AAA Spark Meeting of the Regions

Prioritizing Doing More Good or Less Bad? A Group Comparison Study on Firms’ Strategic Positioning of Corporate Social (Ir)responsibility

• In Event: Corporate Social Responsibility

Abstract

Firms increasingly engage in corporate social responsibility (CSR) and irresponsibility (CSIR) activities concurrently. Meanwhile, scholars have increasingly recognized CSR and CSIR are distinct corporate behaviors with differing consequences. However, it is not clear how firms can capitalize on their CSR/CSIR related strategies. That is, thus far, such questions as what strategies firms can have and which are more effective for firms to benefit from their CSR/CSIR behavioral strategies are not clear in the literature. To fill up this research gap, first, we draw on stakeholder theory and expectancy disconfirmation theory to identify firms’ three strategic positioning options regarding CSR/CSIR: proactive strategy (i.e., increasing CSR, or doing more good), rectification strategy (i.e., reducing CSIR, or doing less bad), and aggressive strategy (i.e., increasing CSR and reducing CSIR, or doing more good and less bad); second, we compile a dataset comprising 12,567 firm-year observations (3,422 firms) from 1994 to 2013 and conduct group comparison analyses. Our findings evidence that the rectification strategy is more effective than the proactive strategy for firms to capitalize on their socially responsible activities, and the aggressive strategy is the most valuable strategy.

Author

• Soonchul Hyun, The University of North Carolina at Greensboro