Doing Good Is Not Enough, You Should Have Been Authentic: Organizational Identification, Authentic Leadership and CSR

Abstract

Previous studies on the relationship between corporate social responsibility (CSR) and organizational performance have emphasized how CSR influences the external stakeholders such as shareholders, customers, and local communities to explain the association. Thus, it is relatively less studied how CSR influences internal stakeholders, which ultimately accrue to organizational performance. Grounded on institutional theory which proposes that institutional enablers such as CSR activities affect macro-level outcomes (i.e., organizational performance) through micro-level mechanisms (i.e., attitudes or behaviors of members), we argue that internal processes are critical to explaining the CSR-performance link. Using 2-wave time-lagged survey data of 301 employees from various companies in South Korea, we first investigate how organizational identification (OI) mediates the CSR-performance link. In addition, we also investigate how authentic leadership moderates the link between CSR and OI. The results showed that OI is an important internal process that CSR enhances for organizational performance. In addition, authentic leadership positively moderated the effect of CSR on OI. Our results suggest that we need to understand internal intermediating mechanisms as well as critical contextual factors to elaborately explain the relationship.