Skip to main content
SpringerLink
Log in

Corporate Social Strategy: Competing Views from Two Theories of the Firm

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

This paper compares two theories of the firm used to interpret firms’ corporate social strategies in order to derive new insights and questions in this research area. Researchers from many branches of strategic management agree that firms can strategically allocate resources in order to achieve both long-term social objectives and competitive advantage. However, despite some progress in investigating corporate social strategy, studies rely on fundamentally diverging theoretical approaches. This paper will identify, compare and begin to integrate two competing theories of the firm implicit in corporate social strategy scholarship: the resource-based and behavioural theories of the firm. I discuss the implications of these two theories for both researchers and practitioners on key debates within corporate social strategy, and conclude by suggesting several fruitful avenues for future research based on the emerging integration of these two theories of the firm within the strategy literature.

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

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Adams M., Hardwick P. 1998. An Analysis of Corporate Donations : United Kingdom Evidence. Journal of Management Studies, 35(5):641–654

    Article  Google Scholar 

  • Alessandri, T. M. and C. A. Maritan: 2004, Evaluating Investments in Capabilities: A Conceptual Framework. Paper presented at the Strategic Management Society, San Juan, Puerto Rico

  • Amit R., Schoemaker P. 1993. Strategic Assets and Organisational Rent. Strategic Management Journal, 14:33–34

    Article  Google Scholar 

  • Aragon-Correa J. A., Sharma S.. 2003. A Contingent Resource-Based View of Proactive Corporate Environmental Strategy. Academy of Management Review, 28(1):71–88

    Google Scholar 

  • Augier M., March J. G. 2002. The Economics of Choice, Change and Organisation. Edward Elgar, Cheltenham

    Google Scholar 

  • Barney J. B.. 1986. Types of Competition and the Theory of Strategy: Toward and Integrative Framework. Academy of Management Review, 11:791–800

    Article  Google Scholar 

  • Barney J. B.. 1991. Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1):99–120

    Article  Google Scholar 

  • Barney J. B., Arikan A. M. (2001). The Resource-based View: Origins and Implications. In: Hitt M. A., Freeman R. E., Harrison J. S. (Eds) The Blackwell Handbook of Strategic Management. Blackwell, Oxford, pp. 124–188

    Google Scholar 

  • Bourgeois L. J. 1981. On the Measurement of Organisational Slack. Academy of Management Review, 6(1):29–39

    Article  Google Scholar 

  • Bourgeois, L. J. and J. V. Singh: 1983, Organisational␣Slack and Political Behaviour Among Top Management Teams. Paper presented at the Academy of Management Proceedings

  • Bowen F. E. 2002a. Organisational Slack and Corporate Greening: Broadening the Debate. British Journal of Management, 13(4):305–316

    Article  Google Scholar 

  • Bowen, F. E.: 2002b, Organisational Slack as a Facilitator of Operational Level Environmental Initiatives. Presented at␣the Academy of Management annual meeting, Denver, CO, USA, August 2002

  • Bowen, F. E. and S. Sharma: 2005, ‘Resourcing Corporate Environmental Strategy: Behavioral and Resource-based Perspectives’, in K. M. Weaver (ed.), Best Paper Proceedings of the Sixty-fifth Annual Meeting of the Academy of Management, pp. N1–6

  • Bromiley P, Fleming L. 2002. The Resource-Based View of Strategy: A Behaviourist’s Critique. In: Augier M., March J. G. (eds) The Economics of Choice Change and Organizations: Essays in Memory of Richard M Cyert Cheltenham, Edward Elgar Publishing, UK

    Google Scholar 

  • Bromiley P. (2005) The Behavioural Foundations of Strategic Management. Blackwell Publishing, Oxford

    Google Scholar 

  • Brush T., Artz K. W. 1999. Toward a Contingent Resource-based Theory: The Impact of Information Asymmetry on the Value of Capabilities in Veterinary Medicine. Strategic Management Journal, 20:223–250

    Article  Google Scholar 

  • Buchholtz, A. K., A. C. Amason and A. B. Carroll: 2001, Corporate Philanthropy and Organisational Slack: An Examination of CEO Delegation to the Top Management Team. Paper presented at the Academy of Management Annual Meeting, Washington, DC

  • Buchholtz A. K., Amason A. C., Rutherford M. A. 1999. Beyond Resources: The Mediating Effect of Top Management Discretion and Values on Corporate Philanthropy. Business Society, 38(2):167–187

    Article  Google Scholar 

  • Buysse K., Verbeke A. 2003. Proactive Environmental Strategies: A Stakeholder Management Perspective. Strategic Management Journal, 24:453–470

    Article  Google Scholar 

  • Campbell L., Gulas C. S., CGruca T. S. 1999. Corporate Giving Behaviour and Decision-Maker Social Consciousness. Journal of Business Ethics, 19:375–383

    Article  Google Scholar 

  • Cohan J. A. 2002. “I Didn’t Know” and “I was Only Doing My Job”: Has Corporate Governance Careened Out of Control? A Case Study of Enron’s Information Myopia. Journal of Business Ethics 40:275–299

    Article  Google Scholar 

  • Conner K. R. 1991. A Historical Comparison of Resource-Based Theory and Five Schools of Thought within Industrial Organization Economics: Do we have a New Theory of the Firm?. Journal of Management, 17(1):121–154

    Article  Google Scholar 

  • Cyert R. M., March J. G. 1963. A Behavioural Theory of the Firm. Prentice-Hall, Englewood Cliffs

    Google Scholar 

  • Cyert R. M., March J. G. 1992. A Behavioural Theory of the Firm, 2nd edn. Blackwell, Oxford

    Google Scholar 

  • Dierickx I., Cool K. 1989. Asset Stock Accumulation and Sustainability of Competitive Advantage. Management Science, 35:1504–1511

    Article  Google Scholar 

  • Engwall L., Danell R. 2002. The Behavioural Theory of the Firm in Action. In: Augier M., March J. G. (Eds) The Economics of Choice, Change and Organisation. Edward Elgar, Cheltenham, UK, pp. 27–47

    Google Scholar 

  • Foss N. J., Knudsen C., Montgomery C. A. 1995. An Exploration of Common Ground: Integrating Evolutionary and Strategic Theories of the Firm. In: Montgomery C. A. (Ed) Resource-based and Evolutionary Theories of the Firm: Towards a Synthesis. Kluwer Academic Publishers, Boston, 1–18

    Google Scholar 

  • Freeman R. E. 1994. The Politics of Stakeholder Theory. Business Ethics Quarterly, 4(4):409–421

    Article  Google Scholar 

  • Geiger S. W., Cashen L. H. 2002. A Multidimensional Examination of Slack and its Impact on Innovation. Journal of Managerial Issues, 14(1):68–84

    Google Scholar 

  • Greve H. R. 2003a. A Behavioural Theory of R D Expenditures and Innovations: Evidence from Shipbuilding. Academy of Management Journal, 46(6):685–702

    Article  Google Scholar 

  • Greve H. R. 2003b. Investment and the Behavioural Theory of the Firm: Evidence from Shipbuilding. Industrial and Corporate Change, 12(5):1051–1076

    Article  Google Scholar 

  • Greve H. R. 2003c. Organisational Learning from Performance Feedback: A Behavioural Perspective on Innovation and Change. Cambridge University Press, Cambridge UK

    Google Scholar 

  • Hannan M. T., Freeman J. 1977. The Population Ecology of Organisations. American Journal of Sociology, 82:929–964

    Article  Google Scholar 

  • Hart S. 1995. A Natural-Resource-Based View of the Firm. Academy of Management Review, 20(4):986–1014

    Article  Google Scholar 

  • Hart, S. and S. Sharma: 2004, ‘Engaging Fringe Stakeholders for Competitive Imagination’, Academy of Management Executive 18(1), 7–18

    Google Scholar 

  • Hemingway C. A., Maclagan P. W. 2004. Managers’ Personal Values and Drivers of Corporate Social Responsibility. Journal of Business Ethics 50:33–44

    Article  Google Scholar 

  • Husted B. W. 2003. Governance Choices for Corporate Social Responsibility: To Contribute, Collaborate or Internalise?. Long Range Planning, 36:481–498

    Article  Google Scholar 

  • Husted B. W., Allen D. B.. 2000. Is It Ethical to Use Ethics as Strategy?. Journal of Business Ethics, 27:21–31

    Article  Google Scholar 

  • Itami, H.: 1987 Mobilizing Invisible Assets (Harvard University Press, Cambridge MA

    Google Scholar 

  • James H. S. 2000. Reinforcing Ethical Decision Making Through Organisational Structure. Journal of Business Ethics, 28(1):43–58

    Article  Google Scholar 

  • Kapelus P.. 2002. Mining, Corporate Social Responsibility and the “Community”: The Case of Rio Tinto, Richards Bay Minerals and the Mbonambi. Journal of Business Ethics, 39:275–296

    Article  Google Scholar 

  • King G. I. 1999. The Implications of an Organisation’s Structure on Whistleblowing. Journal of Business Ethics, 20:315–326

    Article  Google Scholar 

  • Lankoski, L.: 2000, Determinants of Environmental Profit : An Analysis of the Firm-level Relationship between Environmental Performance and Economic Performance (Helsinki University of Technology, Helsinki)

  • Leonard-Barton D. 1992. Core Competencies and Core Rigidities: A Paradox in New Product Development. Sloan Management Review, 13:111–125

    Google Scholar 

  • Levinthal D. A., March J. G.. 1981. A Model of Adaptive Organisational Search. Journal of Economic Behaviour and Organisation, 2:307–333

    Article  Google Scholar 

  • Levinthal D. A. 1995. Strategic Management and the Exploration of Diversity. In: Montgomery C. A. (Ed) Resource-based and Evolutionary Theories of the Firm: Towards a Synthesis. Kluwer Academic Publishers, Boston, pp. 19–42

    Google Scholar 

  • Levinthal D. A., March J. G.. 1993. The Myopia of Learning. Strategic Management Journal, 14:95–112

    Article  Google Scholar 

  • Levitt B., March J. G. 1988. Organisational Learning. In: ScottW. R., Blake J. (Eds) Annual Review of Sociology. Annual Reviews, CA Palo Alto, pp. 319–340

    Google Scholar 

  • Lippman, S. and R. P. Rumelt: 1982, Uncertain Imitability: An Analysis of Interfirm Difference in Efficiency under Competition. Bell Journal of Economics, 13(Autumn) 418–438

    Google Scholar 

  • Litz R. A.. 1996. A Resource-based View of the Socially Responsible Firm. Journal of Business Ethics, 15(12):1355–1363

    Article  Google Scholar 

  • Mahoney J. T. 2005. Economic Foundations of Strategy. Sage, Thousand Oaks

    Google Scholar 

  • March J. G., Simon H. A. 1958. Organizations. Wiley, New York

    Google Scholar 

  • McGuire J., Dow S., Argheyd K.. 2003. CEO Incentives and Corporate Social Performance. Journal of Business Ethics, 45: 341–359

    Article  Google Scholar 

  • Moliterno, T. P. and M. F. Wiersema: 2005, ‘Rent Appropriation and Behavioral Antecedents of Strategic Resource Divestment’, in K. M. Weaver (ed.), Proceedings of the Sixty-fifth Annual Meeting of the Academy of Management, pp. N1–N6

  • Moore G..1999. Corporate Moral Agency: Review and Implications. Journal of Business Ethics, 21:329–343

    Article  Google Scholar 

  • Mullin R. P.. 2002. What Can be Learned from DuPont and the Freon Ban: A Case Study. Journal of Business Ethics, 40:207–218

    Article  Google Scholar 

  • Nelson R. R., Winter S. G. 1982. An Evolutionary Theory of Economic Change. Harvard University Press, Cambridge MA

    Google Scholar 

  • Nohria N., Gulati R.. 1996. Is Slack Good or Bad for Innovation?. Academy of Management Journal, 39(5):1245–1264

    Article  Google Scholar 

  • Penrose, E.: 1959, 1995, The Theory of the Growth of the Firm (Oxford University Press, Oxford)

  • Peteraf M. A.. 1993. The Cornerstones of Competitive Advantage: Combining Institutional and Resource-Based Views. Strategic Management Journal, 14(2):179–191

    Article  Google Scholar 

  • Peterson D. K.. 2004. Recruitment Strategies for Encouraging Participation in Corporate Volunteer Programs. Journal of Business Ethics, 49:371–386

    Article  Google Scholar 

  • Petrick J. A., Quinn J. F.. 2000. The Integrity Capacity Construct and Moral Progress in Business. Journal of Business Ethics, 23:3–18

    Article  Google Scholar 

  • Petrick J. A., Quinn J. F.. 2001. The Challenge of Leadership Accountability for Integrity Capacity as a Strategic Asset. Journal of Business Ethics, 34:331–343

    Article  Google Scholar 

  • Porter M. E. 1980. Competitive StrategyTechniques for Analysing Industries and Competitors. The Free Press, New York

    Google Scholar 

  • Porter, M. E. and C. van der Linde: 1995, ‘Green and Competitive Ending the Stalemate’, Harvard Business Review (Sept-Oct) 120–134

  • Pruzan P.. 2001. The Question of Organisational Consciousness: Can Organisations Have Values, Virtues and Visions?. Journal of Business Ethics, 29:271–284

    Article  Google Scholar 

  • Roome N.. 1992. Developing Environmental Management Strategies. Business Strategy and the Environment, 1(1):11–24

    Article  Google Scholar 

  • Rostami, M. and F. E. Bowen: 2006, Firm Long-Term Performance and Managerial Acquisition Choice: Related Versus Unrelated Acquisitions. Paper Presented at the Southern Management Association Annual Meeting Clearwater Beach, Florida

  • Rugman A. M. Verbeke A.. 2002. Edith Penrose’s Contribution to the Resource-Based View of Strategic Management. Strategic Management Journal, 19:769–780

    Article  Google Scholar 

  • Rumelt R. P. 1984. Towards a Strategy Theory of the Firm. In: Lamb R. B. (Ed) Competitive Strategic Management. Prentice-Hall, Englewood Cliffs, NJ, pp. 556–570

    Google Scholar 

  • Rumelt R. P. 1995. Inertia and Transformation. In: Montgomery C. A. (Eds) Resource-Based and Evolutionary Theories of the Firm: Towards a Synthesis. Kluwer Academic Publishers, Boston, pp. 101–132

    Google Scholar 

  • Russo M. V., Fouts P. A. 1997. A Resource-based Perspective on Corporate Environmental Performance and Profitability. Academy of Management Journal, 40(3):534–559

    Article  Google Scholar 

  • Sama, L. M.: 2002, ‘Do Strategic Slack and Governance Mechanisms Set the Limits of Social Responsiveness? Paper presented at the Academy of Management Conference, Denver, CO

  • Seifert B., Morris S. A., Bartkus B. R. 2003. Comparing Big Givers and Small Givers: Financial Correlates of Corporate Philanthropy. Journal of Business Ethics, 45:195–211

    Article  Google Scholar 

  • Sharma S.. 2000. Managerial Cognitions and Organisational Context as Predictors of Firm Choice of Environmental Strategies. Academy of Management Journal, 43:681–697

    Article  Google Scholar 

  • Sharma S., Vredenburg H.. 1998. Proactive Corporate Environmental Strategy and the Development of Competitively Valuable Organisational Capabilities. Strategic Management Journal, 19:729–753

    Article  Google Scholar 

  • Simon H. A. 1947. Administrative Behaviour. Free Press, New York

    Google Scholar 

  • Simon H. A.. 1952. A Behavioural Model of Rational Choice. Quarterly Journal of Economics, 69:99–118

    Article  Google Scholar 

  • Simon H. A. 1982. Models of Bounded Rationality: Behavioural Economics and Business Organizatioin. MIT Press, Cambridge MA

    Google Scholar 

  • St Clair, L. and M. Tschirhart: 2002, The Influence of␣Slack in Human Resources on Community Service Through the Workplace. Paper presented at␣the Academy of Management Conference, Denver, CO

  • Teece D. J. 1982. Towards and Economic Theory of the Multi-Product Firm. Journal of Economic Behavior and Organization, 3:39–63

    Article  Google Scholar 

  • Thompson, J.D.: 1967, Organisations in Action (McGraw Hill, New York)

  • Verbeke, A., F. E. Bowen and M. Sellers: 2006, Corporate Environmental Strategy: An Integrative Resource-based Framework. in K. M. Weaver (ed.), Best Paper Proceedings of␣the Sixty-sixth Annual Meeting of the Academy of Management, pp. N1–N6

  • Werbel J. D., Carter S. M.. 2002. The CEOs Influence on Corporate Foundation Giving. Journal of Business Ethics, 40:47–60

    Article  Google Scholar 

  • Wernerfelt B. 1984. A Resource-Based View of the Firm. Strategic Management Journal, 5(2):171–180

    Article  Google Scholar 

  • Wernerfelt B. 1995. Resource-based Strategy in a Stochastic Model. In: C. A. Montgomery (Ed.) Resource-based and Evolutionary Theories of the Firm: Towards a Synthesis. Kluwer Academic Publishers, Boston, pp. 133–146

    Google Scholar 

  • Wulfson M. 2001. The Ethics of Corporate Social Responsibility and Philanthropic Ventures. Journal of Business Ethics, 29:135–145

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Haskayne School of Business, University of Calgary, Calgary, AB, Canada, T2N 1N4

    Frances Bowen

Authors
  1. Frances Bowen
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Frances Bowen.

Additional information

Dr. Frances Bowen is an Associate Professor in the Strategy and Global Management Area of the Haskayne School of Business, University of Calgary. Her main research interests cross strategy and organisational theory, focusing on corporate environmental strategy. She has examined firms’ enviromental decisions in a variety of complex decision-making contexts. Current and recent research projects have focused on the roles of subsidiary managers in encouraging environmental initiatives within multinational companies, and how firms might induce suppliers to participate in environmentally sound supply chain management. Her main theoretical interest is how the behavioural theory of the firm can be integrated with the resource-based view to better explain corporate environmental strategy.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Bowen, F. Corporate Social Strategy: Competing Views from Two Theories of the Firm. J Bus Ethics 75, 97–113 (2007). https://doi.org/10.1007/s10551-006-9240-0

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-006-9240-0

Keywords

Search

Navigation