Skip to main content
SpringerLink
Log in

Corporate Social Responsibility and Corporate Longevity: The Mediating Role of Social Capital and Moral Legitimacy in Korea

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

Abstract

How does a company achieve long-term survival? This study starts with the question of why, among companies on the verge of bankruptcy, some survive and some break up. This study argues that the long-term survival of a company is determined by not only its economic performance but also its social performance. It clarifies that sustainable corporate social responsibility (CSR) practices facilitate long-term survival. Thus, this study analyzed 259 CSR actions performed by eight representative long-lived companies in Korea and how the various CSR actions helped these companies overcome crises and survive. The common CSR actions practiced by all the long-lived companies had a positive influence on forming social capital with primary stakeholders and securing legitimacy from secondary stakeholders, which in turn had a significant influence on maintaining survival. This study provides significant implications for the value of CSR practices that have been controversial, by presenting a model of how CSR actions facilitate corporate longevity.

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

Fig. 1
Fig. 2
Fig. 3

We’re sorry, something doesn't seem to be working properly.

Please try refreshing the page. If that doesn't work, please contact support so we can address the problem.

References

  • Abbott, W. F., & Monsen, R. J. (1979). On the measurement of corporate social responsibility: Self-reported disclosures as a method of measuring corporate social involvement. Academy of Management Journal, 22(3), 501–515.

    Google Scholar 

  • Adler, P. S., & Kwon, S. W. (2002). Social capital: Prospects for a new concept. Academy of Management Review, 27(1), 17–40.

    Article  Google Scholar 

  • Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social responsibility a review and research agenda. Journal of Management, 38(4), 932–968.

    Article  Google Scholar 

  • Ahn, S. Y. (2015). A study on the common management practices of long-lived companies—Do they function as longevity routines that enhance long-term survivability? Korean Management Review, 43(3), 889–917.

    Google Scholar 

  • Ahn, S. Y., & Cho, D. S. (2011). The imprinting of founder’s ideology and corporate long-term survival: An explorative study. Journal of Entrepreneurship and Venture Studies, 14(2), 19–47.

    Google Scholar 

  • Aldrich, H., & Auster, E. R. (1986). Even dwarfs started small: Liabilities of age and size and their strategic implications. Research in Organizational Behavior, 8, 165–186.

    Google Scholar 

  • Ashforth, B. E., & Gibbs, B. W. (1990). The double-edge of organizational legitimation. Organization Science, 1(2), 177–194.

    Article  Google Scholar 

  • Aupperle, K. E., Carroll, A. B., & Hatfield, J. D. (1985). An empirical examination of the relationship between corporate social responsibility and profitability. Academy of Management Journal, 28(2), 446–463.

    Google Scholar 

  • Bansal, P., & Clelland, I. (2004). Talking trash: Legitimacy, impression management, and unsystematic risk in the context of the natural environment. Academy of Management Journal, 47(1), 93–103.

    Google Scholar 

  • Barnett, M. L., & Salomon, R. M. (2006). Beyond dichotomy: The curvilinear relationship between social responsibility and financial performance. Strategic Management Journal, 27(11), 1101–1122.

    Article  Google Scholar 

  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

  • Bartels, J., Peters, O., de Jong, M., Pruyn, A., & van der Molen, M. (2010). Horizontal and vertical communication as determinants of professional and organisational identification. Personnel Review, 39(2), 210–226.

    Article  Google Scholar 

  • Becker, G. S. (1962). Investment in human capital: A theoretical analysis. The Journal of Political Economy, 70(5), 9–49.

    Article  Google Scholar 

  • Bolino, M. C., Turnley, W. H., & Bloodgood, J. M. (2002). Citizenship behavior and the creation of social capital in organizations. Academy of Management Review, 27(4), 505–522.

    Article  Google Scholar 

  • Bourdieu, P. (1986). The forms of capital. In J. G. Richardson (Ed.), Handbook of theory and research of for the sociology of education. New York: Greenwood.

    Google Scholar 

  • Bowman, E. H., & Haire, M. (1975). A strategic posture toward corporate social responsibility. California Management Review, 18(2), 49–58.

    Article  Google Scholar 

  • Burgelman, R. A., & Grove, A. S. (2007). Let chaos reign, then rein in chaos—Repeatedly: Managing strategic dynamics for corporate longevity. Strategic Management Journal, 28(10), 965–979.

    Article  Google Scholar 

  • Burt, R. S. (1997). The contingent value of social capital. Administrative Science Quarterly, 42, 339–365.

    Article  Google Scholar 

  • Burt, R. S. (2000). The network structure of social capital. Research in Organizational Behavior, 22, 345–423.

    Article  Google Scholar 

  • Butler, J. K., Jr. (1991). Toward understanding and measuring conditions of trust: Evolution of a conditions of trust inventory. Journal of Management, 17(3), 643–663.

    Article  Google Scholar 

  • Carley, K. (1993). Coding choices for textual analysis: A Comparison of content analysis and map analysis. Sociological Methodology, 23, 75–126.

    Article  Google Scholar 

  • Carroll, G. R. (1985). Concentration and specialization: Dynamics of niche width in populations of organizations. American Journal of Sociology, 90, 1262–1283.

    Article  Google Scholar 

  • Carroll, A. B. (1999). Corporate social responsibility evolution of a definitional construct. Business & Society, 38(3), 268–295.

    Article  Google Scholar 

  • Carroll, G. R., & Huo, Y. P. (1986). Organizational task and institutional environments in ecological perspective: Findings from the local newspaper industry. American Journal of Sociology, 91(4), 838–873.

    Article  Google Scholar 

  • Champion, M., Papper, E., & Medsher, G. (1996). Relations between work-team characteristics and effectiveness: A replication and extension. Personnel Psychology, 49(2), 429–453.

    Article  Google Scholar 

  • Chang, S. J. (2003). Financial crisis and transformation of Korean business groups: The Rise and fall of chaebols. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Chang, S. J., & Hong, J. (2000). Economic performance of group-affiliated companies in Korea: Intragroup resource sharing and internal business transactions. The Academy of Management Journal, 43(3), 429–448.

    Google Scholar 

  • Cho, D. (1990). A study of chaebols. Seoul: Korean Economic Daily.

    Google Scholar 

  • Clarkson, M. E. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review, 20(1), 92–117.

    Article  Google Scholar 

  • Cochran, P. L., & Wood, R. A. (1984). Corporate social responsibility and financial performance. Academy of Management Journal, 27(1), 42–56.

    Google Scholar 

  • Coleman, J. S. (1988). Social capital in the creation of human capital. American Journal of Sociology, 94, 95–120.

    Article  Google Scholar 

  • Collins, J. C. (2001). Good to great: Why some companies make the leap... and others don't. New York: Harper Collins.

  • Dasgupta, P. (1988). Trust as a commodity. In D. Gambetta (Ed.), Trust: Making and breaking cooperative relations (pp. 49–72). Oxford: Basil Blackwell.

    Google Scholar 

  • D’Aveni, R. A., & MacMillan, I. C. (1990). Crisis and the content of managerial communications: A study of the focus of attention of top managers in surviving and failing firms. Administrative Science Quarterly, 35(4), 634–657.

    Article  Google Scholar 

  • Davis, K. (1960). Can business afford to ignore social responsibilities? California Management Review, 2(3), 70–76.

    Article  Google Scholar 

  • De Cremer, D., & van Dijk, E. (2002). Reactions to group success and failure as a function of identification level: A test of the goal-transformation hypothesis in social dilemmas. Journal of Experimental Social Psychology, 38(5), 435–442.

    Article  Google Scholar 

  • De Geus, A. (1997). The living company. Harvard Business Review, 33, 114–135.

    Google Scholar 

  • Deephouse, D. L. (1996). Does isomorphism legitimate? Academy of Management Journal, 39(4), 1024–1039.

    Article  Google Scholar 

  • DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.

    Article  Google Scholar 

  • DiMaggio, P. J., & Powell, W. W. (1991). The new institutionalism in organizational analysis. Chicago: University of Chicago Press.

    Google Scholar 

  • Dowling, J., & Pfeffer, J. (1975). Organizational legitimacy: Social values and organizational behavior. Pacific Sociological Review, 18(1), 122–136.

    Article  Google Scholar 

  • Duriau, V. J., Reger, R. K., & Pfarrer, M. D. (2007). A content analysis of the content analysis literature in organization studies: Research themes, data sources, and methodological refinements. Organizational Research Methods, 10(1), 5–34.

    Article  Google Scholar 

  • Edwards, M. R., & Peccei, R. (2010). Perceived organizational support, organizational identification, and employee outcomes: Testing a simultaneous multifoci model. Journal of Personnel Psychology, 9(1), 17.

    Article  Google Scholar 

  • Eesley, C., & Lenox, M. J. (2006). Firm responses to secondary stakeholder action. Strategic Management Journal, 27(8), 765–781.

    Article  Google Scholar 

  • Eilbirt, H., & Parket, I. R. (1973). The practice of business: The current status of corporate social responsibility. Business Horizons, 16(4), 5–14.

    Article  Google Scholar 

  • Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–550.

    Article  Google Scholar 

  • Farris, G. F., Senner, E. E., & Butterfield, D. A. (1973). Trust, culture, and organizational behavior. Industrial Relations: A Journal of Economy and Society, 12(2), 144–157.

    Google Scholar 

  • Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman.

    Google Scholar 

  • Friedman, M. (1970, September 13). The social responsibility of business is to increase its profits. The New York Times Magazine.

  • Gabarro, J. J. (1978). The development of trust, influence, and expectations. In A. G. Athos & J. J. Gabarro (Eds.), Interpersonal behavior: Communication and understanding in relationships (pp. 290–303). Englewood Cliffs, NJ: Prentice Hall.

    Google Scholar 

  • Gimeno, J., Folta, T. B., Cooper, A. C., & Woo, C. Y. (1997). Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms. Administrative Science Quarterly, 42(4), 750–783.

    Article  Google Scholar 

  • Godfrey, P. C., Merrill, C. B., & Hansen, J. M. (2009). The Relationship between corporate social responsibility and shareholder value: An empirical test of the risk management hypothesis. Strategic Management Journal, 30(4), 425–445.

    Article  Google Scholar 

  • Hart, K. M., Capps, H. R., Cangemi, J. P., & Caillouet, L. M. (1986). Exploring organizational trust and its multiple dimensions: A case study of general motors. Organization Development Journal, 4(2), 31–39.

    Google Scholar 

  • Hosmer, L. T. (1995). Trust: The connecting link between organizational theory and philosophical ethics. Academy of Management Review, 20(2), 379–403.

    Article  Google Scholar 

  • Human, S. E., & Provan, K. G. (2000). Legitimacy building in the evolution of small-firm multilateral networks: A comparative study of success and demise. Administrative Science Quarterly, 45(2), 327–365.

    Article  Google Scholar 

  • Inkpen, A. C., & Tsang, E. W. (2005). Social capital, networks, and knowledge transfer. Academy of Management Review, 30(1), 146–165.

    Article  Google Scholar 

  • Johnson, H. G. (1960). The political economy of opulence. The Canadian Journal of Economics and Political Science/Revue Canadienne d’Economique et de Science Politique, 26(4), 552–564.

    Article  Google Scholar 

  • Jones, G. R., & George, J. M. (1998). The experience and evolution of trust: Implications for cooperation and teamwork. The Academy of Management Review, 23(3), 531–546.

    Article  Google Scholar 

  • Kalleberg, A. L., & Leicht, K. T. (1991). Gender and organizational performance: Determinants of small business survival and success. The Academy of Management Journal, 34(1), 136–161.

    Google Scholar 

  • Kramer, R. M., Brewer, M. B., & Hanna, B. A. (1996). Collective trust and collective action: The decision to trust as a social decision. Paper presented at the earlier versions of this chapter were presented at the Asilomar conference on organizations and the society of experimental social psychology meetings.

  • Kramer, R. M., Hanna, B. A., Su, S., & Wei, J. (2001). Collective identity, collective trust, and social capital: Linking group identification and group cooperation. In M. E. Turner (Ed.), Groups at work: Theory and research (pp. 173–196). Mahwah, NJ: Erlbaum.

  • Lee, S., & Yoo, S. (1987). Management style and practice of Korean chaebols. California Management Review, 95, 95–110.

    Google Scholar 

  • Lieberman, J. K. (1981). The litigious society. New York: Basic Books.

    Google Scholar 

  • Lu, J. W., & Xu, D. (2006). Growth and survival of international joint ventures: An external-internal legitimacy perspective. Journal of Management, 32(3), 426–448.

    Article  Google Scholar 

  • McGuire, J. B., Sundgren, A., & Schneeweis, T. (1988). Corporate social responsibility and firm financial performance. Academy of Management Journal, 31(4), 854–872.

    Google Scholar 

  • McWilliams, A., & Siegel, D. (2000). Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal, 21(5), 603–609.

    Article  Google Scholar 

  • McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. The Academy of Management Review, 26(1), 117–127.

    Article  Google Scholar 

  • Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structure as myth and ceremony. The American Journal of Sociology, 83(2), 340–363.

    Article  Google Scholar 

  • Meyer, M. W., & Zucker, L. G. (1989). Permanently failing organizations. Newbury Park, CA: Sage.

    Google Scholar 

  • Misztal, B. A. (1996). Trust in modern societies: The search for the bases of social order (Vol. 1). Cambridge: Polity Press.

    Google Scholar 

  • Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853–886.

    Article  Google Scholar 

  • Moran, P. (2005). Structural vs. relational embeddedness: Social capital and managerial performance. Strategic Management Journal, 26(12), 1129–1151.

    Article  Google Scholar 

  • Morris, R. (1994). Computerized content analysis in management research: A demonstration of advantages & limitations. Journal of Management, 20(4), 903–931.

    Article  Google Scholar 

  • Mullen, B., & Copper, C. (1994). The relation between group cohesiveness and performance: An integration. Psychological Bulletin, 115(2), 210.

    Article  Google Scholar 

  • Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2), 242–266.

    Article  Google Scholar 

  • O’Hara, W. T. (2004). Centuries of success: Lessons from the world’s most enduring family businesses. Avon, MA: Adams Media.

    Google Scholar 

  • Parsons, T., & Jones, I. (1960). Structure and process in modern societies. New York: Free Press.

    Google Scholar 

  • Pennings, J. M., Lee, K., & Van Witteloostuijn, A. (1998). Human capital, social capital, and firm dissolution. Academy of management Journal, 41(4), 425–440.

    Google Scholar 

  • Ring, P. S., & Van de Ven, A. H. (1992). Structuring cooperative relationships between organizations. Strategic Management Journal, 13(7), 483–498.

    Article  Google Scholar 

  • Rowley, T., Behrens, D., & Krackhardt, D. (2000). Redundant governance structures: An analysis of structural and relational embeddedness in the steel and semiconductor industries. Strategic Management Journal, 21(3), 369–386.

    Article  Google Scholar 

  • Salancik, G. R., & Pfeffer, J. (1978). Who gets power—and how they hold on to it: A strategic-contingency model of power. Organizational Dynamics, 5(3), 3–21.

    Article  Google Scholar 

  • Schultz, T. W. (1961). Investment in human capital. The American Economic Review, 51(1), 1–17.

    Google Scholar 

  • Scott, W. R., & Meyer, J. W. (1983). The organization of societal sectors. In J. W. Meyer & W. R. Scott (Eds.), Organizational environments: Ritual and rationality (pp. 129–153). Beverly Hllls, CA: Sage.

  • Singh, J. V., Tucker, D. J., & House, R. J. (1986). Organizational legitimacy and the liability of newness. Administrative Science Quarterly, 31, 171–193.

    Article  Google Scholar 

  • Starr, J. A., & MacMillan, I. (1990). Resource cooptation via social contracting: Resource acquisition strategies for new ventures. Strategic Management Journal, 11, 79–92.

    Article  Google Scholar 

  • Stinchcombe, A. L. (1965). Organizations and social structure. Handbook of Organizations, 44(2), 142–193.

    Google Scholar 

  • Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571–610.

    Article  Google Scholar 

  • Tsai, W., & Ghoshal, S. (1998). Social capital and value creation: The role of intrafirm networks. Academy of Management Journal, 41(4), 464–476.

    Google Scholar 

  • Tucker, D. J., Singh, J. V., & Meinhard, A. G. (1990). Organizational form, population dynamics, and institutional change: The founding patterns of voluntary organizations. Academy of Management Journal, 33, 151–178.

    Google Scholar 

  • Turner, J. C., Hogg, M. A., Turner, P. J., & Smith, P. M. (1984). Failure and defeat as determinants of group cohesiveness. British Journal of Social Psychology, 23(2), 97–111.

    Article  Google Scholar 

  • Ullmann, A. A. (1985). Data in search of a theory: A critical examination of the relationships among social performance, social disclosure, and economic performance of US firms. Academy of Management Review, 10(3), 540–557.

    Google Scholar 

  • Waddock, S. A., & Graves, S. B. (1997). The corporate social performance-financial performance link. Strategic Management Journal, 18(4), 303–319.

    Article  Google Scholar 

  • Walker, G., Kogut, B., & Shan, W. (1997). Social capital, structural holes and the formation of an industry network. Organization Science, 8(2), 109–125.

    Article  Google Scholar 

  • Weber, M. (1978). Economy and society (Vol. 1). Berkeley: University of California Press.

    Google Scholar 

  • Williamson, O. E. (1991). Strategizing, economizing, and economic organization. Strategic Management Journal, 12, 75–94.

    Article  Google Scholar 

  • Winter, S. G. (1965). Economic “natural selection” and the theory of the firm. New Haven, CT: Yale University.

    Google Scholar 

  • Wit, A. P., & Wilke, H. A. M. (1992). The effect of social categorization on cooperation in three types of social dilemmas. Journal of Economic Psychology, 13(1), 135–151.

    Article  Google Scholar 

  • Woodrum, E. (1984). “Mainstreaming” content analysis in social science: Methodological advantages, obstacles, and solutions. Social Science Research, 13(1), 1–19.

    Article  Google Scholar 

  • Yin, R. K. (2008). Case study research: Design and methods (Vol. 5). London: Sage.

    Google Scholar 

  • Zimmerman, M. A., & Zeitz, G. J. (2002). Beyond survival: Achieving new venture growth by building legitimacy. Academy of Management Review, 27(3), 414–431.

    Article  Google Scholar 

  • Zucker, L. G. (1987). Institutional theories of organization. Annual Review of Sociology, 13, 443–464.

    Article  Google Scholar 

Download references

Acknowledgments

This paper was supported by the National Research Foundation of Korea Grant funded by the Korean government (NRF-2013S1A3A2055114).

Author information

Authors and Affiliations

  1. Management Research Center, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, 151-916, Korea

    Se-Yeon Ahn

  2. College of Business Administration, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, 151-916, Korea

    Dong-Jun Park

Authors
  1. Se-Yeon Ahn
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Dong-Jun Park
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Se-Yeon Ahn.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Ahn, SY., Park, DJ. Corporate Social Responsibility and Corporate Longevity: The Mediating Role of Social Capital and Moral Legitimacy in Korea. J Bus Ethics 150, 117–134 (2018). https://doi.org/10.1007/s10551-016-3161-3

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-016-3161-3

Keywords

Search

Navigation