What drives social responsibility commitment? An empirical analysis of public enterprises in South Korea

Abstract

This study examines factors affecting the social responsibility commitment of public enterprises in South Korea. A panel regression analysis of 70 public enterprises found that the social responsibility commitment appears to increase when organizations are financially healthy and strategically oriented. However, the relationship between ethical behavior and social responsibility was negligible. These results have three management implications: first, the conventional social responsibility assumption that economic efficiency neutralizes societal goals is not necessarily true; second, public enterprises with commitments to strategic social responsibility appear to be more socially responsible than those without commitments to strategic social responsibility; and, third, ethical behavior may not be a reliable indicator of the social responsibility commitment, especially if it is mandated by the government.

Points for practitioners

Public enterprises have increasingly been under pressure to share the burden of social and economic problems in society. However, many practitioners still have little knowledge about under what conditions they can do good and benefit society. The results of this article suggest that profit making embodied in ethical rules and a dedicated governance structure to communicate with stakeholders create conditions that are more conducive to doing socially responsible activity.