The empirical relationship between a firm’s social performance and its financial performance is still not well established in the literature. Despite more than 30 years of research and more than 100 empirical studies on the issue, the results are still mixed. We argue that the heterogeneous results found in previous studies are not due exclusively to problems related with the measurement instruments or the samples used. Instead, we posit that a more fundamental problem related with the endogeneity of social strategic (...) decisions could be driving most of the empirical findings. We show that, using a panel data of 658 firms from 1991 to 2005, how some of the results found in previous research change, and some are even reversed when endogeneity is properly taken into account. (shrink)

There is a need of further research to understand how social capital in the organization can be fostered. Existing literature focuses on the design of reciprocity norms, procedures and stability employment practices as the main levers of social capital in the workplace. Complementary to these mechanisms, this paper explores the impact of ethical managerial behaviour on the development of social capital. We argue that a managerial behaviour based on the true concern for the well-being of employees, as well as their (...) motivational and ethical development, can be particularly important for the generation of social capital in the organization. It is suggested that manager's behaviour should be based on three principles: following examplary behaviour, helping the employees to value the consequences of their actions in other persons, and not betraying employee's trust. When the manager conforms to those principles, he can ease the process through which employees develop associability and identification-based trust with the firm, the two main components of 'Organizational Social Capital'. Bringing ethics into the debate of social capital creation seems to us fundamental, as social capital in the firm is likely to be influenced by the ethical and motivational development of its members. (shrink)

Ethics has recently gained prominence in debates surrounding social capital creation. Despite the significant theoretical progress in this field, it still lacks empirical research. The goal of this study is to empirically explore the ethical leadership of supervisors as an antecedent of the firm’s social capital. We build on social learning theory to argue that employees can learn standards of appropriate behavior by observing the behavior of role models. By displaying and enforcing ethical behavior, supervisors can facilitate the process through (...) which employees learn to feel empathy toward others and establish profound affective relationships with them. Data were collected from 408 Spanish, French, and Portuguese part-time MBA students. Using structural equation modeling techniques, we show that the ethical leadership of supervisors exerts a significant influence on the structural, relational, and cognitive dimensions of social capital. (shrink)

There is a need for further research to understand how social capital in the workplace can be promoted. This article studies the generation of social capital from a comprehensive perspective that integrates ethics and general management. We propose the concept of “ethical work context” as an influential antecedent of the social capital in the firm. The ethical work context, which is aligned with the “humanizing culture” approach proposed by Melé ( Journal of Business Ethics 45 (1), 3–14, 2003a ), allows (...) a broader comprehension of the concrete management practices and organizational dynamics that generate organizational social capital. It is argued that social capital, understood as a by-product of the ethical work context, results both from organizational design and ongoing managerial activity. Creating an ethical work context brings ethics and social capital into the realm of the general manager; a figure that has remained absent from the social capital literature. (shrink)

Ethics has recently gained importance in the debate over social capital creation. The goal of this study is to empirically examine the ethical work context of the firm as an antecedent of the firm’s internal social capital. We build on person–situation interactionist theory to argue that individuals can learn standards of appropriate behavior induced by the ethical work context in which they are embedded. By creating an ethical work context, managers can facilitate the process through which employees learn to feel (...) empathy toward others and establish profound affective relationships with them. Data were collected from 1,817 individuals in 36 business units of 7 Spanish, French, and Portuguese corporations. Using structural equation and hierarchical linear modeling techniques, our results reveal three phenomena. First, we show that a business unit’s ethical work context exerts significant influence on the structural, relational, and cognitive dimensions of internal social capital. Second, the managerial practices that constitute the ethical work context are not equally important across the seven corporations; in particular, managerial practices are more influential in those corporations that belong to knowledge-intensive industries. Third, a business unit’s internal social capital is influenced not only by the business unit’s ethical work context, but also by the ethical work context of the corporation to which it belongs. (shrink)

Corporate governance (CG) can be seen to operate through a 'double agency' relationship: one between the shareholders and corporate management, and another between the corporate management and the firm's employees. The CG and labour management of firms are closely related. A particularly productive way to study how CG affects and is affected by the employment relationship has been to compare CG across countries. The contributions of this paper to that literature are threefold. (1) An integration of aspects of the labour (...) management literature in the CG debate. (2) Based on a sample of about 1000 firms from 31 countries, we find evidence of complementarities between the CG and the labour management of firms. Extreme cases, in general, outperform mixed cases. (3) Firm differences within countries are more important than scholars have assumed so far. We present the results of the study and implications for future research and for practice. (shrink)

Corporate governance (CG) can be seen to operate through a ‘double agency’ relationship: one between the shareholders and corporate management, and another between the corporate management and the firm's employees. The CG and labour management of firms are closely related. A particularly productive way to study how CG affects and is affected by the employment relationship has been to compare CG across countries. The contributions of this paper to that literature are threefold. (1) An integration of aspects of the labour (...) management literature in the CG debate. (2) Based on a sample of about 1000 firms from 31 countries, we find evidence of complementarities between the CG and the labour management of firms. Extreme cases, in general, outperform mixed cases. (3) Firm differences within countries are more important than scholars have assumed so far. We present the results of the study and implications for future research and for practice. (shrink)