Studying the Impact of Corporate Social Responsibility (CSR) Perceptions on Employee Work Attitudes

Abstract

In the last couple of decades the concept of corporate social responsibility has gained importance both in practice as well as in research. Globalization and international trade have given rise to increased complexities in business and among other things has raised expectations of various stakeholders towards firms being responsible business entities.

A majority of studies in this area have evaluated the effect of CSR on the firm’s financial performance. Such studies indicate a positive association between CSR and financial performance across industries and study contexts (Margolis, Elfenbein, & Walsh, 2007; Orlitzky, Schmidt & Rynes, 2003). Others argue that at the very least, good social performance does not lead to poor financial performance (Roman, Hayibor, & Agle, 1999). It has also been argued that corporate social responsibility acts as a competitive advantage for firms (Porter & Kramer, 2006). The overall increased financial performance of the firm may come from increased reputation (Fombrun & Shanley, 1990), being more attractive to the prospective employee (Greening & Turban, 2000; Turban & Greening, 1997; Wiley, Turban, & Cable, 2010) or gaining access to more capital (Hart, 1995).

A likely extension of the understanding of CSR as a competitive advantage is the nascent area of research that explores the impact of CSR perceptions on employees of the firm. A few studies in this area have indicated that CSR perception among employees lead to an increase in the level of organizational commitment (Brammer, Millington, & Rayton, 2007; Kim, Lee, Lee, & Kim, 2010; Peterson, 2004; Turker, 2008).

This study extends the scope of the present research in this area to find the impact of CSR perception not only on positive employee attitudes such as organisational commitment and job satisfaction but also on negative work attitudes like organisational cynicism. This study looks at these relationships for managers and non-managers separately. It is argued that though most of the work in the area of organisational behaviour is centred only on managers it is not possible to generalize the effects to non-managers as well. The available studies linking CSR perception and employee work attitudes do not take into consideration the treatment of employees by their employing organisation and its influence on the relationship between CSR perception and employee work attitudes. This study tested the moderating influence of the treatment of employees (measured by levels of organisational justice and perceived organisational support) by their employing organisations on the relationship between CSR perception and employee work attitudes. It also tested the involvement in company CSR activities by employees as a moderator on the above mentioned relationships.

Data was collected from 550 employees working in various private sector organisations having a CSR programme. The results indicate that the perception of CSR significantly predict organisational commitment and job satisfaction positively and organisational cynicism negatively. These relationships were stronger in the case of managers as compared to non managers except in the case of job satisfaction. A significant moderating effect was found only with distributive justice as a moderator in predicting organisational cynicism for the overall data. Among managers, significant moderation effect was observed with procedural justice, informational justice and overall justice in predicting job satisfaction. None of the moderators were found to be significant in the case of non-managers.

Limitations and future research directions of this research are discussed. Implications from this study contribute to expand the current understanding of the relationship between corporate social responsibility perceptions and employee work attitudes, especially in the Indian context.