Responsible Leadership,Stakeholder Engagement,and the Emergence of Social Capital

I argue in this article that responsible leadership (Maak and Pless, 2006) contributes to building social capital and ultimately to both a sustainable business and the common good. I show, first, that responsible leadership in a global stakeholder society is a relational and inherently moral phenomenon that cannot be captured in traditional dyadic leader–follower relationships (e.g., to subordinates) or by simply focusing on questions of leadership effectiveness. Business leaders have to deal with moral complexity resulting from a multitude of stakeholder claims and have to build enduring and mutually beneficial relationships with all relevant stakeholders. I contend, second, that in doing so leaders bundle the energy of␣different constituencies and enable social capital building. Social capital can be understood as actual or potential resources inherent to more or less institutionalized relationships of mutual recognition (Bourdieu 1980). By drawing on network analysis I suggest, third, that responsible leaders weave durable relational structures and ultimately networks of relationships which are rich in ties to otherwise unconnected individuals or groups. Against this background I argue, fourth, that responsible leadership may result in the creation of value networks (Lord and Brown, 2001) of multiple stakeholders, which enhance social capital and thereby contribute to both a sustainable business and the common good.

Consumers' Perceptions of Corporate Social Responsibilities: A Cross-Cultural Comparison

Based on a consumer survey conducted in France, Germany, and the U.S., the study investigates consumers' readiness to support socially responsible organizations and examines their evaluations of the economic, legal, ethical, and philanthropic responsibilities of the firm. French and German consumers appear more willing to actively support responsible businesses than their U.S. counterparts. While U.S. consumers value highly corporate eco-nomic responsibilities, French and German consumers are most concerned about businesses conforming with legal and ethical standards. These findings provide useful guidance for the efficient management of social responsibility initiatives across borders and for further academic inquiries.     

The Financial Performance of a Socially Responsible Investment Over Time and a Possible Link with Corporate Social Responsibility

This paper empirically examines the financial performance of a UK unit trust that was initially “conventional” and later adopted socially responsible investment (SRI) principles (ethical investment principles). Comparison is made with three similar conventional funds whose investment objectives remained unchanged. Analysis techniques employed in previous studies find similar results: mean risk-adjusted performance is unchanged by the switch to SRI, with no evidence of over-or under-performance relative to the benchmark market index by any of the four funds. More interestingly, changes in variability of returns over time are also modelled using generalised autoregressive conditional heteroscedasticity models, not previously applied to SRI funds so far as is known. Results show a temporary increase in variability of returns, followed by a return to previous levels after around 4 years. Evidence shows the increased variability to be associated with the adoption of SRI rather than with a change in fund management. Possible explanations for the subsequent reduction in variability include the spread of corporate social responsibility activities by firms and learning by fund managers. In addition to reporting on a previously unobserved phenomenon, this paper raises questions for further research.     

Varieties of CSR: Institutions and Socially Responsible Behaviour

A central concern within contemporary socio-economics has been on the relationship between national institutional configurations and societal outcomes. In this paper, we assess the relationship between legal origin and a range of correlated indicators of social responsibility, focusing on socially responsible investing and voluntary charitable giving. We found that in Common Law contexts, lower levels of social responsibility than in Civil Law contexts, other than in the area of charitable giving, where the converse was the case. We explore the reasons for this distinction, and for the different patterns encountered in post-socialist Central and Eastern Europe. Based on the findings, we identify directions for future research.     

For or Against Corporate Identity? Personification and the Problem of Moral Agency

This article explores the concept of corporate identity from a moral perspective. In it we argue that the reification and personification involved in attributing an identity to an organization has moral repercussions. Through a discussion of ‘intentionality’ we suggest that it is philosophically problematic to treat an abstraction of the corporation as possessing identity or acting as a conscious moral agent. The article moves to consider practical and ethical issues in the areas of organizational commitment, of health and safety, and corporate social responsibility, and finds that the notion of identity can be abused, although it will no doubt continue to be used as it does have some practical utility. In conclusion, we argue that despite being meaningless from a philosophical stance, the concept of corporate identity need not be discarded, however, it is far from benign and intense moral scrutiny is necessary wherever it is applied. Ian Ashman PhD is a senior lecturer in the HRM division of the Lancashire business School, University of Central Lancashire. He has recently authored a number of papers on business ethics, leadership and research methods, all of which draw upon his interest in philosophies of existential phenomenology. He is an executive member of European Business Ethics Network U.K. Professor Diana Winstanley PhD, FCIPD was Director of Postgraduate Programmes at Kingston Business School, Kingston University. She wrote over 50 articles and five books, including her latest, ‚Personal Effectiveness: A Guide to Action’ (2005, CIPD) and Ethical Issues in Contemporary Human Resource Development (2000, Macmillan). She was a trained humanistic counsellor and an executive member of European Business Ethics Network U.K. Her research interests were in the areas of workplace learning, development, diversity and business ethics. Sadly, Diana Winstanley, died last summer.     

Social and Symbolic Capital and Responsible Entrepreneurship: An Empirical Investigation of SME Narratives

This paper investigates links between social capital and symbolic capital and responsible entrepreneurship in the context of small and medium enterprises (SMEs). The source of the primary data was 144 ‘Business Profiles’, written by the owner-managers of small businesses in application for a Small Business Awards competition in 2005. Included in each of these narratives were claims relating to the firms’ contributions to wider society, relationships with customers, employees and stakeholders. These narratives were coded and classified in a framework drawn from Nahapiet and Ghoshal’s (1998, Academy of Management Review 23(2), 242–266) categorisation of social capital. The analysis revealed a range of strategic orientations towards the development of social and symbolic capital, along a conceptual continuum ranging from being responsible for oneself to being responsible for others. Overall, the evidence demonstrates the significance of the power inherent in the social relations of SMEs as a force for ethical behaviour, and suggests that normative theories of the development of social capital may provide ‘competitive advantage’ through responsible behaviour for small business in the global economy.Ted Fuller is a Professor of Entrepreneurship and Strategic Foresight, and Head of the Centre for Entrepreneurship and SME Development, Teesside Business School, University of Teesside.Yumiao Tian is a postgraduate research student in the Centre for Entrepreneurship and SME Development, Teesside Business School, University of Teesside.     

Corporate Social Responsibility Practices and Environmentally Responsible Behavior: The Case of The United Nations Global Compact

The aim of this paper is to shed some light on understanding why companies adopt environmentally responsible behavior and what impact this adoption has on their performance. This is an empirical study that focuses on the United Nations (UN) Global Compact (GC) initiative as a Corporate Social Responsibility (CSR) mechanism. A survey was conducted among GC participants, of which 29 responded. The survey relies on the anticipated and actual benefits noted by the participants in the GC. The results, while not conclusive, indicate that companies have more than one reason for adopting environmentally responsible behavior and that ethical and economic reasons co-exist. In terms of performance, the impact of participation in the GC seems to be particularly high in securing network opportunities and improved corporate image. The results indicate that companies that have participated many years in the GC, have submitted the most projects and have attended the most GC meetings also regard their CSR involvement as having had a strong, positive influence on their market performance. GC participation does not result in significant cost advantages, but this does not seem to have been regarded as a goal anyway. Costs seem to be affected to a␣large extent by existence of in-house research and␣development and the capability of developing environmentally sound technologies. Overall, the company receives both ethical and economic benefits from joining the GC. Dilek Cetindamar received her B.S. degree from Industrial Engineering Department at Bogazici University (BU), her MA degree from Economics Department at BU, and her Ph.D. degree from management Department at Istanbul Technical University in 1995. Before her appointment to the Faculty of Management at Sabanci University in 1999, she worked in the following universities: BU, Case Western Reserve University (USA), Portland state university (USA),and Chalmers University of Technology (Sweden). She has seven books, 15 book chapters, and 22 papers published in various international journals. She received an encouragement award from Turkish Science Academy in 2003. Her main interest and research topics are Technology Management, Development Economics and Entrepreneurship. Kristoffer Husoy has a Master of Arts in European Studies of Society, Science and Technology from the University of Oslo and a Master of Science in Engineering Cybernetics from the Norwegian University of Science and Technology. Research interests are Corporate Social Responsibility, environmental, technology and human-computer interaction. He currently holds a scientist position at ABB Corporate Research in Oslo Norway.     

Measuring Corporate Citizenship in Two Countries: The Case of the United States and France

Based on an extensive review of the literature and field surveys, the paper proposes a conceptualization and operationalization of corporate citizenship meaningful in two countries: the United States and France. A survey of 210 American and 120 French managers provides support for the proposed definition of corporate citizenship as a construct including the four correlated factors of economic, legal, ethical, and discretionary citizenship. The managerial implications of the research and directions for future research are discussed.     

The Action Logics of Environmental Leadership: A Developmental Perspective

This article examines how the action logics associated with the stages of consciousness development of organizational leaders can influence the meaning, which these leaders give to corporate greening and their capacity to consider the specific complexities, values, and demands of environmental issues. The article explores how the seven principal action logics identified by Rooke and Torbert (2005, Harvard Business Review 83(4), 66–76; Opportunist, Diplomat, Expert, Achiever, Individualist, Strategist and Alchemist) can affect environmental leadership. An examination of the strengths and limitations of these action logics reveals the relevance of the so-called post-conventional stages of consciousness to the recognition and effective management of complex environmental issues. Suggestions are also made for promoting organizational contexts conducive to the development of a post-conventional environmental leadership.     

The Relationship between Corporate Social Responsibility and Firm Performance: An Application of Quantile Regression

This study empirically examines the relationship between a firm’s fulfilling of corporate social responsibility (CSR) and performance. We developed a CSR index (CSRI) to quantitatively evaluate CSR, which consists of four dimensions measuring a firm’s contributions to the economy, society, environment, and corporate governance, respectively. With data from publicly-listed firms in Taiwan during the period of 2004–2009, results of quantile regression show that fulfilling CSR has a significantly positive impact on firm performance, and that the impact in a more profitable firm tends to be significantly greater than that in a less profitable firm. Specifically, when a firm is more profitable, its management would be more willing to implement CSR. The implication is that a firm could pursue better performance while serving as a good corporate citizen.     

The Social Identity Approach to Effective Leadership: An Overview and Some Ideas on Cross-Cultural Generalizability

When employees identify with the groups and organizations they work for, this typically has positive implications for work-related attitudes and behaviors. The present paper provides a focused overview of the social identity approach to leadership and some ideas on its cross-cultural generalizability. To this end, we will first outline the basic tenets of the social identity approach and summarize the relations of organizational identification with work-related variables. Then, we will discuss the role of social identity-related concepts for effective leadership. In particular, we will present empirical studies on the following three aspects: (1) the transfer of leader identification onto their followers, (2) the role of leader prototypicality, and (3) the ways for leaders to actively manage the identities of the groups they lead. Finally, we will provide some suggestions on how to implement the principles of identity management into practice and offer suggestions for future research, with a special focus on China.     

Changing the Odds: A Study of Corporate Social Principles and Practices in Addressing Problem Gambling

This paper documents a quantitative study into socially responsible principles and practices adopted in registered clubs in New South Wales Australia to manage one of their social impacts – problem gambling. The survey utilised an adapted version of Aupperle's (1982) corporate social responsibility instrument to measure the priority given to economic, legal, ethical and discretionary principles in club machine gambling operations. The survey also assessed support for certain management practices in responsible gambling. The results indicate that the participating club managers prioritise economic, legal, ethical and discretionary principles respectively, and that these are statistically related to practices they have implemented and support in responsible gambling. The managers most favoured secondary harm minimisation practices, followed by reactive primary intervention. Less favoured were proactive primary intervention and discretionary practices. These principles and practices contrast markedly with those advocated by key stakeholder groups, as expressed in semi-structured interviews and submissions to the NSW Gaming Inquiry. Non-industry stakeholders favoured a more balanced set of principles and a more holistic set of management practices in responsible gambling. The results also provide validation of Aupperle's (1982) instrument when applied to corporate management of a single social impact and for Carroll's (1979, 1991) construct of corporate social responsibility.     

The Leadership Archetype: A Jungian Analysis of Similarities between Modern Leadership Theory and the Abraham Myth in the Judaic–Christian Tradition

Archetypal psychology suggests the possibility of a leadership archetype representing the unconscious preferences of human beings as a species about the appropriate relationships between leaders and followers. Mythological analysis compared God’s leadership in the Abraham myth with modern visionary, ethical and situational leadership to find similarities reflecting continuities in human thinking about leadership over as long as 3600 years. God’s leadership behavior is very modern except that God is generally more relationship oriented. The leadership archetype that emerges is of a leader that develops his/her follower by reliably maintaining a vision, behaving according to firm ethical values even when it weakens the leader’s authority, accepting suffering when the follower is unreliable, and always forgiving even when the follower behaves with hubris in an attempt to overthrow the leader. If God’s leadership principles were mandatory in management, many dysfunctional leaders would be disqualified and many of the negative consequences of poor leadership might be averted. Neil Remington Abramson is an Associate Professor of Strategy, Specialist in building effective business relationships in comparative management contexts.     

“I Need You Too!” Corporate Identity Attractiveness for Consumers and The Role of Social Responsibility

The extent to which people identify with an organization is dependent on the attractiveness of the organizational identity, which helps individuals satisfy one or more important self-definitional needs. However, little is known about the antecedents of company identity attractiveness (IA) in a consumer–company context. Drawing on theories of social identity and organizational identification, a model of the antecedents of IA is developed and tested. The findings provide empirical validation of the relationship between IA and corporate associations perceived by consumers. Our results demonstrate that the Corporate Social Responsibility (CSR) contribution to company IA is much stronger than that of Corporate Ability (CA). This may be linked to increasing competition and of decreasing CA-based variation in the marketplace.     

The Communication of Corporate Social Responsibility: United States and European Union Multinational Corporations

This study explores corporate social responsibility (CSR) by conducting a cross-cultural analysis of communication of CSR activities in a total of 16 U.S. and European corporations. Drawing on previous research contrasting two major approaches to CSR initiatives, it was proposed that U.S. companies would tend to communicate about and justify CSR using economic or bottom-line terms and arguments whereas European companies would rely more heavily on language or theories of citizenship, corporate accountability, or moral commitment. Results supported this expectation of difference, with some modification. Specifically, results indicated that EU companies do not value sustainability to the exclusion of financial elements, but instead project sustainability commitments in addition to financial commitments. Further, U.S.-based companies focused more heavily on financial justifications whereas EU-based companies incorporated both financial and sustainability elements in justifying their CSR activities. In addition, wide variance was found in both the prevalence and use of specific CSR-related terminology. Cross-cultural distinctions in this use create implications with regard to measurability and evidence of both strategic and bottom-line impact. Directions for further research are discussed. Laura P. Hartman is a Professor of Business Ethics and Legal Studies in the Management Department in the College of Commerce at DePaul University, as Associate Vice President for Academic Affairs of the University and as Research Director of DePaul’s Institute for Business and Professional Ethics. She is also an invited professor at INSEAD (France), HEC (France), the University of Melbourne, the Université Paul Cezanne Aix Marseille III and the Grenoble Graduate School of Business. She has been published in, among other journals, Business Ethics Quarterly, Business & Society Review, Business Ethics: A European Review, and the Journal of Business Ethics. Robert S. Rubin is an Assistant Professor in the Management Department at DePaul University’s Kellstadt Graduate School of Business. He received his PhD in organizational psychology from Saint Louis University. His current research interests include transformational leadership, leader cynicism, social and emotional individual differences, and management education and development. K. Kathy Dhanda is an Associate Professor at the Department of Management at DePaul University. Her areas of research include sustainable supply chains, environmental networks, marketable permit modeling, sustainable management, and public policy.     

The Nature and Management of Ethical Corporate Identity: A Commentary on Corporate Identity,Corporate Social Responsibility and Ethics

In this paper we open up the topic of ethical corporate identity: what we believe to be a new, as well as highly salient, field of inquiry for scholarship in ethics and corporate social responsibility. Taking as our starting point Balmer’s (in Balmer and Greyser, 2002) AC²ID test model of corporate identity – a pragmatic tool of identity management – we explore the specificities of an ethical form of corporate identity. We draw key insights from conceptualizations of corporate social responsibility and stakeholder theory. We argue ethical identity potentially takes us beyond the personification of the corporation. Instead, ethical identity is seen to be formed relationally, between parties, within a community of business and social exchange. Extending the AC²ID test model, we suggest the management of ethical identity requires a more socially, dialogically embedded kind of corporate practice and greater levels of critical reflexivity. John M. T. Balmer is Professor of Corporate Brand/Identity Management at Bradford University School of Management. His research focuses on a range of corporate-level marketing issues and has a particular interest in the management of corporate brands and identities. His work has been published in leading journals such as California Management Review and Long Range Planning. With Stephen Greyser he co-authored Revealing the Corporation (Routledge, 2003). Kyoko Fukukawa is a lecturer in marketing at Bradford University School of Management and holds a Ph.D. from University of Nottingham, UK. Her research interests include ethical decision-making in consumption and business practices; corporate social responsibility (CSR) of MNCs concerning their policies and strategic communication; and CSR and corporate branding. Her publications appear in Journal of Business Ethics, Journal of Corporate Citizenship and others. Edmund R. Gray is Professor and Chair in the Department of Management at Loyola Marymount University. He is author or co-author of five textbooks and numerous scholarly articles. He holds a Ph.D. from UCLA. His research interests centre around issues of corporate identity, corporate social responsibility and environmental sustainability. Currently, he is conducting research on entrepreneurial firms with environmental/social goals that are an integral part of their mission.     

The Gordian Knot of Ethics: Understanding Leadership Effectiveness and Ethical Behavior

Recent ethical misconduct in American business has resulted in volumes of written commentary, various legislative responses, as well as litigation by those identified as victims. While legislators, judges, juries, and the Securities and Exchange Commission (SEC) pursue an increasing number of cases, there is little attention devoted to understanding what drives executives and other leaders to behave in ways that violate the ethical and legal standards of business in the United States. This understanding is a prerequisite to selecting leaders and designing interventions that prevent future misconduct. Understanding leadership’s nature and functioning is one key to understanding the ethical behavior of an organization as a system and of the people who lead the organization. Two models or frameworks provide the foundation for this paper. The first is a model of leadership competencies. This model identifies five key areas of competence related to overall, long-term leadership success. The second model targets leadership effectiveness. This model has three components – motivational patterns, decision criteria, and competencies. Using the Leadership Effectiveness Model to frame the discussion, the authors describe the nature and importance of the models, with particular focus on motivational patterns. Research suggests these patterns often account for 40–60% of overall leadership effectiveness. This article defines motivational patterns and describes key patterns that may impact ethical behavior of leaders. The article concludes with a discussion of how to use data on motivational patterns in leadership selection, development, and evaluation processes. Carl L. Harshman, Ph.D. is president of Harshman & Associates, Inc., an organizational and leadership development firm and founder of the Institute for Work Attitude and Motivation, an organization performance and research institute. He researches and writes in the areas of individual and organization performance, team development, and leadership and ethics. He can be contacted at carl@harshman.com. Ellen Harshman, Ph.D., J.D. is dean of the John Cook School of Business at Saint Louis University and associate professor in management. Her research interests include leadership, individual and organizational ethics, and issues in employment law. She can be reached at harshman@slu.edu.     

Indulgence versus Restraint: The Moderating Role of Cultural Differences on the Relationship between Corporate Social Performance and Corporate Financial Performance

Adapting to the cultural environment surrounding, a firm is of paramount importance in international marketing practices. Extant marketing literature provides meager guidance to marketers on how to adapt to cultural factors to turn corporate social responsibility strategies into financial outcomes. To address this gap, we utilize the instrumental stakeholder theory and Hofstede's cultural framework to investigate the moderating effect of indulgence versus restraint culture on the relationship between corporate social performance (CSP) and corporate financial performance (CFP). Applying a panel data regression analysis to a dataset of CSP and CFP data for 3753 firms from 43 different countries, we demonstrate that CSP has a positive effect on CFP. However, we show that CSP has a weaker effect on CFP in firms located in indulgent countries. Therefore, to generate financial outcomes, we recommend managers to allocate more resources to CSP initiatives if the firm is operating in a culturally restrained country.     

Revisiting the Concept of a Societal Orientation: Conceptualization and Delineation

Marketers have traditionally evaluated products and practices on the basis of whether something could be sold. It is also important to evaluate products and practices from a societal perspective, “Should a product be sold?” The first idea reflects a managerial orientation and what must be done to sell a product; the second idea reflects a societal orientation and the impact of selling a product. In relation to the second idea, the societal marketing concept was introduced in 1972. There has been little advancement in our understanding of a societal orientation since that time. The current study presents a conceptualization of a societal orientation based on a review of literature and qualitative interviews. The construct was conceptualized as “attention to the long-term well-being of individuals and society at large by enhancing positive impacts from and reducing negative effects associated with production and consumption of a product.” Five domains comprising a societal orientation are proposed: physical consequences, psychological well-being, social relationships, economic contribution, and environmental consciousness.