This week our research tidbits bring together some recent advances in CSR delivery and measurement.
Moving beyond voluntary CSR
Although the literature on corporate social responsibility (CSR) has discussed the scope and meaning of CSR extensively, confusion still exists regarding how to define the concept. One controversial issue deals with the changing legal status of CSR (i.e., the voluntary vs. mandatory nature of the concept).
Based on a review of CSR definitions and meta-studies on CSR definitions, the authors find that the majority of definitions leans toward voluntary CSR. However, some recent regulatory amendments toward mandatory CSR have called into question the established idea of CSR as merely a managerial tool of self-regulation. In this paper, the authors juxtapose the evolution of CSR in India against the scholarly literature discussing voluntary-versus-mandatory CSR to understand the recent shift toward a new conceptualisation of CSR as a form of co-regulation that includes elements of both voluntary and mandatory regulation.
The Indian Companies Act 2013 (Section 135) is a remarkable example in that it replaced an older version from 1956, taking a bold step toward the integration of voluntary and mandatory aspects in the application of CSR. The authors present practical implications of the Indian case for businesses and discuss implications for CSR theory development; the authors particularly consider the evolution of the business and society relationship from a voluntary soft law approach to CSR to an increasingly hard law approach and transitory hybrid forms in-between like soft–hard law and hard–soft law.
Lucia Gatti, Babitha Vishwanath, Peter Seele and Bertil Cottier. 2019. Are We Moving Beyond Voluntary CSR? Exploring Theoretical and Managerial Implications of Mandatory CSR Resulting from the New Indian Companies Act.
Journal of Business Ethics, 160(4), 961–972.
CSR and shareholder value re-examined
In the literature, CSR’s roles on firm performance are found to be positive, negative, or neutral. This inconclusive pattern suggests there may be a more complicated mechanism at work than the traditional focus on simple linear associations.
The authors propose and test an inverted-U-shaped relationship between CSR and shareholder value, the fundamental measure of firm performance. Further, the authors incorporate a critical firm attribute, marketing capability, to moderate the nonlinear link between CSR and shareholder value, thereby exploring a previous understudied area involving the interplay between CSR and market-side competency.
The results show that an initial increase in CSR engagement positively drives firm shareholder value, but the effect turns negative when a firm pursues excessive CSR engagement. Notably, however, this negative association does not apply to firms that have a high marketing capability. The research generates meaningful implications for a stakeholder view of CSR, strategic management, firm valuation, resource-based theories, and business practices.
Wenbin Sun, Shanji Yao and Rahul Govind. 2019. Reexamining Corporate Social Responsibility and Shareholder Value: The Inverted-U-Shaped Relationship and the Moderation of Marketing Capability.
Journal of Business Ethics, 160(4), 1001–1017.
Addressing both business goals and social needs with innovation
This research examines whether and how firms can meet both business goals and social needs through their innovation activities. The authors examine antecedents and consequences of innovation that addresses social needs, in addition to business goals, using data collected from European for-profit firms.
The authors find that innovation including social intent is more likely under conditions of high market turbulence, which represents an important form of demand-driven threats. Meanwhile, the authors find no relationship with competitive intensity, a form of pressure driven threats. Together, these findings suggest that customers and other stakeholders are more likely to drive firms to focus on the social dimension than competitors. The findings also indicate that innovation including social intent is positively related with customer acceptance, which supports the notion that innovation can meet both business goals and social needs. This relationship is partially mediated by perceived market turbulence, which highlights the importance of customers and their demands for social responsibility.
This research advances both theory and practice as the authors add to existing discourses on innovation by providing a broader than common perspective that includes the social dimension as a potential part of innovation conducted to meet business goals. Furthermore, the authors shed light on how and when firms are likely to include intended social outcomes in their innovation (with resultant improvement in performance) and when they are less likely to do so, which highlights a potential untapped opportunity.
Marina Candi, Monia Melia and Maria Colurcio. 2019. Two Birds with One Stone: The Quest for Addressing Both Business Goals and Social Needs with Innovation.
Journal of Business Ethics, 160(4), 1019–1033.
Human rights, the capability approach and corporate responsibility
The capability approach is gaining momentum as a theory of corporate responsibility and business ethics at a time when the UN Guiding Principles have become a most important framework. A novel approach is now emerging that seeks to understand and specify human rights obligations of businesses within the framework provided by the capability approach.
This article partially examines the triad corporate responsibility–human rights–capability approach by exploring the relationship between human rights and capabilities. Thus, it offers conceptual and practical implications for a human rights perspective on corporate responsibility. The bulk of the thesis focuses on studying Nussbaum’s and Sen’s claim that human rights are entitlements to capabilities by means of a discussion of the notion of human dignity.
In particular, the authors show the capability approach’s ability to dissipate theoretical and practical challenges posed by the notion of dignity. This article does not offer a detailed explanation of the implications of the investigation for human rights responsibilities of business. However, an outline of its potential contribution toward unfolding those obligations, conceptually and practically, is provided.
César González-Cantón, Sonia Boulos and Pablo Sánchez-Garrido. 2019. Exploring the Link Between Human Rights, the Capability Approach and Corporate Responsibility.
Journal of Business Ethics, 160(4), 865–879.
Understanding CSR assurance practice
The prior research on different forms of what can be referred to as corporate social responsibility (CSR) reporting is vast. As CSR reporting becomes more commonplace, the theoretical and empirical analysis of this type of reporting has matured and both academics and practitioners have begun to explore the possibility of having CSR disclosures assured.
This paper makes an important contribution by synthesising the findings on emerging forms of CSR assurance practice. It summarises the ground covered to date and provides a comprehensive review of the literature on the characterises, use and limitations of CSR assurance services.
It develops a conceptual model which distinguishes between determinants of CSR assurance at the national- and firm-level and shows how the nature of assurance services, a company’s reporting infrastructure and current technologies of assurance enable or constrain the benefits of having CSR disclosures assured. Areas for future research, based on identified weaknesses in the current CSR assurance environment, are also identified.
Warren Maroun. 2020. A Conceptual Model for Understanding Corporate Social Responsibility Assurance Practice.
Journal of Business Ethics, 161(1), 187–209.
Don’t abuse psychological freedom in corporate–community engagement
This article analyses the ethics of how community engagement and dialogue as applied by a mining corporation in Chile led to erosion of the community’s psychological freedom despite being aligned with best practice. This article details how a mining company squeezed the psychological freedom of the community in order to obtain an agreement between the period of 2000 and 2016.
The findings focus particularly on a 9-month period between 2015 and 2016 when the company undertook intense community engagement. The article identifies six corporate action phases undertaken which curtailed the community’s psychological freedom as paying off local leaders; challenging via courts of law; co-opting community lawyers; prohibiting a key debate during dialogue; and remaining silent after failing to honour its own self-imposed rule.
The findings label the company’s community engagement as contradictory; while it conducted transitional and transformational engagement (in line with best practice) in formal spaces, it also engaged in unethical strategies in the informal spaces of community engagement. The result was overall community consent and an even more fragmented community.
This article finds that when it limits the psychological freedom of participants, who are already divided as a group, corporate–community engagement (CCE) can be viewed as ethically problematic. Based on analysis of the literature and an empirical case analysis, this article contributes a test for assessing the ethics of CCE.
Rajiv Maher. 2019. Squeezing Psychological Freedom in Corporate–Community Engagement.
Journal of Business Ethics, 160(4), 1047–1066.
‘Business unusual’: Building BoP 3.0
With over three billion people currently living below the poverty line, finding better ways to lift people out of poverty is a concern of scholars from a range of disciplines. Within Management Studies, the focus is on developing market-based solutions to poverty alleviation through Bottom/Base-of-the-Pyramid (BoP) initiatives. To date, these have enjoyed limited success, sometimes even exacerbating the problems they attempt to solve.
As a result, there is a growing academic and practitioner push for a third iteration—BoP 3.0—that moves closer to a sustainable development model of poverty alleviation. Through a grounded theory study of 21 Philippines-based organisations implementing poverty alleviation initiatives at the community level, this paper seeks to add to the existing suite of tools and guidance in the BoP field. It does so by questioning how these organisations approach the development and implementation of market-based approaches to poverty alleviation.
The results suggest that these organisations adopt a more community-centric approach, focusing on the creation of a self-reliant community before all else. The authors find this to be the result of a deeper understanding of the drivers of poverty in the communities they work with. Through the extrapolation of key themes and issues in the data, the authors propose a new conceptual model for building BoP 3.0 initiatives.
This model consists of three intertwined theoretical dimensions: understanding issues as matters of concern; identifying limitations; and navigating time. These elements are linked by three active phases that allowed the organisations to move from one dimension to the next: sensemaking; entrainment; and investment.
Danielle A. Chmielewski, Krzysztof Dembek & Jennifer R. Beckett. 2020. ‘Business Unusual’: Building BoP 3.0.
Journal of Business Ethics, 161(1), 211–229.