Papers MVO
What we don’t know about corporate social
responsibility
- Herman Aguines en Ante Glavas
In conducting the literature review they systematically focussed on two issues:
Identifying predictors of CSR, outcomes of CSR, and mediators and moderators of CSR-
outcomes relationships.
o Predictors: antecedents of CSR actions and policies
o Outcomes: those that result from CSR initiatives
o Mediators: those variables that explain the underlying processes and mechanisms of
why CSR initiatives are related to an outcome
o Moderators: describe the conditions under which CSR initiatives influence outcomes
Identifying relationships among variables of institutional, organizational and individual levels
of analysis.
RESULTS OF LITERATURE SEARCH :
There are slightly more conceptual articles (53%) than empirical articles (47%).
There is an increased interest in CSR topics over time, almost half of the CSR articles have
been published since 2005.
Level-of-analysis: 33% of the articles focused on the institutional level, 57% on the
organizational level, 4% on the individual level and 5% addressed two or more levels.
In short: the literature search revealed a balance between the number of conceptual and empirical
articles. But there is a clear imbalance in terms of level of analysis. There is very little research
adopting an individual or multilevel approach.
Institutional levels of analysis
Articles focussing on at least one of Scott’s three pillars of institutions: - normative
- cultural cognitive
- regulative
are articles that address CSR at the institutional level of analysis.
Predictors
Firms engage in CSR due to institutional pressure, particularly from stakeholders. Stakeholders take
on different roles and engage in different activities while attempting to influence firms to engage in
CSR.
Stakeholders can be: shareholders, customers, media, the local community and interest groups.
1
,Stakeholders have three main motives for pressuring firms:
1. Instrumental: self-interest driven
2. Relational: based on a concern with relationships among group members
3. Moral: based on a concern with ethical standards and moral principles
Stakeholders apply pressure primarily through impacting potential revenues and resources and the
reputation of the firm.
Outcomes
An improvement in a firm’s reputation: on the part of consumers who respond to CSR through
favourable evaluations on the company and it’s products as well as through increased loyalty.
Mediators
A few studies have found that the relationship with customers is an important mediator of CSR-
outcomes relationship, specifically customer satisfaction, consumer-organization fit and consumer
trust.
But there seems to be a black box regarding the relationship between predictors and outcomes of
CSR at the institutional level of analysis. Not much is known about institutional-level variables that
may serve as mediators.
Moderators
Regarding stakeholders: The relationship between CSR initiatives and outcomes is stronger as
stakeholders salience increases.
Regarding firm environment: increased regulation was found to strengthen the CSR-outcome
relationship.
Regarding industry: the relationship between CSR initiatives and outcomes is stronger in industries
that are more visible to stakeholders. And the growth of industries also strengthens the CSR-
outcome relationship.
Conclusion
Although they may have different motives, as well as ways of doing so, the actions and
influence of stakeholders serve as an important predictor of CSR actions and policies – they
affect whether firms want to engage in CSR and the types of CSR initiatives firms pursue.
Institutional forces – including regulations, standards and certification also affect the extent
of and types of CSR actions and policies firms choose to implement.
Institutional forces can lead to symbolic rather than genuine CSR actions, whereby firms may
appear to engage in CSR but these initiatives are simply intended to appease stakeholders
demands or meet the minimum requirements.
Firms that engage in CSR are likely to improve their reputation, customer loyalty and
evaluation of their products.
2
, The relationship between CSR initiatives and outcomes changes depending on several
institutional-level variables (moderators).
The institutional-level is silent regarding mediators or underlying mechanisms.
Organizational level of analysis
Predictors
A predictor of CSR engagement is a firm’s instrumental motivation (the perception that CSR is good
for business and likely to lead to an increased competitiveness and legitimacy).
Firms are also motivated by normative reasons: a sense of responsibility and duty, following a higher
order or morals, a sense of stewardship.
Firm specific variables are also influential in affecting CSR initiatives. An alignment of CSR with firm
mission and values is an important predictor of CSR. Also long-term institutional ownership and top
management equity have a positive influence.
As for structure: firms are more likely to engage in CSR when their structures are more open to
relationships with society.
Outcomes
There is a positive relationship between CSR outcomes and financial outcomes.
A few studies explored the relationship between CSR and nonfinancial outcomes such as improved
competitive advantage and attractiveness to institutional investors. Also, firm capabilities were
found to improve as a result of CSR actions and policies, such as management practises, operational
efficiencies, product quality and perceived quality management.
Furthermore CSR initiatives have resulted in improved demographic diversity, especially regarding
women and minorities.
Mediators
Some studies showed that there was no direct relationship between CSR and financial performance.
Another resource showed that the CSR-outcome relationship was fully mediated by a firm’s
intangible resources. Also managerial interpretations of CSR as an opportunity mediates the CSR-
outcome relationships.
Moderators
Scholars investigated moderators, including financial performance, slack resources and lower debt
levels. Showing that when firms have more available financial resources, the relationship between
CSR and outcomes is strengthened.
Other researchers found that as firms have a higher degree of public contact, the relationship
between CSR engagement and outcomes is stronger. Another commonly investigated moderator at
the organizational level is size. As firm size increases, additional resources and visibility of the firm
strengthen the relationship between CSR and outcomes.
3
, Conclusion
Firms engage in CSR primarily due to instrumental reasons such as expected financial
outcomes. Secondly, they also engage due to normative reasons that lie in the firm’s values.
Third, there is a small but positive relationship between CSR actions and policies and financial
outcomes.
There are several nonfinancial outcomes that result from CSR such as improved management
practices, product quality, operational efficiencies, attractiveness to investors and enhanced
demographic diversity.
Mediators explored this far include: a firm’s intangible resources and managerial
interpretations of CSR as an opportunity.
Moderators: the CSR-outcomes relationship is strengthened when level of exposure and
visibility are high and size of the company is large.
Individual level of analysis
Predictors
Commitment from supervisors to CSR is an important predictor of CSR engagement. Employees who
perceive strong signals of encouragement from their supervisors are more likely to develop and
implement creative ideas that positively affect the natural environment.
Organizations that engage in CSR due to institutional forces but without management commitment
engage in “decoupled CSR activities” = those that are disconnected from normal and ongoing
activities seen as part of a firm’s core business.
Given the findings regarding supervisor commitment to CSR, some researchers have found its
antecedents include values, congruence of individual values with organizational values, and
individual concern with certain issues. Personal values are part of the decision making process, so it is
important to understand how values influence engagement in CSR.
Other predictors include pragmatic aspects, such as awareness of CSR guidelines, CSR training and
attendance of CSR conferences. CSR engagement is affected by developmental needs, such as
physiological, safety, affiliative, esteem, and self-actualization.
Outcomes
Working for socially responsible companies leads to increased organizational identification,
employee engagement, retention, organizational citizenship behaviour, in-role performance,
employee creative involvement and improved employee relations. In addition research found that
CSR increases firm attractiveness to prospective employees.
Mediators
Manager’s emphasis on CSR values is associated with followers’ perceptions of visionary leadership,
which positively influenced employees’ extra effort, which in turn positively influenced firm
performance. Other mediators are organizational identity and organizational pride.
4
