Skip to main content
SpringerLink
Log in

The influence of firm, industry and network on the corporate social performance of Japanese firms

  • Published:
Asia Pacific Journal of Management Aims and scope Submit manuscript

Abstract

We develop and test the thesis that corporate social performance (CSP) constitutes a socially constructed and shared strategic asset, which is not only influenced by factors specific to a firm, but also by the social performance of firms in its industry and inter-corporate network. Using variance decomposition, we analyze data from 130 large Japanese firms and find that both firm-specific and industry-level factors account for significant variance in CSP, but network-level factors do not.

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

Figure 1

Similar content being viewed by others

References

  • Adams, J. S. 1963. Toward an understanding of inequity. Journal of Abnormal and Social Psychology, 67: 422–436.

    Article  Google Scholar 

  • Albinger, H., & Freeman, S. J. 2000. Corporate social performance and attractiveness as an employer to different job seeking populations. Journal of Business Ethics, 28(3): 243–253.

    Article  Google Scholar 

  • AsrIA. 2003. Foreign versus Local: The Debate About SRI Priorities in Japan. ASRIA Monograph. October. http://www.asria.org/publications/lib/japan/japan_perspective_colour.pdf.

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

    Article  Google Scholar 

  • Berglöf, E., & Perotti, E. 1994. The governance structure of the Japanese financial keiretsu. Journal of Financial Economics, 36: 259–284.

    Article  Google Scholar 

  • Blackburn, V. L., Doran, M., & Shrader, C. B. 1994. Investigating the dimensions of social responsibility and the consequences for corporate financial performance. Journal of Managerial Issues, 6: 195–212.

    Google Scholar 

  • Brown, T. J., & Dacin, P. A. 1997. The company and the product: Corporate associations and consumer product responses. Journal of Marketing, 61: 68–84.

    Article  Google Scholar 

  • Brush, T. H., Bromiley, P., & Hendrickx, M. 1999. The relative influence of industry and corporation on business segment performance: An alternative estimate. Strategic Management Journal, 20(6): 519–547.

    Article  Google Scholar 

  • Campbell, J. L. 2006. Institutional analysis and the paradox of corporate social responsibility. American Behavioral Scientist, 49: 925–938.

    Article  Google Scholar 

  • Carroll, A. B. 1979. A three-dimensional conceptual model of corporate social performance. Academy of Management Review, 4: 497–505.

    Article  Google Scholar 

  • Caves, R., & Uekusa, M. 1976. Industrial organization in Japan. Washington: Brookings Institution.

    Google Scholar 

  • Chang, S. J., & Hong, J. 2002. How much does the business group matter in Korea? Strategic Management Journal, 23: 265–274.

    Article  Google Scholar 

  • Chang, S. J., & Singh, H. 2000. Corporate and industry effects on business unit competitive position. Strategic Management Journal, 21: 739–752.

    Article  Google Scholar 

  • Chen, K. H., & Metcalf, R. W. 1980. The relationship between pollution control record and financial indicators revisited. Accounting Review, 55: 168–177.

    Google Scholar 

  • Cohen, J., Cohen, P., West, S. G., & Aiken, L. S. 2003. Applied multiple regression/correlation analysis for the behavioral sciences, 3L. Mahwah, NJ: Erlbaum.

    Google Scholar 

  • Dawkins, J., & Lewis, S. 2003. CSP in stakeholder expectations: And their implication for company strategy. Journal of Business Ethics, 44: 185–201.

    Article  Google Scholar 

  • Dess, G. G., & Beard, D. W. 1984. Dimensions of organizational task environments. Administrative Science Quarterly, 29: 52–73.

    Article  Google Scholar 

  • Dierickx, I., & Cool, K. 1989. Asset stock accumulation and sustainability of competitive advantage. Management Science, 35: 1504–1514.

    Google Scholar 

  • Dierkes, M., & Antal, A. B. 1985. The use and the usefulness of corporate social reporting. Accounting, Organizations, and Society, 10(1): 24–34.

    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: 147–160.

    Article  Google Scholar 

  • Dyer, J. H. 1996. Does governance matter? Keiretsu alliances and asset specificity as sources of Japanese competitive advantage. Organization Science, 7: 649–666.

    Article  Google Scholar 

  • Eisenhardt, K. M. 1989. Agency theory: An assessment and review. The Academy of Management Review, 14(1): 57–74.

    Article  Google Scholar 

  • Environics. 1999. The millennium poll on corporate social responsibility. Toronto: Environics International.

    Google Scholar 

  • Fogler, H. R., & Nutt, F. 1975. A note on social responsibility and stock valuation. Academy of Management Journal, 18: 155–160.

    Article  Google Scholar 

  • Frederick, W. C. 1994. The virtual reality of fact vs. value: A symposium commentary. Business Ethics Quarterly, 4: 171–173.

    Google Scholar 

  • Fukuyama, F. 1995. Trust: The social virtues and the creation of prosperity. London: Penguin.

    Google Scholar 

  • Furman, J. L. 2000. Does industry matter differently in different places? A comparison of industry, corporate parent, and business segment effects in four OECD countries. MIT Sloan School (Mimeo).

  • Gedajlovic, E. R., & Shapiro, D. M. 2002. Ownership and firm profitability in Japan. Academy of Management Journal, 45(3): 575–585.

    Article  Google Scholar 

  • Gerlach, M. L. 1992. Alliance capitalism: The social organization of Japanese business. Berkeley: University of California Press.

    Google Scholar 

  • Godfrey, P. C. 2005. The relationship between corporate philanthropy and shareholder wealth: A risk management perspective. Academy of Management Review, 30(4): 777–798.

    Google Scholar 

  • Graves, S. B., & Waddock, S. A. 1994. Institutional owners and corporate social performance. Academy of Management Journal, 27(4): 1034–1046.

    Article  Google Scholar 

  • Greening, D. W., & Turban, D. B. 2000. Corporate social performance as a competitive advantage in attracting a quality workforce. Business and Society, 39: 254–280.

    Article  Google Scholar 

  • Hamilton, G. G., & Biggart, N. W. 1988. Market, culture and authority: A comparative analysis of management and organization in the Far East. American Journal of Sociology, 94: S52–S94.

    Article  Google Scholar 

  • Hawawini, G., Subramanian, V., & Verdin, P. 2003. Is performance driven by industry- or firm specific factors? A new look at the evidence. Strategic Management Journal, 24(1): 1–16.

    Article  Google Scholar 

  • He, Y., Tian, Z., & Chen, Y. 2007. Performance implications of nonmarket strategy in China. Asia Pacific Journal of Management (in press).

  • Heap, S. 2000. NGOs engaging with business: A world of difference and a difference to the world. Oxford: INTRAC.

    Google Scholar 

  • Hillman, A., & Keim, G. D. 2001. Shareholder value, stakeholder management, and social issues: What’s the bottom line? Strategic Management Journal, 22(2): 125–139.

    Article  Google Scholar 

  • Hoffman, A. J. 1997. From heresy to dogma: An institutional history of corporate environmentalism. San Francisco, CA: New Lexington.

    Google Scholar 

  • Hoffman, A., & Ocasio, W. 2001. Not all events are attended equally: Toward a middle-range theory of industry attention to external events. Organization Science, 12(4): 414–434.

    Article  Google Scholar 

  • Hofstede, G. 1979. Value systems in forty countries: Interpretations, validation, and consequences for theory. In L. H. Eckensberger, W. J. Lonner, & Y. H. Poortinga (Eds.), Cross Cultural Contributions to Psychology: 398–407. Lisse, The Netherlands: Swets & Zeitlinger.

    Google Scholar 

  • Hoshi, T., Kashyap, A., & Scharfstein, D. 1990. The role of banks in reducing the costs of financial distress in Japan. Journal of Financial Economics, 27: 67–88.

    Article  Google Scholar 

  • Houge, T., & Wellman, J. 2005. Fallout from the mutual fund trading scandal. Journal of Business Ethics, 62(2): 129–139.

    Article  Google Scholar 

  • Hough, J. R. 2006. Business segment performance redux: A multilevel approach. Strategic Management Journal, 27: 45–61.

    Article  Google Scholar 

  • Hundley, G., & Jacobson, C. K. 1998. The effects of the keiretsu on the export performance of Japanese companies: Help or hindrance? Strategic Management Journal, 19(10): 927–937.

    Article  Google Scholar 

  • Johnson, R. A., & Greening, D. W. 1999. The effects of corporate governance and institutional ownership types on corporate social performance. Academy of Management Journal, 42(5): 564–576.

    Article  Google Scholar 

  • Khanna, T., & Palepu, K. 2000a. The future of business groups: Long run evidence from Chile. Academy of Management Journal, 43: 268–285.

    Article  Google Scholar 

  • Khanna, T., & Palepu, K. 2000b. Is group affiliation profitable in emerging markets? An analysis of diversified Indian business groups. Journal of Finance, 55: 867–891.

    Article  Google Scholar 

  • Khanna, T., & Rivkin, J. W. 2001. Estimating the performance effects of business groups in emerging markets. Strategic Management Journal, 22: 45–74.

    Article  Google Scholar 

  • Kim, H., Hoskisson, R. E., & Wan, W. P. 2004. Power dependence, diversification strategy, and performance in keiretsu member firms. Strategic Management Journal, 25(7): 613–636.

    Article  Google Scholar 

  • King, A., & Lenox, M. 2000. Industry self-regulation without sanctions: The chemical industry’s Responsible Care program. Academy of Management Journal, 43(4): 698–716.

    Article  Google Scholar 

  • King, A., Lenox, M., & Barnett, M. 2002. Strategic responses to the reputation commons problem. In A. Hoffman & M. Ventresca (Eds.), Organizations, Policy and the Natural Environment: Institutional and Strategic Perspectives. Stanford, CA: Stanford University Press.

    Google Scholar 

  • Kock, C. J., & Guillen, M. F. 2001. Strategy and structure in developing countries: Business groups as an evolutionary response to opportunities for unrelated diversification. Industrial and Corporate Change, 10(1): 77–113.

    Article  Google Scholar 

  • Kolk, A., Walhain, S., & van de Wateringen, S. 2001. Environmental reporting by the Fortune Global 250: Exploring the influence of nationality and sector. Business Strategy and the Environment, 10: 15–28.

    Article  Google Scholar 

  • Lewin, A. Y., Sakano, T., Stephens, C. U., & Victor, B. 1995. Corporate citizenship in Japan: Survey results from Japanese firms. Journal of Business Ethics, 14: 81–101.

    Article  Google Scholar 

  • Lincoln, J. R., Gerlach, M., & Ahmadjian, C. L. 1996. Keiretsu networks and corporate performance in Japan. American Sociological Review, 61: 67–88.

    Article  Google Scholar 

  • Luce, R. A., Barber, A. E., & Hillman, A. J. 2001. Good deeds and misdeeds: A mediated model of the effect of corporate social performance on organizational attractiveness. Business and Society, 40: 397–415.

    Article  Google Scholar 

  • Margolis, J., & Walsh, J. 2001. People and profits? The search for a link between company’s social and financial performance. Mahwah, NJ: Erlbaum.

    Google Scholar 

  • Mauri, A. J., & Michaels, M. P. 1998. Firm and industry effects within strategic management: An empirical examination. Strategic Management Journal, 19(3): 211–219.

    Article  Google Scholar 

  • McGahan, A., & Porter, M. 1997. How much does industry matter, really? Strategic Management Journal, 18: 15–30 (Special Summer Issue).

    Article  Google Scholar 

  • McGahan, A., & Porter, M. 2002. What do we know about variance in accounting profitability? Management Science, 48(7): 834–851.

    Article  Google Scholar 

  • Meyer, J. W., & Rowan, B. 1977. Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83: 343–363.

    Google Scholar 

  • Ministry of Environment Japan. 2003. Shakaiteki Toushi Ni Kansuru Nichi-Bei-Ei Sankakoku Chosa (The Survey On Socially Responsible Investment In Three Countries—Japan, The United States And Britain.)

  • Miyajima, H. 1995. The privatization of ex-zaibatsu holding stocks and the emergence of bank-centered corporate groups in Japan. In M. Aoki & H. K. Kim (Eds.), Corporate Governance in Transitional Economies: 361–399. Washington, DC: The World Bank.

    Google Scholar 

  • Murphy, K. R., & Davidshofer, C. O. 1998. Psychological testing: Principles and applications (4th ed.). Upper Saddle River, NJ: Prentice-Hall.

    Google Scholar 

  • Orlitzky, M., & Benjamin, J. D. 2001. Corporate social performance and firm risk: A meta-analytic review. Business and Society, 40: 369–396.

    Article  Google Scholar 

  • Orlitzky, M., Schmidt, F. L., & Rynes, S. L. 2003. Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3): 403–442.

    Article  Google Scholar 

  • Podolny, J. M., & Phillips, D. J. 1996. The dynamics of organizational status. Industrial and Corporate Change, 5: 453–472.

    Google Scholar 

  • Porter, M. E. 1980. Competitive strategy. New York: Free Press.

    Google Scholar 

  • Rao, H. 1994. The social construction of reputation: Certification contests, legitimation and the survival of organizations in the American automobile industry: 1885–1912. Strategic Management Journal, 15: 29–44.

    Article  Google Scholar 

  • Rees, J. 1997. Development of communitarian regulation in the chemical industry. Law & Policy, 19: 477–528.

    Article  Google Scholar 

  • Roberts, R. W. 1992. Determinants of corporate social responsibility disclosure: An application of stakeholder theory. Accounting, Organizations and Society, 17: 595–612.

    Article  Google Scholar 

  • Roberts, P. W., & Dowling, G. R. 2002. Corporate reputation and sustained superior financial performance. Strategic Management Journal, 23(12): 1077–1093.

    Article  Google Scholar 

  • Roman, R., Hayibor, S., & Agle, B. 1999. The relationship between social and financial performance. Business and Society, 38(1): 109–125.

    Article  Google Scholar 

  • Roquebert, J. A., Phillips, R. L., & Westfall, P. A. 1996. Markets vs. management: What ‘drives’ profitability? Strategic Management Journal, 17(8): 653–664.

    Article  Google Scholar 

  • Rumelt, R. 1991. How much does industry matter? Strategic Management Journal, 12: 167–185.

    Article  Google Scholar 

  • Russell, D. W. 2002. In search of underlying dimensions: The use (and abuse) of factor analysis in personality and social psychology bulletin. Personality and Social Psychology Bulletin, 28: 1629–1646.

    Article  Google Scholar 

  • Schmalensee, R. 1985. Do markets differ much? American Economic Review, 75(3): 341–351.

    Google Scholar 

  • Sharfman, M. 1996. A concurrent validity study of the KLD social performance ratings data. Journal of Business Ethics, 15: 287–296.

    Article  Google Scholar 

  • Sharfman, M. P., Shaft, T. M., & Tihanyi, L. 2004. A model of the global and institutional antecedents of high-level corporate environmental performance. Business & Society, 43(1): 6–36.

    Article  Google Scholar 

  • Sharma, S. 2000. Managerial interpretations and organizational context as predictors of corporate choice of environmental strategy. The Academy of Management Journal, 43(4): 681–697.

    Article  Google Scholar 

  • Sheard, P. 1994. Reciprocal delegated monitoring in the Japanese main bank system. Journal of the Japanese and International Economies, 8: 1–21.

    Article  Google Scholar 

  • Sirgy, M. J. 2002. Measuring corporate performance by building in the stakeholder model of business ethics. Journal of Business Ethics, 35: 143–162.

    Article  Google Scholar 

  • Sparkes, R., & Cowton, C. 2004. The maturing of socially responsible investment: A review of the developing link with corporate social responsibility. Journal of Business Ethics, 52: 45–57.

    Article  Google Scholar 

  • Spicer, B. H. 1978. Investors, corporate social performance and information disclosure: An empirical study. Accounting Review, 53: 94–111.

    Google Scholar 

  • Tanimoto, K. 2004. Changes in the market society and corporate social responsibility. Asian Business & Management, 3: 151–172.

    Article  Google Scholar 

  • Todeva, E., & Knoke, D. 2005. Strategic alliances and models of collaboration. Management Decision, 43(1): 123–148.

    Article  Google Scholar 

  • Trevino, L., Weaver, G. R., & Cochran, P. 1999. Integrated and decoupled corporate social performance: Management commitments, external pressures, and corporate ethics practices. Academy of Management Journal, 42: 539–552.

    Article  Google Scholar 

  • Turban, D. B., & Greening, D. W. 1997. Corporate social performance and organizational attractiveness to prospective employees. Academy of Management Journal, 40: 658–672.

    Article  Google Scholar 

  • Waddock, S., & Graves, S. B. 1997. The corporate social performance—financial performance link. Strategic Management Journal, 18: 303–319.

    Article  Google Scholar 

  • Weinstein, D., & Yafeh, Y. 1998. On the costs of a bank-centered financial system: Evidence from the changing main bank relations in Japan. Journal of Finance, 53: 635–672.

    Article  Google Scholar 

  • Wood, D. J. 1991. Corporate social performance revisited. Academy of Management Review, 16(4): 691–718.

    Article  Google Scholar 

  • Yoshikawa, T., & Gedajlovic, E. 2002. The impact of global capital market exposure and stable ownership on investor relations practices and performance of Japanese firms. Asia Pacific Journal of Management, 19(4): 525–540.

    Article  Google Scholar 

  • Yoshikawa, T., & Phan, P. 2001. Alternative corporate governance systems in Japanese firms: Implications for a shift to stockholder-centered corporate governance. Asia Pacific Journal of Management, 18: 183–205.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Haworth College of Business, Western Michigan University, Kalamazoo, MI, 49008-3806, USA

    K. C. O’Shaughnessy

  2. School of Business, University of Connecticut, 2100 Hillside Road Unit 1041, Storrs, CT, 06269-1041, USA

    Eric Gedajlovic

  3. Rotterdam School of Management, Erasmus University Rotterdam (EUR), 3062, PA, Rotterdam, The Netherlands

    Patrick Reinmoeller

Authors
  1. K. C. O’Shaughnessy
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Eric Gedajlovic
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Patrick Reinmoeller
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to K. C. O’Shaughnessy.

Appendix

Appendix

CSR Measures

Table 4 Every company is rated annually on a scale of 1 to 5 with 1 being the highest evaluation and 5 the lowest. The following nine socially relevant categories are used in the rating.
Full size table

Rights and permissions

Reprints and permissions

About this article

Cite this article

O’Shaughnessy, K.C., Gedajlovic, E. & Reinmoeller, P. The influence of firm, industry and network on the corporate social performance of Japanese firms. Asia Pacific J Manage 24, 283–303 (2007). https://doi.org/10.1007/s10490-007-9043-6

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10490-007-9043-6

Keywords

Search

Navigation