Corporate social responsibility actions and organizational legitimacy at the peak of COVID-19: a sentiment analysis

• DOI: https://doi.org/10.1108/CG-09-2020-0389
• Published date: 08 July 2021
• Date: 08 July 2021
• Pages: 1043-1058
• Subject Matter: Strategy,Corporate governance
• Author: Davide Giacomini,Mattia Martini,Alessandro Sancino,Paola Zola,Dario Cavenago

Corporate social responsibility actions and

organizational legitimacy at the peak of

COVID-19: a sentiment analysis

Davide Giacomini, Mattia Martini, Alessandro Sancino, Paola Zola and Dario Cavenago

Abstract

Purpose –This paper aims to analyse stakeholder sentiment about the corporate social responsibility

(CSR) actions implementedby Italian companies between February 20, 2020 and April 20, 2020, which

was the firstpeak in the outbreak of the COVID-19health emergency in Italy.

Design/methodology/approach –Using sentimentanalysis, the impact of COVID-19 on CSR actions is

analysedthrough reactions to the news publishedon Twitter by a sample of Italian news agencies.

Findings –The analysis indicatesthat the actions most appreciated are those that are more radical,e.g.

where the companyhas converted part of its production to make goods thatare useful in dealing with the

COVID-19emergency. The study identifies a new categoryof actions definable as ‘‘crisis-shaped CSR.’’

Practical implications –This is one of the first studies concerning the effectsof the pandemic on both

CSR actionsand organizational legitimacy.

Originality/value –This work explains which strategic approach to CSR is the most effective in

supporting corporate reputation in times of crisis, this study identified which of the CSR initiatives

adopted by companies in Italy were more effective in stimulating positive interactions and sentiment

among the generalpublic.

Keywords Social media, Crisis, Corporate social responsibility, Sentiment analysis,

Natural language processing, Organizational legitimacy

Paper type Research paper

Introduction

On March 11, 2020, the World Health Organization declared the nCoV-19 virus –often

referred to as the coronavirus or COVID-19 –as a pandemic. Some weeks later, the

significant impact of the pandemic on various parts of the world was seen, with serious

consequences on health, economicactivities and, more broadly, on our social relationships.

The COVID-19 pandemic can be considered a global crisis, although it differs from

previous crises with respect to its cause,scope and severity (Reinhart, 2020).

In the face of this kind of shock, a black swan (Taleb, 2008), corporate social responsibility (CSR)

actions are also heavily influenced. For example, it is possible that in the face of a significant

reduction in available resources, motivation for and likelihood of investing in socially responsible

actions may be reduced. Fortunately, initial studies of the effects of the pandemic on CSR have

shown that companies have behaved proactively, particularly in helping society to cope with this

virus (He and Harris, 2020), rather than showing a reduction in their commitment to social goals.

Against this backdrop, the analysis of the reaction of citizens to companies’ actions can

help understand how those actions align with the expectations of society and which of the

various CSR actions implemented are most appreciated by the public (Barbeito-Caaman

˜o

and Chalmeta, 2020).

Davide Giacomini is based

at Faculty of Business and

Law, The Open University,

Milton Keynes, UK.

Mattia Martini is based at

Department of Business

and Law, University of

Milan–Bicocca, Milan, Italy.

Alessandro Sancino is

based at Faculty of

Business and Law, The

Open University, Milton

Keynes, UK. Paola Zola is

based at IIT CNR, Pisa,

Italy. Dario Cavenago is

based at Department of

Business and Law,

University of

Milan–Bicocca, Milan, Italy.

Received 8 September 2020

Revised 28 April 2021

Accepted 3 May 2021

DOI 10.1108/CG-09-2020-0389 VOL. 21 NO. 6 2021, pp. 1043-1058, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 1043

This paper investigates how the general public reacted to the CSR actions taken by Italian

companies during the outbreak of COVID-19. It is one of the first studies that applies

sentiment analysis (SA) to CSR actionsin a global crisis.

From a theoretical perspective, the choice to combine CSR and communication on social

media is generally associated with legitimacy theory and stakeholder theory (Bons

on et al.,

2015;Colleoni, 2013;Khalil and O’Sullivan, 2017). Previous research has confirmed that it is

of fundamental importance for companies to strategically frame and discuss their CSR

efforts online (IBM, 2018;Mys

ˇkov

aandH



ajek, 2018). The analysis of social media to

understand the reactions to corporate actions is a constantly growing and evolving topic;

according to Blankespoor (2018), social media has changed the way companies and

investors communicate and provides a considerable amount of opendata to managers and

researchers.

The present work aims to contribute to this literature, by explaining which strategic

approach to CSR is the most effective in supporting corporate reputation in times of crisis.

More specifically, the study analyses which of the CSR actions adopted by companies in

Italy generated a positive sentiment on the internet.

The paper is structured as follows. The second section presents the theoretical

background; research designand method are then described in the third section; the fourth

section highlights the main findings of the research; and the final section discusses the

findings and limitations of the research and identifies some perspectives for future research

on this topic.

Theoretical background

Since Bowen (1953), the concept of CSR has continually grown as an important research

topic in the management literature (Dutot et al.,2016;Eweje, 2011;Lee and Carroll, 2011;

Sweeney, 2007). Kotler and Lee (2005, p. 3) define CSR as “a commitment to improve

community well-being through discretionary business practices and contributions of

corporate resources.” Legitimacy and stakeholder theories help explain the rationale

behind corporate CSR actions. According to legitimacy theory, companies continually try to

be perceived as fulfilling the expectations of the members of the society in which they

operate (Deegan, 2006). Thus, companies might opt for investing in CSR initiatives to gain

and increase their legitimacy in society. “Organisational legitimacy is generally defined as

the social acceptance of organisations and their actions” (Etter et al.,2018,p.61).

Suchman (1995) identified three categories of legitimacy: pragmatic, cognitive and moral.

Pragmatic legitimacy is conferred by an organization’s audiencesthrough direct exchanges

and is based on their self-interests and determination of practical consequences (Suchman,

1995). Cognitive legitimacy can be broadlydefined as how well organizations execute their

activities from their stakeholders’ points of view (Cruz-Suarez et al.,2014). Moral legitimacy

is based on moral judgments and an exchange of arguments on whether an individual, an

institution or an action can be considered socially acceptable (Scherer and Palazzo, 2011).

The link between CSR and legitimacy is very close because CSR actions may build and

strengthen so-called reputationalcapital (Du and Vieira, 2012;Panwar et al., 2013).

Over the years, the CSR concept has evolved and been progressively linked to the study of

stakeholder engagement (Carroll, 2015;Greenwood, 2007;O’Riordan and Fairbrass, 2014).

In this context, the CSR concept emphasizes the motivations of companies to act in the

interests of and engage with their primary and secondary stakeholders (Adib et al.,2020;

Lozano, 2005;Tanimoto, 2019). According to stakeholder theory, a stakeholder is “any

group or individual who can affect or is affected by the achievement of the organisation’s

objectives” (Freeman, 1984, p. 46). This paper follows other scholars who, in analysing the

influence of social media on the relationship between organizations and their stakeholders,

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