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)

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)

Business Ethics: A European Review, EarlyView.

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)

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)

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)

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)

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)

Prior work shows that capital market participants including investors, analysts, and managers are all impacted by the prevailing level of investor sentiment. We extend this line of work by investigating whether the effects of sentiment spill over into the nonprofit sector by affecting donors’ spending to support moral causes. While donors are driven by ethical, altruistic, and other utility-maximizing motives, it is unclear whether behavioral biases stemming from sentiment would influence donors’ decisions to give. We shed light on this issue (...) using a large industry-diverse panel of over 115 thousand organization-years from 2008 to 2016. Results indicate that nonprofit organizations receive less in stock-based donations and more in cash-based donations during periods of high investor sentiment. Our inquiry separately considers cash and stock-based donations because we expect, and find, that market-related sentiment impacts these types of contributions differently. Moreover, we find that these effects are stronger for organizations with large donors, who are more closely tied to the capital markets, and therefore more susceptible to investor sentiment, as well as charitable organizations, consistent with “tug-at-the-heartstrings” type appeals inducing more emotional donation response. Taken together, the results suggest that market-wide investor sentiment impacts nonprofit organizations and the effects vary in the cross-section. (shrink)

Business ethics in Africa, as a field of research, practice, and teaching, has grown rapidly over the last two decades or so, covering a wide variety of topical issues, including corporate social responsibility, governance, and social entrepreneurship. Building on this progress, and to further advance the field, this special issue addresses four broad areas that cover important, under-researched or newly emerging phenomena in Africa: culture, ethics and leadership; business, society and institutions; corruption, anti-corruption and governance; and philanthropy, social entrepreneurship and (...) impact investing. In addition to advancing research by addressing some of the imbalances and gaps in the extant literature, this special issue draws attention to indigenous African theories, models and firms. Some challenges facing business ethics, as a field of practice and teaching in Africa, are also highlighted. The paper concludes with a summary of the eight articles in this special issue. (shrink)