Panel Paper: Prosociality in Business: A Human Empowerment Framework

Saturday, November 10, 2018
Tyler - Mezz Level (Marriott Wardman Park)

*Names in bold indicate Presenter

Siri Terjesen, American University, Steven Brieger, University of Sussex, Christian Welzel, Leuphana University of Luneburg and Diana Hechavarria, University of South Florida

An increasing number of businesses extend beyond narrow economic interests to socially responsible practices which contribute to the common good. This study introduces a human empowerment framework to better understand why some businesses are more socially oriented than others in their policies and activities. Based on Welzel’s theory of emancipation, we argue that four components of emancipative forces—action resources, emancipative values, social movement activity, and civic entitlements—enable, motivate, and entitle individuals to pursue social goals for their businesses.

Using a sample of over 15,000 entrepreneurs from 43 countries, we report strong empirical evidence for two ecological effects of the framework components on prosociality. We find that the prevalence of action resources, emancipative values, social movement activity, and civic entitlements (1) lift entrepreneurs’ willingness to choose a social orientation for their business (elevator effect), and (2) reinforce the gender effect on prosociality in business activity (amplifier effect). We discuss the human empowerment framework’s added value in understanding how modernization processes fully leverage the potential of social business activities for societies. Our hypotheses read as follows:

Hypothesis 1: The prosociality in business is higher in countries where action resources are more prevalent.

Hypothesis 2: The prosociality in business is higher in countries where emancipative values are more prevalent.

Hypothesis 3: The prosociality in business is higher in countries where social movement activities are more prevalent.

Hypothesis 4: The prosociality in business is higher in countries where civic entitlements are more prevalent.

Hypothesis 5: Females, compared to their male counterparts, show higher levels of prosociality in business.

Hypothesis 6: Emancipative forces moderate the positive relationship between female and prosociality in business, strengthening the link between female and prosociality in business in the presence of higher levels of emancipative forces.

From a theoretical perspective, the rationale of our human empowerment framework offers a new insight of how the rising prosociality has increasingly become a mainstream business activity. Businesses’ growing willingness to improve social well-being and to reduce negative externalities beyond the statutory minimum requirements can be explained against the background of a societal transformation towards humanitarian principles. The empowerment process is not yet complete as younger generations place stronger emphasis on emancipative values than older generations (Welzel 2013), thus continuing to drive prosociality. Given the worldwide trend of a growing number of people relocating from rural, often more traditional areas, to metropolitan cities with greater stocks of action resources in terms of incomes and educational opportunities, we expect further changes in society’s emancipative values which will, in turn, further lift the prosociality in the business world. Social responsibility will become even more important and a mainstream of future society. Notably, this shift will probably also imply that ethics and social responsibility become increasingly profitable. If an increasing number of stakeholders focus on businesses’ prosociality, business-driven engagement for social issues becomes beneficial for businesses and people (Pless and Maak 2009). Thus, socially responsible actions will be seen as a way to achieve competitive advantage and superior performance (Husted and Allen 2000).