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Risk Management, Real Options, Corporate Social Responsibility

Abstract

The relationship of corporate social responsibility to risk management has been treated sporadically in the business society literature. Using real options theory, I develop the notion of corporate social responsibility as a real option its implications for risk management. Real options theory allows for a strategic view of corporate social responsibility. Specifically, real options theory suggests that corporate social responsibility should be negatively related to the firm’s ex ante downside business risk.

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Correspondence to Bryan W. Husted.

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Husted, B.W. Risk Management, Real Options, Corporate Social Responsibility. J Bus Ethics 60, 175–183 (2005). https://doi.org/10.1007/s10551-005-3777-1

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Keywords

  • corporate social responsibility
  • real options
  • risk management