Organizations: External Relations

18 Results

 

Punctuated Generosity: How Mega-events and Natural Disasters Affect Corporate Philanthropy in US Communities

András Tilcsik and Christopher Marquis

Even in a global age, local communities offer a critical context for organizational behavior. This paper asks: Since corporate giving is often locally focused, what happens to local firms' philanthropy when a major event disrupts the life of the community? Mega-events might be actively solicited (such as the Olympics, the Super Bowl, political conventions), or natural (floods and hurricanes). In particular, the authors studied how major events within communities affected the philanthropic contributions of locally headquartered corporations in the US between 1980 and 2006. There are three main findings: 1) Actively solicited mega-events had a positive effect in the event year, but also displayed more complex time-dependent dynamics. In some cases, the effects on corporate philanthropy were visible two years before the event and lasted up to six years, before eventually tapering off. 2) The impact of destructive, unexpected events depended on their magnitude. While major natural disasters depressed philanthropic spending by local corporations, smaller-scale disasters stimulated it. 3) Organizational and community factors moderated some of the effects of events. Overall, findings demonstrate the theoretical importance of looking at geography and events in tandem. Mega-events shape institutional processes in significant ways. This paper is forthcoming in Administrative Science Quarterly. Read More

Dividends as Reference Points: A Behavioral Signaling Approach

Malcolm Baker and Jeffrey Wurgler

While managers appear to view dividends as a signal to investors, managers also argue that standard dividend signaling models are not focused on the correct mechanisms. These standard models posit that executives use dividends to destroy some firm value and thereby signal that plenty remains: The "money burning" typically takes the form of tax-inefficient distributions, foregone profitable investment, or costly external finance. Executives who actually set dividend policy overwhelmingly reject these ideas yet, at the same time, are equally adamant that dividends are a signal to shareholders and that cutting them has negative consequences. In this paper, the authors develop what they believe to be a more realistic signaling approach. Using core features of prospect theory as conceptualized by Daniel Kahneman and Amos Tversky (the fathers of behavioral economics), they create a model in which past dividends are reference points against which future dividends are judged. The theory is consistent with several important aspects of the data. Baker and Wurgler also find support for its broader intuition that dividends are paid in ways that make them memorable and thus serve as stronger reference points and signals. Read More

Why Good Deeds Invite Bad Publicity

Many executives assume that investments in corporate social responsibility create public goodwill. But do they? Felix Oberholzer-Gee and colleagues find surprising results when it comes to oil spills. Open for comment; 21 Comments posted.

No News Is Good News: CSR Strategy and Newspaper Coverage of Negative Firm Events

Jiao Luo, Stephan Meier, and Felix Oberholzer-Gee

This study examines the gatekeeping role of the media in determining which negative corporate events reach a broader audience. Jiao Luo, Stephan Meier, and Felix Oberholzer-Gee test the idea that investments in corporate social responsibility (CSR) create public good will, leading the media to treat companies with a superior CSR track record in a favorable manner. They find the opposite. Newspapers are more likely to report negative news about companies if the companies invested heavily in CSR. For example, oil companies that invest in clean energy face a greater risk of media coverage in the event of an oil spill. An analysis of the tone of media coverage shows that news reports are no more positive for CSR leaders than for the average company. Read More

What Makes a Critic Tick? Connected Authors and the Determinants of Book Reviews

Loretti I. Dobrescu, Michael Luca, and Alberto Motta

The professional critic has long been heralded as the gold standard for evaluating products and services such as books, movies, and restaurants. Analyzing hundreds of book reviews from 40 different newspapers and magazines, Professor Michael Luca and coauthors Loretti Dobrescu and Alberto Motta investigate the determinants of professional reviews and then compare these to consumer reviews from Amazon.com. Read More

The Dynamics of Firm Lobbying

William R. Kerr, William Lincoln, and and Prachi Mishra

Lobbying is a primary avenue through which firms attempt to change policy in the United States, with total expenditures outnumbering campaign contributions by a factor of nine. While lobbying by businesses is a frequently debated issue, there has been little systematic empirical evidence on these behaviors at the firm level. This paper is one of the first to begin to fill this gap. To do so, the researchers constructed an empirical model of lobbying behavior of publicly traded, US-headquartered firms between 1998 and 2006. They also looked in depth at a specific policy shift that has been the subject of significant public debate: the dramatic decline in the limit on H-1B visas that occurred in 2004. Findings show that the decline in the limit on H-1Bs did not induce new firms to lobby that were not previously lobbying on other issues. The decline did, however, significantly shift lobbying resources towards high-skilled immigration issues amongst firms that had lobbied previously for other issues. Moreover, the manner in which this shift occurs among firms already lobbying indicates little constraint on adjustments across issues important for firms. Read More

The Globalization of Corporate Environmental Disclosure: Accountability or Greenwashing?

Christopher Marquis and Michael W. Toffel

Between 2005 and 2008, the world saw a dramatic increase in corporate environmental reporting. Yet this transition toward greater transparency and accountability has occurred unevenly across countries and industries. Findings by professors Christopher Marquis and Michael W. Toffel provide the first systematic evidence of how the global environmental movement affects corporations' environmental management practices. Firms' use of symbolic compliance strategies, for instance, is affected by specific corporate characteristics and by institutional context. This study contributes to a larger body of research on the effects of global social movements and environmental reporting. Read More

One Report: Better Strategy through Integrated Reporting

Robert G. Eccles and Michael P. Krzus

Stakeholders expect it. And smart companies are doing it: integrating their reporting of financial and nonfinancial performance in order to improve sustainable strategy. HBS senior lecturer Robert G. Eccles and coauthor Michael P. Krzus explain the benefits and value of the One Report method. Plus: book excerpt from One Report: Integrated Reporting for a Sustainable Strategy. Read More

Improving Accountability at the World Bank

Its legitimacy and effectiveness on the line, the World Bank faces criticism from its constituents and the civil society organizations that serve them. What options and arguments for accountability make the most sense for global governance institutions like the World Bank? HBS professor Alnoor Ebrahim testified before the U.S. House of Representatives on paths to change. Read More

Responding to Public and Private Politics: Corporate Disclosure of Climate Change Strategies

Erin M. Reid and Michael W. Toffel

Social activists are increasingly attempting to directly influence corporation behavior, using tactics such as shareholder resolutions and product boycotts to encourage companies to improve their environmental performance, increase their transparency about operations and governance, and more stringently monitor their suppliers' labor practices. This paper examines how companies are responding to these pressures, in the context of requests for greater transparency about the risks climate change poses to their business—and the strategies these companies have developed to address these risks. This paper reveals that a company is more likely to comply with social activists' requests for greater transparency about climate change when the company itself, or other companies in its industry, has been targeted by formal shareholder resolutions on environmental topics—and when the company is facing potential regulations restricting greenhouse gas emissions. These findings demonstrate that changes in corporate practices may be sparked by both social activists and by the mere threat of government regulations, and that challenges mounted against a specific firm may inspire broader changes within its industry. Read More

Unconventional Insights for Managing Stakeholder Trust

Michael Pirson and Deepak Malhotra

Most organizations understand the need to manage stakeholder trust. The bad news: Most organizations don't really understand how to manage the difficult job effectively. However, for those companies wishing to reap the benefits of improved cooperation with suppliers, increased motivation and productivity among employees, enhanced loyalty among customers, and higher levels of support from investors, managing stakeholder trust is a prudent, if not critical investment. Trust management may require an appreciation for some unconventional insights regarding the appropriate investment of resources. Stakeholders differ in regard to the kinds and degrees of vulnerability they face; what they need to believe before they will trust also differs. Would-be trust managers will be wise to consider these varying needs and to anticipate the tradeoffs that exist in strengthening relationships with specific stakeholders. Read More

Mattel: Getting a Toy Recall Right

Mattel has been criticized heavily for having to recall not once but twice in as many weeks 20 million toys manufactured in China. But Mattel also deserves praise for stepping up to its responsibilities as the leading brand in the toy industry. Harvard Business School professor John Quelch examines what Mattel did right. Read More

HBS Cases: Using Investor Relations Proactively

Gregory S. Miller, Vincent Dessain, and Daniela Beyersdorfer

Investor relations has a delicate balancing act. It communicates with stakeholders, of course, but can also help employees take a step back and analyze their firm as outsiders do. Harvard Business School's Gregory S. Miller, Vincent Dessain, and Daniela Beyersdorfer explain where IR is going, with energy giants BP and Total leading the way. Read More

Using the Law to Strategic Advantage

Used proactively, corporate legal departments can give you a strategic advantage, argues HBS professor Constance Bagley. It's time for a new relationship between managers and legal. Read More

The Potential Downside of Win-Win

You and your negotiating partner may reach a wonderful agreement for both parties, but have you forgotten people who aren't at the bargaining table, such as your consumers? HBS Professor Max H. Bazerman reflects in this article from Negotiation. Read More

Bypass Marketing: Are Docs Influenced?

Alvin J. Silk

Although they are prescription drugs, Viagra, Prozac, Allegra and many others are pitched directly to consumers. Do physicians take notice? HBS professor Alvin Silk and Harvard's Joel Weissman discuss a recent study. Read More

Shareholders Key to Corporate Reform

Want fundamental corporate reform? Start with shareholders, say Harvard Business School professor Cynthia Montgomery and research associate Rhonda Kaufman. Excerpted from Harvard Business Review. Read More

Partnering and the Balanced Scorecard

Created in 1992, the Balanced Scorecard has become an effective tool for managing strategy. Now authors Robert S. Kaplan and David P. Norton propose using it to communicate values and vision to employees and partners. The payoff? Better strategic relationships with partners. Read More