Exploring the Link between Socioeconomic Status and Social Responsibility

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CEOs have been an important focus in strategy research for the past decade. Prior literature has explored a number of relationships between CEO demographics, such as education, social ties, social capital, and power and CEO and firm behavior. Surprisingly, no research has focused on CEO childhood experiences and their aggregate impact on CEO decisions (consequently on organizational behavior). This research aims to fill this gap by addressing how CEO socio-economic status (SES) during development years (childhood to adulthood) relates to his or her perceptions on social responsibility as reflected by organizational behavior. Specifically, we are addressing the following question: do organizations led by CEOs who grew up rich or poor differ in terms of socially responsible behavior from those led by CEOs who grew up in middle class? We draw on risk perception and affect theory to develop and test our hypotheses regarding the link between CEO SES and a firm’s socially responsible behavior. Thus far, our preliminary analysis of large American organizations over sixteenyear period (2000-2016), reveals that both ends of the spectrum, lower and higher levels of SES, translate in different behaviors as it relates to social responsibility. Organizations led by CEOs who grew up middle class tend to be more socially responsible compared to those led by CEOs who group up either poor or reach.