Does Wealth Matter for Responsible Investment?

[We’re pleased to welcome authors Trond Døskeland and Lars Jacob Tynes Pedersen of the NHH Norwegian School of Economics. They recently published an article in Business & Society entitled “Does Wealth Matter for Responsible Investment? Experimental Evidence on the Weighing of Financial and Moral Arguments,” which is currently free to read for a limited time. Below, they reflect on the motivations and challenges of this research:]


Responsible investment is increasingly prevalent, and both financial and moral concerns can drive such investment. In this article, we investigate how responsible investors of different wealth weigh financial and moral arguments. Prior research on different factors that may co-determine responsible investment behavior yield competing predictions about the influence of personal wealth on investment. We conduct a large-scale natural field experiment on responsible investment, wherein we treat investors with financial, moral and no arguments, respectively. We find that there is a statistically and economically significant difference in responsiveness to financial and moral arguments between investors of different wealth. Specifically, financial arguments are more effective than are moral arguments for high wealth investors but not for low wealth investors, and the effect is particularly high for the wealthiest investors. The findings hold for several different measures of wealth. Our findings contribute to the understanding of the moderating effect of wealth on responsible investment choice. Furthermore, these insights may enable more fine-tuned strategies to stimulate responsible investment among different individual investor segments.

What motivated you to pursue this research?

We are two colleagues – one finance scholar and one business ethics scholar – who suddenly found ourselves working together at the same department. At the time, responsible investment was taking off in Norway, both as a consequence of the early efforts of the Norwegian Sovereign Wealth fund and their pioneering responsible investment efforts, and in the market for private individual investors. We realized that our complementing research interests and knowledge made it possible for us to do interesting work on this emerging topic together.

What has been the most challenging aspect of conducting your research? Were there any surprising findings?

It is challenging to conduct experimental research in close collaboration with companies, because it requires an alignment of the objectives of the research team and the managers of the company. Our field experiment on responsible investment was carried out in the Norwegian bank Skandiabanken. We were fortunate that the managers of the company really valued doing empirical research practice, and we succeeded in designing a project that had research value from a theoretical point of view and value for the company in practical terms. However, typically the time horizons of researchers and business managers are different, and we have different “currencies” – they want actionable insights that can inform business decisions, while our goal is scientific publication. However, we believe that we managed to achieve both objectives in this study.

In what ways is your research innovative, and how do you think it will impact the field?

We run large-scale natural field experiments to understand the decisions of individuals and firms, and we believe that this methodology is very valuable (and still underexploited) to study questions relevant to business and society. We were happy to see that the journal Business & Society called for more experimental work in a recent piece by the journal’s editors, and we hope to see many more field experiments in this field.

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A Different Perspective on the Nonfamily vs. Family CEO Debate

[We’re pleased to welcome authors Rüveyda Kelleci of Hasselt University, Frank Lambrechts of Hasselt University, Wim Voordeckers of Hasselt University, and Jolien Huybrechts of Maastricht University. They recently published an article in the Family Business Review entitled “CEO Personality: A Different Perspective on the Nonfamily Versus Family CEO Debate,” which is currently free to read for a limited time. Below, they reflect on the inspiration for conducting this research:]

What motivated you to pursue this research?

Current family business research on family firm CEOs has mainly focused on the characteristic of “family kinship” to explain the differences and the performance effects of nonfamily vs. family CEOs; however, such research has neglected other aspects of CEOs that may better explain their behavior. Indeed, we argue that the strategy and success of the family firm critically depends on the leadership behavior of the firm’s CEO, which is largely driven by CEO personality. Given that CEO personality has been largely unexplored in the family business domain, we wanted to address this substantial knowledge gap. Therefore, based on a unique, hand-collected dataset, we examined the personality traits of nonfamily and family CEOs in privately held Belgian family firms.

In what ways is your research innovative, and how do you think it will impact the field?

Our research is one of the only studies to empirically examine the very hard to come by data on personality of family firm CEOs. Therefore, our study can serve as a foundation for future research in this unusual, yet important area. We offer a fresh new perspective on the debate about nonfamily vs. family CEOs and thereby alter the way in which differences between the two CEO types are commonly viewed. We argue that family kinship alone cannot fully explain or predict the differences between nonfamily and family CEOs and that we must incorporate their personalities. We find significant differences between nonfamily and family CEOs with regard to nine personality traits: independent minded, democratic, data rational, behavioral, detail conscious, conscientious, relaxed, worrying, and trusting. The findings suggest a very balanced personality profile for nonfamily CEOs and a rather strong-willed personality for family CEOs. Our findings also reveal several personality traits of nonfamily CEOs that are significantly associated with firm financial performance. Surprisingly, for family CEOs, we find no such indications. Moreover, our results call into question some assumptions in the literature about how family CEOs and nonfamily CEOs differ and provide a deeper understanding of prior work. We hope our study will become an important springboard for future research on CEO personality in family firms.

What advice would you give to new scholars and incoming researchers in this particular field of study?

One approach to advance our knowledge of family firm CEOs is to integrate family business research with insights from research on personality. This can help family business scholars to deepen and/or question current assumptions and predictions about differences in behavior between family and nonfamily CEOs. Moreover, as prior research has found that the success of the family firm reflects CEO personality, we argue that a deeper understanding of the personality traits of CEOs in family firms will further the debate on the conduct and performance of family firms. The findings of our study provide numerous fruitful avenues for future research.

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When Does Corporate Social Performance Pay for International Firms?

[We’re pleased to welcome author Alan Muller of the University of Groningen. Dr. Muller recently published an article in Business & Society entitled “When Does Corporate Social Performance Pay for International Firms?,” which is currently free to read for a limited time. Below, Dr. Muller reflects on the impact and innovations of this research:]

What motivated you to pursue this research?

I was inspired to pursue this research because I wanted to better integrate the literature on corporate social performance and internationalization. There is a rich body of research on the link between social performance and financial performance, and an equally rich body of research on the link between internationalization and financial performance. Yet thus far the two had not been connected in any meaningful way. This paper seemed like a great opportunity to link these two streams.

Were there any specific external events—political, social, or economic—that influenced your decision to pursue this research?

The financial crisis that began in 2008 had profound consequences for both corporate social performance and internationalization. Society’s demands for greater responsibility grew louder while it became painfully clear that international success should not be taken for granted. In a way, the crisis intensified scrutiny of both realms, and led to increased recognition that we need to attend to both the costs as well as the (highly uncertain) benefits associated with both. I began thinking that the costs and benefits of both are likely mutually contingent and unequally distributed.

What has been the most challenging aspect of conducting your research? Were there any surprising findings?

The challenge is not so much in the empirics as it is in the positioning of the research. Given the split between the social responsibility literature and the international business literature, the question is: to which audience should the paper be aimed at? To be honest, I positioned it initially as a contribution to the international business literature, but in hindsight it fits better as a business and society paper.

In what ways is your research innovative, and how do you think it will impact the field?

I hope it will function as a bridge between the two bodies of scholarship, and spur more rigorous dialogue with the aim of linking the two more systematically. Because in this day and age, I do not know how the performance effects of social performance and internationalization could be conceptualized in isolation. I also incorporated a few robust analytical techniques that I hope will inspire others.

What did not make it into your published manuscript that you would like to share with us?

I initially had a role in mind for firms’ consumer orientation, because I expected that the legitimacy effects of social performance would work differently for consumer-oriented industries. I incorporated consumer orientation as an additional moderator to an already moderated U-shaped curve. My findings indicated that consumer-oriented firms had even more difficulty benefiting from their social performance internationally, which made sense to me. However, all my friendly reviewers told me that a four-way interaction was a bridge too far!

What advice would you give to new scholars and incoming researchers in this particular field of study?

Follow your passion! But remember that your story, no matter how inspiring to you, will not sell itself. Be clear who is in the audience you are speaking to, and how your story matters for them.

What is the most important/ influential piece of scholarship you’ve read in the last year?

This is difficult, but probably “The Role of Short-Termism and Uncertainty Avoidance in Organizational Inaction on Climate Change”, by Slawinski, Pinkse, Busch, & Banerjee (Business & Society, 2017):

A close second would be “Do‐no‐harm versus do‐good social responsibility: Attributional thinking and the liability of foreignness”, by Crilly, Na, and Jiang (Strategic Management Journal, 2016):

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The Transformational Change Challenge of Memes Around Marriage Equality

[We’re pleased to welcome authors Sandra Waddock of Boston College, Steve Waddell of SDG Transformations Forum, and Paul S. Gray of Boston College. They recently published an article in Business & Society entitled “The Transformational Change Challenge of Memes: The Case of Marriage Equality in the United States,” which is currently free to read for a limited time. Below, they reflect on the impact and innovations of this research:]

Shifting norms around marriage equality in the US provided a perfect setting to look at the role of changing memes in a major cultural transformation and draw insights from the process. Marriage equality—or the right of lesbian, gay, bisexual, and transgender (LGBT) individuals to marry—literally transformed the role of same sex relationships. Such relationships were outlawed and considered a “mental disorder” by the American Psychiatric Association until 1974. In 2015, they were brought within the social pillar of marriage across the nation when the US Supreme Court ruled marriage equality a constitutional right. We used an abbreviated case study with empirical work on core memes associated with the transformation used in a variety of public media.

Memes are core units of culture, according to Susan Blackmore who studied them extensively. They include widely replicated words, phrases, symbols, and images. We studied how the usage of key phrases or memes shifted in the media and scholarly work. Memes studied included gay rights, same-sex partner, civil union, gay marriage, freedom to marry, domestic partner, same-sex marriage, and marriage equality. The thinking behind our study, articulated by Waddock earlier, was that memes provide the foundation for societal narratives that influence thinking, attitudes, and ultimately behaviors, policies, and practices. We wanted to know whether the memes associated with marriage equality had shifted along with activists’ strategies to inform the public narrative.

The results, presented in a series of charts, suggest that indeed transformational change towards marriage equality in the US was accompanied by corresponding shifts in the popular use of different terminology. The chart below illustrates these shifts, highlighting the use of eight different memes describing what ultimately was known as marriage equality from 1970-2015 in the US’s two leading newspapers, The New York Times and The Washington Post. As activists focused in on marriage equality, three key memes begin to take off: first, gay marriage, followed by same sex marriage, and in the ten years before the Supreme Court’s ruling, marriage equality. Other more in-your-face terms like gay rights, which had earlier been the leading meme, while still in use, experienced a decline in usage over the same period.
Systemic transformation like marriage equality is never easy and is fraught with conflict as the case attests. What is too often overlooked, however, is the vital role that the underlying language—or memes—plays in shifting the contextual narrative, which in turn can help change attitudes and ultimately behaviors, policies, and practices as happened in this instance. Nine particular insights into transformation are identified in the article.

Further reading:
Blackmore, S. (2000). The meme machine (Vol. 25). Oxford, UK: Oxford Paperbacks.
Waddock, S. (2015). Reflections: Intellectual shamans, sensemaking, and memes in large system change. Journal of Change Management, 15(4), 259-273.

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Institutional-Political Scenarios for Anthropocene Society

[We’re pleased to welcome authors Andrew J. Hoffman of the University of Michigan and P. Devereaux Jennings of University of Alberta. They recently published an article in Business & Society entitled “Institutional-Political Scenarios for Anthropocene Society,” which is currently free to read for a limited time. Below, they reflect on the impact and innovations of this research:]

We have been motivated to write about possible futures in Anthropocene Society because of our dire realization that humankind has entered a new period (the Anthropocene), one where environmental shifts may overwhelm our civilizing efforts on this planet. To us and many in the academic community, it is clear that humans are a key source of this shift and that focusing on just climate change is insufficient for capturing the pervasive and deep change effects manifest in biodiversity decreases, habitat loss, and rising ambient pollution. The Anthropocene is a completely new context for research on organizations and the natural environment.

Given the scope of this fundamental shift in the role of humans in the natural environment, our social reality will experience a concurrent shift in one way or another. We can be fatalistic about such a dark future, or accept our responsibility of re-choreographing it. As Stephen Jay Gould sardonically quipped, 

“we have become, by a glorious evolutionary accident called intelligence, the stewards of life’s continuity on earth. We did not ask for this role, but we cannot abjure it. We may not be suited to it, but here we are.”

In our article (and related book), we have tried to ask “what will Anthropocene Society look like if we do – or do not – respond?” We use an institutional lens to answer this question and derive four different scenarios for Anthropocene Society’s future: collapsing systems, market rules, technological fix, and cultural re-enlightenment. In each, we see a very different cultural and political reality in organizational fields and logics, our units of analysis. Who has voice in articulating our challenges and potential solutions, and what values or “logics” do these people and groups bring to bear for explaining our changing biophysical reality?

Fields may become chaotic and poorly coordinated by institutions, with inequities growing rapidly, or there may be efforts to stabilize certain domains (key markets, such as stock markets or commodity exchanges) or to employ engineering solutions to certain areas (like flooding in Florida or geo-engineering the atmosphere). However, ideally, a more mindful approach to change and adaptation would be taken, one based on re-oriented values that embrace principles of more thoughtful and limited consumption, better distribution, and the creation of more culturally enriched communities.

The tensions that we see in the Anthropocene and the organizations in Anthropocene Society are ones that we wrestle with in our research. Individually and jointly, we oscillate between more dystopian and utopian visions of the future; we have documented more skeptical and more progressive actions in climate change fields; we have read the tea leaves of climate events and have seen more mishaps and community hardship, but we also see fantastic efforts of survival and solidarity. Humans certainly have the capacity to respond to these unprecedented challenges, as we did with reversing ozone depletion. But future adaptations will depend on institutional and cultural processes.

Our exploration, in turn, offers us an opportunity to reexamine some basic tenets of institutional theory, thereby bringing them more closely in line with our changing bio-physical reality. And in the final analysis, our examination seeks to answer Max Weber’s call to bridge the philosophical divide between physical science and social science – e.g., between Naturwissenshaten and Kulturwissenshaften – where nature is understood through the cultural lens of society, not separate from it.

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How Can Utilities Overcome Their Trustworthiness Problem?

[We’re pleased to welcome authors Dr. Wojtek Przepiorka of Utrecht University and Dr. Christine Horne of Washington State University. They recently published an article in Organization & Environment entitled “How Can Consumer Trust in Energy Utilities be Increased? The Effectiveness of Prosocial, Proenvironmental, and Service-Oriented Investments as Signals of Trustworthiness,” which is currently free to read for a limited time. Below, they reflect on the inspirations, and findings of their research:]

The electricity industry is a significant producer of carbon emissions; it needs a makeover in order to provide clean, reliable, and efficient power into the future. For this new, “smarter” grid to produce the gains it promises, consumer engagement is key. But consumers will only participate if they trust their utility company. Our research addresses the simple but important question of how consumer trust in utility companies can be increased. What can utilities do to convince consumers that they are trustworthy?

The literature on corporate social responsibility and signaling theory, help to address this question. Corporate social responsibility suggests that when companies behave in ways that respect ethical values, people, communities and the natural environment, customers respond positively, in turn increasing company success. Signaling theory asks when a company’s actions (for example, its efforts to be socially responsible) communicate that the company truly has some desirable but unobservable properties (for example that it is trustworthy).

We test whether socially responsible actions by utilities – in particular, prosocial, proenvironment, and service-oriented investments – signal trustworthiness to consumers. We use online survey experiments to test our hypotheses. Population based survey experiments, so-called vignette experiments, have two advantages: (1) random assignment of participants to experimental conditions allows for isolation of causal effects, and (2) survey experiments can be run with representative samples of the population of interest, thus allowing for generalizability of results.

We find that utilities’ proenvironmental investments – their investments in renewable energy – have the most consistent effect on consumer trust. For Americans generally, a utility’s efforts to provide better customer service or to contribute to their community, have little effect. Moreover, consumer trust is the main predictor of these consumers’ willingness to use smart grid related technology.

Utilities are in the news for advocating measures that make installing solar panels more difficult for residential customers. Our findings suggest that utilities’ lobbying efforts that appear to undermine use of renewable energy may have the unintended consequence of reducing consumer trust and feeding anti-smart meter, anti-utility activism. More generally, our findings suggest that consumer trust in utilities is more fundamentally hampered than just by the quality of the customer experience. Instead, trust rests in part on consumers’ assessments of utility commitments to renewable energy.

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The Effects of Financial Crisis on the Organizational Reputation of Banks

[We’re pleased to welcome authors Mario R. Englert of Lauda Dr. R. Wobser GmbH & Co. KG, Christopher Koch of the University Mainz, and Jens Wüstemann of the University of Mannheim. They recently published an article in Business & Society entitled “The Effects of Financial Crisis on the Organizational Reputation of Banks: An Empirical Analysis of Newspaper Articles,” which is currently free to read for a limited time. Below, they reflect on the impact and innovations of this research:

What motivated you to pursue this research?

In the financial crises, the public heavily criticized banking organization. In particular, we observed that some banks were more harshly criticized than others despite having a similar exposure to the financial crisis. This perceived mismatch of blame allocation motivated us to investigate what characteristics of banking organizations are associated with higher levels of blame and, thus, larger losses of organizational reputation during the financial crisis. Thereby, we also wanted to provide suggestions for a “winning strategy” to overcome such a difficult situation (for which also many banks are – even today – still looking for).

Were there any specific external events—political, social, or economic—that influenced your decision to pursue this research?

Clearly, the financial crisis and the strong public attention in the aftermath of the crisis influenced our decision to follow this stream of research. The public pressure was ubiquitous coming along with fundamental shifts in institutional economics. This situation has led to changes of organizational structures and business models of financial institutions as well as new regulatory conditions, with new and revised laws (e.g., the “Single Rulebook” within the EU) and regulatory institutions (e.g., the foundation of the “Single Supervisory Mechanism” in the Euro Area). The following quest for the right external response of banks (e.g., the proclamation of cultural change) that was observable across all media channels further influenced us to follow this research.

What has been the most challenging aspect of conducting your research? Were there any surprising findings?

Data gathering, data sampling, and data analyses were clearly one of the main challenges to conduct our research. We wanted to investigate the public opinion over time with regards to a coherent and powerful sample leaving us with quite a demanding task to get and compile the necessary information. Therefore, we hand-collected a consistent sample of newspaper articles covering the entire German market (hence, we included regional and national newspapers across the entire geography of the country) for an eight year period. Using semantic analyses based on pre-defined as well as self-compiled semantic dictionaries, we came up with a powerful sample and interesting results. Besides the results discussed in the paper, we also observed some surprising patterns. For instance, we observed that some individual savings and mutual banks (although being heavily invested in the US subprime market) gained on public reputation during the financial crisis (leading to a hypothesis that there was a thinking among the public that “if there are so many ‘villains’ out there, there must also be some [local] ‘heroes’”). It has also been fascinating to see that we could identify systematic results in the individual newspaper’s stance towards banking organizations (not reported in the paper). For example, newspapers geographically close the banking organization’s headquarters reported more positively about it. Further, newspapers with a left-wing readership took generally a more negative stance towards the banking industry in general.

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