Why Corporate Social Responsibility Affects the Employee: Investigating Underlying Psychological Mechanisms

Paruzel A. Why Corporate Social Responsibility Affects the Employee: Investigating Underlying Psychological Mechanisms. Bielefeld: Universität Bielefeld; 2021.In organizations and in research, corporate social responsibility (CSR) has gained more and more attention, reflecting global societal developments. Employees’ reactions to CSR are especially relevant, because they witness, design, and participate in CSR and CSR shapes the image employees have of an organization. Up to now, there is a large body of research on the relationships between CSR perceptions and commitment, job satisfaction, and organizational citizenship behavior (OCB). As most studies are correlational, there is not sufficient information about the causality of effects which is relevant to be able to exclude alternative influencing factors. Social identity theory is the prevailing theoretical approach to build hypotheses on, followed by research on justice and meaningfulness as explaining mechanisms of why and how CSR affects employees. It is important to clarify if employees react to CSR because they identify with their organization, because they assume they will be treated fairly by their organization, or because CSR makes their work more meaningful, or if it is a combination of the afore-mentioned. A comparison of psychological mechanisms will show which explaining mechanism is the strongest and therefore should be assigned a central role in future theory developments. This work contributes to the literature by quantitatively synthesizing research findings on the relationship between CSR and employee-related attitudes and behavior. More specifically, I examine its causality and scrutinize the above mentioned major theoretical approaches: identification, justice, and meaningfulness. Based on the results, I recommend how organizations can design their communication of CSR to their employees based on the best working mechanism and identify open research fields. To achieve these goals, three studies were conducted. To investigate if CSR is similarly or differently related to specific outcomes such as commitment and job satisfaction and to compare different CSR initiatives based on their focus (people, planet, or profit), we quantitatively synthesized the state of research. Study 1, a meta-analysis on the relationship between CSR and employee-related attitudes and behavior (N = 89,396, k = 132), revealed significant relationships between CSR and attitudes and behavior and differences with regard to the focus of CSR. Relationships were stronger for attitudes than for behavior. Identification mediated the relationships between CSR and commitment, but not the relationship between CSR and job satisfaction as well as OCB. We identified that experimental studies were severely underrepresented, which lead to Study 2. In Study 2, we examined identification as explaining mechanism to learn whether social identity theory is applicable to CSR research, which is the most often used theory in psychological CSR research. This is important, because identification often was investigated as a mediator, but the underlying theoretical assumptions on how CSR may arise identification have not been sufficiently verified. In doing so, we examined the causality of the relation of CSR and commitment, job satisfaction, and OCB by using an experimental vignette methodology (N = 136 employees). Results showed that there is a causal effect of CSR on commitment and job satisfaction. Identification mediated the effect of CSR on commitment, job satisfaction, and OCB, but CSR explained only little variance in identification. This indicated that identification explains the effect of CSR on employees, but there may be better explaining mechanisms. In Study 3, which is methodologically similar to Study 2, we investigated three explaining mechanisms of the effect of CSR on commitment, job satisfaction, and OCB, and tested them in parallel to compare them: identification, justice, and meaningfulness. Results revealed, contrary to the status of identification in CSR research, justice as the strongest explaining mechanism (N = 189 employees). A successful exact replication of our research findings (N = 131 employees) increased the reliability of our results. To find a common conclusion of the three experimental studies, I synthesized the findings from the experimental studies (Studies 2 and 3, k = 3, N = 456). The results of the meta-analytical structural equation mediation model showed that identification mediated the effect of CSR on commitment, but not job satisfaction and OCB. Justice mediated all effects of CSR on dependent variables. Meaningfulness mediated the effects of CSR on commitment and job satisfaction, but not OCB. The estimates of the indirect effect were largest for justice. All studies taken together, I give an overview of the state of research in CSR, revealing the sizes of the relations of different aspects of CSR and employees’ attitudes and behavior. I showed that the effect of CSR on commitment and job satisfaction is causal, which is important for organizational initiatives on CSR directed at employees to be effective. I conclude that social identity theory should no longer be assigned a central role in CSR theory, and promote justice to be at the core of future theoretical integrations and developments. I discuss what makes justice different from the other psychological mechanisms and why justice may be more relevant to CSR than identification and meaningfulness. Finally, I give practical recommendations for communicating CSR to employees based on our knowledge of the importance of justice for CSR and identify open research fields