Many Ways to Rome: Exogenous and Endogenous Pathways to Environmental and Social Performance

6 Pages Posted: 6 Nov 2015

See all articles by Minna Halme

Minna Halme

Aalto University - School of Business

Jukka Rintamäki

Aalto University - School of Business

Jette Knudsen

Copenhagen Business School

Mika Kuisma

Aalto University - School of Business

Date Written: November 4, 2015

Abstract

While many would agree that the reason-to-be of corporate social responsibility is the expected positive effects on the sustainability performance of business, there is little empirical evidence of outcomes of CSR for the natural environment or society. Meanwhile, little is known about how external drivers, internal CSR policies, strategies, management practices, and combinations thereof influence corporate environmental and social performance. In order to address this gap, in this paper we conduct case studies of 19 companies and seek to identify which configurations of internal and external conditions shape social and environmental performance. In other words we ask which combinations of institutional constraints and organizational practices influence social and environmental performance. Is the effectiveness of one organizational element dependent on the presence or absence of another such internal element? Or is the presence of an organizational CSR practice effective only in conjunction with an external factor such as government regulation or market pressure? The two institutional constraints we include in our analysis are external (market and legislative) pressure and form of ownership, while the three organizational practices chosen for our analysis are the level of organization of CSR, the level of use of environmental and social management tools, and the level of strategic integration of CSR.

With organizational configurations in mind (e.g. Grandori & Furnari, 2008; Fiss, 2007), we do not expect to find only one configuration of institutional constraints and organizational CSR practices leading to positive (or negative) environmental and social performance, but investigate if multiple pathways lead to similar outcomes in terms of environmental and social performance (Aoki, 2001). In this paper we ask the following question: “Which institutional constraints and organizational CSR practices and combinations thereof contribute to the environmental and social performance of companies?”

We define CSR as company activities to integrate environmental, social and long-term economic concerns in business operations and in interactions with stakeholders, and the impacts of company’s operations to society (cf. Dahlsrud, 2008; COM, 2006; COM 2011). We focus on environmental and social outcomes of firm activity (see also Kang, 2013; Luo and Bhattacharya, 2009; Schuler and Cording, 2006; Waddock and Graves, 1997; Wood, 2010). We view social and environmental outcomes as encompassing both company performance and the impact of company activities for society. Social CSR includes items such as the quality of jobs, work life balance, job security, diversity, wage equality and gender equality. Environmental CSR include activities to combat climate change, protect national resources and pollution reduction.

Suggested Citation

Halme, Minna and Rintamäki, Jukka and Knudsen, Jette and Kuisma, Mika, Many Ways to Rome: Exogenous and Endogenous Pathways to Environmental and Social Performance (November 4, 2015). Available at SSRN: https://ssrn.com/abstract=2686145 or http://dx.doi.org/10.2139/ssrn.2686145

Minna Halme (Contact Author)

Aalto University - School of Business ( email )

P.O. Box 21210
AALTO, FI-00076
Finland

Jukka Rintamäki

Aalto University - School of Business

P.O. Box 21210
AALTO, FI-00076
Finland

Jette Knudsen

Copenhagen Business School

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Mika Kuisma

Aalto University - School of Business

P.O. Box 21210
AALTO, FI-00076
Finland

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