Leading Change and Innovation Through “Organizational Laundering”

Change in organizations can be frequent, but change is not always necessary. In pursuit of innovation, and at times their own agenda, leaders who exhibit a pseudotransformational leadership style can have a catastrophic effect on the workplace. Promoting change under the guise of innovation benefits self and not the organization and sponsors a workplace in turmoil. These leaders practice organizational laundering, which is proposed as an introductory term resulting from employing a combination of destructive and pseudotransformational leadership styles in an attempt to be innovative and make organizational change.     

Carbon risk management and corporate competitive advantages: “Differential promotion” or “cost hindrance”?

Given the strengthening of carbon regulations and the launch of emission trading scheme in China, companies are facing tremendous pressure to reduce carbon emissions, suggesting the necessity of understanding whether carbon risk management may affect corporate financial benefits. Therefore, this paper empirically demonstrates the influence of carbon risk management on corporate competitive advantages. We find that the relationship between carbon risk management and corporate competitive advantages is a “kuznets curve” that exists only among firms with weak product competition. And this relationship tends to be weakened in firms with a distant administrative hierarchy. We conclude that the influence of low carbon management on corporate competitive advantages is complicated and subject to the firm's political relevance.     

Internet use for corporate environmental reporting: current challenges—technical benefits—practical guidance

The huge opportunities of using the internet for corporate reporting are arranged in a comprehensive system of technical benefits. In order to give a tangible example and describe practical use thoroughly, the benefits are focused on environmental reporting but they can be transferred in major parts also to financial, social or sustainability reporting—seen as a currently emerging trend towards integrated financial, environmental and social reporting. In more detail, the system of internet‐specific benefits is illustrated by four main categories: benefits concerning the underlying purposes of publishing reports, benefits concerning the entire reporting process, benefits concerning the report contents and benefits concerning the report design. In terms of corporate reporting, professional internet use will enhance the way in which companies give information, communicate and manage their business internally and externally, benefiting all members involved that are reporting companies, addressed key target groups and other stakeholders such as standard setting institutions and benchmarking organizations. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment     

Does doing “good” always translate into doing “well”? An eco‐efficiency perspective

Does doing “good” always translate into doing “well”? Debate over the “value” of corporate social responsibility is high on the agenda of corporate finance research. Deeper understanding is required on managers' incentives to pursue and implement corporate social responsibility related strategies, as is more thorough comprehension of the effect of these strategies to firms' performance levels as well as shareholder and wider stakeholder valuations of the firm. This paper provides a new lens by approaching the subject from a different methodological paradigm, grounded in the performance benchmarking methods more commonly applied in operational research. In so doing, we provide novel evidence of the effect of corporate choices on environmental, social, and governance (ESG) strategic investment compliance (i.e., doing good) to firms' eco‐efficiency levels (doing well). In brief, our empirical findings suggest that ESG and firm's eco‐performance are nonlinearly related. Specifically, advanced ESG policies and disclosure levels are associated with a positive affect to firms' eco‐efficiency levels, but only up to a point, after which the effect becomes “neutral,” that is, ESG demonstrates a visible pattern of diminishing marginal returns. Thus, we may humbly conclude that a firm may “do well” by doing good, but it is not clear they should ever expect to “do great” just by “doing good.” The threshold at which this “neutrality” appears varies systematically with the characteristics of the sector in which the firm is operating, as well as dimensions of board diversity. Finally, it is evident that ESG implementation choices can be a source of managerial agency problems.     

Communicating “pink”: an analysis of the communication strategies,transparency, and credibility of breast cancer social media sites

In public relations, the social media explosion has significantly impacted how organizations communicate to their various publics through sites such as Facebook and Twitter. Although previous studies have investigated dialogic communication and relationship building strategies in organizations, few have carried out this in terms of an organization's overall social media presence, especially with nonprofits. Research has found most nonprofits are not taking full advantage of social media. Moreover, the organizations that did use social media typically employed one‐way communication strategies focusing primarily on information dissemination. This study quantitatively analyzed the transparency and credibility of breast cancer nonprofits are participating on social media sites, specifically Facebook and Twitter, and how these sites affect perceptions of credibility and transparency. Overall, most top breast cancer nonprofits are active on both Twitter and Facebook but differ in terms of activity, credibility, and transparency. Organizations that tweeted more had more “likes”, more followers, and more overall tweets and were seen to be more transparent and credible by virtue of activity alone. This study also found a strong relationship between the transparency and credibility of the organization. Therefore, organizations need to use social media sites not only to communicate with their audiences but also to engage in dialogue on a regular basis. Copyright © 2013 John Wiley & Sons, Ltd.     

“Music to our ears”: understanding why Canadians donate to arts and cultural organizations

The contribution of donations and volunteer time to North American arts and cultural organizations is impressive. Growing economic uncertainty coupled with the increasingly competitive nature of philanthropic work and fluctuating volunteerism rates describe some of the challenges facing nonprofit managers in the arts and cultural field today. The intent of this study was to explain charitable giving to an arts and cultural organization in a Canadian context using variables supported in the literature related to philanthropic behavior. The variables included the norm of social responsibility, donor benefits, philanthropic behavior, and household income. Data (233 questionnaires) were collected at a renowned community symphony with revenue from various sources including over $1 million annually in private support. Multiple regression analysis determined two of the four hypotheses were supported and two were partially confirmed. While the norm of social responsibility and household income did confirm existing literature, philanthropic behavior seemed only defined by length of time as donor rather than by volunteering for arts and cultural organizations and donor benefits included tax incentives but not receiving a “gift” in exchange for a support. Research such as this, which contributes to our understanding of arts and cultural donors and the benefits they seek, continues to be important with the potential to inform nonprofit managers. Copyright © 2010 John Wiley & Sons, Ltd.     

Are All Private Benefits of Control Ineffective? Principal–Principal Benefits,External Governance Quality,and Firm Performance

Private benefits of control (PBC) are benefits that controlling shareholders consume, but that are not shared with minority shareholders. Research focusing on the value protection role of corporate governance typically frames PBC as principal–principal (PP) agency costs, and interprets them as a form of minority shareholder expropriation that decreases firm performance. Taking a value creation perspective of corporate governance, however, we propose a more nuanced role for PBC. Specifically, we see them also as PP agency benefits that compensate controlling shareholders for their monitoring and advisory services, which can increase firm performance. Since both PP costs and benefits affect firm performance, we theorize that PBC enhance firm performance at a diminishing rate. Furthermore, we show that the effect of PBC on firm performance is more positive when country‐level external governance mechanisms are strong.     

Contracts to Communities: A Processual Model of Organizational Virtue

abstract In the face of systemic challenges to corporate legitimacy, scholars and managers alike have been rethinking traditional answers to the question: What does it take to be a good company? We approach this question in two novel ways. We offer a normative answer, grounded in virtue ethics, by introducing a threefold typology of organizational forms. The moral goodness of each form depends on the congruence between its purpose and virtues. But we also offer a positive answer in the form of a processual model which traces corporate goodness to its empirical antecedents and consequences. The model defies a view of organizations as innately good or evil, but rather portrays virtue as the sediment of a value infusion process. We predict that if managers succeed in establishing in their organizations the kind of virtues necessary to support collective moral agency, they can expect to reap gains like enhanced effectiveness and legitimacy. However, when they neglect their moral responsibilities, the result will likely be organizational demise.     

Corporate Ecological Responsiveness: Antecedent Effects of Institutional Pressure and Top Management Commitment and Their Impact on Organizational Performance

Institutional theory argues that conformity to institutional pressure enhances the survival probability of organizations. Two key limitations of institutional theory have been proposed in recent literature: one, that it ignores the role of top management, and two, that it focuses only on survival as a benefit to the exclusion of more strategic benefits such as growth and profitability. In this research, we build a conceptual model that addresses both of these limitations in the context of institutional pressure on organizations to behave more responsibly vis‐à‐vis the natural environment. Results from a survey of 199 manufacturing firms show that the relationship between institutional pressure and corporate responsiveness to the pressure (i.e. corporate environmental responsiveness) is enhanced when top management commitment to the environment is high. Moreover, results show that organizational conformity to institutional pressure enhances the strategic benefits that organizations receive. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Ethical issues in human resources systems

Currently, the topic of ethics is enjoying a surge in popularity among the media and corporate America. It is unclear if the reason for all the attention is “just for show” or if companies truly believe in the substantive benefits, which can be gained by facilitating an ethical context. However, by examining the negative consequences of unethical corporate cultures, as well as the benefits of ethical ones, we demonstrate that perhaps, in this case, the action is what is important, not the motivation. Human resource systems may be a means to promulgating an ethical culture in that ethics pervade selection and staffing, performance appraisal, compensation, and retention decisions. Thus, human resource systems and ethical corporate cultures should be considered partners in the process of creating competitive advantage for organizations.     

Corporate Environmental Paradigms in Shift: Learning During the Course of Action at UPM–Kymmene

Contrary to the popular conception in the corporate environmental management literature that corporations must learn new ecocentric paradigms before they can be expected to produce environmentally sound performance, the present results suggest that cognitive–level environmental learning in organizations does not inevitably precede behaviour change. Rather, at least partially, such learning is likely to occur in the course of action. The article also proposes that external pressure can set motion, but it alone does not lead to an environmental paradigm shift. In order to undergo such a shift, organizations will have to learn a meaning of their own to support new, more environmentally sound forms of activity.
The present study examines empirically how two companies have learnt to incorporate environmental considerations into their managerial paradigms. It adopts a perspective according to which learning is portrayed as a process in which changes are brought about in the collective beliefs that the organization members hold about the relationship of their business to the natural environment (i.e. environmental management paradigm). Applying the grounded theory approach, the article identifies phases of environmental learning starting from the recognition or rejection of weak signals in 'pockets' of the organization, continuing through the gaining of new knowledge and experience towards 'competition' between old and new assumptions about the business–environment relationship, and finally proceeding to potential frame–break.     

Corporate governance and lesbian,gay, bisexual,and transgender‐supportive human resource policies from corporate social responsibility,resource‐based,and agency perspectives

Corporate boards are responsible for ensuring that managers enact policies that are in shareholders' best interests, and managers are responsible for implementing strategies that are not only profitable but also responsive to changing legal and societal demands and the resource needs of the firm. In this paper, we use the theoretical lenses of corporate social responsibility (CSR), the resource‐based view, and agency theory to investigate the relationship between corporate governance structure and the implementation of supportive lesbian, gay, bisexual, and transgender (LGBT) policies. We analyze 10,233 firm‐year observations and 1,594 unique firms, and our results demonstrate that LGBT‐supportive policies are positively associated with firm performance. We also offer new insight into why not all firms adopt such policies. We exploit the passage of the Sarbanes‐Oxley Act as an exogenous shock that increased board independence, and our difference‐in‐difference estimation shows that firms forced to raise board independence in 2002 were less likely to invest in LGBT‐supportive policies. Results suggest that human resource management (HRM) policies can be guided by CSR and resource‐based views in the pursuit of wealth maximization, but agency conflict may also be a concern for external majority boards. We discuss implications for HRM research practice and corporate governance regarding LGBT policies in organizations.     

Different strokes: regulatory styles and environmental strategy in the North‐American oil and gas industry

The environmental management and policy literature presents competing arguments for and against different styles of environmental regulations – command‐and‐control versus flexible regulations that enable voluntary actions. On the one hand, it is argued that firms will not adopt minimum environmental standards without command‐and‐control regulations and that such regulations may actually result in competitive benefits for first movers. On the other hand, the literature argues that command‐and‐control regulations stifle innovation and that flexible regulations encourage proactive environmental strategies that lead to competitive benefits for organizations. This study compared the environmental strategies and competitiveness of oil and gas firms in two different regulatory contexts – the command‐and‐control based US environmental regulations and the flexible collaborative Canadian context. The study found no significant differences in the degree to which firms within the two contexts were more or less proactive in their environmental strategies or in the extent of competitiveness associated with corporate environmental strategies. Follow‐up interviews with 12 Canadian and US companies indicated that regulations appeared to be more important drivers of corporate environmental practices at initial stages and eventually other external and internal drivers became more important influences on corporate environmental strategies. Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment     

Connecting strategic orientation,innovation strategy,and corporate sustainability: A model for sustainable development through stakeholder engagement

This paper aims to enhance our understanding of the relationship between organizations' strategic orientation (i.e., instrumental, equidistant, and stewardship) and their innovational strategy (i.e., organizational ambidexterity and open innovation), and this relationship's influence on their sustainability performance. We expected organizations' strategic orientation to influence their innovational strategy and exhibit better corporate sustainability. We focused on 12 different multinational organizations in the Eurozone and found that inbound open innovation acts as a driver for corporate sustainability while simultaneously positively enabling organizations to pursue both financial and social initiatives. After suggesting open innovation as a new corporate sustainability antecedent, we only found empirical evidence of inbound open innovation. However, we would suggest that if organizations incorporated outbound open innovation in their strategy, they could likely improve their corporate sustainability. Also, we found that achieving an equidistant or stewardship orientation paves the way for sustainability to become an integral part of an organization's innovational culture and actualizes the organization's strategic behavior. Our findings further contribute to a deeper understanding of organizations' characteristics as their sustainability commitment grows and as they move from an instrumental to a stewardship orientation and implement an open innovational strategy.     

Exploring an innovative pivot: How green training can spur corporate sustainability performance

In general, studies on green innovation practices have primarily taken an innovation view to study the costs and benefits to firms. What has been less examined, however, is how green training spurs the intentions and advantages of green innovation. Thus, this paper explores how and when green training influences the likelihood of firms to achieve sustainability performance by using organizational learning theory. Using a dataset of 231 Chinese manufacturing firms, our work shows that green training is positively correlated to corporate sustainability performance via the indirect effect of green innovation behavior. We also find an increasingly positive indirect effect that is conditional on ambidextrous learning; specifically, this indirect effect is least positive for firms with lower ambidextrous learning capacity but stronger for those firms having higher ambidextrous learning capacity. We hold that the key to spurring corporate sustainability performance through green training lies mainly in advancing firms' green innovation behaviors and persistently enhancing their capacities for ambidextrous learning. Thus, this study offers not only new theoretical insights for understanding the effect of green training on corporate sustainability performance but also practical implications for improving corporate sustainability performance within a green economy context.     

Does Illegitimate Corporate Behaviour Follow the Forms of Polity? The Turkish Experience

In this study, we argue that illegitimate corporate actions can not only be strategic responses to the conflicting technical and institutional demands at the field level but also manifestations of the contradictory higher‐order institutional logics at the polity level. By focusing on the statist polity, somewhat neglected by the new institutional theory, we argue that the contradictory nationalist and capitalist institutional logics in the statist polity generate illegitimate corporate actions. We also propose that uncertainties and opportunities created by statist polity characteristics such as weak policy‐making capacity, neopatrimonialism, and clientelism lead to illegitimate corporate actions by triggering conflict between nationalism and capitalism. To demonstrate this, we examine the Turkish case, by focusing particularly on a recent example of illegitimate corporate action, namely the pursuit of non‐operating revenues. The case supports our arguments. It implies that illegitimate corporate behaviours may be ‘institutionalized’ as continuously reproduced by the actors embedded in a polity. It also implies that the impression management techniques to legitimate illegitimate behaviours may vary according to the forms of polity. Finally, it suggests that organizations may adopt hybrid missions as a survival strategy in a contradictory and uncertain business environment, paradoxically ultimately restricting their competitive capacities.     

Management Changes,Reputation, and “Big Bath”—Earnings Management

We study the effects of managerial turnover on earnings management activities in a model in which managers care about their external reputation. We develop an overlapping generations model showing that both outgoing and incoming managers bias reported earnings such that typically very low returns are reported in the first period after a manager has been replaced. Outgoing managers shift earnings forward to their last period in office as they will not benefit from earnings realized after that. Incoming managers can have an incentive to shift earnings to the second period in office as reported earnings will, immediately after a management change, only be partly attributed to their own ability. Deferred compensation can reduce incentives for earnings management.     

The influence of external reference price strategies in a nonprofit arts organization's “pay‐what‐you‐want” setting

Nonprofit arts organizations face conflicting objectives to balance—or more specifically, to create—artistic and educational value and to generate financial income from various sources. Pay‐what‐you‐want (PWYW), a participative pricing mechanism where services have no fixed price and customers actively decide what to pay, is a novel pricing mechanism and is of high interest for organizations and researchers alike. Based on the concepts of loss aversion and gain, this study presents a field experiment to test the effects of different PWYW pricing strategies on the amount of money paid by visitors of a German photo biennial. Explicitly, the provisions of minimum, maximum, and suggested external reference prices are compared to a setting with no external reference prices. We test the derived hypotheses, discuss the results, and provide implications for future research, as well as for the management of nonprofit arts organizations.     

Can governance help in making an IPO “successful”? New evidence from Europe

This paper investigates the determinants of a “successful” IPO from a corporate governance perspective upon a representative sample of European listings from 2000 to 2015. We use an extensive dataset of market performance, financial data, and corporate governance characteristics to run the investigation. Differently from previous studies, our analysis embraces both a short‐term perspective and a medium–long‐term perspective, where the board of directors seems to perform different tasks, moving from a value creation to a value protection strategy. Among the others, we find that board size, board independence, and their qualifications, together with their experience in other boards, are associated with a positive performance of the IPO in a short‐term horizon and in the medium–long‐term period, although significant differences emerge among those time perspectives.     

Benefits and Strategic Outcomes: Are Supplemental Retirement Plans and Safer Driving Related in the U.S. Trucking Industry?

We suggest that a firm's benefits can relate to important organizational outcomes that have strategic implications. We propose a number of mechanisms that could relate benefits to strategic outcomes, including the notion that benefits can help attract and retain the type of employees who are most likely to perform in ways consistent with the firms’ strategies. We illustrate this with the case of supplemental retirement benefits in an actual setting, the long‐haul trucking industry. We report positive organization‐level relationships associated with the management choice of offering these benefits. Our results show that firms offering supplemental retirement plans engage in significantly safer driving practices, as measured by the proxy of driver insurance costs, as hypothesized. These findings show that benefits can be related to outcomes that have strategic implications for the firm. By showing that retirement plans may be of value to organizations, we help to bridge the academic‐practitioner divide and provide motivation and guidance for additional work on this important but underresearched topic. © 2015 Wiley Periodicals, Inc.