Examining multi-level effects on corporate social responsibility and irresponsibility

Abstract

AbstractWhat influences firms to engage in socially responsible (irresponsible) activities? Corporate social responsibility (CSR), the efforts of firms to create a positive and desirable impact on society, and corporate social irresponsibility (CSI), contrary actions of unethical behavior that negatively influence society, have become an important focus of discussion for both corporations and scholars. Despite this interest, our understanding of organizations’ socially responsible (irresponsible) actions and their antecedents is still developing. A dearth of knowledge about the multi-level nature of the drivers of CSR and CSI continues to exist. Utilizing a longitudinal sample composed of 899 firms in 66 industries, we follow a prominent model to empirically examine industry-, firm-, and individual-level effects on CSR and CSI. Employing variance decomposition analysis, our results confirm that all three levels of investigation do indeed influence CSR and CSI. More substantively, our analysis estimates the magnitude of the effects attributable to each of the three levels for both CSR and CSI. We also compare multi-level influences on two separate CSR strategies, those targeting primary stakeholders (strategic CSR) and those targeting secondary stakeholders (social CSR). We find greater industry- and firmlevel effects on social CSR, and higher individual-level effects on strategic CSR. Our results build on the conceptual work of previous authors by providing empirical analyses to confirm multilevel influences on CSR and extending prior multi-level theory to the concept of CSI. Further, we add to the emerging literature regarding stakeholder demands by examining the various influences on CSR strategies targeting different stakeholder groups.