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The effect of physical proximity on investments in corporate social responsibility initiatives: An exploratory analysis
Journal article   Open access   Peer reviewed

The effect of physical proximity on investments in corporate social responsibility initiatives: An exploratory analysis

Monte Wynder
e-Journal of Social & Behavioural Research in Business, Vol.5(1), pp.13-24
2014
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Abstract

Accounting, Auditing and Accountability Business and Management corporate social responsibility moral Intensity proximity multinational corporations
Purpose: This paper investigates the effect of proximity on an individual's willingness to invest in corporate social responsibility (CSR) initiatives. Design/methodology/approach: Students enrolled in an undergraduate management accounting course participated in an experiment. Participants were presented with three CSR initiatives and asked how much they would invest in each. The initiatives differed in terms of the ethical responsibility of, and economic benefit for, the organisation. In a 1x4 experimental design participants received one of four manipulations of physical proximity. Findings/results: Previous research has provided conflicting results regarding the effect of proximity on moral intensity, and consequent ethical decision making (EDM). The results of this exploratory study indicate that physical proximity does influence the level of investment in certain CSR initiatives when ethical responsibility and economic benefit are high. Research limitations/implications: This experimental study is conducted with university students. It therefore has the typical concerns regarding generalizability of the results. Furthermore, small cell sizes mean that there was only enough experimental power to find large effects. The results do, however, indicate that further research is warranted in order to expand upon Jones' (1991) notion of physical proximity as it relates to geographic differences. The finding that participants reacted differently to two locations that were both physically distant suggests that geographic locations also differ implicitly in their social, cultural, and/or psychological proximity. Practical implications: Multinational corporations (MNCs) significantly impact on social welfare in their distant host countries. Understanding the unconscious biases that can influence decision makers in the home country is important in understanding the psychological factors that may influence the level of investment in distant CSR initiatives. Originality/value: While there is a substantial body of research that has examined an organisation's incentives for investing in CSR, this study explores how ethical and economic motives influence the cognitive processes of the decision maker. This focus on the individual is largely absent in the CSR literature.

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