CSR, Irresponsibility and Corruption
Corporate Social Responsibility, Irresponsibility, and Corruption, Special issue of Journal of Business Research, Edited by Jean McGuire, Sanjay Putrevu, Donald Siegel and David Smith; Deadline 30 Dec 2009
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Corporate Social Responsibility, Irresponsibility, and Corruption
JBR Special Issue, Submission deadline: 30 December 2009
Multinational firms are under increasing pressure from multiple stakeholders to be socially and environmentally responsible. Rodriguez, Siegel, Hillman, and Eden (2006) urge these firms to eliminate irresponsible behavior and corruption. The current global financial crisis demonstrates that corporate social irresponsibility is a serious problem. Behavior by senior executives at AIG illustrates greed and disregard for responsible behavior; a firm hosting a multi-million dollar party for its clients after receiving government bailouts in excess of tens of billions of taxpayer dollars.
Corporate social responsibility, irresponsibility, and corruption are encountering increasing scrutiny by consumers, government, and academia but such scrutiny is not new. Armstrong (1977) describes the prevalent tendency of managers to overlook irresponsible and corrupt practices and suggests role-playing as a potential method to reduce such incidences. In Armstrong’s research, subjects were much less likely to embrace the irresponsible decision when they were asked to take the various interest groups (not just company bottom-line) into consideration. In a compelling story about power and betrayal in American business, The Informant (Eichenwald 2001) decodes Archer Daniels Midland’s (ADM) scheme to steal millions of dollars from its own customers. Before its downfall, ADM was one of America’s most politically powerful corporations with alliances with top state and federal elected officials. Researchers following Armstrong’s (1977) lead are turning their attention to methods that might reduce such behavior. For example, scholars report that sharing leadership helps deter corruption tendencies (Pearce, Manz, and Sims 2008) and that informal relationships can help enforce group norms against paying bribes to obtain preferential treatment (Kingston 2008). Recognizing and crafting high-quality checks-and-balances that effectively decrease corporate corruption and unethical practices may represent the silver-lining of the current global financial crisis.
The voluntary undertaking of socially responsible behaviors that could lead to long-term benefits to the company and consumers is a distinct and important issue. Consumers increasingly value corporate social responsibility (henceforth, CSR) and consider CSR to be an important factor influencing their patronage (Brown and Dacin 1997; Mohr and Webb 2005). The rapid rise of social investing indicates that investors also value firms that engage in CSR. In modern societies this phenomenon has broad appeal among consumers as well as corporate and government agencies. For example, an executive order by Florida’s governor requires all state agencies to hold their meetings in Green certified hotels, and asks all State employees to use Green certified hotels for official activities (Goren 2008). Companies are embracing CSR programs (Bhattacharya and Sen 2004; Brown 1998; Drumwright and Murphy 2001; Joyner and Payne 2002; Murray and Vogal 1997); these firms consider CSR as a critical strategy issue (Berens, Van Riel, and Bruggen, 2005; McWilliams, Siegel, and Wright (2006); Siegel and Vitaliano (2007)).
The question of whether or not social or environmental responsibility enhances profitability yields inconsistent results–some research reports a strong correlation between sustainability ratings and financial returns (Godfrey 2005; Orlitzky 2005) and others finding a general consumer unwillingness to forego better-quality products or lower prices in order to support a cause (Barone, Miyazaki, and Taylor 2000; Brown and Dacin 1997; Sen and Bhattacharya 2001). These trends also raise profound research questions across numerous fields in business as well as social science disciplines. From a theoretical standpoint, researchers are attempting to model the antecedents and consequences of responsible behavior at the individual, organizational, industry, national, and societal levels. However, the theoretical literatures on this phenomenon are parallel and independent, which hinders the ability to understand the managerial and policy implications of corporate social responsibility and sustainability.
The following questions indicate key issues. (1) How can firms effectively implement social and environmental responsibility initiatives? (2) Are such initiatives profitable either in the short-run or long-run? (3) Are key stakeholders (shareholders, employees, consumers, general public) willing to embrace such initiatives? (4) What particular initiatives are more feasible than others? (5) Do certain areas of business (human resources, finance, and marketing) engender more pro-CSR initiatives than others? (5) Does embracing such initiatives lead to long-term goodwill and corporate equity for the firm? The flip-side encompasses research relating to the costs and other adverse effects of irresponsible and corrupt behavior. (6) What combinations of actions (causal recipes) are effective in preventing corporate corruption? (7) What combinations of actions work effectively to uncover corporate corruption? (8) How can whistleblowers receive adequate support to encourage future whistleblower actions?
- What does it mean for an organization to be socially responsible and environmentally sustainable in the international arena? What is the social responsibility of global business? How can large, multinational companies become more sustainable? How do definitions of corporate responsibility and sustainability differ across countries? How can firms make adjustments to cater to their specific environment?
- What adjustments in corporate structure, governance, reporting relationships, or incentives might facilitate the integration of financial, social, and environmental domains of business activities?
- Why might socially and environmentally responsible companies perform better or worse financially than organizations that show little concern for their social and ecological environments? What are the moderating and mediating factors that affect these relationships?
- Can socially responsible organizations actually change societies? How might organizational commitments to ecological sustainability change societies or individual attitudes?
- How can theories of social identity, (ethical) decision making, and pro-social/positive organizational behavior contribute to more comprehensive causal models in this area?
- How are corporate social responsibility and sustainability related to leadership qualities and other characteristics of top executives, or systems pertaining to them (such as executive pay structures)?
- What is the best way to measure and evaluate social and environmental performance?
- How do investors value social and environmental performance?
- What role do institutional investors play in the antecedents and consequences of corporate social responsibility?
- What are the relationships between corporate social responsibility, environmental sustainability, firm reputation, and organizational culture/identity?
- How can theories of sustainability, corporate social responsibility, and integrative social contracts inform each other for mutual benefit—in domestic and international arenas?
- What are the human resource management implications of corporate social responsibility and environmental sustainability? For example, do socially responsible hiring practices lead to increased employee morale, higher returns on investment or higher corporate equity?
- Is consumer demand for corporate social responsibility driven by the same factors as consumer demand for corporate environmental sustainability? What does this demand imply for organizations’ strategic positioning?
- Are consumers willing to pay higher prices to cover the increased costs of CSR initiatives? Are the key stakeholders aware of (and interested in) the various CSR initiatives that the firm undertakes?
- How does corporate responsibility relate to corporate “irresponsibility”?
- What is the cost of corporate irresponsibility to the company, consumers, or general public?
- What is the relationship between corruption in private and public sectors?
- What determines the experience of corruption for firms and how can it be managed?
- What kind of public or private safeguards are likely to reduce corporate irresponsibility and corruption?
- This special issue’s objective is to overcome the existing fragmentation in the literature on CSR, irresponsible behaviors, and corruption and examine these issues in an integrated manner, and contribute new knowledge to this area. Some research questions that might be addressed in this special issue include the following:
Send submissions electronically to each of the JBR CSR Special Issue Co-Editors: Jean McGuire (email@example.com), Sanjay Putrevu (Sputrevu@albany.edu), Donald Siegel (DSiegel@uamail.albany.edu), and David Smith (DSmith@uamail.albany.edu) before 30 December 2009. The format of the papers must comply to the Journal of Business Research guidelines.
The tentative timetable for the special issue includes the following milestones.
December 30, 2009 Paper submitted electronically to co-editors
February 28, 2010 Authors notified if their paper is chosen for special issue workshop and that their paper would be considered for the JBR special issue
May 2010 Special Issue Workshop (with assigned discussants) to be held at The University at Albany, SUNY
August 1, 2010 Revisions due (incorporating discussant and external reviewer comments)
October 15, 2010 Authors notified if paper selected for special issue
November 15, 2010 Final papers due from the authors
December 15, 2010 Delivery of full set of papers and guest editors’ introductory paper
Armstrong, S. J. (1977). Social irresponsibility in management. Journal of Business Research, 5 (September), 185-213.
Barone, M.J., Miyazaki, A.D. and Taylor, K.A. (2000). The influence of cause-related marketing on consumer choice: does one good turn deserve another? Journal of the Academy of Marketing Science, 28 (2), 248-262.
Berens, G., Van Riel, C. B. M., and Bruggen, V. (2005). Corporate associations and consumer product responses: the moderating role of corporate brand dominance. Journal of Marketing, 69, 35-48.
Bhattacharya, B.C. and Sen, S. (2004). Doing better at doing good: when, why and how consumers respond to corporate social initiatives. California Management Review, 47(1), 9.
Brown, T.J. (1998). Corporate associations in marketing: antecedents and consequences. Corporate Reputation Review, 1(3), 215-233.
Brown, T.J. and Dacin, P.A. (1997). The company and the product: corporate associations and consumer product response. Journal of Marketing, 61 (January), 68-84.
Drumwright, M. and Murphy, P. (2001). Corporate societal marketing, in Bloom, P. N. and Gundlach, G. T. Eds., Handbook of Marketing and Society, Thousand Oaks, CA, Sage Publications.
Eichenwald, K. (2001). The Informant, Random House.
Godfrey, P. C. (2005). The relationship between corporate philanthropy and shareholder wealth: a risk management perspective. Academy of Management Review, 30 (4), 777-798.
Goren, P. (2008). Director, Green Lodging, Dept of Environmental Protection, State of Florida, personal communication. May 1.
Joyner, B.E. and Payne, D (2002). Evolution and implementation: a study of values, business ethics and corporate social responsibility. Journal of Business Ethics, 41, 297-311.
Kingston, C. (2008). Social structure and cultures of corruption. Journal of Economic Behavior & Organization, 67, 90-102.
McWilliams, A., Siegel, D. S., and Patrick M. Wright (2006). “Corporate Social Responsibility: Strategic Implications," Journal of Management Studies, 43(1): 1-18.
Mohr, L. and Webb, D. (2005). The effects of corporate social responsibility and price on consumer responses. Journal of Consumer Affairs, 39(1), 121-147.
Murray, K. B. and Vogal, C. (1997). Using a hierarchy of effects approach to gauge the effectiveness of corporate social responsibility to generate goodwill toward the firm: financial versus non financial impacts. Journal of Business Research, 38 (2), 141-159.
Orlitzky, M. (2005). Payoffs to social and environmental performance. Journal of Investing, 14 (3), 48-51.
Pearce, C.L., Manz, C.C., and Sims Jr., H.P. (2008). The roles of vertical and shared leadership in the enactment of executive corruption: Implications for research and practice. The Leadership Quarterly, 19, 353-359.
Rodriguez, P, Siegel, D.S., Hillman, A. and Eden, L. (2006). “Three Lenses on the Multinational Enterprise: Politics, Corruption, and Corporate Social Responsibility,” Journal of International Business Studies, 37 (6), 733-746.
Sen, S. and Bhattacharya, C. B. (2001). Does doing good always lead to doing better? consumer reactions to corporate social responsibility. Journal of Marketing Research, 38 (May), 225-243.
Siegel, D. S. and Vitaliano, D. (2007) “An Empirical Analysis of the Strategic Use of Corporate Social Responsibility,” Journal of Economics and Management Strategy, 16(3): 17(3): 773-792.