How Do Strengths and Weaknesses in Corporate Social Performance Across Different Stakeholder Domains Affect Company Performance?

Kamalesh Kumar, Giacomo Boesso*, Giovanna Michelon

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

22 Citations (Scopus)

Abstract

The existing research on corporate social responsibility (CSR) has largely focused on the positive aspect of corporate social performance (CSP) and company performance (CP) and ignored the relationship between actions that would qualify as negative CSP (or weakness in CSP) towards a stakeholder group and company performance. Using data from the KLD collected over a three-year period, this study examines the relationship between both CSP weaknesses and strengths and CP across individual stakeholder domains. Results of the study suggest that strengths in CSP related to primary stakeholder domains are associated with superior company performance. However, this relationship is tenuous, at best, in the case of the secondary stakeholder domain. As for weaknesses in CSP, the results suggest that if a firm performs poorly in meeting the expectations of one or more stakeholders it is penalized in the form of poor performance. This finding generally holds true for both primary and secondary stakeholders. Implications of these findings for public policy and businesses planning to address social issues are discussed.

Original languageEnglish
Pages (from-to)277-292
Number of pages16
JournalBusiness Strategy and the Environment
Volume25
Issue number4
Early online date31 Oct 2014
DOIs
Publication statusPublished - 22 May 2016

Structured keywords

  • AF Accountability Sustainability and Governance

Keywords

  • Corporate social responsibility
  • Social performance
  • Stakeholder

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