Skip to main content
SpringerLink
Log in

What Are the Outcomes of Corporate Social Irresponsibility (CSI)? The Disconnect Between CSI Theory and CSI Practice

  • Chapter
  • First Online:
Corporate Responsibility and Sustainability during the Coronavirus Crisis

Abstract

Corporate social irresponsibility may, indeed, be one of the “grand challenges” of international business and management research. Corporate social irresponsibility (CSI) is broadly assumed to lead to performance decline and reputational damage for those firms involved in acts of wrongdoing. The overview of extant research presented in this chapter illustrates how and why these assumptions are not always supported, therefore explaining, at least in part, the many examples of irresponsible firm behavior observed in business practice. The chapter points to the discrepancies between CSI theory and CSI practice, followed by a discussion concerning the opportunities and challenges associated with acts of irresponsible firm behavior, particularly during times of crises and disruptions. The discussion captures key managerial and policy implications around curtailing corporate social irresponsibility.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 149.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 199.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 199.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Bae, J., Choi, W., & Lim, J. (2020). Corporate social responsibility: An umbrella or a puddle on a rainy day? Evidence surrounding corporate financial misconduct. European Financial Management, 26(1), 77–117.

    Article  Google Scholar 

  • Baron, D. P. (2013). Business and its environment. Boston: Pearson Education.

    Google Scholar 

  • BBC. (2020). Apple and Nike urged to cut “China Uighur ties”. Retrieved from https://www.bbc.co.uk/news/business-53481253.

  • Brammer, S. J., & Pavelin, S. (2005). Corporate reputation and an insurance motivation for corporate social investment. The Journal of Corporate Citizenship, 20(Winter), 39–51.

    Article  Google Scholar 

  • Brammer, S., Branicki, L., Linnenluecke, M., & Smith, T. (2019). Grand challenges in management research: Attributes, achievements, and advancement. Australian Journal of Management, 44(4), 517–533.

    Article  Google Scholar 

  • Breitinger, D., & Bonardi, J.-P. (2019). Firms, breach of norms, and reputation damage. Business & Society, 58(6), 1143–1176.

    Article  Google Scholar 

  • Buckley, P. (2009). Internalisation thinking: From the multinational enterprise to the global factory. International Business Review, 18(3), 224–235.

    Article  Google Scholar 

  • Buckley, P. J., Doh, J. P., & Benischke, M. H. (2017). Towards a renaissance in international business research? Big questions, grand challenges, and the future of IB scholarship. Journal of International Business Studies, 48(9), 1045–1064.

    Article  Google Scholar 

  • Campbell, J. T., Eden, L., & Miller, S. R. (2012). Multinationals and corporate social responsibility in host countries: Does distance matter? Journal of International Business Studies, 43(1), 84–106.

    Article  Google Scholar 

  • Coldwell, D. A. L., Joosub, T., & Papageorgiou, E. (2012). Responsible leadership in organizational crises: An analysis of the effects of public perceptions of selected SA business organizations’ reputations. Journal of Business Ethics, 109, 133–144.

    Article  Google Scholar 

  • Coombs, W. T. (2004). Impact of past crises on current crisis communications: Insights from situational crisis communication theory. Journal of Business Communication, 41(3), 265–289.

    Article  Google Scholar 

  • Coombs, T. W., & Holladay, S. J. (2009). Further explorations of post-crisis communication: Effects of media and response strategies on perceptions and intentions. Public Relations Review, 35(1), 1–6.

    Article  Google Scholar 

  • Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the value of “creating shared value”. California Management Review, 56(2), 130–153.

    Article  Google Scholar 

  • Engelen, P. J. (2010). What is the reputational cost of a dishonest CEO? Evidence from US illegal insider trading. CESifo Economic Studies, 58(3), 1–24.

    Google Scholar 

  • Ertimur, Y., Ferri, F., & Maber, D. A. (2012). Reputation penalties for poor monitoring of executive pay: Evidence from option backdating. Journal of Financial Economics, 104(1), 118–144.

    Article  Google Scholar 

  • Fennis, B. M., & Stroebe, W. (2014). Softening the blow: Company self-disclosure of negative information lessens damaging effects on consumer judgment and decision making. Journal of Business Ethics, 120(1), 109–120.

    Article  Google Scholar 

  • Fombrun, C. J. (1996). Reputation: Realizing value from the corporate image. Cambridge, MA: Harvard Business School Press.

    Google Scholar 

  • Fombrun, C., & Shanley, M. (1990). What’s in a name? Reputation building and corporate strategy. The Academy of Management Journal, 33(2), 233–258.

    Google Scholar 

  • Forbes. (2020). Bangladesh threatens to ban these UK brands, escalating battle to get factories paid. Retrieved from https://www.forbes.com/sites/elizabethlcline/2020/05/27/bangladesh-threatens-to-ban-these-uk-brands-escalating-battle-to-get-factories-paid/#184d967015c4.

  • Gillet, R., Hübner, G., & Plunus, S. (2010). Operational risk and reputation in the financial industry. Journal of Banking & Finance, 34(1), 224–235.

    Article  Google Scholar 

  • Highhouse, S., Brooks, M. E., & Gregarus, G. (2009). An organizational impression management perspective on the formation of corporate reputations. Journal of Management, 35(6), 1481–1493.

    Article  Google Scholar 

  • Jackson, G., Brammer, S., Karpoff, J. M., Lange, D., Zavyalova, A., Harrington, B., & Deephouse, D. L. (2014). Grey areas: irresponsible corporations and reputational dynamics. Socio-Economic Review, 12(1), 153–218.

    Article  Google Scholar 

  • Janney, J. J. & Gove, S. (2011). Reputation and corporate social responsibility aberrations, trends, and hypocrisy: Reactions to firm choices in the stock option backdating scandal. Journal of Management Studies, 48, 1562–1585.

    Google Scholar 

  • Jones, K. & Rubin, P. H. (2001). Effects of harmful environmental events on reputations of firms.Advances in Financial Economics, 6, 161–182.

    Google Scholar 

  • Juergensen, J., Guimón, J., & Narula, R. (2020). European SMEs amidst the COVID-19 crisis: Assessing impact and policy responses. Economia e Politica Industriale, 47(3), 499–510.

    Article  Google Scholar 

  • Karpoff, J. M., & Lott, J. R., Jr. (1993). The reputational penalty firms bear from committing criminal fraud. Journal of Law and Economics, 36(2), 757–802.

    Article  Google Scholar 

  • Karpoff, J. M., Lott, J. R., Jr., & Wehrly, E. W. (2005). The reputational penalties for environmental violations: Empirical evidence. Journal of Law and Economics, 48(2), 653–675.

    Article  Google Scholar 

  • Karpoff, J. M., Lee, D. S., & Martin, G. S. (2008). The cost to firms of cooking the books. Journal of Financial and Quantitative Analysis, 43(3), 581–611.

    Article  Google Scholar 

  • Ke, D., Ng, L., & Wang, Q. (2010). Home bias in foreign investment decisions. Journal of International Business Studies, 41(6), 960–979.

    Article  Google Scholar 

  • Kim, S. (2014). What’s worse in times of product-harm crisis? Negative corporate ability or negative CSR reputation?. Journal of Business Ethics, 123, 157–170.

    Google Scholar 

  • Kim, K. H., Kim, M., & Qian, C. L. (2018). Effects of corporate social responsibility on corporate financial performance: A competitive-action perspective. Journal of Management, 44(3), 1097–1118.

    Article  Google Scholar 

  • Klassen, R. D., & McLaughlin, C. P. (1996). The impact of environmental management on firm performance. Management Science, 42(8), 1199–1214.

    Article  Google Scholar 

  • Kölbel, J. F., Busch, T., & Jancso, L. M. (2017). How media coverage of corporate social irresponsibility increases financial risk. Strategic Management Journal, 38(11), 2266–2284.

    Article  Google Scholar 

  • Lange, D., & Washburn, N. T. (2012). Understanding attributions of corporate social irresponsibility. Academy of Management Review, 37(2), 300–326.

    Article  Google Scholar 

  • Lange, D., Lee, P. M., & Dai, Y. (2011). Organizational reputation: A review. Journal of Management, 37(1), 153–184.

    Article  Google Scholar 

  • Lin-Hi, N., & Müller, K. (2013). The CSR bottom line: Preventing corporate social irresponsibility. Journal of Business Research, 66(10), 1928–1936.

    Article  Google Scholar 

  • Love, E. G., & Kraatz, M. S. (2009). Character, conformity, or the bottom line? How and why downsizing affected corporate reputation. Academy of Management Journal, 52(2), 314–335.

    Article  Google Scholar 

  • Maggioni, D., Santangelo, G. D., & Koymen-Ozer, S. (2019). MNEs’ location strategies and labor standards: The role of operating and reputational considerations across industries. Journal of International Business Studies, 50, 948–972.

    Article  Google Scholar 

  • McDonnell, M. H., & King, B. (2018). Keeping up appearances: Reputational threat and impression management after social movement boycotts. Administrative Science Quarterly, 58(3), 387–419.

    Article  Google Scholar 

  • Mellahi, K., Meyer, K., Narula, R., Surdu, I., & Verbeke, A. (2021). The Oxford handbook of international business strategy. Oxford: Oxford University Press.

    Book  Google Scholar 

  • Mishina, Y., Block, E. S., & Mannor, M. J. (2012). The path dependence of organizational reputation: How social judgment influences assessments of capability and character. Strategic Management Journal, 33(5), 459–477.

    Article  Google Scholar 

  • Mithani, M. A. (2017). Liability of foreignness, natural disasters, and corporate philanthropy. Journal of International Business Studies, 48, 941–963.

    Article  Google Scholar 

  • Nardella, G., & Brammer, S. (2021). Corporate social responsibility, irresponsibility, and the multinational enterprise environment. In K. Mellahi, K. Meyer, R. Narula, I. Surdu, & A. Verbeke (Eds.), The Oxford handbook of international business strategy (pp. 401–420). Oxford University Press.

    Google Scholar 

  • Nardella, G., Brammer, S., & Surdu, I. (2020). Shame on who? The effects of corporate irresponsibility and social performance on organizational reputation. British Journal of Management, 31(1), 5–23.

    Article  Google Scholar 

  • Narula, R. (2019). Enforcing higher labor standards within developing country value chains: Consequences for MNEs and informal actors in a dual economy. Journal of International Business Studies, 50, 1622–1635.

    Article  Google Scholar 

  • Narula, P. (2020). Policy opportunities and challenges from the COVID-19 pandemic for economies with large informal sectors. Journal of International Business Policy, 3, 302–310.

    Article  Google Scholar 

  • Pfarrer, M. D., Pollock, T. G., & Rindova, V. P. (2010). A tale of two assets: The effects of firm reputation and celebrity on earnings surprises and investors’ reactions. Academy of Management Journal, 53(5), 1131–1152.

    Article  Google Scholar 

  • Rabbiosi, L., & Santangelo, G. D. (2019). Host country corruption and the organization of HQ–subsidiary relationships. Journal of International Business Studies, 50(1), 111–124.

    Article  Google Scholar 

  • Raithel, S., Wilczynski, P., Schloderer, M. P., & Schwaiger, M. (2010). The value-relevance of corporate reputation during the financial crisis. The Journal of Product and Brand Management, 19(6), 389–400.

    Article  Google Scholar 

  • Ravasi, D., Rindova, V., Etter, M., & Cornelissen, J. (2018). The formation of organizational reputation. Academy of Management Annals, 12(2), 574–599.

    Article  Google Scholar 

  • Rhee, M., & Haunschild, P. R. (2006). The liability of good reputation: A study of product recalls in the U.S. automobile industry. Organisation Science, 17(1), 101–117.

    Article  Google Scholar 

  • Rugman, A. M., Verbeke, A., & Nguyen, Q. T. K. (2011). Fifty years of international business theory and beyond. Management International Review, 51(6), 755–786.

    Article  Google Scholar 

  • Surdu, I., & Nardella G. (2020). What happens abroad, stays abroad? Reputation risks of MNE irresponsibility in home and host markets. Academy of Management Proceedings. https://doi.org/10.5465/AMBPP.2020.13213abstract.

  • Sweetin, V. H., Knowles, L. L., Summey, J. H., & McQueen, K. S. (2013). Willingness-to-punish the corporate brand for corporate social irresponsibility. Journal of Business Research, 66, 1822–1830.

    Article  Google Scholar 

  • Tech Times. (2017). Samsung shares hit new record high despite Galaxy Note 7 recall. Retrieved from https://www.techtimes.com/articles/191899/20170109/samsung-shares-hit-new-record-high-despite-galaxy-note-7-recall.htm.

  • The Conversation. (2020). Dark waters: What DuPont scandal can teach companies about doing the right thing. Retrieved from https://theconversation.com/dark-waters-what-dupont-scandal-can-teach-companies-about-doing-the-right-thing-132480.

  • The Guardian. (2011). Life and death in Apple’s forbidden city. Retrieved from https://www.theguardian.com/technology/2017/jun/18/foxconn-life-death-forbidden-city-longhua-suicide-apple-iphone-brian-merchant-one-device-extract.

  • The Guardian. (2013). Primark sales rise 20% despite Bangladesh factory disaster backlash. Retrieved from https://www.theguardian.com/business/2013/jul/11/primark-sales-rise-despite-bangladesh-factory.

  • The Guardian. (2020a). Omission of air pollution from report on Covid-19 and race “astonishing”. Retrieved from https://www.theguardian.com/environment/2020/jun/07/omission-of-air-pollution-from-report-on-covid-19-and-race-astonishing.

  • The Guardian. (2020b). “Just get out of here”: How Leicester’s factories went to war with Boohoo. Retrieved from https://www.theguardian.com/business/2020/aug/28/boohoo-leicester-factories-went-to-war.

  • Wang, S. L., & Li, D. (2019). Responding to public disclosure of corporate social irresponsibility in host countries: Information control and ownership control. Journal of International Business Studies, 50, 1283–1309.

    Article  Google Scholar 

  • Wans, N. (2020). Corporate social responsibility and market-based consequences of adverse corporate events: Evidence from restatement announcements. Journal of Accounting, Auditing and Finance, 35(2), 231–262.

    Article  Google Scholar 

  • White, K., Hardisty, D. J., & Habib, R. (2019). The elusive green customer. Harvard Business Review.

    Google Scholar 

  • Zyglidopoulos, S. (2001). The impact of accidents on firms’ reputation for social performance. Business & Society, 40(4), 416–432.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Warwick, Coventry, UK

    Irina Surdu

  2. Loughborough University, Loughborough, UK

    Giulio Nardella

Authors
  1. Irina Surdu
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Giulio Nardella
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Irina Surdu .

Editor information

Editors and Affiliations

  1. Mid Sweden University, Östersund, Sweden

    Anna Sörensson  & Anders Lundström  & 

  2. Södertörn University, Huddinge, Sweden

    Besrat Tesfaye

  3. University of Leicester, Leicester, UK

    Georgiana Grigore

  4. Bucharest University of Economic Studies, Bucharest, Romania

    Alin Stancu

Rights and permissions

Reprints and permissions

Copyright information

© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Surdu, I., Nardella, G. (2021). What Are the Outcomes of Corporate Social Irresponsibility (CSI)? The Disconnect Between CSI Theory and CSI Practice. In: Sörensson, A., Tesfaye, B., Lundström, A., Grigore, G., Stancu, A. (eds) Corporate Responsibility and Sustainability during the Coronavirus Crisis. Palgrave Studies in Governance, Leadership and Responsibility. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-73847-1_4

Download citation

Publish with us

Policies and ethics

Search

Navigation