Proceedings of the International Association for Business and Society

This paper assesses Milton Friedman’s (1962, 1970) strongly negative view of corporate social responsibility (CSR) and his influence among managers and academics. The subtitle reflects the theme of the IABS 2007 conference: advising practitioners, illustrated by Machiavelli’s The Prince (1513). The paper develops two general arguments. The first argument is that Professor Friedman was a highly academic theoretician arguing the general merits of basically simple theoretical ideas. The second argument concerns advising practitioners. While Friedman’s advice is theoretical (i.e., abstract) rather than practical (i.e., pragmatic), this very characteristic may have increased his influence. There are important lessons to study concerning academic influence among practitioners. Simple ideas may facilitate dissemination and persuasiveness. It is thus worth studying Friedman’s approach to controversy.

This paper explores an approach for formulating a prescriptive theory of the firm that integrates economic and ethical criteria to guide strategic and operationalconduct of managers. A prescriptive theory posits goal optimization. A “constrained multiple goal optimization” approach models the firm as a broad set of multiple goals and multiple constraints, the latter both internal and external. An exploration begins with no assumptions concerning whether economics and ethics are compatible or antithetical. If the two approaches are mutually reinforcing, a win-win situation obtains. If the two approaches are in win-lose conflict, a key issue is which approach is hierarchically superior or whether the two approaches can be weighted relatively.

This paper is designed to examine a practitioner oriented model for addressing ideas of corporate social responsibility and integrating those ideas into corporate strategy. Industry will be discussed as the appropriate level of analysis to assist managers in understanding their firm’s external environment and their approach to the more specific social environment. The industry-organization model is used to develop boundaries of competition and social responses. The five forces model will be extended to apply to the social environment and will include industry dimensions, stakeholders, social issues, managerial attention and social impacts.

Decreasing philanthropic funding from governments and foundations and increasing social needs are putting pressure on nonprofits to generate financial resources in more entrepreneurial ways. This type of social innovation within the nonprofit sector can be facilitated through collaborative alliances with universities, corporations and other public/private partnerships. This paper presents a case study of a university partnership between Institute of Social Innovation at Carnegie Mellon University and the Pittsburgh Social Innovation Accelerator.

Using a case study approach, this paper documents and analyzes the development of an innovative business owned and operated by an indigenous community in the Ecuadorian Amazon. The enterprise represents a unique response to issues of environmental sustainability and economic development in a region threatened by oil production. Two research questions are examined: 1) what confluence of factors led a traditional and collectivist community to develop a successful business; and 2) what positive outcomes resulted in terms of environmental and economic sustainability.

In this article we explore the state of current ESCM practices in U.K. companies. We develop a conceptual framework that draws upon the stakeholder,resource-based, and power-dependence perspectives and examine this framework in light of empirical evidence concerning ESCM in 166 UK companies. Using a combination of qualitative and quantitative methods, our evidence suggests that around 50% of sample companies engage in some form of ESCM activity and that experiencing significant external pressure from customers is an important driver of ESCM.

This research concerns accountability by the U.S. electric utility industry for the financial impacts of cap-and-trade emissions allowance activity. We report findings from an extensive examination of disclosure practices for more than 100 facilities that were required to curb pollutant discharges and participate in a government-mandated program of emission allowance distribution and trading.

This study analyzes the adoption and performance implications of two certified management standards in Mexico. Basing our predictions on strategic balance theory we find that those firms seeking for higher levels of differentiation or legitimacy show inferior environmental performance that firms demonstrating higher strategic balance.

The study provides insights on why large Finnish municipalities are engaging in sustainability reporting. The dataset consists of the sustainability disclosures of five large Finnish cities and of a set of interviews conducted with the personnel responsible for composing the sustainability reports in these cities. Preliminary findings suggest that this rising practice is again an example of a fad, arising as the public sector organizations mimic the corporate sector without anyone really pondering whether the municipalities and the public sector as a whole truly need a similar practice the corporations have. We maintain that there are better ways to use a municipality’s scarce resources than imitating the corporate sustainability reporting practices through producing a sustainability report, the main task of which seems to be to exist.

This paper highlights alternative responsible business models with an outspoken and profound dedication to contribute to a sustainable development. Themarket of alternatives and their networking activities to make the alternative market grow will be discussed in terms of programs and anti-programs. Another issue brought up is their ability to stick to the responsible knitting, as they grow and develops in a capitalistic market surrounding.

This paper examines the rise of socially responsible investment (SRI) as a sustainable finance mechanism and discusses the potential of SRI to contribute toward a more socially responsible and environmentally sound model of commerce in the Asia-Pacific region. Using a case study approach, I argue in this paper that the potential of SRI to accelerate the private sector toward greater sustainability has been to date largely explored within the North American and European regional contexts and that the future global development of SRI is likely to depend on whether and to what degree SRI becomes a viable financial instrument in industrialized (Japan) and emerging (Hong Kong/China) economies of the Asia-Pacific region.

Dialectical contradictions influence organizational processes in distinct ways and create a unique dynamics in terms of leadership process in entrepreneurialorganizations. We integrate research from charismatic, transformational, and organizational literature, as well as entrepreneurship literature, to create a generalized model of entrepreneurial leadership that is descriptively robust and conceptually distinct from existing concepts. We focus specifically on visionary, transformational, and motivational contradictions of entrepreneurial leadership and conclude by discussing the implications of organizational reconciliation of these three contradictions for leadership research and practice.

Private politics (Baron 2003), i.e. attempts by various groups in society to influence corporate behavior without recourse to the state regulation or the law, has been an increasingly significant theme over the past few decades, and is likely to remain prominent in the years ahead. Yet, the occasional success of such attempts remains difficult to understand, because from the firm’s perspective, such groups lack a well-developed basis for negotiation and bargaining. Following this line of reasoning, we discuss how such groups try to influence firms, and whether how they do so today is any different from earlier periods in time.

In this article we explore the influences upon the proportion of women on a country’s corporate boards. Using a conceptual framework that builds uponnational business systems theory, we investigate the extent to which national economic, cultural, political and social institutions explain cross-country variationin the gender composition of corporate elites. In the context of a sample drawn from over 40 countries, our empirical analysis shows that such institutionscollectively explain approximately two-thirds of the variance between countries in the percentage of women on their corporate boards. Specifically, our findingsshow that economic and cultural factors play a particularly important role in shaping the gender balance of boards in comparison to political and social factors.

This paper examines the motivation theory of Rowley and Moldoveanu (2003) on shareholder activism in the context of shareholder resolution networks. Shareholder resolution filings occur both within subnetworks as well as across subnetworks, indicating these motivations are mixed. I extend the motivational issue by also examining the response of the corporation to such activism. That resolutions might migrate from identity to interest motivated groups is examined as an element of future research.

Social standards have become important tools in corporate governance. They are often presented as voluntary initiatives in CSR and are generally based on the principle of multi-stakeholder collaboration as a means to gain legitimacy. Yet, based on a case study of a company in the textile industry, the paper shows that not all CSR standards are equally valued and that the adoption of particular CSR standards can be the result of external constraints on managerial discretion, e.g. emerging from business partners and activist groups.

We develop a theory of compliance with corporate governance codes by combining insights from agency, network and reputation theories. Subsequently, we test this theory using a unique dataset with fine-grained compliance information for the book year 2004 as to 130 Dutch stock-listed corporations. We find partial support for our theory.

Micro Credit programs lend money to poor borrowers using innovative mechanisms such as group lending under joint liability while successfully accounting forthe presence of asymmetric information in underdeveloped financial markets. MC Programs have achieved what the conventional financial institutions and the government have not been able to: lend to the poor, recuperate loans and have a positive impact in poverty reduction. While loan recuperation is high (95% for our focus group ALSOL Chiapas), administrative costs also remain high. Social Responsible Savers and Donors play a key role in providing continuous funding to Micro Credit Programs.

For-profit degree granting institutions are a growing and under-researched market segment that represents an extreme level of business involvement in academe. Permitting such institutions to grant degrees is a concern because the profit motive gives an incentive to operators to misrepresent the quality and benefits of such degrees. This paper addresses the issue of how adequately government quality assurance processes are able to protect the public interest. The degree program approval processes in three countries are evaluated using the UNESCO guidelines for cross-border quality provision in higher education as an internationally accepted standard of quality assurance.

War is being privatized at an accelerating rate. This paper suggests that the benefits from privatizing war accrue to the political and economic elite in thatprivatization reduces the political costs of war, allows for state crimes to be committed by proxy, turns war into a free crime zone, and has created new opportunities for war profiteering. However, the benefits to the political and economic elite are not without their costs to the remainder of the population. The capital accumulation process impels companies to expand their markets in order to survive and grow, focus on efficiency in order to maximize profits, and concentrate on fulfilling the contract terms in order to acquire more business. The paper demonstrates how the introduction of these motives has negatively impacted the war in Iraq and foreign affairs.