Reputational Considerations in Firm Response to Social Issues

As firm stakeholders have become more engaged in social issues, they are developing expectations with regard to firm responses to these issues, beyond traditional Corporate Social Responsibility (CSR). This paper examines how firms’ CSR engagement with social issues has evolved from traditional philanthropy to more significant and active actions. As such, corporate social identity is introduced as a new construct that explains the relationship of social issue alignment with the firm’s broader mission. A model is presented that illustrates how a firm’s corporate social identity alignment with a social issue influences stakeholder interpretations of if, when, and how a firm responds to the social issue. The firm’s reputation, as determined by stakeholders, will be significantly influenced by stakeholder evaluation of the firm responses as they align with stakeholder response expectations.