This paper argues that research on the business case for corporate social responsibility (CSR) must account for the path dependent nature of firm-stakeholderrelations, and develops the construct of stakeholder influence capacity (SIC) to fill this void. SIC helps to explain why the effects of CSR on corporate financial performance (CFP) vary across firms and across time, therein providing a missing link in the study of the business case. This paper distinguishes CSR from related and confounded corporate resource allocations and from (...) corporate social performance (CSP), then incorporates SIC into a model that explains how acts of CSR are transformed into CFP through stakeholder relationships. This paper also develops a set of propositions to aid future research on the contingencies that produce variable financial returns to investments in CSR. (shrink)

Do firms benefit from their voluntary efforts to alleviate the many problems confronting society? A vast literature establishing a “business case” for corporate social responsibility appears to find that usually they do. However, as argued herein, the business case literature has established only that firms usually benefit from responding to the demands of their primary stakeholders. The nature of the relationship between the interests of business and those of broader society, beyond a subset of powerful primary stakeholders, remains an open (...) question despite this vast literature. This article develops a set of propositions that highlight constraints on firms’ ability to profit from CSR and outlines a set of managerial challenges on which researchers must focus their attention to truly determine whether and when firms can profit by responding to the needs of society. (shrink)

We measure the influence of reputation rankings on individuals’ perceptions of firms. Through experimental design, we vary whether and how participants are exposed to a reputation ranking alongside other information about a firm. We find that rankings influence perceptions when they are negative and congruent with other information about the firm. These findings help explain how a firm’s reputation can change even if its characteristics remain constant and why change in a firm’s characteristics can be slow to produce change in (...) its reputation. (shrink)

Trade associations operate under the premise of advancing the shared interests of their member firms. How well do they fulfill this role? This article measures the activity of 148 major industry trade associations over time and relates this activity to the performance of the relevant industries and dominant firms within them. Findings suggest that trade association spending increases when the profitability of the four largest firms in an industry decreases, but spending is unrelated to the profitability of the industry overall. (...) This implies that large firms exert control over trade association agendas and may use these communal organizations to advance their own interests rather than the shared interests of the entire industry. Moreover, it points to the need for further development of the currently anemic management literature on the activities of trade associations. (shrink)

Currently more than half of the world’s population lives in cities. This is expected to rise to more than two-thirds by mid-century. Thus, our economic, social, and environmental challenges mostly and increasingly play out in urban settings. How can cities be strengthened to address the growing challenges they face? This special issue addresses the ethical implications of revitalizing urban environments, and the roles that diversity and inclusion, as well as social innovation, play in this process. The five papers herein show (...) that it is not easy to strengthen our cities, but with the right policies, political and corporate leadership, and depth of community grounding in ethical principles, it is possible. In this editorial essay, we summarize the contributions of each of these papers to this important conversation, clarify the questions that remain, and offer directions for future research. (shrink)

One of the more interesting counter-intuitive findings in organizational research is that success breeds failure. This counter-intuitive has been described in termsof core rigidities, core incompetencies, and even the Icarus Paradox. The literature on these topics has concluded that success yields overconfidence and myopia in firms and their managers, and this eventually causes failure. We augment this literature by suggesting that success breeds not only internal pathologies that cause firms to misuse their established resources over time, but also external pathologies (...) that cause firms to lose access to new resources. In particular, success influences stakeholders’ perceptions of firms, causing firms to lose the benefits of underdog status and gain the problems of overlord status. We term this notion that success warps images of the successful, leading to their decline over time, the Helios Paradox, and suggest that dominant firms must counter natural tendencies to succumb to both the Icarus and Helios Paradoxes if they are to remain successful over time. (shrink)

Over the last decade, managers have increasingly emphasised the creation of tangible measures of intangible organisational properties. Many major corporations now include measures for intellectual capital, knowledge capital, reputational capital, and other such intangible assets on their financial ledgers. Counter to the rubric that ‘If it doesn’t get measured, it doesn’t get done,’ we argue that some intangibles are truly intangible, and attempts to apply tangible measures to them creates undue organisational stress and harms the underlying asset. Instead, managers may (...) better foster the growth of intangible assets by placing less emphasis on outcome measurement and more emphasis on the process. Using New York University’s Office of Community Service as a case study, we illustrate how a Zen approach can augment tangible measures to create a truly ‘balanced’ organisational strategy. American firms have widely adopted the strict measurement practices of Japanese firms, but few have adopted the Eastern practice of Zen. A Zen approach fosters trust and provides flexibility that allows organisations to better achieve success in the long run. (shrink)

Over the last decade, managers have increasingly emphasised the creation of tangible measures of intangible organisational properties. Many major corporations now include measures for intellectual capital, knowledge capital, reputational capital, and other such intangible assets on their financial ledgers. Counter to the rubric that ‘If it doesn’t get measured, it doesn’t get done,’ we argue that some intangibles are truly intangible, and attempts to apply tangible measures to them creates undue organisational stress and harms the underlying asset. Instead, managers may (...) better foster the growth of intangible assets by placing less emphasis on outcome measurement and more emphasis on the process. Using New York University’s Office of Community Service as a case study, we illustrate how a Zen approach can augment tangible measures to create a truly ‘balanced’ organisational strategy. American firms have widely adopted the strict measurement practices of Japanese firms, but few have adopted the Eastern practice of Zen. A Zen approach fosters trust and provides flexibility that allows organisations to better achieve success in the long run. (shrink)

In this paper, I seek to build a theoretical framework that explains how effectively different firms can use different types of corporate social responsibility (CSR)to influence stakeholders perceptions of and reactions to different types of errors. CSR affects the errors stakeholders notice, how they frame them, how they respond to them, and how quickly any punishment wanes. Ex ante and ex post CSR decrease the likelihood that stakeholders will notice some errors, improve the framing of those errors that are noticed, (...) and decrease the magnitude and duration of stakeholder attacks sparked by those errors. (shrink)

In this paper, I seek to build a theoretical framework that explains how effectively different firms can use different types of corporate social responsibility to influence stakeholders perceptions of and reactions to different types of errors. CSR affects the errors stakeholders notice, how they frame them, how they respond to them, and how quickly any punishment wanes. Ex ante and ex post CSR decrease the likelihood that stakeholders will notice some errors, improve the framing of those errors that are noticed, (...) and decrease the magnitude and duration of stakeholder attacks sparked by those errors. (shrink)

Aggregated reputation scores and rankings have been rightly criticized for lacking a theoretical basis by which to weight the individual perceptions that form them. The resulting product can be a score or ranking that fails to represent the perceptions of many or even most stakeholders. Little attention has been paid, however, to the reverse. Rather than focus on how individual perceptions can be represented at an aggregate level, herein we focus on how an aggregated reputation can influence individual perceptions. We (...) hypothesize that ratings have a significant influence on stakeholder perceptions, especially where other information is lacking. Through experiments, we find that exposure to reputation ratings provides stakeholders with an anchor point – information about what others think – and their perceptions of the firm are adjusted relative to this anchor. We suggest future work on reputation delve into the heuristics and biasesboundedly rational stakeholders deploy when assessing firms. (shrink)