Jennifer J. Griffin

The Corporate Social Performance and Corporate Financial Performance Debate: Twenty-Five Years of Incomparable Research

This article extends earlier research concerning the relationship between corporate social performance and corporate financial performance, with particular emphasis on methodological inconsistencies. Research in this area is extended in three critical areas. First, it focuses on a particular industry, the chemical industry. Second, it uses multiple sources of data-two that are perceptual based (KLD Index and Fortune reputation survey), and two that are performance based (TRI database and corporate philanthropy) in order to triangulate toward assessing corporate social performance. Third, it uses the five most commonly applied accounting measures in the corporate social performance and corporate financial performance (CSP/CFP) literature to assess corporate financial performance. The results indicate that the a priori use of measures may actually predetermine the CSP/CFP relationship outcome. Surprisingly, Fortune and KLD indices very closely track one another, whereas TRI and corporate philanthropy differentiate between high and low social performers and do not correlate to the firms financial performance.

Corporate social performance : Research directions for the 21st Century

Rowley and Berman (2000) are tackling the right questions in their article. Three critical questions, in essence, are asked: What is corporate social performance (CSP)? What does it mean (i.e., CSP measures)? And, where does the future lie with CSP? In answering these questions, they are creating a CSP research agenda for the 21st Century. While agreeing, to a large extent, with their new set of questions, this paper questions their rationale for what is currently wrong with CSP and focuses on extending future research directions. Specifically, this paper suggests that existing research in related disciplines can help accelerate our understanding of CSP. Marketing (i.e., customer-organization relations) and human relations (i.e., employee-organization relations) literatures, for example, already critically examine the conditions under which various organizational practices, policies, and procedures flourish. These boundary spanning functions provide newinsights that can lead to a broader, richer, and more systematic understanding of the complex CSP construct.

Organizational characteristics and funding environments: A study of a population of United Way-affiliated nonprofits

This study examines a population of United Way–affiliated nonprofit organizations in Massachusetts (1) to test hypotheses generated by previous research on relationships between government funding and specific nonprofit organizational characteristics, (2) to compare differences in organizational characteristics between nonprofits receiving higher percentages of revenues from the United Way and from government sources, and (3) to explore associations between government funding and United Way and underexamined characteristics, including use of commercial income and racial diversity of organizational membership. The study supports previous research on the relationship between government funding and nonprofit characteristics, with one notable exception—less administrative complexity was associated with higher percentages of government funding. The study also finds differences in organizational characteristics between nonprofits with higher proportions of government funding and those with higher percentages of United Way funding, including organization size, number of board members, administrative complexity, use of volunteers, and the racial diversity of boards, staff, and volunteers.

Corporate Public Affairs: Commitment, Resources, and Structure:

Using resource dependency and institutional theories, we create and test a model examining the relationships among senior management commitment, resource allocations, and the structure of public affairs departments. Using a large sample of U.S.-based firms, we find a positive relationship between senior management commitment to the public affairs function and the level of human and monetary resources allocated to the public affairs department. Furthermore, firms structure their public affairs responsibilities into three common activity sets: communications, collaborations, and local activities. These common activities are, in turn, positively associated with senior management commitment and resources allocated to the public affairs department.

Corporate Responsibility Initiatives and Mechanisms

This special issue of Business & Society explores how institutions and actors influence organizational choices regarding corporate responsibility (CR) initiatives and mechanisms. Assuming CR reflects strategic choices made by firms, the authors seek to move discussions from why aspects to aligning the why with the what/how aspects of CR. The articles in this special issue examine CR initiatives at multiple levels (the firm, industry, national, and global) as well as CR mechanisms ranging from “go-it-alone” unilateral activities to collaborative partnerships. The study goals are two-fold. First, the authors focus on firms’ attempt to create and manage a portfolio of corporate responsibilities—social, political, environmental, and economic. These responsibilities involve relationships with a range of stakeholders (investors, employees, consumers, suppliers, and distributors as well as its multiple communities), often simultaneously, and recognizing that the corporation can devote limited resources to manage stakeholder expectations in this regard. Second, the authors seek to understand how institutional and competitive contexts matter in shaping specific CR choices to provide tangible evidence of managing responsibly. The authors suggest that consciously aligning CR initiatives (what) with appropriate mechanisms (how) will allow the corporations to efficiently and effectively pursue their CR objectives and arguably create sustained impact.

Painting a Portrait A Reply

This is a reply to the Research Note by Roman, Hayibor, and Agle in this issue. In this reply, the authors offer some constructive criticism of their analysis in an attempt to continue and further the debate on the relationship between corporate financial and social performance.

Corporate Responsibility and Employee Relations From External Pressure to Action

Research has traditionally portrayed voluntary corporate responsibility (CR) actions toward employees as episodic, discretionary activities that individual firms take in response to marginalized, fringe “gadflies.” In this study, which examines numerous external pressures from a firm’s institutional and task environment, our findings suggest more than simple episodic responses that vary from firm to firm, but rather a conformity of action with respect to a firm’s voluntary activities toward its employees. In the absence of explicit mandates, firms are voluntarily strengthening employee relations, especially if they are increasing employee-relations concerns. Overall, external pressures significantly affect the CR activities that firms direct toward employees.

United States of America: Internal Commitments and External Pressures

With the varied definitions of corporate social responsibility (CSR) we examine the motivation for firms’ CSR activities, how firms credibly demonstrate CSR, and firms’ CSR reporting. These three topics, i.e., why firms participate, how firms participate, and CSR reporting rubrics, help describe and explain the core question of this chapter: what is the practice of CSR in the United States (US)? We argue that the practice of CSR in the US is evolving and accelerating at an uneven pace across industries and within firms because of differences in beliefs in CSR, leadership, employee pressures, government demands, and community input. This chapter suggests examining specific stakeholder relations and how firms cocreate value that leads to a more nuanced view of CSR. The practice of CSR in the US continues to be a matter of choice within a market-driven economy. This freedom to choose underlies many CSR activities. CSR for consumers may include better, safer, and quality products. For employees, CSR is about pride, retention, and being an employer of choice. CSR is a differentiator from rival firms – especially in fiercely competitive markets. For policy makers, CSR is about building trust, credibility, and repetitive access. For suppliers, CSR is about being the partner of choice. And for communities, CSR is about pride, sponsorships, and inclusion. CSR in U.S. firms is the sum of these stakeholder systems plus the innovative creativity resulting in new product/markets to serve shifting social demands.

DOES INDUSTRY MATTER WHEN MANAGING STAKEHOLDER RELATIONS

Corporate social responsibility (CSR) and stakeholder research has long assumed that industry is a defining characteristic for firm behavior and is frequently included as a control variable in empi...

Firm Engagement and Social Issue Salience, Consensus, and Contestation

Facing an increasing number and variety of issues with social salience, firms must determine how to engage with issues that likely have a significant impact on them. Integrating issues management (IM) and salience theories, the authors find that firms engage with socially contested issues—where there is a high degree of societal disagreement—in a different manner from issues that have social consensus, or high agreement. Examining social issue resolutions filed by shareholders from 1997 to 2009 (3,887 total observations), the study finds that socially contested issues, as well as those issues with social consensus, are both likely to result in engagement by the firm. For social issues with consensus, a firm is more likely to opt for a low level of shareholder engagement whereas resolutions regarding contested issues lead to engaging shareholders at a higher level. These findings shed new light on the IM and issue salience literature streams that have suggested firms will react differently to these types of issues, even while they remain largely untested. Finally, firms become less engaged with perennial issues over time. rather than more, providing new guidance to researchers, shareholder activists, and firms alike. To the authors’ knowledge, such fined-grained insight into expected levels of firm engagement with social issue salience has not been put forth previously.