Ann K. Buchholtz

Philanthropy as Strategy When Corporate Charity "Begins at Home"

Scholars and practitioners alike indicate a movement in corporate philanthropy toward “strategic” giving, for example, giving that improves the firms strategic position (ultimately the “bottom line”) while it benefits the recipient of the philanthropic act. Although the existence of this trend is widely accepted, it is represented in the literature most often by anecdotal evidence. This article presents the findings of a survey of corporate giving managers of U.S. firms that have had an established giving program of at least 5 years, with annual giving totaling at least

Beyond Resources: The Mediating Effect of Top Management Discretion and Values on Corporate Philanthropy

200,000 each year. The data show that corporate giving managers believe their firms are becoming increasingly strategic in their philanthropic activities. The findings also indicate that institutional-, firm-, and individual-level influences combine to precipitate strategic philanthropy. These findings lend support to the belief that the nature of corporate philanthropy is evolving to fit a more competitive marketplace.

The Nature of Giving A Theory of Planned Behavior Examination of Corporate Philanthropy

Prior studies have advanced our knowledge of the individual determinants of corporate philanthropy; however, little empirical research has been conducted on how these determinants combine to influence giving. In this study, the authors develop and test an integrated model of the relationship between firm resources and corporate philanthropy as mediated by managerial discretion and managerial values. In addition, the authors offer organizational slack as an alternative measure of organizational resources. As predicted, the results show that firm resources have a positive effect on corporate philanthropy. This effect is fully mediated by managerial discretion and partially mediated by managerial values.

Are Board Members Pawns or Watchdogs? The Link between CEO Pay and Firm Performance

Scholars of social issues in management have consistently argued that corporate philanthropy is one key factor of a firm’s discretionary responsibilities. Several researchers have examined the links between philanthropy and such outcomes as financial profit and organizational reputation. It is interesting to note that the determinants of corporate philanthropy have been left largely unexamined; researchers have yet to fully understand why philanthropy takes place. In this manuscript, Ajzen’s theory of planned behavior (TPB) provides the theoretical foundation for the development of a model that will further our understanding of corporate philanthropic behaviors. The TPB has been used and validated in many different academic fields (such as psychology, exercise science, and management information systems) as a means to understand the determinants of behavior. The authors build on the TPB and examine empirically how altruistic and strategic forces, perceived behavioral control, self-identity, and slack influence philanthropic behaviors.

Seller Responsiveness to the Need to Divest

This study examines the CEO pay and firm performance link from two competing perspectives managerial power and board vigilance. From the managerial power perspective, a powerful CEO dominates the board and decouples the pay-performance link. In contrast, board vigilance maintains that boards represent shareholder interests by effectively tying the CEOs pay to firm performance. Consistent with the board vigilance perspective, the link was stronger when CEOs were older or longer tenured and when more committee members had CEO experience. The authors found no support for the managerial power perspective.

Can excess bring success? CEO compensation and the psychological contract

Little theoretical attention has been given to divestiture; that is, to the question of why two firms that face similar environments make different selling decisions and reap different performance outcomes from a sale. This article proposes a framework of divestiture built around the core concept of seller responsiveness, which is defined as the readiness of the management at the selling firm to respond to the need to divest. The data show how divestiture context, management characteristics, and governance attributes influence seller responsiveness and, in turn, the price the divesting firm receives. Finally, the framework’s implications for research and practice are discussed.

The Institutionalization of Corporate Social Responsibility Reporting

Abstract Strategic human resource management involves creating and maintaining employee skills as well as encouraging employees to perform at their maximum. Both require developing the appropriate psychological contract between the organization and the employee [Human Resource Management Review 8 (1998) 265]. This is no less true for the chief executive officer (CEO), who plays a major role in creating organizational culture. Trust is a critical component in the success of HR activities [Research Management Review 7 (1997) 389], yet the HR literature is relatively silent about how to encourage CEOs to perform trust-generating behaviors. Research on psychological contracts suggests that in order to encourage trust-based behavior, it is necessary to foster a relational psychological contract with employees [Rousseau, D. M., & McLean Parks, J. (1993). The contracts of individuals and organizations. In L. L. Cummings & B. M. Staw (Eds.), Research in Organizational Behavior (pp. 1–43). Greenwich, CT: JAI Press]. However, the generally recommended CEO compensation practice (pay-for-performance) often risks violating the CEOs relational psychological contract. Conversely, the practice of providing golden parachutes (much criticized in the press) helps uphold the CEOs relational psychological contract. Implications are discussed.

Board Socio-Cognitive Decision-Making and Task Performance Under Heightened Expectations of Accountability

This article presents a three-stage model of how isomorphic mechanisms have shaped corporate social responsibility (CSR) reporting practices over time. In the first stage, defensive reporting, companies fail to meet stakeholder expectations due to a deficiency in firm performance. In this stage, the decision to report is driven by coercive isomorphism as firms sense pressure to close the expectational gap. In the second stage, proactive reporting, knowledge of CSR reporting spreads and the practice of CSR reporting becomes normatively sanctioned. In this stage, normative isomorphism leads other organizations to look to CSR reporting as a potential new opportunity for achieving the firm’s goals. In the third stage, imitative diffusion, the defensive reporters together with the proactive reporters create a critical mass of CSR reporters that reaches a threshold at which the benefits of CSR reporting begin to outweigh any costs due to mimetic isomorphism. The study finds support for the model in an examination of Fortune 500 firms from 1997 to 2006.

Shareholder Democracy as a Misbegotten Metaphor

This study examines how heightened expectations of board responsibility and accountability affect the socio-cognitive decision-making of boards and their collective task performance. Using data from the directors of 60 boards who served before and after the enactment of Sarbanes–Oxley, this study provides insight into the potential negative impact that this tightened accountability environment can have on a board’s task performance. Examining several socio-cognitive elements of board decision-making, board authority is found to have a positive main effect on board task performance, while relative CEO power and affective conflict have curvilinear relationships with board task performance. Cohesiveness also moderates the relationship between a board’s perceived uncertainty and affective conflict with board task performance. In sum, the model shows how a new era of director accountability can affect the social cognitions of board decision-making that underlie board task performance.

Agency Relationships in Family Firms: Theory and Evidence

The rise in corporate scandals and the dawning of the great recession motivated frustrated shareholders to seek greater power in order to influence the actions of the firms in which they own equity. Shareholder democracy has become the umbrella term for these shareholder empowerment efforts.1 Shareholder democracy is a worldwide movement (Fairfax, 2008a) that, having achieved a foothold in the United States, is gaining ground in Canada (Veall, 2012) and Europe (Rose, 2012). Although recently reinvigorated, this shareholder democracy movement is not new. The concept dates back to shortly after World War II, when Lewis Gilbert popularized the concept in the United States. Emerson and Latcham (1954: 152) later argued that “vigorous shareholder participation” was in keeping with democratic values. Mintzberg (1983) contributed a similar argument, contending that a country can only consider itself to be free if its major institutions subscribe to democratic principles. Arguments in favor of shareholder democracy have ranged from protecting society from corporate power to protecting shareholders from managerial abuse to protecting the rights of shareholders to shape their own destinies (Tsuk Mitchell, 2006). These arguments have taken hold as the shareholder democracy movement has pushed successfully for shareholder empowerment at annual meetings, SEC policy changes, and legislative developments that all have led to greater direct shareholder influence over corporate practices (Cohen & Schleyer, 2012).2