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Responsible management – dare to care!
Article Type: Guest editorial From: Management Decision, Volume 48, Issue 10
Welcome to the fourth in an ongoing series of special issues of Management Decision devoted to matters of ethics, sustainability and corporate responsibility. Our special issue theme is interwoven with the organizing theme of the annual conference of the Academy of Management, so our 2010 issue seeks to make a contribution to the debate about passion and compassion in management practice consistent with its title “Dare to care: a basis for responsible management”.
While the continuing global financial crisis has highlighted the capacity for responsible decision-making by those who lead strategically significant organizations like RBS, HBOS, and AIG, and even though we have witnessed the sporadic economic “green shoots” of recovery, we also can read headlines like “After a near-death experience, the world financial system is returning to business as usual – only worse” (Hartcher, 2009). At the same time, it would appear governments seem powerless to prevent the return of the bonus culture that is argued to be part of the combination of dynamics that produced the crisis in the first place. This issue seeks to make a contribution to the debate about passion and compassion in management practice consistent with its title “Dare to care: a basis for responsible management”.
The first paper, by Isabel Gallego-Alvarez and her colleagues, analyses whether corporate social responsibility (CSR) practices performed by European companies (both those CSR practices related to marketing-based strategies and those that are not) create value. That value creation will be gauged through two variables: reputation and shareholder value creation. The findings obtained show that all CSR practices, especially those linked to enhancing a company’s image, have a positive effect on shareholder value creation given that investors are able to detect the level of corporate commitment to sustainable development. On the other hand, none of the typologies of CSR practices undertaken have a relevant influence on corporate reputation. The results of this research can show managers how to design their CSR strategies with an orientation to increasing corporate reputation through large investments in CSR which prevent them from being imitated by direct rivals.
In his viewpoint, Osvaldo R. Agatiello suggests corruption is not an end but an instrument of power; and he examines the deeper nature of corruption and the tools we as a society utilize to explain and address its impact on society. In addition, Agatiello considers the role of political authorities in liberal democracies, which are expected to act with the consent of their constituencies and as a consequence of it. While constituencies in turn cannot disown what their authorities decide and do; there are however, certain prerogatives, which society delegates to authorities, and he points out that the responsibility of electorates cannot be delegated. Agatiello concludes that honesty and corruption in political authority and civil service are counter productive and that public politics, through constant scrutiny of political and administrative actors, processes and actions, puts individual innocence to test. That is, societies cannot be excused for the performance of their representatives because, at selecting some candidates for public office and some courses of action over others, they are also deciding on a collective story that stands as an evolving moral narration.
Sebastian Arendt and Malte Brettel examine the effects of corporate social responsibility (CSR) on corporate identity, image and firm performance in a multi-industry setting, in order to support evidence that the effects of CSR differ in different industry settings. Using data collected from a sample of 389 European companies, results show that CSR triggers the corporate-image-building process and that its relationship to company success varies significantly based on company size, industry and marketing budget.
Ramakrishnan Ramanathan et al. examine the role of environmental regulations in inducing innovation and improving performance by studying the linkages among regulations, innovation and performance in the UK using sector level data. The analysis indicates that environmental regulations in the UK are significantly effective in improving economic performance of the industrial sectors. For example, in the short run, environmental regulations negatively influence innovation, and innovation negatively influences economic performance in these sectors. In addition, the research supports the widely accepted “win-win” nature of environmental regulations in improving economic performance (Porter’s hypothesis) since meeting government’s environment standards can further improve economic performance.
Ya Fen Tseng et al. investigate CSR-related practices implemented by small and medium-sized enterprises (SMEs) including their distinct opinions on CSR education based on industrial participants from Kaohsiung, Taiwan, which included both large businesses and SMEs. Study results indicate large enterprises place more emphasis on the importance of CSR education than SMEs, based on the number of employees, the amount of capital, and business volume. In addition, Chen also determined a positive significant influence on concern for CSR issues, teaching approaches, and courses if a firm sets up a CSR department, has annual CSR reporting, implements CSR, and evaluates its performance.
Denise Fleck proposes the view that responsible management of the growth process can prevent an organization from becoming “too big to fail”. She postulates a continued need for organizations to manage growth responsibility since it enhances the organizational propensity to experience healthy longevity. While she advances the notion that organizations can grow responsibility, she also suggests they can exhibit a dual nature. For example, she explores the notion that growing organizations can develop a potential ability to renew and self-perpetuate; but they can also sow the seeds of their own destruction.
A central theme of Yi-Chun Huang and Yen-Chun Jim Wu’s paper is to identify the factors influencing the performance of green new product development while examining the relationship between green performance and financial performance. Deploying a large sample survey of the Taiwan hi-tech industries, he shows corporate environmental commitment, environmental benchmarking, R&D strength, and cross-functional integration have a significant and positive influence on financial performance. Additionally, green product innovation performance has a positive effect on financial performance.
Juan Gamez-Gonzalez et al.’s work proposes and tests the C-40 deontological code of collective orientation specifically for franchise associations. From the review of ethical and deontological codes from franchise associations of 46 countries, 29 topics were identified. The study encourages the increase of ethical and business contents in the existing codes, which would improve relationships among franchisers, franchisees and other stakeholders.
Lopin Kuo et al.’s paper explores whether there is a connection exists between business operational efficiency and environmental responsibility by different Japanese industries listed in the Tokyo Stock Exchange. The results of his work indicate a positive correlation in terms of firm’s environmental conservation cost, net income and economic benefit of environmental conservation. The study enables environmentally conscious investors and fund managers to distinguish between the operationally efficient industries when taking environmental performance into account.
These nine studies clearly demonstrate effectiveness of CSR practices in meeting goals of social good as well as improved bottom lines, as well as offer challenges to organizations to continue to look for ethical ways to incorporate good citizenship in their business planning.
David Lamond, Rocky Dwyer
Hartcher, P. (2009), “After a near-death experience, the world financial system is returning to business as usual – only worse”, Sydney Morning Herald, September 22, available at: www.smh.com.au/opinion/society-and-culture/greed-is-god-again-and-we-have-learned-nothing-20090921-fyjr.html (accessed 26 September 2009)