How expected outcomes, stakeholders, and institutions influence corporate social responsibility at different levels of large basic needs firms

Larissa Shnayder and Frank J. Van Rijnsoever

Business Strategy and the Environment, 2018, vol. 27, issue 8, 1689-1707

Abstract: A firm's choice to practice corporate social responsibility (CSR) is commonly explained using insights from institutional theory or stakeholder management. However, we do not know how important external pressures are at the executive level and individual manager level in a firm's choice to engage in particular CSR activities. Nor do we know how important these external pressures are in comparison with other attributes of CSR activities that can influence this choice, such as costs or expected returns of an activity. Finally, we do not know whether all firms respond in the same way to these influences. Hence, we ask the following: How do the outcomes and pressures for a CSR activity influence the choice of that particular activity by different classes of large basic needs industry firms? Using a choice experiment, we study the CSR activities of 402 firms in the energy, packaged foods, and pharmaceutical industries. We demonstrate that expected outcomes, rather than institutions or stakeholders, drive the choice of an activity. Firms invest differing amounts of funds into a particular activity. Although institutions and stakeholders explain the overall CSR strategy of the firm, they do not explain their choices for specific activities.

Date: 2018
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