The impact of corporate social performance on financial risk and utility: a longitudinal analysis

This study focuses on the wealth-protective effects of socially responsible firm behavior by examining the association between corporate social performance (CSP) and financial risk for an extensive panel data sample of S&P 500 companies between the years 1992 and 2009. In addition, the link between CSP and investor utility is investigated. The main findings are that corporate social responsibility is negatively but weakly related to systematic firm risk and that corporate social irresponsibility is positively and strongly related to financial risk. The fact that both conventional and downside risk measures lead to the same conclusions adds convergent validity to the analysis. However, the risk-return trade-off appears to be such that no clear utility gain or loss can be realized by investing in firms characterized by different levels of social and environmental performance. Overall volatility conditions of the financial markets are shown to play a moderating role in the nature and strength of the CSP-risk relationship.

The effects of corporate social performance on the cost of corporate debt and credit ratings

This study investigates the differential impact that various dimensions of corporate social performance have on the pricing of corporate debt as well as the assessment of the credit quality of specific bond issues. The empirical analysis, based on an extensive longitudinal data set, suggests that overall, good performance is rewarded and corporate social transgressions are penalized through lower and higher corporate bond yield spreads, respectively. Similar conclusions can be drawn when focusing on either the bond rating assigned to a specific debt issue or the probability of it being considered to be an asset of speculative grade.

The impact of social and relational contexts on innovation transfer in foreign subsidiaries

It is widely acknowledged that innovation is one of the pillars of multinational enterprises (MNEs) and that technological knowledge from different host locations is a key factor to the MNEs’ competitive advantages development. Concerning these assumptions, in this paper we aim to understand how the social and the relational contexts affect the conventional and reverse transfer of innovation from MNEs’ subsidiaries hosted in emerging markets. We analyzed the social context through the institutional profile (CIP) level and the relational context through trust and integration levels utilizing a survey sent to 172 foreign subsidiaries located in Brazil, as well as secondary data. Through an ordinary least squares regression (OLS) analysis we found that the relational context affects the conventional and reverse innovation transfer in subsidiaries hosted in emerging markets. We however did not find support for the social context effect.

State capitalism and social responsibility in China's banking industry

China’s financial system has experienced a series of major reforms in recent years. Efforts have been made towards introducing the shareholding system in state-owned commercial banks, restructuring of securities firms, re-organising equity of joint venture insurance companies, further improving the corporate governance structure, managing financial risks and ultimately establishing a system to protect investors (Xinhua, 2010). Financial product innovation, with the further opening up of financial markets and the development of the insurance and bond market, has increased liquidity as well as reduced financial risks. The U.S. subprime crisis indicated the benefit of financial innovations for the economy, but without proper control, they may lead to unexpected consequences. Kirkpatrick (2009) argues that failures and weaknesses in corporate governance arrangements and insufficient accounting standards and regulatory requirements attributed to the financial crisis. Similar to the financial crises of the last decade, the global financial crisis which sparked in 2008, surfaced a variety of significant corporate governance failures: the dysfunction of market mechanisms, the lack of transparency and accountability, misaligned compensation arrangements and the late response of government, all which encouraged management short-termism, poor risk management, as well as some fraudulent schemes. The unique characteristics of the Chinese banking system are an interesting point for studying post-crisis corporate governance reform. Considering that China modelled its governance system on the Anglo-American system, this paper examines the impact of the financial crisis on corporate governance reform in developed economies, and particularly, China’s reform of its financial sector. The paper further analyses the Chinese government’s role in bank supervision and risk management. In this regard, the paper contributes to the corporate governance literature within the Chinese context by providing insights into the contributing factors to the corporate governance failure that led to the global financial crisis. It also provides policy recommendations for China’s policy makers to seriously consider. The results suggest a need for the re-examination of corporate governance adequacy and the institutionalisation of business ethics. The paper’s next section provides a review of China’s financial system with reference to the financial crisis, followed by a critical evaluation of a capitalistic system and a review of Anglo-American and Continental European models. It then analyses the need for a new corporate governance model in China by considering the bank failures in developed economies and the potential risks and inefficiencies in a current State controlled system. The paper closes by reflecting the need for Chinese policy makers to continually develop, adapt and rewrite corporate governance practices capable of meeting the new challenge, and to pay attention to business ethics, an issue which goes beyond regulation.

Interventions in social networks: impact on mood and network dynamics

Results from two studies on longitudinal friendship networks are presented, exploring the impact of a gratitude intervention on positive and negative affect dynamics in a social network. The gratitude intervention had been previously shown to increase positive affect and decrease negative affect in an individual but dynamic group effects have not been considered. In the first study the intervention was administered to the whole network. In the second study two social networks are considered and in each only a subset of individuals, initially low/high in negative affect respectively received the intervention as `agents of change'. Data was analyzed using stochastic actor based modelling techniques to identify resulting network changes, impact on positive and negative affect and potential contagion of mood within the group. The first study found a group level increase in positive and a decrease in negative affect. Homophily was detected with regard to positive and negative affect but no evidence of contagion was found. The network itself became more volatile along with a fall in rate of change of negative affect. Centrality measures indicated that the best broadcasters were the individuals with the least negative affect levels at the beginning of the study. In the second study, the positive and negative affect levels for the whole group depended on the initial levels of negative affect of the intervention recipients. There was evidence of positive affect contagion in the group where intervention recipients had low initial level of negative affect and contagion in negative affect for the group where recipients had initially high level of negative affect.

Autistic traits moderate the impact of reward learning on social behaviour

A deficit in empathy has been suggested to underlie social behavioural atypicalities in autism. A parallel theoretical account proposes that reduced social motivation (i.e., low responsivity to social rewards) can account for the said atypicalities. Recent evidence suggests that autistic traits modulate the link between reward and proxy metrics related to empathy. Using an evaluative conditioning paradigm to associate high and low rewards with faces, a previous study has shown that individuals high in autistic traits show reduced spontaneous facial mimicry of faces associated with high vs. low reward. This observation raises the possibility that autistic traits modulate the magnitude of evaluative conditioning. To test this, we investigated (a) if autistic traits could modulate the ability to implicitly associate a reward value to a social stimulus (reward learning/conditioning, using the Implicit Association Task, IAT); (b) if the learned association could modulate participants’ prosocial behaviour (i.e., social reciprocity, measured using the cyberball task); (c) if the strength of this modulation was influenced by autistic traits. In 43 neurotypical participants, we found that autistic traits moderated the relationship of social reward learning on prosocial behaviour but not reward learning itself. This evidence suggests that while autistic traits do not directly influence social reward learning, they modulate the relationship of social rewards with prosocial behaviour

Exploring the impact of social axioms on firm reputation: a stakeholder perspective

This study proposes a model of how deeply held beliefs, known as ‘social axioms, moderate the interaction between reputation, its causes and consequences with stakeholders. It contributes to the stakeholder relational field of reputation theory by explaining why the same organizational stimuli lead to different individual stakeholder responses. The study provides a shift in reputation research from organizational-level stimuli as the root causes of stakeholder responses to exploring the interaction between individual beliefs and organizational stimuli in determining reputational consequences. Building on a conceptual model that incorporates product/service quality and social responsibility as key reputational dimensions, the authors test empirically for moderating influences, in the form of social axioms, between reputation-related antecedents and consequences, using component-based structural equation modelling (n = 204). In several model paths, significant differences are found between responses of individuals identified as either high or low on social cynicism, fate control and religiosity. The results suggest that stakeholder responses to reputation-related stimuli can be systematically predicted as a function of the interactions between the deeply held beliefs of individuals and these stimuli. The authors offer recommendations on how strategic reputation management can be approached within and across stakeholder groups at a time when firms grapple with effective management of diverse stakeholder expectations.

The impact of social phobia on quality of life: the advantages of anxiety support groups

Social phobia is the least well known of the anxiety disorders and it is perhaps also the least well understood. The lifetime prevalence rates for social phobia, which range from 3% to 13%, clearly indicate that social phobia is a widespread mental health problem. Those affected by social phobia often live their lives around the limitations of the disorder including avoidance of social situations, depression and loneliness. Thus for these individuals, social phobia becomes an impairing disorder which can have long-term negative impacts on work performance and social relationships. Anxiety support groups offer an important resource to sufferers of social phobia. Support groups provide a potentially safe and confidential environment in which to interact with others. Support groups also have the potential to help to de-stigmatize the disorders for sufferers as all members share similar concerns that are often not well understood by others. The practical benefits to be derived from anxiety support groups are presented through the discussion of two case studies.

GLBT workplace experience : the impact of social practices, oranisational context and personal factors on turnover decisions

‘Gay Rights’ have recently become a major issue in many Australian employers with the enactment of new legislation. Thus, research on employment issues for GLBT (gay/ lesbian/ bisexual/ transgendered) members of the work has attracted considerable attention from academic and researchers in recent years. However, there is still little research relating to sexual orientation in the management literature. This paper develops a model exploring the impact of potential personal and contextual factors (legal system, industry and organisational) on turnover decisions of GLBT members of the workforce. This paper also suggests a number of potential topics and methodological issues for future research.

Social engineering and its impact via the internet

Historically social engineering attacks were limited upon a single organisation or single individual at a time. The impact of the Internet and growth of E-Business has allowed social engineering techniques to be applied at a global level. The paper will discuss how new social engineering techniques are being applied and puts forward a conceptual model to allow an understanding of how social engineering attacks are planned and implemented against E-Business activities.

Impact of social expectations on ethical governance of sport organisations

Sport business is different; one of these differences is the significant and important cultural role that sport plays in society. This paper investigates the social expectations of sport, and how these expectations impact on the management and governance of sport organisations. Interviews were undertaken with the directors and CEOs of the Australian Football League and its clubs, to examine the concept of social expectations and ethical governance. Five key themes of the social expectations of sport were found: scrutiny, sport business, sport context, social investment, and the historical development of the club. Each of these themes was identified through the data analysis as having a potential impact on the management and ethical governance of sport organisations. A clearer understanding of the social and cultural context within which sport organisations operate, enables sport organisations to implement sound policy and practices for ethical governance.