This paper examines cultural and leadership variables associated with corporate social responsibility values that managers apply to their decision-making. In this longitudinal study, we analyze data from 561 firms located in 15 countries on five continents to illustrate how the cultural dimensions of institutional collectivism and power distance predict social responsibility values on the part of top management team members. CEO visionary leadership and integrity were also uniquely predictive of such values.
The purpose of the current study was to examine the indirect effects of executives' stakeholder and economic values on firm performance through their followers' perceptions of leadership and followers' extra effort. Analyses of data collected from separate surveys of chief executive officers (CEOs) and two subsets of followers in 520 firms in 17 countries show that CEOs' emphasis on economic values is associated with followers' perceptions of autocratic leadership, whereas CEOs' emphasis on stakeholder values is associated with followers' perceptions of visionary leadership. Additionally, visionary leadership relates positively to employees' extra effort, which in turn relates to firm performance; however, no relationship is found for autocratic leadership. We discuss how predominant decision-making values that are oriented toward a range of stakeholders may yield more favorable outcomes for leaders than values that focus primarily on economic-based issues.
Firm performance is one of the most prominent concepts in organizational research. Despite its importance, and despite the many developmental critiques that have appeared over the years, performance continues to be a difficult concept to apply in a scientifically rigorous way. After surfacing three potentially viable approaches for conceptualizing performance, we find that most studies are internally inconsistent in their use of these approaches, a situation that creates substantial difficulty in effectively interpreting research. The primary source of inconsistency lies in the use of a generalized abstract conceptualization of performance in theory building (the latent multidimensional approach) coupled with the adoption of one or two narrow aspects of performance in the empirical work (the separate constructs approach). Follow-up analyses designed to determine the best path for resolving these mismatches indicate that our field’s heavy use of abstract performance in theorizing is not scientifically grounded and should be replaced with more specific aspects of performance to match existing practices in empirical work. Although this change would profoundly affect the field and would be resisted by many, it offers a concrete path away from indefensible practices. We offer several explanations for current practices but emphasize forces related to institutional theory. From an institutional perspective, it appears that firm performance is treated in a general fashion in many areas of our academic lives because it has been embraced as an instrument of legitimacy rather than as a scientific tool that facilitates dialogue and the accumulation of knowledge. We recommend and begin a conversation designed to highlight the long-run dangers of focusing our attention on an abstract concept of performance and suggest a set of specific steps that could help to move all of us in a new direction as we attempt to enhance the scientific rigor of our field.
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