Transcending the Instrumental Logic of Social Responsibility: A Corporate Reputation Perspective

Abstract

The urgency of the uptake of ethical business practices has popularized legitimacy-based research in the organizational studies and marketing fields. The limitations of compliance-based legitimation approaches have equally been reiterated in theory and practice. This chapter therefore offers a cognitively dominated corporate reputation approach to business ethics and legitimacy, which deepens understanding of firms’ intrinsic morality beyond the instrumental logic of corporate social responsibility (CSR) practices. This chapter offers a synthesis of the stakeholder-contingent application of CSR and corporate reputation in the corporate marketing literature with the institutional-strategic understanding of legitimation in organizational studies. The chapter critically assesses how cognitively situated appraisal of corporate behavior can transcend compliance-based reputational outcomes. A framework is thereafter offered, which can serve as a guide for assessing the thresholds of stakeholder animosity toward organizational behavior. An overview of insights generated from the applied framework is thereafter presented, in the context of a company listed on the Financial Times Stock Exchange (FTSE)/Johannesburg Stock Exchange (JSE) responsible investment index. It is further explicated in the chapter how the appraisal of corporate behavior through the legal CSR lenses can erode strategic legitimation approaches. While espoused philanthropic practices can enhance perceptions of financial stability, perceived incompatibility of such practices with prevailing CSR standards can signal strategic attempts at cosmetically building reputation. The chapter concludes with an overview of the limitations of the instrumental logic of social responsibility and positions stakeholder perceptions of firms’ intrinsic morality at the forefront of sustainable and legitimate business practices.