Although existing research evaluates how the adoption of proactive environmental strategies affects corporate performance, there is little understanding of the organizational mechanisms that link such strategies to competitive advantage. It is, therefore, unclear how environmental strategies relate to other management strategies that could lead to a competitive advantage. In this article, we analyze the organizational capabilities that underlie a firm’s ability to generate competitive advantage from the adoption of proactive environmental strategies. We develop and test a model where absorptive capacity (...) facilitates the development of proactive environmental strategies that result in competitive advantage. Results from a survey of 157 German chemical firms strongly support the model. (shrink)

Although the composition of the board of directors has important implications for different aspects of firm performance, prior studies tend to focus on financial performance. The effects of board composition on corporate social responsibility (CSR) performance remain an under-researched area, particularly in the period following the enactment of the Sarbanes-Oxley Act of 2002 (SOX). This article specifically examines two important aspects of board composition (i.e., the presence of outside directors and the presence of women directors) and their relationship with CSR (...) performance in the Post-SOX era. With data covering over 500 of the largest companies listed on the U.S. stock exchanges and spanning 64 different industries, we find empirical evidence showing that greater presence of outside and women directors is linked to better CSR performance within a firm’s industry. Treating CSR performance as the reflection of a firm’s moral legitimacy, our study suggests that deliberate structuring of corporate boards may be an effective approach to enhance a firm’s moral legitimacy. (shrink)

This research aims to explore the relationship between corporate governance and CSR: What are the major factors that play a direct role in the establishment of this relationship? How does context and institutional background impact upon the relationship between CSR and Governance? Using in-depth semi-structured interviews from two types of governance systems in three countries over three years, this study has demonstrated that in practice, within different settings, CSR is being used both as a strategy as well as a reaction (...) to different drivers. We call this adaptive governance where governance can be defined as a flexible system of action incorporating strategic and monitoring activities that determines the way a company enacts its responsibilities to its shareholders and stakeholders and which is determined at any given time by the interrelationship of institutional drivers and behavioural norms. Governance systems and their interrelationships with CSR are demonstrated as fluid according to the national and institutional context, economic situation and industry impact. In the eyes of practitioners corporate governance includes both structural and behavioural factors as well as responsibilities and actions towards shareholders and stakeholders. Contextual factors that this research highlights to be important to the incorporation of CSR into governance include the economic environment, national governance system, regulation and soft law, shareholders, national culture, behavioural norms and industry impacts. Hypotheses on the impact of institutional contexts, industry impacts and economic situations on different types of CSR actions are proposed for further research. (shrink)

An important issue for successful recruitment is to increase the pursuit intention of job seekers. This study discusses such issue by proposing a research model based on the signaling theory and the expectancy theory. In the model, this study hypothesizes that the perceived corporate social performance of job seekers positively affects their job pursuit intention and recommendation intention indirectly via the mediation of corporate reputation and job advancement prospects. The proposed hypotheses of this research are empirically tested using the data (...) from people seeking a job. The empirical findings of this study complement previous literature by discussing how corporate social performance benefits business organizations from a perspective of human resources and recruitment. Last, managerial implications for business leaders and managers are provided. (shrink)

Implementing corporate social responsibility (CSR) in supply chains is not a trivial task. In fact, many firms in recent years have publicly proclaimed that in order to keep their CSR commitments, they had to reduce reliance on external suppliers by vertically integrating their operations. Our aim in this article is to examine whether there is truly a relationship between a firm’s CSR performance and its level of vertical integration. Drawing on a multi-industry sample of 2,715 firm-year observations, and after addressing (...) endogeneity concerns, we demonstrate that firms with higher CSR performance tend to vertically integrate more (or, outsource less). We also demonstrate that this tendency is weaker for firms that have higher degrees of asset specificity or international diversification. Our core conclusion is that CSR performance and outsourcing are at odds, but firms can reconcile this tension by deepening their collaborations with suppliers. (shrink)

This paper reviews the development of socially responsible investment (SRI) over recent years and highlights the prospects for an increasingly strong connection with the practice of corporate social responsibility. The paper argues that not only has SRI grown significantly, it has also matured. In particular, it has become an investment philosophy adopted by a growing proportion of large investment institutions. This shift in SRI from margin to mainstream and the position in which institutional investors find themselves is leading to a (...) new form of SRI shareholder pressure. Although this bears some resemblance to lobbying campaigns which might take advantage of shareholder rights, we seek to distinguish it as an important phenomenon in its own right — one to which corporate executives are likely to be paying increasing attention in the years to come. We further argue that this approach potentially meets some of the earlier ethical criticisms of certain forms of SRI but, ironically, probably owes its existence to those pioneering approaches. We conclude with some suggestions for further research to inform discussion of the issues highlighted in the paper. (shrink)

In this paper, we draw on insights from theories in the management and corporate governance literature to develop a theoretical model that makes explicit the links between a firm’s corporate social responsibility related board attributes, its board CSR strategy, and its environmental and social performance. We then test the model using structural equation modeling approach. We find that the greater the CSR orientation of the board, the more proactive and comprehensive the firm’s CSR strategy, and the higher its environmental and (...) social performance. Moreover, we find this link to be endogenous and self-reinforcing, with superior CSR performers tending to further strengthen their board CSR orientation. This result while positive is also suggestive of the widening of the gap between the leads and laggards in CSR. Therefore, the question arises as to how ‘leaders’ are using their superior CSR competencies seen by many scholars as a source of corporate competitive advantage. Stakeholders of corporations therefore need to be cognizant of this aspect of CSR when evaluating a firm’s CSR activities. Policy makers also need to be cognizant of these concerns when designing regulation in this field. (shrink)

Ethical debate exists on the effect of gender diversity of the top management teams on organizations. This study aims to contribute to this debate by analyzing the effects of gender diversity of TMTs on the relationship between knowledge combination capability and organizations’ innovative performance. We use a sample of 205 small- and medium-sized enterprises belonging to the sector of Spanish technology-based firms. Our results indicate that gender diversity positively moderates the relationship between knowledge combination capability and innovation performance. Implications for (...) theory and practice are discussed—among them, ways to contribute to more equal gender distribution and to the benefits of gender diversity in top management positions. (shrink)

This paper aims to critically review the existing literature on the relationship between corporate governance, in particular board diversity, and both corporate social responsibility and corporate social responsibility reporting and to suggest some important avenues for future research in this field. Assuming that both CSR and CSRR are outcomes of boards’ decisions, this paper proposes that examining boards’ decision making processes with regard to CSR would provide more insight into the link between board diversity and CSR. Particularly, the paper stresses (...) the importance of studies linking gender diversity and CSR decision making processes, which is quite rare in the existing literature. It also highlights the importance of more qualitative methods and longitudinal studies for the development of understanding of the diversity–CSR relationship. (shrink)

Although the concept of corporate social responsibility is fundamentally multidimensional, most studies use composite scores to assess corporate social performance. How relevant are such composite scores? How the CSR dimensions are weighted? Should the weighting scheme be the same across sectors? This article proposes an original weighting scheme of CSR strengths and concerns, at the sector level, which is proportional to media and nongovernmental organizations scrutiny. The authors show that previous CSP assessments underweight environmental and corporate governance concerns. Moreover, findings (...) suggest that firms that are exposed to the closest scrutiny are usually criticized on one single dimension: for instance, banks for bad corporate governance, and basic-resource firms for environmental damage. Composite scores based on equal weights hence misrepresent CSP and the difference in CSR between sectors. (shrink)

This study examines the impact that research and development (R&D) intensity has on corporate social responsibility (CSR). We base our research on the resource-based view (RBV) theory, which contributes to our analysis of R&D intensity and CSR because this perspective explicitly recognizes the importance of intangible resources. Both R&D and CSR activities can create assets that provide firms with competitive advantage. Furthermore, the employment of such activities can improve the welfare of the community and satisfy stakeholder expectations, which might vary (...) according to their prevailing environment. As expressions of CSR and R&D vary throughout industries, we extend our research by analysing the impact that R&D intensity has on CSR across both manufacturing and non-manufacturing industries. Our results show that R&D intensity positively affects CSR and that this relationship is significant in manufacturing industries, while a non-significant result was obtained in non-manufacturing industries. (shrink)

Corporate governance is often split between rule-based and principle-based approaches to regulation in different institutional contexts. This split is often informed by the types of institutional configurations, their strengths, and the complementarities within them. This approach to corporate governance regulation is mostly discussed in the context of developed economies and their regulatory demands. However, in developing and weak market economies, such as in Sub-Saharan Africa, there is no such explicit split and the debates on such contexts in the comparative corporate (...) governance literature have been meagre. Nonetheless, there are sparks of good corporate governance practices in the region. Drawing from institutional theory and a case study of a largest economy, we explore the appropriateness or suitability of corporate governance regulatory frameworks in Sub-Saharan Africa. Our findings suggest that Nigeria needs an integrated system that combines elements of both rule-based and principle-based regulation, supported by a multi-stakeholder co-regulation strategy. This paper departs from the mainstream rule-based and principle-based categorisations by forging ahead new perspectives on corporate governance regulation, especially in weak market economies. (shrink)

Economic and social activities are undergoing radical changes, which can be labelled as 'knowledge economy and/or society'. In this sense, intellectual capital (IC), or knowledge assets, as the fourth factor of production, is replacing the other ones-job, land and capital. This article tries to offer the origins and nature of the firm's IC that can be labelled as 'An Intellectual Capital-Based View of the Firm Competition'. This framework tries to highlight the strategic role of different intangible assets like talented and (...) committed workers, cultural values, or long-term relationships among the firm and its stakeholders-customers, allies, suppliers and society in general - in gaining and sustaining competitive advantages, being the management of IC a key issue in the management agenda. (shrink)

Economic and social activities are undergoing radical changes, which can be labelled as ‘knowledge economy and/or society’. In this sense, intellectual capital, or knowledge assets, as the fourth factor of production, is replacing the other ones – job, land and capital. This article tries to offer the origins and nature of the firm’s IC that can be labelled as ‘An Intellectual Capital-Based View of the Firm Competition’. This framework tries to highlight the strategic role of different intangible assets like talented (...) and committed workers, cultural values, or long-term relationships among the firm and its stakeholders – customers, allies, suppliers and society in general – in gaining and sustaining competitive advantages, being the management of IC a key issue in the management agenda. (shrink)

This study reviews and synthesizes the contemporary business literature that focuses on the role of corporate social responsibility to enhance firm value. The main objective of this review is to proffer a precise understanding of what has already been investigated and the findings of those investigations regarding the value-enhancing capabilities of CSR for public firms. In addition, this review identifies gaps in the existing literature, evaluates inconsistent findings, discusses possible data sources for empirical researchers, and provides direction for exploring other (...) promising avenues in future studies. The thrust of the CSR literature largely acknowledges the value-enhancing capabilities of firms’ social and environmental activities. However, the predominance of inconsistent theoretical grounds in major CSR-benefits-related areas suggests that there is ample room for future research to contribute to the extant literature. Anecdotal evidence, the prevalence of theoretical arguments, and the availability of large cross-sectional firm-level data suggest that future research will enrich the literature by investigating the real insights behind several unanswered questions, by establishing implicit understandings regarding recognized findings, and by developing new theories in this emerging field. (shrink)

Drawing on propositions from the signaling theory and expectancy theory, this study hypothesizes that the perceived corporate citizenship of job seekers positively affects a firm’s attractiveness and career success expectation. This study’s proposed research hypotheses are empirically tested using a survey of graduating MBA students seeking a job. The empirical findings show that a firm’s corporate citizenship provides a competitive advantage in attracting job seekers and fostering optimistic career success expectation. Such findings substantially complement the growing literature arguing that corporate (...) citizenship brings firms competitive advantages without solid evidence from the perspective of recruitment and human resources. Finally, managerial implications and limitations of this study are also discussed. (shrink)

The article examines the effects of non-financial disclosure on corporate social responsibility. We conceptualise trade-offs between two ideal types in relation to CSR. Whereas self-regulation is associated with greater flexibility for businesses to develop best practices, it can also lead to complacency if firms feel no external pressure to engage with CSR. In contrast, government regulation is associated with greater stringency around minimum standards, but can also result in rigidity owing to a ‘one-size-fits-all’ approach. Given these potential trade-offs, we ask (...) how mandatory non-financial disclosure has been shaping CSR practices and examine its potential effectiveness as a regulatory instrument. Our analysis of 24 OECD countries using the Asset4 database shows that firms in countries that require non-financial disclosure adopt significantly more CSR activities. However, we also find that NFD regulation does not lead to lower levels of corporate irresponsibility. Furthermore, our analysis demonstrates that, over time, the variation in CSR activities declines as firms adopt increasingly similar practices. Our study thereby contributes to understanding the impact of government regulation on CSR at firm level. We also discuss the limits of mandatory NFD in addressing regulatory trade-offs between stringency and flexibility in the field of corporate social responsibility. (shrink)

Business and society research has increasingly moved from the margins to the mainstream. Although this progression has benefited from advances in empirical research, the field continues to suffer from considerable methodological challenges that hamper its development. In this introductory article to the special issue, we review how far our field has come in advancing methods and methodologies in business and society research. We also highlight the methods and methodologies covered by the contributors to this special issue and how they help (...) address key shortcomings in our field. Finally, we suggest some promising research methodologies that can address important business and society research challenges going forward. (shrink)

Debates around sound corporate governance propose board diversity as a key attribute to sufficiently challenge executive management for stakeholder engagement. This study contributes to this debate by empirically investigating the effect of board diversity on corporate social disclosure of Vietnamese listed firms. The study finds a significantly positive effect of diversity-in-boards on CSD while diversity-of-boards has no effect on CSD. The results contribute by showing that a single theoretical approach can provide an adequate explanation for board diversity. The study contributes (...) methodologically by demonstrating the design and measurement of board diversity indices, and a three-dimensional stakeholder-relevant CSD index. The findings benefit regulators and corporate executives in better understanding firms’ CSD practices and stakeholders’ expectations. (shrink)

In this article, we examine the link between board composition and an enterprise strategy outcome, stakeholder relations. Because a firm’s enterprise strategy is set at the highest level of the organization, we expect the presence of stakeholder directors (suppliers, customers, employees, and community representatives) to be positively associated with stakeholder performance.Results from an analysis of 3,268 board members representing 250 firms are discussed in the context of both corporate governance and stakeholder management literatures.

ABSTRACT:We explore the impact on employee attitudes of their perceptions of how others outside the organization are treated above and beyond the impact of how employees are directly treated by the organization. Results of a study of 827 employees in eighteen organizations show that employee perceptions of corporate social responsibility are positively related to organizational commitment with the relationship being partially mediated by work meaningfulness and perceived organizational support and job satisfaction with work meaningfulness partially mediating the relationship but not (...) POS. Moreover, in order to address limited micro-level research in CSR, we develop a measure of employee perceptions of CSR through four pilot studies. Employing a bifactor model, we find that social responsibility has an additional effect on employee attitudes beyond environmental responsibility, which we posit is due to the relational component of social responsibility. (shrink)

Although the literature on corporate social responsibility has discussed the scope and meaning of CSR extensively, confusion still exists regarding how to define the concept. One controversial issue deals with the changing legal status of CSR. Based on a review of CSR definitions and meta-studies on CSR definitions, we find that the majority of definitions leans toward voluntary CSR. However, some recent regulatory amendments toward mandatory CSR have called into question the established idea of CSR as merely a managerial tool (...) of self-regulation. In this paper, we juxtapose the evolution of CSR in India against the scholarly literature discussing voluntary-versus-mandatory CSR to understand the recent shift toward a new conceptualization of CSR as a form of co-regulation that includes elements of both voluntary and mandatory regulation. The Indian Companies Act 2013 is a remarkable example in that it replaced an older version from 1956, taking a bold step toward the integration of voluntary and mandatory aspects in the application of CSR. We present practical implications of the Indian case for businesses and discuss implications for CSR theory development; we particularly consider the evolution of the business and society relationship from a voluntary soft law approach to CSR to an increasingly hard law approach and transitory hybrid forms in-between like soft–hard law and hard–soft law. (shrink)

Unlike previous studies that examine the direct effect of employees’ perceived corporate social responsibility (CSR) on affective organizational commitment (AOC), this article examines a mediated link through organizational trust and organizational identification. Social exchange and social identity theory provide the foundation for predictions that the primary outcomes of CSR initiatives are organizational trust and organizational identification, which in turn affect AOC. The test of the research model relies on data collected from 378 employees of local and multinational companies in South (...) Asia, as well as structural equation modeling to test the postulated relationships. Both organizational trust and organizational identification fully mediate the CSR–AOC link. However, the identification mechanism is significantly stronger than the trust mechanism in terms of building AOC from CSR. Out of four CSR components, CSR toward employees is the strongest predictor of employees’ trust, identification, and AOC, followed by CSR toward community, whereas CSR toward the environment has no effect. Finally, CSR toward community and employees are more associated with social exchange, whereas CSR toward consumers relates more to the social identity process. (shrink)

This paper examines whether a firm’s financial performance is associated with superior environmental, social and governance scores in emerging markets of multinationals in Latin America. The study addresses the current research gap on this issue; it develops hypotheses and tests them by applying linear regressions with a data panel drawn from the Thomson Reuters Eikon™ database to analyse data on 104 multinationals from Brazil, Chile, Colombia, Mexico and Peru between 2011 and 2015. The results suggest that the relationship between the (...) ESG score and FP is significantly statistically negative. Furthermore, in examining environmental, social and governance separately to accurately determine each variable’s relationship to multilatinas’ FP, the results reveal a negative relationship. Finally, the empirical analysis provides evidence for a moderating effect of financial slack and geographic international diversification on the relationship between ESG dimensions and firms’ FP. This study furthers understanding of the relationship between ESG dimensions and FP for the Latin American business context. (shrink)

As stated by previous researchers, in an increasingly competitive environment, organizations need to develop successful innovations to compete and survive in the long term. Furthermore, sustainability and social issues are gaining increasing importance, to the extent that they are now a matter of high concern for firms and for society. Therefore, organizations cannot improve their results at any price and must be responsible for the consequences of their activities, including innovation. In these conditions, a growing demand for new leadership styles (...) and behaviors arises to face this complex context. Stewardship is a leadership behavior that shows great concern for the impact of the organization’s activity on society. A quantitative study has been conducted with the purpose of providing empirical evidence of the relationship between leaders’ stewardship behavior and innovation success, using radical innovation as an explanatory variable. To confirm the hypotheses, structural equations were used on a dataset from a sample of 300 questionnaires from Spanish companies. The study empirically validates the proposed conceptual model. Results show how radical innovation fully mediates the relationship between leaders’ stewardship behavior and innovation success. (shrink)

While green innovation has a positive impact on firms’ performance, some established firms that initiate green innovation activities could suffer from insufficient new green knowledge and skills. Since adopting a sustainability orientation helps firms commit to the creation of superior sustainable practices, and efficiently invest resources necessary to develop appropriate new green products, leading to superior green innovation performance, sustainability orientation offers an alternative approach for diversifying green entrants to achieve green innovation success. Building on resource-based, knowledge-based, and capabilities theories, (...) this study aims to identify key factors that enable sustainability orientation of diversifying green entrants and enhance its effect on green innovation performance. As sustainability issues frequently occur upstream at the supplier level, and since supplier involvement effectively determines new product success, this study theorizes that diversifying green entrants that adopt sustainability orientation require two types of green supplier involvement to enhance the effect of sustainability orientation on green innovation performance. Green knowledge-processing capability and green R&D capability complement green supplier involvement as a knowledge source and green supplier involvement as a co-creator, respectively, to further enhance the amount of green innovation performance. Based on a longitudinal dataset of 336 diversifying green entrants, the results support all our hypotheses. Interestingly, an additional analysis suggests that when diversifying green entrants implement green supplier involvement as a co-creator, they achieve greater green innovation performance than those who implement green supplier involvement as a knowledge source. These findings provide important theoretical implications and practical guidance for established firms to pursue green innovation. (shrink)

Using firm-level data from the U.S. manufacturing industry, this paper examines the relationship among inventory leanness, structural strategies for supply chains, and the carbon intensities of a firm and its suppliers. We formulate hypotheses on and empirically test whether this internal characteristic and these two structural strategies can influence the intensities of firm-level and supply chain environmental impacts. We examine inventory leanness because it not only reflects a manufacturer’s operational efficiency but also markedly influences manufacturers’ financial performance. We also focus (...) on two closely related structural strategies that can influence the scope and ownership of the supply chain process, resulting in changes in emission allocation and, more importantly, how resources are utilized and shared in a firm. Based on multi-year carbon inventory data from U.S. manufacturing firms, we find that manufacturers with greater inventory leanness and a parsimonious process structure tend to attain lower firm-level and supply chain carbon intensities. (shrink)

Given the increasing importance attached to both corporate social responsibility (CSR) and corporate governance, this study investigates the association between these two complimentary mechanisms used by companies to enhance relations with stakeholders. Consistent with both legitimacy and stakeholder theory and controlling for industry profile, firm size, stockholder power/dispersion, creditor power/leverage, and economic performance, our analysis of the annual reports for a sample of 222 listed companies suggests that firms providing more CSR information: have better corporate governance ratings; are larger; belong (...) to higher profile industries; and are more highly leveraged. Our findings support the limited prior research suggesting a link between corporate governance quality and CSR disclosure in company annual reports and suggest that, rather than mandating specific disclosures, regulators might be better served focussing on corporate governance quality as a way of increasing CSR disclosures. (shrink)

The few studies that analyze the impact of a combined strategy of innovation and corporate social responsibility on firm performance mostly focus on financial performance. In contrast, the current study considers the simultaneous impact of technological innovations and CSR on firm growth, which provides a measure of medium-term economic performance. With a sample of 213 firms and a two-step procedure, this study reveals the differentiated effects of strategic versus responsive CSR behavior on the two technological innovation types, as well as (...) the effects of the two innovation types on growth. The findings thus indicate that firms with strategic CSR achieve growth through both their product and their process innovations. (shrink)

In the current study, we examine the changes in disclosure practices on compliance and the fight against corruption at Siemens AG, a large German multinational corporation, over the period 2000–2011 during which a major corruption scandal was revealed. More specifically, we conduct a content analysis of the company’s annual reports and sustainability reports during that period to investigate the changes of Siemens’ corruption and compliance disclosure using both quantitative and qualitative methods. Through the lens of legitimacy theory, stakeholder analysis, and (...) organizational façades, we find evidence that Siemens changed its compliance and corruption disclosure practices to repair its legitimacy in the wake of the 2006 corruption scandal. We analyze these strategies more closely by using the rational, progressive, and reputation façades framework. Our primary findings suggest that the annual reports show peaks of disclosure amounts on corruption and compliance disclosures earlier than sustainability reports, which can be partly explained by analyzing the disclosures made about—and to—the different stakeholder groups. We find that the annual report focuses more on internal stakeholders such as employees, while the sustainability report focuses more on external stakeholders such as suppliers. We also find that the company uses the façades differently depending on which report is being analyzed. (shrink)

The impact of corporate social performance on firm financial performance has been examined previously with mixed results. This study examines the possibility that corporate social performance enhances financial performance by allowing the firm to differentiate, and that this effect may be moderated both by innovation, which also drives firm differentiation, and the level of differentiation in the industry. Hypotheses concerning both direct and moderating effects are developed and tested using secondary data. Our results support both innovation and the level of (...) differentiation in the industry as moderators for a positive relationship between corporate social performance and financial performance: corporate social performance most strongly affects performance in low-innovation firms and in industries with little differentiation. (shrink)