With growing interest in corporate social responsibility (CSR), companies are utilizing it as a public relation (PR) tool for corporate image change. Previous research suggests that the fit between a ...company and CSR activity is a key determinant of CSR success. They show that, the higher the CSR fit, the more positive the consumers’ evaluations are. However, although many companies undertake various CSR activities, there is no research examining the effect of consistency among various CSR activities. In addition, there is a lack of explanation for cases where consumers positively evaluate low CSR fit. In this study, we examine CSR fit, consistency among various CSR activities (CSR consistency), and the degree of consumer support for CSR activities (CSR support). Our multiple regressions show that higher the CSR support, the more positive is the consumer’s evaluation of the company. In addition, when CSR support is high, the effect of CSR fit and CSR consistency on company evaluations is insignificant. However, when consumer support for CSR activities is low, company evaluations are positive only when both CSR fit and CSR consistency are high. In addition, the influence of three variables on company evaluation is mediated by CSR motives. Finally, we discuss the implications of this study.
•The reliability of the impact of CSR on firm value unpacks the riskiness of CSR investment.•Different components of CSR have different impacts on the level and volatility of value ...distribution.•Primary-stakeholder-oriented CSR increases firm value but also increases volatility (risk).•Secondary-stakeholder-oriented CSR reduces volatility (risk) without impacting value.
Prior research in CSR concentrates on its impact on the level of firm value, without considering the risk associated with such effect (i.e., reliability). Understanding the reliability of such an impact is important as it unpacks the risky nature of CSR investment. By classifying CSR activities as competitive-advantage-seeking and legitimacy-seeking, we develop a theoretical framework that provides a holistic understanding of CSR’s impact on firm value in terms of simultaneous implications for both level and reliability. Our results suggest that high performance in primary-stakeholder-oriented CSR increases firm value, but simultaneously increases the variability of the resulting value distribution. In contrast, secondary-stakeholder-oriented CSR does not significantly increase firm value but does reduce the variability of the resulting value distribution. That is, primary-stakeholder-oriented CSR activities demonstrate a “risky investment” property and function as a risky value enhancer, while secondary-stakeholder-oriented CSR activities demonstrate a “risk reduction” property and function as a value stabilizer.
Research Summary
We introduce an innovative method of identifying the risk‐management benefit of corporate social responsibility (CSR). Option‐implied volatility captures the financial markets' ...expectations of a firm's future risk, so if CSR is related to risk‐management benefits, it should be related to lower implied volatility. We find that CSR is associated with low implied volatility and that CSR's insurance benefit is larger for firms that have high leverage, growth opportunities, or uncertainty. However, CSR as an insurance mechanism is less beneficial to firms that are already sound (i.e., those that have high market value and good accounting and financial performance). The results reveal the “terms” of a CSR‐as‐insurance contract, confirm that CSR creates risk‐management benefits, and suggest that financial markets price this benefit in economically significant ways.
Managerial Summary
We suggest a practical technique of evaluating a firm's CSR policy. For example, a manager would simply check how a firm's implied volatility changes as its CSR policy changes. Or, the manager can compare a firm's and its comparable firms' implied volatilities to knowhow financial markets perceive the firm's CSR differently. Option implied volatilities could guide a firm to identify proper CSR‐based risk‐management policies because they have the advantage of being ex ante, real‐time, and objectively observable market‐pricing information in identifying the risk‐management benefit of CSR. Our results also illustrate how a financial expert can use the valuable insight of strategic management literature about CSR‐as‐insurance to price derivative contracts.
Here, the role of business managers in Poland and Germany in creating responsible business was analyzed. The authors examined CSR strategies, challenges in balancing interests and integrating CSR ...principles with business practices. They emphasize the importance of education and the active involvement of managers in CSR strategies for the company’s long-term benefits. The article uses three key research methods. The first is a review of the Polish and foreign literature, allowing for an understanding of the global context of CSR. The second method is the analysis of CSR reports from Poland and Germany, giving insight into practices and standards in these countries. The third method is research based on a questionnaire survey conducted in Poland and Germany, enabling a direct understanding of the attitudes and practices of managers. Polish companies lean towards sustainable purchasing and training more than their German counterparts, pointing to a nuanced approach to CSR in Poland. Meanwhile, German firms appear more invested in community and environmental programs, highlighting their particular emphasis on certain social and environmental dimensions of business. There is a clear commitment to CSR in both countries, but the varied nature of the initiatives suggests differing cultural or regulatory influences. Enhancing CSR awareness, particularly around sustainability education and emission reductions, emerges as a priority for both nations. The data indicate that managers are crucial in steering CSR practices, with their active involvement often leading to positive outcomes. The study provides an analysis of current CSR landscapes in Poland and Germany.
We attempt to provide a more nuanced view of the relationship between corporate social responsibility (CSR) and firm financial performance using a competitive-action perspective. We argue that ...competitive action should be considered as an important contingency that determines the effects of CSR activities on firm financial performance. Using data for 113 publicly listed U.S. firms in the software industry between 2000 and 2005, we found that socially responsible activities (positive CSR) enhance firm financial performance when the firm’s competitive-action level is high, whereas socially irresponsible activities (negative CSR) actually improve firm financial performance when the competitive-action level is low. By introducing competitive action as an important contingency, this study contributes to the literature on CSR and strategic management.
How can we make sense of the range of organizational dynamics that emerge when managers of multi-national enterprises (MNEs) seek to serve their interests as they perceive multiple demands in ...relation to corporate social responsibility (CSR)? In this article, I conceptualize this situation as a case of CSR institutional plurality. Drawing from the literature on MNE micro-politics, which I connect to the CSR literature, I analyze qualitative data gathered from five subsidiaries of a UK MNE to which their HQ transferred CSR reporting: a global norm with a typical explicit CSR mode. My analysis reveals that subsidiary managers responded to CSR institutional plurality by developing aligned or contested versions of the global CSR norm, that were then promoted through the deployment of discursive and symbolic tactics. I develop a grounded model that improves understanding of three power capabilities of subsidiary actors, that is, their socialization to explicit CSR norms, the exercise of employee voice and their political capital that can be deployed to support or curb the advancement of the managerial tactics. In doing so, I reveal the complex pathways through which lower-status subsidiary actors can take part in the reconfiguration of a global CSR norm.
The purpose of this research is to measure the combing impact of corporate social responsibility on company performance and to conduct a comparative analysis among local and foreign companies in this ...context. This research aims to conduct an empirical analysis about how corporate social responsibility contributes to company performance. The study utilizes AHP and fuzzy TOPSIS theory to conduct research. The results revealed that environmental corporate social responsibility has a vital role in the development of organizational reputation and employee commitment. It can be observed from the results that the weights of environmental CSR, corporate CSR, financial CSR, and social CSR are 0.30, 0.25, 0.24, and 0.21, respectively. The preference of these four criteria is environmental CSR > corporate CSR > financial CSR > social CSR. The corporate CSR criterion got the maximum weight of 0.30, whereas the social CSR criteria received the lowest weight of 0.21. The financial CSR get weights of criteria 0.25, and the commercial potential obtained 0.24 weights, while the financial CSR got the 2nd highest criteria weight of 0.25, and the social CSR get weights of criteria 0.21 lowest weighted. The research provides valuable information for decision-makers. The study provides a valuable information for policy makers.
ABSTRACT
We experimentally investigate the combined effects of CSR-related informal (i.e., CSR mission) and formal control elements (i.e., provision of monetary CSR incentives) on employee CSR ...engagement, considering employees’ CSR norms. We predict that a substantive rather than a symbolic CSR mission positively impacts the CSR engagement of employees who attach high importance to CSR and expect monetary CSR incentives to be effective under a symbolic CSR mission, and if employees attach low importance to CSR. The findings show that a substantive relative to a symbolic CSR mission increases the CSR engagement of employees who attach high importance to CSR. Under a symbolic CSR mission, employees increase their CSR engagement when monetary CSR incentives are provided, while under a substantive CSR mission, monetary CSR incentives are only effective for participants who attach low importance to CSR. The results support firms in designing suitable and effective CSR-related management control systems.
Data Availability: Data is available from the authors upon request.
JEL Classifications: M41; M52.
Corporate social responsibility (CSR) initiatives are signals used by organizations to reduce information asymmetries within the market and to make their commitment to sustainability observable. The ...present study aims at investigating the hypothesis that responsible companies operating in controversial industries (i.e., companies whose core business or production processes are perceived as questionable by society given current environmental, social, or/and ethical issues) are likely to be more active in using different types of CSR signals. Through ANCOVA, we assess how firms belonging to both controversial and non-controversial industries differ in the way they manage CSR signals. The empirical results show that companies in controversial sectors are significantly more focused on developing CSR policies and transparency tools since they expect these signals to be really visible and distinctive to stakeholders. However, companies in controversial industries seem to be similar to non-controversial companies in signaling CSR governance, suggesting that organizations expect receivers to attribute little relevance to the least visible signals. Therefore, these signals do not grant a sufficiently large reputational payoff, discouraging firms from taking advantage of the implementation of CSR governance structures. The study supports the idea that firms, in designing different types of CSR signals, take into account the peculiarities of different receivers. At the same time though, this could make firms underestimate the receivers’ ability to decode the signals and to generate countersignals, thus failing in assessing properly the expected return from their CSR signaling.
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