Our pick of research articles this week focus on the drivers putting CSR into practice.
Needed: Intense commitment to ethical mission
What is the impact of mission on ethical business culture? This question was analysed through a qualitative case study of a large nonprofit organisation in the human services industry with a solid history of ethical business practices and consistent use of a values-based decision-making model.
This research explored ethical decision making, ethical business culture, and congruence between enacted and espoused institutional values. Institutional values were identified, and the following pair of research questions was examined: To what extent were incongruent values found between espoused and enacted values? To what extent did incongruent values impact the ethical business culture?
Incongruent enacted values were present in the culture, but negative impact was diminished by a larger number of congruent enacted values. Additional findings revealed that an intense commitment to the mission by all employees was the common thread that wound throughout the organisation’s ethical business culture and essentially abrogated the undesirable effects of incongruent and negative values.
Jana L. Craft. 2018. Common Thread: The Impact of Mission on Ethical Business Culture. A Case Study.
Journal of Business Ethics, 149(1), 127–145.
Employee volunteering is a topic of growing importance in workplaces around the globe. Likewise, research on employee volunteering has seen a marked increase over the past decade, particularly in leading management and psychology outlets.
Despite this increasing visibility, there is little consensus on the state of the literature or directions for the future. In particular, research is currently based on a variety of different definitions and operationalisations and is spread across several disciplines. In order to advance management research on employee volunteering, this review focuses on three contributions:
(1) clarifying the definition and various forms of employee volunteering,
(2) reviewing the current body of knowledge on employee volunteering, and
(3) providing a future research agenda for the role of employee volunteering in the workplace.
Jessica B. Rodell, Heiko Breitsohl, Melanie Schröder, David J. Keating. 2016. Employee Volunteering: A Review and Framework for Future Research.
Journal of Management, Vol 42(1), 55-84.
Support for sustainability is critical
The study empirically investigates the relationship between corporate governance and the triple bottom line sustainability performance through the lens of agency theory and stakeholder theory. The authors claim, in fact, that no single theory fully accounts for all the hypothesised relationships. The authors measure sustainability performance through manual content analysis on sustainability reports of the US-based companies.
The study extends the existing literature by investigating the impact of selected corporate governance mechanisms on each dimension of sustainability performance, as defined by the GRI framework. The authors’ approach allows to identify which governance mechanisms foster triple bottom line performance, also revealing that some mechanisms fit only specific dimension(s) of sustainability. The fact-based findings provide support for a new beginning in the theorising process in which the theories must try not only to provide rationale for the impact of corporate governance on sustainability, but also to explain which dimension of sustainability might be more affected.
The most important implication for practitioners is the support for sustainability practices, which may be gained through implementation of particular corporate governance mechanisms. The findings contribute also to the improvement of the ongoing standard setting process, in particular as it concerns the in-depth revision of the economic dimension of sustainability carried out under the new GRI framework.
Nazim Hussain, Ugo Rigoni and René P. Orij. 2018. Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance.
Journal of Business Ethics, 149(2), 411–432.
Importance of brand equity in CSR impact
The intention of this paper is to examine the impact of corporate social responsibility disclosure on financial performance in a case study of listed Pharmaceutical firms in Pakistan. For this case study, the panel data of 10 years from 2005 to 2014 are obtained through content analysis of annual reports. Quantitative tools were used to measure variables studied in which index was developed and used scoring methodology. Further, brand equity is introduced as a mediator between CSRD and financial performance.
The results of content analysis revealed that GSK Pakistan laboratories involved in greater level of disclosure as compared to other pharmaceutical firms. The average rate of disclosure of listed pharmaceutical firms is increasing annually. Among four themes, the results showed that pharmaceutical firms mostly disclose information regarding community involvement. The results of regression which were significant shows that brand equity act as mediator between the corporate social responsibility disclosure and financial performance.
Muhammad Shoukat Malik and Lubna Kanwal. 2018. Impact of Corporate Social Responsibility Disclosure on Financial Performance: Case Study of Listed Pharmaceutical Firms of Pakistan.
Journal of Business Ethics, 150(1), 69–78.
CSR information and financial analysts’ recommendations
This study examines the relationship between corporate social responsibility (CSR)-related information and the value of financial analysts’ stock recommendations. The information environment in which analysts operate in is affected by CSR-related reports that companies voluntarily issue as well as information that becomes available through third-party analysis and rating institutions.
The authors find an inverse relationship between the value of both upgrade and downgrade revisions and the supply of CSR-related information compiled by third-party institutions, suggesting that CSR-related data are associated with a richer information environment that makes it more challenging for analysts to issue informative recommendations, thereby mitigating their contribution to the price discovery process.
The authors further find that the value of analysts’ recommendation revisions is lower for companies that voluntarily issue CSR-related reports compared to those that do not make such disclosures and that the overall effect of CSR on the informativeness of analysts is stronger in the recent years.
These findings have implications for the evolution of CSR reporting as the incorporation of CSR-related information into market prices legitimizes the relevance of such reports. Furthermore, these findings contribute to our understanding of the role and value of information intermediaries in changing information environments.
Changhee Lee, Dan Palmon and Ari Yezegel. 2018. The Corporate Social Responsibility Information Environment: Examining the Value of Financial Analysts’ Recommendations.
Journal of Business Ethics, 150(1), 279–301.
National stakeholder orientation, CSR and bank loan cost
Based on a sample of firms from 20 countries around the world, this study investigates how the relationship between corporate social responsibility (CSR) and bank loan pricing is affected by the degree of national stakeholder orientation. The authors find that firms with superior CSR performance are more likely to enjoy lower loan costs in more stakeholder-oriented countries than are their counterparts in less stakeholder-oriented countries.
This study contributes to the CSR literature by highlighting the importance of national institutional environments in determining the economic consequences of CSR practices.
Yan-Leung Cheung, Weiqiang Tan and Wenming Wang. 2018. National Stakeholder Orientation, Corporate Social Responsibility, and Bank Loan Cost.
Journal of Business Ethics, 150(2), 505–524.