TY - JOUR
T1 - The influence of social responsibility on employee productivity and sales growth
T2 - Evidence from certified B corps
AU - Romi, Andrea
AU - Cook, Kirsten A.
AU - Dixon-Fowler, Heather R.
N1 - Publisher Copyright:
© 2018, Emerald Publishing Limited.
PY - 2018/9/18
Y1 - 2018/9/18
N2 - Purpose: The purpose of this paper is to examine whether B corps’ (for-profit entities whose owners voluntarily commit to conduct business in a socially responsible manner, beyond traditional CSR, that generates profits, but not at the expense of stakeholders) commitment to social issues influences two aspects of financial performance: employee productivity and sales growth. Design/methodology/approach: This paper is an exploratory analysis of B corps. This paper examines B corps with B Lab’s B Impact Assessment reports and PrivCo financial data, for descriptive information. This paper also analyzes the financial impact of obtaining and reporting on excellence in both employee and consumer focus, as well as the differences in financial growth between B corps and non-hybrid peers. Findings: Overall, results suggest that, among B corps whose treatment of employees (consumers) is recognized as an “area of excellence,” employee productivity (sales growth) is significantly higher. Additionally, sales growth is significantly higher for B corps relative to their peer, non-hybrid, matched firms. Practical implications: Results from this study inform states considering the adoption of the B corp legal status – this legal status does not hinder firm profitability, but instead enhances long-term firm value while allowing firms to beneficially affect their communities, consumers, employees and the environment. Social implications: Results from this study provide important insights regarding the current paradigm shift from the traditional business focus on profit maximization to a fruitful coexistence of profits with social interests and initiatives, within a structure of dissolving national boundaries and increasingly divergent logics. Originality/value: This paper provides an initial empirical examination of B corp performance.
AB - Purpose: The purpose of this paper is to examine whether B corps’ (for-profit entities whose owners voluntarily commit to conduct business in a socially responsible manner, beyond traditional CSR, that generates profits, but not at the expense of stakeholders) commitment to social issues influences two aspects of financial performance: employee productivity and sales growth. Design/methodology/approach: This paper is an exploratory analysis of B corps. This paper examines B corps with B Lab’s B Impact Assessment reports and PrivCo financial data, for descriptive information. This paper also analyzes the financial impact of obtaining and reporting on excellence in both employee and consumer focus, as well as the differences in financial growth between B corps and non-hybrid peers. Findings: Overall, results suggest that, among B corps whose treatment of employees (consumers) is recognized as an “area of excellence,” employee productivity (sales growth) is significantly higher. Additionally, sales growth is significantly higher for B corps relative to their peer, non-hybrid, matched firms. Practical implications: Results from this study inform states considering the adoption of the B corp legal status – this legal status does not hinder firm profitability, but instead enhances long-term firm value while allowing firms to beneficially affect their communities, consumers, employees and the environment. Social implications: Results from this study provide important insights regarding the current paradigm shift from the traditional business focus on profit maximization to a fruitful coexistence of profits with social interests and initiatives, within a structure of dissolving national boundaries and increasingly divergent logics. Originality/value: This paper provides an initial empirical examination of B corp performance.
KW - B corp
KW - Benefit corporation
KW - Corporate social responsibility
KW - Employee productivity
KW - Hybrid organizations
KW - Sales growth
UR - http://www.scopus.com/inward/record.url?scp=85053232427&partnerID=8YFLogxK
U2 - 10.1108/SAMPJ-12-2016-0097
DO - 10.1108/SAMPJ-12-2016-0097
M3 - Article
AN - SCOPUS:85053232427
SN - 2040-8021
VL - 9
SP - 392
EP - 421
JO - Sustainability Accounting, Management and Policy Journal
JF - Sustainability Accounting, Management and Policy Journal
IS - 4
ER -