European Management Journal 32 (2014) 916927

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European Management Journal

j o u r n a l h o m e p a g e : w w w. e l s e v i e r. c o m / l o c a t e / e m j

Employees response to corporate social responsibility: Exploring the

role of employees collectivist orientation
Mariam Farooq a, Omer Farooq b, Sajjad M. Jasimuddin b,*
a
b

Lahore Business School, The University of Lahore, Pakistan

Kedge Business School, Domain de Luminy, BP 921, 13288 Marseille Cedex 9, France

A R T I C L E

I N F O

Article history:
Received 13 May 2013
Accepted 1 March 2014
Available online 16 April 2014
Edited by Michael Haenlein
Keywords:
Corporate social responsibility
Organizational identication
Collectivism
Employees knowledge sharing behavior

A B S T R A C T

Since the extant literature largely ignores the conditions that moderate the impact of CSR on employees related outcomes, we examine the moderating effect of employees collectivist orientation on the
relationship of CSR. Most specically, this study explores how individual employee differences moderate the inuence of CSR on employee behavior. Using self-reports of 378 employees we examined how
employees collectivist orientation moderates the relationship of CSR on knowledge sharing behavior through
organizational identication. Three of the four components (i.e., community, employees, and consumers) of CSR positively affect employees organizational identication and knowledge-sharing behavior.
However, while the effects of community-related CSR actions on the employees outcomes are stronger
for individualistic employees, the effect of employee-related CSR actions on organizational identication is stronger for collectivist employees. The ndings are unique in the sense that we show empirically
that different employees are inuenced by different types of CSR actions. The study therefore suggests
that the internal affects of CSR activities depend on the nature of the employees witnessing them.
2014 Elsevier Ltd. All rights reserved.

Introduction
With the rapid increase of corporate social responsibility (CSR)
practices in many rms, a question about the way in which CSR
affects employees attitudes and behaviors has become crucial. We
regard employees as primary stakeholders, who execute CSR strategies, and are directly involved in CSR programs. It is of interest
to investigate how changing organizational realities affect them. A
few studies (i.e. Farooq, Payaud, Merunka, & Valette-Florence, 2013;
Peterson, 2004; Rego, Leal, Cunha, Faria, & Pinho, 2010; Stites &
Michael, 2011; Turker, 2009) have attempted to answer such question, examining the effects of perceived CSR on organizational
commitment. For example, Stites and Michael (2011) denote the positive effects of perceived CSR on organizational commitment, while
Valentine and Fleischman (2008) consider the effect of CSR on employees job satisfaction. These studies rely on social identity theory
to explain the effect of CSR on employee outcomes, concentrating
on organizational commitment.
Yet scholars have paid little attention to the key variables that
constitute the social identity framework. It is signicantly different form of organizational commitment as it reects individuals

* Corresponding author. Tel.: +33 (0) 491827944/658537495/+44 07952544785;

fax: +33 (0) 491827821.
E-mail address: mariam.farooq@lbs.uol.edu.pk (M. Farooq), omer.farooq@
kedgebs.com (O. Farooq), sajjad.jasimuddin@kedgebs.com (S.M. Jasimuddin).
http://dx.doi.org/10.1016/j.emj.2014.03.002
0263-2373/ 2014 Elsevier Ltd. All rights reserved.

self-denition, while commitment does not (Ashforth & Mael, 1989;

Riketta, 2005; Van Knippenberg & Sleebos, 2006). It is appropriate
to examine the effect of CSR on organizational identication as a
means to predict employee behaviors. A few recent studies demonstrate that CSR initiatives may foster organizational identication
(Farooq et al., 2013; Glavas & Godwin, 2013; Kim, Lee, Lee, & Kim,
2010). However, the theoretical approach of most of these studies
leaves the exact nature of this relationship unclear. Therefore, a comprehensive study is needed to explore the question: how does
perceived CSR inuence the organizational identication of employees? The previous studies also largely ignore the effect of
perceived CSR on employee behaviors. From the managerial as well
as rm performance perspectives, it is always useful to understand the determinant of employees behavioral outcomes at
workplace. The research on the attitudebehavior link suggests that
attitudes do not always become behaviors, due to individual, social,
and cultural factors (Bentler & Speckart, 1979; Zanna, Olson, & Fazio,
1980). To address this gap, we examine the direct effects of CSR, as
well as its indirect effects through the mediation of organizational
identication, on employees knowledge sharing behavior. Knowledge sharing among employees is considered essential for knowledge
management (Jasimuddin, Connell, & Klein, 2012).
The previous research has not explored the conditions that affect
the relationship of CSR and employees outcomes. For this reason,
we examine the moderating effect of employees cultural characteristics on the CSR-employees link. We incorporate employees
collectivist orientation in our study, with an aim to examine how

M. Farooq et al./European Management Journal 32 (2014) 916927

it moderates the effects of CSR on organizational identication and

knowledge-sharing behaviors. We consider collectivism orientation particularly relevant in relation to the social identity mechanism
in that both collectivism and social identity explain an individuals behavior in a group. Moreover, collectivism is an individual
cultural characteristic, but it can broadly classify the people of developed versus developing countries (Triandis, Bontempo, Villareal,
Asai, & Lucca, 1988). By examining the moderating effect of collectivism, we will be able to understand how employees react to CSR
in developing countries vis-a-vis people of developed countries.
Therefore, this research may assist managers of European multinational corporations in formulating effective CSR strategy while
managing global workforce, particularly in developing countries. To
best of our knowledge, this study is the rst of its kind to our knowledge in suggesting that the effects of CSR on employees behaviors
depend on employees collectivist orientation.
We further investigate the differential effects of four components of CSR (i.e., CSR actions related to environment, community,
consumers, and employees) on organizational identication and
knowledge sharing behavior. Some CSR actions are focused on internal stakeholders whereas other actions are focused on external
stakeholders. It is expected that these components may inuence
employees outcomes differently. We use different facets of social
identity theory (external prestige as well as internal respect) to
develop our theoretical framework in order to understand the inuences of different CSR components on employees. Since the
previous studies have used only prestige based mechanism, the
current study adds new insights in this stream of literature by offering different framework for different components. In addition,
understanding differential effects is also useful from managers perspective because it reveals the relative importance of these
components for employees which may help managers formulate
their CSR strategies effectively.
Literature review
Corporate social responsibility
Corporate social responsibility (CSR) is one of the central issues
for the organizations of the 21st century that describes the role of
business in a society (Vilanova, Lozano, & Arenas, 2008). In spite
of the growing signicance of CSR, the literature still lacks its commonly accepted denition (Carroll, 1991; Garriga & Mel, 2004).
While illustrating the challenges associated with the construct of
CSR, Henderson (2001, p. 21) describes that there is no solid and
well-developed consensus which provides a basis for action. The
lack of an all-embracing denition of CSR (WBCSD., 2000, p. 3)
and subsequent diversity and overlap in terminology, denitions,
and conceptual models hamper academic debate and ongoing
research (Gbbels, 2002).
Carroll (1979, p. 500) denes the CSR as the social responsibility of business encompasses the economic, legal, ethical and
discretionary expectations that society has of organizations at a given
point of time. Some scholars (Matten & Crane, 2005; McIntosh,
Thomas, Leipziger, & Coleman, 2002) do not endorse Carrolls interpretation of CSR, arguing that CSR should be beyond economic
and legal responsibilities because every business must practice them.
For instance, Matten and Moon (2008, p. 405) suggest that CSR is
differentiated from business fulllment of core prot-making responsibility and from the social responsibilities of government.
Similarly, McWilliams and Siegal (2001, p. 117), also dene CSR as
actions that appear to further some social good, beyond the interests of the rm and that which is required by law. Excluding the
economic and legal component, we use the denition of Waldman,
Siegel, and Javidan (2006, p. 1703), who state CSR as actions on
the part of the rm that appear to advance, or acquiesce in the pro-

917

motion of some social good, beyond the immediate interests of the

rm and its shareholders and beyond that which is required by law.
In this regard, Tuker (2009) proposes a CSR model which incorporates the stakeholder framework, classifying CSR actions into four
main categories: (i) CSR to social and non social stakeholder, (ii) CSR
to consumers, (iii) CSR to employees, and (iv) CSR to government.
Drawing on the denition of Waldman et al. (2006), we rely on only
the following three dimensions of the Turkers (2009) model:

CSR to social and nonsocial stakeholders represents the responsibility of a business toward society and the natural environment.
CSR to employees represents a rms actions that ensure the wellbeing and support of its employees through good working
condition, including career opportunities, organizational justice,
family-friendly policies and training and development.
CSR to customers is the responsibilities of a rm toward its consumers. It includes product safety, customer care, and handling
customer complaints beyond the law.

Corporate social responsibility and employees outcomes

In this paper, we seek to understand the relationship between
employee perceptions of CSR, organizational identication and
knowledge sharing behavior. Over the last few years, a small body
of literature has emerged that focuses on how employees perception of CSR impacts their work outcomes. One strand of this literature
is concerned with how CSR affects employer attractiveness to prospective employees. Albinger and Freeman (2000) have found that
corporate social performance is positively related to employer attractiveness among job seekers. Others (e.g., Greening & Turban,
2000; Turban & Greening, 1997) also have shown that CSR perception enhances the attractiveness of the organization for the job
seekers. Consequently, socially responsible companies are successful in attracting the large pool of job seeking candidates. In this
context, Greening and Turban (2000) argue that the observed link
between CSR and employer attractiveness can be explained in terms
of the positive signal that CSR practice sends to prospective employees about working norms inside an organization.
The second strand of literature on CSR and employee outcomes focuses on how CSR affects various attitudes of current
employees. Riordan, Gatewood, and Bill (1997) show that a positive corporate image is associated with the increased job satisfaction
and decreased turnover intentions among a sample of nonmanagerial employees. Valentine and Fleischman (2008) explain that
the perceived CSR is positively correlated with job satisfaction among
a sample of business managers. In their studies of the cultural antecedents of corporate citizenship, several researchers (e.g. Maignan
& Ferrell, 2001; Maignan, Ferrell, & Hult, 1999) have found that proactive citizenship is associated with high levels of employee affective
commitment among marketing managers and executives. Similarly, other scholars (e.g., Stites & Michael, 2011, Brammer, Millington,
& Rayton, 2007; Peterson, 2004; Turker, 2009) have shown that the
employee perceptions of CSR are positively related to affective organizational commitment. Carmeli, Gilat, and Waldman (2007) argue
that perceived social responsibility, in terms of the organizations
focus on the development and quality of product and services, enhances the relationship between management and employees, and
employee retention that lead to higher levels of job performance
in an Israeli sample. Kim et al. (2010) also explore that perceptions of CSR has positive impact on employee affective commitment
through employee-company identication. Kim et al. (2010),
however, include only CSR actions focused on community, ignoring the actions related to internal stakeholders and natural
environment. Against this backdrop, we argue that it is most appropriate to examine the effect of CSR on organizational identication

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M. Farooq et al./European Management Journal 32 (2014) 916927

within social identity framework. Yet scholars have paid little

attention to it.
The extant literature suggests that organizational identication is the primary outcome of a social identity process (Ashforth
& Mael, 1989; Dutton, Dukerich, & Harquail, 1994) which is signicantly different form of affective organizational commitment.
Affective organizational commitment is dened as an employees
emotional attachment to, identication with, and involvement in
the organization (Allen & Meyer, 1990, p. 1). On the other hand,
organizational identication is dened as perception of oneness
with or belongingness to an organization, where the individual
denes himself or herself in terms of the organization(s) in which
he or she is a member (Mael & Ashforth, 1992). Although both organizational identication and affective organizational commitment
reect a psychological linkage between employees and an organization, they are considered as different from each other (Ashforth
& Mael, 1989; Riketta, 2005; Van Knippenberg & Sleebos, 2006).
While organizational identication reects individuals selfdenition, affective organizational commitment does not. In addition,
whereas identication is a cognitive/perceptual construct reecting the extent to which the organization is incorporated into the
self-concept, commitment is more typically viewed as an attitude
toward the organization (Pratt, 1998 as cited in Van Knippenberg
& Sleebos, 2006, p. 573). Organizational identication is generally
considered as an antecedent of commitment. For instance, Pratt
(1998) suggests that organizational identication is a cognitive perceptual construct which may cause attitudes such as organizational
commitment. Furthermore, organizational identication is a predictor of many employees behaviors that are not determined by
the affective organizational commitment (Allen & Meyer, 1990).

Hence, the present study examines the impact of CSR on employees organizational identication.
Similarly, the previous studies focus on direct impacts of CSR on
employees related outcomes, and pay little attention to the conditions that can affect the relationship of CSR and employees related
outcomes. In addition, these studies did not distinguish between
CSR initiatives targeted towards different stakeholder groups. Most
of the studies discussed include only external CSR actions of the
company. They neither theorized nor examined the differential effects
of different kinds of CSR actions on employees related outcomes.
The current study is an attempt to ll these gaps.
Hypotheses development
We provide the theoretical framework of this study in Fig. 1. This
study examines the effect of three components of CSR on employeerelated outcomes, proposing that three dimensions positively affect
organizational identication. Every dimension focuses on a particular stakeholder group. The scholars usually classify the stakeholders
into two main categories: external stakeholders and internal stakeholders (Verdeyen, Put, & Van Buggenhout, 2004; Werther Jr &
Chandler, 2010). On the basis of stakeholder classication, we further
categorize three dimensions of CSR into two main categories: External CSR are the actions of organizations that focus on the external
stakeholders and the Internal CSR are the actions that are targeted at internal stakeholders. It is to be noted that CSR to social
and nonsocial stakeholders, and to consumers focus more on outsiders (External stakeholders), whereas CSR to employees is directly
related to insiders (Internal stakeholders). We illustrate them
separately.

Fig. 1. Theoretical research model.

M. Farooq et al./European Management Journal 32 (2014) 916927

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CSR to external stakeholders and organizational identication

Moderating effect of collectivist orientation

Firms societal, environmental, and consumer-focused CSR actions

should have strong effects on employees organizational identication. According to the social identity theory, individuals always
desire and struggle to obtain positive social identity (Aberson, Healy,
& Romero, 2000). They usually draw their social identity from their
membership in different groups (Ashforth & Mael, 1989). Hogg and
Terry (2000) illustrate that membership in business organizations
is the most important component of employees social identity which
is called as organizational identication.
Employees evaluate their self worth and self esteem by using
the status or social standing of their organization (Tyler, 1999). For
this reason, they like to identify with their organizations whose
image they perceive to be prestigious or whose identity enhances
their self-worth, and meets their need for self-enhancement (Tajfel
& Turner, 1985). Organizational identication, therefore, is very sensitive to organizational image and status (Dutton et al., 1994; Tyler
& Blader, 2003). Employees assess the status of their organization
as construed external image which is the belief of the employees
concerning what outsiders think about their organization (Dutton
et al., 1994).
With their different interests, needs, and goals, different stakeholders selectively process different informational cues or signals
provided by the organizations (Riordan et al., 1997), so outsiders
are more likely to monitor external CSR activities. Investments made
by a rm for societal welfare and environmental benets are assessed positively by outsiders, who then rank the organization more
highly. For this reason, we propose that CSR to social and nonsocial stakeholders and to consumers have a strong impact on the
external image of the rm. The extant literature conrms that a rms
philanthropic and community development actions enhance its corporate image and perceptions by outsiders (Fombrun & Shanley,
1990; Fryxell & Jia, 1994). Since external CSR actions improve
corporate images in the eyes of outsiders, employees feel proud to
associate themselves with such a responsible company, which enhances their self-worth and self-esteem. Hence we propose:

Scholars suggest that the tendency to identify with a group varies

across individuals (Mael & Ashforth, 1992; Mael & Ashforth, 1995).
Group identication depends on how people dene themselves in
terms of the relationship between self and others (Markus &
Oyserman, 1989; Wang, 2000; Wang & Mowen, 1997). Some people
tend to dene themselves as separated, unique, and individualistic entities due to their unique traits, abilities, preferences, interests,
goals, and experiences (Epitropaki & Martin, 2005). They like to maintain their self-identity, and have less propensity to identify with a
group (Epitropaki & Martin, 2005). In contrast, individuals having
high collectivist orientation tend to dene themselves through the
connected relationships with others (Epitropaki & Martin, 2005) and
identify highly with in-groups. In this regard, Triandis (1995) suggests that collectivists dene themselves by memberships in various
social groups; therefore, a person with a high collectivist orientation should have a higher tendency to be identied with his (her)
social groups, including work groups.
Other scholars (e.g. Triandis et al., 1988) suggests that collectivists maintain very few in-groups, whereas individualistic people
are attached to many in-groups, such that each group provides only
a small portion of their material, emotional security, and social
identity needs. For this reason, individualists do not feel a strong
attachment to any in-group, and seem to be less concerned about
the image, prestige, and status of a particular social group. In contrast, people having high collectivist orientation obtain all their
materials, emotional security, and social identity from just a few
in-groups, which leaves them strongly attached to each group.
Because they draw much of their social identity from their ingroups, they are more concerned about the image, prestige, and
distinctiveness of these in-groups, including their organization. As
we noted earlier, CSR is very relevant for the image, prestige, and
status of an organization, so employees with a high collectivist orientation should be more concerned about the CSR of their rm, and
in turn, the effect of CSR on organizational identication should
be higher for them. Compared to individualistic employees, collectivist employees should be more concerned about CSR and other
status-related issues pertaining to the groups with which they identify. Therefore, we propose:

Hypothesis 1: Corporate social responsibility toward (a) social and nonsocial stakeholders and (b) consumers positively inuences employees
organizational identication.

CSR to employees and organizational identication

In addition to perceived external prestige, a persons respect in
an organization is another important factor that likely inuences
his (her) identication with organization (Tyler, 1999; Tyler & Blader,
2002). In social identity literature, a persons evaluation of his (her)
own standing within the organization determines perceptions of
respect, which Fuller et al. (2006) demonstrate as a reection
of an individuals global evaluation of the extent to which they
feel that they are a member in good standing or that they believe
they are a valued member of the organization. We suggest that
employee-focused CSR actions are practices which send signals
and cues that the organization is caring, benevolent, and aware
of employees value. Fuller et al. (2006) also note that human resource practices such as recognition, opportunities for extensive
training/development, participation in decision making and problem
solving, and pay for performance are good predictors of perceptions of internal status and organizational identication. To some
extent, these practices overlap with the CSR to employees. We, therefore, propose:
Hypothesis 1c: Corporate social responsibility to employees positively contributes to employees organizational identication.

Hypothesis 2: Employees collectivist orientation positively moderates the effect of CSR on employees organizational identication, such
that the positive effect of CSR on employees organizational identication is higher when collectivist orientation is high than when it
is low.
Effect of CSR on knowledge sharing Behavior through
mediation of organizational identication
Srivastava, Bartol, and Locke (2006) dene knowledge-sharing
behavior as team members sharing task relevant ideas, information, and suggestions with each other. Knowledge sharing is
important to enhance competitiveness of a rm (Jasimuddin, 2007).
Employees may be reluctant to share knowledge with other organizational members for fear of losing power (Jasimuddin, Connell,
& Klein, 2006). However, we anticipate that CSR may induce
knowledge-sharing behavior among employees, through the mediation of organizational identication, because organizational
identication enhances knowledge-sharing behavior by creating perceptions of oneness and belongingness to an organization. In
particular, organizational identication motivates individual behavior that can benet the organization (Ashforth, Harrison, & Corley,
2008), by creating a sense of a collective or shared fate. It also enhances cooperation among the employees within an rm (Bartel,
2001; Kramer, 2006). Employees consideration of organizational

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M. Farooq et al./European Management Journal 32 (2014) 916927

benet and mutual cooperation should motivate them to share

knowledge (Jasimuddin et al., 2006). We, therefore, expect that employees who strongly identify themselves with their organization
share more knowledge for the benet of the organization, due to
strong in-group cohesion and perceptions of shared benets. Hence,
we propose:
Hypothesis 3: The components of CSR positively inuence the
knowledge-sharing behavior of employees through the mediation of
employees organizational identication.
Method
Sample and procedure
We used a cross-sectional design in this study, employing a survey
method to collect the data in a self-reported questionnaire. We
focused on companies that deal in grocery, food, and personal care
products in Pakistan, selecting 11 rms that publish sustainability/
CSR-related information on their websites. Such publicly available
information implies that these companies have been involved in CSR
activities, and employees have some sustainability perceptions about
their companies.
In line with Rupp, Ganapathi, Aguilera, and Williams (2006), we
include only the lower or non-management workforce because they
may not be involved in the process of formulating rms strategies and policies. Our research objective is to examine the
relationships of the employees perceptions of their companies CSR
actions of, and their organizational identication and knowledge
sharing. Since top and middle management develop these policies, they were excluded from the study. The companies under study
were large business enterprises, all of whom had more than 500
employees and operate across the country.
We used a convenience sampling method to collect the data. We
contacted sources in our targeted companies and sought permission to collect data. We xed an appointment with each source, and
asked him (her) to help ensure the availability of colleagues. Through
this procedure, 392 responses were obtained, 3 of which were discarded because they came from top managers. Furthermore, a
missing value analysis revealed 11 surveys with missing values. With
our large sample size, we could afford to drop these respondents.
Thus, the nal sample comprised 378 (326 men and 52 women) respondents across multiple age groups: 150 between 18 and 28 years
of age, 171 who were 2940 years of age, and 57 older than 40 years
of age. Regarding academic qualications, 109 respondents had less
than a bachelors degree, 173 had earned a bachelors degree, and
96 were masters degree holders. In our sample, 273 respondents
were non-management employees, and 105 were functional
managers.
Measures
To measure CSR, we adapted instruments developed by Turker
(2009). Six items pertained to social and nonsocial CSR, six items
focus on CSR to employees, and three measures were for CSR to consumers. We added an item related to contributions to charities and
donations from Maignan and Ferrell (2000), which was missing in
Turkers original CSR instrument. The nal instrument thus included 16 items. To measure organizational identication, we relied
on a ve-item, revised version of Mael and Ashforth (1995) scale,
which has good reliability. The four-item measure of knowledgesharing behavior came from (Faraj & Sproull, 2000). We used a sixitem measure of collectivism developed by Dorfman and Howell
(1988), whose scales, in turn, came from Hofstede (1980) ecologicallevel constructs of culture, to assess cultural dimensions at the
individual level. We adapted the instrument to our context and trans-

lated it into Urdu (the national language of Pakistan). We also

pretested the instrument, and used seven-point Likert scales (1 = extremely disagree to 7 = extremely agree) to collect the data.
Assessing the validity of measurement instruments
Conrmatory factor analysis of CSR
Taking three dimensions from Turkers (2009) CSR measure, we
performed conrmatory factor analysis (CFA) to verify its dimensionality and validity of the CSR measure. The CFA for the threefactor measurement model containing 16 items did not produce a
good t with the data (X2 = 677.45 with 99 degree of freedom [df],
X2/df = 6.8, goodness-of-t index [GFI] = 0.81, root mean square error
of approximation [RMSEA] = 0.12).
Interestingly out of seven items of CSR to social and nonsocial
stakeholders dimension, three items were found very low loadings (0.10, 0.13, and 0.08); each of them related to CSR actions
focused on community welfare. The remaining four items related
to the natural environment had high loadings. Against this background, we treated CSR to social and nonsocial stakeholders
dimension as two components: CSR to community and CSR to environment. This division has been supported by scholars (e. g.
Backhaus, Stone, & Heiner, 2002; Dahlsrud, 2008; Sen & Bhattacharya,
2001), who recommend the separation of societal and environmental responsibility. Backhaus et al. (2002) even specify the most
important dimensions of CSR: environment, community relations,
employee relations, and product-related issues. Sen and Bhattacharya
(2001) assign the CSR actions of 600 companies in the Socrates database to six different categories and differentiate community support
from environmental protection.
Consequently, we tested a four-dimensional CSR model having
CSR to community, CSR to environment, CSR to consumers, and CSR
to employees. The t indices of the four-dimensional model were
good. The X2 statistic reached 175.88 at a signicance level of 0.001,
with 96 degrees of freedom (X2/df = 1.83), which indicates very good
t (Kline, 2004). The GFI of 0.94 and adjusted GFI of 0.92 were greater
than the generally accepted 0.90 level. We also examined incremental t indices: the normed t index (NFI) was 0.95, Bollens
incremental t index (IFI) equaled 0.97, the Tucker-Lewis index (TLI)
was 0.97, and the conrmatory t index (CFI) equaled 0.97all above
the recommended level of .90. In addition, the RMSEA, at 0.047, was
less than the recommended value of 0.05.
Furthermore, the standardized factor loadings for all items were
between 0.62 and 0.90. According to Kline (2004), a standardized
value higher than 0.60 on its respective factor demonstrates a reasonably high factor loading. In addition, we analyzed the convergent
and discriminant validity of the four dimensions using the average
variance extracted (AVE) method (Fornell & Larcker, 1981). The AVE
values were as follows: CSR to community = 0.58, CSR to environment = 0.75, CSR to employees = 0.61, and CSR to consumers = 0.62,
all of which were greater than the recommended value of .50 (Fornell
& Larcker, 1981). The four-dimensional structural of CSR thus has
high convergent validity. To assess discriminant validity, we used
a factor-based procedure, a powerful method that can resolve the
problems of difference in chi-square methods (Fornell & Larcker,
1981). The four dimensions differ from one another, because the AVE
(bold values) by each dimension was greater than their squared correlations (Table 1). Thus, CFA conrmed that four dimensional model
measures the CSR adequately.
Conrmatory factor analysis of other measures
Despite the use of well established instruments to measure the
variables, we performed CFA for all of them to test their dimensionality and validity. We found that all the measures were

M. Farooq et al./European Management Journal 32 (2014) 916927

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Multicollinearity

Table 1
Test of discriminent validity.

We evaluated the degree of multicollinearity among independent variables using both the tolerance value and the variance
ination factors (VIF). The tolerance values for all three independent variables (four components of CSR) were greater than the cutoff point of 0.10 (Cohen, 2003), and VIF values between 1.1 and 1.4,
which indicated the absence of any serious multicollinearity problem.

Latent Variables

CSR to employees
CSR to community
CSR to environment
CSR to consumers
KSB
OI
Collectivism

0.61
0.300
0.029
0.016
0.388
0.274
0.025

0.58
0.011
0.010
0.324
0.217
0.006

0.75
0.010
0.003
0.014
0.001

0.62
0.012
0.006
0.001

0.71
0.125
0.002

0.66
0.012

0.58

Notes: Values on the diagonal represent the average variance extracted; the other
values are the squared correlations among the variables.
OI: organizational identication.
KSB: knowledge sharing behavior.

uni-dimensional and reasonably valid. They had good t with the

data and average variance extracted (AVE) by organizational identication, knowledge sharing behavior, and collectivism were 0.66,
0.71, and 0.58 respectively. All the variables also maintained high
discriminant validity among each other (Table 1).
Beyond the measurement adequacy and validity, we examined
the internal reliability and consistency of four dimensions of CSR
and other three variables. All the measures had high internal consistency and reliability, with Cronbachs alpha values (Cronbach,
1951) of 0.79 for CSR to community, 0.92 for CSR to environment,
0.91 for CSR to employees, 0.82 for CSR to consumers, 0.867 for
organizational identication, 0.88 for knowledge-sharing behavior, and 0.890 for collectivism, all suciently greater than the
recommended value of 0.7 (Nunnally, 1978).
Common method variance
We used multiple methods, such as Harmans single-factor test,
one-factor CFA, and common latent factors, to test whether there
is any presence of common method bias in our data. The principal
component analysis of all the variables produced six distinct factors
that together accounted for 68.32 percent of the total variance; the
rst factor did not account for a majority of the variance (17.54%).
Similarly, the common method latent factor of all the independent, mediating, moderating and dependent variables yielded only
6.4 percent of the common factor, signicantly less than the acceptable threshold of 25 percent (Podsakoff, MacKenzie, Lee, &
Podsakoff, 2003). Thus, it could be claimed that the common method
bias was not a serious threat.

Results
Descriptive statistics
Table 2 shows the means, standard deviations, and correlations among variables. With the correlation table, we could review
all hypothesized and non-hypothesized relationships among all variables. The four components of CSR correlated positively; they also
related positively to collectivism, knowledge-sharing behavior, and
organizational identication. In contrast, the demographic characteristics of respondents were not related to the four components
of CSR nor to any of the dependent variables.

Test of hypothesized research model

Since the proposed three-dimensional model of CSR was not valid,
we used the four-dimensional construct, with its high convergent
and discriminant validity for further analysis. To test our hypothesized model (Fig. 1), we used the structural equation modeling and
developed a structural regression model with the direct effects of
four CSR components on both organizational identication and
knowledge-sharing behavior. We also tested the effect of organizational identication on knowledge-sharing behavior, which enabled
us to calculate the indirect effects of CSR components on knowledge sharing. We controlled for the effects of gender, age, and
education. The hypothesized model produced a very good t with
the data (X2 = 578.16 (315 df), X2/df = 1.835, RMSEA = 0.047, GFI = 0.90,
NFI = 0.91, TLI = 0.95, and CFI = 0.95). The standardized regression
weights obtained from this model show the direct effects of CSR components on organizational identication and knowledge-sharing
behavior, as well as the indirect effects of CSR components on
knowledge-sharing behavior (Table 3). We tested the mediation of
organizational identication, following the guidelines provided by
Iacobucci, Saldanha, and Deng (2007).

Table 2
Mean, standard deviation, and correlations.
Variables
a

Gender
Ageb
Qualicationc
CSR to employees
CSR to community
CSR to environment
CSR to consumers
OI
KSB
Collectivism

Mean

SD

10

1.14
1.75
1.97
4.09
3.65
3.41
5.62
4.32
4.42
5.43

.35
.70
.74
1.15
1.27
1.33
1.16
1.18
1.31
1.17

1
.11*
.02
.01
.01
.05
.06
.03
.07
.02

1
.10*
.02
.02
.04
.06
.07
.01
.04

1
.02
.12*
.02
.12*
.01
.01
.19*

1
.53**
.17**
.06
.52**
.56**
.15*

1
.10*
.09*
.46**
.48**
.06

1
.03
.12*
.05
.02

1
.18**
.10
.01

1
.63**
.04

1
.06

Notes: N = 378.
OI: organizational identication.
KSB: knowledge sharing behavior.
*
p < .05.
** p < .01.
a 1: male; 2: female.
b
1: 1828; 2: 2940; 3: more than 40 years.
c 1: not completed bachelors; 2: bachelors; 3: masters.

922

M. Farooq et al./European Management Journal 32 (2014) 916927

Table 3
Direct, indirect, and moderating effects.
Indirect effect
of CSR on KSB
through OI

Remarks

.22***

Partial
mediation
Partial
mediation
No mediation
Full mediation

Independent
Variables

Dependent
Variables
OI

KSB

Gendera
Ageb
Qualication c
CSR to employees

.02
.09*
.04
.42***

.06
.04
.05
.23***

CSR to community

.25***

.16**

.13*

CSR to environment
CSR to consumers
OI
Collectivism
Employees CSR
collectivism
Community CSR
collectivism
Environmental CSR
collectivism
Consumer CSR
collectivism

.01
.15***

.07
.05
.51***

.01
.08**

.07
.15*
.10+
.08+
.06

Positive
moderation
Negative
moderation
Negative
moderation
No moderation

Notes: N = 378.
OI: organizational identication.
KSB: knowledge sharing behavior.
+ p < .10.
*
p < .05.
** p < .01.
***
p < .001.
a
1: male; 2: female.
b
1: 1828; 2: 2940; 3: more than 40 years.
c 1: not completed bachelors; 2: bachelors; 3: masters.

Effect of CSR on organizational identication

In Hypothesis 1, we predict that CSR components positively affect
organizational identication, and this prediction receive partial
support. Specically, the CSR actions related to employees, communities, and consumers are strong predictors of organizational
identication, but such actions on the natural environment do not
predict organizational identication. Therefore, different types of
CSR actions have differential effects on organizational identication, such that employee-related CSR exerted the strongest impact
on organizational identication, followed by community-related, and
then consumer-related CSR actions. In contrast, CSR toward the environment has no signicant effect on organizational identication.
The strong impact of employee-related CSR actions on organizational identication suggests that employees are interested not
only in external prestige but also in their own status and respect
throughout the organization. This study, thus, conrms that the employees evaluations of their standing within an organization are
important (Tyler & Blader, 2002). These ndings also validate our
proposition that CSR toward employees sends signals that the organization is caring and benevolent. According to the social exchange
theory, people reciprocate such benecial acts (Cropanzano &
Mitchell, 2005), and the investments made by a rm to benet employees welfare also get reciprocated by employees in the form of
positive attitudes and behaviors.
The strong positive effect of community-related CSR actions
further implies that employees worry about community-related
issues and rms responsibility. Employees are concerned about more
than themselves; they also focus on other stakeholders. These ndings suggest that CSR toward the community enhances employees
perceptions of the external image of their rms, and increases their
desire to be identied with them. Furthermore, employees respond
positively to consumer-related CSR actions, in line with marketing
literature that suggests corporate image is a function of product

quality, customer satisfaction, and ability to delight customers (Luo

& Bhattacharya, 2006; Walsh & Beatty, 2007).
The CSR to environment offers surprising results. It has no effect
on organizational identication. Although an important dimension of CSR, it does not maintain any relationship with these workrelated variables. There are two possible explanations for these
results. First, organizational employees based in a developing country
simply may not be concerned about the environmental responsibility of its organizations, perhaps because of the economic
conditions in the country. Such economic disparities may lead
employees to pay more attention to the economic rather than environmental issues. Second, environmental responsibilities are
increasingly becoming legal issues. Because compliance with the
law is the minimum mandate to stay in business. It may not have
a strong impact on the organizational image and thus no effect on
organizational identication or other variables (Fig. 2).
Moderation of collectivist orientation
Hypothesis 2 states that employees collectivist orientation positively moderates the effect of CSR on organizational identication.
That is, the positive effect of CSR on organizational identication
is higher when collectivist orientation is high than when it is low.
To test the hypothesis, we investigate the effect of four products
terms on organizational identication (four components of CSR and
collectivism) in addition to the direct and indirect effects of CSR components on organizational identication and knowledge-sharing
behavior. The results partially supported Hypothesis 2 (Table 3). Specically, we nd a positive moderation of collectivism on the
relationship between employee-related CSR and organizational identication (0.15, p < .05). For example, collectivism positively
moderates the effects of employee-related CSR actions on employees organizational identication, such that the effect was stronger
for the collectivist employees than for individualist ones. However,
the opposite effect held for CSR toward the community and the environment. Although collectivism also moderates the relationships
of community and environmental CSR with organizational identication (0.10 and 0.08, respectively, p < .10), the direction is
negative, in sharp contrast with our hypothesis. The effect of community and environmental CSR actions decreases with the
employees greater collectivist orientations. Employees having low
collectivist orientation responds more strongly to such CSR actions,
as the moderation plots in the Appendix reveal.
These ndings suggest that employees responses to different CSR
actions vary with their collectivist orientation. That is, the effects
of community- and environment-related CSR actions on organizational identication are stronger for individualists than for
collectivists. These interesting ndings imply that collectivist employees are more concerned about the employee-related CSR issues,
whereas individualist employees focus on the community and environmental issues. We suggest that strong in-group concerns make
highly collectivist people least anxious about societal and environmental issues, because they assume that those issues are problems
associated with out-groups. However, the employee-related CSR
actions remain directly relevant to them, because they affect the
in-group, which makes them more sensitive to employees related
CSR issues.
Effect of CSR on knowledge-sharing behavior and mediation of
organizational identication
The ndings partially support Hypothesis 3. That is, CSR positively inuences employees knowledge-sharing behaviors
through the mediation of organizational identication (0.51, p < .01).
The CSR components have exerted strong, indirect, positive
effects on knowledge-sharing behavior through the mediation of

M. Farooq et al./European Management Journal 32 (2014) 916927

923

Notes: The numbers on the paths represent standardized regression weights. Co-variances among independent variables, itemlevel structure of the constructs, and error terms of dependent variables are not shown, for simplicity and clarity.
Hypothesized effects
Un-hypothesized significant effects

Fig. 2. The Revised Research Model with four dimensions of CSR, Showing Standardized regression weights obtained through structural equation modeling.

organizational identication. For example, employee-related CSR has

the strongest indirect positive effect: equal to 0.22 (p < .001), followed by CSR to the community (0.13, p < .05) and CSR toward the
consumer (0.08, p < .01). Environmental CSR has neither direct nor
indirect effects on knowledge-sharing behavior. The signicant
indirect effects, thus, indicate the mediation of organizational identication between CSR components (except environmental) and
knowledge sharing behaviors. Furthermore, CSR actions related to
employees (0.23, p < .001) and the community (0.16, p < .01) have
signicant direct effects on knowledge-sharing behavior; the direct
effects of CSR toward consumers and the environment on knowledgesharing behavior are not signicant. These results indicate partial
mediation for employees and community, and complete mediation for consumer-based CSR actions (Iacobucci et al., 2007). Overall,
CSR inuences employees attitudes, and exerts a strong positive
effect on the behavioral outcomes related to employees, both directly and indirectly through the mediation of organizational
identication.
In addition to the indirect effect of CSR components on knowledge sharing behavior through the mediation of organizational
identication, the study shows that CSR actions related to employees and community have a direct positive inuence on knowledge
sharing behavior. It means that there are potential mechanisms
other than organizational identication that cause these effects.
As CSR to employees is the direct investment of the organization
for the welfare of employees, they may perceive it as organizational support. As a result, they reciprocate these investments in term
of positive behaviors at work (Rhoades & Eisenberger, 2002). Similarly, the direct effect of CSR to community on knowledge sharing
behavior can also be explained with the help of indirect social exchange. Employees may perceive these actions as benevolence and
reciprocate them to maintain social solidarity (Molm, Collett, &
Schaefer, 2007).

Discussion
This study addresses the effect of perceived corporate social responsibility (CSR) on employees knowledge sharing behavior
through the mediation of organizational identication. We further
explore the differential effect of different types of CSR actions on
the employees outcomes because some CSR actions are focused on
internal stakeholders, others are focused on external stakeholders. Most specically, this paper reveals that three of the four
components (i.e., community, employees, and consumers) of CSR
positively affect employees organizational identication and
knowledge-sharing behavior. However, while the effects of
community-related CSR actions on the employees outcomes are
stronger for individualistic employees, the effect of employeerelated CSR actions on organizational identication is stronger for
collectivist employees. The effect of consumer-related CSR actions
on organizational identication does not depend on the individual cultural factor, be it individualism and collectivism).
This study contributes to theory in multiple ways. Contrary to
the previous studies that examined the effect of CSR on affective
organizational commitment, we empirically test the links between
CSR and organizational identication, as well as the effect of CSR
on knowledge-sharing behavior. The study offers further understanding by explaining the effect of employees heterogeneity on
the CSRorganizational identication link. To the best of our knowledge, it is the rst study of its nature to explain how employees
collectivist orientation moderates the effects of different CSR actions
on organizational identication. The ndings are unique in the sense
that we show empirically that different employees are inuenced
by different types of CSR actions. Collectivist employees are more
concerned for employee-related CSR actions, whereas individualist employees are more concerned about the community
and environmental CSR actions undertaken by their rms.

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M. Farooq et al./European Management Journal 32 (2014) 916927

Furthermore, the study offers unique ndings by examining the direct

and indirect effect of CSR components on employees behavior
(knowledge sharing behavior).
Our ndings are important not just for external stakeholders but
also for internal stakeholders. Similarly, the links between CSR and
knowledge-sharing behaviors that are mediated by organizational
identication have many implications for researchers and scholars. It explains the real mechanism between CSR and employees
attitudes and behaviors, which, in turn, has implications for the social
identity literature. Since the CSR is an important contributor to organizational identication, these ndings are useful to scholars who
investigate antecedents of organizational identication, because it
provides them with a lens to see beyond the conventional wisdom
offered by the social identity.
Finally, this study makes contextual contributions, because it was
conducted in Pakistan, which has not been the site of many previous studies. Thus, this study has tested and validated a Western CSR
instrument in Asian context. The psychometric properties and
dimensionalities of CSR instruments differ in this research setting.
For example, employees in Asia consider environmental responsibility different from community-focused responsibilities, whereas
they constitute a single dimension in Western-oriented measures
(Turker, 2009).
The results have signicant implications for CSR strategies of
arm. The ndings that CSR strongly inuence employees organizational identication and knowledge-sharing behaviors emphasize
the instrumental value of CSR and the payoff from corporate investments in it. Organizational identication signicantly affects
job-related variables, such as commitment, motivation, turnover
intentions, absenteeism, and knowledge-sharing behaviors, which
previously have been considered important for competitive
advantages (Datta, Guthrie, & Wright, 2005). Consequently, CSR
helps create a competitive advantage by developing a workforce
that effectively carries out the rms business strategy, leading to
improved business performance (Branco & Rodrigues, 2006). Firms
with high CSR practices attain high productivity because of the
motivation and knowledge sharing among their employees, along
with reduced absenteeism, greater extra-role behavior, and lowered
turnover costs (e.g., recruitment and training of new employees).
The benets of corporate contributions to the community are not
restricted to external reputation and external stakeholder management, but they also may be reected in the behavior of internal
stakeholders.
However, employees differ in their responses to CSR. Collectivist employees are more concerned about internal CSR actions,
whereas individualistic employees are more sensitive to external
CSR issues. Managers should consider employees personal orientations when designing CSR strategy of the rm to capitalize on the
benets of CSR investments. For collectivist regions such as Asia,
the focus should be employee-related CSR, whereas for individualist regions such as North America and Europe, the CSR strategy
should center on community and environmental issues.
Finally, these ndings have implications for policy makers, nongovernmental organizations, and governments. Our results show that
CSR to community, employees, and consumers have signicant positive effects on employees, indicating a relationship of CSR with
employees organizational identication. Although environmental
responsibility is an important part of CSR, the employees may be
little concerned about it. Perhaps people simply are not aware of
or sensitive to the environmental issues. Environmental agencies
and nongovernmental organizations (NGOs) have spent massive resources to create global environmental awareness. But it appears
that they have not succeeded yet in Asia. These ndings may encourage them to rethink their environmental awareness initiatives.

Limitations and future work

The results of this study must be interpreted in the context of
its limitations. First, the data was obtained from a sample of organizations based in a country (i.e., Pakistan). We focused only on
specic industry, namely, grocery, food, and personal care products in Pakistan. The results of the study might not be generalized
to other industries. The results could vary in other organizational
contexts. Future work could investigate the differences in antecedents of organizational identication and knowledge sharing
behaviour in local organizations in different industries. Further, the
ndings could vary in different countries due to the inuence of cultural factors. We believe that the results may be extended to MNCs
in other Asian countries with similar economic and infrastructure
conditions. The partial mediation by organizational identication
between CSR dimensions (employees and community) and employees behaviors implies that some CSR effects do not pass through
organizational identication.
It could be argued that mechanisms other than organizational
identication may cause these effects. To better understand the
CSRemployee behavior link, future studies should include other
theoretical lenses along with the social identity theory to explore
other mediation mechanisms. Although we have examined the
effect of CSR on knowledge-sharing behavior, further research should
incorporate other employee behaviors. We nd that environmental CSR has no impact on employees attitudes and behaviors,
whereas the previous studies conducted in Western context emphasize just such an inuence. Future research could also explore
why employees in Asian countries ignore the environmental actions
of rms.
Conceptually, we do not consider all components of CSR but
instead restricted ourselves to CSR to the community, environment, consumers, and employees. Additional studies might include
the issues like protability, and consider other stakeholders to
examine where employees draw their social identity. Methodologically, the data pertaining to all the variables were collected from
a single source, which may cause common method bias, though our
multiple methods approach indicated that it was not a serious threat.
These data also were collected at one point in time, making it impossible to draw inferences about causality. Further research should
use a longitudinal time lag design.
Conclusion
The main objective of this paper is to examine the effect of CSR
on employees attitudes and behaviors, as well as to determine how
employees responses to CSR varies with their individual cultural
characteristics. The ndings suggest that CSR components are strong
predictors of employees attitudes in terms of organizational identication and knowledge sharing behavior. In particular, CSR
investments in community, the employees, and consumers positively inuence the organizational identication and knowledgesharing behaviors exhibited by employees. That is, employees are
sensitive not only to a rms actions focused on them but also to
CSR actions related to other stakeholders. However, the CSR actions
focused on the environment have no impact. It is also noteworthy
that different employees express concern about different CSR actions.
Those with higher collectivist orientations are more sensitive to
CSR actions pertaining to them, whereas individualist employees
respond more to community- and environment-related CSR actions.
The effects of CSR components on employees behaviors also are
partially mediated by organizational identication, such that mechanisms other than social identity likely explain this relationship and
need to be explored.

M. Farooq et al./European Management Journal 32 (2014) 916927

Appendix A: Moderation plots

Appendix B: The measurement instruments

Moderation of collectivism on the relationship of CSR to employees and OI.

Corporate social responsibility

925

CSR to community
1.
My company gives adequate contributions to charities
2.
My company supports the non-governmental organizations working in
the problematic areas
3.
My company contributes to the campaigns and projects that promote the
well-being of the society
CSR to environment
1.
My company participates to the activities which aim to protect and
improve the quality of the natural
2.
My company makes investment to create a better life for the future
generations
3.
My company implements special programs to minimize its negative
impact on the natural environment
4.
My company targets a sustainable growth which considers to the future
generations

Moderation of collectivism on the relationship of CSR to community and OI.

CSR to consumers
1.
My company protects consumer rights beyond the legal requirements
2.
My company provides full and accurate information about its products to
its customers
3.
Customer satisfaction is highly important for my company
CSR to employees
1.
My company encourages its employees to participate to the voluntary
activities
2.
My company policies encourage the employees to develop their skills and
careers
3.
The management of my company primarily concerns with employees
needs and wants
4.
My company implements exible policies to provide a good work and life
balance for its employees
5.
The managerial decisions related with the employees are usually fair
6.
My company supports employees who want to acquire additional
education

Moderation of collectivism on the relationship of CSR to environment and OI.

Organizational identication

1.
2.
3.
4.
5.

When someone criticizes my company, it feels like a personal insult

I am very interested in what others think about my company
When I talk about my company, I usually say we rather than they
My companys successes are my successes
When someone praises my company, it feels like a personal compliment

Knowledge sharing behavior

1. I like to share my special knowledge and expertise with my other
colleagues at work.
2. If I have some special knowledge about how to perform the organizational task, I am likely to tell the other employees about
it.
3. I always exchange the information, knowledge, and skills with
my colleagues at work.
4. I freely provide my colleagues with hard to nd knowledge or
specialized skills.

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M. Farooq et al./European Management Journal 32 (2014) 916927

Collectivist orientation
1. Group welfare is more important than individual reward.
2. Group success is more important than individual success.
3. Being accepted by members of your work group is very important.
4. Employees should only pursue their goals after considering the
welfare of the group.
5. Managers should encourage group loyalty even if individual goals
suffer.
6. Individuals may be expected to give up their goals in order to
benet group success

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