Can socially responsible leaders drive Chinese firm performance?

Abstract

Purpose – The relationship between socially responsible leaders, the key driver of corporate social responsibility (CSR) practices, and organizational financial performance is a salient issue in the global context for both CSR scholars and practitioners. The purpose of this paper is to provide much-needed insights into the interplay of responsible leadership, CSR practices, and organizational outcomes. Design/methodology/approach – It analyses 85 CEOs’ behaviors and their companies’ performance in a two-year database. It thereby enriches understanding of how leaders’ socially responsible decisions impact upon CSR engagement and firm performance. Findings – The results suggest that socially responsible leaders were positively related with organizational performance of return on equity (ROE). The aspects of integrity, morality, and stakeholder relationship aspects of responsible leadership are closely related to CSR. However, CSR practices were negatively related to ROA and ROE. It implies that in China CSR activities could not boost organizational performance in the short term, at least in two years. Research limitations/implications – Our research has clear limitations. First, most selected firms are renowned large corporations, state-owned, or private enterprises. Foreign-owned enterprises are excluded. Second, the evaluation of CSP is based on the content analysis of firms’ annual CSR reports. Our research has clear limitations. First, most selected firms are renowned large corporations, state-owned, or private enterprises. Foreign-owned enterprises are excluded. Second, the evaluation of CSP is based on the content analysis of firms’ annual CSR reports. Practical implications – Our research has practical implications for the business world. First, CSR practices in China shall be conducted in a strategic way. Second, responsible leadership is of significance for the Chinese MNCs that are overseas to build trustful stakeholder relations with local stakeholders. Originality/value – Based on the data analysis, this study provides in-depth discussion of CSR situation in China and its relationship with firm performance, which is one of the first studies to examine responsible leadership in Chinese context and investigate the relationship between responsible leadership and organizational performance.

Corporate Social Responsibility and Business Performance in Takaful Agencies: The Moderating Role of Objective Environment

“…This argument is consistent with the view of other scholars who described mixed evidence in the relationship, but most studies were found to show positive relationship [62]. While some studies found CSR as an increaser of business performance [26,41,42], other scholars documented negative [63] or no relationship [54] between the CSR practices of an organization and its performance. Even though scholars found mixed results of correlation between social responsibility and financial performance, society still desires a firm to implement good social responsibility and environmental management practices [64].…”

“…Several scholars found that CSR activities have a significant effect on business performance [41,42]. Business performance covers the external performance of an organization based on economic valuation as well as internal performance outcomes that are associated with operational efficiency and effectiveness [43].…”

Being sustainable: The three‐way interactive effects of CSR, green human resource management, and responsible leadership on employee green behavior and task performance

“…Responsible leaders have the supervisory power to encourage and support employees to engage in pro-environmental activities, including recycling and reducing pollution (Afsar et al, 2016;Robertson & Barling, 2013). In addition, responsible leaders value organizational sustainability, indicating they are not only concerned about financial performance but also consider the sustainability of the environment and help to deliver on these values (Doh & Quigley, 2014;Miska et al, 2014;S. Wang et al, 2015).…”

A link between top managers’ perception and corporate social responsibility

“…Angus-Leppan, Metcalf, and Benn (2010) suggest that transformation leadership is needed to formulate and implement CSR policies successfully. Transformational leaders tend to use idealized and inspirational motivation to arouse followers to accept and perform on leader's vision and collective objectives (B. M. Bass, 1985;Grojean, Resick, Dickson, & Smith, 2004;Wang, Huang, Gao, Ansett, & Xu, 2015) Second, transformational leaders are intellectually stimulating and encouraging followers to challenge the status quo so that they can approach complex situation in more innovative ways (B. M. Bass, 1997;Jones Christensen, Mackey, & Whetten, 2014). Transformational leaders scan the environmental tasks and understand how stakeholders' needs be synchronized.…”