Sustainable Strategies: Navigating Corporate Social Responsibility and Irresponsibility for Enlightened Self-Interest

As firms increasingly engage in both corporate social responsibility (CSR) and irresponsibility (CSIR) activities, this study expands the traditional question “does it pay to do more CSR?” to explore the less-studied question “does it pay to do less CSIR?”. We employ stakeholder theory and expectancy disconfirmation theory to outline three sustainable strategies for firms to financially benefit (enlightened self-interest) from CSR/CSIR activities: proactive strategy (increasing CSR, or doing more good), rectification strategy (reducing CSIR, or doing less bad), and aggressive strategy (increasing CSR while reducing CSIR, or doing more good and less bad). Our research objective is to evaluate the financial viability of different CSR/CSIR strategies. We hypothesize that the rectification strategy will surpass the proactive approach, while anticipating that the aggressive strategy will emerge as the most financially advantageous. Our dataset consists of 12,567 firm-year observations (3422 firms) spanning 1994 to 2013, and we conduct rigorous analyses to evaluate these strategies. The findings reveal that the rectification strategy surpasses the proactive strategy, with the aggressive strategy emerging as the most advantageous. The study contributes theoretically and offers managerial insights into these results.