Breaking down the wall of codes: Evaluating non-financial performance measurement

California Management Review

Volumn 48, Issue 2, 2006, Pages

  Chatterji, Aaron ^a   Levine, David ^a  

^a UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33645507980     PISSN: 00081256     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (47)

1. The Forest Service Employees for Environmental Ethics, 〈www.fseee.org/forestmag/0102yuska.shtml〉, last accessed May 17, 2004.
2. We thank Mike Toffel for this example. Also see Julie Schoenung, M., Oladele A. Ogunseitanm, Jean-Daniel M. Saphores, and Andrew Shapiro, "Adopting Lead-Free Electronics: Policy Differences and Knowledge Gaps," Journal of Industrial Ecology, 8/4 (2004): 59-85.
3. David Vogel, The Market For Virtue: The Potential and Limits of Corporate Social Responsibility (Washington, D.C.: Brookings Institution Press, 2005).
4. Thoughtful versions couple restrictions on child labor with policies to promote education and nutrition, as The Nike Foundation and its partners do in Bangladesh. Nike Foundation Website, 〈www.nike.com/nikebiz/nikefoundation/ home.jhtml〉, last accessed September 2, 2005.
5. Managerial incentives based on the firm's stock price is a common example.
6. Robert S. Kaplan and David P. Norton, The Balanced Scorecard: Translating Strategy Into Action (Boston, MA: Harvard Business School Publishing, 1996).
7. By "reliable" we mean that another test would give the same answer; by "valid" we mean that the answer given correctly describes the underlying dimension of social responsibility. For example, a measurement of emissions might be reliable in that repeated measures yield the same answer. If that emission is not costly to human or environmental health, then that metric is not a valid measure of environmental performance.
8. Due to lack of space, we ignore an array of other measurements of the social performance of enterprises ranging from global standards and codes (such as the United Nations Global Compact and the International Financial Corporation Equator Principles) for very large project loans; media surveys such as those for Fortune's Most Admired Company list and the Financial Times' Most Respected Companies list; environmental management standards such as ISO 14000; and social reporting tools such as the Global Reporting Initiative. For a brief description of many of these standards, see 〈www.newecon.org/ DouglasCodesofConduct.html〉.
9. Business Week, July 12, 2004.
10. B. Gerhart, P. Wright, G. McMahan, and S. Snell, "Measurement Error in Research on Human Resources and Firm Performance: How Much Error Is There and How Does It Influence Effect Size Estimates?" Personnel Psychology. 53 (in press).
11. 〈www.ilr.cornell.edu/depts/cahrs/downloads/pdfs/workingpapers/ WP00-21.pdf〉.
12. Randy Shaw, Reclaiming America: Nike, Clean Air, and The New National Activism (Berkeley, CA: University of California Press, 1999).
13. Charles Brown, "Equalizing Differences in Labor Markets," Quarterly Journal of Economics, 85 (1980).
14. Time Magazine (June 1996).
15. Shaw, op. cit. Time Magazine
16. Harvard Business School Case Study 9-700-047
17. Shaw, op. cit. Time Magazine
18. Harvard Business School Case Study 9-700-047; Shaw, op. cit. Time Magazine
19. Quoted in Josiah Brownell, "Hey Wal-Mart, Don't You Know!? Sweatshop's Labor Gotta. . . . Stay?" working paper.
20. Kimberly Ann Eliot and Richard Freeman, "Can Labor Standards Improve Under Globalization?" Institute for International Economics, 2003.
21. Eliot and Freeman, op. cit. Can Labor Standards Improve Under Globalization?
22. William A. Douglas, "Who's Who in Codes of Conduct?" 〈www.newecon.org/DouglasCodesofConduct.html〉, last accessed March 26, 2005.
23. Eliot and Freeman, op. cit. Who's Who in Codes of Conduct?
24. Alexander Gourevitch, "No Justice, No Contract: The Worker Rights Consortium Leads the Fight Against Sweatshops," The American Prospect, June 29, 2001
25. 〈www.prospect.org/webfeatures/2001/06/gourevitch-a-06-29.html〉, last accessed March 26, 2005.
26. Gourevitch, op. cit. The American Prospect
27. Dara O'Rourke, "Outsourcing Regulation: Analyzing Non-Governmental Systems of Labor Standards and Monitoring," Policy Studies Journal, 31/1 (2003): 1-29.
28. Eliot and Freeman, op. cit. Policy Studies Journal
29. O'Rourke, op. cit. Policy Studies Journal
30. Social Accountability International web site, 〈www.cepaa.org/SA8000/ SA8000.htm〉, last accessed March 26, 2005
31. National Retail Federation web site, 〈www.sweatshops-retail.org/ nrf%20website/initiatives.htm〉, last accessed March 26, 2005.
32. The MVO Platform web site, 〈www.mvoplatform.nl/mvotekst/ FWF%20Principles%20and%20Polocies.pdf〉, last accessed March 26, 2005
33. Eliot and Freeman, op. cit. Policy Studies Journal
34. The Ethical Trade Initiative web site, 〈www,ethicaltrade.org/Z/lib/ base/code_en.shtml〉, last accessed March 26, 2005.
35. For electronics, see the Electronic Industry Code of Conduct, 2004, 〈www-03.ibm.com/procurement/proweb.nsf/objectdocswebview/ fileelectronic+industry+supply+code+of+conduct/$file / electronic+industry+supplier+code+of+conduct_oct18.04.pdf〉, last accessed April 12, 2005.
36. For toys, see International Council of Toy Industries (1CTI), Coat of Business Practices, 〈www.toy-tia.org/Content/NavigationMenu/Library/ Publications_Resources1/ICTI_Code/ICTI_Code_of_Business_Practices.htm〉, last accessed April 12, 2005.
37. Thanks to Mike Toffel for this insight.
38. Environmental Defense Fund, Scorecard: The Pollution Information Site, 〈www.scorecard.org/〉, last accessed March 25, 2005.
39. Charles Sabel, Dara O'Rourke, and Archon Fung, "Ratcheting Labor Standards: How Open Competition Can Save Ethical Sourcing," in R. Thamotheram, ed., Visions of Ethical Sourcing (London: Financial Times-Prentice Hall, 2000).
40. On the unclear validity of ISO 14000 as a measure of good environmental performance, see Michael W. Toffel, "Resolving Information Asymmetries in Supply Chains: The Role of Certified Voluntary Programs," working paper, Haas School of Business, University of California, Berkeley, CA, 2005.
41. Dara O'Rourke, "The Social Responsibility Barcode: Providing Information to Consumers on the Environmental and Social Impacts of Products," unpublished manuscript, University of California, Berkeley, 2005.
42. We thank Mary Gentile for this point.
43. Dow Jones claims its data are audited, meaning that its handling of the unaudited data is checked by PricewaterhouseCoopers. This claim is sufficiently confusing that cynics might believe it is meant to mislead stakeholders into believing the quite different claim that companies' responses are audited.
44. We thank Ellen Konar for this point.
45. If social performance metrics help align managers' interests with long-term shareholder value creation - for example, by reducing incentives to reduce investments in long-term relations - socially responsible portfolios can achieve excess returns. It still remains important to use modern portfolio theory to reduce risk.
46. Dillman(2000) provides useful techniques for increasing survey response rates. Don A. Dillman, Mail and Internet Surveys: The Tailored Design Method (New York, NY: Wiley, 2000).
47. We thank Mary Gentile for this point.