Corporate Social Responsibility Trajectory: Mining Reputational Capital

Lars E. Isaksson ()
Additional contact information
Lars E. Isaksson: School of Business and Law, Queensland University of Technology, Brisbane, QLD 4001, Australia

Administrative Sciences, 2025, vol. 15, issue 3, 1-25

Abstract: This study proposes that MNCs might withdraw from the CSR concept to gain tangible benefits, like improved corporate financial performance (CFP), and intangible benefits, such as reputational capital (RC). This represents a paradigm shift from the philanthropic end of the spectrum to the strategic win–win side, where all investments are expected to yield a return. Being tacit, quests for reputational returns are discussed in terms of corporate social performance (CSP) with its currency being RC (an intangible asset). However, this requires a deep understanding of the CSP concept and ‘good management’. This study argues that CSR will change trajectory based on three facets. First, we argue for the replacement of CSR by CSP, where ESG becomes ‘business as usual’. Second, regulatory categories (voluntary or legislated) will merge. Third, ethics endorsing ‘good management’ will alter executive mindsets, making CSP deeply embedded in corporate behavior. Organizational behavior towards CSP must, therefore, be sincere yet not embedded overwhelmingly. We extend previous discussions regarding the relationship between CSP and CFP, who present robust evidence that (1) absent CSR embedment has no/neutral CSP and CFP effect; (2) inadequate CSR yields negative CSP and CFP; and (3) productive CSR positively affects CSP and CFP. Consequently, this study argues that (4) strategic CSR (SCSR) maximizes positive CSP and that (5) excessive CSR is detrimental, yielding negative effects on both CSP and CFP. This study, therefore, conjectures the existence of a ‘sweet spot’, where SCSR optimizes CSP and CFP outcomes. The contributions address ESG engagement as a ‘sweet spot’ concept and provide a model enabling SCSR discussion, CSP evaluations, and an implementation framework for its achievement. The framework gives executives a toolbox to influence their stakeholders toward improved CFP. Therefore, our perspective supports CSP embedment, enabling firms to address business growth and sustainability requirements.

Keywords: strategic CSR; CSP; ESG; CFP; sweet spot; implementation (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2076-3387/15/3/95/pdf (application/pdf)
https://www.mdpi.com/2076-3387/15/3/95/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jadmsc:v:15:y:2025:i:3:p:95-:d:1609461

Access Statistics for this article

Administrative Sciences is currently edited by Ms. Nancy Ma

More articles in Administrative Sciences from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().