Showing papers in "Journal of Business Ethics in 2021"

Environmental, Social and Governance (ESG) Scores and Financial Performance of Multilatinas: Moderating Effects of Geographic International Diversification and Financial Slack

Abstract: This paper examines whether a firm’s financial performance (FP) is associated with superior environmental, social and governance (ESG) scores in emerging markets of multinationals in Latin America. The study addresses the current research gap on this issue; it develops hypotheses and tests them by applying linear regressions with a data panel drawn from the Thomson Reuters Eikon™ database to analyse data on 104 multinationals from Brazil, Chile, Colombia, Mexico and Peru between 2011 and 2015. The results suggest that the relationship between the ESG score and FP is significantly statistically negative. Furthermore, in examining environmental, social and governance separately to accurately determine each variable’s relationship to multilatinas’ FP, the results reveal a negative relationship. Finally, the empirical analysis provides evidence for a moderating effect of financial slack and geographic international diversification on the relationship between ESG dimensions and firms’ FP. This study furthers understanding of the relationship between ESG dimensions and FP for the Latin American business context.

Board Diversity and Corporate Social Responsibility: Empirical Evidence from France

Abstract: This study analyzes how the board’s characteristics could be associated with globally corporate social responsibility CSR and specific areas of CSR. It is drawn on all listed firms, in 2016, on the SBF120 between 2003 and 2016. Our results provide strong evidence that diversity in boards and diversity of boards globally are positively associated with corporate social performance. However, they influence differently specific dimensions of CSR performance. First, we show that large boards are positively associated with all areas of CSR performance, while specific and overall CSR scores are negatively associated with CEO-chair structures. Second, board gender diversity is positively associated with human rights and corporate governance dimensions. Third, age diversity is positively associated with corporate governance, human resources, human rights, and environmental activities. Also, our results provide evidence that outside directors care about CSR performance. Specifically, the presence of foreign directors is positively associated with environmental performance and community involvement, whereas CSR-Governance dimension is positively associated with the presence of independent directors. Regarding the director’s educational level, post-graduated directors are positively and significantly associated with overall CSR score and all CSR sub-scores, except the corporate governance one. When directors have multiple directorships, they are more concerned about human resources, environmental performance, and business ethics. Finally, our findings are robust only in non-family firms. In fact, family boards are less diverse than non-family ones; specifically, they have a lower number of independent, foreign, and high-educated directors.

How Do Companies Respond to Environmental, Social and Governance (ESG) ratings? Evidence from Italy

Abstract: While a growing number of firms are being evaluated on environment, social and governance (ESG) criteria by sustainability rating agencies (SRAs), comparatively little is known about companies’ responses. Drawing on semi-structured interviews with companies operating in Italy, the present paper seeks to narrow this gap in current understanding by examining how firms react to ESG ratings, and the factors influencing their response. Unique to the literature, we show that firms may react very differently to being rated, with our analysis yielding a fourfold typology of corporate responses. The typology captures conformity and resistance to ratings across two dimensions of firm behaviour. We furthermore show that corporate responses depend on managers’ beliefs regarding the material benefits of adjusting to and scoring well on ESG ratings and their alignment with corporate strategy. In doing so, we challenge the idea that organisational ratings homogenise organisations and draw attention to the agency underlying corporate responses. Our findings also contribute to debates about the impact of ESG ratings, calling into question claims about their positive influence on companies’ sustainability performance. We conclude by discussing the wider empirical, theoretical and ethical implications of our paper.

Punishment by Securities Regulators, Corporate Social Responsibility and the Cost of Debt

Abstract: This study examines whether penalties issued to Chinese listed companies by securities regulators for violations of corporate law affect the cost of debt, and the moderating role of corporate social responsibility (CSR) fulfillment on this relationship. Our sample consists of firms listed on Shanghai and Shenzhen stock exchanges from 2011 to 2017 and the data are collected from the announcements of China Securities Regulatory Commission. The findings are as follows: (1) punishment announcements by regulatory authorities increase the cost of debt; and (2) the effect of punishment announcements on the cost of debt is partially offset by prior CSR performance. These findings are shown to be robust. The reputation insurance effect of CSR is more pronounced in state-owned enterprises and in an institutional environment with low marketization, a weak legal environment, and low information transparency. The findings support the reputation insurance hypothesis of CSR and employ the cost of debt as a governance mechanism.

Antecedents of Environmentally and Socially Responsible Sustainable Consumer Behavior

Abstract: Responsible sustainable consumer behavior (RSCB) involves a complex pattern of environmental and social issues, in line with the view of sustainability as a construct with both environmental and social pillar. So far, environmental dimension was far more researched than social dimension. In this article, we investigate the antecedents of both environmentally and socially RSCB and willingness to behave in environmentally/socially responsible way. We include measures of concern, perceived consumer control/effectiveness, personal/social norms and ethical ideologies/obligation to better explain and extend the traditional theory of planned behavior. Additionally, we test the impact of information availability about environmental or social impact on RSCB. Our findings on a representative sample of 426 respondents (ages 18 to 65) show that in general, antecedents of environmentally and socially responsible sustainable consumption are similar in their effect on consumer behavior, with personal norms, concern and ethical ideologies having the strongest impact on RSCB. When comparing both types of behavior, socially responsible behavior is more influenced by perceived behavioral control and possibly social norms than environmentally responsible behavior, while information availability plays its role for both behaviors. Sustainable responsible consumption can be achieved by embracing both dimensions of sustainability and consumers need to have a sense for both social and environmental issues. The complexity and struggles between doing what is good for environment and society could be the reason why consumers have difficulties achieving sustainable responsible consumption.

Mapping the Ethicality of Algorithmic Pricing: A Review of Dynamic and Personalized Pricing

Abstract: Firms increasingly deploy algorithmic pricing approaches to determine what to charge for their goods and services. Algorithmic pricing can discriminate prices both dynamically over time and personally depending on individual consumer information. Although legal, the ethicality of such approaches needs to be examined as often they trigger moral concerns and sometimes outrage. In this research paper, we provide an overview and discussion of the ethical challenges germane to algorithmic pricing. As a basis for our discussion, we perform a systematic interpretative review of 315 related articles on dynamic and personalized pricing as well as pricing algorithms in general. We then use this review to define the term algorithmic pricing and map its key elements at the micro-, meso-, and macro levels from a business and marketing ethics perspective. Thus, we can identify morally ambivalent topics that call for deeper exploration by future research.

Beyond Warm Glow: The Risk-Mitigating Effect of Corporate Social Responsibility (CSR)

Abstract: Corporate social responsibility (CSR) positively impacts relationships between firms and customers. Previous research construes this as an outcome of customers’ warm glow that results from supporting firms’ benevolence. The current research demonstrates that beyond warm glow, CSR positively impacts firms’ sales through mitigating their customers’ perceptions of purchase risk. We demonstrate this effect across three conditions in which customers’ perceived risk of purchase is heightened, using both secondary data and two lab experiments. Under conditions of greater purchase risk (i.e., recessions, a service context, and longer-term consumer commitments), CSR positively impacts both sales and customer purchase intentions to a greater extent than in conditions of lower purchase risk. In addition to measuring purchase risk as the mediating process behind these effects, we demonstrate that the effect of CSR on sales is stronger for those CSR activities that signal a stakeholder orientation.

Do Corporate Social Responsibility Reports Convey Value Relevant Information? Evidence from Report Readability and Tone

Abstract: Corporate social responsibility (CSR) reporting is becoming mainstream, yet there is limited research on whether and how CSR reports communicate value relevant information. We examine the effects of CSR report readability and tone on future CSR performance and the market reaction around the release of CSR reports. Using a hand-collected dataset of Fortune 500 companies that published stand-alone CSR reports from 2002 to 2014, we find that 1-year-ahead CSR performance is positively associated with the changes in both CSR report readability and tone, suggesting that more readable text and more optimistic tone in a firm’s CSR report are indicative of better future CSR performance. Furthermore, consistent with the view that CSR reports communicate important value relevant information to the market, we document significant market reactions to report readability and tone around the release of CSR reports. Additional analyses suggest that CSR report readability enhances the association between the abnormal returns and the change in CSR report tone, and that the market reaction to CSR report readability is more pronounced for firms with lower analyst following and higher financial opacity. Taken together, our results substantiate the important roles of CSR report readability and tone in communicating future CSR performance and imparting value relevant information to the market.

The Role of Ethical Perceptions in Consumers’ Participation and Value Co-creation on Sharing Economy Platforms

Abstract: Consumers’ participation on sharing economy platforms is crucial for the success of the products, services, and companies on those platforms. The participation of consumers enables companies to not only exist, but also to create value for consumers. The sharing economy has witnessed enormous growth in recent years and consumers’ concerns regarding the ethics surrounding these platforms have also risen considerably. The vast majority of the previous research on this topic is either conceptual and focused on organizational aspects, or only discusses privacy and security issues, thus providing a very limited scope of discussion. Therefore, drawing on the marketing and business ethics literature, the present study takes into account a multidimensional view of ethical issues surrounding consumers’ participation on sharing economy platforms. Findings reveal that privacy, security, shared value, fulfillment/reliability and service recovery are the strongest determinants of consumers’ ethical perceptions. These aspects strongly predict the consumers’ value co-creation intentions. Consumers’ participation also predicts their intention to engage in co-creating value, but this effect is stronger with the mediating role of the consumer’s ethical perceptions. The theoretical and managerial implications are also discussed.

How and When Does Socially Responsible HRM Affect Employees’ Organizational Citizenship Behaviors Toward the Environment?

Abstract: Based on the person-organization fit theory, this research aims to investigate how socially responsible HRM (SRHRM) positively affects employees’ organizational citizenship behaviors toward the environment (OCBE) by increasing person-organization fit. This study also captures the moderating effect of the perceived role of ethics and social responsibility (RESR) in influencing the indirect effect of SRHRM on OCBE via person-organization fit. Data were collected from 302 employees in a state-owned chain hotel in Shanghai, China. The results indicated that SRHRM indirectly influenced employee’s engagement in OCBE through person-organization fit. The positive relationship between SRHRM and person-organization fit and the indirect effect of SRHRM on OCBE via person-organization fit were more significant when employees hold high rather than low levels of RESR. Research implications and prospects were also explored in this study.

CSR Actions, Brand Value, and Willingness to Pay a Premium Price for Luxury Brands: Does Long-Term Orientation Matter?

Abstract: Sustainable luxury is a strategic issue for managers and for society, yet it remains poorly understood. This research seeks to clarify how corporate social responsibility (CSR) actions directly and indirectly (through brand value dimensions) affect consumers’ willingness to pay a premium price (WTPP) for luxury brand products, as well as how a long-term orientation (LTO) might moderate these relationships. A scenario study presents fictional CSR actions of two brands, representing different luxury products, to 1,049 respondents from two countries (France and Tunisia). The results of a structural equation modeling approach show that the luxury brands’ CSR actions negatively affect customer WTPP overall and for each brand. The luxury brands’ functional and symbolic value dimensions positively mediate the effects of CSR actions on WTPP, whereas social value does not. The effects of CSR actions and brand symbolic value on WTTP do not differ between countries. The effect of functional value on WTPP differs across countries, such that it is stronger for high-LTO than low-LTO cultures. Inversely, the effect of social on customer WTPP is stronger for low-LTO than high-LTO cultures. These findings have theoretical and practical implications for luxury brand managers.

Organizational Spirituality: Concept and Perspectives

Abstract: There is no agreed-upon, unique concept of spirituality; its dimensions and characteristics depend on the approach used. Spirituality appears in management studies from three main perspectives: individual spirituality, spirituality in the workplace, and organizational spirituality. Spirituality can also be considered from a religious perspective. This article identifies a comprehensive concept of organizational spirituality based on the terms and concepts used in the literature. A systematic review of the literature was made using the Web of Science and Scopus databases; the articles were then subjected to bibliometric analysis using VOSviewer software. The results included two clusters: organizational spirituality and workplace spirituality. Cluster analysis suggested that there is scope for research on workplace spirituality and a gap in organizational spirituality studies. The proposed concept for organizational spirituality is an organizational identity resulting from its values, practices, and discourse that is composed of workplace and individual spirituality guided by the leader and other members and influenced by the environment, organizational culture, and knowledge management. This spirituality generates value and social good that is visible in the organization’s image, mission, vision, and organizational values. This article contributes to the literature by the categorization and systematization of the existing literature and proposing a unified concept—a mental and linguistic representation of organizational spirituality—that represents its essence and confers the qualities and attributes inherent to this phenomenon.

Green is the New White: How Virtue Motivates Green Product Purchase

Abstract: It is important to understand the drivers of green consumption, because of growing concern for the health of the planet. In this paper, the assumption that a virtue-green product relationship exists is tested. The objective is to understand how product morality (versus that of the person using it) can influence the valuation of green products. Relying on virtue theory and positive spillover as conceptual bases, the research implicitly and explicitly tests and confirms green (versus conventional) product virtue. The results demonstrate that perceived green product virtue leads to positive emotions, which explain heightened purchase intentions. In line with the conceptualization, I show that the effect is moderated by the importance consumers place on their own morality (i.e., cultivating personal virtue). Importantly, explicitly framing green products as virtuous activates positive spillover (i.e., prosocial behavior) by consumers; when green products are branded with a virtue cue, they encourage consumers to be more virtuous. Beyond being perceived as better people, when consumers interact with green products they effectively engage in more moral acts, such as making donations. The results confirm the perception of green products as moral agents and provide marketers with insights into the marketing value of virtue cues in green product consumption.

Higher Ethical Objective ( Maqasid al - Shari’ah ) Augmented Framework for Islamic Banks: Assessing Ethical Performance and Exploring Its Determinants

Abstract: This study utilises higher objectives postulated in Islamic moral economy or the maqasid al-Shari’ah theoretical framework’s novel approach in evaluating the ethical, social, environmental and financial performance of Islamic banks. Maqasid al-Shari’ah is interpreted as achieving social good as a consequence in addition to well-being and, hence, it goes beyond traditional (voluntary) social responsibility. This study also explores the major determinants that affect maqasid performance as expressed through disclosure analysis. By expanding the traditional maqasid al-Shari’ah,, we develop a comprehensive evaluation framework in the form of a maqasid index, which is subjected to a rigorous disclosure analysis. Furthermore, in identifying the main determinants of the maqasid disclosure performance, panel data analysis is used by including several key variables alongside political and socio-economic environment, ownership structures, and corporate and Shari’ah governance-related factors. The sample includes 33 full-fledged Islamic banks from 12 countries for the period of 2008–2016. The findings show that although during the nine-year period the disclosure of maqasid performance of the sampled Islamic banks has improved, this is still short of ‘best practices’. Through panel data analysis, this study finds that the Muslim population indicator, CEO duality, Shari’ah governance, and leverage variables positively impact the disclosure of maqasid performance. However, the effect of GDP, financial development and human development index of the country, its political and civil rights, institutional ownership, and a higher share of independent directors have an overall negative impact on the maqasid performance. The findings reported in this study identify complex and multi-faceted relations between external market realities, corporate and Shari’ah governance mechanisms, and maqasid performance.

Firms Talk, Suppliers Walk: Analyzing the Locus of Greenwashing in the Blame Game and Introducing ‘Vicarious Greenwashing’

Abstract: Greenwashing is a phenomenon that is linked to scandals that often occur at the supply-chain level. Nevertheless, research on this subject remains in its infancy; much more is needed to advance our understanding of stakeholders’ reactions to greenwashing. We propose here a new typology of greenwashing, based on the locus of discrepancy, i.e. the point along the supply-chain where the discrepancy between ‘responsible words’ and ‘irresponsible walks’ occurs. With three experiments, we tested how the different forms of greenwashing affect stakeholders’ reactions, from both ethical (blame attributions) and business (intention to invest) perspectives. We developed our hypotheses by building on attribution theory, which seeks to account for how observers construct perceptions about events. We had anticipated that the more internal, controllable and intentional the discrepancy is, the greater the blame attributed to a company is, and the lower the intention to invest will be. When greenwashing occurs at a company level (direct greenwashing), this results in a higher level of blame attribution, while the intention to invest falls. Indirect greenwashing refers to a misbehaviour perpetrated by a supplier who claims to be sustainable, and which results in a less negative impact on a supplied company. We also propose the vicarious greenwashing, which occurs when the behaviour of a supplier is in breach of a company’s claims of sustainability. This type of greenwashing is nevertheless detrimental to investment. The findings here advance our understanding of how greenwashing shapes stakeholders’ reactions, and highlight the need for the careful management of the supply-chain.

Effects of Internal–External Congruence-Based CSR Positioning: An Attribution Theory Approach

Abstract: Although corporate social responsibility (CSR) appears to be mutually beneficial for companies and consumers, the modern marketplace has left both parties in vulnerable positions. Consumers are increasingly subjected to incongruent CSR messages such as greenwashing, while companies are trapped in a strategic positioning dilemma with regard to how to most effectively and ethically approach CSR communication. This has led some companies to instead adopt a strategically silent approach, such as greenhushing. To capture this CSR positioning dilemma and test the positioning effects on consumers’ attributions, this study applies attribution theory to conceptualize four distinct CSR positions (uniform, discreet, washing, and apathetic) which reflect varying combinations of congruence or incongruence between a company’s external CSR communication and its actual internal CSR actions. Using an online experiment, the effects of the CSR positions on consumer attributions for intrinsic and extrinsic CSR motivations and purchase intentions were tested across three CSR domains: environmental; labor; and lesbian, gay, bisexual, and transgender (LGBT) inclusion. Overall, the findings attest to the significant effect of internal–external congruence-based CSR positioning on how consumers respond to CSR communication. Importantly, the results indicate that discreet positioning is perceived similarly to uniform positioning, while misleading and unethical tactics such as CSR-washing are sure to backfire. Theoretical and managerial implications are discussed.

The General Data Protection Regulation in the Age of Surveillance Capitalism

Abstract: Clicks, comments, transactions, and physical movements are being increasingly recorded and analyzed by Big Data processors who use this information to trace the sentiment and activities of markets and voters. While the benefits of Big Data have received considerable attention, it is the potential social costs of practices associated with Big Data that are of interest to us in this paper. Prior research has investigated the impact of Big Data on individual privacy rights, however, there is also growing recognition of its capacity to be mobilized for surveillance purposes. Our paper delineates the underlying issues of privacy and surveillance and presents them as in tension with one another. We postulate that efforts at controlling Big Data may create a trade-off of risks rather than an overall improvement in data protection. We explore this idea in relation to the principles of the European Union’s General Data Protection Regulation (GDPR) as it arguably embodies the new ‘gold standard’ of cyber-laws. We posit that safeguards advocated by the law, anonymization and pseudonymization, while representing effective counter measures to privacy concerns, also incentivize the use, collection, and trade of behavioral and other forms of de-identified data. We consider the legal status of these ownerless forms of data, arguing that data protection techniques such as anonymization and pseudonymization raise significant concerns over the ownership of behavioral data and its potential use in the large-scale modification of activities and choices made both on and offline.

ESG Disclosure and Idiosyncratic Risk in Initial Public Offerings

Abstract: Although legitimacy theory provides strong arguments that environmental, social and governance (ESG) disclosure and performance can help mitigate firm-specific (idiosyncratic) risks, this relationship has been repeatedly challenged by conceptual arguments, such as ‘transparency fallacy’ or ‘impression management’, and mixed empirical evidence. Therefore, we investigate this relationship in the revelatory case of initial public offerings (IPOs), which represent the first sale of common stock to the wider public. IPOs are characterised by strong information asymmetry between firm insiders and society, while at the same time suffering from uncertainty in firm legitimacy, culminating in amplified financial risks for both issuers and investors in aftermarket trading. Using data from the United States, we demonstrate that (1) voluntary ESG disclosure reduces idiosyncratic volatility and downside tail risk and (2) higher ESG ratings have lower associated firm-specific volatility and downside tail risk during the first year of trading in the aftermarket. We provide theoretical arguments for the relationships observed, suggesting that companies striving for ESG performance and communicating their efforts signal their compliance with sustainability-related norms, thus acquiring and upholding a societal license to operate. ESG performance and disclosure help companies build their reputation capital with investors after going public. We also report that ESG disclosure is a more consistent proxy for ex-ante uncertainty as an indicator of aftermarket risk, thereby replacing some of the more conventional measures, such as firm age, offered in the existing literature.

Curbing the Undesirable Effects of Emotional Exhaustion on Ethical Behaviors and Performance: A Salesperson–Manager Dyadic Approach

Abstract: Recent events and popularized stereotypes call into question the ethics of salesperson behaviors. Although prior research demonstrates that salespeople’s emotional exhaustion can have negative consequences for several job outcomes, little is known about the factors that can mitigate such relationships—particularly the relationship between emotional exhaustion and ethical behavior. To remedy this knowledge gap, we draw from self-control theory to propose a novel theoretical framework and develop hypotheses. These hypotheses are tested on a unique dataset consisting of survey data collected from 123 matched business-to-business (B2B) salesperson–manager dyads. The findings reveal that (1) emotional exhaustion is negatively associated with sales performance, (2) emotional exhaustion is negatively associated with ethical behaviors, (3) ethical behaviors are positively associated with sales performance, (4) ethical behaviors mediate emotional exhaustion’s negative effect on sales performance, (5) perceived supervisor support attenuates the negative association between emotional exhaustion and ethical behaviors, and (6) contrary to expectations, grit strengthens the negative association between emotional exhaustion and ethical behaviors. As we show here, perceived supervisor support may attenuate the undesirable effects of emotional exhaustion on ethical behaviors and sales performance. The article’s broader contribution thus lies in its suggestion that managers pay special attention to these factors. Moreover, factors such as grit can have unexpected and undesirable influences; therefore, we draw attention to the importance of scrutinizing these interactions, even when the factors involved are almost universally touted as beneficial. Theoretical and practical implications of the research are discussed.

Can CSR Disclosure Protect Firm Reputation During Financial Restatements

Abstract: We investigate the effectiveness of corporate social responsibility (CSR) disclosure in protecting corporate reputation following financial restatements. As expected under legitimacy theory, firms can signal their legitimacy via nonfinancial disclosure after the negative effects of financial restatements. Our results show that restating firms make substantial improvements to overall CSR disclosure quality by changing their standalone reports to a more conservative tone, increasing readability and report length, even though they strategically disclose less forward-looking and sustainability-related content. Such improvements are more pronounced in restating firms with prior low-quality CSR disclosure. Moreover, restating firms with CSR disclosure have smaller forecast errors than non-CSR disclosers, yet the change in CSR disclosure after restatements does not further improve analyst forecast accuracy. Finally, we find that compared with nondisclosers, restating firms with CSR disclosure suffer smaller firm value losses. Overall, the evidence supports the view that consistent CSR reporting alleviates reputational damage and plays an insurance-like or value protection role during crisis periods.

Distinct Effects of Pride and Gratitude Appeals on Sustainable Luxury Brands

Abstract: This study synthesizes research on evolutionary psychology, emotional appeals, and viral advertising in order to develop a novel perspective on how sustainable luxury brands can be effectively promoted on social media. The results of two experiments show that the emotional appeals of pride and gratitude increase consumer intentions to spread electronic word-of-mouth (eWOM) about sustainable luxury brands via two discrete mechanisms. Study 1 establishes that featuring the pride appeal increases eWOM intentions by heightening the luxury dimension of sustainable luxury brands, whereas featuring the gratitude appeal increases eWOM intentions by heightening the sustainability dimension of sustainable luxury brands. Study 2 shows that these discrete effects of emotional appeals influence consumers to adopt different types of eWOM behaviors toward sustainable luxury brands. Specifically, the pride appeal increases consumer intentions to broadcast eWOM via status attainment motives. In contrast, the gratitude appeal increases consumer intentions to narrowcast eWOM via affiliation seeking motives. The findings offer novel theoretical insights and provide managers with tools to promote sustainable luxury brands in a digital environment.

Powering Sustainable Consumption: The Roles of Green Consumption Values and Power Distance Belief

Abstract: As human consumption is one of the key contributors to environmental problems, it is increasingly urgent to promote sustainable consumption. Drawing on the agentic-communal model of power, this research explores how the psychological feeling of power influences consumers’ preference for green products. We show that low power increases consumers’ preference for green (vs. conventional) products compared to high power (Studies 1a and 1b). Importantly, we identify two factors moderating the main effect of power on green consumption. Specifically, we find that the effect of power on green consumption is more salient among those with high green consumption values (Study 2). In addition, the effects of power are dynamic as a function of power distance belief (PDB), such that low power (vs. high power) promotes green consumption in the low-PDB context while high power (vs. low power) promotes green consumption in the high-PDB context (Study 3). Taken together, these findings provide novel insights into understanding green consumption from the perspectives of social power, green values, and PDB. Besides contributing to the literature, the findings have significant implications for marketers and policy-makers in promoting green campaigns, bridging the attitude-behavior gap, and building a more sustainable society.

Socially Sustainable Supply Chain Management and Suppliers’ Social Performance: The Role of Social Capital

Abstract: The implementation of socially sustainable supply chain management (SSCM) practices (i.e. assessment and collaboration) to tackle suppliers’ social deficiencies (e.g. the use of child labour) often requires a level of cooperation that can be difficult to establish. Despite this daunting challenge, scant scholarly attention has been paid to explore how the implementation of socially SSCM practices can be effectively facilitated and enhanced. Drawing on social capital theory, this study examines the individual impact of assessment and collaboration practices on suppliers’ social performance and explores whether and how these effects can be moderated (strengthened) by the level of social capital (i.e. relational, cognitive, and structural) embedded in the buyer–supplier relationship. Based on a survey of 119 manufacturing companies in the UK, we found that assessment practices are less likely to influence suppliers to improve social performance compared to collaboration practices. However, when relational and structural capital are manifested in the relationship, assessment practices become significant in driving suppliers’ social performance. We also found that the positive impact of collaboration practices is more pronounced when relational and cognitive capital are established in the relationship. This paper contributes to the growing socially SSCM literature by disentangling the vital and relative importance of social capital dimensions on the implementation of socially SSCM practices.

Drivers and Inhibitors of Internet Privacy Concern: A Multidimensional Development Theory Perspective

Abstract: This paper investigates the drivers and inhibitors of Internet privacy concern. Applying the Multidimensional Development Theory to the online environment, we identify the important factors under four dimensions—i.e., environmental, individual, information management, and interaction management. We tested our model using data from an online survey of 2417 individuals in Hong Kong. The results show that the factors under all four dimensions are significant in the formation of Internet privacy concern. Specifically, familiarity with government legislation, Internet knowledge, benefit of information disclosure, privacy protection, and social presence reduce Internet privacy concern, while individuals’ previous privacy invasion experience, risk avoidance personality, and sensitivity of information requested by websites increase Internet privacy concern. We conducted an analysis of unobserved heterogeneity to confirm the significance of these factors. A follow-up moderation analysis shows that the individual factors (i.e., previous privacy invasion experience, risk avoidance personality, and Internet knowledge) moderate the effects of the information management factor (i.e., information sensitivity) and the interaction management factors (i.e., privacy protection and social presence). The findings provide an integrated understanding of the formation of Internet privacy concern.

Unethical Pro-organizational Behavior: A Systematic Review and Future Research Agenda

Abstract: Since the conceptualization of unethical pro-organizational behavior ten years ago, scholarly interest in exploring this phenomenon has multiplied. Given a burgeoning body of empirical research, a review of unethical pro-organizational behavior literature is warranted. This study, therefore, systematically reviews the extant literature on unethical pro-organizational behavior and presents a comprehensive theory-based review of the past developments in this field. We classify previous studies based on their underlying theoretical perspectives and discuss the antecedents and consequences of unethical pro-organizational behavior in work context. We also explicate the boundary conditions under which the influence of these antecedents gets accentuated or alleviated. Overall, this study synthesizes past knowledge to elucidate why, how, and when unethical pro-organizational behavior unfolds in the workplace. Finally, the gaps in the extant theorization are identified and an agenda for future research is proposed.

How Pro-social Framing Affects the Success of Crowdfunding Projects: The Role of Emphasis and Information Crowdedness

Abstract: Crowdfunding is regarded a financing mechanism that could improve the funding opportunities of businesses with a pro-social orientation. Indeed, it is assumed that on digital platforms, citizens are inclined to provide more support to projects with a social benefit than to those without such an orientation, with significant ethical implications for the common good. Yet, extant empirical evidence regarding such a claim is still inconclusive. To advance this discussion, the present paper analyzes the conditions that influence crowd support for projects displaying a pro-social orientation on a reward-based crowdfunding platform. To build our hypotheses, we adopt the lens of framing theory, and we relate it to the digital context. Beginning from the premise that, on crowdfunding platforms, information about projects has a hierarchical structure, we argue that a project’s success crucially depends on how much its proponent emphasizes the pro-social cues within this structure. Moreover, we propose that because pro-social cues demarcate a project over others, the effectiveness of pro-social framing is enhanced when the number of projects on the platform, i.e., its crowdedness, increases. Logit estimates on 8631 Kickstarter projects indicate that pro-social framing is positively associated with success as we expected, yet only when it is moderately emphasized. Further, we find that crowdedness on the platform positively moderates the effect of pro-social orientation on success.

B Corp Certification and Its Impact on Organizations Over Time

Abstract: This study explores the impact of B Corp certification and its associated impact assessment on four case studies of small and medium-sized Brazilian companies certified as B Corps. The results reveal that although all companies had achieved high scores in the certification assessment, awarded on the basis of existing performance, they did not subsequently develop road maps for the future to improve their scores in the way which the B Corp Impact Assessment process endorses as one of the benefits of certification. Their incremental changes are discussed in the light of the main motivations and expectations of these companies’ founders with regard to the certification. A central role of the B Corp certification for this group of companies was to improve their external reputation with investors, clients and consumers. They were not strongly driven to reshape internal processes in ways which would advance their scores in the impact assessment and which would tackle complex problems of corporate governance. Our findings contribute to enriching the discussion of stakeholder engagement and corporate governance in hybrid organizations and contribute to the emerging agenda on studying change over time in B Corps.

Inching to Impact: The Demand Side of Social Impact Investing

Abstract: Social impact investing (SII) is transforming the availability of private capital for nonprofits and social enterprises, but demand is not yet meeting supply. This paper analyzes the perceived barriers faced by nonprofits in engaging with SII, arguing the need to assess differences using a policy field framework. Four parameters of a subsector are conceptualized as shaping participation in SII: the scale of investment required, embeddedness in place, the need for radical innovation, and the configuration of intermediaries (such as loan funds and market brokers). Based on 25 interviews with leaders of nonprofits and intermediaries in affordable housing and community economic development in Canada, the study finds that significant barriers are a lack of knowledge of the market, inadequate financial literacy, and the challenges of measuring and valuing social impacts. In addition, nonprofits report that, in spite of the inherent importance of social impact in this form of investing, they currently make limited use of evaluation and impact metrics, and perceive that intermediaries and investors, particularly in affordable housing, still put a greater emphasis on financial over social returns.

Low-Carbon City Construction and Corporate Carbon Reduction Performance: Evidence From a Quasi-Natural Experiment in China

Abstract: Enterprises are the market players for carbon reductions and carbon trading, and they are also the significant driving force in a low-carbon economy and society. Using the data of A-share listed companies from 2010 to 2016, this study uses a difference-in-differences (DID) model to examine the effects of the low-carbon city construction on corporate carbon reduction performance. Consistent with our hypotheses, we find that the low-carbon city construction promotes corporate carbon reduction performance. Further analysis indicates that the policy effect is stronger for state-owned enterprises (SOEs) than non-state-owned enterprises (non-SOEs). Moreover, environmental quality can affect the promotion of local government officials, which is more prominent in pilot low-carbon cities, and political promotion incentives significantly improve corporate carbon reduction performance. Furthermore, the highest emission reduction effects come in the fourth year after adopting a carbon reduction policy and are concentrated among the firms in the eastern region. Overall, our findings offer a new point view for a deeper understanding of the improvement of corporate carbon reduction performance, and provide microscopic evidence for the objective evaluation of the environmental effects of China's low-carbon city pilot policies.

Beyond Market Strategies: How Multiple Decision-Maker Groups Jointly Influence Underperforming Firms’ Corporate Social (Ir)responsibility

Abstract: Research based on the behavioral theory of the firm (BTOF) argues that firms will actively adopt strategic actions to respond to performance that falls below aspirations, that is performance shortfalls. However, most previous studies have focused on market-related strategic actions, paying less attention to the impact of performance shortfalls on non-market-related strategic actions, especially corporate social responsibility (CSR) and corporate social irresponsibility (CSI). In this study, we propose that firms facing performance shortfalls are likely to reduce CSR levels and increase CSI levels. In addition, we also propose that board characteristics (board size, board age and board tenure) have a significant moderating effect on the above relationship. Empirical analyses based on an unbalanced panel data of China's listed firms from 2010 to 2018 show that our arguments are largely supported.