How and When Does Corporate Giving Lead to Getting? An Investigation of the Relationship Between Corporate Philanthropy
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ORIGINAL PAPER
How and When Does Corporate Giving Lead to Getting? An Investigation of the Relationship Between Corporate Philanthropy and Relative Competitive Performance from a Micro-process Perspective Wenwen Zhao1,2 · Zhe Zhang1 Received: 17 July 2018 / Accepted: 13 March 2019 © Springer Nature B.V. 2019
Abstract The corporate ethics literature has considerably focused on whether giving (corporate philanthropy) results in getting (firm performance). However, the relationship between corporate philanthropy and performance and the underlying mechanisms remain unclear. Drawing on signaling and cue consistency theories, we develop and test a model that specifies whether, how, and when corporate philanthropy benefits relative competitive performance from a micro-process perspective. Using a Chinese sample of 1623 employees, 145 CEOs, and 145 human resources managers, we found that corporate philanthropy could positively influence relative competitive performance through the internal processes—organization-level citizenship behaviors of employees. Moreover, work–life balance practices strengthen the aforementioned mediation. In particular, when a firm performs high levels of work–life balance practices, corporate philanthropy tends to promote more citizenship behaviors in the entire organization, thereby enhancing the relative competitive performance of the firm. By contrast, when organizations perform low levels of work–life balance practices, the aforementioned mediation becomes nonsignificant. The theoretical and practical implications of these findings are discussed. Keywords Corporate philanthropy · Relative competitive performance · Organization-level organizational citizenship behavior · Work–life balance practices
Introduction Corporate philanthropy is an integral and typical component of corporate social performance, and it is often defined as the voluntary donation of firm resources to society (Carroll 1979; Plewnia and Guenther 2017; Wang et al. 2016). Recently, scholars have regarded corporate philanthropy as a strategy to achieve synergistic social and economic * Wenwen Zhao [email protected] Zhe Zhang [email protected] 1
Shool of Management, Xi’an Jiaotong University, No. 28 Xianningxi Street, Beilin District, Xi’an, Shaanxi 710049, China
Business School, Renmin University of China, No. 59 Zhongguancun Street, Haidian District, Beijing 100872, China
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performance (Saiia et al. 2003). However, the relationship between corporate philanthropy and performance remains inconclusive (Margolis et al. 2009; Orlitzky et al. 2003; Seifert et al. 2004; Waddock and Graves 1997). The elusive relationship confuses employers who want to achieve ethical and economic goals simultaneously (Chun et al. 2013). It has been found that belief in the ethics–performance link leads to more tendency to engage in corporate social responsibility (CSR) engagement (Hafenbrädl and Waeger 2017). As the evidence supporting the link between ethics and performance grows, the motivation of employers to make ethic
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