Talk is Not Always Cheap: What Firms Say, How They Say It, and Social Performance

In response to pressures to consider their firms’ socio-environmental impacts, executives increasingly make public commitments to corporate social responsibility (CSR). Nonetheless, there is often a discrepancy between their communication and their actions. We adopt a cognitive-linguistic perspective to develop and test propositions linking corporate communication about CSR to realized social performance. The premise of cognitive linguistics is that mental representations are reflected in the structure of language more so than in its content. We show that the content of firms’ reporting is a poor predictor of their social performance: indeed, the more firms mention non-shareholding stakeholders in their statements, the lower is their social performance. In contrast, we find that linguistic structure better explains firm-level variance in social performance. Specifically, forms of language that represent the multifaceted relationships between different stakeholders (conjunctive language), and that reflect a hierarchy among ideas (analytical language), distinguish high social performers from their peers. We therefore argue that achieving social performance requires not only an awareness of what is important, but also a more nuanced understanding of the complementarities and trade-offs that exist between actions. We discuss implications for future research. The current, working paper version is available at this SSRN link.

 

 

 

My Research

I am a strategy scholar whose research focuses on Sustainability and Corporate Social Responsibility (CSR). More specifically, I seek to understand whether, how, and the extent to which the modern business organization contributes towards building a sustainable future. My academic work evolves around two main themes: a) understanding how investment analysts, and the public equity markets, perceive, evaluate and react to corporate engagement with, and integration of, environmental and social issues into strategy and b) understanding the multiple factors (e.g. institutional, regulatory, behavioural) that may affect, drive or hinder, the corporate decision to adopt environmentally and socially responsible strategies.

Upcoming Events

October 5, 2017

Prof. Ioannou will deliver the prestigious CBGE lecture at FHWien der WKW

October 6, 2017

Prof. Ioannou be a keynote speaker at LBS Worldwide Alumni Celebration in Vienna!

October 16, 2017

Prof. Ioannou will be speaking at the 2017 Global Investors Forum in Switzerland