What drives social responsibility commitment? An empirical analysis of public enterprises in South Korea
| Author | You Hyun Kim,Seok Eun Kim |
| Published date | 01 March 2022 |
| Date | 01 March 2022 |
| DOI | 10.1177/0020852319890642 |
| Subject Matter | Articles |
Article
What drives social
responsibility
commitment? An
empirical analysis
of public enterprises
in South Korea
Seok Eun Kim
Hanyang University, Republic of Korea
You Hyun Kim
Gyeongnam Institute, Republic of Korea
Abstract
This study examines factors affecting the social responsibility commitment of public
enterprises in South Korea. A panel regression analysis of 70 public enterprises found
that the social responsibility commitment appears to increase when organizations are
financially healthy and strategically oriented. However, the relationship between ethical
behavior and social responsibility was negligible. These results have three management
implications: first, the conventional social responsibility assumption that economic
efficiency neutralizes societal goals is not necessarily true; second, public enterprises
with commitments to strategic social responsibility appear to be more socially
responsible than those without commitments to strategic social responsibility;
and, third, ethical behavior may not be a reliable indicator of the social responsibility
commitment, especially if it is mandated by the government.
Points for practitioners
Public enterprises have increasingly been under pressure to share the burden of social
and economic problems in society. However, many practitioners still have little
Corresponding author:
YouHyun Kim, Research Fellow, Research Planning and Coordination Department, Gyeongnam Institute, 248
Yongji-ro, Changwon, Gyeongnam, Republic of Korea.
Email: sergay23@hanmail.net
International Review of Administrative
Sciences
!The Author(s) 2020
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DOI: 10.1177/0020852319890642
journals.sagepub.com/home/ras
2022, Vol. 88(1) 152–170
knowledge about under what conditions they can do good and benefit society.
The results of this article suggest that profit making embodied in ethical rules and a
dedicated governance structure to communicate with stakeholders create conditions
that are more conducive to doing socially responsible activity.
Keywords
ethical behavior, public enterprise, social responsibility, strategic social responsibility
Introduction
Corporate social responsibility (CSR), a term that encompasses business ethics and
the social dimensions of business activity, is being discussed frequently among
public sector organizations (Blowfield and Frynas, 2005). However, few empirical
studies have examined under what circumstances public organizations are likely to
invest resources in advancing societal goals (Ates and Bu
¨ttgen, 2011; Lauesen,
2011). Only sporadic and descriptive studies have presented some information
about public organizations’ social responsibility (SR) in five European countries
(Ates and Bu
¨ttgen, 2011) and India (Mukherjee and Bordoloi, 2014). This lack of
research seems to be related to a perception that because public organizations exist
to operate on behalf of public interests, further SR activities are not necessary.
This article aims to measure factors affecting SR commitment in public,
government-owned enterprises in South Korea (hereafter, Korea). In this article,
public enterprises are defined as organizations wholly or partly owned and funded
by the government to provide critical public services such as electricity, gas, roads,
and water (Encyclopedia Britannica Online, 2017).
1
Under the Act on the
Management of Public Enterprises 2007, the Korean government requires public
enterprises to provide public services in an efficient manner through the establish-
ment of an independent but transparent managerial operation system. However,
the recurrent performance and ethical failures of these organizations drive them to
be socially responsible in order to relieve many societal problems such as income
inequality, community development, and environmental protection. These seem-
ingly conflicting goals, reconciling the demands of advancing social goals with the
need for economic efficiency, raise complex questions: can a social purpose be
compatible with economic efficiency in the operation of public enterprises?
Under what circumstances are public enterprises likely to invest resources in the
pursuit of socially responsible goals?
The purpose of this study is to answer these questions using longitudinal data.
As sample organizations were drawn from a single country, the findings of this
article are only exploratory, not representative. Nonetheless, this article can
still provide preliminary information about the SR activities of public enterprises
in accomplishing societal goals while maintaining economic performance
153
Kim and Kim
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