The complexity turn to modeling firm heterogeneity in corporate social and financial performance

Lars E. Isaksson, Arch G. Woodside

Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

2 Citations (Scopus)

Abstract

Prior research on the association between corporate social performance (CSP) and corporate financial performance (CFP) includes conflicting perspectives and inconclusive findings as to whether or not CSP has a positive, negative, or neutral association with CFP. While Wang et al. (2015) meta-analysis confirms the relationship between CSP and CFP to be significant and positive, in some contexts CSP and CFP associate negatively; CSP may need to receive "good management" support to yield positive financial outcomes [Luo and Bhattacharya (J Mark 73:198-213, 2009)]. The study here tests and supports the perspective that "good management" occurs in configurations (i.e., business models) with high CSP to indicate high CFP. A configurational theoretical stance implies that recipes of bad management with high or low CSP are likely to associate with low CFP. Configurational analysis supports this theoretical perspective. Building from complexity theory, a configurational analysis includes the propositions that complex multiple recipes lead to the same outcome (equifinality tenet) whereby variables (ingredients) found to associate causally in one configuration may be absent in another recipe or even inversely related in a third recipe associated with this same outcome. The present study employs a mixed methods research design (using surveys of senior executives, independent CSP firm assessments using ESG factors (environment, social (or human rights), and governance), and analysis of corporate annual reports of 82 mostly highly-global Swedish firms). The study overcomes the mismatch between case-level theory proposals and variable-based data analyses that is widespread in the relevant literature. The study's findings support the core tenets of complexity theory.

Original languageEnglish
Title of host publicationThe complexity turn
Subtitle of host publicationCultural, management, and marketing applications
EditorsA G Woodside
PublisherSpringer
Pages185-247
Number of pages63
ISBN (Electronic)9783319470283
ISBN (Print)9783319470269
DOIs
Publication statusPublished - 16 Feb 2017

Fingerprint

firm
performance
Modeling
Corporate social performance
Corporate financial performance
Firm heterogeneity
management
senior executive
social rights
annual report
mismatch
research planning
human rights
governance
Complexity theory

Cite this

Isaksson, L. E., & Woodside, A. G. (2017). The complexity turn to modeling firm heterogeneity in corporate social and financial performance. In A. G. Woodside (Ed.), The complexity turn: Cultural, management, and marketing applications (pp. 185-247). Springer. https://doi.org/10.1007/978-3-319-47028-3_6
Isaksson, Lars E. ; Woodside, Arch G. / The complexity turn to modeling firm heterogeneity in corporate social and financial performance. The complexity turn: Cultural, management, and marketing applications. editor / A G Woodside. Springer, 2017. pp. 185-247
@inbook{9fa18167e9244f0097b5feec42f7622a,
title = "The complexity turn to modeling firm heterogeneity in corporate social and financial performance",
abstract = "Prior research on the association between corporate social performance (CSP) and corporate financial performance (CFP) includes conflicting perspectives and inconclusive findings as to whether or not CSP has a positive, negative, or neutral association with CFP. While Wang et al. (2015) meta-analysis confirms the relationship between CSP and CFP to be significant and positive, in some contexts CSP and CFP associate negatively; CSP may need to receive {"}good management{"} support to yield positive financial outcomes [Luo and Bhattacharya (J Mark 73:198-213, 2009)]. The study here tests and supports the perspective that {"}good management{"} occurs in configurations (i.e., business models) with high CSP to indicate high CFP. A configurational theoretical stance implies that recipes of bad management with high or low CSP are likely to associate with low CFP. Configurational analysis supports this theoretical perspective. Building from complexity theory, a configurational analysis includes the propositions that complex multiple recipes lead to the same outcome (equifinality tenet) whereby variables (ingredients) found to associate causally in one configuration may be absent in another recipe or even inversely related in a third recipe associated with this same outcome. The present study employs a mixed methods research design (using surveys of senior executives, independent CSP firm assessments using ESG factors (environment, social (or human rights), and governance), and analysis of corporate annual reports of 82 mostly highly-global Swedish firms). The study overcomes the mismatch between case-level theory proposals and variable-based data analyses that is widespread in the relevant literature. The study's findings support the core tenets of complexity theory.",
author = "Isaksson, {Lars E.} and Woodside, {Arch G.}",
year = "2017",
month = "2",
day = "16",
doi = "10.1007/978-3-319-47028-3_6",
language = "English",
isbn = "9783319470269",
pages = "185--247",
editor = "Woodside, {A G}",
booktitle = "The complexity turn",
publisher = "Springer",
address = "Germany",

}

Isaksson, LE & Woodside, AG 2017, The complexity turn to modeling firm heterogeneity in corporate social and financial performance. in AG Woodside (ed.), The complexity turn: Cultural, management, and marketing applications. Springer, pp. 185-247. https://doi.org/10.1007/978-3-319-47028-3_6

The complexity turn to modeling firm heterogeneity in corporate social and financial performance. / Isaksson, Lars E.; Woodside, Arch G.

The complexity turn: Cultural, management, and marketing applications. ed. / A G Woodside. Springer, 2017. p. 185-247.

Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

TY - CHAP

T1 - The complexity turn to modeling firm heterogeneity in corporate social and financial performance

AU - Isaksson, Lars E.

AU - Woodside, Arch G.

PY - 2017/2/16

Y1 - 2017/2/16

N2 - Prior research on the association between corporate social performance (CSP) and corporate financial performance (CFP) includes conflicting perspectives and inconclusive findings as to whether or not CSP has a positive, negative, or neutral association with CFP. While Wang et al. (2015) meta-analysis confirms the relationship between CSP and CFP to be significant and positive, in some contexts CSP and CFP associate negatively; CSP may need to receive "good management" support to yield positive financial outcomes [Luo and Bhattacharya (J Mark 73:198-213, 2009)]. The study here tests and supports the perspective that "good management" occurs in configurations (i.e., business models) with high CSP to indicate high CFP. A configurational theoretical stance implies that recipes of bad management with high or low CSP are likely to associate with low CFP. Configurational analysis supports this theoretical perspective. Building from complexity theory, a configurational analysis includes the propositions that complex multiple recipes lead to the same outcome (equifinality tenet) whereby variables (ingredients) found to associate causally in one configuration may be absent in another recipe or even inversely related in a third recipe associated with this same outcome. The present study employs a mixed methods research design (using surveys of senior executives, independent CSP firm assessments using ESG factors (environment, social (or human rights), and governance), and analysis of corporate annual reports of 82 mostly highly-global Swedish firms). The study overcomes the mismatch between case-level theory proposals and variable-based data analyses that is widespread in the relevant literature. The study's findings support the core tenets of complexity theory.

AB - Prior research on the association between corporate social performance (CSP) and corporate financial performance (CFP) includes conflicting perspectives and inconclusive findings as to whether or not CSP has a positive, negative, or neutral association with CFP. While Wang et al. (2015) meta-analysis confirms the relationship between CSP and CFP to be significant and positive, in some contexts CSP and CFP associate negatively; CSP may need to receive "good management" support to yield positive financial outcomes [Luo and Bhattacharya (J Mark 73:198-213, 2009)]. The study here tests and supports the perspective that "good management" occurs in configurations (i.e., business models) with high CSP to indicate high CFP. A configurational theoretical stance implies that recipes of bad management with high or low CSP are likely to associate with low CFP. Configurational analysis supports this theoretical perspective. Building from complexity theory, a configurational analysis includes the propositions that complex multiple recipes lead to the same outcome (equifinality tenet) whereby variables (ingredients) found to associate causally in one configuration may be absent in another recipe or even inversely related in a third recipe associated with this same outcome. The present study employs a mixed methods research design (using surveys of senior executives, independent CSP firm assessments using ESG factors (environment, social (or human rights), and governance), and analysis of corporate annual reports of 82 mostly highly-global Swedish firms). The study overcomes the mismatch between case-level theory proposals and variable-based data analyses that is widespread in the relevant literature. The study's findings support the core tenets of complexity theory.

UR - http://www.scopus.com/inward/record.url?scp=85019950672&partnerID=8YFLogxK

UR - http://www.springer.com/gp/book/9783319470269?wt_mc=ThirdParty.SpringerLink.3.EPR653.About_eBook

U2 - 10.1007/978-3-319-47028-3_6

DO - 10.1007/978-3-319-47028-3_6

M3 - Chapter

SN - 9783319470269

SP - 185

EP - 247

BT - The complexity turn

A2 - Woodside, A G

PB - Springer

ER -

Isaksson LE, Woodside AG. The complexity turn to modeling firm heterogeneity in corporate social and financial performance. In Woodside AG, editor, The complexity turn: Cultural, management, and marketing applications. Springer. 2017. p. 185-247 https://doi.org/10.1007/978-3-319-47028-3_6