Value Creation in Equivocal CSR Environments: A Configuration Approach

Abstract

Firms are increasingly expected by their stakeholders to tackle the “wicked problems” of society. These new pressures have created a highly equivocal corporate social responsibility (CSR) environment whereby firms face competing stakeholder perspectives regarding their expected level of financial and social value creation. To reduce CSR environmental equivocality and determine a CSR strategy, organizations need to effectively and efficiently identify, evaluate, and exploit CSR initiatives to create mutually beneficial outcomes (i.e., financial and social value). In this paper, we explain how organizations can optimize their financial and social value creation and promote the construction of intersubjective agreement, which can resolve CSR environmental equivocality. A framework is proposed that explains how the proper alignment of an organization’s level of CSR environmental equivocality, which is comprised of varying amounts of “unknowingness”, entrepreneurial strategy, which encourages and facilitates experimentation, and stakeholder engagement process, which encourages and facilitates information gathering, supports the construction of intersubjective agreement. We offer a typology of organizational value creation in equivocal CSR environments with four “ideal types” of organizations—Container, Explorer, Embracer and Manager—and posit how organizations might move from one ideal type to another.