Arguments can be made on both sides of the question of whether a stringent global corporate environmental standard represents a competitive asset or liability for multinational enterprises (MNEs) investing in emerging and developing markets. Analyzing the global environmental standards of a sample of U.S.-based MNEs in relation to their stock market performance, we find that firms adopting a single stringent global environmental standard have much higher market values, as measured by Tobin’s q, than firms defaulting to less stringent, or poorly enforced host country standards. Thus, developing countries that use lax environmental regulations to attract foreign direct investment may end up attracting poorer quality, and perhaps less competitive, firms. Our results also suggest that externalities are incorporated to a significant extent in firm valuation. We discuss plausible reasons for this observation.

Ratings of corporations ’ environmental activities and capabilities influence billions of dollars of “socially responsible ” investments as well as some consumers, activists, and potential employees. In one of the first studies to assess these ratings, we examine how well the most widely used ratings— those of Kinder, Lydenberg, Domini Research & Analytics (KLD)—provide transparency about past and likely future environmental performance. We find KLD “concern ” ratings to be fairly good summaries of past environmental performance. In addition, firms with more KLD concerns have slightly, but statistically significantly, more pollution and regulatory compliance violations in later years. KLD environmental strengths, in contrast, do not accurately predict pollution levels or compliance violations. Moreover, we find evidence that KLD’s ratings are not optimally using publicly available data. We discuss the implications of our findings for advocates and skeptics of corporate social

research advice of Andrew King, Larry Singell and Stephen Johnson. Thanks also are due to

UNRISD Discussion Papers are preliminary documents circulated in a limited number of copies to stimulate discussion and critical comment.

We believe that the field of organization theory is adrift. In sailing jargon, we are “in irons”—stalled and making little headway toward understanding organizations and their place in our lives. We first attempt to diagnose our maladies and then, in this light, offer three broad research questions that just might reinvigorate our work: First, how can we understand today’s changing organizations? Second, how can we live in these organizations? And third, how can we best live with them? We close by calling attention to how our familiar approaches to building and testing theory might hamper any attempt to revitalize our field. Key words: organization theory; twenty-first century organizations; theory-building agenda We are adrift. The work of organization theorists has been called everything from solipsistic to dangerous, and prominent scholars are concerned. Augier et al. (2005) and Scott (2004) took stock of our field’s history and concluded that our research questions may be constrained by our perhaps too-comfortable academic affiliations with business schools and their economicsoriented, probusiness ethos. Hinings and Greenwood

When integrated with key organizational characteristics, institutional theory can yield new insights to understand differences between firms ’ strategies. We propose that a company’s functional organization and internal power structure influence its facility managers ’ sensitivity to and interpretation of institutional pressures. Combining over 500 responses from an original survey with existing data sources, we show how two corporate departments affect how facility managers perceive and respond to various institutional pressures to adopt environmental management practices.

Coevolution is an established research framework in the biological and evolutionary sciences, and though a new entrant to organization studies, it holds potential to transform the field (Lewin et al., 2003). Its fundamental premise is that entities or organizations evolve in relation to their environments while at the same time these environments evolve in relation to them. This paper argues that a coevolutionary approach is particularly well suited for research on organizations and the natural environment (O&NE), and that O&NE scholars may make significant contributions to organization theory from this perspective. However, this potential depends upon developing and maintaining a clear distinction between coevolution as a verb, or broad logic (a.k.a. macro coevolution), and coevolution as a noun, or specific mechanism (a.k.a. micro coevolution). In building these arguments the paper develops a definition and research framework for coevolutionary research and discusses theoretical and practical implications for O&NE.

Corporations have responded to society’s plea to provide innovative solutions to deep-seated problems of human misery. Organization and management scholarship can play an important role in understanding and guiding this corporate action. To date, this challenge has largely been ignored. Instead, the empirical quest to link a firm’s social investments to its financial returns has preoccupied researchers. Our goal in this paper is to reorient debate and research about social initiatives by business. We try to stimulate a fresh research agenda in three ways. First, we document the 30-year history of empirical work on the search for a relationship between corporate social performance (CSP) and corporate financial performance (CFP). Second, we critically appraise the quality of this work. And third, we question the underlying theoretical and practice-based premises of this research and, in so doing, introduce a set of new research questions to examine. We believe that these alternative questions offer great promise for understanding and, ultimately, guiding possible corporate social initiatives. We close the paper by reflecting upon the role that scholars play, and can play, in guiding the conduct of the business enterprise. 2

This paper explores the conditions that foster a positive relationship between corporate social responsibility and financial performance by developing a model of corporate social strategy. The paper defines corporate social strategy and elaborates a typology of generic social strategies extant in the literature: differentiation, cost leadership, and strategic interaction. It then develops a framework for formulating social strategy by exploring the relationship of industry structure, firm resources, corporate values and ideology, and stakeholders to the generic strategies in order to create competitive advantages that are valuable, rare and imperfectly imitable. Key words: corporate social responsibility, strategy formulation, resource-based view TOWARD A MODEL OF CORPORATE SOCIAL STRATEGY FORMULATION One of the great preoccupations of the social issues in management literature has been the study of the relationship between corporate social responsibility (CSR) and its variants (corporate social responsiveness, corporate citizenship, etc.) and financial performance (Waddock & Graves, 1997; Griffin & Mahon, 1997; Preston & O’Bannon,

this paper, we adopt the term "industry self-regulation" because this most clearly suggests the form of institution that we are interested in -- trade association sponsored industry standards. Such standards have proliferated in recent years and consequently have attracted attention from business, government, and environmental activists (Rees, 1997). In such industry self-regulation, a group of companies join together to regulate their collective action to avoid a common threat or to provide a common good by establishing a standard code of conduct. Firms may be motivated to form such a standard by external pressure from various stakeholders. For example, regardless of their individual performance, members of an industry are often "tarred by the same brush". 5 Consequently, a few poor performers can lead to environmental regulation of the industry as a whole. As a result, companies may be compelled to join together to solve this mutual problem. Whether such industry self-regulation will work remains an area of debate (c.f. UNEP, 1999). Existing scholarship presents two conflicting visions. One viewpoint suggests that selfregulation will only work when it includes explicit sanctions to prevent opportunistic behavior among members (Grief, 1997). Penalties and sanctions, these scholars argue, are needed to prevent firms from free riding off others' efforts (Grief, 1997). Another viewpoint suggests that the need for such sanctions is overstated because the institutional structure of self-regulation can still control behavior through informal means of coercion, the transferal of norms, and the diffusion of best practice (Nash & Ehrenfeld, 1997). In this paper, we reflect on these two perspectives by investigating a leading example of self regulation without sanctions -- the...