Prospector orientation and CSR: the moderating role of national philanthropic environments

In the evolving landscape of business sustainability, Corporate Social Responsibility (CSR) has emerged as a critical strategic tool, especially in the financial sector. This study investigates the impact of CSR on firm financial performance (FP) within the banking industry of Pakistan, while examining the mediating role of innovation capabilities (IC) and the moderating role of financial technology (FinTech). CSR is conceptualized through environmental, social, and governance (ESG) dimensions, and its influence on performance is assessed through both direct and indirect pathways. Drawing on dynamic capability’s theory, stakeholder theory, and the resource-based view, the study employs a quantitative, cross-sectional research design using data from 366 top management respondents from commercial banks. The findings indicate a significant positive relationship between CSR and firm performance, underscoring the strategic value of responsible business practices. Innovation capabilities were found to partially mediate this relationship, highlighting that CSR fosters internal knowledge sharing, stakeholder collaboration, and learning, which in turn stimulate innovation and lead to enhanced performance outcomes. However, contrary to expectations, FinTech did not significantly moderate the CSR–FP relationship. Although FinTech adoption showed a positive association with performance, its interaction with CSR lacked statistical significance, suggesting that the integration of CSR and FinTech is not yet strategically aligned in the sample firms. These results suggest that while CSR and FinTech individually contribute to firm performance, the synergy between them may require more deliberate organizational alignment. The study contributes to CSR literature by clarifying the internal mechanisms linking CSR to performance and calls for greater emphasis on innovation and technological coordination in CSR strategies. The findings offer practical insights for bank managers and policymakers seeking to leverage CSR for sustainable financial success through innovation-led initiatives.

PurposeWith corporate social responsibility (CSR) becoming mandatory, several firms in India have been compelled into spending resources on CSR while their business strategy and processes were unprepared to take up CSR activities, effectively. In this light, the CSR relationship with other business functions would be altered. Using Thomson Reuters data from 2010 to 2018 (pre-mandate to post-mandate) this study aims to re-examine the relationship between CSR and financial performance.Design/methodology/approachThe current study is rooted in the bandwagon-bias effect theory and uses a long-term data (2010–2018) of Indian firms. It uses Refinitiv Thomson Reuters ESG rating to measure CSR and accounting measures for financial performance (FP) to make a pre-post analysis of the impact that mandatory CSR regime has had on firms performance. The study uses the weighted panel regression method.FindingsThe relationship between CSR and FP is different when CSR was voluntary than when it has been mandated by Law. CSR has a positive effect over the FP during the voluntary phase but this positive relationship weakens during the mandatory phase. The waning effect of CSR over FP substantiates the presence of bandwagon bias effect which can be explained by the crowding-in of several companies engaged in CSR activities because of the mandatory CSR law.Research limitations/implicationsvFew countries have made CSR mandatory therefore CSR literature is limited. But mandating CSR is a growing phenomenon so this study augments to the body of knowledge. Until now literature generally converged on a positive relationship between CSR performance and FP but the current study shows altering directions to this relationship in a changing CSR environment. The use of the bandwagon-bias theory contributes to the theoretical approaches. Theoretically, the findings add to the body CSR literature and offer impetus to the evolving domain of impact measurement and reporting.Practical implicationsResults of the study offer a clear indication to managers that they need to re-strategise their CSR activities during the mandatory CSR environment if they wish to draw instrumental benefits of a positive impact on the FP of their firms. CSR expenditure is now a leveller so managers may either exceed the mandatory 2% expenditure as some firms did during the voluntary CSR phase or else design their CSR implementation plans to bring about a more impactful positive change. Communicating the impact of CSR to influential and powerful stakeholders beyond the mandatory reporting to the government is yet another way through which managers can draw benefits of CSR activities. Additionally to draw positive results from CSR activities firms may consider adopting international reporting and benchmarking standards such as the GRI and ISO 26000. Finally, the results of the study can be used by policymakers to make a note that the CSR law is causing a weakening of the financial benefits and therefore.Social implicationsThe results of the study can be used by policymakers also need to make a note that the CSR law is causing a weakening of the financial benefits and therefore firms are adopting shortcuts, by donating the required amount of funds. But donation of funds defeats the real purpose of mandatory CSR which is social impact, therefore the regulators may want to make the necessary changes unplug the gaps in the CSR law to ensure better adherence to the law in spirit and a real impact on the ground activities.Originality/valueWhile CSR–FP relationship has been extensively explored but limited studies have explored this relationship in a mandatory CSR environment and no other work presents a comparative view of the CSR–FP relationship, namely, before and after the mandatory CSR policy. The current study is one of the limited few studying the impact of mandatory CSR policy on FP, and the only one that uses the bandwagon-bias effect to explain the phenomenon of weakening impact of CSR on FP of firms. Bandwagon-bias effect has been used in studying consumer behaviour, where group effect impacts behaviour of individuals and with mandatory CSR policy, firms following the other firms leading to crowding in. Using the bandwagon-bias effect has found limited attention from the CSR scholars, the current study uses this theoretical basis and therefore augments the CSR literature.

PurposeThis paper aims to fill the existing gaps in literature which deal with both the application of a socially oriented philosophy to the theme of strategic corporate social responsibility (CSR) integration and to the systematic analysis of the processes of strategic CSR management, and to create a connection between social management philosophy and the dynamic approach to CSR integration based on the strategic management processes. In particular, this study aims at creating a conceptual model to highlight, in a structured and organic way, the dynamic relationships, based on a social management philosophy, characterizing the integration of CSR in the different strategic management processes: formulation and implementation of both intended and emergent strategies. In relation to these goals, the following research questions are formulated: What are the most important strategic management processes in which to integrate CSR following a social management philosophy? How does integration (strategic CSR) based on social management philosophy impact these processes? How do strategic CSR processes based on social management philosophy determine strategic change? Which are the management tools which support integration based on social management philosophy?Design/methodology/approachThe work is a conceptual paper. The paper has been developed as follows: the identification of the theoretical gaps; the definition of the research objectives; the literature review about both CSR integration and strategic management in a dynamic perspective; the formulation of the research questions; the conceptual analysis, based on social management philosophy, of the relevant propositions related to the dynamic approach to CSR integration; the building of the conceptual model based on the propositions; and the description and the analysis of the model.FindingsIn this model, three circles of change that are able to describe the integration of CSR into strategic management have been identified: A, the circle for achieving the strategic intent; B, the circle for formulating the strategic intent; and C, the circle of bottom-up innovations.Practical implicationsFrom a managerial perspective, it is possible to point out the following implications related to the integration of CSR into strategic management and the achievement of a strategic CSR: as for change dynamics which are linked to the formulations of the intended strategy, it is fundamental to develop a social management philosophy; to achieve the strategic intent, it is necessary to incorporate CSR actions into core activity of value chain; to favour the socially oriented bottom-up innovations, it is necessary to define a favourable organizational context; the strategic CSR must be supported by integrated tools and methodologies that make the rationalization of processes of change possible; and the application of tools and processes, even sophisticated ones, which are not based on social management philosophy may lead, in the long run, to negative tensions among stakeholders, as well as to serious repercussions on the firm’s management and its performance.Social implicationsIt is possible to pinpoint other implications for the society: the circle for achieving the strategic intents, with the aim of improving the execution phase, increases the positive externalities and reduces the negative externalities of the economic activities; the circle for formulating strategic intents allows to identify a win–win solution for CSR issues; and the bottom-up entrepreneurship increases the chances to find innovative solutions which combine social aspects and competitive aspects.Originality/valueThe analyses provide an integrated approach, connecting strategic management and CSR in a dynamic perspective.

PurposeApplying mainstream, Western-centric corporate social responsibility (CSR) theory to make sense of CSR practices of multinational firms of non-Western origin seems to be problematic for CSR theory and practice. The purpose of this study is to critically analyse the CSR integration journey of a Japanese multinational firm with a view to understanding CSR integration in a global business context.Design/methodology/approachThis study used a qualitative research method using a single case study approach to investigate a contemporary phenomenon within its real-life context. A theoretical lens of seven patterns of CSR integration interwoven with Japanese and mainstream CSR discourses is used to make sense of internalisation and internationalisation process.FindingsMain findings are presented under four themes: product harm crisis as a call for CSR, CSR governance and bottom up initiatives, recycling oriented CSR and product designing, co-existing Japanese CSR in the global marketplace. An external misfit of a firm’s practice in the domestic market can lead to internalising country-specific CSR through CSR integration resulting in successful internationalisation of country-specific CSR practices.Research limitations/implicationsCountry-specific CSR integration follows context-specific routines and practices; this process can be shaped and reshaped by the prevailing international CSR discourse due to internationalisation of a firm’s operation.Originality/valueAlthough CSR is viewed as a fundamental strategic priority driving firms to focus on shared value-creating products and services, how best a firm can integrate CSR into an existing business model is unclear. This gap is addressed in this current study.

This study investigates the relationships among Corporate Social Responsibility (CSR), advertising intensity, and performance in different national philanthropic environments. National philanthropic environment is defined as the propensity of a nation to be philanthropic. Employing institutional theory, we hypothesize that (1) advertising intensity mediates the CSR/performance relationship, (2) national philanthropic environment moderates the relationship between CSR and advertising intensity, and (3) national philanthropic environments moderate the relationship between advertising intensity and performance. Using a sample of 262 firms from 10 countries, the results support the moderated mediation model. We demonstrate that the success of CSR programs depends on their effective integration with advertising intensity. However, this dynamic is relevant only in countries with higher levels of national philanthropic environment. Thus, strategic managers should increase advertising intensity as CSR increases to ensure a positive effect on performance, but only in countries with high national philanthropic environments.

Learning and corporate social responsibility : a study on the role of the learning organization, individual competencies, goal orientation and the learning climate in the CSR adaptation process

Purpose– The article aims to investigate whether the integration between corporate social responsibility (CSR) and intellectual capital (IC) reports could be a plausible issue. To address this aim, the paper posits three main research questions: whether there is a theory able to explain the relationship between IC and CSR (RQ1); whether empirical surveys provide evidence of the links between CSR activities (CSRA) and IC (RQ2); and whether organizations have started to disclose social and intangible issues in a single document within the Italian context (RQ3).Design/methodology/approach– To answer theRQs, we decided to arrange three different literature reviews. In detail, to addressRQ1, we searched for theoretical studies focussing on an resource-based view (RBV) perspective of IC or CSR or both. To addressRQ2, we searched for empirical studies addressed to test the links between CSRA and the creation and development of organizational IC. To addressRQ3, we searched for empirical studies focussing on companies’ experiences of integration of CSR and IC reports or on surveys on this theme in the Italian context.Findings– All the three literature reviews provide evidence that the trend to move towards an integration of social and IC issues in a single report is a plausible issue, from a theoretical, management and disclosure point of view.Research limitations/implications– The main limit of the research lies in its theoretical nature; however, the study can provide an impulse for further research on the existing trend in the real-life context, and can also provide the theoretical basis on which to build a model that, starting from the relationships among the different kinds of voluntary reports, provides the criteria and methods to integrate the firm’s corporate voluntary reports in a single report. For researchers, this result also has an implication to control for intangibles, for example, assessing the relationship between CSR and corporate performance may explain some of the mixed findings that have occurred in the past.Practical implications– The article inserts CSR and IC within the RBV theory. Such recognition provides managers the theoretical framework to treat them conjointly, being aware that these two dimensions are intertwined. The article also provides evidence that CSRA impact on IC creation and development. The main implication for company managers is that, when developing a strategy aimed at strengthening IC, they should consider not only all components of intellectual capital but, above all, also include CSR actions and attributes in strategy formulation. Finally, the article provides evidence of a trend towards an integration of CSR and IC reports within the Italian territory. An integrated CSR–IC approach could have relevant implications on the development of the Italian territory characterized by a large number of SMEs and networks of firms that are an integral part of the local community, whose success is often related to their capability to acquire consensus from local stakeholders such as employees, public authorities, financial organizations, banks, suppliers and citizens.Originality/value– The article provides three main contributions: first, the paper suggests that the integration of the two different perspectives IC and CSR finds its theoretical justification in the RBV theory, which is scarcely applied to explain the link between these two perspectives; second, the article provides evidence of the real effects that investments in CSR have on the maintenance and developing of organizational IC; third, it provides evidence that there is a trend moving towards an integration of social and IC issues in a single report in the Italian context.

This paper studies earnings management in an international context. More specifically, the effects of three factors on earnings management are studied: national audit environment, audit firm quality and reliance on international capital markets. National audit environments vary strongly in terms of independence rules, auditor education and auditor liability. Hence, it can be expected that the restrictions imposed by national audit environments on earnings management vary. However, there are two factors that can mitigate the national audit environment effect. First, there is strong evidence that audit firm quality, as indicated by the Big 5 and non-Big 5 dichotomy, affects earnings management opportunities for clients. In the context of this study an important issue is to what extent this quality effect overrides national differences. In other words, to what extent do the international audit firms provide a standardized high quality audit across different jurisdictions? Second, the reliance on international capital markets might reduce companies’ earnings management, irrespective of the opportunities provided by the national environment. The study uses data for the period 1991 1999 from listed firms in four jurisdictions: France, UK, the Netherlands and Germany. The total number of firm year observations is 17,838. The results of the study suggest that national differences in audit environments are strongly affecting earnings management. While earnings management is also affected by the audit quality of the audit firm and the reliance on international capital markets, the effect is rather small. The evidence provided in this study is relevant for the current worldwide integration of capital markets and the acceptance of international accounting standards. For the international comparability of earnings, not only the standardization of financial reporting is important but also the standardization of enforcement across jurisdictions. The results of this study suggest that the enforcement of financial reporting still varies strongly across countries.

COVID‐19 and the Future of CSR Research

PurposeThe purpose of the paper is to evaluate the essential role of corporate social responsibility (CSR) on SMEs' performance by exploring the mediating role of corporate image (CI), corporate reputation (CR) and customer loyalty (CL) between CSR and firm performance (FP) in the context of an emerging country.Design/methodology/approachBased on an extended literature review on CSR, CI, CR and CL studies, the authors evaluate the impact of these four constructs on SMEs' performance in an emerging market. The paper follows a quantitative approach. The study sample was composed of 482 responses covering top executives, managers and experts. The Smart PLS SEM version 3.3.2 was used to analyse the data of the small- and medium-sized enterprises (SMEs) of Vietnam in the year 2020–2021.FindingsThe authors' findings reveal significant and positive relationships amongst CSR, FP, CSR and CI, CSR and CR, CSR and CL, and most importantly, the findings add value to the current knowledge by exploring the mediating effect of CI, CR and CL between CSR and FP.Research limitations/implicationsThe study was conducted in Vietnam. As a result, the findings of the study might not be applicable for other countries, if the economic and environmental settings are different from that of Vietnam. Therefore, future research should consider for other countries, other regions. Second, due to the purpose and priority of the study, CI, CR, and CL was employed as mediators amongst the relationship between CSR and FP. Thus, future research should consider other mediators or moderators in such a relationship to see how CSR generates outcomes in the new associations.Practical implicationsThe study regarding the role of CSR in enhancing the performance of SMEs can motivate firm's chief executive officers (CEOs) to be proactive in getting involved and practising CSR in a consistent manner. Second, the above discussion draws a very important implication for the executive level, the management level of the enterprise, which enterprises should balance the interests of business, customers, other stakeholders, the environment and society in order to optimise CSR outcomes for improving competitiveness and developing sustainably. This implication is particularly important to the survival and development of SMEs in a challenging emerging economy.Social implicationsThe study widens the literature regarding relationship between CSR and SMEs' performance. Besides, the study supports stakeholder theory that explains why CSR positively affects firm's performance. The significant mediating roles of CI, CR and CL were positively confirmed in the study. Although previous studies determined that such roles are strategic source of competitive advantages of enterprises, however, how CSR involved in enhancing the roles has not been deeply explored and integrated. Third, the findings of the study support the resource-based view (RBV) and resource-based perspective that explains why firm should engage in CSR activities, and CI, CR and CL can enhance firm's performance by providing strategic source of competitive advantages that facilitate business to improve its performance in sustainable direction.Originality/valueTo the best of the authors' knowledge, the current literature on CSR and FP shows that, to date, there has been little empirical research on the mediating mechanism of CI, CR and CL in the link between CSR and FP for SMEs. The findings of the study may have great implications for entrepreneurs and top management with respect to the strategic perspectives to drive the businesses and to improve firm's performance in a sustainable direction in the context of emerging markets. In addition, the finding might be of great interest to – and motivate – SMEs' managers to engage with CSR actions where such businesses were or are situated during and after the coronavirus disease-2019 (COVID-19) pandemic. By that understanding, the Government might allow for innovative and groundbreaking policies or the reformation of old policies to leverage businesses to promote their strengths towards sustainable development in the new economic settings. The findings of the study may be a significant contribution to SMEs in Vietnam and in other emerging economies.

Research concerning the relationship between advertising intensity and corporate social responsibility has yielded mixed results. Some scholars have found a positive link, supporting a complementary perspective, while others have found a negative link, supporting a substitute perspective. The authors of this current study employ a contingency perspective to propose that the focal relationship is moderated by national philanthropic environments, which reflects the propensity of a nation to be philanthropic. With a sample of 271 firms from 13 countries, a hierarchical linear model analysis was conducted, and the findings support the contingency perspective. Specifically, the results showed that in countries with high levels of national philanthropic environments there is a positive link between advertising intensity and corporate social responsibility, while in countries with lower national philanthropic environments, there is a negative link.

Corporate social responsibility (CSR) has become an important aspect of sustainable development in today’s globalized society, and yet many doubts remain about the underlying motivation behind CSR implementation. Corporations have great responsibility to society’s development due to the sheer magnitude of their power and their comprehension of the consequences of their actions. Yet a review of the literature has shown there is considerable variation in the way companies adopt CSR within a contextual setting, without a full and clear understanding of the forces that explain this diversity. Furthermore, most CSR studies have focused on the stable political-economic context of developed countries. Thus, this thesis aims to address the call for a better understanding of CSR, especially in the unstable economies typical of developing countries, such as Brazil. The main investigation refers to the following research question: What forces influence diversity in CSR practices in Brazil? In this thesis, CSR practice can be understood as the ethical way in which companies go about their business and their institutional relationships, while reducing negative social and environmental impacts towards global sustainable development (Robert, Broman, & Basile, 2013; Roberts, 2003). To address the research problem, this study draws on Roberts’ (2003) ethical view of CSR motivation and uses an institutional logics perspective as the analytical framework. In particular, the research examines the different aspects of institutional logics and forces to understand how and why companies adopt CSR practices. The methodology employs an exploratory sequential mix-method approach and the research design makes use of the collection and analysis of qualitative data from interviews as the basis of the quantitative second study. The first study built on the identified literature review research gap and aimed to exploring the forces influencing the diversity of CSR practices. The second study was applied to examine the key factors found in the first study, determining the CSR patterns of behaviour and leadership rationale. The participants in the qualitative study were selected purposively from companies with acknowledged corporate social responsibility (CSR). The participants in the quantitative study were managers and top executives with good knowledge of CSR from the largest 500 companies in terms of revenue operating in Brazil in 2018. This comprehensive approach customised to the Brazilian context is original in the CSR literature. The major conclusions provide a higher-order explanation and conceptual tool by which to theorize how the coevolution of organisations and institutions happens, as they mutually shape one another. By focusing not only on shifts in institutional logics, but by identifying the coexistence of different logics into different patterns of behaviour, the empirical research provides an innovative perspective into the academic debate. The reason behind these patterns of corporate behaviour can be justified by higher-order institutional logics common to each specific group of stakeholders in the institutional field. For instance, the groups of stakeholders in the first and second patterns are operating under the same short-term and self-oriented rationale. The groups of stakeholders in the third and fourth patterns are working under the same long-term and system-oriented rationale. This thesis argues that companies can be classified under the four patterns or versions of CSR depending on these two possible rationales: system-oriented companies or self-oriented companies. The second major conclusion elucidates the reason behind the company system-oriented or self-oriented rationale by investigating two determining factors: the maximization-optimization mechanism of success and the short-term-long-term reward system preference. The conclusion is that ‘self-oriented’ companies perceive themselves as isolated ‘individuals’ competing against others in a zero-sum world. This rationale justifies the companies’ search for maximization as the success mechanism and the preference for an instant gratification reward system. Since the concern lies only with individual preference, it is linked to an egotistic values leadership style and short-term thinking. The ‘system-oriented’ companies perceive themselves as being part of a larger system, interacting with each other in a symbiotic world. This rationale justifies the companies’ search for optimization of the system as the success mechanism, and future benefits as a normal reward system. Their concern lies with the health of the system and is linked to an altruistic values leadership style and long-term thinking. Taken as a whole, the findings from this thesis make a significant contribution to the current body of knowledge on CSR practices, in particular in non-stable economies such as the Brazilian context. A range of theoretical and management implications arise from the findings that will assist scholars and practitioners interested in promoting CSR practices, particularly in developing countries.

The institutional perspective on corporate social responsibility (CSR) has discussed two diametrically opposed hypotheses about how institutional context influences CSR. Whereas the mirror hypothesis suggests that CSR is stronger in institutional contexts with stringent CSR-related regulations, the substitute hypothesis posits that CSR is stronger in weakly regulated contexts. Drawing on the micro-CSR literature, we propose that examining individual CSR motivation can help to better understand the effect of institutional context on CSR because it makes focusing on substantively motivated CSR possible, and it can shed light on the hitherto neglected psychological moderators in this relationship. We conducted three studies, obtaining results indicating that institutional trust is an important moderator of the institutional effect on individual CSR motivation. Overall, we found the highest individual CSR motivation when regulatory stringency and institutional trust were high, supporting the mirror hypothesis. However, in contexts of low institutional trust, this positive effect of a strong institutional context was reduced or even reversed. Our study contributes to the literature on the institutional perspective on CSR, micro-CSR, and institutional theory, and it has important practical implications for CSR management.

The micro‐level corporate social responsibility (CSR) literature has underscored the economic benefits of an organization's CSR investments, such as bolstering employees' organizational commitment and improving work performance. Yet, research on the potential influence of CSR in fostering socially oriented outcomes among employees has been rather scarce. This study aims to investigate the influence of CSR on employees' internal whistleblowing behaviors and the underlying mechanisms. A three‐time‐point survey was distributed across the service, manufacturing, construction, and financial insurance industries in Chinese enterprises. The findings reveal that both internal and external CSR positively impact employees' internal whistleblowing behaviors through the mediating role of moral courage, with internal CSR demonstrating a stronger effect. Organizational loyalty positively moderates the mediating role of moral courage in the relationship between internal CSR/external CSR and internal whistleblowing behaviors. Theoretically, this study presents a pioneering endeavor in establishing the link between CSR and employees' internal whistleblowing behaviors, underscoring the significant role that employees' perceptions of CSR play in enhancing societal well‐being and ethical governance. Besides contributing to the micro‐level CSR literature, this study also provides practical insights for organizations seeking to leverage CSR as a tool for promoting employees' ethical conduct.

PurposeThe association between ethical leadership and employees’ ethical behaviors is well-established. But can ethical leadership go beyond this and drive employees’ corporate social responsibility (CSR) engagement? The purpose of this study is to examine the association between ethical leadership and employees’ perception of their engagement in CSR activities while exploring the mediating role of person–organization fit.Design/methodology/approachUsing a quantitative research design, data were collected via self-administered questionnaires from 142 employees of multi-national companies in Malaysia. This study used partial-least squares structural equation modeling to test and validate the research model and hypotheses posited.FindingsThe results reveal that ethical leadership has a positive impact on employees’ CSR engagement, mediated through person–organization fit. Moreover, analyses were carried out to assess the predictive performance of the proposed model. Our results confirmed the predictive capability of the proposed model.Research limitations/implicationsThis study has provided a better understanding of employees’ CSR engagement, which is a crucial factor for effectiveness of CSR implementation in any organization. Finding evidence on the positive role of ethical leadership in driving employees’ CSR engagement extends both the leadership and CSR literature and offers new avenues for future research studies.Practical implicationsThis study has shown that ethical leadership can stimulate employees’ CSR engagement through creating a better person–organization fit. This understanding can help managers in finding ways for more effective involvement of employees in a company’s CSR activities and creating a better working environment.Social implicationsOrganizations can find better ways to involve employees in CSR activities through having ethical leaders who lead by example and champion social causes. Although ethical leadership will benefit society, it will also help employees experience a better fit between their values and those of the organization.Originality/valueDespite extensive research on CSR, its drivers and outcomes, there is still limited knowledge on the role of leaders in driving employees’ CSR engagement. Findings from an emerging economy (i.e. Malaysia) will offer fresh insights into the growing CSR and leadership literature.