Original scientific paper
https://doi.org/10.1080/1331677X.2022.2135557
Real options appraisal for a reactive CSR strategy: the case of Facebook
Mariano Méndez-Suárez,
Abel Monfort
María de las Mercedes de Obesso
Abstract
The present research values reactive corporate social responsibility
(CSR) policies using the theory of Real Options (RO). Its main goals
are to determine the role of RO methodology as a business risk
hedging function on reactive CSR strategies and to analyse
whether the application of RO adds value to companies with
reactive CSR strategies. The study illustrates Facebook’s reactive
CSR policy and also demonstrates that RO can be used serve to
hedge market risk (systematic risk), just like their equivalents in
the financial markets but also to hedge business risks (non-systematic
risk). In addition, it shows that despite the criticism that the
use of reactive CSR strategies may arouse, they have a positive
impact on the market when used at the right time in companies
that do not have a brand positioning closely linked to CSR.
Additionally, the article shows that decision-making is a fundamental
part of managerial functions and whether the situation is considered
as a structured or unstructured problem will determine
the action to be taken. In this particular case the reactive CSR
strategy relates to waiting as an outcome of a planned choice.
Keywords
Corporate social responsibility; CSR; real options; business risks hedging; Facebook
Hrčak ID:
306697
URI
Publication date:
30.4.2023.
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