We use the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission to assess the reputational risks created by political investment opportunities that allow managers to spend unlimited and potentially undisclosed firm resources on independent political expenditures. This new opportunity raises important ethical questions, as it is difficult, and perhaps impossible, under current law for shareholders to hold managers accountable for this investment choice and the reputational risks it entails. Using firms’ known political activity as a proxy for (...) managers’ likely future use of independent political expenditures, we examine how market participants reacted to Citizens United, conditional on this prior activity and corporate governance attributes related to the concentration of decision rights in senior management and blockholders. The results of our analyses document that firms with both a high level of known political activity and CEO-chairperson of the board duality experienced negative abnormal returns in reaction to Citizens United. In contrast, firms with concentrated ownership experienced positive abnormal returns; however, as known political activity increased, investors discounted the benefits of concentrated ownership. These findings suggest that investors expect this expansion of firms’ political investment opportunities to amplify principal-agent problems inherent in corporate political activity. Additionally, our findings provide evidence for those deliberating the mandatory disclosure of firms’ investments in politics as a means of increasing managerial accountability to both shareholders and the public. (shrink)

The increasing centrality of business firms in contemporary societies calls for a renewed attention to the democratization of these actors. This paper sheds new light on the possibility of democratizing business firms by bridging recent scholarship in two fields—deliberative democracy and business ethics. To date, deliberative democracy has largely neglected the role of business firms in democratic societies. While business ethics scholarship has given more attention to these issues, it has overlooked the possibility of deliberation within firms. As argued in (...) the paper, a combination of reforms based on the ideas of workplace deliberation and business deliberation is necessary in order to promote the prospect of deliberation in different business contexts. The paper also discusses the importance of more democratic firms for deliberative democracy at large and, in particular, for the recent debate on deliberative systems. Finally, the paper suggests new areas of investigation to better understand the prospect of democratic deliberation in business firms. (shrink)

Business firms play an increasingly influential role in contemporary societies, which has led many scholars to return to the question of the democratisation of corporate governance. However, the possibility of democratic deliberation within firms has received only marginal attention in the current debate. This article fills this gap in the literature by making a normative case for democratic deliberation at the workplace and empirically assessing the deliberative capacity of self-organised teams within business firms. It is based on sixteen in-depth interviews (...) in six German firms which practice various forms of self-organised teamwork. The article argues that self-organised teamwork can create a space for authentic, inclusive, and consequential deliberation by suspending authoritarian control structures within business firms. Finally, the article proposes the consideration of firms not only as necessary parts of a larger deliberative system but also as deliberative systems in themselves. (shrink)

Firm–employee relationships are dependent on the wider societal context and on the role business plays in society. Changes in institutional arrangements in society affect the perceived responsibilities of firms to their personnel. In this study, we examine mass media discussions about firm–employee relationships from a social responsibility perspective via a longitudinal study in Romanian society. Our analysis indicates how the expected responsibilities of firms towards employees have altered with the changing role of firms in society since the early 1990s. These (...) transformations correspond to the ideological developments, from communist to market-based thinking, which have taken place in post-communist Eastern Europe. More specifically, our study shows how the diminishing expectations of corporate social responsibility (CSR) are linked in mass media to increasingly important talk of human resource management (HRM). HRM is a modern business approach believed to address personnel needs and organisational objectives simultaneously. The congruency of goals in HRM may mistakenly lead to the conclusion that organisations are inherently responsible toward their personnel. We argue that this may not necessarily be the case. HRM, matching well the new free-market ideology in post-communist Eastern Europe, was eagerly embraced in that it defined firm–personnel relationships. In this study, we question whether this was an adequate theoretical perspective for Romanian firms to adopt as it lacks sufficient ethical grounding. We also call for a higher awareness concerning the role of mass media in the management literature, since its current role in constructing the ‘rightness’ and ‘wrongness’ in firm–personnel relationships is hardly considered. (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)

Gender issues are well-researched in the general management literature, particular in studies on new ventures. Unfortunately, gender issues have been largely ignored in the dynamic capabilities literature. We address this gap by analyzing the effects of gender diversity on dynamic capabilities among micro firms. We consider the gender of managers and personnel in 124 Ukrainian tourism micro firms. We examine how a manager’s gender affects the firm’s sensing capacities and investigate how it moderates team gender diversity’s impact on sensing capacities. (...) We also investigate how personnel composition impacts seizing and reconfiguration capacities. We find that female managers have several shortcomings concerning a firm’s sensing capacity but that personnel gender diversity increases this capacity. Team gender diversity has positive effects on a firm’s seizing and reconfiguration abilities. Our study advances research on gender diversity and its impact on firm capabilities and illustrates its relevance for staffing practices in micro firms. (shrink)

ABSTRACT:The ubiquity of family dominated firms in economies worldwide suggests that inquiry into the nature of the ethical frames of these types of firms is increasingly important. In the context of a social exchange approach and the norm of reciprocity, this manuscript addresses social cohesion in a dominant family firm coalition. It is argued that the factors underlying this cohesion, direct versus indirect reciprocity, shape unique attributes of family firms such as intentions for transgenerational sustainability, the pursuit of non-economic goals, (...) and strong interpersonal ties. Exchange structures, represented by direct and indirect reciprocity, lead family and non-family firms toward development of distinctive ethical frames of reference. (shrink)

This study revisits the relation between corporate performance and corporate social responsibility in the context of a major shift in firms’ credit risk status. Relying on corporate credit rating as a performance indicator, we examine whether firms under the scrutiny of rating agencies trade-off CSR engagement for credit quality improvement. To explore whether firms adjust their CSR engagement after a focal rating change, we focus on the investment–speculative grade threshold because of its importance in accessing the public debt market. We (...) find that firms that lose the investment grade rating subsequently increase CSR engagement. We also uncover that improving CSR engagement helps firms restore their credit ratings ex post. Our findings support the view of CSR engagement as a valuable risk management strategy. (shrink)

Multinational companies (MNCs) frequently adopt corporate social responsibility (CSR) activities that are aimed at providing ‘public goods’ and influencing the government in policymaking. Such political CSR (PCSR) activities have been determined to increase MNCs’ socio-political legitimacy and to be useful in building relationships with the state and other key external stakeholders. Although research on MNCs’ PCSR within the context of emerging economies is gaining momentum, only a limited number of studies have examined the firm-level variables that affect the extent (...) to which MNCs’ subsidiaries in emerging economies pursue PCSR. Using insights from resource dependence theory, institutional theory, and the social capital literature, we argue that MNCs’ subsidiaries that are critically dependent on local resources, have greater ties to managers of related businesses and to policymakers, and that those that are interdependent on the MNCs’ headquarters and other foreign subsidiaries, are more likely to be involved in PCSR. We obtain support for our hypotheses using a sample of 105 subsidiaries of foreign firms that operate in India. Our findings enhance our understanding of the factors that determine MNCs’ political CSR in emerging economies. (shrink)

In recent decades, the expansion of economic activity has been accompanied by negative environmental impacts. In response, there have been dramatic changes worldwide in terms of an increased demand for environmentally friendly products and services. To achieve these eco-innovations, firms have sought to acquire knowledge and implement operational flexibility by cooperating with different agents such as universities through a value cocreation system that is also expected to enhance firms’ performance. Using a sample of 250 companies, the present paper examines the (...) role of cooperation with universities in the development of diverse environmental innovations and building operational flexibility and, through this, improving firm performance. Results show that firms that value cooperation with universities develop a wider range of environmental innovations and increase their sales and benefits. (shrink)

In today’s competitive business market, firms that collaborate on a coopetition basis face obstacles in the form of decision-making, dependency, and trust in their competitor partners. This current study is the only one that has examined the relationship between coopetition and firm performance; yet, this relationship appears to be unclear due to the impact of trust and dependency on coopetition. This study investigates the impact of coopetition on firm performance by examining the mediating effects of decision-making and open innovation on (...) firm performance. There are 230 sets of data that were collected from the employees of Chinese small- and medium-sized enterprises through the survey method, and the data were analyzed using Partial Least Square-Structural Equation Modeling. The findings of this study indicated that open innovation has a significant mediation effect between coopetition and firm performance, and that decision-making is also an important mediating effect in bridging the relationship between coopetition and firm performance. By considering these mediators, the findings revealed that the coopetition has a significant impact on firm performance through decision-making and has a significant effect on firm performance through increasing open innovation. The findings also revealed that decision-making played a significant role in mediating the relationship between coopetition and firm performance, which in turn specified a statistically significant positive rel... (shrink)

The monitoring role performed by the board of directors is an important corporate governance control mechanism, especially in countries where external mechanisms are less well developed. The gender composition of the board can affect the quality of this monitoring role and thus the financial performance of the firm. This is part of the “business case” for female participation on boards, though arguments may also be framed in terms of ethical considerations. While the issue of board gender diversity has attracted growing (...) research interest in recent years, most empirical results are based on U.S. data. This article adds to a growing number of non-U.S. studies by investigating the link between the gender diversity of the board and firm financial performance in Spain, a country which historically has had minimal female participation in the workforce, but which has now introduced legislation to improve equality of opportunities. We investigate the topic using panel data analysis and find that gender diversity – as measured by the percentage of women on the board and by the Blau and Shannon indices – has a positive effect on firm value and that the opposite causal relationship is not significant. Our study suggests that investors in Spain do not penalise firms which increase their female board membership and that greater gender diversity may generate economic gains. (shrink)

BackgroundIn recent years, technological advancements have increased the importance of innovation activities. Therefore, firms invest millions of dollars in innovation activities to ensure long-term business sustainability. Similarly, consumer concerns have increased dramatically over the past years. Thus, brand loyalty has become a top priority for firms and consumers. In this background, this research examines how firms’ innovation activities translate into consumer brand loyalty to assure business sustainability in Asian markets, particularly China, Pakistan, and Indonesia.ObjectivesThis study’s specific objectives are to comprehend (...) the concept of firms’ innovation activities and their effect on the brand prototype. Examine the effect of the brand prototype on global brand preference, recommendation, and loyalty among Asian consumers. Find out the impact of brand preference on brand recommendations and the influence of brand recommendations on brand loyalty among Asian consumers.Materials and methodsA total of 814 consumers from Asian countries participated in this study, and structural equation modeling was used to analyze the data.ResultsThe findings indicate that firms’ innovation activities, such as processes, products, and store environment, positively influenced the brand prototype, thereby increasing consumer brand knowledge. Likewise, brand prototype contributes to developing brand preference, brand recommendation, and brand loyalty among Asian consumers. Lastly, consumer brand preference significantly influenced brand recommendation, which positively improves consumer brand loyalty in Asia.ConclusionThis study concluded that Asian consumers have favorable perceptions of firms’ innovation activities, which influences their ability to develop brand prototypes to increase consumer brand knowledge. Similarly, brand prototype fosters brand preference, recommendation, and loyalty. Likewise, favorable brand preference encourages consumers to recommend the brand to others, strengthening brand loyalty. Thus, firms should invest in innovation activities to strengthen consumer brand loyalty in Asian markets. Consequently, this study may assist multinational corporations in increasing their business volumes and market shares in Asia.Managerial recommendationsThis study provides important managerial recommendations. The findings revealed that global managers can develop and implement several branding strategies for sustaining their businesses in the Asian environment. (shrink)

This article examines the findings of an empirical study of law students from the Singapore Management University on their internship experiences at private law firms. As internships are frequently undertaken by law students, it is necessary for stakeholders to understand their impact on the values and ideals of law students in relation to the law and legal practice. This article seeks to increase the consciousness of law school educators, lawyers, and the professional bar about how law firm internships are (...) contributing to the making of future lawyers, so as to facilitate the reflection by these parties as to their roles in shaping future lawyers. (shrink)

Economic openness, both in terms of increased international trade exposure and enhanced inter-firm networking, has been a key element of China’s economic emergence since the implementation of market reforms and the “opening-up policy” over 30 years ago. Unfortunately, these changes have also coincided with the increased incidence of bribery and corruption. Both in general, and in the specific context of China, research on the relationship between a firm’s tendency toward openness and its propensity to engage in bribery is scarce. This (...) study seeks to fill this gap based on empirical evidence provided by a large sample of Chinese firms. The findings of the study reveal that firms’ increased networking and openness tend to occur contemporaneously with greater bribery and corruption. We suggest that this may be due to the misuse of guanxi-based networks that coincide with the presence of firms’ open network strategies, heightened by the potential loss of resource and capability heterogeneity (and hence reduced competitive advantages) in the context of openness. We further find that firms paying bribes do so as an attempt to overcome unnecessary bureaucratic processes and ineffective institutional support that might tend to hinder their development. (shrink)

Gender issues are well-researched in the general management literature, particular in studies on new ventures. Unfortunately, gender issues have been largely ignored in the dynamic capabilities literature. We address this gap by analyzing the effects of gender diversity on dynamic capabilities among micro firms. We consider the gender of managers and personnel in 124 Ukrainian tourism micro firms. We examine how a manager’s gender affects the firm’s sensing capacities and investigate how it moderates team gender diversity’s impact on sensing capacities. (...) We also investigate how personnel composition impacts seizing and reconfiguration capacities. We find that female managers have several shortcomings concerning a firm’s sensing capacity but that personnel gender diversity increases this capacity. Team gender diversity has positive effects on a firm’s seizing and reconfiguration abilities. Our study advances research on gender diversity and its impact on firm capabilities and illustrates its relevance for staffing practices in micro firms. (shrink)

This paper provides an empirical study of Italian ‘boutique law firms’. By building on seventeen semi-structured interviews with lawyers, the paper explores institutional, professional, and societal features of such firms and their lawyers. The article shows that, while the rise of large law firms triggered a partitioning of the Italian legal field in the past decades, more recently this small, but economically important, sector of the profession revived the classic model of delivering legal services characterised by a strong sense of (...) autonomy and independence, a client-centered but ethically robust approach to legal practice, a close relationship with academic and political environments, and a focus on projecting a professional image of themselves and their firms in society. These are, in other words, the last bastion of professionalism and are increasingly gaining an important role in the Italian field. (shrink)

With the rise of responsible innovation initiatives in firms that commercialize innovation in recent years, experts have argued that in order for RI to succeed, practical issues must be considered. Accordingly, this paper explores RI from the perspective of Korean emerging technology development firms. Although social benefits are expected from RI, which aims to reduce the side effects of innovations for society, the implementation of RI requires changing firms’ existing rules and routines. Therefore, predicting benefits and costs from the firm’s (...) perspective can shed light on the likelihood that RI will succeed. In this study, through an expert survey, the relative weights of RI-related benefit criteria and cost criteria were analyzed. On this basis, trends in priorities for RI levels were evaluated from present and future perspectives. Unexpectedly, firms recognized that even if constraints such as RI impose greater costs, they will eventually bring greater benefits. This finding indicates that innovation induced by RI overcomes obstacles, offsets costs, and then finally increases firms’ competitiveness, and that firms are willing to do good for society through RI. In the long term, a firm’s ethical activities may eventually result in improved performance by its management. Therefore, it can be concluded that, even if RI is enforced in a compulsory manner, it is highly likely that it can be well established and promoted even in firms that consider profit first. (shrink)

The engagement of firms in environmental collaborations has become a ubiquitous phenomenon in today’s business landscape. Yet much of the research to date is fragmented across multiple disciplines and lacks a clear framework to support future study. The authors consolidate and synthesize existing contributions into a conceptual map comprised of antecedents, consequences, and contingencies to better understand environmental collaborations. This map offers a perspective on how firms develop strategies, structures, and capabilities to manage and balance environmental and economic performance and (...) increasing demands for environmental sustainability from multiple stakeholders and society. The authors then highlight existing gaps in the extant literature and outline a future research agenda, including key questions and issues needing additional study. (shrink)

This article examines the drivers and barriers for corporate social responsibility (CSR) in the Norwegian graduate uniform industry, which is a market devoid of large corporations, consisting entirely of two small businesses. It finds that these small businesses' CSR activities are not particularly well explained by the existing literature on CSR in small‐ and medium‐sized enterprises, which assumes the presence of large competitors. This raises the question of whether small businesses that do not compete against large corporations may actually behave (...) more like ‘little big firms’ when it comes to CSR. The article finds that the two businesses studied are mostly driven by external pressure to improve their social responsibility. Such pressure stems partly from news reports on their activities and partly from increasing competition leading to a situation where the small businesses operating in the market scrutinise each others' activities. (shrink)

This article examines the drivers and barriers for corporate social responsibility (CSR) in the Norwegian graduate uniform industry, which is a market devoid of large corporations, consisting entirely of two small businesses. It finds that these small businesses' CSR activities are not particularly well explained by the existing literature on CSR in small- and medium-sized enterprises, which assumes the presence of large competitors. This raises the question of whether small businesses that do not compete against large corporations may actually behave (...) more like ‘little big firms’ when it comes to CSR. The article finds that the two businesses studied are mostly driven by external pressure to improve their social responsibility. Such pressure stems partly from news reports on their activities and partly from increasing competition leading to a situation where the small businesses operating in the market scrutinise each others' activities. (shrink)

This paper develops the concept of the ‘continuum of destructiveness’ in relation to organizational corruption. This notion captures the slippery slope of wrongdoing as actors engage in increasingly dubious practices. We identify four kinds of individuals along this continuum in corrupt organizations, who range from complete innocence to total guilt. They are innocent bystanders, innocent participants, active rationalizers and guilty perpetrators. Traditional explanations of how individuals move from bystander status to guilty perpetrators usually focus on socialization and institutional factors. In (...) addition to these factors, we propose that the very distance between an act and its ethical consequences (ethical distance) may also play a determining role – if not always in the same way – in the transition process. Having developed this conceptual argument, we conclude with a discussion of managerial and research implications. (shrink)

Parental participation in the control and administration of Catholic schools has often been minimal and wholly dependent on the clergy. This is not surprising since Catholic parents have generally found the raison d'etre of Catholic schooling convincing and have concentrated their efforts on its continued maintenance and expansion under firm clerical leadership. Therefore, the increasing willingness of Catholic parents publicly to challenge the stated educational policies of the bishops needs to be examined. This article assesses the role of parents in (...) the schools which serve their children. It traces the increasing cases of public conflict between parents and ecclesiastical authority in England and Wales since the 1960s. (shrink)

Research in the field of management has increasingly focused on strategies and tools related to corporate sustainability. Of the tools examined, codes of ethics have been found to play a primary role. Many studies have investigated the content of such codes, as well as their capacity to condition the behaviour of people within organizations. However, few studies have considered the intrinsic quality of codes of ethics. This study aims to investigate the impact that specific factors—firm size, degree of internationalization and (...) industry effect—can have on the quality of codes of ethics. Based on a sample of 248 listed Italian companies, the results of the empirical analysis show that the quality standard is particularly high in larger companies and in those firms operating in industries in which relationships established with critical stakeholders—and disclosure to those stakeholders—play a crucial role. These results have interesting implications for both researchers and practitioners. (shrink)

Researchers and other professionals unanimously agree that companies should become more sustainable, but this will not happen without the support of human resource management. Paradoxically, there is a lack of information on the support human resource management offers to organizational sustainability applied to real cases. Therefore, this research presents a case study on this topic that was carried out in a leading Brazilian company, which is considered as a model and has been selected as ‘the best place to work in (...) the country’. The results provide practical examples of how this family company has been working to guarantee an increasingly sustainable performance with the support of human resources, highlighting the achievements and challenges the company has faced. One of the main results indicates that companies seeking to achieve sustainability need the assistance of the human resource field in order to design a communication system which bridges the gap between practices and sustainable values. (shrink)

This systematic literature review contributes to the increasing interest regarding corporate social responsibility (CSR) in family firms—a research field that has developed considerably in the last few years. It now provides the opportunity to take a holistic view on the relationship dynamics—i.e., drivers, activities, outcomes, and contextual influences—of family firms with CSR, thus enabling a more coherent organization of current research and a sounder understanding of the phenomenon. To conceptualize the research field, we analyzed 122 peer-reviewed articles published in highly (...) ranked journals identifying the main issues examined. The results clearly show a lack of research regarding CSR outcomes in family firms. Although considered increasingly crucial in family firm research, a study investigating family outcomes (e.g., family community status, family emotional well-being), as opposed to firm outcomes, is missing. This literature review outlines the current state of research and contributes to the actual debate on CSR in family firms by discussing how family firms can use CSR activities as strategic management tools. Moreover, our analysis shows a black box indicating how CSR links different antecedents and outcomes. The black box is significant since firms generally need to know where to allocate their scarce resources to generate the best outcomes. We identify nine research questions based on these findings, which we hope will inspire future research. (shrink)

Using an event-study framework, we examine the stock market reaction to the announcement of firm withdrawal from countries designated as “State Sponsors of Terrorism” by the U.S. Department of State. We find that such announcements are, on average, linked to a statistically significant increase in firm value—an effect which already kicks in a few days before the announcement date. The observed abnormal returns are positively associated with the U.S. domicile, the intensity of a firm’s hitherto existing engagement in a (...) designated country, the number of countries that it withdraws from, as well as with a withdrawal from Iran compared to a withdrawal from other countries. Evidence suggests an increase in demand for stocks of withdrawing firms as a plausible cause of the positive stock price reaction. Pension and endowment funds are significantly less likely to own strategic stakes in firms with intensive involvements in countries designated as “State Sponsors of Terrorism.” We find some statistical evidence that firms remaining active in such countries have abnormally positive returns in the long run. (shrink)

Instrumental CSR perspectives suggest that selective investments in prosocial, voluntary behaviors are largely profit-driven, whereas institutional theory emphasizes legitimacy-seeking as a significant mechanism for explicit CSR disclosure. We test both profit-seeking and legitimacy-seeking mechanisms, derived from empirical findings of Western-oriented firms, in a unique setting to understand voluntary CSR disclosure in an Eastern context: South Korea. By examining voluntary disclosure of the 500 largest South Korean firms’ social contributions from 2006 to 2012, a time period purposefully encompassing the global financial (...) crisis, we highlight the limitations of corporate social responsibility theorizing when East meets West. Our findings suggest profitability is not significantly related to voluntary disclosure as predicted by Western, instrumental CSR literature. Overall, we found support for legitimacy-seeking mechanisms as the likelihood of disclosure increased for publicly listed firms and those employing a larger number of workers for all years between 2006 and 2012. Further, firms affiliated with chaebols are more likely to disclose prosocial behaviors prior to, and after, the GFC compared to firms that are not affiliated with chaebols regardless of profitability further suggesting that legitimacy-seeking mechanisms may underlie CSR reporting in Korean firms. (shrink)

This study investigates the key factors that elicit financial reporting fraud among companies in Malaysia. Using enforcement action releases issued by the Security Commission of Malaysia and Bursa Malaysia, we identify a sample of 76 firms that had committed financial reporting fraud during the period of 1996–2016. We use the fraud triangle framework and the Malaysian International Standards on Auditing 240 to identify the factors. Since the simple probit model fails to address the identification problem, we estimate our results using (...) a bivariate probit model. The new model estimates the effects of pressure, opportunity, and rationalization on the probability of fraud likelihood by disentangling the detection probability of fraud. Among several proxies used for pressure, our results suggest that aggressive tax reporting and financial difficulties increase the likelihood of fraud commission. In regard to opportunity, we find that dedicated institutional investors, independence of the board, effective audit committee, and the presence of a female on the board provide active monitoring and oversight in reducing fraud occurrence. Results for rationalization suggest that prior violations and frequent changes of external auditors increase the chances of fraud occurrence. This research offers possible insights to auditors, managers, and regulators to prevent, detect, and react to fraud. Specifically, it highlights the specific factors that may exacerbate the fraudulent intentions of firms. (shrink)

Shareholders with standard monetary preferences will give a manager incentives to increase firm profits, which can be achieved with equity grants. When shareholders are socially responsible, in the sense that they also value corporate social performance, it is not clear which incentives the manager should receive. Yet, in a standard principal–agent model, we show that the optimal contract is surprisingly simple: it consists in giving equity holdings to the manager. This is notably because the stock price will incorporate expected (...) profits as well as the social performance of the firm, to the extent that it is valued by shareholders. Consequently, equity holdings give the manager incentives to jointly maximize the profits and the social performance of the firm according to shareholders’ preferences. To facilitate alignment of interests, more socially responsible firms will optimally hire more socially responsible managers. We conclude that neither the shareholder primacy model nor equity-based managerial compensation is necessarily inconsistent with the attainment of social objectives. (shrink)

In Western societies and organizations, episodes of discrimination based on individual demographic and social characteristics still occur. Relevant questions, such as why ethnic discrimination is perpetuated and how people confront it in the workplace, remain open. In this study, we adopt a social-symbolic work perspective to explore how individuals confront workplace ethnic discrimination by both upholding and challenging it. In doing so, we incorporate the perspectives of those directly experiencing, observing and neglecting discrimination. Specifically, we focus on the Italian branches (...) of North American professional service firms (PSFs), performing a qualitative investigation of the worlds of concern among professionals regarding the topic of ethnic discrimination to explore how different backgrounds motivate social-symbolic work. We find that different forms of work are enacted to support the status quo, shape the boundaries of existing organizational practices, and balance professional identities, emotions, and careers to silence episodes of ethnic discrimination. We also highlight cases of ‘soft,’ yet increasing, work that contests the status quo. Finally, we discuss our results in light of neo-institutional and critical management research to ultimately inspire our focal firms and societies to find alternatives to the rhetoric in the established approaches to inequality. (shrink)

Due to the prevalent influence of legal trends in driving ethical homogenization and persistent decoupling between ethical substance and symbolism in today’s organizations, scholars are calling for a renewed interest in the structural makeup of ethical codes. This article explores the disclosure trends and examines the contents of codes of ethics in the context of Canadian publicly listed acquirers. Relying on the analysis of codes’ public availability, structure, purpose, and promoted values, four clusters of behavior are identified. Although many firms (...) avoid the public disclosure of their codes, the results indicate that code of ethics’ patterns in sample firms are not driven merely by regulatory forces but increasingly shaped by aspirations for building a sustainable values-based corporation. The reported differences across clusters demonstrate that many companies in Canada overcome isomorphic pressures by displaying some originality in the writing of their codes. While symbolism in codes of ethics’ design and adoption prevails in publicly listed acquiring firms, the study provides evidence of an emerging trend of substantial commitment to social responsibilities. (shrink)

Researchers and other professionals unanimously agree that companies should become more sustainable, but this will not happen without the support of human resource management. Paradoxically, there is a lack of information on the support human resource management offers to organizational sustainability applied to real cases. Therefore, this research presents a case study on this topic that was carried out in a leading Brazilian company, which is considered as a model and has been selected as ‘the best place to work in (...) the country’. The results provide practical examples of how this family company has been working to guarantee an increasingly sustainable performance with the support of human resources, highlighting the achievements and challenges the company has faced. One of the main results indicates that companies seeking to achieve sustainability need the assistance of the human resource field in order to design a communication system which bridges the gap between practices and sustainable values. (shrink)

Opportunistic behaviors are considered ethically and strategically troublesome since they disrupt otherwise mutually beneficial relationships. Previous literature has shown that firms attempt to protect their investments from opportunism by generating a large amount of patented marginal innovations in domains central to their industry. However, this approach may generate some ethical dilemmas by preventing firms and societies from more radical, collaborative, and much-needed environmental progress. We extend the environmental innovation literature using strategic and ethical lenses to analyze the potential of an (...) alternative, divergent way to provide financial opportunities for a focal firm without aiming to prevent innovative opportunities for competitors. Our longitudinal analysis of 6768 environmental patents from 59 large companies worldwide in the electrical components and equipment industry shows that high levels of innovation intensity, environmental scope, bargaining power, and environmental expertise increase the incidence of patented environmental innovations related to domains in which industry competitors are less focused (i.e., technological divergence). We also show a positive relationship between this divergence and market-based firm performance. Our results suggest that pursuing innovative divergence to avoid opportunism may make ethical and market sense and we also identify the organizational factors that can support these efforts. (shrink)

China has long enjoyed its position as the world's cheapest production country. However, this position is being shaken due to the increasingly rising costs in China in pace with China's rapid economic development. China's New Labour Contract Law which took effect from 1 January 2008 has further pushed the labour costs in China in general. The purpose of this article is to arrive at an in-depth understanding of why foreign firms conduct sourcing in China where sourcing is becoming increasingly expensive. (...) The experiences of four Swedish companies in the textile and clothing industry (TCI) conducting sourcing in China are presented. Our findings show that sourcing in China is becoming both cost-and strategy-driven. Companies purely chasing the cheapest production would most probably consider leaving China, whereas companies with a long-term strategic intent and a high level of business ethics and corporate social responsibility (CSR) practices will retain all or most of their sourcing activities on the Chinese soil despite the rising costs. (shrink)

Public service organization's increasingly are considering diversification into new “for-profit” or “high-profit” enterprises. Such undertakings offer a number of potential benefits to both the organization and the public. They also have potential problems. This article examines some of the major types of benefits and problems in hopes that both public service managers and public policy makers will give a balanced consideration to these diversification efforts.

Researchers and other professionals unanimously agree that companies should become more sustainable, but this will not happen without the support of human resource management. Paradoxically, there is a lack of information on the support human resource management offers to organizational sustainability applied to real cases. Therefore, this research presents a case study on this topic that was carried out in a leading Brazilian company, which is considered as a model and has been selected as ‘the best place to work in (...) the country’. The results provide practical examples of how this family company has been working to guarantee an increasingly sustainable performance with the support of human resources, highlighting the achievements and challenges the company has faced. One of the main results indicates that companies seeking to achieve sustainability need the assistance of the human resource field in order to design a communication system which bridges the gap between practices and sustainable values. (shrink)

Socially Responsible Investment (SRI) indices play a major role in the stock markets. A connection between doing good and doing well in business is implied. Leading indices, such as the Domini Social Index and others, exemplify the movement toward investing in socially responsible corporations. However, the question remains: Does the ratings-based methodology for assessing corporate social responsibility (CSR) provide an incentive to firms excluded from SRI indices to invest in CSR? Not in its current format. The ratings-based methodology employed by (...) SRI indices in their selection processes excludes many corporations by creating limited-membership lists. This received ratings-based structure is yet to offer an incentive for most of the excluded corporations to invest in improving their levels of CSR. We, therefore, ask under what circumstances a ratings-based method for assessing CSR could provide an incentive to firms excluded from SRI indices to invest in CSR. In this article, we attempt to offer a theoretical reply to this question. We show that when all firms are publicly ranked according to SRI index parameters, such indices can indeed create a market incentive for increased investment by firms in improving their performance in the area of social responsibility. We further show that this incentive tapers off as the amount of investment required exceeds a certain point or if the amount of payback on that investment fails to reach a certain threshold. (shrink)

Corporate social responsibility (CSR) has attracted increasing attention in business and research. Studies have documented how management concepts such as diversity management are translated and adapted to differential local sociocultural contexts outside their countries of origin. More research is needed concerning how CSR concepts are translated and practiced locally within particular organizations. This research is based on an organizational ethnography of the management of multiple social, ethical and business logics of CSR in a Danish frontrunner firm. The study contributes with (...) insights into the ongoing organizational management of potentially opposing logics in CSR. Findings show that managing contradictions of CSR is an ongoing challenge and accomplishment influencing whether ethical, social and business logics collide or reinforce each other. The study shows that when ethics are framed as means to economic ends, some social responsibilities have a tendency to be disregarded in practice. (shrink)

Socially Responsible Investment indices play a major role in the stock markets. A connection between doing good and doing well in business is implied. Leading indices, such as the Domini Social Index and others, exemplify the movement toward investing in socially responsible corporations. However, the question remains: Does the ratings-based methodology for assessing corporate social responsibility provide an incentive to firms excluded from SRI indices to invest in CSR? Not in its current format. The ratings-based methodology employed by SRI indices (...) in their selection processes excludes many corporations by creating limited-membership lists. This received ratings-based structure is yet to offer an incentive for most of the excluded corporations to invest in improving their levels of CSR. We, therefore, ask under what circumstances a ratings-based method for assessing CSR could provide an incentive to firms excluded from SRI indices to invest in CSR. In this article, we attempt to offer a theoretical reply to this question. We show that when all firms are publicly ranked according to SRI index parameters, such indices can indeed create a market incentive for increased investment by firms in improving their performance in the area of social responsibility. We further show that this incentive tapers off as the amount of investment required exceeds a certain point or if the amount of payback on that investment fails to reach a certain threshold. (shrink)

Corporate social responsibility (CSR) has attracted increasing attention in business and research. Studies have documented how management concepts such as diversity management are translated and adapted to differential local sociocultural contexts outside their countries of origin. More research is needed concerning how CSR concepts are translated and practiced locally within particular organizations. This research is based on an organizational ethnography of the management of multiple social, ethical and business logics of CSR in a Danish frontrunner firm. The study contributes with (...) insights into the ongoing organizational management of potentially opposing logics in CSR. Findings show that managing contradictions of CSR is an ongoing challenge and accomplishment influencing whether ethical, social and business logics collide or reinforce each other. The study shows that when ethics are framed as means to economic ends, some social responsibilities have a tendency to be disregarded in practice. (shrink)

Firms are spending billions annually in the name of corporate social responsibility (CSR). Whilst markets are increasingly willing to reward good and responsible firms, they lack the instruments to measure corporate social performance (CSP). To convince investors and other stakeholders, firms invest heavily in building a reputation for good corporate behaviour. This article argues that reputations for CSP are often unrepresentative of true CSP and investigates how differences in 'perceived' and 'actual' – as measured by the Fortune and KLD databases, (...) respectively – can partly be explained by firm characteristics. Amongst other things, it finds that overrated firms are more likely to be relatively big, profitable, operating in non-polluting but competitive industries and with no history of wrong doings to their primary stakeholders. They will also typically spend a lot of effort satisfying the claims of their secondary stakeholders. Above all, the results emphasise the need for researchers to recognise that the databases measure different phenomenon and are not interchangeable. (shrink)

Non-governmental organizations increasingly hold firms responsible for harm caused in their supply chains. In this paper, we explore how firms and NGOs talk about cosmopolitan claims regarding supply chain responsibility. We investigate the language used by Apple and a group of Chinese NGOs as well as Adidas and the international NGO Greenpeace about the firms’ environmental responsibilities in their supply chains. We apply electronic text analytic methods to firm and NGO reports totaling over 155,000 words. We identify different conceptualizations of (...) cosmopolitanism in this discourse: a legalistic approach to cosmopolitanism for Apple and a group of Chinese NGOs and a moralistic approach for Adidas and Greenpeace. We argue that these differences connect to the roles that the firms are expected and perhaps willing to take in SCR: legalistic discourse connects to a governmental function of rule development and enforcement; in contrast, moralistic discourse connects to a citizenship function that focuses on doing good to the global community. We discuss implications for companies’ non-market strategies and future research. (shrink)

Facing an increasing number and variety of issues with social salience, firms must determine how to engage with issues that likely have a significant impact on them. Integrating issues management and salience theories, the authors find that firms engage with socially contested issues—where there is a high degree of societal disagreement—in a different manner from issues that have social consensus, or high agreement. Examining social issue resolutions filed by shareholders from 1997 to 2009, the study finds that socially contested issues, (...) as well as those issues with social consensus, are both likely to result in engagement by the firm. For social issues with consensus, a firm is more likely to opt for a low level of shareholder engagement whereas resolutions regarding contested issues lead to engaging shareholders at a higher level. These findings shed new light on the IM and issue salience literature streams that have suggested firms will react differently to these types of issues, even while they remain largely untested. Finally, firms become less engaged with perennial issues over time. rather than more, providing new guidance to researchers, shareholder activists, and firms alike. To the authors’ knowledge, such fined-grained insight into expected levels of firm engagement with social issue salience has not been put forth previously. (shrink)

Family businesses are often seen as key players in efforts to increase sustainability due to their transgenerational focus. Researchers have reported that companies strengthen their commitment to sustainability as they consolidate their entrepreneurial commitment, but the existing knowledge about drivers of family firms' sustainability choices is limited. This study sought to fill related research gaps by exploring the relationships between five entrepreneurial orientation (EO) components—risk taking, innovativeness, proactiveness, competitive aggressiveness and autonomy—and family businesses' sustainability initiatives. These companies comprise a (...) unique research context in terms of the EO-sustainability link due to their focus on continuity and propensity to create value for future generations. In addition, women increasingly hold leadership positions within family businesses, and studies have categorised both entrepreneurship and sustainability as gendered processes. Thus, this research also explored female chief executive officers' (CEOs) moderating role as corporate change agents who influence the EO-sustainability initiatives relationship. Analyses were conducted using primary data collected from 195 privately held family firms in Poland. The results indicate that only one EO component (innovativeness) is significantly associated with family businesses' sustainability initiatives and that CEO gender moderates the links between two EO components (proactiveness and autonomy) and sustainability. Thus, this article contributes to the management literature by exploring the role of women leaders as change agents for sustainability in family firms. Other significant theoretical and practical implications are also discussed. (shrink)

Under resource dependence theory, firms should benefit from diverse boards of directors. Ethical arguments also highlight that boards should be as diverse as the stakeholders and communities that they serve. In an attempt to increase diversity and women’s presence on boards of directors, legislative efforts have enacted gender quotas. We examine how such efforts are perceived by U.S. market participants. We expect that when a firm operating under a quota law meets only the minimum requirement, investors will view the (...) female directors through the lens of token status theory and invest fewer resources in that firm than they will in a firm that exceeds the quota minimum or has the same composition but is not under a quota law. Through an experiment with 207 MTurk participants, we manipulated whether a firm was or was not under a quota law and whether the number of female board members was just at or exceeded the law’s minimum compliance. We find evidence that under a quota system, U.S. market participants tend to view female directors as tokens when the firm is just at the quota minimum, and these perceptions both affect their view of the firm’s prospects and negatively influence investment decisions. Importantly, however, we find that these negative effects can be offset and that resource dependence theory holds if the firm _exceeds_ the quota, signaling that the hiring of female directors is not simply compliance-dependent and subsequently leading U.S. market participants to invest more resources in the firm. (shrink)

The recent global increase in environmental regulation does not necessarily signal improvement in firms’ ecological imprints. Like many markets, the Arab world is struggling to implement environmental compliance measures among local firms. For Arab countries, the reliance solely on formal policies to improve local firms’ ecological footprints may be risky given the evident institutional challenges to enforce environmental regulations, specially post the Arab Spring. Drawing from the literature highlighting the merits of combining formal and informal controls to ensure successful (...) implementation of a strategy, we argue that the emphasis for regulation must be accompanied by an emphasis for developing environmental ethics of individuals, who are the expected implementers of any environmental policy. In that light, we propose that the Eco-Islam phenomenon can serve as an influential and effective foundation for building organizational cultures with stronger environmental ethics among local small and medium enterprises. We explain the underlying maxims of Eco-Islam then conduct qualitative research among experts preaching or practicing the concept to gain better insights into the potential of leveraging it in Muslim-majority Arab countries. Finally, we conclude with insightful implications for local SMEs in the region. (shrink)

We use an event study to capture the investor reaction to the first Newsweek Green Rankings in September 2009, a notable, multi-dimensional recent development in the rating of corporate environmental CSR performance. Drawing on stakeholder theory, we develop hypotheses about market investor reaction to the disclosure of new, relevant corporate environmental performance in both the short and longer term, whether market investors’ reaction reflects industry context, and whether firm-level contextual variables representing firm size, and market legitimacy significantly impacts the investor (...) reaction. We find that, for the sample of the largest 500 US firms ranked by Newsweek, investors react positively both to the raw and within-industry rankings of green performance in terms of both short-term and longer-term returns. Moreover, the investor reaction is significantly influenced by contextual variables such as firm size and firm market legitimacy. Our results are compatible with the inference that rating agencies like Newsweek serve a valuable information dissemination function such that investors in better ranked firms anticipate larger future cash flows due to more positive reactions from key stakeholders such as environmentally-conscious customers, employees, NGOs, regulators, and thus reward these firms with stock price increases. Finally, larger, more visible firms benefit more, while firms which have more market legitimacy benefit less. We believe these findings will be of considerable interest to scholars of environmental corporate social responsibility. (shrink)

This study examines the influence of stakeholder pressures and family ownership on strategic decarbonization choices of German Mittelstand firms. It distinguishes between _symbolic_ strategies focusing on compensating CO 2 -emissions and _substantive_ strategies directed toward reducing carbon emissions. The relative pressure exerted by _internal_ and _external_ stakeholders on these strategic choices is examined. Data from 443 manufacturing firms reveal that overall stakeholder pressures increase the pursuit of decarbonization strategies. Internal stakeholders pressures are associated with increased reliance on substantive decarbonization (...) strategies both in family-owned and non-family-owned firms. Pressure from external stakeholders are associated with increased reliance on both substantive and symbolic decarbonization strategies only in non-family-owned firms. No effect of external pressures was found in family-owned firms. Implications for theory, management practice, and policy makers are discussed. (shrink)