Temporal Orientation and Corporate Social Responsibility: Global Evidence

There has been a growing emphasis on the importance of a long-term perspective in academia and practice. Yet understanding of the interdependency of those factors – the temporal preferences embedded in organizations and in societal values as well as the influence of temporal orientation of investors – remains limited. We theorize whether and how a firm's corporate social responsibility (CSR) is affected by the societal temporal orientation, its time horizon, and its investors' time horizon. Using a global sample, we confirm that CSR activity is higher when a country has a long-term orientation culture, when the firm has a long-time horizon, and when the controlling institutional investor has a long-term investment horizon. We also find that the national culture's long-term orientation heightens the effect of a firm's long-time horizon on its CSR. Further, our results show that the effects of temporal orientation are more pronounced in environmental than in social CSR.     

Reputation and Corporate Social Responsibility Aberrations,Trends, and Hypocrisy: Reactions to Firm Choices in the Stock Option Backdating Scandal

Drawing on strategic corporate social responsibility (CSR) and reputation theory, this paper examines the market reaction to firm disclosures of involvement in the US stock option backdating scandal. We examine how a firm's prior signals regarding ethical behaviour and values, as demonstrated through CSR initiatives, may both ameliorate and exacerbate market reactions. CSR initiatives may buffer a firm against general wrong‐doing but expose it to greater scrutiny and sanction for related wrong‐doing. Our results show that firms with enhanced overall reputations for CSR are partially buffered from scandal revelations. However, we find that when firms possess an enhanced reputation for CSR associated with corporate governance, violations pertaining specifically to governance are viewed as hypocritical and more harshly sanctioned. We also find lower and negative market reactions for firms that delay but self‐disclose their involvement in the scandal. The study extends the emergent, related literatures on strategic CSR and reputation management, and documents dynamics in the relationship between corporate social and financial performance.     

Corporate commitment to climate change action,carbon risk exposure,and a firm's debt financing policy

Motivated by the rising consensus that corporate engagement in climate change actions holds the key for society's transition into environmentally resilient economy, the study examines whether a firm's commitment to climate change action and its carbon risk exposure shape the firm's debt financing policy. Based on insights drawn from signaling, corporate reputation, and agency theories, we develop models that link corporate commitment to climate change actions and a firm's carbon risk exposure with its debt financing decisions. Using data drawn from S&P 500 companies, for years 2015 to 2019, we find a robust evidence that firms that engage in higher levels of commitment to climate change actions issue a higher proportion of debt with longer terms to maturity, even after controlling for their carbon risk exposure. However, we do not find a robust evidence corroborating an association between firms' carbon risk exposure and their debt financing policy. These findings are consistent with arguments that high-commitment firms enjoy positive reputation, better credit rating, and reduced agency and information asymmetry costs, allowing them to gain easier access to long-term debt markets.     

Do Board's Corporate Social Responsibility Strategy and Orientation Influence Environmental Sustainability Disclosure? UK Evidence

The environmental implications of corporate economic activities have led to growing demands for firms and their boards to adopt sustainable strategies and to disseminate more useful information about their activities and impacts on environment. This paper investigates the impact of board's corporate social responsibility (CSR) strategy and orientation on the quantity and quality of environmental sustainability disclosure in UK listed firms. We find that effective board CSR strategy and CSR‐oriented directors have a positive and significant impact on the quality of environmental sustainability disclosure, but not on the quantity. Our findings also suggest that the existence of a CSR committee and issuance of a stand‐alone CSR report are positively and significantly related to environmental sustainability disclosure. When we distinguish between firms with high and low environmental risk, we find that the board CSR/sustainability practices that affect the quantity (quality) of environmental sustainability disclosure appear to be driven more by highly (lowly) environmentally sensitive firms. These results suggest that the board CSR/sustainability practices play an important role in ensuring a firm's legitimacy and accountability towards stakeholders. Our findings shed new light on this under‐researched area and could be of interest to companies, policy‐makers and other stakeholders. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Corporate sustainability and financial performance: Collective reputation as moderator of the relationship between environmental performance and firm market value

Markets value superior corporate sustainability performance in part because investors use a firm's environmental performance as a signal of desirable but difficult-to-observe attributes, such as the firm's integrity capacity. Yet a signaling conflict can arise when a firm belongs to an organizational form that has a collective reputation for being unethical. In such circumstances, the firm's environmental performance may no longer credibly signal its underlying integrity capacity, leading markets to adjust downward the value they would otherwise place on the firm's environmental performance. Using longitudinal data on South Korean firms, we find that improvements in firm environmental performance lead to smaller increases in market values for firms belonging to a poorly reputed organizational form. However, firms can partially recover lost value by adopting firm features that reduce the signaling conflict, thereby restoring the notion of corporate sustainability performance driving firm market values.     

Populist Syndrome and Nonmarket Strategy

Although recognized as a defining feature of the current political era, populism and its implications for non-market strategy remain undertheorized. We offer a framework that (a) conceptualizes populism and its progression over time; (b) outlines the risks populism generates for firms; and (c) theorizes effective nonmarket strategies under populism. Our framework anchors the political risk profile of populism in three interdependent elements: anti-establishment ideology, de-institutionalization, and short-term policy bias. These elements jointly shape the policymaking dynamics and institutional risks for firms under populism. Our analysis shows how firms can calibrate two nonmarket strategies – political ties and corporate social responsibility – to mitigate populism-related risks. We specify how particular configurations of political ties and CSR activities, aimed at the populist leadership, bureaucrats, political opposition, and societal stakeholders, minimize risk under populism. Further, we theorize how the effectiveness of specific attributes of political ties and CSR – namely their relative covertness (more vs. less concealed) and their relative focus (narrowly vs. widely targeted) – varies as a function of firm type (insiders vs. outsiders) and the probability of populist regime collapse. Finally, we address how motivated reasoning may bias firms' assessments of regime fragility and resulting strategy choices.     

Strategic Corporate Social Responsibility Activities and Corporate Governance in Imperfectly Competitive Markets

We investigate the incentives of firms' owners to commit voluntarily to corporate social responsibility (CSR) activities in an oligopolistic market. The socially responsible attributes attached to products are considered as credence goods, with consumers forming expectations about their existence and level. We show that hiring an ‘individually’ socially responsible CEO and delegating to him the CSR effort and market decisions acts as a commitment device for the firm's owners and credibly signals to consumers that the firm will undertake the ‘missioned’ CSR activities. We also find that CSR activities are welfare enhancing for consumers and firms and thus, they should be encouraged. Copyright © 2013 John Wiley & Sons, Ltd.     

Corporate discourse and environmental performance in Argentina

There is substantial research and policy interest in the relationship between firms and the natural environment, including how this relationship is influenced by regulators, international pressures, rival firms and stakeholder demands. With some exceptions, the ‘softer’ dimensions of environmental aspect management – how attitudes, beliefs and perceptions and the human factors drive corporate behaviour – have been understudied. The work that exists tends to be informal, and allows little scope for the statistical validation that is required for robust inference. This paper examines whether corporate values towards the environment affect a firm's environmental performance. It uses survey methods as well as content and discourse analyses of interview text and corporate reports and web sites to explore the links between managerial ‘mindsets’ and the environmental performance of the firms of which they are a part. Though the application is Argentina, the lessons learned can be generalized to other developing and industrialized countries. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Corporate elite characteristics and firm's internationalization: CEO-level and TMT-level roles

This study attempts resolution of certain ambiguities of the corporate elite – Chief Executive Officer (CEO) and Top Management Team (TMT) – effect on corporate internationalization strategy. This work hypothesized that curvilinear relationship exists between CEO position tenure, TMT size, and TMT tenure heterogeneity and a firm's internationalization, by combining previous upper echelon theory and processing international business school perspective. Our detailed empirical findings indicate that CEO and TMT characteristics show a nonlinear relationship, based on 165 samples of Taiwanese firms operating in a technologically intensive industry. An inverted U-shaped relationship exists between CEO position tenure and TMT size regarding a firm's internationalization. These associations are an inverted U-shape, when internationalization level facing TMT tenure heterogeneity is accounted for.     

企业社会责任、企业声誉对员工满意度影响的实证研究

构建了企业社会责任、企业声誉和员工满意度的关系模型,以西北工业大学深圳地区和西安地区MBA班工程硕士学员为调研对象,欲探讨现阶段企业员工对企业社会责任的认知状况。通过构建结构方程模型,实证分析发现:企业社会责任对企业声誉有显著正向影响;企业声誉对员工满意度有显著正向影响;企业社会责任不直接对员工满意度产生影响,而是通过影响企业声誉后对员工满意度产生作用。     

How do corporate environmental policy and corporate reputation affect risk‐adjusted financial performance?

The current study aims to answer dual, related questions: Does corporate environmental policy affect corporate reputation, and does this link also influence risk‐adjusted profitability and company's risk? With a comprehensive framework involving analyses of each question, among a sample of firms traced by the Reputation Institute, this study reveals several notable results, after correcting for endogeneity biases. First, environmental engagement and green product innovation are both antecedents of corporate reputation. Second, corporate reputation has a positive impact on risk‐adjusted profitability and Z score indicator of financial distress risk. Thus, corporate environmental responsibility and green practices represent cospecialized assets that enhances an intangible asset, namely, corporate reputation. The latter influence constitutes a missing link between sustainable development and the firm's financial performance. Overall, environmental engagement and corporate reputation act as insurance‐like protections of firm competitiveness.     

When a Sinner Does a Good Deed: The Path‐Dependence of Reputation Repair

This study examines how shareholders will interpret a socially desirable action taken by firms with a damaged corporate reputation status. We first explain theoretically why shareholders’ path‐dependent judgments of a tainted firm increase the likelihood of shareholders making less favourable judgments of the firm's socially desirable actions. We then test the theoretical predictions using a sample of Chinese listed firms that were sanctioned for securities fraud and subsequently made donations to the 2008 Sichuan earthquake relief funds. We find that the shareholders evaluate the donations made by fraud‐tainted firms less favourably than those made by firms that have not been sanctioned for fraud. Furthermore, the shareholders’ evaluations of the donations made by fraud‐tainted firms is less favourable if the firms have committed more serious fraud and undertaken fewer positive remedial actions in the post‐fraud period. Overall, our evidence demonstrates that shareholders’ path‐dependent judgments of fraud‐tainted firms constitute a major obstacle that constrains the effectiveness of reputation repair.     

Components of CEO Transformational Leadership and Corporate Social Responsibility*

abstract We use transformational leadership theory to explore the role of CEOs in determining the extent to which their firms engage in corporate social responsibility (CSR). We test this theory using data from 56 US and Canadian firms. CEO intellectual stimulation (but not CEO charismatic leadership) is found to be significantly associated with the propensity of the firm to engage in ‘strategic’ CSR, or those CSR activities that are most likely to be related to the firm's corporate and business‐level strategies. Thus, studies that ignore the role of leadership in CSR may yield imprecise conclusions regarding the antecedents and consequences of these activities. We also critique transformational leadership theory, in terms of its overemphasis on charismatic forms of leadership. This leads to a reconceptualization of transformational leadership, which emphasizes the intellectual stimulation component in the context of CSR.     

How Do Environmental Violation Events Harm Corporate Reputation?

This study, based on attribution theory, provides empirical evidence for how environmental violation events (EVEs) damage corporate reputation, using media reputation as a proxy. Hypotheses are developed to address the influences of violating firms’ past environmental behaviors and ownership on the reputational effect of EVEs. The results show that firms with a history of unfavorable behaviors (precedent environmental violation) are deemed by the media to be more culpable for adverse environmental events and consequently suffer more damage to their reputation, while for firms with a favorable environmental record (environmental awards and honors gained) the reputational harm of an EVE is alleviated to some extent. EVEs cause more reputational damage to foreign‐owned enterprises than to domestic‐owned firms. These findings reveal that certain company behaviors could exert an indirect effect on a firm's reputation by influencing public perception of later relevant behaviors, and imply a discriminatory treatment in a host country for foreign‐owned enterprises. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

The Financial Effects of Uniform and Mixed Corporate Social Performance

Firms typically present a mixed picture of corporate social performance (CSP), with positive and negative indicators exhibited by the same firm. Thus, stakeholders' judgments of corporate social responsibility (CSR) typically evaluate positives in the context of negatives, and vice versa. Building on social judgment theory, we present two alternative accounts of how stakeholders respond to such complexity, which provide differing implications for the financial effects of CSP: reciprocal dampening and rewarding uniformity. Echoing notable findings on strategic consistency, our US panel study finds that firms that exhibit uniformly positive or uniformly negative indicators in particular dimensions of CSP outperform firms that exhibit a mixed picture of positives and negatives, which supports the notion that stakeholders' judgments of CSR reward uniformity.     

Do Family Firms Have Better Reputations Than Non‐Family Firms? An Integration of Socioemotional Wealth and Social Identity Theories

We draw from socioemotional wealth and social identity research to develop a theory on reputational differences among family and non‐family firms. We propose that family members identify more strongly with their family firm than non‐family members do with either a family or non‐family firm. Heightened identification motivates family members to pursue a favourable reputation because it allows them to feel good about themselves, thus contributing to their socioemotional wealth. We hypothesize that when the family's name is part of the firm's name, the firm's reputation is higher because family members are particularly motivated for their firm to have a better reputation. Family members also need organizational power to pursue a favourable reputation; thus, we hypothesize that the level of family ownership and family board presence should be associated with more favourable reputations. We find support for our theory in a sample of large firms from eight countries with disparate governance systems and cultures.     

How Political Actors Co-Construct CSR and its Effect on Firms' Political Access: A Discursive Institutionalist View

This paper explores how corporate social responsibility (CSR) can incentivize political actors to increase firms' political access. Taking a discursive institutional perspective, I argue that the types of access negotiated depend on how political actors co-construct the multiplicity of CSR meanings. To study this process, I focus on the empirical case of the European Union (EU), offering a novel analysis of event observations, policy documents, and interviews with Commission officials, Euro-parliamentarians, and other stakeholders. I find that the value of CSR is highly contested in the EU political arena. I then elucidate four discursive strategies through which political actors interactively refined, reframed, and reinterpreted the meaning of CSR and its relevance for firm access in ways beneficial to their perceived interests. The findings highlight the importance for nonmarket strategy studies to conceptualize CSR as a co-constructed idea and access as negotiated, putting the micro-dynamic relationship between firms and political actors centre stage.     

Corporate social responsibility,durable‐goods and firm profitability

Utilizing a two‐period durable‐goods framework, we show that in uncommitted sales markets a firm may earn higher profits as it increases its level of corporate social responsibility (CSR). We find that this occurs even though CSR has no direct impact other than increasing the durable‐goods firm's manufacturing costs. We show that in sales markets, CSR may allow the firm to credibly commit itself to lower production in the future. This, in turn, can enhance their profits even though the CSR activities are costly and provide no direct demand or marketing benefit in our model. This is important because it provides another, hereto unexplored, strategic rationale for the willingness of profit‐maximizing firms to undertake costly CSR activities. Copyright © 2010 John Wiley & Sons, Ltd.     

How effective human resource management promotes corporate entrepreneurship: evidence from China

Strategic human resource management (SHRM) represents a set of HRM practices that are aligned with firm strategies. The relationship between SHRM and organizational performance has been extensively examined; however, whether and how SHRM influences corporate entrepreneurship remains unknown. Based on the resource-based perspective, this study examined a model linking SHRM with corporate entrepreneurship. The importance of HRM people's political skill for a firm's development of devolved management through SHRM implementation was also examined. Data from a survey of 201 Chinese manufacturing firms confirm a significant relationship between SHRM and corporate entrepreneurship and that the relationship is partially mediated by a devolved management style. The relationship between SHRM and devolved management was shown to be stronger for firms with more politically skillful HRM people.     

Assessing the impact of green supply chain practices on firm performance in the Korean manufacturing industry

As a growing number of customers tend to view corporate social responsibility (CSR) as a key purchase decision criterion, demands for CSR including environmental sustainability have accelerated in today's business world. To meet such demands, many firms consider embracing environment-friendly business practices. However, many firms are still hesitant to implement those practices due to sceptical views about their real managerial benefits. Although the previous literature confirms the positive link between a firm's commitment to environmental sustainability and its performance, the varying degree of impact of different kinds of environment-friendly supply chain practices on the firm's operational performance is still unknown. To fill the void left by prior research, this paper aims to classify various types of green supply chain management (GSCM) practices and then assess the impact of each of these distinct types on the firm's operational performances (especially manufacturing and marketing performance). Also, this paper examines how the firm's organisational profiles such as firm size affect the particular firm's choice of GSCM practices. Our experimental results reveal that the chosen type of GSCM practices influences the firm's performance differently.