Stakeholder Engagement for Corporate Sustainability: A Comparative Analysis of B2C and B2B Companies

Corporate social responsibility (CSR) is receiving a supreme interest, and several experts have revealed the outcomes of CSR disclosure (CSRD) toward organizational performance across the globe. Nevertheless, less attention has been paid to empirical contribution with respect to marketing and sales management, especially from developing nations. This study investigates the impact of CSRD practices, that is, internal (ICSRD) and external (ECSRD) to organizational sales performance (OSP). Data were collected from 450 managers within Small and Medium Size Enterprises (SMEs) of Pakistan and analyzed using structural equation modeling. The findings revealed the positive relationships between OSP and disclosure of CSR activities both ICSRD and ECSRD, that is, responsibility to the environment (ER), community (CR), customers (CCR), suppliers (SR), employees (EER), and responsibility to government rules & regulations (GR). The comprehensive analysis unveiled the higher significant effect of ECSRD than ICSRD.The study provides multidimensional insights for strategic management to support CSR notion and to engage stakeholders pursuing such practices to augment OSP dynamically.This study furnishes research possibilities for practitioners and academicians.

Section: Findings and Discussionmentioning

confidence: 99%

Section: Findings and Discussionmentioning

confidence: 99%

Effect of corporate social responsibility disclosure on firms' sales performance: A perspective of stakeholder engagement and theory

Waheed

Yang

2018

“…In this context, stakeholder theory suggests that companies have to manage the complex network of relations with their different stakeholder groups and interact and engage with stakeholders (Manetti, 2011;Svendsen, 1998;Waddock, 2002). However, the exposure to and the perception of the amount of pressure from stakeholder groups may affect managers' responsiveness to stakeholders' requests (Herremans, Nazari, & Mahmoudian, 2016;Johnson, Redlbacher, & Schaltegger, 2018). A company's management will use its managerial capture to balance its stakeholders' positions and then decide to what extent it will meet their expectations and requirements.…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

“…A company's management will use its managerial capture to balance its stakeholders' positions and then decide to what extent it will meet their expectations and requirements. However, the exposure to and the perception of the amount of pressure from stakeholder groups may affect managers' responsiveness to stakeholders' requests (Herremans, Nazari, & Mahmoudian, 2016;Johnson, Redlbacher, & Schaltegger, 2018). In particular, when powerful stakeholders actively try to interfere with the actions of a company, their pressures can affect CSP, and their engagement may influence the choices of a company's management whether or not to report on specific issues and whether or not to comply with reporting standards (Fordham & Robinson, 2018).…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

Corporate governance and sustainable business conduct—Effects of board monitoring effectiveness and stakeholder engagement on corporate sustainability performance and disclosure choices

Manning

Braam

Reimsbach

2018

This study posits that, in the absence of extensive mandatory regulation and auditing, differences in internal and external corporate governance (CG) mechanisms will explain variations in choices concerning corporate sustainability reporting and the interrelated and underlying corporate sustainability performance (CSP). Specifically, we explore whether board monitoring effectiveness as a major internal CG mechanism and stakeholder engagement as a key external CG mechanism are positively associated with sustainability reporting quality (SRQ), compliance with generally accepted sustainability reporting standards (SRC) and guidelines, and CSP for a sample of Dutch firms that have voluntarily disclosed sustainability reports during the years 2012-2016. In addition to these direct effects, we also investigate the potential indirect effects of the CG mechanisms on SRQ and SRC via CSP and distinguish between nonlagged and lag effects. Using structural equation modeling, our results show that, in the short term, monitoring effectiveness positively affects SRQ and SRC. Stakeholder engagement positively affects SRQ and SRC in the short term and is positively related to SRQ via CSP in the longer term, indicating that active stakeholders, over time, may drive companies toward more sustainable business conduct. Finally, the findings that CSP is positively related to SRQ but negatively related to SRC provide further support for signaling and legitimacy theory, respectively. Companies with superior CSP disclose high-quality information on CSP to signal the firm's superior sustainability performance, whereas poor performing companies legitimize their inferior CSP by complying with more reporting standards, rather than by directly improving their underlying CSP.

“…Second, prior related research offers opposing predictions concerning the effect of CSP on a firm's top‐line performance. Third, even though it is well documented that customers in business markets differ greatly from those in consumer markets in ways that relate to CSP (Lilien, ; Lilien & Grewal, ), prior studies have typically omitted to account for PMP from their theoretical and empirical models (for notable exceptions, see Flammer, ; Johnson, Redlbacher, & Schaltegger, ; Servaes & Tamayo, ). Fourth, answering these questions advances the understanding of the responses to CSP and actual preferences of customers—an important stakeholder group.…”

Section: Introductionmentioning

confidence: 99%

The effect of corporate social performance on the financial performance of business‐to‐business and business‐to‐consumer firms

Luffarelli

Markou

Stamatogiannakis

et al. 2019

There exists a widespread managerial belief that higher corporate social performance (CSP) increases both firm value and sales. Although numerous studies provide evidence of a positive effect of CSP on firm value, whether CSP can impact sales remains largely unknown. Can CSP influence sales? Is this effect contingent on the product-market profile, that is, on whether firms operate in business or consumer markets? We use a panel dataset comprising 23,769 firm-year observations to help address these questions. We find that higher CSP has a strong negative effect on sales for business-to-consumer firms but an insignificant or economically trivial effect for business-to-business firms. However, we also find that higher CSP has a positive effect on firm value for both types of firms. Taken together, these results demonstrate that higher CSP results in higher firm value but can hurt sales. We discuss the theoretical contributions and managerial implications of these findings.