“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.