When organizations solve collective action problems or realize values, they do so by means of institutions. These are commonly regarded as self-stabilizing. Yet, they can also be subject to endogenous processes of decay, or so we argue. We explain this in terms of psychological and cultural processes, which can change even if the formal structures remain unchanged. One key implication is that the extent to which norms, values, and ideals motivate individuals to comply with institutions is limited.

Extant studies of corporate hypocrisy have largely overlooked its implications for employees until recently. Drawing upon social information processing theory, we theorize the impact of corporate hypocrisy on employee silence—an employee behavior potentially detrimental to both organizations and society, as well as the underlying mediating and moderating mechanisms. We empirically tested our hypotheses with two studies. In Study 1, we found that corporate hypocrisy was positively related to employee silence through both employee cognitive trust and employee prosocial motivation. In Study (...) 2, we revealed that consumer pressure weakened the mediating roles of employee cognitive trust and prosocial motivation, while regulatory pressure strengthened these roles. Overall, this study sheds light on whether, how, and when employees remain silent when they perceive corporate hypocrisy. Implications for theory and practice are discussed. (shrink)

Consumers may sense hypocrisy in corporate social responsibility if they note inconsistency in enterprises’ words and deeds related to CSR. This inconsistency originates from the intentional selfish actions and unintentional actions of enterprises. Studies have revealed that consumers’ perception of hypocrisy has a negative influence on enterprise operation. However, studies have not examined how corporate responses to consumers’ hypocrisy perception affect consumers’ attitude and behavior. Therefore, the present study attempted to determine the measures that should be undertaken by enterprises to (...) reduce consumers’ negative response to them when consumers perceive them to be hypocritical. We conducted a situational simulation experiment to explore the effect of the match between corporate hypocrisy manifestation and the corporate response strategy on consumers’ negative behaviors toward an enterprise and to test the mechanism influencing this effect. The results indicated that the interaction between the type of corporate hypocrisy and the corporate response strategy has a significant effect on consumers’ negative behaviors toward an enterprise. Consumers’ negative emotions have a mediating influence on the aforementioned effect. This study explored the response strategies of enterprises during a corporate hypocrisy crisis, classified corporate hypocrisy crises into two types according to the different manifestations of corporate hypocrisy, and introduced situational crisis communication theory into research on corporate hypocrisy. The present results help expand knowledge on corporate hypocrisy. (shrink)

Corporate social responsibility (CSR) aspirations by companies have been identified as a motivating factor for active employee participation in CSR implementation. However, a failure to practise what one preaches can backfire and lead to attribution of hypocrisy. Drawing on a qualitative study of an award-winning sustainability pioneer in the cosmetics sector, we explore the role of moral judgement in how and when employees interpret word–deed misalignment in CSR implementation as hypocritical. First, our case reveals that high CSR aspirations by companies (...) raise employees’ moral expectations. Second, we develop a framework that explains variations in employees’ hypocrisy interpretations based on consequentialist and deontological forms of moral judgement. Our research advances a contextual view of hypocrisy, not as an objective characteristic of an organisation, but as an outcome of interpretative processes of perceived motives and results in CSR implementation. Our framework thereby explains why even highly committed organisations may face accusations of hypocrisy. (shrink)

In this study, we examine whether, how, and when corporate social responsibility increases promotive and prohibitive voices in accordance with ethical climate theory and multi-experience model of ethical climate. Data from 382 employees at two time points are examined. Results show that CSR is positively related to promotive and prohibitive voices. Other-focused and self-focused climates mediate the relationship between CSR and the two types of voice. Moreover, humble leadership moderates the positive relationship between CSR and other-focused climate. Such leadership moderates (...) the negative relationship between CSR and self-focused climate. Humble leadership also moderates the indirect effect between CSR and the two kinds of voice through other-focused and self-focused climates. The findings of this study provide important insights into how and when CSR influences employee voice. (shrink)

Corporate Philanthropy is multi-dimensional, differs between sectors and involves both individual and organisational decision-making to achieve business and social goals. However, the CP literature characteristically focuses on strategic decisions made by business leaders and ignores the role of employees, especially those in lower status and lower paid positions. To redress this imbalance, we conducted a qualitative study of employees’ involvement in CP processes in ten workplaces in the South East of England to identify whether and how they are involved in (...) CP decision-making and to capture their perspective on the nature of CP and the benefits generated by such activities. We specifically chose to study workplaces where employees are involved in the actual execution of the CP strategy, prioritising companies with a visible presence on the high street. The results illustrate the benefits of involving employees in CP decision-making, which we argue derives in part from the ‘liminal-like states’ that typify CP activities organised by shop floor staff, involving the temporary overturning of hierarchies, humanising of workplaces and opportunities for lower level staff to prioritise their personal philanthropic preferences and signal their charitable identity to colleagues and customers. Whilst the data also suggest that CP decision-making remains predominantly top-down and driven by profit-oriented goals, we conclude that employees should be involved in choosing charitable causes as well as in designing and implementing workplace fundraising, in order to maximise the advantages of CP for the company and for wider society. (shrink)

Ethical dilemmas arise when one must decide between conflicting ethical imperatives. One potential ethical dilemma is a manager’s decision of whether to engage in corporate social responsibility activities. This decision could pit the ethical imperative of honoring unwritten obligations to society against the ethical imperative of honoring contractual obligations to the firm. However, CSR activities might only be a minor ethical dilemma or none at all if they simultaneously benefit the firm and society. To examine this I test the association (...) between future-period employee productivity and current-period use of one type of CSR activity: employee volunteer programs. I use a unique sample of 1428 firm-years, hand-collected from sustainability reports of 373 firms. I find evidence that the current-period use of an employee volunteer program has a positive association with future-period employee productivity. I find this result in future periods up to 6 years after a firm uses an employee volunteer program. I also find a positive association between incentives that focus CEOs’ attention on long-term firm outcomes and more extensive employee volunteer programs. (shrink)

Drawing on early work on ethical leadership, we argue that when leaders engage in leader moral hypocrisy (i.e., ethical promotion without ethical demonstration), followers can experience psychological reactance—a negative response to a perceived restriction of freedom—which can have negative downstream consequences. In a survey of employee–manager dyads (study 1), we demonstrate that leader moral hypocrisy is positively associated with follower psychological reactance, which increases follower deviance. In two subsequent laboratory experiments, we find similar patterns of results (study 2) and explore (...) potential alternative mechanisms (study 3). We demonstrate in a final experiment with working adults that the relationship between leader moral hypocrisy and psychological reactance is partly explained by increased perceptions of a leader’s use of power (study 4). We discuss the implications of our findings and advocate for further understanding of the risks associated with psychological reactance in response to leaders and other workplace situations. (shrink)

Instrumental stakeholder theory seeks to explain how managing stakeholders effectively can yield competitive advantage for incumbent firms. We extend instrumental stakeholder theory to explain and predict future competition operationalized as new entrepreneurial entries. Our study is among the first to empirically examine the relationships between aggregate stakeholder management performance and the entrepreneurial entries of individuals. Using a combined U.S. dataset from 2003 to 2013 from the Kinder, Lydenberg and Domini Index, Compustat, and Kauffman’s Entrepreneurship Survey, we find support for three (...) hypotheses. First, higher levels of stakeholder management performance are related to lower rates of entrepreneurial entry. Second, a curvilinear relationship exists between stakeholder management performance and entrepreneurial entry, where both low and very high stakeholder management performance increase entrepreneurial entry. Third, the greater the variance in stakeholder management performance across stakeholders, the more entrepreneurial entry. Our findings suggest that managing for stakeholders can help to avoid future competition. We add an entrepreneurship lens to the business ethics of stakeholder theory showing how incumbent stakeholder management performance shapes opportunities for entrepreneurs, a largely neglected stakeholder group. (shrink)

The micro-level corporate social responsibility (CSR) literature has broadly demonstrated the effects of CSR on employees’ behavior but has mostly been limited to employees’ behavior within the work domain. This business-centered focus overlooks the potential of organizations to change employees’ private social and environmental behavior and thus to address grand societal challenges. Based on the social psychology literature on moral consistency and moral balancing, we conduct three experiments to investigate whether employees’ private prosocial behavior is consistent with their organization’s corporate (...) social (ir)responsibility or whether employees aim to balance their private prosocial behavior, e.g., by compensating for their organization’s CSR activities with a reduced willingness to contribute outside the work domain. Our results provide support for a consistency effect such that employers’ environmental CSR activities increase employees’ donations and willingness to volunteer outside work. Environmental corporate social irresponsibility activities, on the contrary, reduce employees’ private donations and willingness to volunteer. We further find that the positive effects of environmental CSR are partly explained by the strengthening of employees’ environmental self-identity. Our findings highlight that organizational activities have consequences for employees’ moral behavior outside the work domain and thus have important implications for research and practice. (shrink)

We bring together social identity and social exchange perspectives to develop and test a moderated mediation model that sheds light on employees’ perceptions regarding the interrelations between an organization’s external and internal CSR initiatives and their job attitudes and work behaviours. This is important because employees’ sensemaking of CSR motives as being either self-focussed or others-focussed can produce meaningful variations in their job satisfaction and the dimensions of organizational commitment. Also, the consolidation of CSR’s underlying psychological mechanisms can advance our (...) understanding of the processes, contingencies, and outcomes of employees’ perceptions of their employing organization’s CSR initiatives. Our findings indicate that of the two orientations, only external CSR is associated with increased levels of employee commitment through the enhancement of job satisfaction. In particular, job satisfaction was found to fully mediate the impact of external CSR on behavioural commitment and partially mediate its impact on attitudinal commitment. To our surprise, internal CSR has no significant association with job attitudes or work behaviours. We further reveal the complementarity of external and internal CSR orientations; the effect of external CSR on employee outcomes is stronger when employed in concert with internal CSR. Our results contribute to and have implications for both theory and practice. (shrink)

ABSTRACTThis article examines how a firm’s prior record on corporate social responsibility influences individual stakeholders’ perceptions of corporate hypocrisy in the wake of a corporate social irresponsibility event. Our research extends extant corporate hypocrisy literature by highlighting the role of individual stakeholders’ inferences about a genuine CSR motive in their judgments of corporate hypocrisy. This can serve to differentiate perceived corporate hypocrisy from inconsistency that arises because of a lack of ability and/or resources. Our research further identifies a source for (...) such perceptions: individual stakeholders’ perceptions of firm warmth generated by a firm’s prior record of CSR. In addition, we find that when CSR and CSI are in the same domains, it can strengthen perceptions of hypocrisy. This provides direct evidence to explain why markets react differently when CSR and CSI events occur in the same domain. (shrink)

Inconsistent information between an organization’s corporate social responsibility (CSR) commitments and perceived CSR (in-)action is a big challenge for organizations because this is typically associated with perceptions of corporate hypocrisy and related negative stakeholder reactions. However, in contrast to the prevailing corporate hypocrisy literature we argue that inconsistent CSR information does not always correspond to perceptions of corporate hypocrisy; rather, responses depend on individual predispositions in processing CSR-related information. In this study, we investigate how an individual’s moral identity shapes reactions (...) to inconsistent CSR information. The results of our three studies show that individuals who symbolize—i.e., display—their moral identity to the public more than they internalize moral values react less negatively to inconsistent CSR information. We also show that this weakens their anger and willingness to change company behavior. Furthermore, we find that this effect is amplified for extraverted but weakened for neurotic individuals. Our findings underline the importance of individual predispositions in processing CSR information. (shrink)

Companies increasingly recognize the importance of communicating corporate social responsibility including their engagement toward employees, the community, the environment and other stakeholder groups to attract applicants. The positive findings on the effect of CSR on applicants’ reactions are commonly based on the assumption that companies send a clear signal about their commitment to CSR. However, communication is always contextualized and has become more ambiguous through the increased availability of information online. External stakeholders including actual and potential applicants are confronted with (...) inconsistencies between the way companies communicate CSR activities and their overall CSR performance. Drawing on signaling theory, this article raises the question of how the interaction between strong CSR communication and low CSR performance influences organizational attractiveness. We propose that low CSR performance dampens the effect of CSR communication on organizational attractiveness. Hence, the inconsistency between CSR communication and CSR performance decreases organizational attractiveness. To test our hypotheses, we scraped 67,189 posts published on corporate Facebook career pages by 58 Fortune 500 companies from the time they began their respective career page until June 2018. Surprisingly, our results show that a low CSR performance strengthens the effect of CSR communication on organizational attractiveness. Thus, inconsistencies between CSR communication and CSR performance seem to lead to positive evaluations among applicants. (shrink)

This editorial outlines the articles included in the special thematic symposium on corporate social responsibility and employees and highlights their contributions to the literature. In doing so, it highlights the novel theoretical and empirical insights provided by the articles, how the articles inform and expand the methods and research designs researchers can use to study phenomena in this area, and identifies promising directions for future research.

The paper aims to investigate the effects of corporate social performance (CSP) on bankruptcy likelihood in times of economic upswing. This is important because prior related literature focused on data containing times of economic crises. We measure bankruptcy likelihood with the Altman Z score and CSP with Refinitiv ESG scores. By applying static panel data regressions and instrumental variable regressions on a sample of 6696 US-firm-year observations from 2010 to 2019 our main findings are: (i) In contrast to existing research, (...) the level of firms’ CSP seems to have no (positive) effect on the likelihood of bankruptcy during times of economic upswing. (ii) Increasing a firm’s CSP in times of economic upswing leads to a rise in bankruptcy likelihood. We conclude that the positive effects of CSP on stakeholder relationships fail to materialize in flourishing business environments. The costs of increasing CSP, thus, exceed their immediate positive effects and raise bankruptcy likelihood. However, as they reduce financial default risk in subsequent crises, CSP investments can be seen as a balancing measure. Our findings bear implications for scholars, practitioners, and policymakers. (shrink)

With the advent of responsible business, ensuring social responsibility in sourcing is of interest to both academics and practitioners. In this study, we examine one way of achieving this goal: ethical sourcing initiatives (ESIs). ESIs refer to a firm’s formal and informal actions to manage sourcing processes in an ethical and socially responsible manner. While ESIs have been established as an important part of corporate social responsibility, it is unclear whether, how, and when this corporate effort is economically beneficial. We (...) conduct an event study estimating the shareholder value effect of 159 publicly traded firms’ ESIs and find that the stock market reacts positively to ESIs in general. We also compare market reactions under different conditions including reactive versus proactive ESIs, and their interactions with initiative timing, firm size, and financial risk. Additionally, we find that ESIs are associated with long-term stock price and operating performance. Overall, our findings clarify the potential economic benefits of corporate ESIs and encourage buying firms to take these initiatives selectively according to business contexts. (shrink)

The corporate ethics literature has considerably focused on whether giving results in getting. However, the relationship between corporate philanthropy and performance and the underlying mechanisms remain unclear. Drawing on signaling and cue consistency theories, we develop and test a model that specifies whether, how, and when corporate philanthropy benefits relative competitive performance from a micro-process perspective. Using a Chinese sample of 1623 employees, 145 CEOs, and 145 human resources managers, we found that corporate philanthropy could positively influence relative competitive performance (...) through the internal processes—organization-level citizenship behaviors of employees. Moreover, work–life balance practices strengthen the aforementioned mediation. In particular, when a firm performs high levels of work–life balance practices, corporate philanthropy tends to promote more citizenship behaviors in the entire organization, thereby enhancing the relative competitive performance of the firm. By contrast, when organizations perform low levels of work–life balance practices, the aforementioned mediation becomes nonsignificant. The theoretical and practical implications of these findings are discussed. (shrink)