Business Ethics VIII Reflection paper

Corporate Social Responsibility, Multi-faceted Job-Products, and Employee Outcomes

Shuili Du • C. B. Bhattacharya • Sankar Sen

Received: 24 August 2013 / Accepted: 3 July 2014 / Published online: 16 July 2014 ! Springer Science+Business Media Dordrecht 2014

Abstract This paper examines how employees react to their organizations’ corporate social responsibility (CSR)

initiatives. Drawing upon research in internal marketing

and psychological contract theories, we argue that employees have multi-faceted job needs (i.e., economic,

developmental, and ideological needs) and that CSR pro-

grams comprise an important means to fulfill develop- mental and ideological job needs. Based on cluster

analysis, we identify three heterogeneous employee seg-

ments, Idealists, Enthusiasts, and Indifferents, who vary in their multi-faceted job needs and, consequently, their

demand for organizational CSR. We further find that an

organization’s CSR programs generate favorable employee-related outcomes, such as job satisfaction and

reduction in turnover intention, by fulfilling employees’

ideological and developmental job needs. Finally, we find that CSR proximity strengthens the positive impact of CSR

on employee-related outcomes. This research reveals sig-

nificant employee heterogeneity in their demand for orga- nizational CSR and sheds new light on the underlying

mechanisms linking CSR to employee-related outcomes.

Keywords Corporate social responsibility ! Internal marketing ! Ideological job needs ! Developmental job needs ! Employee satisfaction ! Employee turnover intention

Introduction

Corporate social responsibility (CSR), broadly defined as

discretionary organizational policies and practices that attempt to promote long-term economic, social, and envi-

ronmental well-being (McWilliams and Siegel 2000; Sch-

wartz and Carroll 2003), has become a strategic imperative today. More and more organizations across the globe are

leveraging CSR to gain competitive advantage and achieve

long-term success (Du et al. 2011; Surroca et al. 2010; Porter and Kramer 2011). According to a large-scale sur-

vey of executives and CSR professionals by McKinsey,

one of the key pathways through which CSR can create business value is by enhancing employee morale and

reducing employee turnover (Bonini et al. 2009). For any organization, skilled, talented, and motivated employees

comprise a critical factor for sustained organizational

success (Brammer et al. 2007; Greening and Turban 2000). Thus, advancing our understanding of whether, how, and

why employees respond to CSR would help organizations

effectively design and implement CSR programs capable of fulfilling employee needs and thus maximizing business

returns.

Motivated, at least in part, by the mounting importance of CSR, a growing body of research has investigated

employee reactions to CSR and, in general, found that it

has a positive impact on various employee-related out- comes, such as organizational attractiveness to prospective

employees (Greening and Turban 2000), employee justice

S. Du (&) Peter T. Paul College of Business and Economics, University of New Hampshire, 10 Garrison Avenue, Durham, NH 03824, USA e-mail: [email protected]

C. B. Bhattacharya European School of Management and Technology, Schlossplatz 1, Berlin, Germany e-mail: [email protected]

S. Sen Baruch College, City University of New York, One Bernard Baruch Way, New York, NY 10010, USA e-mail: [email protected]

123

J Bus Ethics (2015) 131:319–335

DOI 10.1007/s10551-014-2286-5

perceptions (Rupp et al. 2006), organizational commitment

(Brammer et al. 2007), job satisfaction (Herrbach and Mignonac 2004; Valentine and Fleischman 2008), and

employee loyalty (Bhattacharya et al. 2008, 2011). Further,

a few studies have started to explore the psychological mechanisms underlying the positive effects of CSR on

employee-related outcomes. For instance, drawing on

social identity theory (Ashforth and Mael 1989; Dutton et al. 1994), Kim et al. (2010) finds that CSR enhances

perceived external prestige and employee-organization identification, which then lead to increased employee

commitment.

Although this line of research has yielded substantial insights, our understanding of employee reactions to CSR

remains limited, propelling scholars to call for more

research on this urgent topic (Aguilera et al. 2007; Mueller et al. 2012; Rodrigo and Arenas 2008). In particular, two

key issues stand in the way of a deeper understanding of

employee reactions to CSR. First, while CSR research focusing on external stakeholders (e.g., customers) has

highlighted individual differences as a key factor

accounting for the variability in the business returns to CSR (Sen and Bhattacharya 2001; Sen et al. 2009),

research focusing on employees has yet to take such a

finer-grained approach. Rodrigo and Arenas (2008, p. 266) insightfully commented, ‘‘… (even) less attention has been devoted to the differences among employees in relation to

CSR, presupposing that this group’s expectations, views, and attitudes were homogeneous.’’ Second, extant research

has paid inadequate attention to the mechanisms under-

lying employee reactions to CSR. Not only have prior perspectives been limited to theories of social identity and

identification (e.g., Brammer et al. 2007; Greening and

Turban 2000; Peterson 2004), but also the emergent mechanisms have remained largely untested (see Kim

et al. 2010 for a notable exception). In the words of

Bhattacharya et al. (2008, p. 38), ‘‘companies do not fully understand the psychological mechanisms that link their

CSR programs to anticipated positive returns from their

employees.’’ This research seeks to advance our understanding of

employee reactions to CSR by addressing the above men-

tioned gaps. Drawing upon internal marketing theory (Berry and Parasuraman 1992; Bhattacharya et al. 2008;

Vasconcelos 2008) and the literature on psychological

contract (Rousseau and McLean Parks 1993; Thompson and Bunderson 2003), we conceptualize employees’ jobs as

comprising a multi-faceted bundle of economic, develop-

mental, and ideological attributes. We further theorize that employees are heterogeneous in terms of their multi-fac-

eted job needs and that, when designed properly, CSR

programs can differentially fulfill such needs, producing positive employee-related outcomes such as increased job

satisfaction and reduced turnover intention. Results from

our field survey provide support for our predictions. In doing so, this research makes two key contributions.

First, we document significant employee heterogeneity in

their multi-faceted job needs and, relatedly, their demand for organizational CSR programs. Through cluster analysis,

we identify three distinct employee segments, Idealists,

Enthusiasts, and Indifferents, who vary in their multi-fac- eted job needs and hence in their demand for CSR. Our

findings highlight the importance of exploring employee- specific characteristics in CSR research (Rodrigo and

Arenas 2008). Second, this research advances our under-

standing of the psychological processes linking CSR to employee-related outcomes. We demonstrate the mediating

roles of both developmental and ideological job needs

fulfillment in the CSR—employee outcome linkages. Specifically, we find that organization’s CSR programs

serve to enhance the ‘‘job-products’’; it offers to its internal

customers (i.e., employees), leading to better fulfillment of their multi-faceted job needs and producing, consequently,

more satisfied and loyal employees. In this, our research

complements the social identity perspective on employee reactions to CSR (Kim et al 2010; Peterson 2004). Our

study suggests that, in addition to social identity theory,

internal marketing theory and psychological contract the- ory are relevant conceptual lenses that can enrich and

deepen our understanding of employee reactions to CSR.

Finally, our research implicates CSR proximity, i.e., the degree to which employees are aware of and/or involved in

their organizations’ CSR activities, as a key lever that can

enhance or diminish the relationships between organiza- tional CSR, fulfillment of employees’ ideological and

developmental job needs, and employee outcomes (i.e.,

satisfaction and turnover intention). This points to the need for organizations wishing to reap greater employee-related

benefits from CSR to not only effectively communicate

such programs to their internal customers but also, ideally, engage them actively in their CSR efforts (Du et al. 2010,

2011; Dawkins 2004).

CSR

The notion of CSR has evolved over the decades. In his

classic paper, Carroll (1979, p. 500) defined CSR as

‘‘encompassing the economic, legal, ethical, and discre- tionary expectations that society has of organizations at a

given point in time.’’ More recently, Schwartz and Carroll

(2003) use a Venn diagram to depict a firm’s economic, legal, and ethical responsibilities, and emphasize that these

domains are not mutually exclusive but often overlap

substantially with each other. Recent developments in the CSR literature, such as the notions of ‘‘strategic CSR’’

320 S. Du et al.

123

(Kotler and Lee 2005) and ‘‘shared (social and business)

value creation’’ (Porter and Kramer 2011), confirm the idea that there exists convergence of interests among a firm’s

long-term economic, legal, and ethical responsibilities. An

important characteristic of CSR is the discretionary, or voluntary, nature of these activities (Dahlsrud 2008). In

other words, CSR consists of discretionary activities that

go beyond a firm’s economic interests or legal require- ments to promote the broader, long-term social/environ-

mental well-being (McWilliams and Siegel 2000). A firm’s CSR activities range from philanthropy, cause-

related marketing, employee benefits, community outreach,

to eco-friendly or, more broadly, sustainable business practices. According to stakeholder theory (Freeman et al.

2007), a firm interacts with primary stakeholders, who are

essential to the operation of the business (e.g., consumers, employees, and investors), and secondary stakeholders,

who can influence the firm’s business operation only

indirectly (i.e., community, government, and the natural environment). Through CSR activities, a firm promotes the

well-being of its stakeholders and builds stronger rela-

tionships with them. Through properly designed CSR programs, firms can

reap substantial business benefits due to a more positive

image as well as enhanced stakeholder relationships, such as greater stakeholder satisfaction and loyalty (Kim et al.

2010; Rodrigo and Arenas 2008). Further, the resource-

based view of the firm suggests that CSR can help cultivate fundamental firm-specific intangible resources, such as

human resources, favorable corporate culture, and inno-

vation (Branco and Rodrigues 2006; Litz 1996; Surroca et al. 2010). While a comprehensive review of the business

returns to CSR is beyond the scope of this paper, it is worth

noting that our extant understanding of how employees, a key stakeholder group, react to CSR remains rather limited.

In particular, as we pointed out earlier, heterogeneity in

employee demand for CSR and the psychological processes underlying employee reactions to CSR comprise two

under-investigated yet important topics (Bhattacharya et al.

2008; Rodrigo and Arenas 2008).

Multi-Faceted Job Needs

Internal marketing theory (Berry and Parasuraman 1992;

Bhattacharya et al. 2008; Vasconcelos 2008) emphasizes the importance of organizations being centered on fulfilling

the job needs of its internal customers, namely, employees.

Berry and Parasuraman (1992) define internal marketing as ‘‘attracting, developing, motivating, and retaining qualified

employees through job-products that satisfy their needs.’’

Analogous to the way that products seek to fulfill customer needs, an internal marketing perspective holds that, to

effectively sustain employees’ investment of time, energy,

and ego, a job-product needs to include attribute bundles that cater to the diverse range of employee needs.

Research on psychological contracts suggests that

employees’ job needs are often multi-faceted. Rooted in social exchange theory, psychological contract refers to an

employee’s perception of the unwritten promises and

obligations implicit in his/her relationship with the employing organization (Rousseau and McLean Parks

1993; Thompson and Bunderson 2003). Fulfillment of psychological contract enhances employee job satisfaction

and employee retention, whereas a breach or violation of

psychological contract leads to undesirable outcomes such as intention to quit and actual turnover (Bunderson 2001;

Robinson and Morrison 2000). Employees’ psychological

contracts are typically multi-dimensional, including eco- nomic, developmental, and ideological facets (Robinson

et al. 1994; Thompson and Bunderson 2003). The eco-

nomic facet of psychological contract is more transactional and short-term oriented, often including issues such as the

employing organization’s provision of adequate compen-

sation, benefits, and a safe working environment. The developmental facet of psychological contract is more

relational and long-term oriented, involving issues such as

the organization’s provision of training and professional development. The increasingly competitive and turbulent

job markets nowadays dictate that continuous learning and

development is a key part of employees’ continuing career success. Consequently, employee professional develop-

ment has become a critical part of employee job needs

(Maurer et al. 2002). A third dimension of psychological contract is the ideo-

logical facet, which mainly refers to organizational respon-

sibility to advance social well-being and provide opportunities for employees to participate in the organiza-

tion’s societal citizenship behavior (Blau 1964; Thompson

and Bunderson 2003). Organizational championship of important social causes can be effective inducements to

motivate employee contribution and commitment because

‘‘helping to advance cherished ideals is intrinsically rewarding’’ (Blau 1964, p. 239). Research on social identity

(Bhattacharya and Sen 2003; Dutton et al. 1994) also pro-

vides some indirect support for the importance of ideological job needs; employees desire to work for organizations that

have good values and a positive image, which help satisfy

their higher order self-definitional needs (i.e., ‘‘Who am I?’’).

Heterogeneity in Multi-faceted Job Needs and Demand for CSR

We expect employees to differ in terms of their economic, developmental, and ideological job needs. The internal

Corporate Social Responsibility 321

123

marketing perspective emphasizes individual differences in

employees’ job needs and calls for a segmented approach when designing job-products (Bhattacharya et al. 2008).

Similarly, the psychological contract literature suggests

that employee perceptions of organizational responsibili- ties are personal, self-constructed, and idiosyncratic (Raja

et al. 2004). Differences in individual personality, gender,

and cultural values (e.g., humane orientation, institutional collectivism) have been shown to correlate with different

employee expectations of organizational obligations (Mu- eller et al. 2012; Raja et al. 2004).

Supporting heterogeneity in employees’ multi-faceted

job needs, research on individuals’ relations to their work (Wrzesniewski et al. 1997) has identified three types of

orientations toward work: those viewing work as a job, a

career, or a calling. Individuals with a ‘‘job’’ orientation view work primarily as an opportunity for economic

rewards. Individuals with a ‘‘career’’ orientation have a

deeper personal investment in their work, and value opportunities for professional growth and advancement.

Individuals with a ‘‘calling’’ orientation, on the other hand,

seek work as an expression of self and focus on pursuing something that is principle-based, transcending self-inter-

est. Due to their focus on values, identity expression, and

societal well-being, employees with a ‘‘calling’’ orientation will likely put greater importance on ideological needs

relative to those with a ‘‘job’’ or ‘‘career’’ orientation.

Similarly, those with a ‘‘career’’ orientation will likely place greater importance on developmental needs than

employees with other orientations.

We expect employee heterogeneity in job needs to be reflected in their differential demand for organizational

CSR programs. Prior research suggests that employees

vary in their support of and receptivity to organizational engagement in CSR. Specifically, Rodrigo and Arenas

(2008)’s qualitative study reveals a typology of employees

based on their attitude toward CSR: committed, indifferent, and dissident employees. Committed employees are con-

cerned about social welfare and receive their organizations’

CSR practices with great enthusiasm; indifferent employ- ees focus on their own career and are indifferent about

whether their organizations engage in CSR or not; and

dissident employees are frustrated about their organiza- tions’ spending money on CSR.

However, little is known about why employees differ in

their attitude toward, or demand for, organizational CSR programs. We build upon Rodrigo and Arenas (2008)’s

qualitative work to examine psychological correlates of

employees’ differential demand for organizational CSR. Specifically, since CSR represents an organization’s

actions that intend to further some social good beyond the

interests of the firm, employees higher in ideological needs will naturally put more importance on their organizations’

CSR. In addition, CSR has increasingly become an integral

part of an organization’s daily operation and strategic planning, and as a result, employees often perform CSR-

related responsibilities on their job (Mirvis 2012; Surroca

et al. 2010). As Mirvis (2012, p. 94) points out, ‘‘… more employees today are engaged in sustainable supply chain

management, cause-related marketing, and green business

initiatives – in effect, doing social responsibility on-the- job.’’ Accordingly, employees with higher developmental

needs will likely demand their organizations to engage in more CSR activities. Therefore, we hypothesize,

H1 There exists significant heterogeneity in employees’ multi-faceted job needs (economic, developmental, and ideological).

H2 All else equal, employees’ demand for organizational CSR programs is positively associated with (a) importance

of ideological job needs, and (b) importance of develop-

mental job needs.

CSR and Fulfillment of Multi-faceted Job Needs

CSR programs comprise various strategies and operating

practices that contribute to the long-term economic, social, and environmental well-being (Kotler and Lee 2005). CSR

activities reveal the values and principles of an organiza-

tion (Brown and Dacin 1997; Sen and Bhattacharya 2001), portraying it as a good citizen and a contributor to society

rather than as an entity concerned solely with maximizing

profits. Socially responsible organizations uphold the socio-cultural norms in their institutional environment and

honor ‘‘the social contract’’ between business and society

(Scott 1987). As such, organization’s CSR programs help fulfill employees’ ideological needs of pursuing/champi-

oning social causes and making a difference.

Interestingly, recent research also suggests that CSR programs may help fulfill employees’ developmental

needs (Bhattacharya et al. 2008; Mirvis 2012; Porter and

Kramer 2011). When employees participate in CSR pro- jects that involve tasks outside of their daily routine, they

learn specific skills that can help them advance in their

careers. For example, through its breakthrough citizenship initiative, the Corporate Service Corp, IBM sends its top

employees to volunteer in local communities around the

globe (e.g., emerging markets and less developed regions), contributing their expertise, technology, and

creativity to solving various social and developmental

issues. In the process, IBM employees have significantly increased their cultural intelligence and resilience as

leaders, honed their problem-solving skills, and gained

valuable insights into global markets (CSRwire 2009, 2013).

322 S. Du et al.

123

As more and more organizations integrate socially

responsible programs into their core business strategy (e.g., sustainable supply chain, green business initiatives, products

targeting economically and socially disadvantaged; Kotler

and Lee 2005; Porter and Kramer 2011), employees are increasingly required to engage in CSR activities on the job.

Surroca et al. (2010) find that CSR contributes to the accu-

mulation of human capital because adoption of CSR strate- gies leads to employees’ active involvement in improving the

organization’s environmental and social performance. Con- sequently, CSR initiatives open up much needed opportuni-

ties for empowering employees to affect change, and to hone

essential business skills such as leadership, problem-solving, andout-of-box innovativethinking(Kanter2009). Therefore,

H3 All else equal, organizations that are viewed more favorably for their CSR initiatives are better at the fulfill- ment of employee (a) ideological job needs, and

(b) developmental job needs.

Mediating Role of Job Needs Fulfillment in the CSR— Employee Outcome Link

Prior research has demonstrated that CSR can generate a range of positive employee outcomes such as organiza-

tional commitment (Brammer et al. 2007), job satisfaction

(Herrbach and Mignonac 2004; Valentine and Fleischman 2008), and loyalty (Bhattacharya et al. 2008, 2011).

Bhattacharya et al. (2011) argue that CSR programs need

to fulfill key stakeholder needs to trigger favorable stake- holder reactions. In the context of consumer reactions to

CSR, Du et al. (2008) find that provision of functional and

psychosocial benefits is a key route through which CSR programs enhance customer loyalty.

Drawing upon this line of research as well as the liter- ature on internal marketing, we contend that the fulfillment

of employees’ multi-faceted job needs is the essential route

through which CSR generates positive employee-related outcomes. CSR broadens the attribute bundle of ‘‘job-

products’’ that an organization can offer to its employees

and constitutes a meaningful and valuable job attribute, because it can produce self-relevant benefits for employees.

An organization’s CSR is capable of catering to its

employees’ higher-level, ideological needs (Bhattacharya and Sen 2003) as well as professional developmental needs

(Mirvis 2012; Surroca et al. 2010). In turn, better fulfill-

ment of ideological and developmental needs leads to favorable employee-related outcomes such as job satis-

faction and loyalty. On the other hand, if organization’s

CSR programs, due to ineffective design or implementation (e.g., poor fit between CSR and the organization, lack of

employee awareness), do not fulfill its employees’ needs,

then the link between CSR and positive employee out-

comes is likely to be muted. In short, we expect the ful- fillment of ideological and developmental job needs to

mediate the link between CSR and employee outcomes.

H4 All else equal, organizations that are viewed more favorably for their CSR initiatives enjoy more favorable

employee outcomes, and these positive relationships are mediated by the fulfillment of employee (a) ideological job

needs, and (b) developmental job needs.

Moderating Role of CSR Proximity in the CSR— Employee Outcome Link

We also investigate the role of CSR proximity in the

CSR—employee outcome link. CSR proximity refers to the extent to which employees know about and/or are actively

involved in their organizations’ CSR (Dawkins 2004; Du

et al. 2011). Despite being the internal stakeholders of an organization, employees often exhibit surprisingly low

levels of proximity to their organizations’ CSR activities,

in terms of both CSR awareness and CSR engagement (Bhattacharya et al. 2008; Dawkins 2004). Since awareness

of CSR is a prerequisite for any positive reactions to occur,

employees’ lack of CSR knowledge remains a major challenge for organizations in their attempts to garner

positive outcomes from this stakeholder group.

Furthermore, employees, particularly those looking to fulfill their job needs through CSR, not only demand to be

informed, but they also want to be part of their organiza-

tions’ CSR programs effecting positive change (Cone 2008). Beyond CSR knowledge, employees’ active

involvement or participation in the organization’s CSR

activities greatly increases their proximity to social causes and allows employees to be enactors and enablers of CSR

programs, rather than being mere observers. Employees who have deep knowledge about their organizations’ CSR

and who are actively involved in creating, supporting and

implementing CSR initiatives are likely to be more satis- fied with their job and be more loyal to their organizations.

Overall, we expect CSR proximity to magnify the power of

CSR in generating positive employee outcomes.

H5 CSR proximity moderates the relationships between CSR and employee outcomes, such that the relationships

are stronger when CSR proximity is high.

Mediating Role of Job Needs Fulfillment in the Moderated Relationships

Finally, as we have argued, a key mechanism through which CSR generates positive employee outcomes is employee job

Corporate Social Responsibility 323

123

needs fulfillment. Thus, it is conceivable that, for employees

with high CSR proximity, organizational CSR will enhance employee job needs fulfillment to a greater extent, which

then generates more positive employee outcomes (Bhat-

tacharya et al. 2008; Mirvis 2012). Employees proximal to their organizational CSR will be more likely to have a sense

of accomplishment, learn new skills, and contribute to the

greater good, all of which lead to better fulfillment of ideo- logical and developmental job needs and subsequently result

in greater employee satisfaction and loyalty.

On the contrary, for employees with lower CSR prox- imity (i.e., unaware of and/or not engaged in their orga-

nizations’ CSR activities), CSR actions are less likely to

fulfill their ideological or developmental job needs. As a result, these CSR actions may relate little to job satisfaction

or loyalty for employees with low levels of CSR proximity.

H6 The moderated relationships among CSR, CSR proximity, and employee outcomes are mediated by the

fulfillment of (a) ideological job needs, and (b) develop-

mental job needs.

Figure 1 presents our conceptual framework. Prior

research has shown that, in addition to CSR, another key dimension of organizational perceptions is organizational

competency (Brown and Dacin 1997; Du et al. 2007), which

can affect employee job needs fulfillment and subsequent outcomes. Consequently, we include organizational com-

petency (i.e., the organization’s ability to deliver superior

performance) as a control variable.

Method

Sample and Procedures

We collected data in a large national leadership conference

for professional women. Our respondents were drawn from conference attendees, who are professional women from a

wide range of industries as well as varying professional

backgrounds. We use a women-only sample to test our hypotheses

for two reasons. First, prior research has documented a

gender effect in terms of values, job needs, and demand for CSR (e.g., Brammer et al. 2007; Ramamoorthy and

Flood 2004). For example, relative to men, women care

more about societal and environmental well-being (Sch- wartz and Rubel 2005), and care more about procedural

justice (i.e., perceived fairness of the means used to make decisions; Sweeney and McFarlin 1997; Rama-

moorthy and Flood 2004). Further, when choosing a job,

women place more importance than men on an organi- zation’s CSR and consider ‘‘the potential to make a

contribution to society’’ a more important criterion

(Brammer et al. 2007). Since one of our key research questions is to uncover the mechanisms for the impact of

CSR on employee-related outcomes (i.e., through ful-

filling important job needs), a sample consisting of women who place higher importance on CSR seems

appropriate for an initial test of our theory. At the same

time, with respect to our other research question that

Fig. 1 Conceptual framework

324 S. Du et al.

123

investigates heterogeneity in employee job needs and

demand for CSR (i.e., H1 and H2), a women-only sample comprises a more conservative test of our pre-

dictions, because it is hard to find heterogeneity among a

relatively homogenous, female-only sample relative to a mixed gender sample.

The survey was announced by the organizer of the

leadership conference, a private academic institution located in a large U.S city. A dozen of computer stations

dedicated to the survey study were placed in the lobby of the conference venue, with a link to the survey displayed

prominently on the computer homepage. Conference

attendees were encouraged and reminded to take the survey during session breaks and were assured of the anonymity

and confidentiality of their responses.

A total of 353 women employees filled out the survey at the conference. After deleting data with missing values on

key variables, we got a final sample of 322. Among our

respondents, 58.4 % are between ages 31 and 50, and 27.9 % are 51 or older. 29.5 % of our respondents have a

Bachelor’s degree, and 60.3 % have a Master’s degree or

some graduate school. 55.3 % have personal gross income of $100,000 or higher, and 55.6 % have been with their

current organizations for 6 years or longer. We first

included all demographic variables in our analysis: only age was significant in some of the analytic results, while all

other demographic variables were nonsignificant across all

analysis. Thus, we only present our analysis with age as a covariate.

Measures

Since this survey was administered during the breaks of a

leadership conference, we had to employ short (e.g., single- item, two-item, and three-item) measures to keep the sur-

vey brief and to reduce respondent fatigue and/or impa-

tience. Importantly, though, recent research comparing the predictive validity of multiple-item versus single-item

measures of the same constructs shows that when the

object is concrete and familiar, single-item measures are equally effective and more efficient (Bergkvist and Ross-

iter 2007). Thus, on balance, single-item or other short

measures for familiar constructs such as job satisfaction and economic job need fulfillment seemed both necessary

and appropriate. To minimize demand effects, we first

asked questions relating to employee outcomes, then questions relating to employee multi-faceted job needs,

followed by questions on employee perceptions of CSR

and organizational competency, as well as those on CSR demand and CSR proximity. Please refer to Appendix for

details on all the key measures.

Employee Outcomes

We examine two employee-related outcomes, job satis- faction, and turnover intention. Job satisfaction is a key

employee outcome (e.g., Janssen and van Yperen 2004)

and is measured by a single-item, ‘‘I am satisfied with my present job’’ (1 = strongly disagree, 5 = strongly agree).

Employee retention is critical in preserving organization’s

human resources. We measure employees’ turnover intention by two items ‘‘I do not plan to work with this

organization much longer,’’ and ‘‘If given the opportunity,

I would seek employment with another organization.’’ The correlation between the two items is .65.

Multi-faceted Job Needs

We measure three types of job needs: economic, devel-

opmental, and ideological needs. The economic need is captured by a single-item on compensation package. The

developmental need is captured by two items on opportu-

nities to develop skills/expertise and opportunities for career advancement (Maurer et al. 2002). The ideological

need is measured by two items on ‘‘making a positive

impact on society,’’ and ‘‘opportunities to express and act in line with values’’ (Bhattacharya et al. 2008; Thompson

and Bunderson 2003). To assess individual differences in

terms of job needs, we measure the perceived importance of economic, developmental, and ideological needs,

respectively (1 = very unimportant, 7 = very important).

To assess fulfillment of employee job needs, we measure how well an organization fulfills these different facets of

job needs (1 = not at all, 5 = to a great extent).

Demand for Organizational CSR

To assess employees’ demand for organizational CSR in the workplace, we have two separate measures. One item

assesses employees’ belief as to how important it is that an

organization engages in CSR (Sen et al. 2009). Another item asks employees ‘‘how much of your current salary

would you be willing to give up to help make your orga-

nization ideal in terms of being socially responsible? (0 %, 5 % or less, and 6 % or higher).’’

CSR

Our measure for CSR is based on prior research (Du et al.

2007; Sen and Bhattacharya 2001). Since organizational commitment to CSR is a critical aspect of CSR (Bhat-

tacharya and Sen 2003; Du et al. 2007; Kotler and Lee 2005), we have an overall item for CSR and two items

assessing CSR commitment (Cronbach’s alpha = .90).

Corporate Social Responsibility 325

123

CSR Proximity

For CSR proximity, we include two items assessing employees’ knowledge about and involvement in their

organizations’ CSR programs. CSR knowledge taps into

employees’ level of awareness and familiarity with their organizations’ CSR programs and CSR involvement gages

employees’ direct participation in CSR programs (Du et al.

2011; Dawkins 2004). These two items are correlated at r = .61.

Organizational Competency

In line with prior CSR research (e.g., Brown and Dacin

1997; Du et al. 2007), we include organizational compe- tency as a control for our regression analysis. Organiza-

tional competency is measured by three items (Cronbach’s

alpha = .74).

Confirmatory Factor Analysis for Measurement

The confirmatory factor analysis of our measures indicates

that the overall fit of the measurement model is satisfac-

tory: Chi square(68) = 140.50 (p \ .01); the root mean square residual (RMR) = .03; the root mean square error

of approximation (RMSEA) = .06; the goodness-of-fit

index (GFI) = .94; the comparative fit index (CFI) = .97, the non-normed fit index (NNFI) = .94 and the normed fit

index (NFI) = .94. Furthermore, all indicators load sig-

nificantly on their hypothesized latent construct, demon- strating convergent validity. Average variance extracted

(AVE) for each construct exceeds .50 and is larger than the

square of any inter-construct correlation, thereby demon- strating discriminant validity of the measurement model

(Hair et al. 1998).

Common Method Bias

Because we relied on a single source for our measures, common method bias in self-reported measures could be a

concern. Employing the widely used Harman’s one-factor

method (e.g., Carr and Kaynak 2007; Podsakoff and Organ

1986), we ran a factor analysis of all measures to examine the likelihood of a single or dominant factor. The unrotated

solution showed no evidence of a dominant common factor

(six factors had eigenvalues greater than 1.0; the first factor accounted for 28 % of the total variance). Thus, common

method bias does not seem to represent a serious issue for

this study.

Results

Table 1 presents the descriptive statistics and correlations for the key constructs. Table 2 provides a summary of

findings based on the hypothesis tests. Consistent with our

expectations, our cluster analysis uncovers three employee segments, Idealists, Enthusiasts, and Indifferents, who vary

significantly in their multi-faceted job needs and conse-

quently their demand for CSR. Furthermore, our findings indicate that fulfillment of ideological and developmental

job needs mediates the relationships between organiza-

tional CSR and job satisfaction and turnover intention. Finally, the positive effects of CSR on these employee-

related outcomes are stronger for employees with higher

CSR proximity. We discuss these results in detail next.

Employee Heterogeneity in Multi-faceted Job Needs

and Demand for CSR

To test H1, we ran cluster analysis to uncover different

employee segments based on variations in their multi-fac- eted job needs. Cluster analysis has been widely employed

in marketing to identify consumer segments that share

common characteristics within, and differences across, groups (Punj and Stewart 1993). Since cluster analysis

makes no prior assumptions about differences in the sam-

ple, it is an appropriate method to tackle under-theorized issues such as employee heterogeneity in multi-faced job

needs and demand for CSR (Aldenderfer and Blashfield

1984; Mair et al. 2012).

Table 1 Descriptives and correlations

Correlations greater than .11 are significant at p \ .05

Mean SD 1 2 3 4 5 6 7

1. Job satisfaction 3.83 .95

2. Intention to quit 2.69 1.02 -.55

3. Economic needs fulfillment 3.78 1.00 .36 -.29

4. Developmental needs fulfillment 3.65 .90 .53 -.45 .47

5. Ideological needs fulfillment 3.70 .90 .44 -.38 .31 .46

6. Organizational competency 4.03 .67 .35 -.43 .34 .46 .29

7. CSR 3.89 .85 .37 -.35 .27 .43 .53 .47

8. CSR proximity 3.15 .93 .14 -.11 .13 .31 .33 .11 .44

326 S. Du et al.

123

To run a cluster analysis, one needs to (1) select a set of

attributes that will be included in the analysis, (2) use an appropriate clustering method to create the optimal number

of clusters, and (3) validate the cluster results or solutions

(Aldenderfer and Blashfield 1984; Ketchen and Shook 1996). We use the three dimensions of employee job needs

(economic, developmental, and ideological) on which to

run the cluster analysis. In line with prior research

(Ketchen and Shook 1996), we employ a two-stage clus-

tering method. First, we performed a hierarchical cluster

analysis using Ward’s method to select the appropriate number of clusters and obtain the estimated centroids. We

derive a three cluster solution, based on the increase in the

average within-cluster distance criterion and the profile of the cluster centers identified (Aldenderfer and Blashfield

1984). These results are then used in the second step, a

K-means non-hierarchical clustering method, which fine- tunes the clustering results. Table 3 presents the cluster

analysis results. Based on the cluster profiles, we label

cluster 1 as ‘‘Idealists,’’ who consider all three dimensions of job needs to be highly important, and label cluster 2 as

‘‘Enthusiasts,’’ who place more importance on develop-

mental and ideological needs, but less importance on economic needs. Cluster 3 is labeled as ‘‘Indifferents,’’ who

place more importance on economic and developmental

needs, but less importance on ideological needs. To check the validity of our cluster results, we per-

formed ANOVA and Chi square tests to examine cluster-

wise differences. Employee differences in multi-faceted job needs are expected to relate to differences in their

demand for CSR. As expected, these three clusters, or

segments, of employees differ significantly in their demand for CSR. Specifically, the Idealists’ cluster has the highest

CSR demand, as measure by perceived CSR importance

(M = 4.35), the Enthusiasts’ cluster has the second highest CSR demand (CSR importance: M = 4.16), and the In-

differents’ cluster has the lowest CSR demand (CSR

importance: M = 3.89). The cluster-wise difference is significant (F(2, 319) = 10.88, p \ .01). Regarding another measure for CSR demand, employees’ willingness to trade

off salary for CSR, the Enthusiasts’ cluster has more people willing to trade off more of their salary for CSR (28.3 %

willing to trade off more than 5 % of their salary, 52.8 %

willing to trade off 5 % or less), followed by the Idealists’

Table 2 Summary of hypothesis test results

Hypothesis Key findings

H1 There exists significant heterogeneity in employee multi-faceted job needs. Cluster analysis reveals three employee segments: Idealists, Enthusiasts, and Indifferents, who differ in terms of the level of importance placed on economic, developmental, and ideological job needs.

H1 supported

H2 Employees’ demand for organizational CSR is positively related to the importance of ideological job needs, but not to the importance of developmental job needs.

H2 (a) supported H2 (b) not supported

H3 Organizational CSR is positively related to both the fulfillment of ideological job needs and the fulfillment of developmental job needs.

H3 supported

H4 The positive employee-related outcomes of CSR (i.e., enhanced job satisfaction and reduced turnover intention) are mediated by fulfillment of ideological job needs and fulfillment of developmental job needs.

H4 supported

H5 The positive employee-related outcomes of CSR (i.e., enhanced job satisfaction and reduced turnover intention) are greater when CSR proximity is high.

H5 supported

H6 Fulfillment of ideological job needs mediates the CSR 9 CSR proximity ? job satisfaction (turnover intention) link. Fulfillment of development job needs mediates the CSR 9 CSR proximity ? job satisfaction link, but does not mediate the CSR 9 CSR proximity ? turnover intention link.

H6 (a) supported H6 (b) partially supported

Table 3 Heterogeneity in multi-faceted job needs: cluster analysis results

Cluster 1

Cluster 2 Cluster 3

Cluster size N 150 106 66 % of sample 47 % 33 % 20 % Cluster label Idealists Enthusiasts Indifferents

Clustering variables

Importance of economic needs

6.52 4.75 6.44

Importance of developmental needs

6.51 5.98 6.31

Importance of ideological needs

6.53 6.00 4.96

Corporate Social Responsibility 327

123

cluster (20.4 % willing to trade off more than 5 % of their

salary, 59.3 % willing to trade off 5 % or less), with the

Indifferents’ cluster least willing to trade off their salary for CSR (only 4.5 % willing to trade off more than 5 % of

their salary, and 59.1 % willing to trade of 5 % or less).

The Chi square test for group difference is significant (Chi square = 18.66, p \ .01). These cluster-wise differences lend support to the validity of the derived clusters (Ald-

enderfer and Blashfield 1984). Thus, H1 is supported by our cluster analysis, in the sense that there exists significant

employee heterogeneity (as indicated by three distinct

clusters) in their multi-faceted job needs. To test H2, we examine two dependent variables that

measure employee demand for CSR: perceived importance

of CSR and willingness for salary—CSR tradeoff. We first ran ordinary least square (OLS) regression with perceived

importance of CSR as the dependent variable, and impor-

tance of economic, developmental, and ideological job needs and employee age as the independent variables.

Table 4 presents the regression results. As expected,

importance of ideological job needs is positively associated with CSR importance (b = .33, p \ .01), supporting H2(a). However, developmental job needs are not associ-

ated with CSR importance (b = -.00, NS), failing to provide support for H2(b).

Additionally, we examine another measure of employee

demand for CSR: willingness to trade off salary for CSR (i.e., salary-CSR tradeoff). Since this variable is ordinal,

we ran a probit regression. As can be seen from the results

in Table 4, importance of ideological job needs is posi- tively associated with willingness to trade off salary for

CSR (b = .26, p \ .01), supporting H2 (a). However, importance of developmental job needs are not associated

with willingness to trade off salary for CSR, failing to

provide support for H2(b), although the coefficient for the importance of developmental job needs has the expected

positive sign and approaches the significance level of .10

(b = .15, p = .12). Additionally, as expected, importance of economic job needs is negatively associated with will-

ingness to trade off salary for CSR (b = -.21, p \ .01). In sum, H2(a) is supported, but H2(b) is not supported.

CSR, Fulfillment of Job Needs, and Employee Outcomes

We tested hypotheses 3–6 using multiple regressions with relevant interaction terms. To enhance the interpretation of

the regression coefficients in moderated regression models,

we mean-centered all continuous independent variables (Aiken and West 1991).

CSR and Fulfillment of Job Needs

To test H3, we ran regression models with fulfillment of

ideological and developmental job needs as the dependent variables, respectively, and CSR, CSR proximity, CSR x

CSR proximity, organizational competency, and age as the

independent variables. Table 5 presents the regression results. H3 predicts that CSR will be positively related to

fulfillment of ideological and developmental needs. As

expected, the coefficient of CSR in the ideological job needs fulfillment model is .47 (p \ .01), and the coefficient of CSR in the developmental job needs fulfillment model is

.23 (p \ .01). Thus, H3 is fully supported. Additionally, we regressed fulfillment of economic job needs on the same set

of independent variables and found that CSR is not asso-

ciated with fulfillment of economic job needs fulfillment.

Mediating Role of Job Needs Fulfillment in the CSR—

Employee Outcome Link

To test H4 the mediating roles of ideological and devel-

opmental job needs fulfillment in the CSR—employee outcome link, we use Preacher and Hayes (2008)’s boot-

strap test of the indirect effect. Specifically, according to

Zhao et al. (2010)’s procedure for testing mediation ana- lysis, we regressed ideological (developmental) job needs

fulfillment on CSR, CSR proximity, CSR 9 CSR prox-

imity, organizational competency, and age, which provides coefficient a (i.e., the coefficient of independent vari-

able ? mediator variable: CSR ? ideological/develop- mental job needs fulfillment). We also regressed employee outcomes (i.e., job satisfaction and turnover intention) on

CSR, ideological job needs fulfillment, developmental job

needs fulfillment, CSR proximity, CSR 9 CSR proximity, organizational competency, and age, which provide

Table 4 Relationships between Importance of Job Needs and Demand for CSR

OLS regression

Probit regression

CSR Importance

Willingness to tradeoff salary for CSR

Importance of economic job needs

.03 -.21**

Importance of developmental job needs

-.00 .15

Importance of ideological job needs

.33** .26**

Age -.00 .00

F value 16.19** –

Adjusted R2 .16 –

Pseudo R2 – .07

Likelihood Ratio – 22.57**

** p \ .01

328 S. Du et al.

123

coefficient b (i.e., the coefficient of mediator ? dependent variable: ideological/developmental job needs fulfill-

ment ? employee outcomes). We used 5,000 bootstrap samples and estimated a, b, and a x b for each sample.

Indirect effect is calculated as the mean of all a x b esti-

mates, and the 95 % confidence interval is based on the empirical distribution of a x b estimates. If a x b is sig-

nificant, then the mediating role of ideological/develop- mental job needs fulfillment in the CSR ? employee outcome link is significant.

Regarding the mediating role of ideological job needs fulfillment in the CSR ? employee outcome link, in the case of job satisfaction, the Preacher and Hayes (2008)’s

bootstrap analysis, using 5,000 bootstrap samples, shows that a x b is positive and significant (a x b = .091), with a

95 % bias-corrected bootstrap confidence interval excluding

zero (.019 to .176). This suggests that the mediating role of ideological job needs fulfillment in the CSR ? job satis- faction link is significant at p \ .05. In the case of turnover intention, the bootstrap analysis, using 5,000 bootstrap samples, shows that a x b is negative and significant (a x

b = -.086), with a 95 % bias-corrected bootstrap confi-

dence interval excluding zero (-.168 to -.016). This sug- gests that the mediating role of ideological job needs

fulfillment in the CSR ? turnover intention link is signifi- cant at p \ .05. Taken together, H4 (a) is supported.

Regarding the mediating role of developmental job

needs fulfillment in the CSR ? employee outcome link, in the case of job satisfaction, the bootstrap analysis shows that a x b is positive and significant (a x b = .091), with a

95 % bias-corrected bootstrap confidence interval exclud-

ing zero (.034 to .177). This suggests that the mediating role of developmental job needs fulfillment in the

CSR ? job satisfaction link is significant at p \ .05. In the case of turnover intention, the bootstrap analysis shows that a x b is negative and significant (a x b = -.065), with a

95 % bias-corrected bootstrap confidence interval

excluding zero (-.132 to -.025). This suggests that the

mediating role of developmental job needs fulfillment in

the CSR ? turnover intention is significant at p \ .05. In sum, H4 (b) is also fully supported.

Additionally, when both mediators, ideological and

developmental job needs fulfillment, are included in the regression, neither the direct effect of CSR on job satis-

faction (c = .09, NS) nor the direct effect of CSR on turnover intention (c = -.09, NS) is significant, indicating

that this is indirect only mediation (Zhao et al. 2010).

Moderating Role of CSR Proximity in the CSR—Employee

Outcome Link

H5 predicts that CSR proximity will enhance the rela-

tionship between CSR and employee outcomes (i.e., job

satisfaction and turnover intention). As expected, in the case of job satisfaction (Table 5, job satisfaction model (1),

the coefficient of CSR 9 CSR proximity interaction is

positive (b = .14, p \ .05), suggesting that the relationship between CSR and employee job satisfaction becomes more

positive as CSR proximity increases. In the case of turn-

over intention (Table 5, turnover intention model (1), the coefficient of CSR 9 CSR proximity is negative (b =

-.17, p \ .01), suggesting that CSR will reduce employ- ees’ turnover intention to a greater extent when CSR proximity is higher. Thus, H5 is fully supported.

Mediating Role of Job Needs Fulfillment in the Moderated Relationships

To test H6, the mediating role of job needs fulfillment in the moderated relationships among CSR, CSR proximity,

and employee outcomes, we use Preacher and Hayes

(2008)’s bootstrap analysis of the indirect effect a x b. Regarding the mediating effect of ideological job needs

fulfillment in the CSR 9 CSR proximity ? employee

Table 5 Regression results: CSR, job needs, and employee- related outcomes

** p \ .01, * p \ .05, ? p \ .10

Ideological needs fulfillment

Developmental needs fulfillment

Job satisfaction Turnover intention

Model 1

Model 2

Model 1

Model 2

CSR .47** .23** .28** .09 -.26** -.09

CSR proximity .12* .19** .03 -.07 .02 .10

CSR 9 CSR Proximity .11* .10? .14* .06 -.17** -.11?

Organizational competency .10 .46** .32** .12 -.48** -.34**

Age .01** -.00 .00 .00 -.00 -.01

Ideological needs fulfillment – – – .19** – -.19**

Developmental needs fulfillment

– – – .40** – -.28**

F value 30.02** 28.99** 13.28** 20.69** 16.76** 17.42**

Adjusted R2 .33 .32 .17 .32 .21 .28

Corporate Social Responsibility 329

123

outcome link, in the case of job satisfaction, the bootstrap

analysis, using 5,000 bootstrap samples, shows that a x b is positive and significant (a x b = .021), with a 95 % bias-

corrected bootstrap confidence interval excluding zero

(.0019 to .061). This suggests that the mediating effect of ideological job needs fulfillment in the CSR 9 CSR

proximity ? job satisfaction link is significant at p \ .05. In the case of turnover intention, a x b is negative and significant (a x b = -.020), with a 95 % bias-corrected

bootstrap confidence interval excluding zero (-.058 to -.001). This suggests that the mediating effect of ideo-

logical job needs fulfillment in the CSR 9 CSR proxim-

ity ? turnover intention is significant at p \ .05. In short, H6(a) is fully supported.

Regarding the mediating effect of developmental job

needs in the CSR 9 CSR proximity ? employee outcome link, in the case of job satisfaction, the bootstrap analysis

reveals that a x b is not significant (a x b = .0403), with a

95 % bias-corrected bootstrap confidence interval includ- ing zero (-.0007 to .0925). This indicates that the medi-

ating effect of developmental job needs in the CSR 9 CSR

proximity ? job satisfaction link is not significant. In the case of turnover intention, a x b is negative and significant

(a x b = -.033), with a 95 % bias-corrected bootstrap

confidence interval excluding zero (-.075 to -.0057), suggesting that the mediating effect of developmental job

needs fulfillment in the CSR 9 CSR proximity ? turn- over intention link is significant at p \ .05. In other words, H6(b) is supported in the case of turnover intention but not

in the case of job satisfaction.

Additionally, when both mediators, ideological and developmental job needs fulfillment, are included in the

regression analysis, neither the direct effect of

CSR 9 CSR proximity on job satisfaction (c = .06, NS) nor the direct effect of CSR 9 CSR proximity on turnover

intention (c = -.11, NS) is significant at p = .05, sug-

gesting that this is indirect only mediation.

Discussion

CSR is a matter of strategic importance due to its potential

positive impact on firm financial performance and long-term competitive advantage. This research advances our under-

standing of employee heterogeneity in the demand for

organizational CSR and the underlying mechanisms linking CSR to positive employee-related outcomes. Our findings

have important implications for CSR theory and practice.

Theoretical Implications

The resource-based view of the firm contends that intan- gible, firm-specific resources are the basis of a firm’s

competitive advantage and long-term financial perfor-

mance (Barney 1991). In particular, human capital is one of the most important intangible assets, because competent

and motivated employees are the essential drivers of long-

term organizational growth. Prior literature suggests that CSR can contribute to firm financial performance by cul-

tivating essential intangible resources (e.g., Branco and

Rodrigues 2006; Surroca et al. 2010). Our study advances our current understanding on how CSR cultivates human

capital and contributes to organizational performance in several ways.

First, we extend the CSR literature on employees by

documenting significant employee heterogeneity in their demand for organizational CSR programs, an issue largely

ignored in prior investigations. Through cluster analysis,

we identify three heterogeneous employee segments, Ide- alists, Enthusiasts, and Indifferents, who differ in their

multi-faceted job needs. Further, we show that these three

segments also vary significantly in their demand for orga- nizational CSR programs. In particular, we find that

employees’ ideological job needs, but not their economic

or developmental job needs, are positive correlates of their demand for CSR. This finding suggests that, similar to

consumers, employees vary in their support of and recep-

tivity to organizational engagement in CSR. Second, our research sheds new light on the mechanisms

linking CSR and employee outcomes. Our findings show

that by engaging in CSR, an organization can better fulfill its employees’ ideological and developmental job needs

and thereby enhance employees’ job satisfaction and

reduce their turnover intention. Unlike prior research that draws primarily on social identity theory to explain posi-

tive employee reactions to CSR (e.g., Kim et al. 2010), we

adopt novel, complementary conceptual lenses (i.e., inter- nal marketing theory and psychological contract theory) to

examine how employees react to CSR. Our study shows

that internal marketing theory and, more specifically, the conceptualization of a job as a multi-faceted product

comprise a novel and fruitful approach to investigate

employee reactions to CSR. Future research should con- tinue to adopt an interdisciplinary approach and apply

relevant marketing theories (e.g., customer orientation,

customer segmentation) to study CSR—employee linkages (Du et al. 2011).

One interesting and important finding from our study is

that CSR leads to better fulfillment of not only employee ideological needs but also employee developmental job

needs. As CSR increasingly moves from the periphery to

the center of business strategy (Porter and Kramer 2011), engagement in CSR can be developmental and transfor-

mative for the employees (Mirvis 2012; Surroca et al.

2010). While prior research has shown that CSR can con- tribute to human capital by enhancing employee

330 S. Du et al.

123

satisfaction and loyalty (e.g., Valentine and Fleischman

2008), the positive impact of CSR on the fulfillment of employee developmental needs suggests that an organiza-

tion’s CSR can be a powerful vehicle to build more com-

petent and productive employees. It would be highly worthwhile to investigate the relationship between CSR

and employee competency, such as leadership develop-

ment, expertise, innovativeness, and productivity. Last but not least, our study highlights the importance

of CSR proximity in maximizing returns to CSR. Despite being the key internal stakeholders of an organization,

prior research has shown that employees are often una-

ware of, or uninvolved in their organizations’ CSR activities (Bhattacharya et al. 2008; Dawkins 2004). Our

findings reinforce earlier research by showing that low

CSR proximity is indeed a stumbling block for organiza- tions seeking to reap employee-related benefits from CSR.

Organizations will reap greater employee-related benefits

(i.e., better fulfillment of employees’ ideological and developmental job needs, higher job satisfaction, and

lower turnover intention) when CSR proximity is higher.

Organizations should find ways to more effectively com- municate their CSR to employees and find more ways to

engage their employees.

Practical Implications

The accumulation of human capital is a key source of competitive advantage. Our research offers several

important implications for managers seeking to cultivate

their firms’ human resources through CSR programs. In a conceptual framework accounting for the contingent link

between CSR performance and financial performance from

a consumer perspective, Schuler and Cording (2006) identify moral values (a consumer-specific factor) and

information intensity (a firm-specific factor) as critical

factors that influence the strength of the CSR—financial performance link. Similarly, our study suggests that, in the

employee realm, managers should pay attention to both

employee-specific and firm-specific factors when designing and implementing CSR activities, as well as when assess-

ing the employee-related business outcomes of CSR.

Employees have heterogeneous job-related needs and varying demand for organizational CSR. When designing

and implementing CSR programs, organizations should not

assume ‘‘one size fits all,’’ but rather should adopt a seg- mented approach, tailoring their CSR offerings according

to employees’ individual needs. To better tailor CSR pro-

grams to the needs of employees, organizations should first have a good understanding of their employees. We rec-

ommend that organizations should conduct their own

cluster analysis on their employees and identify the

idealist, enthusiastic, and indifferent clusters. Such analy-

ses would greatly facilitate a more strategic approach to CSR programs.

Further, our findings highlight the important role of CSR

proximity in accentuating the positive impact of CSR on employees. Although CSR proximity can amplify the

business returns to CSR, our study shows that, in general,

CSR proximity among employees is low (i.e., mean = 3.15 on a 5-point scale). Managers should place high importance

on raising CSR awareness and level of CSR engagement among employees. In line with Bhattacharya et al. (2008),

our results suggest that rather than a top-down, add-on

approach to CSR, organizations should involve their employees in the planning, design, and implementation of

CSR programs, making them co-producers and enactors of

social responsibility programs. In addition, communicating CSR programs to employees is also critical. As suggested

by prior research (e.g., Dawkins 2004) and confirmed in

our survey, despite being the internal stakeholder of a firm, employees’ awareness of firm CSR tends to be low.

Managers should explore and utilize various communica-

tion channels to inform their employees of firm CSR activities, such as the organizational intranet, newsletters,

emails, screen displays in organizational buildings,

announcements in regular work meetings, and so on. Relatedly, managers should also adopt a segmented

approach when communicating CSR to their employees,

highlighting different benefits of CSR to different employee segments. For example, emphasizing how CSR

enhances the fulfillment of developmental job needs would

be a useful message to engage the segment of Indifferents, who value developmental needs but care less about ideo-

logical needs.

Finally, managers should realize that CSR can satisfy not only employee ideological job needs, but also

employee developmental job needs. This would lead to a

deeper appreciation of how CSR would help cultivate a firm’s human resources (Branco and Rodrigues 2006).

Rather than treating CSR as add-on, public relations

strategy, managers should mindfully embed CSR programs in the core business strategy and use CSR programs as

important platforms to train and develop their employees.

Through more effective fulfillment of both ideological and developmental job needs, CSR programs can better culti-

vate human capital and contribute to long-term competitive

advantage.

Limitations and Future Research

This research is subject to several limitations. First, despite

the justifications we have for using a female-only sample,

such a single gender sample reduces the external validity of

Corporate Social Responsibility 331

123

our findings. Replications and extensions of our findings

using a mixed gender sample will increase the generaliz- ability of our findings. Second, we use a field survey

methodology and single-informant technique; such an

approach might suffer from common method bias and social desirability bias. Although our analysis shows that

common method bias does not seem to be a serious concern

in our study, future research could utilize other method- ologies (e.g., experiment, secondary data sources) to fur-

ther collaborate our findings. For example, one can get CSR performance ratings from the Kinder, Lydenberg,

Domini & Co. (KLD) dataset, a widely used dataset for

CSR (e.g., Godfrey et al. 2009), and link CSR performance to survey-based employee perceptions and behaviors. Use

of secondary data sources on CSR will also minimize

biases due to socially desirable responding. Additionally, future research should use structural equation modeling to

validate our framework and simultaneously test all

relationships. Third, we employed various short measures (e.g., single-

item, two-item, and three-item) in our study. Although our

confirmatory factor analysis results indicate a satisfactory measurement model, some of the constructs might have

been better measured using multiple, more comprehensive

list of items. Lastly, future research should go beyond a U.S. only sample to explore CSR—employee relationships

in different cultures (e.g., individualistic vs. collectivistic)

and different economic development stages (e.g., devel- oped vs. emerging or developing economies). CSR prac-

tices and strategies are often different in developing

countries with weak institutional environments and abun- dant social issues (Dobers and Halme 2009), as well as

generating dissimilar organizational outcomes (Lindgreen

et al. 2010). Thus, we call for future research to investigate whether and to what extent our framework generalizes to

emerging or developing countries.

More generally, our work opens up several important avenues for future research. First, regarding heterogeneity

in employee demand for CSR, we identify three distinct

segments and show that perceived importance of ideolog-

ical job needs is a key psychological correlate. Future research might dig deeper into factors underlying differ-

ential employee demand for CSR. For instance, one can

explore the relationship between employees’ basic values and their demand for CSR. Schwartz (1992) identifies 10

motivationally distinct basic values: power, achievement,

hedonism, stimulation, self-direction, universalism, benevolence, tradition, conformity, and security. Future

research can explore how these values are correlated with employees’ multi-faceted job needs and consequently their

demand for CSR. One might expect that universalism and

benevolence are correlated with ideological job needs, and power, achievement, stimulation, and security are corre-

lated with developmental job needs. Relatedly, researchers

can take a dynamic view of employee job needs and demand for CSR, and explore how employees’ attitude

toward and demand for CSR might evolve as they move up

along the corporate ladder. Second, CSR programs occur in different stakeholder

domains (e.g., employees, consumers, investors, envi-

ronment, local communities; Freeman et al. 2007) and take on different formats (e.g., philanthropy, employee

volunteering, and socially responsible practices; Kotler

and Lee 2005). Future research can take a finer-grained approach by breaking down an organization’s CSR pro-

grams into different domains or categories, and examine

how different types of CSR might generate different employee-related outcomes. It would be interesting to

compare and contrast CSR programs such as ethics

training (Valentine and Fleischman 2008), employee volunteering, and environmentally friendly sourcing and

manufacturing initiatives (Porter and Kramer 2011), in

terms of their differential impact on fulfilling employee ideological and developmental job needs. Such research

would provide valuable insights to managers seeking to

build intangible resources from a portfolio of CSR activities.

332 S. Du et al.

123

Appendix: Measures for Key Variables

Employee Outcomes (1=strongly disagree, 5=strongly agree) Job Satisfaction

I am satisfied with my present job

Turnover Intention I do not plan to work with this organization much longer If given the opportunity, I would seek employment with another organization

Fulfillment of Job Needs (1=not at all, 5=to a great extent) Please rate the extent to which your present job allows you to attain the following goals,

Fulfillment of Economic Job Needs A competitive compensation package

Fulfillment of Developmental Job Needs Opportunities to develop professional skills/expertise Opportunities for meaningful career advancement

Fulfillment of Ideological Job Needs Do work that makes a positive impact on society Opportunities to express and act in line with you values

Organizational Perceptions CSR (1=strongly disagree, 5=strongly agree)

My organization is socially responsible My organization has put in substantial resources to various social initiatives My organization is really committed to its social initiatives

Organizational Competency (1=strongly disagree, 5=strongly agree) My organization is highly competitive in the marketplace My organization delivers superior performance My organization has the right vision and strategy to ensure long term success

CSR Proximity How much do you know about your organization’s social initiatives? (1=Nothing at all, 5=A lot) To what extent have you participated in your organization’s social initiatives? (1=Have not participated, 5=Extensive participation)

Demand for Organizational CSR CSR Importance (1=strongly disagree, 5=strongly agree)

In my opinion, it is very important for an organization to engage in social initiatives

Salary - CSR Tradeoff (0%, 5% or less, 6% or higher) How much of your current salary would you be willing to give up to help make your organization ideal in terms of being socially responsible?

Importance of Job Needs (1=very unimportant, 7=very important) Importance of economic Job Needs

How important it is for you to have a competitive compensation package Importance of developmental Job Needs

How important it is for you to have opportunities to develop professional skills/expertise How important it is for you to have opportunities for meaningful career advancement

Importance of ideological Job Needs How important it is for you to do work that makes a positive impact on society How important it is for you to have opportunities to express and act in line with you values

Corporate Social Responsibility 333

123

References

Aguilera, R. V., Rupp, D. E., Williams, C. A., & Ganapathi, J. (2007). Putting the s back in corporate social responsibility: A multilevel theory of social change in organizations. Academy of Manage- ment Review, 32(3), 836–863.

Aiken, L. S., & West, S. G. (1991). Multiple regression: testing and interpreting interactions. Newbury Park, CA: Sage.

Aldenderfer, M. S., & Blashfield, R. K. (1984). Cluster analysis. Thousand Oaks, CA: Sage.

Ashforth, B. E., & Mael, F. (1989). Social identity theory and the organization. The Academy of Management Review, 14(1), 20–39.

Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

Bergkvist, L., & Rossiter, J. R. (2007). The predictive validity of multiple-item versus single-item measures of the same con- structs. Journal of Marketing Research, 44(2), 175–184.

Berry, L. L., & Parasuraman, A. (1992). Services marketing starts from within. Marketing Management, 1(1), 24–34.

Bhattacharya, C. B., & Sen, S. (2003). Consumer-company identifi- cation: A framework for understanding consumers’ relationships with companies. Journal of Marketing, 67(2), 76–88.

Bhattacharya, C. B., Sen, S., & Korschun, D. (2008). Using corporate social responsibility to win the war for talent. MIT Sloan Management Review, 49(2), 37–44.

Bhattacharya, C. B., Sen, S., & Korschun, D. (2011). Leveraging corporate responsibility: The stakeholder route to maximizing businessand socialvalue. Cambridge: Cambridge University Press.

Blau, P. M. (1964). Exchange and power in social life. New York: Wiley.

Bonini, S., Koller, T. M., & Mirvis, P. (2009). Valuing social responsibility programs. McKinsey on Finance, 32(Summer), 11–18.

Brammer, S., Millington, A., & Rayton, B. (2007). The contribution of corporate social responsibility to organizational commitment. International Journal of Human Resource Management, 18(10), 1701–1719.

Branco, M. C., & Rodrigues, L. L. (2006). Corporate social responsibility and resource-based perspectives. Journal of Busi- ness Ethics, 69(2), 111–132.

Brown, T. J., & Dacin, P. A. (1997). The company and the product: corporate associations and consumer product responses. Journal of Marketing, 61(1), 68–84.

Bunderson, J. S. (2001). How work ideologies shape the psycholog- ical contracts of professional employees: Doctors’ responses to perceived breach. Journal of Organizational Behavior, 22, 717–741.

Carr, A., & Kaynak, H. (2007). Communication methods, information sharing, supplier development and performance. International Journal of Operations and Production Management, 27, 346–370.

Carroll, A. B. (1979). A three-dimensional conceptual model of corporate performance. The Academy of Management Review, 4(4), 497–505.

Cone. (2008). Past. Present. Future. The 25th anniversary of cause marketing. http://www.coneinc.com/content1187. Accessed 15 March 2013.

CSRWire. (2009). IBM expands corporate service corps in emerging markets. http://www.csrwire.com/press_releases/27515-IBM- Expands-Corporate-Service-Corps-in-Emerging-Markets. Accessed 10 May 2013.

CSRWire. (2013). The civic 50: Why IBM’s integrated commitments make it America’s most community-minded company. http://www.csrwire.com/blog/posts/716-the-civic-50-why-ibm-s-

integrated-commitments-makes-it-americas-most-community- minded-company. Accessed 10 May 2013.

Dahlsrud, A. (2008). How corporate social responsibility is defined: An analysis of 37 definitions. Corporate Social Responsibility and Environmental Management, 15(1), 1–13.

Dawkins, J. (2004). Corporate responsibility: The communication challenge. Journal of Communication Challenge, 9(2), 108–119.

Dobers, P., & Halme, M. (2009). Corporate social responsibility and developing countries. Corporate Social Responsibility and Environmental Management, 16(5), 237–249.

Du, S., Bhattacharya, C. B., & Sen, S. (2007). Reaping relational rewards from corporate social responsibility: The role of competitive positioning. International Journal of Research in Marketing, 24(3), 224–241.

Du, S., Bhattacharya, C. B., & Sen, S. (2010). Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication. International Journal of Management Review, 12(1), 8–19.

Du, S., Bhattacharya, C. B., & Sen, S. (2011). Corporate social responsibility and competitive advantage: Overcoming the trust barrier. Management Science, 57, 1528–1545.

Du, S., Sen, S., & Bhattacharya, C. B. (2008). Exploring the social and business returns of a corporate oral health initiative aimed at disadvantaged hispanic families. Journal of Consumer Research, 35(3), 483–494.

Dutton, J. E., Dukerich, J. M., & Harquail, C. V. (1994). Organiza- tional images and member identification. Administrative Science Quarterly, 39(2), 239–263.

Freeman, R. E., Harrison, J. S., & Wicks, A. C. (2007). Managing for stakeholders: Business in the 21st century. New Haven, CT: Yale University Press.

Godfrey, P. C., Merrill, C. B., & Hansen, J. M. (2009). The relationship between corporate social responsibility and share- holder value: An empirical test of the risk management hypothesis. Strategic Management Journal, 30, 425–445.

Greening, D. W., & Turban, D. B. (2000). Corporate social performance as a competitive advantage in attracting a quality workforce. Business and Society, 39(3), 254–280.

Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate data analysis (5th ed.). Upper Saddle River, NJ: Prentice-Hall.

Herrbach, O., & Mignonac, K. (2004). How organizational image affects employee attitudes. Human Resource Management Journal, 14(4), 76–88.

Janssen, O., & Van Yperen, N. W. (2004). Employees’ goal orientations, the quality of leader-member exchange, and the outcomes of job performance and job satisfaction. Academy of Management Journal, 47(3), 368–384.

Kanter, R. M. (2009). SuperCorp: How vanguard companies create innovation, profits, growth, and social good. New York: Crown Publishing Group.

Ketchen, J. D. J., & Shook, C. L. (1996). The application of cluster analysis in strategic management research: An analysis and critique. Strategic Management Journal, 17(6), 441–458.

Kim, H.-R., Lee, M., Lee, H.-T., & Kim, N.-M. (2010). Corporate social responsibility and employee-company identification. Journal of Business Ethics, 95(4), 557–569.

Kotler, P., & Lee, N. (2005). Corporate social responsibility: Doing the most good for your company and your cause. Hoboken, NJ: Wiley.

Lindgreen, A., Cordoba, J. R., Maon, F., & Mendoza, J. M. (2010). Corporate social responsibility in colombia: Making sense of social strategies. Journal of Business Ethics, 91(2), 229–242.

Litz, R. A. (1996). A resource-based-view of the socially responsible firm: Stakeholder interdependence, ethical awareness, and issue

334 S. Du et al.

123

responsiveness as strategic assets. Journal of Business Ethics, 15(12), 1355–1363.

Mair, J., Battilana, J., & Cardenas, J. (2012). Organizing for society: A typology of social entrepreneuring models. Journal of Business Ethics, 111, 353–373.

Maurer, T. J., Pierce, H. R., & Shore, L. M. (2002). Perceived beneficiary of employee development activity: A three dimen- sional social exchange model. Academy of Management Review, 27(3), 432–444.

McWilliams, A., & Siegel, D. (2000). ‘Corporate social responsibility and financial performance: Correlations or misspecification? Strategic Management Journal, 21, 603–609.

Mirvis, P. (2012). Employee engagement and CSR: Transactional, relational, and developmental approaches. California Manage- ment Review, 54(4), 93–117.

Mueller, K., Hattrup, K., Spiess, S., & Lin-Hi, N. (2012). The effects of corporate social responsibility on employees’ affective commitment: A cross-cultural investigation. Journal of Applied Psychology, 97(6), 1186–1200.

Peterson, D. K. (2004). The relationship between perceptions of corporate citizenship and organizational commitment. Business and Society, 43(3), 296–319.

Podsakoff, P. M., & Organ, D. W. (1986). Self-reports in organiza- tional research: Problems and prospects. Journal of Manage- ment, 12, 531–544.

Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89, 62–77.

Preacher, K. I., & Hayes, A. F. (2008). Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavioral Research Methods, 40(3), 879–891.

Punj, G., & Stewart, D. W. (1983). Cluster analysis in marketing research: Review and suggestions for application. Journal of Marketing Research, 20, 134–148.

Raja, U., Johns, G., & Ntalianis, F. (2004). The impact of personality on psychological contracts. Academy of Management Journal, 47(3), 350–367.

Ramamoorthy, N., & Flood, P. C. (2004). Gender and employee attitudes: The role of organizational justice perceptions. British Journal of Management, 15(3), 247–258.

Robinson, S. L., Kraatz, M. S., & Rousseau, D. M. (1994). Changing obligations and the psychological contract: A longitudinal study. Academy of Management Journal, 37, 137–152.

Robinson, S. L., & Morrison, E. W. (2000). The development of psychological contract breach and violation: A longitudinal study. Journal of Organizational Behavior, 21, 525–546.

Rodrigo, P., & Arenas, D. (2008). ‘Do employees care about CSR programs? A typology of employees according to their attitudes. Journal of Business Ethics, 83, 265–283.

Rousseau, D. M., & McLean Parks, J. (1993). The contracts of individuals and organizations. Research in Organizational Behavior, 15, 1–47.

Rupp, D. E., Ganapathi, J., Aguilera, R. V., & Williams, C. A. (2006). Employee reactions to corporate social responsibility: An organizational justice framework. Journal of Organizational Behavior, 27(4), 537–543.

Schuler, D. A., & Cording, M. (2006). A corporate social perfor- mance-corporate financial performance behavioral model for consumer. Academy of Management Review, 31(3), 540–558.

Schwartz, S. H. (1992). Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries. In M. P. Zanna (Ed.), Advances in experimental social psychol- ogy (Vol. 25, pp. 1–65). New York: Academic Press.

Schwartz, M. S., & Carroll, A. B. (2003). Corporate social responsibility: A three-domain approach. Business Ethics Quar- terly, 13(4), 503–530.

Schwartz, S. H., & Rubel, T. (2005). Sex differences in value priorities: Cross-cultural and multimethod studies. Journal of Personality and Social Psychology, 89(6), 1010–1028.

Scott, W. R. (1987). The adolescence of institutional theory. Administrative Science Quarterly, 32(December), 493–511.

Sen, S., & Bhattacharya, C. B. (2001). Does doing good always lead to doing better? Consumer reactions to corporate social respon- sibility. Journal of Marketing Research, 38, 225–243.

Sen, S., Du, S., & Bhattacharya, C. B. (2009). Building Relationships through Corporate Social Responsibility. In D. J. MacInnis, C. W. Park, & J. R. Priester (Eds.), Handbook of brand relation- ships (pp. 195–211). Armonk, NY: M.E. Sharpe.

Surroca, J., Tribo, J. A., & Waddock, S. (2010). Corporate responsibility and financial performance: The role of intangible resources. Strategic Management Journal, 31(5), 463–490.

Sweeney, P. D., & McFarlin, D. B. (1997). Process and outcome: Gender differences in the assessment of justice. Journal of Organizational Behavior, 18(1), 83–98.

Thompson, J. A., & Bunderson, J. S. (2003). Violations of principle: Ideological currency in the psychological contract. Academy of Management Journal, 28(4), 571–586.

Valentine, S., & Fleischman, G. (2008). Ethics programs, perceived corporate social responsibility and job satisfaction. Journal of Business Ethics, 77, 159–172.

Vasconcelos, A. F. (2008). Broadening even more the internal marketing concept. European Journal of Marketing, 42(11/12), 1246–1264.

Wrzesniewski, A., McCauley, C., Rozin, P., & Schwartz, B. (1997). Jobs, careers, and callings: People’s relations to their work. Journal of Research in Personality, 31, 21–33.

Zhao, X., Lynch, J. G, Jr, & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and truths about mediation analysis. Journal of Consumer Research, 37(2), 197–206.

Corporate Social Responsibility 335

123

���������� �� ���������� �� � � ������� � � ���� ���� �� ������������ ��� ������ �� ���

�����������