Red, blue, and purple firms: Organizational political ideology and corporate social responsibility

Abstract

Research summary: Why do firms vary so much in their stances toward corporate social responsibility (CSR)? Prior research has emphasized the role of external pressures, as well as CEO preferences, while little attention has been paid to the possibility that CSR may also stem from prevailing beliefs among the body politic of the firm. We introduce the concept of organizational political ideology to explain how political beliefs of organizational members shape corporate advances in CSR. Using a novel measure based on the political contributions by employees of Fortune 500 firms, we find that ideology predicts advances in CSR. This effect appears stronger when CSR is rare in the firm's industry, when firms are high in human capital intensity, and when the CEO has had long organizational tenure. Managerial summary: Why do firms vary in their stances toward corporate social responsibility (CSR)? Prior research suggests that companies engage in CSR when under pressure to do so, or when their CEOs have liberal values. We introduce the concept of organizational political ideology, and argue that CSR may also result from the values of the larger employee population. Introducing a novel measure of organizational political ideology, based on employees' donations to the two major political parties in the United States, we find that liberal‐leaning companies engage in more CSR than conservative‐leaning companies, and even more so when other firms in the industry have weaker CSR records, when the company relies heavily on human resources and when the company's CEO has a long organizational tenure. Copyright © 2016 John Wiley & Sons, Ltd.

Political ideology of the board and CEO dismissal following financial misconduct

“…In addition, this is the first study we are aware of that looks at the impact of the political ideology of the board on the outcome of CEO dismissal, which can prompt significant organizational changes. As such, this study complements and extends an emerging body of literature that examines political ideology in organizations (Chin et al, 2013;Christensen et al, 2015;Gupta, Briscoe, & Hambrick, 2017) by incorporating important, but often overlooked aspects (i.e., ideo-attribution and threat management) of political ideology that help us further understand organization-level behaviors and outcomes.…”

Institutional transitions and the role of financial performance in CSR reporting

“…However, China's institutional characteristics are unique-the government and the ruling party constantly uphold socialist ideology and firmly control the economy. Given the impacts of the mainstream ideology on firms' stances toward CSR (Gupta, Briscoe, & Hambrick, 2017), further studies are needed in other transitional economies to recognize the heterogeneity of the buffer effect in different institutional contexts.…”

Green Process Innovation and Innovation Benefit: The Mediating Effect of Firm Image

“…Green process innovation can prove a firm is acting with social responsibility [52][53][54]. These practices are perceived to be sincere by external stakeholders [55].…”

“…It always involves the features of the firm that the public perceive [24]. Firms' image improvement is one of the outcomes generated by green process innovation [4,54]. It can contribute to differentiation in developing a positive firm image [38].…”