Corporate Social Responsibility: When Being Good Actually Makes You Look Bad

A buzzword in the business scene, corporate social responsibility (CSR) has become a strategic priority for many businesses large and small, and it is often considered a win-win situation. By committing to a cause, such as helping local charities or reducing their carbon footprints, business leaders may impress their clients and the media. What a Telfer School of Management led team of researchers has found is that a company’s decision to engage in CSR initiatives also matters (a lot!) to employees.

In a recent publication in the highly reputable Journal of Business Ethics, Telfer School Professor Magda Donia and her co-authors, Telfer School Professor Silvia Bonaccio, Carleton University Professor Carol-Ann Tetrault Sirsly, and California State University Professor Sigalit Ronen, show that it is not enough for a company to get involved in a good cause. What really matters to employees is why their employer is doing so.

The researchers found that employees respond positively only when they perceive their company’s CSR initiatives as genuine. Knowing that their company is truly involved in a cause, they will more strongly identify with their employer. “Everybody prefers to be in a place where they feel that it sincerely cares about important causes,” says Donia, “and when they do, they tend to experience a number of positive feelings about their workplace and their work, such as pride and trust in their organization, and satisfaction and meaning in their work.” As a result, employees are likely to be more committed, perform better, and stay longer than those who work for a company that engages in social practices simply because it is trendy and likely to increase profits.

A key practical take-away of this research is that, when business leaders decide to help a local charity with the goal of making their company look good, their employees cannot be fooled. This happens because “people are often capable of discerning what people’s true motives are, and it is likely that employees, who have day-to-day interactions with their company, are making accurate attributions of their employers’ true intentions,” explains Professor Donia. “When sensing that their employers’ actions are not consistent with the message behind an advertising campaign,” adds Professor Bonaccio, “then employees start asking ‘Why is that?’.” Employees’ negative perceptions of their company as opportunistic can backfire.

“Everybody prefers to be in a place where they feel that it
sincerely cares about important causes, and when they do,
they tend to experience a number of positive feelings
about their workplace and their work."

Professor Donia and co-authors’ advice is to remember that employees are watching. “What organizations need to realize,” adds Professor Bonaccio, “is that they have internal stakeholders who are looking at organizational practices and saying ‘Wait a minute! Why is the organization engaging in this?’.” The bottom line is that simply creating the image of good citizenship will not lead to positive employee outcomes in the long term. If you wish to attract, motivate, and retain the best employees, you need to give them the feeling that your CSR initiatives are intended to make a real difference. At the end of the day, it is about “doing the right thing for the right reason,” says Professor Donia.