Unpacking the drivers of corporate social performance: a multilevel, multistakeholder, and multimethod analysis

The question of what drives corporate social performance (CSP) has become a vital concern for many managers and researchers of large corporations. This study addresses this question by adopting a multilevel, multistakeholder, and multimethod approach to theorize and estimate the relative influence of macro (national business system and country), meso (industry), and micro (firm-level) factors on CSP. Applying three different methods of variance decomposition analysis to an international sample of 2,060 large public companies over a time span of 5 years, our results show that firm-level factors explain the largest proportion of variance in aggregate CSP as well as CSP oriented toward communities, the natural environment, and employees. These results support our hypotheses according to which CSP is not primarily driven by macrolevel or meso level factors, except for shareholder-oriented CSP, which is relatively more influenced by country-level factors. As a whole, our findings also point to the value of subdividing CSP into its stakeholder-specific components as this disaggregation allows for a more careful examination of distinct drivers of distinct aspects of CSP

Individual and Corporate Social Responsibility

Society’s demands for individual and corporate social responsibility as an alternative response to market and distributive failures are becoming increasingly prominent. We first draw on recent developments in the “psychology and economics” of prosocial behavior to shed light on this trend, which reflects a complex interplay of genuine altruism, social or self image concerns, and material incentives. We then link individual concerns to corporate social responsibility, contrasting three possible understandings of the term: the adoption of a more long-term perspective by firms, the delegated exercise of prosocial behavior on behalf of stakeholders, and insider-initiated corporate philanthropy. For both individuals and firms we discuss the benefits, costs and limits of socially responsible behavior as a means to further societal goals

Seeing versus Doing: How Businesses Manage Tensions in Pursuit of Sustainability

Management of organizational tensions can facilitate the simultaneous advancement of economic, social, and environmental priorities. The approach is based on managers identifying and managing tensions between the three priorities, by employing one of the three strategic responses. Although recent work has provided a theoretical basis for such tension acknowledgment and management, there is a dearth of empirical studies. We interviewed 32 corporate sustainability managers across 25 forestry and wood-products organizations in Australia. Study participants were divided into two groups: (1) those considered effective at corporate sustainability and (2) a status-quo group. Contrary to current theory, our findings showed that acknowledgment of organizational tensions was widespread in the Australian forestry and wood-products industry and not limited to those managers who are effective at managing corporate sustainability. What differed was the degree to which managers did something about the perceived tensions—with the effective group more consistently acting to manage and resolve paradoxical scenarios. Our findings suggest that existing theoretical constructs of tension management may not adequately capture the individual-level complexity involved with managing tensions in practice

Is Corporate Social Responsibility an Agency Problem? Evidence from CEO Turnovers

We empirically examine two competing claims: first, if a firm’s Corporate Social Responsibility (CSR) activity is driven by its CEO’s private rent extraction (i.e. an agency problem), firms with higher CSR ratings are poorly governed and their managers are less likely to be dismissed for poor financial performance. In contrast, if CSR reflects owners’ preferences, CEOs of firms with higher CSR ratings are more likely to be removed in light of poor financial performance. We find that CEO turnover-financial performance sensitivity increases in firm CSR scores during the last years of both the outgoing CEO as well as his predecessor. Further, firm CSR ratings do not change following CEO turnover suggesting that CSR ratings are a firm characteristic. Our findings are consistent with the view that CSR is driven by shareholder preferences

The impact of corporate social responsibility disclosure on financial performance : evidence from the GCC Islamic banking sector.

This paper examines the relationship between corporate social responsibility (CSR) and financial performance for Islamic banks in the Gulf Cooperation Council (GCC) region over the period 2000–2014 by generating CSR-related data through disclosure analysis of the annual reports of the sampled banks. The findings of this study indicate that there is a significant positive relationship between CSR disclosure and the financial performance of Islamic banks in the GCC countries. The results also show a positive relationship between CSR disclosure and the future financial performance of GCC Islamic banks, potentially indicating that current CSR activities carried out by Islamic banks in the GCC could have a long-term impact on their financial performance. Furthermore, despite demonstrating a significant positive relationship between the composite measure of the CSR disclosure index and financial performance, the findings show no statistically significant relationship between the individual dimensions of the CSR disclosure index and the current financial performance measure except for ‘mission and vision’ and ‘products and services’. Similarly, the empirical results detect a positive significant association only between ‘mission and vision’ dimension and future financial performance of the examined banks

Corporate tax: what do stakeholders expect?

Motivated by the ongoing controversy surrounding corporate tax, this article presents a study that explores stakeholder expectations of corporate tax in the context of UK business. We conduct a qualitative analysis of in-depth interviews with representatives of community groups (NGOs/think tanks and special interest groups), as well as interviews with those representing business groups (business leaders and industry representatives). We then identify eight themes that together describe “what” companies need to do, “how” they need to do it, and “why” they need to do it, if they wish to appeal to a wide group of interested parties. We discuss our findings based on the corporate social responsibility literature and propose novel ways for community groups and business groups to connect on the topic of corporate tax, suggesting opportunities and themes for dialogue and potential steps to co-create solutions in a stakeholder society