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Sub-theme 69: Rethinking the Relationship between Businesses’ Financial and Social Commitments

Convenors:
Matthew Grimes
University of Cambridge, United Kingdom
Tyler Wry
University of Pennsylvania, USA
Garima Sharma
Georgia State University, USA

Call for Papers

This sub-theme engages with the conference theme “Organizing for the Good Life” by examining, synthesizing, and extending fragmented scholarly conversations on the relationship between financial and social commitments in organizing. In the last two decades, there has been explosion of scholarly interest in understanding the role of business in society (e.g., Margolis & Walsh, 2003). Unlike neo-liberal economists who argue that economic and social goals should be pursued separately (i.e., the separation thesis), organizational scholars tend to envision a role for business in limiting the harms of economic activity and contributing to prosocial goals.
 
Yet as this work has proliferated, so too have the number of approaches that are used to theorize about financial and social commitments of business and how the two relate to each other. Literatures focused on stakeholder theory (Henisz, Dorobantu, & Nartey, 2014), CSR (Wang et al., 2016), social enterprise (Miller et al., 2012; Wry & Haugh, 2018), grand challenges (George et al., 2016), organizational hybridity (Battilana & Lee, 2014), and paradox (Smith & Besharov, 2019) all seek to challenge the separation thesis, yet in so doing they make distinct assumptions about how we should organize for the good life, as well as the associated opportunities and challenges that might arise through such efforts. Many of these assumptions are grounded in the tenets of earlier literatures and the constructs inherent to those literatures. How we choose to understand business’ social and financial commitments in terms of logics, values, beliefs, cognitive frames, identities, missions, interests, dependencies, etc. is thus likely to shape how we view the relationship between those commitments.
 
We believe that there is a need to place these research streams into more direct conversation, clarifying distinctive theoretical and ontological assumptions, while also exploring opportunities for pragmatic integration. To be clear, our goal is not to diminish the distinctive features of these different literatures. Rather, we want to recognize and build on the contributions of prior research, while questioning underlying assumptions in order to spark research that examines boundary conditions, considers contextual embeddedness and environmental shocks, embraces the changing nature of social commitments, and considers the cognitive underpinnings of corporate social action. Ultimately, we hope that such work will lead to a deeper appreciation of the complex relationship between business’ social and financial commitments, while helping to foster systemic understanding (Bansal, Grewatsch, & Sharma, 2021; Grimes, Williams, & Zhao, 2019), visualizations (Ertug et al., 2018), and analyses (Wry & Zhao, 2018) of this interface.
 
With this in mind, we invite submission to this sub-theme from scholars holding a variety of theoretical interests but with a shared interest in the relationship(s) between business’ social and financial commitments. We offer a potential – but certainly not exhaustive – set of research questions, that we believe could add fruitfully to this endeavor:
 
External pressures

  • How and why has public understanding of the relationship between financial and social commitments in organizing shifted over time? To what effect?

  • What are the expectations for how organizations should respond to emergent social issues such as election integrity and police brutality? How do expectations differ across firms and issues?

  • How and why does public understanding of the relationship between financial and social commitments in organizing shift across economies / polities? To what effect?

  • How and why do new forms of governance (e.g., certifications, legislation, rankings, audits) alleviate or exacerbate perceived tradeoffs between financial and social commitments in organizing?


Cultural and contextual factors

  • What is the “good life” to which we should organize? And who gets to decide?

  • What are the cultural, political, and economic conditions that facilitate productive synergies between financial and social commitments in organizing?

  • How does a crisis/exogenous shock affect the relationship between organizations’ social and financial commitments?

  • How does new technology affect the relationship between organizations’ social and financial commitments?

  • How do resource constraints affect the relationship between organizations’ social and financial commitments environments (e.g., a micro enterprise in an urban slum)?

  • How can we interrogate the relationship between social and financial commitments across space and time? What are the new kinds of relationships that are revealed at a higher spatiotemporal scale?

  • Can the ‘separation thesis’ between social and financial commitment be challenged? What new management theories and socioecological systems in practice can replace the current understanding that social and financial commitments are separate and contradictory?


Internal operations

  • How and why do organizational leaders differ in their perceptions of the relationship between their organizations’ financial and social commitments?

  • What rationalities or logics do managers use to evaluate the importance of social and financial commitments? How do these lenses affect perceptions of tradeoffs?

  • How do organizations create conditions that facilitate productive synergies between financial and social commitments in organizing?

  • How do power and politics within organizations affect the relationship between financial and social commitments in organizing?

  • What cognitive strategies do organizational leaders use to integrate social and financial commitments? How do different strategies exacerbate or ameliorate perceptions of tension?

  • How do perceptions of tension affect mission drift? What role does measurement and quantification of impact play?

  • How and when are multiple commitments generative versus destructive? Are there different “theories of integration” that moderate these outcomes?

 

References

  • Bansal, P.T., Grewatsch, S., & Sharma, G. (2021): “How COVID-19 Informs Business Sustainability Research: It’s Time for a Systems Perspective.” Journal of Management Studies, 58 (2), 602–606.
  • Battilana, J. & Lee, M. (2014): “Advancing Research on Hybrid Organizing.” The Academy of Management Annals, 8 (1), 397–441.
  • Ertug, G., Gruber, M., Nyberg, A., & Steensma, H.K. (2018): “From the Editors – A Brief Primer on Data Visualization Opportunities in Management Research.” Academy of Management Journal, 61 (5), 1613–1625.
  • George, G., Howard-Grenville, J., Joshi, A., & Tihanyi, L. (2016): “Understanding and Tackling Societal Grand Challenges Through Management Research.” Academy of Management Journal, 59 (6), 1880–1895.
  • Grimes, M., Williams, T.A., & Zhao, E.Y. (2019): “Anchors Aweigh: The Sources, Variety, and Challenges of Mission Drift.” Academy of Management Review, 44 (4), 819–845.
  • Henisz, W.J., Dorobantu, S., & Nartey, L.J. (2014): “Spinning gold: The financial returns to stakeholder engagement.” Strategic Management Journal, 35 (12), 1727–1748.
  • Margolis, J.D., & Walsh, J.P. (2003): “Misery Loves Companies: Rethinking Social Initiatives by Business.” Administrative Science Quarterly, 48(2), 268–305.
  • Miller, T.L., Grimes, M.G., McMullen, J.S., & Vogus, T.J. (2012): “Venturing for Others with Heart and Head: How Compassion Encourages Social Entrepreneurship.” Academy of Management Review, 37 (4), 616–640.
  • Smith, W.K., & Besharov, M.L. (2019): “Bowing before Dual Gods: How Structured Flexibility Sustains Organizational Hybridity.” Administrative Science Quarterly, 64 (1), 1–44.
  • Wang, H., Tong, L., Takeuchi, R., & George, G. (2016): “From the editors: Corporate social responsibility: an overview and new research directions.” The Academy of Management Journal, 59 (2), 534–544.
  • Wry, T., & Haugh, H. (2018): “Brace for impact: Uniting our diverse voices through a social impact frame.” Journal of Business Venturing, 33 (5), 566–574.
  • Wry, T., & Zhao, E.Y. (2018): “Taking Trade-offs Seriously: Examining the Contextually Contingent Relationship Between Social Outreach Intensity and Financial Sustainability in Global Microfinance.” Organization Science, 29 (3), 507–528.
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Matthew Grimes is a Professor of Organisational Theory and Information Systems at Judge Business School, University of Cambridge, UK. His research, which examines how individuals and organizations create, introduce, and sustain positive social change by way of entrepreneurship, is published in leading management and entrepreneurship journals.
Tyler Wry is an Associate Professor of Entrepreneurship at Wharton School, University of Pennsylvania, USA. His research focuses on understanding the various ways that entrepreneurs, innovators, and investors pursue non-pecuniary goals alongside profits, and with what results. Tyler approaches these questions from a socio-cognitive perspective that focuses on how cultural forces shape actor-level judgement and decision-making processes. His research has been published in outlets such as ‘Academy of Management Annals’, ‘Academy of Management Journal’, ‘Academy of Management Review’, ‘Journal of Business Venturing’, and ‘Organization Science’.
Garima Sharma is an Assistant Professor at the Andrew Young School of Policy Studies, Georgia State University, USA. Her research focuses on sustainability, social entrepreneurship and related tensions of purpose and profits. She is also interested in understanding how research impacts practice, and the topics of rigor-relevance and knowledge cocreation. Garima’s research has been published in ‘Academy of Management Journal’, ‘Journal of Business Venturing’, ‘Organizational Research Methods’, ‘Organization Studies’, and ‘Journal of Management Studies’, among others.