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Corporate Social Actions and Reputation: From Doing Good to Looking Good

By Carol-Ann Tetrault Sirsly

Abstract

While corporate social responsibility (CSR) has garnered the attention of scholars over the past three decades, most attention has been focused on a link to financial performance. Grounded in stakeholder theory and a resource-based view of the firm considering the cospecialized intangible assets of CSR and reputation, this research explores the evolution of corporate social actions and firm reputation over time. We draw on data from the KLD database on corporate social actions and concerns, and on the Fortune most-admired company database to examine the relationship between corporate social behaviour and reputation over time. In the thesis, we argue that starting with the broad premise that any corporate social action or gesture can initially enhance corporate reputation, the firm is then both encouraged and also expected to go further. Accordingly, we propose subsequent actions are needed to meet stakeholder expectations to be able to improve or at least sustain firm reputation. We find that over the timeframe of our study that corporate social actions do experience the predicted positive linear growth. Drawing on a sample of 285 major US firms and a 2002-2006 time frame to provide a 1425 firm year panel, we find corporate social actions to be strongly related to corporate reputation, while the change in corporate social actions also predicts a change in corporate reputation. We also found support for the hypothesis that corporate social actions directed to technical stakeholders have the most significant impact on firm reputation. We do not however find the expected influence of concerns over corporate social actions directed to institutional stakeholders on firm reputation, leading to the intriguing question: why not? We provide detailed illustrations with five of the sampled firms and interpret their CSR-reputation relationships. These findings expand our understanding of the effect of the change over time in corporate social actions and the ensuing effect on corporate reputation. We extend the applicability of our findings to management, discuss limitations and propose future research directions

Year: 2012
OAI identifier: oai:https://spectrum.library.concordia.ca:973781

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