Chinese Strategic Decision-Making
Chinese Strategic Decision-Making
Chinese Strategic Decision-Making
Shuo Wang
Chinese
Strategic
Decision-
making on CSR
CSR, Sustainability, Ethics & Governance
Series Editors
Chinese Strategic
Decision-making on CSR
123
Shuo Wang
Economics and Management
School of Wuhan University
China
Postdoctoral Programme
China Huarong Asset Management, CO., LTD.
Beijing, China
v
Acknowledgements
Sincere and enormous gratitude must be extended to so many who have very
generously shared of themselves in the completion of this research, and should I
erroneously fail to name you, you are thanked here.
I must first and foremost extend a huge thank you to my supervisors, Prof. Patrick
Flood and Dr. Yuhui Gao, for their constant support, invaluable advice and rare
capacity to sustain their concern for my research. It was my honour to work
under their supervision. I am also grateful to Prof. David Jacobson, Dr. Siobhain
McGovern, Dr. Brian Harney, Dr. Aoife McDermott, Margaret Heffernan, and
Dr. Edel Conway, whose advice and encouragement were very important to me.
I would like to acknowledge Dr. Janine Bosak for her suggestions at my six
month review meetings, which were very helpful in the development of this book.
I would also like to thank all my colleagues in the DCU Business School doctoral
programme, particularly Dr. Na Fu, Anna John, Jennifer Farrell, Sahar Validi, and
Rachel Kidney. I should also thank my colleagues in the administration department
of DCU Business School for their assistance, particularly Rachel Keegan, Amanda
Kavanagh, Muriel Keegan, and Clare Balfe.
This research also benefited from suggestions and comments from the visiting
professors at DCU Business School. With the help of Prof. Denise M. Rousseau,
I understood the method of policy-capturing and utilised it to develop my ques-
tionnaire. Professor Gerard P. Hodgkinson and Prof. Jacqueline Coyle-Shapiro
broadened my mind and helped me to refine the research. I would also like to
acknowledge the financial support provided to this study by DCU Business School.
I am deeply indebted to all the participants in the study who gave so generously
of their scarce time for interviewing and the process of completing questionnaires.
My gratitude to those coordinators who provided assistance for the data collection,
particularly Prof. Bin Xu (CUEB) and Prof. Xinbo Sun (NEU) should also be
mentioned.
It is important to mention the names of all those people who helped me to
complete my research with their words, deeds of love, hope and wisdom: Dr. Aamir
Chughtai, Dr. Gráinne Kelly, Dr. Qiang Zeng, Judy Li, Dr. Yurong Liu, Jing Liu,
Guang Yang, Liang Zhao, Rea Woods, Charles Laffiteau, Debasis Ganguly and
vii
viii Acknowledgements
Dr. Xingbang Zheng. Last but not least, I would like to give special thanks to the
members of my family, particularly my husband and my parents, whose continuous
love and support have been ineffably appreciated during the course of my Ph.D.
research and my whole life.
Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 1
1.1 Background of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 1
1.2 Research Motivations and Research Questions .. . .. . . . . . . . . . . . . . . . . . . . 2
1.3 Structure of the Research . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 4
2 Literature Review of Corporate Social Responsibility .. . . . . . . . . . . . . . . . . . 7
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 7
2.1.1 Previous Conceptualisation in the CSR Area.. . . . . . . . . . . . . . . . . 8
2.2 Methodology Used for the CSR Literature Review . . . . . . . . . . . . . . . . . . . 12
2.2.1 Content Analysis .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 12
2.2.2 The Process of Journal and Article Selection . . . . . . . . . . . . . . . . . 13
2.2.3 Coding Process and Agreement Check . . . .. . . . . . . . . . . . . . . . . . . . 13
2.3 Results and Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 14
2.3.1 Background, Significant Development,
and Definitional Period . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 14
2.3.2 Major Themes in CSR . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 19
2.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 28
3 CSR-Related SDM Process and Hypothesis Development . . . . . . . . . . . . . . 29
3.1 The CSR-Related SDM Process of Top Managers . . . . . . . . . . . . . . . . . . . . 29
3.1.1 Organisational and Individual Levels .. . . . .. . . . . . . . . . . . . . . . . . . . 30
3.1.2 Characteristics of Top Executives and Managers . . . . . . . . . . . . . 30
3.1.3 Environmental and Organisational Stimuli . . . . . . . . . . . . . . . . . . . . 31
3.1.4 Personal Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 34
3.1.5 Managers’ Perceived Stakeholder Salience . . . . . . . . . . . . . . . . . . . 38
3.1.6 Strategic Decision-Making Processes . . . . .. . . . . . . . . . . . . . . . . . . . 40
3.2 An Integrated Perspective of the Strategic
Decision-Making Model .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 44
ix
x Contents
6 Discussion of Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 95
6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 95
6.2 Discussion of Within-Subjects Effects . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 95
6.2.1 Stakeholder Claims and CSR-Related SDM . . . . . . . . . . . . . . . . . . 95
6.2.2 Summary of the Within-Subjects Effects . .. . . . . . . . . . . . . . . . . . . . 99
6.3 Discussion of the Between-Subjects Effects .. . . . . .. . . . . . . . . . . . . . . . . . . . 100
6.3.1 Discussion of the Firm Level Findings . . . .. . . . . . . . . . . . . . . . . . . . 100
6.3.2 Discussion of the Individual Level Findings . . . . . . . . . . . . . . . . . . 103
6.3.3 Additional Discussion . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 105
6.3.4 Summary of the Between-Subjects Effects .. . . . . . . . . . . . . . . . . . . 106
6.4 An Overview of CSR-Related Strategic Decision Making.. . . . . . . . . . . 106
6.5 Extending Research Findings from China to Other
Cultural Contexts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 107
6.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 109
7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 111
7.1 Theoretical Contributions .. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 111
7.2 Methodological Contributions .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 113
7.3 Managerial Contributions .. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 113
7.4 Limitations of This Study.. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 114
7.5 Recommendations for Future Research . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 115
General Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 117
Appendices . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 119
Appendix A: Sample Being Used for Analysis . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 120
Appendix B: Categories and Subcategories Used to Classify
Selected CSR Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 121
Appendix C: Frequency Counts of Articles Based on Themes
for Leading Academic Journals . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 121
Appendix D: The Sixteen Scenarios Design Process . . . .. . . . . . . . . . . . . . . . . . . . 122
Appendix E: Questionnaire (English Translation) .. . . . . .. . . . . . . . . . . . . . . . . . . . 125
Section One: Value Survey . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 126
Section Two: Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 127
Section Three: Attitudes Towards Charity Donation . . . . . . . . . . . . . . . . . . 129
Section Four: About Your Organisation.. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 130
Section Five: About Yourself .. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 131
Appendix F: Questionnaire (Chinese Version).. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 132
References .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 139
Abbreviations
xiii
List of Figures
xv
List of Tables
Table 1.1 Summary of the key research questions and research objectives . 4
Table 2.1 Significant development of CSR themes and its pivotal articles . . 16
Table 2.2 Summary of CSR and related concept definitions .. . . . . . . . . . . . . . . . 18
Table 2.3 Main themes of CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 20
Table 3.1 Schwartz’s definition of motivational types of
personal values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 36
Table 3.2 Selected studies of rationality and bounded rationality
on the strategic decision-making process . . . . . .. . . . . . . . . . . . . . . . . . . . 43
Table 3.3 Selected cognition based studies of the strategic
decision-making process .. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 44
Table 4.1 Ontological assumptions underlying social enquiry .. . . . . . . . . . . . . . 56
Table 4.2 Two dominant research paradigms in the social sciences . . . . . . . . . 57
Table 4.3 Comparison of positivist and non-positivist CSR schools . . . . . . . . 58
Table 4.4 Comparing research methods in the strategic
decision-making area . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 60
Table 4.5 Example of scenario design . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 64
Table 4.6 Example of CSR-related scenarios .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 66
Table 4.7 Brief description of questionnaire .. . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 68
Table 4.8 Survey administration (5th October 2010 – 5th
January 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 73
Table 5.1 Profile of companies . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 76
Table 5.2 Profile of participants . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 77
Table 5.3 EFA_pesonal values.. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 79
Table 5.4 EFA_attitudes towards charity donation and
charitable organisations .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 80
Table 5.5 Regression weights of personal values .. . . . . . . .. . . . . . . . . . . . . . . . . . . . 82
Table 5.6 Construct validity (testing the correlation between
latent constructs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 83
Table 5.7 Correlations between stakeholders . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 83
xvii
xviii List of Tables
With increasing economic development, more and more scholars have started to
pay attention to CSR issues. CSR influences many diverse aspects of business,
such as corporate financial performance (CFP) (McWilliams and Siegel 2000),
employment and investment domains (Sen et al. 2006), customer loyalty (Luo and
Bhattacharya 2006), as well as environmental management (Aguilera et al. 2007).
Organisational strategy concerning CSR contributes to stronger corporate reputation
and enhances the capability of sustainable development. Therefore, in order to
pursue sustainable development and achieve a good reputation, numerous managers
integrate CSR issues into their organisational strategic decision-making process.
However, there is little research on the driver of managers’ CSR-related SDM and
the crucial determinants of that decision-making process. This study attempts to
bridge this gap.
Some CSR scholars argue that CSR issues should be analysed in relation to
the specific society in which they occur as they have close associations with
certain social elements. For instance, governments, activities, and media oversee
organisational decision-making and urge them to take responsibility for the social
consequences of their activities (Porter and Kramer 2006). Although there is a
number of research studies concerning CSR in the advanced western countries, CSR
awareness in Asia is rather low and needs more attention (Ip 2008). Consequently,
most CSR studies have been carried out in the context of developed countries (e.g.,
Western Europe, the U.S., and Australia), while there are still too few research
studies about CSR situations and practices in the emerging economies (Belal 2001).
Accordingly, an examination of CSR issues in developing countries is long overdue.
China is a good example to broaden the understanding of CSR issues in a
developing country context as it is the biggest country in Asia and it has different
cultural, political, and economic backgrounds compared to western countries. More
recently, the importance of recognising the differences between the behaviours of
Chinese firms in different industries have been emphasised in the literature (Ralston
et al. 2006). Furthermore, China has experienced an accelerated rate of economic
growth and social revolution. As a result it is both interesting and pertinent to
investigate the CSR issues in China which describe the real situation and strategies
of firms at the present time.
Although the theory of CSR has been developed for more than 20 years, so far there
is no single review to conclude and provide objective comments on the existing
work from an integrative perspective. Firstly, the author utilises content analysis
to examine previous CSR literatures and fill this gap. Following that, the theories
of CSR and strategic decision-making (SDM) are examined and then combined
leading to what the author terms ‘CSR-related strategic decision-making (CSR-
related SDM)’. Secondly, employing the policy-capturing research method, the
author uses the instances of charitable donation as an example of CSR-related SDM.
To this end, the author designed a series of scenarios to describe the circumstances of
charitable donation in China. There is a very particular reason for using this example
in the policy-capturing scenarios. As the knowledge of CSR is at a very early stage
in China, only charitable donations are widely accepted as a typical CSR activity.
Finally, based on the application of stakeholder-salience and causal-explanation
theory, the author extends the results of managers’ CSR-related SDM concerning
charitable donation to other CSR issues, due to its similarity in determinants and
processes.
Thus, the motivations of this research study can be summarised as (i) providing
a comprehensive CSR literature review (ii) analysing CSR issues from the SDM
perspective, and (iii) investigating the process of managers’ CSR- related SDM
in China. Figure 1.1 illustrates the logic of this research using a flowchart. More
specific purposes of the study will be explained in the next section.
Based on Fig. 1.1, the purpose of this research study can be assessed in terms
of theoretical and practical contribution. In terms of theoretical development, the
1.2 Research Motivations and Research Questions 3
Research Findings
Stakeholder Concerning Charitable Donation Causal
Salience Explanation
Theory Theory
Application Application
Extensions to other CSR Activities
Table 1.1 Summary of the key research questions and research objectives
Area of investigation Research questions Research objectives
Roles of stakeholders Whether stakeholder claims To investigate the determinant
can predict managers’ role of stakeholder claims in
CSR-related SDM? managers’ CSR-related SDM
Concerning charitable To identify salient
donation, who are the key stakeholders concerned with
stakeholders? CSR-related SDM
Organisational characteristics Which factors at the To classify what factors of
organisational level influence organisational characteristics
managers’ CSR-related SDM? have impacts on CSR-related
SDM
Individual characteristics Which factors at the To determine the individual
individual level affect characteristics that impact on
managers’ CSR-related SDM? CSR-related SDM
them. (2) From the government’s perspective, it is useful to understand what factors
impact on the SDM of firms and encourage them to participate in CSR activities.
Armed with this knowledge, the government can advocate CSR activities which
provide better returns to society. (3) From the public perspective, it helps people to
understand how to influence the firms they are associated with.
In order to deal with the aforemetioned problems this study attempts to answer
the questions from three aspects: roles of stakeholders, organisational characteris-
tics, and individual characteristics. In particular, the author articulates the specific
research objectives and the associated research questions illustrated in Table 1.1.
Following the overview of the book in this chapter, Chap. 2 utilises content analysis
to examine 762 selected CSR articles from published studies, in order to evaluate the
trends in CSR theory development. More specifically, it analyses 110 articles from
leading academic journals to identify the variables, constructs, and relationships
within CSR theory. In addition to summarising the definitions of CSR, corporate
social performance (CSP), corporate citizenship, and corporate philanthropy, it also
compares the differences between those concepts. It finds that four main themes can
be identified in the CSR arena: corporate context, CSR-related strategy, corporate
reputation, and the relationship between CSP and CFP. Based on the analysis of
the selected papers, this chapter attempts to identify the milestones in CSR theory
development by isolating pivotal articles based on their average citations per year. It
also describes the evolution of CSR by analysing the major themes identified earlier.
Finally, it identifies critical research gaps in the CSR literature.
1.3 Structure of the Research 5
Chapter 1
Introduction
Chapter 2
Literature Review of CSR
Review and
Hypotheses
Development Chapter 3
CSR-related SDM at
Individual Level &
Hypotheses Development
Chapter 4
Methodology &
Research Design
Process of
Contribution
Investigation
and
and
Chapter 5 Implications
interpretation
Data Analysis&
Hypothsis Testing
Chapter 6
Discussion of
Findings
Chapter 7
Conclusion
The CSR review indicates that CSR should be involved in strategies of firms.
However there is a shortage of published research in which the SDM and CSR
perspectives can be combined together. Hence, Chap. 3 reviews the relevant theo-
retical and empirical literature in the SDM area. Firstly, it summarises the broader
context of strategic decisions and points out factors in the external environment
and organisational characteristics that influence the SDM process of managers.
In particular, stakeholder claims and interests shape strategic decisions. Secondly,
it articulates the influences of individual characteristics on the SDM. Thirdly, it
examines the process of SDM using the rational and bounded rationality theory
of decision making. Following that, an integrated perspective of the SDM model
is given, which summarises all the important factors discussed in this SDM review.
Finally, on the basis of the SDM model (see Fig. 3.4), the author generates a research
model (see Fig. 3.5) which proposes the links between vital and influential factors
from an integrated perspective.
Chapter 4 provides a detailed description of how to choose a proper method for
the current research, the process of questionnaire design, sampling methods, and
survey administration. In particular, the author utilised a policy-capturing method
to develop a series of scenarios concerning CSR activities and an explanation of
this method is provided. Chapter 5 reports the research findings of this study,
which starts with a descriptive overview of the statistical findings. The validity
and reliability of measurements employed in the present study were tested. Then,
utilising split-plot repeated-measure ANOVA, the main analysis of within-subjects
and between-subjects effects is presented. Using statistical analysis, Chap. 6 pro-
vides an extensive and thorough discussion of the research findings and compares it
with previous empirical studies. Chapter 7, the conclusion, summarises the research
findings and their theoretical and practical implications. Figure 1.2 provides an
illustrative map of the book chapter structure.
Chapter 2
Literature Review of Corporate Social
Responsibility
2.1 Introduction
The early roots of corporate social responsibility can be traced back to 1917, when
Henry Ford announced that the aim of Ford Motor company is that “To do as much
as possible for everybody concerned, to make money and use it, give employment,
and send out the car where the people can use it : : : and incidentally to make money”
(Lee 2008, p. 54). Eighty years later, Henry Ford’s great-grandson, William Clay
Ford Jr emphasised that Ford company valued all stakeholders’ interests as well as
the social welfare of employees and shareholders, as he said that “we want to find
ingenious new ways to delight consumers, provide superior returns to shareholders
and make the world a better place for us” (Meredith 1999, p. 157).
From a business practice perspective, Ford was one of those companies, who
initiated social responsibility activities. From a research perspective, many scholars
believe that Bowen’s Social Responsibilities of the Businessman (1953) is the
first work to discuss the relationship between corporations and society (Carroll
1979; Wartick and Cochran 1985). In this book Bowen (1953) argues that firms
need to be cognisant of business ethics to achieve long-term superior performance.
CSR initiatives are very important in the context of business ethics (Maignan and
Ferrell 2004). During the last 57 years, several findings have caught the attention
of CSR practitioners and scholars. These include studies which suggested that
CSR activities provide an “insurance-like” protection when negative events happen
(Godfrey et al. 2009); that CSR activities not only influence sales growth, but also
influence the employment and investment domains (Sen et al. 2006); and that firms
with higher CSR ratings may have a sustainable competitive advantage rooted in
human capital as they attract more and better employees than firms with lower CSR
ratings (Carmeli 2005; Hunt et al. 1989; Turban and Greening 1997). Consequently,
in order to pursue sustainable development, and, achieve a good reputation in a
fiercely competitive market, more and more companies are publishing their CSR
disclosures and CSR reports.
Since the 1950s, CSR and its related terms, such as corporate social responsiveness,
corporate social responses, corporate social performance, corporate citizenship,
and corporate philanthropy have been conceptualised and mainly originated from
the management area (e.g., Carroll 1979; Matten and Crane 2005; Wood 1991).
Based on previous business and management knowledge, different CSR scholars
explore the CSR theme and related notions derived from various perspectives,
such as social obligation, marketing, stakeholder-relation, integrated strategy, and
leadership themes. This section reviews the main CSR conceptual views driven by
those related management themes.
The first definition of CSR is suggested by Bowen (1953), as the social obligation
“to pursue those policies, to make those decisions, or to follow those lines of
action which are desirable ion terms of the objectives and values of our society”
(p. 6). The social obligation view of CSR is the foundation of future research
in the CSR area. Following Bowen’s (1953) book, Carroll (1979) identifies the
CSR pyramid, which includes four stages of CSR development: economic, legal,
ethical, and philanthropic obligations. Further, Carroll (1979) argues that “these four
categories are not mutually exclusive, nor are they intended to portray a continuum
with economic concerns on one end and social concerns on the other” (p. 499).
In particular, economic responsibility represents that companies are supposed to
provide goods and services that the society needs and sell them at a profit. Legal
responsibility means that companies should obey societal laws and regulations.
Ethical responsibility can be described as societal expectations of business over
and above legal requirement. Philanthropic responsibility indicates “these roles are
purely voluntary, and the decision to assume them is guided only by a business’s
desire to engage in social roles not mandated, not required by law, and not even
generally expected of businesses in an ethical sense” (Carroll 1979, p. 500). Overall,
this CSR pyramid embodies the four levels of social responsibilities that society
expects companies to do.
Marketing scholars started to consider CSR issues from 1960s and they only empha-
sised on the social obligations related to marketing functions, without thinking
of other aspects of CSR activities. The CSR-related studies in the marketing area
focus on the marketing dimensions, such as cause-related marketing (Barone et al.
2000; Varadarajan and Menon 1988), social sponsorship (Simmons and Becker-
Olsen 2006), environmental marketing (e.g., Crouch 2006; Handelman and Arnold
2.1 Introduction 9
1999; Menon and Menon 1997; Zeithaml and Zeithaml 1984), communicating with
consumers concerning CSR issues (Caruana and Crane 2008), customers response
to organisational CSR behaviour (e.g., Brown and Dacin 1997; Ellen et al. 2006;
Handelman and Arnold 1999; Sen and Bhattacharya 2001), and corporate reputation
(e.g., Berens et al. 2005; Brown and Dacin 1997; Lichtenstein et al. 2004; Wagner
et al. 2009).
Cause-related marketing is defined as “a form of horizontal tie-in between
corporate philanthropy and sales promotion, as synonymous with corporate spon-
sorship of charitable causes, and as the initiation and funding of deserving causes”
(Varadarajan and Menon 1988, p. 59). Meanwhile, other scholars examine how to
utilise CSR activities to create customer satisfaction, increase market value (Luo
and Bhattacharya 2006), and build up corporate brand dominance (Berens et al.
2005).
These research studies discussed above establish the relationship between CSR
and marketing management, which broadens our knowledge in both CSR and
marketing areas. However, the thinking of CSR from the marketing aspect only
emphasises the relations with one of the stakeholders, namely consumers. Managers
gradually notice that there are more social responsibility initiatives (e.g., employee
satisfaction and environment management) and broader stakeholder groups need to
be considered.
theme has promoted leadership theory development and has produced a new
concept, responsible leadership. The investigation of this CSR-related leadership
is at the very early stage and there are many gaps to be filled, such as the structure
and measurement of this leadership style.
Notwithstanding its long-term development, CSR theory has remained contro-
versial and ambiguous and has not yet fully matured. In particular, continuing
disagreements have made CSR somewhat controversial. For instance, some scholars
believe that corporate social performance (CSP) is the outcome of CSR activities
(Aupperle et al. 1985) while others argue that CSP includes CSR principles (Wood
1991). Another debate surrounds the relationship between CSP and corporate
financial performance (CFP), as some studies suggest that it is positive (Aupperle
et al. 1985; Lev et al. 2010; Waddock and Graves 1997) while others, viewing
the results of different samples and causal patterns, suggest it is neutral (Aupperle
et al. 1985; McWilliams and Siegel 2000). CSR theory is still not clearly defined as
there is no universal agreement to distinguish it from other terms which it closely
resembles, such as corporate citizenship and corporate philanthropy. Compared
to the earlier research studies of CSR, CSR theory has made great progress in
the twenty-first century (see “significant developments and pivotal articles” of
Sect. 2.3.1), but there is no typology or milestones to mark its history and research
agenda. Another ambiguity is embedded in the CSP-CFP link. It is still unclear
whether good CSP leads to revenue growth or if firms with higher CFP have the
capabilities to conduct more CSR activities, or if it is a “virtuous circle” (Lev et al.
2010). As a result, it is timely to commence a systematic review in the CSR area to
clarify these ambiguous and controversial issues.
Until now, there have been few efforts to understand and summarise CSR theory.
Although existing reviews have their strengths, their weaknesses have become
increasingly apparent as the theory develops. Firstly, Wood (1991, 2010) provides
an explicit construct of CSP and formulates a CSP theory with more detailed CSP
measurements. The thesis advances here, however, contends that CSP is the outcome
of CSR activities and that Wood’s (1991, 2010) work only explains parts of CSR
theory. Secondly, Lee (2008, p. 56) elaborates on the evolutionary path of CSR
theory and suggests “trends in CSR research” as well as some pivotal publications,
but his review is more a historical description rather than a scientific analysis.
Thirdly, Garriga and Melé (2004) attempt to map the CSR territory, and categorise
this theory from the perspectives of instrumental, political, integrative, and ethical
theories. It can be argued that their typology is based solely on the authors’
perception. Fourthly, although Lockett et al.’s (2006) work appears comprehensive,
the following defects can be identified: it focuses on CSR studies between 1992 and
2002, which only examines the adolescent development stage (see Sect. 2.3.1); it
includes tables of journal articles discussing CSR, but does not analyse the statistics
behind those tables. Although CSR is a very important topic, the existing CSR
reviews are dated or incomplete.
This literature review has three main purposes: firstly, to fill a gap in the review
of the CSR literature; secondly, to identify the milestones in CSR development
and further understand the evolution of CSR theory; thirdly, to encourage the
12 2 Literature Review of Corporate Social Responsibility
The author conducted a content analysis, which is a scientific and systematic method
for observing and analysing information (Budd et al. 1967). Why has the author
chosen this as a method of analysis? Although content analysis is primarily a
qualitative method of analysis, it has some advantages which allow a quantitative
element to be included using techniques such as frequency analysis. Thus, content
analysis can be considered superior to those purely qualitative methodologies, such
as literary interpretation, which are mainly based on authors’ perception (Cascio
and Aguinis 2008). It is particularly suited to the formulation of a literature review
in the CSR area for several reasons. To begin with, content analysis is a replicable
methodology (Cascio and Aguinis 2008). This helps to summarise the intrinsic value
of information, without the disadvantage of bias. Second, it assesses the effects of
corporate context (Kolbe and Burnett 1991), as CSR strategy and the consequences
of CSR activities have significantly different motivations (e.g. due to different
institutional, industrial, and organisational environmental effects). Third, content
analysis is highly flexible (Cascio and Aguinis 2008), which makes it more efficient
as CSR involves various fields (e.g. marketing, human resource management, and
stakeholder management) and these are not easy to categorise unless one uses
content analysis.
In addition, utilising content analysis, this CSR review overcomes weaknesses
evident in previous CSR literature reviews in the following way. Firstly, the author
selected several key words concerning CSR in order to provide a comprehensive
literature review of CSR. Secondly, based on the empirical work of content analysis,
the author examined the underlying trend of the literature on CSR development,
something which has not been done in previous studies.
2.2 Methodology Used for the CSR Literature Review 13
Following Laplume et al.’s (2008) paper selection approach, the author used
Harzing’s (2011) journal quality list to select journal papers based on impact factors
and only analysed those papers from leading academic journals. These included the
following eight management journals: academy of management journal, academy of
management review, strategic management journal, administrative science quarterly,
organisation science, organisation studies, journal of management, and journal of
management studies, in addition to two marketing journals: journal of marketing
and journal of the academy of marketing science. The author also analysed
the following three managerial practice journals: Harvard business review, Sloan
management review, California management review, and four specialised journals:
business & society, business ethics quarterly, and journal of business ethics. The
principal reason for the selection is that primary CSR articles are published in
the management area, and a number of CSR articles have a close connection to
marketing strategy and, accordingly, such papers are likely to be found in marketing
journals. Additionally, those specialty journals were selected as some significant
papers concerning CSR were published in them (see Appendix A), and some
seminal attempts to examine CSR issues are published there.
In the paper selection process, the author reviewed definitions of the key term
“corporate social responsibility” and terms which resemble CSR, such as “corporate
social performance”, “corporate citizenship”, and “corporate philanthropy”. The
author selected articles with those key words in their titles, abstracts, or subject
matter. A further explanation of keywords selected is offered in the section
“Definition of CSR and CSR-related Concepts”. The author mainly utilised the
EBSCO host search engine to select articles. The author also searched CSR articles
with the same keywords in the social sciences citation index (SSCI) database to
ensure that high citation articles in the CSR area were selected. To be thorough,
the author additionally referred to the bibliographies of numerous reviews in the
CSR area, such as the review of previous studies regarding the linkage between
CSP and CFP (Orlitzky et al. 2003) and the review of CSP measurements (Wood
2010). The author did not select articles in the forms of dialogues, responses, and
book reviews, as those types of articles are not always based on logical reasoning
or rigorous empirical work. The final CSR sampling database (see Appendix A)
consists of 762 articles, including 110 articles from leading academic journals, 68
articles from leading managerial journals, and 584 articles from specialised journals.
The content analysis is an important method to explore the main themes in the CSR
area. Following Laplume et al. (2008), as well as Cascio and Aguinis’s (2008) ways
of classification, the author categorised the papers in the database based on themes.
14 2 Literature Review of Corporate Social Responsibility
The author found that most of the papers can be categorised under five headings
which are named: corporate context, strategic management, corporate reputation,
CSP predictors, and CFP predictors. In order to provide a systematic foundation for
coding and categorising each article, the author developed a taxonomy that includes
five broad categories (i.e. the 5 headings) and 16 subcategories (see Appendix B).
Following Cascio and Aguinis’s (2008) approach to improve the reliability of
content analysis taxonomy, the author attempted to map sets of categories onto each
other, regardless of their previous categorisation, in order to challenge the existing
categories. As this study is the first to produce a categorical content analysis in the
CSR area, the author cannot claim that there is no other possible taxonomy or this
classification is based on a comprehensive and systematic codebook. However, the
author is satisfied with this content analysis of 762 selected articles, especially the
110 selected articles from leading academic journals, which makes the taxonomy
sufficiently complete.
To ensure plausibility and reliability, the author performed additional checking
on the coding process. The author asked two scholars, who are knowledgeable in the
CSR field and do not know the existing categories that the author created, to code
and categorise the data again. The author then compared this categorisation with that
of these two scholars and conducted several rounds of meetings and discussions.
Although the classifications between different scholars are quite similar, the author
modified some categories after several meetings. Each of these meetings resulted
in a refinement of the taxonomy to improve interpretive validity and inter-rater
reliability for future coding. During this process, when an article was attached to
more than one category, the author chose the category with the perceived best fit.
This may result in the potential under-representation of some areas, although there is
no evidence to demonstrate this potential under-representation is systematic across
articles (Cascio and Aguinis 2008).
Based on the selected CSR articles database (see Appendix A), the author identified
trends in CSR articles. Figure 2.1 demonstrates that the number of articles within
the CSR field has been increasing, especially during the 2000s, with a significant
upward trend.
Given the increasing numbers of publications in the CSR arena, this chapter
targets articles selected from leading academic journals which undoubtedly rep-
resent the trend seen in CSR studies. An additional reason is that these articles
utilise rigorous methodologies and logical reasoning. Moreover, the author analysed
some articles from leading managerial practice journals as a complement to the
leading academic journals, as those leading managerial practice journals provide
some evidence and opinions from a practical perspective. As can be seen in Fig. 2.1,
the number of CSR articles published in the aforementioned journals has increased
rapidly since the 1970s, while the number of publications seems to reach a peak
every 10 years. Since there are no articles that can be defined as milestones of
CSR theory development, the author aggregated the articles based on 10-year time
blocks, resulting in the following time periods: (a) pre-1980s (1949–1979), (b)
1980s (1980–1989), (c) 1990s (1990–1999), and (d) 2000s (2000–2010). Since
the first time period is the initial stage, it comprises a number of works that offer
rudimentary explanations of the concept of CSR. The author included the articles
before 1970 in the 1970–1979 categories. The techniques of using 10-year time
blocks and commencing with the first year of each decade may appear arbitrary but
allows demonstration of the underlying trends.
450
400
The number of articles
350
300 Specialised journals
250 Top managerial practice
200 journals
150 Top academic journals
100
50
0
1949- 1975- 1980- 1985- 1990- 1995- 2000- 2005-
1974 1979 1984 1989 1994 1999 2004 2010
Period
Roughly based on the 10-year time blocks, the author assembled the CSR articles
published during 1949–2010 in four stages, and named these stages as the incuba-
tion (1949–1979), exploration (1980–1989), adolescent development (1990–1999),
and relative maturity (2000–2010) stage. Several pivotal articles (see Table 2.1) were
identified in the SSCI according to their citation record. Crucial articles in the 1990s
and the 2000s time periods are cited on average of ten times per year and articles in
the 1980s are on average cited five times per year. For the articles from the 1970s and
earlier, this study found several articles that also have relatively high citation rates.
The sets of pivotal articles for each time period represent milestones in CSR
theory development. During the first time period, the incubation stage, the early
discussion about the CSR field can be found in some managerial practice journals
and book chapters. The early studies are primarily designed to increase awareness
of social and ethical principles among business people (Carroll 1979). During this
theoretical building process, there are several explorations in the CSR area: one
CSR structure is put forward by Carroll (1979), another discusses the relationship
between CSR activities and stock market performance (Alexander and Buchholz
1978), and a third suggests a method of CSR measurement (Abbott and Monsen
1979). Although at that stage, there are insufficient empirical and theoretical studies
to support a comprehensive CSR theory, the CSR research studies during that period
provide a foundation for future understanding of CSR theory.
This thesis names the second period (1980–1989) exploration, because it is a
continuous stage of CSR incubation. In this stage, researchers attempt to verify or
support those concepts discussed in the first period: initially, suggesting a yardstick
to monitor understandings of CSR (Tuzzolino and Armandi 1981); second, through
reviewing previous studies to verify and develop the structure of CSR and CSP (Boal
and Peery 1985; Wartick and Cochran 1985); finally, utilising Fortune magazine’s
corporate reputation ratings to examine the relationship between CSP and CFP
(McGuire et al. 1988). During this period, CSR scholars attempt to improve the CSR
Table 2.1 Significant development of CSR themes and its pivotal articles
Stage Period Pivotal articles
Incubation 1949–1979 Abbott and Monsen (1979) and Alexander and
Buchholz (1978)
Exploration 1980–1989 Aupperle et al. (1985), McGuire et al. (1988), and
Wartick and Cochran (1985)
Adolescent development 1990–1999 Agle et al. (1999), Brown and Dacin (1997), Clarkson
(1995), Klassen and Whybark (1999), Russo and
Fouts (1997), Waddock and Graves (1997), and Wood
(1991)
Relative maturity 2000–2009 Campbell (2007), Hillman and Keim (2001), Matten
and Crane (2005), Matten and Moon (2008),
McWilliams and Siegel (2000, 2001), Orlitzky et al.
(2003), and Scherer and Palazzo (2007)
2.3 Results and Discussion 17
concept’s structure at the theoretical level and also the reliability and validity of CSR
measurements at the empirical level. During this stage, the CSR topic receive a great
deal of attention and there are 27 articles published in leading academic journals.
The 27 articles enlarge and consolidate the theoretical and empirical foundations of
CSR studies, utilising combinations of other mature theories, such as stakeholder
theory, marketing theory and the resource-based view.
The fourth period (2000–present) is termed the relative maturity stage. Compared
with previous periods, CSR articles are relatively mature during the twenty-first
century. Some researchers emphasise that the analysis of firms’ CSR issues should
be conducted in a societal environment (Campbell 2007; Matten and Moon 2008;
Scherer and Palazzo 2007). Meanwhile, other researchers continue to show interest
in the outcomes of CSR (Hillman and Keim 2001; McWilliams and Siegel 2000). In
particular, Orlitzky et al. (2003) utilise a meta-analysis to examine 52 previous stud-
ies about the CSP-CFP link and conclude that CSP is more highly correlated with
accounting-based measurements than marketing-based instruments (see Sect. 2.3.2
“CSP and CFP”) in predicting CFP indicators. In the contemporary period, although
there is still no universally accepted CSR theoretical concept, the present study at
least represents an approach to the question of how to develop CSR theory. In this
section, the author has discussed the trends in CSR development, noting four sets of
pivotal articles which are considered landmarks in the evolution of CSR and using
the introduction of each pivotal article to describe the CSR development for each
period. The identification of the four stages facilitates scholars in understanding
the development process of CSR theme and highlights the important issues and
arguments in the previous research studies of CSR. Therefore, the present study
strengthens the understanding of the CSR theory evolution.
With respect to the definition of CSR and its related concepts, the author categorised
articles that addressed the notion or construction of CSR and its related terms into
the “concepts and reviews” section. This contains 18 articles, which represents
approximately 18 % of the total articles from leading academic journals. Based on
those papers, Table 2.2 illustrates the main articles that discuss CSR theory and its
related terms.
Although there is no comprehensive explanation of CSR, the author has sum-
marised this concept using the following aspects: (see Table 2.2): (a) integrative
perspective, namely, those definitions generate by a spectrum of views ranging
from stakeholder concerns to social issues. For example, some scholars believe
that CSR involves corporate activities as they relate to its perceived societal or
stakeholder obligations (Brown and Dacin 1997; Luo and Bhattacharya 2006; Sen
and Bhattacharya 2001); (b) economic perspective, namely, those researchers who
believe the aim of CSR activities is profit-maximisation, which emphasises the
benefits to shareholders and internal stakeholders. For instance, Friedman (1970)
believes that the purpose of CSR is to make as much money as possible for a firm’s
18 2 Literature Review of Corporate Social Responsibility
shareholders; (c) voluntary perspective, namely, researchers who believe that firms
should take some philanthropic actions in accordance with local laws to improve
social welfare; and (d) public perspective, these scholars argue that a CSR strategy
should be designed to fit the social system.
CSR-Related Concepts
Though some earlier studies imply that CSR is an intrinsic part of CSP (Wood 1991),
the view in this study is consistent with most CSR scholars, who contend that CSR
is a broader concept. CSP is only used to provide a description of CSR actions
(Barnett 2007; Schuler and Cording 2006). The concept of CSP is perceived to be
a multi-dimensional structure (see Table 2.2): from the perspective of outcomes,
researchers believe that CSP is a result of CSR activities. From the viewpoint of a
multi-dimensional structure, CSP is defined as having corporate responsibilities to
different types of stakeholders (Wood 1991). Thus, CSP might represent a snapshot
of a firm’s CSR activities and reflect the dimensions of its CSR strategy.
Regarding corporate citizenship, the term has been introduced into CSR reports
in recent years, as more and more firms promote their positions as citizens in a global
business community (Matten and Crane 2005). With the framework of CSR, the
concept of corporate citizenship is both based on CSR and is likely to be derivative
of CSR. There are four perspectives of corporate citizenship: integrative, political,
2.3 Results and Discussion 19
economic, and voluntary (see Table 2.2). Matten and Crane (2005) have indicated
that corporate citizenship involves a broader view that goes beyond the current
discussion about CSR.
With respect to corporate philanthropy, the financial accounting standards board
(FASB) (1993, p. 2) defines philanthropy as “an unconditional transfer of cash or
other assets to an entity or a settlement or cancellation of its liabilities in a voluntary
nonreciprocal transfer by another entity acting other than as an owner”. Thus, the
apparent discrepancy between CSR and corporate philanthropy is that philanthropy
only represents a voluntary dimension of CSR. CSR differs in that it not only
involves a voluntary dimension but also includes Carroll’s (1979) other three CSR
dimensions (i.e., economic, legal, and ethical dimensions) (Godfrey 2005).
In short, developments of CSP, corporate citizenship and corporate philanthropy
are underpinned by principles found in CSR theory. This relationship can be
summarised as follows: (a) CSP is an inevitable consequence of CSR; (b) corporate
citizenship is a related term of CSR in the global community; and (c) corporate
philanthropy is the top level of CSR.
As can be seen in Fig. 2.2, the results of the analysis (the “Frequency counts of
articles based on themes for leading academic journals” in Appendix C) illustrate
60 years of CSR studies, involving five broad themes. With respect to the method
of categorisation in this chapter, the author categorised the CSR articles based on
their topical areas, regardless of their publication time. As the distribution for each
over time shown in Fig. 2.2, it is obvious that based on the number of published
articles, the top five themes can be ranked as follows: concepts and reviews (see
“Definition of CSR and CSR-related Concepts” of Sect. 2.3.1); corporate context;
strategic management; corporate reputation; and CSP-CFP relationship. These five
themes are further explained in the following sections.
60
Total number of articles
Noda and Bower (1996) noted that corporate context is a reinforcement or modifi-
cation of corporate strategic initiatives. Using this as a starting point for a proper
classification of corporate context themes in CSR articles, this study examined each
article in the database and categorised them using the key word “corporate context”.
Then, related articles were found which focused on one of the three levels and they
were termed as follows: individual, organisation, and society (see Table 2.3).
Individual Perspective
Previous studies briefly discuss the effects of personal characteristics of top man-
agers on corporate CSR activities or CSP. For instance, Deckop et al. (2006) find that
the more a corporation used a long-term focus in CEO payment, the higher the firm’s
CSP is ranked. Swanson (1999) believes that CSP should be organised according
to values and suggests an ideal type of CSR responsiveness framework with
value attunement. Furthermore, Agle et al. (1999) state that there are significantly
positive relationships between stakeholder attributions, CEO values and a firm’s
CSP. In sum, a leader’s personal values shape managerial perceptions through his or
her interpretation of external information, and is reflected in a firm’s strategy, and
thus in overall corporate performance (Hambrick and Mason 1984). Furthermore,
from the perspective of the individual in CSR, these scholars contribute the multi-
level theory in the development of CSR theory (Klein et al. 1999).
Organisational Perspective
This level involves institutional investors and owners, which includes pension
funds, mutual funds, investment bankers, insurance companies, and investment
firms (Chaganti and Damanpour 1991). The starting point in this area is Graves and
Waddock’s (1994) work, where they find that the larger the number of institutions
that hold a company’s shares the more positive is the impact on the firm’s CSP.
Johnson and Greening (1999) analyse the effects of different types of institutional
investors on CSP and advance the idea that pension fund equity as well as outside
director representation are positively correlated with the people and product quality
dimensions of CSP. Further, they argue that top management equity also has a
positive impact on the product quality dimension, but has no correlation with the
people dimension of CSP. Furthermore, Neubaum and Zahra (2006) state that long-
term institutional ownership has a positive impact on CSP and financial returns
from CSR activities would be seen 3 years later. David et al. (2007) articulate
a perspective that shareholder proposal activism has a negative impact on CSP
and that managers are more likely to focus on the proposals put forward by those
stakeholders which are perceived to be relatively more important to the company.
Institutional investors and owners not only have interests in the corporate financial
returns, but also pay attention to strategies, activities, relationships with other
stakeholders and the corporate sustainable development. As a result, they have a
great deal of influence on corporate CSR strategy and CSP (Holderness and Sheehan
1988; Pound 1992).
Societal Perspective
Social issues can lead to external pressures unless firms are aware of them and incor-
porate this into their CSR strategy. There are a number of CSR researchers who have
written articles about the societal perspective. Their studies can be categorised along
the three dimensions of: distinct countries, industries, and institutions. Maignan
and Ralston (2002) state that firms in different countries display different levels
of CSR engagement. Furthermore, Matten and Moon (2008) provide an exploration
of why CSR activities differ among countries and how firms should adapt to the
local environment. From an industrial perspective, Bhambri and Sonnenfeld (1988)
compare the insurance and forestry industries and suggest that the differences in
their institutional environments contribute to various components of the public
issues structure in a company’s CSR strategy, and thus influences their CSP. Another
22 2 Literature Review of Corporate Social Responsibility
example is in the retail food industry. Marcus and Anderson (2006), for instance,
note that a firm’s corporate image and use of green technology promotes its
reputation for social responsibility.
Regarding the institutional perspective, based on 10 years field work, Arya and
Zhang (2009) reveal that institutional reforms increasingly bring about awareness
of CSR theory and support for CSR activities, while such reforms also promote
changes in corporate social actions. In another empirical study, based on institu-
tional theory, some scholars attempt to elaborate on the determinations (e.g. firm
size, managerial discretion, and institutional pressures) (Greening and Gray 1994;
Husted and Allen 2006), mediators (Campbell 2007), and strategic investment of
CSR (Gardberg and Fombrun 2006).
In summary, societal issues are important components that should be taken into
account by strategic decision makers. Furthermore, external social pressures and top
management commitments have significant influences on corporate ethics programs
(Weaver et al. 1999). To provide an explanation for the motivation of an increasing
level of corporate engagement in CSR activities, Aguilera et al. (2007) suggest that
corporate social behaviour is driven by instrumental, relational, and moral motives.
Furthermore, partly based on organisational justice literature, Aguilera et al. (2007)
provide an “actors mechanisms to influence social change” framework to explain
the different CSR judgments and how employees reciprocate socially responsible or
irresponsible behaviour.
Risk Management
Using secondary data, Luo and Bhattacharya (2009) note that CSP can improve
shareholders’ value by lowering undesirable firm-idiosyncratic risk and suggest that
CSP is a type of investment, similar to advertising and R&D. In the same year,
Godfrey et al. (2009) find that CSR investment aim at the secondary stakeholder and
society will protect firms from potential risk (e.g., negative judgment and sanctions).
In addition, CSR activities concerning corporate trading partner show that these
CSR initiatives have no benefit for firm performance (Godfrey et al. 2009).
2.3 Results and Discussion 23
Environment Management
Marketing Management
The starting point for CSR in the marketing field is at the very beginning of the
1970s, when researchers argue that CSR is a way of survival (Gelb and Brien
1971). Several years later, the concept of business ethics promotes the combination
of social responsibility and marketing strategy (Murray and Montanari 1986;
Robin and Reidenbach 1987), leading to the emergence of cause-related marketing
(Varadarajan and Menon 1988). Afterwards, studies in this area emphasise two
aspects: corporate context and consumer orientation. Insofar as corporate context
is concerned, CSR scholars suggest that there is a minimum threshold acceptance
of CSR involvement in society, below which the firm’s profit-maximising actions
will be hindered (Handelman and Arnold 1999). Consumers may be a significantly
important component in the corporate context, since consumers’ satisfaction medi-
ates the association of CSR actions with market value (Luo and Bhattacharya 2006).
Later findings show that consumers’ responses to a firm’s CSR activities is positive
when they find those actions are strategic or value driven (Ellen et al. 2006). Conse-
quently, CSR researchers have interests in questions about how a firm communicates
with consumers, how it disseminates product information, and the manner in which
it builds corporate brand dominance through CSR efforts (Berens et al. 2005; Biehal
and Sheinin 2007; Brown and Dacin 1997; Simmons and Becker-Olsen 2006).
Roberts and Dowling (2002) argue that an important aspect of CSR-related strategy
is to sustain or improve corporate reputation, because a growing body of research
studies argues that a good corporate reputation has the potential to create value. An
excellent corporate reputation is a type of intangible asset, something which cannot
be replicated easily by other corporations (Roberts and Dowling 2002). Previous
empirical studies demonstrate that a good corporate reputation has a positive impact
on CFP (this link will be discussed further in the CSP-CFP relationship section).
In the following sections, the author focused on a corporation’s reputation and its
attractiveness to employees and consumers (see Table 2.3).
With regards to a company’s attractiveness to employees, corporate reputation,
and perceived external prestige are positively correlated with employees’ com-
mitment to their firms (Carmeli 2005; Hunt et al. 1989; Turban and Greening
1997). Furthermore, Hunt et al. (1989) state that organisational commitment has
a positive impact on other valuable outcomes, like employee satisfaction, employee
performance, corporate loyalty, and adaptability.
Regarding a firm’s attractiveness to consumers, whether CSR activities improve
consumers’ response or not, a firm’s characteristics and consumers’ characteristics
mediate the relationship between CSR actions and consumers’ response (Sen and
Bhattacharya 2001). Further, evidence suggests that the impact of negative CSR
actions may be very damaging to a company image (Vlachos et al. 2009). In addi-
tion, corporate association, which is consumers’ overall perception of a company
(Brown and Dacin 1997), has been shown to play a role in consumers’ attitudes
towards corporate products (Berens et al. 2005). Additionally, there is a trend seen
in the communication of a corporation’s CSR values to their consumers that positive
consumer attitudes contributes to sales of a firm’s products (Lichtenstein et al. 2004;
Wagner et al. 2009).
Based on the discussion in this section, the following conclusion can be drawn.
Corporate reputation is an intangible asset of firms because it promotes corporate
performance and marketing returns through value creation. The author’s study
contends that corporate reputation deserves more attention in future studies because
it offers a unique competitive advantage for firms.
2.3 Results and Discussion 25
The author noted earlier that ranking corporate reputation is an effective approach
to measure CSR outcomes. Similarly, some systematic measurements of CSP dis-
cussed in this section indicate the results of CSR actions. There is an ongoing debate
about the linkage between CSP and CFP as theoretical and empirical studies support
a number of positions that are often contradictory (Aupperle et al. 1985; Barnett and
Salomon 2006; Cochran and Wood 1984; Godfrey 2005; Hillman and Keim 2001;
McWilliams and Siegel 2000; Russo and Fouts 1997; Waddock and Graves 1997).
To summarise the conclusions reached by previous studies and reveal the underlying
link between CSP and CFP, Orlitzky et al. (2003) conduct a meta-analysis of 52
studies and conclude that CSP has a positive relationship with CFP across all
industries and within all corporate contexts (Margolis and Walsh 2003). Regarding
measurements, Orlitzky et al. (2003) argue that the correlation between CSP and
CFP is more obvious if accounting-based firm performance data is utilised, rather
than marketing-based firm performance data. Further, Orlitzky et al. state (2003)
that corporate reputation is more likely to correlate with CFP than other measures
of CSP. However, Barnett and Salomon (2006) caution that Orlitzky et al.’s (2003)
statement is only based on a compilation of existing evidence, and thus cannot
yield persuasive conclusions, since those previous works are flawed in various ways.
Furthermore, Peloza (2009) summarises previous studies concerning CSP and CFP
relationship and explores the mediation process between CSP and CFP, which has
been overlooked by other scholars. In Peloza’s (2009) review, he examines 159
studies in the CSP-CFP link area and proposes a figure of “stages of financial
impact from corporate social performance” to illustrate the manner in which CSP
influences CFP. In their field study, Barnett and Salomon (2006) develop the concept
of social screening, which is used by social responsible investing managers to
measure the level of company’s CSP. Based on their analysis using social screening,
they indicate that at the early stage, financial returns declined initially, but there is a
rebound when the firm improves its level of social screening (Barnett and Salomon
2006). Subsequently, Brammer and Millington (2008) conduct an investigation into
the CSP-CFP link and conclude that it is curvilinear, that firms with unusually
high or low CSP may have a higher CFP, but firms with unusually low CSP only
promise short-term financial returns, while firms with unusually high CSP promote
more long-term financial returns. Recent studies of the U.S. corporations show that
charitable contributions stimulate revenue growth, especially after controlling for
sales growth (Lev et al. 2010). Overall, despite all the attention paid to the link
between CSP and CFP, the nature of this linkage is still not universally accepted and
remains contested.
Another fierce debate is about the causal link between CSP and CFP: Orlitzky
et al. (2003) state that CSP and CFP are more likely to be mutually influenced
by each other, because firms with good CFP can afford more CSR activities,
which lead to higher CSP. Meanwhile, good CSP helps companies achieve better
financial returns. Although Orlitzky et al.’s (2003) data show that “a virtuous cycle
with quick cycle times or concurrent bidirectionality” (p. 417) occurs, Barnett and
26 2 Literature Review of Corporate Social Responsibility
Salomon (2006) argue that this compilation of data does not represent a definitive
conclusion. Lev et al.’s (2009) empirical data demonstrate that the growth of CFP
has a significant association with future charitable contributions. Though a causal
relationship is proposed by Lev et al. (2010), there are no empirical measurements
that strongly support this causality, which means this is still a contested topic for
future research.
Methodologies of CSP and CFP are vital instruments in evaluating the CSP-
CFP link. Based on CSP construction, CSP measurements can be classified in the
following way (Orlitzky et al. 2003): (a) CSP reputation indexes, such as the Fortune
magazine ratings and the Moskowitz list (Cochran and Wood 1984), (b) social
judgments, which is a CSR management assessment of observable outcomes such as
the one used by the Council on Economic Priorities (CEP) (Fogler and Nutt 1975)
and Kinder, Lydenberg, Domini (KLD) (Barnett and Salomon 2006; Graves and
Waddock 1994; McWilliams and Siegel 2000; Turban and Greening 1997; Waddock
and Graves 1997), (c) leaders’ CSR principles and values, such as Aupperle’s
forced-choice survey (Aupperle et al. 1985), as well as some other scholars’
individual academic surveys (Hansen and Wernerfelt 1989; Reimann 1975), and (d)
CSP disclosures, like the social involvement disclosure scale (Abbott and Monsen
1979). Using the summary by Orlitzky et al. (2003), these CFP measurements can
be classified as market-based measures (e.g., share price appreciation) (Alexander
and Buchholz 1978; Cochran and Wood 1984), accounting-based measures (i.e.,
return on assets, return on equity, and earnings per share) (Abbott and Monsen 1979;
Aupperle et al. 1985; Barnett and Salomon 2006; Fogler and Nutt 1975; Graves
and Waddock 1994; Hansen and Wernerfelt 1989; McWilliams and Siegel 2000;
Russo and Fouts 1997; Turban and Greening 1997; Waddock and Graves 1997),
and managers’ perceptions of CFP (e.g., managers’ perception their firms’ financial
position) (Reimann 1975). The author compared these measurements of CSP (see
Fig. 2.3) and CFP (see Fig. 2.4) used in the database of articles and found that the
measurement of social judgments applies to a majority of them (55 % of the total
articles which discussed the relationship between CSP and CFP). The other types of
perception measurement used in this article are leaders’ CSR principles and values
(22 %), CSP reputation indices (17 %), and CSP disclosures (6 %). Within the CFP
measures dimension, accounting-based measures are the most prevalent (75 %),
while market-based measures (20 %) and managerial perceptions measures (5 %)
are the other most frequently used CFP measures.
There is a growing body of research interest in the linkage between CSP and
CFP which emphasises the different effective factors. For instance, building a CSP-
CFP model which examines consumers’ purchase behaviour (Schuler and Cording
2006), investor preferences (Mackey et al. 2007), and corporate responsiveness
to employees (De la Cruz Deniz-Deniz and Saa-Perez 2003). There are a large
number of studies concerning the CSP-CFP link (20 % of the total number), and
that research reflects the fact that the pursuit of a high CFP is a vital motivation for
firms’ CSR participation.
2.3 Results and Discussion 27
Social Judgement
6% 17% (e.g., CEP and
22% KLD)
Leaders' CSR
Principles and
55% Values
CSP Disclosures
Accounting-based
Measures
Perceptual
75% Measures
In this final section, the author summarises some of the representative questions for
future conceptual, empirical and methodological research study. Generally speak-
ing, future studies should continue to explore the underlying motivations for CSR
participation (Ruf et al. 1998) and explain how to communicate with stakeholders
in order to achieve a better corporate image (Maignan and Ferrell 2004). Previous
research studies put forward questions as follows: in a corporate context, to what
extent does that context influence a firm’s CSR involvement (Matten and Moon
2008) and how should firms adapt to social changes (Aguilera et al. 2007). Second,
with respect to the CSR-related strategy dimension, the discourse about current
CSR concerns can help to develop the “CSR-based leadership” concept (Basu and
Palazzo 2008) and should consider what a good CSR strategy is (Handelman and
Arnold 1999) as well as how this can enhance a firm’s sustainable competitive
advantage (Lev et al. 2010). Also in relation to corporate reputation, how can firms
influence consumers’ response (Berens et al. 2005) and manage their attractiveness
to employees? Finally, the association between CSP and CFP needs to be further
validated and the causal link between the two fundamental elements should continue
as an important discussion topic.
28 2 Literature Review of Corporate Social Responsibility
2.4 Summary
To sum up, this chapter utilises 762 selected CSR articles from published studies to
evaluate the trends in CSR theory development. In particular it analyses 110 articles
from leading academic journals to further investigate the variables, constructs, and
relationships within CSR theory. Based on these selected papers, the author attempts
to denote the milestones in CSR theory development by singling out pivotal articles
based on their average citations per year. Furthermore, the author describes the
CSR evolution by analysing the major themes (e.g. concepts and reviews and the
CSP-CFP link). Finally, the author suggested that it is crucial to examine CSR-
related strategy at the individual level of the executive, and that there is a lack of
research in this area. Hence, the current study attempts to fill this void. The next
chapter thoroughly discusses the CSR-related SDM process at the individual level
and proposes the development of a range of hypotheses.
Chapter 3
CSR-Related SDM Process and Hypothesis
Development
This chapter deals with research on factors that influence the CSR-related strategic
decision-making (SDM) process of individual decision-makers. Firstly, based on
Hambrick and Mason’s (1984) upper echelon theory, it elaborates on the influence
of external environmental and organisational stimuli, characteristics of managers,
and managerial perceptions of stakeholder salience on the SDM process. Secondly,
from an integrated perspective of SDM, the author summarises all the factors dis-
cussed in this chapter and generates a framework called “an integrated perspective
of strategic decision-making process of individual decision-makers” (see Fig. 3.3).
Thirdly, based on this figure, hypotheses are proposed. Finally, this chapter ends
with a conclusion.
This section explores the differences and similarities of SDM processes at the
individual and organisational levels and proposes that it is important to examine
the SDM process at the individual level. Hambrick’s (2007) upper echelon theory
focuses on the examination of individual SDM process of top managers and
produces a figure to illustrate those factors that influence managers’ decision-
making, which includes environmental and organisational stimuli, cognitive base,
selective perception, interpretation, managerial perceptions, as well as strategic
choice (see Fig. 3.1). Therefore, following Hambrick’s (2007) approach, the
author applied CSR issues into SDM process and elaborated the CSR-related
SDM process from the aspects of organisational stimuli, manager characteristics,
and stakeholder salience perceived by managers. Finally, it distinguishes between
rationality, bounded rationality, and cognition. It emphasises the concept of bounded
rationality.
Fig. 3.1 Strategic choice under conditions of bounded rationality (Source: Hambrick and Mason
1984, p. 195)
When examining the SDM from the information processing perspective, the organi-
sational level attributes are viewed as circumstances in which individual information
processing takes place (Corner et al. 1994). Corner et al. (1994) find that compared
to the studies on information processing at the individual level, there is scant
literature on information processing at the organisational level. However, they argue
that both the organisational and individual level information processing experience
similar stages and share the same intellectual foundation (Corner et al. 1994).
Mainly based on their previous assumptions, Corner et al. (1994) propose a
parallel model, which compares information processing at the organisational and
individual levels. This model strengthens the understandings of SDM at both levels
as well as the interaction between the two levels. Therefore, it can be inferred
that the individual level of SDM is the basis for the organisational level and in
turn the organisational level can be viewed as the context of strategic decisions
for the individual level. Note that the upper echelons researchers put an emphasis
on top executives, who are the most powerful actors in formulating firm strategy
(Lin and Shih 2008). Meanwhile, some researchers acknowledge that studies
of top management teams may provide a better explanation for organisational
behaviour and firm performance (e.g., Carpenter and Westphal 2001; Finkelstein
1992; Talaulicar et al. 2005), but it is a great challenge to explicitly explore each
element behind the “behavioural integration” (Hambrick 2007, p. 336) of a top
management team. Hence, it is reasonable to utilise the characteristics of top
executives as predictors of strategic actions (Chaganti and Sambharya 1987).
Concerning the SDM of top executives, Hambrick (2007) proposes that the upper
echelons theory builds on bounded rationality (this will be discussed in Sect. 3.1.6)
3.1 The CSR-Related SDM Process of Top Managers 31
and that it has two focal arguments. (1) Executives make decisions and take actions
based on their own interpretation of the organisational circumstances that they are
involved in, and (2) their interpretations originate in their work experience, personal
values, and managerial perceptions. Furthermore, Hambrick and Mason (1984)
suggests that work experience might generate an orientation which is expected
to influence the SDM process. He also argues that personal values represent
“principles for ordering consequences or alternatives according to preference” (p.
195), which may also influence strategic choices. Moreover, managers’ perception,
which is restricted by the process of limited field version, selective perception,
and interpretation, determines strategic choices directly. In their paper, Hambrick
and Mason (1984) illustrates this process of executives’ strategic choice by a
diagram (see Fig. 3.1). This diagram illustrates how external environmental and
organisational stimuli, managers’ work experience, personal values, and perceptions
impact on how they view the facts, the perceptions that they receive from what they
hear, and the interpretations of how they explain the events.
In addition, Hambrick (2007) points out that the characteristics of executives’
demography can be regarded as “valid, albeit incomplete and imprecise, proxies of
executives’ cognitive frames” (p. 335). Thus, the information about executives’ age,
functional track, career experience, formal education, industry, and firm tenures is
often utilised to predict strategic actions. Further, Hambrick (2007) elaborates that
the real psychological and social processes can assist in identifying the drivers of
executives’ behaviours and decision-making, the well-known “black box problem”
(p. 335). Therefore, based on the suggestion of upper echelon theory, the following
sections describe the influences of organisational stimuli (e.g., firm size and type of
industry), personal values, and the influence of bounded rationality on managers’
CSR-related SDM.
Comparing two non homogeneous examples, the different traits between man-
ufacturing industry and financial services industry lead to various strategies. In
particular, Schroeder et al. (2002) find that the key to success in manufacturing
industry is the proprietary process and the equipment, which is the result of internal
and external learning. Moreover, Rumelt (1991) suggests that the profitability of
manufacturing business is due to specific resources and market position rather than
the membership in the industry. Therefore, in the strategic decision-making process
of manufacturing industry, the decision-makers concentrate more on the unique
technology and particular resources and market position. In contrast, the profitability
of financial services industry is from managers’ expertise (Berger et al. 1999)
and customer relationship (Peppard 2000). To maintain customer loyalty, financial
services firms need to continuously provide good quality service and build up trust
with customers (Bell et al. 2005). Hence, in the financial services industry, the
decision-makers are more likely to concentrate on providing satisfactory services
and maintaining a good relationship with customers.
It is necessary to incorporate the corporate control or ownership into the
analysis of the SDM process (Lioukas et al. 1993; Mintzberg 1973). For example,
compared to nationally-owned enterprises, subsidiaries of multinational companies
are required to include more complex issues, such as both global and local business
circumstances, in their SDM process (Papadakis et al. 1998). Moreover, several
researchers argue that public vs. private ownership may have considerable effects
on SDM processes (Lioukas et al. 1993).
Some researchers argue that the ownership structure influences the formulation
of strategic decisions (e.g., Amihud and Lev 1999; Baysinger et al. 1991). Their
argument can be explained as follows. Firstly, there may be some conflicts of
interests between professional managers and shareholders, such as the separation
of control and ownership of the organisation (Berle and Means 1991). Shareholders
emphasise long-term development of the organisation, while managers are likely
to ensure their personal welfare, job security, and reputation (Baysinger et al.
1991). Secondly, ownership concentration represents the power of stakeholders,
and the identification of owners reflects strategic decisions objectives (Thomsen
and Pedersen 2000). Lastly, various ownerships categories may have differential
access to resources. For instance, state-owned enterprises often have rights to scarce
resources (Peng et al. 2004).
With regard to firm size, although some researchers believe that there is no
different SDM process which can be attributable to firm size (Dean and Sharfman
1993; Hickson et al. 1986), most researchers reckon it as an important factor in the
context of SDM (e.g. Fredrickson and Iaquinto 1989; Papadakis et al. 1998; Snyman
and Drew 2003). Evidence has been produced from different researchers, but they
are not clear or generalisable (Papadakis et al. 1998). Hart and Banbury (1994)
argue that company size may moderate the relationship between the SDM process
capability and performance. In particular, they point out that the process capability
has a positive effect on performance in larger firms but not in smaller firms (Hart
and Banbury 1994). Other researchers find that decision makers in small firms are
more likely to rely upon intuitions than decision makers in large firms (Brouthers
et al. 1998; Khatri and Ng 2000).
34 3 CSR-Related SDM Process and Hypothesis Development
In the contemporary theories regarding values at the individual level, scholars fall
rather clearly into two categories: those who follow Rokeach’s work and those who
are influenced by the conceptions suggested by Hofstede and Triandis (Smith and
Schwartz 1997). Although Hofstede’ framework makes a great contribution to the
value concept development (Sivakumar and Nakata 2001), it focuses at the national
cultural level rather than at the individual level. Hence, this study will concentrate
on Rokeach’s and Schwartz’s studies, which are two of the most popular theories
and instruments of values at the individual level.
3.1 The CSR-Related SDM Process of Top Managers 35
Schwartz and Sagiv (1995, p. 93) define personal values as “desirable goals, varying
in importance, that serve as guiding principles in people’s lives”. Further, Sagiv and
Schwartz (2000) argue that the decisive element that can be employed to identify
different personal values is a type of motivational goals. Based on Rokeach’s (1973)
studies, Schwartz generates ten motivationally-distinct types of values, which are
based on three universal human requirements that all individuals and societies
must be responsive to. Particularly, theses requirements are “biological needs,
interactional requirements for interpersonal coordination, and societal demands
for group welfare and survival” (Schwartz and Bilsky 1987, p. 550). Further,
Schwartz and Bilsky (1987) illustrate these three requirements by examples, for
instance, sexual needs convert into values for intimacy or love, requirements of
36 3 CSR-Related SDM Process and Hypothesis Development
might have some conflicts with, or compatibilities to, another value type. Moreover,
Smith and Schwartz (1997) provides an example of conflicts between achievement
and benevolence values: when people are in the pursuit of personal success, it
may inhibit their ability to contribute to the wellbeing of society generally. In
later research, Schwartz (1992, 1994) finds that the ten motivational values can be
grouped into two bipolar dimensions: openness to change (including self-direction
and stimulation values) versus conversation (security, conformity and tradition) and
self-enhancement (power and achievement) versus self-transcendence (universalism
and benevolence). More specifically, Schwartz emphasises that hedonism consists
of openness to change and self-enhancement, as the motivational value types are
an integrated organisation. Furthermore, Smith and Schwartz (1997) stress that any
variables may have a similar relationship to value types that are close to each other
in the value structure, and “those associations will decrease as one moves around the
circular structure in both directions from the most positively to the least positively
associated value type” (p. 87) (see Fig. 3.2).
Bradi and Schwartz (2003) comment on the bipolar dimensions and believe
that motivations are viewed as conflicts if they lead to opposite behaviours, or
they are compatible if they cause the same behaviour or judgements. In particular,
Rohan (2000) argues that in the second dimension, self-enhancement and self-
transcendence are shown conflicts “between concern for the consequences of own
Openness Self-
to Change Transcendence
Self-
Direction Universalism
Stimulation
Benevolence
Conformity
Hedonism Tradition
Security
Achievement
Power
Self-
Enhancement Conversation
Fig. 3.2 Schwartz’s theoretical model of bipolar value dimensions (Source: Adapted from Smith
and Schwartz’s study 1997)
38 3 CSR-Related SDM Process and Hypothesis Development
and others’ actions for the self and concern for the consequences of own and others’
actions in the social context” (p. 260). Therefore, those people who focus on their
own outcomes rather than on social effects are motivated by self-interest more than
other-regarding.
In 1992, the Schwartz value survey (SVS) is generated, which consisting of
56 values selected to embody each value type in his theoretical value dimensions
(Schwartz 1992). In order to avoid some biases, values are drawn from the major
religions and the data is selected from Asia, Africa, and some western countries
(Schwartz 1994). Additionally, he develops the survey with English, Hebrew, and
Finnish versions together. Thus far his collaborators in 54 countries have collected
data from about 44,000 respondents, which usually consist of one teacher from
an urban school and one college student (Schwartz and Bardi 2001). The data
analysis provides considerable support for Schwartz’s universal ten motivational
value types and their dynamic associations between each other. Therefore, SVS is
widely accepted as a stable measurement questionnaire, which can be applied in
most countries of the world (Schwartz 1992).
This section elaborates on the theme that stakeholders are vital factors for organ-
isational sustainable development and the acquisition of competitive resources.
Starting from the stakeholder attributes and salience, the author argues that stake-
holder claims and needs should be embedded in strategic decisions. Furthermore,
some studies indicate that stakeholders require firms to adopt CSR, and this becomes
the impetus to incorporate CSR (see “CSR-related strategy” of Sect. 2.3.2) into the
SDM process. Finally, from stakeholder-salience theory, this study suggests that
managers’ perceived stakeholder-salience may influence their CSR-related SDM
(see Sect. 3.1.5, “corporate social responsibility claimed by stakeholders”).
SDM scholars believe that strategic decisions are framed by the claims of salient
stakeholders who are perceived to be significantly important to the development
of organisations (Nutt 1998; Witte 1972). The concerns and needs of stakeholders
are the first factors that the decision-makers are required to consider and those
claims direct executives’ actions (Kolb 1983; Mintzberg et al. 1976; Starbuck 1983).
Moreover, some stakeholder claims are believed to be of insufficient importance
and so have no influence on SDM, while other claims are deemed as decisive
elements of organisational development and may lead to innovation or great changes
(Nutt 1998).
While numerous decision-making researchers recognise the importance of stake-
holders’ role in the SDM process, few empirical studies have been conducted to
analyse the nature of stakeholders and how their needs and concerns influence the
SDM process of managers. Nutt (1998) identifies the types of claims that may
contribute to strategic decisions and how those claims impact on decision-maker
behaviours as well as on the success of strategic decisions. In his later study,
Nutt (2004) suggests that decision-makers tend to adopt the stakeholder claims
without sufficient analysis. In particular, he points out that some decision-makers
are prone to adopt ideas found in stakeholder claims, rather than consider a wide
range of opportunities or threats or indeed to make an effort to seek better solutions
(Nutt 2004).
In another study of stakeholder influences on strategic decisions, stakeholders are
perceived to be an “external control of the organisation” (Dean and Sharfman 1993,
p. 587), which has a positive relationship with procedural rationality. Stakeholders
seek the opportunity to insert their ideas into organisational strategy (Nutt 1998)
and accordingly they pay close attention to strategic decisions and insist on
rational procedures (Dean and Sharfman 1993; Fredrickson and Iaquinto 1989).
40 3 CSR-Related SDM Process and Hypothesis Development
Furthermore, the external control perspective suggests that actors involved in the
organisations immediate environment have considerable influence on organisational
choices (Dean and Sharfman 1993; Romanelli and Tushman 1986), and that
stakeholder claims may have a significant impact on strategic decisions.
In recent years, the discussion of stakeholder claims has gained a more prominent
role in studies relating to the formulation of competitive strategy to pursue improved
firm performance (e.g., de Luque et al. 2008; Hillman and Keim 2001; Walsh and
North 2005). The attention of stakeholders might be a result of the increase in
interest in CSR (Harrison et al. 2010). In addition, Harrison et al. (2010) argue that
executives attach importance to CSR in order to obtain and develop their competitive
resources (Gulati 1999; Harrison et al. 2010). Embedding stakeholder claims into
SDM is very helpful in building a good CSR image and as a result it generates
inimitable advantages such as the attraction of stakeholders to the firm (Jones 1995;
Turban and Greening 1997) and the reduction of “the potential for loss of value such
as expenses associated with adverse legislation, regulatory penalties, or consumer
retaliation” (Harrison et al. 2010, p. 59).
Consequently, the discussion of CSR emerges as a predominant stream in the area
of strategic decisions. More and more researchers notice that stakeholder interests,
and the management of the relationship with stakeholders, are critical to corporate
success (e.g., Godfrey 2005; Harrison and Freeman 1999). The management of
stakeholders is invariably associated with corporate engagement with CSR and
corporate performance. The stakeholder-manager relationship determines the extent
of corporate involvement in matters related to CSR. Therefore, managers’ CSR-
related SDM depends on their managerial perception of stakeholder salience as
well as stakeholder interests and claims. The next section discusses the process of
strategic decision making from the bounded rationality perspective.
This section introduces the conceptual framework of the SDM process. This will
be followed by an elaboration on the rationality behind strategic decision models,
which are themselves criteria of decision behaviour (Dean and Sharfman 1993).
Finally, this review notes the new trend to provide an explanation of SDM from a
non-rational perspective.
the optimal point on the continuum between the dichotomy in different envi-
ronments (e.g., Dess 1987; Fredrickson 1984; Fredrickson and Iaquinto 1989;
Priem 1990).
Eisenhardt and Zbaracki (1992) generate a table to list the studies on rationality
and bounded rationality conducted during the years from 1963 to 1992. The author
searched the citation of the articles summarised by their work in SSCI and found the
five most cited articles were: Allison (1971), Mintzberg et al. (1976), Janis (1982),
Eisenhardt and Bourgeois III 1988), and Eisenhardt (1989). These five papers have
been cited more than one thousand times and consequently serve as the foundation
stones in this area. Following Eisenhardt and Zbaracki’s (1992) structure, this
examination summarised those works from 1991 to 2010 in Table 3.2. Those seven
studies were published in leading journals in the SDM research area (e.g., strategic
management journal, academy of management journal, academy of management
review, journal of business venturing, organisation science, journal of management,
and journal of management studies). This indicates that in the period SDM studies
focus on the heated debate of rationality and bounded rationality in different
environments (Dean and Sharfman 1993; Hitt and Tyler 1991). However, some
new topics do arise in the same period: some studies explore how the rationality
of strategic decisions contributes to firm performance. While others suggest that the
analysis of SDM should be considered in specific cultural contexts (Elbanna and
Child 2007).
Sharfman (1996) database; field firms in 16 industries rationality and political behaviour to decision success.
study (survey) on decision success
Goll and Rasheed Field study 62 largest Moderating effects of There is a significantly positive relationship
(1997) (survey) and manufacturing firms environmental factors in the between rationality and performance in
secondary data relationship between processes context high in munificence and dynamism.
sources rationality and firm performance
Hough and White Simulation 400 decisions from 54 The role of environmental Environmental dynamism may act as a
(2003) executive teams dynamism in the relationship moderator in the relationship between process
between process rationality and rational-comprehensive decision making and
firm performance decision quality.
Elbanna and Child Field study: 397 survey respondents, Explore a comprehensive model of Comparing to intuition, both rational and
(2007) survey and 36 semi-structured strategic decision effectiveness in political processes have more influence on
interviews interviews Egypt culture. strategic decision effectiveness.
43
44 3 CSR-Related SDM Process and Hypothesis Development
Table 3.3 Selected cognition based studies of the strategic decision-making process
Research field Summary of studies from leading journals
Cognitive bias and heuristics Burmeister and Schade (2007), Dane and Pratt (2007), Hiller
and Hambrick (2005), Hough and White (2003), Busenitz Jay
and Lowell (1997), Haley and Stumpf (1989), Bukszar and
Connolly (1988), and Lyles and Thomas (1988)
Cognitive simplification Schwenk (1988) and Duhaime and Schwenk (1985)
Cognitive mapping Hodgkinson et al. (2002) and Hodgkinson et al. (1999)
differences between entrepreneurs and managers’ SDM process, Busenitz Jay and
Lowell (1997) find that entrepreneurs are more likely to utilise biases and heuristics
than managers do in the SDM process. Furthermore, they provide a description
that entrepreneurs face more environmental uncertainty than managers, and under
conditions of environmental complexity, biases, and heuristics can be a more
effective and efficient method to use than rationality in the SDM process (Busenitz
Jay and Lowell 1997).
In prior studies of the SDM process from the cognitive perspective, researchers
attach importance to three main streams, namely cognitive bias and heuristics,
cognitive simplification, and cognitive mapping. In particular, cognitive simplifi-
cation studies analyse how bias influences each stage of the SDM process and
simplifies it. In their cognitive mapping research, Hodgkinson et al. (2002) attempt
to find a proper means to overcome cognitive biases arising from strategic decisions
formulation. The author concluded by listing the main articles in the research
fields of cognitive bias and heuristics, cognitive simplification, as well as cognitive
mapping, which are published in leading journals (e.g., strategic management
journal, academy of management journal, academy of management review, and
journal of business venturing) (see Table 3.3).
Thus, the conceptual framework of the cognitive simplification process and
biases (or heuristics) studies challenge the long standing theory of rationality
vs. bounded rationality continuum (Eisenhardt and Zbaracki 1992). These studies
provide an alternative view of SDM with suggestion that in some uncertain contexts,
a non-rational approach to decision making is superior to a rational one. Hence,
decision-makers do not need to blindly comply with the rationality of decision
making and they can sometimes utilise their biases and heuristics to make effective
decisions.
The above discussion of the SDM can be explained using causal explanation
theory, which is an integrated perspective of the SDM process. De Rond and
Thietart (2007) believe that managers make decisions precisely, as they are aware
3.2 An Integrated Perspective of the Strategic Decision-Making Model 45
that all their strategic decision-making may be vital to the firm’s survival and
development. Furthermore, on the basis of causal explanation theory (Runde and
de Rond 2010), they articulate the interaction among choice, chance, and causal
background, as well as discussing how all these factors unite to form a corporate
strategy (De Rond and Thietart 2007). In particular, choice is defined as “the
freedom of organisational actors to choose and act of their own will” (De Rond
and Thietart 2007, p. 536). Chance represents an event that happened randomly,
without any expectation or obvious causal relationship with previous behaviours
and endeavours (Bandura 1998; Mayr 1997). De Rond and Thietart (2007) argue
that causal background represents some attendant contextual factors. Hence, in
this thesis, the environmental and organisational stimuli, managers’ characteristics,
and stakeholder-manager relationship can be viewed as causal background factors.
Engagement in CSR activities reflects decision-making choices. Meanwhile, CSR
activities may be viewed as reflection of the outcomes of strategic chance, at least in
part. Furthermore, causal background, choice, and chance form the decision-making
of CSR-related strategy.
Using Papadakis et al. (1998) and Elbanna and Child’s (2007) research models,
the author developed a framework “an integrated model of the SDM process” to
integrate and summarise the main research fields in the SDM process (see Fig. 3.3).
Firstly, concerning the broader context, two dimensions were identified, namely
the external environment and organisational context and both of them influence
managers’ CSR-related SDM. To describe the environmental situation, studies
attach importance to the issues of environmental uncertainty (e.g., Busenitz Jay
and Lowell 1997), hostility/munificence (e.g., Castrogiovanni 1991; Elbanna and
Child 2007), and environmental dynamism. Concerning organisational character-
istics; issues concerning industry circumstances (e.g., Zajac and Bazerman 1991),
corporate ownership or control, firm size and age, as well as organisational life cycle
(e.g., Chandler 1962) receive considerable attention.
Secondly, following Hambrick’s (2007) upper echelon theory, individual char-
acteristics of top executives, such as demographic and psychological characteristics
were examined in the SDM process. Thirdly, the author turned to the nature of strate-
gic decisions, SDM process, and outcomes of SDM. Some researchers have a great
interest in the nature and type of strategic decisions, which is also the starting point
of SDM analysis. A number of highly influential works explore the SDM process
can be viewed as largely related to three main topics: rationality and bounded ratio-
nality, bias and heuristics (e.g., Hiller and Hambrick 2005), and political behaviour
(e.g., Child and Tsai 2005). Regarding the outcomes of SDM, this is an emerging
topic which includes decision quality (e.g., Olson and Parayitam 2007), decision
effectiveness (e.g., Dooley and Fryxell 1999; Forbes 2007), and firm performance.
Among those factors in Fig. 3.3: the external environment, organisational
context, SDM process, individual characteristics of decision-makers are important
issues in current studies, and receive more attention in this review. Overall, like
numerous SDM researchers, the author utilised an integrative model to analyse
the SDM issues, because many elements are embedded in the SDM process or its
related bodies. These unavoidably influence each other and could not be examined
separately.
46 3 CSR-Related SDM Process and Hypothesis Development
Demography:
Age, gender, education, Psychology:
functional area, Personal values,
work experience
Fig. 3.3 An integrated model of the strategic decision-making process of individual decision-
makers (Sources: Adapted from Papadakis et al. (1998) and Elbanna and Child’s (2007))
As already noted in this thesis, CSR represents claims by stakeholders and can
be incorporated into the SDM process (see Fig. 3.3). In other words, CSR issues
might be viewed as types of strategic decisions, which are similar to new business
investment. The nature of strategic decision determines the focal factors that
decision makers should consider in the process of SDM. This examination selected
strategic decisions of CSR issues, namely charitable donation and the focal factors,
which included organisational stimuli, SDM process, and individual characteristics.
Moreover, the research followed Hambrick’s (2007) upper echelon theory, which
emphasises and analyses the influence of CEOs’ characteristics on the SDM process.
Consequently, in this study the author focused solely at the individual level of
analysis of decision-makers. As Hambrick’s (2007) theory is based on the bounded
rationality theory, this study focused on this stream. In this section, within-subject
effects and between-subject effects of different factors were explored. Finally,
the current review generated the research model “An integrated model of the
strategic decision-making process of individual decision makers” (see Fig. 3.4),
which illustrated key factors of the CSR-related SDM process. It indicated the
organisational settings, which included industry, ownership, previous company
donation, firm size, organisational life cycle, and firm age. Further, it identified
the influential factors at the individual level, such as managers’ personal values
and managers’ perceived CEOs’ attitudes toward charity donation and charitable
organisation. As the relationship between most of these factors has been elaborated
in the review in the SDM section of the review of research, the following sections
mainly identify the directions of those relationships.
3.3 Current Study: The SDM Process of Individual Decision-Makers. . . 47
H2 H3 H4 H5 H6 H7
Stakeholders’
Claims
• Shareholders
CSR-related
• Employees
Decision Making
• Governments
Customers H1, H1a, H1b, H1c, H1d, H1e
•
• Competitors
H8 H9
Perceived CEO’s
Manager’s
Attitudes
Personal Values
Towards Charity
Influenced by individual characteristics
Sections 2.3.2 and 3.1.5 argued that the claims of CSR from stakeholders should be
embedded in SDM. Stakeholder claims demand that firms consider CSR issues.
Firms are likely to pursue their CSR activities in order to meet stakeholder
needs, which in turn may benefit corporate competitive advantage and sustainable
development (Werther and Chandler 2006). Agle et al. (1999) demonstrate that
the higher the level a CEO perceived the importance of stakeholders, the higher
the level of corporate social performance their companies achieved. As corporate
performance is the outcome of a series of strategic activities, there is of necessity a
“black box” in Agle et al.’s (1999) framework. It does not illustrate that the CEOs’
perception of stakeholders impact on firms’ CSP through CSR strategy. As a result
this is explored in the author’s study. The author therefore states that:
H1: Stakeholder claims will predict the CSR-related SDM.
Concerning specific stakeholders, shareholder impacts on CSR-decision-making
have been highlighted in recent literature. In the traditional view, the maximisation
of shareholder claims are drivers of mangers’ decision making (Mujtaba 2010).
However, if shareholders recognise the CSR event as an ethical investment, they
may support it. From an employee perspective, when managers engage in SDM, they
should concentrate on the changing nature of employees’ attitudes and behaviours
(Trevino 1986). From the government aspect, managers are more likely to make
decision making consistent with local government policy to reduce the risk of regu-
48 3 CSR-Related SDM Process and Hypothesis Development
latory activity and improve their corporate image. Regarding customers, they might
seek to modify organisational behaviour through their “discriminatory purchasing
behaviours” (Brammer and Millington 2004, p. 1416). When contemplating CSR
issues, managers are influenced by pressures of competitors’ CSR behaviours. On
the basis of the discussion above, it can be inferred that the five stakeholders might
have an impact on the CSR-related SDM specifically. Hence, the sub-hypotheses are
H1: If shareholders support the CSR event, managers are more likely to decide to
participate in CSR activities.
H1a: If employees support the CSR event, managers are more likely to decide to
participate in CSR activities.
H1b: If local government supports the CSR event, managers are more likely to
decide to participate in CSR activities.
H1c: If customers support the CSR event, managers are more likely to decide to
participate in CSR activities.
H1d: If competitors are already involved in the CSR event, managers are more likely
to decide to participate in CSR activities.
In Sect. 3.1.3, it was explained how corporate ownership or control had an impact
on the SDM process. Furthermore, this examination concluded that some research
acknowledged that public vs. private ownership or control might significantly
affect strategic decisions and SDM processes. In particular, Lioukas et al. (1993)
demonstrate that state-owned enterprises have privileged access to competitive
resources from the state. As a result, governments ultimately take responsibility
for supervising the state-owned enterprises’ behaviours to make it consistent with
the public interest. Therefore, state-owned enterprises are required to conform to
obligations and directions of governments. Moreover, government is one of the
stakeholders that have a determining effect on the process of SDM. It can be inferred
that ownership has a positive effect on the relationship between stakeholder claims
and the decision-making regarding company donations. Hence, the next hypothesis
proposed is,
H3: Compared to non-state-owned enterprises, managers from state-owned enter-
prises are more likely to decide to participate in CSR activities.
As firms grow, the managers recognise new resources and are supposed to use
new management practice to achieve success (Brush and Chaganti 1999). Further,
Brammer and Pavelin (2006) state that the participation of CSR activities is also
related to the issue of access to resources. With greater resources, larger firms
are more likely to partake in CSR events (Johnson and Greening 1999). However,
50 3 CSR-Related SDM Process and Hypothesis Development
smaller firms are often constrained by their limited resources, which prohibit them
from engaging in CSR initiatives. Hence, it can be supposed that,
H5: The higher the level of firm size the more likely it is that the managers decide to
participate in CSR activities
Organisational life cycle and firm age can be explained in the same way in their
response to CSR issues. According to Smith et al. (1985) the different stages of
organisational life cycle determine the various priorities of management practices.
For example, at the early stage, managers concentrate more on the potential problem
of obtaining capital investment (Jawahar and McLaughlin 2001). Thus, at this stage,
firms are relatively unwilling to make decisions to partake in CSR activities as
they lack the finance to do so. In contrast, mature firms may have more available
resources to engage in a CSR commitment. Similarly, numerous CSR scholars have
noticed that organisational life cycle or firm age are relatively important elements in
the process of shaping CSR-related strategy (e.g., Barnett 2007; Cochran and Wood
1984; Jawahar and McLaughlin 2001; Tuzzolino and Armandi 1981). Therefore,
H6: The later the level of organisational life cycle the more likely it is that the
managers decide to participate in CSR activities
H7: The older the firm’s age the more likely it is that the managers decide to
participate in CSR activities.
Through explorative research, the author observed that CEOs’ attitudes towards
charity donation and charitable organisation might have a significant influence
on SDM process. Moreover, Webb et al. (2000) argue that attitudes towards on
charity donation and charitable organisations closely relate with decision-making
concerning charity. Specifically the influences of two attitudes are as follows. CEOs’
attitudes towards charity donation are affected by their personal norms, which are
“situated, self-based standards for specific behaviour generated from internalised
values during the process of behavioural decision making” (Schwartz and Howard
1984, p. 234). CEOs’ attitudes towards charitable organisations are influenced by
three factors: (1) people’s familiarity with the charity, (2) the efficiency of the
charity in terms of how much money has been utilised in helping those people in
need and how much money has been allocated for administration of the charitable
organisation, and (3) CEOs’ perceptions of whether the charitable organisations
meet their goals as promised.
52 3 CSR-Related SDM Process and Hypothesis Development
3.4 Summary
This chapter explores the approach adopted for the current study and describes each
step of the questionnaire design process. In the section on questionnaire design,
the author discusses the content of the questions, and also explains the sequence,
layout, and production of the questionnaire. Following that, the sampling method
and survey administration are described. Finally, this chapter concludes with a
summary of work to date.
The way that scholars view the world may influence the approaches for the research
design that they adopt. According to Easterby-Smith et al. (2008), there are at
least three reasons why the understanding of philosophical underpinnings is very
important: firstly, it refers to how to gather the required evidence, how to explain
the data, and how to answer the basic questions in the investigation, which is useful
to clarify the research design. Secondly, the understanding of philosophy helps
scholars to consider about what kind of research design is suitable for their studies.
Thirdly, it helps scholars to operate their research design (p. 56). Moreover, Johnson
and Duberley (2000) emphasise the importance of philosophical assumptions and
argue that “how we come to ask particular questions, how we assess the relevance
and value of different research methodologies so that we can investigate those
questions, how we evaluate the outputs of research, all express and vary according to
our underlying epistemological commitments” (p. 1). The following sections review
the various philosophical assumptions and link philosophy and methodology in the
CSR area.
Gill and Johnson (1997) believes that ontology represents “the study of the essence
of phenomena and the nature of their existence” (p. 178). There are two main
ontological positions: nominalism and realism. Easterby-Smith et al. (2008) state
that nominalism “includes the view that it is the labels and names we attach to
experiences and events which are crucial” (p. 62). The realist position is that reality
exists outside our mind. For example, Bhaskar (1989) elaborates that “the ultimate
objects of scientific inquiry exist and act (for the most part) quite independently of
scientists and their activity” (p. 12). Morgan and Smircich (1980) utilise a frame-
work to illustrate the ontological assumptions of social enquiry (see Table 4.1).
Epistemology refers to a “general set of assumptions about the best ways of
inquiring into the nature of the world” (Easterby-Smith et al. 2008, p. 60). Gill
and Johnson (1997) define epistimology as “the branch of philosophy concerned
with the study of the criteria by which we determine what does and does not
constitutes warranted or valid knowledge” (p. 177). In practical terms, it emphasises
the instrument of investigation. Epistemology is polarised between the philo-
sophical aspects of positivism and anti-positivism (Burrell and Morgan 1979).
The pro-positivism camp focuses on the understanding of universal laws and the
causality between variables. The anti-positivism camp is loosely comprised of those
approaches which utilise qualitative research, phenomenonlogy, interpretivism or
social constructionism, which represents the understanding of subjective meanings
that the particular individuals involved create (Burrell and Morgan 1979).
during the process of exploring the social phenomena. This statement is also true
for the analysis of organisational behaviour (Burrell and Morgan 2005). The most
dominant paradigms are positivism and interpretivism (Easterby-Smith et al. 2008;
Sarantakos 1993).
Historically, positivism has been developed into several branches, which include
methodological positivism, neo-positivism, and logical positivism (Lee and Lings
2008). These philosophical assumptions are driven by scientific realism, which
states that reality is objective, and independent of researchers’ knowledge of
the phenomena (Craig 1998). In brief, positivism believes that social research is
conducted in an instrumental approach and “research is a tool for studying social
events, and learning about them and their interconnections so that general causal
laws can be discovered, explained and documented” (Sarantakos 1993, p. 37). In
contrast, interpretivism is subjective and assumes that: (1) reality is internally based
on the description the researchers attach to it, (2) the research is “immersed in
the phenomenon of interest” (Firestone 1987, p. 17), (3) researchers provide the
interpretation of the actors’ reasons for their behaviour, and (4) “value neutrality is
neither necessary nor possible” (Sarantakos 1993, p. 36). The main characteristics
and underlying assumptions of these two paradigms are summarized in Table 4.2.
Applying the philosophical assumptions into the CSR area, there are two major
schools of thought: positivist CSR and non-positivist CSR (Scherer and Palazzo
2007). The aim of positivist CSR scholars is “to provide a distinctive view of a
corporation’s overall efforts toward satisfying its obligations to society” (Wartick
and Cochran 1985, p. 758). In particular, three kinds of issues are discussed
by positivist CSR scholars: (1) the social expectations towards organisational
CSR behaviour, (2) the process or activities that companies conduct to meet the
expectations of society, and (3) the measurable results of organisational CSR
activities. Therefore, these problem areas are integrated within the outcomes of
organisational CSR efforts (Wood 1991) and examined by empirical methods.
Unlike positivist management researchers, non-positivist CSR scholars rely on
business ethics and normative foundations (Weaver et al. 1999). These non-positivist
CSR scholars not only describe factual moralities, but also explore principles and
criteria to facilitate the examination and justification of ethical behaviour in business
(Goodpaster 1998). Table 4.3 summarises the major differences between positivist
CSR and non-positivist CSR studies, which include foundation, ideology, main
concepts, mode of coordination in society, drivers of CSR, main philosophies, and
management theories. Moreover, to clarify the two different groups of thoughts, the
author classified positivist and non-positivist studies, which are cited more than ten
times each year since it has been published.
The ontological approach was applied into the current study, as it attempts to
inquire the nature of reality. The epistemological position focuses on the utilising
best possible measurement instrument. Therefore, this study followed a positivist
ontology, which is based on the view that “there are objective facts about the world
4.2 Choosing an Appropriate Research Method for the Current Survey 59
that do not depend on interpretation or even the presence of any person. From
this perspective social science is (or should be) value-free” (Glynos and Howarth
2008, p. 75). Furthermore, the reasons to choose this paradigm to examine CSR-
related strategic decision-making issues can be explained from three aspects: firstly,
it is appropriate to utilise and quantify the process and outcomes of CSR, i.e., in
data collection, analysis, and interpretation of findings. Secondly, most strategic
decision-making studies are examined in the positivist approach (e.g., Haley 1997;
Priem 1992; Priem et al. 1995). Thirdly, according to the literature, the core driver of
CSR-related strategic decision-making is powerful stakeholders, which is consistent
with the dominant thinking represented in the positivist CSR approach. Since
surveys have dominated most of the research in positivist CSR, this research is
aligned with the mainstream research methods in this area.
According to Malhotra and Birks (2007), the research design, which formulates
the procedures to solve the research problems, is a blueprint for carrying out
the research study. According to Saunders et al. (2009), the type of research
design can be generally classified as embodying a deductive or inductive approach.
Further, they explain that deductive research takes advantage of rigorous testing to
develop an existing theory. In particular, deductive researchers deduce the research
hypotheses from a theory, test these hypotheses using rigorous methods, analyse the
specific results from inquiry, and then make conclusions and modify the theory.
Based on observations of human behaviours, inductive researchers attempt to
understand better the nature of issues and generally conduct an exploratory and
discovery phase of any research project. As there was sufficient literature regarding
SDM and CSR, it was decided to adopt the deductive research method for the current
study.
With regard to the specific strategy, the author chose a survey approach, as
Saunders et al. (2009) state that the survey strategy has two functions, both of which
are applicable to the current study. One is that it can suggest possible reasons for
particular relationships between factors and can be used to generate a model of
those relationships. Another is that it can develop the findings that can be applied
to the whole population with less cost and time. Moreover, survey strategy has been
applied to many scenario-based studies in the analysis of business and management
issues (e.g., Kristof-Brown et al. 2002; Spence and Keeping 2010). The next section
further explores the reason why a scenario-based study has been chosen.
60 4 Methodology and Research Design
analyse actual decisions in the real world. Moreover, scenario-based work is more
preferable than a case study, as it is possible to use a large enough sample of firms
and decisions to test the SDM process of managers. One of the scenarios-based
methods is PC study and the next section provides more details of it.
avoid the problems of multi-collinearity, which is often found in the field data.
Thus, PC provides increased “psychological fidelity in that participants are asked to
afford overall evaluations of multi-attribute scenarios” (Reeve et al. 2008, p. 243).
Finally, PC is typically utilised at the individual level. It is also more similar to real
world situations in business than those approaches which ask participants to rate the
importance of the independent attributes directly (Karren and Barringer 2002).
PC is suitable to analyse managers’ decision making (Powell and Mainiero
1999) of CSR issues, as CSR is a complicated concept which is affected by
multiple factors. For the current study, this methodology allows the author to gain
direct evidence of the degree to which stakeholders actually influence managers’
SDM concerning CSR issues. The understanding of causal relationships between
different stakeholders and managers’ SDM processes concerning CSR will also be
strengthened in this PC study (Priem and Butler 2001).
Many PC studies (e.g., Reeve et al. 2008; Spence and Keeping 2010) adopt
Aiman-Smith et al.’s (2002) tutorial, which provides an explicit introduction on
how to use PC techniques. They thoroughly discuss the main issues in the study
design, the procedures and instruments in data collection, the regression models
in data analysis, and the recommendation for data interpretation. Therefore, the
current study mainly followed Aiman-Smith et al.’s (2002) guideline for each
step of scenario design, execution, analysis, interpretation, and data reporting. The
description of the experimental design is as follows.
Some researchers acknowledge that one of the main problems of studies on attribute
valuation is the number of attributes (Breaugh 1992), as it is not easy to make a
trade-off between the number of cues and the number of scenarios (Aiman-Smith
et al. 2002). It is necessary to design scenarios to be as inclusive as possible while
avoiding redundant attributes (Slaughter et al. 2006). Previous studies also suggest
that respondents might not cooperate with the author if the number of independent
variables or cues is more than seven or less than two (Brehmer and Brehmer 1988;
Miller 1956). Aiman-Smith et al. (2002) especially argue that if there are more than
five cues in each scenario, the number of scenarios will be unrealistic.
Another trade-off in scenario design is the number of cue and cue values, as
there is a reverse relationship between the two factors. As Aiman-Smith et al. (2002)
acknowledge “the greater the number of values per cue, the smaller the number of
cues that can be included, and vice versa” (2002, p. 396). Moreover, they elaborate
that two or three levels of values are frequently utilised in scenario design, and the
type of values can be numeric or categorical (Aiman-Smith et al. 2002).
4.3 Questionnaire Design 63
scenarios may lead to respondent exhaustion and make the research unwieldy. Thus,
it is necessary to randomly select a number of scenarios from the full crossed
design.
Turning to the current study, the 32 scenarios represent enough information to
describe realistic and stable estimates, but they will eventually lead to participant
fatigue or boredom (Graham and Cable 2001). Kachra and White (2008) note that in
order to strike a balance between enough information and the interests of scenarios,
it is better to interview or survey a small group of people who have expertise in
the related subject matter. Therefore, they ask doctoral students to conduct a pilot
study of their scenario to test participant fatigue (Kachra and White 2008). In this
study ten Ph.D. students were invited to the test, as they had 2–3 years of work
experience in China, and they were very familiar with the determinants of managers’
decision making. Moreover, they studied different disciplines such as business
study, chemistry, computing science, and biology in Ireland. They expressed their
views about the length and complexity of the scenarios for different versions of
scenario design: firstly, they believed that half of the scenarios (16 scenarios) is
the maximum that participants can accept; secondly, they acknowledged that taking
charity donation as an example of CSR activities in China is a good choice, because
the development of CSR is at a very early stage in China and only charity donation
is widely accepted as a CSR activity. Lastly, the sequence of different stakeholder
claims should be the same for each scenario, as it can save participants time.
Finally, 16 scenarios are randomly selected from 32 scenarios and these selected
scenarios are believed to be the proper ones for the participants. The author
endeavoured to select the scenarios many times, until these items had no collinearity.
Following Klaas et al.’s (2006) study, which is discussed in the next section, the
author tested the relationship between independent variables (cues) and found they
were uncorrelated. In each scenario design, if the stakeholder “supports” the charity
donation then it will be highlighted with “•” and coded as one as a dummy variable.
Meanwhile, if a stakeholder “ignores” the charity donation it was left blank and
coded as zero as a dummy variable. Table 4.5 illustrates a sample of scenario design
process. More details of the 16 scenario designs can be found in the Appendix D
(p. 101).
This research used SPSS 17.0 to analyse the distribution of the 5 information
cues (i.e., shareholders, employees, government, customers, and competitors) in the
16 scenarios. A brief description of variables and the results of collinearity analysis,
which indicated that the potential of collinearity did not exist among the five cues,
were illustrated in the next chapter. Therefore, according to Karren and Barringer
(2002), the author utilised the realistic information and minimised variable inter-
correlations, which enhanced the validity of the PC design (see Sect. 5.3.3).
Thus, the experiment designed to examine managers’ decisions of organisational
donation contains 16 scenarios, five information cues, and two levels of values. The
context of scenarios is that a “massive flood disaster has occurred” and different
stakeholders hold various attitudes towards the organisational charity activities.
Respondents were required to rate the probability that their organisation would
donate for disaster relief in each scenario.
Researchers are required to note that participants need some time to learn how to
answer each question (Aiman-Smith et al. 2002). Moreover, comparing data from
PC of full crossed and fractional design, Graham and Cable (2001) suggest that
although fractional design could not provide as much information as full crossed
design does, it may decrease fatigue and make participants more willing to attend to
the survey. Therefore, fractional design was selected in this study. Beyond that, the
researcher established a set of “practice trials” (Aiman-Smith et al. 2002, p. 406)
to facilitate participants in adapting to the survey. In this way, the negative effect of
start-up learning and participant fatigue were captured at the minimum level.
Concerning the measurement of outcome, Likert-type scales are widely utilised
in PC studies (Rotundo and Sackett 2002). They note that it is reasonable to
use 5-to 7- point Likert-type scales to measure the outcomes as long as they do
not examine the interaction variables. In line with previous PC studies (Hitt and
Tyler 1991; Webster and Trevino 1995), the current study chose 7- point Likert-
type scales to examine the probability that participants would consider donating in
each circumstance. This research emphasised managers’ decision-making for their
organisations, but the participants were required to answer if they would also like to
donate on behalf of themselves. It was supposed that most consider their individual
behaviours first, then the organisational actions. Accordingly, the author placed
the questions about individual’s preference first. The introduction of the scenario
questionnaire and a sample of scenarios were illustrated below (see Table 4.6).
According to your organisation’s situation, what is the probability that your organisation
would consider to donate at this moment?
It can be inferred that the power of a PC study relies on the number of scenarios
used (Karren and Barringer 2002). Although a full crossed-scenario design may
offer higher power, it results in participant fatigue, which reduces the reliability
of measurement (Karren and Barringer 2002). As fractional scenario design is
exploited to minimise fatigue, another approach to increase the power of the PC
study is to utilise a large number of participants in the study (Cohen 1988). Karren
and Barringer (2002) also exemplify several cases to demonstrate that a large sample
is more effective to examine the individual difference between subjects.
To sum up, this section provided a comprehensive and detailed explanation of the
scenario design process: the approach to dealing with the trade-off on the number
of cues and number of scenarios, to determine cue ranges and demand effects, to
generate fractional scenario design, to make cues uncorrelated, to minimise the
start-up learning effect and participant fatigue. It also concluded that sample size
was required in PC studies. Based on these research principles, the author will now
illustrate the process of scenario design for the current study in greater detail.
Schwartz Value Survey (SVS) is used as the measurement of personal values. Based
on Schwartz’s theory, the SVS is utilised to measure people’s value priorities.
4.3 Questionnaire Design 67
Similar to the Rokeach Value Survey (1973), SVS has 56 values and the meaning of
each value is defined by a specification in parentheses. Respondents are required
to assess each item according to the importance as “a guiding principle in my
life”. Values are evaluated on a 9-likert scale ranging from (1) “opposed to my
values”, through (0) “not important” to (7) “of supreme importance”. Compared
to the Rokeach Value Survey (1973), this survey not only avoids the restriction
of ipsative procedure (Hicks 1970) and western imposed-ethics (Schwartz 1992),
but also reacts to critics of the western bias (Bond 1988; Braithwaite and Law
1985). Furthermore, the SVS is a universal application, which represents not only
represents western cultures but also covers eastern cultures. For instance the Chinese
version of SVS has 58 values, including 2 additional values (preserving my public
image and observing social norms) which are specifically designed for the Chinese
context. Those 58 values can be divided into 2 lists, the first 30 values can be
identified as terminal values, while the other 28 values represent instrumental values
(see Sect. 3.1.4 “the Schwartz Project”). As discussed in Sect. 3.1.4, the 58 values
can be classified as 4 dimensions: self-transcendence, self-enhancement, openness
to changes, and conservativeness.
Resultant self-enhancement of SVS was applied to the current study and could be
obtained by subtracting the mean score for the two self-transcendent values from the
mean score for the three self-enhancement values (Sousa et al. 2010). In addition,
the mean score of self-enhancement for each participant is obtained by averaging
the scores of the power, achievement, and hedonism values. Meanwhile, the mean
score of self-transcendence for each participant is obtained by averaging the scores
of the universalism and benevolence values (Feather 1995).
The author adopted Webb et al.’s (2000) scales to measure attitudes influencing
monetary donations to charitable organisations, as their instrument was validated
and widely accepted in this area (e.g., Ewing and Napoli 2005; Pracejus and Olsen
2004; Roman and Ruiz 2005; Venable et al. 2005). For instance, Rossiter (2002)
notes that Webb et al. (2000) exploit a rigorous approach and “the content saturation
procedure” (p. 322) to generate measures of attitudes towards charitable donations.
During the instrument development process, Webb et al. (2000) carry out a series
of studies relating to item generation and questionnaire formulation. Eventually nine
items remain and can be classified into two categories: four items representing
attitudes towards charity and five items representing charitable organisations.
Among these nine questions, one item in attitudes towards charitable organisation
should be reverse scored, as it addresses negative comments on charitable donation.
This question is “how much of the money donated to charity is wasted” (Webb et al.
2000, p. 303). The author asked the ten doctoral students (see Sect. 4.3.2 “correlated
and uncorrelated cues”) to test this measurement and found that it could also be
applied in the Chinese context.
68 4 Methodology and Research Design
At the organisational level, firm size, location, firm age, organisational life cycle,
the annual amount of monetary donation and industry are controlled to reduce the
influences of environmental and organisational factors. Meanwhile, at the individual
level, managers’ age, gender, level of education, degree type, functional area in
work experience, current position, current functional areas, and years of work
experience are controlled to minimise the impact of personal demographic elements
(see Table 4.7).
Several question structures are utilised in the survey design. Firstly, the Likert scale
is often applied as it requires respondents to rate the degree of their attitudes or
feelings towards a series of statements. Beyond that, the measures of personal
values, managers’ attitudes towards charity and charitable organisations, as well as
the importance of stakeholders as perceived by executives are also developed using
the Likert scale.
Regarding the wording of questions, the author followed Malhotra and Birks’
s (2007, pp. 384–387) guidelines: (1) define the issue, (2) use ordinary words,
(3) use unambiguous words, (4) avoid leading or biased questions, (5) avoid
implicit alternatives, (6) avoid implicit assumptions, (7) avoid generalisations and
estimates, and (8) use positive and negative statements. Based on Usunier’s (1998)
back-translation techniques for questionnaires, the author asked a Chinese Ph.D.
colleague to translate the source questionnaire from English to Chinese, then
asked another Chinese colleague to translate the new source Chinese questionnaire
back to English. Comparing the original and translated English questionnaires,
the author discovered problems between them and made appropriate adjustments
to ensure lexical equivalence, idiomatic equivalence, and grammatical-syntactical
equivalence (Usunier 1998).
seems a bit sensitive, so it is much better to leave it until last to avoid respondents’
objection or unwillingness to cooperate.
The layout and reproduction of the questionnaire may also influence the results.
Following Brace’s (2008) suggestions on this point, the author did the following:
(1) divided the questionnaire into several parts, utilising a different colour for
each section, (2) reproduced the questionnaire on good-quality paper and asked a
professional designer to produce it, (3) stapled papers together to make a booklet,
which facilitated participates handling it, (4) attempted to make each question
fit on a single page, (5) avoided crowding questions together, and (6) expressed
instructions clearly and placed them as close to questions as possible.
In addition to this, the author also emphasised the details in the cover letter and
the close of the questionnaire. The cover letter was the start of the questionnaire,
which included messages concerning the importance of this research, the benefits
to participants, confidentiality, and instructions on how to respond. The author
formatted the cover letter according to Dillman’s (2007) suggestions that it should
include a clear title to make it interesting, subtitles to indicate the nature of each
topic and a logo to make it more attractive. Furthermore, the author’s names
and contact details were provided in the cover letter to facilitate participants who
needed to contact her. Concerning the closing of the questionnaire, the author asked
participants to comment on the survey and provide some feedback. The author
clearly expressed two different methods of returning the questionnaire when it was
completed. Finally, the author asked respondents to provide their email address and
company names if they would like the research report. The questionnaire finished
by expressing the author’s appreciation for the participants’ cooperation.
The target participants of this study was top managers as their managerial charac-
teristics may influence organisational strategy (Hambrick and Mason 1984). Also,
as discussed in the SDM review, managers’ SDM process may influence other
managers and consequently formulate the organisational strategy. However, many
researchers have noticed that it is very difficult to achieve reliable and accurate data
in China (Ambler et al. 1999; Park and Luo 2001) especially from top leaders.
It is almost impossible to obtain a response to a survey which is delivered by
mail. Therefore, as with other strategic decision researchers (e.g., Agarwal et al.
2010b), the author utilised E.M.B.A. (Executive Master of Business Administration)
and M.B.A. (Master of Business Administration) candidates as a sample. It would
be feasible to obtain relatively reliable data in China with the cooperation of the
coordinators of EMBA and MBA programmes.
Recently more and more scholars notice that it is acceptable to collect data
from EMBA/MBA programmes. For instance, Delgado-Garcia and De La Fuente
Sabat (2010) argue that several SDM researchers use MBA candidates as a sample
(e.g., Mittal and Ross 1998). Furthermore, Bateman and Zeithaml (1989) use two
groups (MBA students and practicing managers) to examine the psychological
influences on strategic decisions, and they find that the results of MBA candidates
are consistent with that of practicing managers.
On the basis of the above discussion, it seems a reasonable approach to use MBA
candidates as a sample, but some researchers challenge the quality of the results
obtained from MBA candidates. It is doubtful that the attitudes and perceptions
of MBA candidates are inconsistent with practicing managers in each case. In
addition, MBA candidates have similar backgrounds – at least the same educational
environment – which may lead to similar opinions. In order to avoid these problems,
the author utilised part-time EMBA and MBA candidates who work in companies
72 4 Methodology and Research Design
for 5 working days and attended EMBA/MBA programme during the weekend.
The study considered those candidates who were practicing managers with at least
3 years work experience as qualified respondents. In addition to EMBA/MBA
candidates, the author also contacted other groups of managers who attended
management skills training other than EMBA/MBA programmes to complete the
survey. Those trainees attended 1 or 2 days training courses and most of them did not
meet each other before the training. Thus, the author could compare the results from
the EMBA/MBA student group and the managers group. If there was no difference,
it suggested that the results from the EMBA/MBA candidates group were valid and
persuasive (see Sect. 5.4.1).
Turning to the survey administration, the author contacted organisers of
EMBA/MBA programmes in top Chinese universities to invite them to participate
in this survey. Seven research coordinators were willing to cooperate with the study.
Theses coordinators were professors from seven different Chinese business schools
in seven leading universities. These were Tsinghua University (TU), Northeastern
University (NEU), Harbin Industrial University (HIU), Huazhong University of
Science and Technology (HUST), Beijing Jiaotong University (BJTU), Nankai
University (NKU), and Capital University of Economics and Business (CUEB).
The coordinators assisted the author to deliver the questionnaire to EMBA/MBA
candidates or trainees in their classes. Before the survey administration, the author
met and discussed with the coordinators many times in order to ensure that they
were well aware of the questionnaire.
The process of survey administration was as follows. Firstly, the author emailed
the draft of the questionnaire to coordinators and asked for their suggestions.
Secondly, the author went to China to visit the coordinators and discussed with
them the requirements of candidates qualified to participate in the survey. Thirdly,
the coordinators went to the EMBA/MBA classes to give a brief introduction of the
survey and to administer the process. If the author could not attend that class, the
coordinator performed this task on behalf of the author.
Data was collected in China between 5th October 2010 and 5th January 2011.
There were 376 valid questionnaires received from nine provinces and cities: Beijing
(163), Heilongjiang (85), Liaoning (78), Hebei (61), Hubei (43), Tianjin (30),
Shanghai (29), Henan (17), and Jiangxi (13). The response rate was (519/830)
62.53 % and the valid response rate was (376/519) 72.45 %. According to Menon
et al. (1996), it is acceptable if the response rate of top management survey is
in the range of 15–20 %. Thus, this response rate was satisfactory. Concerning
the classification of responses, the valid response data included EMBA candidates
(177), MBA candidates (196) and management skills trainees (146). As discussed
in Sect. 4.4, the author needed to compare the results from EMBA/MBA candidate
group and the managers group. If there was not different, it suggested that the
results from the EMBA/MBA candidates group avoid the bias of group-thinking.
The analysis demonstrates that the data from the EMBA/MBA candidate group were
valid and persuasive (see Sect. 5.4.1). More details of this data collection process
can be found in Table 4.8.
4.5 Summary 73
Table 4.8 Survey administration (5th October 2010 – 5th January 2011)
EMBA/MBA candidates
Respondents Time Location Coordinator Delivery Return
(1) CUEB (MBA) 31st Oct. Beijing C1 120 83
(2) NEU (EMBA) 12th Oct. Liaoning C2 120 78
(3) CUEB (MBA) 14th Nov. Beijing C4 30 15
(4) HIU (EMBA) 17th Nov. Heilongjiang C3 90 50
(5) BJTU (EMBA) 20th Nov. Beijing C5 50 18
(6) HIU (MBA) 4th Dec. Heilongjiang C3 50 35
(7) HUST (EMBA) 24th Oct. Hubei C6 20 17
(8) TU (EMBA) 2nd Nov. Beijing C3 20 14
(9) TU (MBA) 10th Nov. Beijing C3 40 33
(10) NKU (MBA) 20th Dec. Tianjin C7 70 30
Subtotal 610 373
Management Trainees
Respondents Time Location Coordinator Delivery Return
(1) Training 1 10th Oct. He Nan C3 40 17
(2) Training 2 1st Dec. Shanghai C3 40 29
(3) Training 3 5th Dec. Hebei C3 40 31
(4) Training 4 5th Dec. Hebei C3 40 30
(5) Training 5 20th Oct. Hubei C3 20 15
(6) Training 6 16th Dec. Hubei C3 20 11
(7) Training 7 18th Dec. Jiangxi C3 20 13
Subtotal 220 146
Total of all participants 830 519
4.5 Summary
5.1 Introduction
This chapter presents the within-subjects and between-subjects findings. The main
objective of this study is to assess what factors can predict managers’ CSR-
related SDM. In particular, this chapter examines which type of stakeholders, what
influential factors both at the organisational level and at the individual level may
explain the variance of CSR-related SDM and, moreover, how those factors impact
the CSR-related decision making. This chapter begins with a descriptive overview of
the statistics. The validity and reliability of measurements employed in the present
study are assessed. The main analysis of within-subjects and between-subjects is
subsequently conducted. This chapter ends by noting interesting additional findings.
The companies from which participants were drawn represented various stages of
the organisational life cycle, firm size, firm age, ownership, and location. Table 5.1
shows that 46.1 % of companies were at the emerging growth stage and 44.4 % of
companies were at the mature stage. From firm size aspect, 33.8 % of companies had
below 200 employees, 34.1 % of companies had 201–1,500 employees, and 32.1 %
of companies had 1,501–500,000 employees. Concerning firm age, 31.3 % of
companies were 1–10 years, 32.5 % of companies were 11–20 years old. Regarding
ownership, 36.3 % of companies were more than 21 years old. Concerning
ownership, 56.7 % of companies were state-owned enterprises, 28.0 % of companies
were private enterprises, 7.0 % of companies were foreign-owned enterprises, and
8.3 % of companies were joint-venture enterprises. Regarding the locations of
participants’ firms, 56.6 % of companies were located in major cities (i.e. Beijing,
study were comparable. Based on this data, it was necessary to test validity of
the measurement before the main analysis was conducted. The following section
discussed the procedures of scanning and purifying the instruments utilised in the
present study.
Validity testing is a process that assesses whether the scale items are sufficiently
highly correlated and internally consistent with each other to represent an under-
lying construct or not. Validity can be defined as “the degree to which the finding
is interpreted in a correct way” (Kirk and Miller 1986, p. 20). Construct validity
indicates the extent to which a measure effectively evaluates the construct it intends
to assess (Nunnally and Bernstein 1994). Discriminate validity stands for the degree
to which the operationalisation is different from others. It should not be similar from
a theoretical perspective, while convergent validity represents the extent to which
two or more measures of the same theoretical concept correlate highly. In this thesis,
the author assessed discriminate validity and convergent validity as they were two
key criteria of construct validity (Campbell and Fiske 1959).
Concerning the relationship between validity and reliability, validity is usually
tested with reliability, which is the degree to which the instrument gives consistent
results. It is worthwhile noting that it is possible to “obtain perfect reliability with
no validity at all” (Kirk and Miller 1986, p. 20). However, perfect validity can
ensure good reliability. The validity and reliability test is used to purify measures
and ensure that a scale measures exactly what it is supposed to measure. The
remaining part of this section described the process used to assess the discriminate
and convergent validity of the scales which were employed in the present study.
The aim of exploratory factor analysis (EFA) is to summarise data and explore
the theoretical construct of variables that are correlated. As the PC study utilised
a special approach, its validity and reliability would be discussed separately. The
following paragraphs articulated the EFA procedures of personal values as well as
attitudes towards charity donation and charitable organisations.
The EFA assessment of personal values is shown in Table 5.3, the Kaiser-Myer-
Olkin (KMO) was 0.80, with a significance of p < 0.001. As KMO values between
0.7 and 0.8 were adequate for factor analysis, values between 0.8 and 0.9 were
ideal (Hutcheson and Sofroniou 1999), the value of 0.8 fell into the range of ideal,
which meant that the sample size was adequate for factor analysis. The total variance
5.3 Scanning Instruments 79
explained was about 59.75 %, with the first factor explaining 22.34 % of the total
variance. When the sample size exceeds 250, the average communality should
be greater than 0.6 (Field 2009) so high communality is acceptable in this case.
Moreover, the 23 items comprising five latent variables represented five dimensions
(i.e. benevolence, universalism, achievement, power, and hedonism) of personal
value structure. The author noted the dimension for each item and explored the
underlying structure.
80 5 Data Analysis and Hypothesis Testing
The first factor was the combination of benevolence and achievement. Egri and
Ralston (2004) argue that individual values change according to the evolutionary
process of societal values. Therefore, the author assumed that achievement was
the foundation of benevolence, because in the Chinese culture there was a popular
saying that “In times of hardship, one should treasure oneself solely. In times of
success, he should benefit the others concurrently.” In other words, when a person
is poor, all he can do is to try his best to improve himself, when he becomes wealthy,
he is supposed to help others as much as possible. Therefore, the link between
achievement and benevolence can be explained. The second factor was identified
as universalism, with the third as power and the fourth as hedonism. Based on
the classification in Table 5.3, item 13 ‘broadminded (U)’, item 18 ‘preserving my
public image (P)’, item 7 ‘wisdom (U)’, and item 25 ‘observing social norms (P)’
were not loaded on the dimension suggested by Schwartz’s (Bardi and Schwartz
2003) personal value structure. Therefore, those items were removed for further
analysis and 19 value items remained.
The measurement of attitudes towards charity donation and charitable organisa-
tions is displayed in Table 5.4. The KMO was about 0.73, which meant the sample
size was ideal for factor analysis. The rotated factor analysis and the communalities
are illustrated in Table 5.4.
According to Webb et al.’s (2000) instrument, the first four items (C1–C4) were
measures of peoples’ attitudes towards charity donation and the last five items
(C5–C9) were measures of peoples’ attitudes towards charitable organisations. In
Table 5.4, items C1–C4 were loaded onto factor 1, which represented attitudes
towards charity donation. Meanwhile, items C5, C6, C7, C8, and C9 formed factor
2, which referred to attitudes towards charitable organisations. Since C6 was not
loaded onto factor 2, which represented it, it was not consistent with the structure.
Hence, C6 was removed and eight attitude items remained.
The limit of EFA is that it cannot test the latent variables of the structure, but
confirmatory factor analysis (CFA) can be employed to further analyse this. In
particular, CFA is used to assess whether measures of a construct are consistent with
corporate reality as understood by the author and to validate a theory about latent
variables. In line with Anderson and Gerbing’s (1988) approach of scale reliability
testing, this study assessed the model fit, factor loadings, and correlation between
constructs. After the EFA process, 19 items of personal values, 8 items of attitudes
towards charity donation and charitable organisations were remained. In this section,
the author utilised AMOS 18.0 software and combined the two measurements to
examine their structures and test their validities.
In the first round of item selection, the model fit was found to be unacceptable.
Among the model fit indicators, the Tucker-Lewis index (TLI) and comparative fit
index (CFI) should be greater than 0.90 (Byrne 2009). In this case the TLI was
0.879 and CFI was 0.919. Furthermore, a root mean square error of approximation
(RMSEA) less than or equal to 0.05 indicated a good fit (Browne and Cudeck 1993),
but in this output the RMSEA was 0.057. Since standardised regression weights
of A1 equality (0.340), A5 world at peace (0.469), A23 successful (0.462), A2
social power (0.414), A4 wealth (0.403), C4 of attitudes (0.352), and C5 of attitudes
(0.275) were less than 0.50 were dropped (Sackett and Ellingson 1997).
In the second round of selection, the model fit was satisfactory for further
study, as TFI was 0.949, CFI was 0.970, and RMSEA was 0.045. However, the
standardised regression weight of “A6 Unity with nature” was 0.480, which was less
than 0.50. Therefore, the item “A6 Unity with nature” was deleted. After two rounds
of selection, 13 items of personal values and six items of attitudes were remained.
For each item, the standardised regression weights were above 0.50. Concerning the
model fit, Chi-square value was 21.768 and the degree of freedom (df) was 100,
with a significance of p < 0.001. All indicators of the critical ratio of regression
weights (C.R.) were above 1.96, which indicate significance. TLI was 0.952, CFI
was 0.972, and RMSEA was 0.044, which indicated that the measurement model
was acceptable (see Table 5.5).
Table 5.5 illustrates the construct validity of personal values as well as attitudes
towards charity donation and charitable organisations. In particular, convergent
validity is on the basis of “the correlation between responses obtained by maxi-
mally different methods of measuring the same construct” (Peter 1981, p. 136).
Meanwhile, discriminate validity is obtained through demonstrating that mea-
surements which should differ from each other do not correlate highly (Lievens
et al. 2006). As shown in Table 5.5, all standardised regression weights (fac-
tor loadings) ranged from 0.605 (C3) to 0.894 (A11 loyal) and higher than
0.50, which indicated convergent validity (Peters-Scheffer et al. 2008). More-
over, all of the composite validity items (C.R. [self-transcendence] D 0.959, C.R.
[self-enhancement] D 0.844, and C.R. [attitudes] D 0.881) were higher than 0.70,
and all average variants extracted (A.V.E. [self-transcendence] D 0.748, A.V.E.
82 5 Data Analysis and Hypothesis Testing
Benevolence
Loyal 1.000 0.894
Helpful 1.028 0.093 11:049 0.848
Honest 0.835 0.078 10:756 0.710
Forgiving 0.797 0.079 10:060 0.690
Responsible 0.718 0.075 9:618 0.648
Universalism
Social justice 1.000 0.719
Protecting the environment 0.984 0.099 9:903 0.732
A world of beauty 0.836 0.104 8:024 0.690
Self-enhancement: Alpha D 0.761, C.R.b D 0.844, A.V.E.c D 0.519
Achievement
Capable 1.000 0.659
Ambitious 0.974 0.091 10:675 0.677
Influential 0.912 0.098 10:300 0.667
Power
Authority 1.000 0.707
Hedonism
Self indulgent 1.000 0.707
Attitudes: Alpha D 0.764, C.R.b D 0.881, A.V.E.c D 0.556
Attitudes towards charity donation
C1 1.000 0.639
C2 0.981 0.138 7:097 0.648
C3 0.866 0.137 6:314 0.605
Attitudes towards charitable organisations
C7 0.865 par_11 0.715
C8 1.076 par_12 0.851
C9 0.821 par_13 0.663
Note:
a
S.E. D Standardised error
b
C.R. D Composite validity
c
A.V.E. D Average variance extracted
Model fit index: Chi-square values D 21.768 and df D 100,
Chi-square/df D 0.217, p < 0.001. TLI D 0.952, CFI D 0.972, RMSEA D 0.044
[self-enhancement] D 0.519, and A.V.E. [attitudes] D 0.556) were higher than 0.50,
which was further evidence of convergent validity.
Following Peter’s (1981) suggestions, this research assessed discriminate valid-
ity by examining the inter-correlation of the construct. According to Fornell and
Larcker’s (1981) statement that the shared variance between two constructs (i.e.,
the square of their interaction) should be less than the average variance extracted
5.3 Scanning Instruments 83
Table 5.6 Construct validity (testing the correlation between latent constructs)
Dimensions Self-transcendence Self-enhancement Attitudes
Self-transcendence 0.865
Self-enhancement 0.438 0.720
Attitudes 0.333 0.045 0.746
Note: Diagonal is the square root of the average variance extracted
and explained by each dimension. In Table 5.6, this study followed Sousa et al.’s
(2010) method to produce the correlation matrix for the constructs. It was shown
that there was adequate discriminate validity, as the off-diagonal indicators were
lower than the diagonal indicators in their corresponding rows and columns.
Unlike the validity test of personal values and attitudes instruments, the validity
test of PC scenario is more complicated. In accordance with Karren and Barringer
(2002), this examination assessed the validity of PC scenarios in two approaches
during the process of questionnaire design. Firstly, the author asked ten Chinese
Ph.D. students in Dublin and ten Chinese managers in Beijing to test the question-
naires. Based on feedback from these participants, the author refined the scenarios
and made them more realistic (see Sect. 4.3.7). Orlitzky et al. (2003) believe that
this “self-report attribute design” can ensure the external validity of the results.
Secondly, this research examined the collinearity among the independent variables.
In Table 5.7, the random assignment of levels of cues was controlled for potential
collinearity among the five independent variables. In SPSS output, the average
variance inflation factor (VIF) was very close to 1 and this indicated that collinearity
was not a problem for this research design (Bowerman and O’Connell 1990). This
meant that the information cues were highly uncorrelated in the 16 hypothesised
scenarios. Furthermore, Table 5.7 indicates that if the inter-correlation between any
pair of independent variables was between .00 and .20, it was more likely favourably
accepted (Karren and Barringer 2002).
84 5 Data Analysis and Hypothesis Testing
To confirm the reliability of the dependent variables, Kachra and White’s (2008)
approach in analysing Chronbach’s alpha was followed. This was found to be
.860. Since the principal factor should be a one-component solution, the statistics
demonstrated that the PC scale captured 59.81 % of total variance, which confirmed
unidimensionality. Therefore, the examination of the validity and reliability of PC
indicated an adequate validity of the instrument.
Before carrying out the main analysis, three preliminary tests were carried out:
the first to explain the reason for choosing the technique to analyse the data; the
second, to assess the differences between the EMBA/MBA candidates and trainees
5.4 Main Analysis and Hypotheses Testing 85
in order to ensure this data could be analysed together; and the third to test the null
hypothesis of the statistics. After that, the author conducted the within-subjects and
between-subjects analyses and explained the reason behind indicators. The method
of reporting the results of statistical analysis followed several examples in split-plot
repeated-measures ANOVA (e.g., Armstrong et al. 2002; Kachra and White 2008).
The section ends with a summary of the hypotheses testing.
Firstly, concerning the approach of analysis, researchers state that there are many
multiple- regression models, such as ordinary least squares (OLS) and generalised
least squares (GLS) that could be employed in PC research (Aiman-Smith et al.
2002). Since OLS represents the biased estimation of the standard error of coef-
ficients, while GLS represents unbiased estimates of standard error, GLS is more
suitable to examine the present PC study. Comparing different techniques utilised
in the PC area, it was found that the split-plot repeated-measures ANOVA was most
suitable to analyse the split-plot scenarios used in current study. The reasons are
explained in the next paragraph.
The split-plot repeated-measures ANOVA analysis can be described as “a
factorial design analysis of variance in which at least one of the factors is based
on independent observations and at least one is based on correlated observations”
(Gardner 2001, p. 128). When an analysis focuses on the independent observation, it
may take the between-subjects factors as a single-factor analysis of variance. When
an analysis emphasises the correlated observations, it utilises within-subjects, as
in a repeated measures or randomised blocks design. In other words, in the current
study, examining the within-subjects factors (stakeholders) was akin to analysing the
same participants’ responses corresponding to a series of different scenarios; while
assessing the between-subjects factors resembled examining the responses of differ-
ent groups of participants (e.g., groups of different ownership and groups of different
firm size) responded to the same scenarios. Since the randomised selected scenario
design was applied in this study (see Sect. 4.3.2), it required split-plot repeated-
measures ANOVA. SPSS 17.0 was utilised to carry out the statistical analysis.
Secondly, testing the null hypothesis on the basis of the split-plot repeated-
measures ANOVA is necessary to test the assumption of sphericity. This refers to the
assumption of homogeneity of variance in between-group ANOVA (Girden 1992).
SPSS produces a Mauchly’s test measurement of the hypothesis that the variance
of the differences between two conditions is equal. The significance of Mauchly’s
test indicates that the F-ratio needs to be corrected. SPSS produces three types
of correction, Greenhouse-Geisser correction, Lower-bound estimate, and Huynh-
Feldt correction. Among them, the Greenhouse-Geisser correction is the most
preferable (Gardner 2001). In the present study, the significance p D .000 < 0.05,
meant the F-ratio was violated and needed to be corrected. In fact, the significance
86 5 Data Analysis and Hypothesis Testing
depended on the sample size. Moreover, a big sample with a small deviation was
more likely to lead to significance in Mauchly’s test. Therefore, the author utilised
the corrected F-ratios of Greenhouse-Geisser correction in statistical analysis.
Thirdly, before conducting the main analysis, it was necessary to investigate if
there was any difference between the three groups of participants, EMBA, MBA
candidates, or trainees from 1 or 2 days of management training programmes.
Utilising the techniques of split-plot repeated-measures ANOVA (Gardner 2001),
it was found that among these three groups, the F-ratio was 1.422 and p D 0.243,
which meant that there was no significant difference among them. The data from
EMBA/MBA programmes and training programmes could be analysed in one
dataset. Furthermore, this finding met the challenges on the quality of the data (see
Sect. 4.4).
After preparation, data could be examined as the within-subjects effects. Table 5.8
shows the mean score of CSR-related SDM, and the F-ratio, significance, partial
eta squared (˜2 ), as well as observed power of with-subjects effects. Moreover,
Table 5.8 refers to the differences in which the same participants deal with a series
of situations. The variances of the five independent variables (stakeholders) and
the combinations of the five stakeholders were listed. Firstly, each of the variance
of stakeholders and the whole combinations were obviously significant (p < 0.01).
Secondly, Partial Eta Squared (˜2 ) was a measure of effect size in ANOVA, which
described the proportion of variance explained by the factor (Pierce et al. 2004). Its
criterion was that .10 was a small effect, .30 was a medium effect, and .50 was a
large effect (Field 2009).
Some PC studies utilised partial eta square (˜2 ) to represent the effect size (e.g.,
Kachra and White 2008). In this study, the customers (˜2 D .162) had small effects,
shareholders (˜2 D .353) and employees (˜2 D .489) had medium effects, while
government (˜2 D .594) and competitors (˜2 D .794) had large effect. Furthermore,
the interaction of these five stakeholders had a large effect (˜2 D .639). Therefore,
Table 5.8 supports hypothesis 1 that “Stakeholder claims will predict the CSR-
related decision making”. Thirdly, observed power refers to whether there is a
sufficient sample size to detect this issue. It is acceptable if the observed power
is above or equal to 0.80 (Norusis 1990). In this examination, all of the stakeholders
and their various combinations had values in excess of 1.0, which was considered
favourable.
Concerning the relationship between stakeholders and CSR-related SDM, when
the shareholders ignored the charity donation, the mean score of CSR-related SDM
was 6.559. While when shareholders supported the charity donation, the mean
score of CSR-related SDM was 6.874. That was, when shareholders supported
the donation, the mean score of CSR-related SDM was higher than the score that
when shareholders ignored the donation. Thus the hypothesis that “If shareholders
support the CSR event, managers are more likely to decide to participate in CSR
activities” was supported. Following the same approach, it can be identified that the
claims of employees (ignorance: 6.869; support: 6.563) and government (ignorance:
6.659; support: 6.774) had positive impacts on CSR-related SDM. However, the
claims of customers (ignorance: 6.791; support: 6.642) and the CSR behaviour of
competitors (ignorance: 7.023; support: 6.409) did not have a positive impact on the
managers’ CSR-related SDM. Therefore, hypotheses H1a and H1c were supported,
but hypotheses H1b, H1d, and H1e were rejected.
With regard to the indicators of industry, the F-ratio was 8.146, with a signifi-
cance of p D .005, partial eta squared was .051 and the observed power was .810.
These statistics showed that industry could explain a certain amount of variance
of CSR-related SDM. In order to compare the influences of different industries,
the author selected 70 manufacturing and mining industry firms and 85 financial
services industry firms.
In the manufacturing and mining industry group, the mean score of CSR-
related SDM was 6.632. While in the financial services industry, the mean score
of CSR-related SDM was higher, 6.803. It was obvious that the higher the score of
CSR-related SDM, the more likely that the managers made decisions to participate
in CSR activities. On the one hand, financial services companies reserved more
5.4 Main Analysis and Hypotheses Testing 89
capital than the manufacturing and mining industries. On the other hand, it was
relatively important for financial services companies to build up trust between the
firm and customers through participating in CSR events. Therefore, hypothesis
2 “compared with manufacturing and mining industries, managers from financial
service industries are more likely to decide to participate in CSR activities” was
supported.
Concerning ownership, the study focused on the analysis of three types of
ownership: foreign-owned enterprises (FOEs), state-owned enterprises (SOEs), and
private enterprises. The joint-venture enterprise was not analysed, because it incor-
porated different kinds of shareholders (e.g., foreign organisations, government,
and private organisations), and it was difficult to detect the control of the firms.
Indicators of the three types of ownership were that the F-ratio was 2.537, with a
significance of p D .036, ˜2 was .025 and the observed power was .624. The statistics
indicated that ownership could explain a certain amount of variance of CSR-related
SDM. The mean score of CSR-related SDM of the private enterprises group, SOE
group, and FOE group were 6.609, 6.726, and 6.795 respectively. Compared to SOE
and private enterprise, the FOE was more likely to make decisions to participate in
CSR events as it had the highest score. Thus, hypothesis 3 that “compared to non-
state-owned enterprises managers from state-owned enterprises are more likely to
decide to participate in CSR activities” was rejected.
In order to further explain the variance of CSR-related SDM from the owner-
ship perspective, it was found that the effects of “foreign-owned enterprises and
government” as well as “private enterprises and government” were not significant
(p > 0.05). However, the effect of “state-owned enterprises and government” was
very significant (p < 0.01), which suggested that the claims of government would
influence state-owned enterprises, but not foreign-owned enterprises and private
enterprises.
Concerning previous company donation, the F-ratio was 18.571, with a signif-
icance of p D 0.000. Partial eta squared was .151 and the observed power was
1.000. The statistics showed that previous company donations could explain a
significant amount of variance of CSR-related decision making. Participants were
classified into four groups according to the amount of money donated in last year
(2009), namely “below 0.20 million” group, “0.21–1.00 million” group, “1.01–
10.00 million” group, and “above 10.00 million” group. From the lower level of
the group to the higher level of the group, the four mean scores of CSR-related
SDM were 6.503, 6.715, 6.856, and 6.860 respectively. There was a clear indication
that the higher the amount of previous company donation, the more likely that
the managers decided to participate in CSR activities. Therefore, hypothesis 4 was
supported.
Regarding firm size, the F-ratio was 4.413, with a significance of p D .013. Partial
Eta Square was .025 and the observed power was .758, which meant that firm size
could explain a significant amount of variance of CSR-related SDM. Firm size
90 5 Data Analysis and Hypothesis Testing
was divided into three groups according to the frequency of employees, namely,
firms of 10–200 employees, firms of 201–1,500 employees, and firms of 1,501–
500,000 employees. From the lower level group to the higher level group, the three
mean scores of CSR-related SDM were 6.631, 6.717, and 6.781 respectively. These
statistics showed that the larger the firm size, the higher the possibility that managers
decided to participate in CSR activities. Hence, hypothesis 5 was supported.
Concerning organisational life cycle, the F-ratio was 2.031, with a significance
of p D .109, which meant the factor of organisational life cycle did not explain
the variance of CSR-related SDM in this study. According to the statistics,
organisational life cycle did not have significant impact on the managers’ CSR-
related SDM. Thus, hypothesis 6 “The higher the level of organisational life cycle
the more likely it is that the managers decide to participate in CSR activities” was
rejected.
With regards to firm age, the F-ratio was 3.212, with a significance of p D .023.
Partial eta squared was .028 and the observed power was .738. The companies were
divided into three groups, namely, 1–10 years (31.3 %), 11–20 years (32.5 %),
and above 21 years (about 36.2 %), and each group represented one third of the
participants. In the 1–10 years group, the mean score of CSR-related SDM was
6.623. In the 11–20 years group, the mean score of CSR-related SDM was 6.707. In
the above 21 years group, the mean score of CSR-related SDM was 6.787. The
results demonstrated that the older the firm, the more likely that the managers
would make decisions to become involved in CSR events. Therefore, hypothesis
7 was supported. In addition, an analysis was made of the homogeneity of variances
between firm size (Levene statistic D 8.267, df1 D 2, df2 D 277, p D 0.000) and firm
age (Levene statistic D 26.086, df1 D 2, df2 D 273, p D 0.000). Since Levene’s test
was used to assess the tenability of the assumption of equal variances, this statistic
meant that there was no significant difference between the firm size and firm age
groups.
Regarding the perspective of personal values, the F-ratio was 1.749, with a
significance of p D .000. Partial eta squared was .686 and the observed power was
1.000. These indicators showed that personal values explained a large amount of
variance of CSR-related SDM. As the mean score of the resultant self-enhancement
was 0.74, participants were divided into two groups, namely a higher level of
resultant self-enhancement group (above 0.74) and a lower level of resultant self-
enhancement group (below 0.74). In the higher level group and lower level group,
the mean score of CSR-related SDM are 6.690 and 6.744 respectively. Therefore,
hypothesis 8 “the higher the level of the managers’ resultant self-enhancement
the less likely it is that the managers decide to participate in CSR activities” was
supported.
Regarding the attitudes aspect, the F-ratio was 36.351, with a significance of
p D .000, partial eta squared was .0091 and the observed power was 1.000. These
indicators meant that the factor of attitudes could explain a small amount of variance
of CSR-related SDM. Since the mean score of attitudes was 45, the author divided
the participants into two groups, namely below 45 group and above 45 group. In
the below 45 group and above 45 group, the mean scores of CSR-related SDM
5.4 Main Analysis and Hypotheses Testing 91
were 6.601 and 6.830 respectively. From these statistics, the author inferred that the
higher the level of CEOs’ perceived positive attitudes towards charity donation and
charitable organisations, the more likely that the managers would make decisions to
become involved in CSR activities. Therefore, hypothesis 9 was supported.
5.5 Summary
To sum up, the main objective of this chapter is to examine influential factors in
CSR-related SDM. These factors include stakeholders, factors at the firm level, and
factors at the individual level. Before the main analysis, a validity and reliability
test for the measurements was conducted. In order to analyse the impact of
these influential factors, a split-plot repeated- measures ANOVA is conducted
and hypotheses are tested. Overall the study demonstrates that the claims of
employees and government have a positive impact on CSR-related SDM, while
previous company donation, firm size, firm age, CEOs’ attitudes towards charity
donation and charitable organisations also have positive impacts on the CSR-related
Table 5.11 Means, standard deviations and Pearson correlationsa
Mean S.D. N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1 Resultant self- 10.00 8.00 376 1.000
5.5 Summary
enhancement
2 Decision- 81.74 11.74 376 .192** 1.000
makingb
3 Attitude 45.33 6.56 375 .288** .265** 1.000
4 Ownership 3.00 1.00 369 .016 .063 .040 1.000
5 Area 4.00 19.95 376 .045 .030 .019 .193** 1.000
6 Firm age 22.27 22.28 342 .001 .154** .040 .101 .053 1.000
7 Organisational 2.00 0.66 358 .046 .061 .119* .199** .005 .324** 1.000
life cycle
8 Donationc 2.00 1.05 329 .016 .372** .249** .062 .021 .220** .186** 1.000
9 Industry 0.00 0.50 157 .142 .224** .163* .154 .274** .127 .174* .296** 1.000
10 Age 3.00 0.81 372 .218** .050 .156** .021 .044 .129* .125* .117* .229** 1.000
11 Gender 1.00 0.48 358 .077 .049 .008 .029 .050 .052 .041 .014 .162* .201** 1.000
12 Education 3.00 0.60 369 .056 .046 .039 .019 .008 .017 .045 .085 .039 .112* .025 1.000
13 Major 5.00 3.68 362 .088 .026 .012 .023 .028 .003 .047 .011 .048 .025 .035 .073 1.000
14 Current 3.00 1.26 354 .119* .072 .060 .096 .018 .007 .127* .132* .113 .402** .198** .051 .012 1.000
position
15 Work 1.00 0.84 355 .195** .002 .164** .030 .037 .092 .154** .059 .182* .871** .237** .059 .024 .406** 1.000
experience
*Correlation is significant at the 0.05 level (1-tailed)
**Correlation is significant at the 0.01 level (1-tailed)
a
Pairwise deletion of missing values reduced the sample size from 376 to numbers ranging from 376 to 329 across various measures
b
Decision-making represents managers’ CSR-related decision-making
c
Donation means the amount of company donation in last year
The sample of industry measure is 375 because the author only selected two industries from 15 industries
93
94 5 Data Analysis and Hypothesis Testing
SDM. Moreover, the higher the level of resultant self-enhancement, the less likely
managers are to make decisions to participate in CSR activities. Compared with
manufacturing and mining industries, the financial services industries are more
likely to make decisions to participate in CSR activities. Table 5.12 is the conclusion
of hypotheses testing. Nine out of the 15 hypotheses were supported. However, 5
hypotheses were rejected. The explanations of the results are discussed in more
detail in the next chapter.
Chapter 6
Discussion of Findings
6.1 Introduction
This study supports the hypothesis that stakeholder claims can predict CSR-related
SDM. The results of split-plot repeated-measures ANOVA demonstrate that each
stakeholder claim can explain a certain amount of CSR-related SDM variance (the
p of each stakeholder is 0.000, and the ˜2 ranges from 0.162 to 0.794). In addition to
this, the combination of shareholder, employee, government, and customer claims,
as well as competitor behaviours has a very significant impact on CSR-related SDM
(p D 0.000, ˜2 D 0.639). These research findings are in line with the theory that
stakeholder claims influence the CSR-related SDM (Harrison and Freeman 1999).
In previous empirical studies, CSR scholars provide evidence of the rela-
tionship between stakeholders and corporate CSR-related strategy. For example,
Sen et al.’s (2006) findings demonstrate that, contingent on CSR awareness, stake-
holders react positively to the focal companies not only in the consumption area,
but also in employment, ethical investment, and CSR issues. Kacperczyk (2009)
elaborates that exogenous increases in takeover protection measures cause firms to
emphasise the opinions of their stakeholders concerning community and the natural
environment. Other scholars argue that stakeholder claims and interests are the
driver of corporate CSR-related strategy, while companies benefit from these CSR
activities. For instance, Choi and Wang (2009) offer significant evidence that high
levels of stakeholder awareness facilitate corporate ability to both sustain a superior
financial performance and recover from substandard financial performance more
quickly. Agle et al. (1999) state that there are significantly positive relationships
between stakeholder attribution, CEO values, and CSP.
In general, previous empirical studies on the relationship between CSR and
stakeholders identify two outcomes: that excellent CSR involvement leads to better
stakeholder relations and that a higher level of stakeholder awareness drives better
CSR-related strategies. The present study examines the latter aspect of the impact
of stakeholder claims on the CSR-related SDM. As most empirical works assess the
relationship between stakeholder salience and corporate social performance (CSP),
there is a gap between the drivers and the outcomes. The current study aims to
fill this gap. Basu and Palazzo (2008) suggest that managers make organisational
decisions concerning CSR with respect to their key stakeholders. This statement
is supported by the current study and can be explained with reference to the five
stakeholder perspectives in the following paragraphs.
This investigation illustrates that shareholder claims do not have a positive impact
on managers’ CSR-related SDM in the Chinese context. In particular, compared
with the situation where shareholders ignore charity donation (6.559), the mean
score of CSR-related SDM in circumstances where shareholders support this aspect
of CSR (6.874) is higher. Some CSR scholars contend that a firm’s CSR activities
should be consistent with the interests of shareholders, as they are key stakeholders
(McWilliams and Siegel 2001).
Therefore, the potential explanation for the results is that if shareholders pay
no attention to charity donation, it does not influence managers’ decision making,
while if shareholders support charity donation, managers are more likely to support
their claims, because it shareholders are the most important stakeholders for
most companies in China. Moreover, for many Chinese state-owned enterprises,
government is one of the largest shareholders of the company. Those state-owned
enterprises may not only need financial support from shareholder, but also need
their shareholders’ support in perspective of exclusive resources. Hence, top leaders’
decision-making concerning charitable donation are more likely to be in line with
their shareholders’ claims.
6.2 Discussion of Within-Subjects Effects 97
Power Legitimacy
Competitors Employee
Shareholdes
Government
Customers
Urgency
Fig. 6.1 An application of
stakeholder-salience theory to
the current study
100 6 Discussion of Findings
have the power, legitimacy, and urgency and they are the focal stakeholders
regarding the managerial decision-making of charitable donations. Furthermore, in
Mitchell et al.’s (1997) theory, shareholders and government are salient stakeholders
and the most important determinants of managers’ decisions concerning charitable
donations.
On the basis of Mitchell et al.’s (1997) stakeholder-salience theory, Agle et al.
(1999) utilise the data provided by the CEOs from 80 large firms in the U.S., and
they find evidence that stakeholder salience is related to CSP. Moreover, they point
out that stakeholder theory needs further development in the CSR area. Brammer
and Millington (2004) notice the vital role of stakeholders in the decision making
regarding charitable donation, but they do not examine the impact of stakeholders
directly. Therefore, the present study is the first attempt to analyse the relationship
between various stakeholder claims and CSR-related SDM concerning charitable
donation in China. As such it contributes to the application of stakeholder-salience
theory.
6.3.1.1 Industry
The statistics indicate that managers from financial services industries are more
likely to make decisions to engage in CSR activities than managers from manu-
facturing and mining industries. Numerous CSR scholars emphasise the industry-
specific control group as well as financial performance (e.g., Basu and Palazzo
2008; McGuire et al. 1988) when they examine the relationship between CSR and
corporate strategy. They also examine how the traits of industry affect the managers’
decision-making concerning charitable donation.
As elaborated in Sect. 3.1.3, the success of manufacturing industry depends
heavily on specific resources and market position. In contrast, the profitability of
6.3 Discussion of the Between-Subjects Effects 101
the financial services industry is largely due to manager expertise and customer
loyalty. Based on this, the potential explanations of industry effect can be due to
the following three aspects. Firstly, these two contrasting industries need to satisfy
different customers. In the Chinese context, firms in the financial service industries
face a competitive market and they need to become involved in CSR activities to
build up a good public image. Secondly, the two distinct industries concentrate on
various aspects of CSR activities. Manufacturing and mining industries, especially,
focus on the environment, while the financial services industry emphasises the
welfare of common people (Bhambri and Sonnenfeld 1988). Lastly, in enterprises in
the financial services industry, such as banks and securities companies are generally
much wealthier than most firms in manufacturing and mining industries, therefore
managers from financial services industries are more likely to make decisions to
engage in CSR activities than managers from manufacturing and mining industries.
6.3.1.2 Ownership
Inconsistent with the hypothesis that state-owned enterprises (SOEs) are more
likely to become involved in CSR activities, the results show that foreign-owned
enterprises (FOEs) may have more initiative to engage in CSR events. In particular
the mean score of CSR-related SDM of FOEs (6.795) is the highest followed by
SOEs (6.726) and private enterprises (6.609). Although the effect size is small
(p D .036 and ˜2 D .025), the findings are quite interesting.
The potential explanations of the ownership effect are follows. On the one
hand, the statistics show that despite the government support or ignore the charity
donation, the mean scores of CSR-related SDM of managers from FOEs and
private enterprises are around 6.8 and 6.6 respectively. However, with regards to
the SOEs, when the government pays no attention to charity donation, the mean
score is 6.65, while when the government supports charity donation, the mean
score increases to 6.85. From this, it can be inferred that SOE managers make
charitable donation decisions based on the encouragement or the claims of the
government, while private enterprises and FOEs are not affected by the pressures
of government directly. On the other hand, most FOEs are large firms in China
(more than 77 % are medium and large firms), which are more likely to catch the
attention of the public. Especially after the “5.12 Sichuan-Wenchuan earthquake”,
more and more Chinese people emphasise the charitable behaviour of large firms,
as they believe that corporate philanthropy represents the morality of organisational
culture. Therefore, SOE managers’ decision-making reflects the local government
claims and FOE managers’ decision-making represents the attention of the local
society. Government may not compel companies to donate to disaster relief, but
society has interests in CSR at all times. Hence, FOEs are more likely to make
decisions to participate in charitable donations than SOEs.
102 6 Discussion of Findings
Concerning firm size, the larger the firm, the more likely the managers are to make
decisions to participate in CSR activities. From the lower level of the group to
the higher level of the group (i.e., “10–200” group, “201–1,500” group, “1,501–
500,000” group), the three mean scores of CSR-related SDM increase sequentially
(i.e., 6.631, 6.717, and 6.781). The result is consistent with the literature.
The potential explanation of this phenomenon is that the larger the firm size, the
more attention it will attract from the media and the public. Therefore, there is more
social scrutiny from society, which encourages them to engage in CSR activities.
Moreover, with greater resources, larger firms have more capabilities and resources
to become involved in CSR activities. Therefore, it is reasonable to assume that the
larger the firm size, the more likely it is that managers make decisions to participate
in CSR activities.
6.3 Discussion of the Between-Subjects Effects 103
Regarding organisational life cycle, the result does not support the hypothesis
that “the higher the stage of organisational life cycle, the more likely that the
managers make decisions to participate in CSR activities”. In fact, the effect
of the organisational life cycle is not significant (p D .109 > 0.05), which means
that this factor cannot account for the variance of CSR-related SDM. There are
many assertions that strategic decisions concerning CSR must be coupled with
organisational life cycle dynamics (e.g., Jawahar and McLaughlin 2001; Tuzzolino
and Armandi 1981), but the results of this study do not conform to that literature.
There are two potential explanations of this phenomenon. The stage of organ-
isational life cycle is determined by many factors, such as industry and firm age
(Agarwal et al. 2002b). Further, all these factors may have diverse influence on
the decisions to engage in charitable donation. The additional findings show that
when all the between-subjects factors are examined together, the corporate age and
industry become insignificant (see Sect. 5.4.4), which means these two variables are
not stable indicators. As organisational life cycle depends on industry traits and firm
age, it is acceptable that it might have no impact on managers’ CSR related decision
making. Another explanation is that managers tend to rank their companies on a
high level, as the organisational life cycle is an objective judgment. For instance, if
a firm is in the declining stage, the manager is more likely to choose the “mature
stage”, as he or she may think it is a much better phrase to describe his or her firm.
Unlike the organisational life cycle, the impact of firm age is consistent with the
hypothesis. From the lower level of the group to the higher level of the group
(i.e., “10–200” group, “201–1,500” group, “1,501–500,000” group), the three mean
scores of CSR-related SDM increase (i.e., 6.631, 6.717, and 6.781). An analysis of
the homogeneity of variance between firm age (Levene statistics D 26.086, df1 D 2,
df2 D 273, p D .000) and firm size (Levene statistics D 8.267, df1 D 2, df2 D 277,
p D .000) demonstrates that there is no significant difference between these two
factors. From this, in can be inferred that, in general, the older the firm, the larger
its size. Therefore, the explanation of firm age effect is similar to that of firm size
influences.
This study reflects those findings. Based on the mean score for resultant self-
enhancement, participants are divided into two groups: higher level and lower level
groups. Compared with the higher level group (6.690), the mean score of CSR-
related SDM in the lower level group (6.744) is higher. Moreover, indicators of
effect size suggest that personal values account for a large amount of the variance
of CSR-related SDM (p D .000 and ˜2 D .686). Agle et al. (1999) conduct their
empirical study in the U.S. and demonstrate that CEOs’ values are positively
associated with CSP. Especially, they utilise the self-regarding and others-regarding
measures of personal values, which are the counterparts of self-enhancement
and self-transcendence. As charity donation is part of CSR activities, managers’
decision-making concerning charitable donation can be driven by the same values
as CSR. Therefore, the result of the current study is consistent with Agle et al.’s
(1999) work but uses a different perspective to demonstrate this.
Another explanation for the personal values effect is that different concerns
originate from various values. McWilliams et al. (2006) acknowledge that if the
decision-maker is driven by altruism (i.e., self-transcendence and others-regarding),
then he/she sincerely wants to be socially responsibly and is not concerned whether
these CSR activities affect the bottom line or not. Contrarily if the decision-
maker is egoism (i.e., self-enhancement and self-regarding), he/she will not react
to the CSR event, unless his/her firm is compelled by regulation. Similarly, self-
enhancement managers are driven by success and seek personal success, while
self-transcendence managers are more concentrated on benefitting others (Gao and
Bradley 2007). On this basis, it is reasonable to infer that if the manager is on the
higher level of resultant self-enhancement, he/she makes decisions to engage in CSR
activities just because he/she feels huge pressures from stakeholders (e.g. employees
or government). Whereas, if the manager is on the lower level of resultant self-
enhancement, he/she might initiate involvement in CSR activities as he/she believes
that it will benefit the society.
one hand, from the CEO perspective, if the CEO supports the charity donation and
charitable organisations, this suggests that he/she is familiar with the donation and
the efficiency of charitable organisations. This perception may lead the manager to
support the charitable donation and agree with the plans concerning CSR issues. On
the other hand, from manager’s perspective, he/she is more likely to make decisions
consistent with CEOs’ attitudes. Otherwise the plan of engagement for a CSR event
may not be approved by the CEO. It is well known that in most Chinese enterprises,
there is a hierarchical structure where everybody acknowledges who has authority
over whom (Adler et al. 1989). Hence, managers tend to make decisions regarding
charity in line with their CEOs’ perceived attitudes towards charity donation and
charitable organisations.
As the author mentioned above, the between-subjects factors employed in this study
usually act as influential variables in previous research studies (e.g., Graves and
Waddock 1994; McGuire et al. 1988). In the present study, they are examined
as control groups of participants to assess the range of variances explained by
each factor, which strengthens our knowledge of how those elements influence
mangers’ CSR-related SDM. However, the disadvantage of split-plot repeated-
measures ANOVA makes it impossible to examine the important factors while
controlling other variables. To make up for this weakness, an ANCOVA is conducted
to explore the role differences in the seven between-subjects factors.
The data suggests that the amount of previous company donation and managers’
personal values are two relatively important determinants (see Table 5.9), which
can account for large amount of variance in CSR-related SDM. Meanwhile, the
firm size, CEOs’ attitudes towards charity donation and charitable organisation, as
well as ownership can be viewed as covariate variables. The results of hierarchical
regression suggest that all the between-subjects factors can account for about 15.4 %
of CSR-related SDM.
With regard to the issue that managers may have distinct local CSR-related
SDM attributes, it is observed that there are huge economic disparities in China
(Law et al. 2003; Yao and Zhang 2001). For instance, Demurger (2001) suggests
that the disparity in national infrastructure investment (e.g. transport network
density, telecommunication, coal production, and electricity production) leads to
the economic disparities. Furthermore, she classifies major Chinese cities according
to their GDP per capita average annual growth performance from 1978 to 1998
106 6 Discussion of Findings
(Demurger 2001). Among them, Beijing, Shanghai, and Tianjin are at the first
level, followed by Wuhan, Shenyang, and Harbin at the second level. Some small
cities mentioned in this thesis are categorised as at the third level. Therefore, it is
reasonable that the higher the level of city a company is located in, the more likely
that managers will make a decision to donate.
In this section, explanations behind the statistics are discussed and the results of
this study are compared with previous works. As personal values have a largest
effect size (˜2 D .686), this means that it is a predominant factor among between-
subjects variables. Moreover, the previous company donation has a small effect
size (˜2 D .151), which has the largest effect among the factors at the firm level.
Following that, the effect size of industry (˜2 D .051), CEOs’ attitudes (˜2 D .091),
firm age (˜2 D .028), ownership (˜2 D .025), and firm size (˜2 D .025) are relatively
small.
The current study just takes charitable donation as an example of CSR activities, the
roles of stakeholder and the associations of contextual variables may be different if
other CSR activities (e.g., environment, employee relations, and product safety) are
examined. However, the process of managers’ strategic decision-making concerning
charitable donation can be extended to other CSR activities, because all the
decisions are based on managers’ rational decision process. De Rond and Thietart
(2007) believe that managers make decisions precisely, as they are aware that all
their strategic decision-making may be vital to the firm’s survival and development.
Furthermore, on the basis of causal explanation theory (Runde and de Rond 2010),
they develop a figure to articulate the interaction between choice, chance, and causal
background, as well as to discuss how all these factors form corporate strategy (De
Rond and Thietart 2007).
The author applies De Rond and Thietart’s (2007) figure to elaborate the
overview of managers’ CSR-related strategic decision-making (see Fig. 6.2). Con-
cerning the causal background, some stakeholders may ask firms to take business
responsibilities, while industry, ownership, previous CSR-related strategy, firm size,
and firm age might affect managers’ CSR-related SDM. In particular, manager’s
personal values and CEOs’ perceived attitudes towards CSR activities indicate their
free will, which also have a significant impact on the results of decision making.
Therefore, factors in the social background impact on managers’ decisions to choose
to engage in CSR activities or ignore it. If there is causal sufficiency, managers’
decisions would lead to more chances for organisational development. For instance,
6.5 Extending Research Findings from China to Other Cultural Contexts 107
Choice:
Necessity
Involvement of CSR activates
Ignorance of CSR activities
Causal Background:
Stakeholders’ Claims,
Industry,
Ownership,
Previous CSR-related Strategy,
Firm Size, CSR-related
Sufficiency
Firm Age, Strategic
Managers’ Personal Values, Decision-making
CEOs’ Attitudes toward CSR
Chance: Activities
Risk Management,
Environment Management,
Marketing Management,
Stakeholder Relations Management,
Corporate Reputation
Corporate Social Performance Necessity
Corporate Financial Performance
Fig. 6.2 An application of causal explanation theory to CSR-related strategic decision making
(Source: Adopted from De Rond and Thietart 2007)
Cultural indicate that cultural values represent the aspirations and direction that
national cultures wish to develop (Javidan et al. 2005). Some scholars argue
that societal-level values and beliefs held by members of a culture can impact
on the specific values concerning the functioning of organisations, including top
managers’ CSR-related strategic decision-making (House et al. 1999; Triandis et al.
1988). Moreover, Lawton and Rajwani (2011) state that managerial choices are
influenced by certain political resources and policy context. In particular, some CSR
activities (e.g., charitable donation and environmental protection) have similarities
with corporate political activities, which can help the company to attain some
exclusive resources and maintain competitive advantage (Lawton 2011). Therefore,
it is necessary to extend the discussion of the current research findings to other
cultural contexts. The author compares the research findings in China with Waldman
108 6 Discussion of Findings
et al.’s (2006) study, which examined data from 561 firms located in 15 countries to
explore how societal culture influences top managers’ social responsibility values.
Based on the research model of this thesis, the author discusses the cultural influence
on CSR-related SDM from three aspects: stakeholders, organisational level, and
individual level.
At the individual level, Waldman et al.’s (2006) finding suggests that managers
in cultures emphasising institutional collectivism pay more attention on overall
aspects of CSR during the SDM process, as those managers value more on the
societal-level issues. Compared with United States, Russia, and Japan, China is
a high collectivism-driven country (Ralston et al. 1997). Hence, the institutional
collectivism may lead Chinese managers to have more societal concerns, compared
with U.S. managers, who are more individualism-driven. Moreover, Ralston et al.
(1997) utilised Schwartz’s (1992) value survey to measure managerial work values
in both China, Russia, Japan, as well as U.S. and argue that U.S. managers have the
overall highest score on the self-enhancement continuum. As the current research
findings suggest that the higher level of self-enhancement, the less likely managers
tend to make decisions to participate in CSR activities, the U.S. managers’ high
self-enhancement score may have negative influence on their decisions concerning
CSR issues.
Concerning stakeholders, stakeholder claims help to predict the results of
Chinese managers’ CSR-related SDM. Waldman et al. (2006) find that other
stakeholders (e.g., employees and customers), and the state “were shown to be
differentially predicted by our control variables, as well as national culture-level
and firm-level leadership variables” (p. 833). In other words, the influences of
stakeholder claims may be different across national boundaries. In particular,
the author found that Chinese managers’ CSR-related SDM is consistent with
employees and governments’ claims. Chinese managers may ignore the requirement
of shareholders as they pursue their CSR-related SDM, because the shareholder-
representative system is not mature in the Chinese market. However, managers in
developed countries may be in tune with shareholders, when they make CSR-related
SDM (McWilliams and Siegel 2001). Especially, “higher per capita gross domestic
product is positively associated with managerial values focusing on shareholders”
(Waldman et al. 2006, p. 833).
Regarding the organisational level, Waldman et al. (2006) find that the greater
power distance in the company, the higher level of managers’ lack of concern for
stakeholders. Moreover, in such societies, managers may tend to manipulate the
use of power, without considering constituencies (House et al. 2004). Furthermore,
in western culture, the SDM process is relatively flat and the diversity of each
individuals in the top management team can influence the results of decision results
(Knight et al. 1999). Meanwhile, Chinese managers’ decision-making process is
relatively hierarchical and driven by the top managers’ values. Therefore, it can be
expected that compared with Chinese managers, western managers may place value
more on stakeholders’ claims in the CSR realm.
6.6 Summary 109
6.6 Summary
Previous investigations demonstrate that stakeholder claims and some other influ-
ential factors (i.e. industry, ownership, firm size, organisational life cycle, firm age,
and managers’ personal values) may affect a manager’s CSR-related SDM (see Sect.
3.1), but there is no empirical work to examine the role of those factors in a CSR-
related SDM. The current study attempts to fill this gap and utilises the PC approach
to examine managers’ real perception of key stakeholders.
The statistics show that the claims of stakeholders can predict the results of
managers’ CSR-related SDM and the claims of key stakeholders (i.e. shareholders
and government) are consistent with the final decisions. Furthermore, regarding
the between-subjects effects, in line with the hypothesis, industry, the amount
of previous company donation, firm size, firm age, and CEOs’ attitudes have
positive impacts on the results of managers’ CSR-related SDM. Moreover, the
effect of resultant self-enhancement has a negative impact on the results, which
is also consistent with the hypothesis. However, the hypotheses of ownership and
organisational life cycle are rejected.
Beyond that, the author also discusses the research findings extensively. Firstly,
stakeholder salience theory is utilised to further articulate the roles of various
stakeholders and a figure is employed to elaborate the status of each stakeholder.
Next, based on the results of covariate analysis, the associations of between-subjects
factors are discussed further. Lastly, causal explanation theory is applied to combine
all factors and develop an overview of managers’ CSR strategic decision-making.
Chapter 7
Conclusion
This section reiterates the original research questions and highlights how these
questions and the methodological approach employed, contribute to the literature.
The main objectives of this study are (i) utilising content analysis to examine the
CSR literature review, (ii) integrating CSR with SDM and conducting a new method
to analyse stakeholder-salience theory as well as, (iii) using casual explanation
theory to examine CSR issues. The following paragraphs analyse these three
theoretical contributions in more detail.
Firstly, the current CSR review advances the CSR literature in a number of
ways. (1) It can be viewed as a synthetic and systemic review, which includes
primary research studies in the CSR field up to, and including June 2010. (2)
This review generates a typology of CSR theory thus promoting the theoretical
and managerial development of CSR research. (3) The author identifies the pivotal
articles (highly cited articles) within each time period, which not only show the
CSR evolution process, but also represent the most important work in the CSR
field. (4) This study suggests four perspectives on CSR-related strategy (i.e. risk
management, environment management, marketing management, and stakeholder
relations management) and identifies the relationship between CSP and CFP which
provides a solid foundation for CSR practitioners. (5) Using this combination
of qualitative and quantitative methods, the content analysis is a replicable and
effective way to analyse CSR concepts.
Secondly, based on the CSR review, this study combines SDM with CSR
issues and points out the crucial roles of stakeholder claims. In order to clarify
the contribution of the current study, the author compares this study with Agle
et al. (1999) and Brammer and Millington’s (2004) studies (see Table 7.1). These
two empirical works also explore the relationship between stakeholders and CSR
activities and have been published on leading academic journals with high citations.
Table 7.1 shows that the current study makes contribution by its method of
examining stakeholder salience. Brammer and Millington (2004) acknowledge that
the claims of stakeholders are significantly important, but they do not measure this
directly in their investigation. Agle et al. (1999) make great progress by developing
an instrument to analyse stakeholder salience, asking participants to rank each
stakeholder attribute (i.e. legitimacy, power, and urgency) based on their perception.
In the present study, participants are asked to respond to repeated measures of a
series of scenarios, which include the five stakeholders’ claims and CSR-related
SDM. This study identifies key stakeholders through the analysis, which is more
objective than Agle et al.’s (1999) work. Since each scenario combines the five
stakeholder claims, participants are required to consider the competing claims,
whereas, in Agle et al.’s (1999) study, participants focus solely on each stakeholder
and did not need to consider them together, which does not relate to corporate reality.
Thus, as an application of stakeholder-salience theory, this thesis contributes to the
existing literature by providing a new method of examination and bridging the gap
between stakeholder salience and CSP.
Thirdly, besides the application of stakeholder-salience theory, the author also
employs causal explanation theory to explain the research findings. De Rond
and Thietart (2007) utilise causal explanation theory to analyse the complicated
relationships between strategic choice, chance, and causal background. On the basis
7.3 Managerial Contributions 113
of their work, this study integrates all the research findings and provides further
explanations of managers’ CSR-related SDM, which attempts to utilise this theory
in the CSR area. Moreover, this causal explanation represents the basic principles
and determinants of most CSR activities. Thus this application extends the process
and influential factors from the decisions of charitable donations to other CSR
activities.
There are numerous practical implications arising from these research findings. On
the one hand, the thesis shows what factors affect the CSR-related SDM. On the
other hand, from a stakeholder perspective, it demonstrates the salient stakeholders
in relation to CSR issues in the Chinese context. Both these perspectives strengthen
the understanding of this issue. The following sections will discuss these managerial
contributions in more detail.
The results of between-subjects factors show that industry, ownership, previous
company donation behaviour, firm size, firm age, decision makers’ personal values,
114 7 Conclusion
and CEOs’ attitudes towards charity influence the results of CSR-related SDM.
This implies that environmental factors are necessary and these factors should be
included or controlled in future work. Personal values and previous organisational
behaviours are particularly important determinants. Thus, these research findings
strengthen the understanding of stakeholder salience and CSR-related SDM process.
Similarly, based on these findings, numerous suggestions can be provided in
practice from the five stakeholders’ perspectives. As the “shareholder-representative
system” has not reached its mature stage in China, individual shareholders cannot
exercise their rights properly: shareholders have urgency, but do not have the power
and legitimacy to influence corporate strategy. However, in order to change the
situation, shareholders may attract the attention and exploit the power of the media
as well as the power of government. Employees can exercise their rights to affect
their firm’s strategy by trade union. The government has the power, legitimacy,
and urgency to influence CSR-related strategy. Hence, the local government can
urge or encourage firms to participate in CSR activities in order to benefit the
society and achieve a win-win situation. Customers may not have direct impact
on organisational behaviour. Thus, similar to shareholders, the effective way for
customers to express their claims is through the media. Finally, from the competitor
perspective, as most companies prefer differentiating strategy concerning CSR
issues, firms should take action as soon as possible to take advantage of early
development.
There are two potential limitations in the methodology that employed in the CSR
literature review. Firstly, there is a possible limitation in the classification process.
Although this study attempts to make it replicable, this process still necessitates that
subjective judgments be made, which means some details might not be consistent
with the work of other panels of researchers. Secondly, there is a limitation in the key
words selection technique. There may be a critical argument, as some words, such as
“social issues”, “environmental issues”, “business ethics”, and “stakeholder issues”,
which are also relevant in the CSR area are not included in the article selection
(Lockett et al. 2006). However, those terms do not have very close connections with
the CSR concept (see Sect. 2.2.2). Although there is no explicit or implicit CSR
boundary, the four key words components are chosen to give the results of this study
more focus.
There are four limitations in the questionnaire design: (1) as PC techniques only
allow the analysis of a specific issue, this study concentrates on charitable donation
at CSR events. The process and determinants of CSR-related SDM concerning
charitable donation can be extended to other CSR activities, but the results of
decisions might be different if other CSR issues (e.g., environment and product
safety) are considered. (2) Although the simplified scenario design may facilitate
participants to understand and respond to the questionnaire, other scholars may
7.5 Recommendations for Future Research 115
challenge this: in the PC design, this study attempts to focus on the vital factors
and does not cover the elements of social media, regulations, activities of non-
governmental organisations (NGOs), and other stakeholders (e.g., community),
which also have certain impacts on managers’ decision-making. This should be
considered in future research. (3) Although the study endeavours to make those
scenarios consistent with the real world, some scenarios may not actually happen in
business. Furthermore, the author randomly selected 16 from 32 scenarios and the
collinearity is not a problem of this study, but some scholars may still argue that
this research could not represent all the situations and may have biases. (4) As there
is no universal description of organisational life cycle stage in China, participants
respond to the questions based on their own understandings and judgements, which
may influence the results of analysis. These issues should be considered in future
research.
Following the questionnaire design, a potential bias is identified in the sample
selection. In order to avoid the challenge that there is bias to select data from
EMBA/MBA classes, the author delivers some surveys in training classes, in which
trainees do not know each other before. The author assesses the homogeneity of
the three groups (i.e. EMBA, MBA, and trainees), and find there is no obvious
difference. However, other scholars believe that the data obtained from training
classes are not as good as that collected via mail survey.
Turning to the weakness of research methodologies employed in this study,
the main disadvantage of split-plot repeated-measures ANOVA is that it can not
examine the important factors while controlling other variables. In order to make
up for this deficiency, the author uses the ANCOVA techniques to examine the
between-subjects factors, but it cannot analyse the association of within-subjects
factors when calculating the between-subjects effects. On the other hand, there
are five within-subjects factors and nine between-subjects factors, which make the
statistical analysis of examining the interactions between these factors at the two
levels too difficult.
Although the present study explores the corporate context, CSR-related strategy
and CSR-related outcomes, there are still numerous gaps in our knowledge of these
factors. Based on the views expressed in Werther and Chandler’s (2006) book
and the review of previous CSR articles, this study identifies critical gaps in topic
areas of the current CSR theme. Although some “critical gaps” have already been
observed in articles of specialised journals, they do not receive sufficient attention.
Those gaps will require more attention in future studies. The author discusses future
studies, based on the three main themes: corporate context, CSR-related strategy,
and CSR outcomes.
With regard to the corporate context dimension, CSR-related culture needs to
be investigated (Handelman and Arnold 1999), and an analysis of competitors
116 7 Conclusion
Corporate
Context
Current Study
CSR-related CSR-related
Strategy SDM at the
Individual
Level
CSR-related
Outcomes
Corporate
Investors
and be analysed in the near future. The solid lines mean the relationships that have
been examined in this study. Meanwhile, the broken lines represent the associations
that need further explorations.
General Conclusion
Literature on CSR and SDM suggests that research on the association of
stakeholder salience, organisational and individual characteristics, as well
as mangers’ CSR-related SDM still need theoretical and empirical support.
This study has attempted to address some issues raised in the literature and
suggested possible topics for future research. To aid theoretical development,
the study utilises content analysis to summarise literature in the CSR area,
including the main streams of SDM literature, and further articulates SDM
concerning CSR issues. On the basis of the SDM literature, the author
develops a research model which examines managers’ CSR-related SDM
from an integrative perspective. The findings suggest that stakeholders can
predict managers’ CSR-related SDM. In particular, the shareholders and
the government are two key stakeholders to consider when managers make
decisions about charity donation. Moreover, the factors of industry, owner-
ship, previous company donation, firm size, firm age, personal values, and
CEOs’ attitudes influence the results of CSR-related SDM. Furthermore,
the study applies stakeholder-salience and causal explanations theory to
examine the results thoroughly. Finally, research contributions, implications,
and limitations of this study are provided. The thesis ends with directions for
future research.
Appendices
Corporate Context
Individual level: personal values; incentive
Organisational level: stakeholder perspective; ownership perspective
Societal level: policy perspective; countries perspective; institutional perspective
Corporate reputation
Employees’ attractiveness; consumers’ attractiveness
CSR-related Strategy
Risk management; environment management; marketing management; stakeholder
management
The CSP Predictors
CSP disclosures: annual report; letters to shareholders; corporate disclosures to society
CSP reputation ratings: fortune magazine ratings; reputation ratings developed by scholars;
Social audits:
CSP processes and observable outcomes: “behaviour” measures of CSP; Kinder, Lydenberg,
Domini (KLD) measures; Council on Economic Priorities (CEP) index
Corporate financial performance (CFP) predictors
Marketing-based measures: market return on security; excess market return of stock; abnormal
market returns
Accounting-based indicators: firm’s return on assets (ROA); return on equity (ROE); earnings
per share (EPS)
Perceptual measures of CFP: firm’s “soundness of financial position”; “wise use of corporate
assets”; “financial goal achievement relative to competitors”
6. The shareholders and the local government pay no attention to donate. However,
employees are concerned about the charity donation. Customers pay strong
attention to firm’s donation. Competitors have already donated for these stricken
areas.
Shareholders Employees Government Customers Competitors
7 •
7. The employees, the local government, customers, and competitors pay no
attention to donate. However, the shareholders are concerned about the donation
for these stricken areas.
Shareholders Employees Government Customers Competitors
8 • • •
8. The employees and the local government pay no attention to donate. However,
the shareholders are concerned about the donation. Customers are concerned
about firm’s donation activities. Competitors have already donated for these
stricken areas.
Shareholders Employees Government Customers Competitors
9 • • • •
9. The shareholders support the donation for these stricken areas. The local
government advocates firms’ donation. Customers pay strong attention to firm’s
donation activities. Competitors have already donated. However, the employees
are not concerned about donation at all.
Shareholders Employees Government Customers Competitors
10 • • •
10. The shareholders support the donation for these stricken areas. The local
government advocates firms’ donation. Competitors have already donated.
However, the employees are not concerned about donation at all. Customers
are not concerned about firm’s donation activities at all.
Shareholders Employees Government Customers Competitors
11 • • •
124 Appendices
11. The shareholders support the donation for these stricken areas. The employees
would like to donate. Competitors have already donated. However, the local
government is not concerned about the donation at all. Customers pay no
attention to firm’s donation activities at all.
Shareholders Employees Government Customers Competitors
12 • •
12. The shareholders support the donation for these stricken areas. Customers are
concerned about firms’ donation activities. However, the employees are not
concerned about the donation at all. The local government pays no attention
to the donation. Competitors would not like to donate.
This is no right or wrong answer in this section. Please answer each question as
soon as possible. Generally it needs no more than 3 s to fill each question.
Your task is to rate how important each value is for you as a guiding principle in
your life. Use the rating scale below:
(-1 is for rating any values opposed to the principles that guide you; 7 is for rating
a value of supreme importance as a guiding principle in your life) (The higher the
number <0, 1, 2, 3, 4, 5, 6>, the more important the value in your life)
Appendices 127
A number of scenarios involving situations which might induce a firm into charity
donation are enlisted. Recently, there was a massive flood disaster in some of the
regions. For each scenario, based on the information provided in every case, and
p
your experience and knowledge, please rate on a scale from 1 to 7. Place a “ ” in
the appropriate place.
128 Appendices
Appendices 129
When you make decisions about charity donation for your organisation, to what
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