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Putting a Face on the Issue: Corporate Stakeholder Mobilization in Professional Grassroots Lobbying Campaigns

Walker, E. T. — Fri, 06 Nov 2009 17:12:46 PST

Business scholars pay increasing attention to the expanded influence of stakeholders on firm strategies, legitimacy, and competitiveness. At the same time, analysts have noted that the transformed regulatory and legislative environments of recent decades have encouraged firms to become much more politically active. Surprisingly, relatively little research has tied together these two trends. The present study integrates perspectives on stakeholder management with research on corporate political activity to develop an understanding of the structural sources of stakeholder mobilization in professional grassroots lobbying campaigns. This study employs a unique, original data source to consider how the adoption of grassroots lobbying by a firm relates to its industry, degree of inside lobbying, partisan PAC contributions, and more. This research shows that corporate grassroots lobbying is shaped most significantly by a firm’s degree of inside lobbying, as highly active firms take a diversified strategy for gaining influence. Firms in industries with a heavy public presence as well as those concerned with taxation, government appropriations, and economic development also adopt these strategies readily. PAC contributions to Republican, but not Democratic, candidates also heighten firms’ propensity to lobby the public.

Role of Nongovernmental Organizations in the Business-Government-Society Interface: Special Issue Overview and Introductory Essay

Dahan, N. M., Doh, J., Teegen, H. — Fri, 30 Oct 2009 15:14:15 PDT

One Voice, But Whose Voice? Exploring What Drives Trade Association Activity

Barnett, M. L. — Wed, 28 Oct 2009 09:49:32 PDT

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.

How We See Them Versus How They See Themselves: A Cognitive Perspective of Firm-NGO Relationships

Lucea, R. — Mon, 12 Oct 2009 15:56:18 PDT

The present study complements current firm–nongovernment organization (NGO) literature by emphasizing the influence of managerial cognition on organizational behavior. In particular, I find that NGOs confront or seek to collaborate with other NGOs or with firms to appear as legitimate actors before selected third parties and as a way to access various sources of funds. By contrast, firm managers interacting with these NGOs are fundamentally concerned with achieving social stability so that their organizations can operate undisturbed. These different goals give rise to considerably dissimilar mental representations of the same reality—representations that subsequently inform strategic action by both types of actors.

Nongovernmental Organizations in Business and Society, Management, and International Business Research: Review and Implications From 1998 to 2007

Kourula, A., Laasonen, S. — Mon, 12 Oct 2009 15:56:18 PDT

This review shows how the relationship between nongovernmental organizations (NgOs) and businesses has been examined in business and society, management, and international business (IB) literatures. altogether 88 relevant studies have been identified through the analysis of article abstracts from 11 leading journals in these fields. The articles have been classified into three categories according to their focus: NgO–business interface, NgO–business– government interface, and NgOs as one of many corporate stakeholders. Six main themes are identified: (a) activism and NgO influence, (b) dyadic partnership (NgO–business), (c) cross-sector partnership (NgO–business– government), (d) global governance and standardization, (e) national-level governance, and (f) stakeholder management. The state of the research topic is assessed, and implications and avenues for further research are provided.

Review Essay: Reflections on Relationships Between NGOs and Corporations

den Hond, F. — Fri, 09 Oct 2009 16:28:34 PDT

This review essay reflects on relationships between the NGO activism and advocacy movement and corporations. The essay does so through a review of Yaziji and Doh’s 2009 book NGOs and Corporations: Conflict and Collaboration. The review essay considers the strengths and weaknesses of the book in relationship to our understanding of NGOs. The essay emphasizes that both NGO and corporate perspectives are important in assessing NGO–corporation relationships.

The Contested Politics of Corporate Governance: The Case of the Global Reporting Initiative

Levy, D. L., Brown, H. S., de Jong, M. — Tue, 06 Oct 2009 15:50:34 PDT

The global Reporting Initiative (gRI) has successfully become institutionalized as the preeminent global framework for voluntary corporate environmental and social reporting. Its success can be attributed to the "institutional entrepreneurs" who analyzed the reporting field and deployed discursive, material, and organizational strategies to change it. gRI has, however, fallen short of the aspirations of its founders to use disclosure to empower nongovernmental organizations (NgOs). The authors argue that its trajectory reflects the power relations between members of the field, their strategic choices and compromises, their ability to mobilize alliances and resources, and constraints imposed by the broader institutions of financial and capital markets. The authors draw three notable implications from this study. First, institutional theory needs to pay more attention to economic structures, strategies, and resources. Second, institutional entrepreneurship by relatively weak societal groups such as NgOs is inherently constrained by the structural power of wider institutions and by the compromises required to initiate change. Third, the strategies of NgOs represent a form of power capable of shifting, if not transforming, the field of corporate governance.

(Re)Forming Strategic Cross-Sector Partnerships: Relational Processes of Social Innovation

Le Ber, M. J., Branzei, O. — Tue, 01 Sep 2009 12:11:42 PDT

This study explores the relational processes that underpin social innovation within strategic cross-sector partnerships. Using four longitudinal narratives to document the duality of success and failure in strategic collaborations between nonprofit and for-profit organizations, the authors explain how partners navigate this duality: deliberate role (re)calibrations help the partners sustain the momentum for success and overcome temporary failure or crossover from failure to success. Our grounded framework models three relational factors that moderate the relationship between role recalibrations and the momentum for success or failure: relational attachment, a personalized reciprocal bond between partners, which provides a stabilizing buffer in the face of unexpected contingencies; partner complacency, an insufficient investment that signals temporary misalignments; and partner disillusionment, an erosion of confidence in the other partner’s commitment that diagnoses premature failure.

The Private Regulation of Global Corporate Conduct: Achievements and Limitations

Vogel, D. — Mon, 17 Aug 2009 16:51:11 PDT

The article assesses the achievements and limitations of the private regulation of global corporate conduct. Private regulation occurs through voluntary, private, nonstate industry and cross-industry codes that address labor practices, environmental performance, and human rights policies. The author argues that while private regulation has resulted in some substantive improvements in corporate behavior, it cannot be regarded as a substitute for the more effective exercise of state authority at both the national and international levels. Ultimately, private regulation must be integrated with and reinforced by more effective state-based and enforced regulatory policies at both the national and international levels.

Doing Business in a Transitional Society: Economic Environment and Relational Political Strategy for Multinationals

Luo, Y., Zhao, H. — Mon, 08 Jun 2009 08:59:40 PDT

This article addresses how foreign subsidiaries formulate their relational political strategy by responding to the unique parameters of the economic and institutional environment in an emerging market in an attempt to improve their performance. To this end, the authors have developed a model that assesses economic environment antecedents characterizing an emerging market (regulatory distance, industry accessibility, environmental uncertainty, and economic development) as well as the performance consequence of the subsidiaries’ relational political strategy. A possible moderating effect of the firm’s reputation in the host country and length of operations on the relationship between political strategy and local performance is also examined in the model. Our analysis of primary and secondary data concerning 358 foreign-invested enterprises in China generally supports this model.

The Role of Governance in Corporate Social Responsibility: Lessons From Dutch Finance

de Graaf, F. J., Stoelhorst, J. W. — Wed, 27 May 2009 15:41:37 PDT

This article extends the corporate social performance (CSP) model by studying the role of governance structures and governance systems in shaping corporate social responsibility. The authors argue that a governance perspective offers a fruitful research strategy both to study empirically how firms balance the competing moral frameworks and political philosophies that are part and parcel of defining their role in society and to further the theoretical integration of the descriptive and normative perspectives in the business and society field. They illustrate the potential of this research strategy with a comparative case study of processes of responsiveness at four Dutch banks with markedly different governance structures. This study shows how governance systems and structures both enable and constrain corporate responsibility and responsiveness. The authors conclude with a proposal to reorient the CSP model to harness the integrative potential of studying corporate social responsibility through a governance lens.

The Political Standardizer

Frankel, C., Hojbjerg, E. — Mon, 27 Apr 2009 12:15:03 PDT

Our aim in this article is to demonstrate that corporate technical activity and corporate political activity can overlap substantially or intertwine in ways quite difficult to tease apart analytically. Theories of corporate political activity must therefore be modified to include technical standardization as potentially part of such activity. The article proposes a conceptual framework for studying such situations and argues for the existence of a "political standardizer," defined as a company that works for or through technical standardization as a political strategy. Such a firm pursues political objectives in its technical standardization practices. The article illustrates this argument with a case study of the toy producer LegO^®. The case study provides support for existence of a political standardizer and illustrates concretely how technical and political activities are combined by a particular company.

Inclusive Networks for Building BOP Markets

Reficco, E., Marquez, P. — Fri, 27 Mar 2009 11:25:06 PDT

The idea that business can play a role in alleviating poverty has caught the imagination of academics and practitioners alike. An emerging consensus points to the critical importance of partnerships in market initiatives addressed to the base of the pyramid (BOP). But despite the calls for cross sector partnerships in BOP initiatives, our collective understanding of how these actually work has not advanced proportionally. This study attempts to address this issue by examining the dynamics at play in nine networks that integrated the BOP with mainstream markets in nine developing nations of North, Central, and South America. Our field-based analysis generated a number of tentative propositions structured around three broad issue-areas: alliance formation (drivers that compelled companies to engage in strategic partnerships), alliance implementation (choice of governance mechanisms, resources for enhancing trust and reciprocity between partners, and conflict-resolution mechanisms), and performance outcome (the extent to which an organization’s commitment to an alliance impacted its performance and its societal context).

Corporate Social Responsibility and Broad-Based Black Economic Empowerment Legislation in South Africa: Codes of Good Practice

Arya, B., Bassi, B. — Fri, 27 Feb 2009 11:17:54 PST

The South African government has been active in promulgating specific corporate social responsibility (CSR) regulations since 1994 directed at the economic empowerment of historically disadvantaged Black people. Government laws have sought to involve corporations in promoting social cohesion and in addressing problems of historical exclusion of Black communities from the mainstream economy. This objective of transformation within the economy culminated in the release of the Broad-Based Black Economic Empowerment Act in 2003. The Department of Trade and Industry finalized the Codes of Good Practice on February 9, 2007, to clarify and ensure consistency in the implementation of socially responsible behavior in one area, empowerment of historically disadvantaged Black people (other areas of CSR do not display this consistently) within organizations across industry sectors. In this article, the authors discuss the key principles of this legislation, approaches to monitoring and measuring Codes of Good Practice implementation, and their implications for social-change initiatives in local and multinational enterprises that operate in South Africa.

Understanding Corporate Governance Reform in South Africa: Anglo-American Divergence, the King Reports, and Hybridization

Andreasson, S. — Wed, 18 Feb 2009 11:31:43 PST

This article investigates corporate governance reform in South Africa in the context of the country’s international links with Anglo-American corporate governance and domestic pursuit of socioeconomic development. Two key questions are evaluated. (a) How has divergence within the Anglo-American model influenced corporate governance reform in South Africa? (b) Can South Africa’s historical closeness to the Anglo-American model be combined with increasing attention to stakeholder issues to produce a hybrid "African model" of corporate governance? evaluating these questions, the following issues are explored in turn: the contrast between shareholder and stakeholder models, divergence between U.S. and U.K. approaches to corporate governance as exemplified by Sarbanes-Oxley, locating a South African approach in context of the Anglo-American model, the King reports and an emerging "African" model of corporate governance, and the role of international and domestic factors in shaping South Africa’s ongoing reform process.

Regulating Water: A Naturological Analysis of Competing Interests Among Company, Town, and State

Kurland, N. B., Zell, D. — Fri, 06 Feb 2009 14:08:48 PST

This article analyzes, through Frederick’s (1995) naturological lens, the General Rate Case (GRC) process to regulate a private water utility in California. Golden State Water Company is the utility. The GRC concerned is Ojai, California. The authors conclude that (a) Frederick’s conceptual framework proves useful to understand antecedents of effective common-pool resource management, and (b) the GRC process encourages economizing values more than it does ecologizing ones. In essence, short-term needs overshadow long-term needs, and the economizing interests of a single member of the GRC network overshadow the ecologizing interests of diverse stakeholders. By focusing only on whether the private utility’s requests are economically justified, and not on the needs of the larger ecosystem, the GRC is unable to ensure long-term protection of either (a) the ratepayer or (b) the natural environment and community.

HIV/AIDS as Business Risk: A South African Case Study

van Wyk, J. — Tue, 16 Dec 2008 19:13:26 PST

This article utilizes a political system framework to trace the political sources of business risk stemming from the unfolding HIV/AIDS generalized epidemic in South Africa. The article integrates relevant dimensions of the fields of international business and political science to facilitate the assessment of such risks for firms. Risk formation and updating is a sequential process. The conditions from which business risk emerges, the politicization of the generalized (i.e., widespread) epidemic through boundary-crossing activities, and "inputs" are explored. The transformation of HIV/AIDS from an epidemic to a business threat is underscored by the South African government’s tendency to view the issue as part of the public agenda rather than part of its formal agenda. Governmental inaction, as well as action, led to an array of risks for firms operating in South Africa (e.g., operations, asset impairment, competitive, franchise). Mitigating strategies for managers are discussed, including avoidance, offsetting, transference, sharing, remedy, and anticipation.

An Exploratory Analysis of Corporate Social Responsibility and Disclosure in Annual Reports

Dawkins, C. E., Fraas, J. W. — Wed, 08 Oct 2008 16:29:01 PDT

Previous studies indicate two possibly asymmetric findings about the relationship between corporate social performance (CSP) and annual report disclosure practices: (a) disclosure practices of companies with favorable CSP emanate from a sense of ethical duty, and (b) there are strategic reasons to link CSP with disclosure practices. To test the relationship between CSP and annual report disclosure, this study divided S&P 500 companies into two groups, defined for low CSP (resulting n = 148) and high CSP (resulting n = 69). For the low CSP group of companies, disclosure was positively related to CSP strengths. For the high CSP group of companies, disclosure was positively related to CSP weaknesses. The authors conclude that low CSP disclosure practices are related to CSP strengths to build or repair reputation, whereas high CSP disclosure practices are associated with CSP weaknesses to protect favorable CSP brand.

Equity and Expectancy Considerations in Stakeholder Action

Hayibor, S. — Thu, 14 Aug 2008 12:30:10 PDT

An "interest-based" view of stakeholder action—a view that stakeholders act against organizations to safeguard or promote their own interests—underlies much research in stakeholder theory. In this article, the author uses two motivation theories—equity theory and expectancy theory—to address the general research question, "What are the conditions under which stakeholders will take action against an organization?" Doing so allows for a more explicit elaboration of an interest-based approach to understanding stakeholder action. Applying these theories, the author develops propositions concerning the conditions that are likely to precipitate stakeholder sanctions directed at a focal organization and develops a basic framework for understanding when such stakeholder action is likely. Finally, the author discusses the theoretical and practical implications of this work.

An Examination of Perceived Corporate Citizenship, Job Applicant Attraction, and CSR Work Role Definition

Evans, W. R., Davis, W. D. — Tue, 12 Aug 2008 19:20:36 PDT

Recent perspectives on corporate social responsibility (CSR) have called for increased research on how CSR affects individuals. Research is needed to examine whether individual differences affect the relationship between CSR and individual reactions to CSR. In response, this experimental study examined how perceptions of corporate citizenship influence job applicant attraction and work role definitions. Personal values and education concerning CSR are considered as interactive factors affecting the influence of perceptions of corporate citizenship. Results indicate that perceived corporate citizenship had a greater impact on job applicant attraction for those individuals who received prior education regarding CSR and for those who were higher in other-regarding value orientation. Furthermore, perceived corporate citizenship had a positive impact on the extent to which participants defined CSR as a personal work role responsibility. The authors also discuss the practical implications of these results for job applicant attraction and employee socialization.

An Historical Perspective on the Interplay of Christian Thought and Business Ethics

Bay, D., McKeage, K., McKeage, J. — Thu, 26 Jun 2008 14:10:53 PDT

To provide effective guidance for business decisions, a set of ethical principles must be stable over time, rather than responding to changes in the business environment for expediency sake. This article examines the ability of religious principles to maintain such stability by reviewing the historical relationship between commerce and Christianity, beginning with early Christianity and concluding with the Enlightenment. The changes in five constructs are examined: ownership of land, acquisition of wealth, attitude toward work, charging of interest and acceptability of trade. For each construct, the attitude evidenced in early Christianity was, at least to some degree, inimical to business as we view it today. That perspective changed over time, with the practice becoming at first acceptable and later even admired. The authors conclude that ethical principles based on referents from outside business are ineffective as a check on the undesirable effects of business on society.

International Business Dynamics: Drivers of Multinational Corporations' In-Country Economic Returns

Bartkus, V. O., Davis, J. H. — Fri, 30 May 2008 13:31:13 PDT

Globalization of the world economy and proliferation of multinational corporations (MNCs) has dramatically affected the power balance among international actors. On one hand, MNCs have long influenced the states in which they operate, with the consequent erosion of state sovereignty. On the other, states directly affect MNCs, in effect becoming another factor of production in addition to the economist’s traditional set of labor, land, and capital. This article introduces a theoretical model based on the interaction of the MNC, the local state, and the local market to predict and explain the economic returns that the MNC will earn on its investment in the local market.

Governance Choice for Strategic Corporate Social Responsibility: Evidence From Central America

Husted, B. W., Allen, D. B., Rivera, J. E. — Thu, 24 Apr 2008 17:59:36 PDT

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.

Corporate Commitment to Global Quality of Life Issues: Do Slack Resources, Industry Affiliations, and Multinational Headquarters Matter?

Amato, C. H., Amato, L. H. — Thu, 24 Apr 2008 17:59:35 PDT

Global markets challenge multinational corporations to harmonize quality of life (QOL) commitments across a broad spectrum of stakeholders with different corporate responsibility perspectives. Few studies have examined strategic planning issues associated with international quality of life (IQOL). This research investigates the importance of slack resources, industry affiliation, and multinational headquarter location (U.S. or non-U.S.) on commitment to societal and individual QOL for Fortune U.S. and global companies. Content analysis of corporate mission statements provides the vehicle for assessing QOL commitment. Models are estimated using logistic regression with instrumental variables included to address potential problems with simultaneity between QOL commitment and return on assets, a proxy for slack resources. Findings include a positive and significant relationship between environmental QOL commitment and slack resources as well as industry and cultural differences in QOL commitment issues.

Toward a General Theory of CSRs: The Roles of Beneficence, Profitability, Insurance, and Industry Heterogeneity

Godfrey, P. C., Hatch, N. W., Hansen, J. M. — Thu, 24 Apr 2008 17:59:34 PDT

Corporate social responsibility (CSR) is a tortured concept. A number of alternative definitions of the construct exist at the theoretical level, and much debate surrounds the meaning (and its related implications for practice) of the term. Empirically, CSR research reaches few remarkable conclusions. In this article, the authors reconceptualize CSR into a number of discrete corporate social responsibilities (CSRs), each of which can have a positive or negative social impact, and each of which has an endogenous managerially driven component and an exogenous stakeholder-driven component. Using an industry-level sample drawn from the KLD database, the authors test the impact of hypothesized drivers of CSR on various CSRs.

Is Corporate Social Performance a Criterion in the Overseas Investment Strategy of U.S. Pension Funds? An Empirical Examination

Cox, P., Schneider, M. — Thu, 24 Apr 2008 17:59:32 PDT

This study examines overseas investing by U.S.-domiciled pension plans. The authors explore whether U.S. pension plans invest based on corporate social performance (CSP) in a core overseas market, the United Kingdom. As a guide to social investing opportunities available to U.S. pension funds in the United Kingdom, their investments are compared to U.K.-domiciled pension plan domestic investments. U.S. labor union plan portfolios have a positive relationship with workplace practices, and U.S. private plan portfolios, with CSP’s community dimension. U.S. state and foundation plan portfolios have no relationship with CSP. Other than union plans, U.S. pension plans stress corporate financial performance in their U.K. investments. U.K. union plan portfolios have a positive relationship with workplace practices, and U.K. state, foundation, and private plan portfolios with environment.

Corporate Social Performance Disoriented: Saving the Lost Paradigm?

Gond, J.-P., Crane, A. — Fri, 28 Mar 2008 16:51:11 PDT

Corporate social performance (CSP) has been a prominent concept in the management literature dealing with the social role and impacts of the corporation; it has been promulgated as a unifying paradigm for the field. However, the concept of CSP is still lacking strong theoretical foundations and empirical validity, suggesting that the paradigmatic status of CSP might be lost. In this paper, the authors draw on Hirsch and Levin’s (1999) life cycle approach to explore the development of CSP as a concept, explain why it has so recurrently failed to deliver on these dimensions, and offer possible routes for future research that may potentially ameliorate this problem.

Over the Long Run? Short Run Impact and Long Run Consequences of Stakeholder Management

Garcia-Castro, R., Arino, M. A., Canela, M. A. — Fri, 28 Mar 2008 16:51:10 PDT

The stakeholder view of the firm has been justified under instrumental and normative bases. Whereas the instrumental basis argues that "enlightened stakeholder management" is a necessary precondition to seek shareholders’ value maximization, the normative basis relies on the observance of ethical norms by managers and the notion that the stakeholders should be treated as "ends." Some scholars argue that both views actually converge. However, this article provides empirical evidence of the negative effects of stakeholder management in shareholders’ value in the short run and the positive effects over the long run, using a longitudinal database of 658 U.S. firms. Given the difficulties of anticipating the instrumental long-term financial effects of short-run decisions affecting the different stakeholders, the authors’ findings support the view of the normative basis for stakeholder theory based on ethics, norms, and heuristic criteria as a way to solve conflicts among the claims of different stakeholders.

Strategic Responses to Perceived Corruption in an Emerging Market: Lessons from MNEs Investing in China

Luo, Y. — Mon, 04 Feb 2008 17:01:16 PST

Success in foreign emerging markets is increasingly critical to the global market leadership for many multinational enterprises (MNEs). However, corruption in emerging markets is pervasive and rampant. This study addresses how MNE subunits strategically respond to perceived corruption in the business segment of a foreign emerging market wherein they invest and operate. My analysis suggests that an MNE subunit’s investment commitment decreases, and its export market orientation increases, with perceived escalated corruption in the specific business segment. Though perceived corruption in an industrial setting (sectorial corruption) has a stronger effect on the subunit’s market orientation, changes in perceived corruption over time (longitudinal corruption) exert a greater influence on investment commitment. To individual subunits, the strength of these strategic responses to corruption is heightened by their ethical awareness but weakened by their indigenous dependence.

Corporate Social Responsibility in Mexico and France: Exploring the Role of Normative Institutions

Blasco, M., Zolner, M. — Wed, 30 Jan 2008 08:46:34 PST

Scholarship on corporate social responsibility (CSR) shows both that the concept itself is interpreted in a multitude of different ways and that significant cross-cultural differences exist in the way that business approaches the question of social responsibility and ethics. Little comparative work, however, has yet been carried out that investigates the reasons behind such differences. The authors analyze the cases of Mexico and France by drawing on Enderle’s practical, semantic, and theoretical dimensions of business ethics. The authors further integrate the concept of "normative institutions" to explore attitudes toward CSR and assess the likely future adoption of CSR practices in each country. The article concludes that despite similar institutional conditions in Mexico and France, the interplay of those institutions combined with the historical role of business and its relationship with society produces quite different articulations of CSR in each country. The article highlights the need for further studies that explore how institutions enable and constrain business’ articulation of social responsibility.