Social Performance Feedback Research Articles

Reacting to criticism: What motivates top leaders to respond substantively to negative social performance feedback?

The responses of organizations in situations of negative feedback from stakeholders are attracting increasing scholarly and societal attention. The literature has so far largely focused on situational factors that direct such responses, while calling for a more acute examination of individual factors. Anchored in Stakeholder Theory and Trait Activation Theory, this study examines how and to what extent prosocial motivation (a normative-oriented trait) and fear of failure (an instrumental-oriented trait) determine organizational leaders’ substantive responses to negative social performance feedback. We test our predictions on two waves of original survey data, including a conjoint experiment, on a sample of leaders of young organizations. Our findings contribute to literature and practice related to organizational responses to social performance feedback.

The impact of financial feedback on the innovative activity of companies: the moderating role of corporate governance quality

ABSTRACT This research analyzes performance feedback and corporate innovative activity in the context of corporate governance quality. The research goal is as follows: to examine the influence of social and historical performance feedback on R&D intensity of a firm, and to determine whether governance quality strengthens interconnection between performance feedback and R&D intensity. The sample consists of panel data on 283 South-Eastern Asian public companies from the manufacturing industry sector. The sample covers seven countries during the time period from 2015 to 2020, providing 1698 firm-year observations. It was discovered that sample firms are sensitive to positive and negative social performance feedback and do not respond to historical feedback. A comparative analysis between types of feedback has shown that firms value social feedback more than historical feedback. It was also established that higher corporate governance quality decreases performance feedback sensitivity among firms, which weakens the relationship between the feedback and innovative activity. Firms with weak governance systems value social performance feedback more than companies with mature governance. The study of these types of feedback in combination with the quality of corporate governance can be used by company executives in corporate strategic planning and operational decision-making. CEOs should be ready to use performance feedback information in addition to their personal judgment.

Talk or Walk? The Effect of Social Performance Feedback on Green Innovation and CSR Reporting

Talk or Walk? The Effect of Social Performance Feedback on Green Innovation and CSR Reporting

Corporate social performance feedback and corporate social responsibility decoupling in China: The salience of legitimacy and/or efficiency

AbstractDespite its detrimental effects, corporate social responsibility (CSR) decoupling has been underexamined in the literature. This research explores why and how companies engage in CSR decoupling from the perspective of behavioral theory of social performance. We contend that legitimacy threats drive firms with corporate social performance (CSP) below stakeholder expectations toward substantive CSR initiatives, which reduces CSR decoupling. In contrast, efficiency deficit drives firms with CSP above stakeholder expectations toward symbolic CSR initiatives, increasing CSR decoupling. Building upon literature on issue salience, these relationships are moderated by industry culpability and earnings pressure. A longitudinal analysis was conducted on Heckman two‐stage estimation using a sample of 5166 Chinese publicly listed firms from 2010 to 2019, which supports our hypotheses. Additionally, the findings remain robust after rigorous tests. This study contributes to the CSR literature by shedding light on the impact of CSP feedback on CSR decoupling and enriches the behavioral theory of social performance by incorporating the perspective on CSP feedback through issue salience.

Performance feedback on sales growth and M&A: Evidence from China

This study examines the effects of performance feedback on sales growth relative to social and historical aspirations on corporate merger and acquisition (M&A) decisions and M&A performance. A sample of 924 M&A deals announced by Chinese manufacturing firms between January 2006 and June 2022 is analyzed using logistic regression and multiple linear regression. Robustness tests are also conducted to show that the main results are consistent. We find that (1) negative performance feedback relative to social aspiration motivates acquirers to undertake more risk in M&A-related decisions such as choosing overseas targets and using non-deferred payments in deal structure; while negative historical performance feedback significantly encourages acquirers to choose deferred deal structure. Positive performance feedback does not have a significant impact on acquirers’ choices; (2) In terms of M&A performance, both negative and positive performance feedback relative to social aspiration can have a positive effect on M&A performance; while historical performance feedback cannot affect M&A performance. This paper addresses the heterogeneity of the effects of performance feedback (which is divided into historical and social performance feedback) on firm behavior and contributes to the Behavioral Theory of Firms and Stewardship theory.

Take Itself as a Mirror: Social Performance Feedback and Corporate Carbon Reduction Management

Take Itself as a Mirror: Social Performance Feedback and Corporate Carbon Reduction Management

Social Performance Feedback and Firm Communication Strategy

Although corporate social performance has become an important measure of firm performance, there is little understanding about how firms respond to social performance feedback and how impression management may function as an important firm response to the feedback. Building upon and extending the literature on the behavioral theory of the firm and the strategic use of language, we examine how discrepancies between firms’ social performance and their aspiration levels affect how firms use visual expressions in their CSR reports. In addition, we argue that the relationship between social performance discrepancies and the use of visual expressions in CSR reports is moderated by the extent to which firms conduct socially responsible activities to enhance legitimacy (reflected in the level of state ownership) and the extent to which firms engage in social activities to improve financial performance (reflected in foreign exposure). Using a sample of Chinese firms issuing CSR reports from 2009 to 2017, our empirical results provide strong support for these arguments.

Inconsistency in Performance Feedback and Corporate Environmental Performance

Environmental issues have absorbed attention from social authorities and individuals. Although enterprises are the primary bearers of social responsibility, at the same time, they produce substantial environmental pollution. Under this background, based on a behavioral theory of the firm and prospect theory, this article takes A-share substantial polluting companies listed in Shanghai and Shenzhen from 2012 to 2017 to discuss how companies will manage their environmental performance when companies in different performance feedback results base on historical and social aspiration levels .The research results show whether it is a historical or social aspiration level when actual corporate performance is worse than the aspiration level, the higher the degree of difference, the worse the corporate environmental performance level. When actual corporate performance is better than the aspiration level, whether it is a historical or social aspiration level, the higher the degree of difference, the lower the corporate environmental performance level is. Further research found that when multiple performance feedback results and their feedback directions are both inconsistent, the more significant negative historical performance feedback and the more positive social performance feedback, the better the environmental performance of the enterprise.

The Construction of Social Performance in Digital Communication Channels

Firms increasingly need to perform well socially and therefore often adjust their strategies based on social performance feedback. However, social performance feedback tends to be multivocal and no...

Performance feedback and outward foreign direct investment by emerging economy firms

Integrating the behavioral theory of the firm (the BTF) and the self-enhancement motive of managers, this paper examines how performance feedback—the discrepancy between actual performance and aspiration levels—affects the international expansion of emerging economy firms (EEFs). Empirical results using panel data on 876 publicly-listed Chinese manufacturing companies over a 7-year period indicate that performance relative to social aspiration (i.e., peer performance) and relative to historical aspiration (i.e., firms’ own past performance) affects EEFs’ levels of subsequent outward foreign direct investment (OFDI). Specifically, performance below social or historical aspiration enhances levels of OFDI, while the effect of performance below social aspiration is stronger than that of underperforming historical results. The results also show that performance above social aspiration enhances levels of OFDI, while performance above historical aspiration decreases levels of OFDI. Moreover, we uncover the importance of considering the joint effect of historical and social performance feedback, as receiving consistent or mixed signals about firm performance may result in risk-taking behaviors that differ from those triggered by just one performance signal on its own. These findings underscore the impact of performance feedback relative to social and historical aspirations on EEFs’ OFDI activities.

A Multiple Social Comparisons Analysis of Performance Feedback and Pay Dispersion on Diversification

Firm performance can be assessed relative to prior historical or social performance. However, social performance feedback has been theoretically underdeveloped among these two measures. Building on...

Disentangling Risk and Change

Using data on 3,225 actively managed U.S. mutual funds from 1980 to 2006, we test hypotheses designed to disentangle risk and change as outcomes of behavioral performance feedback routines. We theorize that managers make decisions involving risk and decisions involving change under different conditions and motivated by different concerns. Our results show internal social comparison across units within a firm will motivate risk, whereas external social comparison across firms will motivate change. When a fund experiences a performance shortfall relative to internal social comparison, the manager is likely to make decisions that involve risk because the social and spatial proximity of internal comparisons trigger individual concern and fear of negative individual consequences, such as job loss. In contrast, when a fund experiences a performance shortfall in comparison with external benchmarks, the manager is more likely to consider the shortfall an organizational concern and make changes that do not necessarily involve risk. Although we might assume that negative performance in comparison with both internal and external benchmarks would spur risky change, our results indicate that risky change occurs most often when a decision maker receives unfavorable internal social performance feedback and favorable external social performance feedback. By questioning assumptions about why and when organizational change involves risk, this study begins to separate change and risk outcomes of the decision-making process.

Neural correlates of anticipation and processing of performance feedback in social anxiety.

Fear of negative evaluation, such as negative social performance feedback, is the core symptom of social anxiety. The present study investigated the neural correlates of anticipation and perception of social performance feedback in social anxiety. High (HSA) and low (LSA) socially anxious individuals were asked to give a speech on a personally relevant topic and received standardized but appropriate expert performance feedback in a succeeding experimental session in which neural activity was measured during anticipation and presentation of negative and positive performance feedback concerning the speech performance, or a neutral feedback-unrelated control condition. HSA compared to LSA subjects reported greater anxiety during anticipation of negative feedback. Functional magnetic resonance imaging results showed deactivation of medial prefrontal brain areas during anticipation of negative feedback relative to the control and the positive condition, and medial prefrontal and insular hyperactivation during presentation of negative as well as positive feedback in HSA compared to LSA subjects. The results indicate distinct processes underlying feedback processing during anticipation and presentation of feedback in HSA as compared to LSA individuals. In line with the role of the medial prefrontal cortex in self-referential information processing and the insula in interoception, social anxiety seems to be associated with lower self-monitoring during feedback anticipation, and an increased self-focus and interoception during feedback presentation, regardless of feedback valence.

Social Performance Cues Induce Behavioral Flexibility in Humans

Behavioral flexibility allows individuals to react to environmental changes, but changing established behavior carries costs, with unknown benefits. Individuals may thus modify their behavioral flexibility according to the prevailing circumstances. Social information provided by the performance level of others provides one possible cue to assess the potential benefits of changing behavior, since out-performance in similar circumstances indicates that novel behaviors (innovations) are potentially useful. We demonstrate that social performance cues, in the form of previous players’ scores in a problem-solving computer game, influence behavioral flexibility. Participants viewed only performance indicators, not the innovative behavior of others. While performance cues (high, low, or no scores) had little effect on innovation discovery rates, participants that viewed high scores increased their utilization of innovations, allowing them to exploit the virtual environment more effectively than players viewing low or no scores. Perceived conspecific performance can thus shape human decisions to adopt novel traits, even when the traits employed cannot be copied. This simple mechanism, social performance feedback, could be a driver of both the facultative adoption of innovations and cumulative cultural evolution, processes critical to human success.