Regulatory focus and interdependent economic decision-making

The effect of regulatory focus and performance measurement on corporate social responsibility investment decisions

Purpose

This paper aims to investigate the relationship between regulatory focus, performance measurement and corporate social responsibility (CSR) investment decisions.

Design/methodology/approach

Using an experimental method with a 2 × 2 between-subjects factorial design involving 144 participants, the data were analyzed using t-test and contrast test. In the experiment, the authors assigned participants into prevention focus or promotion focus group and complementary performance measurement or substitute performance measurement condition.

Findings

The results show that CSR investment is more preferable for managers in prevention focus instead of those in promotion focus group. Additionally, CSR investment is more preferable for managers in complementary performance measurement condition compared to those in substitute performance measurement condition. This study also provides evidence that the greatest CSR investment is reached when managers are in both prevention focus group and complementary performance measurement conditions.

Practical implications

Companies need to activate the prevention focus for managers to motivate CSR investment. Additionally, companies need to use complementary performance measurements, which consist of CSR measurement and financial measurements.

Originality/value

CSR research is dominated by theories explaining the external models which trigger companies to perform CSR. Existing research related to the internal models is limited to psychological aspects that are not directly related to company performance. This study investigates the motivational attributes that have a direct and strong influence on managers behavior. This research shows that regulatory focus is better at predicting CSR investment and is more motivational for individuals to perform well at work.

Promotion- and Prevention-Focused Networking and Its Consequences for Entrepreneurial Success

Building and using social networks is an important factor in individuals’ personal as well as professional success. In the present work, we examine how individuals’ regulatory focus relates to their networking behavior. Findings from a sample of 300 entrepreneurs across 25 networking groups showed that a general focus on motivations for growth and advancement ( promotion) predicted an increase in out-degree centrality (i.e., how much weekly, business-related contact entrepreneurs had with members in their own networking group), whereas a general focus on motivations for safety and security ( prevention) predicted a decrease in out-degree centrality. Moreover, greater out-degree centrality further predicted an increase in the revenue entrepreneurs generated from members in their networking group. These findings demonstrate how individual differences affect personal motivations for how entrepreneurs’ develop and use their business networks and highlight the importance of motivations for growth and security in relationship formation and maintenance more generally.