A BEHAVIORAL THEORY OF SOCIAL PERFORMANCE: SOCIAL IDENTITY AND STAKEHOLDER EXPECTATIONS

Firms use reference points to evaluate financial performance, frame gain or loss positions, and guide strategic behavior. However, there is little theoretical underpinning to explain how social performance is evaluated and integrated into strategic decision making. We fill this void with new theory...

Full description

Saved in:
Bibliographic Details
Published in:The Academy of Management review 2018-04, Vol.43 (2), p.259-283
Main Authors: NASON, ROBERT S., BACQ, SOPHIE, GRAS, DAVID
Format: Article
Language:English
Subjects:
Ambiguity
Behavior
Behavioral decision theory
Companies
Decision making
Discrepancies
Feedback
Financial performance
Legitimacy
Social entrepreneurship
Social identity
Social interaction
Stakeholders
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Firms use reference points to evaluate financial performance, frame gain or loss positions, and guide strategic behavior. However, there is little theoretical underpinning to explain how social performance is evaluated and integrated into strategic decision making. We fill this void with new theory built on the premise that inherently ambiguous social performance is evaluated and interpreted differently than largely clear financial performance. We propose that firms seek to negotiate a shared social performance reference point with stakeholders who identify with the organization and care about social performance. While incentivized to align with the firm, firm-identified stakeholders provide intense feedback when there are major discrepancies between their expectations and the firm’s actual social performance. Firms frame and respond to feedback differently depending on the feedback valence: negative feedback will be framed as a legitimacy threat, and firm responses are likely to be substantive; positive feedback will be framed as an efficiency threat, and firm responses are likely to be symbolic. However, social enterprises face a double standard in evaluations and calibrate responses to social performance feedback differently than do nonsocial enterprises. Our behavioral theory of social performance advances knowledge of organizational evaluations and responses to stakeholder feedback.
ISSN:0363-7425
1930-3807
DOI:10.5465/amr.2015.0081