Business and Management INK

Non-participation in Controversial Business

March 22, 2011 666

“Stakeholder Management and Nonparticipation in Controversial Business” was just published in Business & Society’s Online First. The article was written by Rosamaria C. Moura-Leite, Robert C. Padgett, and Jose I. Galan, all of University of Salamanca, Salamanca, Spain. Rosamaria C. Moura-Leite provides some background on the article:

– Who is the target audience for this article?

This article is targeted at researchers interested in how corporate social performance impacts on organization. Our research added to the numerous efforts researchers have made to further knowledge on this topic, provide knowledge specific on the impact the non-participation in controversial business can have on corporate financial performance.

– What Inspired You To Be Interested In This Topic?

There are several studies that have contributed to our understanding of the effect that corporate social performance has on corporate financial performance, although the non-participation in controversial business construct has therefore been analyzed in only a handful of studies. We identified the need to know more about the instrumental component of firms’ avoidance of controversial businesses.

– Were There Findings That Were Surprising To You?

Yes. The purpose of this paper has been to provide knowledge on the impact that firms’ non-participation in controversial business can have on corporate financial performance. To achieve this objective we adopted two economic measures, a market-based and an accounting-based, since they focus on different aspects of an organization’s financial performance. We expected similar results between the two economic measures, but our empirical evidence demonstrated different results, which gave and added value of our approach to the literature on a different way.

– How Do You See This Study Influencing Future Research And/Or Practice?

Our findings created opportunities for further research focusing on understanding the motivation behind non-participation in controversial business by type of activity. This would be an interesting research topic, because each controversial business activity has different characteristics, and their specific effects on the organization have not been studied profoundly in the literature.

For business managers our study provides empirical proof that non-participation in controversial business impacts positively on a firm’s market performance, so firms have to take into account stakeholders’ opinion regarding any involvement in controversial businesses because it can have a negative impact on their firm.

– How Does This Study Fit Into Your Body Of Work/Line Of Research?

Each of the authors of this research has corporate social performance as a topic in their line of research. Understanding the involvement in controversial business has helped us to improve our comprehension of the relationship between social performance and organizational performance, insights that we can use for other researches.

– How Did Your Paper Change During The Review Process?

The paper had major changes during the revision process. We were lucky to have very competent and highly developmental reviewers and editors, who challenged us to truly create a meaningful contribution to the field.

– What, If Anything, Would You Do Differently If You Could Go Back And Do This Study Again?

We are very happy with the final paper, especially for its acceptance for publication in such a prestigious journal. There is no perfect research; there are always details that can be improved. In our case, we think that the research could have used a larger sample and could have included other control variables such as advertising expenditure, which wasn’t available to us.

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