Abstract
How does a company achieve long-term survival? This study starts with the question of why, among companies on the verge of bankruptcy, some survive and some break up. This study argues that the long-term survival of a company is determined by not only its economic performance but also its social performance. It clarifies that sustainable corporate social responsibility (CSR) practices facilitate long-term survival. Thus, this study analyzed 259 CSR actions performed by eight representative long-lived companies in Korea and how the various CSR actions helped these companies overcome crises and survive. The common CSR actions practiced by all the long-lived companies had a positive influence on forming social capital with primary stakeholders and securing legitimacy from secondary stakeholders, which in turn had a significant influence on maintaining survival. This study provides significant implications for the value of CSR practices that have been controversial, by presenting a model of how CSR actions facilitate corporate longevity.
Conclusion and Discussion
This paper analyzed various CSR principles observed in long-lived Korean companies and modeled how a company’s continual CSR principles contribute to its long-term survival. The model derived in this paper offers several implications about corporate long-term survival.
First, this study suggests that CSR principles play a critical role in maintaining the survival of companies by creating and leveraging relational social capital and moral legitimacy. Collins (2001), who studied long-lived companies, explained the maintenance of core values as the cause of corporate longevity. This study answers the question of how maintaining a single value can lead to better adaptation to changes. The research model in this paper suggests that CSR principles followed by the Korean long-lived companies enable the companies’ long-term survival. Moral values, unlike utilitarian values, are unchanging regardless of the passing of years. Thus, we can conjecture that the CSR principles maintained by the Korean long-lived companies were safeguarded as the organizations’ core values and ultimately contributed to the firms’ longevity.
