Corporate Social Responsibility Reporting in China: Symbol or Substance?

Christopher  Marquis; Cuili  Qian

Article | Organization Science | 2014

Corporate Social Responsibility Reporting in China: Symbol or Substance?

by Christopher Marquis and Cuili Qian

Abstract

This study focuses on how and why firms strategically respond to government signals regarding appropriate corporate activity. We integrate institutional theory and research on corporate political strategy to develop a political dependence model that explains (a) how different types of dependency on the government lead firms to issue corporate social responsibility (CSR) reports and (b) how the risk of governmental monitoring affects the extent to which CSR reports are symbolic or substantive. First, we examine how firm characteristics reflecting dependence on the government—including private versus state ownership, executives serving on political councils, political legacy, and financial resources—affect the likelihood of firms issuing CSR reports. Second, we focus on the symbolic nature of CSR reporting and how variance in the risk of government monitoring through channels such as bureaucratic embeddedness and local government institutional development influences the extent to which CSR communications are symbolically decoupled from substantive CSR activities. Our database includes all CSR reports issued by the approximately 1,600 publicly listed Chinese firms between 2006 and 2009. Our hypotheses are generally supported. The political perspective we develop contributes to organizational theory by showing (a) the importance of government signaling as a mechanism of political influence, (b) how different types of dependency on the government expose firms to different types of legitimacy pressures, and (c) that firms face a decoupling risk that leads them to be more likely to enact substantive actions in situations where they are likely to be monitored.

Keywords: institutional theory; political strategy; Non-market Strategy; emerging markets; China; corporate social responsibility; Corporate Disclosure; Corporate Social Responsibility and Impact; Emerging Markets; Government and Politics; China;

Format: Print

53 pages

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Citation:

Marquis, Christopher, and Cuili Qian. "Corporate Social Responsibility Reporting in China: Symbol or Substance?" Organization Science 25, no. 1 (January–February 2014): 127–148.

Article | Organization Science | September–October 2018

The Paradox of Responsive Authoritarianism: How Civic Activism Spurs Environmental Penalties in China

Christopher Marquis and Yanhua Bird

Recognizing the need to better understand institutional change processes in authoritarian states, which play an increasingly prominent role in the world economy, we examine the efficacy of civic activism aimed at spurring governmental action concerning the environmental performance of firms in China. We highlight the paradox of “responsive authoritarianism” on display in China: to avoid needing to rule by coercion alone, the government seeks citizens’ feedback and tolerates pressures for change, but at the same time it resists the associated legitimacy threats regarding its capacity to rule. Local governments and the media play crucial and dual roles in this system: they mitigate change pressures from civic activism that takes place within the state’s systems, but they magnify change pressures from publicly visible civic activism occurring outside those systems. We test our conceptual model using a unique dataset of environmental penalties imposed on Chinese publicly listed firms from 2007 to 2011. Our findings contribute to understanding processes of institutional change and outcomes of social movements.

Keywords: civic activism; authoritarianism; regulation; corporate sustainability; Environmental Sustainability; Government and Politics; Business and Government Relations; Social Issues; Change; China;

Citation:

Marquis, Christopher, and Yanhua Bird. "The Paradox of Responsive Authoritarianism: How Civic Activism Spurs Environmental Penalties in China." Organization Science 29, no. 5 (September–October 2018): 948–968. View Details

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This article is a layman summary of "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing," published in Organization Science 27, no. 2 (March–April 2016): 483–504.

Under increased pressure to report environmental impacts, some firms selectively disclose relatively benign impacts, creating an impression of transparency while masking their true performance. We identify key company- and country-level factors that limit firms' use of selective disclosure by intensifying scrutiny on them and by diffusing global norms to their headquarters' countries. We test our hypotheses using a novel panel dataset of 4,750 public companies across many industries and headquartered in 45 countries during 2004–2007. Results show that firms that are more environmentally damaging, particularly those in countries where they are more exposed to scrutiny and global norms, are less likely to engage in selective disclosure. We discuss contributions to the literature that spans institutional theory and strategic management and to the literature on information disclosure.

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Corporate Social Responsibility Reporting in China: Symbol or Substance?

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