Paper short abstract:

This study develops a dynamic framework based on the qualitative study of the diffusion of shoe fitting service to explain why companies behave in socially responsible ways. We view the adoption of such behavior as a dynamic process comprising interaction between stakeholders and companies.

Paper long abstract:

This study develops a dynamic framework to explain why companies behave in socially responsible ways. Research on the predictors of corporate social responsibility (CSR) reveals that companies behave in socially responsible ways because of pressure from stakeholders—shareholders, suppliers, buyers, consumers, the local community, social activist groups, etc. Companies act in order to avoid potential loss of revenue and reputation. However, the existing literature overlooks the dynamics among stakeholders and companies. We consider the company's adoption of socially responsible behavior as a dynamic process, involving interaction between stakeholders and companies.

Stakeholders and companies act and react regarding CSR in an interactive process. Therefore, we must consider the possibility of modification of the stakeholder's strategy. For example, a social activist group may modify its approach to achieve its ultimate goal, solving a social problem, based on a company's reaction.

To illustrate the dynamic framework of CSR adoption, we explore the diffusion of shoe fitting service among companies in the shoe industry. In the 1980s, the Japan Institute of Footwear (JIF), a small, voluntary association, began to proclaim the importance of shoe fitting and promote its shoe fitter training program. At the time, shoe fitting was a new concept in Japan, and although adopting it was responsible behavior towards customers, it meant additional cost for retailers in an environment where nobody knew the importance of it for foot health. However, some retailers adopted it, and it has become widespread today. JIF has adjusted the training program and its frame several times based on companies' reactions. Through the case of shoe fitting, we can see an example of the dynamics of the company adoption of CSR.

Paper short abstract:

In modern financial institutions, implementing sustainable Corporate Social Responsibility (CSR) is essential in order to increase banks` surplus and corporate value. This study is to evaluate the effects of CSR on the increase in corporate value for Japanese financial institutions.

Paper long abstract:

In modern financial institutions, implementing sustainable Corporate Social Responsibility (CSR) is essential in order to increase banks` surplus and corporate value. If financial institutions provide high-quality financial services in the best interests of their customers, it enhances the productivity of the corporate sector and contributes to steady asset accumulation in the private sector, and the resultant stronger customer base will ensure a stable revenue flow. A perception gap exists between Japanese financial institutions and their customers in terms of banks' lending practices. From the banks' point of view, customers they are willing to finance are scarce, and thus 　competition through rate discounts becomes fierce; from the customer's point of view, banks won't lend to them without some kind of collateral or guarantee.

The first aim of this study is to evaluate the effects of CSR on the increase in corporate value for Japanese financial institutions. Our empirical analysis is based on a survey on trust and reputation of Japanese financial institutions (members of the Japanese Bankers Association) in relation to CSR.

The second aim of this study is to examine the efficacy of the "Business Model for Creating Shared Value (CSV)," also known as the "Business Model for Japanese Financial Institutions," in increasing corporate value. The Business Model for CSV, officially announced by the Japanese Financial Services Agency (JFSA) in October 2016, is a customer-oriented asset management and intermediation model. At that time, JFSA encouraged financial institutions to voluntarily disclose their initiatives to create customer-oriented business policies. Accordingly, this study will examine the effectiveness of CSV between financial institutions and their customers.

Our research revealed a common perception that the expense of CSR is simply one of the costs of doing business as a financial institutions. However, in the changing relationship between CSR and society, we can also think of it as financial institutions beginning to consider CSR as part of their branding strategy. To establish the sustainability of CSR, we will demonstrate the capitalization of brand value for financial institutions through banks` surplus analysis in a two-stage economic model.

Paper short abstract:

This study will examine Michael Porter's hypothesis in which properly designed environmental reforms trigger innovation that even lead to absolute advantages over firms in foreign countries, using the case of Japanese automakers in the U.S. market during the 1970s and 1980s.

Paper long abstract:

The purpose of this study is to historically examine the impact of environmental structural reforms on the international competitiveness of Japanese automobile industry in the 1970s and 1980s. In particular, this presentation will examine the hypothesis in which Japanese automakers that followed the environmental reforms acquired its competitive advantage over American counterparts that avoided complying with the reform. Michael Porter (1995) hypothesizes that "properly designed environmental standards can trigger innovation that may partially or more than fully offset the costs of complying with them. Such "innovation offsets"… can not only lower the net cost of meeting environmental regulations, but can even lead to absolute advantages over firms in foreign countries not subject to similar regulations." In 1972, the Central Council for Environmental Pollution Control in Japan reported on the regulation target on emission gas similar to the 'Muskie Act' of 1970 in the U.S. As the U.S. government decided to postpone the enactment of this Act, Japan's emission regulation became the world toughest. Japanese automakers had begun developing their technology to counter the emission gas problem prior to this governmental regulation, but they were urged to further develop the technology to meet the environmental reform requirement. Between 1973 and 1978, Japanese government gradually strengthened the emission gas target and automakers made strenuous efforts to meet the target. Major automakers such as Toyota claimed in their corporate history that these efforts became useful for gaining know-hows of overall product performance and quality improvement. Meanwhile, in the U.S., the Energy Tax Act of 1978 imposed a tax on the sale of automobile that failed to meet the fuel economy standard. Coupled with increasing social pressures on emission gas problems, U.S. automakers suffered to meet the new guideline set by the environmental reformists whereas Japanese automakers enjoyed the fruit of meeting tough conditions set by the reforms of their home country. Using the above historical cases, this study will discuss the impact of conforming to and going against the reforms and finally examine Porter's hypothesis in the case of Japanese and American automobile business.