Social Sustainability of a Firm: Orientation, Practices, and Performances

Xiaozhen Wang, Mark Yang, Kihyun Park, Ki-Hyun Um and Mingu Kang ()
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Xiaozhen Wang: School of Innovation and Entrepreneurship, Zhejiang University of Science & Technology, Hangzhou 310023, China
Mark Yang: Department of Management, College of Business and Public Management, West Chester University, West Chester, PA 19383, USA
Kihyun Park: Department of Management, Rockwell School of Business, Robert Morris University, Moon, PA 15108, USA
Ki-Hyun Um: College of Business Administration, Pukyong National University, Busan 48513, Korea
Mingu Kang: School of Management, Zhejiang University, Hangzhou 310058, China

IJERPH, 2022, vol. 19, issue 20, 1-12

Abstract: This paper investigates how firms’ social sustainability practices can influence their social performance and, ultimately, financial performance. We include two corporate social sustainability practices: employee-oriented (employee well-being and equity) and socially driven (corporate social involvement) practices. Three leading social theories (social identity theory, social exchange theory, and resource-based view) are applied in explaining how firms’ social practices influence intermediate and bottom-line performance outcomes. Empirical results of 212 US manufacturing firms reveal that (1) the social orientation of the firm promotes firms’ social performances (employee-oriented and community-oriented outcomes) directly; (2) social orientation also indirectly promotes employee-oriented outcomes via employee well-being and equity practices, and so does community-oriented outcome via corporate social involvement practices; and (3) the firms’ social performances can enhance financial performance. The theoretical and managerial implications derived from these empirical results are discussed as well.

Keywords: social sustainability; social exchange theory; social identity theory; employee well-being and equity; corporate social involvement (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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