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Talk is Not Always Cheap: What Firms Say, How They Say It, and Social Performance

38 Pages Posted: 31 Mar 2014 Last revised: 17 Feb 2017

Donal Crilly

London Business School - Department of Strategic & International Management

Ioannis Ioannou

London Business School

Date Written: February 16, 2017

Abstract

In response to pressures to consider their firms’ socio-environmental impacts, executives increasingly make public commitments to corporate social responsibility (CSR). Nonetheless, there is often a discrepancy between their communication and their actions. We adopt a cognitive-linguistic perspective to develop and test propositions linking corporate communication about CSR to realized social performance. The premise of cognitive linguistics is that mental representations are reflected in the structure of language more so than in its content. We show that the content of firms’ reporting is a poor predictor of their social performance: indeed, the more firms mention non-shareholding stakeholders in their statements, the lower is their social performance. In contrast, we find that linguistic structure better explains firm-level variance in social performance. Specifically, forms of language that represent the multifaceted relationships between different stakeholders (conjunctive language), and that reflect a hierarchy among ideas (analytical language), distinguish high social performers from their peers. We therefore argue that achieving social performance requires not only an awareness of what is important, but also a more nuanced understanding of the complementarities and trade-offs that exist between actions. We discuss implications for future research.

Keywords: corporate social responsibility, corporate social performance, sustainability, stakeholders, managerial cognition

JEL Classification: L21, L2, L1, M1, D74

Suggested Citation

Crilly, Donal and Ioannou, Ioannis, Talk is Not Always Cheap: What Firms Say, How They Say It, and Social Performance (February 16, 2017). Available at SSRN: https://ssrn.com/abstract=2417987 or http://dx.doi.org/10.2139/ssrn.2417987

Donal Crilly

London Business School - Department of Strategic & International Management ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom

Ioannis Ioannou (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom
02070008748 (Phone)

HOME PAGE: http://www.ioannou.us

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