Social performance feedback and firm communication strategy

• Main Authors: WANG, Heli, JIA, Ming, XIANG, Yi, LAN, Yang
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2022
• Subjects: Behavioral theory of the firm; impression management; corporate social responsibility; visual; Asian Studies; Business Law, Public Responsibility, and Ethics; Organizational Behavior and Theory; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/6890; https://ink.library.smu.edu.sg/context/lkcsb_research/article/7889/viewcontent/SocialPerformance_2021_av.pdf
• Institution: Singapore Management University

Although corporate social performance has become an important measure of firm performance, there is little understanding about how firms respond to social performance feedback and how impression management may function as an important firm response to the feedback. Building upon and extending the literature on the behavioral theory of the firm and the strategic use of language, we examine how discrepancies between firms’ social performance and their aspiration levels affect how firms use visual expressions in their CSR reports. In addition, we argue that the relationship between social performance discrepancies and the use of visual expressions in CSR reports is moderated by the extent to which firms conduct socially responsible activities to enhance legitimacy (reflected in the level of state ownership) and the extent to which firms engage in social activities to improve financial performance (reflected in foreign exposure). Using a sample of Chinese firms issuing CSR reports from 2009 to 2017, our empirical results provide strong support for these arguments.