What Dimension of CSR Matters to Organizational Resilience? Evidence from China

Abstract

Prior work on corporate social responsibility (CSR) has focused mainly on its effects on the short-term performance of firms from developed countries. In this article, we shed light on its effects on organizational resilience, which is defined as the firm's ability to positively cope with environmental turbulence, and operationalized by long-term, improved sales growth and financial volatility. In line with this operationalization, we adopt CSR's performance-enhancing and performance-insuring mechanisms to disentangle the relationship between CSR and organizational resilience. Furthermore, we divide CSR into five dimensions, namely shareholder, employee, business, society and environment-related CSR, and respectively examine their impacts on organizational resilience. The empirical study on a large sample of public firms in China from 2010 to 2017 shows that CSR as a whole significantly increases the firms' long-term growth and reduces their financial volatility. As for the five specific dimensions, they all have a significant negative effect on financial volatility, and the employee, business, environment-related CSR are positively associated with long-term growth. Yet, the empirical results did not indicate significant associations between shareholder and society-related CSR and firms' long-term growth. This study first explores the impacts of CSR's different dimensions on organizational resilience. Also, we contribute to enriching the literature on CSR by examining the long-term performance-insuring effect of CSR with a quantitative analysis of emerging markets. Finally, we discuss some important managerial implications, as well as promising directions for future research.2 of 23 conditions, unestablished industrial structures, and the intense, chaotic competition brought by rapid development, Chinese enterprises are likely to face more changes and uncertainties in their business environment, which makes them more vulnerable than those from developed countries. Second, as the concern about CSR in China comes far later than that in developed countries, the effect of Chinese CSR on organizational resilience may be different. The Kinder, Lydenberg, and Domini (KLD) database, for example, began to internationally provide ratings of corporate social performance in 1991. While, the first official research report on Chinese CSR was released in 2009, and then Chinese listed companies were required to issue their annual CSR reports. In line with this, we aim at providing some new insights of CSR and its effects on organizational resilience with evidence from emerging markets.In doing so, we first clarify the conceptualization and operationalization of organizational resilience. Defined as the ability of an organization to respond positively to environmental changes, organizational resilience is a latent, unobservable construct usually measured by its outcomes [6]. The most desired outcome of organizational resilience recognized in extant literature is a firm's persistent superior performance in the changing business en...

Corporate Social Responsibility And Brand Equity Of Malaysian Top 100 Brand Companies

“…Importantly, the "good act" of maintaining nature by a company would in turn support the company by minimising the expense of the company and creating a good interpretation of the company in the minds of its consumers (Jones et al, 2005;Kippenberger, 1996). The results correspond to previous works by Oberseder et al (2013), Abdolvand and Charsetad (2013), Khojastehpour and Johns (2014), Wang et al (2015), Farooq et al (2015), Mensah et al (2017), Lv et al (2019). However, in studies by Feng et al (2016), Yang et al (2020) and Yang and Basile (2019), who found a negative relationship between environmental CSR and BE among the Top 100 Global Brands and 78 other businesses, a contrary outcome can be found.…”

“…Many past studies have proven that, in general terms, CSR affects BE (Benoit-Moreau & Parguel, 2007;, Wang, 2010Tuan, 2012, Wang et al, 2015Singh & Islam, 2017;Lv et al, 2019) and specific CSR activities on BE (Fatma et al, 2015;Lv et al, 2019). Empirical studies have also revealed that a company employing CSR practices is able to strengthen its brand (Iqbal et al, 2013).…”

The COVID-19 pandemic and organisational commitment of senior hotel managers

“…The dimension CSR-consumers was excluded because the original study covered items measuring customer orientation not directly connected to the social responsibility aspects of hotel operations. Further, Lv et al (2019) have shown that the environment and employee dimensions of CSR exert the largest effect on organisational resilience, thus providing another rationale for their adoption in this study. Following Lee et al’s (2013) conceptualisation and measurement protocol, organisational resilience was conceived as a multidimensional construct composed by two dimensions named adaptive capacity and planning for resilience.…”

“…Given that staff is a cornerstone of human capital of any organisation ( Brown et al, 2019 ), which exerts direct influence on its resilience, as discussed earlier, hotels should more pro-actively engage in CSR in light of future disastrous events, such as climate change, for example. As Lv et al (2019) argue, this will not only improve disaster resilience of any business, but can also refine its long-term financial performance.…”

“…This need becomes especially prominent in the time of crises and disasters which exposes vulnerability of these categories of stakeholders ( Henderson, 2007 ) and highlights the importance of hotels as ‘duty of care’ providers ( Dobie et al, 2018 ). Hence, it is argued that the levels of CSR adopted by hotels prior to COVID-19 may have affected organisational resilience of hotels which is supported empirically by Lv et al (2019) albeit not specifically in the hospitality context. This, in turn, may have impacted the range of (current and future) measures that hotels put in place in order to combat the negative implications of the pandemic for their business, as discussed above and reinforced by He and Harris (2020) .…”