Performance below social aspirations, CSR initiatives and CEO characteristics: a conceptual framework

Purpose - This conceptual paper aims to contribute to prior corporate social responsibility (CSR) studies by examining CSR issues through the lens of the behavioral theory of the firm, which emphasizes the bounded rationality and limited cognition of firms’ decision-makers. The authors suggest that social aspiration may be a more important benchmark since stakeholders tend to evaluate a firm’s corporate social performance (CSP) against other comparable firms. Design/methodology/approach - After reviewing various theoretical perspectives that have been applied to CSR studies spanning from 1985 to 2023, the authors summarize their limitations on examining executives’ decisions toward CSR initiatives. By drawing on the behavioral theory of the firm, a conceptual model was developed to explain how firm executives increase subsequent CSR initiatives when their firms’ CSP is below social aspiration. Findings - This study suggests that firms increase their subsequent CSR initiatives when their CSP is below the performance of their peers. Furthermore, the authors propose three important characteristics of chief executive officers, including tenure, hubris and international experience, as boundary conditions that can impact the extent of firms’ subsequent CSR initiatives when CSP is below social aspiration. Originality/value - The paper contributes to the CSR literature by emphasizing the influence of decision-makers’ bounded rationality on firms’ CSR initiatives.