A Multilevel Theory of Social Change in Organizations

Group 9

Key Issues Addressed

Why organizations are increasingly engaging in CSR activities?

Who are the actors who push an organizations CSR activities?

What are the motivations for these actors?

Regional and Cultural influences on attitude towards CSR

A multilevel theoretical model to explore how social change can be triggered by organizations engaging in CSR activities

Identifying actors or stakeholders

Who are Stakeholders?
All those who impact, are impacted by, or have a legitimate interest in the Companys actions and performance Or Any group or individual who can affect or is affected by the achievement of the organizations objectives

Types of Stakeholders

Primary Stakeholders
Usually are those that engage in economic transactions with the business mainly those who are necessary for survival E.g.: customers, suppliers, creditors, and employees, government, communities

Secondary Stakeholders
Do not engage in direct economic exchange with the business - but are affected by or can affect its actions, yet are not crucial for survival E.g: general public, competitors and the media

Different Levels or Actors

Micro Individual Employees Meso Organizational Owners, Managers & Consumers Macro National Government Supra Transnational Intergovernmental Entities & NGOs

Motivations
Three classes of motivations based on the multiple needs model developed in 2001*
Self-Interest Driven

Instrumental

Relational

Concerned with relationship among group members

Moral

Concerned with Ethical standards and moral principles

* Cropanzano, Rupp, Mohler, and Schminke (2001)

Individual level
Key Actor: Employees
- CSR becomes a heuristic for fairness - Employees perceived fairness of work environment affect: - Employee well being Job Satisfaction , health & emotion - Relevant outcomes commitment, turnover, performance - Perceptions of job applicants in term of CSR performance impacts their willingness to join the firm

Instrumental Motives
Psychological need for Control
General concerns for fairness are extrapolated into fairness for employees Control helps to maximize the favourability of outcomes

Individual level (cont)

Relational Motives
CSR fosters positive social relationships bring people together Need for belongingness Quality of management relationships have an impact on self-worth and sense of identity

Moral Motives
Need for meaningful existence Independent of self interest Basic respect for human dignity and self-worth

Individual level Interactions Interplay

In situations of high importance, with serious consequences, employees are likely to be motivated by moral principles Need for Meaningful Existence > Need for belongingness > Need for Control

Organizational Level
Assumptions
Firms do not exist in vacuum Different mechanisms exist to sustain firm survival and efficiency
Insiders (Direct Power)
Owners(shareholders) Managers TMT (Top management team)

Outsiders (Voice/Purchasing Power)

Consumers

Organizational Level Insider motives

Instrumental motives
Shareholder Model (Anglo-American) CSR directly related to competitiveness such as reputation of the firm Stakeholder Model (Continental) When CSR efforts are compatible with long term profitability

Relational Motives
Shareholder Model (Anglo-American) Imitation of peers in order to gain social legitimation for survival Long term investors e.g. mutual funds concerned with long term vision and environmental and social performance Stakeholder Model (Continental) Owners act to ensure well being of different stakeholders engaged in a relationship with the firm

Moral Motives
Stewardship Theory Personal morality of the TMT e.g. Ford Worlds largest recycler of automobile plants

Organizational Level Outsider motives

Instrumental motives
Consumers might have some instrumental motives When environmental stewardship creates products that are perceived as healthier

Relational Motives
Collective Identity of consumers Imitation of peers in order to gain social legitimation for survival Long term investors e.g. mutual funds concerned with long term vision and environmental and social performance

Moral Motives
Existence of ethical Shopping movement mobilized social group of consumers Power to damage brands by boycotting products e.g. Nike Consumers will pay more for a product from a good company - (Sen, Gurhan-Canli, & Morwitz,2001)

Organizational level Interactions Interplay

A downward hierarchical ordering of motives among insider organizational actors (i.e., TMTs) will lead to stronger pressure on firms to engage in social change through CSR.

An upward hierarchical ordering of motives among outsider organizational actors (i.e., consumers) will lead to stronger pressure on firms to engage in social change through CSR.

National level
Key Actor: Government
- Broader coverage than voluntary initiatives - Laws set social expectations about responsible corporate behaviour

Instrumental Motives
Competitive advantage
Fuelling innovation Enhancing customer reputation Creating high performance workplaces Maintaining important intangible assets

Risk Management Strategy

Flagship companies representing the country internationally

National level (cont)

Relational Motives
Responsibilities to promote social cohesion and to address problems of social exclusion Responsibility to foster Social partnership among labour, business, and communities

Moral Motives
Collective responsibility for social conditions

National level Interactions Interplay

Total government CSR motivation can be a function of any combination of motivations and that no particular hierarchical ordering

Transnational level Interactions Interplay

Different actors in the transnational space have a mixture of motivations, the relative priorities are different for each actor E.g.: For NGOs, moral altruism is a stronger motive, followed by relational and then instrumental while this is reversed for CIG Broad Social Justice or Environmental Mission Labour unions a subset Have a specific CSR focus or broader pro business focus
Corporates

NGO

Corporate interest groups Press companies to consider CSR

IGOs

Discourses among Business, Civil Society & governments

Transnational level Intergovernmental Entities

Competitiveness Collective Responsibility

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Social Cohesion

Compensatory interactions

Transnational level Corporate interest groups & NGOs

Power (Obtain scarce resources) Interest alignment, collaboration & quasi regulation

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Altruism

Multiplicative interactions

Examples
Conflicting Motives Between Employees and Organizations
Interest alignment, collaboration & Paradox regulation quasi

High pressure on organizations to engage in CSR

At employee level: High morality based motives among employees At organizational level: High instrumental needs among insiders Altruism

Power (Obtain scarce resources)

Highly moral employees look for firms with corresponding values which may not engage in CSR Most social change will occur when moral employees work for instrumental organizations Multiplicative This makes employee initiated social change difficult interactions

Examples (contd)
Contradictory Yet Complimentary Motives of Management and Consumers
Interest alignment, collaboration & quasi regulation Paradox

Power (Obtain scarce resources)

High pressure on organizations to engage in CSR

Consumer level: Amount of moral concerns among consumers Altruism At organizational level: High instrumental needs among insiders

Firms relational High consumer motivations within demand for their industry group socially responsible might outweigh their instrumental products motivations incentivizes firms Multiplicative to produce such Firms motivated by relational motives interactions products

Examples (contd)
Amplifying Motives of Governments, NGOs, and Organizations

Interest alignment, collaboration & quasi regulation Governmental laws and policies enacted for CSR

Power (Obtain scarce resources)

highly depend on
business culture in the country consumers interests Institutional investors actions Corporate governance regime Altruism Multiplicative NGOs effectiveness interactions Individualistic versus collectivist nature of the countrys underlying political and social philosophy

Conclusion
Account for multiple actors across different levels to understand social change
Power (Obtain scarce resources)

Interest alignment, collaboration & quasi impede and Interactions across and within levels can bothregulation facilitate

CSR

CSR practices are diffused around the world

Altruism

Multiplicative interactions

Limitations
The study is not fully comprehensive taking into account all levels

Interest alignment, collaboration & Model does not differentiate among companies with differentregulation seriousness quasi degrees of CSR
Model does not cover the intensity of CSR efforts and its consequences due to the applied pressure Model does Altruism intensity of CSR efforts and its consequences due to the applied not cover the Multiplicative pressure

Power (Obtain scarce resources)

interactions

Relative efficacy of top down influences on firm behavior versus the bottom up influence

Thank You!
Altruism

Multiplicative interactions