A selection of interesting research and articles we found recently – what influences corporate social responsibility (CSR) and what does CSR influence?

What do we know about CSR? Review and Research Agenda
Herman Aguinis and Ante Glavas review the corporate social responsibility (CSR) literature based on 588 journal articles and 102 books and book chapters, as the rest of this abstract shows. They offer a multilevel and multidisciplinary theoretical framework that synthesizes and integrates the literature at the institutional, organizational, and individual levels of analysis. The framework includes reactive and proactive predictors of CSR actions and policies and the outcomes of such actions and policies, which they classify as primarily affecting internal (i.e., internal outcomes) or external (i.e., external outcomes) stakeholders.

The framework includes variables that explain underlying mechanisms (i.e., relationship- and value-based mediator variables) of CSR–outcomes relationships and contingency effects (i.e., people-, place-, price-, and profile-based moderator variables) that explain conditions under which the relationship between CSR and its outcomes change.

The authors’ review reveals important knowledge gaps related to the adoption of different theoretical orientations by researchers studying CSR at different levels of analysis, the need to understand underlying mechanisms linking CSR with outcomes, the need for research at micro levels of analysis (i.e., individuals and teams), and the need for methodological approaches that will help address these substantive knowledge gaps. Accordingly, they offer a detailed research agenda for the future, based on a multilevel perspective that aims to integrate diverse theoretical frameworks as well as develop an understanding of underlying mechanisms and microfoundations of CSR (i.e., foundations based on individual action and interactions). The authors also provide specific suggestions regarding research design, measurement, and data-analytic approaches that will be instrumental in carrying out their proposed research agenda.

Read more in: Herman Aguinis and Ante Glavas 2012. What We Know and Don’t Know About Corporate Social Responsibility: A Review and Research Agenda.
Journal of Management, 38(4), 932-968.

 

Do different kinds of CSR affect financial outcomes differently?  
Yes, according to Maretno Harjoto and Hoje Jo who examined how sell-side analysts interpret firms’ corporate social responsibility (CSR) activities. Specifically, the authors examine the differential impact of overall, legal and normative CSR on the analysts’ earnings forecast dispersion, stock return volatility, cost of equity capital and firm value. Using a sample of U.S. public firms during 1993–2009, they found that overall CSR intensities reduce analyst dispersion of earnings forecast, volatility of stock return and cost of capital (COC), and increase firm value. However, this impact is reduced for firms with better accounting and disclosure quality.

When the researchers disaggregated CSR into legal and normative CSR, they found that legal (normative) CSR decreases (increases) analysts’ dispersion, stock return volatility and COC, while legal (normative) CSR increases (decreases) firm value. The sell-side analysts tend to have less (greater) information asymmetry regarding the net benefits of pursuing CSR that is (not) required by laws. The researchers found, however, that the benefit of having normative CSR realised in 1 year lag such that analyst dispersion, stock return volatility, COC decreased respectively, and firm value increased. Furthermore, they found that the benefit of normative CSR is offset for firms with higher accounting and disclosure quality.

For more information, see: Maretno A. Harjoto and Hoje Jo. 2015. Legal vs. Normative CSR: Differential Impact on Analyst Dispersion, Stock Return Volatility, Cost of Capital, and Firm Value.
Journal of Business Ethics, 128(1), 1-20.

 

Attitudes to liberalism as determinants of greenwashing
Previous literature has shown contradictory results regarding the relationship between economic liberalism at the country level and firms’ engagement in corporate social action (CSA). Because liberalism is associated with individualism, it is often assumed that firms will engage in mostly symbolic rather than substantive social and environmental actions; in other words, they will practise “greenwashing.” To understand how cultural beliefs in the virtues of liberalism affect the likelihood of greenwashing, Thomas Roulet and Samuel Touboul disentangle the effects of the distinct and co-existing beliefs in the virtues of economic liberalism. They begin by conducting an exploratory qualitative analysis of managers’ sentiments on this matter, using focus groups. They then use these investigative elements to articulate a comparison of the conflicting theoretical arguments: in liberal contexts, are firms, as social entities, inherently selfish or pro-active when it comes to CSA?

The authors empirically test their hypotheses on a large-scale dataset. Finally, they show paradoxically that in countries where beliefs in the virtues of competition are strong, firms are more likely to greenwash, while in countries where beliefs in the virtues of individual responsibility are prominent, firms are more likely to focus on concrete actions. These findings suggest that in contexts where weak governments are seen as ideal, firms might feel the need to step into fill institutional voids, in contexts in which competitive mindsets dominate, this tendency is counterbalanced.

For fuller information, read: Thomas J. Roulet and Samuel Touboul. 2015. The Intentions with Which the Road is Paved: Attitudes to Liberalism as Determinants of Greenwashing.
Journal of Business Ethics, 128(2), 305-320.

 

CSR as corporate political activity: Observations on IKEA’s CSR identity–image dynamics
Mette Morsing and Anne Roepstorff have developed a conceptual framework to understand how a company’s CSR identity becomes defined as a political activity destabilising the strong identity–image relations. Morsing and Roepstorff draw on theories of political CSR and organisational identity–image relations to study how CSR emerges as a corporate political activity in a context where the corporate CSR work is first appreciated and later critiqued by the public in the wake of socio-political events. They analyse the micro-organisational processes in the context of macro-political level changes, and refer to this as the ‘identity–image dynamics of political CSR’.

Concretely, the authors describe in two vignettes how IKEA’s declared ‘apolitical and neutral’ CSR identity becomes entangled with national and international socio-political events that critically challenge the corporate engagement prior to national understandings of citizenship rights. In this process, IKEA’s CSR identity becomes defined as a political and non-neutral activity. This article contributes by bringing attention to the organisational level dynamics of political CSR by offering a conceptualisation of how global and local socio-political events may disturb the alignment between CSR identity and image and challenge the corporate CSR work beyond managerial control.

The full paper is at: Mette Morsing and Anne Roepstorff. 2015. CSR as Corporate Political Activity: Observations on IKEA’s CSR Identity–Image Dynamics.
Journal of Business Ethics, 128(2), 395-409.

 

National context matters for CSR in SMEs in 6 European countries
Yves Fassin and his team report 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, the researcher team found that the SME owner–managers’ mental models show a few commonalities as well as a number of differences across the different country samples. They interpret those differences by linking individual cognition to macro-environmental variables, such as language, national traditions and dissemination mechanisms.

The results of this 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 the 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.

Read further in: Yves Fassin, Andrea Werner, Annick Van Rossem, Silvana Signori, Elisabet Garriga, Heidi von Weltzien Hoivik and Hans-Jörg Schlierer. 2015. CSR and Related Terms in SME Owner–Managers’ Mental Models in Six European Countries: National Context Matters.
Journal of Business Ethics, 128(2), 433-456.