“the consultancy firm KPMG (2008) found a 60% increase in responsibility reports between 2005 and 2008″ (Mueller, 2012). This quote by the author shows that in today’s world of business, CSR is very popular among managerial positions. It is because there is a widespread belief that CSR improves the performance of companies because of many reasons. But today in this blog, I am only focusing on CSR’s impact on employee’s affective traits. According to industrial and organizational psychology, employees perform the best when they are emotionally attached to corporations, and that happens when they trust them. On the other hand, employees will not perform as well because they do not feel any affection toward their employers.

So, in order to increase firm performance, one should make employees feel a positive connection with its company. Since research shows that CSR promotes the affective commitment of employees, and the more affection an employee feels for their company, the higher quality of their work they do increases. Therefore, a firm doing something like donating money to charity, cleaning the environment, and other CSR-related activities increase profits through employees’ mental connection with their company. In conclusion, the happier the employee feel for their company, the more work he or she does for it.

Reference: Mueller, K., Hattrup, K., Spiess, S., Lin-Hi, N., & Kozlowski, Steve W. J. (2012). The Effects of Corporate Social Responsibility on Employees’ Affective Commitment: A Cross-Cultural Investigation. Journal of Applied Psychology,97(6), 1186-1200.

CSR is growing and trending in today’s business world. For several decades it has evolved from something relatively unknown to a popular managerial marketing practice in organizations. While CSR in workplace hade good feedbacks from its practitioners, there were many flaws encountered from establishing CSR policies into their strategies. First of all, CSR is widely accepted as a firm performance boost or in simplest terms, it has the power of increasing a firm’s profits by improving their reputation. One major flaw of CSR involvement is the cost for small firms. Companies that doing well financially are able to invest in CSR regularly and in higher quality, so it is much harder for smaller companies to compete with them.

Another one of the noticeable flaws of CSR is the fact that there are other areas that could be invested in. What I  and the author Isaksson agree on is that it is not guaranteed that performing CSR activities would definitely maximize profits. For example, there is a chance that investing money in commercials, new products, and others can be better than CSR engagement for the firm performance. In conclusion, investing in CSR doesn’t automatically mean more profits; a skilled and knowledgeable team is needed to utilize CSR at an optimal level.

Reference: Isaksson, Kiessling, & Harvey. (2014). Corporate social responsibility: Why bother? Organizational Dynamics, 43(1), 64-72.

In recent years, it feels like Wells Fargo, one of the most renowned bank, is suddenly caring about society and the environment’s condition. They were able to fulfill their many Corporate social responsibility goals of 2020 ahead of time. To me, It is as if Wells Fargo is doing everything in their power to promote their corporate image rather than truly wanting to contribute to society and the environment. The reason I feel this way is because of today’s view on CSR. In the present, when people in the business field think about CSR, they think about using it as a marketing device to firm performance.

Wells Fargo is no different than others. People might believe Wells Fargo is very benevolent for the constant donations, but it is highly likely they are doing it to improve their reputation, and it is working. The Wells Fargo account fraud scandal is about the bank creating millions of fake savings and checking accounts for their clients without their consent and knowledge. Because of this controversy, Wells Fargo was despised, but now the hate faded away. In my opinion, Wells Fargo was able to restore their reputation and people’s trust through CSR.

Reference: Wells Fargo to Release Corporate Social Responsibility Report. (2014, June 20). Wireless News, p. Wireless News, June 20, 2014.

A firm’s action determines the type of media coverage it receives. For example, good CSR firms, in general, get favorable and positive media coverage. Through Cahen, Chen, and Chen’s detailed research, it is true that there is a causal relationship between CSR performance and favorability of media coverage. So, a way to maximize firm performance is to do CSR-related activities in order to boost a firm’s media image, and a firm with a better reputation is known to attract more customers. Also, a better media image resulted in higher firm value.

I agree with the authors’ findings because I believe news influence people’s view toward a company. For example, if I switch on the TV and found out that a company was donating money or helping the environment, I would more likely buy their products. But, if a firm is involved in some shady business, I would not be their customer. So, media coverage has its advantages and disadvantages. But, a company that is socially responsible will become more and more popular through reporting of the business press. In conclusion, almost all firms benefit from good media coverage, and to get that advantage, firms should have CSR.  

Reference: Cahan, Steven F., Chen, Chen, Chen, Li, & Nguyen, Nhut H. (2015). Corporate social responsibility and media coverage. Journal of Banking & Finance, 59, 409.

The employee’s attitude towards his/her firm has a negative effect on their performance. So, employee cynicism reduces the performance of a firm through three types of organizational cynicism. They include employee questions the integrity of the firm, detests the firm because of personal reasons and attacks the firm in the public. In order to prevent employees’ action from ruining the firm’s image, which leads to a loss in profit, a firm should invest in CSR. According to Reynaud, CSR reduces employee cynicism because it causes their employee to trust the firm and their coworkers.

CSR efforts may include creating a safer and more comfortable environment should be established for employees because it increases positivity and commitment to the firm. The more appreciation a firm show to their workers, the more work they are willing to do. When people think about CSR, they usually think about donating to charity, something out of the workplace. But, benefitting its workers is another form of CSR, which also improves a firm’s performance. If a firm treats its employee well enough, the employee would be grateful and in return work harder in return. I agree with the author because employees have the power to influence on what others think about the firm. The reputation of the firm is in the hands of its employee.  

Reference: Reynaud, E. (2018). How Perceived Corporate Social Responsibility Affects Employee Cynicism: The Mediating Role of Organizational Trust. Journal of Business Ethics, 1-15.

In the twenty-first century, almost everyone can access news and information through their devices. Firms know that whenever the media gives plenty of attention to something, it will become trending and influential on people’s decisions. For example, there is countless news on employees mistreating customers, and as a result, people would boycott the business. So, firms became warier of their position and surroundings because there is a chance their misdeeds or CSI can be recorded and broadcasted through the media. Firms would less likely to perform CSI since it can hurt their profits if their misconducts are exposed. Also, a firm’s CSR or charities are spread across social media as well. By using media, firms could make the world know about their actions in improving the community or environment to potentially attract more customers. In conclusion, media attention lowers chance of firms committing CSI, and improving chances of firm’s CSR.

Firms receiving that are receiving a lot of attention from media would less likely to be irresponsible because people are watching, and the wrong move can harm their performance. According to stakeholders theory, a firm’s duty is to maximize profits. In order to maximize profits, firms need to act according to the public’s expectations. I agree with Zyglidopoulos. It is obvious firms want the public to know about their good side and hides their bad side. So, when firms perform CSR, they want the media to spread the news about their responsibility because having a good reputation improves firm performance.

Reference: Zyglidopoulos, Georgiadis, Carroll, & Siegel. (2012). Does media attention drive corporate social responsibility? Journal of Business Research, 65(11), 1622-1627.

The stakeholder approach is a management philosophy which prioritizes the growth of stakeholder’s equity in an organization. Those who support the stakeholder approach view CSR as something good, and on the other hand view CSI as something bad. As many may know, CSR is an action taken by an organization to help out society, and hopefully, it can improve the reputation and performance of the organization in return. So, through the stakeholder approach, marketing managers and others view the performance of CSR as having a benefit on both society and the organization, a win-win situation. But, CSI, Corporate Social Irresponsibility, the opposite of CSR, are misdeeds companies perform that hurts society in order to achieve benefits, usually short-term. Companies perform CSI secretly, but in the modern day, where technology is everywhere, it is easier to expose their misdeeds and spread the news than before.

The authors, Price, and Sun, means that companies should prioritize CSR over CSI because not only is CSI unethical, it is going to hurt or even destroy a company once the public finds out about the wrongdoings. For example, the Enron scandal, the corporation hid their financial losses while lying about the increase in profit by not falsely reporting their situation. Their stock surged and Eron expanded, it also obtained many facilities, but once the public found out about the losses in profit, the stock price went from an all-time high of $90.56 to $0.26. Employees lost their jobs and retirement funds. The company went bankrupt. So, this article’s message is don’t rely on CSI.       

Reference: Price, & Sun. (2017). Doing good and doing bad: The impact of corporate social responsibility and irresponsibility on firm performance. Journal of Business Research, 80, 82-97.

Corporate Social Responsibility is a policy in businesses that aims to help improve the society and/or the environment, even though it is not required of them by law or obligation. While CSR is optional, there are intensive debates whether firms should incorporate it into their system. There are two sides to a society’s view on CSR. One group, the business-focused, believes that a firm’s only duty is to aim for high profits in order to satisfy its stakeholders, while not breaking any laws. The other group, society-focused, believes that companies have the responsibility to involve itself in philanthropic activities to give back to society. Although CSR is nonmandatory, many agree it is against society’s moral and ethical code by keeping wealth to themselves.

I agree with the author of the book, Okpara(2013) that CSR is not required of firms, but society expects powerful firms to be charitable. I love the fact that Okpara convinces leaders of the 21st century and potential ones to utilize CSR as a catalyst for a company’s growth, instead of mocking firms without CSR policies. I, personally, do not view wealthy companies that do not implement CSR as selfish because it is their choice and I would probably keep all the profits. But, I and most of the population are attracted to companies who engage in charity.

Reference: Okpara, John O. ; Idowu, Samuel O. (2013). Corporate Social Responsibility (CSR, Sustainability, Ethics & Governance). Berlin, Heidelberg: Springer Berlin Heidelberg.

Should firms invest in CSR? There were many research on effects of CSR on firm performance in the past and found out that CSR, in general, provides unstable outcomes on performance. It is unclear whether CSR improves or undermines firm performance. No firm is the same and not every firm is in the same situation, so there would be a lot of unpredictabilities. But, firms in a competitive market or environment receive more benefits from CSR investment than firms in lower competitive area. In a competitive scene, customers usually prefer firms that provide goods at low prices and other factors. CSR might drive customer’s attention away from pricing and make them focus on the social values of the firm instead, and of course, firms with good reputations to attract more customers.

Basically, CSR could be used as a marketing device to improve a firm’s prestige, which results in more profit. I agree with the author that CSR can have a positive impact on firm performance.  For example, I experience pleasure being a customer of Wells Fargo, knowing their generosity– they promised to donate some amount of their earnings each year. Sometimes, people favor firms that help our society over other firms because it feels like the customers themselves are doing the helping by supporting the firm financially. In conclusion, CSR does not improve every firm, but only ones that are in a competition with other firms.        

Reference: Kemper, Schilke, Reimann, Wang, & Brettel. (2013). Competition-motivated corporate social responsibility. Journal of Business Research, 66(10), 1954-1963.

The demand for corporate social responsibility is increasing. It may seem like a positive thing, but there is more to it. More and more companies are providing the public with CSR reports, but it’s hard to rely on it because CSR reporting is optional and not regulated by the government. The world largest companies’ reports in 2014 showed they were in poor quality and even contrasting to other reports. Because of this, stakeholders are suspicious and distrustful. To combat this problem, another firm that is relevant and renowned promises to issue CSR reports truthfully. However, this method called external assurance is still young and unpopular.

So, here is an advice, don’t trust CSR reports completely. Misuse of CSR can harm a company, but it can also benefit from it if used correctly. For example, a company’s reputation increases, which results in trusts from its stakeholders and authorities, allowing financial freedom. The CSR-sustainability monitor report is undoubtedly significant to my research because the Weissman School (2016) identified a notable problem from the modern day and mentioned a possible solution. The author made good use of data through extensive research instead of his/her personal view on CSR–he/she was unbiased. I agree with the author that CSR can be profitable or ruin depending on the situation, but CSR is definitely trending.  

Reference: Baruch College Zicklin School of Business Weissman Center for International Business (2016). Report on the Scope and Quality of CSR Reports from the World’s Largest Companies (2016 edition.). New York. NY: Baruch College.