RESPONSE - Insead

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Recommendations: Recommendations for policy and standards 106 Exhibit 4. Other results from the analysis of the factors explaining cognitive alignment 1. Firm leadership and cognitive alignment A corporate leader with a credible reputation of personal commitment to CSR can be expected to have a positive influence on cognitive alignment. The effect will be apparent throughout the organization as managers will tend to adopt similar beliefs and behaviors and so respond to stakeholder interests and priorities. The hypothesis is: The greater the commitment of leadership to CSR, the greater will be the cognitive alignment between managers and stakeholders (narrower cognitive gaps). Table A: Impact of leadership on cognitive alignment Gap 1: sequential order of stakeholders Gap 2: stakeholders impact on company Gap 3: company impact on stakeholder s Strong CSR leadership 28% 32% 34% 2% Weak CSR leadership 23% 37% 32% 9% Gap 4: firm social performance Table A shows that results of the analysis. Cognitive gaps 2 and 4 supports the proposition, since managers in firms with strong CSR leadership tend to have a more aligned “risk” ranking of stakeholders and a more careful assessment of their company’s social performance. However, difference in averages for gaps 1 and 3 go in the opposite direction. In summary, the corporate leader’s personal commitment to CSR might be an important factor to explain interfirm differences in the magnitude of cognitive alignment, but the evidence in support of this hypothesis is mixed. More work is needed on this factor to ascertain its impact on cognitive alignment. 2. Organisational structure and cognitive alignment A centralised organisational structure allows for easier diffusion of homogeneous principles and beliefs supporting social responsible behaviour throughout the organization. However, a decentralised structure affords more flexibility and openness in engaging with the interests and priorities of local constituencies. Decentralisation also suggests the ability to tailor corporate behaviour for these local interests. A dual hypothesis can therefore be proposed for empirical inquiry: H1. A centralized organizational structure is associated with higher cognitive alignment (lower gaps). H2. A decentralized organizational structure is associated with higher cognitive alignment (lower gaps). <strong>RESPONSE</strong>: understanding and responding to societal demands on corporate responsibility
Recommendations: Recommendations for policy and standards 107 Table B: Impact of organisational structure on cognitive alignment Gap 1: sequential order of stakeholders Gap 2: stakeholders impact on company Gap 3: company impact on stakeholder s Centralised Org Structure 29% 27% 36% 1% Decentralised org structure 23% 30% 25% 6% Gap 4: firm social performance Gaps 1 and 3 exhibit strong support for H2: companies with a decentralized structure are characterized by smaller average cognitive gaps (higher levels of alignment). However, Gaps 2 and 4 appear to go in the opposite direction, with a (slight) advantage enjoyed by companies with a centralized structure. Overall, therefore, the pattern is not clear and further empirical work is called upon to develop clearer empirical evidence. 3. Influence of CSR department and cognitive alignment An influential CSR department in the power structure of the organization should help diffuse the sensitivity towards, and understanding of, stakeholder interests by managers. The hypothesis is: The greater influence of CSR departments and executives, the greater cognitive alignment will be observed (narrower cognitive gaps). Table C below shows the magnitude of average cognitive gaps for firms with influential CSR departments compared with those with low levels of influence (split around the approximate median). Table C: Impact of CSR department’s influence on cognitive alignment Gap 1: Sequential order of stakeholders Gap 2: stakeholders impact on company Gap 3: company impact on stakeholder s HIGHER influence 25% 28% 25% 1% LOWER influence 24% 26% 31% 7% Gap 4: firm social performance Gaps 3 and 4 show support for the hypothesis. Gaps 1 and 2 are too close to show a clear pattern. Overall, then, the data shows a modest support for the proposition, which is nonetheless offered to future studies for further probing. 4. Organisational values and cognitive alignment Finally, managers in some companies motivate their company’s investments in CSR practices with the adherence with well established organizational values. Those companies in which managers make a clear link between CSR and organisational values might be expected to have a positive cognitive alignment with their stakeholders, as shared beliefs of this kind produce a greater openness and understanding towards stakeholders' interests and priorities. The hypothesis is: Companies with managers citing organisational values as key rationale will exhibit greater cognitive alignment <strong>RESPONSE</strong>: understanding and responding to societal demands on corporate responsibility
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SIXTH FRAMEWORK PROGRAMME PRIORITY
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Contents Executive summary 6 1 Intr
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Tables Table 1. Typology of factors
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Executive summary Recommendations c
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Executive summary Recommendations l
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Executive summary Recommendations r
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Introduction Aims of this study “
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PART I: CSR AND COGNITIVE ALIGNMENT
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A model of cognitive alignment and
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Methodology Scope 3 Methodology 3.1
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Methodology Company case studies Th
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Methodology Case comparison Analysi
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Methodology CrossPair Comparison
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Findings: Managers’ understanding
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Findings: External factors and cogn
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Findings: Internal factors and cogn
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Findings: Internal factors and cogn
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Page 59 and 60: A Model of Social Consciousness and
Page 65 and 66: Methodology Experiment Settings 8.3
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Page 69 and 70: Findings: Developing Social Conscio
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Page 83 and 84: Recommendations Recommendations for
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