In response to both internal and external expectations and pressures, companies increasingly consider corporate social responsibility (CSR) as an essential factor in their strategic planning, but in a very diverse manner. To help synthesize the flourishing research in CSR variation across firms, we propose a three-orientation framework to map out a wide range of CSR strategies in current literature. Furthermore, we emphasize the importance of executive leadership and suggest that differences in leader’s values are the key drivers of CSR heterogeneity. This study offers a parsimonious model that maps out three primary pathways between leadership values and CSR strategic configurations. Drawing from charismatic leadership theory, we argue that three distinct types of leader power motives define three modes of leader’s strategic decision frames, which, in turn, influence corresponding CSR orientations. Specifically, socialized charismatic leaders favor prosocial decision frame that results in integrative CSR orientation; neutralized charismatic leaders embrace instrumental decision frame leading to strategic CSR mode; and personalized charismatic leaders tend to adopt self-serving CSR strategies driven by the self-serving decision frame. This holistic view advances the knowledge about the micro-foundations of CSR drivers and the essential role of leader values.
Introduction
Companies and their leaders increasingly acknowledge the critical role businesses play in addressing environmental and societal issues (Barney and Rangan, 2019) and allocate resources for CSR programs (Jamali and Karam, 2018). In 2019, chief executive officers (CEOs) of 181 major companies in the U.S. issued a statement reevaluating the purpose of a corporation to include a fundamental commitment to all stakeholders. These reimagined corporate objectives also highlight the inextricable tensions between firm’s pursuit of doing well and doing good by delivering values to diverse stakeholders. In seeking to balance among the complex and sometime competing expectations from various stakeholders, organizations often adopt very different CSR strategies (Godfrey et al., 2009; Bundy et al., 2018).
Such diversity in CSR engagement and its complex performance implications pose challenging questions for strategy scholars. We witness an increasing research effort in investigating the heterogeneity in company’s CSR engagement (Wang et al., 2016; Vishwanathan et al., 2020; Zhao et al., 2022). This line of inquiry tends to focus on two key questions: how firms are different in their CSR investments and, more recently, why firms adopt such diverse engagement strategies. For the questions of how firms differ, multiple CSR typologies (i.e., internal-external; Farooq et al., 2017; technical-institutional CSR; Mattingly and Berman, 2006) have emerged. These frameworks depict the differences in CSR postures in terms of various subgroups of stakeholders or CSR dimensions targeted by organizations’ social investment (Chang et al., 2014). In turn, these different CSR types have varying implications related to firm’s risk, social evaluation, and performance (Godfrey et al., 2009). For instance, Tang et al.’s (2015) study shows that a strategy focusing more on internal than external CSR leads to better performance than one engaging more external CSR. This is a useful lens and steps forward from using an aggregated CSR score for understanding how firms differ in their CSR activities. In the meantime, the typology approach also presents two limitations. One has to do with the potential typology proliferation in order to capture the full scope of combinations of stakeholder sub-groups or CSR dimensions that different firms choose to include in their CSR portfolios. In addition, CSR typology literature has yet to fully address the critical question of why organizations strategically prioritize some stakeholders over others and the conversations have predominantly focused on the macro and institutional drivers. As a result, such an effort to understand the heterogeneity in CSR engagement has mostly ignored the role of human decision-makers and thus almost remains “faceless.” With the voice of the key decision-makers muted, the understanding of why companies opt for dissimilar CSR strategies remains incomplete. Thus, an overarching configuration framework can be helpful to organize widely diverse CSR postures and shed light on underlying drivers.
To better understand CSR heterogeneity, strategy scholars argue that it is essential to examine the question of why, i.e., organization’s motivation underlying their CSR participation (Doh and Stumpf, 2005; Maak and Pless, 2006; Waldman, 2011; Aguinis and Glavas, 2012). A recent stream of research in strategy shifts the conversation to highlight the strategic role of CEOs and top management team (TMT) in CSR engagement. Drawing from upper echelons theory (UET; Hambrick and Mason, 1984; Hambrick, 2007), these studies portray strategic decision-makers being responsible for the diversity in CSR strategic choices (Waldman and Javidan, 2009; Wowak et al., 2016). Scholars stipulate that strategic leaders’ (CEOs and TMTs are referred as strategic leaders throughout the rest of the paper) individual attributes and psychological orientations have profound effect on organization’s strategic actions and performance. In many ways, an organization’s strategic choices are often a reflection of managerial personal values. In the case of CSR engagement, studies have shown that CEO’s personal characteristics such as political ideology (e.g., Chin et al., 2013), self-regulatory focus (Perez-Batres et al., 2012), and narcissistic personality (Petrenko et al., 2016) have a meaningful influence on CEO’s interpretation of environmental factors and choices of CSR strategies. Evidence has supported the links between certain styles of leadership and firm’s CSR engagement (e.g., authentic leadership-CSR, Kim et al., 2018; ethical leadership-CSR, Saha et al., 2020). This line of inquiry provides critical insight into the role of decision-maker’s personal values in firm’s CSR diversity. However, current leader-CSR research has a similar limitation as the CSR typology literature. These studies primarily focus on piecemealed CEO-CSR links (i.e., one attribute-one type of CSR, one leader style-one type of CSR). While acknowledging the research effort in exploring a wide range of leader style-CSR links, we also see a need for an overarching framework to address the more encompassing research question: What are the core leadership principles underlying various leadership styles that drive different CSR choices?
Taken together, we see rich but fragmented research streams in both the how-literature (CSR typology with stakeholder lens) and the why-literature (CSR drivers with UET lens). Time is ripe for developing a more holistic understanding of why and how companies manage CSR differently. Our study addresses the research gap discussed above by proposing an overarching framework to coherently synthesize the leadership-CSR literature. The central premise is that firm’s CSR activities are executive leader’s strategic choices influenced by leader’s personal values. Leaders have different value systems, particularly those associated with power and sense of responsibilities for others. As a result, we see different modes of CSR engagement.
There are two main objectives here. One is to develop an encompassing framework to synthesize the wide range of leader behaviors and CSR strategies in the literature. An impressive number of studies have provided enormous insights into the Leader-CSR phenomena (Zhao et al., 2022). A number of systematic review pieces have done the field a great service by summarizing the leadership-CSR literature with grand details and breadth (e.g., Pless et al., 2012; Miska and Mendenhall, 2018; Ashrafi et al., 2020; Saha et al., 2020; Zhao et al., 2022). This is also where our paper departs from these studies. Thus, our second objective is to build an overarching conceptual model to integrate the extant literature on leader-CSR. The unique contribution of this study is the parsimonious synthesizing theme: we address the question of how leadership impacts CSR strategies by identifying the CSR-related value principles underpinning various leader styles (opp. Specific leader style in relation to particular CSR tactic). Similarly, we identify three high-order families of CSR orientations to represent the principal characteristics of diverse CSR portfolios. Furthermore, we highlight the CSR decision frame as an underlying mechanism and develop the pathway model linking leadership to CSR. Specifically, leader’s power motives are translated into his or her CSR decision frame, which in turn defines leader’s interpretations of the environment and assessment of various stakeholders (Mitchell et al., 1997) and ultimately firm’s CSR preferences.
To achieve such encompassing yet parsimonious dual objective, we adopt a spectrum approach to conceptualize leadership values, CSR decision frames, and CSR orientations as three continuums, respectively, (as shown in Figures 1, 2). We then define three focal points along each spectrum to articulate the key distinctions among core principles. Along the leader-value spectrum, there are three types of power motives (three “faces”), altruism value, converging value, and self-serving value. Similarly, along the spectrum for leader decision frame and CSR orientation, there are three types of foci including societal focus, firm focus, and personal focus. These focal points provide a parsimonious structure along the encompassing spectrum. In essence, diverse leadership styles can be synthesized into three CSR-related value systems, while diverse CSR strategies are summarized into three primary orientations.
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