James E. Mattingly

Measurement of Corporate Social Action: Discovering Taxonomy in the Kinder Lydenburg Domini Ratings Data

The contribution of this work is a classification of corporate social action underlying the Social Ratings Data compiled by Kinder Lydenburg Domini Analytics, Inc. We compare extant typologies of corporate social action to the results of our exploratory factor analysis. Our findings indicate four distinct latent constructs that bear resemblance to concepts discussed in prior literature. Akey finding of our research is that positive and negative social action are both empirically and conceptually distinct constructs and should not be combined in future research. Additionally, we recommend that some prior research results be reconsidered to determine whether these newly derived measures might clarify some previous findings.

Corporate Social Performance: A Review of Empirical Research Examining the Corporation–Society Relationship Using Kinder, Lydenberg, Domini Social Ratings Data:

This article reviews empirical research of corporate social performance (CSP) using Kinder, Lydenberg, Domini (KLD) social ratings data through 2011. The review synthesizes 100 empirical studies, noting consistencies and inconsistencies among studies examining similar constructs. Notable consistencies were that, although accounting measures of financial performance were a positive outcome of CSP, the same was not often true of stock returns. Also, demographics of top management teams (TMTs) increased CSP strengths, but did not reduce concerns, whereas organizational decentralization reduced CSP concerns. Notable inconsistencies were that CEO demographics were not as often related to CSP as were TMT demographics, indicating that managerial discretion may be an important mitigating factor shaping managerial effects on CSP. Also, although CSP for some organizations seemed influenced by institutional pressures, other organizations appeared to be less influenced, perhaps suggesting that some organizations are more able than others to resist institutional pressures. Future research should attempt to probe observed consistencies and inconsistencies, and to test the boundaries of observed relationships, toward a disciplined program of middle-range theory development.

Stakeholder salience, structural development, and firm performance: Structural and performance correlates of sociopolitical stakeholder management strategies

This study attempts to establish the importance of firm-level interactions with sociopolitical stakeholders in explaining firms prospects for survival. Institutional arguments are proposed to explain the effects of internal structures-both organizational and phenomenological-on firms sociopolitical relational strategies, whereas arguments grounded in the stakeholder view of the firm are advanced to explain effects of sociopolitical stakeholder relations on firm performance. Findings indicate that firms tended to adopt cooptative relationships with sociopolitical stakeholders. Furthermore, firms cooperativeness toward sociopolitical stakeholders had little effect on financial performance but, under some conditions, had positive effects on social performance. Implied is that markets may not be an effective governance mechanism to ensure firms alignment with democratic institutions in a plural society and that public policies may be needed to address these failures.

Governance implications of the effects of stakeholder management on financial reporting

Purpose – The purpose of this paper is to test whether effective stakeholder management results in transparent financial reporting. Design/methodology/approach – This paper uses a linear model informed by stakeholder theorizing and established measures of stakeholder management, earnings quality, and earnings management. Findings – Organizations exhibiting effective stakeholder management have higher earnings quality and are less likely to engage in discretionary earnings management. Research implications – Future research should carefully sort out the meaning of different measures of earnings quality, should clarify cross-national institutional differences to reconcile contradictions in extant research, and should discover the underlying governance orientations that shape decision-making processes and outcomes. Practical implications – Governing bodies must take into account how underlying organization cultures shape governance regimes, which may determine the transparency with which organization actors interact with various stakeholder groups. Originality/value – This study establishes a positive link between effective stakeholder management and transparent financial reporting, suggesting that both may be artifacts of deeper underlying orientations toward accountability, transparency, and managerial discretion.

Social Issues in Management Division Dissertation Award Competition for 2010: Acknowledging Exemplary Research Processes and Outcomes in Doctoral Study

This special dissertation forum, the first of its type to be published in this journal, reports the outcome and process for the 2010 annual Dissertation Award Competition for the Social Issues in Management (SIM) Division of the Academy of Management. The special forum comprises this introductory essay by the chair of the award committee and three dissertation abstracts by the award finalists. In addition, each finalist has provided a thoughtful essay reflecting on their experiences of the research process as junior scholars. The dissertation abstracts, with reflection essays, are in alphabetical order by last name of award finalist.

Performance Outcomes of Investing Slack Resources in Corporate Social Responsibility

Our study examined relationships among slack resources, investment in corporate social responsibility (CSR) and firm performance, finding that accounting and market returns respond differently to investments of slack in CSR. Although accounting returns to both financial and organizational CSR investment were positive, equity markets reward organizational slack but punish financial slack investments. Moreover, distinguishing among forms of CSR indicates that both accounting and market returns respond much more positively to investment in stakeholder protection than to investment in stakeholder improvement. Finally, risk, strategy, and governance are mediating mechanisms partially explaining CSR effects but not to the extent we expected.