Modeling Cognitive Social Capital and Corporate Social Responsibility (csr) As Preconditions for Sustainable Networks of Relations
Abstract: The paper studies the relationship between social capital (SC) and Corporate Social Responsibility (CSR) by investigating the idea of a virtuous circle between the level of SC and the implementation of CSR as an extended model of corporate governance. By joint use of the tools of network analysis and psychological game theory, the paper shows the role of cognitive SC and CSR in promoting the emergence of cooperative networks between the firm and all its stakeholders (structural SC). In particular, (a) the level of cognitive SC, in terms of community or society-wide disposition to comply with fair social norms, plays a key role in providing opportunities for the firm to agree (with strong stakeholders) on CSR principles. (b) The explicit agreement on CSR principles and norms engenders cognitive social capital on its own, by creating room for conformist preferences, and positively affects beliefs about reciprocal conformity. (c) The level of cognitive social capital (both beliefs and dispositions) principles generate structural social capital understood as long-term cooperative relationships between the firm and its (strong and weak) stakeholders. Alongside the notion of sub game prefect equilibria and credible threats, we show that strong stakeholders endowed with high cognitive social capital, have an incentive in punishing the firm if it is not cooperative with weak stakeholders.