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.