Antecedents of corporate social performance: the effects of task environment managerial discretion

Purpose - The purpose of this research is to better understand how industry conditions affect corporate social performance (CSP). To accomplish this objective, the authors develop and test a theoretical argument that task environment managerial discretion plays an important role in determining a firm’s level of CSP. Design/methodology/approach - In this research, the authors utilize a longitudinal data set of archival data nested across year, firm and industry. They then test their research model using multilevel techniques, which account for the nested nature of their research design. Findings - Firms exhibit higher levels of CSP when their industry’s environment is high in dynamism and product differentiation. Conversely, firms exhibit lower levels of CSP when capital intensity is high. Finally, the authors find that firms exhibit higher levels of both positive and negative CSP as industry munificence increases. Research limitations/implications - A number of researchers have called for investigation into the antecedents of CSP. This research provides an important next step in understanding the factors that influence firm CSP. Specifically, this research illustrates how the task environment affects stakeholder management by influencing the degree to which firms engage in CSP. Practical implications - Managers should be mindful of the task environment’s conditions for managerial discretion and how these conditions affect stakeholder support for CSP. Moreover, managers should understand how industry conditions affect the firm’s ability to achieve competitive advantage through the use of CSP strategies. Originality/value - While there has been much research aimed at understanding the potential CSP-firm performance link, there has been relatively little attention paid to understanding what influences firm CSP in the first place. This research suggests that industry-level characteristics of managerial discretion strongly influence firm strategic actions toward social performance.