The Impact of Managerial Environmental Perceptions on Corporate Entrepreneurship: Towards Understanding Discretionary Slack's Pivotal Role

abstract    This study seeks to further delineate how a firm's competitive environment influences the firm's pursuit of entrepreneurial activities. To do so, we develop and test a parsimonious model that establishes the role of discretionary slack as a salient mediating mechanism through which managerial environmental perceptions influence corporate entrepreneurship. In addition, we examine two contingencies that further explain discretionary slack's impact on corporate entrepreneurship, including managements' market sensing capacity and use of outcome-based incentives. Using single- and multi-source survey data from 495 small- to medium-sized firms, we find support for our model and its associated hypotheses. Specifically, we find that discretionary slack is significantly influenced by managerial perceptions of environmental munificence and dynamism and, in turn, mediates the impact of these perceptions on corporate entrepreneurship. In addition, we find that discretionary slack's impact on corporate entrepreneurship is significantly enhanced by managements' market sensing capacity but, interestingly, not by outcome-based incentives.     

Standardization or localization? Executing corporate philanthropy in international firms

• Corporate social responsibility (CSR) has become a key component of a firm's reputation. The reputational vulnerabilities and pressure for CSR are perhaps greatest among international firms with business activities across many countries and cultures. Although the strategies of firms entering new markets have been well researched, the CSR component of the market entry decision has been largely ignored, despite its significant relationship with the financial performance of the firm. Further, previous research has largely considered CSR from an environmental performance point of view, and thus has focused on a minimum level of investment in CSR as opposed to the optimal form of the investment. Our paper seeks to address this gap by examining market entry decisions as they relate to corporate philanthropy.

Copyright © 2009 John Wiley & Sons, Ltd.     

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.     

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.     

Doing good or choosing well? Corporate reputation,CEO reputation,and corporate financial performance

Using data from Taiwan’s top 150 listed companies over the period 2003 to 2014, our study explores the influence of CEO reputation and corporate reputation on the financial performance of companies. The analysis focuses especially on the interaction between CEO reputation and corporate reputation to identify which dimension of reputation is more relevant to firm performance. We show that, though both corporate reputation and CEO reputation have an individual impact that benefits the financial performance of the company, the impact of CEO reputation is more persistent across different time periods and more comprehensive across different industries. Furthermore, we find that CEO reputation still has a positive impact on firm performance when corporate reputation is poor, indicating that CEO reputation is more important to firm performance. To pursue better financial performance, should a company make greater effort to build a good corporate reputation, or merely recruit a CEO with a good reputation? Our suggestion here is simple: “choosing well” is better than “doing good.”     

Environmental Governance of Enterprises and their Economic Upshot through Corporate Reputation and Customer Satisfaction

Drawing on resource‐advantage and signalling theories, we investigate two mechanisms, namely corporate reputation and customer satisfaction, by which the environmental governance of enterprises can benefit their economic performance. Based on secondary data from the 500 largest US enterprises compiled from multiple sources, our findings contribute to the literature by establishing the link between corporate reputation and green reputation. We also establish the economic performance paths of environmental governance via corporate reputation and customer satisfaction. This study expounds on why ‘green’ matters and identifies the performance roles of two corporate strategic resources extractable from the environmental governance of enterprises. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment     

社会责任投资与价值投资相悖吗?——基于国际经验的比较

社会责任投资促进了公司绩效评价模式的变革。从美国和亚太地区的经验来看,社会责任投资的整体表现更好;社会责任形象较好公司股票价格表现更佳;强有效的资本市场一方面将推动社会责任形象好的公司股票获得更高估值,另一方面也将促使上市公司在社会责任领域投入更多资源。长远来看,社会责任投资与价值投资并不相悖。社会责任投资在中国的发展之路还属于起步阶段,中国上市公司对企业社会责任持有非常积极的观点,但中国资本市场并没有给企业社会责任积极评价。     

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.     

Improving Firm Environmental Performance and Reputation: The Role of Employee Green Teams

This paper examines the link between a firm's organization environmental management capability, represented by the development of green teams made up of employees, and its performance. In particular, two categories of firm performance will be analysed: environmental performance and environmental reputation. This link has been investigated in a sample made of the largest publicly traded US companies. Data about green teams have been collected through the content analysis of firm environmental/sustainability/corporate social responsibility reports and/or their websites, whereas data about environmental performance and reputation are those reported in the US 500 Newsweek's 2010 Green Ranking. Regression analysis results show that the creation of employee green teams positively affects both environmental performance and environmental reputation. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Do environmental,social, and governance activities improve corporate financial performance?

This study investigated the relationship between corporate efficiency and corporate sustainability to determine whether firms concerned about environmental, social, and governance (ESG) issues can also be efficient and profitable. We applied data envelopment analysis to estimate corporate efficiency and investigated the nonlinear relationship between corporate efficiency and ESG disclosure. Evidence shows that corporate transparency regarding ESG information has a positive association with corporate efficiency at the moderate disclosure level, rather than at the high or low disclosure level. Governance information disclosure has the strongest positive linkage with corporate efficiency, followed by social and environmental information disclosure. Moreover, we explored the relationship between particular ESG activities and corporate financial performance (CFP), including corporate efficiency, return on assets, and market value. We found that most of the ESG activities reveal a nonnegative relationship with CFP. These findings may provide evidence about voluntary corporate social responsibility strategy choices for enhancing corporate sustainability.     

Corporate responsibility activities and economic performance: a theory of why and how they are connected

Whether a firm undertakes corporate responsibility (CR) activities for strategic or altruistic reasons, it is important to understand the relationship between such activities and economic performance. CR activities may be distinguished based on which combination of three possible outputs – learning, reputation and CR outcomes – they produce. This distinction matters not only for the ultimate environmental and social sustainability but also for the relationship between CR activities and economic performance. Taking advantage of this distinction, an integrative synthesis of knowledge of the relationship between CR activities and economic performance can be developed that presents the relationship in terms of a dynamic, case‐specific, inverted U‐shaped efficiency frontier and the vertical distance from this frontier. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

Corporate Social Responsibility: Three Key Approaches

abstract    Corporate social responsibility remains an embryonic and contestable concept. This paper assesses three key approaches and offers a perspective gauging little prospect of theoretical synthesis. Ethical responsibility theory advocates strong corporate self-restraint and altruism duties and expansive public policy strengthening stakeholder rights. Economic responsibility theory advocates market wealth creation subject only to minimalist public policy and perhaps customary business ethics. These two viewpoints embed competing moral frameworks and political philosophies. Any theoretical synthesis must discover some subset of ethical principles yielding corporate competitive advantage. Corporate citizenship language invokes a political metaphor providing neither true intermediate positioning nor theoretical synthesis. Two conflicting interpretations abandon responsibility language without adopting the economic viewpoint. An instrumental citizenship interpretation expands philanthropy as a strategic lever for increasing corporate reputation and market opportunities while retaining managerial discretion. An ideal citizenship interpretation restates ethical responsibility into voluntarism language intended to influence managerial discretion concerning universal human rights.     

Motivations and Barriers to Corporate Environmental Management

This paper integrates two conceptual frameworks, utility maximization and institutional theory, to analyze voluntary corporate environmental management. The utility maximization or economic approach centers on motivations to decrease cost, increase revenue and improve manager utility. Institutional theory emphasizes how external pressures from market and non‐market constituents shape the firm's environmental efforts. We view the two frameworks as complementary and postulate a model that includes both types of influences. Survey data from six major industries consisting of a diverse set of facilities are used to estimate the effects of economic and institutional factors on a facility's use of environmental practices and pollution‐prevention activities. Our results support the hypothesized model, and show that cost barriers, management attitudes toward environmental stewardship, company ownership and external institutional forces, including competitiveness, investor and regulatory pressures, all affect a facility's environmental practices and pollution prevention activities. Findings suggest that a multifaceted policy strategy is needed to advance corporate environmental management across diverse firms. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment     

The influence of managerial satisfaction on corporate environmental performance and reputation

Organizational studies have widely debated the relationship between job satisfaction and job performance. Some papers have dealt with managerial satisfaction and businesses' performance adopting agency theory to interpret the results. However, no studies have yet considered the relationship between the satisfaction levels of an environmental manager and corporate environmental performance. This paper thus analyses the role played by the environmental manager's satisfaction in enhancing corporate environmental performance and reputation. The paper uses data from a survey of 412 Eco Management and Audit Scheme registered organizations. The results show a positive relationship between managerial satisfaction and environmental performance, whereas no such positive relationship was found when considering eco‐innovation performance. In addition, the environmental manager's satisfaction has a positive and indirect influence on the corporate environmental reputation. These results contribute to the literature on agency theory and aim to extend the debate between job satisfaction and job performance to the sustainable business field.     

Corporate social responsibility and corporate performance: a quantile regression approach

This paper investigates the impact of corporate social responsibility activities on corporate performance. In view of the inconsistent empirical findings in the literature, and the limitations of least squares regressions, we adopt a quantile regression method to fill this gap in the literature. An important finding is that the sensitivity of a company’s performance to its engagement in corporate social responsibility activities does not vary with the quantile location of the firm’s performance level, and the engagement in corporate social responsibility activities has a significant positive relation with corporate performance across all quantiles. This study argues that undertaking corporate social responsibility leads to greater financial returns than the related costs. Therefore, this study concludes that engaging in corporate social responsibility is beneficial for firms, and thus worth implementing.     

Are entrepreneurial foreign activities of Peruvian SMNEs influenced by international certifications, corporate social responsibility and green management?

Given the crucial role of entrepreneurial foreign activity as a source of corporate profits and competitive advantage, it is of interest to investigate which factors may help promote it. This paper evaluates whether entrepreneurial foreign activities of small and medium-sized multinational enterprises (SMNEs) of Latin American developing countries are affected by international certifications, corporate social responsibility and green management. To that aim, we use a sample of 100 Peruvian exporting firms from several sectors and a methodology consisting of partial least squares structural equation modeling. Results reveal that, while acquiring and holding international certifications as well as the investments carried out in actions related to corporate social responsibility do not have positive effects on the performance of entrepreneurial foreign activities of Peruvian SMNEs, green management exerts a positive influence. Therefore, environmental management is revealed as an effective tool to help firms from developing countries compete successfully in the markets and, in turn, improve the economic situation in those regions.     

Corporate Governance and the Environment: What Type of Governance Creates Greener Companies?

We build on a stakeholder–agency theoretical perspective to explore the impact of particular corporate governance mechanisms on firm environmental performance. Our empirical evidence shows that several important corporate governance mechanisms such as the board of directors, managerial incentives, the market for corporate control, and the legal and regulatory system determine firms' environmental performance levels. These results suggest that these different governance mechanisms resolve, to some extent, the existing divergence of interests between stakeholders and managers with respect to environmental activities.     

Exploring the relationship between environmental orientation and brand value: is there fire or only smoke?

This paper investigates whether a firm's environmental orientation influences corporate brand value. In the discussion on sustainable development, corporate participation is a given, and increasingly firms are adopting environmental policies and practices. This paper observes corporate environmentalism from two perspectives: environmental embeddedness – the level to which environmental values are incorporated in brand identity; and environmental performance – the level of a firm's accordance with environmental policies and good practices. Cross‐analysis of these two perspectives generates four types of corporate environmental orientation: leaders, performers, advocates and laggards. The results do not provide conclusive evidence for whether consumers reward environmental leaders and punish environmental laggards by converting their environmental opinions into brand perceptions and purchasing decisions. It is believed that the hypothesized relationships are moderated and mediated by other stimuli, so managers are advised not to negate corporate social responsibility, but rather to invest wisely in environmental activities and its communication. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Environmental proactivity,competitive strategy,and market performance: The mediating role of environmental reputation

This article examines the impact of small and medium-sized enterprises' (SMEs) proactive environmental strategy on market performance through the mediating mechanism of environmental reputation. In addition, we investigate the potential moderating role of competitive strategies on the environmental reputation-market performance nexus. Data were collected from 223 SMEs. Using the hierarchical multiple regression analysis, the results show that a proactive environmental strategy positively enhances environmental reputation. Also, the influence of proactively environmental strategy on market performance is mediated by environmental reputation. In addition, our findings show the relationship between environmental reputation and market performance is greater for firms that adopt the differentiation strategy but not significant for firms adopting the low-cost and integrated strategies. Our study offers several theoretical and practical implications.     

The relationship between corporate reputation and organizational citizenship behavior: a comparative study on TV companies and banks

Corporate reputation (CR) is an increasingly emphasized issue in the management and organizational studies. Many research studies on the corporate reputation have revealed the impact of that issue on the informal performances of employees. The purpose of this study is to determine the relationship between corporate reputation and organizational citizenship behavior (OCB). The survey method has been conducted through random sampling. Four TV companies and four banks have been included in the survey. Results have been evaluated comparatively across two different sectors. The research has been composed of two parts; in the first part the corporate reputations of the chosen companies have been measured according to the Cravens et al. (2003) index. In the second part of the research the organizational citizenship behaviors of the employees in the eight companies have been measured and the relationship between corporate reputations of the companies and the employees’ OCBs have been analyzed through the correlation and regression analysis. It is revealed that there is a statistically significant effect of CR on OCB.