Stages of Corporate Sustainability: Integrating the Strong Sustainability Worldview

[We’re pleased to welcome author Nancy E. Landrum of Loyola University Chicago. Landrum recently published an article in Stages of Corporate Sustainability: Integrating the Strong Sustainability Worldview,” which is currently free to read for a limited time. Below, Landrum reflects on the inspiration for conducting her research and her contribution to the field:]

O&E_72ppiRGB_powerpointI recently read sustainability reports produced by mining companies.  The reports stated the companies were balancing economic, social, and environmental responsibilities, their environmental impact was minimized while their social benefits were maximized, and they were striving to be environmental leaders.  Yet the dictionary describes sustainability as using a resource in a way that it is not depleted or permanently damaged.  I thought it was ironic that mining companies could claim they were operating sustainably since resource depletion is the purpose of mining.

I went back to the literature on the sustainability spectrum which suggests that sustainability is a continuum that ranges from weak to strong sustainability.  It occurred to me that while the mining companies’ activities did not match my understanding of sustainability, there could, in fact, be multiple interpretations of sustainability.  Companies’ activities could be placed along the sustainability spectrum to define whether they were following the principles of weak sustainability, strong sustainability, or somewhere in between.

This lead to the integration of 22 micro- and macro-level models of stages of development in corporate sustainability which were then aligned with the sustainability spectrum.  I found that existing models had numerous stages that aligned with weak sustainability but did not include stages that aligned with strong sustainability.  The integration of existing models and subsequent alignment with the sustainability spectrum resulted in the creation of a new unified model for stages of corporate sustainability that now included strong sustainability.

This new model allows us to see that companies can be at varying points along the sustainability spectrum and reveals multiple interpretations of sustainability.  While mining companies might be at one end of the spectrum, more progressive companies might be further along the spectrum; they are at different stages based upon their differing interpretations of corporate sustainability.  Most importantly, with the inclusion of strong sustainability, this new model expands our view beyond what currently defines corporate sustainability and opens new territory for the pursuit of a more sustainable future.

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A Broader Look at Firms’ Corporate Social Performance in 2000-2010

 

10310820984_fb57a27068_z[We’re pleased to welcome Elise Perrault of College of Charleston. Elise recently published an article in Business & Society, entitled “What have firms been doing? Exploring what KLD data report about firms’ corporate social performance (CSP) in the period 2000-2010,” with co-author Michael Quinn of Bentley University.]

With a strong interest for firms’ relationship with stakeholders and, more broadly, society, we constantly read about how firms address – or not – a wide variety of social issues. However, this stream of research generally provides anecdotal evidence or analyzes antecedents and consequences of firms’ involvement in a targeted issue (such as philanthrophy or environmental management, for example). In short, we felt the need for a broad, 30,000 ft, view of how firms generally engage with stakeholders through addressing social issues. At the same time, with the soaring popularity of KLD data in the field, we wanted to gain a more precise appreciation of how this data source pictured firms’ actions in society.

We find our results quite revealing and at times surprising. For instance, the results show that firms are increasingly attending to secondary stakeholders, even while garnering more concerns on primary stakeholder dimensions. This points us to question whether managers are experiencing shifting beliefs regarding the value of BAS CoverCSR; specifically that it represents less a mechanism to attract stakeholder support and more a cornerstone to their risk management approach in terms of how society values the firm’s existence. We also find, as expected, that firms generally nurture strengths in the same dimensions in which they present concerns.

The most surprising finding is the extent to which prior corporate social performance (CSP) in a given dimension is linked to CSP in other dimensions over time. This suggests that as firms engage in CSP, they find rewards that drives them to further invest in yet other dimensions of CSP. As a result, we are led to reconsider the notion of a “virtuous circle” (Waddock & Graves, 1997) and suggest that future research examines in greater depth the real benefits that firms perceive from CSP and the motives that drive their increasing commitment to CSP.

Having provided this broader view of firms’ involvement with stakeholders and social issues, we hope this research will serve as a foundation for future research in several ways. For starters, we note the significance of industry dummies in the analysis. This finding confirms what previous research indicates, that industry matters to CSP strenghts and concerns. However, the extent to which industry affiliation predisposes a population of firms to certain CSP strenghts or concerns remains unaddressed. Pushing further in this direction would be to explore how industry affiliation affects stakeholders’ perceptions, and whether stakeholders are more forgiving or scrutinizing of firms in certain industries, for example.

Another insight from our analyses is the importance of using a long time frame when analyzing firms’ CSP, which has seldom been used in previous research. Doing so would enable researchers to see patterns and connections between various dimensions of CSP, answering questions such as “Do strengths (concerns) on certain dimensions of CSP generally prompt firms to subsequently perform better or worse on these and other dimensions?” While this would shed light on the ways in which firms can be primed to address certin social issues, on a broader scale, these analyses contribute to the conversation debating the fundamental question regarding the purpose of the firm and its obligations to shareholders and stakeholders.

The abstract for the paper:

With the blossoming of research on corporate social performance (CSP), the data produced by Kinder, Lydenberg, Domini (KLD) have become the standard to measure firms’ social and stakeholder actions. However, to date, only a few studies have focused on examining the data directly, and have done so largely in terms of validating the concepts and methods in the data set’s construction. The present study seeks to complement these efforts by contributing knowledge about what the KLD data report on firms’ actions toward primary and secondary stakeholders, and the dimensions of CSP that firms generally engage in, together or sequentially. With data on 3,073 firms over the period 2000-2010, results show that firms expend more resources on garnering strengths in primary stakeholder dimensions, although this trend is sharply deteriorating to the benefit of secondary stakeholders—notably the natural environment. Results also show that firms generally approach CSP with a mixed behavior, with strengths and concerns in the same dimensions, especially as it pertains to secondary stakeholders. These are the same dimensions in which firms show the longer, more intrinsic commitments, suggesting that secondary stakeholder strengths and concerns may be structural in nature. However, there is also evidence of relationships across dimensions, indicating that firms’ involvement in CSP can generate momentum. The rich implications of these findings are discussed.

You can read “What have firms been doing? Exploring what KLD data report about firms’ corporate social performance (CSP) in the period 2000-2010” from Business & Society free for the next two weeks by clicking here. Want to stay current on the latest research published by Business & SocietyClick here to sign up for e-alerts!

Interested in submitting a manuscript to the journal? You can learn more about Business & Society‘s manuscript guidelines by clicking here.

*Conference sponsorship image attributed to Fortune Live Media (CC)

Rethinking How We Measure Corporate Social Responsibility

10617765806_b7f4f4ca12_z[We’re pleased to welcome Gunther Capelle-Blancard. Gunther recently published an article in Business & Society with co-author Aurélien Petit entitled “The Weighting of CSR Dimensions: One Size Does Not Fit All.”]

Companies could develop eco-friendly products or support social programs, and meanwhile damage the environment or experiment governance failures. Corporate Social Responsibility is multidimensional. Often, though, responsible investors (and customers) are interested in synthetic rankings that sum up the ESG (Environmental, Social and corporate Governance) scores.  Such composite scores raise fundamental questions which, surprisingly, are widely overlooked by academics and practitioners.

If the question of fungibility (“do good actions compensate bad ones?”) is essential and has been discussed in the literature, this article focuses on commensurability (the “apples and oranges” problem). For instance, Oil & Gas companies are mostly criticized on environmental issues, while corporate governance is the main stake for Banks. Overall ratings that sum equally environmental, social and corporate governance marks would not reflect the sectors’ concerns. One size does not fit all.

We develop a new method of CSR rating, based on news disclosed by the media and nongovernmental organizations. Thanks to the Covalence EthicalQuote database, we BAS Coveranalyze more than 70,000 positive or negative ESG news, regarding the world’s largest companies. Our results suggest that rating agencies and previous academic research underweight the environment and corporate governance. Mostly, our method allows fitting the ratings to the sectors’ specific stakes. It can be used to assess Corporate Social Performance better.

The abstract for the paper:

Although the concept of corporate social responsibility (CSR) is fundamentally multidimensional, most studies use composite scores to assess corporate social performance (CSP). How relevant are such composite scores? How the CSR dimensions are weighted? Should the weighting scheme be the same across sectors? This article proposes an original weighting scheme of CSR strengths and concerns, at the sector level, which is proportional to media and nongovernmental organizations (NGOs) scrutiny. The authors show that previous CSP assessments underweight environmental and corporate governance concerns. Moreover, findings suggest that firms that are exposed to the closest scrutiny are usually criticized on one single dimension: for instance, banks for bad corporate governance, and basic-resource firms for environmental damage. Composite scores based on equal weights hence misrepresent CSP and the difference in CSR between sectors.

You can read “The Weighting of CSR Dimensions: One Size Does Not Fit All” from Business & Society free for the next two weeks by clicking here. Want to know all about the latest research from Business & SocietyClick here to sign up for e-alerts!

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*Highrise image credited to Sonny Abesamis (CC)

gunther_IMG_20150922_164249_b41bfe265c.jpgGunther Capelle-Blancard (PhD, University of Paris 1) is professor of economics at the University of Paris 1 Panthéon-Sorbonne and research fellow at the Centre d’Economie de la Sorbonne and Labex RéFi (Regulation financière). His research examines socially responsible investment, corporate social performance, and financial market regulation. His articles have appeared in such journals as Business Ethics: A European Review, European Financial Management Journal, Journal of Environmental Economics and Management, and Journal of Investing.

Aurélien Petit

Aurélien Petit (PhD, University of Paris 1) is research fellow at the Centre d’Economie de la Sorbonne. His research interests focus on corporate social responsibility and information disclosure strategies.

Good in Theory, Bad in Practice: Corporate Social Marketing in the Alcohol Industry

Green Margarita

Corporate social marketing (CSM) campaigns are used to improve the image of a wide variety of companies. Each CSM initiative is unique, but when it comes to companies in the alcohol industry, CSM campaigns seem to share a certain moral ambiguity. In sharp contrast to the other CSM initiatives, which demonstrate how an organization contributes positively to the community, similar campaigns for companies in the alcohol industry have drawn criticism for the way they promote “responsible drinking.” In their article, “Smokescreens and Beer Googles: How Alcohol Industry CSM Protects the Industry,” published in Social Marketing QuarterlySandra C. Jones of Australian Catholic University, Austin Wyatt of Swinburne University of Technology, and Mike Daube of McCusker Centre for Action on Alcohol and Youth delve into why CSM campaigns for organizations in the alcohol industry can prove to be problematic, particularly for the community.

The abstract:

Corporate social marketing (CSM) is one of several initiatives companies can undertake to demonstrate their corporate social responsibility (CSR). While there are many motivations for CSR and CSM, all are linked to profit in some way, including promoting the reputation of the organization. While CSM is often seen as evidence of SMQ Jan 2016organizations making a contribution to their community, there are some industries whose CSM campaigns have drawn considerable controversy and criticism. This article discusses the role of the alcohol industry in developing and disseminating “responsible drinking” CSM activities. It discusses some of the problems identified with alcohol industry CSM campaigns—including evidence that industry education campaigns communicate ambiguous messages; improve public perceptions of the industry but do not discourage harmful or underage drinking; and divert attention from more effective approaches, such as controls on price and availability. The paper also addresses the issue of other CSM/CRM activities undertaken by the alcohol industry, such as encouraging consumers to purchase a brand by donating a proportion of the profits to health and social causes (including those that are exacerbated by alcohol consumption). It discusses the value of these activities for the industry and their potential negative impact on the health of the community. In summary, the evidence suggests that industry CSM and CRM activities protect the industry (from restrictive policies and declining sales) but may in fact be detrimental to the community.

You can read “Smokescreens and Beer Goggles: How Alcohol Industry CSM Protects the Industry” from Social Marketing Quarterly by clicking here. Want to know all about the latest research from Social Marketing Quarterly? Click here to sign up for e-alerts!

Top Five: Administrative Science Quarterly

asqAre you looking for cutting-edge, peer-reviewed research on organizational studies? Take a look at the top five articles currently being read in Administrative Science Quarterly. ASQ seeks to advance the understanding of management, organizations, and organizing in a wide variety of contexts, including teams, business and nonprofit organizations, government agencies, and markets. These papers are free to access through December 31 using the links below:

J. P. Eggers

Falling Flat: Failed Technologies and Investment under Uncertainty

Administrative Science Quarterly March 2012 57: 47-80

M. K. Chin, Donald C. Hambrick, and Linda K. Treviño

Political Ideologies of CEOs: The Influence of Executives’ Values on Corporate Social Responsibility

Administrative Science Quarterly June 2013 58: 197-232

Ethan S. Bernstein

The Transparency Paradox: A Role for Privacy in Organizational Learning and Operational Control

Administrative Science Quarterly June 2012 57: 181-216

Dennis A. Gioia, Kristin N. Price, Aimee L. Hamilton,and James B. Thomas

Forging an Identity: An Insider-outsider Study of Processes Involved in the Formation of Organizational Identity

Administrative Science Quarterly March 2010 55: 1-46

Jason P. Davis and Kathleen M. Eisenhardt

Rotating Leadership and Collaborative Innovation:Recombination Processes in Symbiotic Relationships

Administrative Science Quarterly June 2011

Administrative Science Quarterly, owned and managed by the Samuel Curtis Johnson Graduate School of Management at Cornell University, is a top-ranked, quarterly, peer-reviewed journal that publishes the best theoretical and empirical papers on organizational studies from dissertations and the evolving, new work of more established scholars, as well as interdisciplinary work in organizational theory, and informative book reviews. Browse the latest issue here, and sign up for e-alerts so you don’t miss out on future issues and articles published in OnlineFirst.

Top Five: Administrative Science Quarterly

asqAre you looking for cutting-edge, peer-reviewed research on organizational studies? Take a look at the top five articles currently being read in Administrative Science Quarterly. ASQ seeks to advance the understanding of management, organizations, and organizing in a wide variety of contexts, including teams, business and nonprofit organizations, government agencies, and markets. These papers are free to access through September 19 using the links below:

Isin Guler, Mauro F. Guillén, and John Muir Macpherson
Global Competition, Institutions, and the Diffusion of Organizational Practices: The International Spread of ISO 9000 Quality Certificates
June 2002

M. K. Chin, Donald C. Hambrick, and Linda K. Treviño
Political Ideologies of CEOs: The Influence of Executives’ Values on Corporate Social Responsibility
June 2013

Sarah Harvey and Chia-Yu Kou
Collective Engagement in Creative Tasks: The Role of Evaluation in the Creative Process in Groups
September 2013

Daniel M. Cable, Francesca Gino, and Bradley R. Staats
Breaking Them in or Eliciting Their Best? Reframing Socialization around Newcomers’ Authentic Self-expression
March 2013

Wolf-Christian Gerstner, Andreas König, Albrecht Enders, and Donald C. Hambrick
CEO Narcissism, Audience Engagement, and Organizational Adoption of Technological Discontinuities
June 2013

Administrative Science Quarterly, owned and managed by the Samuel Curtis Johnson Graduate School of Management at Cornell University, is a top-ranked, quarterly, peer-reviewed journal that publishes the best theoretical and empirical papers on organizational studies from dissertations and the evolving, new work of more established scholars, as well as interdisciplinary work in organizational theory, and informative book reviews. Browse the latest issue here, and sign up for e-alerts so you don’t miss out on future issues and articles published in OnlineFirst.

The CSR Agenda: Part 4 of 5

On Tuesday, Forbes published a case study about a corporate social responsibility strategy that spelled the difference between life and death:

Around 2000, Xerox was in big trouble. According to Dr. Joseph Cahalan, Xerox’s Vice President of Communications and Social Responsibility, the company was literally “days” away from filing for bankruptcy. Still, employees didn’t defect en masse like rats from a sinking ship. On the contrary, they rallied around the Xerox banner, fighting tooth and nail to keep the company afloat as if the company was a local mom and pop shop, not a Fortune 500. Cahalan attributes this to the culture which attracted him to work for Xerox in the first place: “People stayed and made that fight to save the company, in large part because they feel that it’s a company worth saving.”

How did Xerox earn this kind of loyalty?

Click here to read the article in Forbes.

What corporate social responsibility strategies are playing out in your research or practice? In this fourth installment of our series on CSR, we present an assortment of articles that tackle the issues across the field. We also hope to hear from you: CSR-related papers are currently being sought by SAGE journals from the Journal of Marketing Education and  Organization & Environment to Cornell Hospitality Quarterly and Business & Society. You can view some of the latest Calls for Papers here.

Part Four: How are the current shifts in CSR strategy playing out?

Click here to read “A Social Connection Approach to Corporate Responsibility: The Case of the Fast-Food Industry and Obesity” by Judith Schrempf of University of Richmond, published on July 24, 2012 in Business & Society.

Click here to read “The Prospects and Limits of Eco-Consumerism: Shopping Our Way to Less Deforestation?” by Peter Dauvergne and Jane Lister, both of the University of British Columbia, published in the June 2010 issue of Organization & Environment.

Click here to read “Organization-Based Social Marketing: An Alternative Approach for Organizations Adopting Sustainable Business Practices” by Mary Franks Papakosmas of the University of Wollongong and Gary Noble and John Glynn, both of the Sydney Business School and Faculty of Commerce, published in the June 2012 issue of Social Marketing Quarterly.

Click here to read “Societal Development Through Human Resource Development: Contexts and Key Change Agents” by Namhee Kim of Walden University, published in the August 2012 issue of Advances in Developing Human Resources.

Click here to read “Does Environmental Certification Help the Economic Performance of Hotels? Evidence from the Spanish Hotel Industry” by María-del-Val Segarra-Oña and Ángel Peiró-Signes of the Universitat Politècnica de València, Rohit Verma of Cornell University School of Hotel Administration, and Luis Miret-Pastor of the Universitat Politècnica de València, published in the August 2012 issue of Cornell Hospitality Quarterly.

Don’t miss tomorrow’s series finale, in which we’ll close with thoughts on constructing a CSR agenda for the future.