Community Isomorphism and Corporate Social Action

We advance a model of how institutional pressures at the community level shape corporate social action within the metropolitan area in which firms are headquartered. We define corporate social action as those firm behaviors and practices that extend beyond immediate profit maximization goals and that are intended to increase social benefits or mitigate social problems for constituencies external to the firm. We conceptualize corporate social action in terms of its nature, including the focus or target of corporate efforts (e.g., arts, education or health services) and the form that it takes (e.g., cash, in-kind donations, volunteerism), and level (or amount) of corporate social action. We propose that community isomorphism, i.e., the resemblance of a corporation’s social practices to those of other corporations within its community, influences the nature and level of corporate social action and patterns corporate social action within communities. We conclude with a consideration of the theoretical implications of emphasizing community as the focal unit of analysis for understanding corporate social action.