Scholarly article on topic 'A Strategic Influence of Corporate Social Responsibility on Meaningful Work and Organizational Identification, via Perceptions of Ethical Leadership'

A Strategic Influence of Corporate Social Responsibility on Meaningful Work and Organizational Identification, via Perceptions of Ethical Leadership Academic research paper on "Economics and business"

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Abstract of research paper on Economics and business, author of scientific article — A. Asuman Akdoğan, Aykut Arslan, Özgür Demirtaş

Abstract As a way of having strong relations with the stakeholders, Corporate Social Responsibility (CSR) may become a strategy for the companies. But research on relationship between the perceived CSR of internal stakeholders (employees) and organizations are limited. This study examined a model of CSR on organizational identification (OI), via the mediating role of meaningful work (MFW). It also investigated the moderating role of ethical leadership (EL). Data were obtained from the employees of an Aviation company operating in Kayseri, Turkey. The results indicate that there is a positive relationship between CSR and OI. In addition, MFW partially mediated the relationship between CSR and OI. Furthermore, no evidence of the moderator role of EL on CSR and MFW relation was found.

Academic research paper on topic "A Strategic Influence of Corporate Social Responsibility on Meaningful Work and Organizational Identification, via Perceptions of Ethical Leadership"

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Procedía - Social and Behavioral Sciences 235 (2016) 259 - 268

12th International Strategic Management Conference, ISMC 2016, 28-30 October 2016, Antalya,

Turkey

A Strategic Influence of Corporate Social Responsibility on Meaningful Work and Organizational Identification, via Perceptions

of Ethical Leadership

A.Asuman Akdogana Aykut Arslanb* Ózgür Demirta§c

a Erciyes University, Kayseri, Turkey b Piri Reis University,, Istanbul, Turkey c Inonu University, Malatya, Turkey

Abstract

As a way of having strong relations with the stakeholders, Corporate Social Responsibility (CSR) may become a strategy for the companies. But research on relationship between the perceived CSR of internal stakeholders (employees) and organizations are limited. This study examined a model of CSR on organizational identification (OI), via the mediating role of meaningful work (MFW). It also investigated the moderating role of ethical leadership (EL). Data were obtained from the employees of an Aviation company operating in Kayseri, Turkey. The results indicate that there is a positive relationship between CSR and OI. In addition, MFW partially mediated the relationship between CSR and OI. Furthermore, no evidence of the moderator role of EL on CSR and MFW relation was found.

©2016 The Authors.Publishedby ElsevierLtd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.Org/licenses/by-nc-nd/4.0/).

Peer-review under responsibility of the organizing committee of ISMC 2016.

Keywords: Corporate Social Responsibility; Meaningful Work; Ethical Leadership; Organizational Identification

1. Introduction

In today's environmental conditions, having strong and sustainable relations with stakeholders is very important

* Corresponding author. Tel.: +9-216-581-0050; fax: +9-216-581-0051. E-mail address: aarslan@pirireis.edu.tr

1877-0428 © 2016 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Peer-review under responsibility of the organizing committee of ISMC 2016. doi:10.1016/j.sbspro.2016.11.029

for the companies to stay competitive. There are a variety of strategic choices, which can be utilized to build and preserve these relations. One of them is CSR. CSR provides many benefits to companies from increasing competitive potential to gain reputation (Grigore, 2009).

CSR is mostly served as an impression and reputation management strategy for the companies. However, the motivational side of the CSR, especially inside the organization, is mostly neglected. Moreover, there is inconclusive evidence whether perceived CSR inside the organizations has an impact on the attitudes and behaviors of the employees towards the company while it is creating strategic competitive advantage.

The studies that indicate whether CSR can be related to some employee outcomes is an ongoing issue; however, not much has been said about the mechanisms that drive employees' responses to CSR initiatives (De Roeck, Marique, Stinglhamber, & Swaen, 2014). Given that, we propose a model which CSR may strategically influence organizational identification indirectly by meaningful work and the role of ethical leadership in this relationship as a moderator.

This article is organized in four main sections. First, a review of the literature on CSR, MFW, OI, and EL are presented, followed by the development of hypotheses. Second, the research method- participants, procedures, and measures- are discussed in detail. Third, an analysis of the field study data is presented along with the discussion of the results in relation to the literature. Finally, strengths and weaknesses, research implications and future research recommendations are given.

2. Literature Review

In the following sections, a literature review for the given variables is presented in detail, following the hypotheses development.

2.1. The Strategicness of CSR

CSR is perceived as an umbrella term that incorporates a wide range of synonyms and overlapping terms regarding the relations between business and society as well as "business ethics" ( Matten & Moon, 2004). To some, it is "primarily concerned with the external image and reputation of the organization" (what is called as 'external CSR') and to the others it is "related to the internal operation of the organization" (what is called as 'internal' CSR). (Brammer, Millington, & Rayton, 2007: 1702). But all in all it is defined as "a discretionary allocation of corporate resources toward improving social welfare that serves as a means of enhancing relationshi ps with key stakeholders" (Barnett, 2007: 801).

The question whether CSR might hold a strategic value to firms has taken a wide range of debate (Heikkurinen, 2012; Jones & Bartlett, 2009; McElhaney, 2009). For example Baron (2001) addresses this issue by highlighting the direct effect of CSR and private politics on the costs of the firm and thus, might have a strategic effect as well, due to its strength to change the competitive positions of firms in an industry. It is also possible that CSR may assist the companies to develop competitive advantage (Galbreath, 2009; De Roeck et al., 2014) provided that it is linked integrally with business strategy (Galbreath, 2009). Heikkurinen (2012) points our attention to the discussion of "responsibility" in the literature in terms of instrumental economic value and competitive potential. This may mean also to act upon only if provides a benefit to the companies and they do this by a cost-benefit analysis. And contrary to common believe that holds CSR activities as a profit-sacrificing attitude that resembles to an altruistic behavior, companies "engage in a more limited but more profitable set of socially beneficial activities that contributes to their financial goals"(Reinhardt & Stavins, 2010:178). Additionally, some papers enrich the debate of strategicness by incorporating the notion of strategic use of CSR (Siegel & Vitaliano, 2007) and try to answer its role in differentiation strategy. The naïve idea of fulfilling ones responsibilities to its community and to the other shareholders is contradicted by the "profit-maximizing" CSR practices (Sakarya, Bodur, Yildirim-Oktem, & Selekler-Goksen, 2012; Siegel & Vitaliano, 2007; Baron, 2001; McWilliams & Siegel, 2001; Reinhardt & Stavins, 2010). Hoping to gain something from these actions, companies are conducting CSR practices. Yet, strategic CSR programs are indeed lucrative (Reinhardt & Stavins, 2010). For instance, they resulted in greater customer loyalty, new products, sometimes productivity gains, increased reputation and image along with surmounting sustainability (McElhaney, 2009; Pivato, Misani, & Tencati, 2008; Sakarya et al., 2012). Similar point of view seems also be held by practitioners. The Economist, a well-known popular magazine, classifies CSR into four categories according to its raising or lowering profits and raising or lowering the social welfare (Siegel & Vitaliano, 2007). CSR is also identified with corporate

strategy (McElhaney, 2009) and advised to develop and execute it as a business strategy. In a book review (Galan, 2006), based on four recent books, it is elaborated how CSR is embedded in and interacts with the field of strategic management, i.e. how they have integrated it into their business strategies and at the mean time how it poses significant challenges. Lastly, companies may use CSR strategically in such a way that they may support their core business processes and thus contributing to their effectiveness in realizing their missions (Sakarya et al., 2012).

2.2. The Effect of CSR on OI

OI, also called as Organizational Identification, refers to a fundamental sense of identity that reflects "a psychological state wherein one define one's self by the same attributes that one believes define one's organization" (Lee, Park, & Koo, 2015:1049). According to a study conducted in Korea (Kim, Lee, Lee, & Kim, 2010) CSR might indeed related to employees' identification with their firm via two identification cuing factors; CSR associations and CSR participation. While CSR associations seem to be working indirectly through perceived external prestige, CSR participation directly influence on employee-firm identification. Researchers explained the identification phenomena via social identity theory. In one research, for example, Panagopoulos, Rapp, & Vlachos (2015) suggest that the perceived CSR performance by the employees could help to form a self-concept, which may lead employees to get affectively attached to their organizations. In another one, it is asserted that employees may identify "more strongly with companies that represent values" and with the ones whom they "perceive as being particularly attractive for relevant others" (Mueller, Spiess, Hattrup, & Lin-Hi, 2012:1188). Based on CSR literature, they strongly emphasized the link between CSR and affective commitment, which is defined by Meyer and Allen (1991 as cited in Mueller et al., 2012:1186) as "the employee's emotional attachment to, identification with, and involvement in the organization". Interestingly, unlike the model of this study, the literature tackles with OI (Jones, 2010; De Roeck et al., 2014) as an underlying self-enhancement process that mediates CSR-employees' attitudes and conceptions like pride might have played a role as a psychological link between organizational membership and their self-concepts (Riketta, 2005). Internalized CSR initiatives in companies not only represent a fairly rare opportunity for the existing employees but also for the prospective employees' positive perception about the firms (Bauman & Skitka, 2012). It is highly likely that discretionary attitudes (i.e. CSR activities) have the potential to increase employees' identification and commitment to the organization, organizational citizenship behaviors, and meaningfulness of work through, like pride, increased morality that can foster social ties between the individuals and their organizations. Thus, we propose the following hypothesis:

Hypothesis 1. CSR has a direct influence on Organizational Identification.

2.3. MFW as a mediator between CSR and OI

Onkila & Siltaoj (2015) posit that CSR might have a dissociated role; due to the external pressure, most firms practice CSR symbolically for the public, but internally, an organization wide adaption cannot be established. The reason behind this is based on the formal CSR rules and their incompatibility to organisatory life which relies heavily on "the dominant in-house assumption" of it. They argue that both the integrated formal rules as well as top-down processes as the main determinants of responsibility may be the causes. Similarly, business practitioners also accuse firms that engage in CSR by "dressing their windows" or "greenwashing" in order to disguise their bad social or environmental practices (AmCham Article, 2005). In order to make a sense, CSR should be internalized by all members according to an overall consensus that draws on commitment, cooperation, and unity. In another study by Leal, Rego, & Cunha (2015), this so-called internalization process which particularly embraces members individually in an organization might shed light on meaningfulness. With meaningfulness we mean, meaning at work that "implies a relationship between the person and the organization or the workplace, in terms of commitment, loyalty and dedication" (Chalofsky, 2010:12). In other words, the term suggests "an inclusive state of being that contains meaning and purpose of one's life through activities (work) that comprise most of our waking hours" (p.19). Anyway, Leal et al. (2015) found that both positive affect and the sense of meaningful work partially mediate the relationship between the perceptions of CSR and Psychological Capital. This mediating effect is also investigated by Glavas & Kelley (2014). They found that the work meaningfulness with perceived organizational support, both partially mediated the employee perceptions of CSR on organizational commitment. Voluntarily contributions of employees to their

community and the perceived value of it could help to enhance their "sense of purpose, agency, and impact, which are experienced as meaningful" (Leal et al., 2015:115). Similarly, Newman, Nielsen, & Miao (2015) investigated how the perception of CSR by the employees may lead to an increase in job performance and organizational citizenship behavior (OCB). What they found is a strong influence of perceived CSR on OCB toward social and non-social stakeholders but not on employees, customers or government. This mechanism is sparked by "a sense of pride in working for the organization and lead to increased identification with the organization" due to an improvement of the external reputation of the organization. Lastly, Raub & Blunschi (2013) discussed the power of meaningful work which is fostered by the CSR awareness of the employees inside the organizations among the hospitality industry. The consequences of this process are positively related to "job satisfaction, engagement in helping and voice behavior, and personal initiative, and CSR awareness is negatively related to emotional exhaustion" (p.1).

Among the few scholars who explored the link between CSR and MFW, Michaelson (2005) proposed MFW as a two dimensional concept; i.e. objective and subjective. The objective part is consisted of conditions that make work purportedly meaningful to the worker such as free choice to enter, honest communication, fair and respectful treatment, etc. and make the focal point of research in CSR on labor standards; whereas the subjective parts point to conditions that "involve perceptions about the meaningfulness of doing work or the meaningfulness of another end to which work is a means" (p.16). Further, he discussed that the connectedness between CSR and MFW lied in individual values and the virtuousness they perceived at work.

The meaning of work has been shown to influence some of the most important outcomes in organizational studies and one of them is OI (Rosso, Dekas, & Wrzesniewski, 2010). According to Pratt, Rockmann, & Kaufmann (2006) work is meaningful to an employee as long as it can reflect who the individual is; in other words his identification with the organization. Additionally, it is also stated that one's experiencing personal meaning at work has been proven to be influential in satisfying higher order needs such as "belonging" to "esteem" and to "self-actualization" (Ghadi, Fernando, & Caputi, 2013:533). Most people seek jobs that will fulfil these needs and attain the sense of life purpose. This is how they are motivated. Hackman and Oldham (1976 as cited in Ghadi et al., 2013) established the existing link between meaningful work and the possibility of intrinsic motivation. We posit that CSR will affect MFW and MFW will affect OI positively. Thus, MFW will act as a mediator between CSR and OI relationship. Based on these assumptions, we propose the following hypothesis:

Hypothesis 2. MFW has a mediator role on the relationship between CSR and OI. 2.4. The Moderating Effect of EL between CSR and MFW Relationship

Business ethics scholars investigated MFW as a moral issue that involves the management of others at workplace (Demirtas et al., 2015; Michaelson et al., 2014). Bowie (1998) indicated that business ethics is the moral necessity for meaningful work, while Michaelson (2005) noted the importance of organizations' ethical/moral obligation systems that help employees to experience meaningful work. Furthermore, despite the fact that there are a lot of studies and discussions of ethics in organizational behavior, which mostly tend to conceptualize ethical leadership in very broad terms, empirical research on ethical leadership and meaningful work is scarce. In today's world, the concepts of ethics and CSR have gained priority due to the corporate scandals such as Enron, and National Irish Bank. From the CSR perspective, when the value system of a corporation explicitly acknowledges the importance of human values by granting them parity with the values of profit and technology, then economic responsibilities will be balanced with moral responsibilities, the corporation will seek to balance the interests of the stakeholders without sacrificing its economic responsibilities, and the responsibilities of its managers will be not only to the corporation and its shareholders but also to other stakeholders. It has also been suggested that the social responsibility concept has led to employees -especially the younger generation- to look for work as meaningful (Martela, 2010). Therefore, the responsibility falls on to shoulders of and requires guidance from the leaders at workplace (De Hoogh & Den Dartog, 2008), EL in particular. EL is defined as "the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making" (Brown, Trevino, & Harrison, 2005:121). This type of leadership behavior helps to attenuate the employees' anxiety by being considerate, open, trustworthy and honest, and by stressing the importance of adherence to the high ethical principles, especially faced with uncertainty in the organizations while doing their jobs (Demirtas, 2015; Trevino, Brown, & Hartman, 2003). As noted by Mallory and Rupp (in press: 1), leader-driven CSR is inclined to "act as an antecedent to strong Leader-Member Exchange

formation, and an amplifier post-development". It is asserted that the extent to which managers are perceived as being interpersonally "just" may shape and reinforce their position as a moral authority. As such, it is also likely that this notion may lead to embodiment of a heightened perception of an ethical work environment (Roberson & Colquit, 2005). Albeit the theoretical moral underpinnings that points out a strong relation between EL and CSR, it is rather surprising to see how scarce the empirical literature is on this topic. Among the few, Wu, Kwan, Yim, Chiu, & He (2015) for instance, found a positive influence of CEO EL on CSR via organizational ethical culture. Likewise, Choi, Ullah, & Kwak (2015) looked up EL-CSR interaction and the role of perceived ethical work climate in which a significant interaction was observed and the latter acted as a meaningful mediator and moderator. At last, Aslan & §endogdu (2012)'s study in Konya, Turkey, reported again a positive effect of EL on CSR. Consequently, with similar point of view, we argue that the influence of EL and its perception by the employees will bolster the impact of CSR and their perception of a meaning they obtain at work. Thus, we propose the following hypothesis:

Hypothesis 3. Ethical Leadership moderates the relationship between CSR and MFW.

Figure-1

Model of the study

3. Methodology

3.1. Research Goal

In this survey, we aimed to investigate the influence of CSR on MFW and OI, via moderator role of EL perceptions.

3.2. Sample and Data Collection

The data were collected from the employees who work for an aviation industry in Kayseri. 400 employees were randomly selected to participate in this study, questionnaire forms were delivered and a total of 323 responded. For our purposes, participants were required to work fulltime employees and should have direct relations with their supervisors. The sample consisted of 282 (87%) male and 41 (13%) female participants with an average age of 37.12 years. Participants' averaged years spent in their current job was 8.3 and most of them had a high school degree (67.07%).

3.3. Measures

Items are averaged within the scales to create composite measures for each variable. Items were coded such that high scores equate to high levels of the construct of interest.

Corporate Social Responsibility was measured using the CSR Scale (Turker, 2009). This scale consists of 10 items (e.g., "Our firm supports social benefits in order to enhance our life quality". The Cronbach's alpha was .93.

Ethical leadership was measured using the Ethical Leadership Scale (Brown et al., 2005). This scale consists of 10 items (e.g., "Defines success not just by results but also the way that they are obtained"). The Cronbach's alpha was .72.

Meaningful Work was measured using the Work as Meaning Inventory (Steger et al., 2012). It consists of 10 items (e.g., "I understand how my work contributes to my life's meaning"). The Cronbach's alpha for this scale was .75.

Organizational Identification was measured using the scale developed by Mael & Ashforth (1992). The scale consists of 6 items (e.g., "This organization's successes are my successes"). The Cronbach's alpha for this scale was .86.

3.4 Analyses and Results

The correlations among and descriptive statistics for the variables in this study can be found in Table 1.

Table 1 Means, Standard Deviations and Correlations

Variable Mean SD 1 2 3 4

1. Corporate Social Responsibility 3.31 .86

2. Ethical Leadership 3.41 .50 .352**

3. Meaningful Work 3.16 .60 .606** .543**

4. Organizational Identification 3.78 .75 .523** .610** .670**

n = 323, *p<.05, **p<.01 level (2-tailed)

As can be seen from the above table, there are positive correlations between CSR and all the other variables. Thus, to evaluate the established hypotheses, we used hierarchical regression analyses for mediation and moderation relationships. The mediation analyses results are given in Table 2. According to the results, we can assert that CSR has a positive influence on OI (P=.523; p<01). Thus, Hypothesis 1 was supported.

Table 2 Regression Analyses for Mediation

DV: OI

Step 1 IV-Med Step 2 IV - DV Step 3 IV/Med - DV

(P) (P) (P)

Independent variable

CSR .606** .523** .186**

Mediator

MFW .557**

R2 .367 .274 .470

F Change 185.979 121.056 142.133

Durbin-Watson 1.848 1.998 2.083

n = 323, **p < .01; Note: Standardized Betas are shown. IV = independent variable; DV = dependent variable; Med = mediator CSR=Corporate Social Responsibility; MFW= Meaningful Work; OI=Organizational Identification

To evaluate the mediation analyses, we used the methodology given by Baron & Kenny (1986). First, the independent variable should be significantly related to the mediator variable. Second, the independent variable should be related to the dependent variable. Third, the mediating variable should be related to the dependent variable and the

independent variable included in the equation. If the first three conditions hold, then at least partial mediation is present. If the independent variable has a non-significant beta weight in the third step, then complete mediation is present (MacKinnon et al., 2002).

Hypothesis 2 asserts the mediating effect of meaningful work on the CSR and OI relationship. The results, shown in Table 2, indicate that MFW partially mediated the relationship between CSR and OI, as the beta for CSR decreased after adding MFW but it remained significant. Thus, it can be said that Hypothesis 2 was supported.

To evaluate the confidence levels, we tested the upper and the lower confidence levels (MacKinnon & Luecke, 2011) according to the Hayes' macro (Hayes, 2013). For hypothesis 2, these values were UCL = .3809 and LCL = . 2197, and the Sobel test result also (z=8.5) show that the model is in the confidence levels.

To test Hypothesis 3, we again used hierarchical regression. The results are shown in Table 3.

Table 3 Regression Analyses for Moderation

DV: MFW (P) R2 AR2 F Change Durbin-

Watson

Modei1 .606** .367 185.979 _(CSR)_

Model 2

(CSR) .393**

(EL) • * .687 .321 328.314

___ 1.722

Model 3

(CSR) (EL)

Interaction (EL* CSR)

n = 323, **p < .01; Note: Standardized Betas are shown. CSR= Corporate Social Responsibility; EL= Ethical Leadership; MFW=Meaningful Work

As can be seen from Table 3, when EL was entered into the model, the coefficient of CSR did not change much. Likewise, the interaction term (CSR*EL) is not significant (P= -.009, p> .01), indicating a non-significant relationship. In other words, Hypothesis 3 was not supported.

.393** .605** -.009

4. Discussion and Conclusion

This study investigated the influence of CSR on OI, via the mediating role of MFW. Furthermore, it also examined the moderating role of EL on the relationship between CSR and MFW. As a result, it was found that CSR had a direct effect on OI, and MFW has a mediator role on this relationship. Similar results were also reported in other studies; for example Dolphin, 2004, Panagopoulos et al., 2015, Mueller et al., 2012, Glavas & Kelley, 2014 and many others. But, significant results were found for the role of EL on the relationship between CSR and MFW.

There might be some reasons of why the moderator role of EL was not found significant. First, two concepts (EL and CSR) might have pointed out nomological similarities (i.e. making people happy by helping them or doing the righteous thing for people), that is, people could have perceived both concepts as the same thing, and second, since the sampling consist of a governmental organization (military), the code of conduct as well as directives enforces individuals to act ethically. In other words, most of those people working there might have internalized these and consequently, the effect of EL might have been neglected. Third, the dependent, independent, moderator and demographics data were gathered only in a one-time survey. Thus, this data should have an influence on the outcomes. If other studies could test the same model in a two-time survey, the moderator effect is expected to occur differently.

Anyway, this study does contribute to the literature in three-way. First, full-time employees from all levels of the

organizations were surveyed. Second, the survey has been administered by the researchers to increase participation and also to increase the accuracy of the responses. Third, it advances the CSR literature, by examining the effects of CSR on MFW and OI through a strategic management perspective. These findings have important implications for the literature as well as for the practice.

There are also some limitations that need to be addressed. First, the sample was gathered from a single organization. Thus, the results could not be generalized. Second, the data was gathered only in a one-time survey. Thus, a longitudinal data is expected to alter the existing results.

The findings of this study have shown that relationships do exist between CSR and OI and this could help an organization to position itself strategically. However, further research is needed to examine more closely regarding the complexities of these relationships. Future research should extend this study by including constructs such as organizational citizenship behaviour, work engagement, and some other performance outcomes in their research models.

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