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CSR Motive Attributions: The Roles of Executive Leadership Ethics and Consumer Cynicism
Abstract
Consumers expect organizations to be socially responsible but, at the same time, have been shown to be skeptical of the motives behind corporate social responsibility (CSR) initiatives. This is because some organizations engage in CSR simply for the positive financial benefits (i.e., instrumental motive), rather than a genuine concern for society (i.e., moral motive). This has led to increased public scrutiny of the ethics of corporate executives. In this paper, we developed a theoretical model that links morally questionable CEO leadership ethics to consumer support of a firm’s CSR through the mediating effects of consumer CSR motive attributions and cynicism respectively. We proposed that media exposure to morally questionable CEO ethics encourages higher consumer attributions of instrumental motives and lower attributions of moral motives. In turn, these attributions affect consumer CSR financial donations, volunteering, and purchase intentions through the mediating effect of cynicism. In an experimental study of consumer media exposure to three types of CEOs (i.e., morally questionable, ethical, and ethics-unknown), we found empirical support for our model. The findings demonstrate that consumers consider CEO ethics in determining the sincerity of a CSR initiative and will shun an organization’s CSR if they perceive it to be purely instrumentally motivated.
This paper is an attempt to examine leadership in the digital era, which gives rise to digital leadership. Digital technology has caused a rethink of the leadership approach in a digital environment that is continuous, dynamic, proactive, and complex, which is driven by phenomena such as globalisation (connectiveness and integration), mass immigration, and multiculturalism. E-privacy requires consent from all parties; how to engage them in the process is a central theme of the paper. Furthermore the type of leadership required is discussed and how it needs to develop in the future, which is identified as the post-General Data Protection Regulation (GDPR) era. Last, but not least, is a discussion of the challenges the e-privacy debate presents, such as collective or group e-privacy, and moving from a tick-box approach to GDPR to a recognised global framework that requires commitment from the CEO and the senior management team. Leverage via reputational damage and the power of a regulatory regime could be tools to make businesses commit in spirit to the GDPR framework and view it not just as a penalty for doing business.
This article looks at the subject of corporate social responsibility and how companies use it in their marketing communication activities, a practice known as cause-related marketing (CRM). According to the definition of Angelidis and Ibrahim (1993), corporate social responsibility is ‘corporate social actions whose purpose is to satisfy social needs’. Corporate social responsibility requires investment and it yields measurable outcomes.
It is commonly accepted that cause-related marketing is a communications tool for increasing customer loyalty and building reputation. The expected change in a company's image because of CRM campaigns appears to depend a great deal upon how customers perceive the reasons for a company's involvement in cause-related programmes and the amount of help given to the cause through a company's involvement (Webb and Mohr, 1998). Mohr et al. (1998) suggest that consumers with a high level of scepticism will be less likely to respond positively to CRM campaigns as opposed to consumers with a low level of scepticism.
This article traces the concept of corporate social responsibility (CSR) from its post WWII beginnings in popularity up through the end of the 1990s. The article focuses on definitions or understandings of the concept/construct. It does not focus on actual company practices during this time as they were quite varied. (This article has been ranked #1 most read in the Business and Society journal for years now).
Drawing on propositions from social identity theory and signaling theory, we hypothesized that firms' corporate social performance (CSP) is related positively to their reputations and to their attractiveness as employers. Results indicate that independent ratings of CSP are related to firms' reputations and attractiveness as employers, suggesting that a firm's CSP may provide a competitive advantage in attracting applicants. Such results add to the growing literature suggesting that CSP map provide firms with competitive advantages.
Using data on 143 hospital organizations, this article examines the antecedents and effects of two forms of organizational legitimacy (managerial and technical) over a 46-year period. Results show that both the managerial and technical forms provide notable improvements in organizational survival chances but that the strength of each effect varies over time depending on the nature of the institutional environment. Variation also appears in the antecedents of legitimacy - for example, the ability of a hospital to secure approval for its managerial practices depends on the correspondence between its mission and the logic of the surrounding institutional environment. The results suggest that a multidimensional model can reveal nuances of organizational legitimacy that are missed by more unitary conceptions.
This paper examines corporate scandals of both a financial and nonfinancial nature between 1993 and 2011 expressly linked to a firm’s CEO. Findings suggest that in the short run investors react adversely to such events and recalcitrant CEOs end up costing their shareholders dearly. Such scandals are more likely among large firms, firms with insiders on the board and where the value of options granted to a firm’s managers is substantial. However, firms with more cash flows are less likely to be mired in such scandals and their stock returns less likely to be affected. There is an increase in stock price volatility of affected firms in the days following the announcement of the scandal. A point of respite for investors is the damage being confined to the short run. The stock price performance of the firms affected by the scandals match the performance of control firms in the long run post-announcement. However, the operating performance of the sample firms is better than their matched counterparts in the years after the scandal. We contribute to the extant literature by considering corporate scandal events that are the doings of a firm’s CEO and not necessarily financially motivated
This paper examines the influence of CEO career horizon problems on corporate social responsibility (CSR). We assume that as CEOs are getting older, they tend to disengage in CSR due to their shorter career horizons. We further argue that high levels of industry-level discretion (ILD) and blockholder ownership amplify the negative effects of CEO age on CSR. Using a panel sample of US-based firms over 2004–2009, we do not find the main effect of CEO age on CSR, but find support for the moderating effects, such that CEO age is negatively associated with CSR when there are high levels of ILD and blockholder ownership. Therefore, results suggest that CEO career horizon problems matter for CSR when (1) CEOs have sufficient discretion over the firm’s strategic decisions and (2) outside blockholders put more pressure on CEOs to engage in financial earning management.
The instrumental benefits of firm’s CSR activities are contingent upon the stakeholders’ awareness and favorable attribution. While social media creates an important momentum for firms to cultivate favorable awareness by establishing a powerful framework of stakeholder relationships, the opportunities are not distributed evenly for all firms. In this paper, we investigate the impact of CSR credentials on the effectiveness of social media as a stakeholder-relationship management platform. The analysis of Fortune 500 companies in the Twitter sphere reveals that a higher CSR rating is a strong indicator of an earlier adoption, a faster establishment of online presence (followers), a higher responsiveness to the firm’s identity (replies and mentions), and a stronger virality of the messages (retweets). Incidentally, the higher CSIR rating is also found to be associated with the stronger virality. Our findings also suggest that socially responsible firms can harvest proactive stakeholders’ participation (user-driven communication) without investing more resources (firm-driven communication). As the first study that conceptualizes the social media as a proponent of CSR, this paper contends that “being socially responsible” makes more practical sense for firms with the rise of social media.
Many scholars across various academic disciplines are investigating the following questions: What do individuals know or believe about an organization? How does a focal organization (and/or other interested entity) develop, use, and/or change this information? and How do individuals respond to what they know or believe about an organization? Cross-disciplinary research that centers on these questions is desirable and could be enhanced if researchers identify and develop consistent terminology for framing these questions. The authors work toward that end by identifying four central “viewpoints” of an organization and proposing labels to represent each of these viewpoints: identity, intended image, construed image, and reputation.
In this article, we examine the empirical association between firm value and CSR engagement for firms in sinful industries, such as tobacco, gambling, and alcohol, as well as industries involved with emerging environmental, social, or ethical issues, i.e., weapon, oil, cement, and biotech. We develop and test three hypotheses, the window-dressing hypothesis, the value-enhancement hypothesis, and the value-irrelevance hypothesis. Using an extensive US sample from 1995 to 2009, we find that CSR engagement of firms in controversial industries positively affects firm value after controlling for various firm characteristics. To address the potential endogeneity problem, we further estimate a system of equations and change regression and continue to find a positive relation between CSR engagement and firm value. Our findings support the value-enhancement hypothesis and are consistent with the premise that the top management of US firms in controversial industries, in general, considers social responsibility important even though their products are harmful to human being, society, or environment.
Corporate social responsibility (CSR) is often used as a key criterion in gauging corporate reputation. This research examined
the influence of consumers’ attributions on corporate outcomes in response to CSR. Researchers and managers have considered
consumers’ beliefs about CSR initiatives to be simplistic, serving either economic ends or reflecting sincere social concerns.
The results of two studies established that consumers’ attributions were more complex than traditionally viewed, mirroring
many of the motives ascribed to companies by managers and researchers. Rather than viewing corporate efforts along a self-
or other-centered continuum, consumers differentiated four types of motives: self-centered motives that are strategic and
egoistic and other-centered motives that are values driven and stakeholder driven. Consumers responded most positively to
CSR efforts they judged as values driven and strategic while responding negatively to efforts perceived as stakeholder driven
or egoistic. Attributions were shown to affect purchase intent as well as mediate the structure of an offer.
Most theorizing on the relationship between corporate social/environmental performance (CSP) and corporate financial performance (CFP) assumes that the current evidence is too fractured or too variable to draw any generalizable conclusions. With this integrative, quantitative study, we intend to show that the mainstream claim that we have little generalizable knowledge about CSP and CFP is built on shaky grounds. Providing a methodologically more rigorous review than previous efforts, we conduct a meta-analysis of 52 studies (which represent the population of prior quantitative inquiry) yielding a total sample size of 33,878 observations. The meta- analytic findings suggest that corporate virtue in the form of social responsibility and, to a lesser extent, environmental responsibility is likely to pay off, although the operationalizations of CSP and CFP also moderate the positive association. For example, CSP appears to be more highly correlated with accounting-based measures of CFP than with market-based indicators, and CSP reputation indices are more highly correlated with CFP than are other indicators of CSP. This meta-analysis establishes a greater degree of certainty with respect to the CSP-CFP relationship than is currently assumed to exist by many business scholars.
This article selectively reviews studies of impression management (IM) published since 1988 and identifies strengths, limitations, and future research directions in three key areas: research investigating the use of IM at the individual level of analysis (e.g., performance appraisal); research that applies IM theory, concepts, and thinking to better understand organizational phenomena (e.g., feedback seeking); and research investigating organizational-level IM (e.g., how firms create legitimacy). Following their review, the authors offer some overarching recommendations for future examinations of IM in organizations, giving particular attention to the need for clear definitions and categories of IM behaviors and the value of multi-level investigations.
This paper extends previous work to examine the antecedents and customer-related consequences of corporate reputation for one important stakeholder group, customers, and within a special service sector where product and corporate associations are synonymous. We begin by linking the concept of corporate reputation to related concepts. Then, using structural equation modelling on customer survey data (n=511), we examine the impact of customer satisfaction and trust on corporate reputation, as well as how corporate reputation affects customer loyalty and word of mouth behaviour. The management implications of these results are discussed.
Drawing from signalling theory, this study examines how the stock market reacts to the public announcement of the hiring of management consultants and whether it differentially values clients on the basis of their financial profitability and the brand-name of the engaged consultant. An event study analysis of 118 client firms that publicly announced the hiring of management consulting firms finds that the stock market, on average, responded positively and significantly to the engagement news. Regression analysis further reveals that the stock market reaction tended to be the highest for client firms that had the highest profitability levels. In addition, the stock market reaction to the hiring announcement was not related to the consultant's brand-name reputation; clients engaging the most reputable consultants (e.g. McKinsey & Company, Bain, Boston Consulting Group, Booz-Allen Hamilton) did not realize any different market response than those clients that employed the other consultants. Overall, most client firms that publicly announced the hiring of management consultants experienced a rise in their market value and those that had the highest financial profitability realized the highest increase. Further, the findings imply that there may be boundaries to reputational spillover benefits in partnering relationships.
Corporate social responsibility (CSR) has emerged as an effective way for firms to create favorable attitudes among consumers.
Although prior research has addressed the direct influence of proactive and reactive CSR on consumer responses, this research
hypothesized that consumers’ perceived organizational motives (i.e., attributions) will mediate this relationship. It was
also hypothesized that the source of information and location of CSR initiative will affect the motives consumers assign to
a firms’ engagement in the initiative. Two experiments were conducted to test these hypotheses. The results of Study 1 indicate
that the nature of a CSR initiative influences consumer attribution effects and that these attributions act as mediators in
helping to explain consumers’ responses to CSR. Study 2 suggests that the source of the CSR message moderates the effect of
CSR on consumer attributions. The mediating influence of the attributions as well as the importance of information source
suggests that proper communication of CSR can be a viable way to inculcate positive corporate associations and purchase intentions.
Keywordscorporate social responsibility–consumer attributions–corporate communications–CSR strategy–information source
Interest in the problem of method biases has a long history in the behavioral sciences. Despite this, a comprehensive summary of the potential sources of method biases and how to control for them does not exist. Therefore, the purpose of this article is to examine the extent to which method biases influence behavioral research results, identify potential sources of method biases, discuss the cognitive processes through which method biases influence responses to measures, evaluate the many different procedural and statistical techniques that can be used to control method biases, and provide recommendations for how to select appropriate procedural and statistical remedies for different types of research settings.
An introduction is presented to articles in this issue including "What Are Microfoundations?," "Rational and Reasonable Microfoundations of Markets and Institutions" and " Microfoundations of Management: Behavioral Strategies and Levels of Rationality in Organizational Action."
The aim of this study is to illuminate reputational change processes and identify the underlying theoretical mechanisms. We draw upon extant literature to develop three distinct explanations for reputational change, respectively emphasizing criteria of organizational "character," symbolic conformity, and technical efficacy. We evaluate these explanations by examining the reputational consequences of corporate downsizing. Our results show that downsizing exerted a strong, negative effect on reputation, consistently with the character explanation. However, significant moderation of this negative effect by other factors, including stock market reaction and downsizing's overall prevalence, indicates the need for a multitheoretical approach to reputational change.
Provides a comprehensive analysis of cynicism in the workforce and tells how to identify and successfully combat it in organizations. Offers case studies of companies ranging from Ben and Jerry's Ice Cream to Unisys and Caterpillar Tractor to show how businesses of all types and sizes can effectively rebuild trust and restore confidence in organizational life.
Corporate social responsibility (CSR) is a hot topic in management today. More than ever before, companies engage in CSR initiatives to make a positive Contribution to society or support their strategic goals. Yet, in the face of a plethora of CSR claims and numerous reported incidents of corporate misconduct, many people doubt the extent to which companies live up to their professed standards, and consumer skepticism toward corporate social involvement is on the rise. Drawing on attribution theory, this study proposes and tests a model that explains both how consumer skepticism toward the CSR of grocery retailers develops and its influence on important consumer-related outcomes. The findings reveal that attributions of egoistic- and stakeholder-driven motives elicit consumer skepticism toward CSR, while values-driven attributions inhibit skepticism. The results also indicate that CSR skepticism hurts retailer equity, decreases resistance to negative information about the retailer, and stimulates unfavorable word of mouth.
Recent thinking about top management has been influenced by alternative models of man.1 Economic approaches to governance such as agency theory tend to assume some form of homo-economicus, which depict subordinates as individualistic, opportunistic, and self-serving. Alternatively, sociological and psychological approaches to governance such as stewardship theory depict subordinates as collectivists, pro-organizational, and trustworthy. Through this research, we attempt to reconcile the differences between these assumptions by proposing a model based upon the subordinate's psychological attributes and the organization's situational characteristics.
Research on employee recruitment has shown that an organization’s corporate social performance (CSP) affects its attractiveness as an employer, but the underlying mechanisms and processes through which this occurs are poorly understood. We propose that job seekers receive signals from CSP that inform three signal-based mechanisms that ultimately affect organizational attractiveness: job seekers’ anticipated pride from being affiliated with the organization, their perceived value fit with the organization, and their expectations about how the organization treats its employees. We hypothesized that these signal-based mechanisms mediate the relationships between CSP and organizational attractiveness, focusing on two aspects of CSP: an organization’s community involvement and pro-environmental practices. In an experiment (n = 180), we manipulated CSP via a company’s web pages. In a field study (n �= 171), we measured CSP content in the recruitment materials used by organizations at a job fair and job seekers’ perceptions of the organizations’ CSP. Results provided support for the signal-based mechanisms, and we discuss the implications for theory, future research, and practice.
The present research examined the effects of corporate executive officer (CEO) ethical leadership on the job pursuit attitudes and behaviors of prospective job applicants. Furthermore, this paper tested two potential mediatory mechanisms for explaining why CEO ethicality matters to prospective applicants: perceived organizational reputation (Study 1) and perceived value congruence with the CEO or person–CEO fit (Study 2). The results of Study 1 showed that job seekers at a career fair were more likely to apply for a job with an ethical CEO's company, compared to that of a morally-questionable CEO or one whose ethicality was unknown. The results also showed that perceived organizational reputation mediated the relationship between CEO ethicality and job pursuit. These findings were replicated in Study 2. In addition, Study 2 showed that perceived value congruence with the CEO also mediated the link between CEO ethicality and job pursuit, although this effect was conditional on the Honesty–Humility personality of the prospective job applicant. These findings highlight the potential relevance of executive ethical leadership within the recruitment context.
Employee cynicism is an attitude characterized by frustration, hopelessness, and disillusionment, as well as contempt toward and distrust of business organizations, executives, and/or other objects in the workplace. This paper uses theory on contract violation to help integrate the diverse literature on cynicism and develop plausible propositions concerning some of the predictors and moderators of employee cynicism. First, the pertinent theory and research on cynicism is reviewed. Four specific domains of research are discussed in terms of their relevance to cynicism in an organizational setting. Next, the literature on psychological and implied contracts and their violation is presented as a framework for the study of employee cynicism. Finally, hypothetical linkages between cynicism and specific characteristics of the contemporary workplace are explored, offering propositions for future research.
Signaling theory is useful for describing behavior when two parties (individuals or organizations) have access to different information. Typically, one party, the sender, must choose whether and how to communicate (or signal) that information, and the other party, the receiver, must choose how to interpret the signal. Accordingly, signaling theory holds a prominent position in a variety of management literatures, including strategic management, entrepreneurship, and human resource management. While the use of signaling theory has gained momentum in recent years, its central tenets have become blurred as it has been applied to organizational concerns. The authors, therefore, provide a concise synthesis of the theory and its key concepts, review its use in the management literature, and put forward directions for future research that will encourage scholars to use signaling theory in new ways and to develop more complex formulations and nuanced variations of the theory.
This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs of dishonesty. Additional applications of the theory include comments on the structure of money markets, on the notion of “insurability,” on the liquidity of durables, and on brand-name goods.
The authors develop a conceptual framework of how managers interpret competitors' signals over time in various market contexts. From the framework, the authors generate hypotheses about the relative effectiveness of signaling strategies used by firms in different market contexts. The authors conducted two empirical studies involving a repeated entry-pricing game to test the hypotheses. The results of Study 1 show that the entrant's perceptions of the aggressiveness of the incumbent depend on the focus and strength of the incumbent's signals. The results of Study 2 show that the strength of the entrant's responses to the incumbent's signals depends on the incumbent's use of bluffs and the cost of information about the factors driving the incumbent's signals. The implications of these findings for how firms should signal to achieve such strategic objectives as revealing or concealing information, developing a desired reputation, and influencing competitors' responses over time are discussed. The authors conclude by discussing the limitations of the article and its implications for further research.
Comparing the fit of alternative models has become a standard procedure for analyzing covariance structure analysis. Comparison of alternative models is typically accomplished by examining the fit of each model to sample data. It is argued that rather than using this indirect approach, one should do direct comparisons of the similarities and differences among competing models. It is shown that among the existing good‐ness‐of‐fit indexes, the root mean square residual (RMSR) is the only one that can be used for this purpose. However, the RMSR fails to satisfy some important statistical desiderata. Rao's Distance (RD), an alternate measure, is shown to overcome this limitation of RMSR. The preference for RD over RMSR for model comparisons is illustrated through a detailed analysis of a particular sample of multitrait‐multimethod data. A simulation study conducted to empirically investigate the sampling behavior of RD reveals that the true orderings of intermodel proximities are recovered (on average) with a fair degree of accuracy.
This paper provides a multi-level theoretical model to understand why business organizations are increasingly engaging in corporate social responsibility (CSR) initiatives, and thereby exhibiting the potential to exert positive social change. Our model integrates theories of micro-level organizational justice, meso-level corporate governance and macro-level varieties of capitalisms. Using a theoretical framework presented in the justice literature, we argue that organizations are pressured to engage in CSR by many different actors, each driven by instrumental, relational and moral motives. These actors are nested within four "levels" of analysis: individual, organizational, national and transnational. After discussing the motives affecting actors at each level and the mechanisms used at each level to exercise influence, as well as the interactions of motives within levels, we examine forces across levels to propose the complex web of factors, which both facilitate and impede social change by organizations. Ultrimately, this proposed framework can be usd to systematize our understanding of the complex social phenomenon of increasing CSR engagement, and to develop testable hypotheses. We conclude by highlighting some empirical questions for future research, and develop a number of managerial implications.
Do shareholders gain when managers disperse corporate resources through activities classified as corporate social responsibility (CSR)? Strategy scholars have recently developed a theoretical model that links such activities to shareholder value when a firm suffers a negative event; we test key portions of this theory of the ‘insurance-like’ property of CSR activity. We posit that such activity leads to positive attributions from stakeholders, who then temper their negative judgments and sanctions toward firms because of this goodwill. We extend the risk management model by theorizing that some types of CSR activities will be more likely to create goodwill and offer insurance-like protection than other types. We delineate several firm and event specific characteristics that we expect to influence the link between CSR activities and an insurance effect. We then test our model using an event study of 178 negative legal/regulatory actions against firms throughout the 11 years from 1993–2003. We find that participation in institutional CSR activities—those aimed at a firm's secondary stakeholders or society at large—provides an ‘insurance-like’ benefit, while participation in technical CSRs—those activities targeting a firm's trading partners—yields no such benefits. We conclude by considering the implications of our findings for future theorizing and research into the economic value of CSR engagement. Copyright © 2008 John Wiley & Sons, Ltd.
Firms engage in corporate social responsibility (CSR) because they consider that some kind of competitive advantage accrues to them. We contend that resource-based perspectives (RBP) are useful to understand why firms engage in CSR activities and disclosure. From a resource-based perspective CSR is seen as providing internal or external benefits, or both. Investments in socially responsible activities may have internal benefits by helping a firm to develop new resources and capabilities which are related namely to know-how and corporate culture. In effect, investing in social responsibility activities and disclosure has important consequences on the creation or depletion of fundamental intangible resources, namely those associated with employees. The external benefits of CSR are related to its effect on corporate reputation. Corporate reputation can be understood as a fundamental intangible resource which can be created or depleted as a consequence of the decisions to engage or not in social responsibility activities and disclosure. Firms with good social responsibility reputation may improve relations with external actors. They may also attract better employees or increase current employees’ motivation, morale, commitment and loyalty to the firm. This article contributes to the understanding of why CSR may be seen as having strategic value for firms and how RBP can be used in such endeavour.
Corporate crises call for effective communication to shelter or restore a company’s reputation. The use of corporate social
responsibility (CSR) claims may provide an effective tool to counter the negative impact of a crisis, but knowledge about
its effectiveness is scarce and lacking in studies that consider CSR communication during crises. To help fill this gap, this
study investigates whether the length of company’s involvement in CSR matters when it uses CSR claims in its crisis communication
as a means to counter negative publicity. The use of CSR claims in crisis communication is more effective for companies with
a long CSR history than for those with a short CSR history, and consumer skepticism about claims lies at the heart of this
phenomenon.
While there are growing bodies of research examining both the differences between strongly and poorly socially performing
firms, and the impact of firm leaders on other strategic outcomes, little has been done in examining the effect of firm leaders
on corporate social performance (CSP). This study directly addresses this issue by using upper echelon theory, and the KLD
Research Analytics CSP ratings, to show that observable CEO characteristics predict differences in CSP between firms, even
when firm and industry characteristics are controlled for. Using a sample of 650 public US firms I find that strong or exemplary
CSP, as measured by the strengths categories of KLD’s ratings, is positively related to the CEO having a bachelor’s degree
in humanities, having a breadth of career experience and being female. I find that KLD strength ratings are negatively related
to the CEO having a bachelor’s degree in economics and to their level of short-term compensation. Preliminary tests of causality
support the assertion that these effects reflect CEO discretion rather than being an artifact of reverse causality. Significant
relationships between the CEO characteristics and poor social performance as measured by the concerns categories of KLD’s
ratings are not found. This suggests that CEOs have more discretion in influencing strong and exemplary social performance
than in impacting poor CSP. Implications, particularly for economics education, are discussed. While there are many fruitful
directions for future research, the benefits and challenges to conducting similar studies in other countries is focused upon
to correspond to the global nature of this special issue.
KeywordsCEO-corporate social performance-corporate social responsibility-KLD-leadership-upper echelon theory
Leaders should be a key source of ethical guidance for employees. Yet, little empirical research focuses on an ethical dimension of leadership. We propose social learning theory as a theoretical basis for understanding ethical leadership and offer a constitutive definition of the ethical leadership construct. In seven interlocking studies, we investigate the viability and importance of this construct. We develop and test a new instrument to measure ethical leadership, examine the proposed connections of ethical leadership with other constructs in a nomological network, and demonstrate its predictive validity for important employee outcomes. Specifically, ethical leadership is related to consideration behavior, honesty, trust in the leader, interactional fairness, socialized charismatic leadership (as measured by the idealized influence dimension of transformational leadership), and abusive supervision, but is not subsumed by any of these. Finally, ethical leadership predicts outcomes such as perceived effectiveness of leaders, followers’ job satisfaction and dedication, and their willingness to report problems to management.
The use of corporate social responsibility (CSR) initiatives to influence consumers and differentiate product offerings has become quite common. This research builds on the growing body of marketing literature through two investigations that manipulate consumers' perceptions of fit, motivation, and timing of corporate social initiatives embedded within promotions. We find that low-fit initiatives negatively impact consumer beliefs, attitudes, and intentions no matter what the firm's motivation, and that high-fit initiatives that are profit-motivated have the same impact. Furthermore, consumers consider the timing (proactive versus reactive) of the social initiative as an informational cue, and only the high-fit, proactive initiatives led to an improvement in consumer beliefs, attitudes, and intentions.
In this multi-method study, we examined the relationships of leader's social responsibility with different aspects of ethical leadership (morality and fairness, role clarification, and power sharing) as well as with despotic leadership. We also investigated how these leadership behaviors relate to effectiveness and optimism, using multiple-source ratings. Interviews with CEOs (N = 73) were coded for the presence of leader's social responsibility and its facets. Also, using questionnaires, direct reports rated each CEOs' leader behavior (n = 130) and a second group of direct reports (n = 119) rated effectiveness and optimism. As expected, leaders high on social responsibility were rated higher on ethical leadership and lower on despotic leadership. Ethical leadership was also positively related to perceived top management team effectiveness and subordinates' optimism about the future of the organization and their own place within it.
This research explored the differential effects on employees of two types of social exchange violations: those that generate perceptions of psychological contract breach and of organizational cynicism. We predicted that psychological contract breach and cynicism would result in differential outcomes because of differences in the person specificity of their underlying social exchange relationships. Using a sample of bank employees, we found that cynicism partially mediated the effects of psychological contract breach on work-related attitudes (organizational commitment, job satisfaction), but that only psychological contract breach (not cynicism) predicted employees' behavioral responses (performance, absenteeism). Further, affective cynicism fully mediated the relationship between psychological contract breach and emotional exhaustion, suggesting that cynical attitudes have negative consequences for the attitude holder. Copyright © 2003 John Wiley & Sons, Ltd.
A social identity theory of leadership is described that views leadership as a group process generated by social categorization and prototype-based depersonalization processes associated with social identity. Group identification, as self-categorization, constructs an intragroup prototypicality gradient that invests the most prototypical member with the appearance of having influence; the appearance arises because members cognitively and behaviorally conform to the prototype. The appearance of influence becomes a reality through depersonalized social attraction processes that make followers agree and comply with the leader's ideas and suggestions. Consensual social attraction also imbues the leader with apparent status and creates a status-based structural differentiation within the group into leader(s) and followers, which has characteristics of unequal status intergroup relations. In addition, a fundamental attribution process constructs a charismatic leadership personality for the leader, which further empowers the leader and sharpens the leader-follower status differential. Empirical support for the theory is reviewed and a range of implications discussed, including intergroup dimensions, uncertainty reduction and extremism, power, and pitfalls of prototype-based leadership.
It is shown that, in large samples, the more parsimonious of two competing nested models yields an estimator of the common parameters that has smaller sampling variance. The use of parsimony as a criterion for choice between two otherwise acceptable models can thus be rationalized on the basis of precision of estimation.
Prior research suggests that consumers evaluate firms more negatively if they attribute the firm’s business practices to firm-serving motivations rather than to motivations that serve the public good. The authors propose an alternative hypothesis: firm-serving attributions lower evaluation of the firm only when they are inconsistent with the firm’s expressed motive. As such, the negative effect of consumer skepticism regarding a firm’s motives can be inhibited by public acknowledgment of the strategic benefits to the firm. The power of this inhibition procedure was demonstrated in an experiment that manipulated the salience of firm-serving benefits and the firm’s publicly stated motive. Consumer evaluation of the sponsoring firm was lowest in conditions when firm-serving benefits were salient and the firm outwardly stated purely public-serving motives. This experiment also revealed that the potential negative effects of skepticism were the most pronounced when individuals engaged in causal attribution prior to company evaluation. Finally, this study measured the different effects on attribution and evaluation of two distinct forms of skepticism: situational skepticism—a momentary state of distrust of an actor’s motivations—and dispositional skepticism—an individual’s ongoing tendency to be suspicious of other people’s motives.
We use transformational leadership theory to explore the role of CEOs in determining the extent to which their firms engage in corporate social responsibility (CSR). We test this theory using data from 56 US and Canadian firms. CEO intellectual stimulation (but not CEO charismatic leadership) is found to be significantly associated with the propensity of the firm to engage in 'strategic' CSR, or those CSR activities that are most likely to be related to the firm's corporate and business-level strategies. Thus, studies that ignore the role of leadership in CSR may yield imprecise conclusions regarding the antecedents and consequences of these activities. We also critique transformational leadership theory, in terms of its overemphasis on charismatic forms of leadership. This leads to a reconceptualization of transformational leadership, which emphasizes the intellectual stimulation component in the context of CSR. Copyright Blackwell Publishing Ltd 2006.
We introduce a new hybrid approach to joint estimation of Value at Risk (VaR) and Expected Shortfall (ES) for high quantiles of return distributions. We investigate the relative performance of VaR and ES models using daily returns for sixteen stock market indices (eight from developed and eight from emerging markets) prior to and during the 2008 financial crisis. In addition to widely used VaR and ES models, we also study the behavior of conditional and unconditional extreme value (EV) models to generate 99 percent confidence level estimates as well as developing a new loss function that relates tail losses to ES forecasts. Backtesting results show that only our proposed new hybrid and Extreme Value (EV)-based VaR models provide adequate protection in both developed and emerging markets, but that the hybrid approach does this at a significantly lower cost in capital reserves. In ES estimation the hybrid model yields the smallest error statistics surpassing even the EV models, especially in the developed markets.
Has Tim Hortons given up on sustainability?
- A Crane
- D Matten
Crane, A., & Matten, D. (2015) Has Tim Hortons given up on
sustainability? http://craneandmatten.blogspot.ca/2015/04/hastim-hortons-given-up-on.html. Accessed January 21, 2016.