Corporate Social Responsibility (CSR) Is One Of The Fervently Debated Issues: Finance Assignment, NCI, Ireland

Corporate social responsibility (CSR) is one of the fervently debated issues in today’s intensely competitive trade world. The idea has long progressed from being simply a “nice but optional” practice to being essentially obligatory for many businesses, and as such these organizations are now more likely to behave responsibly towards key social issues.

Organizations incorporating CSR into their business strategy in order to enhanced brand image, their reputation, to increased financial and shareholder value, build a good relationship with suppliers and government (KPMG, 2011). In view of the success of CSR, several studies have investigated the impact of CSR on the different viewpoints of the organizations, such as financial performance (Brammer and Millington, 2008), relationship with internal and external stakeholders (Snider, Hill and Martin, 2003) and strategic contexts (Porter and Kramer, 2002) but failed to discuss the CSR from an employee perspective.

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Employees comprise a primary stakeholder group of great importance for companies since they directly contribute with their individual performance and overall behavior to companies’ functioning, efficiency, and survival (Clarkson, 1995; Donaldson & Preston, 1995). According to the World Economic Forum (2002), employees are viewed by companies’ CEO as the key stakeholder exerting pressure and providing incentives for socially responsible behavior.

As members of the organization, employees are concerned about, contribute to, and react to its investment in social responsibility practices (Rupp et al., 2006). Employees not only expect companies to behave in a socially responsible manner, but they are also important agents of CSR (Duarte & Neves, in press; Peterson, 2004; Rupp et al., 2006). Therefore, the daily implementation of CSR strategies is, ultimately, the responsibility of employees. The achievement of planned CSR outcomes will largely depend on their willingness to collaborate and adhere to CSR strategies (Collier & Esteban, 2007). Besides their importance as agents of CSR, employees also play other roles that potentially increase their interest in and awareness of the companies’ socially responsible practices.

They are direct (e.g. HRM policies) and/or indirect (e.g. community support policies) beneficiaries and observers of the implementation of CSR strategies (Maignan& Ferrell, 2001; Peterson, 2004). In view of this triple-role, employees’ perceptions of social performance might exert influence on their relationship with companies, triggering emotional, attitudinal, and behavioral responses; therefore CSR should be a topic of interest to OB scholars, managers, and companies alike (Rupp et al., 2006; Van Buren, 2005).

For several years the notion of employee commitment has been an area of concern amongst many scholars. Since the early 1970s, differences in meanings of the term have arisen. Sheldon (1971) described commitment to the organization as:

“an attitude or an orientation toward the organization which links or attaches the identity of the person to the organization.”

Organizational commitment was examined by Mowday, Steers, and Porter (1979) over two common distinctions, specifically attitudinal and a behavioral approach to commitment. According to the attitudinal approach commitment, commitment creates as a result of some mixture of work experiences, organizational expectations, and individual characteristics, which lead to positive sentiments towards an organization, which in turn gets to be commitment (Mowday, Steers and Porter 1979). Within the behavioral approach, an individual achieves a state or position of commitment as a result of participating in committing behavior- behavior that, in essence, makes it expensive to reverse a position or withdraw from a few lines of action.