Decoupling Corporate Social Orientations: A Cross-National Analysis

This study examines the variations in corporate social orientations (CSOs) across developed and developing countries in the context of a legitimacy threat. Conceptualizing CSO as signals, the author develops and validates a seven-code index of CSO that identifies executive orientations toward multiple stakeholders. Using this index on CEO shareholder letters from the United States, Germany, and India, the author finds that firms signal a multi-stakeholder image toward employees, communities, and environment during good times to enhance their social license to operate, and yet such signals are not carried through during the threat period. This disconnect in signaling in the wake of a legitimacy threat is indicative of decoupling in corporate orientations and exposes the multi-dimensionality of the CSO concept. By adding a cross-national and temporal dimension, this research contributes toward better understanding the complexity behind CSOs and opens new areas for future research.