The moderating effect of organizational life cycle on the relationship between corporate social performance and corporate financial performance

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Master thesis

The moderating effect of organizational life cycle on the relationship between corporate social performance and corporate financial performance

Student name: Robin Anker

Student number: 10222369

Program: MSc in Business Administration – Strategy Track

Name of Institution: Amsterdam Business School, University of Amsterdam

Supervisor: Pushpika Vishwanathan

Date: 23-06-2016

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Statement of originality

This document is written by Robin Anker who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

The aim of this thesis is to analyse the moderating effect of organizational life cycle (OLC) on the relationship between corporate social performance (CSP) and corporate financial performance (CFP). Research on the CSP-CFP relationship has mainly focused on researching large established firms. By investigating the moderating effect of OLC it can be investigated how the CSP-CFP relationship changes as firms grow from small startups to mature firms. Throughout their life cycle firms have different relations with different types of stakeholders and by looking at OLC it is hoped to explain how these relationships change. Database research was used to combine data on OLC variables, return on assets for financial performance and social scores to measure CSP. The sample that was used contained cross-sectional data. Using hierarchical clustering the sample was divided into five clusters representing startup, rapid growth, maturity, revival and a group of unidentifiable firms. A multiple regression was used to test for interaction effects between the different life cycle stages, CFP and CSP. A direct bidirectional relationship was found between CSP and CFP. A moderating effect of OLC was also found but this proofed only significant for firms situated in the revival stage of their life cycle.

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I. Introduction

While the term corporate social responsibility (CSR) became popular in the 1960s, the concept is still relevant and has considerable influence in today‟s society. The idea that firms contribute in the preservation of the environment has gained increasing acceptance around the world. Recently the all the members of the European Union (EU) singed an ambitious climate agreement in Paris (“Historic climate deal in Paris: EU leads global efforts.,” 2015) to avoid further climate change and limit global warming. This shows that governments are increasingly creating stricter environmental laws. Also, the recent Volkswagen scandal (Gardner, Lienert, & Morgan, 2015) and the following public outcry shows that consumers care about firm‟s social behaviour and that they condemn firms that do not invest in proper

measures to contribute the society beyond delivering value to their shareholders. These events show that CSR is still a relevant concept for consumers, governments and environmental organizations and that it is worth looking into for firms.

Besides the interest of these different stakeholders concerning a firm‟s social performance, there are also financial benefits possible for firms that engage in CSR. A positive relationship between a firm‟s social performance and its financial results has already

been established in the past, but due to a range of possible moderators and mediators in this relationship there is still a lot of ground to be covered to explain this complex relationship. A potentially interesting phenomenon that influences the relationship between CSR and financial performance is organizational life cycle (OLC). A firm‟s OLC describes different stages a firm goes through from the moment it is founded, followed by growth into maturity and possibly the demise of the firm. Scholars have found that a stage a firm is in has an influence on the relationship between CSR and financial performance. This thesis will focus on the moderating effect of this OLC on this relationship.

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The relationship between CSP and CFP has been researched extensively since the introduction of the concept. There are mixed results because there is a lack of agreement on an exact definition for CSP and because different measurement standards are used by researchers. Crane et al. (2008) argues that due to the shaky foundations of the construct that other theories are better able to explain why firms engage in close relations with their stakeholders than the current literature on the CSP-CFP relationship. While scholars still disagree on the results, a growing number of empirical research shows that a positive relationship between CSP and CFP (Orlitzky et al., 2003). In their meta-analysis Orlitzky et al. (2003) find prove for a bidirectional relationship, which indicates that both CSP and CFP have a positive influence on each other.

A number of moderators and mediators of the CSP-CFP relationship have been researched. The most prominent mediator that is discussed in the literature is the size of the firm. This variable is used as a control variable in a number of empirical studies indicating that firm size positively influences the strength of the CSP-CFP relationship. Chen & Metcalf (1980) conclude that size is a background factor that influences the CSP-CFP relationship. While Wang & Bansal (2012) fail to find evidence for the fact that size confound the relationship between CSP and CFP they do say that size is an important factor in this relationship and that further research in other moderators is needed to give a more clear image. Other factors that have been researched are firm reputation, attractiveness to new employees, industry differences and difference in relationship with stakeholders (van Beurden & Gössling, 2008). Tough scholars deem size an important moderator, the empirical research that has been undertaken on the CSP-CFP relationship has mainly focused on established firms. Wang & Bansal (2012) argue that this is surprising because new ventures make up a big part of the business environment every year. They argue that newness and lack

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of long term orientation has a negative influence on the effect of CSP on CFP. So when investigating the CSP-CFP relationship it is important to look at firms with different sizes.

Differences between smaller and more mature firms can also be found in the way they handle their relationships with different stakeholders. Relationships with stakeholders and the value they offer for firms vary in different stages of a firm‟s OLC. Jawahar & Mclaughlin (2001) argue that specific stakeholders are important to firms at specific periods in their organizational life cycle because in each stage a firm faces different opportunities and threats. Because of this some stakeholders will be approached proactively while others will receive minimal attention or will be ignored. In the startup stage, where firms predominately need financial support and they need to sell their product, stockholders, creditors and customers will be most important. In the growth stage a firm needs to expand and stabilize its relationships. The extra resources a firm needs to expand puts pressure on preserving good relationships with suppliers. In the mature stage a firm operates in a more stable environment resulting in a bigger cash reserve. This allows firms to engage all important stakeholders in a proactive way. So the way firms treats their stakeholders depends on where firms are situated in their OLC and how important stakeholders are to the firm.

Because the bulk of empirical research into the CSP-CFP relationship has focused on large established firms, younger firms situated in the early stages of their organizational life cycle have not received sufficient attention. While Wang & Bansal (2012) focussed on the moderating effect of new ventures on the CSP-CFP relationship this thesis will look at the moderating effect of different OLC stages. Though firm age and size are used to classify OLC stages, they do not solely determine what stage a firm is in. A firm can move back and forth between different stages so only age and size are not valid indicators of a firm‟s OLC.

The stage a firm is situated in depends on differences in structure and strategy, making it a more complex construct. Studying OLC makes it possible for researchers to look at long term

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changes in strategy and structure and see how stakeholder relations change as firms move between stages (Jawahar & Mclaughlin, 2001). This makes OLC a better indicator to predict where a firm is situated in its development than size or age. Knowing where a firm is situated in its OLC also supports managers in making strategic decisions because each stage requires a different structure and a different set of strategic measures (Elsayed & Paton, 2009). This can assist managers in making the important decision whether invest in CSR and how much resources to use for these investments.

Though the difference in structure and strategy between different stages in the OLC have been discussed in detail in the literature, little empirical research has been done to investigate the exact influence of the organizational life cycle on the relationship between CSP and CFP (Elsayed & Paton, 2009). Elsayed & Paton (2009) investigate the relationship between CSP and CFP during different stages in the organizational life cycle. The make use of corporate environmental policy (CER) scores, which indicates a firm‟s environmental commitment, as a proxy of CSP. The CER scores are aggregating scores that chief executives give other companies on their environmental commitment. They find that during the initial growth and the revival stage the relationship is positive, during the rapid growth stage there is no significant relationship found and in the maturity stage the strongest relationship is found. By using the CER scores as a proxy for CSP, Elsayed & Paton (2009) do not measure all aspects of the multidimensional construct of CSP.

This thesis will elaborate on the research of Elsayed & Paton by looking at multiple dimensions of CSP. By investigating not only environmental performance but also other components of CSP the relationship between different stakeholders and their influence on CFP can be investigated. This thesis will also look at firms in a different part of the world, namely firms in the United States (U.S.). For these firms a larger amount of CSP data is available, making it possible to gain a more varied sample of firms. Because there is a

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difference in how firms engage in CSR between countries, namely that U.S. firms focus more on community related CSR activities opposed to European firms focussing on sustainability of their production processes (Maignan & Ralston, 2002), this thesis will explore if the moderating effect of OLC still holds for U.S. firms. By investigating broader CSP dimensions and by applying the OLC theory on U.S. firms I hope to build on the existing work of Elsayed & Paton (2009) and see if their results still hold under these different circumstances. This thesis will empirically examine how the relationship between CSP and CFP changes as a firm moves through its life cycle. As a firm matures its relationship with its stakeholders possibly changes which can lead to a different relationship with firm financial performance. The research question that will be used is the following:

What is the effect of the organizational life cycle stage a firm is situated in on the relationship between CSP and CFP?

This thesis contributes to CSR research by applying investigating the moderating effect of different OLC stages on the CSP-CFP relationship. A broader conceptualization of CSP will be investigated as will a sample of U.S. firms. By doing this I will test if the findings of Elsayed & Paton (2009) still hold for a broader measure of CSP and for a sample of a different country. This question will be answered by doing an extensive literature review on the influence of OLC on the CSP-CFP relationship. In the empirical research the focus will be on CSP scores and their relationship with CFP, the actual social activities and firm disclosure will not be taken into account. This makes it possible to create a big dataset of firms to do the empirical investigation but it prohibits a thorough investigation into the underlying factors of CSP. The results of the empirical research show only a significant difference between the revival stage and the unidentified stage of a firm‟s OLC indicating

that further research is needed to improve OLC measures and the moderating effect of OLC on the CSP-CFP relationship.

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II. Literature review

Corporate social performance and financial performance A definition of corporate social responsibility

Traditionally the goal of an organization was to produce services and goods as efficiently as possible to create value for its shareholders (Jamali, 2006). Since the 1980s firms have moved away from this approach due to the growing importance of sustainability, leading to a new way of doing business. Globalisation and an increase in international trade have led to a more complex business environment, a higher demand for transparency and to firms concerning themselves more with societal needs (Jamali, 2006). This new way of doing business means firms are more engaged with the environment in which they operate and that they produce goods and services in a more responsible way. The increased attention for investments in society can be labelled as CSR. Depending on what resources a firm has available and what motivation a firm has to engage in these activities, a firm will respond to social needs in different ways. If firms possess the resources and capabilities that fit a specific social need than it will get involved by creating a solution. If a firm‟s capabilities and resources do not fit

a social need it will choose offer financial aid (Margolis & Walsh, 2003). Some examples of responsible activities are investing in environmental friendly production methods, supporting local communities, donating to charity or offering custom benefits to employees. Because responsibilities cannot be observed directly scholars use CSP, a measure that quantifies a firm‟s social behaviour, when conducting empirical research (Crane et al., 2008).

Scholars often use the concept without using a definition (McWilliams et al., 2006), and those who have defined it did so in a number of ways (McWilliams et al., 2006; Sprinkle & Maines, 2010), all of which have their own characteristics, resulting in a disagreement among scholars about the exact meaning of the concept (Maignan & Ralston, 2002). Though scholars disagree about the exact definition of the concept, a number of characteristics of the

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concept are repeatedly mentioned: (1) CSR entails the complete set of policies a firm develops and the actions it takes that have a positive impact on society and increase the welfare of numerous stakeholder groups other than shareholders (Cochran, 2007; McWilliams et al., 2006; Sprinkle & Maines, 2010) or reduce a firm‟s negative impact on society (Maignan & Ralston, 2002), (2) these actions and policies go beyond the solely economic purposes of the firm and beyond requirements of government regulations (Aguilera et al., 2007; Mcwilliams & Siegel, 2001; McWilliams et al., 2006), (3) firms engage in these actions because they have ethical obligations toward society (Crane et al., 2008), (4) these actions are often integrated in the decisions a firm makes about its strategy (Jamali, 2006).

The dimensions of corporate social performance

As is the case with CSR, CSP is a concept that has no set definition and consists of multiple dimensions. Over the years CSP has changed from a narrow concept into a complex one consisting of multiple dimensions, that plays an important role in current corporate decision making (Cochran, 2007; Garriga & Melé, 2004). CSP can be categorized along three different dimensions: economic, environmental and social (Jamali, 2006). The economic dimension describes measures of sustainability beyond financial ones, encompassing human and intellectual capital a firm develops. The environmental dimension deals with the impact a firm has on its environment, meaning the natural environment and its inhabitants. The focus of the social dimension is the impact a firm has on the network of social relations it functions in. This encompasses dealing with the requirements of various internal and external stakeholders (Jamali, 2006). Firms must make the difficult decision to spread their resources over the different dimensions to make a grounded trade-off.

Besides multiple dimensions to describe CSP, there are also different ways to measure the concept. Ways to measure CSP are social disclosure, corporate actions and social ratings. Disclosure is the amount of information regarding social activities a firm makes public,

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corporate actions are the concrete social actions a firm undertakes and corporate social ratings are indexes that rate the social performance of firms (van Beurden & Gössling, 2008). Each measurement technique has its own advantages and disadvantages and the preferred method will depend on the employed research method. Because of the disagreement among scholars about the meaning of the concept, it is hard to classify what exactly CSP means and how it should be measured. If researchers would use a similar definition of CSP throughout their research, results between studies would have been easier to compare and there would be a much greater understanding of the concept (Hull & Rothenberg, 2008). The lack of understanding about the cause and the consequences of CSP do not provide managers with a clear understanding of how it can be implemented best.

Motivations to engage in CSR

There is a disagreement among scholars regarding the use of CSR policies in an organization. This disagreement rests on a fundamental tension between different views about the primary function of a firm (Margolis & Walsh, 2003). Shareholder view argues that the primary function of the firm is to create shareholder value while stakeholder view argues that firms should also take into account other stakeholders besides shareholders, such as employees, customers and suppliers. Firms face a difficult consideration regarding if and how to engage in CSP. Shareholders require firms to produce financial results while society is increasingly demanding the involvement of firms in social issues. Investments in social activities have to be justified by managers and these investments must arise from a careful cost-benefit analysis regarding the use of firm resources (Margolis & Walsh, 2003). The costs of CSP can be measured by looking at CSP activities a firm undertakes and the activities a firm could not undertake because resources where diverted to CSP activities (Sprinkle & Maines, 2010). To determine the cost of CSP activities, a firm must compare the socially responsible activity to the traditional activity. Firms must also take into account the possible of effect of engaging in

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CSP activities on customers and employees. When doing a cost benefit analysis firms have to take into account that the benefits of social performance only occur over a longer period of time; first the costs of investments in social performance have to be amortized (Brammer & Millington, 2008). The reason that there is controversy regarding CSP activities of firms is that it is assumed that firms incur significant costs by pursuing these activities beyond their objective of profit maximization (Herremans et al., 1993). Because of this disagreement it is difficult for managers to justify their motivations for engaging in social behaviour.

There are three types of motivations for firms to engage in CSP. According to the instrumental view firms can engage in CSP to achieve higher financial performance. The second motivation stems from the negative duty approach, which describes that firms are compelled by stakeholder norms to engage in CSP (McWilliams et al., 2006). Depending on the environment a firm operates in, it faces different degrees of internal and external pressures to engage in social initiatives (Aguilera et al., 2007). Engaging in CSP activities that are demanded from non-financial stakeholders can be important for firm survival, because not satisfying these stakeholders can lead to withdrawal of their support (McWilliams et al., 2006). Examples of this are stricter rules imposed by governments regarding environmental issues, an increased activity of labour onions and consumer demand for sustainable products and production methods. Lastly, positive duty view suggests that engagement in CSP can also arise from a firm‟s motivation to make a difference in society

(Maignan & Ralston, 2002). According to this view a firm has altruistic intentions; it believes that the efforts put in CSP are part of being a good citizen (Sprinkle & Maines, 2010).

Scholars point out a number of benefits for firms engaging in CSR. Sprinkle & Maines (2010) and Turban & Greening (1997) find that firms that have higher CSP have higher reputations and are more attractive to future employees than firms that have low CSP scores. They also argue that familiar firms spend more on advertising, get more attention in

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newspapers and score better in community relations, employee relations, product quality and treatment of women and minorities. These results indicate that potential employees are aware of firms their CSP and that this is taken into account in their decisions, leading to a larger possible pool of applicants. This increases the change for firms to find qualified personnel, possibly resulting in a competitive advantage. Firms also pursue a CSP strategy so customers think the firm is more reliable. Consumers assume that the products that are produced by a reliable firm are of higher quality (Mcwilliams & Siegel, 2001). If firms are able to determine that consumers demand CSP, they can capitalize on this by offering premium products or services that are produced sustainable (Mcwilliams & Siegel, 2001; Sprinkle & Maines, 2010). But to be able to use this as a differentiating factor firms have to make sure that these products meet the minimum requirements of the industry standard (Hull & Rothenberg, 2008). Though firms have different motivations to engage in CSR activities the endgame for both firms and all of its stakeholders is the same. A healthy society and successful businesses are dependent on each other. Firms need a healthy society to be able to grow and successful businesses create jobs and wealth for society (Porter & Kramer, 2006). Thus firms should take into account that all of its activities have an impact on the community in which it operates.

Firms can either engage in social behaviour in a reactive or a proactive manner, depending on what better fits a firm‟s strategy. Although a firm‟s policies regarding social

behaviour are mostly reactive, following government restrictions, environmental failure or protests, firms are increasingly engaging in social behaviour in a proactive way (Aguilera et al., 2007). Engaging in CSP in a reactive manner will result in multiple short firm activities that do not have a lasting influence on society (Porter & Kramer, 2006). Firms that proactively engage in social behaviour often focus on their „triple bottom line‟, meaning they are focused on economic profitability, environmental sustainability and social performance.

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Firms can for example, proactively engage in CSR activities regarding government policies so they can create strong government relations (McWilliams et al., 2006). The advantage of strong government relations are a lower likelihood of strict new government policies on industries in which firms operate and the ability to prepare for new regulations (Cochran, 2007; Sprinkle & Maines, 2010).

The CSP-CFP relationship

CFP is used to measure the economic performance of firms. When CSP is measured using market-based measures stock performance or price per share are used, when it is measured using accounting-based measures return on assets (ROA) or growth are used (van Beurden & Gössling, 2008). By examining the impact a firm‟s actions have on it‟s different stakeholders it is possible to find ways in which CSP could lead to higher profitability (Cochran, 2007). This does not mean that every firm with high CSP will automatically see an increase in financial performance; CSP is one of multiple factors that can influence firm performance. Previous research has resulted in inconsistent findings regarding the relationship between CSP and CFP (McWilliams et al., 2006; Orlitzky et al., 2003). The inconclusive results of previous empirical studies into the CSP-CFP relationship suggest that the relationship is more complex than a direct causal relationship (Hull & Rothenberg, 2008). These inconsistencies have been attributed to researchers making use of (1) questionable social performance indexes, (2) varying financial performance measures (Waddock & Graves, 1997) and (3) unsuitable sampling methods (van Beurden & Gössling, 2008). While the majority of studies report a positive relationship, some authors report a negative relationship and some find no relationship (Herremans et al., 1993; Margolis & Walsh, 2003).

Scholars have different conceptual arguments to explain the relationship between CSP and CFP. These arguments are based on ideas regarding how to make optimal use of a firm‟s

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pressure to make the right choices (Waddock & Graves, 1997). The shareholder approach argues that investment in social activities should only be undertaken if they increase firm performance and consequently increase shareholder value. Opponents of investment in CSR activities state that the presence of CSP indicates that firms misuse resources on CSP activities that should be used on projects that could increase shareholder value (McWilliams et al., 2006; Waddock & Graves, 1997). Firms that use these resources for CSP activities can incur extra costs, which can cause them to have a competitive disadvantage (Alexander & Buchholz, 1978).

Stakeholder view suggests engaging in CSP has a positive effect on CFP. Multiple authors suggest that socially responsible firms are likely to have skilful managers resulting in better firm performance (Alexander & Buchholz, 1978; Herremans et al., 1993). Because of better performance firms will possess slack resources (Orlitzky, 2001; Waddock & Graves, 1997) which can be invested in CSR activities. Slack resources are the resources a firm possesses beyond the minimal amount resources it needs to produce their regular output of products or services (Ren & Guo, 2011). Investments in CSP will improve relationships with key stakeholders which can lead to better financial performance. By investing in social responsibly on a continual basis firms can prevent large expenses that may occur after new environmental laws get enacted. For managers to be able to justify their investments in CSP they have to find the balance between creating shareholder value and fulfilling moral obligations towards society (Margolis & Walsh, 2003). Assuming that it is the goal of management to maximize shareholder value, a disinvestment that decreases rates of return violates management‟s obligation towards shareholders (Posnikoff, 1997). So managers have

to be reasonably sure these activities will pay off, because negative CSP will be evaluated differently than positive CSP. Van der Laan et al. (2008) find that the effect of negative CSP on financial performance is stronger than the effect of positive CSP.

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The conceptual arguments of these scholars have also been empirically tested. Alexander & Buchholz (1978), Hull & Rothenberg (2008) and Mcwilliams & Siegel (2001) find a neutral relationship between CSP activity and financial performance. Mcwilliams & Siegel (2001) explain this by pointing out that there the effect of CSP activity depends on its costs and benefits. Orlitzky (2001) and van Beurden & Gössling (2008) both use a meta-analysis and find that the majority of empirical studies discover a positive relationship between CSP and CFP. After controlling for firm size Orlitzky (2001) concludes that there is some inconsistency in the results, but the positive relationship still holds. Herremans et al. (1993) find that firms that have poor reputations for social responsibility have significantly lower financial performance than firms that have good reputations. This is especially the case for firms that operate in industries that experience high levels of social conflict. Scholars have also found that the positive relationship between CSP and CFP goes in both directions (Orlitzky, 2001; Waddock & Graves, 1997). These authors find that both prior financial performances can lead to an increase in CSP and that high CSP can lead to an increase in financial performance. Thus CSP can have a positive influence on CFP, but the underlying reasons for this is not yet clear. Stakeholder theory will get into the underlying mechanisms of the CSP-CFP relationship.

Stakeholder theory

Definition of stakeholder theory

Stakeholder theory is an organizational management approach that deals with different groups that make up the environment an organization operates in and how a firm cooperates with these groups. Stakeholder theory has a lot in common with the CSP model, which investigates the relationship between CSP and financial performance (Mcwilliams & Siegel, 2001). Freeman defines stakeholders as the entities that have an influence on the strategic decisions made by firms or entities that are affected by these decisions (Freeman, 1984). This

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definition is broad and does not specify what stakeholders are most important to firms and whose needs should be given more attention. There is considerable disagreement between scholars on how to define a stakeholder. Narrow definitions only describe on the influence the relation with a stakeholders has on the performance of the firm. Broad definitions focus on all groups that affect and are affected by the focal firm (Mitchell, Agle, & Wood, 1997). Because these definitions are so broad, virtually anyone can be classified as stakeholder. This makes it difficult for managers to assess what stakeholders are relevant for the firm and how they should be treated. The way firms define what they consider a stakeholder will determine what strategy they will employ and how they will treat the potential stakeholder. Firms that engage in CSP build strong relationships with their stakeholders which can lead to firms creating a competitive advantage (Mcwilliams & Siegel, 2001). Managing for stakeholders is the opposite of the „arms-length‟ approach in which stakeholders are treated as exchangeable

economic actors. Using this approach, stakeholders will only be allowed to express their concerns if this is in the best interest of the firm (Harrison et al., 2010).

There are different perspectives with regard to how to incorporate stakeholder‟s needs in a firm‟s strategy. But these perspectives all agree on the fact that to achieve high

performance firms should adapt a broad strategy in which they should consider the needs and demands of multiple stakeholders (Harrison et al., 2010). If the needs of the important stakeholders are satisfied firm welfare will be optimized. The difference between the different perspectives lies in the amount of value and decision making power that should be allocated to stakeholders to satisfy them beyond the minimum to amount that is needed to keep participation going. The way stakeholders are described in management literature rests on two different views of what an organization is and how it functions. The conventional input-output view of the cooperation treats stakeholders such as investors, suppliers and employees as a number of functions that act as input for the firm. These inputs all contribute

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to delivering a satisfying end product to customers. The stakeholder model takes into account all stakeholders of the firm with legitimate interests, which cooperate with the firm to gain a net benefit. In this model there is no one stakeholder that has a priority over the others (Donaldson & Preston, 1995). Stakeholder theory and its related concepts have been explained in different ways by various authors using contradictory evidence and arguments. This has led to the problem that there is no consensus on the nature and the purpose of the theory.

Relevance of stakeholder theory

The reason firms should not only focus on satisfying the needs of their shareholders is because organizations do not exist in a vacuum. Firms operate in a network of actors in which goods, services, information and other resources are exchanged (Freeman, 1984) and it is thus important to take into account all the stakeholders a firm deals with on multiple levels. On each level firms are pressured to engage in CSP activities by different actors and these actors all have a different set of motivations to do this. Each of the firm‟s stakeholders have their own expectations on how a firm should use their resources (Waddock & Graves, 1997). According to stakeholder theory the success of an organization depends on how an organization manages its relationships with individuals and groups that have an influence on its long term survival (van Beurden & Gössling, 2008). These individuals or groups could be financers, shareholders, employees, customers and local communities. Firms are dependent upon these stakeholders for certain resources. The extent to which a firm relies on other firms and stakeholders depends on the importance of the resources these stakeholders control (Jawahar & Mclaughlin, 2001). Because of these dependencies firms do not have the freedom to determine how they can distribute their resources. Analysing these actors and their motives can help firms to come up with a strategy to manage their stakeholder relations in a way that is benefitionary to the firm and its long term survival. This way firms can develop custom

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relationships with each of their primary stakeholders so they can protect their critical resources (Van der Laan et al., 2008). Because multiple stakeholders contribute to the long-term value of the firm, it is obligated to create value for all those stakeholders that play an important part in the success of the firm. This is why firms must be well informed about what constitutes a stakeholder. To do this firms must measure whether they attend to stakeholder needs in an effective way; they need to develop a system to assess if they maintain their stakeholder relationships in an appropriate manner (Perrini & Tencati, 2006).

Different perspectives of stakeholder theory

Different arguments to justify stakeholder theory can be divided in three perspectives; descriptive, instrumental and normative stakeholder theories. Arguments for the descriptive approach attempt to show that concepts of stakeholder theory can explain observed reality, instrumental arguments suggest a relationship between CSP and CFP and the normative approach bases its arguments on utilitarian concepts (Donaldson & Preston, 1995). Descriptive stakeholder theory is used to describe and explain characteristics of corporate behaviour. It deals with the relationships that exist between firms and stakeholders and how these parties maintain these relationships. To fully understand the relationship between CSP and CFP it is important to weigh the underlying stakeholder interactions that make up a firm CSP policy (Van der Laan et al., 2008). Instrumental stakeholder theory is used to find relations between stakeholder management and firm performance (Donaldson & Preston, 1995). Most studies that have looked at the relationship between managing for stakeholders and firm performance have found a positive relationship (Harrison et al., 2010). If a stakeholder trusts a firm, it may be willing to provide sensitive information because it believes this information will not be used in a harmful way (Harrison et al., 2010). In this way the combination of firm and stakeholder resources that is created during collaboration can lead to a competitive advantage. Firms have to be careful in these relationships not over

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allocate value to stakeholders and they have to take into account stakeholder opportunism. Instrumental stakeholder theory suggests that the satisfaction of stakeholder will lead to increased financial performance. Normative stakeholder theory is used to identify the moral guidelines firms have towards society (Donaldson & Preston, 1995; Mitchell et al., 1997). It is used to explain why firms should consider meeting stakeholder demands and needs based on ethical considerations. Many authors that research stakeholder theory build upon its normative approach, focussing on the moral principles on which firms make their decisions (Jawahar & Mclaughlin, 2001; Van der Laan et al., 2008). Donaldson & Preston (1995) argue that the three different approaches of stakeholder theory build on top of each other. The top layer of the theory is the descriptive part, which explains the relation of the theory with the real world. The middle layer is the instrumental part that explains what the results are of stakeholder management. At the core of the theory the normative part can be found, which presumes that all behaviour is based on stakeholder‟s intrinsic values.

Determining stakeholder’s importance

Managing for stakeholders is allocating resources to meet the demands of legitimate stakeholders other than shareholders and develop and trustful relationship beyond what is needed to simply retain their participation with a firm (Harrison et al., 2010). When a firm manages for stakeholders it tries to identify how the actions it takes affect the welfare of its stakeholders. It does this by examining what factors determine the welfare of a stakeholder and what the relative weight of these factors is. Both the firm and its stakeholders provide each other with information about factors that influence their welfare to come to an understanding about the value the can create for each other. The more information both parties provide the more the interdependence between the two parties grows (Harrison et al., 2010). Stakeholders will only cooperate fully with a firm if they perceive the value they get is fair to what other stakeholders get. A firm will not be able to maximize the satisfaction of all

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its stakeholders and it will also not be realistic to satisfy only one of its stakeholders. Because of this, firms will choose to fulfil their responsibilities toward their stakeholders to varying extends (Jawahar & Mclaughlin, 2001). The most likely way to handle the distribution of value and decision making power will be to come up with a balanced division of resources among stakeholders (Harrison et al., 2010). There are different ways a firm can determine what stakeholders are relevant for firm survival and what stakeholders offer no value. Firms are selective regarding what stakeholders they take into account when creating a strategy. This results in firms focussing on those elements of their strategy which are most visible to their environment (Thompson, 1967). It is important that managers are aware of the presence of a variety of stakeholders, and that they respond to their needs (Donaldson & Preston, 1995). Firms should not pay attention to needs of certain stakeholders and ignore others, but they should pay certain kinds of attention to some stakeholders while providing other kinds of attention to others (Mitchell et al., 1997). Depending on the relationship between a firm and a stakeholder and what a firm wants to achieve by maintain the relationship, a stakeholder receives some form of attention.

Several scholars have developed ways to classify stakeholders in different groups, of which some groups are more important than others. Depending on the classification strategy a firm chooses it can divide stakeholders in groups that are relevant and non-relevant and develop a proper approach to deal with these groups. Jawahar & Mclaughlin (2001) focus on the role stakeholders play in providing resources for firms. Stakeholders that are in possession of resources that are critical to the survival of the firm will receive more attention than stakeholders who are not in possession of these resources. If the level of interdependence between a firm and its primary stakeholders is high, this could mean that without the cooperation of the two parties a firm could not continue its business. Perrini & Tencati (2006) divide stakeholders in primary and secondary stakeholders. Primary

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stakeholders are those that have relationships with the focal firm that go both ways; the two parties are dependent on each other. Secondary stakeholders try to influence the relationships of firms with primary stakeholders. They are dependent on the firm for realising their goals, but the firm is not dependent on them. Because firms are dependent on primary stakeholders they will create explicit agreements with them to assure access to critical resources. In their empirical research Van der Laan et al. (2008) do not find a significant difference between the two groups. They attribute this to the use of a sample of mainly large and old firms from a specific time period.

Ullmann (1985) has developed a more elaborate classification scheme, looking at stakeholder power, the firm‟s posture towards a stakeholder and its economic performance.

The strategy a firm will pursue will depend on the combination of the three dimensions of the relationship with a stakeholder (Ullmann, 1985). Mitchell et al. (1997) focus on stakeholder salience, which is how managers manage competing stakeholder claims and what stakeholders deserves priority. They divide stakeholders in groups based on the possession of three different attributes: power to influence the firm, the legitimacy of the relationship and the urgency of the claim of the stakeholder on the firm. The interaction of these attributes creates different types of stakeholders that have different types of relationships with the firm. They find a positive relationship between the amount of attributes a stakeholder possess and its salience. It is important to note that these criteria on which Mitchell et al. (1997) argue stakeholders can be sorted in different groups are based on how managers perceive them. If managers are unable to judge the presence of these attributes they cannot make a grounded decision on stakeholder salience. Managers must also take into account that as the environment changes, these attributes also change and thus stakeholder salience does as well.

Based on the employed classification scheme firms have different options as to how to deal with different types of stakeholders, which have a varying degree of involvement

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(Jawahar & Mclaughlin, 2001). Having a proactive attitude towards a stakeholder means that firms go through great lengths to address the needs of a particular stakeholder. Accommodating a stakeholder means addressing their needs, but to a lesser degree than having a proactive attitude. When a firm uses a defensive strategy, it only does the minimal amount of effort that is legally required to address stakeholder needs. If a firm exercises a strategy of reaction, stakeholders are ignored or firms fight against having to satisfy the needs of these stakeholders. Depending on what strategy a firm employs a certain amount of resources will have to be freed to attend to the needs of a stakeholder. A proactive strategy required the most resources, while reaction requires the least. A firm has a proactive attitude towards critical stakeholders, for the stakeholders that are less critical a firm can pursue a defensive or reactive strategy (Jawahar & Mclaughlin, 2001). If a firm is motivated to manage for stakeholders it has different options to define and categorize them on salience. Depending on its importance a stakeholder will receive an appropriate treatment, but firms do have to consider that the importance of stakeholders can change as a firm matures and its environment changes.

Organizational life cycle

Definition of Organizational life cycle

As organizations grow bigger and age they follow a predictable pattern that can be described as an evolution through a set of stages. Each stage represents a step in the development of a firm from its initial founding towards its maturity and potentially its insolvency. To be able to classify common patterns in organizational development in different firms it must be assumed that regularities occur between firms and that these regularities can be assigned to different and delimited stages (Dodge & Robbins, 1992). Because organizational activities and structures are not the same in each stage, problems that firms encounter differ per stage and some of these problems can transfer to other stages (Dodge & Robbins, 1992). This is why it

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is possible to identify an organizational life cycle (OLC) that firms go through. In each stage firms must deal with different problems, which results in the need for different managerial skills, priorities and structural forms (Hanks et al., 1993). These problems are, besides being connected to a particular stage in firm‟s OLC, also different depending on the size of the firm (Dodge & Robbins, 1992). Smaller firms encounter a different internal and external environment when they move through their OLC than larger firms do. The problems firms experience early in their life cycle are mostly caused by the external environment while in later stages internal problems become more pressing to the survival of the firm (Hanks et al., 1993). This explains why managers focus more attention on external problems in the early stages of the firm‟s life cycle opposed to focussing on internal problems in the latter stages (Lester et al., 2003).

OLC is a multidimensional phenomenon, making it a complex concept consisting of different parts related to organizational context and organizational structure (Hanks et al., 1993). The classification of stages of an OLC depends on how a stage is defined by the researcher and by what characteristics are used to separate the different stages from each other. Miller & Friesen (1984) use four primary factors to identify a life cycle. Situation describes the condition of the firm, like its size, the market it‟s in and the diversity of ownership. Structure describes the complexity of the departments and how they report to each other and who has decision making power. Decision making style describes the process by which decisions are made in an organization and strategy describes the corporate or business unit strategy a firm pursues. Other scholars use a variety of measures to describe life cycles, all of which have their own different variables covering context, strategic orientation, decision making responsibility and structural characteristics (Lester & Parnell, 2008; Lester et al., 2003). Unique periods of a life cycle can be established by focusing on a mixture of these characteristics. This has resulted in a multitude of definitions each putting emphasis on

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other aspects of what constitutes a stage in an OLC. What these definitions have in common is that they all contain some dimensions of strategy and structure and how these two elements influence each other.

The fact that scholars do not agree on a definition of OLC has to do with two problems. The first problem is the disagreement on the amount of stages and the second problem is the deterministic nature of the concept (Lester & Parnell, 2008). The idea of a life cycle comes from the field of biology and in this context a life cycle has a sequential path from beginning to end. Quinn & Cameron (1983) argue that the stages a firm moves through during its OLC can be characterized as sequential in nature, occurring in a predetermined order and involving a broad spectrum of organizational activities and structures. Phelps et al. (2007) argue that a life cycle should not be viewed as a succession of stages, but as a series of stable and unstable states. Each state contains of a number of problems and depending on their ability to gain and implement new knowledge they can solve these problems and move to the next state of their development. This would imply that firms cannot go back a step in their OLC and that organizational renewal defies the idea of a predetermined path firms must follow. This perspective has been challenged (Phelps et al., 2007) because the assumptions that growth is only linear, sequential and deterministic are not fully applicable to organizational development. Although the concept of OLC has no clear definition and the deterministic nature of the concept can be questioned it is still a relevant way of analysing firms to gain a better insight in how they progress in their organizational development. Based on the reviewed literature in this thesis the following assumptions will be made on an OLC:

- It contains a number of unique stages that are defined by a set of structural and contextual variables

- In these stages organizations encounter different problems which they need to solve in order to move to the following stage of their development

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- The order in which organizations move through these stages is not sequential or pre-determined; firms can move back and forth between stages

The relevance of researching OLC

Life cycle stages can be used to analyse the stage a firm is in during its organizational development. Analysing firms their OLC can be used to predict the behaviour of organizations (Primc & Ater, 2015) and can thus be used to guide decisions of managers (Lester & Parnell, 2008). By mapping life cycle stages, growth patterns of firms can be represented systematically and analysed (Phelps et al., 2007). This is useful because firm growth is not linear and it is not possible to associate problems firms have solely based on their age. Firms can be in different stages of their development while they are similar in age. Depending on the stage a firm is in it needs to undergo changes in structure and context in order to able to survive (Phelps et al., 2007). These changes will result in a transformation in firm characteristics enabling firms to move to the next stage in their OLC. Organizations are dynamic in nature; strategic decision making varies according to the stage of the firm´s life (Chandler, 1962). In different stages of its life cycle firms pursue a different strategy. While relatively young firms focus on establishing a foothold in the market launching a new product or service, mature firms that are more diversified could go after multiple markets with multiple products or services. According to Chandler (1962) structure follows strategy; pursuing a diversified strategy requires a decentralized and complex structure while pursuing a niche strategy requires a more centralized and simple structure.

OLC can also help to assist firms to come up with a good compensation structure for their personnel. An alignment between salaries an organizational life cycle will result in an optimal compensation structure (Madhani, 2010). Human resources must be able to recognize a firm‟s life cycle and after a transition from one stage to another make proper adjustments. Management priorities also depend on the life cycle stage a firm is in. Managers base the

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decisions they make on their past experience. Once they are successful they tend to hold on to the priorities they have developed during their stay at an organization, leading to a possible inhibition to change their behaviour if a firm has moved to the next change in its OLC (Smith et al, 1985). This is why it is important for managers to be aware of transition into a new stage so they can adapt their priorities to still be able to make solid strategic decisions. When managers are able to distinguish among OLC stages they can improve their ability to implement appropriate strategies (Elsayed & Paton, 2009). This can prevent managers from implementing a strategy that unnecessarily wastes valuable resources (Phelps et al., 2007). For managers to be able to see what strategic choices must be made for long-term competitiveness and to be able to focus on obtaining and developing valuable resources they need to recognize where a firm is situated in its OLC.

The influence of OLC stages on the CSP-CFP relationship

Though scholars have been investigating the concept of OLC for a while no agreement has been reached on what exactly constitutes a stage, making it difficult to apply the concept to different situations (Hanks et al., 1993). A number of different OLC models have been proposed that use different dimensions to describe the amount of stages and how to identify them. Although the amount of stages and characteristics differ per model, the structures of the models have some overlap (Hanks et al., 1993). Each of the models starts with the birth of a new firm and how it struggles to survive and tries to develop to a viable organization. This is followed by a period of rapid growth and ends with a stable and standardized organization (Dodge & Robbins, 1992). Some scholars argue an OLC contains of only three stages, while others mention up to ten stages. The difference between models using a small amount of stages and a large amount of stages is the detail in which they describe developments firms go through. Large models tend to divide stages into more specific periods of time, while smaller models combine multiple periods in order to present a more straightforward picture

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of an OLC (Lester & Parnell, 2008). The disagreement between scholars about the amount of stages is twofold. They do not agree on how many stages there are between the emergence of the firm and the moment it stabilizes itself, and there is no agreement on the inclusion of the decline and possible revival stage of organizations in OLC models (Hanks et al., 1993). These stages are not mentioned because they have similar characteristics to the startup stage. The impact the decline stage has on the strategy and structure is less predictable; the decline of the firm can start in any other stage of the OLC (Hanks et al., 1993).

The disagreement on the amount of stages arises from two problems. Most models of OLC are conceptual and not empirically tested and thus the measures used to describe stages lack specificity (Hanks et al., 1993). There is also no agreement in the literature on the duration of a single stage (Quinn & Cameron, 1983). Some argue that stages have no prescribed length of time and that stages can be passed through rapidly, while others argue that stages take an extended amount of time to go through (Lester et al., 2003). Strong empirical support has been found for models containing three, four or five stages (Lester & Parnell, 2008; Lester et al., 2003). These stages describe a development consisting of startup, early growth, rapid growth, maturity and decline (Hanks et al., 1993). Lester & Parnell (2008) argue that small firms never go past the second stage of their OLC resulting in a group of larger and more formally structures firms occupying the mature stage. According to them smaller firms can thus only be found in the startup and decline life cycle stages. Though authors do not agree on the amount of stages an OLC contains, a common structure can be found in their models.

Elsayed & Paton (2009) argue that the relationship between CSP and CFP is moderated by organizational life cycle. They propose that the CSP-CFP relationship is a dynamic one, influenced by the interaction of the firm and its environment. Investigating OLC as a moderating component to the CSP-CFP relationship can help to explain a unique

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part of this relationship. The life cycle stage a firm is positioned in will influence the strategic decisions that are made regarding the firm‟s CSR policies. A positive relationship can be found between financial performance and CSR policies (Elsayed & Paton, 2009). Because firms require different resources in different stages of their OLC, in every stage some stakeholders will be more important than others. A firm will favour certain stakeholders in the early stages of its OLC and others will be more important in the later stages (Jawahar & Mclaughlin, 2001).

As organization progress through their OLC a number of structural changes occurs. Firms their organizational situation becomes more complex (Miller & Friesen, 1983); information processing increases, firms become more differentiated and decision making becomes more decentralized (Lester & Parnell, 2008). Firms become older and they lose their entrepreneurial mind-set and become less innovative. This results in firms situated in later stages of their life cycle being less likely to have an emphasis on the natural environment (Dibrell, Craig, & Hansen, 2011). Small firms that are situated in the early stages of their life cycle have the ability to cater to the needs of consumers or businesses demanding socially responsible products and services (Dibrell et al., 2011). These firms could potentially be more motivated than older and larger firms to come up with a socially responsibly based value proposition because of their entrepreneurial mind-set.

In the startup stage the founders of the firm try to turn their venture into a viable business (Dodge & Robbins, 1992; Jawahar & Mclaughlin, 2001; Lester & Parnell, 2008), focussing on a niche strategy, carrying out frequent innovations of their product or service (Miller & Friesen, 1983). Firms are small, have a simple structure (Hanks et al., 1993; Lester & Parnell, 2008) and operate in an environment with little competition (Miller & Friesen, 1983). The ownership of the firm is tightly concentrated and the decision making style is highly centralized (Hanks et al., 1993), and firms are focussing on continued innovation,

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often requiring significant risks (Miller & Friesen, 1983). In this stage firms are acquiring their initial funding from investors (Jawahar & Mclaughlin, 2001). The most critical needs of a firm are funds to start the business and the acceptance of customers for the newly introduced product or service (Jawahar & Mclaughlin, 2001). Firms will use their resources to satisfy the needs of their most critical stakeholders, which will be investors, shareholders and customers, most likely by pursuing a proactive strategy. In this stage firms must also focus on training competent employees and establishing good relationships with suppliers to gain a steady supply of materials. A firm will pursue an accommodative strategy in their relationship with suppliers and employees, the remainder of the stakeholders will be treated with a defensive or a reactive strategy (Jawahar & Mclaughlin, 2001). Caused by their innovativeness firms early in their OLC are more likely to have a positive environmental policy (Dibrell et al., 2011). By building or adapting their strategy around a socially responsible approach they can target consumers and businesses thereby creating their own competitive edge (Elsayed & Paton, 2009). If firms use the right combination of resources to pursue such a strategy they could end up creating a sustainable competitive advantage (Barney, 1991) over their competitors by focusing on CSP. Although firms in the initial stages of their OLC have the advantage to be able to build their strategy around a socially responsible approach, they do have to take into account the constraints they have with regard to their limited resource base (Elsayed & Paton, 2009). Because firms in the early stages of their OLC want to differentiate themselves and create competitive advantage they invest in CSP possibly leading to beter CFP. This leads to the following hypotheses:

H1: In the startup stage of a firm’s OLC, CSP will have a positive impact on CFP.

In the growth stage firms exercise a broader strategy through a more functional structure (Hanks et al., 1993; Miller & Friesen, 1983). By capitalizing on the product or service they have introduced to the market firms in this stage experience a strong growth (Dodge &

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Robbins, 1992; Lester & Parnell, 2008). The ownership of the firm is more dispersed and decision making has become more decentralized, involving more layers of management (Miller & Friesen, 1983). To be able to pursue rapid growth firms need a steady supply of resources from their suppliers (Jawahar & Mclaughlin, 2001). To accommodate growth firms need to extend the workforce and gain more materials from suppliers (Jawahar & Mclaughlin, 2001). This is why suppliers and employees will be treated proactively. Because of high demand during the growth stage, firms can allow themselves to use an accommodation strategy towards customers. The continued expansion results in firms not being able to allocate a substantial part of their financial resources to socially responsible initiatives. Because of this for firms situated their growth stage, financial performance will not have a significant influence on environmental performance anymore (Elsayed & Paton, 2009). Steady customer demand and continued drive to grow will result a lack of influence of CSP on financial results and a lack of investment in subsequent CSP. This leads to the following hypotheses:

H2a: In the growth stage of a firm’s OLC, CFP will not have an impact on CSP. H2b: In the growth stage of a firm’s OLC, CSP will not have an impact on CFP.

When a firm reaches the mature stage it becomes less involved in pursuing an innovation strategy; it follows the competition and it starts to improve on efficiency (Jawahar & Mclaughlin, 2001; Miller & Friesen, 1983). Due to the entrance of competitors and a narrowing gap between supply and demand the firm‟s growth is slowing down (Dodge &

Robbins, 1992). The ownership of the firm is even further dispersed and the decision making style changes to a more risk aversive and cautious style (Miller & Friesen, 1983). Organizations have a formal structure which is achieved by bureaucracy (Dodge & Robbins, 1992; Hanks et al., 1993; Lester & Parnell, 2008). In the mature stage a the strongest positive

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relationship can be found between financial performance and environmental policy (Elsayed & Paton, 2009). The peak in the relationship can be attributed to two factors, one being an excess in financial resources and the other is increase visibility to the public. These financial resources have created a buffer of slack resources that can be used for environmental activities (Dibrell et al., 2011). The presence of these slack resources gives managers to option to engage in social activities, thus firms will be able to deal with most stakeholders in a proactive manner (Jawahar & Mclaughlin, 2001). It is important to note here, that managers decide to either actually engage in these activities or use the slack resources for other purposes (Elsayed & Paton, 2009). Managers of firms in the later stages of their OLC will use slack resources to engage in socially responsible activities. Using these investments managers attempt to offset the negative performance firms show because of a limit of viable opportunities to invest in (Elsayed & Paton, 2009). Thus firms situated in the mature stage of their OLC will direct a high amount of resources towards CSP due to the availability of slack resources, increased visibility and increased spreading of ownership. This leads to the following hypotheses:

H3a: In the growth stage of a firm’s OLC, CFP will have the highest impact on CSP. H3b: In the growth stage of a firm’s OLC, CSP will have the highest impact on CFP.

In the revival stage firms try to renew their strategy in an attempt to reverse their declining profits (Jawahar & Mclaughlin, 2001; Lester & Parnell, 2008); new markets are entered and more attention is paid to pursuing innovations (Miller & Friesen, 1983). The size of firms in the revival stage is the largest of all stages. Through a set of control systems corporate headquarters monitors all divisions of the firm (Lester & Parnell, 2008; Miller & Friesen, 1983). In this stage decision making becomes more responsive to market requirements (Miller & Friesen, 1983). Managers of firms in this stage are restricted in their use of firm

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resources. Because firms are reinventing themselves to become relevant again, options to invest in social initiatives are limited for managers (Jawahar & Mclaughlin, 2001). Financial resources are directed toward opportunities that can rekindle firm growth. Firms focus will be on creating new value for their customers to rebuild market share and on investors to gain new capitol to accommodate growth. Thus customers and investors will be deled with in a proactive manner. Because firms have to cut costs an accommodative strategy will be employed towards employees and suppliers (Jawahar & Mclaughlin, 2001). A defensive strategy will be pursued towards other stakeholders. Because firms in the revival stage are still relatively large and visible a certain level of CSP is still expected to please stakeholders. Thus firms situated in the revival stage of their OLC are restricted to direct a large amount of resources towards CSP even though they are motivated to. This leads to the following hypotheses:

H4a: In the revival stage of a firm’s OLC, CFP will have an impact on CSP, but less positive than in the mature stage.

H4b: In the revival stage of a firm’s OLC, CSP will have an impact on CFP, but less positive than in the mature stage.

The last stage of the OLC is the decline stage. This stage involves firms pursuing no particular strategy because of their lack of market understanding (Miller & Friesen, 1983). All decision making power is situated at the top of the firm (Lester & Parnell, 2008), resulting in conservatism and a large distance between the top management team and customers. Firms in the later stages of their OLC have increased difficulty adapting their strategic decisions to the changing environment (Dibrell et al., 2011). If firms fail to choose a clear strategy for renewal in the decline stage, they run the risk of eventually having to file for bankruptcy. No specific hypotheses for this stage were proposed.

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The four hypotheses can be summarized in the theoretical framework displayed in figure 1. Whereby the bidirectional relationship between CSP and CFP is moderated by where a firm is situated in its OLC. Because slack resources theory and good management theory propose opposing arguments regarding the CSP-CFP relationship rival hypotheses will be tested in the different OLC stages if this theoretically makes sense.

s Corporate Social Performance Corporate Financial Performance Organizational life cycle

The moderating effect of organizational life cycle on the relationship between corporate social performance and corporate financial performance

Contents

Statement of originality

Abstract

I.

Introduction

II.

Literature review