Academic journal article Journal of Small Business Strategy

Get What You Give? an Examination of Enlightened Self-Interest, Philanthropic Intent, and Engagement in Philanthropy for Small Firm Owners

Academic journal article Journal of Small Business Strategy

Get What You Give? an Examination of Enlightened Self-Interest, Philanthropic Intent, and Engagement in Philanthropy for Small Firm Owners

Article excerpt

INTRODUCTION

In his search for a contemporary definition of philanthropy, Sulek (2010) notes that evolution has occurred over time in how philanthropy is viewed so as to generate a modern definition focusing on "application of private means to public ends" (2010: 201). Salamon (1992) is generally credited with crafting a definition of philanthropy that has become synonymous with charitable giving, and this definition has been largely adopted by philanthropy scholars (Sulek, 2010). From a corporate and business-oriented perspective, philanthropy is traditionally recognized as "giving" via donation with the intent to generate social return on investment (Pepin, 2005; Stroup & Neubert, 1987). Based on the categorizations presented by Carroll (1979), philanthropy has generally been viewed as a broad form of discretionary social responsibility (Besser, 1998; Déniz & Suárez, 2005; Fitzgerald, Haynes, Schrank, & Danes, 2010; Post, 1996) for businesses, given it is not undertaken to comply with laws or regulations and has the potential to generate social returns through the betterment of communities.

Several scholars have examined corporate philanthropy, along with motivations, determinants, and outcomes associated with giving behaviors in the corporate context (e.g., Buchholtz, Amason, & Rutherford, 1999; Porter & Kramer, 2002; Saiia, Carroll, & Buchholtz, 2003; Seifert, Morris, & Bartkus, 2003; Seifert, Morris, & Bartkus, 2004; Wang, Choi, & Li, 2008). Ultimately, researchers argue that corporate philanthropy may heighten corporate reputation (Brammer & Millington, 2005) even if it does not improve the firm's bottom line in the short-run (Wang et al., 2008), and that firms are aware of the benefits that may accrue to them by giving. Increasingly, researchers argue that firms undertake philanthropy to strategically improve both reputation and the bottom line (Godfrey, 2005; Ricks, 2005; Saiia et al., 2003) with values of managers holding an influential role in such practices (Buchholtz et al., 1999).

Buchholtz and colleagues (1999) argue that the firm's upper echelon hold significant influence in setting the firm's values towards corporate philanthropy, and scholars further contend that giving can be leveraged to gain visibility for the firm, satisfy stakeholders, increase brand awareness and image, and reach new market segments (Varadarajan & Menon, 1988). More recently, researchers have channeled research related to attitudes towards philanthropy via the Ajzen's (1991) Theory of Planned Behavior (TPB) (e.g., Dennis, Buchholtz, & Butts, 2009; Smith & McSweeney, 2007; van der Linden, 2011). Given the closely held nature of small firms, and the flexibility afforded by concentrated upper echelon (Jenkins, 2006), managerial values and discretion are likewise expected to dictate participation in philanthropic endeavors to reach similar ends.

Scholars agree that small businesses play important roles in their communities (Fitzgerald et al., 2010; Lepoutre & Heene, 2006; Niehm, Swinney, & Miller, 2008) and in the limited studies available on small business philanthropy and social responsibility, small firms have been found to play crucial roles in their communities and beyond (Besser, 1998; Tietz & Parker, 2014; Madden, Scaife, & Crissman, 2006). Prior researchers suggest that small businesses support charitable organizations or philanthropy at higher levels than their larger corporate counterparts, with data suggesting that approximately 75% to 91% of U.S. small businesses participate in some sort of philanthropy (Cronk, 1988; Katz-Stone, 1998; Preston, 2008; Princeton, 2001). Research has also shown that small business owners tend to be more ethical and socially responsible than corporate managers (Bucar & Hisrich, 2001), and have a stronger connection with the local business community (Besser & Miller, 2004; Green, 1992; Solymossy & Masters, 2002). …

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