Facelift and CSR: Who performs more?

kulsumkhatun997

What we were missing, a study that would add fuel to the fire showing that facelift pays dividends. The study Do Actions Speak Louder than Words? The Case of Corporate Social Responsibility (CSR) by Olga Hawn of Duke University and Ioannis Ioannou of London Business School has a number of interesting conclusions about the relationship between actions, appearances and financial results. But before reproducing your conclusions on social media, with the risk of them being misinterpreted, it is necessary to analyze in detail how they were obtained and the implications they may have for the company's strategy. (Reading this article requires attention, it is not light) This study is based on a statistical analysis of the relationships between indicators of what the authors call “ substantive activities ” and “ symbolic activities ” and performance measured as return on assets. To do this, the indicators were analyzed in a database of 2,261 companies in 43 countries between 2002 and 2008 (from Latin America only Brazil (16 companies), Chile (5), Mexico (9) and Spain (52) are included).

The four hypotheses postulated by the Phone Number List study and which are verified by the statistical analysis carried out, are the following: ° The higher the level of CSR assets (previous CSR activities), the greater the effect of symbolic activities on performance and vice versa; ° The higher the level of CSR assets (previous CSR activities), the lower the effect of substantive activities on performance and vice versa; ° The greater the gap between substantive and symbolic activities, the greater their impact on performance, and vice versa; ° The greater the compatibility between substantive and symbolic actions, the greater the effect on performance, which suggests a synergy between both types of activities. Before analyzing these results and their implications, it is important to analyze how they measure substantive actions, symbolic actions and company performance. The measures considered substantive are, for the most part, the existence of policies in the company such as eco-efficiency, remuneration for performance and industrial safety, among others. They also include more specific measures such as, for example, the percentage of women on the board of directors, the use of renewable energy, audit of the sustainability report.



It includes some measures that may be irrelevant for many companies, such as whether it produces for the Bottom of the Pyramid (this can be CSR or opportunism, depending on how it is implemented), whether the Sarbaes-Oxley law applies (something restricted to companies that operate in USA, or if it has products for water treatment, among others. The indicators that they consider as symbolic refer to activities where they “say they have”, “report”, “alleged”, such as if they claim to have work-life balance programs, claim to have training programs or report having resource-saving activities ( eco-efficiency). This substantive and symbolic distinction is very tenuous . What is more substantive: having a non-discrimination policy (substantive) or saying that it does not discriminate (symbolic)? In my opinion they belong to the same category of symbolic, I rather prefer the second one where they say they do than the first one where they say they intend to do it. It is closer to the action and is eventually auditable by stakeholders (including your employees). A substantive action should be one that has evidence that something is done.