Corporate social performance (CSP) consists of actions in different domains that vary in the information they provide stakeholders, and hence, in their effect on firm performance. To demonstrate this, the authors examine the impact of CSP on firm performance in two areas—the product and the environment, referred to as product social performance (PSP) and environmental social performance (ESP), respectively. PSP has a stronger positive impact on firm performance compared to ESP. The findings using disaggregated measures of PSP and ESP indicate negativity bias in that PSP weakness has a stronger negative impact on firm performance compared to PSP strength. Copyright © 2013 John Wiley & Sons, Ltd.

Although the goal of a product recall program is to enhance safety, little is known about whether firms learn from product recalls. This study tests the direct effect of product recalls on future accidents and future recall frequency and their indirect effect through future product reliability in the automobile industry. The authors test the hypotheses on 459 make/year observations involving 27 automobile makers between 1995 and 2011. The findings suggest that increases in recall magnitude lead to decreases in future number of injuries and recalls. This effect, in turn, is partially mediated by future changes in product reliability. The results also suggest that the positive relationship between recall magnitude and future product reliability is (1) stronger for firms with higher shared product assets and (2) weaker for brands of higher prior quality. The findings are robust across alternate measures and alternate model specifications and offer valuable insights for managerial practice and public policy.

Defective products are often recalled to limit harm to consumers and damage to the firm. However, little is known about why the timing of product recalls varies after an investigation is opened. Likewise, there is little evidence on whether recall timing affects stock markets. This study tests the effect of problem severity on time to recall, the role of brand characteristics in moderating this relationship, and the stock market impact of time to recall. The authors test the hypotheses on a sample of 381 recall investigations in the automobile industry between 1999 and 2012. The results show that although problem severity increases time to recall, this relationship is weaker when the brand under investigation (1) has a strong reputation for reliability and (2) has experienced severe recalls in the recent past. However, the relationship between problem severity and time to recall is stronger when the brand is diverse. Importantly, the results reveal that stock markets punish recall delays. The study suggests that time to recall has significant implications for managers and policy makers.

Companies are more frequently taking public stands on often controversial social, political, economic, and environmental issues. Despite the importance of the topic, research on understanding the role of companies in societal change through activism is scarce. Using institutional theory, this article defines corporate activism as a company’s willingness to take a stand on social, political, economic, and environmental issues to create societal change by influencing the attitudes and behaviors of actors in its institutional environment. This framework conceptualizes corporate activism as a response to barriers that hinder the solution of an issue. These barriers stem from institutional actors’ attitudes and behaviors toward the issue, and corporate activism can address these barriers through influence and change strategies that can target the institutional environment “top-down” or “bottom-up.” This framework further investigates how the identity orientation of the company facilitates corporate activism. This research has important implications for managers, policy makers, and any other agents that aim to facilitate social change.

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