René Bekkers Corporate Social Responsibility, Corporate Philanthropy and Economic Performance 10...
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Transcript of René Bekkers Corporate Social Responsibility, Corporate Philanthropy and Economic Performance 10...
René Bekkers
Corporate Social Responsibility, Corporate Philanthropy
and Economic Performance
10 July 2012
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Individuals and corporations
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• My research thus far has concentrated on
philanthropy and volunteering by individuals
and households.
• It is an old prejudice of mine that
corporations are more rational than
individuals.
• This belief has eroded in the past years.
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The story today
Is an application of theories developed for
individual philanthropy to the behavior of
corporations.
Let’s name the animals, get things organized.
Comments are very welcome.
No tables today.
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Why do corporations act prosocially?
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• The merchant banker acts according to
Friedman’s principle that “The business of
business is business”.
• How many corporations act like the merchant
banker?
• In the Netherlands, few corporations actually have
a CSR/CP policy, let alone a ‘rational’ one.
• CP is usually reactive rather than pro-active.
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Definitions
CSR: direct contributions of corporations that
help produce public goods or avoid public
bads.
CP: indirect contributions of corporations that
help produce public goods or avoid public
bads through an intermediary organization –
usually a nonprofit organization.
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Mechanisms driving CSR/CP activities
Perhaps the mechanisms that drive individual
philanthropy are not so different from the
mechanisms that drive CSR and CP activities.
85% of donation acts by individuals occurs in
response to direct solicitations.
83% of corporations has no systematic policy
with respect to philanthropy.
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Eight Mechanisms
1. Awareness of need2. Solicitation3. Costs/benefits4. Altruism5. Reputation6. Psychological
benefits7. Values8. Efficacy
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Bekkers, R. & Wiepking, P. (2011). A Literature Review of Empirical Studies of Philanthropy: Eight Mechanisms That Drive Charitable Giving. Nonprofit & Voluntary Sector Quarterly, 40 (5): 924-973.
Hypothesis construction
Syllogisms:
L: General lawC: Conditions
H: Hypothesis
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Explanans
Explanandum
Awareness of need
General law: Actors that are more aware of societal needs
are more strongly engaged in philanthropy.Condition:
Firms with a larger workforce are more aware of societal needs.
Hypothesis: Firms with a larger workforce are more
strongly engaged in philanthropy.
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Awareness of need
The same general law: Actors that are more aware of societal needs
will be more strongly engaged in philanthropy.Another condition:
Firms with a more diverse workforce are more aware of societal needs.
Another hypothesis: Firms with a more diverse workforce are more strongly engaged in philanthropy.
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Information through networks
Awareness of need is information about societal
needs channeled and modified from potential
recipients through social networks to potential
helpers.
Nonprofit organizations intermediate between
recipients and potential donors, giving recipients a
voice, or advocating a cause when there are no
recipients or victims who can speak for themselves.
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Organizational networks
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Organizations are connected to Each other,
At the organizational level through:Formal ties: joint ventures, alliances,
memberships in branch organizations At the individual level through:
Formal ties: memberships in unions and professional organizations
Informal ties: the ‘old boys network’ of CEOs and management executives, the networks of lower level employees
Networks of organizations
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Organizations are connected to Recipients,
At the organizational level, Formally through ties with nonprofit
organizations and with clients (being recipients) At the individual level,
Formally through employees’ participation in nonprofit organizations as volunteers or donors
Informally through employees’ ties to individual recipients
Choice of recipients
To understand how and explain why
corporations choose certain recipients for their
CSR/CP activities, we need to know the
composition of corporate networks.
Networks not only generate awareness of need
by channeling information, but also generate
solicitations and reputational advantage.
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Costs and benefits
L: The lower the costs of CSR/CP activities, the more strongly corporations are engaged in them.
C: Tax incentives lower the costs of CSR/CP activities.
H: The stronger the tax incentives for CSR/CP activities, the more strongly corporations are engaged in them.
C: Sponsoring yields more benefits than donating.H. Corporations are more likely to sponsor than to
donate.
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Reputation
The reputation mechanism refers to the social rewards of CSR and CP activities.
L: The higher the social rewards for CSR/CP activities, the more strongly corporations are engaged in them.
C: CSR/CP activities that are publicized to clients and employees yield more social rewards.
H: Corporations that publicize CSR/CP activities are more strongly engaged in CSR/CP.
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Questions about reputation
In which conditions and for which corporations
does publication of CSR/CP activities generate
higher reputational advantages?
When the costs are higher and benefits are smaller.
For firms in more competitive markets for clients
and employees.
For firms that produce credence goods posing a
trust problem to clients.
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Testing, testing?
The literature on CSR/CP is enormous: ‘Corporate
Philanthropy’ yields 11,000 hits on Google Scholar;
‘Corporate Social Responsibility’ yields 117,000 hits.
Meta question: To what extent are the findings of
previous research consistent with the hypotheses
about the mechanisms driving CSR/CP activities?
Another literature review is required to answer this.
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Tools for a meta-analysis
Standardize effect sizes
Data about sources: journal impact scores, peer-
reviewed, year of publication
Data about data: country, sector, sample size,
measures, experimental, cross-sectional,
longitudinal
Data about models: covariates, censoring, fixed
effects
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Stringent testing, please
Corporations that expect higher benefits from
CSR/CP activities will be more strongly engaged.
These expectations depend in part on previous
economic performance.
Longitudinal panel data and appropriate statistical
models are required to detect potential feedback
loops (e.g., EP CSR EP).
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Even if…
Most of the literature on CSR/CP is correlational.
Causality or even the timing of events cannot be
inferred.
Correlational data include an EPCSR/CP effect in
the CSR/CP effect estimate.
Hypothesis: the more stringent the statistical
model applied to the data, the weaker the
estimated effect of CSR/CP on EP.
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Thanks, says
René BekkersHead of Research
Center for Philanthropic StudiesVU University Amsterdam
[email protected]: @renebekkers
http://renebekkers.wordpress.com
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