Abstract
This paper takes both a conceptual and an empirical approach to answer the question as to how Corporate Social Responsibility (CSR) can be connected to the company’s role as an agent of social value creation when it operates within an imperfect institutional framework of market competition. To develop a functional design for an empirical study, we draw on the concept of ordonomics, which provides a heuristics for responsible business activities in society. Drawing on ordonomics, we devise three questions: Referring to action responsibility we ask in which CSR activities companies do invest in their day-to-day business. Referring to governance responsibility we ask as to how companies realize win-win solutions through strategic commitments. In addition, with regard to discourse responsibility we ask in which stakeholder dialogues companies engage in order to discuss and find functional rules for organizing win-win solutions. In our empirical study, we reveal insights into the micro-level analysis of the CSP-CFP link and generate several new questions to be the subject of future research.
Highlights
For almost 35 years, the effect of social activity on company performance has been under empirical analysis
Empirical studies have inquired into the relationship between corporate social responsibility (CSR) or, to use the notions of empirical research, corporate social performance (CSP) and corporate financial performance (CFP)
Based on the ordonomic understanding that companies can usemorality as a factor of production,‘ this paper takes both a conceptual and an empirical approach to answering the question as to how CSR can be connected to the company‘s role as an agent of social value creation in its day-to-day business and governance activities
Summary
For almost 35 years, the effect of social activity on company performance has been under empirical analysis. After about 170 studies, it is still an unsettled issue whether companies do well because they are doing good or whether companies that are doing well can do good This ambiguity has led some of the most prominent scholars in the field to a discouraging conclusion. This paper takes the above conclusion as its starting point for both a conceptual and an empirical contribution to empirical CSR research. Based on the ordonomic understanding that companies can usemorality as a factor of production,‘ this paper takes both a conceptual and an empirical approach to answering the question as to how CSR can be connected to the company‘s role as an agent of social value creation in its day-to-day business and governance activities. Part 2 presents the ordonomic concept ofmorality as a factor of production‘ Based on this conceptualization, Part 3 contains an ordonomic contribution to the empirical research.
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