Abstract
Corporate social responsibility (CSR) functions as a positive signal to stakeholders that a firm is a responsible corporate citizen. However, CSR is increasingly becoming an ambiguous signal of organizational goodwill because many companies engage in CSR purely out of self-interest, rather than genuine altruism. In this paper, we integrate attribution theory with signaling theory to explore how stakeholders react when they receive additional signals that contradict the company’s intended positive CSR signal. Specifically, we argue that morally questionable CEO ethics in the media negatively influences stakeholders’ CSR motive attributions, which in turn results in increased cynicism that ultimately impacts CSR support intentions and behaviors. We find support for our hypotheses in a quasi-experimental study of stakeholder media exposure to different types of CEOs (morally questionable, ethical, and ethics-unknown). Our findings demonstrate that stakeholders consider CEO ethics an important signal of CSR motives, and will shun the CSR initiatives of morally questionable CEOs.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Explore related subjects
Discover the latest articles, news and stories from top researchers in related subjects.Notes
One example of corporate attempts to generate interest and publicity with CSR initiatives occurred on March 3, 2016, when sixteen organizations, including Google, eBay, and JetBlue, formed an alliance to tackle illegal trafficking of endangered wildlife.
It is conceivable that participants who are currently working, compared to those not working, were more aware of the business environment by virtue of their embeddedness within an organization (34.3 % of the sample were currently working). It is further conceivable that participants in more senior years of their studies are more aware of the business environment by virtue of their learning during their business studies compared to those in earlier years of their studies (participants program year: 1.4 % in year one; 22.5 % in year two; 19.2 % in year three, 40.4 % in year four; 16.4 % in an MBA program). If this was the case, we would expect unemployed and junior-year participants to interpret signals sent by the organization differently. Counter to this possibility, there were no significant relationships between these demographic variables and the constructs of interest in this study. As such, we are confident that our full sample may be considered stakeholders that are equally influenced by interactions with companies in the public domain.
We tested an alternate, partially mediated model that links CEO leadership ethics directly to organizational cynicism and the dependent variables. In this model, instrumental and moral motive attributions were also linked directly to the dependent variables. This partial mediation model demonstrated great fit to the data, χ 2 (112) = 165.82, p < 0.01, Δχ 2 (112) = 36.17, p < 0.01. However, this model resulted in very modest improvements in the fit indices, ΔCFI = 0.018, ΔTLI = 0.016, and ΔRMSEA = 0.005. Moreover, some of the results in the partially mediated model are less easily interpretable. For example, the negative link between organizational cynicism and volunteer intentions—observed in the correlation matrix and the fully mediated model—becomes positive in the partial model. Moreover, organizational cynicism, the only significant predictor of donation behavior—observed in the correlation matrix and the fully mediated model—becomes marginally significant (β = − 0.51, p = 0.09) in the partially mediated model. For these reasons, we opted for our hypothesized fully mediated model, which is the more parsimonious and interpretable of the two. This is in line with the rule of thumb in the SEM literature that more parsimonious models with fewer estimated parameters are better than more complex models (e.g., Bentler and Mooijaart 1989; Kumar and Sharma 1999). This rule of thumb is particularly important if the parsimonious model is most closely aligned with the proposed theoretical model and if the less parsimonious model offers minimal gains in model fit indicators.
References
Aguilera, R., Rupp, D., Williams, C., & Ganapathi, J. (2007). Putting the S back in corporate social responsibility: A multilevel theory of social change in organizations. Academy of Management Review, 32, 836–863.
Akerlof, G. A. (1970). The market for “lemons”: Quality uncertainty and the market mechanism. Quarterly Journal of Economics, 84, 488–500.
Andersson, L. M. (1996). Employee cynicism: An examination using a contract violation framework. Human Relations, 49, 1395–1418.
Bansal, P., & Roth, K. (2000). Why companies go green: A model of ecological responsiveness. Academy of Management Journal, 43, 717–736.
Becker-Olsen, K. L., Cudmore, B. A., & Hill, R. P. (2006). The impact of perceived corporate social responsibility on stakeholder behavior. Journal of Business Research, 59, 46–53.
Bentler, P. M., & Mooijaart, A. (1989). Choice of structural model via parsimony: A rationale based on precision. Psychological Bulletin, 106, 315–317.
Bergh, D. D., & Gibbons, P. (2011). The stock market reaction to the hiring of management consultants: A signalling theory approach. Journal of Management Studies, 48, 544–567.
Bolino, M. C., Kacmar, K. M., Turnley, W. H., & Gilstrap, J. B. (2008). A multi-level review of impression management motives and behaviors. Journal of Management, 34, 1080–1109.
Branco, M. C., & Rodrigues, L. L. (2006). Corporate social responsibility and resource-based perspectives. Journal of Business Ethics, 69, 111–132.
Brønn, P. S., & Vrioni, A. B. (2001). Corporate social responsibility and cause-related marketing: An overview. International Journal of Advertising, 20, 207–222.
Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97, 117–134.
Brown, T. J., Dacin, P. A., Pratt, M. G., & Whetton, D. A. (2006). Identity, intended image, construed image, and reputation: An interdisciplinary frame-work and suggested terminology. Journal of the Academy of Marketing Science, 34, 99–106.
BSR/Cone. (2008). Corporate responsibility in a new world survey. http://www.conecomm.com/stuff/contentmgr/files/0/3f834783347d770e69d66e51cb6d7037/files/bsr_cone_2008_survey.pdf. Accessed August 21, 2015.
Cai, Y., Jo, H., & Pan, C. (2012). Doing well while doing bad? CSR in controversial industry sectors. Journal of Business Ethics, 108, 467–480.
Carroll, A. B. (1999). Corporate social responsibility evolution of a definitional construct. Business and Society, 38, 268–295.
Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2011). Signaling theory: A review and assessment. Journal of Management, 37, 39–67.
Crane, A., & Matten, D. (2015) Has Tim Hortons given up on sustainability? http://craneandmatten.blogspot.ca/2015/04/has-tim-hortons-given-up-on.html. Accessed January 21, 2016.
Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22, 20–47.
De Hoogh, A. H., & Den Hartog, D. N. (2008). Ethical and despotic leadership, relationships with leader’s social responsibility, top management team effectiveness and subordinates’ optimism: A multi-method study. The Leadership Quarterly, 19, 297–311.
Devinney, T. M. (2013). Is microfoundational thinking critical to management thought and -practice? Academy of Management Perspectives, 27, 81–84.
Ellen, P. S., Webb, D. J., & Mohr, L. A. (2006). Building corporate associations: Stakeholder attributions for corporate socially responsible programs. Journal of the Academy of Marketing Science, 34, 147–157.
Foreh, M. R., & Grier, S. (2003). When is honesty the best policy? The effect of stated company intent on stakeholder skepticism. Journal of Stakeholder Psychology, 13, 349–356.
Godfrey, P. C., Merrill, C. B., & Hansen, J. M. (2009). The relationship between corporate social responsibility and shareholder value: An empirical test of the risk management hypothesis. Strategic Management Journal, 30, 425–445.
Groza, M. D., Pronschinske, M. R., & Walker, M. (2011). Perceived organizational motives and consumer responses to proactive and reactive CSR. Journal of Business Ethics, 102, 639–652.
Hogg, M. A. (2001). A social identity theory of leadership. Personality and Social Psychology Review, 5, 184–200.
Johnson, J. L., & O’Leary-Kelly, A. M. (2003). The effects of psychological contract breach and organizational cynicism: Not all social exchange violations are created equal. Journal of Organizational Behavior, 24, 627–647.
Jones, D., Willness, C., & Madey, S. (2014). Why are job seekers attracted by corporate social performance? Experimental and field tests of three signal-based mechanisms. Academy of Management Journal, 57, 383–404.
Jory, S. R., Ngo, T. N., Wang, D., & Saha, A. (2015). The market response to corporate scandals involving CEOs. Applied Economics, 47, 1723–1738.
Kanter, D., & Mirvis, P. (1989). The cynical Americans: Living and working in the age of discontent and disillusion. San Francisco: Jossey-Bass.
Kelley, H. H., & Michela, J. L. (1980). Attribution theory and research. Annual Review of Psychology, 31, 457–501.
Kumar, A., & Sharma, S. (1999). A metric measure for direct comparison of competing models in covariance structure analysis. Structural Equation Modeling: A Multidisciplinary Journal, 6, 169–197.
Lee, K., Oh, W. Y., & Kim, N. (2013). Social media for socially responsible firms: Analysis of fortune 500’s twitter profiles and their CSR/CSIR ratings. Journal of Business Ethics, 118, 791–806.
Love, E. G., & Kraatz, M. (2009). Character, conformity, or the bottom line? How and why downsizing affected corporate reputation. Academy of Management Journal, 52, 314–335.
Manner, M. (2010). The impact of CEO characteristics on corporate social performance. Journal of Business Ethics, 93, 53–72.
Mills, J. H. (2003). Making sense of organizational change. London, UK: Routledge.
Ogunfowora, B. (2014). The impact of ethical leadership within the recruitment context: The roles of organizational reputation, applicant personality, and value congruence. Leadership Quarterly, 25, 528–543.
Oh, W. Y., Chang, Y. K., & Cheng, Z. (2016). When CEO career horizon problems matter for corporate social responsibility: The moderating roles of industry-level discretion and blockholder ownership. Journal of Business Ethics, 133, 279–291.
Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24, 403–441.
Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88, 879–903.
Prabhu, J., & Stewart, D. W. (2001). Signaling strategies in competitive interaction: Building reputations and hiding the truth. Journal of Marketing Research, 38, 62–72.
Ruef, M., & Scott, W. R. (1998). A multidimensional model of organizational legitimacy: Hospital survival in changing institutional environments. Administrative Science Quarterly, 43, 877–904.
Skarmeas, D., & Leonidou, C. N. (2013). When consumers doubt, Watch out! The role of CSR skepticism. Journal of Business Research, 66, 1831–1838.
Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87, 355–374.
Spence, M. (2002). Signaling in retrospect and the informational structure of markets. American Economic Review, 92, 434–459.
Tim Hortons. (2014). Sustainability and responsibility: 2014 Performance Highlights. http://sustainabilityreport.timhortons.com/pdf/2014-performance-report.pdf. Accessed January 21, 2016.
Turban, D. B., & Greening, D. W. (1997). Corporate social performance and organizational attractiveness to prospective employees. Academy of Management Journal, 40, 658–672.
Vanhamme, J., & Grobben, B. (2009). “Too good to be true!”. The effectiveness of CSR history in countering negative publicity. Journal of Business Ethics, 85, 273–283.
Waldman, D. A., Siegel, D. S., & Javidan, M. (2006). Components of CEO transformational leadership and corporate social responsibility. Journal of Management Studies, 43, 1703–1725.
Walsh, G., Mitchell, V. W., Jackson, P. R., & Beatty, S. E. (2009). Examining the antecedents and consequences of corporate reputation: A customer perspective. British Journal of Management, 20, 187–203.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Ogunfowora, B., Stackhouse, M. & Oh, WY. Media Depictions of CEO Ethics and Stakeholder Support of CSR Initiatives: The Mediating Roles of CSR Motive Attributions and Cynicism. J Bus Ethics 150, 525–540 (2018). https://doi.org/10.1007/s10551-016-3173-z
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-016-3173-z