In the wake of the most recent financial crisis, corporations have been criticized as being self-interested and unmindful of their relationship to society. Indeed, the blame is sometimes placed on the corporate legal form, which can exacerbate the tension between duties to shareholders and interests of stakeholders. In comparison, the Benefit Corporation (BC) is a new legal business entity that is obligated to pursue public benefit in addition to the responsibility to return profits to shareholders. It is (...) legally a for-profit, socially obligated, corporate form of business, with all the traditional corporate characteristics combined with societal responsibilities. Considering the history and perception of shareholder primacy in United States law, it is argued that this new business structure is an ethical step toward empowering socially committed commercial entities. The contribution of this research is to provide a fundamental base of knowledge about the new legal form of business, the BC, upon which further study may rely. First, the legal history of the corporation is briefly reviewed in order to provide context to the relationship of the corporate form to society, including exploration of the premise that shareholder wealth maximization is its best and only purpose. Second, the BC is described in detail, and state statutes are compared. Third, the BC is placed within the context of corporate social responsibility. Finally, opportunities for future research are discussed. (shrink)

We investigate whether the disclosure of a firm’s decision to organize as a benefit corporation (BC) rather than a traditional C corporation (CC) influences investors. We survey 136 investors and 57 MBA students and find that they expect BCs to attain higher future corporate social responsibility (CSR) than CCs even when both have equal CSR ratings. Approximately one third of our sample prefers to invest in BCs when CCs have greater financial returns, indicating a willingness by some (...) investors to sacrifice personal financial gain for social good. Our results suggest that investors weight the information contained in BC disclosures as reliable and value-relevant in their investment decisions. We extend the CSR disclosure literature by indicating how investors weight this new type of CSR information, which may affect how BCs fare as publicly traded companies. (shrink)

Jay Coen Gilbert, co-founder of B Lab, discusses his vision for a “new economy” where business is a “force for good.” In this interview, Coen Gilbert provides an overview of how B Lab’s various initiatives—Certified B Corporations, the B Impact Assessment, B Analytics, GIIRS, and Benefit Corporations—function interdependently to accelerate a culture shift to redefine success in business. Coen Gilbert then focuses on the role of benefit corporations in this larger movement. The benefit corporation is a (...) new legal form of business that requires a corporate purpose dedicated to “general public benefit” and the delivery of demonstrable “material positive impact on society and the environment.” Novel fiduciary and reporting requirements differentiate the benefit corporation from the traditional corporation founded on shareholder primacy. Coen Gilbert explains how the benefit corporation is better suited to create long-term shareholder value as well as sustainable value for society, the environment, and other stakeholders. He addresses critiques of and challenges to the benefit corporation as an agent of change for business. (shrink)

Due to growing consumer demand for mission-driven businesses, new corporate forms have emerged over the past decade in the United States. The Benefit Corporation is the fastest-growing of these new forms. Benefit Corporations are for-profit, but allow the firm to declare a “social purpose/benefit” in its articles of incorporation and permit the firm to pursue the benefit in tandem with increasing shareholder value. This paper first attempts to evaluate how effectively states have implemented this legislation. (...) This paper extrapolates potential problems in the irregularities of visibility and record-keeping across the various states through the analysis of data accessibility and legislative differences. Irregularities in the public rollout of this legislation affect the transparency of Benefit Corporations and, as a result, the ability for stakeholders to hold the firm accountable. Complicating these issues is the fact that Benefit Corporation advocacy is largely centralized in a few third party organizations. This paper examines some of the downfalls of such conflated public/private involvement in implementing successful innovative business structures. (shrink)

Due to growing consumer demand for mission-driven businesses, new corporate forms have emerged over the past decade in the United States. The Benefit Corporation is the fastest-growing of these new forms. Benefit Corporations are for-profit, but allow the firm to declare a “social purpose/benefit” in its articles of incorporation and permit the firm to pursue the benefit in tandem with increasing shareholder value. This paper first attempts to evaluate how effectively states have implemented this legislation. (...) This paper extrapolates potential problems in the irregularities of visibility and record-keeping across the various states through the analysis of data accessibility and legislative differences. Irregularities in the public rollout of this legislation affect the transparency of Benefit Corporations and, as a result, the ability for stakeholders to hold the firm accountable. Complicating these issues is the fact that Benefit Corporation advocacy is largely centralized in a few third party organizations. This paper examines some of the downfalls of such conflated public/private involvement in implementing successful innovative business structures. (shrink)

Benefit corporation legislation has rapidly disseminated in the United States. Its advocates claim it is a necessary corporate form to address the unique needs of for-profit social enterprises, despite many scholarly and legal practitioners who doubt the need for or wisdom of adopting this organizational form. Others suggest that the legislation is flawed and deficiencies should be addressed. After reviewing the present status of benefit corporation legislation, this article contributes to the discourse arguing that benefit (...) corporations are unnecessary under the law; benefit corporation legislation does not enhance corporate law; benefit corporation laws create unnecessary new legal risks for both traditional and benefit corporations, and their respective directors; and third party certification in entity formation law is inappropriate. (shrink)

The benefit corporation is a for-profit corporation required to create a positive impact on workers, communities, society, and environment. The purpose of this paper is to explore how BCs reconcile dominant and alternative frames of profit. This study presented here explores three BCs in the U.S. through a dual-method approach based on observations and interviews. The study reveals how BC members understand and express the idea of profit. Furthermore, it shows the formation of an alternative frame of (...) profit and elucidates three processes whereby the dominant and alternative ideas are reconciled. It highlights both interpretive capabilities and limitations of social actors within the dominant discourse of the contemporary social-economic system. (shrink)

This paper offers a new model of corporate purpose and applies it to the emerging legal form of the benefit corporation. First, corporate purpose is applied to the two currently dominant models of shareholder and stakeholder focus. Both are found inadequate to promote positive social and environmental impact because they remain anchored in a profit-seeking corporate purpose. Second, we offer an alterna­tive model of Integrative Corporate Purpose. Third, we apply ICP to benefit corporations as an ethically superior (...) model for promoting the common good. The benefit corporation offers four advancements: positive duties to stakeholders; legal protections for managers and directors to manage for the common good; a requirement to have a purpose geared toward public benefit; and required report­ing of benefits to stakeholders and the environment. The implications of benefit corporations are discussed within the larger arena of corporate social responsibility. (shrink)

Michael Hannigan is the CEO and co-founder of Give Something Back Office Supplies, the third largest office supply company on the west coast of the United States. Hannigan began his business in 1991, long before any benefit corporation legislation was enacted. He reincorporated his business as a benefit corporation after California passed such legislation in 2011. On April 23, 2015, he spoke at the 22nd Annual Stakeholder Dialogue Speaker Series convened at the University of St. Thomas, (...) Minneapolis, by Daryl Koehn and the Veritas Institute. His remarks cover the genesis of his interest in socially responsible business and the start of his company. Hannigan also discusses the arc of what he refers to as the “fourth sector”—the emergence of the social enterprise sector. He evaluates where benefit corporations began and shares his reflections on how they may develop in the future. Hannigan’s talk concludes with a short question and answer session with audience members at the event. (shrink)

Corporations evolved from serving a public purpose at the beginning of the seventeenth century to, legally and culturally, primarily maximizing profit for shareholders which continues at the beginning of this twenty-first century. Government and civil society have largely continued serving the public interest over time, but have struggled to keep pace with increasing and rapidly evolving challenges in recent decades. While social entrepreneurs and the corporate sector have stepped in to help address these challenges, through the practice of corporate responsibility, (...) they have faced unnecessary hurdles in doing so. The benefit corporation was established in 2010 both to remove these hurdles and also help further unleash the power of business to address society’s most pressing problems. Despite various criticisms, benefit corporations are doing just that – enhancing the practice of corporate responsibility in the process – and will continue to improve over time. This paper summarizes the advantages of benefit corporations, points out some shortcomings which serve as areas for improvement, and addresses some of these criticisms. (shrink)

Corporations evolved from serving a public purpose at the beginning of the seventeenth century to, legally and culturally, primarily maximizing profit for shareholders which continues at the beginning of this twenty-first century. Government and civil society have largely continued serving the public interest over time, but have struggled to keep pace with increasing and rapidly evolving challenges in recent decades. While social entrepreneurs and the corporate sector have stepped in to help address these challenges, through the practice of corporate responsibility, (...) they have faced unnecessary hurdles in doing so. The benefit corporation was established in 2010 both to remove these hurdles and also help further unleash the power of business to address society’s most pressing problems. Despite various criticisms, benefit corporations are doing just that – enhancing the practice of corporate responsibility in the process – and will continue to improve over time. This paper summarizes the advantages of benefit corporations, points out some shortcomings which serve as areas for improvement, and addresses some of these criticisms. (shrink)

More than half of the S&P 500 and the Fortune 500 companies publish corporate social responsibility reports. CSR is at the heart of a new form of corporation, the benefit corporation, which requires the pursuit of a social purpose as well as pursuit of profit. Thirty-four states, plus the District of Columbia, have enacted benefit corporation legislation. Most laws require that benefit corporations publish reports on their social purpose performance using a third-party assessment format. (...) The purpose of this paper is to analyze 1,530 benefit corporations identified by B Lab and the state of Minnesota for proof of social purpose performance, as demonstrated in reports on their websites. The study found some companies with excellent reports, but those had had a CSR focus prior to becoming benefit corporations or had been Certified B Corporations. However, most benefit corporations in the study had no published reports; many have no websites. (shrink)

More than half of the S&P 500 and the Fortune 500 companies publish corporate social responsibility (CSR) reports. CSR is at the heart of a new form of corporation, the benefit corporation, which requires the pursuit of a social purpose as well as pursuit of profit. Thirty-four states, plus the District of Columbia, have enacted benefit corporation legislation. Most laws require that benefit corporations publish reports on their social purpose performance using a third-party assessment (...) format. The purpose of this paper is to analyze 1,530 benefit corporations identified by B Lab and the state of Minnesota for proof of social purpose performance, as demonstrated in reports on their websites. The study found some companies with excellent reports, but those had had a CSR focus prior to becoming benefit corporations or had been Certified B Corporations. However, most benefit corporations in the study had no published reports; many have no websites. (shrink)

Drawing on evolutionary realism as a guiding framework and using relevant theoretical bases at macro-, meso-, and micro- levels, we investigate the relative variance explained by each level on selection and retention of Benefit Corporations. Based on a sample of 5052 observations of certified B-Corps and 1403 observations of decertified B-Corps, relative to the country and industry differences, firm-level differences explain most of the variance in non-economic performance, especially for workers and community impact areas. Industry-level differences explain small differences (...) in customers and environmental performance while country differences do not explain meaningful performance differences. The results also show a similar pattern in relative effects for decertified B-Corps. Our findings point to the value of disaggregating the relative effects of multilevel factors in further understanding drivers of non-economic performance and the decertification of B-Corps. (shrink)

Social enterprises may take a variety of legal forms (limited liability companies, nonprofit entities, etc.). This paper focuses primarily upon one particular new form increasingly popular within the United States—the “Benefit Corporation.” I evaluate whether US Benefit Corporations are likely to realize as much social benefit as is frequently claimed. Part One of the paper describes the features of Benefit Corporations as they are constituted in many states. Part Two lays out the benefits extolled by (...) supporters of this US legal corporate form. Part Three challenges these claims and adduces some reasons for doubting whether Benefit Corporations will prove to be as socially useful as they claim to be. Part Four concludes with some suggestions for future lines of research into the nature of the firm and Benefit Corporations in particular. (shrink)

Social enterprises may take a variety of legal forms. This paper focuses primarily upon one particular new form increasingly popular within the United States—the “Benefit Corporation.” I evaluate whether US Benefit Corporations are likely to realize as much social benefit as is frequently claimed. Part One of the paper describes the features of Benefit Corporations as they are constituted in many states. Part Two lays out the benefits extolled by supporters of this US legal corporate (...) form. Part Three challenges these claims and adduces some reasons for doubting whether Benefit Corporations will prove to be as socially useful as they claim to be. Part Four concludes with some suggestions for future lines of research into the nature of the firm and Benefit Corporations in particular. (shrink)

In recent years the benefit corporation has emerged as a new organizational form dedicated to legitimizing the pursuit of corporate social responsibility (CSR). Eschewing traditional governmental authority, the benefit corporation derives its moral legitimacy from the values of its owners and the oversight of a third party evaluator. This research identifies the benefit corporation as a new type of gray sector organization (GSO) and applies extant theory on GSOs to analyze its design. In particular, (...) it shows how the theory of GSO accountability can be used to assess the potential of benefit corporations for enhancing CSR. This research first examines the statutes that have established benefit corporations in five states in the US, along with bills in other states, to show how legislation defines their specific public benefits and holds them accountable for delivering these benefits. It then compares the accountability of the benefit corporation with that of other corporate - centric GSOs, e.g., GSOs that closely resemble traditional corporations. It concludes with significant design-based concerns about the utility of the benefit corporation as an effective organization for implementing CSR. (shrink)

Benefit corporations, whose chartered mission includes attending to specific and general social benefits, are sometimes criticized as monstrous hybrids trying to serve two incompatible purposes. Dual-Investor Theory, which regards society as an investor in every business venture, answers this objection by providing a natural and compelling rationale for benefit corporations. Several other objections to benefit corporations are articulated and addressed, including the problems of greenwashing and mission drift; lack of clear direction; mismatch between quantitative measures and the (...) nature of social benefit; and the charge that benefit corporations are unnecessary and create additional costs and burdens. When benefit corporations are understood in the light of Dual-Investor Theory, they constitute a potentially significant advance, more a hybrid rose than a monstrous hybrid. (shrink)

Studies of corporate social performance (CSP) research indicate the critical importance of research design and methodology in developing and testing CSP theories. In this paper we analyze data from a study of environmental performance in the U.S. wine industry to demonstrate how the research methodologies can cause researchers to reach different theoretical conclusions from the same data. We conclude that structural equation modeling (SEM) offers CSP researchers valuable tools that can accommodate critical theory development needs.

Research on corporate social responsibility (CSR) has tended to focus on external stakeholders and outcomes, revealing little about internal effects that might also help explain CSR-firm performance linkages and the impact that corporate marketing strategies can have on internal stakeholders such as employees. The two studies ( N = 1,116 and N = 2,422) presented in this article draw on theory from both corporate marketing and organizational behavior (OB) disciplines to test the general proposition that employee trust partially mediates the (...) relationship between CSR and employee attitudinal and behavioral outcomes. Both studies provide evidence in support of these general relationships. Theoretical and practical implications of these findings are discussed in the context of CSR and corporate marketing research. (shrink)

This article analyses the link between innovation with high social benefits and corporate social performance (CSP) and the role that family firms play in this. This theme is particularly relevant given the large number of firms that are family-owned. Also the implicit potential of innovation to reconcile corporate sustainability aspects with profitability justifies an extended analysis of this link. Governments often support socially beneficial innovation with various policy instruments, with the intention of increasing international competitiveness and simultaneously supporting sustainable development. (...) In parallel, firms pursue corporate social responsibility (CSR) and environmental management activities partly in the hope that this will foster such innovation in their organisation (alongside their main aim of improving CSP). Hence, the main research question of this article is about the association of CSP with innovation with high social benefits and the determinants of the potential moderation of this association. Based on panel data, the article analyses the link between CSP and innovation, and the effect of being a family firm using panel estimation techniques. The results point to a moderating role of family firms on the link between innovation with high social benefits and CSP. The article concludes by assessing the policy implications of this insight. (shrink)

In order to be competitive in an era of ethical consumerism, brands are facing an ever-increasing pressure to integrate ethical values into their identities and to display their ethical commitment at a corporate level. Nevertheless, studies that relate business ethics to corporate brands are either theoretical or have predominantly been developed empirically in goods contexts. This is surprising, because corporate brands are more relevant in services settings, given the nature of services, and the fact that services settings comprise a greater (...) number of customer–brand interactions and touch points than goods contexts. Accordingly, the purpose of this article is to empirically examine the effects of customer perceived ethicality of corporate brands that operate in the services sector. Based on data collected for eight service categories using a panel of 2179 customers, the hypothesized structural model is tested using path analysis. The generalizability theory is applied to test for measurement equivalence between these categories. The results of the hypothesized model show that, in addition to a direct impact, customer perceived ethicality has a positive and indirect impact on brand equity, through the mediators of recognition benefits and brand image. Moreover, brand heritage negatively influences the impact of customer perceived ethicality on brand image. The main implication is that managers need to be aware of the need to reinforce brand image and recognition benefits, as this can facilitate the translation of customer perceived ethicality into brand equity. (shrink)

This paper examines the implementation, communication and benefits of corporate codes of ethics by the top companies operating in Australia, Canada and Sweden. It provides an international comparison across three continents. It is also based on a longitudinal approach where three national surveys were performed in 2001–2002 and replications of the same surveys were performed in 2005–2006. The empirical findings of this research show in all three countries that large organisations indicate a substantial interest in corporate codes of ethics. There (...) are, however, differences in the ways that the companies in each country implement and communicate their corporate codes of ethics and the benefits that they see being derived from them. The longitudinal comparison between 2001–2002 and 2005–2006 indicates changes in the implementation, communication and benefits of corporate codes of ethics in the three countries. (shrink)

This paper examines the implementation, communication and benefits of corporate codes of ethics by the top companies operating in Australia, Canada and Sweden. It provides an international comparison across three continents. It is also based on a longitudinal approach where three national surveys were performed in 2001–2002 and replications of the same surveys were performed in 2005–2006. The empirical findings of this research show in all three countries that large organisations indicate a substantial interest in corporate codes of ethics. There (...) are, however, differences in the ways that the companies in each country implement and communicate their corporate codes of ethics and the benefits that they see being derived from them. The longitudinal comparison between 2001–2002 and 2005–2006 indicates changes in the implementation, communication and benefits of corporate codes of ethics in the three countries. (shrink)

One explanation that may be given for why nonprofit organizations pay lower wages than do other organizations is that nonprofits are more pleasant places to work. Indeed, some authors have proposed that nonprofit organizations should make an effort to promote a working environment that reflects the beliefs of the organization. This paper uses several proxies for whether an organization is a pleasant place in which to work, and tests for whether nonprofits are more likely to offer such pleasant working conditions. (...) Analysis shows that nonprofits are not more likely to offer these conditions in many instances. (shrink)

In recent years, firms have greatly increased the amount of resources allocated to activities classified as Corporate Social Responsibility (CSR). While an increase in CSR expenditure may be consistent with firm value maximization if it is a response to changes in stakeholders' preferences, we argue that a firm's insiders (managers and large blockholders) may seek to overinvest in CSR for their private benefit to the extent that doing so improves their reputations as good global citizens and has a "warm-glow" (...) effect. We test this hypothesis by investigating the relation between firms' CSR ratings and their ownership and capital structures. Employing a unique data set that categorizes the largest 3000 U. S. corporations as either socially responsible (SR) or socially irresponsible (SI), we find that on average, insiders' ownership and leverage are negatively related to the firm's social rating, while institutional ownership is uncorrelated with it. Assuming that higher CSR ratings is associated with higher CSR expenditure level, these results support our hypothesis that insiders induce firms to over-invest in CSR when they bear little of the cost of doing so. (shrink)

While consumer motivation to maintain a relationship with a retailer is a function of personal idiosyncratic characteristics, specific perceptions of retailers may play a role in influencing receptivity to relationship maintenance. This study integrates relationship marketing tactics and corporate associates into a model of consumer ethical purchasing behavior that improves the relationship between sellers and buyers. Results show social benefits, special treatment benefits, CSR, and service quality have direct and indirect impact on ethically questionable consumer behaviors in retailing. This study (...) also modifies the consumer ethics scale of Muncy and Vitell for the East Asian market with good reliability and validity in order to measure ethically questionable consumption behaviors in retailing. Finally, some theoretical contribution and practical implications are discussed. (shrink)

Firms engage in corporate social responsibility (CSR) because they consider that some kind of competitive advantage accrues to them. We contend that resource-based perspectives (RBP) are useful to understand why firms engage in CSR activities and disclosure. From a resource-based perspective CSR is seen as providing internal or external benefits, or both. Investments in socially responsible activities may have internal benefits by helping a firm to develop new resources and capabilities which are related namely to know-how and corporate culture. In (...) effect, investing in social responsibility activities and disclosure has important consequences on the creation or depletion of fundamental intangible resources, namely those associated with employees. The external benefits of CSR are related to its effect on corporate reputation. Corporate reputation can be understood as a fundamental intangible resource which can be created or depleted as a consequence of the decisions to engage or not in social responsibility activities and disclosure. Firms with good social responsibility reputation may improve relations with external actors. They may also attract better employees or increase current employees’ motivation, morale, commitment and loyalty to the firm. This article contributes to the understanding of why CSR may be seen as having strategic value for firms and how RBP can be used in such endeavour. (shrink)

Ethical dilemmas arise when one must decide between conflicting ethical imperatives. One potential ethical dilemma is a manager’s decision of whether to engage in corporate social responsibility activities. This decision could pit the ethical imperative of honoring unwritten obligations to society against the ethical imperative of honoring contractual obligations to the firm. However, CSR activities might only be a minor ethical dilemma or none at all if they simultaneously benefit the firm and society. To examine this I test the (...) association between future-period employee productivity and current-period use of one type of CSR activity: employee volunteer programs. I use a unique sample of 1428 firm-years, hand-collected from sustainability reports of 373 firms. I find evidence that the current-period use of an employee volunteer program has a positive association with future-period employee productivity. I find this result in future periods up to 6 years after a firm uses an employee volunteer program. I also find a positive association between incentives that focus CEOs’ attention on long-term firm outcomes and more extensive employee volunteer programs. (shrink)

The business and human rights movement shares several goals with the Benefit Corporation movement: corporations respecting human rights; maintaining a “wide aperture” so that all impacts of a company on people and communities are addressed; and creating rigorous standards of conduct and means of accountability. This paper argues that nonetheless the movements are traveling along parallel tracks and thus missing an opportunity for mutual learning that can improve their effectiveness. The BHR movement can look to B Corps for (...) concrete examples of viable companies that value human rights intrinsically and not just where there is a “business case” to do so. The B Impact Assessment, the B Corp certification tool, can better ensure that B Corps are in fact respecting human rights by adopting BHR standards. And both movements must give greater consideration to the potential contradiction between unlimited scaling—a key goal of B Corps—and the ability of large multinational corporations to respect human rights. (shrink)

Modern society is challenged by a loss of efficiency in national governance systems values, and lifestyles. Corporate social responsibility (CSR) discourse builds upon a conception of organizational legitimacy that does not appropriately reflect these changes. The problems arise from the a-political role of the corporation in the concepts of cognitive and pragmatic legitimacy, which are based on compliance to national law and on relatively homogeneous and stable societal expectations on the one hand and widely accepted rhetoric assuming that all (...) members of society benefit from capitalist production on the other. We therefore propose a fundamental shift to moral legitimacy, from an output and power oriented approach to an input related and discursive concept of legitimacy. This shift creates a new basis of legitimacy and involves organizations in processes of active justification vis-à-vis society rather than simply responding to the demands of powerful groups. We consider this a step towards the politicization of the corporation and attempt to re-embed the debate on corporate legitimacy into its broader context of political theory, while reflecting the recent turn from a liberal to a deliberative concept of democracy. (shrink)

In this paper, we consider the relationships among corporate accountability, reputation, and tax behavior as a corporate social responsibility issue. As part of our investigation, we provide empirical examples of corporate reputation and corporate tax behaviors using a sample of large, U.S.-based multinational companies. In addition, we utilize corporate tax controversies to illustrate possibilities for aggressive corporate tax behaviors of high-profile multinationals to become a reputation threat. Finally, we consider whether reputation serves as an accountability mechanism for corporate tax behaviors (...) among other mechanisms for holding firms accountable for corporate tax behaviors. Our conceptual work points to a complicated relationship among shareholder, stakeholder, and civic responsibilities in the development and execution of firm’s corporate tax strategies. Building on those insights, our empirical illustration considers corporate reputation data alongside data which reflects corporate tax behavior. Based on this work, we find no clear trend or pattern indicating that reputation is associated with or affected by certain types of corporate tax behaviors. That is, our exploratory empirical illustration suggests that corporate tax behavior does not produce broad reputational consequences that would motivate a change in firm behavior. Drawing from celebrity and strategic silence research, we then suggest that reputation may not be a well-functioning mechanism for holding corporations to account for contributing their fair share of the resources used by government for the benefit of society and offer-related theoretical insights. (shrink)

Facing increased competition, universities are driven to project a positive image to their internal and external stakeholders. Therefore some of these institutions have begun to develop and implement corporate identity programs as part of their corporate strategies. This study describes a Turkish higher education institution’s social responsibility initiatives. Along with this example, the study also analyzes a specific case using concepts from the Corporate Identity and Corporate Social Responsibility literature. The motives leading the university to manage its corporate identity, the (...) social responsibility initiatives in the local and national communities, and the possible benefits of these initiatives for the parties involved are all identified. The major finding is that philanthropy is one of the main elements of Istanbul Bilgi University’s corporate identity program and that the university has altruistic motives for its social responsibility initiatives. (shrink)

Despite the economic relevance and distinctiveness of family firms, little attention has been devoted to researching their nature and functioning. Traditionally, family firms have been associated both to positive and negative features in their relationships with the stakeholders. This can be linked to different orientations toward corporate social responsibility. Thus, this research aims to identify the approaches that Spanish family firms maintain about social responsibility, based on the model developed by Quazi and O' Brien Journal of Business Ethics 25, 33-51 (...) (2000). An empirical study carried out for 112 Spanish family firms gives support to our initial assumption about these organizations not being a homogeneous group in terms of their orientation towards corporate social responsibility. The differences in perceptions do not seem to be associated to biographical characteristics. These results lead to some relevant academic and practical implications that suggest interesting lines for future research. (shrink)

The aim of this paper is to shed some light on understanding why companies adopt environmentally responsible behavior and what impact this adoption has on their performance. This is an empirical study that focuses on the United Nations (UN) Global Compact (GC) initiative as a Corporate Social Responsibility (CSR) mechanism. A survey was conducted among GC participants, of which 29 responded. The survey relies on the anticipated and actual benefits noted by the participants in the GC. The results, while not (...) conclusive, indicate that companies have more than one reason for adopting environmentally responsible behavior and that ethical and economic reasons co-exist. In terms of performance, the impact of participation in the GC seems to be particularly high in securing network opportunities and improved corporate image. The results indicate that companies that have participated many years in the GC, have submitted the most projects and have attended the most GC meetings also regard their CSR involvement as having had a strong, positive influence on their market performance. GC participation does not result in significant cost advantages, but this does not seem to have been regarded as a goal anyway. Costs seem to be affected to a␣large extent by existence of in-house research and␣development and the capability of developing environmentally sound technologies. Overall, the company receives both ethical and economic benefits from joining the GC. (shrink)

Based on a survey and content analysis of 462 peer-reviewed academic articles over the period 1990–2014, this article reviews theories related to the external drivers of corporate social responsibility and the internal drivers of CSR that have been utilized to explain CSR. The article discusses the main tenets of the principal theoretical perspectives and their application in CSR research. Going beyond previous reviews that have largely failed to investigate theory applications in CSR scholarship, this article stresses the importance of theory-driven (...) explanations of CSR and the complementarity of different theories. The article demonstrates that the current mainstream theorizing of CSR is dominated by theories related to the external drivers of CSR and is less developed with regard to the internal dynamics. The article outlines several productive avenues for future research: the need for multi-theory studies and more research at multiple levels of analysis, particularly at the individual level of analysis. It suggests that CSR scholarship can benefit from combining theoretical insights from a range of established theoretical lenses such as institutional theory and RBV, and can gain new insights from theoretical lenses such as Austrian economics and micro-level psychological theories. (shrink)

This study investigates the distinct and joint effects of corporate social performance, firm size, and visibility on a company’s decision to disclose sustainability-related information through sustainability reports. It seeks to provide more nuanced explanations for why certain companies tend to extensively report on their sustainability performance. First, while prior studies have predominantly focused on environmental reporting, the current analysis considers comprehensive sustainability reports that include both environmental and social issues. Second, the article argues that the effects of two important antecedents (...) of legitimacy pressure—firm size and organizational visibility—should be analyzed separately rather than restricting the analysis on the effects of legitimacy pressure per se. Third, it argues that the hypothesized effects are nonlinear because the marginal costs and benefits of sustainability reporting vary with a company’s CSP level, its size, and its visibility in the public. Finally, although there is a strong link between CSP and sustainability reporting, the strength of this link depends on its size and visibility. The study of 280 companies in environmentally and socially sensitive industries provides considerable support for these hypotheses, including evidence that size and visibility independently affect sustainability reporting and that the shape of the CSP/sustainability reporting link is contingent upon firm size and visibility. (shrink)

This article addresses our failing ability to hold business corporations to the public interest, or even to bare legality. It defends, in brief compass, the reasonableness of the expectation that corporations provide public benefits as consideration for their public privileges. But as succeeding sections recount, the traditional instrument for holding corporations to the public interest has gradually been undermined; and our standard, punitive tools for holding them even to bare legality, suffer from inherent limitations and fail adequately to deter corporate (...) misconduct. A more adequate approach would be to supplement the current punitive regime with reform of corporate governance in directions that would decrease the temptation of managers to engage in misconduct in the first place. Several possibilities are considered, with the most promise found in allowing corporations to be owned by Danish-style “industrial foundations.” Among its advantages, the reform is realizable and would reduce incentives to corporate misconduct without compromising on performance. Industrial foundations also customarily direct a portion of corporate profits to charity, in effect reinstating the norm that for-profit corporations provide public benefits. (shrink)

Are corporations morally defensible sorts of entities? How might we go about showing that they are? Thomas Donaldson offers us the most detailed contractarian justification for the moral defensibility of corporations. In this paper I show how we can significantly develop this sort of justification to yield a more compelling contractarian justification, though one that is importantly conditional. The primary points I take up in this paper are these:1. The question Donaldson poses to generate his contract is not quite as (...) simple as may appear. The sort of transformation we need to consider is more complex than the sort Donaldson describes.2. Partly because of considerations that arise in discussing the first point, the contract we are considering is a more conditionalagreement. The terms of the agreement will vary depending on the kind of state we are assuming prevails. The sort of contract we wantto draw up is at least a three-way contract: between society, productive organizations and the state. The sort of agreement we reach will have the following form: society a agrees to allow productive organizations of type b to exist if we assume state c will do various things (d1 to dn), productive organizations will do various things (e1 to en) and members of society will do various things (f1 to fn). Importantly, if state c is not doing d1 to dn, productive organizations may not be morally defensible.3. The terms of the contract that can be derived would benefit from the introduction of some of Rawls’s apparatus.4. When we consider the right questions, with more of the background institutions filled in, and when we include some more social contract apparatus, we get a better contract which fills in for us not only the obligations of business but, importantly, many obligationsfor government as well. (shrink)

Research studies on Corporate Social Responsibility often focus on revealing corporate leaders’ attitudes toward various issues of CSR. The position of the present paper is that to understand CSR, we must grasp the collaborative perspective of CSR, and discern the attitudes of community leaders as well as corporate leaders. To this end, the study compares attitudes of community leaders with those of corporate leaders in three localities in Israel. The study examines various issues of CSR, highlighting the benefits to both (...) community and corporation of reciprocal relations. Results from t‐tests confirmed significant differences between the groups. Some important implications for CSR particularly in terms of collaboration between community and corporation are discussed. (shrink)

It is generally assumed that a corporate purpose aiming to benefit all stakeholders has a positive effect on employee motivation and engagement, but no empirical studies into these specific effects were found. To examine this assumption, a corporate mission and vision matching the definition of a higher purpose were tested in two subsequent studies. The first study (N = 270) was a cross-sectional self-report study. The second study included a longitudinal design (N = 56) modeling purpose, motivation, and engagement (...) in a cross-lagged panel design over three time-points. The results associated purpose with motivation and engagement. The subsequent longitudinal analysis confirmed the presumed directionality from purpose to engagement, but not to motivation. Hence, while a corporate purpose can be added to the list of antecedents to work engagement, the relationship with motivation, despite the significant association with purpose in the cross-sectional study, remains more complicated. The present study adds to the knowledge of the beneficial effects of a broader purpose and responds to the current surge of interest in purpose as an instrument for sustainable business. (shrink)

Given that the benefits of Corporate Political Activity (CPA) are usually granted in the form of favorable industry regulation that benefits all industry participants rather than a single firm, small politically inactive firms are often able to take advantage of the benefits from CPA without investing in them. We argue that the free‐riding problem is context specific. Situations of extreme uncertainty create institutional voids that enable individual firms to more fully appropriate the returns from their CPA. In this paper, we (...) examine the influence that CPA had on the U.S. government’s disbursements of TARP funding in 2008. We find that politically active firms were able to avoid the free‐rider problem by obtaining more instances of TARP funding when compared to firms that were not politically active. In addition to being more likely to receive TARP funds, politically active firms received larger amounts of TARP funding than those firms who were not politically active. (shrink)

The link between corporate philanthropy and firm value has been controversial. On one hand, corporate philanthropy is often criticized as an agency cost because it may serve narrow managerial self-interests. On the other hand, corporate philanthropy may enhance firm value because it improves the relationships between firms and their stakeholders. In this study, we argue that this controversy is contingent upon whether corporate governance mechanisms can stimulate the financial benefit of corporate philanthropy. Based on a sample of U.S. firms (...) from 1996 to 2003, we find that CEO long-term pay positively moderates the relationship between corporate philanthropy and firm value while multiboard outside directors negatively moderate this relationship. Contrary to our expectations, we find that the relationship between corporate philanthropy and firm value enhances as CEO tenure increases. Our findings show that corporate governance plays an important moderating role in the relationship between corporate philanthropy and firm value. (shrink)

Facing increased competition, universities are driven to project a positive image to their internal and external stakeholders. Therefore some of these institutions have begun to develop and implement corporate identity programs as part of their corporate strategies. This study describes a Turkish higher education institution’s social responsibility initiatives. Along with this example, the study also analyzes a specific case using concepts from the Corporate Identity and Corporate Social Responsibility literature. The motives leading the university to manage its corporate identity, the (...) social responsibility initiatives in the local and national communities, and the possible benefits of these initiatives for the parties involved are all identified. The major finding is that philanthropy is one of the main elements of Istanbul Bilgi University’s corporate identity program and that the university has altruistic motives for its social responsibility initiatives. (shrink)

This article presents results of exploratory research conducted with managers from over 500 Norwegian companies to examine corporate motives for engaging in social initiatives. Three key questions were addressed. First, what do managers in this sample see as the primary reasons their companies engage in activities that benefit society? Second, do motives for such social initiative vary across the industries represented? Third, can further empirical support be provided for the theoretical classifications of social initiative motives outlined in the literature? (...) Previous research on the topic is reviewed, study methods are described, results, are presented, and implications of findings are discussed. The article concludes with the analysis of study limitations and directions for future research. (shrink)

Since the global financial crisis in 2008, corporations have faced a crisis of trust, with growing sentiment against ‘elites and ‘big business’ and a feeling that ‘something ought to be done’ to re-establish public regard for corporations. Trust and trustworthiness are deeply moral significant. They provide the ‘glue or lubricant’ that begets reciprocity, decreases risk, secures dignity and respect, and safeguards against the subordination of the powerless to the powerful. However, in deciding how to restore trust, it is difficult to (...) determine precisely what should be done, by whom, and who will bear the cost, especially if any action involves a risk to overall market efficiency and corporate profitability. The paper explores whether corporations have a moral duty to be trustworthy, to bear the cost of being so and thus contribute to resolving the current crisis of trust. It also considers where the state and other social actors have strong reason to protect and enforce such moral rights, while acknowledging that other actors have similar obligations to be trustworthy. It outlines five ‘salient factors’ that trigger specific rights to trustworthiness and a concomitant duty on corporations to be trustworthy: market power, subordination (threat and intimidation), the absence of choice, the need to preserve systemic trust, and corporate political power which might undermine a state’s legitimacy. Absent these factors and corporations do not have a general duty to be trustworthy, since a responsible actor in fair market conditions should be able to choose between the costs and benefits of dealing with generally trustworthy corporations. (shrink)

Corporations are facing a growing demand for the transparency of political contributions. In the United States, this demand has largely focused on the implementation of a mandatory disclosure law. It rests on the assumption that legal enforcement can make it easier to observe the ties between corporations and political parties. In this study, I challenge this assumption. I build my case by first developing a conceptual foundation of corporate political transparency. I argue that in the absence of economic benefits, legal (...) enforcement has a limited effect on CPT. Instead of encouraging transparency, mandatory disclosure can lead to the concealment of corporate political contributions. To develop a model of concealment, I borrow the characterizations of disguise from theatrical drama. Using the context of Indian firms, I show the limitation of mandatory disclosure and the efficacy of regulatory incentive. My study highlights the need for a broader debate on CPT to understand the relative implications of regulatory policies. (shrink)