How CEO Hubris Affects Corporate Social (Ir)responsibility

Strategic Management Journal, Forthcoming

38 Pages Posted: 11 Jun 2014

See all articles by Yi Tang

Yi Tang

Hong Kong Polytechnic University

Cuili Qian

University of Texas at Dallas

Guoli Chen

INSEAD - Singapore

Rui Shen

The Chinese University of Hong Kong, Shenzhen - School of Management and Economics; Shenzhen Finance Institute

Date Written: June 8, 2014

Abstract

Grounded in the upper echelons perspective and stakeholder theory, this study establishes a link between CEO hubris and corporate social responsibility (CSR). We first develop the theoretical argument that CEO hubris is negatively related to a firm’s socially responsible activities but positively related to its socially irresponsible activities. We then explore the boundary conditions of hubris effects and how these relationships are moderated by resource dependence mechanisms. With a longitudinal dataset of S&P 1500 index firms for the period 2001-2010, we find that the relationship between CEO hubris and CSR is weakened when the firm depends more on stakeholders for resources, such as when its internal resource endowments are diminished as indicated by firm size and slack, and when the external market becomes more uncertain and competitive. The implications of our findings for upper echelons theory and the CSR research are discussed.

Keywords: CEO hubris, corporate social responsibility, stakeholder theory, resource dependence

Suggested Citation

Tang, Yi and Qian, Cuili and Chen, Guoli and Shen, Rui, How CEO Hubris Affects Corporate Social (Ir)responsibility (June 8, 2014). Strategic Management Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2447479

Yi Tang

Hong Kong Polytechnic University ( email )

11 Yuk Choi Rd
Hung Hom
Hong Kong

Cuili Qian

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Guoli Chen (Contact Author)

INSEAD - Singapore ( email )

Singapore

Rui Shen

The Chinese University of Hong Kong, Shenzhen - School of Management and Economics ( email )

2001 Longxiang Road, Longgang District
Shenzhen, 518172
China

Shenzhen Finance Institute ( email )

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