Bryan W. Husted

Governance Choices for Corporate Social Responsibility: to Contribute, Collaborate or Internalize?

Abstract Within a competitive business environment where resources are limited, it is increasingly important for senior management to make every investment count. Measuring ‘return on investment’ occurs at every level of operations—so why not also in the arena of Corporate Social activity? Until now, much research has focused on finding the link between corporate social responsibility (CSR) and increased business performance. Researchers have not examined the cost implications associated with the different forms of governance utilized by companies to implement their CSR activities, e.g., outsourcing through charitable contributions, developing an in-house program, or creating a more collaborative model, which benefits both the company and the partner nonprofit organization. Careful examination and evaluation of these costs will help senior management choose the governance structure that will maximize the benefits they reap from CSR activities. Drawing upon insights from organizational economics, this article develops a framework to compare the alternative modes of CSR governance and identifies the key drivers that affect governance choice, including associated costs. Most importantly, it provides a decision-making tool that can guide senior management in this vital choice as a way to contribute to the competitive advantage of the firm.

Governance Choice for Strategic Corporate Social Responsibility Evidence From Central America

The decision to internalize corporate social responsibility (CSR) activities, to buy (outsource) them in the form of corporate philanthropy, or to collaborate with other organizations is of great significance to the ability of the firm to reap benefits from such activity. Using insights provided by organizational economics and the resource-based view of the firm, this article describes how CSR centrality affects governance choice. This framework is tested using data collected from Central America. The findings suggest that the higher the centrality of CSR activities to the firms’ mission, the more likely that the firms will engage in CSR internally. The article discusses directions for further research and concludes with the managerial implications of this research.

Gender, human capital, and opportunity identification in Mexico

Purpose – The purpose of this paper is to understand how gender affects the number and innovativeness of business opportunities identified by future entrepreneurs in Mexico.Design/methodology/approach – Comparing social feminist theory and human capital theory, this study examines the effect that human capital has on opportunity identification among men and women in Mexico. The authors specifically examine the role of specific and general human capital in the opportunity identification process. A survey instrument was applied to 174 MBA students at a university in Northeastern Mexico.Findings – This study shows the significant effect of specific human capital: people with greater prior knowledge of customer needs or problems tended to identify more opportunities; however, the probability of identifying opportunities with innovation increased when individuals had been exposed to different industries through prior work and entrepreneurial experience. Gender differences were not significant for either the nu...

La medición del desempeño social empresarial a través de las redes sociales

Corporate social performance (CSP) has been studied extensively by management scholars, yet most approaches to its measurement continue to be ambiguous, controversial and difficult to research. In this paper, we propose measuring CSP via the construct of stakeholder satisfaction through social media. Using organizational justice theory, we argue that the satisfaction of stakeholder expectations can be understood partly through the perception of unjust corporate behavior, which is then expressed by stakeholders through social media. The explosion of social networking and microblogging has made it possible for people to express opinions with respect to the economic, social, and environmental events for all sorts of firms. We test these ideas using event study methods with a sample of 5,440 observations from ten firms. We find preliminary evidence of the sensitivity of social media to these events.

Income Inequality and the Firm

Growing income inequality has become a major social welfare problem across the globe. To date, scant attention has focused on the role of the firm in theories of income inequality, and management and organization theory has largely been silent on the issue. In this paper, we propose a redefinition of income inequality relevant for the firm. We also provide a theoretical framework that identifies the firm-level causes of inequality, the cues indicating when inequality is excessive, and the factors that might inhibit managerial recognition and response to those cues. Our analysis provides the basis for future empirical work and suggests important implications for theories of human resource management, executive pay, organizational justice, and social responsibility. It also suggests a number of critical recommendations for managers and policy makers seeking to reduce excessive levels of income inequality.

Corporate Social Strategy: From stakeholder management to social strategy

A stakeholder in an organization is (by its definition) any group or individual who can affect or is affected by the achievement of the organization’s objective. Freeman, Strategic Management: A Stakeholder Approach , (1984: 25) The social strategy decision Thanks to Professor Freeman’s considerable efforts, the term stakeholder is now a standard part of the business lexicon. Unfortunately, despite Freeman’s insistence that shareholders and stakeholders are on the same side, the term stakeholder is used most often in an adversarial context: shareholders and their CEO hired guns are pitted against the stakeholders – i.e., everybody else. Freeman’s core argument – that in the long term the firm’s success depends on satisfying legitimate non-economic as well as economic stakeholders – has not convinced microeconomists and strategic management scholars. Legitimacy is the crux of the issue. In a series of Academy of Management Review articles, Thomas Jones (Jones, 1995; Jones and Wicks, 1999; Jones et al ., 2007) has made a laudable effort to reconcile normative and instrumental stakeholder management theory by demonstrating that both are necessary and possible. In his most recent paper, he builds on Phillips’ (2003) work on normative and derivative legitimacy to defend, via the former, meeting the ethical demands of stakeholders, and, by the latter, acceding to the demands of powerful stakeholders that may harm the organization and/or other legitimate stakeholders (Jones et al ., 2007: 142). Nonetheless, there still remains the quarter-century-old problem of stakeholder theory when it comes to navigating conflicting normative (ethical) and instrumental objectives. In response, Jones et al . (2007) define a typology of organizational ethical cultures and provide propositions on how each type will respond to stakeholder groups under different conditions of stakeholder salience. The model is descriptive, predicts when a particular type of ethical culture will pay attention to specific types of stakeholders, but it cannot claim to advance the prospect of firm ethical behavior or of stakeholders benefiting from firm responsiveness to their needs. As has often been the case in stakeholder research, the authors suggest that creating trust through ethical behavior will redound to the firm’s benefit. However, they cannot make an economic case for ethical stakeholder management, nor explain how stakeholder management creates competitive advantage and economic value.