The Double-Edged Sword of Learning by Volunteering: When Corporate Volunteers Broker Knowledge from Nonprofit Partners Abroad.
This paper examines under what conditions anticipated benefits of corporate volunteering with nonprofit partners in developing countries might rather give way to identity strain for participating employees upon their return. Results from a multimethod field study, conducted using qualitative and survey data from a ten-year corporate volunteering program between global logistics provider TNT and the United Nations World Food Programme (WFP), show that such programs can be a double-edged sword, juxtaposing both their potential advantages and drawbacks. Thus, task interdependence with nonprofit peers in developing countries enables corporate volunteers to learn about operating in complex institutional environments and to identify with the partnership, yet also lead them (indirectly) to experience identity strain upon their return – a strain that can eventually induce departure from the firm’s employ. To avoid this risk, firms must foster a sense of the volunteer experience being recognized as valuable. By integrating research on corporate volunteering and cross-sector partnerships, theoretical implications are drawn concerning the micro-level mechanisms through which Corporate Social Responsibility can create private (as well as public) value.
The Determinants of CSR Implementation via NGO Partnerships: Evidence from the 2013 Reform to the India Companies Act (with Christiane Bode)
This paper examines under what conditions firms implement their corporate social responsibility (CSR) activities directly on their own or in partnership with nongovernmental organizations (NGOs). We propose that firms’ choices are made in function of capabilities and legitimacy-based considerations, whose effects depend on both corporate and NGO sector characteristics and preferences. We test our hypotheses using government data collected after the passage of the 2013 amendment to the India Companies Act regulating firms’ CSR contributions, covering 80,223 CSR projects implemented subsequently. We find that firms face two sets of trade-offs in making their choice: first, they must decide between investing internally to implement a geographically specialized portfolio of projects versus having to rely on the constraints of the NGO sector’s capacity across geographies and social causes. Secondly, NGOs can help the corporate sector overcome legitimacy deficits but collaboration will not materialize if they perceive the two sectors’ public and private value creation objectives to be misaligned. Our findings contribute to CSR research by explaining how such activities are implemented, as well as furthering our understanding of nonmarket strategy governance more broadly.
Recalibrating the Value of Political and NGO ties: Investor Reactions to Corruption Backlash in Brazil (with Marina Gama and Rodrigo Bandeira-de-Mello)
We study whether and how investors react to institutional backlash against political corruption and, in particular, whether such events lead investors to recalibrate their assessment of firms’ political ties versus their ties to nongovernmental organizations (NGOs). We exploit the police raids in the early phases of Operation Carwash, the largest corruption probe in Brazilian history, to test our hypotheses. Our event study reveals positive market-wide abnormal stock returns following the raids, suggesting that investors reacted favorably to this signal of institutional reform. We then analyzed firm-level abnormal returns for companies not implicated in the corruption probe. The results indicate that investors recalibrated their assessments of political versus NGO ties depending on whether those ties were conspicuous to the public, with asymmetric effects: investors were not swayed by campaign donations that were publicly disclosed but considered the less conspicuous presence of former politicians on corporate boards a hidden liability. Conversely, investors rewarded highly visible ties to NGO partners but not more discrete ties to NGO governing bodies, which failed to provide the same reputational signal. Our results shed light on the impact of institutional events that indirectly affect firms by altering the basis for investor valuations of their entire portfolio of nonmarket ties.
From Political Ties to Nonprofit Connections? The Strategic Reconfiguration of Cross-Sector Interactions
(with Marina Gama)