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
Date Written: February 16, 2017
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: Suggested Citation