Business & Society recent issues

Editorial Announcement

Windsor, D. — 2008-08-22

From the Editor

Windsor, D. — 2008-08-22

The Role of Corporate Reputation in the Stakeholder Decision-Making Process

Puncheva, P. — 2008-08-22

Although it is widely accepted that corporate reputation influences organization-stakeholder interactions, there is no theoretical framework that conceptualizes this aspect in stakeholders' decision-making processes for establishing various forms of relationships with a firm. By adopting an interdisciplinary approach, this article provides a theoretical model that explains the role corporate reputation has in the process through which stakeholders decide to establish relationships with a firm. It is argued that the stakeholder decision-making process for exchange with a company is based on several exchange rules: corporate reputation, social legitimacy, pragmatic legitimacy, and exchange benefits. The article concludes with a case study of James Hardie Industries in Australia, which illustrates the function of the proposed conceptual model.

A Conceptual Framework for Online Business Protest Tactics and Criteria for Their Effectiveness

Martin, K. D., Kracher, B. — 2008-08-22

In this article, the authors lay the foundation for the emerging area of research on online protest tactics mobilized against business. The authors offer a definition of online business protest tactics and distinguish them from related activities such as electronic civil disobedience and cybercrime. They also appeal to the interest-group literature as one theoretical foundation for this area of research. Based on the degree to which each tactic involves intrusion, disruption, or damage, the authors categorize the array of online business protest tactics into a typology, providing definitions and illustrative examples from the business press for each. They advance a dualistic framework to evaluate the intermediate and ultimate effectiveness of the various online business protest tactics using a set of criteria relevant to both online and off-line environments, and conclude by suggesting avenues for future research.

Going to War With the Army You Have: Labor's Shareholder Activism in an Era of Financial Hegemony

Marens, R. — 2008-08-22

According to Arrighi and Silver, the United States faces a crisis of declining hegemony historically characterized by stagnating wages, hypertrophy of the financial sector, and the shifting of production overseas. Previous cycles suggest that the fate of workers within the hegemonic core depends in part on their political and organizational response. For a generation, organized labor in the United States has sought ways to exercise influence over private and public pension funds. As a result, union staffers have become sophisticated shareholder activists. Recent financial scandals have created a new opening for these activists, who have responded by forming coalitions to reform executive pay. The recent dismissal of a California Personnel Employees Retirement System official implies limits to this investor "pluralism," but the situation is hardly settled. Another economic downturn might move the interests of investors and workers closer together, and shareholder activists could play a role settling the resulting conflicts over the distribution of income.

When Does a Corporate Social Responsibility Initiative Provide a First-Mover Advantage?

Tetrault Sirsly, C.-A., Lamertz, K. — 2008-08-22

Theory and research on corporate social responsibility (CSR) have been concerned primarily with identifying stakeholders, categorizing types of CSR initiatives, and linking corporate social performance to firm performance. In this conceptual article, the authors assess strategic CSR initiatives, inquiring into the conditions that might give rise to a sustainable competitive advantage in social performance. In what circumstances does a firm's CSR initiative create a first-mover advantage, and when should a firm prefer an early- or late-adopter position? Using the resource-based view and the asymmetries approach of first-mover advantages, the authors propose that for a CSR initiative to lead to a sustainable first-mover advantage, it must be central to the firm's mission, provide firm-specific benefits, and be made visible to external audiences. These strategic attributes generate internal sustainability and must be complemented to ensure external defensibility by a firm's ability to assess its environment, manage its stakeholders, and deal with social issues.

Perceptions of Price Fairness: An Empirical Research

Gielissen, R., Dutilh, C. E., Graafland, J. J. — 2008-08-22

This article researches factors that influence price fairness judgments. The empirical literature suggests several factors: reference prices, the costs of the seller, a self-interest bias, and the perceived motive of sellers. Using a Dutch sample, we find empirical evidence that these factors significantly affect perceptions of fair prices. In addition, we find that the perceived fairness of prices is also influenced by other distributional concerns that are independent of the transaction. In particular, price increases are judged to be fairer if they benefit poor people or small organizations rather than rich people or big organizations.

Financial Misrepresentation: Antecedents and Performance Effects

Harris, J. D. — 2008-08-22

This doctoral thesis examines the influence of relative performance and managerial incentives on corporate financial misrepresentation, and then tests the relationship between misrepresentation and subsequent operating performance, including the moderating effects of change in board composition and Chief Executive Officer (CEO) turnover. Using a hand-collected data set from several archival sources of company records, the study includes a combination of estimation techniques, including categorical dependent variable and fixed-effect methods, all conducted using a matched sample of misrepresenting and nonmisrepresenting firms. The author draws several important conclusions from the empirical analyses. First, CEO incentive pay and poor relative performance increase the likelihood of misrepresentation. Second, misrepresentation impairs subsequent operating performance, although this negative effect can be partially offset by CEO replacement and increased board independence. The study advances our academic understanding of corporate misconduct and contributes to academic theory across research literatures, including strategic management, organization theory, and business ethics.

Editorial Announcement

Windsor, D. — 2008-05-06

From the Editor

Windsor, D. — 2008-05-06

Integrating and Unifying Competing and Complementary Frameworks: The Search for a Common Core in the Business and Society Field

Schwartz, M. S., Carroll, A. B. — 2008-05-06

In the field of business and society, several complementary frameworks appear to be in competition for preeminence. Although debatable, the primary contenders appear to include (a) corporate social responsibility, (b) business ethics, (c) stakeholder management, (d) sustainability, and (e) corporate citizenship. Despite the prevalence of the five frameworks, difficulties remain in understanding what each construct really means, or should mean, and how each might relate to the others. To address the confusion, the authors propose three core concepts—value, balance, and accountability—that might be used to better integrate the five frameworks and potentially provide the basis for further discussion and theoretical development of the business and society field.

Corporate "Philanthropy Strategy" and "Strategic Philanthropy": Some Insights From Voluntary Disclosures in Annual Reports

Campbell, D., Slack, R. — 2008-05-06

To develop this study of strategic philanthropy in the United Kingdom, voluntary charitable donations policy disclosures were captured from the annual reports of two samples of U.K. companies: one of the entire Financial Times Stock Exchange 100 at year-end 2002 and another of 14 selected companies over a 15-year period. Post and Waddock's descriptions of "philanthropy strategy" and "strategic philanthropy" were employed to establish the extent to which these concepts were conveyed to readers of annual reports based on the belief that high disclosure serves both agency accountability to shareholders and the information needs of soliciting charities. Conclusions drawn include that although there is a relatively high level of policy disclosure, the detail of narrative in, and consistency (over time) of, these disclosures is very patchy, and only a minority of companies show evidence of adopting a fully strategic approach to philanthropy.

Pension Funds and Corporate Social Performance: An Empirical Analysis

Cox, P., Brammer, S., Millington, A. — 2008-05-06

This study examines the relationship between pension fund ownership of companies and corporate social performance using a unique database of more than 500 publicly listed U.K. companies. The empirical analysis emphasizes the heterogeneous character of pension fund holdings and the multidimensional nature of corporate social performance. The results highlight that the characteristics of pension fund management are significant drivers of preferences for social performance and that employee-related aspects of social performance are preferred by pension funds.

The Political Capital of Foreign Subsidiaries: An Exploratory Model

Blumentritt, T., Rehbein, K. — 2008-05-06

This article explores the concept of political capital in the setting of multinational corporation foreign subsidiaries. Drawing on resource dependence theory, the literature on corporate political activities, and the bargaining power framework, hypotheses are developed examining the antecedents to subsidiary political capital. The article tests hypotheses based on primary data from 91 foreign subsidiaries using path analysis. The empirical results suggest that both ownership of bargaining power resources and the management of those resources through government affairs activities are important in explaining the variation of political capital across foreign subsidiaries.

Editorial Announcement

Windsor, D. — 2008-02-04

2007 Reviewer Acknowledgement

2008-02-04

From the Editor

Windsor, D. — 2008-02-04

Introducing the Politics of Stakeholder Influence: A Review Essay

de Bakker, F. G. A., den Hond, F. — 2008-02-04

If stakeholder theory is to become a full theory of business—society relationships, it will have to develop a better understanding of processes by which stakeholders may gain and hold influence over firms. A better understanding of the political processes involved is required. This paper—as well as the papers in this special issue—takes a political `view' to addressing the issue, and thereby extends the currently dominant demographic and structural approaches. It suggests that the influence of stakeholders over firms is the temporary outcome of processes of action, reaction, and interaction among various parties. Consequently, the further advancement of stakeholder theory would benefit from the adoption of process-research methods and thinking.

A Social Movement Perspective of Stakeholder Collective Action and Influence

King, B. — 2008-02-04

This article provides a social movement theory—based explanation for the emergence and influence of corporate stakeholders. The author argues that stakeholder influence originates in the collective action of potential stakeholders. Collective action binds individual stakeholders together, assists in the formation of a common identity and interests, and provides the means for stakeholder strategic action. The author suggests three main factors that explain the emergence of stakeholder collective action and its consequent influence: mobilizing structures, corporate opportunities, and framing processes. By focusing more on the collective action necessary for stakeholder influence, we also gain a better understanding of how negotiation processes might unfold between stakeholders and corporate decision makers.

Turning Stakeseekers Into Stakeholders: A Political Coalition Perspective on the Politics of Stakeholder Influence

Holzer, B. — 2008-02-04

Many firms, especially transnational corporations, find it increasingly difficult to predict and handle conflicts with external interest groups. In addition to a set of established stakeholders, they face a complex arena of newly emerging "stakeseekers" who also claim to have a stake in the corporation's decision making. Corporations seek to establish relationships with such groups to anticipate and prevent conflicts that could otherwise wreak havoc on their reputation. Through stakeholder engagement, stakeseekers may be turned into stakeholders. It has been argued that in the process, critics are simply co-opted. However, corporate objectives are not necessarily monolithic. Conceived as a political coalition of various interests, the structure of the corporation often reflects societal divisions. Parts of the corporation can thus serve as sounding boards for external claims. Referring to the case of Royal Dutch/Shell in particular, this article shows how a political coalition perspective on the corporation may help to understand and analyze the politics of stakeholder influence.

Building Chains and Directing Flows: Strategies and Tactics of Mutual Influence in Stakeholder Conflicts

Zietsma, C., Winn, M. I. — 2008-02-04

This article aims to deepen the understanding of the processes and specific actions aimed at influencing and shaping business practices through dynamic stakeholder relationships. An inductive, longitudinal study of all players involved in a stakeholder conflict identified four clusters of influence tactics that were used by both secondary stakeholders and their target firms: issue raising, issue suppressing, positioning, and solution seeking. The stakeholders studied built elaborate influence chains and worked to direct influence flows. The study contributes to stakeholder theory by offering a refined understanding of both bilateral and mutual-influence tactics, expanding the theory's focus beyond bilateral relationships, and highlighting the use of dependence relationships among multiple embedded organizations to build influence over a specific target, and more generally, an organizational field. These findings are discussed in light of work on social movement organizations and institutional theory.

Frames and Filters: Strategic Distrust as a Legitimation Tool in the 50-Year Battle Between Public Health Activists and Big Tobacco

Derry, R., Waikar, S. V. — 2008-02-04

Despite growing interest in the dynamics and influences of activist groups, few studies have examined the specific tactics used by activists to achieve legitimacy and how these actions affect target firms or industries. This article studies the history and current state of the battle between tobacco control groups and Big Tobacco in search of evidence for their use of framing—a process of generating shared meaning and purpose through the creation of overarching messages—as a vehicle for carrying out their mission, achieving legitimacy, and thwarting the efforts of adversaries. The authors propose that both sides marshal specific core frames in service of broader master frames, namely the projection of honesty and trustworthiness for the tobacco industry, countered by public health's master frame of distrust of the industry. The evolution of this battle may also be understood within the framework of a two-factor model of trust and distrust; the authors assert that the relationship between tobacco control and the industry will likely continue as one of low trust/high distrust, in part because the master frame of distrust has served multiple purposes for public health activists, including the establishment of greater legitimacy with the public and, by proxy, with the target industry. Several specific conclusions are drawn regarding the functions of distrust and the relationship between framing, trust, and legitimacy.

Editorial Announcement

Windsor, D. — 2007-12-07

From the Editor

Windsor, D. — 2007-12-07

Family Matters: Founding Family Firms and Corporate Political Activity

Hadani, M. — 2007-12-07

This study explores the impact of publicly traded founding family firms (FFFs) on their propensity for corporate political activity (CPA) and their choice of political approaches. Based on the behavior and characteristics of publicly traded FFFs, the author expected a positive association between FFFs and corporate political activity and a preference for relational, or long-term, over transactional, or short-term, corporate political activity. It was found that publicly traded FFFs are more likely to engage in CPA only when the firm's founder is in an executive position. Furthermore, publicly traded FFFs show a preference for relational versus transactional corporate political activity. These findings are examined in light of FFF and corporate political strategy literatures.

"Contraversations" Constructing Conflicts: Lessons From a Town-Gown Controversy

Aggestam, M., Keenan, J. — 2007-12-07

Businesses and societies face increasingly complex problems. Collaborative relationships are needed to leverage the differences among participants and to balance stakeholder concerns. The article takes a discursive, constructionist approach in exploring the relations of five factions involved in resolving a town-gown conflict. The case data are narratives collected during a pivotal community-wide meeting in which the town-gown factions participated. The findings underscore the characteristics and roles of language in constructing and organizing meanings. In particular, the focal data reveal the influence of "contraversation"—that is, dialectical and dialogical conversation particularly and publicly directed against one faction, in constructing antagonisms and thwarting collaboration. The focal findings added insight into the demographic and historical characteristics of the factions, the socially embedded understandings, and the role of conversations in developing discursive resources that create collective identities and translate them into integrating rather than disintegrating intergroup performance in facing problematic concerns.

On the Economic Dimensions of Corporate Social Responsibility: Exploring Fortune Global 250 Reports

Fortanier, F., Kolk, A. — 2007-12-07

The macro-level debate on the economic impact of multinational enterprises (MNEs) is still unsettled. This article explores micro-level evidence by examining what Fortune Global 250 firms themselves report about their economic impact. Such reporting embodies corporate attempts to account for their economic implications, in addition to the environmental and social aspects of their activities that have traditionally received more attention in the context of corporate responsibility. Firms' reports turn out to provide a rich illustration of the mechanisms through which MNEs (can) affect economic development (including sheer size, technology transfer, and backward linkages) and of how such impacts are being operationalized and measured. The authors test which MNEs are most likely to disclose information on the various mechanisms and find that it is influenced by region, sector, and size but not by profitability. Implications of this exploratory study for research and practice are discussed.

Book Review: William C. Frederick. 2006. Corporation, Be Good! The Story of Corporate Social Responsibility. Indianapolis, IN: Dog Ear Publishing. 334 pages, $22.50

Wasieleski, D. M. — 2007-12-07