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Business for Good? An Investigation into the Strategies Firms Use to Maximize the Impact of Financial Corporate Philanthropy on Employee Attitudes

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Abstract

Most research on the corporate philanthropy of organizations has focused on the external benefits of such initiatives for firms, such as benefits for firm reputation and opportunities. However, many firms justify their giving, in part, due to the positive impact it has on their employees. Little is known about the effectiveness of such efforts, or how they can be managed strategically to maximize impact. We hypothesize a main effect of office-level corporate philanthropy on average employee attitudes in that office, but also investigate three strategies that offices may use to enhance this impact. Testing our hypotheses with 3 years of data on attitudes of an average of 14,577 employees in 53 offices we find support for the main effect, but mixed support for the specific strategies used to enhance impact.

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Notes

  1. This number is the average of the years in our sample.

  2. Our focus on the office level of analysis was also driven by a limitation in the data. Specifically, although data on employee attitudes was collected at the individual level, to preserve anonymity and ensure truthful answers, the outside vendor that collected this attitude data for the firm did not provide the organization with individual-level data. Thus, we focused our theorizing and research design at the office level of analysis, rather than a nested multi-level of analysis of offices and individuals (i.e., HLM modeling).

  3. A potential concern in any paper is the degree to which the independent variables are each unique measures in the context of the data. In this case, the question involves the degree to which the amount of financial corporate philanthropy and the strategies used to direct such giving are independent from each other. In our data, the average dyadic correlation between these four measures is 0.15. Further, in principal components analysis, the four measures each load independently, with no single factor explaining a significant proportion of the overall variance.

  4. To further assess the internal consistency of this scale, we also conducted principal components analysis to investigate the factor structure exhibited in the measurement of these items. Only one factor emerged with an eigenvalue greater than 1.0, which accounted for 73 % of the variance (eigenvalue = 2.94). This provided further empirical evidence that these four items are best analyzed as a single construct. In addition, in a robustness sensitivity analysis, we examined models in which this extracted component was substituted for the 4-item scale as our indicator of employee work attitudes. Not surprisingly, we found the same pattern of results.

  5. We also controlled for office size. However, to avoid redundancies in the model in which office size was present in multiple terms (the scaled IV and moderator variables, as well as entered in as a control), we do not include office size as a control in our primary presented models. However, we tested the sensitivity of our models to the inclusion of office size in these models. The results are substantively unchanged with office size included or excluded from the models.

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Authors and Affiliations

  1. Department of Management, Mendoza College of Business, Notre Dame University, 360A MCOB, Notre Dame, IN, 46556, USA

    Emily S. Block

  2. Kedge Business School, Rue Antoine Bourdelle, BP 921, 13288, Marseille Cedex 9, France

    Ante Glavas

  3. Department of Management, Mendoza College of Business, Notre Dame University, 365 MCOB, Notre Dame, IN, 46556, USA

    Michael J. Mannor

  4. Department of Health Policy and Management, Fielding School of Public Health, University of California Los Angeles, 650 Charles Young Drive S., Los Angeles, CA, 90095, USA

    Laura Erskine

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Correspondence to Emily S. Block.

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Block, E.S., Glavas, A., Mannor, M.J. et al. Business for Good? An Investigation into the Strategies Firms Use to Maximize the Impact of Financial Corporate Philanthropy on Employee Attitudes. J Bus Ethics 146, 167–183 (2017). https://doi.org/10.1007/s10551-015-2930-8

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