Corporate Responses to COVID-19: A Nonmarket Strategy Approach

Abstract

The COVID-19 pandemic has been an unprecedented threat to the survival of U.S. firms. Prior studies show that firms use market strategies such as layoffs and pay cuts to cope with organizational crises. Little is known about how firms engage in corporate social responsibility (CSR) and corporate political activities (CPA) during crises. This study focuses on how America’s largest publicly traded firms use these two nonmarket strategies to cope with the COVID-19 pandemic. Results suggest that public firms actively engaged in both CSR and CPA after the outbreak. The preliminary estimation shows that firms listed in Russell 1000 have donated or pledged over $3.9 billion to corporate philanthropy and invested over 2.1 billion in observed political donations and lobbying in Congress in the early pandemic. The marked variation in corporate nonmarket strategies could be partially attributed to corporate elites’ political ideology, political accountability, and perceived COVID-19 risk.

Explore the Approaches to Corporate Social Responsibility Implemented by E-Commerce Platforms in China During the Early Stage of COVID-19: A Mixed-Methods Content Analysis

“…These findings enrich the studies on the factors associated with CSR actions during crisis. 13,34,[48][49][50] In summary, our findings have implications for policy and practice during a public health emergency. The design of prevention and control policies should incorporate e-commerce platforms, as they played an important role in our society through various CSR approaches.…”

“…As a traditional approach, similar behaviors of companies were popular worldwide during COVID-19. 33,34 Furthermore, the platforms engaged in stabilizing the transaction price and maintaining the transaction safety in 2-sided markets. This responsive approach indicates an ad hoc public philanthropy that CSR actions were regarded as irregular, event-based actions to prevent firms' activities harming social welfare.…”

The COVID-19 global crisis and corporate social responsibility

“…Zhang ( 2021 ) examines the largest US public firms based on market capitalization and explores how these firms use CSR to cope with the COVID-19 pandemic. Zhang finds that firms have engaged in the following CSR activities (2021, p. 1043): adopted remote work policies and modified their employees’ work schedules (82%); implemented some health and safety measures such as providing personal protective equipment to their employees (62%); contributed to community relief funds (48%); issued customer accommodations policies such as relaxing payment deadlines (47%); provided community services (41%); closed stores or suspended services (32%); offered paid sick leave (21%); and adopted pay cuts to top executives and board members (21%).…”

Introduction to the Special Issue on Coronavirus (COVID-19) & Society

“…Finally, Yongjun Zhang (2021) investigates two particular kinds of organizational responses, them being corporate social responsibility and political activities. The author analyzes the largest publicly traded firms in the United States and finds that they engaged in both of these nonmarket strategies to cope with COVID-19.…”