Strategic CSR and Value Creation within Small and Medium U.S. Enterprises

Small and medium size enterprises (SMEs) have become increasingly more important in the United States, Europe, and globally, due to their growing numbers and economic impact (Jenkins, 2004). Currently small businesses create two-thirds of the net new jobs annually, comprise over 23 million firms, account for over half of all U.S. sales, employ more than half of the private-sector workforce, and generate nearly 50 percent of annual U.S. GDP (Small Business Administration, Introduction Section, para. 1). Corporate Social Responsibility (CSR) has been an evolving construct since the latter half of the 2oth century and has often been cited as a source of competitive advantage and firm sustainability. Although studies have shown a connection between strategic CSR and long-term economic benefit, researchers have struggled to show a direct link between strategic CSR and firm financial performance. Burke and Logsdon (1996) developed a model linking strategic CSR to firm economic value creation. Though this model has been empirically tested on multi-national enterprises (MNEs) and SMEs, there are few studies of US.-based SMEs. The purpose of this quantitative, explanatory, correlational and non-experimental research study was to examine the relationship between five business strategy components central to an effective CSR strategy (centrality, specificity, proactivity, visibility, and voluntarism) and SME economic value creation (profit and value creation). Senior management from small and medium size enterprises throughout the U.S. were invited to participate in this study. There were over 100 respondents to the online survey, the majority of who were concentrated in the Southeastern United States. Results from this study showed that each of the five CSR strategies had a significant effect on both profit and value creation, with the exception of visibility which did not have a significant effect on profit. This suggests that SME managers did not see a direct link between visibility in the news media and profit. When all five strategies were integrated, results indicated that visibility and voluntarism had a significant effect on value creation and specificity had a significant effect on profit

Sustainable Business

In recent years lawyers have become increasingly active in the field of for-profit social enterprise and sustainable business. This is nowhere more evident than in the design of new organizational forms such as the low-profit limited liability company (L3C), the flexible purpose corporation, and the benefit corporation. In this emerging field, sustainability is perhaps the most prized quality as well as its most versatile construct. This Essay contributes to the debate over new legal forms by analyzing the multiple meanings of sustainability in this context. The analysis demonstrates the importance of distinguishing between the social enterprise as a dual mission or double bottom line endeavor (i.e., one that pursues both profits and a non-pecuniary mission) and the sustainable business as a triple bottom line endeavor (i.e., one that pursues the tripartite goals of profits, social equity, and environmental sustainability -- also known as people, planet, profit), and the critical yet unappreciated differences between the two types of undertakings. Social enterprise and sustainable business each attempt to solve a different problem, and these problems differ vastly in scale. In the case of social enterprise, new forms such as the L3C and flexible purpose corporation address a relatively discrete and concrete problem: how can mission-driven for-profit businesses expand access to capital without endangering their missions, enabling them to combine the most advantageous features of the for-profit and nonprofit forms. The ability of new forms to achieve these aims has been extensively discussed, but relatively little has been said about the non-pecuniary missions of such businesses other than that they be legally charitable, social, or confer a public benefit. In contrast, the sustainable business movement is more ambitious and specific in its aims: it seeks to enlist private enterprises in a global struggle to avert humanitarian disaster and ecological catastrophe. Although it has been little remarked upon, the benefit corporation form provides a good model for how triple bottom line businesses may be organized. At the same time, the benefit corporation could, if accepted as the model or archetypal social enterprise, serve as a Trojan horse for environmental sustainability by imposing an environmental mandate on every social enterprise, thereby eliminating the distinction between social enterprise and sustainable business. No longer could a social entrepreneur simply follow her bliss if that bliss is deemed environmentally unsustainable. The problems created by imposing an additional non-pecuniary bottom line on dual mission social enterprises have been neither acknowledged nor resolved

Introduction to Data Ethics

An Introduction to data ethics, focusing on questions of privacy and personal identity in the economic world as it is defined by big data technologies, artificial intelligence, and algorithmic capitalism. Originally published in The Business Ethics Workshop, 3rd Edition, by Boston Acacdemic Publishing / FlatWorld Knowledge

Board Diversity by Term Limits?

Four-fifths of the corporate board seats in the United States are held by men and a shocking number of companies lack any female representation on their boards. While institutional investors have pushed these companies for change, California took a more aggressive step and followed several European countries by mandating a quota for board representation. Heated argument has ensued over what diversity we should prioritize and what mechanisms should be used to promote diversity. Yet could these challenges be avoided altogether through the use of term limits? This Article is the first academic inquiry exploring the connection between term limits and the sex diversification of the corporate board. Drawing upon quantitative data on director turnover in the S&P 1500 and qualitative data on S&P 500 firms with term limits, our research shows that firms experiencing higher board turnover have more sex diversity. We argue that term limits, a mechanism that increases turnover, may correlate with improved sex diversity on boards. Our findings suggest that promoting term limits in the United States offers a market-based mechanism that could avert this polarized diversity debate

Disruptive New Firms in the Sharing Economy: A Process View of Corporate Reputations

This thesis addresses the formation of corporate reputations for digital platform-based disruptive new firms (DNFs) in the sharing economy. I provide one of the first empirical studies to examine the process by which reputations unfold over time, taken from a socially constructed view. I offer a nuanced understanding into the formation of both market and character reputations. I conduct a longitudinal qualitative analysis of a typical case of DNFs in the sharing economy, Uber Technologies Inc. The findings highlight that DNFs develop rapid market reputations and may sustain it in light of misconduct and wrongdoing. The impact of enduring misconduct, places a negative pressure on DNFs’ character reputations, however limited. I evaluate stakeholder sensemaking in two marketplaces: the marketplace of goods and services and the marketplace of ideas (Mahon & Wartick, 2003). In the former, DNFs are subject to rapid market responses by primary stakeholders, investors, who by rewarding firms on meeting economic imperatives, incite the adoption of precarious practices. In the marketplace of ideas, misconduct and wrongdoing evoke more significant tensions between economic and social values. The nature of DNFs wrongdoing often resides in a grey zone, which drives contested understandings in the marketplace of ideas. Enduring and positive market signals of DNFs’ market reputations also interfere with stakeholder sensemaking. As a result, character reputations take time to form and place limited pressure on market reputations. I also highlight that the embeddedness of a CEO-founder and the firm is a critical mechanism by which DNFs may ward off damage to character reputations

Sustainable Strategies for Brand Loyalty and Customer Loyalty: Unraveling Born Global Firm Practices

Abstract The research in this thesis aimed to explore how sustainability impacts brand loyalty in born global companies, which are companies that early in their development establish themselves internationally. Sustainability is a critical issue for businesses in today's world as consumers and stakeholders demand that businesses take social and environmental responsibility. In this thesis, we take an exploratory approach by applying the Gioia method to examine the topic more thoroughly. The research highlighted a significant relationship between sustainability and brand loyalty in born global companies, as most companies incorporate sustainable practices into their operations, products, and services, resulting in building trust and loyalty among customers. Integrating sustainability into corporate branding is a positive driver of competitive advantage, as companies that receive recognition for their commitment to sustainability differentiate themselves from competitors, which attract and retain a customer base that values sustainability. The research also highlights the importance of communicating sustainable practices through various channels, such as social media, marketing, websites, and direct customer interactions, to improve brand identity and customer trust. The research highlights that several born global companies incorporate sustainability into their corporate branding strategies, which help develop a distinct brand that communicates the company's commitment to corporate social responsibility (CSR). The study also emphasized the importance of incorporating sustainability into all aspects of the company's operations, including supply chain, product development, packaging and communication efforts, as key factors for effective sustainability branding. As a result, sustainability and brand loyalty are strongly connected in born global companies. The importance of corporate social responsibility has a further impact on the society and environment, while it also strategically differentiates themselves from competitors. This results in increased trust and brand loyalty among the customers

The Legal Fate of Internet Ad-Blocking

Ad-blocking services allow individual users to avoid the obtrusive advertising that both clutters and finances most Internet publishing. Ad-blocking\u27s immense - and growing - popularity suggests the depth of Internet users\u27 frustration with Internet advertising. But its potential to disrupt publishers\u27 traditional Internet revenue model makes ad-blocking one of the most significant recent Internet phenomena. Unsurprisingly, publishers are not inclined to accept ad-blocking without a legal fight. While publishers are threatening suits in the United States, the issues presented by ad-blocking have been extensively litigated in German courts where ad-blocking consistently has triumphed over claims that it represents a form of unfair competition. In this article, I survey the recent German ad-blocking cases and consider the claims publishers are likely to raise against ad-blocking in the imminent American litigation. I conclude that, when the American ad-blocking cases come, they are bound to meet with the fate they suffered in Germany. I argue that the relevant German and American legal frameworks reinforce a similar set of values, including respect for individual autonomy, recognition of the broad social benefits ad-blocking can generate, and an insistence that publishers accept ad-blocking as part of the free market in which they must evolve and innovate in order to compete

Innovation Agents

The standard narrative of entrepreneurship is one of self-employed creative individuals working out of their garage or independently owned start-up companies. Intrapreneurship--where employees are responsible for being alert to new opportunities inside firms--is another model for developing innovations. Relatively little is known, however, about the latter process through which large, complex firms engage in groundbreaking corporate entrepreneurship. This Article\u27s focus is on these types of innovation agents. It provides a thorough account of the positive and negative spillovers of intrapreneurial firms while making the following key points: First, intrapreneurial companies utilize their economies of scale, scope, and age to deliver innovations to the masses. They transform ideas, labor, and raw materials into tangible assets that can be traded in the market. Second, in doing so they offer individual entrepreneurs opportunities to capitalize their knowledge. Sustaining entrepreneurs\u27 prospects for supra-competitive profits is the main engine that motivates the latter to invest in discoveries in the first place. Lastly, intrapreneurial firms also serve as greenhouses for entrepreneurship through the migration of their own talented labor in the market. While these spillovers have tremendous societal benefits, they can also introduce harms. First, the race for the next breakthrough might result in anticompetitive behavior by rivals who conspire with employees-intrapreneurs to leave their firms and take with them confidential information. Second, intrapreneurs often aspire to undertake their own independent journey. In so doing, they leave secure positions and high salaries while carrying valuable knowledge and expertise. This, in return, often prompts intrapreneurial firms to act opportunistically and lock-in or lock-out intrapreneurs in restrictive and wasteful arrangements. As a solution, this Article proposes ways law can balance the positive and negative spillovers of intrapreneurship and ways the tax system can help achieve such result

Two Essays on the Effects of CEO Social Activism

The first essay theorizes and quantifies the effects of CEO activism on firms’ financial performance. We examine this relationship within the framework of screening theory. We find that CEO social activism generally leads to adverse investor reactions. This negative effect is most prominent when there is interdimensional incongruence in CEO social activism messages. In addition, we find that the negative effect of CEO social activism is moderated by organizational characteristics that resolve incongruence caused by disparate signals. The second essay seeks to understand how a CEO’s social activism influences corporate social performance. We hypothesize that CEO social activism will have a negative influence on a wide variety of firm-level social performance indicators due to previous theory and research which finds that firms have self-serving intentions behind corporate social responsibility. Consistent with our prediction, we find that CEO social activism negatively influences the firms’ social performance with respect to human rights. We also find partial support for a negative relationship between CEO social activism and the firms’ subsequent social performance regarding the natural environment. Contrary to our theoretical prediction, we find that CEO social activism positively influences firms’ social performance with respect to the community dimension; and we find no relationship between social performance related to employee well-being. These findings suggest that by and large, CEO social activism has negligible or negative influences on various aspects of the firm’s social performance, with the possible exception of social activism within the firm’s local communities. We also find that CEO power sometimes accentuates these relationships