Corporate Responses to Shareholder Activists: Considering the Dialogue Alternative

This empirical study examines corporate responses to activist shareholder groups filing social-policy shareholder resolutions. Using resource dependency theory as our conceptual framing, we identify some of the drivers of corporate responses to shareholder activists. This study departs from previous studies by including a fourth possible corporate response, engaging in dialogue. Dialogue, an alternative to shareholder resolutions filed by activists, is a process in which corporations and activist shareholder groups mutually agree to engage in ongoing negotiations to deal with social issues. Based on a unique dataset of resolutions filed by member organizations of the Interfaith Center on Corporate Responsibility from 2002 to 2005 and the outcomes of these resolutions, our analysis finds that corporate managers are more likely to engage in dialogue with shareholder activists when the firm is larger, is more responsive to stakeholders, the CEO is the board chair, and the firm has a relatively lower percentage of institutional investors.     

企业与非政府组织的关系:态度与策略

非政府组织是非市场环境的一个重要组成部分。非政府组织对市场主体———企业产生什么影响?企业在如何与非政府组织打交道?西方学者对这些问题进行了广泛研究,也对跨国公司与中国非政府组织的关系进行过一些案例研究。对西方学者的相关主要研究为中国企业研究自身与NGO的关系提供有价值的参考。     

Opening Constructive Dialogues Between Business Ethics Research and the Sociology of Morality: Introduction to the Thematic Symposium

Journal of Business Ethics - Over the last decade, scholars across the wide spectrum of the discipline of sociology have started to reengage with questions on morality and moral phenomena. The...     

Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based Crowdfunding

The present article is a continuation of the debate two sets of authors (Bagus and Howden vs. Barnett and Block) have been engaging in regarding one type of maturity mismatching: borrowing short and lending long (BSLL). All four authors had agreed that this practice can set up the Austrian Business Cycle; the present author denies that BSLL would be a legitimate commercial interaction in the free society; Bagus and Howden continue to maintain that it would be licit. Our main criticism of Bagus and Howden is a reductio ad absurdum: that this opens them up to the charge of embracing the doctrine of market failure; this is something highly problematic for the two of them, since all four contributors to this debate are well-known supporters of laissez faire capitalism.     

民族企业与跨国公司竞争的模型分析

立足于我国的实际情况,分析民族企业与跨国公司之间的竞争状况,并在此基础上建立民族企业与跨国公司竞争的分部模型和整体模型及其演化模型。分部模型分为价格竞争模型、产品和成本竞争模型以及研发竞争模型;整体演化模型分为螺旋上升模型、恶性循环模型和维持现状型。通过上述模型分析为我国产业的成长提供理论支持并为民族企业的成长提出决策建议。     

大股东侵害与中小股东利益保护:一个模型分析

大股东侵害中小股东利益的现象已引起社会的广泛关注,但已有文献缺乏对大股东侵害成因和程度的研究。依据公共选择理论和产业组织理论,本文模型指出实施监督职能但没有得到相应投资收益是大股东侵害中小股东利益的重要原因,大股东的侵害包括以补偿监督成本为目的的第I类侵害、要求监督成本的支出取得合理投资回报为目的的第II类侵害和大股东利用公司内部信息以最大化其收益为目的的第III类侵害,且不同类型的侵害对大股东和公司的意义不同。为有效解决大股东侵害问题,并提高大股东的监督水平,就应对大股东的第I类和第II类侵害进行补偿,并对第III类侵害进行惩罚。     

Ideology and the Balanced Scorecard: An Empirical Exploration of the Tension Between Shareholder Value Maximization and Corporate Social Responsibility

In a society where the ideology of shareholder value maximization (SVM) prevails, how do evaluators make appraisal and bonus decisions when corporate social responsibility (CSR) measures and financial measures in the balanced scorecard (BSC) point in different directions? To explore this question, we conducted two studies to develop and test a conceptual framework. Participants were asked to evaluate the performance of two managers, using a case we wrote about a commercial bank. We found that (1) evaluators are more willing to drop CSR performance measures than financial measures from the evaluations; (2) perceived CSR relevance is influenced by where evaluators stand in regard to CSR (“stakeholder view” in the “Perceptions of the Role of Ethics and Social Responsibility” or PRESOR scale) and also by where evaluators believe shareholders stand (shareholder support); and (3) there is a financial bias in appraisal and bonus decisions when CSR measures are used in the BSC, consistent with SVM ideology. We conclude by discussing the implications of the influence of SVM ideology on the use of CSR measures in terms of business research, practice, and education.     

论我国企业与跨国公司联盟的战略转移

20世纪80年代以来,越来越多的跨国公司建立起多种形式的战略联盟,90年代以后,战略联盟逐步向纵深化发展。面对跨国公司战略联盟的发展,我国入世后受到的冲击将会更大。本文着重分析世界跨国战略联盟的发展特征、跨国公司新特点和我国的实际情况,认为我国有条件的企业应与跨国公司建立契约式战略联盟。     

Building Trust Between Consumers and Corporations: The Role of Consumer Perceptions of Transparency and Social Responsibility

Developing trust in a company is a significant part of building the company-consumer relationship. Previous studies have sought to identify the positive consequences of trust such as loyalty and repurchase, but the question of what builds trust remains largely unanswered. To answer the question, we developed a model that depicts the relationships among transparency, social responsibility, trust, attitude, word-of-mouth (WOM) intention, and purchase intention. An online survey was conducted with a US nationwide sample of 303 consumers, and the data were analyzed using the structural equation modeling method. The results indicated that consumers’ perceptions of a corporation’s efforts to be transparent in the production and labor conditions and to be socially responsible by giving back to the local community directly affected these consumers’ trust and attitudes toward the corporation, and indirectly affected their intentions to purchase from and spread positive WOM about the corporation. Theoretical and practical implications are discussed.     

Missing the Popular Vote: Pitfalls in US Democracy and Reform Proposals

Intereconomics - Only a few years ago, it was a widespread belief that globalisation would trigger processes of democratisation worldwide. However, even old and established democracies such as the...     

Corporations and entrepreneurs: Paradox and opportunity

The intrapreneur is the corporate entrepreneur. But some people consider “corporation” and “entrepreneur” so opposite that “intrapreneur” is an oxymoron, a contradiction in terms. Not so, says the author, who argues that an organization without an entrepreneurial spirit becomes a bureaucracy. On the other hand, the small firm cannot depend on entrepreneurship alone. Without professional management it may stay small—or worse, go broke.     

Inconsistencies in Activists’ Behaviours and the Ethics of NGOs

Non-governmental organizations (NGOs) and pressure groups have taken up the mission of counterbalancing the huge power of the multinational corporations. Curiously, while most NGOs have a sincere ethical background and a genuine ethical motivation, the way some activist groups and NGOs themselves act does not always live up to the principles they advocate. Research using a multiple case study methodology is used to provide an illustration of various questionable practices followed by pressure groups revealing a range of tactics. The concerns, the objectives and the legitimacy of NGOs and activist groups will be discussed, along with their strategies and tactics. A framework will be developed as a basis for analysing the ethical aspects of the various NGO actions. The analysis of the cases will reveal some worrisome inconsistencies between the demands and the practices of NGOs and activist groups. Should not the means employed by activists and NGOs be consistent with their own espoused or implied values? As power gives responsibility, NGOs should be seen as having corporate stakeholder responsibility.     

Non-Libertarianism and Shareholder Theory: A Reply to Schaefer

Libertarianism and the shareholder model of corporate responsibility have long been thought of as natural bedfellows. In a recent contribution to the Journal of Business Ethics, Brian Schaefer goes so far as to suggest that a proponent of shareholder theory cannot coherently and consistently embrace any moral position other than philosophical libertarianism. The view that managers have a fiduciary obligation to advance the interests of shareholders exclusively is depicted as fundamentally incompatible with the acknowledgement of natural positive duties – duties to aid others that have not been acquired by some prior commitment or transaction. I argue that Schaefer is mistaken. Positive duties are incompatible with the shareholder model only if we must contribute to their fulfilment in the corporate context; only if we have some reason to think that it is not possible or not permissible to discharge these obligations entirely in our private lives or through our various other roles and capacities. But we have no good reason to accept this. I argue that individuals are presumptively free to decide how and when to discharge their positive duties, and that buying shares does not cause this presumption to lapse. Hence a non-libertarian moral theory can be held without incoherence by a proponent of the shareholder model.     

Multinational Corporations and the Social Contract

The constitutions of many nations have been explicitly or implicitly founded upon principles of the social contract derived from Thomas Hobbes. The Hobbesian egoism at the base of the contract fairly accurately represents the structure of market enterprise. A contractarian analysis may, then, allow for justified or rationally acceptable universal standards to which businesses should conform. This paper proposes general rational restrictions upon multi-national enterprises, and includes a critique of unjustified restrictions recently proposed by the Organization for Economic Cooperation and Development (OECD). I propose restrictions that may be tighter than the OECD and international law currently demand, because reason requires that the activities of enterprises accord with standards of environmental and governmental sustainability in addition to consortium, national law and international law agreements. I argue that it is justifiable that indictments may be presented by a citizen or a government against the local arm of a multinational enterprise in response to violations committed by an arm within a different country.     

Shareholder authorized inside trading: A legal and moral analysis

This article evaluates inside trading from a legal and a moral perspective. From both of these points of view, the practice of inside trading is fraudulent whether it occurs in the traditional format or in the variation known as misappropriation. Fraud is a legal tort and a moral wrong consisting of a breach of duty that intentionally causes harm to persons that the insider can reasonably foresee. In defense against allegations of fraudulent inside trading, the defendant may argue that one or more elements of fraud are not evident, or, if the elements are clear, that the fraud was a justified means of avoiding some worse evil or of achieving some greater good. The article concludes that inside trading, under circumstances approved by shareholders, is neither fraudulent nor unfair. Bill Shaw is a Professor of Business Law at the University of Texas at Austin.     

Corporate Directors and Social Responsibility: Ethics versus Shareholder Value

This paper reports on the results of an experiment conducted with experienced corporate directors. The study findings indicate that directors employ prospective rationality cognition, and they sometimes make decisions that emphasize legal defensibility at the expense of personal ethics and social responsibility. Directors recognize the ethical and social implications of their decisions, but they believe that current corporate law requires them to pursue legal courses of action that maximize shareholder value. The results suggest that additional ethics education will have little influence on the decisions of many business leaders because their decisions are driven by corporate law, rather than personal ethics. Jacob Rose is Associate Professor at Southern Illinois University Carbondale. His research emphasizes judgment and decision making in accounting and governance contexts.     

Social Shareholder Engagement: The Dynamics of Voice and Exit

Investors concerned about the social and environmental impact of the companies they invest in are increasingly choosing to use voice over exit as a strategy. This article addresses the question of how and why the voice and exit options (Hirschman 1970) are used in social shareholder engagement (SSE) by religious organisations. Using an inductive case study approach, we examine seven engagements by three religious organisations considered to be at the forefront of SSE. We analyse the full engagement process rather than focusing on particular tools or on outcomes. We map the key stages of the engagement processes and the influences on the decisions made at each stage to develop a model of the dynamics of voice and exit in SSE. This study finds that religious organisations divest for political rather than economic motives using exit as a form of voice. The silent exit option is not used by religious organisations in SSE, exit is not always the consequence of unsatisfactory voice outcomes, and voice can continue after exit. We discuss the implications of these dynamics and influences on decisions for further research in engagement.     

Corporations and NGOs: When Accountability Leads to Co-optation

Interactions between corporations and nonprofits are on the rise, frequently driven by a corporate interest in establishing credentials for corporate social responsibility (CSR). In this article, we show how increasing demands for accountability directed at both businesses and NGOs can have the unintended effect of compromising the autonomy of nonprofits and fostering their co-optation. Greater scrutiny of NGO spending driven by self-appointed watchdogs of the nonprofit sector and a prevalence of strategic notions of CSR advanced by corporate actors weaken the ability of civil society actors to change the business practices of their partners in the commercial sector. To counter this trend, we argue that corporations should embrace a political notion of CSR and should actively encourage NGOs to strengthen “downward accountability” mechanisms, even if this creates more tensions in corporate–NGO partnerships. Rather than seeing NGOs as tools in a competition for a comparative advantage in the market place, corporations should actively support NGO independence and critical capacity.     

People Who Complain about Advertising: The Aficionados,Guardians, Activists and Seekers

Creativity is a driver of competitive advantage. It is found in firms of all sizes, but perhaps has greatest impact within the entrepreneurial smaller firm. This paper discusses the origins of the study of creativity, from social psychology to the business discipline. Creativity is then viewed as a key competency at the Marketing/Entrepreneurship Interface, linked with related issues such as innovation, vision, leadership and motivation. The benefits of developing creative competencies are presented and linked to a knowledge entrepreneur's set of 21_st century business skills. A model of creativity as competitive advantage is developed, built from sets of internal and external factors impinging upon firm and managerial performance. Finally, a series of recommendations for both marketing practitioners and academics are made, focusing on the need to challenge convention in order to progress ideas, products and services into the new century.