et al. (Journal of the Academy of
Marketing Science 27(4):455-469, 1999) may be refined, at least when the employees
are the stakeholders in question.
This empirical study examines corporate responses to activist shareholder groups
filing social-policy shareholder resolutions. Using resource dependency theory as
our conceptual framing, we identify some of the drivers of corporate responses to
shareholder activists. This study departs from previous studies by including a
fourth possible corporate response, engaging in dialogue. Dialogue, an alternative
to shareholder resolutions filed by activists, is a process in which corporations
and activist shareholder groups mutually agree to engage in ongoing negotiations to
deal with social issues. Based on a unique dataset of resolutions filed by member
organizations of the Interfaith Center on Corporate Responsibility from 2002 to
2005 and the outcomes of these resolutions, our analysis finds that corporate
managers are more likely to engage in dialogue with shareholder activists when the
firm is larger, is more responsive to stakeholders, the CEO is the board chair, and
the firm has a relatively lower percentage of institutional investors.
The challenges associated with climate change will require governments, citizens,
and firms to work collaboratively to reduce greenhouse gas emissions, a task that
requires information on companies' carbon risks, opportunities, strategies, and
emission levels. This paper explores the conditions under which firms participate
in this endeavor. Building on theories of how social activists inspire changes in
organizational norms, beliefs, and practices, we hypothesize that shareholder
actions and regulatory threats are likely to prime firms to adopt practices
consistent with the aims of a broader social movement. We find empirical evidence
of direct and spillover effects. In the domain of private politics, shareholder
resolutions filed against a firm and others in its industry increase a firm's
propensity to engage in practices consistent with the aims of the related social
movement. Similarly, in the realm of public politics, threats of state regulations
targeted at a firm's industry as well as regulations targeted at other industries
increase the likelihood that the firm will engage in such practices. These findings
extend existing theory by showing that both activist groups and government actors
can spur changes in organizational practices, and that challenges mounted against a
single firm or a single industry can inspire both firm and field-level changes.
Copyright (C) 2009 John Wiley & Sons, Ltd.
We propose that the failure to adopt an idea or innovation can arise from an in-
group bias among employees within an organizational subunit that leads the
subunit's members to undervalue systematically ideas associated with members of the
organization outside their subunit. Such biases in internal selection processes can
stymie organizational adaptation and therefore depress the performance of the firm.
Analyzing data on innovation proposals inside a large, multinational consumer goods
firm, we find that evaluators are biased in favor of ideas submitted by individuals
that work in the same division and facility as they do, particularly when they
belong to small or high-status subunits. Copyright (c) 2013 John Wiley & Sons, Ltd
Although a number of studies have shown that corporate social responsibility (CSR)
activities often lead to greater organisational performance in western developed
economies, researchers are yet to examine the strategic value of CSR in emerging
economies. Using survey data from 280 firms operating in Dubai, this study examines
the link between CSR activities and organisational performance. The results show
that CSR has a positive relationship with all three measures of organisational
performance: financial performance, employee commitment, and corporate reputation.
These results reinforce the accumulating body of empirical support for the positive
impact of CSR on performance and challenge the dominant assumption that, given the
weak institutional framework in emerging economies, CSR activities drain resources
and compromise firms' competitiveness.
Although studies in organizational storytelling have dealt extensively with the
relationship between narrative, power and organizational change, little attention
has been paid to the implications of this for ethics within organizations. This
article addresses this by presenting an analysis of narrative and ethics as it
relates to the practice of organizational downsizing. Drawing on Paul Ricoeur's
theories of narrative and ethics, we analyze stories of organizational change
reported by employees and managers in an organization that had undergone persistent
downsizing. Our analysis maintains that the presence of a dominant story that seeks
to legitimate organizational change also serves to normalize it, and that this, in
turn, diminishes the capacity for organizations to scrutinize the ethics of their
actions. We argue that when organizational change narratives become singularized
through dominant forms of emplotment, ethical deliberation and responsibility in
organizations are diminished. More generally, we contend that the narrative closure
achieved by the presence of a dominant narrative amongst employees undergoing
organizational change is antithetical to the openness required for ethical
questioning.
The economic theory of the consumer, which assumes individual satisfaction as its
goal and individual freedom to pursue satisfaction as its sine qua non, has become
an important ideological element in political economy. Some have argued that the
political dimension of economics has evolved into a kind of "secular theology" that
legitimates free market capitalism, which has become a kind of "religion" in the
United States [Nelson: 1991, Reaching for Heaven on Earth: The Theological Meaning
of Economics. (Rowman & Littlefield Publishers, Inc, Savage, Maryland); 2001,
Economics as Religion: From Samuelson to Chicago and Beyond (The Pennsylvania State
University Press, University Park, Pennsylvania); Thurow: 1983, Dangerous Currents:
The State of Economics (Random House, New York); Milbank: 1990, Theology and Social
Theory, Beyond Secular Reason (Basil Blackwell, Cambridge, Massachusetts)].
Consumer theory in its ideological form provides an important base for this
religion and is no longer merely a positive framework for understanding consumer
choice or estimating market demand. The paper explores the view of the human being,
the "anthropology," that is implicit in the economic theory of the consumer and
compares its "theological" implications with the corresponding theological
anthropologies in the Judaeo-Christian tradition. The paper outlines the
assumptions of consumer theory and then focuses on three aspects of the theory from
a critical theological perspective: the individual in community, property
ownership, and human destiny (or "eschatology" in theological terminology). The
principal conclusion is that consumer theory, viewed from this perspective, leads
to a reductionist and existentially harmful view of human beings. The maximization
of individual satisfaction raises genuine ethical issues when viewed as a political
and religious value. The paper argues that the issues could be ameliorated if
economists would include more explicit treatment of a social dimension and ethical
alternatives in consumer theory and if theologians would give greater attention to
economic theory.
There are major concerns about the level of personal borrowing, particularly
sourced from credit cards. This paper charts the progress of an initiative to
create a Responsible Lending Index (RLI) for the credit industry. The RLI proposed
to voluntarily benchmark lending standards and promote best practice within the
credit industry by involving suppliers of credit, customer representatives and
regulators. However, despite initial support from some banks, consumer bodies and
the Chair of the Treasury Select Committee, it failed to gain sufficient support
from financial institutions in its original format. The primary reasons for this
were related to the complexity of building such a robust index and the banks trade
body's fear of exposing its members to public scrutiny. A revised alternative, the
Responsible Lending Initiative, was proposed which took into account these
concerns. However, the Association of Payment Clearing Service (APACS), the trade
body of the credit industry, then effectively destroyed the proposal. This article
describes an attempt to address the challenges in the credit card industry with the
initiation of the RLI, reflected in stakeholder discourse and in the context of a
wider concern expressed by the involved stakeholders in terms of the need for
greater responsibility in the banking industry's lending practices.
Can SRI be a means to make investors both virtuous and prosperous? This paper
argues that there can be significant tensions between these goals, and that SRI
(and indeed all investment) should not allow the pursuit of maximizing investment
returns to prevail over an ethical agenda of promoting social and economic justice
and environmental protection. The discourse on SRI has changed dramatically in
recent years to the point where its capacity to promote social emancipation,
sustainable development and other ethical goals is in jeopardy. Historically, SRI
was a boutique sector of the market dominated by religious-based investors who
sought to invest in accordance with the tenets of their faith. From the early
1970s, the aspirations of the SRI movement morphed significantly in the context of
the divestment campaign against South Africa's apartheid regime. No longer were
social investors satisfied with just avoiding profit from immoral activities;
instead, they also sought to change the behavior of others. Business case SRI is a
problematic SRI benchmark for several reasons: often there is a countervailing
business case for financing irresponsible activities, given the failure of markets
to capture all social and environmental externalities; secondly, even if investors
care about such concerns, there may be no means of financially quantifying their
significance for investment purposes; and, thirdly, even if such factors can be
financially quantified, they may be deemed to be such long-term financial costs or
benefits that they become discounted and ignored. The ethics case for SRI and
ethical business practices more generally takes the view that both investors and
the companies they fund have ethical responsibilities that trump the pursuit of
profit maximization. Ethical investment should be grounded on this foundation.
However, it may not be enough. To keep ethical investment ethical will likely
require institutionalizing new norms and governance standards, in such domains as
reforming fiduciary duties and the internal governance of financial organizations.
SRI's own codes of conduct including the UNPRI have yet to demonstrate the
robustness to move the financial community beyond business as usual.
In this multiple-case study, I analyze the perceived importance of seven categories
of institutional entrepreneurs (DiMaggio, Institutional patterns and organizations,
Ballinger, Cambridge, MA, 1988) for the corporate social responsibility discourse
of three multinational companies. With this study, I aim to significantly advance
the empirical analysis of the CSR discourse for a better understanding of facts and
fiction in the process of institutionalization of CSR in MNCs. I conducted 42 semi-
structured face-to-face and phone interviews in two rounds with 30 corporate
managers from three multinational companies. The data has been analyzed using
qualitative (multiple coding) and quantitative (ANOVA, v 2 analysis) techniques.
The findings indicate that one company is driven by civil society's influence on
consumer's perception, the second company by direct attacks by civil society,
agenda setting organizations and legislators, and the third by the pressure of
large customers and legislators. The results suggest that the coping behaviors of
MNCs at both extremes of the spectrum of perceived responsible behavior aim at (1)
improving the business case for CSR and (2) increasing legitimacy in society,
resulting in converging CSR perceptions, and fostering an institutionalization of
CSR.
In recent years, there has been a surge in popularity of the fair-trade industry,
which seeks to improve trading conditions and to promote the rights of marginalized
workers. Although research suggests that fair-trade products are perceived as
promoting social and economic responsibility, some individuals-namely, those who
seek to maintain existing group inequalities (i.e., those high in social dominance
orientation or SDO) or those induced to think inequality is a good thing-may not
share this perception. Across three studies, we found that (1) SDO relates
negatively to fair-trade consumption, and (2) this relationship is mediated by the
tendency for high-SDO individuals to see fair-trade products as less compatible
with their conception of social justice. Our findings held after controlling for
related individual-differences variables, and regardless of whether SDO was
measured or manipulated. Implications for how to maximize the likelihood that
people will perceive fair-trade products as "fair" are discussed.
This paper investigates the capacity investment decision of a supplier who solicits
private forecast information from a manufacturer. To ensure abundant supply, the
manufacturer has an incentive to inflate her forecast in a costless, nonbinding,
and nonverifiable type of communication known as "cheap talk." According to
standard game theory, parties do not cooperate and the only equilibrium is
uninformative-the manufacturer's report is independent of her forecast and the
supplier does not use the report to determine capacity. However, we observe in
controlled laboratory experiments that parties cooperate even in the absence of
reputation-building mechanisms and complex contracts. We argue that the underlying
reason for cooperation is trust and trustworthiness. The extant literature on
forecast sharing and supply chain coordination implicitly assumes that supply chain
members either absolutely trust each other and cooperate when sharing forecast
information, or do not trust each other at all. Contrary to this all-or-nothing
view, we determine that a continuum exists between these two extremes. In addition,
we determine (i) when trust is important in forecast information sharing, (ii) how
trust is affected by changes in the supply chain environment, and (iii) how trust
affects related operational decisions. To explain and better understand the
observed behavioral regularities, we also develop an analytical model of trust to
incorporate both pecuniary and nonpecuniary incentives in the game-theoretic
analysis of cheap-talk forecast communication. The model identifies and quantifies
how trust and trustworthiness induce effective cheap-talk forecast sharing under
the wholesale price contract. We also determine the impact of repeated interactions
and information feedback on trust and cooperation in forecast sharing. We conclude
with a discussion on the implications of our results for developing effective
forecast management policies.
We contribute to the study of offshoring and outsourcing by examining how
stakeholders' ethical evaluations of these decisions are influenced by both their
roles and the issues embedded within the decisions. Although offshoring and
outsourcing have been studied from a transactional perspective, the moral issues
embedded within these decisions can profoundly affect how the organization is
perceived by outside stakeholders. First, we contend that investors use different
moral paradigms compared with consumer stakeholders, as a result the stakeholder
role an individual occupies significantly influences their ethical evaluation of
offshoring and outsourcing decisions. Next, we examine whether embedded issues of
product quality and information security increase the moral intensity of offshoring
and outsourcing decisions, thereby negatively influencing ethical evaluations.
Using vignettes, we find that respon- dents viewed either offshoring or outsourcing
less favorably than relocation. Surprisingly, respondents viewed offshoring with
data security risks more negatively than offshore outsourcing with quality risks,
suggesting that the issue of information security has a greater moral intensity
than the issue of product or service quality for both consumer and investor
stakeholders. Thus, we show that that embedded issues play a significant role in
stakeholders' ethical judgments of business decisions, such as offshoring and
outsourcing.
During the last 10 years or so, a number of corporate social responsibility (CSR)
initiatives have been introduced in global supply chains, which aim to improve the
conditions of workers engaged in producing goods for export This article discusses
the observations of CSR in practice in the Costa Rican-United Kingdom (UK) banana
chain The banana chain makes for an interesting case study because there are
dominant corporate actors at each end who are in a position to influence the
conditions experienced by workers on banana plantations At the top of the chain
there are four major UK supermarket groups who control access to the retail market
and as self-appointed guardians of consumer interest are demanding that producers
adopt more socially responsible practices At the other end, banana production is
highly Integrated and controlled by three large North American agri-businesses who
have developed their own social and environmental certification programmes Costa
Rica also makes for an interesting country to locate the study as it has a
tradition of state-led policies to protect worker rights Yet, in spite of CSR
commitments made by both supermarkets and producers that emphasise health and
safety and the country's established Labour Law, this article shows that there are
problems for workers when they are forced to meet demanding production schedules
Furthermore, It suggests that whilst supermarkets continue to drive down consumer
prices and put pressure on producers to reduce costs, downward spiral of working
conditions is created regardless of the CSR policies in place However, this article
also identifies that changes to supermarket behaviour is possible when consumer
trust is at stake
Recent financial fraud legislation such as the Dodd-Frank Act and the Sarbanes-
Oxley Act (U. S. House of Representatives, Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010, [H. R. 4173], 2010; U. S. House of
Representatives, The Sarbanes-Oxley Act of 2002, Public Law 107-204 [H. R. 3763],
2002) relies heavily on whistleblowers for enforcement, and offers protection and
incentives for whistleblowers. However, little is known about many aspects of the
whistleblowing decision, especially the effects of contextual and wrongdoing
attributes on organizational members' willingness to report fraud. We extend the
ethics literature by experimentally investigating how the nature of the wrongdoing
and the awareness of those surrounding the whistleblower can influence
whistleblowing. As predicted, we find that employees are less likely to report: (1)
financial statement fraud than theft; (2) immaterial than material financial
statement fraud; (3) when the wrongdoer is aware that the potential whistleblower
has knowledge of the fraud; and (4) when others in addition to the wrongdoer are
not aware of the fraud. Our findings extend whistleblowing research in several
ways. For instance, prior research provides little evidence concerning the effects
of fraud type, wrongdoer awareness, and others' awareness on whistleblowing
intentions. We also provide evidence that whistleblowing settings represent an
exception to the well-accepted theory of diffusion of responsibility. Our
participants are professionals who represent the likely pool of potential
whistleblowers in organizations.
Today's corporations are increasingly engaging in efforts to address societal
concerns ranging from hunger and poverty to education and financial stability,
predominantly through corporate volunteering. Yet, because research has been
focused on the individual volunteer we still know relatively little about how
corporate volunteering can help address grand challenges. In this study, we
introduce the concept of "corporate volunteering climate" in order to examine the
broader, more system-level functioning of corporate volunteering in workplaces.
Drawing on the sense-making process, we theorize about how this climate develops-to
what extent is it driven by company-level policies versus employee convictions for
a cause? We also explore the potential influence of corporate volunteering climate
for volunteers and non-volunteers, in terms of the workplace (through employee
affective commitment) and the community (through employee intentions to volunteer,
whether through corporate opportunities or personally). The results of a study
conducted with United Way Worldwide suggest that corporate volunteering climate
arises through both employee belief in the cause and corporate policies, and that
these forces act as substitutes for each other. Moreover, by fostering a sense of
collective pride among employees, this climate is related to affective commitment,
and corporate and personal volunteering intentions.
Previous empirical research has found mixed results for the impact of corporate
social responsibility (CSR) investments on corporate financial performance (CFP).
This paper contributes to the literature by exploring in a two stage investor
decision-making model the relationship between a firm's innovation effort, CSR, and
financial performance. We simultaneously examine the impact of CSR on both
accounting-based (financial health) and market-based (Tobin's Q) financial
performance measures. From a sample of top corporate citizens, we find that: (1) a
firm's social responsibility commitment (CSR) contributes to its financial
performance; (2) after controlling for investment in innovation activities, CSR
continues to have a positive impact on a firm's financial performance; (3) the
customer dimension of CSR has a positive effect on both CFP measures, whereas the
employee dimension indicates a significant impact only on financial heath; and (4)
the community relation dimension of CSR only affects the market-based CFP measure
of firms with high innovation intensity.
This paper examines employees' reactions to Corporate Social Responsibility (CSR)
programs at the attitudinal level. The results presented are drawn from an in-depth
study of two Chilean construction firms that have well-established CSR programs.
Grounded theory was applied to the data prior to the construction of the conceptual
framework. The analysis shows that the implementation of CSR programs generates two
types of attitudes in employees: attitudes toward the organization and attitudes
toward society. These two broad types of attitudes can then be broken down into
four different categories: (1) acceptance of the new role of the organization, (2)
identification with the organization, (3) importance attached to the work performed
and (4) a sense of social justice. In turn, each of these categories is a grouping
of many different concepts, some of which have at first sight little to do with
CSR. Finally, the analysis reveals an attitudinal employee typology: the committed
worker, the indifferent worker, and the dissident worker.
Although a lot of research establishes consumer reactions to corporate social
responsibility (CSR), little is known about the theoretical mechanisms for these
reactions. We conduct a field experiment with adult consumers to test the
hypothesis that the effects of perceived CSR on consumer reactions are mediated by
felt gratitude and moderated by the magnitude of altruistic values held by
consumers. Two classes of consumer reactions are considered: intentions to (1) say
positive things about the company, and (2) participate in advocacy actions
benefiting the company.
Corporate social responsibility (CSR) research has focused often on the business
returns of corporate social initiatives but less on their possible social returns.
We study an actual company-consumer partnership CSR initiative promoting
ecologically correct and conscious consumption of bottled mineral water. We conduct
a survey on adult consumers to test the hypotheses that consumer skepticism toward
the company-consumer partnership CSR initiative and the moral emotion of elevation
mediate the relationship between company CSR motives perceived by consumers and
consumer behavioral responses following this CSR initiative. Favorable consumer
behavioral responses, in turn, relate positively to consumer support of other green
products. The results provide scholars and managers with means of improving their
understanding and handling of company-consumer partnership CSR initiatives.
This paper reports on the results of an experiment conducted with experienced
corporate directors. The study findings indicate that directors employ prospective
rationality cognition, and they sometimes make decisions that emphasize legal
defensibility at the expense of personal ethics and social responsibility.
Directors recognize the ethical and social implications of their decisions, but
they believe that current corporate law requires them to pursue legal courses of
action that maximize shareholder value. The results suggest that additional ethics
education will have little influence on the decisions of many business leaders
because their decisions are driven by corporate law, rather than personal ethics.
Idiosyncratic deals (or i-deals) are mutually beneficial, personalized agreements
of a nonstandard nature that are negotiated between individual employees and their
employers. This article outlines the development of a 16-item measure of i-deals
negotiated by job incumbents. Across four studies, the authors developed a reliable
scale with a multidimensional factor structure that replicated across three
separate samples. Study 1 was aimed at verifying that they had appropriately
specified the domains across which i-deals are negotiated. In Study 2, the authors
developed a measure of i-deals and confirmed its reliability and factor structure.
Studies 3 and 4 provided further evidence for the psychometric properties of the i-
deals measure and examined antecedents and outcomes of i-deals. Overall, the
results indicate that employees negotiate i-deals across four content domains
(i.e., schedule flexibility, location flexibility, task and work responsibilities,
and financial incentives) and that i-deals have important implications for work
attitudes.
Should responsibility for strategic planning and execution be assigned to the same
manager? Should a firm have a chief operating officer with responsibilities
distinct from those of the chief executive officer? How does the division of labor
affect managerial opportunism? This paper uses a formal agency-theoretic model to
address these questions and present a new theory of the division of managerial
labor. Building on Penrose's typology [Penrose E (2009) The Theory of the Growth of
the Firm, 4th ed. (Blackwell, Oxford, UK)], the theory identifies when to assign
(i) entrepreneurial services, which relate to strategic planning and the
acquisition of resources, and (ii) managerial services, which relate to execution,
to the same generalist manager rather than to different specialists. The analysis
reveals the critical importance of separability, i. e., whether a supervisor can
separately observe the outcomes of entrepreneurial and managerial services. If
managers and their supervisor have symmetric information about separability, hiring
a generalist dominates because managerial services, which are easier to assess,
reduce the scope for opportunism associated with entrepreneurial services, which
are harder to assess. Conversely, if managers have better information regarding
separability and the probability of separability is low, hiring specialists
dominates because hiring a generalist allows the potential for opportunism
associated with entrepreneurial services to contaminate the provision of managerial
services. Even so, the benefits of hiring a generalist may be restored if the
services are sequenced appropriately. An implication of such sequencing is that a
firm will grow in fits and starts, giving rise to a "Penrose effect" even if labor
market frictions do not impede the assimilation of new managers.
We examine how start-of-workday mood serves as an "affective prime" that relates to
how employees see work events, how they feel subsequent to events, and how this
felt affect relates to objective performance. Using experience sampling and both
archival and coded performance, we tested these relationships in a call center. We
found that start-of-workday mood relates to employee perceptions of customer
affective display and employee affect subsequent to events (i.e., calls). Positive
affect subsequent to events relates to coded performance quality, whereas negative
affect subsequent to events relates to productivity. We find evidence that affect
subsequent to events is a mediator.
Drawing on archival materials from the Roman Republic and US antebellum South, this
paper challenges the distinction between research on 'modern' and 'pre-modern'
management thought, where the former commonly entails a critical analysis of
management thinking within a social context and the latter offers documentation of
past knowledge and practices. Contrary to this division, we offer a critical
analysis of management discourse taking place in agrarian societies based on
chattel slavery. In the late Roman Republic and early empire, the patrician elite
confronted challenges to their large-scale land ownership, run by hired managers
upon the landlord's absence. In the antebellum South, following the Nat Turner
revolt, plantation owners staved off threats from abolitionism and Northern
political activists. These challenges led to a considerable effort devoted to the
elaboration of principles regarding the private management of unfree labor. Texts
not only provided practical managerial advice, but also promoted an ideology
supportive of the labor arrangements in dispute. We conclude by pointing to the
relevance of these case studies from both an historical and a contemporary
perspective.
Traditionally, research focused on determining the causes of employee pay
satisfaction has investigated the influence of job-related inputs, both extrinsic
and intrinsic to the job itself. Together with these inputs, pay-related fairness
issues have played an important role in explaining the phenomenon. However, few
studies consider the factors linked to fairness issues, such as ethical leadership.
Because ethical leadership necessarily entails the concept of fairness, it
seemingly should have a positive effect. Furthermore, because the presence of
supervisor ethical leadership (SEL) offers strong chances for employees to achieve
moral accomplishments and excel in the practice of their jobs, SEL should enhance
the effects of intrinsic job inputs. Whereas high job motivating potential (JMP)
makes it easier for employees be self-actualized, moral fulfillment is necessary
for them to obtain authentic self-actualization at work and minimize the impact of
pay deficiencies. Along with SEL, JMP should be shaped to increase positive
experiences of job meaningfulness, responsibility for job outcomes, and knowledge
of results at work, which can lead to enjoyment in doing the job in itself, not
just for compensation-related motives. Hierarchical regression analysis with a
sample of 151 employees in a diverse set of Spanish organizations supports the
direct effects of JMP and SEL and shows that higher levels of SEL increase the
positive effects of JMP on pay satisfaction. The practical implications of these
findings and further research directions conclude this article.
This study investigates the impact of customer interpersonal and informational
injustice on service workers' emotional labor (surface acting). Results from a
study conducted on 152 bank tellers in Germany showed that customers are evaluated
by employees as a potential source of unfairness. Perceptions of customer justice
were found to interact with individual differences in perspective taking in the
prediction of surface acting such that the negative effect of customer injustice on
surface acting was stronger for those low in perspective taking (compared to those
high in perspective taking). Although anger was expected to mediate this moderated
effect, this hypothesis was not confirmed. Considering the results post hoe, a
revised theoretical model is proposed based on Cropanzano, Weiss, Suckow, and
Grandey's model of justice and emotional regulation. Future research is needed to
test this model and determine what leads employees to deploy emotional regulation
strategies when faced with unfair customers.
This research documents consumers' potential to monitor corporations' License to
Operate through their consumption responses to corporate social responsibility
failures. The premise is that the type of social contracts or standards in place
may determine how consumers, through their individual and collective behaviors, can
play a direct role in influencing corporate behavior, when corporations fail to
meet social responsibility standards. An experiment conducted with a large sample
of consumers in the United States shows that consumers respond differently to a
company's failure in its social responsibilities depending on whether the violated
standard is a government mandate or a voluntary commitment and depending on the
consumers' own environmental consciousness. The findings highlight the potential
power of individual consumers and consumer collectives in narrowing the governance
gaps relative to social and environmental issues and reducing the likelihood of CSR
failures.
This article revolves around the debate surrounding the lack of a coherent
definition for corporate social responsibility (CSR). I make use of Jacques
Derrida's theorizing on contested meaning to argue that CSR's ambiguity is actually
necessary in light of its functional role as a "supplement" to corporate profit-
seeking. As a discourse that refuses to conclusively resolve the tension between
profit-seeking and prosociality, CSR expresses an important critical perspective
which demands that firms act responsibly, while retaining the overall corporate
frame of shareholder supremacy. CSR does this by ambivalently affirming both
profit-seeking and prosociality, a necessary contradiction. Attempts to reduce
CSR's ambiguity can thus only succeed by undermining its viability as a normative
discourse that captures how certain elements of society understand how firms should
act. The analysis suggests that greater scholarly attention is needed with regard
to the material discursive environments within which discourses such as CSR are
deployed. A discursive approach to research could thus benefit future
practitioners, who have to act according to fluid standards of responsibility that
cannot be authoritatively defined, but which can be better understood than they are
at present.
We provide an empirical investigation of leadership characteristics and social
justice issues in the context of financial literacy service-learning. Using a
unique dataset of student self-ratings, we find that students experience
statistically significant increases in 8 of the 10 leadership dimensions and 7 of
the 7 social justice issues examined in this study. Leadership dimensions include:
persuasion, building community, "commitment to the growth of people," stewardship,
empathy, awareness, foresight, and listening. Interest in social justice issues
include: dignity of the human person, community and the common good, rights and
responsibilities, option for the poor, dignity of work, solidarity, and care for
God's creation. The statistically significant increases in these dimensions
following the completion of the service-learning suggest positive effects on
students' self-perception of leadership qualities and interests in social justice
issues: business school students sense improvement in nurturing growth of employees
and colleagues, commitment to serving the need of others, understanding and
empathizing with others, ethics, ability to foresee the likely outcome of a
situation, and listening intently to others. As a consequence of the financial
literacy service-learning, we believe that business students become more prepared
toward becoming ethical leaders and citizens with compassion to serve the world for
the well-being of all people, rich and poor alike.
This paper analyses empirical evidence of efforts to enable Spanish micro and small
manufacturing companies to boost their labour productivity rates through the
development of the main pillars of their corporate social responsibility (CSR)
policies. This study aims to develop new approaches and sensibilities towards work
from an ethical, values (virtues) and CSR perspective, showing how internal
dimensions of CSR, such those related to relationships with employees and
responsibility in processes and product quality, can improve labour performance and
labour efficiency, thereby contributing to a better society. The results of a
sample of 929 small businesses indicate that the social responsibility policies
that most contributed to a short-term increase in labour productivity are those
related to internal aspects of the company, in particular its involvement in the
quality of processes and products, promotion of innovation and employee care.
However, the impact on labour productivity of CSR policies related to external
factors, such as relationship with stakeholders and environmental concern, could
not be empirically proven in this paper.
A critical issue for the future growth and impact of socially responsible
investment (SRI) is whether institutional investors are legally permitted to engage
in it - in particular whether it is compatible with the fiduciary duties of
trustees. An ambitious report from the United Nations Environment Programme's
Finance Initiative (UNEP FI), commonly referred to as the 'Freshfields report', has
recently given rise to considerable optimism on this issue among proponents of SRI.
The present article puts the arguments of the Freshfields report into some further
both empirical and critical perspective, however, and suggests that its findings do
not call for very much optimism. The general argument is that while the
understanding of fiduciary duty outlined by the Freshfields report seems to allow
institutional investors to at least sometimes take some social or environmental
considerations into account, the support it gives for SRI is notably contingent
and, furthermore, it rules out exactly the kind of SRI which proponents of social
responsibility and environmental sustainability should hold in highest regard -
proactive cases and socially effective investment strategies. If SRI is to become
an important force for corporate social responsibility through its adoption by
institutional investors, then, it is suggested that legal reform is needed.
Stakeholder theory usually focuses on the moral responsibility of corporations
towards their stakeholders. This article takes the reverse perspective to shed
light on the moral responsibility of stakeholders-specifically, investors or
'financiers'. It explicates a distinction between two types of financiers,
creditors and shareholders. Many intuitively judge that shareholders have greater
or more extensive moral responsibility for the actions of the corporations they
invest in than do bondholders and other creditors. Examining the merits of possible
arguments for or against treating owners and creditors differently elucidates which
arguments can support the moral duties of investors generally, and different duties
for different groups of investors specifically. The paper considers three possible
lines of arguments, rooting investors' responsibility, respectively, in how they
enable corporate conduct, how they benefit from it, and to what extent they are
complicit in it. The paper argues that a notion of complicity is the only tenable
ground for holding investors liable; sketches an account of complicity based on the
recent philosophical literature on collective intention and collective action; and
concludes that shareholders but not creditors can generally be seen as complicit on
this account.
Economists studying innovation and technological change have made significant
progress toward understanding firms' profit incentives as drivers of innovation.
However, innovative performance in firms should also depend heavily on the
pecuniary and nonpecuniary motives of the employees actually working in research
and development. Using data on more than 1,700 Ph.D. scientists and engineers, we
examine the relationships between individuals' motives (e. g., desire for
intellectual challenge, income, or responsibility) and their innovative
performance. We find that motives matter, but different motives have very different
effects: Motives regarding intellectual challenge, independence, and money have a
strong positive relationship with innovative output, whereas motives regarding job
security and responsibility tend to have a negative relationship. We also explore
possible mechanisms underlying the observed relationships between motives and
performance. Although hours worked (quantity of effort) have a strong positive
effect on performance, motives appear to affect innovative performance primarily
via other dimensions of effort (character of effort). Finally, we find some
evidence that the role of motives differs in upstream research versus downstream
development.
The article presents an analysis and critique of Milton Friedman's argument that
the social responsibility of business is merely to increase its profits. The
analysis uncovers a central claim that Friedman implies, but does not explicitly
defend, namely that the shareholders of a corporation have no duty to direct that
corporation's management to exercise social responsibility. An argument against
this claim is then advanced by way of a convergence strategy, whereby multiple
influential moral approaches are shown to align themselves against Friedman. The
convergence strategy shows that Friedman's position lies on the lonely fringes of
Western moral thought, and that at least some of Friedman's professed adherents
appear to offer incoherent moral views. The convergence strategy is shown to
suggest, but not entail, a stakeholder model of the corporation. The article
concludes by considering two objections.
As a result of recent preventable corporate failures (e.g., Enron, WorldCom, Lehman
Brothers, Fannie Mae), there is a growing desire to understand what might motivate
employees to courageously detect and deflect organizational problems before they
harm the entire organization. Based on 94 interviews we conducted with a wide
variety of employees who witnessed or undertook courageous actions, we inductively
developed a model using employees' accounts of the unfolding sequence of events. We
learned that employees report engaging in courageous workplace actions when they
feel responsible for dealing with a challenging situation such as a workplace
error, an abuse of power, an ambiguous situation, or someone in need. We
interpreted the stories of courage as suggesting that workplace courage may be a
two-stage process, where actors first determine their level of personal
responsibility to respond to the challenging situation and then determine the
potential social costs of acting. Our model of the courageous workplace action
appears to challenge the conventional wisdom of courage as being attributed to a
person's disposition, may enrich theories of intrinsic motivation, and may help
clarify the role of cognition in courageous action. Our findings may also help to
resolve some of the contradictory evidence regarding the antecedents of the many
organizational constructs related to courage including whistle-blowing, voice,
speaking up, taking charge, positive deviance, and organizational dissent.
Operational decisions under information asymmetry can signal a firm's prospects to
less informed parties, such as investors, customers, competitors, and regulators.
Consequently, managers in these settings often face a trade-off between making an
optimal decision and sending a favorable signal. We provide experimental evidence
on the choices made by decision makers in such settings. Equilibrium assumptions
that are commonly applied to analyze these situations yield the least cost
separating outcome as the unique equilibrium. In this equilibrium, the more
informed party undertakes a costly signal to resolve the information asymmetry that
exists. We provide evidence, however, that participants are much more likely to
pursue a pooling outcome when such an outcome is available. This result is
important for research and practice because pooling and separating outcomes can
yield dramatically different results and have divergent implications. We find
evidence that the choice to pool is influenced by changes in the underlying
newsvendor model parameters in our setting. In robustness tests, we show that
choosing a pooling outcome is especially pronounced among participants who report a
high level of understanding of the setting and that participants who pool are
rewarded by the less informed party with higher payoffs. Finally, we demonstrate
through a reexamination of two previous studies how pooling outcomes can
substantively extend the implications of other extant signaling game models in the
operations management literature.
A key factor in the decision to convert a publicly owned company to private status
is the expectation that value will be created, providing the firm with rent. These
rents have implications regarding the property rights of the firm's capital-
contributing constituencies. We identify and analyze the types of rent associated
with the newly private firm. Compared to public firms, going private allows owners
the potential to partition part of the residual risk to bond holders and employees,
rendering them to be co-residual risk bearers with owners. We propose that new
promotion-based contracts with bond holders and employees, reflecting their
particular investments, be negotiated as the firm migrates from public to private
status. These contracts should acknowledge the firm's intent to maximize
shareholder value and its need to take the risks necessary to do so, but support
that the firm's survival not be undermined due to its possibly opportunistic
owners.
With regard to the topicality of corporate social responsibility (CSR) in retail
practice, only a few studies have comprehensively analyzed the role of CSR in
retail. Due to the specific role of a retailer as a gatekeeper between the producer
and the consumer in the supply chain, a comprehensive understanding of the impact
of consumer perceptions of CSR activities is of great relevance. Therefore, this
study contributes information regarding the impact of CSR activities on retailer
performance. Using a comprehensive conceptualization of CSR, the results of our
customer survey (N = 3,313) suggest that CSR has positive implications as driver of
customer loyalty and favorable consumer purchasing behavior. The authors
demonstrate the CSR dimensions that are most important for retailers to influence
positively consumer purchasing behavior. This study highlights the significance of
the credibility of retailer CSR activities and show that consumers' CSR orientation
impacts the relationship between retailer CSR activities and consumer behavior.
This study complements previous empirical research on the business case for
corporate social responsibility (CSR) by employing hitherto unused data on
corporate social performance (CSP) and proposing statistical analyses to account
for bi-directional causality between social and financial performance. By allowing
for differences in the importance of single components of CSP between industries,
the data in this study overcome certain limitations of the databases used in
earlier studies. The econometrics employed offer a rigorous way of addressing the
problem of endogeneity due to simultaneous causality. Although the study's results
provide no evidence that there is a generic or universal business case for CSR,
they indicate that there is a strong link between single stakeholder-related issues
of CSR and financial performance. However, the analysis does not establish
causality within these relationships.
Market-based social governance schemes that establish standards of conduct for
producers and traders in international supply chains aim to reduce the negative
socio-environmental effects of globalization. While studies have examined how
characteristics of social governance schemes promote socially responsible producer
behavior, it has not yet been examined how these same characteristics affect
consumer behavior. This is a crucial omission, because without consumer demand for
socially produced products, the reach of the social benefits is likely to be
limited. We develop a comprehensive model that links two characteristics of market-
based social governance schemes-(1) stringency and enforcement of requirements, and
(2) promotion-to two conditions required for governance schemes to generate
significant social benefits: (1) socially responsible behavior of participating
firms; and (2) consumer demand for socially produced products which, in turn,
expands products produced according to social governance schemes, and thus, the
quantity of social benefits. We discuss market-based social governance schemes in
the context of fair trade coffee.
We introduce the concept of emotional labor variability, which captures individual
differences in surface acting and deep acting fluctuations over time. In a
multilevel study of 78 customer service employees who provided 522 matched daily
surveys over a two-week period, employees who were more variable in their use of
surface acting reported lower levels of job satisfaction and higher levels of work
withdrawal. Self-monitoring was positively associated with both the level and
variability of surface acting, and the effects of surface acting variability on job
satisfaction and work withdrawal were weaker when self-monitoring was high. The
results for deep acting were inconsistent. Overall, our results demonstrate how the
concepts of surface acting variability and deep acting variability can extend
theory and research on emotional labor as well as on self-monitoring.
Scholars have studied the various pressures that companies face related to socially
responsible behavior when stakeholders know the particular social issues under
consideration. Many have examined social responsibility in the context of
environmental responsibility and the general approaches companies take regarding
environmental management. The issue of currently unregulated, but potentially
hazardous, chemicals in consumer products is not well understood by the general
public, but a number of proactive consumer product companies have voluntarily
adopted strategies to minimize use of such chemicals. These companies are exceeding
regulatory requirements by restricting from their products chemicals that could
harm human or environmental health, despite the fact that these actions are costly.
They do not usually advertise the details of their strategies to end consumers.
This article uses interviews with senior environmental directors of 20
multinational consumer product companies to investigate why these companies engage
in voluntary chemicals management. The authors conclude that the most significant
reasons are to achieve a competitive advantage and stay ahead of regulations,
manage relationships and maintain legitimacy with stakeholders, and put managerial
values into practice. Many of the characteristics related to the case of chemicals
management are extendable to other areas of stakeholder management in which risks
to stakeholders are either unknown or poorly understood.
Individual and collective ethical stances regarding ethical consumption and related
outcomes are usually seen as both a form of concern about extant market offerings
and as opportunities to develop new offerings. In this sense, demand and supply are
traditionally portrayed as interacting dialectically on the basis of extant
business models. In general, this perspective implicitly assumes the juxtaposition
of demand side ethical stances and supply side corporate initiatives. The Eataly
story describes, however, a different approach to market transformation; in this
case a company and a social movement (Slow Food) have negotiated and collaborated
prior to initiating a new business model. This collaboration process and its
outcomes are described, focusing specifically on ordinary Eataly customers' and
Slow Food members' reactions. Given that Eataly can be regarded as a case of
mainstreaming, ordinary customers seem satisfied with the new offering and the Slow
Food support for the initiative; the more purist members of the Slow Food movement
had critical concerns, however, as happened in similar conditions, according to
literature, with regard to Fair Trade. The Slow Food endorsement of the new venture
has also been observed from the attitude-behaviour gap perspective, as it
contributed to addressing the factors affecting the gap between attitudes and
actual behaviours. Extensive qualitative data were collected and analysed over a 3-
year period. The main study implications refer to the ways in which companies and
social movements could interact to co-design new business models, as well as
outlining consumers' attitudes and behaviours towards such new offerings.
This paper shows that corporate social responsibility (CSR) and firm value are
positively related for firms with high customer awareness, as proxied by
advertising expenditures. For firms with low customer awareness, the relation is
either negative or insignificant. In addition, we find that the effect of awareness
on the CSR-value relation is reversed for firms with a poor prior reputation as
corporate citizens. This evidence is consistent with the view that CSR activities
can add value to the firm but only under certain conditions.
The United Nations Global Compact (UNGC) was created in 2000 to leverage UN
prestige and induce corporations to embrace 10 principles incorporating values of
environmental sustainability, protection of human rights, fair treatment of
workers, and elimination of bribery and corruption. We review and analyze the GC's
activities and impact in enhancing corporate social responsibility since inception.
First, we propose an analytical framework which allows us to assess the qualities
of the UNGC and its principles in the context of external and internal elements
that influence code effectiveness and implementation. Second, we analyze UNGC
performance in encouraging companies to become signatory members and bring about
demonstrable change in corporate CSR-sustainability activities. In its 10-year
report, UNGC has proclaimed growth in both membership and program activity.
However, all credible and publicly available data and documentation conclusively
demonstrate that the UNGC has failed to induce its signatory companies to enhance
their CSR efforts and integrate the 10 principles in their policies and operations.
The result has been a loss of public trust and support of UNGC from important
constituencies among civil society organizations, and those individuals and groups
adversely impacted by corporate activities and resultant negative externalities.
This diminished credibility has also made UNGC largely dependent on the corporate
sector for its very survival. We conclude that this dependence has in turn impaired
and would continue to hinder UNGC's ability to fulfill its mission. Such an outcome
raises serious questions as to the viability, usefulness, and continued existence
of UNGC.
John Hasnas's fine article, "Up from Flatland: Business Ethics in the Age of
Divergence," fails in its stated goal of challenging the mainstream business ethics
community's methods of analyzing normative issues. However, it achieves what is
likely Hasnas's true goal of alerting both business ethicists and managers of the
bigger stakes now in play when the federal government indicts employees and seeks
their employers' cooperation in establishing the prosecutor's case. While
prosecutorial overreaching is a legitimate concern that deserves to be highlighted,
it requires no qualitative change in normative ethical analysis. That analysis now
involves different inputs (greater stakes for firms and employees), but continues
to involve a familiar but complicated weighing of shareholder interests against
employee interests and, sometimes, a weighing of both against the requirements of
the law.
In recent years, much discussion has taken place regarding the social role of firms
and their responsibilities to society. In this context, the role of universities is
crucial, as it may shape management students' attitudes and provide them with the
necessary knowledge, skills and critical analysis to make decisions as consumers
and future professionals. We emphasise that universities are multi-level learning
environments, so there is a need to look beyond formal curricular content and pay
more attention to implicit dimensions of the learning process in order to create
significant learning. With this in mind, we propose an integrative and holistic
approach to guide the integration of ethics, corporate social responsibility and
sustainability in management education that aims to improve students' knowledge and
attitudes. In this model, we consider three interdependent levels of analysis-the
institutional level, the curricular level and the instrumental level-which together
produce a leverage effect on student learning. For each level, we identify the main
issues and aspects that need to be considered, based on an extensive literature
review in this field.
The vast majority of extant empirical research examining the relationship between
corporate social performance (CSP) and financial performance (FP) selects samples
of only those firms which are observed engaging in CSP. In this study, the authors
assert that firms' efforts to pursue CSP and subsequently their appearance in
social-choice investment advisory (SIA) firms' ranking databases are non-random.
Studying the CSP-FP link using selected samples of only those firms whose social
performance is ranked by SIA firms introduces a sample-selection bias which limits
generalization of results to a population of all firms, and at worst provides
alternate explanations for observed relationships. The authors test these
assertions on a large sample of public corporations in the United States over 6
years and find a sample-selection bias. Upon correction of this bias, this study
confirms the positive impact of CSP on FP.
Research summary: Previous studies have mixed findings on the relation between
corporate socially responsible policies and firm performance. This paper focuses on
a specific type of corporate social responsibility-corporate sexual equality,
measuring how a firm treats its lesbian, gay, bisexual, and transgender (LGBT)
employees, consumers, and investors-and examines whether and how it relates to firm
performance. Using a longitudinal dataset of public firms in the U.S. during the
period of 2002-2006, we demonstrate that firms with a higher degree of corporate
sexual equality have higher stock returns and higher market valuation. We also
identify one of the mediating channels, the labor market channel, that brings
higher productivity to firms that embrace sexual equality. Managerial summary:
Corporate sexual equality measures how a company treats its lesbian, gay, bisexual,
and transgender (LGBT) employees, consumers, and investors. It is an important
dimension of corporate social responsibility policies and diversity management.
Using a longitudinal dataset of public firms in the U.S. during the period of 2002-
2006, we demonstrate that firms with a higher degree of corporate sexual equality
have higher stock returns, higher market valuation, and higher labor productivity.
Our findings suggest that discriminatory hiring behaviors based on sexual
orientation hurt employers and shareholders financially and that implementing
corporate sexual equality policies can enhance firms' financial performance,
generating competitive advantages in labor markets and mutual benefits between
employers and employees. Copyright (C) 2016 John Wiley & Sons, Ltd.
The imposition of social obligations on the UK energy supply industry provides an
important opportunity to examine how social responsibilities are construed by
companies and how these constructions relate to perceptions of the role of
regulation, specifically the scope for compromise and influence with the regulator.
Our data suggest four templates for understanding this relationship: embracing
social obligations, business as usual, management deliberation, and conflicts with
commerce. First, embracing social obligations is based on competitive advantage and
struggles for market leadership, and highlights informal mechanisms in attempts to
influence the regulatory agenda. Second, business as usual reflects pre-existing
standard operating procedures and a generalized approach to serving the broad
consumer base in line with regulation as formal policing procedures. Third,
management deliberation is a way of either reflecting upon or stalling progress on
social issues, and suggests compromise and passivity in regulatory relations.
Fourth, conflicts with commerce focuses on the inherent difficulties of reconciling
social obligations with economic regulation and a profit orientation, so that
meeting minimum standards or the risk of regulatory censure may be sensible
strategies. Together these templates emphasize the subjective and multiple nature
of social responsibility and of regulatory relationships, and demonstrate struggles
for the strategic and operational meaning over the nature of public interest and
competitive advantage.
We investigate the efficiency, foreclosure, and collusion rationales for vertical
integration in a large sample of vertically related takeovers. The efficiency
rationale, as discussed under the transaction cost economics and property rights
theories, posits that vertical integration mitigates contractual inefficiencies
between suppliers and customers (termed as holdup) and provides incentives to
undertake relationship-specific investments. In contrast, the foreclosure and
collusion rationales suggest that vertical integration is anticompetitive in
nature. Specifically, the foreclosure argument suggests that vertical integration
is used to raise costs of rival firms, and the collusion argument suggests that
vertical integration facilitates coordination between the integrated firm and its
rivals. To distinguish between the three hypotheses, we examine (1) the
announcement period wealth effects to the merging firms, rival firms, and customer
firms; and (2) the operating performance changes to the merging firms in vertical
takeovers. We find that firms expand their vertical boundaries consistent with an
efficiency enhancing rationale.
In this article, the authors develop and test a theory on the effect of
institutional investor heterogeneity on CEO pay. Their theory predicts that
institutional investors' incentives and capabilities to monitor CEO pay are
determined by the fiduciary responsibilities, conflicts of interest, and
information asymmetry that institutional investors face. Their theory suggests, in
contrast to previous literature, that public pension funds and mutual funds exert
different effects on CEO pay at their portfolio firms because they do not have the
same monitoring incentives and capabilities. Using a longitudinal sample of S&P
1500 firms for the years 1998 to 2002, the authors find that public pension fund
ownership is more negatively-indeed, oppositely-associated with both the level of
CEO pay and CEO pay-for-performance sensitivity than mutual fund ownership. Their
findings suggest that (a) researchers' use of institutional investor
classifications that do not distinguish public pension fund ownership and mutual
fund ownership can be misleading and (b) while CEO pay critics have called for pay
plans that are in line with the "less pay and more sensitivity" principle, this may
be an ineffective goal to pursue.
Despite the prevailing discourses on the importance of top management ethical
leadership, related theoretical and empirical developments are lacking. Drawing on
institutional theory, we propose that top management ethical leadership contributes
to organizational outcomes by promoting firm-level ethical and procedural justice
climates. This theoretical framework was empirically tested using multi-source data
obtained from 4,468 employees of 147 Korean companies from various industries. The
firm-level analysis shows that top management ethical leadership significantly
predicts ethical climate, which then results in procedural justice climate that
fully mediates the effects of top management ethical leadership on two
organizational outcomes, namely, firm-level organizational citizenship behavior and
firm financial performance. The present study provides a plausible theoretical
account and empirical validation of a mechanism through which top management
ethical leadership enhances organizational performance.
Research examining firm and industry effects on performance has primarily focused
on the financial aspects of firm performance. Corporate social performance (CSP) is
a major aspect of firm performance that has been under-examined empirically in the
literature to date. Adding to the fundamental debate regarding firm versus industry
effects on performance, this study uses data drawn from the Kinder, Lydenberg and
Domini Co. (KLD) database to examine the degree to which CSP is related to firm,
industry, and temporal factors. The results of these analyses suggest that CSP
tends to change in a linear manner over time; however, the slope of this line
varies across firms and industries. These findings are supported by several
robustness checks accounting for autocorrelation, alternative measures of industry,
different samples commonly used when using KLD data to measure CSP, and alternative
measures of CSP when using the KLD database. The authors also directly compare
firm, industry, and temporal effects between CSP and financial performance.
Locating organizations is a difficult task, making it difficult to study them and
difficult to represent that study. There is no single phenomenon of organization.
We identify them through their buildings, brands, products, employees, customers,
marketing materials, legal status and so on, but it is hard to identity a single
unified entity. This research note argues that organization lies in our encounters
with it, that is, our experience of organization which constitutes its existence.
In order for scholars of organization to be able to say anything about these
experiences we need a methodology designed to capture experience. The work of John
Dewey is useful here with his insistence on art as experience. This note takes
Dewey's work on art and applies it to a particular case example - The Body Shop
International - and demonstrates how organization studies can be enhanced through
an arts or studio-based approach. Indeed, it argues, along with Dewey, that any
civilized community of practice might be expected to produce art, and that the
organization studies community should welcome an arts practice as a sign of its own
maturity.
Tokenistic short-term economic success is not good indicia of long-term success.
Sustainable business success requires sustained existence in a corporation's
political, economic, social, technological, legal and environmental contexts. Far
beyond the traditional economic focus, consumers, governments and public interest
groups alike increasingly expect the business sector to take on more social and
environmental responsibilities. Corporate social responsibility (CSR) is the model
in which economic, social and environmental responsibilities are fulfilled
simultaneously. However, there is insufficient empirical evidence that demonstrates
genuine widespread adoption of CSR in practice, and its underlying reasons. Though
research in CSR has been rapidly growing, its commercial reality and implications
need to be further improved if it is to inspire corporations to voluntarily adopt
CSR. In the literature, Carroll's four-dimensional (economic, legal, ethical and
discretionary) CSR framework offers a theoretical basis for developing an
empirically based model to explain why and how profit-motivated managers take up
CSR voluntarily. Our study has developed a structural equation model to identify
the key factors and their interactions that influence economically motivated
managers to take on voluntary CSR, and validate Carroll's four-dimensional
construct. The results support Carroll's four-dimensional CSR framework, with the
exception of the link pertaining to the relationship between economic and
discretionary/voluntary responsibility. This characterises the economic reality
that financial market-driven economic responsibility does not automatically
translate into social responsibility. Nevertheless, the empirical results
demonstrate that corporations can be led to engage in more voluntary CSR activities
to achieve social good when appropriate legal and ethical controls are in place.
Our paper investigates spillover effects across different business segments of
publicly traded financial conglomerates. We find that the investment decisions of
mutual fund shareholders do not depend only on the prior performance of the mutual
funds; they also depend on the prior performance of the funds' management
companies. Flows into equity and bond mutual funds increase with the prior stock
price performance of the funds' management companies after controlling for fund
performance and other fund characteristics. The sensitivity of flows to the
management company's performance is not justified by the subsequent performance of
the affiliated funds. The results indicate that the reputation of a company's brand
has a significant impact on the behavior of its customers.
In the current socioeconomic environment, brands increasingly need to portray
societal and ethical commitments at a corporate level, in order to remain
competitive and improve their reputation. However, studies that relate business
ethics to corporate brands are either purely conceptual or have been empirically
conducted in relation to the field of products/goods. This is surprising because
corporate brands are even more relevant in the services sector, due to the
different nature of services, and the subsequent need to provide a consistent high-
quality customer experience across all the brand-customer interactions and touch-
points. Thus, the purpose of this article is to study, at a corporate brand level
and in the field of services, the effect of customer perceived ethicality of a
brand on brand equity. The model is tested by structural equations, using data
collected for eight service categories by means of a panel composed of 2179
customers. The test of measurement equivalence between these categories is
conducted using generalizability theory. Confirmatory factor analysis marker
technique is applied in order to check for common method variance. The results of
the hypothesized model indicate that customer perceived ethicality has a positive,
indirect impact on brand equity, through the mediators of brand affect and
perceived quality. However, there is no empirical evidence for a direct effect of
customer perceived ethicality on brand equity.
We investigate what drives responsible investment of European pension funds.
Pension funds are institutional investors who assure the income of part of the
population for a long period of time. Increasingly, stakeholders hold pension funds
accountable for the non-financial consequences of their investments and many funds
have engaged in responsible investing. However, it appears that there is a wide
difference between pension funds in this respect. We investigate what determines
pension funds' responsible investments on the basis of a survey of more than 250
pension funds in 15 European countries in 2010. We use multinomial logistic
regression and find that especially legal origin of the country, ownership of the
pension fund and fund size-related variables are to be associated with pension
funds' responsible investment. For fund size, we establish a curvilinear
relationship; especially the smallest and largest pension funds in the sample tend
to engage with responsible investing.
We provide an empirical study of the reframing of accounts of responsibility for
strategy. We found that top management ambivalence about strategy provided a middle
management team with wide scope for interpretation of responsibility for developing
and implementing a strategic initiative. In the early stage, responsibility as well
as expectations about the strategy's successful outcome were talked up. In the
later stage, when it was considered that the strategic initiative was failing, the
middle management implementation team engaged in 'talking down' of expectations. We
show that reframing from initial duty to capability to later accountability shaped
and reflected actors' changing goals. By focusing on responsibility we increase
understanding of the division of labour in the actual practice of strategizing,
including where and how strategizing is done. Most important, we show how
protagonists' goals drive the framing and reframing of strategic agendas, and how
linguistic devices such as disclaimers and self-handicapping influence this
process.
We explore captain-ownership and vessel performance in eighteenth-century
transatlantic shipping. Although contingent compensation often aligned incentives
between captains and shipowners, one difficult-to-contract hazard was threat of
capture during wartime. We exploit variation across time and routes to study the
relationship between capture threat and captain-ownership. Vessels were more likely
to have captain-owners when undertaking wartime voyages on routes susceptible to
privateers. Captain-owned vessels were less readily captured than those with
nonowner captains, but more likely to forgo voyage profits to preserve the vessel's
safety. These results are consistent with multitask agency, where residual claims
to asset value rather than control rights influence captain behavior. This article
is among the first to empirically isolate mechanisms distinguishing among major
strands of organizational economics regarding asset ownership and performance.
Managerial summary: Organizations face an enduring challenge: Owners hire an
executive to act on their behalf, but it is difficult to ensure that the executive
indeed acts in their interests. In this study, we exploit a useful historical
context-eighteenth-century transatlantic shipping from Liverpool-to explore the
cause and effect of a captain's becoming part-owner of his vessel. Captains became
part-owners for voyages likely to encounter enemy privateers. Captain-owners were
less likely to be captured, but were more willing to forgo cargo profits to
preserve the vessel's safety. Our results provide a useful analogy to modern firm
owners who must determine whether to award equity to executives, and to managers
who must determine whether to provide assets to employees or rely on employee self-
provision of assets (e.g., tools for tradespeople). Copyright (C) 2016 John Wiley &
Sons, Ltd.
Despite common assumptions that capitalism and compassion are contradictory, we
theorize that compassion (1) can be compatible with capitalism, and (2) may either
manifest or be inhibited within capitalistic society through a range of
organizational approaches. These, in turn, result in varying consequences for
employees' experiences, feelings, and behaviors. In this article, we examine the
perceived support provided to employees by their organizations during the 2011
Brisbane flood. Analysis of interview data identifies a continuum of organizational
responses: from neglect to ambiguity to compassionate care, each of which
engendered various employee experiences, feelings, and behaviors toward themselves,
their organizations, and the community at large. The empirical findings lead to
theorizing that the perceived organizational responses are consonant with a range
of capitalistic tendencies. Perceived organizational neglect is most consonant with
neoclassical capitalism, understood as having a primary focus on self-interest and
profit maximization. Perceived ambiguity tends to fit with a supplemental
capitalism that adds social responsibility to the baseline of classical capitalism.
Organizational compassionate care fits with a transformed or conscious capitalism
that considers value creation in society to be an organization's primary purpose.
An important aspect of brand perception emanates from its corporate social
responsibility (CSR) activity. When two brands involved in CSR activities form a
cobranding alliance, their respective CSR perceptions can impact consumer attitudes
toward the alliance. As an ethically-oriented strategy, the alliance can be
potentially beneficial to both partner brands, and can create opportunities for
promoting CSR activities. The research streams on brand management, cobranding, and
CSR, however, are silent about this important branding strategy that has several
embedded business and societal benefits. This study examines how CSR-based consumer
perceptions and ethical self-identity impact consumer evaluation of cobrands.
Employing a quasi-experimental between-subjects design, the study tests six
cobranding scenarios in three product categories. The data were collected via
structured questionnaires resulting in 318 valid responses. The data were analyzed
employing Partial Least Squares Structural Equation Modeling. The results confirm
that positive CSR perceptions toward the partner brands are robust indicators of
attitudes toward cobrands. Further, the match between the CSR activities of the
partner brands (positive CSR fit) and the product categories (product fit)
influences cobrand attitudes. The results also show evidence of 'spill-over'
effects, where the alliance has a positive impact on subsequent CSR perceptions
toward the partner brands. Additionally, the findings demonstrate an asymmetry in
the effects of the cobrand on subsequent CSR perceptions wherein consumers with low
ethical self-identity show greater spill-over effects from the cobrand than those
with high ethical self-identity. The study contributes to knowledge in the domains
of business ethics, cobranding, and social responsibility. The findings have
managerial implications for designing CSR-based ethical branding strategies for
cobrands.
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.
The recent rise in ethical consumerism has seen increasing numbers of corporate
brands project a socially responsible and ethical image. But does having a
corporate brand that is perceived to be ethical have any influence on outcome
variables of interest for its product brands? This study analyzes the relationship
between perceived ethicality at a corporate level, and brand trust, brand affect
and brand loyalty at a product level. A theoretical framework with hypothesized
relationships is developed and tested in order to answer the research question.
Data have been collected for 45 product categories in the fast moving consumer
goods sector using a panel of 4,027 Spanish consumers. The proposed relationships
are tested using structural equations modeling. The results suggest there is a
positive relationship between perceived ethicality of a brand and both brand trust
and brand affect. Brand affect also positively influences brand trust. Further,
brand trust and brand affect both show a positive relation with brand loyalty. The
managerial and academic implications of the results are discussed.
In this article, we develop theoretical and empirical linkages between corporate
social responsibility (CSR) initiatives of business organizations and their market
development efforts at the bottom of the pyramid (BOP). We use qualitative in-depth
interviews of 21 CSR heads of business organizations and its CSR partner
organizations in India (an emerging market) to explore, develop, and explain
plausible theoretical linkages between CSR initiatives of the organizations and its
market development efforts at BOP using theory of market separations. Using
theoretical frameworks from CSR literature and sub-theory of market separations
from marketing literature, the study suggests that market development at BOP is
enhanced using the CSR route in several ways. These are, (1) making the BOP market
development less risky, (2) mask the CSR initiative as a BOP pilot project to
generate internal traction within the organization, (3) integrating the BOP
communities with the last mile of the supply chain of the organization, (4)
bringing government intervention to accelerate scale-up, and (5) developing BOP as
future markets for consumers and supply chain partners to make business more
sustainable. Our study has several theoretical as well as managerial implications
linking organizations' market development efforts at BOP with its CSR initiatives.
Tasubinsa is a "Special Employment and Occupational Center" constituted in
accordance with Spanish Law where 90% of the workers have mental, sensorial or
physical impairments of at least 30%. Its positive experience of more than 15 years
provides entirely different responses from mainstream neoclassical theory
(transaction cost theory, agency theory, and shareholder theory) to basic questions
such as "What is a firm?", "What is its purpose?", "Who owns a firm?", and "What do
a firm's owners seek?". The article discusses how these different premises give
rise to a distinctive corporate culture centered on the handicapped person.
This article examines the business practices of Jamsetji Nusserwanji Tata, the
founder the Tata group of business in India in the 19th century, from the
perspective of stakeholder welfare. Jamsetji Nusserwanji Tata was concerned about
the welfare of all major stakeholder constituents. His business practices promoted
the welfare of employees, customers, society, owners, competitors, environment and
other stakeholders. He implemented several measures even before law mandated them
thus acting as a forerunner in promoting stakeholder welfare. His business plans
became the foundation for an economically strong India. This article, after an
initial overview of the stakeholder framework, describes the business practices of
Jamsetji Nusserwanji Tata with regard to major stakeholder constituents. Relevant
research findings regarding each stakeholder constituent studied have been cited to
show that the practices of Jamsetji Nusserwanji Tata have relevance to business
even today.
This article advances the idea that shareholders who seek to influence corporate
behaviour can be understood analytically as norm entrepreneurs. These are actors
who seek to persuade others to adopt a new standard of appropriateness. The article
thus goes beyond studies which focus on the influence of shareholder activism on
single instances of corporate conduct, as it recognises shareholders' potential as
change agents for more widely shared norms about corporate responsibilities. The
article includes the empirical example of US internet technology companies who, in
their Chinese operations, face conflicts of norm systems in regard to freedom of
expression on the internet. Shareholders have been active in seeking to persuade
these companies to adopt a norm of adhering to global standards for human rights
over restrictions implied by authoritarian regimes to which they deliver services.
Previous studies on corporate social responsibility (CSR) communication suggest
that firms' social initiatives should be communicated through third-party, non-
corporate sources because they are perceived as unbiased and therefore reduce
consumer skepticism. In this article, we extend existing research by showing that
source effects in the communication of social sponsorships are contingent on the
brand's pre-existing reputation. We argue that the congruence between the
credibility and trustworthiness of the message source and the brand helps predict
consumer responses to a social sponsorship. The results show that a non-corporate
source (publicity) generates more positive brand evaluations than a corporate
source (advertising) when the sponsor has a positive reputation. However, the
converse effect occurs when brand reputation is low: when the sponsor has a poor
reputation, a corporate source generates more positive brand evaluations than a
non-corporate source. Mediation analyses show that the interaction effect between
CSR information source and brand reputation can be explained by sponsorship
attitude, persuasion knowledge, and perceived fit between the brand and the cause.
Corporate social responsibility (CSR) is a recognised and common part of business
activity. Some of the regularly cited motives behind CSR are employee morale,
recruitment and retention, with employees acknowledged as a key organisational
stakeholder. Despite the significance of employees in relation to CSR, relatively
few studies have examined their engagement with CSR and the impediments relevant to
this engagement. This exploratory case study-based research addresses this paucity
of attention, drawing on one to one interviews and observation in a large UK energy
company. A diversity of engagement was found, ranging from employees who exhibited
detachment from the CSR activities within the company, to those who were fully
engaged with the CSR activities, and to others who were content with their own
personal, but not organisational, engagement with CSR. A number of organisational
context impediments, including poor communication, a perceived weak and low
visibility of CSR culture, and lack of strategic alignment of CSR to business and
personal objectives, served to explain this diversity of employee engagement.
Social exchange theory is applied to help explore the volition that individual
employees have towards their engagement with CSR activities, and to consider the
implications of an implicit social, rather than explicit economic, contract between
an organisation and its employees in their engagement with CSR.
This article examines the role of intermediaries in financial markets in fostering
corporate sustainability. Responsible investment (RI) indices have been primarily
identified as intermediaries that provide information regarding corporate social
performance (CSP) for investors and other stakeholders. The authors argue that the
role of these intermediaries is not confined solely to information provision, but
they may also incentivize high levels of CSP through mechanisms such as exclusion
threats, signaling, and engagement. The authors rely on unique access to the
archives of the FTSE4Good Index to examine the effects of these mechanisms on CSP.
The study shows that companies facing exclusion threats and signaling are more
likely to comply with the intermediary's criteria, and medium levels of engagement
leads to higher levels of CSP. The authors contribute to the study of
sustainability in financial markets by explicating the mechanisms that
intermediaries and other financial actors could employ to foster greater corporate
sustainability.
Today's young marketers transition from schools and into the workforce with a
variety of career options in sales, advertising, and general marketing after
graduation. Beyond their discipline-specific knowledge of market research, consumer
behavior, and marketing communications, these individuals bring along their own set
of personal values and ideologies that may influence how they engage the people,
personalities, and priorities of the business organization. As new generations of
young professionals enter the publicly scrutinized fields of sales and marketing,
they are expected to make morally grounded decisions that may be informed by these
values and ideologies. This study frames this state of affairs by examining the
inquiry "Who Shall Lead Us?" whereby young marketers evaluate the fitness of a
leadership climate in which they would potentially work. Here, individual cultural
values and ethical ideologies are posited to influence evaluations of
transformational leadership.
While considerable attention has been given to the harm done to consumers by
marketing, less attention has been given to the harm done by consumers as an
indirect effect of marketing activities, particularly in regard to supply chains.
The recent development of dramatically expanded global supply chains has resulted
in social and environmental problems upstream that are attributable at least in
part to downstream marketers and consumers. Marketers have responded mainly by
using corporate social responsibility (CSR) communication to counter the critique
of CSR practice, but these claims of ethical corporate behavior often lack
credibility and can result in a backlash against brands. The article argues that
more adequate attention to the harmful upstream effects of downstream marketing and
consumption decisions requires greater attention to stakeholder marketing and
marketer efforts to help create responsible consumers. It concludes by identifying
implications for further research in this important emergent area of marketing
ethics.
This paper examines the shareholder primacy norm (SPN) as a widely acknowledged
impediment to corporate social responsibility and explores the role of business
schools in promoting the SPN but also potentially as an avenue for change by
addressing misconceptions about shareholder primacy and the purpose of business. We
start by explaining the SPN and then review its status under US and UK laws and
show that it is not a likely legal requirement, at least under the guise of
shareholder value maximization. This is in contrast to the common assertion that
managers are legally constrained from addressing CSR issues if doing so is
inconsistent with the economic interests of shareholders. Nonetheless, while the
SPN might be muted as a legal norm, we show that it is certainly evident as a
social norm among managers and in business schools-reflective, in part, of the sole
voting rights of shareholders on corporate boards and of the dominance of
shareholder theory-and justifiably so in the view of many managers and business
academics. We argue that this view is misguided, not least when associated with
claims of a purported legally enforceable requirement to maximize shareholder
value. We propose two ways by which the influence of the SPN among managers might
be attenuated: extending fiduciary duties of executives to non-shareholder
stakeholders and changes in business school teaching such that it covers a
plurality of conceptions of the purpose of the corporation.
Labor unions are key stakeholders in the field of corporate social responsibility
but researchers have paid surprisingly little attention to their CSR strategies.
This article extends stakeholder theory by treating unions as having stakeholders
that influence their CSR strategies. Drawing on qualitative data from a
longitudinal study on selected unions in France between 2006 and 2013, this paper
analyzes the underlying reasons for the differences in their approaches. It finds
connections between the unions' CSR strategy, and the perception of and cooperation
with stakeholders.
Corporate reputation has roots in national beliefs about the role of the business
corporation in society; these beliefs are constructed in accordance with the
preferences of powerful stakeholders. Building on a stakeholder-power approach to
corporate governance, we investigate whether differences in the legal rights and
protections of shareholders, creditors, and workers across countries affect the
general public's reputation assessments of business corporations. Using a sample of
593 of the largest publicly traded companies in the world from 32 countries during
2007 to 2011, we find that in societies where shareholders enjoy a high degree of
legal rights, the impact of stock market returns on corporate reputation becomes
more positive. Likewise, the negative relationship between earnings volatility and
reputation becomes greater when creditor rights are stronger. Contrary to
expectations, we found no evidence of an interaction effect between labor rights
and corporate social performance on corporate reputation.
Whether the nation of Israel has become a "light unto the nations" in terms of
ethical behavior among its business community remains in doubt. To examine the
current state of business ethics in Israel, the study examines the following: (1)
the extent of business ethics education in Israel; (2) the existence of formal
corporate ethics program elements based on an annual survey of over 50 large
Israeli corporations conducted over 5 years (2006-2010); and (3) perceptions of the
state of business ethics based on interviews conducted with 22 senior Israeli
corporate executives. In general, and particularly as a young country, Israel might
be considered to have made great improvements in the state of business ethics over
the years. In terms of business ethics education, the vast majority of universities
and colleges offer at least an elective course in business ethics. In terms of
formal business ethics program elements, many large companies now have a code of
ethics, and over time continue to add additional elements. Most respondents
believed they worked in ethical firms. Despite these developments, however, there
appears to be significant room for improvement, particularly in terms of issues
like: nepotism/favoritism; discrimination; confidentiality; treatment of customers;
advertising; competitive intelligence; whistle-blowing; worker health and safety;
and the protection of the environment. When compared with the U.S. or Europe, most
believed that Israeli firms and their agents were not as ethical in business. A
number of reasons were suggested that might be affecting the state of business
ethics in Israel. A series of recommendations were also provided on how firms can
better encourage an ethical corporate culture. The paper concludes with its
limitations.
Poor working conditions remain a serious problem in supplier facilities in
developing countries. While previous research has explored this from the developed
buyers' side, we examine this phenomenon from the perspective of developing
countries' suppliers and subcontractors. Utilizing qualitative data from a major
knitwear exporting cluster in India and a stakeholder management lens, we develop a
framework that shows how the assumptions of conventional, buyer-driven voluntary
governance break down in the dilution of buyer power and in the web of factors
rooted in suppliers' traditions, beliefs, local demands and resource dependency. We
reveal out how success in governing collaborative global supply chains often falls
short within the subcontracting stage, where a stakeholder management mindset is
elusive to most participants. We suggest that success in governing collaborative
global supply chains is dependent on concepts of stakeholder utility and the
presence of shared value that is often at odds with the realities of power,
information asymmetry and compliance/reward systems inherent in the non-market
coordination of global supply chains. Our findings offer important insights for
delineating the concepts of value creation from CSR concepts and practices, and for
modifying the basic assumptions of conventional supply chain governance.
This study examines how the match (vs. mismatch) between personal and firm-level
values regarding environmental responsibility affects employee job satisfaction and
creativity and contributes to three literature streams [i.e., social corporate
responsibility, creativity, and person-environment (P-E) fit]. Building on the P-E
fit literature, we propose and test environmental orientation fit versus nonfit
effects on creativity, identifying job satisfaction as a mediating mechanism and
regulatory pressure as a moderator. An empirical investigation indicates that the
various environmental orientation fit conditions affect job satisfaction and
creativity differently. More specifically, environmental orientation fit produces
greater job satisfaction and creativity when the employee and organization both
demonstrate high concern for the environment (i.e., a high-high environmental
orientation fit condition) than when both display congruent low concern for the
environmental (i.e., a low-low environmental orientation fit condition).
Furthermore, for employees working in organizations that fit their personal
environmental orientation, strong regulatory pressure to comply with environmental
standards diminishes the positive fit effect on job satisfaction and creativity,
while regulatory pressure does not affect the job satisfaction and creativity of
employees whose personal environmental orientation is incongruent with that of the
organization.
Perceptions of a firm's stance on corporate social responsibility (CSR) are
influenced by its corporate marketing efforts including branding, reputation
building, and communications. The current research examines CSR from the consumer's
perspective, focusing on antecedents and consequences of perceived CSR. The
findings strongly support the fact that particular cues, namely perceived financial
performance and perceived quality of ethics statements, influence perceived CSR
which in turn impacts perceptions of corporate reputation, consumer trust, and
loyalty. Both consumer trust and loyalty were also found to reduce the perceived
risk that consumers experience in buying and using products. From these significant
findings, we draw several conclusions and implications, including the importance of
enhancing firm focus toward its ethical commitment and long-term reputation.
The certification-based Fair Trade initiative has been steadily growing during the
last two decades. While many scholars have analyzed its main characteristics and
developments, only a few have assessed it against a concept of justice. And those
exceptional cases have only focused on distributive justice, proving unable to
grasp the important ethical elements that Fair Trade integrates in its project. In
reaction to this, this article intends to critically examine what the Fair Trade
movement proposes to be 'fair' by resorting to the thought of the French
philosopher Emmanuel L,vinas. To accomplish this goal, a new understanding of his
conception of justice is presented, one that seeks to overcome the limitations that
the two most common interpretations in the literature suffer. The idea of L,vinas'
'dialectics of justice' is used to discuss Fair Trade's relation of alterity, its
appropriation of the notion of 'face' and its commitment to and responsibility for
marginalized producers and workers. This analysis shows that Fair Trade operates
with what could be described as a fetishized understanding of Levinasian ethics
that justifies a deeply unjust praxis.
Research summary: This paper uses signaling theory to bring together two
complementary research streams that have largely ignored each other: strategic
human resource management and media relations management. We argue that when
publicly traded firms voluntarily and publicly disclose positive information about
their value creation and appropriation activities, they also send positive signals
to managerial labor markets regarding executives' capabilities. Accordingly, we
hypothesize a positive association between public disclosures and voluntary
executive turnover. An analysis of pharmaceutical and communications equipment
firms from 1990 to 2004 supports this prediction, underscoring the need to
understand better the effects of voluntary public disclosures on a firm's ability
to protect its human capital. More generally, our results highlight the importance
of considering the impact of a single signal on multiple receivers. Managerial
summary: Given the organizational benefits of positive media coverage, the
considerable effort that firms put into managing their image in the media is not
surprising. We argue and show, however, that when a firm enhances its public image
it also improves its executives' positions in the managerial labor market and, by
so doing, increases their likelihood of voluntarily leaving the firm. In
particular, we find that corporate press releases, an important mechanism for
managing information released in the public domain to signal a firm's competitive
advantages, may result in unintentional loss of senior management talent. This
trade-off suggests that firms should increase coordination between their strategy,
human resources, and corporate communications/investor relations departments to
ensure that they collectively weigh the benefits and costs of publicly disclosing
value-relevant information. Copyright (C) 2015 John Wiley & Sons, Ltd.
Not much has been written about how the ethics of U.S. business executives are
perceived by the American public, yet the perception of integrity is important to
both businesses and their investors. This study examines the U.S. public's
perceptions of the ethics of American business executives using Gallup Poll data
for the past thirty years. Organizations with unethical executives have trouble
attracting investors, customers, and new managerial talent. They suffer lawsuits,
market share deterioration, and often prison time for the once-revered leaders.
This study also looked at the U.S.'s relative standing on the Corruption
Perceptions Index and the Edelman Trust Barometer. Confidence in the ethics of the
U.S. business executive remains fairly low on the Gallup Poll surveys and the U.S.
has declined on the CPI and Edelman Trust Barometer.
Efforts to identify antecedents of employee turnover are likely to offer value to
organizations through money saved on recruitment and new-hire training. The authors
utilized the stakeholder perspective to corporate social responsibility to examine
the effects of a perceived climate for ethics on the relationship between diversity
climate and voluntary turnover intentions. Specifically, they examined how ethics
climate (employees' perceptions that their organization values and enforces
ethically correct behavior) affected the diversity climate-turnover intentions
relationship. Results indicated that ethics climate moderated the diversity
climate-turnover intentions relationship. Turnover intentions were lowest among
workers perceiving both a pro-diversity and highly ethical climate. These results
reinforce the need to communicate both diversity values and ethical standards to
employees.
Efforts to identify antecedents of employee turnover are likely to offer value to
organizations through money saved on recruitment and new-hire training. The authors
utilized the stakeholder perspective to corporate social responsibility to examine
the effects of a perceived climate for ethics on the relationship between diversity
climate and voluntary turnover intentions. Specifically, they examined how ethics
climate (employees' perceptions that their organization values and enforces
ethically correct behavior) affected the diversity climate-turnover intentions
relationship. Results indicated that ethics climate moderated the diversity
climate-turnover intentions relationship. Turnover intentions were lowest among
workers perceiving both a pro-diversity and highly ethical climate. These results
reinforce the need to communicate both diversity values and ethical standards to
employees.
Despite the numerous forays into understanding the concept and consequences of
Corporate Social Performance (CSP), very little is known about how CSP impacts
employees. In response, this study examines the relationship between employee
perceptions of CSP and organizational commitment in a manufacturing industry
setting. Survey data are collected from 136 production employees at three kitchen
cabinet manufacturers in the United States. The results of the study show that both
community-related and environmentally-related CSP are positively related to
organizational commitment. These results imply that companies should communicate
their CSP to all employees because it has the potential to increase their
employees' organizational commitment, which may result in positive organizational
outcomes. This study contributes to extant literature by highlighting the
importance of employees as a relevant stakeholder for CSP research, as well as
employing comprehensive perceptual measures of both community-related and
environmentally-related CSP, in a manufacturing context.
Three global developments situate the context of this investigation: the increasing
use of social media by organizations and their employees, the burgeoning presence
of social media policies, and the heightened focus on corporate social
responsibility (CSR). In this study the intersection of these trends is examined
through a content analysis of 112 publicly available social media policies from the
largest corporations in the world. The extent to which social media policies
facilitate and/or constrain the communicative sensibilities and values associated
with contemporary notions of CSR is considered. Overall, findings indicate that a
large majority of policies, regardless of sector or national headquarters,
increasingly inhibit communicative tenets of contemporary CSR (i.e., free speech,
collective information sharing, and stakeholder engagement/dialogue) and thereby
diminish employee negotiation and participation in the social responsibilities of
corporations. Moreover, policies generally enact organizational communication
practices that are contrary to international CSR guidelines (e.g., the UN Global
Compact and other international agreements). Findings suggest that social media
policies represent a relatively unrecognized development in the
institutionalization of CSR communicative norms and practices that call into
question the promising affordances of social media for the inclusion of various
voices in the public negotiation of what constitutes corporate social
responsibility.
In the wake of Citizens United v. the Federal Elections Commission, more companies
are spending heavily on political speech, but the moral implications of doing so
are not clear. Few business ethicists have directly addressed the moral legitimacy
of corporate political speech and the conditions under which it may be morally
permissible. My goal here is to outline the moral hazards associated with engaging
in corporate political speech. I argue that whether one takes a narrow Friedman-
style shareholder primacy view of managerial duty, a broader stakeholder view, or
an even more wide-ranging political corporate social responsibility view of the
moral duties of business, various moral hazards must be taken into account in
determining the moral legitimacy of corporate political speech. I discuss a number
of moral hazards endemic to corporate political speech and suggest ways in which
business practitioners might avoid those moral hazards.
This article examines corporate responsibility in the supply chains of four of the
largest Scandinavian multinational corporations - IKEA, Nokia, Novo Nordisk, and
StatoilHydro - and offers two key findings. First, these Scandinavian companies
have all implemented responsible supply chain practices where suppliers in
developing nations, and the communities of these suppliers, are engaged as key
stakeholders and treated as partners. Second, these supply chain practices all
share the common bond of having honesty and the establishment of trust-based
relationships at their foundation. As a result, these Scandinavian companies have
developed a "cooperative advantage" in their ability to form successful, long-term
partnerships in their respective supply chains.
Assumed benefits from improved reputation are often used as motives to drive
corporate social responsibility (CSR) initiatives. Are improved cost efficiencies
among these reputation benefits? Cost efficiencies and cost management have become
more relevant as revenue streams dry up in these tough economic times. Can a good
reputation aid these efforts to develop cost efficiencies specifically when
managing labor costs? Prior research hypothesizes that good reputation can create
labor productivity and efficiency benefits. The purpose of this study is to
empirically investigate reputation's relationship with labor efficiency, labor
productivity, and labor cost. Using a sample of highly reputable firms from
Fortune's America's Most Admired Companies list and a corresponding matched sample
of firms, we find that reputation is associated with improved labor efficiency and
labor productivity. However, we do not find a significant association between
reputation and reduced labor costs. Our study contributes to current research
hypothesizing and finding efficiency benefits associated with good reputation.
Documenting these potential reputation benefits has important implications for CSR
activities and initiatives. It supports recent work that incorporates reputation
into a more developed model of the relationship between CSR and performance
(Vilanova et al.: 2009, Journal of Business Ethics 87, 57-69). This work is useful
to businesses and supports strategies focused on "doing well by doing good" and
maintaining healthy reputations.
As the interest in corporate social responsibility (CSR) within advertising
industry is growing, this paper explores the discourse on CSR among employees in
advertising agencies. Different sensemaking dimensions are taken into account to
examine how employees, as one of the key stakeholders involved in the joint meaning
construction, make sense of CSR. In addition, this paper studies the legitimation
approaches that employees use to address CSR of advertising agencies. The empirical
evidence of discursive examples also indicates that there is a linkage between
sensemaking and legitimation perspective in CSR discourse analysis and supports the
idea that both may be a potential route toward institutionalization of CSR inside
organizations or sectors.
What signals do firms in emerging economies send to stakeholders when they adopt
corporate social responsibility (CSR) practices? We argue that in emerging
economies, firms that adopt CSR practices positively signal investors that their
firms have superior capabilities for filling institutional voids. From an
institution-based view, we hypothesize that the institutional environment moderates
the signaling effect of CSR on a firm's financial performance. Based on a sample of
firms from ten Asian emerging economies, we find a positive relationship between
CSR practices and financial performance. This positive relationship is stronger in
the less developed capital market than in the more developed one. The financial
benefits of CSR practices are also more salient in the low information diffusion
market than in the high one. We emphasize that signaling theory and the
institution-based view can jointly contribute to the CSR literature.
Several streams of management research have focused on the relationship between
organizations, employees, and customers within the context of services. However,
this body of work lacks integration and requires an internally consistent framework
encompassing critical constructs, causal mechanisms, and levels of analyses. To
address these gaps, we reviewed empirical studies with service-related outcomes
published in management and organizational behavior journals as well as critical
summative and theoretical works within the fields of management and marketing, and
constructed an integrative framework for services management theory and research.
This framework incorporates constructs and relationships within (individual and
unit levels) and across (multilevel and microfoundations) levels of analyses and
highlights areas that are ripe for future theoretical development and empirical
inquiry.
Postmerger integration is a highly challenging and demanding task. Its success
depends not only on economic factors but also on the organisational members'
feelings and their personal contribution to the new entity. Mergers are usually
made for the sake of profitability in the first place, whereas less attention is
paid to employees in such situations. This article describes various ethical
observations made in our study on corporate mergers in the Nordic Electro-business
industry. We examine how the organisational change was experienced by personnel,
what kinds of ethical reflections surfaced in different phases of the process, and
what conclusions might be drawn from them. The main focus is on the ethical
meanings that emerged in our interviewees' stories spontaneously, without the topic
of ethics having been separately brought up in the interview situation. The
organisational members: we interviewed 35 electro-business employees who were
either transferred from Vattenfall's contracting unit to the acquiring company or
were already working there at the time of the merger. These persons were
interviewed twice: first in 2001, the year of the initial merger, and again in
2005, 4 years from the start of the process and 1 year from the final ownership
change. The merger process seemed to lead to decreased responsibility among the
organisational members, which highlights the discrepancy between genuine ethical
thinking and executive talk. Our study also revealed a dramatic shift in the moral
attitudes of the managers who fell from power in the turmoil of organisational
change. This moral dimension is evident in their sharply critical argumentation
against the new operating model and new corporate management, as well as in their
eventual indifference and non-commitment to the organisation. The ethical meanings
of 'the good life' and a happy work community slowly disintegrated and were
replaced by a longing for the earlier communality and sense of togetherness in
their old organisation. This meant that 'the good life' would have to be sought
elsewhere.
We address current criticisms of the RBV (oversight of dynamism, environmental
contingencies, and managers' role) by linking value creation in dynamic
environmental contexts to the management of firm resources. Components of the
resource management model include structuring the resource portfolio; bundling
resources to build capabilities; and leveraging capabilities to provide value to
customers, gain a competitive advantage, and create wealth for owners. Propositions
linking resource management and value creation are offered to shape future
research.
We combine new information technology (IT) offshoring and IT workforce microdata to
investigate how the use of IT offshore captive centers is affecting the skill
composition of the U. S. onshore IT workforce. The analysis is based on the theory
that occupations involving tasks that are "tradable," such as tasks that require
little personal communication or hands-on interaction with U. S.-based objects, are
vulnerable to being moved offshore. Consistent with this theory, we find that firms
that have offshore IT captive centers have 8% less of their onshore IT workforce
involved in tradable occupations; those without offshore captive centers have
increased the proportion of onshore employment in these same occupations by 3%. In
addition, we find that hourly IT workers (e. g., IT contractors) are
disproportionately employed in tradable jobs, and their onshore employment is 2%-3%
lower in firms with offshore captive centers. These findings persist after
considering different measures of employment composition, including controls for
human capital, firm performance, domestic outsourcing, and whether firms choose to
build or buy software. Instrumental variables and corroborating regressions suggest
that our estimates are conservative-the magnitude of the effect generally rises
after accounting for reverse causality and measurement error.
This case study documents a high-profile incident involving the world-famous auto
maker Daimler Benz with its customers in China. On the one hand, angry customers
felt victimized by the auto maker's lack of willingness to take responsibility and
its double standard between industrialized markets and emerging economies in
dealing with customer complaints; on the other hand, the auto maker also felt
frustrated at how this product warranty matter quickly escalated into a public
relations nightmare. The case illustrates the complexity of operating in emerging
markets where institutional environments are vastly different, and the difficulty
of balancing business interests with social responsibility. It also illustrates the
urgent needs for emerging markets to develop institutional infrastructure to
protect consumer rights, and to offer proper channel for conflict resolution.
We develop a theoretical model, explore the relationship between temptation (both
reflective and formative) and unethical intentions by treating monetary
intelligence (MI) as a mediator, and examine the direct (temptation to unethical
intentions) and indirect (temptation to MI to unethical intentions) paths
simultaneously based on multiple-wave panel data collected from 340 part-time
employees and university (business) students. The positive indirect path suggested
that yielding to temptation (e.g., high cognitive impairment and lack of self-
control) led to poor MI (low stewardship behavior, but high cognitive meaning)
that, in turn, led to high unethical intentions (theft, corruption, and deception).
Our counterintuitive negative direct path revealed that those who controlled their
temptation had high unethical intentions. Due to the multiple faces of temptation
(the suppression effect), maliciously controlled temptation (low cognitive
impairment and high self control) led to deviant intentions. Subsequent multi-group
analysis across gender (a moderator) reformulated the mystery of temptation: a
negative direct path for males, but a positive indirect path for females. For
males, the negative direct path generated a dark impact on unethical intentions;
for females, the positive indirect path did not, but offered great implications for
consumer behavior. Both falling "and" not falling into temptation led to unethical
intentions which varied across gender. Our counterintuitive, novel, and original
theoretical, empirical, and practical contributions may spark curiosity and add new
vocabulary to the conversation regarding temptation, money attitudes, consumer
psychology, and business ethics.
Consumers often purchase goods that are "hard to find" to conspicuously display
their exclusivity and social status. Firms that produce such conspicuously consumed
goods such as designer apparel, fashion goods, jewelry, etc., often face challenges
in making optimal pricing and production decisions. Such firms are confronted with
precipitous trade-off between high sales volume and high margins, because of the
highly uncertain market demand, strategic consumer behavior, and the display of
conspicuous consumption. In this paper, we propose a model that addresses pricing
and production decisions for a firm, using the rational expectations framework. We
show that, in equilibrium, firms may offer high availability of goods despite the
presence of conspicuous consumption. We show that scarcity strategies are harder to
adopt as demand variability increases, and we provide conditions under which
scarcity strategies could be successfully adopted to improve profits. Finally, to
credibly commit to scarcity strategy, we show that firms can adopt sourcing
strategies, such as sourcing from an expensive production location/supplier or
using expensive raw materials.
While the literature on front-line service work utilizes a variety of productive
images, I argue that these images do not capture certain of the more problematic
experiences of front-line service employees. Drawing on words used by these workers
themselves, and using concepts from psychoanalysis and its application to
organizational dynamics, I therefore propose a new image, that of toxicity. I argue
that-especially when under severe pressure from customers - front-line workers may
have the unconscious fantasy that they have been polluted by toxic substances. The
unconscious experience of the entry of toxic material is likely to result in
further contagion of relationships such as those among employees and between
employees and customers. This may also result in workers retaliating against
customers by exacting revenge on them. A downward spiralling of relationships may
follow, with the result that large parts of the work environment are experienced as
toxic. The implications for theory are explored. In conclusion, I argue that the
theme of toxicity helps us connect the employee-customer interface with a deep
reservoir of primordial human experience that links the body with emotions.
Pulling from theories of social exchange, deonance, and fairness heuristics, this
study focuses on the relationship between overall justice climate and both the
prosocial and deviant behaviors of groups. Specifically, it considers two
contextual boundary conditions on this effect-corporate social responsibility (CSR)
and group moral identity. Results from a laboratory experiment are presented, which
show a significant effect for overall justice climate and a two-way interaction
between overall justice climate and CSR on group-level prosocial and deviant
behaviors, and a marginally significant interaction of group moral identity with
overall justice climate on group deviance. The implications of contextual
influences on workplace ethics and justice are discussed.
This research explores how consumers respond to Corporate Social Responsibility
(CSR) in China with a multiproduct, comparative survey. Empirical results conclude
that (1) Chinese consumers, who show a high level of awareness and trust of CSR,
are more likely to transform a good CSR record into positive corporate evaluation,
product association, and purchase intention; (2) Consumer responses to CSR vary
across different product categories. Those firms selling experience products (vs.
search and credence products) are more likely to gain consumers' positive product
associations and purchase support through CSR practices; and (3) The relationships
between consumer demographics and their CSR responses are not linear, and those
consumers with a middle level of age and income would respond to CSR more
positively. Managerial implications are provided.
This paper documents that business ethics has positive impacts upon the development
of intellectual capital. Knowledge has become the most important asset of modern
businesses, and this study argues that business ethics is associated with the
development of intangible knowledge resources-intellectual capital. Businesses with
ethical values at the core reinforce ethical conducts and successfully build trust
with their various stakeholders, leading to the formation of an ethical and
trustworthy corporate culture and a positive corporate environment. Thus, in this
reasoning, an ethical approach to business can encourage open communication,
problems solving, knowledge sharing and creativity among employees to increase
organisational capital; enhance interactions and relationships with suppliers,
customers and other stakeholders to increase social capital; attract and retain
good talent to increase human capital. Questionnaire survey is adopted as the
research method with businesses in the electronic and information technology
industries in Taiwan as sample. The results suggest that business ethics is
associated with increased intellectual capital. Thus, this study demonstrates that
the development of intellectual capital is in line with strengthened ethics. It
contributes to the literature through combining research on business ethics with
intellectual capital theories and extends the extant intellectual capital
literature.
We examine the impact of employee turnover on operating performance in settings
that require high levels of knowledge exploitation. Using 48 months of turnover
data from U.S. stores of a major retail chain, we find that, on average, employee
turnover is associated with decreased performance, as measured by profit margin and
customer service. The effect of turnover on performance, however, is mitigated by
the nature of management at the store level. The particular aspect of management on
which we focus is process conformance-the extent to which managers aim to reduce
variation in store operations in accordance with a set of prescribed standards for
task performance. At high-process-conformance stores, managers use discipline in
implementing standardized policies and procedures, whereas at low-process-
conformance stores, managers tolerate deviations from these standards. We find that
increasing turnover does not have a negative effect on store performance at high-
process-conformance stores; at low-process-conformance stores, the negative effect
of turnover is pronounced. Our results suggest that, in settings where performance
depends on the repetition of known tasks, managers can reduce turnover's effect by
imposing process discipline through standard operating procedures.
Presently, the social responsibility literature is replete with the diverse ways in
which work organizations and the regulatory nation states in which they are
domiciled can improve the quality of their workers' lives. But do workers
themselves become motivated to contribute (i.e., give back) to society when they
experience a work life of better quality than their peers? Specifically, which
sectors of society do such workers contribute to? Through a questionnaire that was
administered to a cross section of workers in the private sector of Nigeria, this
study found out that quality of work life (QWL) correlates significantly and
positively with workers' motivation to contribute to society. However, workers were
less motivated to contribute to Nigeria's government sector that is globally known
for corruption than making contributions to the piety and social infrastructural
sectors. Results also revealed that both the paternalistic and consultative forms
of social responsibility were positively related with QWL. These results imply that
social responsibility should be seen as a veritable platform on which satisfied
stakeholders of business organizations can reciprocally make their own
contributions for the overall good of society. By virtue of stakeholders'
contributions, the benefits of corporate social responsibility can actually
reverberate into other sectors of societal life (e.g., the piety sector) that were
never thought of during the design phase of socially responsible programmes.
Finally, the study's findings give credence to Anil Sarin's Contributory Theory of
Existence which states that people who have once received help from a particular
organ of society (e.g., educational system, health care system, etc.) will be
motivated to contribute to that organ or other organs of society.
Contributing to a social cause can be an important driver for workers in the public
and nonprofit sectors as well as in firms that engage in corporate philanthropy or
other corporate social responsibility policies. This paper compares the
effectiveness of a social incentive that takes the form of a donation received by a
charity of the subject's choice to a financial incentive. We find that social
incentives lead to a 13% rise in productivity, regardless of their form (lump sum
or related to performance) or strength. The response is strong for subjects with
low initial productivity (30%), whereas high-productivity subjects do not respond.
When subjects can choose the mix of incentives, half sacrifice some of their
private compensation to increase social compensation, with women more likely to do
so than men. Furthermore, offering subjects some discretion in choosing their own
payment schemes leads to a substantial improvement in performance. Comparing social
incentives to equally costly increases in private compensation for low-productivity
subjects reveals that the former are less effective in increasing productivity, but
the difference is small and not statistically significant.
This article contributes to the limited literatures on small- and medium-size
enterprises (SMEs) and corporate social responsibility (CSR). Using an
institutional theoretical framework, we analyzed fieldwork interviews with twenty
SMEs and perspectives of 165 SME managers and workers in textiles, garment, and
footwear industries, the most important wage-earning sector in Vietnam. Having
understood in the context of a developing "market economy with socialist
orientation'' (thus a "Southern perspective''), we find that socially responsible
practices and expectations developed long before the arrival of CSR as a western
concept and an MNC agenda. While identifying and contributing ideas concerning
forms of "informal'' CSR practices-influenced by social and cultural expectations-
to the CSR/SME literature, we are conscious of the mixed effects of these practices
and the ongoing nuanced negotiations between workers and managers in these SMEs. In
our research, we found that it takes both domestic and international stakeholders
to improve labor conditions in Vietnam under the banner of CSR.
This paper explores the possible impact of the recent legal developments on
organizational whistleblowing on the autonomy and responsibility of whistleblowers.
In the past thirty years numerous pieces of legislation have been passed to offer
protection to whistleblowers from retaliation for disclosing organisational
wrongdoing. An area that remains uncertain in relation to whistleblowing and its
related policies in organisations, is whether these policies actually increase the
individualisation of work, allowing employees to behave in accordance with their
conscience and in line with societal expectations or whether they are another
management tool to control employees and protect organisations from them. The
assumptions of whistleblower protection with regard to moral autonomy are examined
in order to clarify the purpose of whistleblower protection at work. The two
extreme positions in the discourse of whistleblowing are that whistleblowing
legislation and policies either aim to enable individual responsibility and moral
autonomy at work, or they aim to protect organisations by allowing them to control
employees and make them liable for ethics at work.
Many scholars have suggested the relationship between corporate social performance
and its ability to attract a large number of high-quality job applicants, because
previous literature indicates that employees with strong social awareness help
create a high-performance organization. For that reason, an important issue for
successful business recruitment is how to boost the pursuit intention of job
seekers. This study discusses such issue by proposing a model based on signaling
theory and cognitive dissonance theory. In the proposed model of this study, the
positive relationships between four dimensions of corporate social performance and
job pursuit intention are hypothetically moderated by socio-environmental
consciousness. The proposed hypotheses of this research were empirically tested
using the data from graduating students seeking a job. The empirical findings of
this study complement previous literature by discussing how corporate social
performance benefits business firms from a perspective of strengthened human
resources and recruitment. Finally, managerial implications for business managers
based on the findings herein are provided.
Globalisation has accelerated economic development in emerging economies through
the outsourcing of their supply chains and at the same time has accelerated the
degradation of environmental and social conditions. Society expects corporations to
play an essential role in creating economic, environmental and social prosperity
beyond their country of origin. In order to regulate outsourcing activities in the
supply chain, many multinationals are constantly searching for ways to manage their
indirect environmental and social impacts accordingly, as well as to meet their
stakeholder expectations. Because expectations of stakeholders vary widely across
different regions, this study intends, by engaging with major stakeholders, to
identify what are the local and regional supply chain stakeholders' perceptions and
expectations. The findings would help in building consensus, strengthening the
implementation and establishing the future corporate social responsibility (CSR)
framework. This study collects and analyses data from 21 major stakeholders in Hong
Kong and Mainland China. The results indicate that local and regional stakeholders
perceive that CSR is fairly significant to largely export-oriented businesses, but
it is lagging behind the West due to the fact that most local/regional companies
only become involved in CSR when this is a client requirement. They see responsible
corporations as meeting the local legislative requirement; going beyond this
requirement is unnecessary. A voluntary approach favours multi-party partnership
initiatives with pilot trust programmes aimed at managers' and workers' capacity
building. Most stakeholders favour the proposed regional partnership initiative,
supply chain task forces aimed at bringing together relevant organisations and
people with different sets of skills. Distinct roles of different organisations are
identified to assist suppliers to understand CSR, and only this will bring about
long-term sustainable change.
Operational failures persist, in part because employees work around them without
engaging in actions to prevent recurrence. To break this cycle, we investigate the
impact of work design factors on responses to operational failures. We use hospital
nurses as subjects in a laboratory experiment, where, unknown to them, two
medication administration supplies are missing. We observe their real-time
responses to the two failures and whether they contribute an improvement idea. We
randomly assign half of the participants to an experiment location far away from a
satellite pharmacy where the missing supplies can be obtained ("difficult
condition"), and the other half are located near the satellite pharmacy ("easy
condition"). Both conditions contain risky, against-policy supplies that can be
used to complete the work tasks, giving participants a choice between policy-
compliant workarounds and risky, against-policy workarounds. In the first study, we
find that participants in the difficult condition are more likely to contribute
improvement ideas but are less likely to use policy-compliant workarounds. A second
experiment with a 2 x 2 design shows that participants in the difficult condition
who have high access to the process owner are more likely to use policy-compliant
workarounds than when they have low access. Our results suggest that hospitals can
increase communication about operational failures by deliberately making it
difficult to work around them while simultaneously providing a high level of access
to process owners. Otherwise, nurses encountering operational failures are likely
to resort to against-policy workarounds, a behavior observed in practice.
A growing number of studies have investigated the various dimensions of corporate
social responsibility (CSR) in the literature. However, relatively few studies have
considered its impacts on employees. The purpose of this study is to analyze how
CSR affects the organizational commitment of employees based on the social identity
theory (SIT). The proposed model was tested on a sample of 269 business
professionals working in Turkey. The findings of the study revealed that CSR to
social and non-social stakeholders, employees, and customers were the significant
predictors of organizational commitment. However, there was no link between CSR to
government and the commitment level of employees.
Corporate social responsibility (CSR) is one of the most prominent concepts in the
literature and, in short, indicates the positive impacts of businesses on their
stakeholders. Despite the growing body of literature on this concept, the
measurement of CSR is still problematic. Although the literature provides several
methods for measuring corporate social activities, almost all of them have some
limitations. The purpose of this study is to provide an original, valid, and
reliable measure of CSR reflecting the responsibilities of a business to various
stakeholders. Based on a proposed conceptual framework of CSR, a scale was
developed through a systematic scale development process. In the study, exploratory
factor analysis was conducted to determine the underlying factorial structure of
the scale. Data was collected from 269 business professionals working in Turkey.
The results of the analysis provided a four-dimensional structure of CSR, including
CSR to social and nonsocial stakeholders, employees, customers, and government.
The resource-depleting effect of surface acting is well established. Yet we know
less about the pervasiveness of this depleting effect and what employees can do at
work to replenish their resources. Drawing on conservation of resources theory and
the ecological congruence model, we conduct a five-day diary study among customer
service representatives (CSRs) to examine the extended depleting effect of surface
acting and whether social interactions with coworkers (i.e., giving and receiving
help) can mitigate the negative consequences of emotional labor. Momentary reports
from 102 CSRs indicate that within-person daily surface acting positively predicted
end-of-day emotional exhaustion, and the effect of emotional exhaustion spilled
over to work engagement the following day. Analyzing the within-person moderating
effects of giving and receiving help at work, we find that giving help buffered the
depletion process while receiving help did not. We discuss the theoretical and
practical significance of considering the temporality of the resource-depleting
effects of surface acting, the role of at-work help giving in buffering the
negative effect of emotional labor that could affect the sense of self, and the
importance of resource congruence in influencing the efficacy of buffering effects.
How can firms support their customers' collaborative, social responsibility
initiatives - and especially pro-environmental, firm-customer collaborations? Does
corporate transparency affect customers' willingness to undertake pro-environmental
collaborative programs? This study addresses these questions in relation to the US
residential electricity market. It focuses on the impact of customers' perceptions
of the utility's degree of transparency and on the willingness to engage in pro-
environmental behavior (PEB) related to electricity consumption. The responses of
1257 interviewees from US households to questions related to their electricity
suppliers are analyzed through structural equation models (SEMs) using latent
variables. Results show that customers' perceptions of an electricity utility's
transparency affect their willingness to collaborate in environmental programs, and
that the degree of perceived transparency of the utility is related to customers'
environmental awareness.
This study explored several proposed relationships among professional ethical
standards, corporate social responsibility, and the perceived role of ethics and
social responsibility. Data were collected from 313 business managers registered
with a large professional research association with a mailed self-report
questionnaire. Mediated regression analysis indicated that perceptions of corporate
social responsibility partially mediated the positive relationship between
perceived professional ethical standards and the believed importance of ethics and
social responsibility. Perceptions of corporate social responsibility also fully
mediated the negative relationship between perceived professional ethical standards
and the subordination of ethics and social responsibility. The results suggested
that professions should develop ethical standards to encourage social
responsibility, since these actions are associated with enhanced employee ethical
attitudes.
Companies offer ethics codes and training to increase employees' ethical conduct.
These programs can also enhance individual work attitudes because ethical
organizations are typically valued. Socially responsible companies are likely
viewed as ethical organizations and should therefore prompt similar employee job
responses. Using survey information collected from 313 business professionals, this
exploratory study proposed that perceived corporate social responsibility would
mediate the positive relationships between ethics codes/training and job
satisfaction. Results indicated that corporate social responsibility fully or
partially mediated the positive associations between four ethics program variables
and individual job satisfaction, suggesting that companies might better manage
employees' ethical perceptions and work attitudes with multiple policies, an
approach endorsed in the ethics literature.
The theory of enterprise culture (du Gay, 1996) has provoked one of the more
enduring strands of research on organizations and identities. Yet, after a decade
and half of debate, the validity of this theory remains mired in ambiguity. In this
article we revisit the theory of enterprise culture by exploring shifts in the
popular business press and employee responses to them, in an effort to track the
identity norms that have impinged on job seekers over time. Scrutinizing career-
advice texts published between 1980 and 2010, we do indeed find partial support for
the theory of enterprise culture, as the most popular renderings of work and
employment have exhibited a marked yet complex turn toward entrepreneurial
rhetoric. Interviews with 53 employees and job seekers suggest that a discourse of
personal branding is indeed pervasive, and is often uncritically incorporated into
the conceptions that job seekers bring to bear on their career horizons. Yet we
also find that enterprise discourse has evolved beyond the notion of the sovereign
consumer on which enterprise theory was initially based. Employees today are
advised not merely to be responsive to the wants of customers; now, they must
actively shape those wants, emulating corporate marketing techniques in an effort
to establish the value of their own personal brands. Homo economicus is alive and
well but has elided existing representations.
Direct-to-consumer advertising (DTCA) of prescription drugs has been a heavily
contested issue over the past decade, touching on several issues of responsibility
facing the pharmaceutical industry. Much research has been conducted on DTCA, but
hardly any studies have discussed this topic from a corporate social responsibility
(CSR) perspective. In this article, we use several elements of CSR, emphasising
consumer autonomy and safety, to analyse differences in DTCA practices within two
different policy contexts, the United States of America and the European Union
(EU). Doing so results in an alternative analysis of the struggle between
proponents and opponents of DTCA from a CSR perspective, adding an alternative view
on this debate.
Protests that target firms' socially irresponsible behavior are increasingly
organized via digital media. This study uses two methods to investigate the effects
that online protests and mitigating firm responses have on shareholders' and
consumers' evaluation. The first method is a financial analysis that includes an
event study which measures the effect of online protests on the target firm's share
price, as well as an investigation of the boundary effects of protest
characteristics. The second method is an online experiment that assesses the effect
of an online protest campaign on consumers' perception and purchase intention, as
well as any mitigating effects that a firm's response may have. Contrary to recent
studies suggesting that participation in online protests is only token support
without any substantive effects, our results show that online protests do hurt.
Firms can expect to suffer financial, reputational, and sales damage when an online
protest campaign mobilizes consumers successfully. We also show that online
protests are more likely to take firms by surprise than offline protests. Firms can
exacerbate or reduce the damage by their response. We find that although firms may
repair the damage to consumers' purchase intentions, the negative effects on a
brand's image are harder to rectify. The results have valuable implications for
protest organizers and managers faced with the task of responding.
This study examines the effects of culture, gender, and function on orientation
toward corporate social responsibility (CSR) among 416 employees of an
international financial service organization. The main objective of the study is to
investigate the variation of corporate social responsibility orientation (CSRO)
across national cultures. The authors draw on a theory of cultural value
orientations to identify three culturally distinct transnational clusters: West
Europe, the English speaking countries, and South Asia. These clusters coincide
with the business units (BUs) and markets of the organization under investigation.
By employing a framework of CSRO, the study reveals substantial differences across
clusters within one single internationally operating organization. The English-
speaking and the South Asia clusters were found to be most concerned with legal
regulations and economic performance. In contrast, the West Europe continental
cluster was found to be more concerned about business conforming to ethical norms
than achieving high levels of economic performance or conforming to legal
regulations. Furthermore, the study reveals gender differences in CSRO and
differences among random employees and employees who are professionally active in
the area of CSR. This article concludes by discussing implications of these
findings for internationally operating organizations in the light of the recent
global financial crisis.
Workplace incivility research has focused on within-organizational sources of
incivility, and less attention has been paid to outside-organizational sources such
as customers. In a cross-sectional field study, the authors found that service
employees (N = 307) who reported higher levels of uncivil treatment from customers
engaged in higher levels of incivility toward customers. Specifically, the results
show that customer incivility toward employees is related to employee incivility
toward customers through job demands first and then emotional exhaustion. The
authors discuss the implications of these results and highlight directions for
future research.
In this study, we seek to further delineate factors that condition the relationship
between slack resources and firm performance. To do so, we develop and test a model
that establishes the role of venture capital (VC) and angel investors as powerful
external stakeholders who positively moderate the slack-performance relationship.
In addition, we provide more insight into this relationship by examining
differences between these two types of private investors and by examining the role
of their ownership stakes. We test our hypotheses using a sample of 1215 private
firms, including VC-backed firms, angel-backed firms, and similar firms without
such investors. We find that the presence of VC investors positively moderates the
relationship between both financial and human slack resources and firm performance,
while angel investors only positively moderate the effect of human resource slack.
Further, VC investors are only marginally better at helping entrepreneurs to
extract value from human resource slack than angel investors and they are no better
when it comes to financial slack. Finally, we find that the impact of financial and
human resource slack on firm performance is more positive in VC-backed firms when
investors hold high ownership stakes, an effect which is significantly stronger
than when angel investors hold high ownership stakes.
Past research has established that new firms can enhance their attractiveness to
prospective resource providers by affiliating with more reputable firms. But
research on this process has yet to fully account for two critical realities
underscored by recent research: (1) firms need to acquire resources from different
groups of resource providers and (2) reputation is multidimensional. Drawing on the
organizational reputation literature and on information processing theory, we
propose that two groups of resource providers will respond differently to new
firms' affiliations in accordance with differences in the groups' abilities to
recognize and interpret reputation-related signals. We also propose that within a
single group of resource providers, distinct characteristics of the affiliate will
exert different influences. We test these propositions using longitudinal data from
Belgian firms that affiliated with venture capital (VC) investors. Consistent with
our predictions, we find that characteristics of a VC affiliate exert more
influence on prospective financiers than on prospective employees. We further find
that prospective financiers were more influenced by a VC's industry-specific
experience than by its media prominence, whereas prospective employees were more
influenced by a VC's media prominence than by its industry-specific experience.
Taken together, the findings show that new firms' resource attraction trajectories
are shaped by their affiliates in more complex ways than past research has
accounted for.
Socially Responsible Investment (SRI) has grown considerably over the past three
decades. One form of SRI, engagement-SRI, is today by far the most practiced form
of SRI (in assets managed) and has the potential to mainstream SRI even further.
However, lack of formalized engagement procedures and evaluation tools leave the
engagement practice too opaque for such a mainstreaming. This article can be
considered as a first step in the development of a standard for the engagement
practice. By developing an engagement heuristic, this article offers a more
transparent engagement dialog. Drawing on Stevenson's and Austin's speech-act
theories, this article develops a classification of management's responses to the
signaling of allegations and controversies on two dimensions: a factual dimension
concerning (dis)agreements on factual claims and an attitudinal dimension
concerning (dis)agreements on responsibilities, values, and norms. On the basis of
the distinctions this article develops, the authors provide for a synoptic table
and offer a next-step heuristic for the engagement process that started with
signaling a concern to management. The article uses an engagement logic that, while
keeping the exit option for the investor open, allows management to address
signaled concerns without having to let down or to opt out at the first setback in
the dialog process between investor and investee corporation.
Corporate crises call for effective communication to shelter or restore a company's
reputation. The use of corporate social responsibility (CSR) claims may provide an
effective tool to counter the negative impact of a crisis, but knowledge about its
effectiveness is scarce and lacking in studies that consider CSR communication
during crises. To help fill this gap, this study investigates whether the length of
company's involvement in CSR matters when it uses CSR claims in its crisis
communication as a means to counter negative publicity. The use of CSR claims in
crisis communication is more effective for companies with a long CSR history than
for those with a short CSR history, and consumer skepticism about claims lies at
the heart of this phenomenon.
As part of their corporate social responsibility, many organizations practice
cause-related marketing, in which organizations donate to a chosen cause with every
consumer purchase. The extant literature has identified the importance of the fit
between the organization and the nature of the cause in influencing corporate
image, as well as the influence of a connection between the cause and consumer
preferences on brand attitudes and brand choice. However, prior research has not
addressed which cause composition most appeals to consumers or the impact of cause
choice on corporate image. A between-subjects field experiment in the Netherlands
examines the influence of three core cause attributes-cause type, cause scope, and
cause acuteness-on consumers' perceptions of corporate image. Furthermore, this
experiment examines the extent to which consumer identification with the cause
mediates the influence of the cause attributes on corporate image. The findings
indicate that identification with the cause leads to more positive evaluations of
marketing campaigns for cause type and cause scope. Also, however, our results
uncover a negative direct relationship between cause scope and corporate image.
Cause acuteness is only marginally influential in corporate image perceptions. By
proposing and testing a comprehensive model of the influence of cause attributes on
corporate image in cause-related marketing, this article provides important
implications and suggests avenues for further research.
The literature is replete with articles emphasizing the importance of corporate
social responsibility. However, few, if any, of these articles discuss the role of
the consumer in achieving corporate social responsibility. It is the premise of the
current paper that it may be difficult for corporate social responsibility to
succeed without the assistance of consumers. That is, for corporate social
responsibility to flourish, it needs to be accompanied by consumer social
responsibility (CnSR). This paper examines this proposition, makes the distinction
between consumer ethics and CnSR, and presents research in these two expanding
areas of inquiry, examining literature which supports the role of CnSR in
complementing corporate social responsibility.
Interest in corporate social responsibility (CSR) is gaining momentum in academic
and managerial circles. However, prior work in the area has paid little attention
to how CSR initiatives should be implemented inside the organization. Against this
backdrop, this study examines the impact of CSR initiatives on an important
stakeholder group-employees. We build and test a comprehensive multilevel framework
that focuses on whether employees derive job satisfaction from CSR programs. The
proposed model predicts that a manager's charismatic leadership influences
employees' interpretations about the motives underlying their companies' engagement
in CSR initiatives (intrinsic and extrinsic CSR-induced attributions) which, in
turn, influence employee job satisfaction. Hierarchical linear modeling of data
from 47 organizational units comprising 438 employees from three world-leading
manufacturing organizations shows that when employees think that their manager
possesses charismatic leadership qualities, they tend to attribute the
organization's motives for engaging in CSR activities to intrinsic values, which,
in turn, are positively associated with job satisfaction. Also, the extent to which
managers are perceived as charismatic leaders relates positively to job
satisfaction. Interestingly, CSR-induced extrinsic attributions are neither
explained by charismatic leadership nor do they predict job satisfaction.
Implications for both theory and practice are discussed.
While most research on business-nonprofit partnerships has focused on macro and
meso perspectives, this article pays attention to the micro level. Drawing on
various theoretical perspectives from both marketing and management, this study
conceptually relates the outcomes of active employee participation in such
partnerships to consumer self-interest. This article also explores empirically
whether and when self-interest affects consumers' responses toward firms in
relation to business-nonprofit partnerships. The study reveals that self-interest
can directly influence consumers' behavioral responses toward firms (i.e.,
switching and buying intentions, and word of mouth), whereas the impact on
evaluative responses in terms of attitude and trust is only weak. The fit between
the firm and the nonprofit partner (company-cause fit) turns out to moderate this
effect, with consumer self-interest only playing a role if fit is high.
Implications for research and practice are discussed.
The paper advances the conceptual understanding of responsible leadership and
develops an empirical scale of discursive responsible leadership. The concept of
responsible leadership presented here draws on deliberative practices and
discursive conflict resolution, combining the macro-view of the business firm as a
political actor with the micro-view of leadership. Ideal responsible leadership
conduct thereby goes beyond the dyadic leader-follower interaction to include all
stakeholders. The paper offers a definition and operationalization of responsible
leadership. The studies that have been conducted to develop the discursive
responsible leadership scale validated the scale, discriminated it from other
leadership scales, and demonstrated its utility in affecting unethical behavior and
job satisfaction in organizations. Responsible leadership is shown to be first,
dependent on the hierarchical level in an organization; second, capable of reducing
unethical treatment of employees; and finally, a means of enhancing the job
satisfaction of employees. The paper concludes with study limitations, future
research directions and practical implications.
Current literature suggests that corporate social responsibility (CSR) can affect
consumers' attitudes towards an organization and is regarded as a driver for
reputation-building and fostering sustained consumer patronage. Although prior
research has addressed the direct influence of CSR on consumer responses, this
research examined the mediating influence of consumer's perceived organizational
motives within an NGO setting. Given the heightened public attention surrounding
the 2008 Beijing Olympic Games, data were collected from consumers of the Games to
assess their perceptions of the International Olympic Committee's (IOC) socially
responsible initiatives. We hypothesized that consumers of the Games were likely to
cognitively elaborate on CSR messages by way of three specific attribution effects
derived from the literature. The results show that, contingent on CSR awareness,
consumers responded positively to social efforts judged to be values-driven and
stakeholder-driven; and a negative response was seen for efforts judged to be
strategic. These attribution effects influenced various types of patronage and
perceived organizational reputation.
Although many organizations around the world have engaged in corporate social
responsibility (CSR) programing, there is little evidence of social impact. This is
a problematic omission since many programs carry the stigma of marketing ploys used
to bolster organizational image or reduce consumer skepticism. To address this
issue and build on existing scholarship, the purpose of this study was to evaluate
a socially responsible youth employability program in the United Kingdom. The
program was developed through the foundation of a professional British soccer team
to bolster employability and life skills for marginalized London youth. Program
funding was provided by a large multinational bank as part of their CSR agenda.
This evaluation was undertaken to understand the beneficiary impacts associated
with program deployment. Results from the pre-intervention/post-intervention,
sequential mixed-method evaluation show statistically significant differences among
several "soft'' beneficiary outcomes (e.g., self-esteem, self-efficacy, and
perceived marketability). However, results are mixed regarding whether the "hard''
outcome of employment was achieved by program participants. Qualitative findings
buttress these results, indicating a high level of motivation for work, attitude
enhancement, and satisfaction with program delivery.
The attention paid to the influence of organizational philanthropy on consumer
responses has precipitated a shift in the role this practice plays in
organizational dynamics-with philanthropy becoming an increasingly strategic
marketing tool. The authors develop and test a model predicting that: (1) perceived
organizational credibility will mediate the relationship between awareness of
philanthropy and the outcomes of advocacy and financial sacrifice; (2) consumer
social consciousness will moderate the relationship between awareness of
philanthropy and firm credibility, and between credibility and the outcome
variables; and (3) these moderated relationships will be mediated by perceived
credibility. Data obtained from a sample of professional golf patrons support our
assertions. Notably, the findings implicate perceived credibility as a key
intervening variable in the hypothesized relationships for the PGA Tour.
Retail banking is facing many challenges, not least the loss of its customers'
trust and loyalty. The economic crisis is forcing banks to examine their
relationships with stakeholders and to offer greater reassurance that their brand
promises will be delivered. More than ever, banks need to stand for something
positive and valued by stakeholders. One way to achieve this is through paying more
attention to brand values. Our article explores how values are adopted by employees
within a bank. When employees 'live' their brand's values, their behaviour during
customer interactions reflects this, encouraging the strengthening of customer
relationships. Specifically, we test the relationship between leadership style,
employee commitment, and the adoption of values. Data was collected from a survey
of 438 branch employees in a leading Irish retail bank. The study found that a
structured and directive leadership style was effective at encouraging the adoption
of the bank's values. Moreover, when employees are committed to the organisation,
this has a significant impact on their adoption of values. Thus, this study
supports the literature which suggests that leadership and commitment are
prerequisites for values adoption.
Despite the importance of ethical leadership, the impacts of its different facets
on firm-level performance are unclear. Drawing on the resource-based view of the
firm and the group engagement model, we propose that ethical leadership consisting
of leader humane orientation, leader responsibility and sustainability orientation
and leader moderation orientation are beneficial to firm performance, and leader
justice orientation plays moderating roles. We empirically tested this theoretical
framework employing multi-source survey data collected from 264 Chinese firms. The
findings reveal that both leader humane orientation and leader responsibility and
sustainability orientation have positive influences on both firm financial and
social performance, while leader moderation orientation only has positive influence
on firm financial performance. In addition, leader justice orientation positively
moderates the relationship between leader humane orientation and leader
responsibility and sustainability orientation and financial performance as well as
the relationship between leader moderation orientation and social performance.
These findings provide theoretical and practical implications for understanding how
different facets of ethical leadership jointly function to influence firm
performance.
We examine whether investors value the disclosure of first-time standalone
corporate social responsibility (CSR) reports, and whether market valuations differ
between government-controlled and privately controlled firms. Using a matched
sample of Chinese publicly listed firms, we find that CSR initiators have higher
market valuations than matched CSR non-initiators, and CSR initiators controlled by
the central and local governments have lower market valuations than CSR non-
initiators and CSR initiators controlled by private shareholders. Additional
analyses demonstrate that CSR initiators with high CSR reporting quality and
perceived credibility have higher market valuations than CSR initiators with low
CSR reporting quality and medium or low perceived credibility of CSR reporting. We
do not find convincing evidence that CSR mandate, litigation risk, and prior stock
returns affect market reactions to CSR reporting. Overall, we find that the market
values standalone CSR reports, and that CSR reporting quality and perceived
credibility are important factors in market valuation.
Taking emotion and resource perspectives, we examined the daily relationship
between customers' mistreatment of employees and employee sabotage of customers, as
well as employees' individual- and unit-level emotion-based and resource-based
moderators for this relationship. Multilevel analyses of daily survey data from 131
call center employees showed that daily customer mistreatment significantly
predicted customer-directed sabotage. In addition, supporting the emotion
perspective, employees' negative affectivity exacerbated the effect of customer
mistreatment on customer-directed sabotage, whereas employees' self-efficacy for
emotional regulation weakened such effect. Further, supporting the resource
perspective, job tenure and service rule commitment both weakened the effect of
customer mistreatment.
This article studies how financial investors respond to firms' corporate social
responsibility (CSR) performance in terms of their investing behaviors, and how
such behaviors change contingent on an event that provokes their attention and
concerns to CSR. Using the melamine contamination incident in China as a natural
experiment, it is found that neither the individual investors' nor the
institutional investors' behaviors are influenced by firms' CSR performance before
the incident. Nevertheless, in the post-event period, institutional investors'
behaviors are significantly influenced by firms' CSR performance that exceeds a
certain threshold. Furthermore, such an effect diminishes for a better CSR
performance. In comparison, the authors do not find any effects of CSR performance
on individual investors, either before the event or after the event. Finally,
firms' performance and investors' behaviors jointly affect firms' stock returns
after the event but not before the event. This article reconciles the mixed
findings in the literature on the effect of firms' CSR performance on their
financial performance by showing that such an effect exists in a contingent manner.
Furthermore, the authors show that a too low or a too high CSR performance could
lead to undesirable responses from investors. Therefore, managers should pay
attention to optimizing firms' CSR activities.
An important issue for successful recruitment is to increase the pursuit intention
of job seekers. This study discusses such issue by proposing a research model based
on the signaling theory and the expectancy theory. In the model, this study
hypothesizes that the perceived corporate social performance of job seekers
positively affects their job pursuit intention and recommendation intention
indirectly via the mediation of corporate reputation and job advancement prospects.
The proposed hypotheses of this research are empirically tested using the data from
people seeking a job. The empirical findings of this study complement previous
literature by discussing how corporate social performance benefits business
organizations from a perspective of human resources and recruitment. Last,
managerial implications for business leaders and managers are provided.
This policy-capturing study, conducted in China, investigated the cognitive basis
of managerial decisions to make a corporate charitable donation, a global issue in
the context of corporate social responsibility (CSR) research and practice.
Participants (N = 376) responded to a series of scenarios manipulating pressure
from the five stakeholders (government, customers, competitors, employees, and
shareholders) most commonly addressed by CSR research. The independent variables
examined included organizational factors (industry, ownership, previous company
donation, firm size, firm age, and perceived CEO attitudes toward charity) and the
participants' personal values. Results indicate a large positive effect of
shareholder and governmental pressure on the decision with lesser positive effects
from customers and competitors. Surprisingly, employee pressure had a negative
effect on the decision to make a charitable donation. Further, personal values and
perceived CEO attitudes toward charity were significantly related to the decisions
participants made. In line with our theorizing, the findings indicate that a
combination of personal, organizational, and institutional factors was salient in
the minds of decision makers.
Focusing on corporate responsibility (CR) toward employees, this article discusses
how multilayered institutional logics affect the relationship between the firm and
its employee stakeholders. It considers what constitutes CR toward employees and
explores the institutional logics that can shape whether employers treat their
employees as merely means to a strategic end or as ends in themselves.
Specifically, the article examines market-, state-, professional-, and firm-based
institutional logics that influence how employers treat their employees. The
conclusion suggests that external institutional logics both enable and constrain
firms to adopt a more instrumental relationship with their employees. However, some
forms of organizational identity may generate firm-based institutional logics that
enable firms to resist these pressures. Suggestions for future research focusing on
the institutional and organizational drivers behind understanding CR toward
employees are offered.
Different perspectives on corporate social responsibility (CSR) exist, each with
their own agenda. Some emphasise management responsibilities towards stakeholders,
others argue that companies should actively contribute to social goals, and yet
others reject a social responsibility of business beyond legal compliance. In
addition, CSR initiatives relate to different issues, such as labour standards and
corruption. This article analyses what types of CSR initiatives are supported by
political and economic arguments. The distinction between different CSR
perspectives and CSR issues on the one hand and between political and economic
arguments on the other could help to advance the debate on the justification and
welfare impact of CSR. It is argued that ordinary boundary conditions for business
behaviour in a market economy provide support for some, but not all, CSR
initiatives. This has implications for policy priorities. Building on the analysis,
it is proposed that more attention should be paid to the behaviour of large
multinational enterprises in their normal business operations and to CSR issues
with a potentially large impact on market functioning.
Employees' positive affective displays have been widely used as a strategic tool to
enhance service experience and strengthen customer relationships. Companies have
primarily focused their employee training programs on two dimensions of display:
intensity and authenticity. Yet there is limited research on when, how, and why
these two dimensions affect customer reactions. Drawing on the emotions as social
information (EASI) framework (Van Kleef, 2009), we develop a conceptual model in
which display intensity and display authenticity differentially influence customer
loyalty by changing customers' affective reactions and cognitive appraisals.
Further, we propose that the relative impact of either dimension depends on
customers' motivation to understand the environment deeply and accurately (i.e.,
their epistemic motivation). We tested our model in one field study and one
laboratory study. Results across these two studies provide consistent support for
the proposed model and advance our understanding about how different dimensions of
employees' positive affective displays enhance customer reactions. Thus, findings
of this research contribute to knowledge on the interpersonal effects of emotions
in customer-employee interactions.
Recent years have seen a significant increase in stakeholder pressure on firms to
be not only economically sustainable but also from an environmental and social
perspective. Besides operational changes in practices and products companies have
reacted toward this increased pressure from a strategic perspective through
structural changes of their top management team (TMT). A recent addition to the TMT
has been the appointment of the chief officer of corporate social responsibility
(CSR). In this paper, we take a behavioral perspective and investigate how the
employment of a chief officer of CSR to the TMT impact on firm performance.
Specifically, we explore how certain characteristics of the newly appointed chief
executive of CSR impact on a firm's financial performance. We collected secondary,
longitudinal data of listed companies in the United States. Results indicate that
appointing a chief executive of CSR does under certain conditions and
characteristics result in financial performance benefits. Furthermore, the greatest
financial performance benefits can be achieved if the appointee is female and has a
CSR functional background.
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 corporate executives 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.
Civil society organizations (CSOs) attempt to induce corporations to behave in more
socially responsible ways, with a view to raising labour standards. A broader way
of conceptualizing their efforts to influence the policies and practices of
employers is desirable, one centred upon the concept of civil governance. This
recognizes that CSOs not only attempt to shape the behaviour of employers through
the forging of direct, collaborative relationships, but also try to do so
indirectly, with interactions of various kinds with the state being integral.
Drawing on evidence derived from UK-based CSOs involved in work and employment
relations, four types of civil governance are identified and characterized. By
elaborating the concept of civil governance, and demonstrating how different types
of civil governance operate, the research extends our knowledge and understanding
of how CSOs, as increasingly prominent actors in the field of work and employment
relations, operate within, and contribute to, systems of labour governance.
How do business leaders make ethical decisions? Given the significant and wide-
spread impact of business people's decisions on multiple constituents (e.g.,
customers, employees, shareholders, competitors, and suppliers), how they make
decisions matters. Unethical decisions harm the decision makers themselves as well
as others, whereas ethical decisions have the opposite effect. Based on data from a
study on strategic decision making by 16 effective chief executive officers (and
three not-so-effective ones as contrast), I propose a model for ethical decision
making in business in which reasoning (conscious processing) and intuition
(subconscious processing) interact through forming, recalling, and applying moral
principles necessary for long-term success in business. Following the CEOs in the
study, I employ a relatively new theory, rational egoism, as the substantive
content of the model and argue it to be consistent with the requirements of long-
term business success. Besides explaining the processes of forming and applying
principles (integration by essentials and spiraling), I briefly describe rational
egoism and illustrate the model with a contemporary moral dilemma of downsizing. I
conclude with implications for further research and ethical decision making in
business.
Ethical or 'socially sustainable' sourcing mechanisms mandating labour standards
among the suppliers and subcontractors that organisations source goods and services
from are becoming more common. The issue of how labour activist groups such as
trade unions can encourage organisations to adopt and strengthen these mechanisms
within domestic production networks is largely unexplored. Using three cases of
domestic sustainable sourcing campaigns developed by unions in Britain, the
strategies used by labour activists, the characteristics of the organisations
targeted and the motivations of lead firms for improving sourcing practices are
analysed. The article makes a significant contribution by demonstrating that
organisational susceptibility to reputational risk is a key factor influencing the
capacity of activist groups to convince and compel their targets to improve
sourcing practices. It argues that different types of organisations are susceptible
to reputational damage in different ways, that risk events provide opportunities
for unions to strengthen their leverage against target organisations, and that the
multidimensional nature of corporate reputation needs to be better considered for
understanding how campaigns are framed and executed.
This doctoral thesis examines the impact of corporate supplier diversity programs
on corporate purchasers' intention to purchase from women-owned enterprises using
Ajzen's theory of planned behavior. Two hundred and seventy-two corporate
purchasers across a diverse range of industries and geographical regions in the
United States participated in a mail survey in which the participants responded to
questions (capturing the constructs of the theory of planned behavior) related to a
selected scenario. These scenarios (a 2 x 2 factorial design) manipulated two
constructs: male/female of the small enterprise owner and corporate purchasers'
familiarity/unfamiliarity with the enterprise. The goal of the experimental
manipulation was to ensure sufficient variance in the study constructs. The results
provided general support for the theory of planned behavior in capturing how
corporate purchasers make decisions. The findings of the study show that programs
designed to promote women-owned enterprises may be effective in gaining acceptance
from corporate purchasers. Thus, the dissertation makes a contribution to the
corporate social responsibility literature as it reveals that it is possible for
business to incorporate positive duty into its core economic activities without
compromising its financial gains and that the economic-aligned and duty-aligned
orientations can be integrated.
We have conducted a case study of Foxconn's suicide crisis when 12 Foxconn
employees committed suicide during the first 5 months of 2010. In this case study,
we have examined Foxconn's crisis communication strategies during the critical
period and explored the failure in crisis communication in terms of the stakeholder
approach. Our findings show that Foxconn adopted a mixed response strategy by
trying to address the concerns of various stakeholders while refusing to take
responsibility for the suicides. Foxconn's failure in the crisis was due to its
imbalanced stakeholder relations that failed to recognize employees as important
stakeholders, resulting in the failure to provide the ethics of care and justice
that was warranted. Our findings suggest that an ethical stakeholder approach can
complement Benoit's and Coombs' crisis communication theories and strategies.
The central prediction of the current paper is that manufacturer price advertising
may be a less effective tool for influencing demand than retailer price
advertising. We manipulate the source of a price advertisement in an experiment run
on a sample of pickup truck owners. Manufacturer price advertising leads to lower
indicators of potential demand than dealer price advertising, even among consumers
who are experienced with the brand. An econometric analysis of pickup truck sales,
price, and advertising data shows that this effect is large enough to detect in
market data. Manufacturer and dealer price advertising both increase the demand
intercept and the responsiveness of demand to price, but the effects of dealer
price advertising are larger. Although dealer price advertising is more effective
than manufacturer price advertising, manufacturer price advertising may still be
useful to reduce channel conflict.
The purpose of this study is to identify China's indigenous conceptual dimensions
of corporate social responsibility (CSR) and to increase the knowledge and
comprehension about CSR in specific context. We conducted an inductive analysis of
CSR in China based on an open-ended survey of 630 CEOs and business owners in 12
provinces (municipalities) in China. In the survey, we collected CSR sample
responses. After examining the qualitative data, we identified nine dimensions of
CSR, among which six dimensions are similar to their western counterparts; however,
the other three dimensions were never mentioned in previous literature, which
mostly study the cases in the western world. In addition, two of the widely
accepted CSR dimensions in the western world have no embodiments in China. A
comparative study of CSR between China and western countries also unveiled some
unique dimensions of CSR in China. In conclusion, CSR manifested in China is
different from that in western countries, and China's CSR is closely related to its
social and cultural background.
We explore service employees' transient authenticity in their interactions with
customers. Drawing on interviews with employees, we present a model of authenticity
that begins with the salience of a customer's nonservice identity characteristics
and an employee's identification with his or her task, both of which generate a
sense of autonomy in employees. This psychological autonomy enhances the behavioral
expression of authenticity, though such expression may yield costs involving loss
of resources. Authenticity is reflected in uncalculated honesty, viewing a task as
a personal endeavor, and conveying distinctive interpersonal closeness to
customers.
Despite growing interest in ethical consumer behaviour research, ambiguity remains
regarding what motivates consumers to purchase ethical products. While researchers
largely attribute the growth of ethical consumerism to an increase in ethical
consumer concerns and motivations, widened distribution (mainstreaming) of ethical
products, such as fairtrade, questions these assumptions. A model that integrates
both individual and societal values into the theory of planned behaviour is
presented and empirically tested to challenge the assumption that ethical
consumption is driven by ethical considerations alone. Using data sourced from
fairtrade shoppers across the UK, structural equation modelling suggests that
fairtrade purchase intention is driven by both societal and selfinterest values.
This dual value pathway helps address conceptual limitations inherent in the
underlying assumptions of existing ethical purchasing behaviour models and helps
advance understanding of consumers' motivation to purchase ethical products.
Online gambling companies claim that they are ethical providers. They seem
committed to corporate social responsibility (CSR) practices that are aimed at
preventing or minimising the harm associated with their activities. Our empirical
research employed a sample of 209 university student online gamblers, who took part
in an online survey. Our findings suggest that the extent of online problem
gambling is substantial and that it adversely impacts on the gambler's mental and
physical health, social relationships and academic performance. Online problem
gambling seems to be related to the time spent on the Internet and gambling online,
parental/peer gambling and binge drinking. As our findings show that there are
harmful repercussions associated with online gambling, we argue that companies in
this controversial sector cannot reach the higher level of CSR achieved by other
industries. Nevertheless, they can gain legitimacy on the basis of their CSR
engagement at a transactional level, and so, by meeting their legal and ethical
commitments and behaving with transparency and fairness, the integrity of the
company can be ensured. We also argue that current failures in the implementation
and control of CSR policies, the reliance on revenue from problem gamblers' losses,
and controversial marketing activities appear to constitute the main obstacles in
the prevention or minimisation of harm related to online gambling. As online
gambling companies must be responsible for the harm related to their activities, we
suggest that CSR policies should be fully implemented, monitored and clearly
reported; all forms of advertising should be reduced substantially; and unfair or
misleading promotional techniques should be banned. The industry should not rely on
revenue from problem gamblers, nor should their behaviour be reinforced by
marketing activities (i.e. rewards). We realise, however, that it is unrealistic to
expect the online gambling industry to prioritise harm prevention over revenue
maximisation. Policy makers and regulators, therefore, would need to become
involved if the actions suggested above are to be undertaken. CSR is paramount to
minimise harm and provide a healthier user experience in this business sector, but
it also poses marketing dilemmas. We support a global collaborative approach for
the online gambling industry, as harm related to gambling is a public health issue.
This paper examines how a firm's financial distress and the legal environment
regarding the ease of bankruptcy reorganization can alter product market
competition and supplier-buyer relationships. We identify three effects-predation,
bail-out, and abetment-that can change firms' behavior from their actions in the
absence of financial distress. The predation effect increases competition before
potential bankruptcy as the nondistressed competitor behaves as if it has some
first-mover advantage that could benefit a supplier with price control. The bail-
out effect reflects the supplier's incentive to grant the distressed firm
concessions to preserve competition, improving supply chain efficiency and
providing support for the exclusivity rule in Chapter 11 of the United States
Bankruptcy Code when the supplier and the distressed firm are financially linked.
The abetment effect is that the supplier may deliberately abet the competitor's
predation, leading to increased operational disadvantages for the distressed firm
before bankruptcy. Together these effects stress that a firm's bankruptcy potential
can hurt its competitors and benefit its suppliers/customers. They also provide
guidelines for firms' operational decisions in such situations, a rationale for
observed firm actions surrounding bankruptcies, and motivation for policies
supporting reorganization and relaxing broad enforcement of nondiscriminatory
pricing regulations.
Research examining consumer responses to the provision of nutritional information
as part of restaurant menus has produced mixed results. In light of pending
legislation requiring the provision of nutritional information, the authors examine
the how corporate social responsibility (CSR) impacts consumer service evaluation
of restaurants. Findings from three studies demonstrate that the relationship
between consumer attitudes toward the disclosure of nutrition information and their
subsequent evaluation of the food provider is impacted by CSR-related initiatives.
Studies one and two find that consumer evaluations are enhanced when the firm has
an existing reputation for CSR and when the firm includes healthy product options
as part of the introduction of the nutritional information. Study 3 finds these
effects are particularly strong with fast-food restaurants. Overall, the findings
suggest that, for some firms, the introduction of the legislation provides an
opportunity to strengthen relationships with customers and gain advantage over some
competitors.
This paper analyzes electronic marketplaces with different ownership structures:
biased marketplaces and neutral marketplaces. Biased marketplaces can be either
buyer-owned or supplier-owned, whereas neutral marketplaces are owned by
independent third parties. We develop a single-period model, with fulfilled
expectations equilibrium. The buyers experience positive network effects that are a
function of the number of suppliers and the suppliers receive similar positive
network effects depending on the number of buyers. We develop a general model with
atomistic buyers and suppliers. We find that biased marketplaces set prices to
induce greater participation (demand) from both buyers and suppliers compared to a
neutral marketplace. This counterintuitive result can be understood in the context
of the positive cross-network effects experienced by buyers and suppliers and the
added benefit to the owner of a biased marketplace from participating in the
marketplace. Biased marketplaces also provide greater social welfare compared to
neutral marketplaces.
This research aims to explore the relationship between corporate governance and
CSR: What are the major factors that play a direct role in the establishment of
this relationship? How does context and institutional background impact upon the
relationship between CSR and Governance? Using in-depth semi-structured interviews
from two types of governance systems in three countries over three years, this
study has demonstrated that in practice, within different settings, CSR is being
used both as a strategy as well as a reaction to different drivers. We call this
adaptive governance where governance can be defined as a flexible system of action
incorporating strategic and monitoring activities that determines the way a company
enacts its responsibilities to its shareholders and stakeholders and which is
determined at any given time by the interrelationship of institutional drivers and
behavioural norms. Governance systems and their interrelationships with CSR are
demonstrated as fluid according to the national and institutional context, economic
situation and industry impact. In the eyes of practitioners corporate governance
includes both structural and behavioural factors as well as responsibilities and
actions towards shareholders and stakeholders. Contextual factors that this
research highlights to be important to the incorporation of CSR into governance
include the economic environment, national governance system, regulation and soft
law, shareholders, national culture, behavioural norms and industry impacts.
Hypotheses on the impact of institutional contexts, industry impacts and economic
situations on different types of CSR actions are proposed for further research.
Understanding firms' behavior across countries - a key concern in the international
business literature - requires the joint consideration of both institutional
influences and firms' profit maximization goals. In the corporate social
responsibility (CSR) area, however, researchers have utilized theories that take
into account only one or the other - institutional theory, which explains CSR as
legitimacy-seeking activities in line with national-level institutions, or
economic-based approaches that consider CSR effects only in terms of firm
profitability. While an institutional argument implies convergence in CSR behavior
among firms in similar institutional contexts, profit maximization logic treats CSR
as a firm-specific behavior. We integrate these perspectives by demonstrating the
moderating effects of firms' economic motivations for seeking legitimacy on the
relationship between institutional environment and CSR responsiveness. We argue
that variations in firms' economic visibility and economic vulnerability can bring
about differences in their need for societal goodwill, and in turn, their
legitimacy seeking. Findings on a database of apparel firms' employee-related CSR
across 23 countries support this overall argument. The integration of such
fundamentally different theoretical perspectives allows us to contribute new
theoretical insights to international business on the influence of national
institutions on firms' behavior.
This study examines the social impacts of labor-related corporate social
responsibility (CSR) policies or corporate codes of conduct on upholding labor
standards through a case study of CSR discourses and codes implementation of Reebok
- a leading branded company enjoying a high-profiled image for its human rights
achievement - in a large Taiwanese-invested athletic footwear factory located in
South China. I find although implementation of Reebok labor-related codes has
resulted in a "race to ethical and legal minimum'' labor standards when notoriously
inhumane and seriously illegal labor rights abuses were curbed, Chinese workers
were forced to work harder and faster but, earned less payment and the employee-
elected trade union installed through codes implementation operated more like a
"company union'' rather than an autonomous workers' organization representing
worker' interests. In order to explain the paradoxical effects of Reebok labor-
related codes on labor standards, I argue the result is determined by both
structural forces and agency-related factors embedded in industrial, national and
local contexts. To put it shortly, I find the effectiveness of Reebok labor-related
codes is constrained not only by unsolved tension between Reebok's impetus for
profit maximization and commitment to workers' human rights, but also by hard-nosed
competition realities at marketplace, and Chinese government's insufficient
protection of labor rights. Despite drawing merely from a single case study, these
findings illuminate key determinants inhibiting the effectiveness of labor-related
CSR policies or codes in upholding labor standards, and hence two possible way-outs
of the deadlock: (1) sharing cost for improving labor standards among key players
in global supply chain; and (2) combining regulatory power of voluntary codes and
compulsory state legislations.
Corporate social responsibility (CSR) movement against labor abuses has gained
momentum globally since the 1990s when many corporations adopted codes of conduct
to regulate labor practices in their global supply chains. However, workers'
participation in the process is relatively weak until very recently, when new
worker empowerment programs are increasingly initiated. Using conceptual tool
created by stakeholder theorists, this article examines dynamics and performance of
worker participation in implementation process of codes of conduct through a case
study of CSR practices of Reebok at one of its footwear supplier factories in south
China. Empirical data was collected during 2002-2005 through participant
observation, in-depth interviews, and document reviews.
The common discourse on intellectual property rights rests mainly on utilitarian
ground, with implications on the question of justice as well as moral significance.
It runs like this: Intellectual property rights are to reward the originators for
his/her intellectual labour mainly in monetary terms, thereby providing incentives
for originators to engage in future innovative labouring. Without such incentives,
few, if not none, will engage in creative activities and the whole human community
will, thereby, suffer because of reduced inventions. However, such utilitarian
argument on piracy as de-motivation may not be necessarily justified. In fact,
intellectual property arrangement is one among different institutions concerning
how the society may handle new ideas and creative works. In reality, private
ownership over one's intellectual product is merely a modern western concept that
is being aEuro(1)advertised' as being normative, which, by itself, is highly
debatable. Alarming still, such normative argument assumes both justness and moral
dimensions. This article will analyse whether such argument is philosophically
sound.
Managing stakeholders is an important managerial aspect of corporate social
responsibility. Employee stakeholder is one of the primary stakeholders that are
critical to a company. Previous studies have shown inconclusive findings regarding
the performance impact of managing this stakeholder, with some identifying little
impact while others finding a positive association. This study further explores
this issue in the context of foreign companies' subsidiaries in China. A potential
mediating mechanism (i.e., customer orientation) between employee stakeholder
orientation and performance (both financial performance and innovation performance)
was proposed; a sample of 103 Chinese subsidiaries of foreign companies which have
new product development responsibilities was used to test hypotheses. A
subsidiary's employee orientation was found to show a significant positive
relationship with its product innovation performance, but no significant
relationship with its financial results. Moreover, employee orientation showed a
significant indirect relationship with both performance outcomes through customer
orientation.
This paper reports a study of the key success factors of what have been recognized
as successful service enterprises in China, each considered representative of its
respective industry. The grounded theory approach was used to analyze information
collected from these enterprises, resulting in the identification of the attributes
shared by these enterprises: customer-oriented service, service management, service
innovation, and corporate social responsibility. Based on these attributes, a
survey was conducted to verify the relationships among these attributes and
important outcomes, namely customer satisfaction, perceived service quality, and
enterprise reputation. The results of the statistical analysis indicate that the
four attributes have positive impacts on service outcomes. The findings are of far-
reaching importance in view of the vast potential service markets in China.
The influence of corporate social performance (CSP) on stakeholders is one of the
focal issues in corporate social responsibility (CSR) research. Using data of
listed companies in China, this paper examines whether CSR behavior in the form of
charitable donations garners a positive reaction from suppliers. Results derived
from both level and change model regressions show that superior CSP makes it easier
for a firm to obtain trade credit from suppliers, although the effect is
significant only in non-state-owned enterprises (non-SOEs). The results are robust
to various measures of CSP and endogeneity tests. The results support the strategic
philanthropy view and apply stakeholder theory in supply chain, that strategic CSR
can help firms to attract suppliers and consolidate cooperative relationships with
them, which in turn benefits the firms in terms of more trade credit financing from
suppliers. This paper also shows that state-owned enterprises and non-SOEs have
different CSR intentions and use CSR to achieve strategic goals in different ways.
The conclusions drawn from this study provide practical guidance on CSR strategy,
suggesting that CSR activities can help a firm in transition economies to enhance
its corporate image, establish and consolidate the good relationship with
suppliers, and obtain economic benefits or achieve long-term business objectives.
High-performance work systems (HPWS)-performance research has dominated innovative
human resource management studies for two decades. However, mainstream HPWS
research has paid little attention to employees' perceptions of HPWS, or to the
relationship between HPWS and corporate social performance (CSP). The influence of
CSP on employee outcomes such as organizational commitment and organizational
citizenship behaviour (OCB) has thus been similarly neglected. This paper seeks to
investigate these missing links in literature using data collected from a sample of
700 employees in China. The findings demonstrate that HPWS is positively related to
HPWS satisfaction and employees' perceptions of CSP. HPWS satisfaction fully
mediates the relationship between HPWS and employees' affective commitment (AC).
There are multiple mediators between HPWS and OCB, indicating more complicated
mechanisms through which HPWS leads to desired HR outcomes. Employees' perceived
CSP has a significant influence on HPWS satisfaction, AC and OCB, suggesting firms
should place a premium on achieving a reputation as being socially responsible.
Prior theory claims that buyback and revenue-sharing contracts achieve equivalent
channel-coordinating solutions when applied in a dyadic supplier-retailer setting.
This suggests that a supplier should be indifferent between the two contracts.
However, the sequence and magnitude of costs and revenues (i.e., losses and gains)
vary significantly between the contracts, suggesting the supplier's preference of
contract type, and associated contract parameter values, may vary with the level of
loss aversion. We investigate this phenomenon through two studies. The first is a
preliminary study investigating whether human suppliers are indeed indifferent
between these two contracts. Using a controlled laboratory experiment, with human
subjects taking on the role of the supplier having to choose between contracts, we
find that contract preferences change with the ratio of overage and underage costs
for the channel (i.e., the newsvendor critical ratio). In particular, a buyback
contract is preferred for products with low critical ratio, whereas revenue sharing
is preferred for products with high critical ratio. We show these results are
consistent with the behavioral tendency of loss aversion and are more significant
for subjects who exhibit higher loss aversion tendencies in an out of context task.
In the second (main) study, we examine differences in the performance of buyback
and revenue-sharing contracts when suppliers have the authority to set contract
parameters. We find that the contract frame influences the way parameters are set
and the critical ratio again plays an important role. More specifically, revenue-
sharing contracts are more profitable for the supplier than buyback contracts in a
high critical ratio environment when accounting for the supplier's parameter-
specification behavior. Also, there is little difference in performance between the
two contracts in a low critical ratio environment. These results can help inform
supply managers on what types of contracts to use in different critical ratio
settings.
Emerging markets experience institutional and social changes over time that present
different stakeholder expectations for multinational corporations (MNCs). MNCs are
often accused of social misdeeds and experience public crises during the changes,
leaving questions on how they adapt to the local social transition to sustain
operations. Conventional adaptation strategies put too much emphasis on maximizing
economic returns by arbitraging national differences and catering to local market
and consumer characteristics. The economic orientation may fail to address evolving
and diverse stakeholder expectations, easily leading to public crises. This study
conceptualizes economic adaptation and social adaptation as two sets of knowledge
and capabilities that would have equally important impacts on MNCs' sustainable
operations in emerging markets. The empirical testing examines consumer rights-
related public crises experienced by 180 MNCs in China. The results suggest that
MNCs' social adaptation activities have significantly positive effects in
mitigating public crises while certain aspects of economic adaption, such as early
entry into China, reliance on local leadership, and speedy expansion of local
employees, lead to public crises. The significant interaction effects confirm that
MNCs need to follow a balanced approach, paying attention to both economic and
social components to avoid public crises and sustain growth in emerging markets.
Employing a unique dataset of Chinese nonlisted firms, this paper investigates the
effects of the presence of 19 governance structures on 20 employees' interest
indicators. In general, we find that firms with the governance structures pay
workers higher hourly wages, require less monthly working hours, and have a smaller
chance of wage arrears. Meanwhile, the shares of total wage and welfare
expenditures in total sales revenue are lower in these firms, which results in
higher profitability. Moreover, firms with the governance structures invest
significantly more into training and provide employees with better fringe benefits.
Considering the low labor protection standard and the weak external regulations of
China's labor market, we explain the positive findings thusly: corporate governance
structures induce managers to adjust wage payments to the ``efficiency wage''
level, which is the best balance point for the interests of both shareholders and
employees and, therefore, for maintaining the stakeholder relationships. We also
find the governance structures that give blockholders superpower are negatively
associated with employees interests. These results highlight the importance of
giving enough discretion to managers in order to successfully find the common
ground for creating mutual values for shareholders and employees.
In this paper, we consider a buyer who designs a product and owns the brand, yet
outsources the production to a supplier. Both the buyer and the supplier incur
quality-related costs, e.g., costs of customer goodwill and future market share
loss by the buyer and warranty-related costs shared by both the buyer and the
supplier whenever a nonconforming item is sold to a customer. Therefore, both
parties have an incentive to invest in quality-improvement efforts. This paper
explores the roles of different parties in a supply chain in quality improvement.
We show that the buyer's involvement can have a significant impact on the profits
of both parties and of the supply chain as a whole, and he cannot cede the
responsibility of quality improvement to the supplier in many cases. We also
investigate how quality-improvement decisions interact with operational decisions
such as the buyer's order quantity and the supplier's production lot size.
Food safety problems in China, such as deadly tainted milk, have attracted growing
attention from a corporate social responsibility (CSR) perspective. To examine the
forces that potentially drive CSR behavior within the Chinese food industry, our
study is organized as follows. First, a review is conducted on the unique history
of CSR in China as well as some of the major Chinese food scandals that have taken
place. The primary drivers of CSR in China that have been suggested in the
literature are then summarized. Next, new institutional theory perspectives are
drawn upon to analyze three forces that potentially affect the behavior of Chinese
firms: (a) coercive isomorphism, (b) mimetic processes, and (c) normative
pressures. Based on a questionnaire survey of 164 Chinese managers and employees,
the CSR behavior of firms operating in the Chinese food industry is found to only
be significantly affected by the institutional factor of normative pressures. The
study concludes with its limitations as well as the implications of the findings.
This paper argues that sweatshop workers' choices to accept the conditions of their
employment are morally significant, both as an exercise of their autonomy and as an
expression of their preferences. This fact establishes a moral claim against
interference in the conditions of sweatshop labor by third parties such as
governments or consumer boycott groups. it should also lead us to doubt those who
call for MNEs to voluntarily improve working conditions, at least when their
arguments are based on the claim that workers have a moral right to such
improvement. These conclusions are defended against three objections: 1) that
sweatshop workers' consent to the conditions of their labor is not fully voluntary,
2) that sweatshops' offer of additional labor options is part of an overall package
that actually harms workers, 3) that even if sweatshop labor benefits workers, it
is nevertheless wrongfully exploitative.