Institutional, stakeholder, and cultural influences on corporate social performance: an institution-based view

Abstract

Although scholars are beginning to explore the institutional and stakeholder influences on corporate social performance (CSP), these influences have been examined in isolation and as separate forces. Research on CSP also has not considered that institutions and stakeholders are embedded within distinct cultures, which are not homogeneous and can differ on key dimensions. To address these issues, we explore how institutional pressures from organisations' external stakeholders can influence CSP and how these influences can, in turn, differ across cultures. Specifically, we theorise about the influence of coercive institutional pressures, stemming from pressures exerted on firms by organisations and institutions that firms depend on for tangible and intangible resources. Drawing from the institution-based view of firm strategy, we argue that in order to acquire tangible and intangible resources, firms often respond to stakeholders' coercive pressures by engaging in activities to improve CSP. Thus, coercive institutional forces and CSP are positively related. Furthermore, we posit that the influence of stakeholders on CSP will differ across cultures. We focus on a particularly salient cultural dimension - power distance - and theorise that high power distance strengthens the coercive effects of government and weakens the effects of unions and interest groups on CSP.