Public trust's duality in the CSP - reputation - financial performance relationship across countries

Within the literature investigating relationships among Corporate Social Performance (CSP), Corporate Reputation (CR), and Corporate Financial Performance (CFP) (Orlitzky, Schmidt, & Rynes, 2003; Waddock & Graves, 1997), we identify two lines of inquiry. First, scholars have investigated the effect that CSP has on CR, “the overall estimation in which a particular company is held by its various constituents” (Fombrun, 1996: 36). Most maintain that CSP enhances CR (Fombrun & Shanley, 1990; Wang & Berens, 2014), with some exceptions (Walker & Dyck, 2014). Second, scholars concur that CR enhances CFP (Newburry, 2010; Roberts & Dowling, 2002). We argue that public trust in business (Harris, Moriarty, & Wicks, 2014) plays an important moderating role in the CSP-CR-CFP relationship, as some have implicitly suggested (Barnett, 2007; Du, Bhattacharya, & Sen, 2010). Public trust in business, or more accurately public trust in the institution (North, 1990) of business, is “the level and type of vulnerability the public is willing to assume with regard to business relations” (Bolton et al., 2009: 6). Public trust in business has been declining since the 1960s (Nye, Zelikow, & King, 1997) remaining at low levels since the 1990s (Wicks et al., 2014). Although both managers (Business Roundtable Institute for Corporate Ethics, 2004) and academics (Wicks et al., 2014) agree that low levels of public trust can harm, inadequate research has investigated its effect on firms (Harris et al., 2014; Bolton et al., 2009). We aim to partially rectify this deficiency. Here, we draw on signaling theory to investigate the role that public trust in business (Bolton et al., 2009) has in moderating the relationship among CSP, CR and CFP. We argue that levels of public trust towards business influence the CSP-CR-CFP relationship and develop hypotheses regarding this influence. Given that national context may systematically influence the CSP-CFP relationship (Gardberg & Fombrun, 2006) and that public trust in business may vary cross-nationally (e.g. Chan, Lam, & Liu, 2011), we test our hypotheses on an unbalanced panel of 462 firms from 2006-12 from 9 countries (a total of 2534 observations)

The impact of corporate philanthropy on reputation for corporate social performance

This study seeks to examine the mechanisms by which a corporation’s use of philanthropy affects its reputation for corporate social performance (CSP), which the authors conceive of as consisting of two dimensions: CSP awareness and CSP perception. Using signal detection theory (SDT), the authors model signal amplitude (the amount contributed), dispersion (number of areas supported), and consistency (presence of a corporate foundation) on CSP awareness and perception. Overall, this study finds that characteristics of firms' portfolio of philanthropic activities are a greater predictor of CSP awareness than of CSP perception. Awareness increases with signal amplitude, dispersion, and consistency. CSP perception is driven by awareness and corporate reputation. The authors’ contention that corporate philanthropy is a complex variable is upheld, as we find that CSP signal characteristics influence CSP awareness and perception independently and asymmetrically. The authors conclude by proposing avenues for future research

Towards one vision, one voice: A review essay of the 3rd International Conference on Corporate Reputation, Image and Competitiveness

The 3rd International Conference on Corporate Reputation, Image and Competitiveness brought together academics and practitioners from a variety of fields to discuss many critical issues on the topic of how corporate reputation can contribute to corporate performance. In this paper, several of the presentations are overviewed to draw out common themes from the papers presented at this conference. After identifying common themes, unifying framework is offered to bring together the disparate fields that contribute to one common topic, that of corporate reputation. Creation of a common framework is critical to advancing the study of corporate reputation and its influence on corporate performance

Corporate environmental performance: Revisiting the role of organizational slack

To date, there has been little agreement on the role of organizational slack in firms' Environmental Performance (EP). Drawing on the Behavioral Theory of the Firm (BTOF), we advance this line of inquiry by conceptualizing the distinct effects that absorbed slack and unabsorbed slack have on EP as well as how industry discretion, firm-specific regulatory pressures, and EP-aspiration levels moderate these effects. We test our hypotheses with a unique panel of 753 US public firms for the period 1991–2008. As hypothesized, our findings indicate that unabsorbed slack has a positive effect on EP, while absorbed slack has a negative one. Industry discretion, firm-specific regulatory pressures, and EP aspiration levels moderate these relationships in distinct ways. We discuss the implications of our research on managerial and policy decision-making

Corporate environmental performance: Revisiting the role of organizational slack

To date, there has been little agreement on the role of organizational slack in firms' Environmental Performance (EP). Drawing on the Behavioral Theory of the Firm (BTOF), we advance this line of inquiry by conceptualizing the distinct effects that absorbed slack and unabsorbed slack have on EP as well as how industry discretion, firm-specific regulatory pressures, and EP-aspiration levels moderate these effects. We test our hypotheses with a unique panel of 753 US public firms for the period 1991–2008. As hypothesized, our findings indicate that unabsorbed slack has a positive effect on EP, while absorbed slack has a negative one. Industry discretion, firm-specific regulatory pressures, and EP aspiration levels moderate these relationships in distinct ways. We discuss the implications of our research on managerial and policy decision-making

The Impact of Corporate Philanthropy on Reputation for Corporate Social Performance

This study seeks to examine the mechanisms by which a corporation’s use of philanthropy affects its reputation for corporate social performance (CSP), which the authors conceive of as consisting of two dimensions: CSP awareness and CSP perception. Using signal detection theory (SDT), the authors model signal amplitude (the amount contributed), dispersion (number of areas supported), and consistency (presence of a corporate foundation) on CSP awareness and perception. Overall, this study finds that characteristics of firms’ portfolio of philanthropic activities are a greater predictor of CSP awareness than of CSP perception. Awareness increases with signal amplitude, dispersion, and consistency. CSP perception is driven by awareness and corporate reputation. The authors’ contention that corporate philanthropy is a complex variable is upheld, as we find that CSP signal characteristics influence CSP awareness and perception independently and asymmetrically. The authors conclude by proposing avenues for future research