Publications
Publications
- 2024
- HBS Working Paper Series
CSR Under the Pressure of Financial Shocks
By: Monica Kabutey, Syrena Shirley and Anywhere Sikochi
Abstract
This study examines how the COVID-19 pandemic influenced firms' interactions with customers and suppliers. Customer-supplier relationships are essential because the success of interconnected firms affects the sustainability of the entire supply chain. We use the economic shock of COVID-19 to evaluate if socially responsible firms truly adhere to responsible business practices (i.e. prioritize stakeholders) when faced with financial pressure. Using a difference-in-differences design, we find that socially responsible firms take longer to pay their suppliers though they do not appear to relax payment terms for customers during COVID. These strategies contradict the principles of stakeholder theory, which focuses on understanding and addressing the interests of all stakeholders. Overall, our findings show that socially responsible firms focus more on safeguarding their own liquidity rather than stakeholder priorities during crisis periods.
Keywords
COVID-19 Pandemic; Supply Chain; Customer Focus and Relationships; Business and Stakeholder Relations; Corporate Social Responsibility and Impact; Financial Crisis
Citation
Kabutey, Monica, Syrena Shirley, and Anywhere Sikochi. "CSR Under the Pressure of Financial Shocks." Harvard Business School Working Paper, No. 25-006, August 2024.