The Design Dimensions of the Just Organization: An Empirical Test of the Relation Between Organization Design and Corporate Social Performance
Gerde, Virginia Woods
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Although organization design to bring about corporate social performance (CSP) is a critical issue in the business and society field, little research has been conducted. This study is an empirical test of the general model of the just organization presented by Stephens and colleagues (1991; Stephens, et al., 1997). The theoretical development describes organizational design principles from John Rawls' (1971) Theory of Justice, chosen for its emphasis on economic organizations and structure, its emphasis on efficiency as well as justice, and its affinity with Max Weber's wertrational (or value rationality) social action category from Economy and Society (1978/1910). From the general model of the just organization and characteristic organizational design features (structural and processual) consistent with the general model, an ideal type of just organization is developed. The primary hypothesis is that the more an organization emulates the ideal type of the just organization, the better its social performance will be as measured by higher CSP ratings. The degree of similarity of design with the ideal-type profile of the just organization is measured by the Euclidean distance, or summary distance metric, of the sample organization's profile to the ideal-type profile. The methodology utilizes surveys of corporations for organizational design features and the CSP ratings from the Kinder, Lydenberg, and Domini, Inc., social ratings database. The results indicate that there is no correlation between organization design and social performance when CSP is taken as an aggregate of all the stakeholder-firm relationships. However, when the specific stakeholder relationship is analyzed, there is an association between the presence of stakeholder-specific design features and higher CSP ratings along the stakeholder-specific social rating dimension.
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