While past studies have enriched our understanding of the impact of returnee executives on firm market strategy and outcomes, we know relatively little about the relationship between returnee executives and firm nonmarket strategies. Grounded in upper echelons theory, this study explores the relationship between returnee executives and corporate philanthropy, the latter of which is an important nonmarket strategy in emerging economies such as China. Using data on publicly listed Chinese companies from 2010 to 2017, we find that the proportion of (...) returnee executives is negative related to corporate philanthropy. We also find that this negative relationship is strengthened by executive ownership, but weakened by corporate prominence and political connections. Our study makes important theoretical contributions to strategic leadership research, upper echelons theory, and the literature of corporate philanthropy. The managerial implications are also discussed. (shrink)

In China, many private entrepreneurs have obtained political offices in the government. In this study, we argue that Chinese private entrepreneurs who are formally connected with government institutions, compared to other Chinese private entrepreneurs, tend to contribute more to philanthropic causes not only for instrumental concerns but also out of altruistic values. We submit this argument to an empirical test through a secondary data analysis of a representative sample of Chinese entrepreneurs collected by a coalition of government and industry groups. (...) The results of this analysis show that politically connected entrepreneurs are more likely to make major philanthropic donations and, at the same time, hold a stronger sense of the responsibility for doing so. The most important contribution of this research is that it reveals the ethical basis of the philanthropic activities of Chinese private entrepreneurs, especially those with political connections, that has been unappreciated by extant literature. (shrink)

In China, many private entrepreneurs have obtained political offices in the government. In this study, we argue that Chinese private entrepreneurs who are formally connected with government institutions, compared to other Chinese private entrepreneurs, tend to contribute more to philanthropic causes not only for instrumental concerns but also out of altruistic values. We submit this argument to an empirical test through a secondary data analysis of a representative sample of Chinese entrepreneurs collected by a coalition of government and industry groups. (...) The results of this analysis show that politically connected entrepreneurs are more likely to make major philanthropic donations and, at the same time, hold a stronger sense of the responsibility for doing so. The most important contribution of this research is that it reveals the ethical basis of the philanthropic activities of Chinese private entrepreneurs, especially those with political connections, that has been unappreciated by extant literature. (shrink)

Prosocial compensation is a corporate social responsibility practice that involves donating money to a charitable cause on behalf of customers as a means to compensate them for their loss after a service failure. In order to determine the effectiveness of PC, we carried out three experiments while also comparing its effectiveness within private and public settings. Experiment 1 focused on the signaling effects of communicating the promise to offer PC to potential customers in the event of service failure. Results show (...) that, in both private and public settings, PC has positive effects on corporate image, credibility, and word-of-mouth intent. More significantly, PC improved one’s CSR image, whereas more tangible compensation, such as a gift voucher, did not. Experiments 2A and 2B focused on the effects of offering PC after a service failure on perceptions of justice. Results show that PC contributes to perceived distributive justice, procedural justice, and post-recovery satisfaction in both private and public settings. Our study showed that PC could be a relevant new CSR practice for organizations wanting to enhance theirs CSR image while contributing to fulfilling their ethical and philanthropic CSR responsibilities. We discuss the implications of our findings and offer several avenues for follow-up research on this initial study on PC. (shrink)

Business Ethics: A European Review, EarlyView.

As an important way for enterprises to fulfill social responsibility, corporate philanthropy has attracted much attention from the academic community. But there are still few well-targeted theoretical and empirical studies on what functions the board of directors should perform to better fulfill philanthropic responsibilities. Taking this deficiency as a breakthrough, this study focuses on Chinese state-owned and private enterprises to analyze and test the functions performed by the BOD in CP. Based on the sample of Chinese A-share listed companies from (...) 2008 to 2019, the empirical results show that the BOD of state-owned enterprises mainly performs a monitoring function in CP while that of private enterprises mainly performs a consulting function. The above findings remain valid when potential biases in the quantitative analysis are considered. Further research shows that environmental dynamism and board fault lines inhibit the performance of the above two functions. The contributions of the study include clarifying the functional characteristics of the BOD in CP and its influencing factors, revealing new theories to the formation mechanism of CP, which provide references for enterprises to optimize philanthropic decision-making. The limitation should also be emphasized that our findings are based only on Chinese contexts. (shrink)

This study examines how the corporate philanthropy decisions of group-affiliated firms in Korea are made. Based on the attention-based view, we argue that when corporate decision makers at group-affiliated firms focus their attention more on internal markets than external stakeholders because of the firm’s high reliance on intragroup transactions, the firm will decrease its level of corporate philanthropy. We further argue that the relationship will be stronger when governance mechanisms focus on the instrumental value of corporate philanthropy. Using a panel (...) sample of group-affiliated firms in Korea from 2011 to 2015, we find that as intragroup sales increase, the level of corporate philanthropy decreases, and such a negative relationship is stronger when outside director representation and foreign investor ownership are high. Our study suggests that internal dependence and corporate governance mechanisms jointly affect the level of corporate philanthropy at firms in a business group. Thus, this study contributes to the literature on corporate philanthropy, business group, and corporate governance. (shrink)

Business Ethics: A European Review, EarlyView.

Philanthropic giving among leaders is often assumed to be an expression of ethical leadership in both academic and media discourses; however, this assumption can overlook the ways in which philanthropy produces and is underpinned by inequality. In order to extend current understandings of ethical leadership, this study employs a critical discourse analytic approach to examine how the link between philanthropy and ethical forms of leadership is verbally and visually constructed in the media. Based on the analysis, the article demonstrates how (...) the construction of Australian philanthropists as ethical leaders is achieved through their representation via three paradoxical identities: Aristocratic Battlers; Caring Controllers; and Publicity-Shy Celebrities. These discourses are mediated by Australian cultural norms and serve to conceal yet ultimately reinforce social and economic inequality. The article proposes that a critical discursive approach to understanding leadership ethics can help to explore the hidden or adverse effects of ostensibly ethical practices. (shrink)

This study focuses on examining the thematic landscape of the history of scholarly publication in business ethics. We analyze the titles, abstracts, full texts, and citation information of all research papers published in the field’s leading journal, the Journal of Business Ethics, from its inaugural issue in February 1982 until December 2016—a dataset that comprises 6308 articles and 42 million words. Our key method is a computational algorithm known as probabilistic topic modeling, which we use to examine objectively the field’s (...) latent thematic landscape based on the vast volume of scholarly texts. This “big-data” approach allows us not only to provide time-specific snapshots of various research topics, but also to track the dynamic evolution of each topic over time. We further examine the pattern of individual papers’ topic diversity and the influence of individual papers’ topic diversity on their impact over time. We conclude this study with our recommendation for future studies in business ethics research. (shrink)

Community development, or the socio-economic transformation of local communities, has been a significant focus of organizational ethics. Such community development programmes—whether led by state, civil society, or businesses—are animated by modernization and have involved, I argue, the production of a new moral order. As part of which, communities were imagined in particular ways, historically. Drawing on a periodization of history of philanthropy of the Tata Group (India’s leading multinational conglomerate) from the 1860s onwards, I outline the four stages involved in (...) the production of this new moral order—each with a distinct formulation of community—as part of India’s development. The shifts in imaginaries of community, I conclude, were justified and legitimized by the elites as part of the wider nation-building efforts. (shrink)

Scholars of business and management studies have recently turned their attention to inequality, a key issue for business ethics given the role of private firms in transmitting—and potentially challenging—inequalities. However, this research is yet to examine inequality from a subaltern perspective. In this paper, we discuss the alleviation of inequalities in organizational and institutional contexts by drawing on the ideas of Dr. B. R. Ambedkar, a jurist, political leader and economist, and one of the unsung social theorists of the twentieth (...) century. Specifically, we focus on Ambedkar’s critique of the Indian caste system, his outline of comprehensive reform, and prescription of representational politics to achieve equality. We contend that an Ambedkarite ethical manifesto of persuasion—focussed on state-led institutional reforms driven by the subaltern—can help management researchers reimagine issues of inequality and extend business ethics beyond organizational boundaries. (shrink)

This paper investigates whether corporate philanthropic decisions are associated with a firm’s listing status and business group affiliation. Analyzing a large sample of public and private firms in Korea, we find that public firms make more charitable contributions than private firms and business group-affiliated firms make more charitable contributions than non-affiliated firms. The results suggest that public firms, owing to greater public scrutiny, and business groups, owing to higher political costs, are encouraged to make more corporate charitable contributions. Further, we (...) find that greater corporate giving by public firms than private firms is more pronounced for business group-affiliated firms, compared with non-affiliated firms. The result is consistent with business groups’ strategic coordination of their affiliates’ philanthropic decisions to tunnel business group resources out to controlling shareholders who hold a larger portion of private affiliates than public affiliates. (shrink)

This study examines the role of corporate philanthropy in the management of reputation risk and shareholder value of the top 100 ASX listed Australian firms for the 3 years 2011–2013. The results of this study demonstrate the business case for corporate philanthropy and hence encourage corporate philanthropy by showing increasing firms’ investment in corporate giving as a percentage of profit before tax, increases the likelihood of an increase in shareholder value. However, the proviso is that firms must also manage their (...) reputation risk at the same time. There is a negative association between corporate giving and shareholder value which is mitigated by firms’ management of reputation. The economic significance of this result is that for every cent in the dollar the firm spends on corporate giving, Tobin’s Q will decrease by 0.413 %. In contrast, if the firm increase their reputation by 1 point then Tobin’s Q will increase by 0.267 %. Consequently, the interaction of corporate giving and reputation risk management is positively associated with shareholder value. These results are robust while controlling for potential endogeneity and reverse causality. This paper assists both academics and practitioners by demonstrating that the benefits of corporate philanthropy extend beyond a gesture to improve reputation or an attempt to increase financial performance, to a direct collaboration between all the factors where the benefits far outweigh the costs. (shrink)

A salient if under researched feature of the new age of global inequalities is the rise to prominence of entrepreneurial philanthropy, the pursuit of transformational social goals through philanthropic investment in projects animated by entrepreneurial principles. Super-wealthy entrepreneurs in this way extend their suzerainty from the domain of the economic to the domains of the social and political. We explore the ethics and ethical implications of entrepreneurial philanthropy through systematic comparison with what we call customary philanthropy, which preferences support for (...) established institutions and social practices. We analyse the ethical statements made at interview by 24 elite UK philanthropists, 12 customary and 12 entrepreneurial, to reveal the co-existence of two ethically charged narratives of elite philanthropic motivations, each instrumental in maintaining the established socio-economic order. We conclude that entrepreneurial philanthropy, as an ostensibly efficacious instrument of social justice, is ethically flawed by its unremitting impulse toward ideological purity. (shrink)

This article discusses the ethics and drivers of philanthropic foundations in emerging markets. A foundation organizes assets to invest in philanthropic initiatives. Previous scholarship has largely focused on developed countries, especially the United States, and has questioned the ethics behind the activities of foundations, particularly for strategic motives that served wider corporate purposes. We argue that philanthropic foundations in emerging markets have distinctive characteristics that merit separate examination. We scrutinize the ethics behind the longitudinal activity of such foundations using 70 (...) oral history interviews with business leaders in 18 countries in Africa, Asia, Latin America, and the Middle East. We find that 55 out of 70 foundations associated with these leaders have been used as vehicles for a specific type of philanthropic ethics defined as “spiritual philanthropy”. These foundations often embodied personal or family traditions, culture, and religious values, which emphasized charitable giving and social responsibility. As in the case of many of the industrial foundations in Europe, these foundations also carried founding family names and provided a structure to maintain family control and enhance corporate reputation. We argue that, as business leaders in emerging markets are more directly exposed to dire social, educational and health deprivation than their counterparts in developed countries, they are less inclined toward grandiose world-making, and their foundations are more focused on delivering immediate benefits to communities in their home countries, motivated by implicit or explicit spirituality. (shrink)

Using a dataset of corporate philanthropic gifts of $1 million or more, we examine the influence of corporate donors on the performance of recipient non-profit organizations. We find that corporate donors positively influence NPO performance, specifically in the form of higher revenues per employee, program ratios, and fundraising returns. We find little evidence that large foundation or individual donors similarly enhance organizational performance. In additional analysis, we find that large corporate donations matter when the corporation is more likely to have (...) influence over the recipient NPO. These findings suggest that corporate donors provide the monitoring and expertise needed to enhance organizational performance beyond simply providing funding to NPOs. Our results are robust to a two-stage model and propensity score matching to address endogeneity concerns. While prior research has examined the effect of corporate philanthropy on donor organization performance, we contribute to the literature by examining whether corporate philanthropy also improves recipient organization performance. (shrink)

The dynamic organisational processes in businesses dilute the boundaries between the individual, organisational, and societal drivers of corporate philanthropy. This creates a complex framework in which charitable project selection occurs. Using the example of European tour operators, this study investigates the mechanisms through which companies invest in charitable projects in overseas destinations. Inextricably linked to this is the increasing contestation by local communities as to how they are able to engage effectively with tourism in order to realise the benefits tourism (...) development can bring. This research furthers such debates by exploring the processes through which tour operators facilitate community development through charitable giving. Findings show, with no formal frameworks in existence, project selection depends upon emergent strategies that connect the professional with the personal, with trust being positioned as a central driver of these informal processes. Discretionary responsibilities are reworked through business leaders’ commitment to responsible business practises and the ethical subjectivity guiding these processes. (shrink)

Despite receiving a great deal of research attention, the effect of corporate philanthropy on shareholder value remains inconclusive. To address this issue, the present paper examines emotionality as an important factor based on which investors infer about the firm’s motive as well as the beneficiary’s worthiness and react accordingly. Consistent with attribution theory, our event study shows that announcements with more emotional expressions are associated with higher cumulative abnormal stock returns and the effect is stronger when investor attention is greater. (...) We further find that the positive interaction effect between emotionality and investor attention is more pronounced for scandal-free firms than for firms with corporate social irresponsibility (CSI). The empirical evidence remains consistent under various robustness tests. The paper concludes with implications for future research and managerial practices. (shrink)

Business and Society Review, Volume 126, Issue 4, Page 407-431, Winter 2021.

This paper examines the association between corporate philanthropy and tunneling by controlling shareholders. Using a unique dataset from China, the paper finds evidence that firms donating more are less likely to tunnel. The negative association between philanthropy and tunneling is stronger when firms are faced with more severe agency conflicts, as indicated by lower largest shareholding, fewer growth opportunities, lower state ownership, and weaker product market competition. The results suggest that companies engaging in philanthropy have incentives to enhance their reputations (...) and improve their relationships with stakeholders. (shrink)

We examine corporate philanthropic decisions in response to the local spread of COVID-19. From a strategic perspective, firms may proactively undertake philanthropic efforts to limit the spread of the pandemic and avoid a degraded business environment. From the perspective of non-trivial costs, increased economic uncertainty can raise concerns about business survival and lead to conservative philanthropic strategies. Following the proverb “prosperity makes friends, adversity tries them,” at the provincial level, our results support the second perspective. Specifically, when the spread of (...) the pandemic worsens in a province, local firms are less likely to make COVID-19-related donations in terms of likelihood and amount. Investors also react negatively, not only to the local spread of COVID-19 but also to COVID-19-related philanthropic donations. At the organizational level, our evidence indicates that there is at least some level of cost–benefit analysis underlying corporate philanthropic decisions. Specifically, corporate philanthropic donations, especially those made to the local business environment, are significantly affected by organizational-level factors, such as pre-existing resource availability and motives to acquire political and reputational resources. Overall, our multilevel study presents a comprehensive picture of corporate philanthropic decisions amid the COVID-19 crisis. (shrink)

During the past decades, academics and practitioners have been extensively focusing on corporate philanthropy as an important part of corporate social responsibility and a vast number of papers have been published on this topic in various disciplines. To have a better understanding of the evolution of corporate philanthropy, this paper critically reviews some 60 years of research covering 228 corporate philanthropy documents (including 214 journal articles, 5 dissertations, and 9 books and book chapters) across and between disciplines, and analyzes their (...) content in a systematic and comprehensive manner. A multi‐level and multidisciplinary theoretical framework that synthesizes and integrates the corporate philanthropy literature at micro‐, meso‐, and macro‐levels of analysis is offered. Specifically, the framework presents antecedents, intermediaries (moderators and mediators), consequences of corporate philanthropy, and the underlying mechanisms of the corporate philanthropy–firm performance relationship. This paper helps bridge important knowledge gaps of corporate philanthropy and its relation with firm performance by studying corporate philanthropy at a multi‐level of analysis and applying diverse theoretical frameworks of corporate philanthropy. The paper concludes by offering several suggestions for future research on corporate philanthropy. (shrink)

In this article, we propose that giving in cash and non-cash differ in their relation with the giving firm’s future corporate financial performance and only cash giving is associated with future CFP. Using a novel dataset from ASSET4 that differentiates corporate giving over a sample period of 2002–2012, we examine three competing hypotheses: agency cost hypothesis that cash giving reflects agency cost and destroys value for shareholders, investment hypothesis that cash giving is an investment by management that aims for better (...) future return, and information hypothesis that cash giving has informational value to shareholders as cash is a critical resource at a firm and giving is a decision by managers who are insiders. We find that indeed, only cash giving is positively associated with future CFP and firm value, measured by Fama–French five-factor abnormal risk-adjusted stock returns, future return on assets, and Tobin’s Q. In addition, we find that the positive association exists only between excess, i.e., unexpected, but not expected cash giving and future CFP. Our empirical findings support the information hypothesis, but neither the agency hypothesis nor the investment hypothesis, and are robust to a number of endogeneity tests, including orthogonalized cash giving, instrumental variable regression using geography-based instruments, and propensity score matching. Furthermore, we show that the positive association between future CFP and unexpected cash giving is only pronounced at firms with good governance and relatively higher sales growth where agency problems are less likely, and at firms with no alternative mechanisms to demonstrate the strength of cash flow. Additionally, we do not find evidence that suggests in-kind giving to possess any informational value. (shrink)

Purpose This paper aims to examine whether companies engaging in corporate philanthropy, a component of corporate social responsibility, disclose information about such activities publicly on their websites, analyze whether there is a relation between the kind of charitable giving, the number of donation types, or the industry sector the company belongs to, the mention on the company website and whether there is a relation between communicate company corporate philanthropy and communicate other company CSR issues. Design/methodology/approach The research methodology was descriptive (...) statistics research method. The data were collected during the months of June and July 2013 from the websites of 141 companies that had recently engaged in corporate philanthropy. Findings The study found that, surprisingly, a considerable portion of companies practicing corporate philanthropy do not disclose that information on their websites. This was especially the case when donations were made with product instead of in cash. Originality/value This study quantifies the fact that many companies engage in CSR through corporate philanthropy but do not communicate those activities to a wider public. This can be seen as a missed opportunity to take advantage of a variety of positive effects that companies related to CSR benefit from. On the other hand, it can also be interpreted as a missed opportunity for the NGOs to encourage their donors to “come out” with their philanthropic activities. (shrink)

Corporate Philanthropy is multi-dimensional, differs between sectors and involves both individual and organisational decision-making to achieve business and social goals. However, the CP literature characteristically focuses on strategic decisions made by business leaders and ignores the role of employees, especially those in lower status and lower paid positions. To redress this imbalance, we conducted a qualitative study of employees’ involvement in CP processes in ten workplaces in the South East of England to identify whether and how they are involved in (...) CP decision-making and to capture their perspective on the nature of CP and the benefits generated by such activities. We specifically chose to study workplaces where employees are involved in the actual execution of the CP strategy, prioritising companies with a visible presence on the high street. The results illustrate the benefits of involving employees in CP decision-making, which we argue derives in part from the ‘liminal-like states’ that typify CP activities organised by shop floor staff, involving the temporary overturning of hierarchies, humanising of workplaces and opportunities for lower level staff to prioritise their personal philanthropic preferences and signal their charitable identity to colleagues and customers. Whilst the data also suggest that CP decision-making remains predominantly top-down and driven by profit-oriented goals, we conclude that employees should be involved in choosing charitable causes as well as in designing and implementing workplace fundraising, in order to maximise the advantages of CP for the company and for wider society. (shrink)

With the growing call for private sector actors to address global challenges, it is necessary to first assess whether regions with the greatest needs are accessing corporate philanthropy. In this paper, we ask whether corporate philanthropy is reaching those with the greatest health-care needs. Drawing on economic geography and corporate homophily, we argue that corporate philanthropy tends to exacerbate health inequality as grants are destined for counties with fewer health problems. We test and find support for this hypothesis using data (...) on health grants made by US corporate foundations and county-level health data. Our results that corporate health grants are less likely to go to counties which have a lower proportion of medical service providers and insured citizens suggest that corporate foundations are unwittingly complicit in worsening the resource gap between small, poor, rural counties and large, wealthy, urban counties. From an ethical perspective, we provide some guidance as to how this may be corrected. (shrink)

Family firm philanthropy (FFP) is the donation of resources to support societal betterment in ways meaningful for the controlling family. Family business literature suggests that socioemotional goals of achieving family prominence, harmony, and continuity drive FFP. However, these drivers fail to explain spiritually motivated philanthropic behaviors like anonymous giving by business families. 14 case studies of Indian Hindu business families with a combined FFP exceeding 2 billion INR in 2016–17 reveal spirituality or the moral dimension as an additional important driver (...) of corporate behaviors like FFP. Two fundamental spiritual beliefs of dharma (duty towards society) and karma (right to action without expectation of rewards) instill a duty-bound giving culture in Hindus. However, the strength of each belief varies in controlling families revealing four configurations of philanthropists labeled as Devout, Committed, Devoid, and Coerced in this study. Devouts, the biggest givers, are spiritually motivated, controlled by at least third-generation family members with executive power and professional support. Committed philanthropists are motivated by societal development rather than spirituality. While devoids hold spiritual beliefs, they neglect to devote appropriate resources or develop professional structures to support FFP. Coerced, the smallest givers, focus on business growth, lack family champions or supporting professional structures, and face turbulent family or business domains. (shrink)

Business Ethics: A European Review, EarlyView.

Increasingly, frontiers between business and philanthropy seem to be blurred. Reward-Based Crowdfunding platforms contribute to this blurring of lines since they propose funders to support both for-profit and philanthropic projects. Our empirical paper explores the case of Ulule, the leading crowdfunding platform in Europe. Our results, based on a statistical analysis of more than 3000 projects, show that crowdfunding platforms foster specific kinds of relationships relying on reciprocal giving, beyond the usual opposition between altruistic and selfish motivations. We use the (...) work of Marcel Mauss to account for this process of reciprocal giving, and we argue that Maussian theory of gift can be used more generally to describe funding activities in the context of early stage entrepreneurship. (shrink)

Accountability for corporate social responsibility (CSR) and its societal challenges is undetermined, and it is unclear whether business or society should carry these responsibilities. Despite severe criticism from some, many organizations continue to invest in and promote CSR. The purpose of this multiple-case study was to increase the understanding of the phenomenon from the perspective of a purposeful sample of participants who contribute to CSR execution and who were representatives of the 10 organizations identified as active promoters. The participant corporations (...) (case studies), in Europe and North America, were mainly in the telecommunications industry. Study data came from 11 face-to-face, semistructured interviews with chief executive officers (CEOs) and other CSR key participants, a review of corporate archival records, and a review of other sources regarding the effective implementation of CSR in these organizations. The conceptual framework consisted of Carroll’s constructs of CSR based on economic, legal, social, and discretionary elements. The constant comparative method was used to analyze the interview data and identify factors leading corporations to continue to engage in CSR. These factors were economic, social impact, legal compliance, or good reputation, sponsored by transformational or adaptive leaderships and endorsed by visionary CEOs. The findings may enlighten and motivate other organizations to engage in CSR programs and connect stakeholders’ contribution to a broadened positive social change. (shrink)