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Values That Create Value: Socially Responsible Business Practices in SMEs—Empirical Evidence from German Companies
Abstract
Socially responsible business and ethical behaviour of companies have been of interest to academia and practice for decades. But the focus has almost exclusively been on large corporations while small- and medium-sized enterprises (SME) have not received as much attention. Thus, this paper focuses on socially responsible business practices of SME entrepreneurs or owner-managers in Germany. Based on the assumption that decision-makers in SMEs are the central point where all business activities start, members of a German entrepreneurs association were approached in the course of a qualitative and quantitative survey. They were asked to assess in what way their social responsibility is expressed in specific management practices towards selected stakeholder groups. These practices in turn were assumed to result in perceived positive reactions of the respective stakeholders and subsequently to positively influence the firm's financial performance, i.e. cost reductions and increase in profits. In the paper, a research model is presented that elaborates the relationship between an SME executive's social responsibility and the value creation of a firm, i.e. whether (personal) values create (economic) value. It was found that socially responsible management practices towards employees, customers and to a lesser extent society have a positive impact on the firm and its performance. As such, values can create additional value.
... SMEs are portrayed as having limited awareness, willingness, and ability to engage with climate change issues and engage in mitigation behavior compared to large firms (Biondi et al., 2000;Hammann et al., 2009;Spence, 2007;Tilley, 1999;Wedawatta et al., 2010;Williams & Schaefer, 2013;Yadav et al., 2018). In instances where there is knowledge and awareness of climate change, pro-environmental behavior in SMEs may be constrained by financial and human resources and small customer base (Battisti & Perry, 2011;Hall, 2006). ...
... In instances where there is knowledge and awareness of climate change, pro-environmental behavior in SMEs may be constrained by financial and human resources and small customer base (Battisti & Perry, 2011;Hall, 2006). Additionally, SMEs generally do not have official environmental policies in place (Spence, 2007), but climate friendly practices may take place informally (Hammann et al., 2009;Hillary, 2004;Lawrence et al., 2006;Lepoutre & Heene, 2006;Sawyer & Evans, 2010;Spence, 2007). ...
... There is however growing empirical evidence that SMEs do engage with environmental issues given their ethical considerations even if on a small scale (Lawrence et al., 2006;Revell et al., 2010). Their personal responsibility and motivations are important in the strategic direction of the business, which can lead to greater engagement with environmental issues (Hammann et al., 2009;Jenkins, 2004;Vives, 2006). Small firms also have greater freedom over decision making and shorter communication channels where the owner is the sole decision-maker, which may make it quicker and easier to implement mitigation strategies (Hammann et al., 2009;Lefebvre et al., 2003). ...
The objective of this paper is to investigate climate change awareness and mitigation effort and their associated motivating and limiting factors to pro-environmental behavior and firm demographics in small and medium-sized enterprises (SMEs) in Switzer-land. For this purpose, a questionnaire was developed, conducted, and analyzed on motivating and limiting factors along with firm demographics, using descriptive statistics and ordinary least squares (OLS) and ordered probit regression models. The results show that Swiss SMEs are in general aware of climate change and their resulting consequences. SMEs have taken steps to help mitigate greenhouse gas emissions through recycling, reduction of energy and water consumption, and use of recycled packaging. SMEs could however improve their environmental impact through low-carbon means of transport and use of public transport, sustainable raw material inputs, sustainable energy sources, and setting environmental goals and audits. There was a positive association between climate change awareness and mitigation. Motivating factors to pro-environmental behavior included financial advantage and responsibility towards the environment, while firm size and human resources were limiting factors. Lastly, different mitigation measures might be influenced by different
... While the numerical dominance and economic contribution of small businesses is fairly well documented (although still under appreciated), their role in civic and philanthropic affairs has received far less attention (Hammann, Habisch, and Pechlaner 2009;Jenkins 2006;Morsing and Perrini 2009;Smith and Oakley 1994;Spence and Rutherfoord 2004;Thompson and Smith 1991;Wilson 1980). This is unfortunate since, as indicated above, they constitute the vast majority of businesses in small cities and metropolitan areas and are frequently the only businesses in small towns (with population less than 10,000 residents). ...
... Owners and top managers still set overall social performance policies (Buchholtz, Amason, and Rutherford 1999;Useem and Kutner 1986), but are removed by several layers of personnel from the day to day implementation of the firm's social performance policies. In small businesses, the influence of the owner on BSP is more direct, less influenced by professional philanthropic expectations, and more susceptible to the norms present in the local community culture (Besser and Miller 2001;Besser 2002;Hammann, Habisch, and Pechlaner 2009;Jenkins 2009;Spence and Rutherfoord 2004). ...
... The values of the top decision maker distinguish equally situated firms that provide BSP from those that do not. This finding applies to large businesses (Buchholtz et al. 1999;Useem and Kutner 1986) and small businesses alike (Baden, Harwood, and Woodward 2009;Besser 2002;Burton and Goldsby 2009;Hammann, Habisch, and Pechlaner 2009;Spence and Rutherfoord 2004;Thompson et al. 1993). If the owner/manager believes that working for community betterment is the right thing to do, or believes it will help the business' bottom line in the long run, and there is sufficient resource slack, the social performance of his/her business will be greater. ...
This paper is a review of previous scholarship on the social responsibility of small businesses in small towns, with the addition of findings from recent research on the subject conducted by the authors. We focused on the responsibility of businesses to work for community betterment, which includes a wide variety of charitable and social causes. The extant literature and new research lead to several general conclusions. First most small business owners believe they have an obligation to work for community and societal betterment, but it is proportional to their size compared to other businesses in the same location. While the values of top management have a significant impact on the social performance of businesses of all sizes, in small businesses, social performance is more directly and personally shaped by the owners than is the case in large businesses. Small business owners are more socially and economically embedded within the community in which they operate than are managers of big businesses. Moreover, in small towns, they are more visible than similarly sized businesses in metropolitan locations. For this reason, size of town is a key intermediary variable between size of business and level of social performance. Partially as a result of their greater embeddedness and visibility, small business owners in small towns are likely to conform to the local patterns of civic engagement. For many of the same reasons, small business owners’ social performance is affected by the expectations and prevailing patterns of social performance displayed by members of the business networks to which they belong.
Past research supports the argument that doing good is good for business in large and small firms alike, although the relationship is less well documented for small businesses. We expand the research to consider the rewards and penalties of business social responsibility for the business owner personally. This is an important outcome of business social performance for all sizes of business, but for small businesses where owner discretion may be the only factor determining the community involvement of the business, it is critical. We end by advocating for more research attention directed toward small business social performance, the impact of town size on business social performance, and the personal costs and benefits of business social performance for the owners themselves.
... The manager's commitment to RBPs is strongly rooted in individuals' own values and ethics (Lawrence et al., 2006) as well as decision-making and logic (Blombäck & Wigren-Kristoferson, 2014;Schwartz, 2016). With an assumption that decision-makers in SMEs are central to the start of all business activities (Hammann et al., 2009), the decisions taken by entrepreneurs can be extrapolated from the individual to the organizational level (Dincer & Dincer, 2013).In SMEs, responsibility-related activities tend to be informal and have a non-structured character (Lawrence et al., 2006;Santos, 2011). For example, in a study by Blombäck and Wigren-Kristoferson (2014, p. 304), one CEO opened up about company's RBPs towards the local community: "It's more a question of wanting to help, financially. ...
... Strategic planning and orientation have been found to lead to a competitive advantage in SMEs achieved through RBPs (Avram & Kühne, 2008;Nejati et al., 2017); however, following a model suggested by Hammann et al. (2009), we would argue that decision-makers' logic leads to an increase of business responsibility resulting in the improvements of SME competitiveness. We tested the resulting theoretical model presented in Fig. 1 in the context of internationalized SMEs. ...
... Responsibility towards customers and employees, both groups being core stakeholders for SMEs (Martínez-Martínez et al., 2017), is found to lead to a better reputation by improving the image of the company as the one that cares not only about profits but also about non-financial good (Nejati et al., 2017). Another study by Hammann et al. (2009) named employees, customers, and society as the most important stakeholders who benefit the most from SME responsibility. However, out of those stakeholder groups in our study, only customer RBPs improved every aspect of competitive performance. ...
Sustainability is a global trend that requires balancing environmental, social, and financial concerns. Issues related to social and environmental responsibility have attracted growing research interest in the research domains on small businesses and large multinational companies, but they are yet to be explored in the context of internationalized small and medium-sized enterprises (SMEs), which experience the liabilities of foreignness and smallness but whose share of and impact on the world economy are growing. This study connects entrepreneurial decision-making with business responsibility and explores the effects of effectual decision-making logic on responsible business practices (RBPs) and their outcomes in the context of internationalized SMEs.
The empirical part of the study was based on the survey data from a sample of 179 Finnish SMEs. The results obtained via linear regression modeling showed that a more pronounced effectual logic can lead to more RBPs in internationalized SMEs. The RBPs, in turn, were found to have a positive impact on the competitive performance of these SMEs, thus serving as mediators. This study contributes to the literature on responsible decision-making in both the research areas of internationalization of SMEs and small business responsibility.
... Their study stated that CSR is a concept reflected in invisible corporate characteristics rather than financial performance. Previous studies on social responsibility and corporate management performance have verified that the practice of social responsibility has a positive effect on financial performance [1,2,16,17]. This is also linked to the social atmosphere or social expectations of companies. ...
... This is also linked to the social atmosphere or social expectations of companies. Therefore, the results of these studies seem to justify encouraging the practice of social responsibility activities by offsetting the cost required to practice such activities for private companies seeking profit [1,2,16,17]. Research on the non-financial performance approach is a cognitive evaluation of organizational members, and various non-financial performances such as customer satisfaction [10], organizational trust [12], organizational commitment [18], turnover rate, and work satisfaction [11] are studied. ...
... Khattak et al. [2] found that CSR has a positive effect on various performances factors (environmental, financial, and innovation) in SMEs in Pakistan. Hammann et al. [16] analyzed the effect of CSR activities on corporate performance for small and mediumsized enterprises in Germany. According to their research, CSR activities for employees, customers, and society were found to have a positive effect on financial performance. ...
For the sustainable growth of venture companies, this explorative study aimed to comprehensively analyze the factors affecting their performance. In addition, this study attempted to verify whether different or similar performance management should be performed according to the difference in characteristics of venture companies. In this study, corporate performance was classified into non-financial and financial performance and analyzed by dividing it into quantitative and qualitative growth. As factors influencing performance, this study analyzed corporate competitiveness compared to competitors and the number of CSR types in which companies participate. In addition, it intended to provide realistic implications and academic contributions to the performance management of venture companies by verifying whether differences in characteristics such as a company’s start-up business year, growth stage, and industry should be reflected in corporate performance management as control variables.
... Moreover, legal, industrial, sociocultural institutions, as well as market forces, affect the ethical behavior of SMEs (Cambra-Fierro et al., 2008). Various types of socially responsible management practices concerning different interest groups may enhance the firm's competitive strengths not only for large corporations but also for SMEs (Hammann et al., 2009). Studies have called for a greater exploration in the form of multilevel research of the prerequisites for engaging in responsibility (Soundararajan et al., 2018). ...
... Other studies of SME responsibility also use this terminology (e.g. Hammann, Habisch and Pechlaner, 2009;Moore, Slack and Gibbon, 2009;Ryan, O'Malley and O'Dwyer, 2010;Hasan, 2016;Chakraborti and Mishra, 2018). Thus, in this dissertation, "RBP" refers to the practices related to responsibility, both social and environmental, among SMEs. ...
... RBP has been widely used among SMEs in some countries (Nejati & Amran, 2013) and applied to several SME responsibility studies (e.g. Hammann, Habisch and Pechlaner, 2009;Moore, Slack and Gibbon, 2009;Ryan, O'Malley and O'Dwyer, 2010;Hasan, 2016;Chakraborti and Mishra, 2018). Hence, this dissertation also uses RBP, because it captures the concrete actions performed by SMEs to address their social and environmental responsibilities. ...
This dissertation focuses on the role of responsible business practices (RBPs) in the operations of internationalized small- and medium-sized enterprises (SMEs). Most research has assumed that SMEs are resource-constrained entities, as the existing research in international business is focused on the corporate social responsibility of large multinational enterprises. However, SMEs are the backbone of the economy in most countries, and in recent decades, they have become increasingly involved in international business while practicing social and environmental RBPs and contributing to global sustainability.
The research question “What is the role of responsible business practices in internationalized SMEs?” guides this dissertation, and institutional theory and dynamic capability view are the theoretical frameworks used. Four publications examine the antecedents, processes, and performance outcomes of SMEs’ involvement in RBPs and internationalization at the organizational and institutional levels. The dissertation is a mixed-method study, which uses quantitative data collected from Finnish SMEs and qualitative data collected through interviews with partnering SME dyads originating from Finland and Russia.
The results suggest that research on SME internationalization and SME business responsibility has common grounds in terms of drivers and outcomes and highlight the intersections of these two streams as a fruitful research area. The main findings of this dissertation demonstrate that social responsibility plays a crucial role in transferring and increasing the contribution of organizational capabilities and environmental responsibility to SMEs’ competitive and international performance.
... That is why the term "socially responsible behavior" is often used by the authors. Baumback (1988), Hammann, Habisch, & Pechlaner (2009), Jenkins (2004, and Vives (2006) in their works investigated how personal values of top managers and owners influence business operations and the process of strategic decision making in SMEs. Vyakarnam et al. (1997) argued that while resolving ethical dilemmas, it is important to consider personal features of a company's executives, values demonstrated and articulated by owners and managers, and specifics of internal relationships between company owners and other stakeholders. ...
... This approach is valuable in the process of studying SMEs' practices of responsible behavior, which are not largely demonstrated to the public through non-financial reporting as in the case of large public corporations. Interviewing as a method of data gathering proved its efficiency in numerous researches related to social responsibility of business (Andreini, Pedeliento, & Signori, 2014;Chirikova, 2006Chirikova, , 2007Hammann et al., 2009;Öberseder, Schlegelmilch, & Murphy, 2013;Treviño, den Nieuwenboer, Kreiner, & Bishop, 2014;Vyakarnam et al., 1997). According to the literature dedicated to the methodology, methods and techniques of social research (Denzin & Lincoln, 2000;Iadov, 2003;Locke, 2001;Shteinberg, 2009), interviewing allows to realize researcher's plans in minor details and explain attitudes, relations and behavior patterns of people in real life and organizational reality. ...
... Meanwhile, it is possible to conclude that representatives of Russian SMEs follow a clientoriented approach regarded as a social and cultural attribute of the CSR model. It corresponds to outcomes of research conducted by Hammann et al. (2009), which focused on responsible behavior of German SMEs, and survey results from the Czech Republic published by Pohludka & Stverkova (2019). It also corresponds to conclusions by Ivashina (2016), stating that SMEs in Russia and Italy lack a clear understanding of social responsibility and are not motivated for responsible behavior but in some cases, regard responsible behavior as a tool for creating effective, sustainable relations with strategic external stakeholder groups. ...
This chapter focuses on identifying motivation for socially responsible behavior in small and medium enterprises (SMEs) in Russia. It also investigates the attitudes of owners and executives of Russian SMEs toward the concepts of business ethics and social responsibility of business. A research set the background of this chapter, including the gathering of primary data through 57 focused interviews. Results of a critical analysis conclude that top managers and owners of Russian SMEs do not thoroughly understand these concepts. However, it also shows that they do not neglect them. Research findings point to a growing level of adherence to the principles of business ethics and responsible behavior. There is strong evidence showing motivation for following principles of ethical and responsible behavior. In addition to an understanding of legal requirements, company owners and top managers are finding that positive relationships between firms and stakeholders are crucial for sustainable performance.
... The differences regarding the owner lead to fundamental distinctions in managerial approaches to sustainability [58]. Research findings indicate that owner-managers play a significant role in micro-foundations of sustainability practices in SMEs, thus making them key individuals in the wider social and cultural settings [3,59]. ...
... The authors specified that individual beliefs and values of owners and managers represent a key factor regarding the engagement with sustainability. These results do not support the previous literature arguing that management attitudes or values impact commitment to sustainability (e.g., [59,107]). The results of Westman et al. [27] also reveal the importance of the well-being of employees in sustainability engagement and of the socioenvironmental context in which SMEs are immersed. ...
Main aim: This paper examines the main topics of research in the literature studying the topic of sustainability in small and medium-sized enterprises (SME), and aims at presenting a future research agenda. Method: We conducted a systematic literature review based on articles published between 2000 and 2020. From an initial set of 88 papers taken from WoS in the period under analysis, 42 papers were effectively analyzed. Main results: The results of an in-depth reading reveal four clusters representing the main topics of research in the field: sustainability and SMEs’ performance; green and environmental management issues; social and cultural issues and their impact on sustainability policies; values, skills, and capabilities. Key findings suggest that the following angles of research appear to be underexplored: theoretically grounded research; research using large samples; articles examining sustainability reporting; research looking into non-manufacturing sectors; work examining settings in developing countries; research undertaking international comparisons; articles exploring the complementarity between the literature on sustainability in SMEs and on family-owned businesses; and the influence of the social and cultural context on SMEs’ engagement with sustainability. Main contribution: This paper offers insights to academia, practitioners, and policy makers to help SMEs engaging with sustainability and may assist also the latter to develop strategies to improve SMEs’ social and environmental reporting. Given the current pandemic crisis, and the urgency for sustainable business practices, we expect to contribute to expanding knowledge in this field of research.
... The success of an organization depends on the organization's capacity to manage the relationships with its stakeholders. Management of relationships with key business stakeholders has become an essential tool for value generation (Hammann, Habisch, & Pechlaner, 2009), making the stakeholders theory's interpretation a necessary step in understanding any possible relationship amongst CSR and firm performance (Vázquez-Carrasco & López-Pérez, 2013). The basic assumption behind this theory is that CSR may be an organizational device that leads to more effective use of resources (Orlitzky, Schmidt, & Rynes, 2003), which has a positive impact on corporate financial performance. ...
... The existence and the nature of the relationship between CSR and performance is even less clear when CSR strategies and practices are adopted by SMEs (Morsing and Perrini, 2009). There have been few studies investigating this relationship in SMEs (Niehm et al., 2008;Marín and Rubio, 2008;Hammann et al., 2009;Sweeney, 2009, Torugsa et al., 2013Gallardo-Vazquez andSanchez-Hernandez, 2013, 2014;Turyakira et al., 2014 ). This is due both to the difficulty in identifying the effects in the mediumelong term (Lepoutre and Heene, 2006) and to the nature itself of CSR strategies, often characterized by a lack of codification and based on informal relationships between SMEs and their stakeholders (Battaglia et al., 2014). ...
The paper assesses its relationship with firm innovation and Organizational performance in a single integrative model by using spss data set of 53 Pakistani SME’s firms. A questionnaire of self-administrative is developed to collect the data. Researcher personally visits of different SME’s firms and collect the data from manager of SME’s firms. The research use 275 questionnaire is distributed in different SME’s sector. In this study the statistical techniques of data analysis are used to investigate and find out the relationship among the Firm performance and the other factors. SPSS version16 is used for reliability analysis, descriptive statistics, regression analysis, correlation analysis, to check either modal is good fit or not. Our results supports a partial mediation effect of innovation performance on the relationship between corporate social responsibility and firm performance, meanwhile the effect of corporate social responsibility on firm performance shrinks upon the adding of innovation performance to the model. The findings may help to understand how corporate social responsibility is an important driver mechanism for companies to be more inventive, proficient and effective.
... SMEs depend on their strong regional relationships and cannot afford to ignore the CS claims of their direct environment, since, compared to large firms, they receive negative feedback more immediately, but are less powerful in terms of managing the situation (Chrisman and Archer, 1984;Hammann et al., 2009), meaning that community approval is vital for their economic success (Park and Campbell, 2018;Perrini, 2006). Because SMEs tend to integrate the expectations and behaviour of the local community into their strategic considerations (Perrini, 2006), this paper hypothesizes: ...
... Similarly, Zhang et al. (2009) found that a lack of employee demand was the most important barrier to Chinese SMEs engaging in environmental management. Similarly, close interaction with employees may result in SMEs recognizing that responding to their demands may bring certain benefits to the firm, such as organisational identification and commitment (El Akremi et al., 2018), recruitment and retention (Ronda et al., 2020) and through this, improved firm performance (Hammann et al., 2009), which likely reduces SMEs' controlled CS motivation. In his descriptive paper on the reasons for the environmental engagement of 57 Dutch SMEs in the printing sector, Masurel (2007) expounds that increasing employee motivation through improved working conditions was the most important reason for those firms engaging in environmental activities. ...
Small and medium-sized enterprises (SMEs) are said to engage significantly less with corporate sustainability (CS) than their larger peers, because they are more reluctant to voluntarily engage in CS beyond regulatory thresholds. However, the mechanisms for changing the reluctance of SMEs with regard to CS are poorly understood. By drawing on self-determination and stakeholder theory from a social proximity perspective, this paper argues that stakeholders play a key role in influencing the controlled CS motivation of SMEs, and that SMEs will consider the claims of ‘proximate’ stakeholders as being more salient than ‘distant’ regulatory pressure, with the latter even potentially exercising a negative effect on SMEs' controlled CS motivation. The hypotheses are empirically tested using survey-based data from a sample of 344 privately-held SMEs operating in Germany and Austria. Results of the structural equation model confirm that ‘proximate’ employee and community pressure reduces controlled CS motivation and ultimately increases overall CS performance, whilst ‘distant’ regulatory pressure has precisely the opposite effect, ultimately reducing the CS performance of SMEs. These findings help to clarify that the close attachment of SMEs to their employees, and their deep embeddedness in the local community might be important catalysts with regard to CS improvements of SMEs, whilst regulatory pressure reduces their willingness to engage in CS, since this is often perceived as an unfair, demotivating, external imperative, which compromises their self-determination. Lastly, theoretical and managerial implications are provided.
... Respecto a las PYMEs, las investigaciones indican que existe un importante desempeño de sostenibilidad con los grupos de interés con quienes guardan mayor relación, es decir, con orientación a los clientes, desempeño con empleados y gestión con proveedores (Spence, 1999;Longo et al., 2005;Villegas et al., 2021). Otros estudios en PYMEs encuentran iniciativas y acciones de RSC con sus grupos de interés, que repercuten en la empresa a nivel estratégico en la obtención de beneficios y ventajas competitivas (Marín y Rubio, 2008;Ortiz y Kuhne, 2008;Fisher et al., 2009;Jenkins, 2009;Hammann et al., 2009). ...
... Gráfico 1 -Nivel de cumplimiento de estándares de sostenibilidad con grupos de interés Fuente: Elaboración propia Destacan la información de desempeño laboral que corresponde al detalle de empleados por categorías, luego la información sobre formación y educación de empleados y finalmente la información sobre seguridad y salud de colaboradores relacionados con la operación del negocio. Esta información es consecuente con satisfacer las expectativas laborales y considerar que los empleados son recursos claves en el desempeño de la empresa e impulsadores del desempeño de sostenibilidad y permiten mejorar la relación con dicho grupo de interés (Hammann et al., 2009;Herrera et al., 2016;Graafland, 2018;Crossley et al., 2021). ...
El desempeño e información de sostenibilidad corporativa son considerados como
objetivos estratégicos promovidos por las empresas de distinta naturaleza. Este estudio
analiza la naturaleza y cumplimiento de información de sostenibilidad de PYMEs
españolas en sus reportes de sostenibilidad de 2019 y 2018, de acuerdo a los
estándares de la Global Reporting Initiative (GRI) sobre desempeño con clientes,
empleados y proveedores, acorde con la teoría de los stakeholders. Se realizó un
estudio cualitativo de análisis de contenido de la naturaleza de información revelada
según los estándares GRI y otro cuantitativo de relación entre el endeudamiento y
rentabilidad de la empresa con el nivel de cumplimiento de información. Los resultados
señalan que se informa en mayor medida la gestión de calidad e innovación en
productos y servicios con clientes, enfatiza categorías de empleados y su formación, y
sobre prácticas de adquisición con proveedores con un enfoque instrumental. Se
encuentra correlación positiva y significativa entre la rentabilidad y nivel de información
de desempeño de sostenibilidad con grupos de interés.
... Aguilera, Williams, Conley and Rupp (2006) attribute the differences in the concern for CSR between firms in US and UK to the different corporate governance structures between the two countries. Hammann, Habisch, and Pechlaner (2009) empirically show that the personal value of SME entrepreneurs on social responsibility positively influences on firm performance. Husted, Allen, and Rivera (2010) contend that internal CSR engagement will be more likely for a firm that has a closer fit between its CSR activities and its mission and objectives. ...
This paper explores the strategic consideration of organizational governance for CSR adoption. Specifically, it develops a conceptual framework that outlines how an organization’s concern for its clients and employees influences the relationship between organizational governance and various domains of CSR behaviors. Based on survey data from organizations that are actively engaged in CSR in Hong Kong, there is evidence that adoption of client-oriented CSR practices complementarily mediates the positive relationship between organizational governance and CSR practices in all areas except those related to community involvement and development. On the other hand, adoption of employees-oriented CSR practices is a complementary mediator for the positive relationship between organizational governance and CSR practices related to the environment and the community.
... Indeed, due to corporate social responsibility organization achieves a competitive edge as well financial stability (Freeman, 1988). Stakeholder theory explained the connection between the management of the firm and stakeholders (Hammann et al. 2009). However, the research study reveals that the corporate social responsibility activities of the organization should be an asset instead of a cost (Wibisono, 2007). ...
This research work checks the influence of the financial inclusion index (FI) and corporate social responsibility index (CSRI) on financial stability, profitability, and return on equity of the Islamic banks of Pakistan. Further, research works to check whether the corporate social responsibility index plays a moderating role in the association between the financial inclusion and financial stability of Islamic banks and windows of Islamic conventional banks of Pakistan. The corporate social responsibility index was measured through the contribution of social activity to society. Financial inclusion was measured through financial access to the entire society without any discrimination against society. In this paper, samples of the Islamic banks including the Islamic window of the conventional banks for 2005 to 2020 are investigated. Further, the data is selected of the variables from the financial statement and balance sheet of the banks. The fixed effects and generalized moments of the method are employed to check the affiliation between the FI and CSR on the stability and profitability of Islamic banks. The generalized moment of method (GMM) has been employed on the panel data set to control the endogeneity from the model. The empirical results of this research study have the following conclusion: Firstly, FI has a constructive and significant impact on the financial stability and profitability of the banks. Secondly, corporate social responsibility has a positive and significant impact on stability and profitability. Finally, the interaction term corporate social responsibility has a positive and significantly moderating effect on the relationship with the financial inclusion on the stability (FS) and profitability on the Islamic banks.
... According to a review of 52 studies by Cordeiro and Tewari (2015), companies that pay attention to their stakeholders' needs through CSR practices increase their market value and profitability. Hammann et al. (2009) investigated the relationship between the social responsibility of the German SMEs and their value creation. Findings revealed that "socially responsible management practices geared towards employees and customers have a positive impact on the firm and its performance". ...
While corporate social responsibility (CSR) has been extensively explored from the standpoint of large corporations and developed economies, smaller businesses and developing economies have received little attention. Small and medium-sized enterprises (SMEs) continue to be the backbone of most economies, significantly accounting for a major share in economic value creation. This implies that the contribution of SMEs in achieving sustainable development is therefore critical. The study seeks to add to the limited literature by investigating the implication of socially responsible behavior on the performance of SMEs in Nigeria. Corporate reputation, profit maximization and management efficiency are dependent variables used as proxies for performance measurement. A well-structured questionnaire was administered to 63 Nigerian SMEs. The study adopted a structural equation model using SmartPLS for the data analysis. Findings show a significant relationship between corporate social responsibility and the three determinants of firm performance (management efficiency, profit maximization and corporate reputation). This study has implications for owners/managers of SMEs who are keen on improving performance by leveraging on socially responsible behaviour through the development, implementation and communication of a sustainable and acceptable CSR initiative. Recommendations and suggestions for further investigations are made.
... First is the moral discrete comprising honesty and integrity, carries them in daily life, and abides by the basic ethical norms. The second is the ethical manager, leading with the quality of benefiting the lower staff, establishing moral values to the working members through practice (Hammann et al., 2009), communication through effective mode exemplifying the subordinate to show behavioral ethics and morality (Lin et al., 2016), and taking moral decisions influencing the firm's behavior and ethical norms. Furthermore, technological advancements have brought the digital and physical worlds together, as well as the potential to make cognitive judgments without the intervention of humans (Hu et al., 2022). ...
To enhance environmental protection and sustainable development, green innovation (GI) is an inevitable choice for enterprises. This study incorporates social identity theory and social learning theory to explore the impact of ethical leadership on employee GI behavior. In addition, this study also examines the mediating effects of green organizational identity (GOI) and the moderating role of strategic flexibility (SF). Using the structural equation modeling, an empirical survey was conducted among 300 Chinese manufacturing companies. The study found that ethical leadership (EL) positively affects employees’ GI behavior (EGIB). It also positively impacts the GOI, which led to EGIB. In addition, the study also confirmed that GOI played a mediating role in the relationship between EL and EGIB. The results further indicated that SF positively enhanced the effect of GOI on EGIB. The findings have important contributions to theory and practice in the current research context.
... Despite this, to our knowledge, the role of CSR in SMEs has received very little research attention in comparison, and only recently [8] has research on international entrepreneurship started to assess the importance of CSR from the perspective of SMEs. This is a notable omission in the literature since there is recent evidence that sustainability and responsible business practices can be an important competitive advantage for SMEs [4,[8][9][10]. However, such practices may also incur commercial liabilities for SMEs [11]. ...
Responsibility and sustainability are today a key part of doing business globally. However, the attention of scholars and policymakers has mainly been on large multinational enterprises, with small and medium-sized enterprises (SMEs) receiving less attention. Recent studies have noted the importance of learning for SMEs to engage in corporate social responsibility (CSR), but it is not yet known how the learning orientation of SMEs impacts their CSR, and how the development impacts the internationalization and performance of SMEs, which are research gaps that recent studies have noted. Shedding light on those dynamics is also important from a practical perspective since in most countries SMEs constitute a large majority of firms in both amounts and total employment. The present study contributes by illustrating how CSR impacts different types of performance in SMEs, and how the learning orientation of SMEs predetermines their CSR. Regression analyses conducted on an empirical sample of Finnish SMEs indicate that CSR in SMEs has an impact on certain types of performance and that their learning orientation determines their CSR. Therefore, the study contributes to the literature on responsibility and sustainability in SMEs, and to that SME internationalization, by shedding light on the antecedents and outcomes of CSR for SMEs.
... Moreover, this research underlined that the quality of these reports vary between countries in Europe, since countries in Western Europe pay particular attention to details about issues in social reports. Hammann et al. (2009) analyzed the effects of CSR on performance in small and medium sized enterprises (SMEs), since the literature has given little attention to these issues and has mainly focused on large corporations. Results of this study showed a positive impact of a social responsible management towards stakeholders' performance. ...
This chapter provides a review of the current state of corporate social responsibility (CSR) communication research and a theoretical framework on related topics. The analysis covers a period of twenty years (from 1997 to 2016) and statistically maps the streams of research advances on CSR communication, identifying top academic journals in the field. Moreover, the authors focus on the importance of CSR communication for businesses, the different approaches to communication, and review the literature dealing with both digital and traditional tools adopted for CSR communication. A discussion on how today's businesses are aware of the importance of communicating CSR to their stakeholders and are implementing both digital and traditional tools in a complementary way for their CSR communication strategy follows; research gaps, limitations, and further directions conclude the chapter. Finally, this chapter provides some inputs about the relevance of this topic for digital business transformation.
... For instance, the personal values of entrepreneurial founders often exert a profound influence on small, emerging and family-owned enterprises, in part due to their capacity to exercise power and discretion (Dieleman & Koning, 2020;García-Álvarez & L opez-Sintas, 2001;Hemingway, 2005). In addition, values held by members of the wider workforce and local community may play a role due to the locally embedded nature of many such businesses (e.g., Hammann et al., 2009;Jamali et al., 2017). Compounding these, the COVID-19 pandemic has brought values practices to the fore for millions of SMEs, as normal activities have been radically reconfigured, and owners and managers have reflected on the purpose and priorities of their businesses (Hopley, 2021). ...
Collectively, small and medium‐sized enterprises (SMEs) make a significant contribution to carbon emissions. Transformative changes are needed to achieve Net Zero amongst the SME community, presenting policymakers and practitioners with a complex and largely unresolved set of challenges. In this paper, we investigate the unexploited potential of human values in facilitating these changes, with a particular focus on the role and experiences of specialist intermediaries, such as business advisors, as agents of change. The paper reports on four linked, transdisciplinary research projects, which tested and validated a values‐based intervention in collaboration with businesses and advisors, designed to promote more effective, long‐term journeys towards Net Zero. Our study connects research evidence on SME support with key insights from values literature, including the emerging concepts of values practices and values work. We discuss outcomes from the four projects, and the broader implications for research, policy, and practice.
... Folgende Forschungsfrage fasst den Fokus der Studie zusammen: RQ: Welche Relevanz hat die ökologische Nachhaltigkeit sowie der Einsatz von Green IT/IS für Unternehmen und wie wird deren Einsatz und Umsetzung gesteuert? Um diese Frage zu beantworten, führen wir eine quantitative Umfragestudie durch, die darauf abzielt i) mit welchen Zielen Unternehmen eine explizite Nachhaltigkeitsstrategie verfolgen, ii) ob (Green) IT/IS Teil dieser Strategie sind, und iii) welche Green IT/IS-Praktiken die Unternehmen eingeführt haben.Wir haben uns auf KMU in Deutschland, Österreich, und der Schweiz konzentriert, da eine zunehmende Anzahl dieser Unternehmen Nachhaltigkeit als einen wichtigen Differenzierungs-und Wettbewerbsfaktor betrachtet(Hammann et al. 2009). Außerdem sind sie ein Eckpfeiler der Volkswirtschaften dieser Länder und machen mehr als 60 % der industriellen Verschmutzung in Europa aus. ...
Zusammenfassung
Seit längerem sind Green IT/IS ein Diskussionsthema und werden für Unternehmen zu einer zunehmend wichtigen Komponente auf dem Weg zu ökologischer Nachhaltigkeit. Unklar ist jedoch, wie verbreitet nachhaltige IT- und IS-Maßnahmen in der Praxis sind, mit welchem Ziel sie eingesetzt werden und wie ihre Wirkung gemessen wird. Um diese Fragen zu adressieren, haben wir eine Umfragestudie mit KMU in der deutschsprachigen DACH-Region durchgeführt. Dieser Beitrag gibt einen Einblick in die Antworten von 1535 Unternehmen und zeigt, dass die Mehrheit die ökologische Nachhaltigkeit zwar als relevant betrachtet (70,8 %), aber nur wenige (23,7 %) Kennzahlen zur Untersuchung der Nachhaltigkeit ihres Unternehmens eingeführt haben. Ein noch geringerer Teil hat Green IT- (11,2 %) oder Green IS-Praktiken (9,4 %) eingeführt. Dies deutet auf Forschungsbedarf zur erfolgreichen Einführung und Nutzung von Green IT/IS in Unternehmen und ihrem positiven Beitrag für das Unternehmen und die Umwelt hin.
... The stakeholder theory encompasses most business theories to provide sustainable competitive advantage (Jones et al., 2018). Several studies advocate the stakeholder theory, which derives from systemic theories, i.e., the "open systems", which currently characterize the debates between the organization and its environment (Bridoux & Stoelhorst, 2016;Halme & Korpela, 2014;Hammann et al., 2009). This highlights the simultaneous possibility of action and reaction between the firm and the environment, mostly referring to the complex interactions between the behaviour of the various third parties involved, such as stakeholders . ...
Responsible Business Model Innovation is increasingly becoming a relevant challenge in academic research and business practice, mainly in the Asian context. Changes in business models are widely acknowledged as a key strategy for achieving long-term innovation. However, little is known about the design journey of Responsible Business Model Innovation. By applying the knowledge-based view and stakeholder theory, this paper introduces the founding pillars of Responsible Business Model Innovation, namely: Corporate Social Responsiveness, Inclusiveness, and Reflective Knowledge Exchange. Based on the analysis of extended bodies of literature published between 2011 and 2021 on business model innovation, sustainability innovation, stakeholder theory and responsible innovation, the article explores the state of the art of business ethics and dynamic capabilities in Asian organizations. Findings show that recent research in the field of sustainability and ethical values are improving the impact on business models, thus encouraging the advent of Responsible Business Model Innovation. This article contributes to the emerging field of responsible innovation and offers novel theoretical and practical implications for academy and practitioners, including a first attempt to develop a road map to be followed to achieve of sustainable and ethical values for business and society at large.
... SHT suggests that the FP of banks largely depends on the enduring relationship with stakeholders. Hence, managing the stakeholders is a key tool for FP (Hammann et al., 2009). Accordingly, banks engage in SBD as a form of establishing trusting, cooperative and goodwill relationships with stakeholders (Jizi et al., 2014). ...
This paper contributes to the sustainable development in business literature by examining the impact of a broad corporate governance disclosure index on sustainable banking initiatives and, subsequently, determines the extent to which the sustainability‐for‐performance sensitivity metric is moderated by corporate governance mechanisms. Based on data collected from 220 banks in 16 Sub‐Saharan Africa countries over the 2007–2018 period (i.e., making over 2027 bank‐year observations), the findings of the study are as follows: Firstly, the study finds that corporate governance mechanisms have positive impact on sustainable decisions, as captured by environmental disclosures and sustainable banking initiatives. Secondly, the study finds that sustainable banking initiatives improve the financial performance of banks in the Sub‐Saharan African countries. Finally, the study detects that the relationship between sustainable banking initiatives and financial performance is significantly moderated by corporate governance mechanisms, revealing that the sustainability‐for‐performance sensitivity metric is mainly positive, and improves in banks with quality corporate governance mechanisms. This indicates that the sustainability‐for‐performance sensitivity is contingent on the quality of the bank's corporate governance structures. The findings have key implications for banking practitioners, environmental activists, regulators and policymakers.
... The stakeholder's theory accentuates that the success of a company depends upon the withstanding relationship with stakeholders. The efficient management of this relationship enhances the competitive power of the firms, which further accelerates the value creation process of the businesses (Hammann et al., 2009). 3 Consistent with this theory, a recent global survey indicates that 76% of managers believe that CSR contributes positively to long-term shareholder value which enhances the sustainability of the business. ...
This study examines the impact of corporate social responsibility (CSR) on the financial performance of commercial banks of Pakistan under the regulatory environment of SECP Voluntary Guidelines 2013. Our framework of analysis is based on slack resource theory, good management theory, and stakeholders' theory of CSR. The existing empirical literature on CSR might be subject to potential issues, including multicollinearity, profit persistence, and endogeneity. Therefore, we apply the dynamic panel model under the Arellano-Bond framework to avoid the estimation issue and arrive at the unbiased and consistent estimates. The results of this empirical investigation reveal mixed evidence on this nexus. Community investment deteriorates the financial performance of the banking sector in Pakistan. Commercial banks switched their reporting and reporting disclosures due to some regulatory and operational changes in 2015. Considering this fact, we conduct a restricted analysis under the Arellano-Bond framework. The results of our restricted analysis reveal that product responsibility plays a positive and significant role in the financial performance of Pakistani banks under certain conditions. We could not find any other evidence of the positive impact of any other dimension of corporate social responsibility on the financial performance of the Pakistani banking sector. 158 H.U. Rahman et al.
... Next to shareholder pressure, prior literature has also highlighted that (family) value orientation in family firms tends to positively influence corporate citizenship-oriented behaviour (e.g. Hammann et al., 2009;Le Breton-Miller and Miller, 2016). Likewise, the ability of founders (owners) to enforce their personal values upon the family firms' strategic orientation (Koiranen, 2002;Aronoff and Ward, 2016) has been found as an important and contributory factor for corporate citizenship orientation (Le Breton- Miller and Miller, 2016). ...
The current chapter addresses the antecedents and influences of corporate citizenship in a family-owned firm. Drawing from a case study of a Finnish family firm in the medical supplies sector, we contribute to the extant literature by focusing on antecedents such as lack of shareholder pressure, founder's vision and experiences, and intergenerational aspirations, and by linking these to reputational advantage. We also try to explore if reputational advantages have any specific linkage with the type of customer for the firm (i.e. public sector customers vs. private sector customers). The Nordic context is significant and appears as a major factor in our study. The increasing role of the private sector in maintaining the welfare state and contributing to societal wellbeing emerges in the findings as an influential factor. This adds a rather novel aspect to the literature on socioemotional wealth. Moreover, honest tax paying also emerged as an important attribute associated with corporate citizenship in the case firm. Finally, our study supports the notion that for family-owned firms to receive reputational advantage and long-term competitiveness, adopting a long-term perspective of its corporate citizenship role, rather than merely focusing on short-term monetary gains, is imperative.
... In addition, the study "CSR Communication: Talking to People Who Listen" published by APCO Worldwide (2004) also emphasizes the significance of CSR information to companies. Many authors have since focused on CSR information (Fisher, Geenen, Jurcevic, McClintock, & Davis, 2009;Hammann, Habisch, & Pechlaner, 2009;Nielsen & Thomsen, 2009;Patenaude, 2011;Vidal, Bull, & Kozak, 2010). According to Liu, Li, Quan, & Yang (2019), information has become a crucial commodity able to detect opportunities in potential markets, as indicated by the theory mentioned above. ...
Corporate social responsibility (CSR) strategies have become an important research topic in recent years as they can generate numerous benefits for organizations, especially when an adequate market orientation (MO) has been defined. In this sense, several research questions arise: do companies have enough CSR information to implement appropriate strategies? Does the information that they have gathered allow them to define a complete set of CSR activities (response) based on the triple bottom line approach? And, once they have carried out their initiatives, do these companies ensure adequate dissemination of the results to stakeholders?. In order to answer the above questions, this study sought to examine companies’ CSR orientation from a MO perspective. Working with data on a sample of 165 firms in Spain, during January 15th and February 15th, 2017, structural equation modeling was used to test a set of research hypotheses. The results reveal an important link between information, response, and diffusion and help extend the MO strategy concept. CSR information has a positive, direct influence on the development of initiatives covering three dimensions (economic, social and environmental). In addition, a direct relationship exists between the development of social and environmental initiatives and CSR disclosure. This research’s findings contribute to the literature on interest groups and business sustainability. Also, they confirm that the development of social and environmental initiatives contributes positively to CSR dissemination and to the generation of competitive advantages. This way, collecting CSR information constitutes a valuable asset. With respect to the limitations of the study, the answers reflected each SME leader’s subjective opinion, the variables’ measurement was dealt with through reflective models using the PLS technique based on variance and only Spanish companies already oriented toward CSR participated in the study.
... Interviews were conducted on a semi-structured basis, using a prepared questionnaire (Hammann et al., 2009;Vázquez-Carrasco and López-Pérez, 2013) that presented the interviewees with fifteen guiding topics, relating mainly to the nature of the company's activity, funding sources across the company lifecycle, barriers of various kinds including access to formal financing sources, and more. At the beginning of the interview the interviewee was asked to provide some personal and professional background information about him/herself, so that the interview could start with a question that the interviewee would feel no difficulty or have no reservations about answering. ...
... Kľúčovú úlohu v rozvoji etiky v MSP zohráva vlastník-manažér (Spence, 1999). Jeho hodnoty sa konkretizujú vo všetkých aktivitách firmy (Hammann et al., 2009). MSP sú však často vystavené "pokušeniu" znížiť svoje etické hodnoty, keď im ide o prežitie (Arend, 2013;Fassin, 2005). ...
Abstrakt: Cieľom danej štúdie je odhaliť stav podnikateľskej etiky v podnikoch pôsobiacich v slovenskom podnikateľskom prostredí na základe štatistickej analýzy jednej časti reprezentatívneho empirického výskumu uskutočneného na Slovensku v roku 2019. Hlavné zistenia: (1) podnikateľská etika sa začala v slovenskom podnikateľskom prostredí rozvíjať, ale celkovo je jej stav ešte na nízkej úrovni, (2) najrozšírenejšími implementovanými etickými prvkami v slovenskom podnikateľskom prostredí sú overovanie spoľahlivosti obchodného partnera a etický kódex, (3) veľkosť firmy je faktor, ktorý vplýva na implementáciu etiky do organizácie a (4) členstvo v profesijnej organizácii je faktor, ktorý pozitívne vplýva na zavádzanie etiky do organizácie. Abstract: The aim of this study is to uncover the state of business ethics in the Slovak business environment. The results are based on a statistical analysis of a part of the representative empirical research carried out in Slovakia in 2019. Main findings: (1) the development of business ethics in the Slovak business environment started but its level is low; (2) checks of the accountability of business partners and code of ethics are the most widespread ethical elements in the Slovak business environment; (3) the size of a company is a factor that influences the implementation of ethics in an organization; and (4) membership in a professional organization is a factor that influences the implementation of ethics in the organization. Kľúčové slová: podnikateľská etika, etický program, veľkosť podniku, profesionálne asociácie, Slovensko
... The practice of responsible management by firms has been found to generate positive responses from stakeholders, leading to improved firm performance (Hammann et al., 2009). While large corporations continue to lead the charge, small businesses are also playing increasing roles in performing responsible management, and in growing their positive social and environmental impact (Jenkins, 2006). ...
There are rising calls for the adoption of responsible management practices in virtually every economic sector of both developed and developing economies. Among others, efforts to promote responsible management have been championed by governments, international organisations, academic institutions, and industry regulators. In developing economies, such moves have spawned numerous success stories across diverse sectors such as energy, mining, manufacturing, and agriculture. Despite these glowing achievements, a plethora of challenges persist that threaten the sustainable development agenda. Against this backdrop, we address some crucial pathways for the sustainability logic and responsible management philosophy, as exemplified by contemporary practices across various sectors within the emerging markets context. We conceptualised responsible management as built on three pillars and examine the contribution of this triad of cognate concepts and practices: corporate social responsibility, green business, and sustainable management. We argue that social responsibility is pivotal to responsible management since it is imperative for corporations to consider the interests of multiple stakeholders, including employees, the society, the environment, future generations, and not only the interests of companies and investors. Akin to corporate social responsibility are sustainable management practices. We applaud current sustainability transitions concerning initiatives by businesses to drive meaningful and rewarding sustainability action. However, considering the upsurge of irresponsible and unsustainable business practices that harm the biosphere, needlessly kill wildlife, deplete natural resources, and destroy vegetation, the chapter explicates some specific ways in which businesses in emerging markets can drive green business initiatives from thought to finish, as expressed through green sourcing, green processing, green production, and green consumption practices. We also make recommendations regarding how governments, policymakers, and managers can support and embed the responsible management agenda in emerging markets. The chapter recommends that organisations must reimagine present-day sustainability actions by adopting innovative and sustainable initiatives such as reducing consumption, recycling, remanufacturing, reusing resources, and employing cutting-edge technology to monitor business processes across the entire value-chain from manufacturing to the end-user. At the micro level, we advocate that firm managers, entrepreneurs, and individuals must propel efforts in adopting responsible management practices. Finally, this chapter introduces the multisectoral chapters contained in the pages of this book, outline contributions to theory, and discuss practical managerial and policy implications.
... This theory states that the success of a firm is directly proportional to the company's capability to manage good relationships with the stakeholders. This management of relationship between the company and its stakeholders is an essential tool to generate value and therefore the interpretation of this theory by different companies in different ways can affect the possible correlation between CSR and company's performance (Hammann et al 2009, Perrini et al 2011 The need for studying the relationship between CSR and CFP is because there is a major scarcity of studies focusing on explicit CSR activities declared by firms. The studies which have been done have shown mostly mixed results and there is a sever scarcity of such research in Indian context. ...
Plethora of researches has been undertaken to determine impact of corporate social responsibility (CSR) on financial performance (FP) of enterprises, and leads vary extensively. The main reason for such diverse results may be due to flawed evaluation or due to trivial measured variables looked at. In this paper we aim at exploring the partnership between CSR and FP in the Indian financial sector. Data have been gathered from 39 banks listed on BSE for period of 5 years (2015-2019). The result indicates positive impact of CSR on financial performance of banks.
... A key determinant of small business social responsibility practice, and its associated scope and nature, is the heterogeneous values of individual firms (Ciliberti et al., 2008;Hsu & Cheng, 2012;Smith & Oakley, 1994), in tandem with the differing types of relationships, in terms of breadth, depth and nature, that small firms cultivate with their external stakeholders (Hammann et al., 2009;Lähdesmäki et al., 2019;Lähdesmäki & Suutari, 2012). Values are an essential driver of standards and ethics in small firms and shape the importance and urgency with which small firms come to regard particular social responsibility issues (Jenkins, 2006). ...
Research on socially responsible supply chains has tended to define suppliers over‐simplistically as either responsible or irresponsible. This paper illuminates the varied roles of broadly socially responsible small and medium sized enterprises by seeking to discern the differences and highlight the heterogeneity of the approaches taken. Distinguishing our approach from extant corporate social responsibility categorisations, a typology is outlined, drawing on Jungian Theory of Extraversion and the strategic capability of smaller firms. The analysis suggests four groupings of socially responsible small and medium enterprise supplier: strategic engager; strategic contemplator; active connector and active reflector. Overall, the paper seeks to inject nuance into discussions regarding supplier social responsibility practices, adding to the small business social responsibility literature, as well as unifying a number of strands of research relating to supply chain responsibility. The proposed typology offers firm foundations for further empirical and conceptual research in the area.
... In any case, there is a need for more research and a specific approach to the reality of ethics in SMEs (Jenkins, 2006), as well as the development of specific theoretical and conceptual tools that allow to manage ethics in these companies (Hammann et al., 2009;Lee, 2008). SMEs evolve and change over time, maybe even more rapidly than larger organizations, and therefore, we can speak of a concept of "dynamic" ethics, as opposed to the traditional investigation of "static" ethics (Arend, 2013) It is necessary, therefore, to focus research not only on a particular ethical behavior but also on the cause and antecedents of such behavior (Brand, 2009;Spence, 1999). ...
The purpose of this study is to explore the influence of the ethical infrastructure in small and medium enterprises (SMEs) on the perceived importance of ethics and the ethical culture of these companies. The study also aims to identify the individual actionable items that contribute to this influence and help managers willing to improve the importance of ethics and the ethical culture within their organizations. The method used consisted of a quantitative study based on partial least squares (PLS) with 148 valid questionnaires from 65 SMEs. The actionable elements that have a more significant impact on the perceived importance of the role that ethics plays in the company are the following: to establish norms of behavior, whether written or not; to communicate clearly that nonethical behavior is not tolerated; to put in place sanctioning mechanisms for actions that while not ethical, could benefit the company; to consider employee expectations; and to give voice to employees in critical issues that might affect the company and to set up measures for work–life balance.
... Socially responsible business and ethical behavior of companies have been of interest to academia and practice for decades. However, the focus has almost exclusively been put on large corporations, while small-and medium-sized enterprises (SME) have not received as much attention (Hammann et al. 2009). In a financial economic scenario, in which the corporate survival of small and medium enterprises (SMEs) is more conditioned than ever with the competitive performance, this article aims to show that the strategic incorporation of socially responsible actions, more concerned and engaged with stakeholders, contributes to improving the competitiveness of these organizations (Herrera Madueño et al. 2016). ...
Non-financial reporting is the basic tool for presenting the implementation of sustainability goals (SDGs). This paper investigated the current status of non-financial reporting standardization in terms of small and medium-sized enterprises. The topic of non-financial reporting has been discussed in recent years from the perspective of large business entities. So far, it has only rarely been applied to SMEs. This will increase significantly in the coming years when such reports will also become obligatory for smaller entities. The first stage of the research, based on the method of analysis and criticism of the literature, will be prepared in the area of the subject taken, including relations between the main concepts: sustainability, non-financing reports, SMEs. The essential data source used for the article is reports published by the Global Reporting Initiative. Based on the research conducted, it can be concluded that it is necessary to develop non-financial reporting standards for SMEs. These results may become a valuable resource of knowledge and a set of samples that can be useful in developing this area. Especially since it can be expected that such reports will also be obligatory for SMEs.
Few studies probe small and medium enterprises (SMEs) in the context of sustainability. Thus, this study examines the sustainability orientation in SMEs and its impact on financial performance, considering the ‘ageing effect’. It employs a sample of Italian SMEs operating in the wine sector, using a survey questionnaire to collect qualitative and quantitative data for analysis. Accordingly, although sustainability remains typically unembedded within such SMEs, when it is embedded, a positive correlation with performance is evident. Furthermore, age is a relevant variable that can explain a different sustainability orientation and its impact on financial performance. This research contributes insight into sustainability orientation in SMEs, extending the sustainability, age, and SME performance literature. Managerial implications suggest the need to better emphasise social issues and invest more in skilled human resources and training programmes.
Companies require the development of corporate social responsibility - CSR practices that are a means of relating with their stakeholders and that demonstrate how they contribute to satisfying their needs. This article seeks to carry out a descriptive analysis of CSR practices by stakeholder presented in the literature and to make a comparison with the practices reported by the most exporting SMEs in Valle del Cauca.To this end, a review of academic articles between 2010 and 2020 was carried out and a content analysis was made of the CSR practices published on the web pages of the most exporting SMEs in Valle del Cauca according to the report of the Cali Chamber of Commerce in 2020, using as a basis for comparison the dimensions of economic, philanthropic and ethical-legal CSR proposed by Carroll. The results indicate that the stakeholder group that perceives the greatest number of practices on the part of the SMEs analyzed are the employees, and that the CSR dimension with the most practices is ethical-legal. Finally it is found that multiple practices are aimed at two or more stakeholders, which allows for an optimization of resources and a better scope per CSR practice applied in SMEs.
This study investigates how family continuation, namely family tradition and succession intention, alter the socially responsible behavior of small and medium sized (SME) family firms. Using a unique dataset, we have conducted multiple regressions on survey data from German family SMEs and show a statistically and economically significant increase in Corporate Social Responsibility (CSR) alongside the planning of family succession. However, when analyzing the different facets of CSR, we have found strong variances: While succession intention goes along with an increased community, market, and supply chain engagement this is not the case for CSR directed towards employees, or the environment. Family tradition didn’t correlate with a change in CSR behaviour to a relevant extent. In our theoretical embedding we employed socio-emotional wealth (SEW) theory to explain our findings. Thereby, our study fills a gap in the literature adding the perspective of SME family firms on the use of CSR in the context of family succession and also adding to the theoretical understanding of SEW.
Social responsibility is a common part of corporate practice and an established topic of scientific research. Foreign studies have repeatedly concluded that the consistent integration of social responsibility into corporate strategy and strategic management of all dimensions of CSR strengthen corporate growth, bring competitive advantages, and contribute to the sustainable development of society. The aim of the paper is to find out whether even in the Czech Republic business entities with a strategic concept of CSR achieve better economic results compared to those whose approach to social responsibility is rather intuitive and unsystematic. Also, it seeks to answer the question of whether, with different corporate strategies, it is desirable to focus on different CSR activities that would support corporate growth. A survey of the dimensions of strategic CSR and basic economic characteristics was carried out on a set of more than 400 Czech companies engaged in CSR. Data were processed by methods of cluster analysis, factor analysis and multinomial logistic regression. The results show that there is a link between a more advanced (i.e., strategic) concept of CSR and achieving economic prosperity. It was also found that companies with different corporate strategies should carefully consider the benefits of individual CSR activities. All three strategies have shown positive effects resulting from activities aimed at employees and the local community. The differentiation strategy has shown the benefits of cultivating a market environment and the highest quality strategy for human rights protection. On the other hand, with the lowest price strategy, additional CSR activity does not mean an economic advantage. The conclusions contribute to the clarification of the links between strategic CSR and corporate growth in the Czech business environment and contribute specific knowledge that can be implemented by companies if they want to strengthen the positive effects of their socially responsible activities.
Little is known about how, and through which characteristics, CEO effects DUI mode innovation activities in SMEs. Thus, we connect the DUI mode concept with business management research and use data from 40 qualitative interviews in German non-R&D-based, but innovative SMEs. Applying the upper echelon concept as an analytical framework our results show that the CEO acts as an important moderator and mediator between DUI learning mechanism and innovation performance. In particular CEO’s values and cognitive base may help to increase innovation activities of the employees. Our paper is the first that empirically applies CEO’s psychological attributes of the upper-echelons concept to DUI innovations in non-R&D SMEs. We have developed a new version of the upper echelons model as well as hypotheses gained from the qualitative data analysis that are ready to be tested with quantitative procedures to improve the upper echelons theory concerning DUI-led innovation processes in SMEs.
A successful business must pay attention not only to how to improve the welfare of shareholders, but also the welfare of all stakeholders. This study aims to see the effect of disclosure of Corporate Social Responsibility (CSR) on corporate financial performance. Financial performance is measured using three indicators, which are return on Equity (ROE), total stock return and Tobin’s Q. ROE represents company’s profitability, total stock return reflects company’s performance in the market and tobin’s Q shows firm value. CSR is measured using the Corporate Social Disclosure Index (CSRDI) which is based on the ISO 26000 standard. By using two controlling variables, company size and leverage, the results show that there is a negative and insignificant effect between CSR and ROE ratio. Although CSR practice together with control variables also has no effect on total stock returns, but there is a significant positive effect between CSR disclosures and firm value. These results can motivate company’s managers to include CSR as a management strategy to increase firm value by paying serious attention to stakeholders and sustainability issues.
Social performance is a measurement of organizational outcome in social, environmental, economic, and government domain by considering multiple stakeholders. Increasing the social performance of Small and Medium Industry (SMI) can be done through innovation. Innovation concept that is suitable to be implemented in SMI is open innovation. Open innovation is characterized by the existence of knowledge flow among SMIs and between SMI and stakeholders. Knowledge flow in an organization is managed through knowledge management. The relationship between knowledge management and open innovation has been discussed in previous literature. However, there is no previous research that identifies the role of knowledge management and open innovation which supports the enhancement of SMI’s social performance. In this study, a conceptual model which represents the relationship between knowledge management and social performance through open innovation in SMI context is developed and tested. The knowledge management concept is represented by knowledge identification, knowledge acquisition, knowledge retention, knowledge sharing, and knowledge application. The open innovation concept consists of two dimensions which are inbound and outbound. The social performance concept is represented by the focus on community and employee. The respondents of this study are 27 small and medium industries which produce batik in Indonesia. The model is tested using the partial least square. The result shows a significant relationship between knowledge acquisition and inbound open innovation, knowledge sharing and outbound open innovation, and inbound open innovation and social performance.
Ethics is one of the values that many business leaders say the new center of their priorities … but in reality, it is only a minority of them who use it. Nevertheless, respect for ethical principles is a source of performance. We wanted, through this study show the influence of ethical behavior of the leader on the overall performance of small and medium enterprises (SMEs) in a Cameroonian context. To achieve this, we adopted a quantitative approach based on a questionnaire. It emerges from this study that ; the leaders of Cameroonian SMEs adopt ethical practices consistent with their profit research objectives. Besides the results of this research show that honesty and respect for others positively influence business performance.
L’éthique est l’une des valeurs que beaucoup des dirigeants d’entreprises disent placer au centre de leurs priorités, mais en réalité ce n’est qu’une minorité d’entre eux qui en font usage. Pourtant, le respect des principes éthiques est source de performance. Nous avons voulu, à travers cette étude, montrer l’influence du comportement éthique du dirigeant sur la performance globale des petites et moyennes entreprises (PME) dans un contexte camerounais. Pour y parvenir, nous avons adopté une démarche quantitative basée sur un questionnaire administré auprès des dirigeants de PME. Il ressort de cette étude que, les dirigeants de PME camerounaises adoptent des pratiques éthiques compatibles avec leurs objectifs de recherche de profit. Par ailleurs, les résultats de cette recherche montrent que l’honnêteté et le respect d’autrui influencent positivement la performance des entreprises.
Purpose
This study aims to examine the relationship between corporate social responsibility (CSR) and firm value (FV) with the moderating role of the organizational life cycle (OLC).
Design/methodology/approach
To fill the missing link of the CSR–FV relationship in the life cycle of the firms, this study divided the firm life cycle into five stages and tested the impact of FV on CSR in each phase. This study uses the ordinary least squares, generalized method of moments method with the dynamic panel data model of 225 Vietnamese listed companies for the period from 2014 to 2018.
Findings
This study’s findings confirm the positive effect of CSR on FV. Besides, in most of the stages of the firm life cycle, FV positively affects CSR practices, and this effect is highest in the growth stage. In the decline phase, the relationship between FV and CSR is complex depending on the resources and ability of companies. This study’s results are trusted through many robustness tests.
Research limitations/implications
This research does not include all financial, insurance and investment firms to measure the CSR–FV relationship with OLC as moderating role. Further research might conduct in the larger sample or using data in cross countries enhance the evidence for the given relationship.
Originality/value
This research contributes empirical evidence to the scientific literature on CSR, FV and OLC, which would be tremendously helpful for policymakers and business owners to enhance company efficiency.
This integrated approach implies a broad approach to monitor the performance of the organization both during its life cycle and on the different social dimensions, from the perspective of the conformity of the management processes in relation to the economic, social, and environmental principles. Currently, the social responsibility reporting is a major challenge for the management of organizations in the context where honesty, transparency, business ethics, are values shared by an entire community. The research involves a process through which a series of correlations between the CSR reporting tools and the organization performance management can be analyzed by highlighting the role of the different reporting variables in the architecture of the performance indicators of the organization. The chapter addresses how a set of CSR reporting indicators can be identified and be integrated into the performance indicators which characterize the sustainability of a company.
Purpose
The purpose of this paper is to comprehend the nature of online reviews received on various social networking sites and internet-based platforms regrading organizational corporate social responsibility (CSR) initiatives.
Design/methodology/approach
Given the novelty of this field, a qualitative exploratory research study was carried out. For this research, 28 Indian CSR experts on online CSR reviews were interviewed with a semi-structured open-ended questionnaire for data collection. Thematic and relational content analysis was applied for data analysis. The data was analysed based upon the theoretical anchors of micro foundations approach, organizational egoism (reputational and economic) concept and organizational logic (instrumental and integrative) literature and stakeholder salience.
Findings
The study analysis indicated that online CSR reviews that organizations received on various social networking sites and internet-based platforms from different individual and institutional stakeholders were complaints, appreciations, observations and recommendations in nature. Online CSR reviews appreciated more of integrative organizational logic than instrumental organizational logic. CSR reviews present on online platforms valued organizational reputational egoism more than organizational economic egoism. The salience of stakeholders was getting redefines in Web 2.0 based online CSR reviews. Finally, micro foundations approach was becoming a more potent perspective in the CSR narrative.
Research limitations/implications
This research study was anchored in the micro foundations approach of CSR (Hafenbrädl and Waeger, 2017). This study ascertained those individuals did matter in organizational CSR narrative (Maak et al., 2016). Furthermore, how firms were evaluated through online reviews based upon organizational egoism (reputational and economic) (Casali, 2011; Casali and Day, 2015) and organizational logic (instrumental and integrative) (Seele and Lock, 2015; Liu, 2013; Gao and Bansal, 2013; Bansal and Song, 2017) was studied. Finally, in the world of online reviews, the notion of salient stakeholders (Mitchell et al., 2011; Magness, 2008) was getting redefined, and this aspect was also covered in this research study.
Practical implications
Firms have been engaging in CSR initiatives towards provision of social benefits and community engagement. Regarding firm CSR initiatives, CSR managers traditionally used to receive feedback from the stakeholders based upon written and special surveys conducted post or during the late stages of CSR engagement. The advent and ubiquitous presence of digital mobile devices and Web 2.0-enabled internet connections altered the way firms received feedback. This was because increasingly online reviews were received from stakeholders on firm CSR web pages, social networking sites and other online spaces. Many of the online CSR reviews were regarding the compliments and achievements that the CSR initiatives had achieved. However, a significant portion of online CSR reviews were regarding the complaints regarding the CSR initiatives. Online CSR reviews received from an array of stakeholders are inputs for firm managers. Online CSR reviews are thus an asset for an organization. Managers need to develop capabilities towards applying this asset for the expressed purposed. These online CSR reviews could be used as inputs to draw new CSR initiatives, redefine extant CSR initiatives. Furthermore, these online CSR reviews could be used as inputs to alter the organizational resources, capabilities, competencies and process regarding CSR initiatives.
Originality/value
This was one of the first studies that integrated the theoretical aspects of salient stakeholders, organizational logic, organizational egoism through the lens of micro foundations approach in the context of organizational CSR initiatives. To the best of the author’s knowledge, this was indeed a novel contribution, as the same was explored and explicated based upon online CSR reviews on internet-based platforms.
In this article, we rely on the development of a Massive Open Online Course (MOOC) to show the relevance of a values-based approach to responsible management. To clarify the notion of values, we draw on Heinich’s axiological sociology, which presents values as principles of judgment and action. Building on this approach, we interviewed 35 management scholars to understand the values they attribute to responsible management. Our analysis led to the identification of seven actionable values that can be used to circumscribe responsible management. We also show how three interrelated levels of analysis—namely, individual (micro), organizational (meso), and societal (macro)—allowed us to further organize the interview data to produce rich content for the MOOC. Our contribution is twofold: first, our values-based approach helps overcome the axiological ambiguity of the Principles for Responsible Management Education (PMRE), which invoke the importance of incorporating “the values of global social responsibility” (Principle 2), but fail to define and operationalize these values. Second, we provide a rationale and guidance for implementing values-based responsible management education in Business Schools.
Increasingly, firms are playing a key role in resolving societal problems, including pandemics. The contribution of firms in pandemics can be performed through corporate social responsibility initiatives. Consequently, firms make their target audience aware of their corporate social responsibility activities through communication efforts. However, there is an advocacy to adopt a strategic approach in corporate social responsibility communication. In emerging economies, the performance of CSR has been widely viewed as a philanthropic gesture, thus leading to firms not using innovative ways such as CSR communication to enhance its effectiveness and strategic benefits. This paper, therefore, seeks to identify the various CSR communication activities within the CSR communication strategy domain. The study adopted a semi-systematic literature review approach to understanding ways to perform CSR communication, with a close look at communications on firms COVID-19 initiatives. Some examples of COVID-19 CSR communications in emerging economies are also provided. The paper suggested that a strategic CSR communication on COVID-19 is determined by the strategy (informational, reactive, and deliberative), the creative message and content of the message (CSR initiative, CSR fit, CSR motive, and CSR impact), communication channel (advertisement, website, annual report and sustainability report, social media) and must be results-driven. The paper contributes to how firms must undertake CSR communication in emerging economies.
We examined the mediating effects of corporate governance and image on CSR and performance link. We find CSR positive related to firm performance but insignificant. We further established CSR and FP are positive and insignificant without the existence of CI and CG but becomes significant with the inclusion of both mediating variables. Therefore, corporate governance codes and principles should be enhanced in Cameroon, since CSR engagement helps in better governance practice through establishing good internal controls and monitoring that ultimately enhances a firm financial performance. Several policy recommendations were discussed.
Purpose
This paper aims to provide empirical evidence and policy implications on the link between corporate social responsibility, financial inclusion and financial performance of the banking sector in an emerging market.
Design/methodology/approach
This study uses data collected from the annual reports of 13 listed banks in Vietnam from 2011 to 2019. CSR is proxied by the ratio between charitable contributions and bank profits. Besides, this study uses the number of branches and the number of agents as the proxies for a level of financial inclusion. The generalized method of moments and various tests are used to ensure the robustness of the findings.
Findings
Findings in this study indicate that CSR activities do matter, and they contribute positively to financial inclusion. In addition, the bank’s size is also associated with an increased level of financial inclusion.
Practical implications
Findings from this study provide important implications for bank executives and policymakers in Vietnam in managing and extending CSR activities with the view of supporting and enhancing financial inclusion.
Originality/value
To the best of the author’s knowledge, this is the first empirical study in the context of the banking sector in Vietnam in which the impact of CSR activities and financial performance of the banking sector on financial inclusion at the bank level is examined.
The chapter looks to contribute in a theoretical way to the measurement of the concepts of CSR (corporate social responsibility), good governance, and reputation in SMEs, since they are concepts of great importance in business management and are related. Social responsibility actions through the exercise of good governance means that SMEs can obtain a solid reputation. The purpose of the chapter is to develop how companies that incorporate social responsibility into their business model achieve a better image in the eyes of their stakeholders. Codes of ethics play an important role as an instrument of good governance. As a result, the chapter proposes measurement indicators to be used in future empirical research to verify the effects of causality. They can be a valuable tool for knowledge management as a source of innovation for SMEs.
Little empirical work has been done on the effect of stakeholder management on corporate performance. In this study, we contributed to stakeholder theory development by (1) deriving two distinct stakeholder management models from extant research, (2) testing the descriptive accuracy of these models, and (3) including important variables from the strategy literature in the tested models. The results provide supports for a strategic stakeholder management model but no support for an intrinsic stakeholder commitment model. Implications of these findings for management practice and future research are discussed.
Stakeholder theory begins with the assumption that values are necessarily and explicitly a part of doing business. It asks managers to articulate the shared sense of the value they create, and what brings its core stakeholders together. It also pushes managers to be clear about how they want to do business, specifically what kinds of relationships they want and need to create with their stakeholders to deliver on their purpose. This paper offers a response to Sundaram and Inkpen's article "The Corporate Objective Revisited" by clarifying misconceptions about stakeholder theory and concluding that truth and freedom are best served by seeing business and ethics as connected.
This study investigates the relationship between organizational commitment and employee perceptions of corporate social responsibility (CSR) within a model that draws on social identity theory. Specifically, we examine the impact of three aspects of socially responsible behaviour on organizational commitment: employee perceptions of corporate social responsibility in the community, procedural justice in the organization and the provision of employee training. The relationship between organizational commitment and each aspect of CSR is investigated within a model that distinguishes between genders and includes a set of control variables that is drawn from the commitment literature (Meyer et al., 2002). The analysis is based on a sample of 4,712 employees drawn from a financial services company. The results emphasize the importance of gender variation and suggest both that external CSR is positively related to organizational commitment and that the contribution of CSR to organizational commitment is at least as great as job satisfaction.
This study investigates the relationship between organizational commitment and employee perceptions of corporate social responsibility (CSR) within a model that draws on social identity theory. Specifically, we examine the impact of three aspects of socially responsible behaviour on organizational commitment: employee perceptions of corporate social responsibility in the community, procedural justice in the organization and the provision of employee training. The relationship between organizational commitment and each aspect of CSR is investigated within a model that distinguishes between genders and includes a set of control variables that is drawn from the commitment literature (Meyer et al., 2002 Meyer, J.P., Stanley, D.J., Herscovitch, L. and Topolnytsky, L. 2002). The analysis is based on a sample of 4,712 employees drawn from a financial services company. The results emphasize the importance of gender variation and suggest both that external CSR is positively related to organizational commitment and that the contribution of CSR to organizational commitment is at least as great as job satisfaction.
This paper critically examines available theoretical models which have been derived from statistically established patterns of association between contextual and organizational variables. These models offer an interpretation of organizational structure as a product of primarily economic constraints which contextual variables are assumed to impose. It is argued that available models in fact attempt to explain organization at one remove by ignoring the essentially political process, whereby power-holders within organizations decide upon courses of strategic action. This `strategic choice' typically includes not only the establishment of structural forms but also the manipulation of environmental features and the choice of relevant performance standards. A theoretical re-orientation of this kind away from functional imperatives and towards a recognition of political action is developed and illustrated in the main body of the paper.
Stakeholder theory has been a popular heuristic for describing the management environment for years, but it has not attained full theoretical status. Our aim in this article is to contribute to a theory of stakeholder identification and salience based on stakeholders possessing one or more of three relationship attributes: power, legitimacy, and urgency. By combining these attributes, we generate a typology of stakeholders, propositions concerning their salience to managers of the firm, and research and management implications.
In this article we discuss trust in ethics and management as a qualified and conditional good, arguing that researchers should focus on optimal trust--a mixture of trust and distrust appropriate in most contexts, including business. Trust is an important part of strategic choice, and managers who develop optimal trust in relationships with stakeholders will improve firm performance. We offer a definition of optimal trust, develop propositions based on the definition, and include indicators managers might use to assess whether trust is optimal in relationships with various stakeholders. [ABSTRACT FROM AUTHOR] Copyright of Academy of Management Review is the property of Academy of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
This technical paper determines the extent to which small and medium enterprises (SMEs) behave responsibly, and propose measures to enhance and promote corporate social responsibility in SMEs. Corporate social responsibility (CSR) has taken on a broader view and refers to the actions that firms take to carry out their activities in a responsible manner, respecting the environment, the community and the workforce, and also creating opportunities to enhance them. The study covers eight countries in Latin America and over 1,300 firms surveyed. As SMEs represent over 95 percent of all firms in Latin America, provide between 40 and 60 percent of all jobs, and account for 30 to 50 percent of GDP, their behavior can have a significant impact on society and the environment.
Ethical leaders are ultimately responsible for developing a strong and sustainable ethical climate in organisations. Ethical values and the ability to influence followers to internalise these values have become prerequisites for effective leadership in modern organisations. Although ethics, leadership, and values have received much attention, there has been little coordinated effort to integrate transformational leadership with ethical climate and ethical values. The aim of this study was to develop and validate a theoretical model to explain the structural relationships between these variables in the South African business context. The results revealed that altruism influences transformational leadership positively, and that transformational leadership in turn has a positive effect on ethical climate. Some support was also found for the proposition that integrity moderates the effect of transformational leadership on ethical climate.
This study examines the relationships among ethics code awareness, perceived corporate ethical values, and organizational commitment. Three key findings emerged. First, those aware of the existence of an ethics code in their organizations perceived their organizations as having more ethical values than those not aware of an ethics code in their organizations. Second, respondents exhibited higher levels of organizational commitment when they were aware of an ethics code in their companies. Finally, the relationship between ethics code awareness and organizational commitment was fully mediated by perceptions of an organization’s ethical values. The results suggest that ethics codes may lead to higher levels of organizational commitment by increasing the belief that their organizations have strong ethical values, as long as the existence of ethics codes are adequately communicated.
The 1960s saw the birth of corporate social responsibility. In the 1970s, companies focused on the management of social responsiveness. In the 1980s, corporations are grappling with the issue of making social responsibility a part of overall strategic management. The authors examine some of the ramifications of the search for a new definition of social responsibility.
The purpose of this chapter is to outline the development of the idea of "stakeholder management" as it has come to be applied in strategic management. We begin by developing a brief history of the concept. We then suggest that traditionally the stakeholder approach to strategic management has several related characteristics that serve as distinguishing features. We review recent work on stakeholder theory and suggest how stakeholder management has affected the practice of management. We end by suggesting further research questions.
The authors explore corporate ethical values and organizational commitment in marketing. They (1) discuss corporate ethical values as a component of corporate culture, (2) review the literature on organizational commitment, (3) hypothesize a positive relationship between corporate ethical values and organizational commitment, and (4) empirically test the relationship with data from more than 1200 professional marketers, representing subsamples of marketing managers, marketing researchers, and advertising agency managers. The study results provide strong evidence of a positive association between corporate ethical values and organizational commitment. Given previous research demonstrating a strong link between commitment and specific organizational benefits, corporate ethics may be not only an important societal issue, but a key organizational issue as well.
This analysis considers the impact of the top managers in an organization on the organization's outcomes, specifically strategic choices and performance levels. The focus is not on the chief executive alone, but rather on the entire top management team. Using a macro view, these organizational outcomes are perceived to be related to the values and cognitive bases of those high-power individuals in the organization. In developing the model, emphasis is on the background characteristics of the top managers as opposed to the psychological dimensions. A series of propositions that should be tested to support the upper echelons theory are presented. The topics of these propositions include age, functional track, other career experiences, education, socioeconomic roots, financial position, and group characteristics. The creation of this model is just the beginning of the work that is necessary to evaluate and understand the upper echelons theory. Further input is needed from areas such as the executive recruiting industry. Additionally, clinical and statistical studies are both necessary to fully develop this theory. (SRD)
The results of a survey conducted in the Atlanta and Athens, Georgia area suggest that small business managers and non-business individuals have similar perceptions of small business's social responsibility.
Customer responsibilities are viewed as the chief concern of both groups. Low rankings given on the small firm's contribution to employment and innovation suggest a need for greater public awareness of the societal role of small business. ¹
1 This research was partially funded by the University of Georgia Small Business Development Center. An earlier version of this manuscript was presented at the 29th World Conference of the International Council for Small Business, Chicago, IL, June 1984.
Strategic Management: A Stakeholder Approach was first published in 1984 as a part of the Pitman series in Business and Public Policy. Its publication proved to be a landmark moment in the development of stakeholder theory. Widely acknowledged as a world leader in business ethics and strategic management, R. Edward Freeman’s foundational work continues to inspire scholars and students concerned with a more practical view of how business and capitalism actually work. Business can be understood as a system of how we create value for stakeholders. This worldview connects business and capitalism with ethics once and for all. On the 25th anniversary of publication, Cambridge University Press are delighted to be able to offer a new print-on-demand edition of his work to a new generation of readers.
Stakeholder theory has been a popular heuristic for describing the management environment for years, but it has not attained full theoretical status. Our aim in this article is to contribute to a theory of stakeholder identification and salience based on stakeholders possessing one or more of three relationship attributes: power, legitimacy, and urgency. By combining these attributes, we generate a typology of stakeholders, propositions concerning their salience to managers of the firm, and research and management implications.
In this article we discuss trust in ethics and management as a qualified and conditional good, arguing that researchers should focus on optimal trust - a mixture of trust and distrust appropriate in most contexts, including business. Trust is an important part of strategic choice, and managers who develop optimal trust in relationships with stakeholders will improve firm performance. We offer a definition of optimal trust, develop propositions based on the definition, and include indicators managers might use to assess whether trust is optimal in relationships with various stakeholders.
Ethical leadership literature (Bass & Steidlmeier, 1999; Kanungo & Mendonca, 1996) suggests that authentic transformational leadership must be based on some moral foundation. Such literature is not as clear, however, on whether transactional leadership can have moral foundation as well. The paper argues that transformational and transactional leadership behaviours are judged to be ethical based on two different sets of values, motives, and assumptions. These values, motives, and assumptions are grounded in two types of ethical perspective for understanding the behaviour of the two types of leaders. Transformational leaders have an organic worldview and moral altruistic motives grounded in a deontological perspective. Transactional leaders, on the other hand, have an atomistic worldview and mutual altruistic motives grounded in a teleological perspective.
Sustainable competitive advantage has proved elusive for companies in the 1990s. While making enormous investments in technology, research, and state-of-the-art marketing, many of today's managers continue to ignore the single most important factor in achieving and maintaining competitive success: people. Yet all evidence indicates that the source of competitive advantage is shifting from technology, patents, or strategic position to how a company manages its employees. In this excerpt from his newly published book, Competitive Advantage through People, Jeffrey Pfeffer describes how successful companies have overcome the barriers to change and offers a solid framework—with specific actions—for implementing these changes in any industry.
This article examines current priorities of non-financial reporting among large, publicly traded European corporations to assess how companies disclose on corporate social responsibility. It analyzes 90 multinational companies' social environmental, and sustainability reports; identifies what they report on relations with stakeholders; and examines differences among reporting tools. There are two key findings. Companies differ in the way they deal with non-financial reports along a continuum between a monitoring approach and a managerial approach. Second, companies tend to focus on specific CSR-relevant themes that reflect the priorities of multiple stakeholders. The latter include safety for workers and of products, product quality and innovation, environmental protection, dialogue with communities and stakeholders in general, attention to skill development, and responsible citizenship.
Three types of trust in economic exchanges are identified: weak form trust, semi-strong form trust, and strong form trust. It is shown that weak form trust can only be a source of competitive advantage when competitors invest in unnecessary and expensive governance mechanisms. Semi-strong form trust can be a source of competitive advantage when competitors have differential exchange governance skills and abilities, and when these skills and abilities are costly to imitate. The conditions under which strong form trust can be a source of competitive advantage are also identified. Implications of this analysis for theoretical and empirical work in strategic management are discussed.
In this paper the exclusive focus on large firms in the field of business ethics is challenged. Some of the idiosyncrasies of small firms are explained, and links are made between these and potential ethical issues. A review of the existing literature on ethics in small firms demonstrates the lack of appropriate research, so that to date we can draw no firm conclusions in relation to ethics in the small firm. Recommendations are made as to the way forward for small firm business ethics research. Questions for investigation are suggested using micro, meso and macro perspectives. Much exploratory work needs to be done to lay the groundwork for this important area of social and commercial research in the future.
Is an ethical leader an oxymoron? Society demands and expects greater accountability from organizational leaders. The literature on leadership, especially business leadership, has neglected ethical issues by focusing only on those approaches and strategies that emphasize self-centred, individualistic concerns. How ever, true and effective leadership is one in which the leader's behaviour and the exercise of the leadership influence process are consistent with ethical and moral values. The authors argue that our understanding of leadership is incomplete, if not deformed, if it does not include the three critical dimensions of ethical leadership.
This study examined the customer orientation - performance link in small- and medium-sized businesses and tested for the possible effects of innovation orientation, market dynamism and competitive intensity on the degree of customer orientation among these firms. Specific performance measures used were new product success, sales growth and return on investment (ROI). Based on constructs of these measures, a research scale was developed for the study and data were collected via a self-administered mail survey among a UK samples of small- and medium-sized enterprises (SMEs). The results show a positive effect of customer orientation on SME performance. There are also findings on the varied influences of innovation orientation and the competitive environment on the levels of SME customer orientation. In the light of existing literature, implications of our findings for SME managers, the study’s limitations and future research directions are subsequently addressed.
This article presents conclusions from a 10-year research program, the purpose of which has been to develop a framework and methodology, grounded in the reality of corporate behavior, for analyzing and evaluating corporate social performance. There are three principal sections: (a) a summary of the approaches, models, and methodologies used in conducting more than 70 field studies of corporate social performance from 1983-1993; (b) a discussion of the principal conclusions derived from the data that (1) corporations manage relationships with stakeholder groups rather than with society as a whole, (2) it is important to distinguish between social issues and stakeholder issues, and (3) it is necessary to identify the appropriate level of analysis in order to evaluate CSP; and (c) a discussion of propositions and areas for further research.
The authors explore corporate ethical values and organizational commitment in marketing. They (1) discuss corporate ethical values as a component of corporate culture, (2) review the literature on organizational commitment, (3) hypothesize a positive relationship between corporate ethical values and organizational commitment, and (4) empirically test the relationship with data from more than 1200 professional marketers, representing subsamples of marketing managers, marketing researchers, and advertising agency managers. The study results provide strong evidence of a positive association between corporate ethical values and organizational commitment. Given previous research demonstrating a strong link between commitment and specific organizational benefits, corporate ethics may be not only an important societal issue, but a key organizational issue as well.
This analysis considers the impact of the top managers in an organization on the organization's outcomes, specifically strategic choices and performance levels. The focus is not on the chief executive alone, but rather on the entire top management team. Using a macro view, these organizational outcomes are perceived to be related to the values and cognitive bases of those high-power individuals in the organization. In developing the model, emphasis is on the background characteristics of the top managers as opposed to the psychological dimensions. A series of propositions that should be tested to support the upper echelons theory are presented. The topics of these propositions include age, functional track, other career experiences, education, socioeconomic roots, financial position, and group characteristics. The creation of this model is just the beginning of the work that is necessary to evaluate and understand the upper echelons theory. Further input is needed from areas such as the executive recruiting industry. Additionally, clinical and statistical studies are both necessary to fully develop this theory. (SRD)
The management of competing stakeholder interests has emerged as a significant topic in the management literature. Related issues are the relationship between stakeholder management and the perception that a firm is socially responsible, and the performance implications of both stakeholder management and social responsibility. Theory and models surrounding these issues are abundant, but empirical research is in an early stage. This research forum reports six excellent efforts to-tackle fundamental ideas about stakeholders, social responsibility, and performance.
The field of strategic human resource management (SHRM) has been criticized for lacking a solid theoretical foundation. This article documents that, contrary to this criticism, the SHRM literature draws on three dominant modes of theorizing: universalistic, contingency, and configurational perspectives, Seven key strategic human resource practices are identified and used to develop theoretical arguments consistent with each perspective, The results demonstrate that each perspective can be used to structure theoretical arguments that explain significant levels of variation in financial performance.
Ethical leadership literature (Bass & Steidlmeier, 1999; Kanungo & Mendonca, 1996) suggests that authentic transformational leadership must be based on some moral foundation. Such literature is not as clear, however, on whether transactional leadership can have moral foundation as well. The paper argues that transformational and transactional leadership behaviours are judged to be ethical based on two different sets of values, motives, and assumptions. These values, motives, and assumptions are grounded in two types of ethical perspective for understanding the behaviour of the two types of leaders. Transformational leaders have an organic worldview and moral altruistic motives grounded in a deontological perspective. Transactional leaders, on the other hand, have an atomistic worldview and mutual altruistic motives grounded in a teleological perspective.RésuméLa littérature sur le leadership éthique (Bass & Steidlmeier, 1999; Kanungo & Mendonca, 1996) suggère que le leadership transformationnel authentique doit être basé sur des fondements moraux quelconques. Par con-tre, la littérature ne précise pas si le leadership trans-actionnel doit aussi avoir des fondements moraux. Cette étude démontre que les comportements de leadership transformationnels ainsi que transactionnels sont jugés comme étant basés sur deux différents groupes de valeurs, motifs et suppositions en ce qui attrait à l'éthique. Ces valeurs, motifs et suppositions sont fondés sur deux types de perspectives éthiques defaçon à com-prendre le comportement des deux types de leaders. Les leaders transformationnels out une perception orga-nique du monde ainsi que des motifs moraux altruistes basés sur une perspective déontologique. À l'opposé, les leaders transactionnels ont une perception atomiste du monde et des motifs mutuels basés sur une perspective téléologique.
In this paper the exclusive focus on large firms in the field of business ethics is challenged. Some of the idiosyncrasies of small firms are explained, and links are made between these and potential ethical issues. A review of the existing literature on ethics in small firms demonstrates the lack of appropriate research, so that to date we can draw no firm conclusions in relation to ethics in the small firm. Recommendations are made as to the way forward for small firm business ethics research. Questions for investigation are suggested using micro, meso and macro perspectives. Much exploratory work needs to be done to lay the groundwork for this important area of social and commercial research in the future.
Corporate social responsibility is frequently defined primarily in terms of the social and environmental impact of systemic organisational activity. This misses the point. To be applicable, corporate responsibility should be understood as a process, through which individuals’ moral values and concerns are articulated. Moreover, there are important grounds for asserting that such a process should be participative, involving employees (and perhaps other stakeholders). It seems inconsistent not to respect such groups’ right to an opinion, while at the same time purporting to be ethical and responsible; also, a better alignment of organisational policy and employees’ values holds possibilities for enhanced motivation and work performance. Through such a participative process, matters of social responsibility may be identified in the expectations and moral claims of an organisation’s stakeholders. Such claims constitute prima facie obligations to which those responsible for corporate policy should attend, and where such demands conflict then dialogue is required in order to establish an appropriate course of action.