Changing the Rules of the Game: The Legitimacy of CSR Standards

Abstract

In order for Corporate Social Responsibility (CSR) standards to promote socially responsible behavior in industry, they need endure over the long-term by responding to the dynamics of society. Revisions of their content are thus necessary to maintain both their input legitimacy – the socially constructed norms are accepted as fair and effective by society – and their output legitimacy – the extent to which standards are actually able to standardize the behavior of its adopters. By studying the effects of the standards underlying a front-of-pack label indicating the healthiness of food products, our study shows that a) making CSR standards more aligned with the views of civil society can increase the average social value created, but that b) de-certifications of products due to stricter standards demotivates firms to invest in enhancing compliance. The article concludes that revisions of CSR standards can only improve both types of legitimacy if the subsequent changes in firm behavior are visible and transparently reported by the standardization organization.