Determinants of corporate social
performance: the influence of
organizational culture, management
tenure and financial performance
Tiago Melo
Abstract
Purpose – The purpose of the paper is to examine the influence of organizational culture, top
management tenure and financial performance on corporate social performance (CSP).
Design/methodology/approach – The sample comprises 295 Fortune 500 American companies from
2000 to 2005. Financial information from Thompson World Scope is contrasted with social responsibility
data from KLD database and the estimation technique applied is panel data.
Findings – Results indicate that a humanistic culture has a positive impact of CSP, as well as
management tenure and slack resources in a lesser degree.
Research limitations/implications – The paper successfully constructs and employs a variable
depicting the humanistic culture of a firm. More research is needed to define which factors determine
this culture dimension, so it can be scientifically agreed on as opposed to being used exploratorily.
Practical implications – The results point out that firms that incorporate a humanistic approach to
culture perform well in CSP because their internal cultural values and beliefs drive them to establish a
good relationship with stakeholders.
Originality/value – As opposed to the majority of the studies that focus on the CSP leading to financial
performance relation, this article alternatively analyzes factors that determine CSP.
Keywords Organizational culture, Humanistic culture, Management tenure,
Corporate social performance, Slack resources hypothesis, Financial performance
Paper type Research paper
Introduction
Academic attention and managerial practice have made corporate social performance
(CSP) into an important performance metrics in business management and research. This is
reflected by the linkages that have been established between CSP and a vast number of
management theories: agency theory (Frankforter et al., 2000; Jones et al., 2007; Prior et al.,
2008; Wieland, 2005), behavioral theory (Bowen, 2007; Detert et al., 2000; Jones et al., 2007;
Rodriguez et al., 2008), good management theory (Backhaus et al., 2002; Brammer and
Pavelin, 2006), neoclassical economic theory (Buchholtz et al., 1999; Friedman, 1970;
Windsor, 2006; Wood and Jones, 1995), slack resources theory (Demacarty, 2009; Orlitzky
et al., 2003; Preston and O’Bannon, 1997; Strike et al., 2006), social cognition theory (Agle
et al., 1999; Buchholtz et al., 1999; Gardberg and Fombrun, 2006; Quinn and Dalton, 2009)
and theory of the firm (McWilliams and Siegel, 2001; Rowley and Berman, 2000; Wieland,
2005), amongst others.
A significant majority of the researchers’ considerations were devoted to uncovering the
relationship between CSP and firm performance, through stakeholder theory – the
mainstream (e.g. Brammer and Millington, 2008; Donaldson and Preston, 1995; Freeman,
1984; Jones, 1995; Mitchell et al., 1997; Orlitzky et al., 2003) or resource dependence theory
DOI 10.1108/17471111211196557 VOL. 8 NO. 1 2012, pp. 33-47, Q Emerald Group Publishing Limited, ISSN 1747-1117
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SOCIAL RESPONSIBILITY JOURNAL
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PAGE 33
Tiago Melo is based at the
Facultad de Economia y
Empresa, Universidad de
Salamanca, Salamanca,
Spain.
The author would like to thank
the Spanish Ministry of
Education and Science-FEDER
(Project SEJ2007-67496) and
the Ibero-American Chair in
Management and Corporate
Social Responsibility/
Santander Bank, for their
financial support for this
research.