CSR and financial performance: The role of CSR awareness in the restaurant industry

Initiatives for corporate social responsibility (CSR) often have served business as a source of competitive advantage. However, despite firms’ attempts to capitalize on their CSR efforts, stakeholders’ low awareness of these initiatives makes it difficult to realize the full value of the strategic CSR. In this study, we propose and test in the context of the restaurant industry whether CSR awareness, measured by CSR media coverage, moderates the relationship between the social and financial performance. Our results support the notion that stakeholders’ CSR awareness affects the manner in which CSR initiatives can result in financial gain. Our research has implications both for firms’ investment policies in social initiatives and for highlighting the importance of communicating CSR initiatives to relevant stakeholders.     

Application of upper echelon theory for corporate social responsibility dimensions: Evidence from the restaurant industry

ABSTRACT

This study applies upper echelon theory and validates its conceptual framework by investigating chief executive officers’ observable determinants (e.g., the age, tenure, and formal education of top managers) of corporate social responsibility (CSR) in the restaurant industry. Multiple CSR dimensions (e.g., operational, non-operational, community, diversity, employee, environment, and product) are examined through fixed effects regression. The results indicate that older and highly educated CEOs who serve more stakeholders perform fewer CSR activities, whereas longer tenured CEOs who serve more stakeholders perform more CSR activities. Consequently, non-operational, community-, diversity-, employee-, and environment-related CSR activities are significantly explained by the proposed attributes. By validating both the theoretical perspectives of upper echelon theory and the role of stakeholder demands in CSR decisions, this research can contribute to expanding the CSR and upper echelon literature to the restaurant industry.     

The impact of material and immaterial sustainability on firm performance: The moderating role of franchising strategy

CSR and sustainability engagement is growing rapidly with ever-increasing attention. Accordingly, restaurant stakeholders now demand restaurant companies to disclose relevant ESG information (i.e., materiality) to analyze risks and opportunities that ESG factors bring to firms over the long term. As established in stakeholder theory, restaurant materiality is shaped by a firm's key stakeholders and also by the industry's distinguishing factor, franchising. However, despite their importance and timeliness, materiality and franchising remain largely absent from scholarly discussion in the field of tourism and hospitality. Using a novel industry-specific materiality classification of sustainability initiatives, here we show that franchising positively moderates the impact of investing in immaterial sustainability on firm performance. The results provide early empirical validation of stakeholder theory in relation to restaurant materiality and franchising, and show the impact of allocating a firm's resources to material and immaterial sustainability issues on firm performance in the restaurant context.     

Restaurant chain’s corporate social responsibility messages on social networking sites: The role of social distance

Considering the large influence of social media on the restaurant chain industry, finding effective communication strategies to interact with customers is critically important. The purpose of the study was to investigate how restaurant chain’s CSR messages on social networking sites affect brand value and social distance. Data were collected from 403 social media users with a dining experience at a U.S. restaurant chain. A two-step structural equation model and a two by two between-subject experimental design were conducted for this study. The perception of CSR messages on SNS positively affects customer’s social distance and the restaurant’s brand credibility, and consequently enhance the brand equity. Restaurant chain’s concrete (vs. abstract) CSR messages on SNS has a positive influence on customers’ brand equity when their social distance is close (vs. distant). The study highlights the importance of shortening social distance to enhance brand equity when developing CSR messages on SNS.     

The impact of hotel CSR for strategic philanthropy on booking behavior and hotel performance during the COVID-19 pandemic

During the novel coronavirus (COVID-19) pandemic, some hotels have engaged in corporate social responsibility (CSR) activities to help overcome the crisis. Given that most existing research examines the impact of hotel CSR on a single stakeholder, how hotel CSR activities in a crisis are perceived by multiple stakeholders is unknown. Drawing on the concept of strategic philanthropy, this study examines the impact of hotel CSR activities during the pandemic, such as providing accommodations to healthcare workers, on hotel firms' market value and prospective hotel customers’ booking behavior. Adopting mixed-methods approach, this study finds negative impacts of hotel CSR for strategic philanthropy on firm market value and customer booking behavior. The study result indicates that the value of hotel CSR depends on the nature and environmental contexts of CSR. Specific theoretical and practical implications are provided.     

The corporate social responsibility–financial performance link in the U.S. restaurant industry: Do economic conditions matter?

This study examines the role played by economic conditions (recessionary periods) on the link between corporate social responsibility (CSR) and corporate financial performance (CFP) in the U.S. restaurant industry. The choice of industry setting is based on the fact that the restaurant industry is subject to consumer discretionary expenditures and is thus highly sensitive to the state of the economy. This study further examines the relationship between CSR and CFP by dichotomizing CSR activities based on whether they are related to the firm's core operations or not, thus parsing out the effect of operations-related (OR) and non-operations-related (Non-OR) CSR activities, providing a more nuanced explanation of how some CSR activities may be more beneficial than others, to firm value in hard economic times.     

Total quality management,corporate social responsibility and performance in the hotel industry

Total quality management (TQM) and corporate social responsibility (CSR) are relevant management philosophies in the hotel industry to be able to generate a sustainable competitive advantage. This paper examines how the implementation of both TQM and CSR influences the results of hotels’ stakeholders as an antecedent of business performance. An empirical study of a sample of 141 Spanish hotels from the Andalusian region shows that the adoption of such approaches improves the capacity of hotels to create benefits for their stakeholders, and these results have a positive effect on hotel performance. The study also provides evidence of the complementarity of both management philosophies as TQM can enhance the development of CSR.     

Corporate social responsibility and systematic risk of restaurant firms: The moderating role of geographical diversification

Despite growing attention to corporate social responsibility (CSR) in the tourism literature, the relationship between CSR activities and systematic risk, one of the critical components in evaluating shareholder value, has been a topic of scarce examination. Further, the moderating role of geographical diversification on the link between CSR and systematic risk in the restaurant context has not been studied. Therefore, the current study explores these issues in the restaurant context based on the organizational theory and stakeholder theory. In addition, this study dichotomizes CSR activities into two dimensions, socially responsible activities (i.e., positive CSR) and socially irresponsible activities (i.e., negative CSR), to examine the separate effects of the two dimensions. A two-way fixed-effects model that effectively accounts for unobserved effects in a panel data set has been employed to test the proposed hypotheses.     

Are better-connected CEOs more socially responsible? Evidence from the U.S. restaurant industry

Extensive research has documented how corporate social responsibility (CSR) outcomes are determined by CEOs' intrinsic characteristics, while their social network status has been under-researched. Building on impression management theory and resource-based theory, the current study analyzes the association between CSR activities and top management's position in the social hierarchy, i.e., network centrality. The heterogeneous effects across different restaurant and CSR types are examined based on stakeholder theory. Using a panel dataset of publicly traded U.S. restaurant companies and a novel dataset of CEO network centrality, we find that firms with highly connected CEOs are involved in more socially responsible activities. In addition, the marginal effect of network centrality on CSR is stronger for fast-food than for full-service restaurants and more prominent for external than internal stakeholder subcategories. The results advance the determinant analysis of CSR and provide managerial implications for CEO selection and policy suggestions on CSR promotion.     

Corporate Social Responsibility and the Operationalization Challenge for Global Tourism Organizations

Tourism businesses have increasingly sought to contribute to society through corporate social responsibility (CSR) initiatives. Larger tourism organizations normally seek to institutionalize CSR under their corporate CSR policy and strategy that is common for their whole organization. This presents challenges for organizations with global operations. This article examines the operationalization of CSR policy by hotel properties in coastal destinations in Thailand. The research found that stakeholders other than the hotels played pivotal roles in the implementation of CSR programs and that there was a preference for involvement by hotels in local projects, over those situated elsewhere in the country or internationally. These hotels tended to partner with other non-hotel stakeholders to execute their external CSR programs and for these to be directed at social issues rather than environmental issues. Overall it was concluded that there are limits to the extent that corporate headquarters may direct the implementation of CSR.     

Social responsibility and total quality in the hospitality industry: does gender matter?

This empirical study examines the role of gender diversity in top management teams (TMTs) and their impact on corporate social responsibility (CSR), which is an underexplored topic within the hotel sector. Based on stakeholder theory, we argue that the relationship between gender diversity and hotel performance is indirect and mediated by CSR. Our study also analyses how the implementation of total quality management (TQM) and CSR influences hotel stakeholder results, and hence business performance. Using a sample of Spanish hotels, we provide evidence that gender diversity in TMTs increases the level of implementation of CSR within the hotel industry. The results show that the impact of gender diversity on hotel performance is mediated by CSR. The findings also suggest that the adoption of TQM and CSR management philosophies improves the capacity of hotels to benefit their stakeholders, and that this improvement has a positive effect on hotel performance.     

Are you good enough? CSR,quality management and corporate financial performance in the hospitality industry

Hospitality firms are increasingly investing in corporate social responsibility (CSR) to generate strong relationships with stakeholders while aiming to benefit their own performance. However, CSR may bring both costs and benefits to the focal firm. We analyze how corporate financial performance (CFP) is affected by CSR, finding that the impact of CSR on CFP has a U-shaped form, where CSR is a cost that translates into higher benefits only when it generates solid relationships between firms and their stakeholders. Furthermore, we adopt a contingency approach, assessing the role of quality management (QM) on the CSR-CFP relationship. We find that the simultaneous implementation of CSR and QM is less beneficial to CFP than the isolated implementation of CSR due to the redundancy of different activities aimed at similar goals, i.e., stakeholders’ satisfaction. In doing so, we advance academic understanding of the impact of CSR and QM on CFP.     

Effects of different dimensions of corporate social responsibility on corporate financial performance in tourism-related industries

Although the stakeholder framework proposes the multidimensionality of corporate social responsibility (CSR) (Clarkson, 1995), previous research has yet to investigate the relationship between certain dimensions of CSR and corporate financial performance (CFP) in tourism-related industries. The purpose of this study was to disaggregate CSR into five dimensions based on corporate voluntary activities for five primary stakeholder issues: (1) employee relations, (2) product quality, (3) community relations, (4) environmental issues, and (5) diversity issues, and examine how each dimension would affect financial performance among firms within four tourism-related industries (airline, casino, hotel, and restaurant). While all CSR dimensions were proposed to have positive financial effects, results revealed that each dimension had a differential effect on both short-term and future profitability and that such financial impacts varied across the four industries. The findings can provide tourism managers with insights into which dimensions of CSR activities would improve their companies’ financial performance.     

Does size matter? Corporate social responsibility and firm performance in the restaurant industry

Despite an increasing number of hospitality studies on the link between corporate social responsibility (CSR) and corporate financial performance (CFP), the literature has predominantly focused on the CSR–CFP relation without considering moderating factors. Consequently, the current study introduces firm size as a potential moderator on the CSR–CFP relationship. Performing a two-way fixed-effects model by firm and year with Newey-West standard errors, this study finds that firm size moderates the effect of positive CSR on CFP while it does not moderate the effect of negative CSR on CFP in the U.S. restaurant context.     

Hotel employees’ perceptions on corporate social responsibility: The case of Hong Kong

This study examines the perceived importance of corporate social responsibility (CSR) attributes of Hong Kong hotel employees and their hotels’ performance on those attributes, and to determine underlying performance factors that ultimately lead to the perceived overall CSR effectiveness of hotels. The importance–performance analysis results show that Hong Kong hotels generally performed well on 17 out of the indicated 30 CSR attributes. Furthermore, the attribute “promote innovation in products and services” was considered to be overkill, and another attribute, “demonstrates a commitment to the environment,” requires the immediate attention of hotels. Six performance factors were extracted and Hong Kong hotels performed best in the area of finance. The factors “state of affairs” and “novelty” positively and significantly affected employees’ perceived overall CSR effectiveness of their hotels. Almost 70% of the respondents agreed that Hong Kong hotels had been effective in carrying out their CSR. Hotels in Hong Kong should find our study results helpful in pinpointing CSR attributes considered of various importance and performance levels from the perspective of one of their important stakeholders, their employees. In particular, the relatively low awareness toward the environment of both the employees and the hotels should alert the hotel management to invest greater efforts in environmental protection.     

Effect of corporate social responsibility,customer attribution and prior expectation on post-recovery satisfaction

A conceptual model is proposed to account for how customers’ attributions of the cause of a service failure, their perceptions of a firm's social responsibility and their prior expectations can influence post-recovery satisfaction through the mediating effect of customer–company (C–C) identification. It was tested in the context of hospitality services. Findings from a survey of 281 restaurant patrons show that after a service failure, favorable corporate social responsibility (CSR) perception can help mitigate the negative effects of internal cause attribution on customer identification and ultimately contribute to post-recovery satisfaction. Besides, the interaction effect of CSR perception and attribution on C–C identification is particularly salient for customers with higher prior expectation. Findings also highlight that the dynamic interaction effect among attribution, CSR perception and prior expectation on customer post-recovery satisfaction is mediated by C–C identification.     

Impacts of positive and negative corporate social responsibility activities on company performance in the hospitality industry

In spite of growing concern for corporate social responsibility (CSR) in various industries including the hospitality industry, the relationship between CSR activities and financial performance is a rarely examined subject in the hospitality context. Especially, research measuring the separate impacts of positive and negative CSR activities on companies’ financial performances remains, as yet, unconsidered. Thus, this study examines different impacts of positive and negative CSR activities on financial performance of hotel, casino, restaurant and airline companies, theoretically based on positivity and negativity effects. Findings suggest mixed results across different industries and will contribute to companies’ appropriate strategic decision-making for CSR activities by providing more precise information regarding the impacts of each directional CSR activity on financial performance.     

Can corporate social responsibility protect firm value during the COVID-19 pandemic?

The novel coronavirus (COVID-19) pandemic has caused a significant decline in the stock market worldwide, and hospitality companies are experiencing serious financial problems. Protecting and preserving firm value is a critical way of helping hospitality companies survive the crisis. The influence of corporate social responsibility (CSR) on firm value has been widely investigated. However, little is known about the stock price movement following CSR activity adoption during an industrial crisis. Using event study and difference-in-difference method, this study reveals that engaging in CSR activities can increase the stock returns and stakeholder attention of hospitality firms during the pandemic. Community-related CSR has a stronger and more immediate effect on stock returns than customer- and employee-related CSR. Results also indicate that hospitality firms that pursue improved stock market performance during a pandemic can invest in CSR to protect communities, customers, and employees for attracting further stakeholder attention.     

Spirituality and corporate social responsibility: an empirical narrative from the Balinese tourism industry

The emerging body of knowledge has indicated the positive relationship between spirituality and corporate social responsibility (CSR), yet our understanding of how spirituality can play a role in CSR in general, and in tourism in particular, remains limited. This research takes a qualitative case study approach to the role of spirituality-inspired CSR by providing an empirical investigation of tourism businesses in Bali, Indonesia, where the Hindu based Tri Hita Karana philosophy drives its cultural identity. A total of 20 qualitative interviews and two focus groups were conducted with Bali tourism stakeholders including businesses, government, community and NGOs. The findings show that spirituality plays an important role in CSR in Balinese tourism in three dimensions, namely (1) as a key element of the broader social and cultural context to create a conducive external environment for CSR; (2) as a CSR driver to inspire business leaders; and (3) as a complement to CSR governance, though with limitations. This research contributes to the literature by providing an empirical narrative that demonstrates strong multi-layered links between spirituality and CSR and the implications for tourism destinations in spirituality-oriented cultures.     

EPU and financial performance in the hospitality and tourism industry: Moderating effect of CSR,institutional ownership and cash holding

The purpose of this study is to examine the effect of policy-related economic uncertainty (EPU) on the financial performance of hospitality and tourism companies. More precisely, the study aims at revealing how the performance of hospitality and tourism companies is affected at times of increasing EPU, and the role of corporate social responsibility (CSR) engagement, institutional ownership and cash holding to moderate this proposed relationship. The study’s sample includes a total of 113 companies from the hotel, restaurant and airline industries for the period 2001-2018. Hypotheses are tested via two-way fixed-effect regression. The study finds that increasing EPU is detrimental to firm performance presented in declining Tobin’s Q. However, the magnitude of this negative effect on firm performance becomes less pronounced as firms engage more in CSR, have larger fraction of institutional ownership and hold larger cash and cash equivalents