Doing Good and Doing No Harm: The Differential Effects of Founders’ Regulatory Focus on CSR

Corporate social responsibility (CSR) represents a constellation of volitional choices that reflect the motivations and strategic goals of founders. We propose that the founders’ regulatory focus—promotion focus and prevention focus—will influence their entrepreneurial firms’ CSR profiles. We advance this perspective by locating founders and empirically testing that (1) promotion focus will be positively related to CSR strengths; (2) prevention focus will be negatively related to CSR concerns; and (3) these associations will be amplified when founders act on the relative power they possess. Moreover, we explore the interactions between founders’ regulatory focus and CSR and their effects on firm performance (sales and market). We test our ideas with a sample of 315 founders, resulting in 945 firm-year observations. Results indicate that the promotion focus of founders is manifested in their preferences for “doing good” and the prevention focus of founders is manifested in their preferences for “doing no harm.” We further found that CSR influences entrepreneurial firm performance in complex ways.