This study aims to trace the conceptual evolutionary path of theories on corporate social responsibility (CSR) and to reflect on the implications of the development. The retrospection has revealed that the trend has been a progressive rationalization of the concept with a particular focus on tighter coupling with organizations’ financial goals. Rationalization involves two broad shifts in the conceptualization of CSR. First, in terms of the level of analysis, researchers have moved from the discussion of the macro-social effects of CSR to organizational-level analysis of CSR's effect on profit. Next, in terms of theoretical orientation, researchers have moved from explicitly normative and ethics-oriented arguments to implicitly normative and performance-oriented managerial studies. Based on the retrospection, the limitations of the current state of CSR research that places excessive emphasis on the business case for CSR are outlined, and it is suggested that future research needs to refocus on basic research in order to develop conceptual tools and theoretical mechanisms that explain changing organizational behavior from a broader societal perspective.

A review of the theories of corporate social responsibility: Its evolutionary path and the road ahead

In an era of rising concern about financial performance and social ills, companies’ economic achievements and negative externalities prompt a common question: Does it pay to be good? For thirty-five years, researchers have been investigating the empirical link between corporate social performance (CSP) and corporate financial performance (CFP). In the most comprehensive review of this research to date, we conduct a meta-analysis of 251 studies presented in 214 manuscripts. The overall effect is positive but small (mean r = .13, median r = .09, weighted r = .11), and results for the 106 studies from the past decade are even smaller. We also conduct sensitivity analyses to determine whether or not the relationship is stronger under certain conditions. Except for the effect of revealed misdeeds on financial performance, none of the many contingencies examined in the literature markedly affects the results. Therefore, we conclude by considering whether, aside from striving to do no harm, companies have grounds for doing good - and whether researchers have grounds for continuing to look for an empirical link between CSP and CFP.

Does it Pay to Be Good...And Does it Matter? A Meta-Analysis of the Relationship between Corporate Social and Financial Performance

Why have systems of “transnational private regulation” recently emerged to certify corporate social and environmental performance? Different conceptions of institutional emergence underlie different answers to this question. Many scholars argue that firms create certification systems to solve problems in the market—a view rooted in a conception of institutions as solutions to collective action problems. The author develops a different account by viewing institutions as the outcome of political contestation and by analyzing conflict and institutional entrepreneurship among a wide array of actors. Using a comparative case study design, the analysis shows how these arguments explain the formation of social and environmental certification associations. Both theoretical approaches are needed, but strong versions of the market‐based approach overlook an important set of dynamics that the author calls the “political construction of market institutions.” The analysis shows how both problem solving in markets and ...

https://www.jstor.org/stable/10.1086/518871

Institutional Emergence in an Era of Globalization: The Rise of Transnational Private Regulation of Labor and Environmental Conditions1

One of the older questions in the debate about Corporate Social Responsibility (CSR) is whether it is worthwhile for organizations to pay attention to societal demands. This debate was emotionally, normatively, and ideologically loaded. Up to the present, this question has been an important trigger for empirical research in CSR. However, the answer to the question has apparently not been found yet, at least that is what many researchers state. This apparent ambivalence in CSR consequences invites a literature study that can clarify the debate and allow for the drawing of conclusions. The results of the literature study performed here reveal that there is indeed clear empirical evidence for a positive correlation between corporate social and financial performance. Voices that state the opposite refer to out-dated material. Since the beginnings of the CSR debate, societies have changed. We can therefore clearly state that, for the present Western society, “Good Ethics is Good Business.”

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The Worth of Values – A Literature Review on the Relation Between Corporate Social and Financial Performance

*This paper synthesizes the expanding corporate social responsibility (CSR) literature. We define CSR from an economic perspective and develop a CSR taxonomy that connects disparate approaches to the subject. We explore whether CSR should exist and investigate conditions when CSR may produce higher welfare than other public good provision channels. We also explore why CSR does exist. Here, we integrate theoretical predictions with empirical findings from economic and noneconomic sources. We find limited systematic empirical evidence in favor of CSR mechanisms related to induced innovation, moral hazard, shareholder preferences, or labor markets. In contrast, we uncover consistent empirical evidence in favor of CSR mechanisms related to consumer markets, private politics, and public politics. (JEL D21, L21, M14)

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Economic Perspectives on Corporate Social Responsibility

The Market for Virtue: The Potential and Limits of Corporate Social Responsibility. By David Vogel. Washington, DC: The Brookings Institute, 2005. 222p. $28.95.Is there a “market for virtue”? If so, what can it do, and what can it not do to improve our world? In his incisive new book, David Vogel takes aim at these questions and the now-fashionable claim that there is a business case for corporate social responsibility (CSR). He concludes that there is no business case that can be generalized to all firms per se, but there is a political case for broadening what we mean by that much-used term.

The Market for Virtue: The Potential and Limits of Corporate Social Responsibility

AcknowledgmentsIntroduction: Holy War by Other MeansPart I Demonization in America1 Demonization American-Style 2 The Politics of Moral Personae 3 America's Moral Paradox 4 The Deep Divide and the Most Vulnerable Part II Demonization and Wars5 Seeking the Enemy 6 Terror, Evil, and the New Cold War 7 Terror Wars and Culture Wars 8 Preserve the Environment! Become an Environmental Sport Conclusion: A New Democratic Covenant Notes IndexAbout the Authors

Liars! Cheaters! Evildoers!: Demonization and the End of Civil Debate in American Politics

Free trade and global markets are issues that have dominated for some time the political and economic agendas of both industrialized and newly developing nations. While greater prosperity for all peoples is most frequently cited as the main gain, free trade is also considered a promoter of democracy, an argument deployed in bringing China into the World Trade Organization. World peace has also been cited as one of the fruits of closer economic integration, as parochial walls between peoples are undermined, interdependence grows and is made more transparent, and mutual prosperity assured. We contest the faith upon which these assumptions rely. We argue that the theory and practice of neo-liberal free trade and neo-revisionist democracy implicate the modern democratic nation state in paradoxes that it is ill-equipped to negotiate. To exit these paradoxes, or at least to mollify the rancor they can produce, both the ideas of free trade and of democracy need to become more robust.

Free Trade: A Paradox for Democracy

Liberty to speak free of government interference and political equality are both essential to democracy. Yet political equality requires governmental regulation of resources needed for political speech. Analysis of Supreme Court cases, supplemented by considerations from democratic theory, suggest that this apparent paradox is better understood as a tension within the idea of free speech itself: between liberty to speak and the need for government to oversee fair distribution of resources necessary for politically effective speech. Although it is a tension worth negotiating with care, democracy simply requires fairness in distribution of politically relevant resources. The Supreme Court has erred in not reading the Constitution as mandating political equality as a fundamental right, and also in not incorporating real political equality as a compelling state interest. Therefore, the public should seek a 28th Amendment that would mandate political equality regardless of economic circumstance as a fundamenta...

Tom De Luca

Papers

The Market for Virtue: The Potential and Limits of Corporate Social Responsibility

Liars! Cheaters! Evildoers!: Demonization and the End of Civil Debate in American Politics

Free Trade: A Paradox for Democracy

Free Speech, Political Equality, and Campaign Finance Reform: A Paradox for Democracy?