The Influence of Task Environmental Uncertainty on the Balance Between Normative and Strategic Corporate Social Responsibility

Abstract

Corporate social responsibility (CSR) is increasingly ubiquitous, but firms differ in their emphasis on conforming to industry CSR norms versus using CSR strategically to differentiate from competitors. Research explains that managers attempt to balance conformity and differentiation regarding CSR but does not explain what shifts this balance. We draw from optimal distinctiveness research to explain how different types of uncertainty created by industry task environments shift the balance between conforming to industry CSR norms and pursuing differentiated CSR activities. Using variance decomposition on a 9-year panel of 3,184 firms from 357 industries in the United States, we find that managers emphasize normative (strategic) CSR to a greater (lesser) extent in low-munificence and high-complexity task environments, where uncertainty drives managers toward the security of established industry CSR norms, and to a lesser (greater) extent in high-dynamism task environments, where following uncertain CSR norms is less attractive. We also find that the influence of uncertainty created by industry task environments has, on balance, remained constant as business norms shifted from shareholder to stakeholder primacy. Our theoretical framework reveals task environmental uncertainty as an antecedent to how managers attempt to achieve optimal distinctiveness regarding CSR and explains how different sources of uncertainty shape these attempts.