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

From social ties to embedded competencies: The case of business groups

Our current views of economic competition are still rooted in the imagery of the isolated firm that transacts with its buyers, suppliers, and competitors via largely anonymous factor and product markets. Yet this view is fundamentally at odds with the growing importance of business groups in the global economy. We thus need a reconceptualized version of our idea of economic competition, which is capable of explaining competitive advantage at the group-versus-group rather than firm-versus-firm level of analysis. In the present paper we build on insights derived from organizational sociology and organizational economics to develop a business group-level theory of competition and competitive advantage based on embedded competencies

The impact of downsizing on corporate reputation

This study investigates the impact that downsizing has on corporate reputation. Drawing on the relevant literatures, two hypotheses are developed and tested. The findings of the study are as follows. First, downsizing has a negative impact on corporate reputation. Second downsizing is more damaging to corporate reputation than ‘downscoping’–the sale of a division

Review of: A. B. Shani and P. Docherty 'Learning By Design: Building Sustainable Organizations'

No abstract available

The issue life-cycle: implications for reputation for social performance and organizational legitimacy

Drawing on the issue life-cycle, corporate reputation, and organizational legitimacy literatures, this paper develops a theoretical model of how the evolution of the firm's performance in relation to an issue impacts the firm's reputation and legitimacy. It is argued that firms gain or lose in their reputation for social performance by respectively leading or lagging behind in the evolution of societal expectations concerning given issue. Also, that if firms lead or lag behind in the evolution of an issue beyond certain critical point, they lose organizational legitimacy. The paper concludes with a discussion of its research and managerial implications

The social and environmental responsibilities of multinationals: evidence from the Brent Spar case

This paper argues that multinational corporations face levels of environmental and social responsibility higher than their national counterparts. Drawing on the literatures of stakeholder salience, corporate reputation management, and evidence from the confrontation between Shell and Greenpeace over the Brent Spar, in 1995, two mechanisms – international reputation side effects, and foreign stakeholder salience – are identified and their contribution in creating an environment more restrictive, in terms of environmental and social responsibility, is elaborated on. The paper concludes with discussing the links of the work presented here with a number of ongoing debates within the filed of international business ethics, and the managerial implications of the two mechanisms identified

Greek museum media visibility and museum visitation: an exploration of cultural agenda setting [mediensichtbarkeit griechischer museen und museumsbesuche: eine untersuchung zum kulturellen agenda-setting]

This project investigates the classic agenda-setting hypothesis in the context of the Greek cultural market. It is hypothesized that Greek museums with higher visibility in newspaper content are related to higher visitation than museums with lower media visibility. Because of the nature of the Greek cultural market-Greece receives more than 10 million tourists during the summer months-several variables are controlled for, such as the seasonality of visitation, the type of governance of the organization, one-time events, such as the Olympic Games, which took place in the summer of 2004, and promotion initiatives undertaken by museums. When controlling for such culturally specific variables, there is evidence supporting the agenda-setting hypothesis within the Greek cultural market

Cultural agenda setting: salient attributes in the cultural domain

In this paper, we propose that agenda-setting theory also applies in the cultural domain of human activities. We argue that because cultural goods have high levels of relevance and uncertainty, their potential consumers will experience a high Need for Orientation (NFO), which will make them seek information in the news media, just like they do when faced with an NFO in the political domain. Moreover, we expect that agenda-setting theory would apply in the cultural domain in a more fragmented manner and that within the cultural domain it would apply differently in various cultural sub-domains. To build our argument, we draw from media, cultural studies and marketing literatures