Abstract
Corporate Social Responsibility's (CSR) competitive advantage continues to disappear rapidly due to embedded gaps in practice. Thus, managers and scholars are beginning to shift their focus from the business case of CSR toward how firms address weaknesses within CSR practices. This study reveals the prevalence and influence of different cognitive bias types in CSR formulation, implementation, and communication. In this paper, CSR formulation emerged as the domain more predisposed to cognitive biases, followed by CSR implementation and CSR communication with 12, 9, and 5 cognitive bias types, respectively. Based on a systematic review, we provide a conceptual framework that discusses CSR cognitive bias' antecedents, indicator taxonomy, context, and consequences on partnerships. Following that, we identify the major implications for strategy theory and discuss possible future research areas to address.
| Original language | English |
|---|---|
| Article number | 104201 |
| Pages (from-to) | 1-9 |
| Number of pages | 9 |
| Journal | Resources Policy |
| Volume | 86 |
| DOIs | |
| Publication status | Published - Oct 2023 |
Bibliographical note
Funding Information:Through CSR, defined as the ‘clearly articulated and communicated policies and practices of corporations that reflect business responsibility for some of the wider societal good’ (Matten and Moon, 2008, p. 405), extractive companies have engaged in practices that seek to ensure societal growth and well-being (Gilberthorpe and Banks, 2012; Hilson et al., 2019). Mohammed et al. (2022) further argue that CSR promotes community development, corporate reputation, and brand. García-Rodríguez et al. (2013) also acknowledged that CSR positively affects the environment, economic growth, and the development of the localities and countries where these companies operate. Despite the gains, CSR has been criticised for its inability to deliver on its promises in the extractive sector (Atal, 2017; Basu et al., 2015; Long, 2022). Critics argue that CSR is a complex and multi-faceted process subject to conflicting interests and influences of multiple stakeholders (Madanaguli et al., 2022; Mariani et al., 2021). For example, Brooks (2010) asserts that CSR has taken a wrong turn from emancipatory rhetoric and intent to economic rationality primarily to satisfy managerial interests at the expense of societal growth and development. Long (2022) also emphasised that recently CSR has been constrained to scenarios directed at enhancing business profitability and shareholder value to the detriment of the local communities they profess to support.In CSR formulation, social bias, in-group bias, anchoring bias, heuristics, information bias, outcome bias, overconfidence bias, stereotype bias, egocentric bias, confirmation bias, framing effect, and sunk cost effect were identified. Several studies within this domain indicated that in CSR formulation, managers apply heuristics due to the enormous availability of information which, due to time and budget constraints, cannot be holistically considered, resulting in cognitive biases (Abuya and Odongo, 2020; Faruque, 2018; Long, 2022). For example, Rickard (2020) and Smith et al. (2012) assert that managerial and organisational interests result in social bias, which occurs when certain groups’ interests are considered and others are neglected. Atal (2017) posits that mining companies in developing countries promote and meet the demands of local elites to gain community support. However, such in-group biases backfire for extractive companies in that local elites fail to achieve community support due to issues of unequal benefit sharing and poor partnership quality. Abuya (2016) also suggests that a common cause of CSR ineffectiveness relates to heavy reliance on past experiences and information in CSR formulation regardless of changing business environments and industry perspectives, which reflects anchoring bias.Bezzola et al. (2022) further insinuate outcome and information biases by asserting that extractive companies’ CSR reports are unreliable and lack accurate measurement of CSR practices. Basu et al. (2015) highlight information and loss aversion biases by positing that extractive companies and managers distorts information in CSR communication to induce favourable community perceptions and dependence to push through halted projects. While Bezzola et al. (2022) indicate that engaging in genuine CSR disclosure can strongly influence peaceful relations and quality partnerships with local communities and attract community support, CSR communication can also be a medium for distorting information, eliciting persuasive intents and triggering unrest (Basu et al., 2015; Marfo et al., 2016; Slack, 2012). Thus, identifying biases at this stage exposes the cognitive limitations inherent in CSR communication based on which management can be trained to eradicate such biases.This research was funded by the COVID-19 Supplementary Funding Project (CSFP) provided by Charles Darwin University.
Funding Information:
This research was funded by the COVID-19 Supplementary Funding Project (CSFP) provided by Charles Darwin University .
Publisher Copyright:
© 2023 The Authors