A Conceptual Framework of the Corporate Management of Social Impacts: The Case of Problem Gambling

• Published date: 01 December 2002
• Date: 01 December 2002
• DOI: http://doi.org/10.1111/1467-8594.00147

A Conceptual Framework of the

Corporate Management of Social

Impacts: The Case of Problem

Gambling

NERILEE HING AND JAN MCMILLEN

Corporate social issues management and corporate social

performance are two growing f‌ields of study with a shared

focus on organizations and their social impacts. However,

few attempts have been made to integrate concepts from these

f‌ields. While the corporate social issues literature generally takes a

longitudinal perspective to explain how social issues evolve as a

function of public policy and stakeholder and organizational

changes, the corporate social performance literature has concen-

trated on snapshot methods and analyses of corporate social

principles, processes, and outcomes by which an organization’s

social performance is judged. Yet, given the complementary

emphases of these two f‌ields, conceptual integration appears

potentially valuable in explaining how organizations manage their

social impacts.

This article highlights the utility of an integrated approach when

attempting to explain how one industry has managed one of its

social impacts. It was found that concepts drawn solely from the

corporate social issues or the corporate social performance f‌ield

were inadequate in capturing all explanatory factors. That is, the

Dr. Nerilee Hing is with the School of Tourism and Hospitality Management at Southern Cross

University, Lismore, Australia. Dr. Jan McMillen is a Director of the Australian Centre for

Gambling Research in Sydney, Australia.

This article is based on Ph.D. research by Nerilee Hing conducted through the University of

Western Sydney and supervised by Jan McMillen.

Business and Society Review 107:4 457–488

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explanation was incomplete without considering both longitudinal

inf‌luences inherent in the emergence of a corporate social issue,

and management principles, processes, and outcomes depicted in

models of corporate social performance. Integrating these two

perspectives allowed a more complete explanation of how the

industry under examination has managed one of its social impacts

over time and how its corporate social performance has been

judged.

The industry under study was the registered clubs industry in

the state of New South Wales (NSW), Australia. The social impact

examined was problem gambling. The study aimed to examine from

past, present, and future perspectives whether and how the clubs

have managed problem gambling to the satisfaction of key stake-

holders.

The article commences by summarizing historical contributors

to the emergence of problem gambling as a corporate social issue

for NSW clubs. It then assesses the clubs’ contemporary social

performance by comparing their principles and practices in

responsible provision of gambling to those advocated by key

stakeholders. Research f‌indings present insights into the future

direction of the clubs in responsible management of gambling and

inform development of an explanatory framework of how organiza-

tions manage their social impacts. The framework builds upon and

integrates previous conceptualizations of corporate social perform-

ance and corporate social issues management. The utility of this

framework is demonstrated by a theoretical analysis of the

research f‌indings.

AN HISTORICAL PERSPECTIVE ON THE

EMERGENCE OF PROBLEM GAMBLING AS A

CORPORATE SOCIAL ISSUE FOR NSW CLUBS

NSW registered clubs are not-for-prof‌it organizations established

to pursue and promote a common sporting, social, cultural, or

professional interest of their members. They also are now major

providers of machine gambling. This f‌irst section summarizes key

historical contributors to the emergence of problem gambling as a

corporate social issue for NSW clubs. These are discussed in terms

of the role of the clubs and other stakeholders.

458 BUSINESS AND SOCIETY REVIEW

The Role of NSW Clubs in the Emergence of Problem

Gambling as a Social Issue

As an issue of management concern for NSW clubs, problem

gambling had its seeds in their historical development as major

providers of machine gambling in NSW and Australia. When

gaming machines were legalized in NSW clubs in 1956, prevailing

government policy linked legalized gambling to social benef‌it

through, for example, church and charity bingo and state-run

lotteries for explicit social and welfare purposes. The off‌icial not-

for-prof‌it status, restricted membership, and social benef‌it objec-

tives of community clubs were characteristics that enabled the

NSW government to justify legal sanctioning of club machine

gambling, despite economic objections from NSW hotels and moral

objections from church groups and the Protestant middle class.

Granting the clubs a state monopoly over machine gambling gave

them considerable competitive advantage and legitimacy, spurring

a remarkable industry expansion for the remainder of the century.

1

After 1956, the lure of gaming machine revenues fueled expo-

nential growth in the number of NSW clubs, while their machine

gambling operations and the funneling of resultant prof‌its into club

facilities and services changed the nature of individual clubs. The

clubs steadily evolved from small, elitist organizations in the early

1900s, to mass leisure organizations for people from a wide social

spectrum, attracted by the machines and the superior club

facilities.

By the 1970s, this liberal environment had nurtured the

emergence of very large clubs with extensive gaming machine

installations, and whose social benef‌it focus had become increas-

ingly blurred through ambitions to expand membership and

patronage through extensive gambling and other club facilities.

In the context of increased competition for gambling f‌lowing from

expansionist government policies during the 1980s and 1990s,

NSW clubs became more aggressively commercial in their machine

gambling operations and more politicized in an effort to protect

what had become their main revenue source. By the 1990s the

NSW club sector was characterized by increasing industry concen-

tration, with the large clubs yielding considerable political

and market inf‌luence and pursuing the usual commercial goals

of increasing market share, attracting maximum patronage,

NERILEE HING AND JAN MCMILLEN 459