IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v35y2026i3p3370-3391.html

Between Calm and Passion for Organizational Authenticity: Seeking Efficiency Within the Financial–ESG Trade‐Off

Author

Listed:
  • Jihun Choi
  • Young‐Kyu Kim
  • Taewoo Roh

Abstract

Environmental, social, and governance (ESG) is pivotal for firms and their stakeholders, highlighting the importance of organizational authenticity (OA) in mitigating information asymmetry between signalers and receivers, thereby enhancing effective communication of social strategies. However, firms communicate with heterogeneous audiences whose interests and levels of information access differ, resulting in uneven reception of signals and complicating the communication process. Given the heterogeneity in signal receivers, stakeholder recognition of signals varies and aligning social strategies with executives' intrinsic values may conflict with certain stakeholders' expectations, creating an authenticity paradox. Therefore, clarifying whether OA strengthens or weakens signaling warrants careful examination. We tested our hypotheses using executive statements from S&P‐listed firms' earnings call transcripts on Seeking Alpha, supplemented with firm‐level data from multiple sources, including Morgan Stanley Capital International, Center for Research in Security Prices/Compustat, and ExecuComp. The findings indicate that the optimal level of social strategies depends on heterogeneity among receivers and that low OA enhances signaling efficiency.

Suggested Citation

  • Jihun Choi & Young‐Kyu Kim & Taewoo Roh, 2026. "Between Calm and Passion for Organizational Authenticity: Seeking Efficiency Within the Financial–ESG Trade‐Off," Business Strategy and the Environment, Wiley Blackwell, vol. 35(3), pages 3370-3391, March.
    • Handle: RePEc:bla:bstrat:v:35:y:2026:i:3:p:3370-3391
    DOI: 10.1002/bse.70350
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.70350
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.70350?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Seth, Rama & Mahenthiran, Sakthi, 2022. "Impact of dividend payouts and corporate social responsibility on firm value – Evidence from India," Journal of Business Research, Elsevier, vol. 146(C), pages 571-581.
    2. Francesco Perrini & Angeloantonio Russo & Antonio Tencati & Clodia Vurro, 2011. "Deconstructing the Relationship Between Corporate Social and Financial Performance," Journal of Business Ethics, Springer, vol. 102(1), pages 59-76, March.
    3. Thanh Tiep Le & X.V. Vo & V.G. Venkatesh, 2022. "Role of Green Innovation and Supply Chain Management in Driving Sustainable Corporate Performance," Post-Print hal-04452852, HAL.
    4. Wallach, Karen Anne & Popovich, Deidre, 2023. "When Big Is Less than Small: Why dominant brands lack authenticity in their sustainability initiatives," Journal of Business Research, Elsevier, vol. 158(C).
    5. Kamini Gupta & Donal Crilly & Thomas Greckhamer, 2020. "Stakeholder engagement strategies, national institutions, and firm performance: A configurational perspective," Strategic Management Journal, Wiley Blackwell, vol. 41(10), pages 1869-1900, October.
    6. Yvette Sterbenk & Sara Champlin & Kasey Windels & Summer Shelton, 2022. "Is Femvertising the New Greenwashing? Examining Corporate Commitment to Gender Equality," Journal of Business Ethics, Springer, vol. 177(3), pages 491-505, May.
    7. Karl Taeuscher & Hannes Rothe, 2021. "Optimal distinctiveness in platform markets: Leveraging complementors as legitimacy buffers," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 435-461, February.
    8. Hongbo He & Yiqing Chen & Ruiqi Guo & Lerong He & Hong Wan, 2025. "Cost of Vagueness: Stakeholders’ Responses to Firms’ ESG Information," Journal of Business Ethics, Springer, vol. 202(3), pages 543-566, December.
    9. Caroline Flammer, 2015. "Does Corporate Social Responsibility Lead to Superior Financial Performance? A Regression Discontinuity Approach," Management Science, INFORMS, vol. 61(11), pages 2549-2568, November.
    10. Arturs Kalnins, 2018. "Multicollinearity: How common factors cause Type 1 errors in multivariate regression," Strategic Management Journal, Wiley Blackwell, vol. 39(8), pages 2362-2385, August.
    11. Wenbin Sun & Shanji Yao & Rahul Govind, 2019. "Reexamining Corporate Social Responsibility and Shareholder Value: The Inverted-U-Shaped Relationship and the Moderation of Marketing Capability," Journal of Business Ethics, Springer, vol. 160(4), pages 1001-1017, December.
    12. Ghasem Zaefarian & Matthew J. Robson & Zhaleh Najafi-Tavani & Stavroula Spyropoulou, 2023. "Relationships of stressors and opportunism in cross-border exchange partnership contexts: When and how monitoring matters," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(3), pages 441-475, April.
    13. Yasir Dewan & Tal Simons & Georg Wernicke, 2024. "The Ideological Imperative: Corporate Social Responsibility and News Media Coverage of Firms," Organization Science, INFORMS, vol. 35(5), pages 1930-1955, September.
    14. Thomas G. Canace & Leigh Salzsieder & Tammie J. Schaefer, 2023. "Preventing Disclosure-Induced Moral Licensing: Evidence from the Boardroom," Journal of Business Ethics, Springer, vol. 187(4), pages 841-857, November.
    15. Yoojung Ahn, 2022. "A Socio-cognitive Model of Sustainability Performance: Linking CEO Career Experience, Social Ties, and Attention Breadth," Journal of Business Ethics, Springer, vol. 175(2), pages 303-321, January.
    16. William Ocasio, 1997. "Towards An Attention‐Based View Of The Firm," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 187-206, July.
    17. Jordi Surroca & Josep A. Tribó & Sandra Waddock, 2010. "Corporate responsibility and financial performance: the role of intangible resources," Strategic Management Journal, Wiley Blackwell, vol. 31(5), pages 463-490, May.
    18. Cristian L. Dezsö & David Gaddis Ross, 2012. "Does female representation in top management improve firm performance? A panel data investigation," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1072-1089, September.
    19. Liao, Shushu & Nolte, Ingmar & Pawlina, Grzegorz, 2024. "Can Capital Adjustment Costs Explain the Decline in Investment–Cash Flow Sensitivity?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 59(5), pages 2399-2424, August.
    20. Glenn Hoetker, 2007. "The use of logit and probit models in strategic management research: Critical issues," Strategic Management Journal, Wiley Blackwell, vol. 28(4), pages 331-343, April.
    21. Florian Habermann & Felix Bernhard Fischer, 2023. "Corporate Social Performance and the Likelihood of Bankruptcy: Evidence from a Period of Economic Upswing," Journal of Business Ethics, Springer, vol. 182(1), pages 243-259, January.
    22. Jin Hyung Kim & Jooyoung Kwak & Hyung‐Kun Park, 2025. "ESG as a nonmarket strategy to cope with geopolitical tension: Empirical evidence from multinationals' ESG performance," Strategic Management Journal, Wiley Blackwell, vol. 46(3), pages 693-722, March.
    23. Rudy Setyopurnomo & Sudarso Kaderi Wiryono & Yuliani Dwi Lestari & Subiakto Sukarno, 2025. "Incorporating earned value management into income statements to improve project management profitability and elevate application in the business and management," PLOS ONE, Public Library of Science, vol. 20(1), pages 1-30, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Iftekhar Hasan & Nada Kobeissi & Liuling Liu & Haizhi Wang, 2018. "Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of Productivity," Journal of Business Ethics, Springer, vol. 149(3), pages 671-688, May.
    2. Lee, Hun & Andrevski, Goce & Ferrier, Walter J. & Waldron, Theodore L., 2026. "When do high-CSR investments pay off? The role of competitive repertoire adjustments," Journal of Business Research, Elsevier, vol. 203(C).
    3. Xiao, Chengyong & Wang, Qian & van der Vaart, Taco & van Donk, Dirk Pieter, 2018. "When Does Corporate Sustainability Performance Pay off? The Impact of Country-Level Sustainability Performance," Ecological Economics, Elsevier, vol. 146(C), pages 325-333.
    4. Byung‐Jik Kim & Min‐Jik Kim, 2026. "Beyond Good Intentions: Unraveling the CSR‐Employee Health Nexus Through the Lens of Job Stress and Work Overload: A Three‐Wave Time‐Lagged Study," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 33(1), pages 894-924, January.
    5. Jianjun Zhang & Li Tong & Kunyuan Qiao, 2024. "Mimicry Dynamics: A Study of Multinational Enterprises’ Philanthropy in China," Journal of Business Ethics, Springer, vol. 194(3), pages 501-521, October.
    6. Iftekhar Hasan & Nada Kobeissi & Liuling Liu & Haizhi Wang, 2018. "Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of Productivity," Journal of Business Ethics, Springer, vol. 149(3), pages 671-688, May.
    7. Marcel Seefloth & Florian Siedler & Christoph Kayser & Benedikt T. Retsch & Henning Zülch, 2025. "Sustainability Performance and Its Impact on Financial Distress Risk—Evidence From STOXX Europe 600," Business Strategy and the Environment, Wiley Blackwell, vol. 34(5), pages 5699-5741, July.
    8. Guangyu Huang & Yanhong Huang & Liqiong Shen, 2025. "The paradox of corporate social responsibility in excessively leveraged firms: legitimacy pursuit vs. economic efficiency dilemma," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-15, December.
    9. Alexandra ZBUCHEA & Florina PÎNZARU, 2017. "Tailoring CSR Strategy to Company Size?," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 5(3), pages 415-437, September.
    10. Haram Seo, 2025. "Counter-Activism Against Ideological Opponents: Evidence Based on the Competitive Dynamics of Corporate Engagement in Advocacy Giving," Organization Science, INFORMS, vol. 36(4), pages 1333-1356, July.
    11. Mushtaq Hussain Khan & Inam Ul Haq & Muhammad Umer Azeem & Abdul Ghafoor, 2025. "Climate Change Initiatives, Environmental Management Training, and Firm Performance: The Trickle‐Down Effect of Board‐Level Gender Diversity on Gender Diversity in the top Management Team," Business Strategy and the Environment, Wiley Blackwell, vol. 34(7), pages 9274-9300, November.
    12. Yusen Dong & Pengcheng Ma & Lanzhu Sun & Daniel Han Ming Chng, 2024. "Goodwill Hunting: Why and When Ultimate Controlling Owners Affect Their Firms’ Corporate Social Responsibility Performance," Journal of Business Ethics, Springer, vol. 193(3), pages 535-553, September.
    13. Mercedes Rubio-Andrés & Santiago Gutiérrez-Broncano & Jorge Linuesa-Langreo & Miguel Ángel Sastre-Castillo, 2025. "Exploring the reality of corporate sustainability strategy and sales performance in entrepreneurial SMEs: the mediating effect of innovation and sustainability performance," International Entrepreneurship and Management Journal, Springer, vol. 21(1), pages 1-34, December.
    14. Yu Meng & Maoyong Cheng, 2025. "Leadership Power: The Absence of Political Incentives and ESG Performance," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(5), pages 4446-4472, December.
    15. Pere Mercadé‐Melé & Carmina Fandos‐Herrera & Sofía Velasco‐Gómez, 2021. "How corporate social responsibility influences consumer behavior: An empirical analysis in the Spanish agrifood sector," Agribusiness, John Wiley & Sons, Ltd., vol. 37(3), pages 590-611, July.
    16. Paolo Saona & Pablo San Martín, 2026. "Revisiting the Default Risk‐ESG Relationship: New Evidence in European Markets," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 33(1), pages 129-168, January.
    17. Mehmet Ali Köseoglu & John A. Parnell & Melissa Yan Yee Yick, 2021. "Identifying influential studies and maturity level in intellectual structure of fields: evidence from strategic management," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(2), pages 1271-1309, February.
    18. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    19. Jeremy Galbreath, 2018. "Do Boards of Directors Influence Corporate Sustainable Development? An Attention‐Based Analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 27(6), pages 742-756, September.
    20. Christian Schwens & Marcus Wagner, 2019. "The role of firm-internal corporate environmental standards for organizational performance," Journal of Business Economics, Springer, vol. 89(7), pages 823-843, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:35:y:2026:i:3:p:3370-3391. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.