A Study of Social Responsibility in the Organization's Accounting Function: An Empirical Study

Author

Stephen N. Gilpin, Fontbonne College

Year of Award

1989

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business

Department

Business Administration

Keywords

market theory, responsibility, bias, business, ethics

Abstract

This study investigates whether a positive relationship exists between each of five characteristics of the firm (political visibility of the firm, political visibility of the firm's industry, profitability, ownership level of ethical investors, and growth rate) and the level of socially responsible disclosure provided by the firm. The study was conducted under agency theory. Under this theory, the firm is viewed as having an implied social contract with society and provides social disclosure to inform society of contract compliance. The theory also suggests that society expects different levels of social performance of firms depending on the firms' characteristics; consequently, firms facing higher societal expectations use socially responsible disclosure to indicate compliance with the expectations.

The dependent variable is defined as a percentage and as a dichotomous variable, allowing both the ordinary least squares and the logistic analysis to be used to estimate models. Data was obtained from questionnaires mailed to a random sample of five hundred firms traded on the New York or American Stock Exchanges, the 1987 annual reports of respondents, and COMPUSTAT's Prices-Dividends-Earnings file.

A positive relationship was found between size and social disclosure. Similarly, a positive relationship was found between the firm's profitability and social disclosure. While management's perception of the firm's industry's visibility was only marginally significant, the firm's industry classification had significant explanatory power.

General support was also found for a positive relationship between both management's perception of the firm's political visibility and the ownership level of ethical investors and the social disclosure level. However, neither the firm's systematic risk nor growth rate was statistically significant.

Lastly, management's claim of giving substantial consideration to its social responsibilities when making economic decisions was not supported by the data. Also, managers are satisfied with current socially responsible disclosure even though they realize that most of it is of a self-serving nature.

Comments

This thesis was selected for its superior quality, and was suggested as a good example for MBA students to follow.

Document Type

Restricted Thesis

Recommended Citation

Gilpin, Stephen N., "A Study of Social Responsibility in the Organization's Accounting Function: An Empirical Study" (1989). All Theses, Dissertations, and Capstone Projects. 487.
https://griffinshare.fontbonne.edu/all-etds/487