The Social Psychology of Organizations.

Trust: The Social Virtues and the Creation of Prosperity

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

We investigate whether superior performance on corporate social responsibility (CSR) strategies leads to better access to finance. We hypothesize that better access to finance can be attributed to (1) reduced agency costs due to enhanced stakeholder engagement and (2) reduced informational asymmetry due to increased transparency. Using a large cross-section of firms, we find that firms with better CSR performance face significantly lower capital constraints. We provide evidence that both better stakeholder engagement and transparency around CSR performance are important in reducing capital constraints. The results are further confirmed using several alternative measures of capital constraints, a paired analysis based on a ratings shock to CSR performance, an instrumental variables approach, and a simultaneous equations approach. Finally, we show that the relation is driven by both the social and environmental dimension of CSR. Copyright © 2013 John Wiley & Sons, Ltd.

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Corporate social responsibility and access to finance

Do shareholders gain when managers disperse corporate resources through activities classified as corporate social responsibility (CSR)? Strategy scholars have recently developed a theoretical model that links such activities to shareholder value when a firm suffers a negative event; we test key portions of this theory of the ‘insurance-like’ property of CSR activity. We posit that such activity leads to positive attributions from stakeholders, who then temper their negative judgments and sanctions toward firms because of this goodwill. We extend the risk management model by theorizing that some types of CSR activities will be more likely to create goodwill and offer insurance-like protection than other types. We delineate several firm and event specific characteristics that we expect to influence the link between CSR activities and an insurance effect. We then test our model using an event study of 178 negative legal/regulatory actions against firms throughout the 11 years from 1993–2003. We find that participation in institutional CSR activities—those aimed at a firm's secondary stakeholders or society at large—provides an ‘insurance-like’ benefit, while participation in technical CSRs—those activities targeting a firm's trading partners—yields no such benefits. We conclude by considering the implications of our findings for future theorizing and research into the economic value of CSR engagement. Copyright © 2008 John Wiley & Sons, Ltd.

https://onlinelibrary.wiley.com/doi/pdf/10.1002/smj.750

The relationship between corporate social responsibility and shareholder value: an empirical test of the risk management hypothesis

Measures of corporate reputation currently in widespread use suffer from fundamental methodological and conceptual weaknesses. This paper begins with a brief overview of the reputation construct and its expected dimensionality. It then examines some of the major indices in use and documents their principal weaknesses. A new instrument is proposed — ‘the reputation quotientSM (RQ) — to measure corporate reputations and establish its empirical validity and reliability through focus groups and pilot studies. It concludes that the reputation quotient is a robust measure of corporate reputations that considerably improves the state of the art in reputation measurement.

https://link.springer.com/content/pdf/10.1057%2Fbm.2000.10.pdf

The Reputation QuotientSM: A multi-stakeholder measure of corporate reputation

It is argued that no simple correlation can be established between corporate social performance and corporate financial performance. The activities that generate CSP do not directly impact the company's financial performance, but instead affect the bottom line via its stock of reputational capital - the financial value of its intangible assets. It is suggested that corporate citizenship programs can be designed to help companies address reputational threats and opportunities to achieve reputational gains while mitigating reputational losses.

Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk

We argue that citizenship programs are strategic investments comparable to R&D and advertising. They can create intangible assets that help companies overcome nationalistic barriers, facilitate globalization, and outcompete local rivals. Program content selection reflects a balance between legitimation and differentiation, and choices are influenced both by local institutional environments that shape expectations of corporate commitment to citizenship and by the degree of customization required because of institutional distance. Citizenship profiles therefore enable the sociocognitive integration that global companies require to operate effectively across diverse local markets.

/pdf/corporate-citizenship-creating-intangible-assets-across-51gs7p9xx5.pdf

Corporate Citizenship: Creating Intangible Assets Across Institutional Environments

Corporate reputations are of growing interest as intangible assets that provide firms with a competitive advantage in the marketplace. This article describes the development and validation of the RepTrak™ Pulse, an emotion-based measure of the corporate reputation construct that untangles the drivers of corporate reputation from measurement of the construct itself. The authors draw on signaling theory to conceptualize corporate reputation as a set of beliefs about companies. Qualitative research conducted in the US demonstrated the content validity of this measure of reputation. Quantitative studies with multiple samples of participants validated the simplified measure in different geographical locations and confirmed the measure's ability to assess perceptions across stakeholder groups. Specifically, the authors examined how the US general public thinks about companies, how Canadian doctors assess pharmaceutical companies, how US consumers rate energy companies, and how Danish transportation employees evaluate their own firm. To confirm its cross-cultural validity the authors collected and analyzed data from 17 countries from six continents. This article reports the results of these analyses, and demonstrates the reliability, internal validity, nomological validity and cross-cultural validity of the RepTrak™ Pulse scale as a short-form, etic measure of corporate reputation that can be used to facilitate cross-cultural research as well as online interviewing and survey-based data collection.

https://link.springer.com/content/pdf/10.1057%2Fcrr.2011.5.pdf

Naomi A. Gardberg

Papers

The Reputation QuotientSM: A multi-stakeholder measure of corporate reputation

Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk

Opportunity Platforms and Safety Nets: Corporate Citizenship and Reputational Risk

Corporate Citizenship: Creating Intangible Assets Across Institutional Environments

RepTrak™ Pulse: Conceptualizing and Validating a Short-Form Measure of Corporate Reputation