Holier Than Thou: Strategic CSR and the Threat of Managerial Hypocrisy



Why do some firms attract a higher share of public moral judgment than others for similar moral transgressions? Despite the potentially severe consequences of moral judgment, this question has received little research attention. We hypothesize that moral standards at which firms are held are more stringent if firms are perceived as good firms, defined as companies that seem to care more about advancing the social rather than private goal compared to other firms since an inconsistency in the moral conduct may induce the perception of hypocrisy. We test the hypothesis that the management of firms with high scores in CSR-related dimensions are more likely to attract negative media attention when they violate top executive compensation norms. Our evidence is affirmative and stable across different models such as negative binominal and glm regressions. However, moral transgressions seem only to be perceived as hypocritical when the moral discrepancy in conduct affects the same moral category of justice. Differences in the visibility of firms or mimetic processes of the press cannot explain our results.
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Guido Berens