Firm Responses to Local Ethics: How Does Christianity Shape CSR Engagement Patterns?

Acknowledging that firms tend to employ different CSR strategies in response to different stakeholders, this study argues that local ethics can differentiate CSR engagement according to different stakeholders. Given that Protestants hold the work ethic more than a social ethic while Catholics emphasize the social ethic stronger than a work ethic, such differentiated socio-economic values of Christianity can influence the firm action to make relationships with their stakeholders. In particular, drawn from instrumental stakeholder theory, which emphasizes the relationships between firms and stakeholders, this study discerns two types of stakeholder relations, formalcontract- based and social-contract-based stakeholders. As the social contracts, which emphasize social integration, are congruent with the social ethic that is valued in Catholic faith, firms in the Catholicism-dominated locale tend to approach to what the social contract-based stakeholders value (i.e. social responsibilities). Meanwhile, as the formal contracts emphasizes work ethics which value personal responsibilities, firms in the Catholicism-dominated locale tend to avoid the discrepancy between the local ethic (i.e. social ethic) and the formal-contract-driven ethic (i.e. work ethic). To test this idea, we sample 1,409 U.S firms which are identified in terms of the local ethic of the firm based on the dominance between Catholic faith and Protestant faith. Then, in the perspective of Catholic faith, we examine that the firms in the Catholicism-dominated locale employ “approach”-oriented CSR strategies in response to the social-contract-based stakeholders while they focus on “avoidance”-oriented CSR strategies in response to the formal-contract-based stakeholders.