Recent research suggests that committing to corporate social responsibility (CSR) can induce moral licensing among employees, resulting in unethical behaviors. We extend this line of research and develop a theoretical framework to study how CSR influences managerial decision-making in crisis management. We test this theory in the context of product recall remediation. We examine under what circumstances CSR induces morally consistent or morally dubious recall remedial decisions and factors moderating this effect. We focus on two product recall remedial decisions that differ in ambiguity—full versus partial compensation and proactive versus passive recall. We predict and show that a company’s strong prior CSR performance increases the likelihood of full compensation but decreases the likelihood of a proactive recall. This finding suggests that CSR can induce moral licensing behavior at the highest corporate level when a decision is morally difficult to diagnose. Further analysis reveals that consumer harm and institutional ownership moderate the relationship between CSR and these two remediation strategies. Together, our findings provide important insights into when CSR leads to moral licensing in crisis remediation and how the link can be mitigated, and thus shed light on when CSR yields consistent and meaningful ethical business decisions.

This study investigates the financial and operational implications of enterprise systems (ES) in corporate risk management. Using matched difference-in-differences analyses based on ES implementation events, we document a significant reduction in the volatility of operating cash flows following ES implementations. We further show that ES implementers have better post-implementation operational efficiency than matched non-ES firms and better manage sales, costs of sales, working capital, and operating expenses to reduce operating cash flow volatility. Consistent with the benefits of lower cash flow volatility documented in prior literature, we find ES implementers demonstrate higher investment efficiency, lower reliance on external financing, and higher debt capacity post-ES-implementation than the matched non-ES firms. Our study sheds light on the economic benefits of utilizing ESs in corporate risk management and in so doing responds to the paucity of empirical research in this area.