The Relation Between Policies Concerning Corporate Social Responsibility (CSR) and Philosophical Moral Theories – An Empirical Investigation

This article examines the relation between policies concerning Corporate Social Responsibility (CSR) and philosophical moral theories. The objective is to determine which moral theories form the basis for CSR policies. Are they based on ethical egoism, libertarianism, utilitarianism or some kind of common-sense morality? In order to address this issue, I conducted an empirical investigation examining the relation between moral theories and CSR policies, in companies engaged in CSR. Based on the empirical data I collected, I start by suggesting some normative arguments used by the respondents. Secondly, I suggest that these moral arguments implicitly rely on some specific moral principles, which I characterise. Thirdly, on the basis of these moral principles, I suggest the moral theories upon which the CSR policies are built. Previous empirical studies examining the relation between philosophical moral theories and the ethical content of business activities have mainly concentrated on the ethical decision-making of managers. Some of the most prominent investigations in that regard propose that managers mainly act in accordance with utilitarian moral theory (Fritzsche, D. J. and H. Becker: 1984, Academy of Management Journal 27(1), 166–175; Premeaux, S. and W. Mony: 1993, Journal of Business Ethics 12, 349–357; Premeaux, S.: 2004, Journal of Business Ethics 52, 269–278). I conclude that CSR policies are not based on utilitarian thinking, but instead, on some kind of common-sense morality. The ethical foundation of companies engaged in CSR, thus, does not mirror the ethical foundation of managers.     

Is Corporate Responsibility Converging? A Comparison of Corporate Responsibility Reporting in the USA,UK, Australia,and Germany

Corporate social reporting, while not mandatory in most countries, has been adopted by many large companies around the world and there are now a variety of competing global standards for non-financial reporting, such as the Global Reporting Initiative and the UN Global Compact. However, while some companies (e.g., Henkel, BHP, Johnson and Johnson) have a long standing tradition in reporting non-financial information, other companies provide only limited information, or in some cases, no information at all. Previous studies have suggested that there are, country and industry-specific, differences in the extent of CSR reports (e.g., Kolk et al.: 2001, Business Strategy and the Environment 10, 15–28; Kolk: 2005, Management International Review 45, 145–166; Maignan and Ralston: 2002, Journal of International Business Studies 33(3), 497–514). However, findings are inconclusive or contradictory and it is often difficult to compare previous studies owing to the idiosyncratic methods used in each study (Graafland et al.: 2004, Journal of Business Ethics 53, 137–152). Furthermore, previous studies have relied mainly on simple measures, such as word counts and page counts of reports, to compare the extent of reporting that may not capture significant differences in the content of the reports. In this article, we seek to overcome some of these deficiencies by using textual analysis software and a more robust statistical method to more objectively and reliably compare the CSR reports of firms in different industries and countries. We examine a sample of leading companies in four countries (US, UK, Australia, and Germany) and test whether or not membership of the Global Compact makes a difference to CSR reporting and is overcoming industry and country specific factors that limit standardization. We conclude that GlobalCompact membership is having an effect only in certain areas of CSR reporting, related to the environment and workers, and that businesses from different countries vary significantly in the extent to which they promote CSR and the CSR issues that they choose to emphasize in their reports. These country differences are argued to be related to the different institutional arrangements in each country.     

An Inquiry into the Study of Corporate Codes of Ethics

This paper takes its point of departure in an article by Stevens [Stevens, B.: 1994, Journal of Business Ethics 54, 163–171], in which she identified a lack of knowledge regarding how corporate codes of ethics are communicated and affect behavior in organizations. Taking heed of this suggested gap, we review studies on corporate codes of ethics with an empirical content, published since 1994. The conclusion of the review is that we still lack knowledge on how codes work, how they are communicated and how they are transformed inside organizations. Stevens’ plea could even be extended, arguing that the knowledge gap might be of even more significance than in the mid-1990s. Some directions for how this situation can be approached in future studies are outlined in the paper.     

Business Reputation and Labor Efficiency,Productivity, and Cost

Assumed benefits from improved reputation are often used as motives to drive corporate social responsibility (CSR) initiatives. Are improved cost efficiencies among these reputation benefits? Cost efficiencies and cost management have become more relevant as revenue streams dry up in these tough economic times. Can a good reputation aid these efforts to develop cost efficiencies specifically when managing labor costs? Prior research hypothesizes that good reputation can create labor productivity and efficiency benefits. The purpose of this study is to empirically investigate reputation’s relationship with labor efficiency, labor productivity, and labor cost. Using a sample of highly reputable firms from Fortune’s America’s Most Admired Companies list and a corresponding matched sample of firms, we find that reputation is associated with improved labor efficiency and labor productivity. However, we do not find a significant association between reputation and reduced labor costs. Our study contributes to current research hypothesizing and finding efficiency benefits associated with good reputation. Documenting these potential reputation benefits has important implications for CSR activities and initiatives. It supports recent work that incorporates reputation into a more developed model of the relationship between CSR and performance (Vilanova et al.: 2009, Journal of Business Ethics 87, 57–69). This work is useful to businesses and supports strategies focused on “doing well by doing good” and maintaining healthy reputations.     

Creating an Ethical Work Context: A Pathway to Generate Social Capital in the Firm

There is a need for further research to understand how social capital in the workplace can be promoted. This article studies the generation of social capital from a comprehensive perspective that integrates ethics and general management. We propose the concept of “ethical work context” as an influential antecedent of the social capital in the firm. The ethical work context, which is aligned with the “humanizing culture” approach proposed by Melé (Journal of Business Ethics 45(1), 3–14, 2003a), allows a broader comprehension of the concrete management practices and organizational dynamics that generate organizational social capital. It is argued that social capital, understood as a by-product of the ethical work context, results both from organizational design and ongoing managerial activity. Creating an ethical work context brings ethics and social capital into the realm of the general manager; a figure that has remained absent from the social capital literature.     

Brand-anchored discrete choice experiment (BDCE) vs. direct attribute rating (DAR): An empirical comparison of predictive validity

The image of a brand provides a key driver of brand equity. To build and control a strong brand image though, brand managers require a valid procedure to measure it. This article empirically compares the predictive validity of two measurement techniques to assess brand image: First, a brand-anchored discrete choice experiment (BDCE) which is based on a brand-anchored conjoint approach where brands serve as the levels for any attribute and which was originally introduced as ranting-based approach by Louviere and Johnson Journal of Retailing, 66, 359–382 (1990) and further extended to a BDCE by Eckert et al. International Journal of Research in Marketing, 29, 256–264 (2012). Second, a direct attribute rating (DAR) approach which is commonly used for commercial applications of brand image measurement. An empirical study using a representative sample of the German beer market shows that BDCE shows significantly higher levels of predictive validity (i.e., higher correlations with the actual market shares of the brands under investigation) than the widely used DAR method.     

The First 50 Years of <Emphasis Type="Italic">Business Economics</Emphasis>

This article traces the history of Business Economics, focusing first on its institutional history—its beginnings, key contributors, debates on its content, and shifts in editorial policy. It then turns to discussion of particular articles that are distinguished either by the judgment of Business Economics’ Editorial Board or whose authors have been honored by the National Association for Business Economics for their outstanding service. The article also presents trends in the sources and content of Business Economics over its 50-year history.     

Multinational Firms’ Leadership Role in Corporate Social Responsibility in Latin America

This paper explores the commitment to corporate citizenship on the part of the largest U.S.-based multinationals in the emerging market region of Latin America. The websites of the largest U.S.-based firms – according to the 2007 Fortune 500 list – are reviewed and their CSR efforts in Latin America are noted. The firms’ positions on corporate citizenship in Latin America are mapped onto a three-by-three matrix in which firms’ commitment to corporate citizenship ranges from profit-making motivations to a more holistic approach where support for non-profit causes is embraced by the entire firm and implemented at all levels (Marsden, Business and Society Review 105(1), 9–26, 2000). The largest U.S.-based multinationals were selected for this study because of their leadership role and the fact that other firms within their respective industries may seek to emulate the firms’ level of commitment to corporate citizenship. While the matrix can be used to evaluate corporate citizenship efforts in any market – or globally – the emphasis in this study is on Latin America, a region of interest for two reasons: because of the paucity of research on this particular emerging market region as it relates to CSR, and because there is some evidence to suggest that philanthropic initiatives by the region’s wealthy individuals lag behind individual philanthropic efforts in other world regions (Oppenheimer, Latin America’s Rich Should Donate More. McClatchey-Tribune Regional News, 2007). If this is the case, this study aims to identify whether companies are picking up the slack.

“You make a living by what you get; but you make a life by what you give.” Winston Churchill

     

Understanding the Interplay Among Regulatory Self-Efficacy,Moral Disengagement,and Academic Cheating Behaviour During Vocational Education: A Three-Wave Study

This study uses a quasi-experimental design to investigate what happens to individual socially responsible attitudes when they are exposed to group dynamics. Findings show that group engagement increases individual attitudes toward social responsibility. We also found that individuals with low attitudes toward social responsibility are more likely to change their opinions when group members show more positive attitudes toward social responsibility. Conversely, individuals with high attitudes do not change much, independent of group characteristics. To better analyze the effect of group dynamics, the study proposes to split social responsibility into relative and absolute components. Findings show that relative social responsibility is correlated with but different from absolute social responsibility although the latter is more susceptible than the former to group dynamics.     

On the Credibility Determinants of a Quality Label: a Quasi-Natural Experiment Using the Example of <Emphasis Type="Italic">Stiftung Warentest</Emphasis>

In 2013, Stiftung Warentest, which is one of the most important consumer organizations in Germany, tested hazelnut chocolate for their leading magazine called test. The hazelnut chocolate of Ritter Sport, which is a high-quality producer of chocolate in Germany, failed the test and received the grade “unsatisfactory.” Stiftung Warentest accused Ritter Sport of labelling an artificial flavouring as a natural flavouring. Ritter Sport rejected the accusation, went to court, and won the trial. Stiftung Warentest had to withdraw the issue in question of test magazine. The affair received broad media coverage from December 2013 to September 2014. Using the case Ritter Sport versus Stiftung Warentest, it is analysed whether negative headlines really undermine the credibility of a quality label by examining Stiftung Warentest and their quality label called test. In addition, it is examined what can be done to restore or, more generally, increase the credibility of a quality label. Based on a quasi-natural experiment, it is found that the negative headlines regarding Stiftung Warentest have undermined the credibility of the test label. It is also found that the credibility of the test label can be increased by providing reference values to the tests, strengthening the independence of Stiftung Warentest, and using laboratory methods for the tests. For the most part, the same holds true for any quality label. High-quality producers, quality-conscious consumers, and the awarding organization of the quality label can benefit from an increased credibility of a quality label.     

Brand love: development and validation of a practical scale

Batra et al. (Journal of Marketing 76, 1–16, 2012) created a new conceptualization of brand love but did not develop a pragmatically useful measure for studies where questionnaire length is a constraint. The current research develops a more parsimonious brand love scale, with three nested versions of 26, 13, and 6 items, respectively. This research also validates the scales, and in so doing conducts several important validity tests not considered by Batra et al. The 26-item scale is able to predict consumer loyalty, word of mouth, and resistance to negative information, with an R ² of .90, after correcting for measurement error.     

Social Entrepreneurship: The Role of Institutions

A relatively small segment of business, known as social entrepreneurship (SE), is increasingly being acknowledged as an effective source of solutions for a variety of social problems. Because society tends to view “new” solutions as “the” solution, we are concerned that SE will soon be expected to provide answers to our most pressing social ills. In this paper we call into question the ability of SE, by itself, to provide solutions on a scope necessary to address large-scale social issues. SE cannot reasonably be expected to solve social problems on a large scale for a variety of reasons. The first we label the organizational legitimacy argument. This argument leads to our second argument, the isomorphism argument. We also advance three other claims, the moral, political, and structural arguments. After making our arguments, we explore ways in which SE, in concert with other social institutions, can effectively address social ills. We also present two examples of successful ventures in which SEs partnered with governments and other institutions.     

Rebuilding Trust: Ireland’s CSR Plan in the Light of <Emphasis Type="Italic">Caritas in Veritate</Emphasis>

This paper seeks to contribute to the discussion on national corporate social responsibility (CSR) plans from the perspectives of the three logics as articulated in Caritas in Veritate, by using the Irish national CSR plan as an example. Good for Business, Good for the Community: Ireland’s National Plan on Corporate Social Responsibility 2014–2016 maintains that CSR activities can enable organisations to build relationships and trust with communities. One of the consequences of the 2008 financial crisis was the decrease in trust in banking systems and in business more broadly. It is well recognised that relationships of trust are essential to the life of the market, the state and civil society. Pope Emeritus Benedict XVI’s Caritas in Veritate contends that corresponding to the life of the market, the state and civil society are three logics: the logic of exchange (i.e. giving to acquire), the logic of public obligation (i.e. giving through duty) and the logic of gift (i.e. giving due to solidarity). This paper proposes that the normative framework of the three logics of Caritas in Veritate can be read into the Irish national CSR plan. This paper argues that the examples of CSR initiatives proffered by the plan could point organisations in the direction of the logic of gift and therefore enable the rebuilding of relationships of trust with citizens and communities.     

Mission Possible: Do School Mission Statements Work?

Does ethical content in organizational mission statements make a difference? Research regarding the effectiveness and results of mission statements is mixed. Krohe (1995, Across the board, 32, 17–21) concluded that much of the good results do not come from the mission statements themselves but from the strategic re-education that happens in producing one. We attempted to discover whether universities that explicitly state their ethical orientation and vision in their mission statements had students with higher perceived character trait importance and activities that reinforce character than universities that did not. While the faculty and administration may receive benefits from mission statement development through strategic re-education as Krohe suggested, do the statements influence the students at the university who may have had no role in its creation? Using a sample of senior business students at 16 universities we found that students at universities with ethical statements in their mission statements had significantly higher perceived character trait importance and character reinforcement than those at universities whose missions lacked ethical statements. This research suggests that schools that explicitly stated ethical content in their?mission statements do influence student ethical orientation.     

Business Cases and Corporate Engagement with Sustainability: Differentiating Ethical Motivations

This paper explores links between different ethical motivations and kinds of corporate social responsibility (CSR) activities to distinguish between different types of business cases with regard to sustainability. The design of CSR and corporate sustainability can be based on different ethical foundations and motivations. This paper draws on the framework of Roberts (Organization 10:249–265, 2003) which distinguishes four different ethical management versions of CSR. The first two ethical motivations are driven either by a reactionary concern for the short-term financial interests of the business, or reputational, driven by a narcissistic concern to protect the firm’s image. The third responsible motivation works from the inside-out and seeks to embed social and environmental concerns within the firm’s performance management systems, and the fourth, a collaborative motivation, works to bring the outside in and seeks to go beyond the boundaries of the firm to create a dialogue with those who are vulnerable to the unintended consequences of corporate conduct. Management activities based on these different ethical motivations to CSR and sustainability result in different operational activities for corporations working towards sustainability and thus have very different effects on how the company’s economic performance is influenced. Assuming that corporate managers are concerned about creating business cases for their companies to survive and prosper in the long term, this paper raises the question of how different ethical motivations for designing CSR and corporate sustainability relate to the creation of different business cases. The paper concludes by distinguishing four different kinds of business cases with regard to sustainability: reactionary and reputational business cases of sustainability, and responsible and collaborative business cases for sustainability.     

Individual Competencies for Corporate Social Responsibility: A Literature and Practice Perspective

Because corporate social responsibility (CSR) can be beneficial to both companies and its stakeholders, interest in factors that support CSR performance has grown in recent years. A thorough integration of CSR in core business processes is particularly important for achieving effective long-term CSR practices. Here, we explored the individual CSR-related competencies that support CSR implementation in a corporate context. First, a systematic literature review was performed in which relevant scientific articles were identified and analyzed. Next, 28 CSR directors and managers were interviewed. The literature review complemented with interview data resulted in the following eight distinct CSR-related competencies: (1)Anticipating CSR challenges; (2) Understanding CSR-relevant systems and subsystems; (3) Understanding CSR-relevant standards; (4) CSR management competencies, including (4a) Leading CSR programs, (4b) Managing CSR programs, and (4c) Identifying and realizing CSR-related business opportunities; (5) Realizing CSR-supportive interpersonal processes; (6) Employing CSR-supportive personal characteristics and attitudes; (7) Personal value-driven competencies, including (7a) Ethical normative competencies, (7b) Balancing personal ethical values and business objectives, and (7c) Realizing self-regulated CSR-related behaviors and active involvement; and (8) Reflecting on personal CSR views and experiences. Based on these results, implications for further research on this topic, as well as implications for practitioners, are discussed.     

Governance in the Australian Superannuation Industry

In the superannuation/pension industry, ordinary investors entrust their retirement savings to the trustees of the superannuation plan. Investors rely on the trustees to ensure that ethical business and risk management practices are implemented to protect their retirement savings. Governance practices ensure the monitoring of ethical risk management (Drennan, L. T.: 2004, Journal of Business Ethics 52, 257?C266). The Australian superannuation industry presents a unique scenario. Legislation requires employers to contribute a minimum of 9% of the employees wage to retirement savings. However, there are no legislated governance standards, although there are standards of recommended governance practices. In this article, we examine the level of voluntary adoption of governance practices by the trustees of Australian public sector and industry superannuation funds. We also assess whether superannuation governance practices are associated with performance and volatility/riskiness of returns. Survey results show that the majority of superannuation plans adopt recommended governance practices supporting the concept of ethical management of the member??s retirement savings. The examination of governance principles that impact returns and risk shows that board size and regular review of conflicts are positively associated with return. Superannuation plans with higher volatility in returns meet more frequently.     

International entrepreneurship in universities: Context,emergence and actors

This special issue presents an opportunity to explore the international aspects of academic and university based international entrepreneurship. Over the last decades much research attention has been focused on university spin-off firms (USOs) on issues such as, creation, risk, strategies and performance (see Druilhe and Garnsey, 2004; Link and Scott, 2005; Lockett and Wright, 2005; Walter et al, 2006; Wright et al., 2006). There has been a dearth of studies that have examined the international dimensions and aspects of university-based spin-off firms. The six articles presented in this special issue point towards interesting future research agendas at the interface between academic and international entrepreneurship. Three core themes emerge from this special issue: Context, Emergence and Actors. In sum, this special issue pinpoints: firstly, specific features of universities and research organizations as contexts for international technology entrepreneurship; secondly, the process of organizational emergence and entrepreneurial cognition; and thirdly, insight into learning processes of USOs and the role of non-academic actors. Our article concludes by identifying future avenues of research.     

A Falling of the Veils: Turning Points and Momentous Turning Points in Leadership and the Creation of CSR

Contemporary organizations often reciprocate to society for using resources and for affecting stakeholders by engaging in corporate social responsibility (CSR). It has been shown that CSR has a positive impact on employee attitudes. However, not all employees may react equally strongly to CSR practices. Based on socio-emotional selectivity theory (Carstensen in Science 312:1913–1915, 2006), we contend that the effect of CSR on employee satisfaction will be more pronounced for older than for younger employees, because CSR practices address those emotional needs and goals that are prioritized when people’s future time perspective decreases. In one multi-source field study (N = 143) and one experimental study (N = 500), we demonstrate that CSR indeed has a stronger positive effect on employee satisfaction for older relative to younger employees. Accordingly, engaging in CSR can be an attractive tool for organizations that aim to keep their aging workforce satisfied with their job.     

Globalization and Poverty: Oxymoron or New Possibilities?

We examine the occurrence of ethics- related terms in 10-K annual reports over 1994–2006 and offer empirical observations on the conceptual framework of Erhard et al. (Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics, and Legality (Harvard Business School, Harvard) 2007). We use a pre-Sarbanes-Oxley sample subset to compare the occurrence of ethics-related terms in our 10-K data with samples from other studies that consider virtue-related phenomena. We find that firms using ethics-related terms are more likely to be “sin” stocks, are more likely to be the object of class action lawsuits, and are more likely to score poorly on measures of corporate governance. The consistency of our results across these alternative measures of ethical behavior suggests that managers who portray their firm as “ethical” in 10-K reports are more likely to be systematically misleading the public. These results are consistent with the integrity-performance paradox.