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Business Strategy and Corporate Social Responsibility

Author

Listed:
  • Yuan Yuan

    (South China University of Technology)

  • Louise Yi Lu

    (Australian National University)

  • Gaoliang Tian

    (Xi’an Jiaotong University)

  • Yangxin Yu

    (City University of Hong Kong)

Abstract

This study examines the relation between a firm’s business strategy and its corporate social responsibility (CSR) performance. Using a comprehensive measure of business strategy based on the Miles and Snow (Organizational strategy, structure, and process, McGraw-Hill, New York, 1978, Organizational strategy, structure, and process, Stanford University Press, Stanford 2003) theoretical framework, we find that firms following an innovation-oriented strategy (prospectors) are associated with better CSR performance than those following an efficiency-oriented strategy (defenders). Specifically, compared with defenders, prospectors engage in more socially responsible activities, fewer socially irresponsible activities, and perform better in both stakeholder- and third-party-related CSR areas. Taken together, our results suggest that business strategy is an important determinant of CSR performance. Prospectors take advantage of CSR, as their innovation-oriented strategy allows them not only to benefit more from CSR, but also to have more tolerance for the uncertainty, risk, and long time-horizon associated with CSR engagement.

Suggested Citation

  • Yuan Yuan & Louise Yi Lu & Gaoliang Tian & Yangxin Yu, 2020. "Business Strategy and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 162(2), pages 359-377, March.
    • Handle: RePEc:kap:jbuset:v:162:y:2020:i:2:d:10.1007_s10551-018-3952-9
    DOI: 10.1007/s10551-018-3952-9
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