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Corporate Social Responsibility Reporting: A Content Analysis in Family and Non-family Firms
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Family firms are ubiquitous and play a crucial role across all world economies, but how they differ in the disclosure of social and environmental actions from non-family firms has been largely overlooked in the literature. Advancing the discourse on corporate social responsibility reporting, we examine how family influence on a business organization affects CSR reporting. The arguments developed here draw on institutional theory, using a rich body of empirical evidence gathered through a content analysis of the CSR reports of 98 large- and medium-sized Italian firms. The grounded theory analysis informs and contextualizes several differences in the type and content of corporate social responsibility reports of family and non-family firms. Our findings show that in comparison to non-family firms, family firms disseminate a greater variety of CSR reports, are less compliant with CSR standards and place emphasis on different CSR topics. We, thus, contribute to the family business and corporate social responsibility reporting literatures in several ways, offering implications for practice and outlining promising avenues for future research.
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... One reason is the way SEA scholars position institutional theory vis-à-vis other theories when motivating their choice of theories. A large number of studies motivate the choice of institutional theory as an alternative (Qian et al. 2011, de Aguiar and Bebbington 2014, Comyns 2016 or, more frequently, complement to legitimacy theory and/or stakeholder theory (Islam and Deegan 2008, Beddewela and Herzig 2013, Momin and Parker 2013, Chelli et al. 2014, Searcy and Buslovich 2014, Campopiano and de Massis 2015, Chatelain-Ponroy and Morin-Delerm 2016, Baldini et al. 2018, Russo-Spena et al. 2018, Gaia and Jones 2020, Eliwa et al. 2021, Ruiz-Lozano et al. 2022, Thoradeniya et al. 2022, Roy et al. 2023, Lopatta et al. 2023. Echoing arguments put forward in earlier discussions of the role of theory in the SEA literature (e.g. ...
... The vast majority of the studies exploring the influence of institutional isomorphism are disclosure studies that pay little attention to intra-organisational processes in explaining what drives organisations to report social and environmental information (e.g. Perez-Batres et al. 2010, Zeng et al. 2012, de Villiers and Alexander 2014, Campopiano and de Massis 2015, Comyns 2016, 2018, Griffin and Youm 2018, Parsa et al. 2021, Thoradeniya et al. 2022 or adapt their reporting practices to changing societal expectations that are manifest in such isomorphism (e.g. Islam and Deegan 2008, Beddewela and Herzig 2013, de Aguiar and Bebbington 2014, Briem and Wald 2018, Chelli et al. 2014, Russo-Spena et al. 2018, Sidhu and Gibbon 2021, Sorour et al. 2021. ...
... Most research examining the influence of such isomorphism on social and environmental disclosures has been based on qualitative content analyses of publicly available reports (e.g. Chelli et al. 2014, de Aguiar and Bebbington 2014, Campopiano and de Massis 2015, O'Neill et al. 2015, Baldini et al. 2018, Christ et al. 2019, quantitative, archival methods (e.g. Perez-Batres et al. 2010, Zeng et al. 2012, de Villiers and Alexander 2014, Comyns 2016, Griffin and Youm 2018, Lopatta et al. 2023) and cross-sectional field studies covering a relatively large number of organisations (e.g. ...
... 1) environmental, 2) social and 3) governance. For what matters the environmental pillar, it makes reference to reports concerning initiatives related to the state and conservation of the natural environment, responsible use of energy and natural resources, reduction of pollutant emissions and research into sustainable design and innovation (Campopiano & de Massis, 2015;Sanches et al., 2017). There are mixed results on the effect of environmental performance on earnings management. ...
... Lodhia et al. (2020) show that firms concerned about their image reduce earnings management and promote social activities through social media with the purpose of disseminating information on social issues, which legitimise them in their stakeholders' eyes. These initiatives foster workers to achieve future objectives, let managers move away from financial goals and thus reduce earnings management practices (Campopiano & de Massis, 2015;Hassabelnaby et al., 2010). Following previous research, it is assumed a negative relationship between social performance and earnings management. ...
The purpose of this paper is to investigate the relationship between environmental, social and governance (ESG) performance, both in its totality and its three pillars (environmental, social and governance), and earnings management. The sample includes companies listed on the Italian Stock Exchange market (FTSE Italia All-Share index) during business years 2014–2019. After excluding those firms belonging to the financial sector, along with those with missing values, the final sample consists of 103 firms for a total of 618 firm-year observations. Data have been collected from two databases, that are Refinitiv Eikon (for ESG and governance variables) and AIDA Bureau van Dijk (for economic and financial variables). Panel data regression analysis has been implemented to analyse the impact of ESG performance on accrual-based (AEM) and real based (REM) earnings management. It is found that ESG performance has a negative effect on AEM but not on REM, and the governance pillar has the strongest impact compared to those of environmental and social ones. In addition, this research suggests a bidirectional link between ESG performance and earnings management. This analysis contributes to prior research since it is the first study that has used accrual and real-based earnings management proxies with this topic in relation with ESG performance and its three components in the Italian traditional corporate governance system. Corporate practice, regulators and researchers should recognize that ESG performance and earnings management should be discussed together.
... Whether this impact is positive or negative depends on the presence and intensity of various factors such as the levels of regional "Familiness" (Basco, 2015(Basco, , 2024, socio-emotional wealth (SEW) (G omez-Mej ıa et al., 2007), family social capital (Arregle et al., 2007; and/or the family's stewardship of their environment (Madison et al., 2016). Sufficient levels of these factors enable distinct interactions between family firms and their environment, such as the development of long-standing relations/stakeholders (R€ od, 2016), a heightened concern for their reputation (Campopiano and De Massis, 2015), a vested interest in their employees (Davis et al., 2010) and a general concern for their surroundings (Ba u et al., 2019). ...
Purpose
The purpose of this research is to develop theory, thereby attending to the existing knowledge gap regarding the impact of family firms on entrepreneurial ecosystems (EEs). Reducing such a gap is both timely and relevant given the ubiquity of family firms across the globe and the lack of theoretical development at the intersection of EE and family firm literatures. By employing social capital theory in a propositional theorizing approach, this article presents unique propositions that enrich current understanding of the EE phenomenon.
Design/methodology/approach
Our method adopts a three-step propositional theorizing approach. The first step outlines our conceptualization, drawing on social capital theory and identifying multiple levels of analysis pertaining to EEs and family firms. The second step precisely identifies the constructs used for the theorization process, drawing upon relevant literature. The third step involves proposition building, which produces our findings.
Findings
As a result of our propositional theorizing method, we developed 10 theoretical propositions to explain interactions between family members, nonfamily entrepreneurs, family firms and new ventures in the EE, thereby focusing on the social elements of the EE and reducing its conceptual complexity while extending the explanatory power of family social capital in the EE.
Research limitations/implications
Despite being increasingly relevant in research, policy and practice discourse, EEs remain under theorized. By theorizing in this context, we provide explanations of the mechanisms to explain social interactions between family members, nonfamily entrepreneurs, family firms and new ventures and how such interactions are likely to provide better access to the untapped resources in the EE. Furthermore, our theorization also identifies underexplored research areas paving the way for future scholars.
Practical implications
This article is relevant to practitioners and policymakers interested in creating balanced, inclusive and effective EE policies and interventions. Our theorization generates insights that complement a bottom-up approach where the state assumes a facilitating role for actors such as family firms to positively impact their EE. This research is both timely and necessary because, if unaddressed, it will lead to ineffective and potentially exclusionary policies and EE interventions.
Originality/value
We contribute to the literature by synthesizing the two domains and thereby advancing knowledge at the intersection of EE and family firm literatures. We strengthen the link between two burgeoning research areas through a propositional theorizing mode of theory development. Under the assumptions of a grand theory, social capital theory, we highlight the benefits that derive from social interactions in the EE between family firms and other EE actors.
... Vazquez (2018) concluded that family businesses are vastly different from non-family businesses, which, as one can assume, will also influence their attitude toward organization culture. Other authors see the sources of this difference in the family's own involvement (Sharma & Sharma, 2011), the personalities of the founder and his/ her successors (McMullen & Warnick, 2015), the interpersonal relations and communication (Campopiano & De Massis, 2014), or in the social relations and emotions (Cennamo et al., 2012). ...
Plain Language Summary
Findings of the research have shown that the behaviours and attitudes inside the family do not necessarily match the nature of the organizational culture in their company. This hypothesis was confirmed only for the clan culture. This research study suffers from several limitations. The study has limitations in generalizability. The research was carried out in one country, a country with a relatively short history of family business. Families and their businesses do not yet have as much knowledge and experience as family businesses with a long tradition. However, the results obtained offer an opportunity for comparative research in countries where family business has a long tradition. This study assumes a direct relationship between family values and organizational culture. There is the possibility that there are other relationships that could be considered as other mediating variables not considered in this study. For this reason, more research could focus on a more robust understanding of relationships within families and how they influence culture in their business by including mediators that incorporate the influence of, for example, strategic decision making or business model development. The complexity of the respondents’ position may not have yielded reliable results. The complexity of a situation where a respondent identifies the relationships and values of their own family members and then values within their business, often perceived as a second family, can jeopardize the reliability of the answers. A limitation could be seen in the F-PEC model used. Some contemporary authors argue that Klein et al.’s F-PEC scale defines only a very specific type of family business. There are other types more conceptually and empirically, as also affirmed by Gupta and Levenburg. However, the structure of this model has been shown to be a suitable choice for the family model contoured here. FIM - formulated questions or group assignments may be submitted for discussion. The authors do not claim that the FIM is a final closed model. It will certainly require further elaboration or refinement. The authors welcome any comments. Research implications: By providing a clear and predictable relationship between the intensity and nature of family members’ relationships with each other and with the family business and the formation of organizational culture, the study contributes to family business theory, contributing to the study of family involvement in family business in terms of creating and maintaining the informal intangible aspects of organizational culture. Practical implications: for family business owners, it could provide impetus for establishing policies, rules, or roles within the family so that their involvement in the family business positively influences the creation and behaviour of the organizational culture in their business. Social implications arise from the importance of the existence of family firms that are significant in the economy. Not only the owners of family businesses, but also policymakers and regulatory authorities should contribute through their initiatives to promote the informal organizational culture that is a prerequisite for the growth and sustainability of family businesses, which are typically the largest employment generators in most economies. Originality/value/theoretical contribution: the study addresses the nature of organizational culture and the “character” of the family. By the “character” of the family is meant the relationships between family members and the relationships of family members to the family business. Relationships within the family and the relationship of family members to the family business are undoubtedly reflected not only in the formal structure, but also in the informal culture. The study reveals how these two “characters” are not/related.
... More and more listed companies choose to actively disclose CSR reports. CSR reports are becoming a crucial tool to communicate with stakeholders [28]. CSR reports publish not only the social responsibility of the companies, but also the operation information [29]. ...
The literature has confirmed that when managers increase profits through earnings management, the readability of annual reports may be reduced Lo (2017), Ye (2018). Whether this conclusion is suitable for Chinese corporate social responsibility (CSR) reports, however, is still unclear. Based on the panel data of 5083 Chinese non-financial listed companies from 2010 to 2019, this paper adopts multiple linear regression to investigate the impact of earnings management on the readability of Chinese CSR reports. The results show that: (1) There is a significant negative correlation between earnings management and the readability of Chinese CSR reports, with the readability of Chinese annual reports as a mediating variable. (2) The negative effect is more significant when companies are not punished for violations, when the internal control index is low, when companies lack ISO14001 certification and when companies do not have independent third-party authentication for Chinese CSR reports. (3) When earnings management just exceeds zero, the readability of Chinese CSR reports decreases. (4) The economic consequences of reducing the readability of Chinese CSR reports are that financing costs are increased and environmental performance is decreased. To improve the quality of information disclosure of listed companies, the recommendations are as follows: First, the government should issue CSR reporting standards to reduce the manipulation of Chinese CSR reports. Second, Chinese CSR reports disclosed by listed companies must be audited by independent third parties to enhance the credibility of the information. Third, the company needs to strengthen its external and internal supervision to reduce the manipulation space for the readability of Chinese CSR reports. This study extends the negative relationship between earnings management and the readability from annual reports to Chinese CSR reports. To prevent investors from detecting earnings management, the readability of Chinese CSR reports may be reduced. At the same time, the study has definitely added value to the existing literature in the domain of CSR.
The main purpose of this paper is to empirically assess the impact of a critical mass of female directors on the firm’s CSR performance, focusing on whether the effect of a female critical mass on CSR is moderated by the family firm status.
In order to test this hypothesis, we perform an OLS regression on a sample of 76 Italian publicly listed firms for the year 2019,
We find that, on the one hand, a female critical mass is associated with a better CSR performance, and that family firms have a lower CSR performance than nonfamily firms, but on the other hand we find that when family firms have a female critical mass on the board their CSR performance improves.
Overall, these findings support the conclusion that the effect of a female critical mass on CSR performance is influenced by the family firm status.
This research may contribute to both the literature on board gender diversity and to the literature on family firms by providing evidence that family ownership is a contingency variable that positively moderates the effect of a critical mass of female directors on the CSR performance of firms.
In terms of practical implications, this finding provides a starting point for family owners and managers to review the composition of their board in view of the CSR results they want to achieve. This finding may be also of interest for institutional investors who are increasingly using CSR performance as a proxy for good management and long-term goals, and that therefore should consider the findings of this study when looking at the factors that can shape the CSR performance of family firms.
Results of this study go against previous expectations regarding the positive effects of boards' and owners' gender diversity and family ownership on SMEs' green behaviors, expressed by the implementation of proactive environmental strategies (PES) and energy consumption monitoring (ECM). We show that such generally accepted and recommended concepts may not always work, specifically within Central and Eastern European (CEE) countries. Based on the foundations of stakeholder theory, we surprisingly reject hypotheses expecting positive effects of boards' gender diversity on SMEs' green behaviors. Compared to the research to date, we newly examine the effect of the frequency of manager–employee meetings on SMEs' green behaviors. We show that SMEs' implementation of PES and ECM requires a different frequency of employee engagements. In addition, we confirm that the presence of environmental managers is fruitful for the implementation of PES in family firms. We also reveal that family firms' ECM is significantly triggered by energy taxes, but also by the owners' gender diversity. By linking the managerial perspective including employees' engagement and PES with the technical discipline of ECM, this study provides several theoretical and practical implications.
Using proxy data on all Fortune-500 firms during 1994–2000, we find that family ownership creates value only when the founder serves as CEO of the family firm or as Chairman with a hired CEO. Dual share classes, pyramids, and voting agreements reduce the founder's premium. When descendants serve as CEOs, firm value is destroyed. Our findings suggest that the classic owner-manager conflict in nonfamily firms is more costly than the conflict between family and nonfamily shareholders in founder-CEO firms. However, the conflict between family and nonfamily shareholders in descendant-CEO firms is more costly than the owner-manager conflict in nonfamily firms.
While downsizing has been widely studied, its connection to firm ownership status and the reasons behind it are missing from extant research. We explore the relationship between downsizing and family ownership status among Fortune 500 firms. We propose that family firms downsize less than non-family firms, irrespective of performance, because their relationship with employees is based on normative commitments rather than financial performance alone. We suggest that their actions are related to employee and community friendly policies. We find that family businesses do downsize less irrespective of financial performance considerations. However, their actions are not related to their employee or community friendly practices. The results raise issues related to the motivations of large multinationals to downsize and the drivers of their stakeholder management practices.
- This paper describes the process of inducting theory using case studies from specifying the research questions to reaching closure. Some features of the process, such as problem definition and construct validation, are similar to hypothesis-testing research. Others, such as within-case analysis and replication logic, are unique to the inductive, case-oriented process. Overall, the process described here is highly iterative and tightly linked to data. This research approach is especially appropriate in new topic areas. The resultant theory is often novel, testable, and empirically valid. Finally, framebreaking insights, the tests of good theory (e.g., parsimony, logical coherence), and convincing grounding in the evidence are the key criteria for evaluating this type of research.