Jump to Content Jump to Main Navigation

Management Approaches to Social Responsibility
by
Kellie C. Liket, Pursey P.M.A.R. Heugens

Introduction

In its most narrow sense, “social responsibility” (SR) refers to corporations going beyond their legal and economic obligations to better society. However, SR is used as an umbrella term to refer to many (inter)relating concepts such as corporate social responsibility, corporate social performance, corporate citizenship, and sustainability. The SR literature does not compose an autonomous field of theorizing. It relies on various disciplines to supply it with theories and methodologies, such as economics, psychology, sociology, and management. Therefore, it can best be understood as a field of application at the intersection of a variety of social–scientific approaches. The interdisciplinary nature of SR research harbors opportunities for cross-fertilization, but it also comes associated with several forms of “collateral damage,” including a lack of conceptual clarity and insufficient delineation of research paradigms. In the extant SR literature, two broad branches can be identified. First, there is an instrumental branch, which seeks to demonstrate how investments or expenditures on SR can contribute positively to corporate performance or other self-set corporate goals. Second, there is a normative branch, which seeks to identify the extralegal and extra-economic duties and obligations that rest on corporations.

Textbooks

Despite the generally unstructured landscape of academic and practitioner books on the topic of SR, there are a number of useful textbooks addressing the SR of companies. These books typically contain a historicizing account of the SR concept, an overview of the various stakeholder groups associated with corporate or entrepreneurial activity, a categorization of the foundational theories or contributions to the SR concept, and a number of conceptually adjacent applications of SR thought. In one contribution, Vogel 2006 lays out the argument that a market for SR exists, but is incomplete by definition. Carroll and Buchholtz 2012 is one of the few undergraduate-level textbooks on SR, while Crane, et al. 2008 is more suited to graduate students.

  • Carroll, Archie B., and Ann K. Buchholtz. Business and Society: Ethics, Sustainability, and Stakeholder Management. 8th ed. Mason, OH: South-Western Cengage Learning, 2012.

    Save Citation »Export Citation »E-mail Citation »

    One of the very few undergraduate-level textbooks on SR. The book is somewhat US focused, but its strengths lie in the fact that it offers a non-value-laden approach to SR, is based on a broad reading of the SR literature, and provides a useful synopsis of all available analytical tools and models.

    Find this resource:

  • Crane, Andrew, Dirk Matten, and Jeremy Moon. Corporations and Citizenship. Cambridge, UK: Cambridge University Press, 2008.

    DOI: 10.1017/CBO9780511488542Save Citation »Export Citation »E-mail Citation »

    A useful SR textbook, but best reserved for graduate students. It uses the concept of citizenship, both as a metaphor and as a direct application, to understand the social and political role of corporations in civil society.

    Find this resource:

  • Vogel, David. The Market for Virtue: The Potential and Limits of Corporate Social Responsibility. Washington, DC: Brookings Institution Press, 2006.

    Save Citation »Export Citation »E-mail Citation »

    David Vogel argues that there is a “market” for SR, in the sense that corporations are likely to voluntarily engage in SR behaviors in response to stakeholder blowback, but this market is necessarily incomplete. Political solutions are therefore needed to further regulate the social impact of business.

    Find this resource:

Reference Resources

Because SR is both a relatively new field as well as a field drawing from many disciplines, academic journals are the best source of high-quality information. Other reference sources are the encyclopedic work Visser, et al. 2010, which provides a comprehensive dictionary directed toward practitioners and teachers. Moreover, Crane, et al. 2008 lays out the state-of-the-art research and current debates in SR. Waddock and Rasche 2012 makes academic research accessible to practitioners by providing a readable overview of core ideas on SR. Carroll, et al. 2012 takes a historical approach and details the history of corporate responsibility in the United States from the mid-18th century onward until the present day. The Academy of Management Annals often features chapters on social responsibility.

  • Academy of Management Annals.

    Save Citation »Export Citation »E-mail Citation »

    Comprehensive yearly review inaugurated in 2007; published by Routledge/Taylor and Francis. Each volume consists of original, commissioned chapters that provide critical literature reviews of particular topics in management, including SR.

    Find this resource:

  • Carroll, Archie B., Kenneth J. Lipartito, James E. Post, and Patricia Hogue Werhane. Corporate Responsibility: The American Experience. Cambridge, UK: Cambridge University Press, 2012.

    Save Citation »Export Citation »E-mail Citation »

    This edited volume, which brings together contributions from a variety of accomplished scholars, focuses on the case of SR in the United States. Applying a historical lens, the chapters in this volume analyze the evolution of corporate SR from the late eighteenth century to the present day.

    Find this resource:

  • Crane, Andrew, Abagail McWilliams, Dirk Matten, Jeremy Moon, and Donald S. Siegel, eds. The Oxford Handbook of Corporate Social Responsibility. Oxford: Oxford University Press, 2008.

    DOI: 10.1093/oxfordhb/9780199211593.001.0001Save Citation »Export Citation »E-mail Citation »

    This edited volume brings together a broad collection of high-quality contributions to corporate social responsibility, written by leading scholars in the field. In addition to covering the origins of SR thought, the volume also incorporates critiques, applications, and methodological contributions.

    Find this resource:

  • Visser, Wayne, Dirk Matten, Manfred Pohl, and Nick Tolhurst. The A to Z of Corporate Social Responsibility: A Complete Reference Guide to Concepts, Codes and Organizations. 2d ed. Chichester, UK: Wiley, 2010.

    Save Citation »Export Citation »E-mail Citation »

    This work presents a wealth of examples and case studies in which current practices of SR are documented. It specifically highlights the innovative ways in which SR is being practiced. It also provides the most comprehensive overview to date of transnational institutional bodies of SR.

    Find this resource:

  • Waddock, Sandra A., and Andreas Rasche. Building the Responsible Enterprise: Where Vision and Values Add Value. Stanford, CA: Stanford Business Books, 2012.

    Save Citation »Export Citation »E-mail Citation »

    This text tries to build a bridge between the worlds of academia and practice by discussing corporate responsibility research in a way that makes it accessible and valuable to practicing managers and policymakers. It contains both practical tools and case examples.

    Find this resource:

Journals

Peer-reviewed academic journals generally provide the most up-to-date knowledge about the field. For research on SR it is useful to make a distinction between general management journals, specialized disciplinary journals, and managerial publications. The general management journals include the journals published by the Academy of Management, which consist of the Academy of Management Journal, the flagship journal for empirical research, and Academy of Management Review, publishing theoretical and conceptual articles. Other general management journals that address SR are the Administrative Science Quarterly and the Journal of Management Studies. A strong focus on SR can be found in specialized disciplinary journals such as Business Ethics Quarterly, Journal of Business Ethics, and Business and Society. Managerial publications aiming to inform practicing managers, such as Harvard Business Review, also frequently report on issues related to SR. All of the journals noted here are available in an online format by subscription, and subscribers can usually access forthcoming publications before they appear in print.

History and Trends

Even though there is evidence for businesses taking responsibility for societal issues for centuries, as documented in, for example, Heald 1970, academic interest in the concept has spurred only since the 1950s. Noteworthy references from before the 1950s include Clark 1939. Bowen 1953 especially lays the foundation for the theoretical work on corporate social responsibility (CSR), shifting the question from whether business should take on SRs to which specific SRs “businessmen” [sic] should take upon themselves. In reaction to Bowen, opponents such as T. Levitt and Milton Friedman (Friedman 1970, Levitt 1958) argue that businesses should not go beyond their alleged responsibility of maximizing the value delivered to their shareholders, within the bounds set by the law. The 1960s present a shift in the concept of SR with decreased attention for the macrolevel discussion on the moral obligations of businesses. Instead, the discussion becomes focused on the “business case” for CSR, and the link between CSR and firms’ long-term financial performance is fully explored. In response, the 1970s and 1980s show many studies on the link between CSR and corporate financial performance. However, theoretical arguments and concrete mechanisms to explain this link do not begin to emerge until the 1980s and 1990s. After the 1990s and into the 2000s, CSR becomes almost universally sanctioned, illustrated by its widespread promotion by various constituents in global society such as the Organisation for Economic Co-operation and Development, United Nations, World Bank, and nongovernmental organizations such as the Global Reporting Initiative. Various other related concepts, such as corporate citizenship, are proposed. Moreover, in an attempt to create consensus on the concept, models of CSR are extended by the integration of numerous other dimensions. Theories such as stakeholder theory and agency theory are increasingly applied and compared, and new emphases arise on performance, outcomes, and results measurement.

  • Bowen, Howard Rothman. Social Responsibilities of the Businessman. New York: Harper, 1953.

    Save Citation »Export Citation »E-mail Citation »

    Makes that essential point that entrepreneurs do not operate in a societal vacuum, and that they have the responsibility to orientate their ventures on the expectations, aims, and values of the larger society of which they are part.

    Find this resource:

  • Clark, John Maurice. Social Control of Business. 2d ed. New York: McGraw-Hill, 1939.

    Save Citation »Export Citation »E-mail Citation »

    Provides a systems-thinking approach to the issue of SR. Analyzes how social controls can be used to correct for a lack of SR of business. The core of the argument is that in a pluralistic society, privately applied controls lead to half-measures and piecemeal solutions, such that more concerted control by the state is warranted.

    Find this resource:

  • Friedman, Milton. “The Social Responsibility of Business Is to Increase Its Profits.” New York Times Magazine, 13 September 1970, 32–33, 122, 124, 126.

    Save Citation »Export Citation »E-mail Citation »

    The seminal statement of the libertarian case against corporate-level SR investments. Argues not only that managers have no business diverting revenues that belong to shareholders toward social causes, but also that doing so interferes negatively with the functioning of the free-market economy.

    Find this resource:

  • Heald, Morrell. The Social Responsibilities of Business: Company, and Community, 1900–1960. Cleveland, OH: Case Western Reserve University Press, 1970.

    Save Citation »Export Citation »E-mail Citation »

    A visionary book, which not only documents the history of corporate responsibility but also makes conjectures concerning the future development of SR practices. Identified certain SR behaviors that are now common practice well ahead of time, such as the spread of corporate foundations and corporate social auditing. Suggests four alternative ways of “measuring” the social performance of business: (1) reducing social performance to financial performance; (2) relying on the invisible hand of the market to eradicate irresponsible behavior; (3) welfare economics–based social welfare modeling; and (4) the creative voluntarism of corporate responsibility.

    Find this resource:

  • Levitt, T. “The Dangers of Social Responsibility.” Harvard Business Review 36.5 (1958): 41–50.

    Save Citation »Export Citation »E-mail Citation »

    States that managers should not let themselves be led by sentiments or idealism when it comes to SR. Socially responsible actions should be taken only if they make good business sense. Managers should invest in their knowledge of government functions, such that they can let it take care of general welfare.

    Find this resource:

Conceptual Reviews

Numerous studies summarize the evolution of the conceptualization SR, often culminating in a more concrete agenda for future research, such as Carroll 1999, which presents a comprehensive historical overview. Waddock 2004 provides the argument that SR has evolved in a number of different “universes,” both within the scholarly domain as well as at the intersection between the academy and practice. Lee 2008 argues that the conceptual evolution of SR has seen a general shift to an increased focus on the business case of SR. Other reviews, such as Wood 2010, focus on the measurement of SR, whereas Peloza and Shang 2011 addresses the value SR can create for stakeholders.

Meta-Analyses

There are a number of informative meta-analyses and bibliometric studies of the SR literature, including Orlitzky, et al. 2003, which focuses on the effects of social and environmental performance on financial performance. On the basis of a bibliometric analysis of the literature, de Bakker, et al. 2005 finds SR to be firmly embedded in management research. On the basis of a comprehensive review of the SR literature, Aguinis and Glavas 2012 argues for multilevel and multidisciplinary research of SR and provides a compelling agenda for future research.

  • Aguinis, Herman, and Ante Glavas. “What We Know and Don’t Know about Corporate Social Responsibility: A Review and Research Agenda.” Journal of Management 38.4 (2012): 932–968.

    DOI: 10.1177/0149206311436079Save Citation »Export Citation »E-mail Citation »

    In this comprehensive review, the authors study the SR literature within a multilevel and multidisciplinary framework, which synthesizes the institutional, organizational, and individual levels of analysis. A detailed research agenda is offered on the basis of a multilevel perspective on SR.

    Find this resource:

  • de Bakker, Frank G. A., Peter Groenewegen, and Frank den Hond. “A Bibliometric Analysis of 30 Years of Research and Theory on Corporate Social Responsibility and Corporate Social Performance.” Business and Society 44.3 (2005): 283–317.

    DOI: 10.1177/0007650305278086Save Citation »Export Citation »E-mail Citation »

    In this article the literature is reviewed and three views on the evolution of SR are identified. Finds that SR research is deeply rooted in the management sciences, as it simultaneously builds on existing managerial concepts and theories and continually inspires the theorization of new concepts and issues. Available for purchase online.

    Find this resource:

  • Orlitzky, Marc, Frank L. Schmidt, and Sara L. Rynes. “Corporate Social and Financial Performance: A Meta-Analysis.” Organization Studies 24.3 (2003): 403–441.

    DOI: 10.1177/0170840603024003910Save Citation »Export Citation »E-mail Citation »

    Presents a comprehensive synthesis of the research on the relationship between social and environmental performance on the one hand and financial performance on the other. Finds that SR, and to a lesser extent, environmental responsibility, is likely to affect financial performance positively, especially when financial performance is operationalized with accounting-based measures. Available online for purchase or by subscription.

    Find this resource:

Definitions

Unsurprisingly, given that researchers from a variety of foundational disciplines such as (welfare) economics, philosophy, (organizational) sociology, and social psychology have contributed to SR as field of scholarly application, a variety of definitions of SR exists. Sometimes these definitions are conceptually complementary, but sometimes they are in more or less direct competition with one another, especially when the underlying scientific paradigms are incommensurable. Such tensions between definitions are fueled further by the fact that the debate about SR has stronger ideological undertones than are found in most other debates in the social sciences. Positions in the debate range from pure libertarianism, which is very condemning of SR activities by corporations, to pure philanthropy, which sees even enlightened self-interest as an overly narrow motivation for SR. To make sense of the variety of definitions of SR, we present them chronologically. We first characterize the evolution of the concept up to 1970, then proceed by discussing SR definitions in the 1970s (a period characterized by rapid progress in SR thought), and close with contemporary definitions.

Definitions until 1970

One of the earliest definitions of SR is proposed in Bowen 1953: “It refers to the obligations of businessmen [sic] to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society” (p. 6). Subsequently, Davis 1960 offers a slightly more extensive definition “businessmen’s [sic] decisions and actions taken for reasons at least partially beyond the firm’s direct economic or technical interest” (p. 70). The foundations for the currently popular definition of SR are laid in McGuire 1963: “The idea of social responsibilities supposes that the corporation has not only economic and legal obligations but also certain responsibilities to society which extend beyond these obligations” (p. 144). Davis and Blomstrom 1966 clearly builds upon this broadened conceptualization, although the authors refer again to the business person as the agent instead of the corporation: “Social responsibility, therefore, refers to a person’s obligation to consider the effects of his decisions and actions on the whole social system. Businessmen [sic] apply social responsibility when they consider the needs and interest of others who may be affected by business actions. In so doing, they look beyond their firm’s narrow economic and technical interests” (p. 12). Walton 1967 offers a definition that frames SR as a relationship between business and society: “In short, the new concept of social responsibility recognizes the intimacy of the relationships between the corporation and society and realizes that such relationships must be kept in mind by top managers as the corporation and the related groups pursue their respective goals” (p. 14).

  • Bowen, Howard Rothman. Social Responsibilities of the Businessman. New York: Harper, 1953.

    Save Citation »Export Citation »E-mail Citation »

    This book introduces two innovations to the SR literature. First, it argues that SR is not just about philanthropy but also about alignment between corporate objectives and societal values. Second, it makes the case that not all corporations face similar responsibilities, and that responsibilities should be commensurate with a corporation’s power in society.

    Find this resource:

  • Davis, Keith. “Can Business Afford to Ignore Social Responsibilities?” California Management Review 2.3 (1960): 70–76.

    DOI: 10.2307/41166246Save Citation »Export Citation »E-mail Citation »

    In this article the question whether businesses should practice SR is addressed, and Davis attempts to formulate an answer based on arguments of a factual rather than normative standpoint.

    Find this resource:

  • Davis, Keith, and Robert L. Blomstrom. Business and Its Environment. New York: McGraw-Hill, 1966.

    Save Citation »Export Citation »E-mail Citation »

    In this book, Davis and Blomstrom apply the “open systems” or “cybernetic” approach, which was popular at the time among organization theorists, to the question of SR, stressing the interdependence between business and its social environment. Part of the McGraw-Hill Series in Management.

    Find this resource:

  • McGuire, Joseph William. Business and Society. New York: McGraw-Hill, 1963.

    Save Citation »Export Citation »E-mail Citation »

    In this widely circulated book, McGuire argues that the SR of business extends beyond generating profits for shareholders and abiding by the law, toward assuming responsibility for the natural environment and wider stakeholder groups.

    Find this resource:

  • Walton, Clarence Cyril. Corporate Social Responsibilities. Belmont, CA: Wadsworth, 1967.

    Save Citation »Export Citation »E-mail Citation »

    A representative publication of this era, in that Walton stresses the voluntary nature of SR and the willingness of businesses to altruistically accept costs that are not directly or measurably connected with economic benefits to themselves.

    Find this resource:

Definitions in the 1970s

By the 1970s, the “conventional wisdom” on SR is captured by the definition in Johnson 1971: “A socially responsible firm is one whose managerial staff balances a multiplicity of interests. Instead of striving only for larger profits for its stockholders, a responsible enterprise also takes into account employees, suppliers, dealers, local communities, and the nation” (p. 50). In its publication Social Responsibilities of Business Corporations the Committee for Economic Development defined corporate social responsibility (CSR) in stating that “business functions by public consent and its basic purpose is to serve constructively the needs of society to the satisfaction of society” (Committee for Economic Development 1971, p. 11). Davis 1973 offers a classic definition of CSR as “the firm’s consideration of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firm, . . . (to) accomplish social benefits along with the traditional economic gains which the firm seeks” (p. 312). Votaw 1973 (p. 70) discusses “dimensions of corporate social performance,” and in the process distinguishes between corporate behavior that might be called “social obligation,” “social responsibility,” and “social responsiveness.” In social obligation the criteria are economic and legal only. SR, by contrast, goes beyond social obligation, where it “bring[s] corporate behavior up to a level where it is congruent with the prevailing social norms, values, and expectations of performance” (p. 62). Preston and Post 1975 seeks to draw attention away from the concept of CSR and toward a more general notion of public responsibility.

  • Committee for Economic Development. Social Responsibilities of Business Corporations. New York: Committee for Economic Development, 1971.

    Save Citation »Export Citation »E-mail Citation »

    One of the first publications to use a social contract metaphor to conceptualize the relationship between business and society. The many practitioners on the Committee for Economic Development ensured a dynamic view of this relationship, and stressed the necessity of corporate adaptiveness in maintaining a societal license to operate.

    Find this resource:

  • Davis, Keith. “The Case for and against Business Assumption of Social Responsibilities.” Academy of Management Journal 16.2 (1973): 312–322.

    DOI: 10.2307/255331Save Citation »Export Citation »E-mail Citation »

    The arguments for and against SR are examined in this article. Davis concludes that the issue is, in the end, determined by the public, who exerts pressures on businesses to engage in SR. Available online by subscription.

    Find this resource:

  • Johnson, Harold L. Business in Contemporary Society: Framework and Issues. Belmont, CA: Wadsworth, 1971.

    Save Citation »Export Citation »E-mail Citation »

    A book that is frequently seen as a precursor of stakeholder thought, because it emphasizes that more parties should be taken into consideration when formulating corporate policy than shareholders and recipients of corporate philanthropy alone.

    Find this resource:

  • Preston, Lee E., and James E. Post. Private Management and Public Policy: The Principle of Public Responsibility. Englewood Cliffs, NJ: Prentice-Hall, 1975.

    Save Citation »Export Citation »E-mail Citation »

    In this much celebrated book, Preston and Post argue that managers should not establish the responsibility profile of their companies based on their individual consciences, but rather should focus on the public-policy process as a conduit through which public and private interests can be reconciled.

    Find this resource:

  • Votaw, Dow. “Genius Becomes Rare.” In The Corporate Dilemma: Traditional Values versus Contemporary Problems. Edited by Dow Votaw and S. Prakash Sethi. Englewood Cliffs, NJ: Prentice-Hall, 1973.

    Save Citation »Export Citation »E-mail Citation »

    Votaw adds a strategic element to SR thought by identifying the various stages of professionalization and commitment that corporations have to go through in developing an interface with society.

    Find this resource:

Contemporary Definitions

Wartick and Cochran 1985 finds that the concept of SR has taken binary connotations, as if responsible companies engage in CSR while irresponsible companies do not. In one of the most-cited articles of the business and society field, Carroll 1979 develops a three-dimensional conceptual model of corporate social performance (CSP) that views the set of responsibilities businesses may accept on behalf of society not as trade-offs but as a cumulative set captured in a pyramid; defining CSR as “the social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time” (p. 500). Others further develop the Carroll model, such as Ullmann 1985, Wartick and Cochran 1985, and Wood 1991. Frederick 1986 sums up the definition of SR as follows: “The fundamental idea of ‘corporate social responsibility’ is that business corporations have an obligation to work for social betterment” (p. 4). Wood 1991 criticizes Carroll and other researchers for not explicitly stating a thorough definition of CSR. Consequently, Wood 1991 attempts to reconcile the various definitions and models by offering a model that frames principles of SR at the institutional, organizational, and individual levels. Processes of social responsiveness are shown to be environmental assessment, stakeholder management, and issues management. Outcomes of CSP are posed as social impacts, programs, and policies. Ever since, the concept of SR has become firmly rooted in the practitioners’ debate, whereas in the academic literature the term has been subject to conceptual proliferation resulting in a range of closely (inter-)related concepts such as CSP, corporate social responsiveness, corporate citizenship, and the like.

  • Carroll, Archie B. “A Three-Dimensional Conceptual Model of Corporate Social Performance.” Academy of Management Review 4 (1979): 497–505.

    Save Citation »Export Citation »E-mail Citation »

    In this article Carroll presents what turned out to be a foundational conceptual model of CSP dividing the total SR of a firm into four hierarchical elements: economic responsibilities, legal responsibilities, ethical responsibilities, and discretionary responsibilities. Available online by subscription.

    Find this resource:

  • Frederick, W. C. Theories of Corporate Social Performance: Much Done, More to Do. Working paper 632. Pittsburgh: Katz Graduate School of Business, University of Pittsburgh, 1986.

    Save Citation »Export Citation »E-mail Citation »

    Frederick’s work is associated with greater attention to the specific issues to which SR activities should be oriented. The agenda he sets encompasses greater attention to environmental pollution, consumer interests, quality of work life, and multinational behavior.

    Find this resource:

  • Ullmann, Arieh A. “Data in Search of a Theory: A Critical Examination of the Relationships among Social Performance, Social Disclosure, and Economic Performance of U.S. Firms.” Academy of Management Review 10.3 (1985): 540–557.

    Save Citation »Export Citation »E-mail Citation »

    Ullmann builds upon the conceptual model proposed by Carroll 1979, arguing that solid theorization, clearer definitions of terms, and higher-quality empirical data would resolve the inconsistencies in the findings in SR research. Available online for purchase or by subscription.

    Find this resource:

  • Wartick, Steven L., and Philip L. Cochran. “The Evolution of the Corporate Social Performance Model.” Academy of Management Review 10.4 (1985): 758–769.

    Save Citation »Export Citation »E-mail Citation »

    In this review of the conceptual history of SR, the authors find that SR has taken binary connotations, wherein companies that engage in SR are presented as responsible and companies that do not are presented as irresponsible. Propose more attention for CSP and argue for its role as a foundation of a paradigm for the field. Available online by subscription.

    Find this resource:

  • Wood, Donna J. “Corporate Social Performance Revisited.” Academy of Management Review 16.4 (1991): 691–718.

    Save Citation »Export Citation »E-mail Citation »

    Explicitly critiquing both Carroll 1979 and other researchers for the lack of provision of a thorough definition of SR, Wood attempts to reconcile the various definitions and models by offering a model that frames principles of SR at the institutional, organizational, and individual levels. Available online for purchase or by subscription.

    Find this resource:

Theoretical Approaches

The SR field has never genuinely become an area of autonomous theorizing. Instead, the field has become a receptacle and an area of application for a large number of theoretical approaches originating in management, or in the social sciences and applied philosophy more broadly. The theories most frequently used to conceptualize the relationship between business and societal actors include agency theory, stakeholder theory, institutional theory, resource dependency theory, the resource-based view (RBV) of the firm, and various theories in the area of business ethics.

Agency Theory

Agency theory stems from the agent–principal relation, in which in the context of the firm the agent (manager) is hired by a (fictitious) principal (the shareholder) to run the corporation on his or her behalf. In such agency relationships, problems tend to emerge because agents’ efforts are difficult to measure (the metering problem) and their behavior is difficult to observe (the monitoring problem), while, at the same time, the interests of agents and principals are imperfectly aligned. Friedman 1970 was the first source to argue that corporate social responsibility (CSR) signals an agency problem within the firm. From this agency theory perspective, any of the resources not spent on value-adding activities or shareholders’ returns are demonstrating a misuse of resources that stems from the personal preferences of corporate managers to advance their personal agendas. Following in Friedman’s footsteps, Baumol and Blackman 1991 posits that CSR is a form of corporate altruism at the managerial level, and is a waste of scarce resources that are, arguably, the responsibility of the government. In turn, agency theory has been critiqued for its naive view of the efficacy of governments, failing to recognize governments’ failures.

  • Baumol, William J., and Sue Anne Batey Blackman. Perfect Markets and Easy Virtue: Business Ethics and the Invisible Hand. Cambridge, MA: Blackwell, 1991.

    Save Citation »Export Citation »E-mail Citation »

    Baumol and Blackman promote a variation on the theme advanced by Adam Smith that it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. The authors argue that society is best served by businesses advancing their private goals while abiding by the law.

    Find this resource:

  • Friedman, Milton. “The Social Responsibility of Business Is to Increase Its Profits.” New York Times Magazine, 13 September 1970, 32–33, 122, 124, 126.

    Save Citation »Export Citation »E-mail Citation »

    By far, the most-cited article critiquing SR. Friedman defends the capitalist view of the firm, in which businesses’ only responsibility is maximizing its profit for its shareholders. He deems SR to be a “socialist” concept that undermines the ideas of a free society.

    Find this resource:

Stakeholder Theory

The core idea behind stakeholder theory is that firms can strategically serve and manage stakeholders beyond their shareholders alone; such stakeholders have traditionally been omitted from the analyses and were perceived as being adversarial to the firm’s profit potential. In its embrace of stakeholder thought, strategic management becomes a balancing act between the (often competing) multiplicity of objectives. Freeman 1984 is important in pushing stakeholder theory forward, defining “stakeholders” as “any group or individual who is affected by or can affect the achievement of an organization’s objectives” (p. 46). Stakeholder theory was extended and consequently applied to SR by works such as Clarkson 1995 and Jones 1995 in the Academy of Management Review (cited under Journals). Clarkson 1995 creates the distinction between stakeholder issues and social issues, urging the need to use appropriate levels of analysis: institutional, organizational, and individual. Jones 1995 aims to construct an instrumental stakeholder theory by relating it to economic theories such as principal–agent theory, team production theory, and transaction cost economics to advance the link between actions and outcomes. In response to one of the greatest shortcomings of stakeholder theory, its lack to prescribe which groups are and which are not instrumental to the firm, several scholars have developed frameworks of stakeholder identification and prioritization. Donaldson and Preston 1995 argues that stakeholder theory has three strong and interlocking features, notably: descriptive accuracy, instrumental power, and normative validity. While these features can pertain to or be found in any stakeholder relationship, they are analytically distinct and must be conceptualized and researched differently. The framework developed by Mitchell, et al. 1997 uses the concepts of power, legitimacy, and urgency to evaluate which stakeholders should be prioritized for action by managers. Agle, et al. 1999 empirically tests and affirms this three-pronged typology of stakeholder salience.

  • Agle, Bradley R., Ronald K. Mitchell, and Jeffrey A. Sonnenfeld. “Who Matters to CEOs? An Investigation of Stakeholder Attributes and Salience, Corporate Performance, and CEO Values.” Academy of Management Journal 42.5 (1999): 507–525.

    DOI: 10.2307/256973Save Citation »Export Citation »E-mail Citation »

    In this unique study the authors empirically examine the relevance of the stakeholder attributes of power, legitimacy, urgency, and salience to identify which stakeholders are perceived as legitimate by CEOs. Available online by subscription.

    Find this resource:

  • Clarkson, Max B. E. “A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance.” Academy of Management Review 20.1 (1995): 92–117.

    Save Citation »Export Citation »E-mail Citation »

    In this article that results from a longitudinal research program aiming to develop a methodology and framework to study SR grounded in the practical reality of SR, Clarkson creates the distinction between stakeholder issues and social issues and urges further research to make a clear distinction between these two types of issues. Available online by subscription.

    Find this resource:

  • Donaldson, Thomas, and Lee E. Preston. “The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications.” Academy of Management Review 20.1 (1995): 65–91.

    Save Citation »Export Citation »E-mail Citation »

    In this study the main justifications of stakeholder theory are reviewed: descriptive accuracy, instrumental power, and normative validity. The authors argue that each of these elements is distinct and subsequently requires different types of evidence. Available online by subscription.

    Find this resource:

  • Freeman, R. Edward. Strategic Management: A Stakeholder Approach. Boston: Pitman, 1984.

    Save Citation »Export Citation »E-mail Citation »

    In this foundational publication for the instrumental stakeholder perspective, Freeman promotes the strategic analysis of firm–stakeholder relations, promoting a view that paying careful attention to stakeholder interests is not contrary to corporate interests, but rather helps advance them.

    Find this resource:

  • Jones, Thomas M. “Instrumental Stakeholder Theory: A Synthesis of Ethics and Economics.” Academy of Management Review 20.2 (1995): 404–437.

    Save Citation »Export Citation »E-mail Citation »

    Jones aims to enhance stakeholder theory by constructing an instrumental stakeholder theory. He relates stakeholder theory to economic theories such as principal–agent theory, team production theory, and transaction cost economics, advancing the link between actions and outcomes. Available online for purchase or by subscription.

    Find this resource:

  • Mitchell, Ronald K., Bradley R. Agle, and Donna J. Wood. “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts.” Academy of Management Review 22.4 (1997): 853–886.

    Save Citation »Export Citation »E-mail Citation »

    This article attempts to strengthen the theoretical status of stakeholder theory by defining three attributes a stakeholder can possess: power, legitimacy, and urgency. On the basis of combinations of these attributes, typologies of stakeholders are developed. Available online for purchase or by subscription.

    Find this resource:

Innovations in Stakeholder Theory

Innovations in stakeholder theory are the network-based model of corporate social responsibility (CSR) (Rowley 1997), the distinction between the strategic stakeholder model and the intrinsic model (Berman, et al. 1999), and a “convergent” model that integrates the strategic and intrinsic models (Jones and Wicks 1999). Luoma and Goodstein 1999 finds in an empirical study that variations in institutional environments are associated with stakeholder representation on corporate boards. Numerous empirical studies, including Barnett 2007, have attempted to uncover whether stakeholder management contributes to enhance financial performance. Porter and Kramer 2011 stresses that companies and stakeholders must jointly search for shared value in a way that helps them escape traditional trade-offs and antagonisms between business and societal interests.

  • Barnett, Michael L. “Stakeholder Influence Capacity and the Variability of Financial Returns to Corporate Social Responsibility.” Academy of Management Review 32.3 (2007): 794–816.

    DOI: 10.5465/AMR.2007.25275520Save Citation »Export Citation »E-mail Citation »

    Barnett explains the inconsistencies in the results of the relationship between SR and corporate financial performance by arguing that others have failed to take account of the path-dependent nature of relationships with stakeholders. Available online for purchase or by subscription.

    Find this resource:

  • Berman, Shawn L., Andrew C. Wicks, Suresh Kotha, and Thomas M. Jones. “Does Stakeholder Orientation Matter? The Relationship between Stakeholder Management Models and Firm Financial Performance.” Academy of Management Journal 42.5 (1999): 488–506.

    DOI: 10.2307/256972Save Citation »Export Citation »E-mail Citation »

    The authors distinguish between the strategic stakeholder model and the intrinsic model and test the descriptive accuracy of each of these models. Available online for purchase or by subscription.

    Find this resource:

  • Jones, Thomas M., and Andrew C. Wicks. “Convergent Stakeholder Theory.” Academy of Management Review 24.2 (1999): 206–221.

    Save Citation »Export Citation »E-mail Citation »

    In this study a “convergent” model is developed that integrates the strategic and intrinsic approaches to stakeholder theory, arguing that they are incomplete without one another. Available online by subscription.

    Find this resource:

  • Luoma, Patrice, and Jerry Goodstein. “Stakeholders and Corporate Boards: Institutional Influences on Board Composition and Structure.” Academy of Management Journal 42.5 (1999): 553–563.

    DOI: 10.2307/256976Save Citation »Export Citation »E-mail Citation »

    In this empirical study Luoma and Goodstein find that variations in institutional environments are associated with stakeholder representation on corporate boards. Available online for purchase or by subscription.

    Find this resource:

  • Porter, Michael E., and Mark R. Kramer. “Creating Shared Value.” Harvard Business Review (January–February 2011): 62–75.

    Save Citation »Export Citation »E-mail Citation »

    Reframes capitalist production from wealth creation in the narrow, private sense to shared value creation in a broader, more inclusive sense. Stresses that shared value creation can lead to privately appropriable wealth and the betterment of societal problems simultaneously. Available online for purchase or by subscription.

    Find this resource:

  • Rowley, Timothy J. “Moving beyond Dyadic Ties: A Network Theory of Stakeholder Influences.” Academy of Management Review 22.4 (1997): 887–910.

    Save Citation »Export Citation »E-mail Citation »

    Rowley shifts the traditional focus in stakeholder theory on dyadic relationships by developing a network-based model of CSR. Available online by subscription.

    Find this resource:

Institutional Theory

Institutional theory explains differences between firms’ SR on the basis of the social, cultural, and institutional context in which companies are located. Its core argument is that these contextual differences influence the motivations of managers, shareholders, and all other stakeholders by attaching normative sanctions and social evaluations to alternate courses of behavior. Such sanctions derive not only from formal institutions like the law, but also from informal social structures, as institutions are understood as “collections of rules and routines that define actions in terms of relations between roles and situations” (March and Olsen 1989, p. 160). In Suchman 1995, corporations are motivated to adhere to these varying institutional pressures as they can gain social legitimacy by “confirming to environments” (p. 587). Thus “legitimacy” is defined as ‘‘a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions’’ (p. 574). Jennings and Zandbergen 1995 argues for the vital role of institutional theory in explaining the concept and practice of corporate environmental responsibility. Moreover, it is argued that institutional theory allows SR to be understood as part of the general trend toward the globalization of international management (Guler, et al. 2002). Aguilera and Jackson 2003 posits that institutional theory, as opposed to agency theory, which is argued to be too simplistic, is especially useful in comparing cross-national differences in SR. Campbell 2007 develops a framework specifying numerous institutional factors that influence whether corporations practice SR. Critical perspectives on institutional theory have argued that it neglects the role of agency by portraying organizations as passive adapters, as in Tempel and Walgenbach 2007.

  • Aguilera, Ruth V., and Gregory Jackson. “The Cross-National Diversity of Corporate Governance: Dimensions and Determinants.” Academy of Management Review 28.3 (2003): 447–465.

    Save Citation »Export Citation »E-mail Citation »

    In this study the diversity in corporate governance practices is explained using a theoretical model that is rooted in institutional theory. Aguilera and Jackson argue that understanding the role of institutional factors in shaping corporate governance practices is essential to issues of international convergence. Available online for purchase or by subscription.

    Find this resource:

  • Campbell, John L. “Why Would Corporations Behave in Socially Responsible Ways? An Institutional Theory of Corporate Social Responsibility.” Academy of Management Review 32.3 (2007): 946–967.

    DOI: 10.5465/AMR.2007.25275684Save Citation »Export Citation »E-mail Citation »

    Developing a framework on the basis of institutional theory Campbell specifies conditions under which corporations are likely to practice SR. These conditions include public and private regulation, the presence of nongovernmental organizations, institutionalized norms, associate behavior among corporations, and organized dialogues among corporations and their stakeholders. Available online for purchase or by subscription.

    Find this resource:

  • Guler, Isin, Mauro F. Guillén, and John Muir Macpherson. “Global Competition, Institutions, and the Diffusion of Organizational Practices: The International Spread of ISO 9000 Quality Certificates.” Administrative Science Quarterly 47.2 (2002): 207–232.

    DOI: 10.2307/3094804Save Citation »Export Citation »E-mail Citation »

    Utilizing institutional theory the authors analyze SR as an organizational practice that is diffused due to the globalization of international management practices. The concepts of institutional theory of coercive, normative, and mimetic effects are complemented by social network theory to understand the diffusion of SR practices between and within countries. Available online for purchase or by subscription.

    Find this resource:

  • Jennings, P. Devereaux, and Paul A. Zandbergen. “Ecologically Sustainable Organizations: An Institutional Approach.” Academy of Management Review 20.4 (1995): 1015–1052.

    Save Citation »Export Citation »E-mail Citation »

    In this study, Jennings and Zandbergen argue for the importance of institutional theory in understanding the concept and practices of corporate sustainability (environmental responsibility). Available online for purchase or by subscription.

    Find this resource:

  • March, James G., and Johan P. Olsen. Rediscovering Institutions: The Organizational Basis of Politics. New York: Free Press, 1989.

    Save Citation »Export Citation »E-mail Citation »

    March and Olson argue that political science must incorporate insights from organization theory if it is to fully understand the workings of political life. Appointed policymakers and elected officials alike are all conditioned by their institutional environments, which exert a behavioral influence on their decision making.

    Find this resource:

  • Suchman, Mark C. “Managing Legitimacy: Strategic and Institutional Approaches.” Academy of Management Review 20.3 (1995): 571–610.

    Save Citation »Export Citation »E-mail Citation »

    Suchman argues that companies are motivated to respond to institutional pressures in order to maintain their social legitimacy that can be pragmatic, moral, or cognitive. Managerial strategies are proposed for the gaining, maintaining, and repairing of each of these types of legitimacy. Available online by subscription.

    Find this resource:

  • Tempel, Anne, and Peter Walgenbach. “Global Standardization of Organizational Forms and Management Practices? What New Institutionalism and the Business-Systems Approach Can Learn from Each Other.” Journal of Management Studies 44.1 (2007): 1–24.

    DOI: 10.1111/j.1467-6486.2006.00644.xSave Citation »Export Citation »E-mail Citation »

    Tempel and Walgenbach argue that institutional theory neglects the role of agency by portraying organizations as passive adapters. This work proposes a combined theory rooted in new institutionalism and the business-systems approach to better understand the effects of globalization on management practices. Available online for purchase or by subscription.

    Find this resource:

Resource Dependency Theory

Resource dependency theory has become one of the most influential theories of strategic management and organizational theory. First introduced in Pfeffer and Salancik 1978, the theory seeks to explain how organizations reduce environmental uncertainty and interdependence, and identifies five actions that firms can take to minimize their environmental dependences: (1) mergers/vertical integration; (2) joint ventures and other interorganizational relationships; (3) interlocking boards of directors; (4) political action; and (5) executive succession. In a review of the overall resource dependency literature, Hillman, et al. 2009 describes the focus on either one (or a combination of) these five actions, finding clear evidence of the original assertion of resource dependency theory that firms that depend on the environment can and do enact multiple strategies to combat these contingencies. Empirical evidence shows that each of the proposed areas of action validates the reciprocal effect of uncertainty and interdependence on businesses. Resource dependence theory has frequently been applied in the context of SR, primarily to explain the differential responsiveness of businesses to the social demands of various stakeholder groups, and appears to be driven by the latter’s direct or indirect control over critical inputs for these businesses’ primary transformation processes.

  • Hillman, Amy J., Michael C. Withers, and Brian J. Collins. “Resource Dependence Theory: A Review.” Journal of Management 35.6 (2009): 1404–1427.

    DOI: 10.1177/0149206309343469Save Citation »Export Citation »E-mail Citation »

    In this review of the research on resource dependency theory, Hillman and colleagues find empirical support for the original assertion of resource dependency theory that firms that depend on the environment can and do enact multiple strategies to combat these contingencies.

    Find this resource:

  • Pfeffer, Jeffrey, and Gerald. R. Salancik. The External Control of Organizations: A Resource Dependence Perspective. New York: Harper and Row, 1978.

    Save Citation »Export Citation »E-mail Citation »

    Pfeffer and Salancik synthesize and extend an earlier stream of research in organizational sociology and economic sociology that explains the measures actors take in response to their critical dependencies on outside, nominally independent actors.

    Find this resource:

Resource-Based View

The resource-based view (RBV) allows for an analysis of the extent to which corporations engage in CSR strategically, to create sustainable competitive advantage based on tangible or intangible firm resources. The RBV was introduced by Wernerfelt 1984 and subsequently refined by Barney 1991. Wernerfelt built the theory on the basis of earlier work by Penrose 1995, which viewed corporations as bundles of heterogeneous resources and capabilities that are imperfectly mobile across them. When these resources are valuable and rare, because they are hard to imitate and are nonsubstitutable, they can be a source of sustainable competitive advantage (Barney 1991). Hart 1995 is the first to apply RBV theory to SR, focusing on environmental responsibility, and argues that for certain corporations, environmentally responsible behavior can become a source of sustained competitive advantage. Russo and Fouts 1997 finds that higher levels of environmental performance correlate with superior financial performance. McWilliams and Siegel 2001 outlays a supply-and-demand model on the workings of RBV and compares two identical firms of which one adds a social dimension to its product. A cost-benefit analysis is performed to see whether demand for SR products are larger than costs. Findings show there is an “ideal” level of SR for each firm that can be determined by using a cost-benefit analysis. McWilliams, et al. 2002 demonstrates a specific case of RBV’s contention that SR can create sustained competitive advantage, showing how US firms can use political strategies based on SR to raise regulatory barriers that prevent foreign competitors from using substitute technology.

  • Barney, J. “Firm Resources and Sustained Competitive Advantage.” Journal of Management 17.1 (1991): 99–120.

    DOI: 10.1177/014920639101700108Save Citation »Export Citation »E-mail Citation »

    Explores how resources can be a source of sustained competitive advantage by discussing four categories of resource characteristics: value, rareness, imitability, and sustainability. Available for purchase online.

    Find this resource:

  • Hart, Stuart L. “A Natural-Resource-Based View of the Firm.” Academy of Management Review 20.4 (1995): 986–1014.

    Save Citation »Export Citation »E-mail Citation »

    In this study Hart links the RBV of the firm as a theoretical framework for understanding competitive advantage to SR by introducing three strategies of resource management: pollution prevention, product stewardship, and sustainable development. Available online for purchase or by subscription.

    Find this resource:

  • McWilliams, Abagail, and Donald Siegel. “Corporate Social Responsibility: A Theory of the Firm Perspective.” Academy of Management Review 26.1 (2001): 117–127.

    Save Citation »Export Citation »E-mail Citation »

    McWilliams and Siegel develop a supply-and-demand model of SR, arguing that there is an ideal level of SR for each individual firm depending on various drivers that can be determined using a cost-benefit analysis. Available online by subscription.

    Find this resource:

  • McWilliams, Abagail, David D. Van Fleet, and Kenneth D. Cory. “Raising Rivals’ Costs through Political Strategy: An Extension of the Resource-Based Theory.” Journal of Management Studies 39.5 (2002): 707–724.

    DOI: 10.1111/1467-6486.00308Save Citation »Export Citation »E-mail Citation »

    The RBV of the firm is extended in this study to analyze how effective various competitive strategies are, especially various political strategies

    Find this resource:

  • Penrose, Edith Tilton. The Theory of the Growth of the Firm. 3d ed. New York: Wiley, 1995.

    DOI: 10.1093/0198289774.001.0001Save Citation »Export Citation »E-mail Citation »

    A true management classic that analyzes the opportunities and problems commercial firms face as they grow in size. Penrose identifies one of the main factors holding back profitable growth as the relatively slow expansion of managerial talent in any business firm, which is needed to exploit the opportunities driving and driven by growth.

    Find this resource:

  • Russo, Michael V., and Paul A. Fouts. “A Resource-Based Perspective on Corporate Environmental Performance and Profitability.” Academy of Management Journal 40.3 (1997): 534–559.

    DOI: 10.2307/257052Save Citation »Export Citation »E-mail Citation »

    In this empirical study Russo and Fouts find that it pays to be green, as environmental performance positively links to financial performance. Moreover, this relationship is stronger in industries with high growth. Available online for purchase or by subscription.

    Find this resource:

  • Wernerfelt, Birger. “A Resource-Based View of the Firm.” Strategic Management Journal 5.2 (1984): 171–180.

    DOI: 10.1002/smj.4250050207Save Citation »Export Citation »E-mail Citation »

    This foundational article introduces the RBV of the firm in analogy to the product view of the firm. Available online for purchase or by subscription.

    Find this resource:

Business Ethics

One of the foundational ideas in the field of business ethics is that businesses are by definition interrelated with society, and are therefore forced to deal with society’s ethical demands. Business ethics draws on various moral frameworks, such as those developed by Kant and Rawls, in opposition to utilitarianism. Business ethics has a relatively long-standing focus on SR research. Joyner and Payne 2002 reviews the six most significant historical works that analyze corporate social responsibility (CSR) from a business ethics approach. Barnard 1938 is the first to address the significance of the role of organizations within society at large, where business decisions are made on the basis of an assessment of the economic, legal, moral, social, and physical elements of the environment. Simon 1945 advances this by pointing to the relevance for firms to adjust to the values of consumers. Drucker 2006 reorients the perspective from ethics and moral obligations to CSR by positing public responsibility as one of the key areas for business objectives. Andrews 1987 states that strategic orientation, due to the growing important of values, ethics, and CSR, includes both an economic strategy as a strategy to support “community institutions” (p. 77). Freeman 1984 notes the growing importance of ethics as illustrated by the development of codes and the number of courses on ethics in business schools. His proposition of stakeholder management is a reconciliation of ethics, values, and SR. Windsor 2006 states that by necessity the ethical perspective on SR is diffuse and demands a case-by-case assessment of what constitutes ethical business decisions.

  • Andrews, Kenneth R. The Concept of Corporate Strategy. 3d ed. New York: Richard D. Irwin, 1987.

    Save Citation »Export Citation »E-mail Citation »

    One of the foundational works for the discipline of strategic management. While this work is no longer cited frequently by contemporary strategic management scholars, the Andrews legacy lives on through several analytical tools he helped promote, including strengths, weaknesses, opportunities, and threats analysis.

    Find this resource:

  • Barnard, Chester Irving. The Functions of the Executive. Cambridge, MA: Harvard University Press, 1938.

    Save Citation »Export Citation »E-mail Citation »

    Based on his own experiences as a practicing executive at AT&T and New Jersey Bell, Barnard provides a gripping account of the executive’s job, in addition to numerous observations on organizations more broadly. His work is considerably more theoretical than practical, however, and is greatly inspired by his frequent exchanges with leading sociologist Talcott Parsons.

    Find this resource:

  • Drucker, Peter Ferdinand. The Practice of Management. New York: Collins, 2006.

    Save Citation »Export Citation »E-mail Citation »

    Peter Drucker has been a prominent management thinker for well more than half a century. In this book, he is one of the first to single out managers as an object worthy of study in their own right, and provides a descriptively accurate analysis of managers’ work activities. Originally published in 1954.

    Find this resource:

  • Freeman, R. Edward. Strategic Management: A Stakeholder Approach. Boston: Pitman, 1984.

    Save Citation »Export Citation »E-mail Citation »

    In this foundational publication for the instrumental stakeholder perspective, Freeman promotes the strategic analysis of firm–stakeholder relations, promoting a view that paying careful attention to stakeholder interests is not contrary to corporate interests, but rather helps advance them.

    Find this resource:

  • Joyner, Brenda E., and Dinah Payne. “Evolution and Implementation: A Study of Values, Business Ethics and Corporate Social Responsibility.” Journal of Business Ethics 41.4 (2002): 297–311.

    DOI: 10.1023/A:1021237420663Save Citation »Export Citation »E-mail Citation »

    The six most significant historical works that analyze CSR from a business ethics perspective are reviewed in this paper, illustrating the increased attention for business ethics, values, and SR in the literature. Available online for purchase or by subscription.

    Find this resource:

  • Simon, Herbert Alexander. Administrative Behavior. New York: Free Press, 1945.

    Save Citation »Export Citation »E-mail Citation »

    Advances a view of the human decision maker as an imperfect, rationally limited individual in an exceedingly complex organizational context characterized by information overload. This condition of “administrative man” leads to predictable biases and behaviors.

    Find this resource:

  • Windsor, Duane. “Corporate Social Responsibility: Three Key Approaches.” Journal of Management Studies 43.1 (2006): 93–114.

    DOI: 10.1111/j.1467-6486.2006.00584.xSave Citation »Export Citation »E-mail Citation »

    Reviews the three key theoretical approaches to SR, arguing incapability for synergizing these theories due to the difference in moral framework and political philosophies that underlie them. Available online for purchase or by subscription.

    Find this resource:

Environmental Approaches

The environmental dimension is a well-established aspect of SR. It contains various concepts such as triple bottom line; people, planet, profit; sustainability; and cradle to grave or cradle to cradle. SR has been studied actively from the environmental accounting and environmental economics perspectives. The economic point of view analyzes the expected value of the returns of environmental activities as well as the risks they pose to these returns (Reinhardt 1999). Schaltegger and Figge 2000 develops the concept of environmental shareholder value that helps in the identification of the influence that environmental strategies have on shareholder value creation. Loew 2003 systematizes environmental cost concepts by combining the environmental impact and environmental costs. A comprehensive overview of monetarization methods in the environmental economics literature is provided in Turner, et al. 1994.

  • Loew, Thomas. “Environmental Cost Accounting: Classifying and Comparing Selected Approaches.” In Environmental Management Accounting: Purpose and Progress. Edited by M. Bennett, Pall M. Rikhardsson, and Stefan Schaltegger, 41–56. Dordrecht, The Netherlands: Kluwer Academic, 2003.

    DOI: 10.1007/978-94-010-0197-7Save Citation »Export Citation »E-mail Citation »

    A contribution that specifies how environmental cost accounting is different from more generic cost accounting, and how several approaches have developed to deal with the specific problems associated with environmental costs.

    Find this resource:

  • Reinhardt, F. L. “Bringing the Environment down to Earth.” Harvard Business Review (July–August, 1999) 149–157, 186.

    Save Citation »Export Citation »E-mail Citation »

    Using an economic analysis of the expected value of the returns of environmental responsibility, Reinhart presents a range of circumstances that influences these returns. Moreover, he presents five practical approaches managers can take to identify these circumstances and to subsequently integrate economic responsibility in their business practices.

    Find this resource:

  • Schaltegger, Stefan, and Frank Figge. “Environmental Shareholder Value: Economic Success with Corporate Environmental Management.” Eco-Management and Auditing 7.1 (2000): 29–42.

    DOI: 10.1002/(SICI)1099-0925(200003)7:1%3C29::AID-EMA119%3E3.0.CO;2-1Save Citation »Export Citation »E-mail Citation »

    This study extends the perspective on the returns of environmental responsibility by focusing not on the amount of environmental protection a firm engages in but on the manner in which this is practiced. Available online for purchase or by subscription.

    Find this resource:

  • Turner, R. Kerry, David W. Pearce D, and Ian Bateman. Environmental Economics: An Elementary Introduction. London: Harvester Wheatsheaf, 1994.

    Save Citation »Export Citation »E-mail Citation »

    A solid introductory text to the field of environmental economics, with a particular focus on the monetarization of externalities and other social costs associated with environmental problems.

    Find this resource:

Applications and Extensions

In addition to being a scholarly field of work, SR is also a field of practice. The societal issue of SR has spawned a veritable industry of dedicated consultancy businesses, social audit firms, social investment funds, social rating agencies, social communication advisory services, and the like. These practitioners have also had a major agenda-setting influence on the scholarly community, which over the years has become more concerned with providing evidence of the “business case” for SR, and with researching the aforementioned SR practice institutions. These practice applications have thus led to several interesting extensions of the scholarly SR literature.

Corporate Financial Performance

Over the years SR has increasingly been understood as a strategic tool that enhances a firm’s corporate financial performance (CFP). Despite the wide popularity of researching the relationship between SR and CFP, consensus has yet to be reached owing to the contrasting findings. Bragdon and Marlin 1972 is the first study to examine the SR–CFP relationship, finding that SR positively affects CFP. Following this work, more researchers have found confirmation for this positive relationship. However, others find no relationship—or a negative relationship—between SR and CFP. Griffin and Mahon 1997 posits that one of the causes for these contrasting outcomes is the methodological inconsistency of the various studies. Margolis, et al. 2007 collects and analyzes 167 published studies conducted over thirty-five years that empirically examined the relationship between corporate social performance (CSP) and CFP. The findings suggest that there is a positive overall association, but there is very little evidence of a negative association. The conclusion is that future research should be redirected to gain a better understanding of why firms pursue CSP, the mechanisms connecting prior CFP to subsequent CSP, and how firms manage the process of pursuing both CSP and CFP simultaneously.

Mechanisms Linking Social Responsibility and Corporate Financial Performance

Although less prevalent as the empirical studies attempting to link SR and corporate financial performance (CFP), numerous studies have researched the mechanisms that connect SR and CFP. Richardson, et al. 1999 specifies the mechanisms through which SR generates capital market responses. Schuler and Cording 2006 explains the role of consumer-purchasing behavior in the relation between SR and CFP. Others have argued for the mechanisms of improved reputation and consumer loyalty (Kanter 1999), attraction of socially conscious consumers as well as good employees (Turban and Greening 1997), increased market value (Mackey, et al. 2007), and in Porter and Kramer 2002, the development of new markets.

  • Kanter, R. M. “From Spare Change to Real Change: The Social Sector as Beta Site for Business Innovation.” Harvard Business Review 77.3 (1999): 122–132, 210.

    Save Citation »Export Citation »E-mail Citation »

    Kanter argues and provides concrete examples to illustrate that SR has increasingly developed to be an opportunity for companies to innovate, as projects and partnerships with social purposes function as sources of inspiration.

    Find this resource:

  • Mackey, Alison, Tyson Mackey, and Jay B. Barney. “Corporate Social Responsibility and Firm Performance: Investor Preferences and Corporate Strategies.” Academy of Management Review 32.3 (2007): 817–835.

    DOI: 10.5465/AMR.2007.25275676Save Citation »Export Citation »E-mail Citation »

    Develops a theoretical model of SR in which the demand and supply of investment opportunities in SR determine whether SR activities have an impact on the market value of firms. Available online for purchase or by subscription.

    Find this resource:

  • Porter, Michael E., and Mark R. Kramer. “The Competitive Advantage of Corporate Philanthropy.” Harvard Business Review 80.12 (2002): 56–69.

    Save Citation »Export Citation »E-mail Citation »

    Porter and Kramer argue that there is no inherent contradiction in maximizing profits and bettering society as SR efforts can function as enablers of improving a firm’s competitive context.

    Find this resource:

  • Richardson, Alan J., Michael Welker, and Ian R. Hutchinson. “Managing Capital Market Reactions to Corporate Social Responsibility.” International Journal of Management Reviews 1.1 (1999): 17–43.

    DOI: 10.1111/1468-2370.00003Save Citation »Export Citation »E-mail Citation »

    This study specifies the mechanisms through which SR generates capital market responses, using the model to identify the gaps in the knowledge about the relationship between SR and CFP. Available online for purchase or by subscription.

    Find this resource:

  • Schuler, Douglas A., and Margaret Cording. “A Corporate Social Performance–Corporate Financial Performance Behavioral Model for Consumers.” Academy of Management Review 31.3 (2006): 540–558.

    DOI: 10.5465/AMR.2006.21318916Save Citation »Export Citation »E-mail Citation »

    Schuler and Cording explain the relation between SR and CFP by focusing on the role of consumer-purchasing behavior. They argue intensity of information and moral values to affect this relationship. Available online for purchase or by subscription.

    Find this resource:

  • Turban, Daniel B., and Daniel W. Greening. “Corporate Social Performance and Organizational Attractiveness to Prospective Employees.” Academy of Management Journal 40.3 (1997): 658–672.

    DOI: 10.2307/257057Save Citation »Export Citation »E-mail Citation »

    Combining social identity and signaling theory, this study posits SR as a source of competitive advantage through reputational advances and increased attractiveness as an employer. Available online by subscription.

    Find this resource:

Corporate Philanthropy

Carroll 1991 conceptualizes corporate philanthropy as a specific element of SR, presenting philanthropy as the top of the ‘‘pyramid of corporate social responsibility’’ (p. 42). Seifert, et al. 2003 proposes that corporate philanthropy can consist of cash donations; in-kind gifts of firms’ products, services, use of facilities, or managerial expertise; and cash donations given indirectly to charities through, for example, a corporate-sponsored foundation. Both Seifert, et al. 2003 and the Aguilera, et al. 2007 study focus on the drivers that are able to predict firms’ philanthropic expenditures. Logsdon and Wood 2002 and Simon 1995 both address the challenges related to the globalization of philanthropy, and Fry, et al. 1982; Godfrey 2005; and Orlitzky, et al. 2003 research the effect of philanthropic giving on financial performance. Burlingame and Frishkoff 1996 conceptualizes this more-strategic form of philanthropy as the opposite end of the continuum of so-called altruistic philanthropy. In strategic philanthropy, the philanthropic deeds are more strongly related to the identity of the firm, and there is professionalism in the giving function.

  • Aguilera, Ruth V., Deborah E. Rupp, Cynthia A. Williams, and Jyoti Ganapathi. “Putting the S Back in Corporate Social Responsibility: A Multilevel Theory of Social Change in Organizations.” Academy of Management Review 32.3 (2007): 836–863.

    DOI: 10.5465/AMR.2007.25275678Save Citation »Export Citation »E-mail Citation »

    A multilevel theoretical model is developed that integrates theories of organizational justice, corporate governance, and varieties of capitalism to explore the drivers of SR. Available online for purchase or by subscription.

    Find this resource:

  • Burlingame, Dwight F., and Patricia A. Frishkoff. “How Does Firm Size Affect Corporate Philanthropy?” In Corporate Philanthropy at the Crossroads. Edited by Dwight Burlingame and Dennis R. Young, 86–104. Bloomington: Indiana University Press, 1996.

    Save Citation »Export Citation »E-mail Citation »

    In this contribution, the authors comment on the professionalization of corporate philanthropy under the influence of the contingency factor size. In their analysis, which distinguishes between altruistically inspired and strategically inspired philanthropy, the latter form is associated with larger, more differentiated firms.

    Find this resource:

  • Carroll, Archie B. “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders.” Business Horizons 34.4 (1991): 39–48.

    DOI: 10.1016/0007-6813(91)90005-GSave Citation »Export Citation »E-mail Citation »

    In this article, Carroll follows up on his foundational conceptual model of CSP (Carroll 1979, cited under Contemporary Definitions). He again divides the total SR of a firm into four hierarchically related elements: economic responsibilities, legal responsibilities, ethical responsibilities, and discretionary responsibilities.

    Find this resource:

  • Fry, Louis W., Gerald D. Keim, and Roger E. Meiners. “Corporate Contributions: Altruistic or For-Profit?” Academy of Management Journal 25.1 (1982): 94–106.

    DOI: 10.2307/256026Save Citation »Export Citation »E-mail Citation »

    Using the height of advertising expenditures the authors conclude that corporate philanthropic deeds are motivated by profit consideration. Available online for purchase or by subscription.

    Find this resource:

  • Godfrey, Paul C. “The Relationship between Corporate Philanthropy and Shareholder Wealth: A Risk Management Perspective.” Academy of Management Review 30.4 (2005): 777–798.

    DOI: 10.5465/AMR.2005.18378878Save Citation »Export Citation »E-mail Citation »

    Godfrey proposes a theoretical model that integrates three mechanisms through which corporate philanthropy has a positive effect on corporate financial performance (CFP): it generates positive moral capital with communities and other stakeholders, provides shareholders with insurance-like protection for their intangible assets at risk, and contributes to shareholder wealth. Available online for purchase or by subscription.

    Find this resource:

  • Logsdon, Jeanne M., and Donna J. Wood. “Business Citizenship: From Domestic to Global Level of Analysis.” Business Ethics Quarterly 12.2 (2002): 155–187.

    DOI: 10.2307/3857809Save Citation »Export Citation »E-mail Citation »

    The concept of global business citizenship and its distinction from corporate citizenship is studied in this paper. Logsdon and Wood argue that the implementation of fundamental norms enhance businesses’ abilities to operate in an increasingly globalized world. Available online by subscription.

    Find this resource:

  • Orlitzky, Marc, Frank L. Schmidt, and Sara L. Rynes. “Corporate Social and Financial Performance: A Meta-Analysis.” Organization Studies 24.3 (2003): 403–441.

    DOI: 10.1177/0170840603024003910Save Citation »Export Citation »E-mail Citation »

    Presents a comprehensive and methodologically rigorous review of the relationship between social and environmental performance on financial performance. Argues that mostly SR, and to a lesser extent environmental responsibility, is likely to positively affect financial performance, especially when financial performance is operationalized with accounting-based measures.

    Find this resource:

  • Seifert, Bruce, Sara A. Morris, and Barbara R. Bartkus. “Comparing Big Givers and Small Givers: Financial Correlates of Corporate Philanthropy.” Journal of Business Ethics 45.3 (2003): 195–211.

    DOI: 10.1023/A:1024199411807Save Citation »Export Citation »E-mail Citation »

    In this study the authors match pairs of companies with high and low levels of philanthropic expenditures, finding a positive relationship between profit and philanthropic expenditures, and no relationship between corporate philanthropy and CFP. Available online for purchase or by subscription.

    Find this resource:

  • Simon, Françoise L. “Global Corporate Philanthropy: A Strategic Framework.” International Marketing Review 12.4 (1995): 20–37.

    DOI: 10.1108/02651339510097711Save Citation »Export Citation »E-mail Citation »

    Simon argues that in the face of globalization, corporate philanthropy requires an increasingly strategic approach to mitigate the high risks stemming from ethical problems and the complexities in monitoring subsidiaries’ philanthropic practices. Available online for purchase or by subscription.

    Find this resource:

Empirical Studies on Strategic Philanthropy

There are only a few studies that seek to support the theoretical trend of strategic philanthropy with empirical evidence. These include studies on the evaluation practices of nineteen firms in Orange Country, California, in Tokarski 1999; 180 industrial and consumer firms in the United Kingdom in Carrigan 1997; the management of charitable giving of large UK firms in Brammer, et al. 2006; and the strategic philanthropic behaviors of firms in the Dow Jones Sustainability Index (DJSI) by Maas and Liket 2011.

  • Brammer, Stephen, Andrew Millington, and Stephen Pavelin. “Is Philanthropy Strategic? An Analysis of the Management of Charitable Giving in Large UK Companies.” Business Ethics: A European Review 15.3 (2006): 234–245.

    DOI: 10.1111/j.1467-8608.2006.00446.xSave Citation »Export Citation »E-mail Citation »

    Uses data from a survey of UK companies to uncover the extent to which strategic philanthropy is practiced. Findings illustrate the diversity of philanthropic practices and suggest that strategic motivations play only a minor role in determining philanthropic expenditures. Available online for purchase or by subscription.

    Find this resource:

  • Carrigan, Marylyn. “The Great Corporate Give-Away: Can Marketing Do Good for the ‘Do-Gooders’?” European Business Journal 9.4 (1997): 40–46.

    Save Citation »Export Citation »E-mail Citation »

    In this study of the monitoring and evaluation practices of 180 industrial and consumer firms in the United Kingdom, Carrigan concludes that there is a need for companies to become more strategic in their philanthropic practices.

    Find this resource:

  • Maas, Karen, and Kelly Liket. “Talk the Walk: Measuring the Impact of Strategic Philanthropy.” Journal of Business Ethics 100.3 (2011): 445–464.

    DOI: 10.1007/s10551-010-0690-zSave Citation »Export Citation »E-mail Citation »

    Using data from the DJSI, Maas and Liket find an increasing trend in impact measurement of philanthropy, with more than half of the DJSI companies measuring the impact in 2009. Important drivers are firm size, sector, region, and philanthropic expenditures. Available online for purchase or by subscription.

    Find this resource:

  • Tokarski, Kelly. “Give and Thou Shall Receive.” Public Relations Quarterly 44.2 (1999): 34–40.

    Save Citation »Export Citation »E-mail Citation »

    This study finds a lack of formal evaluation of corporate philanthropy programs in a sample of nineteen firms in Orange County, California. Tokarski argues that badly managed philanthropy can be a drain on funds and risks a backfiring of reputational effects.

    Find this resource:

Standards and Regulations

The rapid institutionalization of the global trend of SR is illustrated by the numerous standards and regulations that have emerged. These include management standards such as AA1000, reporting standards such as the Global Reporting Initiative, and voluntary agreements such as the UN Global Compact and the International Labour Organization Decent Work Agenda. These standards and regulations have been enforced by the embrace of SR by numerous global institutes such as the United Nations, World Bank, Organisation for Economic Co-operation and Development, and the International Labour Organization. Gray 2000 provides an overview of the developments and trends in auditing and reporting.

Methodological Weaknesses

Despite decades of attention to SR in both theoretical and empirical studies, there is still a lack of consensus on the concept of SR. For example, the concept has alternatively been defined in terms of corporate philanthropy, ethical business behavior, or corporate environmental performance. Ullmann 1985 argues that the lack of definitional clarity has hampered comparability and compatibility across studies, which in turn causes methodological difficulties. Consequently, numerous studies have critiqued the methodologies used in studying SR. McWilliams, et al. 1999 points to the unreliability of the use of the event-study methodology to measure the consequences of SR, and cautions for the use of stock price as a proxy for financial performance, as performance regards the organizational level whereas corporate social responsibility activities often occur at plant or product level. In a later study, McWilliams and Siegel 2000 challenges the regression model that has often been used to assess the SR–CFP relationship. Because SR is, according to Rowley and Berman 2000, not a viable theoretical or empirical construct, the use of more specifically defined operational concepts of SR to control for the wide variation in operational settings that hamper comparability is suggested. In a recent meta-analysis of the SR literature, Aguinis and Glavas 2012 argues that one of the dominant causes for the methodological weaknesses in SR research is a lack of integration and synthesis of the diverse literature that is characterized both by multidisciplinary and multiple levels of analysis. This results in a highly fragmented body of literature with a substantial micro- and macrodivide, the neglect of alternative theoretical frameworks, and a lack of attention for the importance of mediators and moderators that influence the extent to which SR leads to specific outcomes.

  • Aguinis, Herman, and Ante Glavas. “What We Know and Don’t Know about Corporate Social Responsibility: A Review and Research Agenda.” Journal of Management 38.4 (2012): 932–968.

    DOI: 10.1177/0149206311436079Save Citation »Export Citation »E-mail Citation »

    In this meta-analysis of the SR literature, a dominant cause for the methodological weaknesses in SR research is argued to be a lack of integration and synthesis of the diverse literature. A detailed research agenda is offered that is rooted in a multilevel perspective allowing for the integration of diverse theoretical frameworks and underlying mechanisms of SR.

    Find this resource:

  • McWilliams, Abagail, and Donald Siegel. “Corporate Social Responsibility and Financial Performance: Correlation or Misspecification?” Strategic Management Journal 21.5 (2000): 603–609.

    DOI: 10.1002/(SICI)1097-0266(200005)21:5%3C603::AID-SMJ101%3E3.0.CO;2-3Save Citation »Export Citation »E-mail Citation »

    McWilliams and Siegel demonstrate how the inconsistency in the findings on the relationship between SR and CFP is due to the failure of the research designs to incorporate a control variable for investment in research and development. They illustrate that including this variable results in the finding of a neutral relationship between SR and financial performance. Available online for purchase or by subscription.

    Find this resource:

  • McWilliams, Abagail, Donald Siegel, and Siew Hong Teoh. “Issues in the Use of the Event Study Methodology: A Critical Analysis of Corporate Social Responsibility Studies.” Organizational Research Methods 2.4 (1999): 340–365.

    DOI: 10.1177/109442819924002Save Citation »Export Citation »E-mail Citation »

    This study makes the argument that event studies lack the robustness to function as a basis for conclusions on the managerial implications of SR. By reviewing a number of event studies the authors illustrate the effect of differences in research design and implementation on the findings, and propose alternative methodologies to complement event studies when researching SR. Available online for purchase or by subscription.

    Find this resource:

  • Rowley, Tim, and Shawn Berman. “A Brand New Brand of Corporate Social Performance.” Business and Society 39.4 (2000): 397–418.

    DOI: 10.1177/000765030003900404Save Citation »Export Citation »E-mail Citation »

    Rowley and Berman argue that the lack of development of SR into a viable theoretical or operational construct has caused the inability of the field to generalize results and produce meaningful comparisons between studies. To overcome this problem they recommend narrow defining and operationalizing of the concept of SR. Available for purchase online.

    Find this resource:

  • Ullmann, Arieh H. “Data in Search of a Theory: A Critical Examination of the Relationships among Social Performance, Social Disclosure, and Economic Performance of U.S. Firms.” Academy of Management Review 10.3 (1985): 540–557.

    Save Citation »Export Citation »E-mail Citation »

    In this study Ullmann argues that the inconsistency of the findings on SR is caused by a lack of theory, inappropriate definitions of key terms, and deficiencies in the empirical data. Available online for purchase or by subscription.

    Find this resource:

Corporate Social Responsibility and Development

Many SR efforts, especially philanthropic efforts, have been directed at the developing world. The perspective of SR and development as a win–win situation became more deeply embedded with the concept of “the Bottom of the Pyramid” in Prahalad 2010. A critical review of this trend in Halme, et al. 2009, observes that despite the lack of rigorous evidence of the effects of SR on both business and society, “trust is placed” in SR as “an ideology and as an instrument for contributing to the resolution of many global and environmental ills” (p. 1). There is a warning concerning the limited effects short-time single-cause efforts companies typically undertake can have on development, as development is by definition a long-term process. Banerjee 2007 is a warning that, due to asymmetry of information, corporations engaging in SR might self-present as striving for societal goals at the same time the entities are actually fulfilling private ones. Moreover, there is the argument that SR “does not challenge,” but reinforces, corporate power (Banerjee 2007, p. 147). This view aligns with the critical perspective presented by Halme, et al. 2009 that SR in the development context changes the relations between corporations, consumers, the government, and nongovernmental organizations in society. This embrace of the corporate solution for societal problems may divert attention from a broader political, economical, or societal view. Jamali and Mirshak 2007 points out that exploitation by corporations is even more likely to take place in the developing-country context, because in developing countries, civil society is too unorganized to provide powerful watchdogs or a critical media. Blowfield and Frynas 2005 makes the argument that SR activities risk creating dependency circles instead of promoting empowerment. Stigzelius and Mark-Herbert 2009 agrees with this argument and illustrates it in a powerful case study by showing that due to the adoption of the newly established labor standard SA8000, suppliers face increasingly complex requirements that are often contradictory to workplace safety, and restrict overtime and wages that ensure a sufficient standard of living.

  • Banerjee, Subhabrata Bobby. Corporate Social Responsibility: The Good, the Bad and the Ugly. Northampton, MA: Edward Elgar, 2007.

    Save Citation »Export Citation »E-mail Citation »

    With this book Banerjee introduces the important concepts of asymmetry of information and power to illustrate the risks associated with SR in the development context.

    Find this resource:

  • Blowfield, M., and J. Frynas. “Setting New Agendas: Critical Perspectives on Corporate Social Responsibility in the Developing World.” International Affairs 81.3 (2005): 499–513.

    DOI: 10.1111/j.1468-2346.2005.00465.xSave Citation »Export Citation »E-mail Citation »

    This article introduces an editorial that specifically focuses on the effects of SR on developing countries and poor and marginalized populations. Its central argument is that the claims that have been made about SR’s potential contributions to the poor have been unsubstantiated to date, outlining an agenda for a more critical review of SR’s ability to alleviate poverty. Available online by subscription.

    Find this resource:

  • Halme, Minna, Nigel Roome, and Peter Dobers. “Corporate Responsibility: Reflections on Context and Consequences.” Editorial. In Special Issue: Corporate Responsibility: Reflections on Context and Consequences. Edited by Minna Halme, Nigel Roome, and Peter Dobers. Scandinavian Journal of Management 25.1 (2009): 1–9.

    DOI: 10.1016/j.scaman.2008.12.001Save Citation »Export Citation »E-mail Citation »

    This editorial is a review of the SR literature in which the authors argue that the concept of SR is uncritically embraced despite a substantial lack of empirical evidence for the effects of SR on both the corporation and society. Moreover, it argues that academic explorations of SR have mostly been US centered and thereby insensitive to local contexts, especially those of developing and emerging countries. Available online for purchase or by subscription.

    Find this resource:

  • Jamali, Dima, and Ramez Mirshak. “Corporate Social Responsibility (CSR): Theory and Practice in a Developing Country Context.” Journal of Business Ethics 72.3 (2007): 243–262.

    DOI: 10.1007/s10551-006-9168-4Save Citation »Export Citation »E-mail Citation »

    In this study Jamali and Mirshak make the argument that developing countries are vulnerable to corporate abuse of SR as a mechanism of exploitation due to the absence of numerous accountability mechanisms such as the media and an organized civil society.

    Find this resource:

  • Prahalad, C. K. The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits. Upper Saddle River, NJ: Wharton, 2010.

    Save Citation »Export Citation »E-mail Citation »

    In this popular book Prahalad argues that there is a large untapped market in developing countries that companies ought to recognize. It provides examples and cases of win–win situations where both the companies and the poor benefit from tapping into this “new” market.

    Find this resource:

  • Stigzelius, Ingrid, and Cecilia Mark-Herbert. “Tailoring Corporate Responsibility to Suppliers: Managing SA8000 in Indian Garment Industry.” Scandinavian Journal of Management 25.1 (2009): 46–56.

    DOI: 10.1016/j.scaman.2008.04.003Save Citation »Export Citation »E-mail Citation »

    Stigzelius and Mark-Herbert present a case study of the effects of transnational regulations. They illustrate the complexity the SA8000 introduces to suppliers as it presents general guidelines that are ill adapted to specific context and can thereby be inherently contradictory to issues such as workplace safety, restricted overtime, and wages that ensure a sufficient standard of living. Available online for purchase or by subscription.

    Find this resource:

LAST MODIFIED: 01/28/2013

DOI: 10.1093/OBO/9780199846740-0037

back to top

Article

Up

Down