Article2016

From Doing Good to Looking Even Better : The Dynamics of CSR and Reputation

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Corporate Social Responsibility Reporting Corporate Social Responsibility and Sustainability Corporate Identity and Reputation

Abstract

Grounded in stakeholder theory and a resource-based view of the firm, this longitudinal research demonstrates the evolution of corporate social responsibility (CSR) and firm reputation over time. Drawing on a 5-year sample of 285 major U.S. firms obtained from the KLD database and Fortune’s Most Admired Companies, we find that the proposed dynamic relationship predicts evolving stakeholder expectations to incite organizations to improve their social performance to earn reputational benefits. Contrary to the often labeled stickiness of reputation, we find a “Red Queen” effect that supports reputation as a dynamic construct where the change in CSR does predict a change in corporate reputation. Similarly, we find that the change in reputation over time varies by industry, being most pronounced for manufacturing. From a practical perspective, this relationship across time may incite managers to create sustainable competitive advantage by continuously investing in doing good to reap the benefits of looking good and looking even better with time.

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References

1991Firm Resources and Sustained Competitive Advantage 2004Firm resources and sustained competitive advantage 1997Dynamic capabilities and strategic management 1985Economic Action and Social Structure: The Problem of Embeddedness 2010Strategic management a stakeholder approach 2002Evaluating Goodness-of-Fit Indexes for Testing Measurement Invariance 1994Testing Structural Equation Models.1998Fit indices in covariance structure modeling: Sensitivity to underparameterized model misspecification.

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2020Corporate social responsibility in emerging market economies: Determinants, consequences, and future research directions 2017The (In)effectiveness of Voluntarily Produced Transparency Reports 2019Corporate Social Responsibility as an Antecedent of Innovation, Reputation, Performance, and Competitive Success: A Multiple Mediation Analysis 2018The impact of CSR on corporate reputation perceptions of the public—A configurational multi‐time, multi‐source perspective 2021CSR Communication through Social Media: A Litmus Test for Banking Consumers’ Loyalty

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