Exploring the role of intrinsic and extrinsic CSR attribution | Researchers: Joana Story and Pedro Neves
Results show that when employees perceive that their organizations invest in CSR practices that they believe to be sincere and at the same time strategic, this increases their task performance and they also tend to exert extra effort in their work.
Corporate Social Responsibility
Corporate social responsibility (CSR) is now considered a strategic necessity for organizations. Studies have consistently demonstrated that effective CSR plans can bring benefits to organizational stakeholders such as shareholders, investors, employees, and consumers. If organizations do not invest in CSR they may jeopardize their brand and reputation which could decrease short and long term profitability. However, if they do invest, they may be inadvertently criticized by their stakeholders, especially if they perceive that these investments make organizations skim on product quality and safety or mistreatment of employees. Green washing, ethical scandals, and inconsistent practices (such as laying off employees while increasing CEO pay) make stakeholders cynical of organizations’ motivations as it comes to CSR.
Stakeholders may perceive CSR practices differently because individuals make attributions based on information they have available to them in order to make causal explanation of CSR practices. Employees are better equipped to assess corporate initiatives such as CSR in the context of their organization. Intrinsic CSR practices are those perceived as sincere. That is, the organization’s motivation to engage in these practices is because they care about the cause. Extrinsic CSR practices are those perceived as strategic, with the intention of getting something back or avoiding some kind of punishment from the community.
Intrinsic CSR attributions allow individuals to feel connected with their organizations. Extrinsic CSR attributions are strategic and reinforce the shared value creation. Perception of intrinsic CSR attribution alone may backfire, as employees may believe their organization is investing in practices that while valuable may put their job or promotion at risk. Perception of extrinsic CSR attribution alone may also backfire because of the cynicism it may bring regarding the possible lack of concern about the moral obligation of the firm. Therefore, the researchers tested whether the combination of intrinsic and extrinsic CSR attributions was positively related to task performance and extra-role behavior.
The hypothesis was tested with a group of 229 leader-subordinate dyads in 17 different organizations. Of the most relevant results, the researchers highlight:
• Employees appear to be able to distinguish between intrinsic and extrinsic motives of CSR
• Intrinsic and extrinsic motives alone did not increase individual performance or extra-role behaviors
• The combined effects of both intrinsic and extrinsic attributions was significantly related to both task performance and extra-role behaviors
• Managers and executives need to be careful about how CSR strategy is formulated and communicated. CSR practices need to be consistent with the moral values of the firm AND they need to be strategic
This article is based on the paper "When corporate social responsibility (CSR) increases performance: exploring the role of intrinsic and extrinsic CSR attribution." authored by Joana Story and Pedro Neves, published in 2015 in Business Ethics: A European Review 24, no. 2, pages 111-124.