How does social trust affect corporate financial performance? The mediating role of corporate social responsibility

Prior studies assert that social trust may positively influence the economic performance of countries and firms (within those countries). This paper proposes a more nuanced mechanism whereby corporate social responsibility (CSR) mediates the relationship between country-level social trust and firm-level financial performance. Anchored in neo-institutional theory, we theorize that social trust instills norms of trustworthiness and willingness to trust others guiding individual and corporate behaviors. In order to comply with such norms and gain legitimacy, firms in high-trust society are more likely to commit to CSR activities that serve the interests of stakeholders. CSR activities, in turn, can positively influence financial performance by enabling firms to access stakeholders' resources and capabilities and to decrease transactions costs in the stakeholder relationships. We tested our theory by analyzing 9818 firm-year observations across 34 countries, during the 2006 to 2015 period. Our analysis shows the expected CSR mediation in the relationship between social trust and firm-level financial performance. Our findings are robust across different models addressing the concerns of endogeneity, alternative measures, and potential moderators.     

Who cares about organizational purpose and corporate social responsibility,and how can organizations adapt? A hypermodern perspective

Organizations are becoming increasingly mindful of their purpose, clarifying their raison d’etre and fulfilling their economic, social, governance, ethical, and environmental responsibilities. One of the drivers for this behavior is stakeholders’ interest in purpose-driven organizations committed to creating positive value in society. However, less is known about these stakeholders: who they are, why they care, and how organizations can adapt in response. In this article, I use the theoretical framework of hypermodernity to propose that a specific type of stakeholders, identified as hypermodern individuals, may care about purpose-led, responsible organizations. This article highlights five characteristics of these individuals that may explain why they care, including their desire to contribute to a humane and caring world and their love for experiential consumption. Furthermore, I offer recommendations for managers on how to create actionable strategies to implement and communicate purpose and corporate social responsibility to this stakeholder group.     

Here or there? Consumer reactions to corporate social responsibility initiatives: Egocentric tendencies and their moderators

This research examines how consumers react to corporate social responsibility (CSR) programs that vary in geographic focus. Three experiments compare consumers' patronage of a company in response to local and distant CSR initiatives. The extant egocentrism literature suggests that a CSR activity focused locally, and thus, with greater personal relevance, should increase patronage of the company responsible for the CSR activity. Indeed, this egocentric bias, exhibited in the form of increased purchase intentions or actual choices, is found across all three studies. However, these egocentric tendencies are moderated by consumers' superordinate identities. In study 1, consumers' greater intentions to patronize a company whose CSR activity is domestic vs. foreign are moderated by their sense of global identity. In study 2, consumers' increased choices of a company whose CSR activity is in their home state vs. a distant state are moderated by levels of environmental consciousness. Finally, in study 3, increased patronage of a company whose CSR activity focuses in consumers' home city vs. a distant city depends on the salience and level of consumers' superordinate group identity.     

Dare to be different? Investigating the relationship between analyst categorisation hierarchies and corporate social responsibility (CSR) conformity

This paper investigates how analyst categorisation hierarchies (CH) affect corporate social responsibility (CSR) conformity. We argue that firms that are labelled as either high rank or low rank by analysts have higher institutional immunity, while firms that are categorised as middle rank have lower immunity. These heterogeneous institutional immunities will affect the levels of CSR conformity differently. Our results, which originate from a sample of Chinese listed firms from 2009 to 2016, suggest that CH exhibit an inverted‐U‐shaped relationship with CSR conformity. High‐ranked and low‐ranked firms are most likely to be CSR nonconformist, while middle‐ranked firms tend to conduct CSR like the majority of their industry peers. Moreover, we also investigate the environmental boundary conditions of this curvilinear relationship. This relationship is moderated by environmental munificence (positively) and dynamism (negatively). Our findings fill the theoretical gap by proposing an institutional‐based explanation for the CSR conformity heterogeneity which is rarely discussed and extending the boundary conditions for the categorisation‐CSR conformity relationship.     

Does the nature of political connection matter for corporate social responsibility engagement? Evidence from China

We examine whether firms' political connection affects their corporate social responsibility (CSR) engagements and how the effects vary with different political ties, namely symbolic and material connections. These ties reflect different degrees of political embeddedness, interest alignment, network size, and monitoring with the government, and therefore impart divergent effects on managerial incentives for CSR practices. Our analysis indicates that CSR in firms with symbolic connection is much more associated with agency cost than CSR in firms with material connection. We also find that large firms with symbolic connection exhibit lower CSR performance than those with material connection, probably because the former group tends to substitute the prestige of their political capital for the goodwill associated with CSR engagement. These results show that accounting for the effects of different types of political connection on managerial incentives contributes some clarity to the debate about the compatibility of CSR with primary corporate mandates.     

How do destination social responsibility strategies affect tourists’ intention to visit? An attribution theory perspective

Destination social responsibility (DSR) initiatives have recently received increasing attention as an effective way for destinations to maintain sustainable tourism development and competitive advantages. Through the lens of attribution theory, this study divided DSR strategies into proactive and reactive approaches and explored their influences on tourists' attribution and intention to visit a destination. This study also investigated the moderating role of information sources on the relationship between DSR strategies and tourists' attribution. The results of two experiments indicated that tourists' altruism attribution and visit intention tended to be higher when a destination applied the proactive (vs. reactive) DSR strategy. Tourists who got a reactive DSR message from an internal (vs. external) information source tended to generate stronger visit intention. The findings provide important implications for destinations to adopt appropriate DSR strategies and information channels for inducing tourists’ visit intention.     

Liabilities of origin and its influence on firm's corporate social performance? A study of emerging market multinational corporations

This study draws upon the institutional-based view to examine how home country institutional voids affect the corporate social performance (CSP) of emerging market multinational corporations (EMNCs). We propose that home country institutional voids of EMNCs are positively related to CSP. We also argue that EMNCs' internationalization and visibility will further augment the above relationships. We tested our hypotheses using a sample of 89 EMNCs from 10 countries from 2009 to 2018 and found support for our arguments. Our findings show that EMNCs use CSP to overcome the liabilities of origin due to their home-country institutional voids. Internationalization and visibility increase the challenges of origin liabilities and EMNCs respond by enhancing their CSP. Our research adds to the existing knowledge base on institutional voids within the realm of international business.     

Sustainability assurance and cost of capital: Does assurance impact on credibility of corporate social responsibility information?

This paper aims to examine the credibility value of sustainability assurance and the type of assurance provider on cost of capital. A large sample of international companies from the period 2007–2014 was used to develop our models of analysis. We find a greater decrease in cost of capital for companies that publish and assure their social and environmental reports. Thus, voluntary sustainability disclosures decrease the cost of capital. However, companies also have the opportunity to reinforce this decrease by providing an assurance statement, so increasing the credibility of corporate social responsibility information. In addition, the decrease in the cost of capital is significantly higher when such assurance is provided by a top‐tier accountancy firm instead of by engineering or consultancy firms; this result supports also the reputational capital of accountancy firms.     

Angels and devils?: How do benevolent and authoritarian leaders differ in shaping ethical climate via justice perceptions across cultures?

The current study examines the effects of two major dimensions of Paternalistic Leadership (PL), authoritarian and benevolent leadership, on the perceived workplace ethical climate in different cultural contexts. Based on social influence and organizational justice theories, we illuminate the processes underlying the effects of these leadership styles on ethical climate by proposing perceived procedural and interactional justice as potential mediators. We also test how these mediating effects vary in three different countries: Taiwan, Turkey, and the United States. Based on a sample of 674 Taiwanese, 409 Turkish, and 479 American employees, we identified several interesting mediation and moderation results on leadership‐justice‐ethical climate paths. To our surprise, while procedural justice was an important mechanism linking benevolent leadership and ethical climate in all three countries, it mediated the relationship between authoritarian leadership and ethical climate only in Turkey. However, interactional justice was found to be a significant mediating mechanism only in the United States and for both authoritarian and benevolent leadership. In addition, cultural context moderated the PL‐justice link such that the strongest positive benevolent leadership and interactional justice relationship, as well as the strongest negative association between authoritarian leadership and both types of justice, were observed in Turkey.     

How different are corporate social responsibility motives in a developing country? Insights from a study of Indian agribusiness firms

Against the backdrop of increasing foreign direct investment flows in the developing economies in Asia, the investigation of topical aspects of corporate social responsibility (CSR) in the region increases in importance. We examine the CSR motives of four large indigenous agribusiness firms in India with a view of assessing the validity of the claim that CSR in this country, compared to developed countries, is influenced substantially more by moral, cultural, and religious considerations and less by self‐interest and profit seeking. Unlike numerous other investigations of CSR that rely on questionnaires and company reports, our data are drawn from in‐depth interviews and theme analysis revealing some intricate motives behind CSR behavior and business conditions that inspire them. Our findings challenge some previously reported results and indicate that the degree to which such a behavior is affected by the state of economic development and cultural differences may be smaller than is often argued.     

Building a competitive advantage based on transparency: When and why does transparency matter for corporate social responsibility?

Customers today are increasingly demanding transparency from firms. This article discusses the concept of performance transparency and explores when and why transparency plays a key role for a firm’s corporate social responsibility (CSR) effectiveness. In doing so, it addresses consumer skepticism as the logic of the transparency-CSR interaction and presents empirical evidence of the effect. It also discusses key principles for managing performance transparency effectively. Companies should monitor and track performance transparency regularly, initiate consistent transparency practices along with CSR activities, pay attention to the types of information made available, and adapt the transparency practices to the involvement level.     

How do threshold firms sustain corporate entrepreneurship? The role of boards and absorptive capacity

As companies move from one stage of their cycle to the next, they often have to revamp their skills and build innovative capabilities to survive, achieve profitability, and stimulate growth. Corporate entrepreneurship (CE) activities give these firms a foundation for building and exploiting these capabilities. In turn, stimulating and sustaining CE requires the infusion of resources and new knowledge into the firm's operations, using multiple external sources. In this paper, we highlight the importance of boards of directors and absorptive capacity for gaining access to varied and current knowledge that enriches CE. We suggest that boards and absorptive capacity complement each other in fueling CE activities. Further, boards can sometimes substitute for poor absorptive capacity and vice versa, influencing the intensity of CE activities. Managing these complementarities (or substitutions) is crucial for sustaining CE initiatives and creating value from them.     

Does it really pay to be good,everywhere? A first step to understand the corporate social and financial performance link in Latin American controversial industries

Most research studying the corporate social performance (CSP)–corporate financial performance (CFP) link has utilized developed country samples. Also, this literature has generally focused on a wide variety of industries, ignoring the fact that certain sectors – such as controversial industries – have graver social and environmental issues. Hence, a gap exists in this tradition when it comes to emerging markets and controversial industries. This paper attempts to fill this void by providing preliminary evidence and insight on the matter. Based on an exploration in six Latin American countries and five controversial industries, we find a negative bidirectional association (or a non‐significant one at best) between CSP and CFP. These results tend to contradict the mainstream conclusion of a positive bidirectional link, suggesting that institutional and market‐level forces play a major role in shaping this relationship.     

‘How do firms reach out to foreign universities? Inventors’ personal characteristics and the multinational structure of firms’

We analyze the determinants of firm-based inventors’ collaborations with universities abroad, comparing them with collaborations with national universities. We propose a micro-founded theoretical framework that introduces the role of personal linkages and global organizational pipelines as drivers of international academic collaborations, and we empirically investigate collaborations with national and international universities in a sample of inventors in Italy. We find that in general international collaborations depend positively on inventors working for multinational enterprises (MNEs). Instead for collaborations with national universities, the personal local linkages of the inventors play a large role. However, we also find that for collaborations with very distant universities abroad, such as US ones, working for an MNE is less crucial and the personal linkages of inventors become more important. In this case being an inventor with a network of foreign colleagues and with greater acquaintance with the norms of open science facilitates the interaction. This applies also to inventors who work for MNEs. The results point to a hybrid model of global linkages in the case of collaborations between firms and universities, in which both the personal international linkages of the inventors and the global organizational pipelines of MNEs play an important role.     

How can we make this work? Understanding and responding to working parents of children with autism

As autism spectrum disorder (ASD) escalates in prevalence, organizations are likely to encounter employees whose lives are touched and reframed by this intense, pervasive, and lifelong condition. Families are dramatically affected as emotional and financial challenges are heightened. Employees want and need to remain productive members of their organizations, but some adjustments are necessary. However, little is known regarding the needs and expectations of employees whose children have been diagnosed with ASD. Even less is known about how organizations, managers, and co-workers can respond to provide sensitivity, maintain overall team equity, and ensure high-quality performance. This article reports the results of an in-depth study of working parents of children with ASD as they openly and candidly share perspectives on workplace needs and accommodations. Employees—adamant that performance expectations should not be mitigated—discussed the support and the primary accommodation they sought: flexibility. Guides for both managers and co-workers are offered herein.     

How does past behaviour stimulate consumers' intentions to repeat unethical behaviour? The roles of perceived risk and ethical beliefs

Repeated unethical behaviour by consumers is a serious challenge for participants in business transactions, including consumers, retailers, and those responsible for market supervision. Due to the inherent risk of such behaviours, we examine perceived risk to uncover the psychological mechanism by which consumers consider past behaviour (PAB) when deciding to repeat unethical behaviour. We divide perceived risk into two categories, material risk (MAR) and nonmaterial risk (NMR), based on two kinds of ethical evaluation and explore their mediating effects in the process through which PAB influences consumers' intentions to repeat unethical behaviour (CIRUB). We check the moderating effect of consumers' ethical beliefs on the relationship between PAB and CIRUB. We use survey data from four typical ethical scenarios to test the proposed structural relationships. Direct positive effects of PAB on consumers' intentions are observed in all four scenarios. NMR has stable, positive mediating effects in all scenarios. MAR is found to have negative mediating effects in two scenarios (switching price tags and using an expired coupon) and a positive effect in one scenario (copying software). However, no effect is observed in the benefiting from a cashier's mistake scenario. Finally, ethical beliefs are proven to positively moderate the relationship between PAB and consumers' intentions in the first two scenarios, but not the last two. This study also discusses the implications of the findings and offers suggestions for future research.     

Formal and informal management training programs for women in Canada: Who seems to be doing a good job?

The increasing complexity of Canadian businesses in a changing marketplace indicates that women as well as men managers will have to be well trained to be able to position themselves in this new environment with a certain degree of success and personal happiness. As management educators, we have to accept an important share in this responsibility. This paper examines some of the factors that should be considered by those who want to develop management training programs for the future women managers or entrepreneurs.Dina Lavoie is associate professor of management and organization development at the Ecole des Hautes Etudes Commerciales at Montreal since 1977. Her main area of interest is entrepreneurship. She has authored the first studies on women entrepreneurs in Canada and has developed some of the first management training programs for women managers in Quebec, New Brunswick and several Asean Countries where she has resided and worked for several years. She is secretary-treasurer general of the new National Entrepreneurship Development Institute of Canada (NEDI) and is advisor to the federal and several provincial governments on issues related to women entrepreneurs and women managers. She is member of the board of trustees of several organisations including NEDI and the Asian Institute of Technology (Bangkok). We find her listed in Who's Who of Canadian Women, The World Who's Who of Women, the International Directory of Distinguished Leadership etc.     

How do institutional transitions impact the efficacy of related and unrelated diversification strategies used by business groups?

Drawing from institutional theory and organizational theory, this paper reports findings from a longitudinal study of Indian business groups as they were responding to pro-market institutional reforms. It explores their diversification choices at the group level, and the group performance consequences of these choices during a period of institutional change (1988–2012). Results show that although overall group diversification had a positive impact on performance, as institutions developed and market reforms took root, unrelated diversification resulted in poorer performance. However, related diversification strategies resulted in positive group performance outcomes after pro-market reforms had taken root. This suggests that the performance consequences of alternative diversification strategies adopted by business groups change as institutional development occurs, an important facet of business group evolution that has received limited attention in the extant literature.     

How does a local initiative contribute to social inclusion and promote sustainable food practices? Focus on the example of social cooking workshops

Initiatives from food system players closer to citizens are currently valorized to promote sustainability. Based on TCR and on the practice theories, this research aims at studying the impacts of a local initiative on two aspects: social inclusion and sustainable food practices. To do so, we chose the example of cooking classes for people in social instability. Cooking classes may contribute to fight against social exclusion through two factors: first the group dynamic and then the value‐creation for participants. Besides, cooking classes may drive towards sustainable food practices on the basis of advice about new skills. Cooking classes in three different social service structures were observed: a Social Centre; a social service structure hosting young people suffering from homophobia; and, a hosting centre for people with disabilities. To complete these observations, semi‐directive one‐hour interviews were conducted with three participants from the different groups. This information was analyzed with thematic analysis and practice theories tools. Results show that the main factor of social inclusion is the value‐creation, with two factors contributing to people's self‐esteem: (re)teach them how to cook; and offer them the opportunity to cook and eat good food. The cooking classes are efficient to promote sustainable food practices, promoting at the same time the interest in shared‐eating, shared‐cooking, and new skills. Nevertheless, it is not enough for the people to adopt new practices because of material and logistical barriers. As such, our findings are important for policy makers tasked with promoting sustainable consumption and social insertion within vulnerable population.     

How to manage corporate purchasing synergy in a decentralised company? Towards design rules for managing and organising purchasing synergy in decentralised companies

More and more organisations are showing interest in how purchasing strategy and structures may support their overall business strategies. More and more, therefore, the question prevails how to get organised at a corporate level to capture the potential purchasing synergies. The challenge is to generate knowledge regarding how to structure and manage effectively purchasing synergies between business units. This paper deals with the concept of purchasing synergy or more specifically: the management of value-adding linkages in the area of purchasing between different business units in a multi-business company. It summarises the intermediate results from Ph.D. research currently conducted at Eindhoven University of Technology. Based on the findings derived from in-depth case studies at three large multinational companies, we propose a model, which may support management by formulating the right strategy and designing the right structure aimed at capturing the potential synergies.