Research Roundup: September 2022

Feeling Different Can Boost Social Cohesion

In conversations about diversity, equity, inclusion, and belonging, most people view the impact of feeling excluded as negative. But in at least one way, it can have positive effects, according to a forthcoming paper in the Journal of Business Ethics. The paper was co-authored by Janet Johansson, an associate professor in the department of business administration at Linköping University in Sweden, and Alice Wickström, a doctoral candidate in the department of management studies at Aalto University School of Business in Finland.

It's true that when employees are viewed as “different” because of their ethnicity, physical abilities, or other factors, they can experience frustration, feel marginalized, or feel pressure to conform at work. But Johansson and Wickström find that these feelings can inspire employees to develop stronger, more caring relationships with co-workers.

The paper’s findings are based on an in-depth ethnographic study that Johansson conducted at a publicly funded theater company in Sweden. Over two years, Johansson conducted 46 in-depth interviews with company staff and observed the theater company’s weekly meetings, rehearsals, and day-to-day practices.

Analysis of these interviews and observations revealed that employees who feel different at work often come together to form groups based not on conforming to the norm, but on championing tolerance of perceived differences. By caring “with” instead of “for” others, the co-authors emphasize, individuals were able to empower and seek empowerment from each other in ways that were beneficial to themselves and to the organization.

“Participants expressed a unanimous feeling of responsibility for reaching out to and caring about the situations of both close and distant others,” the co-authors write. By “expressing care for their well-being and future possibilities, we sense that the individuals intended to enhance ... the wellbeing of others as they pursued equality, fairness, justice and wellbeing for themselves.”

Employers View Maternity Breaks as Unemployment

Past research has estimated that if stay-at-home parents were paid fair market value for all the tasks they perform, their annual salary would amount to more than 178,000 USD. But even so, a recent study in the Journal of Economics Behavior & Organization finds that many employers view maternity leave as a period of unemployment.

Bryan Tomlin, an associate professor of economics at California State University Channel Islands (CSUCI), and his economics students sent nearly 400 résumés to companies in the Los Angeles metro area with open administrative assistant positions. In these résumés, students posed as fictional mothers who fell into one of four groups: those who continued working as they raised children, those who explicitly mentioned having been stay-at-home mothers, those who had unexplained gaps on their résumés, and those who took breaks from working in their own fields to work in the childcare industry while raising their own children. All other details on the résumés were identical.

Mothers who had continued working were twice as likely to receive responses to their résumés as those who mentioned having been stay-at-home mothers.

Tomlin found that potential applicants who had continued working were twice as likely to receive responses to their résumés as those in the other three groups. In other words, those who mentioned stay-at-home parenting or working in the childcare industry were viewed in the same way as those who had an employment gap.

Tomlin argues that hiring managers who view stay-at-home mothers as unemployed do not consider how difficult the job of parenting can be. Parents “don’t get any breaks,” he says. “If you’re a mom, you have to wait until the kids are taking a nap to try to catch up on the laundry or cleaning or try to take a nap yourself.”

According to a 2020 study by LinkedIn, 60 percent of working mothers who took time off from work found it challenging to re-enter the workforce. Given this reality, employers should do all they can to view parenting and other forms of childcare in a different light, says Tomlin. “My job is infinitely easier than [my wife’s],” he adds. “And she gets nothing. I get paid.”

Strategic CSR Messaging Builds Trust

When crisis strikes, most companies take to social media to communicate with customers, whether to express sympathy or explain their actions to support their communities. One study finds that organizations can do more to build trust among customers if they also clearly embed their corporate social responsibility (CSR) strategy into their social media communications.

The study’s co-authors include Anna Farmaki and Elias Hadijielias, both of the Cyprus University of Technology; Hossein Olya of the University of Sheffield and Babak Taheri of the Marketing and Consumer Studies Research Centre at Nottingham Business School (NBS), both in the U.K.; and Maria Hadijielia Drotarova of Ctl Eurocollege in Cyprus.

The research team analyzed 2,858 CSR-related tweets posted by 93 international companies between February 2020 and September 2021—the height of the COVID-19 pandemic. These companies operated in a range of sectors, from technology and healthcare to transportation and retail. Not surprisingly, many of these companies focused their tweets on their response to the pandemic. However, some companies did not also communicate clear, consistent, and compelling messages about their overall CSR strategies—instead, each tweet was a “one-off” response.

By failing to take CSR into account in their social media posts during the crisis, organizations missed an opportunity to communicate additional messages about their CSR commitment, the researchers argue. For instance, companies could have used their social media postings to share their organizational values and explain how they are acting responsibly toward customers and society. 

Now that companies are no longer in crisis mode, the researchers say it is a good time for them to design a cohesive long-term strategic marketing plan that takes CSR into account. For companies to ensure their messaging builds trust and engages their intended audiences in positive ways, the research team offers these recommendations:

• Communicate CSR strategies in the form of “SMART” objectives (specific, measurable, achievable, relevant, and time-bound).
• Be specific about how the organization has been adaptive during previous crises.
• Ensure that CSR messaging aligns with both the organization’s general marketing plan and its values, mission, and vision.
• Keep marketing communication strategies agile enough to engage local and international communities as appropriate.
• Collect audience feedback during and after any crisis to gain insights that can be used to improve future campaigns.

By taking these steps, organizations will be ready with more proactive and engaging CSR messages when the next crisis strikes. “Consumers are much more aware of CSR in recent times, and companies must ensure their strategies make a real difference to society,” says Taheri of NBS. Part of that objective, he adds, is to make CSR a critical part of not only a company’s mission and vision, but also its marketing communication plan.

Two Ways to Address Climate Change

Two separate studies explore how financial approaches can help reduce the impact of climate change:

Offer “ESG” pay to executives. In a working paper, four researchers find that firms that include environmental, social, and governance (ESG) metrics in their executive compensation packages reduce their greenhouse gas emissions in more tangible ways than those that do not.

The paper is co-authored by Shira Cohen of San Diego State University Fowler College of Business in the U.S., Igor Kadach and Gaizka Ormazaba of IESE Business School in Spain, and Stefan Reichelstein of the University of Mannheim Business School in Germany.

The research team analyzed the compensation packages offered by 4,395 public firms from 21 countries, using data from the ISS Executive Compensation Analytics database. Among these firms, dedicated “ESG pay” was associated with more favorable ESG scores from external rating agencies. ESG pay also is more common among companies in industries and companies most affected by ESG-related issues, as well as higher among companies with publicly issued environmental commitments.

By including ESG metrics in executive compensation plans, organizations can convey to stakeholders that they view ESG as a serious commitment, not as mere “window dressing,” says Reichelstein. In the process, he adds, firms “may strengthen customer loyalty and make the firm’s equity shares more attractive for institutional investor groups.”

By including ESG metrics in executive compensation plans, organizations can convey to stakeholders that they view ESG as a serious commitment, not as mere “window dressing.”

Create “adaptation bonds.” A recent paper argues that the creation of a new global asset class could help the world in its fight against climate change. According to Bob Buhr, an honorary research fellow at Imperial College Business School’s Centre for Climate Finance & Investment in the U.K., adaptation bonds would be similar to U.S. municipal bonds, which finance domestic infrastructure projects.

The difference is that investors who purchase adaptation bonds would finance projects such as those that increase the energy efficiency of buildings, improve flood and storm surge protections, upgrade water provision systems, and adapt ports and transport networks to rising sea levels.

Adaptation bonds offer additional advantages. These include raising the visibility of adaptation projects, expanding the investor base, and requiring the development of universal standards for adaptation and resilience projects. The bonds also could lower project costs, by encouraging organizations not to defer necessary improvements.

Buhr admits that implementing adaptation bonds presents several challenges, including the need to adopt a global tax system. However, Buhr views the effort as necessary. The United Nations Environment Programme estimates that for the world to adapt to the effects of climate change, developing nations alone might need financing that amounts to around 180 billion USD annually through 2030—and even more between 2030 and 2050.

“‘Monumental’ does not appear to be an inappropriate term for the work that must be done,” Buhr writes. “The adaptation finance gap is still growing every year. However, if this work is not done, the consequences will be severe—so let’s start discussing financial triage.”