Speaking of Corporate Social Responsibility
Author:
Dr. Christopher MARQUIS
Associate Professor of Business Administration
Harvard Business School
Abstract:
We argue that the language spoken by corporate decision makers can significantly affect how they perceive future-oriented strategies, such as corporate social responsibility (CSR). Building on research in economics and linguists that shows that obligatory future-time-reference (FTR) in a language reduces the psychological importance of the future, we theorize that companies with strong-FTR languages as their official/working language will have less of a future orientation and so perform worse in future-oriented activities such as corporate social responsibility (CSR). Examining thousands of global companies across 59 countries from 1999-2011, we find support for our theory. Furthermore, the negative association between FTR and CSR performance is weaker for firms with greater exposure to diverse global languages due to (a) being headquartered in countries with higher degree of globalization, (b) having a higher degree of internationalization, and (c) having a CEO with more international experience. These results are robust after controlling for country fixed effects and in a quasi-natural experiment setting, and similar language effect is found for other future-oriented organizational behaviors such as R&D expenditure. Contributions to the globalization of CSR and cognitive bases of strategy are discussed.
