Investigating stakeholder theory and social capital: Csr in large firms and smes
TL;DR: In this article, the authors argue that the idiosyncrasies of large firms and SMEs explain the different approaches to CSR, and that the notion of social capital is a more useful way of understanding the CSR approach of SMEs, whereas stakeholder theory more closely addresses the approach of big firms.
Abstract: The concept of corporate social responsibility (CSR) has been widely investigated, but a generally accepted theoretical framework does not yet exist. This paper argues that the idiosyncrasies of large firms and SMEs explains the different approaches to CSR, and that the notion of social capital is a more useful way of understanding the CSR approach of SMEs, whereas stakeholder theory more closely addresses the CSR approach of large firms. Based on the extant literature, we present a comparison of large firm and SME idiosyncrasies suggesting that both consolidated and emerging strategic orientations toward responsible behaviours exist. Idiosyncrasies of large firms and SMEs are also discussed to provide an assessment of the firm’s strategic CSR orientation, suggesting the key drivers upon which CSR strategies must be based. A twofold consideration emerges. First, the CSR–SME relationship could be better explained if the notion of social capital is taken into account, but this should also be accompanied by a stakeholder view of the SME; second, social capital and stakeholder theory should be taken as alternative ways of explaining CSR in both large firms and SMEs.
Citations
More filters
TL;DR: Based on the findings of a qualitative empirical study of corporate social responsibility (CSR) in Swiss MNCs and SMEs, the authors suggest that smaller firms are not necessarily less advanced in organizing CSR than large firms.
Abstract: Based on the findings of a qualitative empirical study of corporate social responsibility (CSR) in Swiss MNCs and SMEs, we suggest that smaller firms are not necessarily less advanced in organizing CSR than large firms. Results according to theoretically derived assessment frameworks illustrate the actual implementation status of CSR in organizational practices. We propose that small firms possess several organizational characteristics that are favorable for promoting the internal implementation of CSR-related practices in core business functions, but constrain external communication and reporting about CSR. In contrast, large firms possess several characteristics that are favorable for promoting external communication and reporting about CSR, but at the same time constrain internal implementation. We sketch a theoretical explanation of these differences in organizing CSR in MNCs and SMEs based on the relationship between firm size and relative organizational costs.
386 citations
TL;DR: In this paper, the authors argue that despite the potential motivation, foreign affiliates from more distant home countries are in fact less likely to engage in host country CSR, and also predict that host-country CSR reputation negatively moderates this relationship.
Abstract: Prior studies have found that foreign affiliates of multinational enterprises (MNEs) suffer from liability of foreignness (LOF). Foreign affiliates may be able to improve their social legitimacy and overcome LOF by demonstrating social commitment to host country constituents through corporate social responsibility (CSR). If LOF is positively related to the distance between the home and host countries, and CSR activities confer social legitimacy benefits to foreign affiliates, we should expect CSR activities and distance to be positively related. However, we argue that despite this potential motivation, foreign affiliates from more distant home countries are in fact less likely to engage in host country CSR. Our argument focuses on the ways distance affects the MNE’s willingness and ability to engage in CSR abroad. We also predict that host-country CSR reputation negatively moderates this relationship. Using Community Reinvestment Act data for foreign bank affiliates from 32 countries in the United States over 1990-2007, we find strong support for our hypotheses. The paper enriches our understanding of CSR practices in MNEs, and of when and how MNEs try to overcome legitimacy issues in host countries.
367 citations
TL;DR: In this article, the authors present a multidimensional framework which can serve as a tool for research scholars and supply chain prac... to assist focal companies in the development of sustainable supply chains.
Abstract: Purpose – This paper aims to provide a framework which can assist focal companies in the development of sustainable supply chains. Sustainable development from an industrial perspective has extended beyond organisational boundaries to incorporate a supply chain approach. Design/methodology/approach – The literature related to sustainable supply chain management is reviewed by incorporating concepts from four organisational theories, including the resource-based, institutional, stakeholder and social network perspectives, to illustrate key drivers and enablers of sustainability initiatives in the supply chain. A conceptual multidimensional framework is then developed that can be used for the initial assessment of supply chain sustainability. Findings – Development and assessment of sustainability in supply chains are being increasingly incorporated as part of supply chain management today. This paper presents a multidimensional framework which can serve as a tool for research scholars and supply chain prac...
310 citations
Cites background from "Investigating stakeholder theory an..."
...Stakeholders can influence organisations to follow specific actions including sustainability initiatives and voluntary integration of sustainability into business operations (Rowley, 1997; Vurro et al., 2009; Russo and Perrini, 2010)....
[...]
...2.3.3 Stakeholder Theory Stakeholders can influence organisations to follow specific actions including sustainability initiatives and voluntary integration of sustainability into business operations (Rowley, 1997; Vurro et al., 2009; Russo and Perrini, 2010)....
[...]
TL;DR: In this paper, the authors used Thomson Reuters ASSET4 ESG ratings to analyze the influence of firm size, a company's available resources for providing ESG data, and the availability of a company’s ESGdata on the company's sustainability performance.
Abstract: The concept of sustainable and responsible (SR) investments expresses that every investment should be based on the SR investor’s code of ethics. To a large extent the allocation of SR investments to more sustainable companies and ethical practices is based on the environmental, social, and corporate governance (ESG) scores provided by rating agencies. However, a thorough investigation of ESG scores is a neglected topic in the literature. This paper uses Thomson Reuters ASSET4 ESG ratings to analyze the influence of firm size, a company’s available resources for providing ESG data, and the availability of a company’s ESG data on the company’s sustainability performance. We find a significant positive correlation between the stated variables, which can be explained by organizational legitimacy. The results raise the question of whether the way the ESG score measures corporate sustainability gives an advantage to larger firms with more resources while not providing SR investors with the information needed to make decisions based on their beliefs. Due to our results, SR investors and scholars should reopen the discussion about: what sustainability rating agencies measure with ESG scores, what exactly needs to be measured, and if the sustainable finance community can reach their self-imposed objectives with this measurement.
307 citations
TL;DR: In this paper, the authors focus on the ways in which distance affects the MNE's willingness and ability to engage in CSR abroad, and predict that host-country CSR reputation negatively moderates this relationship.
Abstract: Prior studies have found that foreign affiliates of multinational enterprises (MNEs) suffer from liability of foreignness (LOF). Foreign affiliates may be able to improve their social legitimacy and overcome LOF by demonstrating social commitment to host-country constituents through corporate social responsibility (CSR). If LOF is positively related to the distance between the home and host countries, and CSR activities confer social legitimacy benefits on foreign affiliates, we should expect CSR activities and distance to be positively related. However, we argue that, despite this potential motivation, foreign affiliates from more distant home countries are in fact less likely to engage in host-country CSR. Our argument focuses on the ways in which distance affects the MNE's willingness and ability to engage in CSR abroad. We also predict that host-country CSR reputation negatively moderates this relationship. Using Community Reinvestment Act data for foreign bank affiliates from 32 countries in the United States over 1990–2007, we find strong support for our hypotheses. The paper enriches our understanding of CSR practices in MNEs, and of when and how MNEs try to overcome legitimacy issues in host countries.
273 citations
References
More filters
TL;DR: In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analys...
Abstract: In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analys...
31,693 citations
Book•
01 Jan 2000TL;DR: Putnam as mentioned in this paper showed that changes in work, family structure, age, suburban life, television, computers, women's roles and other factors are isolating Americans from each other in a trend whose reflection can clearly be seen in British society.
Abstract: BOWLING ALONE warns Americans that their stock of "social capital", the very fabric of their connections with each other, has been accelerating down. Putnam describes the resulting impoverishment of their lives and communities. Drawing on evidence that includes nearly half a million interviews conducted over a quarter of a century in America, Putnam shows how changes in work, family structure, age, suburban life, television, computers, women's roles and other factors are isolating Americans from each other in a trend whose reflection can clearly be seen in British society. We sign 30 percent fewer petitions than we did ten years ago. Membership in organisations- from the Boy Scouts to political parties and the Church is falling. Ties with friends and relatives are fraying: we're 35 percent less likely to visit our neighbours or have dinner with our families than we were thirty years ago. We watch sport alone instead of with our friends. A century ago, American citizens' means of connecting were at a low point after decades of urbanisation, industrialisation and immigration uprooted them from families and friends. That generation demonstrated a capacity for renewal by creating the organisations that pulled Americans together. Putnam shows how we can learn from them and reinvent common enterprises that will make us secure, productive, happy and hopeful.
24,532 citations
01 Mar 2010
18,472 citations
Book•
01 Jan 1984TL;DR: The Stakeholder Approach: 1. Managing in turbulent times 2. The stakeholder concept and strategic management 3. Strategic Management Processes: 4. Setting strategic direction 5. Formulating strategies for stakeholders 6. Implementing and monitoring stakeholder strategies 7. Conflict at the board level 8. The functional disciplines of management 9. The role of the executive as mentioned in this paper.
Abstract: Part I. The Stakeholder Approach: 1. Managing in turbulent times 2. The stakeholder concept and strategic management 3. Stakeholder management: framework and philosophy Part II. Strategic Management Processes: 4. Setting strategic direction 5. Formulating strategies for stakeholders 6. Implementing and monitoring stakeholder strategies Part III. Implications for Theory and Practice: 7. Conflict at the board level 8. The functional disciplines of management 9. The role of the executive.
17,404 citations
Book•
01 Jan 1990
TL;DR: In this article, a new approach to describing both stability and change in social systems by linking the behavior of individuals to organizational behavior is proposed. But the approach is not suitable for large-scale systems.
Abstract: Suggests a new approach to describing both stability and change in social systems by linking the behavior of individuals to organizational behavior.
16,017 citations