Corporate Social Responsibility Decisions Research Articles

Gender diversity and corporate social responsibility performance: A critical assessment

AbstractPrevious research predominantly used quantitative data to examine the relationship between female representation and corporate social responsibility (CSR) performance. Little is known as to how female leaders drive CSR changes in practice. This study explores the complexities and paradoxes of gender roles in CSR engagement based on 20 in‐depth interviews with female leaders. We find that although gender traits from social roles are relevant, women leaders face considerable challenges in navigating the power dynamics prevalent in boardrooms when driving CSR initiatives. The pronounced power imbalance compels them to reframe CSR within the dominant board discourse and mobilise rhetorical and narrative strategies to acquire authority and alter power dynamics within board CSR decisions.

Manufacturer Encroachment on a Sustainable Supply Chain under Asymmetric Green Information

This paper investigates manufacturer encroachment on a sustainable supply chain, where the manufacturer holds exclusive information on product greenness and is responsible for both corporate social responsibility (CSR) and greening. The manufacturer and the retailer play a signaling game whereby CSR effort and wholesale price serve as joint green signals. Findings reveal that, firstly, encroachment induces higher CSR efforts from manufacturers. When customers exhibit a strong CSR preference, the resulting CSR increment leads to increased offline demand and drives up both wholesale and retail prices in a mutually beneficial manner. This phenomenon is referred to as the CSR effect, yielding a win-win encroachment. Secondly, when signaling product greenness to highly CSR-sensitive customers, the high-greenness manufacturer principally distorts her CSR effort downward to an extent unprofitable for the low-greenness manufacturer to mimic and subordinately distorts the wholesale price downward to counter CSR-induced demand decrement and mitigate CSR cost pass-through downstream. Finally, the win-win encroachment pattern is characterized by encroachment profit and signal expense sharing, with encroachment strengthening downward-distorted signaling while signaling weakens the CSR effect. These insights contribute valuable guidance for green manufacturers in CSR decision-making, which functions as a component of green signaling and facilitates transitioning to dual-channel sustainable supply chains.

Regional Climate Risk and Corporate Social Responsibility: Evidence from China

ABSTRACT Although firms suffer from regional climate risk in their production and operation, they are still highly expected by the public to play a leading role in addressing regional climate risk. In this paper, we study how regional climate risk affects corporate social responsibility (CSR). By constructing regional climate risk indicators and employing the OLS method to conduct empirical analyses, we find that regional climate risk can significantly promote CSR. Furthermore, regional climate risk can suppress firm’s cash flow, thereby exerting internal pressure on firms to assume CSR. Meanwhile, regional climate risk can raise higher public expectations for firms, imposing external pressure on them to assume CSR. We suggest that external pressure from the public plays a dominant role in CSR decision-making. Besides, we confirm that CSR can achieve a win-win goal for both firms and the public by mitigating the damage of regional climate risk on the firm’s long-term performance. We provide a new perspective for studying firm’s motivation to assume CSR under the influence of regional climate risk.

The effect of shale gas booms on environmental CSR activity

Using shale gas developments that are staggered across counties and time, we examine whether uncertain environmental risks affect firms' environmental CSR (corporate social responsibility). We find that firms headquartered in shale gas boom counties significantly increase environmental CSR compared with firms located in nonboom counties. Furthermore, we demonstrate that the impacts of shale gas booms on environmental CSR are more pronounced when firms' litigation risk is higher, when firms have more stakeholder interactions, and when firms' orientation is more long-term. Additionally, the increased environmental CSR driven by the shale boom is associated with subsequent firm value. Furthermore, evidence demonstrates that firms trade off the benefits and potential legal liability of internalizing physical environmental risk in environmental CSR decisions.

Senior management mindsets for corporate social responsibility

Despite the large amount of factual data on senior management’s significant role in achieving corporate social responsibility (CSR), little effort has been devoted to shed light on the CSR decision-making process and the managerial mindsets that drive it. To fill this gap in CSR research, this study explores the CSR decision-making process and senior management mindsets regarding CSR, inductively prompted by the CSR literature and a qualitative study. This study offers a conceptual model of socially responsible decision-making based on the Doctus knowledge-based system. The model is empirically analyzed and verified through semi-structured interviews with CSR experts. Further, an inductive examination of the qualitative data using individual-level analysis revealed three different mindsets of senior management towards CSR: conformist, self-interested, and shareholder satisfaction/profit-driven mindsets.

What’s in It for Me? CEOs’ Rent-Seeking Motivations and Corporate Social Responsibility Decisions

ABSTRACT Prior research has argued that companies in transition economies engage in corporate social responsibility (CSR) activities to achieve political goals, such as building connections with the government. However, it is unclear why chief executive officers (CEOs) agree to make these politically driven CSR decisions that mainly benefit the controlling shareholders. We show that controlling shareholders may “bribe” the CEOs with greater compensation or perks—a form of economic rents extracted by the CEOs—to make CSR decisions, and such a pattern is more salient in local government-owned companies. We reason that these CSR activities reflect implicit contracting between the controlling shareholders and the CEOs. Through cross-section analyses, we find that the CEO’s economic rents vary with local government fiscal needs, the firm’s governance structure, and CEO power. Furthermore, we demonstrate that increases in CSR-linked compensation lead to a decline in shareholder value. Data Availability: All data are available from public databases identified in the paper. JEL Classifications: D72; M12; P26.

Do Old Board Directors Promote Corporate Social Responsibility?

This study investigates the influence of old directors on corporate social responsibility (CSR) using roughly 25,000 firm-year observations from 2001 to 2015 in the United States. We employ the widely used selection, optimization, and compensation (SOC) model from psychology to explain the CSR decisions of old directors. Our results indicate that firms with a higher percentage of old directors tend to have lower engagement in CSR activities. To address endogeneity, we adopt the difference-in-differences method and use the event of sudden deaths and unexpected retirements of old directors and find that our results remain robust. Our analysis also reveals that the negative impact of old directors on CSR is more significant in firms where directors receive fewer reputational spillover benefits from CSR initiatives and/or firms exhibiting poor corporate governance. In addition, this adverse impact of old directors comes from two effects: a reduction in efforts to enhance CSR strengths and an increase in inaction to address CSR concerns. Overall, these findings suggest that the CSR decision-making process of old directors involves assessing the costs and benefits of CSR engagements, consistent with our hypothesis derived from the SOC model.

Market penalty, collective punishment, and buffering: A study on the insurance‐like effect of CSR in environmental violations

AbstractWhile the existing literature finds that corporate social responsibility (CSR) can provide insurance‐like protection in negative events, it remains unclear how CSR buffers firms from market penalties for negative events. To address this concern, we conduct event studies and regressions using data from the environmental violations by Chinese publicly traded companies and their interlocked companies from 2009 to 2021. Our results show that the market reacts negatively to environmental violations. The market penalty diffuses through director networks and leads to the collective punishment of interlocked firms. CSR has an insurance‐like effect that buffers market penalties and collective punishment for environmental violations. Long‐term CSR has a stronger insurance‐like effect than short‐term CSR. Additionally, the insurance‐like effect of CSR still exists during repeated environmental violation events. This paper contributes to the literature on the insurance‐like effect of CSR and provides a reference for corporate CSR practice and investors' CSR decisions.

Pengaruh Corporate Social Responsibility, Social Media Marketing, Store Environment, dan Perceived Value terhadap Purchase Decision (Studi Kasus Pada Pelanggan Pamella Satu Supermarket Yogyakarta)

The study's goal is to examine the effects of corporate social responsibility (CSR), social media marketing (SMM), store ambience, and perceived value on shoppers' decisions at Pamella Satu Yogyakarta. The article analyzes the influence of many external variables, including CSR, SMM, store environment, perceived value, and final purchase decision. Ninety shoppers of Yogyakarta's Pamella Satu Supermarket participated in the study. A random sample approach was used in the distribution of the questionnaire. This study used multiple regression, testing of hypotheses, and checks for data quality as well as tests based on classical assumptions. Corporate social responsibility (CSR) was shown to have a significant beneficial impact on customer buying choices, whereas the effects of social media marketing (SMM) was found to be negative and insignificant. Third, the ambience of a business has a negligible and negative effect on clients' ultimate purchases. The extent to which consumers perceive value influences their purchases is substantial.

The effect of incentive types and organizational value statements on corporate social responsibility decisions

The effect of incentive types and organizational value statements on corporate social responsibility decisions

Determinants of engagement with and of stakeholders in CSR decision-making: a stakeholder perspective

PurposeThis study aims to explore the determinants of engagement with and of stakeholders in corporate social responsibility (CSR) decision-making.Design/methodology/approachUsing stakeholder theory, this study is mainly based on business ethics and CSR literature to develop a model depicting social and organizational contextual factors for engagement in the context of CSR decision-making.FindingsThis study identifies nine antecedents for engagement with and of stakeholders in CSR decision-making. Based on stakeholder perspective, the author explores how engagement constructs are influenced at both social and organizational levels by the determinants stakeholder pressure, stakeholder roles, stakeholder resources, stakeholder relationships, stakeholder management, two-way communication, procedural justice, interactional justice and stakeholder proactive strategy.Practical implicationsThis study provides insights for companies regarding the determinants underlying engagement to reflect its importance in the context of CSR decision-making.Social implicationsA better understanding of the determinants of engagement is critical because engagement contributes to achieving “win-win” solutions that ensure increased stakeholder satisfaction.Originality/valueTo the best of the author’s knowledge, this paper is one of the first to explore the determinants of engagement with and of stakeholders in CSR decision-making at both social and organizational levels by referring to stakeholder theory.

CSR implementation for the garment supply chain performance: a system dynamic approach

ABSTRACT As a social and environmental-sensitive industry, garment firms are trying to implement corporate social responsibility (CSR) to cope with the increasing pressure of public concerns for globalised socially responsible supply chains (SC). We build such a model by using the System Dynamics (SD) approach. With the mechanism of mutual interactions between different variables of a complex system, our study examines different conditions of CSR implementation in the SC under which it is profitable for SC actors. Our sensitivity analysis demonstrates that when CSR implementation can stabilise market demand, firms’ CSR investment is beneficial. Our study provides a theoretical and managerial foundation that may be used to strengthen the consideration of CSR engagement in the garment SC. By analysing the covariance of factors influencing decision making to implement CSR strategies, our approach allows SC managers to make CSR decisions and production management. Furthermore, the model provides tools for evaluating and forecasting the effectiveness of their CSR strategies according to industry specifics.

Do pressure-sensitive institutional investors moderate CSR decisions towards value creation of Indian firms?

Purpose Research on the significance of corporate social responsibility (CSR) and value creation is nascent as compared to CSR and financial performance. The concept of value is also evolving because of changing business environments, globalization and the expanded idea of CSR. Nowadays, managers expect a more quick, pragmatic approach to satisfy valid stakeholder claims while simultaneously creating competitive advantage through reputation and investor value. The paper aims to examine the impact of CSR on the market and sustainable value creation through CSR expenditure in India and the moderating role of pressure-sensitive institutional investors (PSII). Design/methodology/approach The study used panel data regression methodology on a sample of 1,845 non-financial Indian firms from 2015 to 2021. Findings CSR creates market and sustainable value for non-financial Indian firms in line with stakeholder theory. The authors find a positive moderating role of governance represented by PSII on CSR and market value creation but not on sustainable value. Research limitations/implications The study is based on secondary data. CSR, despite being a regulatory obligation, provided long-term benefits that increased their sustainable growth rate. The results highlight the importance given by financial markets to CSR activities. Other types of institutional investors can also be examined in future research. CSR can be embedded in the core operations of the firm, which can help in fostering a culture of sustainability and responsible business practices that benefit firms and society as a whole. Tax incentives can be provided to firms investing in CSR. Practical implications CSR provides long-term benefits to the firm, which enhances the goodwill and integrity of the firm in the market. The results reveal that besides capital market investors, firms are subject to the scrutiny of consumers, communities and the government as expectations rise and information spreads faster, which can have repercussions. CSR helps in meeting such expectations and the perceived value of the firms. Managers and chief executive officers (CEOs) can pay attention to the type of institutional investors like PSII, which can be formed as a part of the firm’s CSR strategy. Social implications The positive impact of CSR on sustainable value expresses a long-term management orientation based on the improvement of stakeholder relations and the associated environmental impacts referring to cohesion and consensus, market opportunities and strengthened reputation and image. A sustainable company involves a conscious and continuing effort in the equilibrium between contrasting stakeholders’ expectations in an attempt to optimize value creation. Tax exemption can be provided for CSR activities. Originality/value The authors contribute to the scant literature on CSR and value creation, especially sustainable value, as most of the prior studies are not empirical on sustainable value in the Indian context. Managers and CEOs can pay attention to the types of institutional investors like PSII, which can be formed as a part of the firm’s strategy.

Ethical leadership and TMT decision-making of corporate social responsibility - a perspective of self-determination theory.

This study examines the impact of ethical leadership on top management team (TMT) decision-making regarding corporate social responsibility (CSR), considering the mediating role of TMT passion and the moderating role of performance stress. The study distinguishes between TMT harmonious and obsessive work passion and categorizes CSR as proactive and reactive. The findings reveal the following: (1) Ethical leadership positively influences proactive CSR, with TMT harmonious work passion acting as a positive mediator and TMT obsessive work passion playing a negative mediating role; (2) ethical leadership positively affects reactive CSR, with both TMT harmonious and obsessive work passion serving as positive mediators; (3) performance stress diminishes the impact of ethical leadership on TMT harmonious work passion; however, it amplifies the effect on TMT obsessive work passion. Consequently, the mediating effect of TMT harmonious work passion weakens, while the mediating effect of TMT obsessive work passion strengthens. This study emphasizes the significant role of TMT in CSR strategic decision-making and proposes a novel mediating mechanism through which ethical leadership drives CSR decision-making by considering TMT work passion. These findings reconcile the theoretical-practical conflict and have important theoretical and practical implications for enterprises in fulfilling their social responsibility.

An application of artificial neural networks in corporate social responsibility decision making

SummaryNeural networks in deep learning are changing the way we interact with the world. This paper focuses on building a logit artificial neural network (ANN) and through it finds out the factors affecting the decision to join corporate social responsibility (CSR) of firms. This study contributes to suggesting new directions for research in the artificial intelligence (AI) era on the relationship between corporate governance and CSR. The dataset of 817 Taiwanese electronic firms is analyzed for the period 2014–2020. The empirical results show that when the power of the board of directors, supervisors, and CEOs are higher, firms do not choose to participate in CSR. The independent board has not yet promoted its corporate oversight of CSR participation. The decision not to participate in CSR of the firms is made when they are more equipped with the background of accounting, finance, and law. Only firms with higher debt, asset value, and profitability are willing to join CSR. These research results suggest some important points for future policy reforms towards sustainability.

Riding the waves or fighting the tides? Female leaders' CSR engagement

AbstractThis study examines how organizational factors interact with individual factors in influencing female leaders' intentions to engage in corporate social responsibility (CSR) through the lens of planned behavior. Through in‐depth interviews with 20 female corporate leaders from Australia and China, seven themes emerged as factors shaping their CSR engagement. We examined those factors using the theory of planned behavior (TBP) conceptual framework, and found that organizational factors, especially corporate culture and peer influence, dominated female leaders' intentions to engage in CSR. Power interacts with culture and affects female leaders in two countries in different manners: in China, the distance to top corporate power determines female leaders' intentions toward and the way they engage in CSR, while lack of critical mass is often cited by their Australian counterparts as the main factor deterring their CSR engagement. This study demonstrates how organizational factors shape leaders' CSR decisions, reveals the nuances behind the gender–CSR link, and posits for different remedies to unleash the power of female leaders in different cultures.

The effect of CEOs’ being the only children in the family on their CSR engagement

Purpose This study aims to investigate the influence of CEO’s only-child status on corporate social responsibility (CSR) practices. It seeks to extend the understanding of upper echelon theory by examining unexplored CEO characteristics and their impact on CSR decisions. Design/methodology/approach The paper uses manually collected CEO family information and Chinese Stock and Market Accounting Research data as a basis to examine the influence of CEOs’ early-life experiences on their engagement in CSR activities. The study applies attachment security theory from developmental psychology and uses upper echelon theory, particularly focusing on CEOs’ only-child status. A comparative analysis of philanthropic donations between CEOs who are only children and those who have siblings is conducted. The study also examines the moderating effects of corporate slack resources and CEO shareholdings. Findings Preliminary findings suggest that CEOs who are only children are more likely to engage in CSR compared to their counterparts with siblings. However, the difference in donation amounts between the two groups tends to attenuate with decreased slack resources and increased CEO shareholdings. Originality/value To the best of the authors’ knowledge, this research represents the first attempt to investigate being the only child in one’s family and the CSR-related decision of CEOs, which extends the upper echelon theory by introducing the family science theory into the management domain.

Environmental dynamics and corporate social responsibility: An empirical analysis based on Chinese manufacturing listed companies

Environmental dynamics is a significant situational factor affecting corporate strategic decisions. Taking China's listed manufacturing companies from 2010 to 2019 as a research sample, based on organizational ethics theory, this study explores the impact of environmental dynamics on corporate social responsibility (CSR). It analyses the impact of autonomy (CEO duality) and life experience (returnee CEO) of the CEO, the subject of CSR decision-making, on the above relationship. The study shows that firms in uncertain external environments will reduce CSR activities, i.e., the greater dynamic in the external environment, the worse the CSR performance, while CEO duality and returnee CEO will weaken the above relationship. Further study finds that amongst the four dimensions of CSR, environmental dynamics is negatively and significantly related to the remaining three dimensions, except for the technique (T) dimension. The weakening effect of CEO overseas study experience on the negative relationship between environmental dynamics and CSR is stronger. The negative impact between environmental dynamics and CSR is more significant in SOE groups. High-growth firms have a weakening effect on the negative relationship between environmental dynamics and CSR.

Pretending to be Socially Responsible? The Role of Consumers’ Rewarding Behaviour

Extant evidence on corporate social responsibility (CSR) shows that consumers are willing to pay a premium if they infer that the firm is truly "prosocial" (i.e if it is altruistic), but their valuation of the product will not increase as much (and may even decrease) if they believe the company has an ulterior motive for CSR (i.e. if the firm is opportunistic). We pose that the CSR level of investment can be strategically used as a signalling tool to help consumers identify the true nature of the firm and solve this incomplete information problem. Using a signalling game, where altruistic firms want to express their nature and opportunistic ones want to conceal it, we explore the relative effectiveness of consumers’ premiums and penalties (expressed as demand increases or decreases, respectively) in the promotion of corporate truth-revealing behaviour. We also characterize the conditions for market equilibria in which altruistic firms are distinguished from opportunistic ones, allowing consumers to solve the information asymmetry and, with that, influence firms’ profits. Contrary to what might be expected, we show that rewards for altruistic CSR and penalties for opportunistic CSR are not symmetrically effective. Our results help companies to improve their CSR decisions, by understanding how consumers solve the information asymmetry regarding the true nature of the CSR investments. Especially for altruistic firms, this may be important to guarantee that CSR effort and expenses are not just a cost but turn into higher revenues and profits.

Director independence and its influence on corporate social responsibility decisions and performance

PurposeThis study aims to provide an understanding of how directors perceive the relationship between board independence and corporate social responsibility (CSR) performance which has remained under-researched.Design/methodology/approachThe qualitative data were collected through semi-structured interviews of 19 directors from 14 organisations operating in Australia. Data were analysed following the six-phase process of thematic analysis.FindingsThe findings indicate that independent directors contribute to board CSR decisions in two major ways: they bring an outsider view to the board, and they monitor managers in taking decisions that consider the interests of the broader stakeholder groups.Research limitations/implicationsThe in-depth analysis of director independence and CSR highlights the structural and behavioural aspects of director independence and CSR playing out in board rooms. Propositions are offered which can be tested to advance the research in this arena.Practical implicationsThe findings suggest that efforts are required at organisational policy level to ensure the effectiveness of director independence for CSR.Originality/valueThis study provides insights into the “black box” of boardroom dynamics highlighting important contextual factors influencing director independence and CSR decisions previously under-explored.