A selection of interesting articles we found recently considering whether CSR brings any benefits.
The business case for corporate social responsibility: a critique and an indirect path forward
Do firms benefit from their voluntary efforts to alleviate the many problems confronting society? A vast literature establishing a “business case” for corporate social responsibility (CSR) appears to find that usually they do. However, as argued herein, the business case literature has established only that firms usually benefit from responding to the demands of their primary stakeholders.
The nature of the relationship between the interests of business and those of broader society, beyond a subset of powerful primary stakeholders, remains an open question despite this vast literature. This article develops a set of propositions that highlight constraints on firms’ ability to profit from CSR and outlines a set of managerial challenges on which researchers must focus their attention to truly determine whether and when firms can profit by responding to the needs of society.
Read the full paper for free at: Michael L. Barnett. 2016. The business case for corporate social responsibility: a critique and an indirect path forward.
Business & Society. Published online before print July 18, 2016, doi: 10.1177/0007650316660044.
From doing good to looking even better: the dynamics of CSR and reputation
Grounded in stakeholder theory and a resource-based view of the firm, this longitudinal research demonstrates the evolution of corporate social responsibility (CSR) and firm reputation over time. Drawing on a 5-year sample of 285 major U.S. firms obtained from the KLD database and Fortune’s Most Admired Companies, Carol-Ann Sirsly & Elena Lvina find that the proposed dynamic relationship predicts evolving stakeholder expectations to incite organizations to improve their social performance to earn reputational benefits.
Contrary to the often labeled stickiness of reputation, the researchers find a “Red Queen” effect that supports reputation as a dynamic construct where the change in CSR does predict a change in corporate reputation. Similarly, the authors find that the change in reputation over time varies by industry, being most pronounced for manufacturing. From a practical perspective, this relationship across time may incite managers to create sustainable competitive advantage by continuously investing in doing good to reap the benefits of looking good and looking even better with time.
Read the full paper for free at: Carol-Ann Tetrault Sirsly & Elena Lvina. 2016. From doing good to looking even better: the dynamics of CSR and reputation.
Business & Society. Published online before print February 9, 2016, doi: 10.1177/0007650315627996.
Decoupling among CSR policies, programs, and impacts: an empirical study
There are relatively few empirical studies on the impacts of corporate social responsibility (CSR) policies and programs. This article addresses the research gap by analyzing the incidence of, and the conditions that affect, decoupling (defined as divergence) among CSR policies, implementation of CSR programs, and CSR impacts for various environmental and social issues. Complete decoupling is a condition of full divergence among policies, programs, and impacts amounting to purely ceremonial CSR.
Using ratings from a sustainability rating agency on a sample of about 1,000 large companies in 24 countries, the authors find empirical evidence not supporting a conclusion of complete decoupling. The empirical evidence suggests four levels of nondivergence in the sample.
First, for most CSR issues examined, CSR policies of high quality (as measured by scope and level of detail) do have relatively strong effects on CSR implementation.
Second, CSR programs of high quality (as measured by scope, the use of targets, and the use of strict deadlines) do have relatively strong effects on CSR impacts.
Third, for most CSR issues, even low-quality CSR policies enforce the incidence and quality of programs in comparison with having no policy at all.
Fourth, weak programs have more impact on the realization of CSR goals than having no program at all.
The authors also find that the quality of CSR reporting (as measured by the implementation level of global reporting initiative guidelines) and locating the responsibility for CSR at the board level reduce decoupling by strengthening the quality of CSR programs.
Read the full paper for free at: Johan Graafland & Hugo Smid. 2016. Decoupling among CSR policies, programs, and impacts: an empirical study.
Business & Society. Published online before print May 23, 2016, doi: 10.1177/0007650316647951.
Implementing corporate social responsibility: empirical insights on the impact of the UN Global Compact on its business participants
The implementation of corporate social responsibility (CSR) is crucial for the legitimacy of an organization in today’s globalized economy. This study aims to enrich our knowledge of the implementation of the largest voluntary CSR initiative—the UN global compact (UNGC). Drawing on insights from stakeholder, network, and institutional theory, the author derives a positive impact of UNGC participation duration on the implementation level of the UNGC principles, despite potential weaknesses in the initiative’s accountability structure. Moreover, he scrutinizes the validity of the newly introduced UNGC “differentiation programme” before applying this framework in the empirical analysis.
Results from ordinal, linear, and instrumental variable regression models suggest that, contrary to claims made by UNGC critics, the duration of UNGC participation does affect the level of UNGC implementation. However, this effect appears to be much smaller than previous practitioner studies have suggested. Moreover, strong local UNGC networks affect the implementation level of the UNGC positively. Their hypothesized moderating role between UNGC participation duration and UNGC implementation level, however, is only significant in networks with activities of high quality rather than high quantity.
See the full paper for free at: Stefan Schembera. 2016. Implementing corporate social responsibility: empirical insights on the impact of the UN Global Compact on its business participants.
Business & Society. Published online before print March 15, 2016, doi: 10.1177/0007650316635579.
The influence of family firms and institutional owners on corporate social responsibility performance
Research on corporate social responsibility (CSR) has traditionally focused on managerial discretion and stakeholders’ influence. This study extends current research by addressing the effect of family firms and institutional owners on CSR performance, namely, CSR strengths and concerns.
Based on stewardship theory and the socioemotional wealth perspective, the authors propose that family firms are more likely to value CSR performance. Next, drawing from multiple agency theory, the researchers predict that institutional owners, unlike family owners, will influence a firm’s CSR performance differently. Lamb and Butler tested our hypotheses using a sample of 153 firms from 1994 to 2006 and found general support for our hypotheses.
A higher percentage of family owned equity and the presence of a family CEO are found to increase CSR strengths, whereas transient institutional owners have an opposite effect. The presence of a family CEO and founding family are found to reduce CSR concerns. Contrary to our predictions, dedicated institutional owners are positively associated with CSR concerns.
Find the full paper for free at: Nai H. Lamb & Frank C. Butler. 2016. The influence of family firms and institutional owners on corporate social responsibility performance.
Business & Society. Published online before print May 9, 2016, doi: 10.1177/0007650316648443.