• ISSN(P) : 2708-2474
  • ISSN(E) : 2708-2482
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The Effect of Corporate Social Responsibility on Employees' Organizational Commitment: The Central Role of Organizational Identification

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Abstract

This study investigates the effect of Corporate Social Responsibility on Employee’s Organizational commitment with the mediation of Employee’s Organizational Identification. All the hypothesis and inferences are drawn upon Social Identity theory and Self-Categorization theory. Data were collected through a self-administered questionnaire from a sample of 207 employees of the telecommunication industry. This data was further sorted and analyzed using Structural Equation Modeling (SEM) and Confirmatory Factor Analysis (CFA). Mediation of employee’s organizational commitment was tested by using the bootstrapping method and the guidelines provided by Preacher and Hayes. Results showed that there is both a direct and indirect relationship of CSR with Employee’s organizational commitment through Employee’s Organisational Identification, thus supporting the entire hypothesis proposed for this study. Furthermore, managerial implications as well as limitations of this study are also stated at the end.

 

Key Words

Corporate Social Responsibility (CSR), Employee’s Organizational Commitment (EOC), Employee’s Organizational Identification (EOI), Social-Identity theory, Structural Equation Modeling (SEM), Confirmatory Factor Analysis (CFA), Preacher & Hayes mediation analysis.

 

Introduction

Corporate Social Responsibility appears to be echoed highly both in theoretical and managerial discussions on various research agendas, which claim that organizations need to do the good, as this is not only the right way of performing various organizational operations, but it can correspondingly yield to enhanced performance and sophisticated results (Bhattacharya & Sen, 2004). Following this notion, CSR has progressed and diverted from a philosophy, dogma and an ideology to reality, and many ponder upon the importance of roles and responsibilities to be defined by organizations towards society, and incorporation of ethical and social standards in business models and strategic directions (Lichtenstein, Drumwright, & Braig, 2004). Although Pinkston and Carroll (1994) discuss, that firms’ demonstration of CSR in their business policies is gradually increasing and many struggles in the path along (Lindgreen, Swaen, & Johnston, 2009).

The progress and development of CSR reveal the assumption, guidance and inspiration of various theories, such as institutional theory, the Resource-based theory of the firm, agency theory, corporate stewardship theory, and stakeholder theory, which fallouts in countless conceptual underpinnings of organization’s social responsibilities (McWilliams et al. 2002). Some studies detect substantial research in CSR literature and pinpoint potential research gaps, according to a recent article published in the International Journal of Management Reviews research on CSR has evolved and progressed along with two possibilities. From an analytical viewpoint, a diversion can be observed by the researchers from macro-level effects to organizational level effects. These researchers also analyze the impact of CSR on organizational performance and various other functions within the organization actively.

 From a theoretical perspective, a shift can be observed from obviously normative and ethical standpoints to tacitly normative and performance-based managerial studies.  (Lee, 2008)

Despite a highly acknowledged notion that CSR helps the firms to deliver value and meet the responsibilities of all the stakeholders, a variety of other concerns, on the other hand, remain unnoticed and thus, unresolved. The primary objective of this study is to provide superior and sophisticated literature of key CSR topics concentrating primarily on managerial and organizational level and to draw appropriate, logical and influential conclusions about queries that are not entertained.

Organizations actively following the notion of CSR and rigorously participating in these activities are called responsible corporate citizens  (Jeurissen, 2004). This participation also includes their efforts in communicating the CSR initiatives effectively and efficiently down the line (Luo & Bhattacharya, 2006). The sole purpose of this communication is to enrich and shape up their positive image in the key stakeholder’s minds. This study concentrates on deliberating the perception of CSR by employees in an organization, and on inspecting if there is any change in their commitment towards the organization resulting from the effective formulation, adoption and application of these policies.

Even though CSR now seems like a crucial element of contemporary business activities, but this rigorous, vibrant and practical development of CSR inside a firm has emerged lately, and its literature is still in the developmental stage (Lindgreen et al., 2009). Executing CSR in a business firm might be a detrimental task; however, the guarantee of success still lacks conceptual and experimental support, especially, from the viewpoint of dynamism. Research models and recommendations accessible to the business manager even today are blurred, indistinct and unclear (Porter & Kramer, 2002). Studies of CSR in the context of developing countries are even more limited in both scale and scope. All these studies focus on very limited aspects and thus, lack substance (Maignan, Ferrell, & Ferrell, 2005).

 Dunphy and Doppelt claim that the implementation of CSR in an organization is the result of the transformational and incremental organizational change process in which the prevailing views about strategic directions of a company are fundamentally revamped. These radical changes in business processes, technologies and revitalization of market analysis techniques come by transformational approaches (Hart & Milstein, 1999).

The role of CSR activities implemented by an organization for positioning their brand image in the eyes and subconscious minds of customers and various other actors connected directly or indirectly with the business, cannot be taken for granted (Wanderley et al., 2008). However, debates about the communication and dissemination of CSR initiatives are still prevalent in the literature. The choice with the organizations about the use of conventional marketing tools is a question mark if the organization choose to communicate their CSR initiatives (Ven, 2008).

Some studies have also shown a negative impact of communicating social activities on organizations, as CSR communication not necessarily benefit the organizations every time. This communication might sometimes lead to stakeholder’s cynicism and skepticism (Mohr, Webb, & Harris, 2001). A discreet, interdisciplinary and systematic examination of CSR communication is necessary because it could offer crucial insights in the area of CSR accentuating the role of various communication tactics in this arena. It can provide the basis for organizational reporting, which encompasses various environmental and social issues, highlight different CSR frameworks and provide means to include multiple stakeholders in the process. 

Employee commitment signifies a belief of the employee to go an extra mile and exert effort backed up by strong determination on behalf of an organization, because the values and goals are well-acknowledged and widely accepted, which results in a resilient aspiration to enhance and preserve the membership of the firm (Mowday, Steers, & Porter, 1979). Various studies have shown a strong positive link between this HRM outcome with key success factors of an organization such as lower absenteeism, citizenship behavior and higher levels of job satisfaction, which results in enhanced productivity and higher performance standards of an employee (Mathieu & Zajac, 1990).  Studies regarding employee commitment are substantial in the management literature; however, in developing countries particularly, such as Pakistan, the number of studies addressing this issue in relation with the implementation and perception of CSR is scarce.

Employees with higher levels of commitment dedicate greater efforts and offer greater levels of willingness towards the goals and objectives of their organizations (Guest, 1987). Practices like organizational culture, strategic orientation, organizational policies and procedures and internal structure should be kept in the right place in order to support and achieve the desire for higher levels of employee commitment. Reader’s discretion is important as, the concept of “employee’s commitment” is often jumbled and used interchangeably with the terminologies such as “high performance” and “high involvement” in the United States and UK literature respectively (GouldWilliams, 2004).

Boxall and Macky (2009) have underlined recently, that the work practices depicting high commitment and high involvement are not equivalent, despite the fact that high involvement work practices lean towards high commitment, reciprocity is not essentially the case. Work practices which enhance employee’s empowerment are the ones having a significant effect on employee’s organizational commitment (Gardner, Wright, & Moynihan, 2011). Based on many different studies employee’s high commitment can be achieved by paths not including high involvement at all, for instance, job security and compensation (Boxall & Macky, 2009).

To better comprehend the concept of organizational commitment, this study follows a tri-component model proposed by Meyer and Allen (1991), which states that an employee’s organizational commitment is classified into three categories, i.e. normative, affective and continuance commitment. According to this model, employee’s organizational commitment consists of factors such as emotional ties with the organization, identification, the costs accompanying the decision of leaving the organization and a sense of compulsions and responsibilities.

Noble and Mokwa (1999) offered another notion of perceived fit, which is defined as, “the degree to which a strategy being implemented is seen as congruent with the overall direction of the organization”. One among the major reasons of employee’s high commitment to their organization stems out of the strong urge to maintain their membership with the firm to assist its objectives (Blau & Boal, 1987). Worker employer relationship helps in shaping up their behaviors (Rousseau, 1995). These intra-organizational relationships and its role is gaining emergence gradually and adopting the pace, as the managers are beginning to understand its crucial role and value in the long-term success of the organization (Menon, Bharadwaj, & Howell, 1996). Drawing upon the studies of Hennig-Thurau, Gwinner, and Gremler (2002) there are three constituents of relationship quality in an organization, these constituents are highly interrelated, rather than being singular or independent: trust in the firm, gratification with the firm and commitment to the connection with the organization. According to various studies, the role of supportive management and supervision in enhancing employee’s commitment is vital and adds up to the productivity of the firm exponentially (Johnson et al. 1990).

Employee’s organizational commitment is all about developing a psychological linkage between the objectives of an employee and the goals and objectives of the organization at large, and shaping his/her attitude and behavior based on this connection to enhance the effectiveness of organizational productivity (Arthur, 1994). A wide array of practices and policies which affect employee’s organizational commitment are a part of HRM strategies; high commitment strategies might include any set of these HRM strategies (Whitener, 2001). This research, however, emphasizes specifically on the dimensions of CSR strategy and its influence on employee’s commitment resulting in a particular organizational performance.

The amount of literature and investigation of various dimensions of CSR is massive; however, linking this phenomenon and examining its impact, particularly on the behavior of an employee is very limited in scale and scope. Prior studies on identifying the influence of CSR on organizational personnel are two-folded. In the initial section, the researchers tend to observe its effect on prospective workers (Albinger & Freeman, 2000). These researches are highly in tandem with the belief that CSR builds a decent repute for organizations and intensifies its desirability as an establishment. Rendering to one description, perceived trustworthiness of a firm in the mind of a prospective job applicant deficient in any prior contact with the firm increases, because of the firm’s propensity to follow CSR activities with an unbound zeal and exuberance (Viswesvaranetal 1998). This relationship makes more sense when we take the Social Identity Theory into account, explained by Greening and Turban (2000) in their study, which stated that a prospective job seeker receives signals of a firm’s social performance, trying to explain what it would be like to work for this organization. The role of a current employee in the studies of CSR cannot be taken for granted. Therefore, in the second category, the main focus of the researchers is to find out how CSR activities effect the current employees (Brammer & Millington, 2005).

Various other researchers such as Riordan, Gatewood, and Bill (1997) also discussed the effect of CSR or organization’s perceived image, intended behaviors and attitudes of an employee. The study of Maignan, Ferrell, and Hult (1999) specified that pre-emptive corporate’s social conscious is an outcome of market-oriented and benevolent cultures, where there is a concern for the community, environment, societal norms and values that are in turn associated with enhanced ranks of customer loyalty, higher levels of commitment, and improved performance.

Different studies, such as the pragmatic analysis of Peterson (2004) evidently indicated linkage between employee’s sensitivities of a firm’s citizenship behavior and organizational commitment. Correspondingly, Brammer and Millington (2005) also scrutinized the influence of conscious behavior on the commitment of an employee towards the firm, whereas suggesting that exterior CSR is positively linked to organizational commitment.

Based on the propositions of Social Identity Theory (SIT), individuals attempt to categorize themselves into distinctive categories (social) via describing their self-descriptions in various social contexts (Ashforth & Mael, 1989). Nationality, sports team, political affiliation, and similar groups are certain factors, which serve as necessary constituents to build up an individual’s repertoire of memberships in various social catalogues (Hogg, Terry, & White, 1995). Perception of an individual’s belongingness to a particular category builds up self-image, which in turn combine all its aspects together to constitute social identity (Tajfel, Fraser, & Jaspars, 1984). Therefore, it can be stated that social identity is a combination of all the aspects of memberships in different social categories, prescribing one’s characteristics to be a participant of that cluster. Whatever an individual thinks, feels and behaves depends upon the membership in this group.

Following the concept of SIT and the logic behind this theory, a company can also be considered as a system of social cataloging. Employee’s self-description can be affected by organizational membership, as it might become a central element of individual’s identity. Organizations acting in a socially responsible manner are good corporate citizens, and this positive distinctiveness is depicted in the firm’s practices and values. Therefore, the sense of commitment and belongingness to this positive reputation of the organization perceived by its employees signifies their self-concept (Smidts, Pruyn, & Van Riel, 2001). In a nutshell, workers’ attitudes on the job are affected by the image and repute of the organization, resulting from the enhancement of their social identity.

However, the mechanism behind the impact of CSR on advocacy behavior of an individual has not gained ample consideration in the extant body of knowledge; as a result, there is a dire need for further research on the dynamics of CSR affecting individuals (Randy Evans & Davis, 2011). The basic focus of this research is to contemplate the logic and rationale behind the relationship between CSR, and the behavior of the firm’s employee and employee’s organizational identification could be one of the psychological mechanisms, which influences the linkage between CSR and organizational commitment. Drawing upon the literature provided by SIT and self-categorization theory an employee’s sophisticated needs such as self-esteem and social identity needs are fulfilled by the firm’s external positive stature and reputation, which in turn, increases the commitment level of the employee towards that organization. An organization’s active participation in CSR initiatives is directly related to improved levels of employee’s commitment because a strong sense of pride emerges in the minds of employees to identify themselves with such a prestigious organization. Therefore, a claim which receives support from the literature indicates that CSR affects employee’s organizational commitment both unswervingly and circuitously through the intermediation of employee’s organizational identification Carmeli, Gilat, and Waldman (2007) and Kim et al. (2010).

Extant literature in the field of CSR and researches regarding the testing and validation of various theories and procedures have been carried out in western context. This study, however, provides evidence of CSR affecting employee’s behaviors and attitudes in the context of developing non-western countries such as Pakistan (Dobers & Halme, 2009). Numerous research scholars have suggested the analysis and examination of these philosophies in non-western contexts (Tsui, Nifadkar, & Ou, 2007). Hence, the current research tends to express the buoyancy and poise of managers in countries like Pakistan about taking CSR initiatives as they observe these activities beyond mere governing acquiescence. 

Generally, the present research serves three purposes. Initially, it scrutinizes the direct and uninterrupted effect of CSR on employees’ organizational commitment (EOC). Secondly, it inspects the intervening (mediation) role of employees’ organizational identification (EOI) influencing the relationship between CSR and EOC. Lastly, it adds to the prevailing body of knowledge and information by presenting proof from a non-western context.

 

Theoretical Base & Hypothesis Development

CSR & Employees’ Organizational Commitment

The term CSR denotes a belief of firm’s activities, which are voluntary in nature, signifying the importance of including environmental as well as social concerns alongside economic gains resulting from various organizational operations and strategic maneuvers, while taking the perspective of multiple stakeholders into consideration (Van Marrewijk, 2003). Practical implications of CSR and its importance is now crucial and evident both internationally, such as “European Multi-stakeholder Forum for CSR”,  and at the local level like “Corporate Social Responsibility Voluntary Guidelines 2013” provided by SECP (Securities and Exchange Commission of Pakistan) (Sıngh, Sanchez, & Bosque, 2008).

All the existing scales of CSR and its various indicators need to be examined intensely and reviewed critically, assisting future researches which seek to evaluate the degree of CSR and its effect on various dimensions of trade operations, firm’s performance, HRM outcomes such as employee’s attitudes, perceptions and behaviors, and the well-being of the community at large. The positive impact of CSR on a variety of employee’s outcomes such as low turnover rate, effective and enhance productivity, trustworthiness, lower absenteeism and organizational prestige and reputation has gained enormous support in the preceding researches Carmeli et al. (2007), Kim et al. (2010) and Jones (2010).

Employee’s organizational commitment is one among the most important outcomes of employee and is directly related to motivation while performing the routine duties; it is generally viewed as an indicator of employee’s psychological association with his/her organization (O'Reilly & Chatman, 1986). This bond between an employee and his/her firm has implications in decisions regarding the maintenance of membership behavior, the importance of which cannot be taken for granted by the managers (Meyer & Allen, 1997). Organization is an entity, which provides a nourishing culture, an environment that can properly utilize its employee’s capabilities and skills to a substantial degree and satisfy the needs and wants of its workers, as people come to work for an organization with certain needs, particular skill set and expectations. To increase the levels of EOC, the organization must provide opportunities and challenges to its workers (Vakola & Nikolaou, 2005). The idea that a firm’s taking CSR initiatives actively and its positive relationship with employee’s commitment towards their organization has gained adequate acknowledgement in the literature, such as in the research findings of Peterson (2004) and Brammer and Millington (2005).

According to SIT, individual’s sense of membership and pride in the organization increases, if the organization is involved in such positive activities. Organization’s concerns for ecological sustainability, ethical code of conduct, legitimacy and community’s well-being even at the stake of its profitability at least in the short run, are highly valued by its employees. Rising concerns for ecological issues, resource exhaustion, macroclimate change and fraudulent accounting practices, conscious employees working for such an entity can sense a higher level of attachment and commitment to it. Therefore, based on the discussion above, the relation between CSR and EOC is drawn upon SIT, which is much precise, and propose the following for the study.

H1:  Corporate social responsibility has a significant positive effect on employees’ organizational commitment. 

 

CSR and Employees’ Organizational Identification (EOI)

Ashforth and Mael (1989) termed EOI as a psychological course of an individual’s self-categorization. A strong sense of belongingness and self-definition are the key factors on the basis of which, employees categorize themselves with their firms (Tajfel et al., 1984). This deeply ingrained scope of categorization in an individual’s mind emerges from corporate associations and leads to stronger and higher levels of EOI (Bhattacharya & Sen, 2003; Brown et al., 2006).

Similarity and distinctiveness of identity are reflected together in identity attractiveness (Bhattacharya & Sen, 2003). The similarity in identity is narrowly associated with self-continuity (Pratt, 1998). Strong CSR linkage with the firm can detect the inconsistencies experienced by employees amongst their social, moral and commercial selves (Berger, Cunningham, & Drumwright, 2006). An admirable trait of an organization reflects its employee’s concept of its own self (Lichtenstein et al., 2004; Marin & Ruiz, 2007). Consequently, workers can recognize their selves as complete, cohesive individuals (Berger et al., 2006).

On the other hand, Identity distinctiveness is an attribute that is related to the organization and cannot be articulated by others. These attributes sometimes shape organizational identities, such as an organization interpreting itself as an ideal of its mission and values (Scott & Lane, 2000). This uniqueness is able to be converted into identity attractiveness (Bhattacharya & Sen, 2003). An organization’s identity attractiveness includes the discernments of this organization’s moral standards, values and social apprehensions by the employees, which mold in the process of formulating the identity attractiveness quite well (Greening & Turban, 2000). 

The affiliation between CSR and EOI is also proposed by SIT, which recommends a positive link between these two entities; this claim is also greatly supported in prior studies. The pursuit of individuals achieving and maintaining positive social identities is an everlasting endeavor (Aberson, Healy, & Romero, 2000), which are further derived and translated into memberships in various diverse assemblies (Ashforth & Mael, 1989). Amongst these clusters, membership in companies might be the utmost vital factor (Hogg & Terry, 2000). An organization’s corporate image and external repute are enhanced by its active involvement in philanthropic and social development activities, compelling even non-stakeholders to rate it highly (Brammer & Millington, 2005). In addition, the amount of respect and admiration with which a firm treats its employees influences their identification, as a result of the enhancement of perceived status inside an organization (Tyler & Blader, 2002). Preference in creating an identity by the employees is given to the firms, which have a positive image and enhance self-worth of its workers (Tajfel et al., 1984).

The association between CSR and employee’s organizational identification can be drawn upon SIT and Self-Categorization Theory, hence proposed as:

H2:  CSR is positively correlated with employee’s organizational identification.

 

Organizational Identification and Commitment (EOI and EOC)

The distinction between employee’s identifications towards his/her organization and commitment is quite subtle, one depicts a mental state, while the other represents an intention to involve in a certain behavior, which builds and maintain long term healthy relationships respectively (Rodrigo & Arenas, 2008). Therefore, it is safe to state that a mental frame, which results in subsequent behavior and eventually resulting in a psychological attachment towards the organization (Bhattacharya & Sen, 2003; Dutton, Dukerich, & Harquail, 1994; Kotler & Lee, 2008).

Another major distinction between identification and commitment of an employee towards their organization provided by SIT and Self-Categorisation theory is that, identification is highly flexible and the salience of the group, context and interactions play a sensitive role in its changing nature and scope, while the attitudes once developed and established are relatively stable (Pratt, 2001; Wagner & Ward, 1993).

Sources from which, employee’s organizational identification and commitment emerges are different (Pratt, 1998). The nature of employee’s organizational identification is contingent and is based a certain degree of perceived likelihood with the firm (Mael & Ashforth, 1992), on the other hand, the nature of employee’s commitment is more materialistic, which is based on the philosophy of exchange (Tyler & Blader, 2000). Similarly, the outcomes of both concepts are also different from each other. Employees having a higher level of identification with their organization will think and act with respect to the norms and values of the groups, despite the fact that they are not formally bound to do so by their job contracts or any other control mechanism, as these norms and values are incorporated in their self-concept. On the other hand, employees with higher levels of commitment have gravitated towards formal aspects of their jobs and supervision (Pratt & Foreman, 2000).

Following the notion of SIT, EOC is a crucial outcome of EOI, which is referred to as ‘‘an employee’s emotional attachment to, identification with, and involvement in the organization’’ (Meyer & Allen, 1991). Pratt (1998) particularly suggests that commitment is an attitude of an employee that originates from a cerebral perceptual construct called employee’s organizational identification. It can be assumed consequently that, employees with a higher level of identification with their organization are also highly committed, because of internal respect and external organizational prestige.

A statement, which is highly supported in the literature above, represents a positive association between EOI and EOC. Hence, the following hypothesis is proposed:

H3:  Employees’ organizational identification is positively related to employees’ organizational commitment.

 

EOI as a Mediator

As mentioned earlier, employee’s commitment increases when a firm engages itself in CSR initiatives rigorously, this commitment is further exhibited in higher levels of productivity and enhanced performance. It is also stated in the previous sections that EOI and EOC are both related together psychologically, where EOI is generally the antecedent or a predictor of employee’s organizational commitment. Therefore, there is a strong possibility that a bridge exists in the middle of CSR and EOC. 

Based on the literature and notion of SIT, the sense of pride of the employee, which results from identification with the firm engaged in positive, responsible activities leads to a change in the attitude of an employee, and eventually results in increased levels of commitment and loyalty towards the company. Therefore, an organization that invests in care, benevolence, generosity, compassion and well-being might have a direct or indirect impact, i.e., through organizational identification on its employees’ organizational commitment. Therefore, we propose that:

H4:  Employees’ organizational identification mediates the relationship between CSR and employees’ organizational commitment.

 

H4 Mediator

Research Methodology

Data Collection & Sampling

Telecommunication industry of Pakistan, i.e., all the cellular service provider companies were targeted for this study, because of their workplace formalities, organizational structures and active involvement in social and philanthropic activities. All these companies publish their social reports annually; therefore, the degree of formality of CSR policies and their dissemination across the organization cannot go unnoticed. Keeping in mind the complexity, intangibility and non-standardization of this study, employees serving in the top and middle-level management was selected. The total number of workforces in all four cellular companies is more than 6,000 approximately (Pakistan Telecommunication Authority).

Convenience-based non-probability sampling technique was used to choose and include the participants for this research, due to the widespread and uneven nature of the population. The total number of questionnaires distributed among all the employees was 300. In response to which, only 207 questionnaires were received, and data was sorted for further analysis.

 

Measures

A self-reported questionnaire adapted from prior studies and from a review of the literature in original English language was used to for all the measures in this research. There is no need to translate the questionnaire, as English is used comprehensively as a medium of exchange and instructions in foremost institutions as well as in organizations including private and non-private firms (Raja, Johns, & Ntalianis, 2004). A 5-point Likert scale ranging from 1 expressed strongly disagree, and 5 mentioned strongly agree, was used to record all the responses. Measurement scales used in the study are explained in the following sections. 

 

Corporate Social Responsibility

CSR measurement scale comprised of 14 items adopted from the studies of Lichtenstein et al. (2004); Maignan and Ferrell (2001); Montgomery and Stone (2009) to measure corporate social responsibility of an organization. Reliability measures for this scale, i.e., Cronbach’s Alpha was 0.94.

 

Employees’ Organizational Commitment

06 items scale was used from the studies of Marsden, Kalleberg, and Cook (1993) to measure employees’ organizational commitment. The scale’s Alpha was 0.82.

 

Employees’ Organizational Identification

06 items scale is used from the studies of Rettab, Brik, and Mellahi (2009) and Moksness (2014) to measure EOI, which also acted as a mediator influencing the linkage between CSR and EOC. Cronbach’s Alpha for this case was calculated to be 0.91.

 

Table 1. Reliability Statistics

Variables Cronbach’s Alpha (α)

No. of Items

CSR                                                                      0.940

14

OrgComm                                                             0.82                                                             

06

OrgIden                                                                 0.91                                              

06

 

Results

Confirmatory Factor Analysis

The validity of constructs was calculated by using Confirmatory Factor Analysis (CFA), adopting the standards provided by Anderson and Gerbing (1988). All the factor loadings were significant (p > 0.05), which means that the validity of all the constructs was satisfactory, and above the recommended threshold level of 0.5 (Hair Jr, 2006). The alpha values (Cronbach’s) were above the 0.7 (see table 1), the standard provided by Nunnally (1978) demonstrating internal reliability of the measurement scales being used. Hence, the reliability and validity of measurement scales were assessed appropriately and confirmed sufficiently.

 

Correlation Analysis and Descriptive Stats

Table 2. presents the correlation analysis among all the variables used in the current study along with a comprehensive description of descriptive statistics including mean scores, reliability analysis and standard deviation. All the coefficients (correlation) between study variables are in line to our hypothesized and posited relationships. CSR is positively correlated with EOC (r = 0.804, p < 0.05) and employee’s organizational identification (r = 0.812, p < 0.05). Similarly, the correlation between EOC and EOI is also statistically significant (r = 0.819, p < 0.05).

** means P<0.01, *means p<0.05 Alpha in parenthesis

 

Structural Equation Modeling and Testing Hypothesis

SEM was used in the current study to examine the hypothesis and analyze the direct and indirect relationships among our variables, as SEM is the technique, which combines various characteristics of factor analysis such as multiple regression analysis and estimates multiple dependence relationships simultaneously (Hair et al., 2006). The findings of the model fit indices and all the beta coefficients are revealed in the illustration below, along with the path diagram. All the values regarding the goodness of fit criteria (χ² = 1623.364, df = 296, χ²/df =1623.364/296 = 5.484 at p-value of 0.000, RMSEA = 0.147, CFI = 0.722, TLI = 0.695, SRMR = 0.070) meet the required and prerequisite criteria, which designates that the data fits the model fine.

On the basis of standardized path beta coefficients shown in the diagram below, the initial hypothesis proposed for the study H1, which states that CSR has a direct positive effect on EOC was rejected (β = 0.3, p > 0.05). However, H2 of the study, which states that CSR has a direct positive effect on EOI was supported by the results (β = 0.78, p > 0.05). Based on the findings H3 of the study, which states that EOI has a significant positive effect on EOC was also accepted (β = 0.62, p > 0.05).

 

Variables

No.of   Observations

Mean

Std.Dev.

OrgComm

CSR

OrgIden

1. Age

207

1.59

0.717

 

 

 

2. Qualification

207

1.63

0.813

 

 

 

3. Experience

207

2.37

0.724

 

 

 

4. OrgComm

207

3.471

0.698

1.0000 (0.827)

5. CSR

207

3.678

0.748

0.804*

1.0000 (0.940)

6. OrgIden

207

3.837

0.815

0.812*

0.819*

1.0000 (0.914)

Table 2. Mean Scores, Standard Deviations, Reliabilities, Correlation and Descriptive Stats

Mediation of EOI

To evaluate the mediation of EOI in the association between CSR and EOC, we used bootstrapping/resampling method recommended by Preacher and Hayes (2004). The reason for selection of this non-parametric approach is its superiority over other techniques for testing mediation such as Barron and Kenny technique (Baron & Kenny, 1986) and Sobel Test (Preacher & Hayes, 2004).

Based on this approach, we used 1000 bootstrapped sample and a correctional bias method at 95 % confidence intervals. If 95% confidence intervals for indirect effect does not contain zero (0), mediation is resolute (Preacher & Hayes, 2004). The following table demonstrates the results of the mediation analysis.

 

Table 3. Mediating effect of Organizational Identification

Path

Total Effect

Direct Effecta

Indirect Effectb

Lower Level

Upper Level

CSR        OrgIden--->OrgComm

 

0.7507**

0.3937**

0.3570**

0.2318

0.4958

CSR (Corporate social responsibility), OrgComm (EOC), OrgIden (EOI) 

aCSR--->Orgcomm

b(CSR--->OrgIden) × (OrgIden--->Orgcomm)

cDetermined by bootstrapping with bias correction

 

Based on the results above, CSR has both a direct and an indirect effect on EOC. The direct effect of CSR on EOC is 0.3937, which is significant at p<0.01. However, the variance explained by CSR in employee’s organizational commitment is (0.393), which means there is another variable(s) in the relationship sharing its variance. The indirect effect of CSR on EOC through the mediation of EOI was 0.3570, which is also significant at p<0.01, as both the upper and lower limits of the confidence intervals, do not contain zero or negative value. On the other hand, the total effect was calculated to be 0.7507 at a p-value of 0.0000, that is the total direct (non-mediated) and non-direct (mediated) effect of CSR on EOC. A unit change in CSR means 0.75 units change in EOC both in the same direction as the relationship is positive between these two variables. According to these results, the H4 for the study, which states that EOI plays a mediating role in the relationship between CSR and EOC, was confirmed and thus, accepted.

 

Discussion

This research reports and addresses the research gap in the literature by examining both the direct and indirect relationship of CSR on employee’s organizational commitment through organizational identification. Both of these links between CSR and employee’s organizational commitment are drawn upon the assumption made by the Social Identity Theory (Tajfel et al., 1984; Tajfel & Turner, 1986) and Self-Categorization Theory (Turner et al., 1987). Hypothesis for both the relationships was tested in the context of these two theories.

Findings of this study are twofold. First, it shows that CSR has a direct effect on employee’s organizational commitment. Secondly, there is also a mediation effect of organizational identification, which influences the relationship between CSR and EOC. Therefore, an indirect relationship between CSR and EOC through organizational identification is also statistically significant, as shown by the results above.

Hypotheses drawn upon the direct and indirect relationship between CSR and EOC with the mediation of EOI were affirmed. It means that CSR affects EOC, but there are other factors into play, which act as a bridge between these two variables and are responsible for influencing these attitudinal changes in an employee.

Increased levels of CSR initiatives cause its employee’s commitment to go up because of the increased sense of pride and confidence of the employee in the organization. This sense of pride emerges from the strong identification of employee with his/her organization engaged in such positive activities. Stronger and higher levels of identification with the organization yield greater commitment, which eventually results in their enhanced productivity.

Finally, the main purpose of this study was to find out the central role of EOI in the affiliation between CSR and EOC. Based on the results of bootstrapping, strong support for our claim was found. It was thus, concluded from the findings that employee’s organizational identification acts as a bridge in the relationship between CSR and employee’s organizational commitment.

A firm’s active involvement in philanthropic activities, its external reputation and prestige, deep growing concerns for environment and community at large and a nourishing working culture fulfills employees’ higher and subtle level of needs such as self-esteem and social identity needs. This satisfaction consequently enables an employee to work for his/her organization more devotedly, diminishing various organizational problems such as lower absenteeism, high turnover costs, intense competition and losing valuable tacit and explicit knowledge to the competition. This research also supports previous literature and contribute to the subject matter that claims that employee’s organizational identification is a psychological, rational and thoughtful construct that causes attitudes such as employees’ organizational commitment (Pratt, 1998). Therefore, the findings support both the social identity, and self-categorization mechanisms, representing a direct and indirect relationship between CSR and organizational commitment through EOI. 

 

Managerial Implications

This research proposes potential and impending implications for the managers in the firms, particularly in the context of Pakistan. Employees nowadays are considered as strategic assets of an organization, thus keeping them involved and engaged, increases their identification and eventually their commitment. Investing heavily in CSR initiatives should be one of the most important priorities of organizations, as it is not only a good thing to do, but it is also necessary (Bhattacharya & Sen, 2004). CSR should be used as a company’s strategic direction because it can yield promising results by enhancing employee’s performance and organizational productivity.

Identifying employee’s specific needs and preferences by analyzing the culture of the workgroup through internal surveys is a good technique to recognize their expectations from the organization in the domain of CSR. It is exceptionally imperative that organizations should focus on the communication of their CSR initiatives to the employees, as some of the employees are not even aware of these initiatives, which causes a hindrance in their perception. This information could be disseminated to the employees in the shape of rules, policies and organization code of conduct. Decision-making should include the frontline employees as well, as they are the ones with updated market information and immediate feedback from the customers.

 

Limitations and Future Directions

This research contributes to the existing body of knowledge and addresses the research gap significantly by providing empirical evidence and prudent theoretical justifications in the context of Pakistan, however, it is not free from limitations. The data collected for this research was too sample-specific and only focused on one industry, i.e., Telecom industry. This study should be conducted in the future by focusing on various other industries and civil organizations of the country to encompass the political aspects as well. Focusing on a single sample for this study makes generalizability limited; therefore, in future diverse and large samples should be used to generalize the findings for the whole population in a much better manner. Secondly, the data collected was cross-sectional through a self-reported questionnaire and thus, cannot be free of any human or measurement error. However, to tackle this situation, we conducted CFA to measure and establish the validity of our constructs. Longitudinal data should be used in the future for better analysis and objective measures.

Another major limitation in this study was the sample size, which we calculated and standardized to be 350 at first, but because of the non-availability of data and reluctance of the respondents to fill in the questionnaire reduced the sample size to 220 approximately including the missing data. Furthermore, the study includes only one mediator, i.e., employee’s organizational identification, CSR should be measure with other mediators in future researches such as organization culture, brand image, trust, emotions, organization citizenship behavior. CSR, instead of the independent variable can also be used in moderation or mediation to a variety of relationships in future studies. Studies in the future should focus on serial mediation process in order to explain the justify the concept of CSR in an effective manner.

 

 


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