| Corporate Social Performance And Firm Risk: A Meta-Analytic Review |
| | Orlitzky, Marc | Australian Graduate School of Management | marco@agsm.edu.au | 011612-9931-9437 |
| | Benjamin, John D. | American U. | jbenj@american.edu | (202) 885-1892 |
| | The relationship between corporate social performance (CSP) and firm (market and accounting) risk is reviewed in a meta-analysis of
prior empirical published studies (total k = 60 correlation coefficients; total N = 6,186 observations). This quantitative research integration
investigates (1) the sign and magnitude of the empirical relationship, (2) the temporal, and thus likely causal, order, and (3) the
presence of operationalization of each construct as a moderator. Overall, the meta-analysis suggests that the higher a firm's
corporate social performance, the lower its risk (corrected meta-analytic r [rho] = -.21). The negative "true-score" correlation rho
between prior CSP and subsequent risk is about two times larger than rho between prior risk and subsequent CSP. Measurement
(operationalization) of each construct acts as a moderator, with total market risk showing the largest negative correlation
(rho = -.57) among risk measurement subcategories and CSP reputation ratings showing the largest negative correlation (rho = -.32)
among CSP measurement subcategories. |
| | Keywords: Corporate social performance; firm risk; meta-analysis |
| Managerial Opportunism and Firm Performance: An Empirical Test of Instrumental Stakeholder Theory |
| | Berman, Shawn L. | Boston U. | shberman@bu.edu | (617)-353-4656 |
| | This study links the work in corporate social performance (CSP), stakeholder theory, and managerial compensation. These perspectives are used to examine the relationship between chief executive compensation levels and firm performance, defined across three stakeholder groups, to test hypotheses from instrumental stakeholder theory, as developed by Jones (1995). Using a sample from the wood products industry (SIC codes 24 and 26), data are collected concerning employees, shareholders, and the natural environment. Data Envelopment Analysis (DEA), a linear programming technique that allows for a single measure of firm activity to be generated from multiple input and output variables, is used to estimate a performance rating for each firm, based on these three stakeholder groups. Regression analysis is then employed to study the relationship between chief executive pay and firm performance. As predicted by instrumental stakeholder theory, there is a negative relationship between performance and firms which reward their CEOs with extraordinarily high compensation packages, relative to the industry average and adjusted for firm size. Implications of the findings and areas for future research are also discussed. |
| | Keywords: Stakeholder theory; Corporate social performance; CEO compensation |
| The Influence of Diversity and Stakeholder Role on Corporate Social Orientation |
| | Smith, Wanda J. | Virginia Polytechnic Institute and State U. | wjsmith@vt.edu | (540)-231-6105 |
| | Wokutch, Richard E. | Virginia Polytechnic Institute and State U. | wokutch@vt.edu | (540)-231-5084 |
| | Dennis, Bryan S. | Virginia Polytechnic Institute and State U. | bdennis@vt.edu | (540)-231-4024 |
| | This paper examines the influence of diversity characteristics and stakeholder role on how individuals perceive corporate social responsibility. Using Aupperle’s notion of corporate social orientation (1984) that is based on Carroll’s (1979) model of economic, legal, ethical, and discretionary responsibilities, we examined how diversity characteristics and stakeholder role affect the relative degree of emphasis placed on these four categories of social responsibility.
A survey was conducted of graduate and undergraduate students at 5 colleges/universities in the United States. Using MANOVA and univariate ANOVA, we found that individuals in the role of employee rate economic responsibilities highest, whereas individuals in the role of customer rate legal responsibilities highest. Also confirmed were hypotheses that females in the customer context rate ethical responsibilities more important than males in the customer context and that in the employee context Blacks rate discretionary responsibilities higher than Whites.
These findings are important in that they show corporate social responsibility is a contingent phenomenon, likely to be influenced by various characteristics of the observer as well as by the perspective from which the observation takes place. The specific findings regarding the influence of diversity characteristics on corporate social orientation are also important because of the increasing prominence of women and of people of color in the US workforce.
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| | Keywords: Corp Social Responsibility; Business Ethics; Diversity |