Corporate social responsibility practices and performance improvement among Chinese national state-owned enterprises

Based on the stakeholder theory, this study develops “7+2” dimensions for CSR practices measurement among Chinese national state-owned enterprises (CNSOEs), and examines if their CSR practices bring financial and social performance improvements. By analyzing the 2011 CSR reports that cover 100 CNSOEs, we identify that these CNSOEs highlight CSR practices related to the environment, labor practices, political responsibility, and human rights in their reports. However, three CSR practices related to managing the supply chains, fair operating practices and community development need more of their attention. We evaluate the social performance of CNSOEs by using the two performance ranking systems developed by the Chinese Academy of Social Sciences. Regression results obtained through Structural Equation Model (SEM) using the partial least square (PLS) method indicate that CSR practices pertinent to organizational governance, human rights, and the environment are beneficial for their social performance. With secondary data inputs from the annual operating performance evaluation conducted by the State-owned Assets Supervision and Administration, we identify that four CSR practices can bring financial performance, but two of the four concerning communities and managing the supply chains are implemented at the lowest level among the others. Our “7+2” CSR practices dimensions together with their underlying measurement items extend the use of stakeholder theory for studying CSR practices, which can also serve as a checklist for evaluating how well CSR practices are implemented at CNSOEs. Our study results identify the need for CNSOEs to highlight community-related CSR practices in their operations and expand CSR efforts to the management of their supply chains.

[1]  Seoki Lee,et al.  Corporate social responsibility and firm performance in the airline industry: The moderating role of oil prices , 2013 .

[2]  Kelley Lee,et al.  The Limits of Corporate Social Responsibility: Techniques of Neutralization, Stakeholder Management and Political CSR , 2012, Journal of business ethics : JBE.

[3]  K. Lai,et al.  Confirmation of a measurement model for green supply chain management practices implementation , 2008 .

[4]  Marinko Škare,et al.  Corporate Social Responsibility and Corporate Financial Performance – Is There A Link? , 2012 .

[5]  Morten T. Hansen,et al.  Faking It or Muddling Through? Understanding Decoupling in Response to Stakeholder Pressures , 2012 .

[6]  K. Lai,et al.  An Organizational Theoretic Review of Green Supply Chain Management Literature , 2011 .

[7]  Qinghua Zhu,et al.  The moderating effects of institutional pressures on emergent green supply chain practices and performance , 2007 .

[8]  Jasmine Siu Lee Lam,et al.  Port hinterland intermodal container flow optimisation with green concerns: a literature review and research agenda , 2013 .

[9]  Raymond Asomani-Boateng,et al.  Closing the Loop , 2007 .

[10]  K. Davidson,et al.  A corporate social responsibility indicator system for construction enterprises , 2012 .

[11]  Cedric E. Dawkins,et al.  An Exploratory Analysis of Corporate Social Responsibility and Disclosure , 2013 .

[12]  Jason Q. Zhang,et al.  Board Composition and Corporate Social Responsibility: An Empirical Investigation in the Post Sarbanes-Oxley Era , 2012, Journal of Business Ethics.

[13]  R. Edward Freeman,et al.  Stakeholder Theory, Fact/Value Dichotomy, and the Normative Core: How Wall Street Stops the Ethics Conversation , 2012 .

[14]  Robert Taylor.  China's labour legislation: implications for competitiveness , 2011 .

[15]  Yongqiang Gao.  Philanthropic disaster relief giving as a response to institutional pressure: Evidence from China , 2010, Journal of Business Research.

[16]  R. Virvilaitẹ,et al.  Corporate Social Responsibility in Forming Corporate Image , 2011 .

[17]  Meng Zhao.  CSR-Based Political Legitimacy Strategy: Managing the State by Doing Good in China and Russia , 2012 .

[18]  Joseph Sarkis,et al.  RELATIONSHIPS BETWEEN OPERATIONAL PRACTICES AND PERFORMANCE AMONG EARLY ADOPTERS OF GREEN SUPPLY CHAIN MANAGEMENT PRACTICES IN CHINESE MANUFACTURING ENTERPRISES , 2004 .

[19]  A. Kourula,et al.  Pluralism in Political Corporate Social Responsibility , 2012, Business Ethics Quarterly.

[20]  Dongmin Kong.  Does corporate social responsibility matter in the food industry? Evidence from a nature experiment in China , 2012 .

[21]  K. Lai,et al.  Examining the effects of green supply chain management practices and their mediations on performance improvements , 2012 .

[22]  Kamal Munir,et al.  Impact at the ‘Bottom of the Pyramid’: The Role of Social Capital in Capability Development and Community Empowerment , 2012 .

[23]  M. Griesse.  The Geographic, Political, and Economic Context for Corporate Social Responsibility in Brazil , 2007 .

[24]  L. Preston,et al.  The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications , 1995 .

[25]  S. Zahra,et al.  Stakeholder Pressure on MNEs and the Transfer of Socially Irresponsible Practices to Subsidiaries , 2013 .

[26]  Kamalesh Kumar,et al.  Descriptive, instrumental and strategic approaches to corporate social responsibility: Do they drive the financial performance of companies differently? , 2013 .

[27]  T.C.E. Cheng,et al.  Socially responsible supplier development: Construct development and measurement validation , 2012 .

[28]  L. Fransen,et al.  The Embeddedness of Responsible Business Practice: Exploring the Interaction Between National-Institutional Environments and Corporate Social Responsibility , 2012, Journal of Business Ethics.

[29]  Ian A. Harwood,et al.  On the resilience of Corporate Social Responsibility , 2011 .

[30]  T. Eng,et al.  Strategic Direction of Corporate Community Involvement , 2013 .

[31]  I. Ducassy.  Does Corporate Social Responsibility Pay Off in Times of Crisis? An Alternate Perspective on the Relationship between Financial and Corporate Social Performance , 2013 .

[32]  R. Edward Freeman.  Corporate Views of the Public Interest , 1984 .

[33]  Mario Risso,et al.  A horizontal approach to implementing corporate social responsibility in international supply chains , 2012, Int. J. Technol. Manag..

[34]  Mark Anner,et al.  Corporate Social Responsibility and Freedom of Association Rights , 2012 .

[35]  Yaping Wang,et al.  Firm Performance, Corporate Ownership, and Corporate Social Responsibility Disclosure in China , 2013 .

[36]  Chung-Hua Shen,et al.  Corporate social responsibility in the banking industry: Motives and financial performance , 2013 .

[37]  T. Jones.  INSTRUMENTAL STAKEHOLDER THEORY: A SYNTHESIS OF ETHICS AND ECONOMICS , 1995 .

[38]  D. Kucukusta,et al.  Corporate social responsibility practices in four and five-star hotels: Perspectives from Hong Kong visitors , 2013 .

[39]  N. Wijnberg.  Normative Stakeholder Theory and Aristotle: The Link Between Ethics and Politics , 2000 .

[40]  Sufang Zhang,et al.  Political and institutional analysis of the successes and failures of China’s wind power policy , 2013 .

[41]  Qinghua Zhu,et al.  Evaluating green supplier development programs at a telecommunications systems provider , 2012 .

[42]  Constantin Belu,et al.  Strategic corporate social responsibility and economic performance , 2013 .

[43]  Ran Zhang,et al.  Corporate Social Responsibility, Ownership Structure, and Political Interference: Evidence from China , 2010 .

[44]  Wesley Helms,et al.  ANTECEDENTS OF SETTLEMENT ON A NEW INSTITUTIONAL PRACTICE: NEGOTIATION OF THE ISO 26000 STANDARD ON SOCIAL RESPONSIBILITY , 2012 .

[45]  Jose M. Cruz,et al.  Mitigating global supply chain risks through corporate social responsibility , 2013 .

[46]  K. Lai,et al.  Green supply chain management implications for "closing the loop" , 2008 .

[47]  C. Bhattacharya,et al.  Corporate Social Responsibility: A Corporate Marketing Perspective , 2011 .

[48]  R. Faff,et al.  Corporate philanthropy: Insights from the 2008 Wenchuan Earthquake in China , 2012 .

[49]  S. Powell.  The nexus between ethical corporate marketing, ethical corporate identity and corporate social responsibility: an internal organisational perspective , 2011 .

[50]  Andreas Rasche,et al.  Opportunities and Problems of Standardized Ethics Initiatives – a Stakeholder Theory Perspective , 2008 .

[51]  X. Font,et al.  Corporate social responsibility: The disclosure–performance gap , 2012 .

[52]  T.C.E. Cheng,et al.  Measures for evaluating green shipping practices implementation , 2013 .

[53]  Kamalesh Kumar,et al.  Examining the Link between Strategic Corporate Social Responsibility and Company Performance: An Analysis of the Best Corporate Citizens , 2013 .

[54]  C. Noronha,et al.  Corporate Social Responsibility Reporting in China: An Overview and Comparison with Major Trends , 2013 .

[55]  A. Chan,et al.  Critical perspectives on CSR and development: what we know, what we don`t know, and what we need to know , 2006 .

[56]  Ting Chi,et al.  Building a sustainable supply chain: an analysis of corporate social responsibility (CSR) practices in the Chinese textile and apparel industry , 2011 .

[57]  Michaela A. Balzarova,et al.  Stakeholders’ Influence and Contribution to Social Standards Development: The Case of Multiple Stakeholder Approach to ISO 26000 Development , 2012 .

[58]  Michel Tenenhaus,et al.  PLS path modeling , 2005, Comput. Stat. Data Anal..