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date: 05 August 2020

Corporate Social Responsibility: An Overview From an Organizational and Psychological Perspective

Summary and Keywords

Corporate social responsibility (CSR) is an important topic for both academics and practitioners because it potentially influences all aspects of an organization—from relationships with stakeholders to strategy to daily routines and practices. Thus, scholars have explored CSR for close to one hundred years. Prior research has been primarily conducted at the organizational and institutional levels, but has largely overlooked the individual-level of analysis, which is a major gap considering that CSR is enacted by and influences people. Recently, this gap has been addressed by an increased focus on the individual level of analysis—also known as “micro-CSR.” However, CSR is a multilevel construct, so even when focusing on the individual level, all levels need to be taken into consideration at the same time. Moreover, CSR is cross-disciplinary. Prior research has often focused on disciplines such as strategy, but fields such as psychology have much to offer—especially because CSR is conducted through and affects individuals. Moreover, due to the historical focus of CSR on the organizational level of analysis, most studies have aggregated CSR to the firm level. These studies have shown mixed results of the effects of CSR. One reason is that when CSR is aggregated, the variance at the individual level of analysis is lost. Employees might react both positively and negatively to CSR. For example, CSR is often extra-role (e.g., volunteering, being part of committees) and can have a negative effect of role strain and stress. For other employees, they might find tension with the way that CSR is carried out. Future research could dive more deeply into the psychology of CSR and how, when, and why employees might react to CSR differently.

Keywords: corporate social responsibility, micro-CSR, psychology, sustainability, employees, human resources, organizational behavior

Introduction

Since the 1950s, the concept of corporate social responsibility (CSR) has continuously grown in importance, both among academics and practitioners (Aguinis & Glavas, 2012; Carroll, 1999; Waddock, 2004). Ninety-three percent of the world’s 250 largest corporations by revenue now formally report on CSR (KPMG, 2015). In parallel, academia has also focused heavily on CSR with over 650 schools and universities formally committing to embedding CSR in teaching and research.1 Moreover, in a search of the literature, we found 11,758 articles on CSR in peer-reviewed journals related to psychology.2 Due to the vast and diverse extant CSR literature, there is much we already know about CSR.

However, CSR has historically been studied at the institutional and organizational levels of analysis with the individual level being largely overlooked until recently (Glavas, 2016b).3 In order to address this gap, scholars in psychology and related fields (e.g., organizational behavior (OB), human resources) have been increasingly studying CSR (Gond, El Akremi, Swaen, & Babu, 2017). We now know a lot about topics at the individual level such as job seeking (Jones, Willness, & Madey, 2014), organizational identification (Farooq, Farooq, & Jasimuddin, 2014; Jones, 2010), perceived organizational support (Glavas & Kelley, 2014), and trust (de Roeck & Delobbe, 2012). Yet, there is still so much more that psychologists can contribute to CSR, such as developing multilevel models of CSR (Jones, Willness, & Glavas, 2017), exploring the dark side of CSR (Willness, forthcoming), and studying relevant topics such as work meaningfulness (Aguinis & Glavas, 2019), perceptions of CSR (Jones, forthcoming), and CSR attributions (Donia & Sirsly, 2016; Vlachos, Panagopoulos, & Rapp, 2013).

In order to help further integrate psychology with CSR, our article is structured as follows. First, we present a brief history and definitional development of CSR over the years, along with outlining its similarities/differences with overlapping concepts such as sustainability and corporate social performance (CSP). Second, we review the literature on CSR by analyzing across three levels of analysis (institutional, organizational, and individual). Third, we outline a non-exhaustive agenda for future research on CSR from a “psychological” perspective.

Thus, our article contributes to CSR by further accelerating the increasing CSR research by psychologists and related fields in the following ways. Our article offers a first stop and relatively general overview of past and current CSR trends so that those not familiar with CSR can find an approachable entry to the field, while those familiar with it may find an overview that provides clarity to a rather complex field. In addition, each part of our article outlines the implications of past and current trends of CSR so that scholars can understand the role that psychology and related fields might play in CSR. Finally, our future research agenda offers guidance for relevant CSR research—most notably, we recommend bridging CSR with fields of psychology such as developmental and cognitive psychology. To be clear upfront, our intent is not to further fragment the field by calling for more research only at the individual level of analysis; rather, we see the role of scholars who can explore micro-CSR as critical to being able to build multilevel models of CSR. In addition, our intent is not to provide another systematic review of CSR,4 but instead to provide an overview for a wide audience that will hopefully inspire research from not only psychology but also multiple disciplines.

The Concept and History of CSR

Because there are numerous definitions of CSR—which we will partly cover later in this article—for purposes of clarity, the overarching definition that we use for CSR in this article is: “context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance” (Aguinis & Glavas, 2012, p. 933). As Aguinis and Glavas (2012) further state, although the definition of CSR refers to policies and actions by organizations, such policies and actions are influenced and implemented by actors at all levels of analysis (e.g., institutional, organizational, and individual).

Certain organizational activities, which could today be labeled as “socially responsible” date back centuries. Although social responsibility (SR) was already explored in academia from the 1930s (Berle, 1931; Dodd, 1932), the roots of the current SR movement mostly date back to the post-World War II period (Spector, 2008). Scholars (e.g., Carroll, 2008) generally trace the scholarly conceptualization of CSR to Howard R. Bowen’s (1953) “foundational” book titled Social Responsibilities of the Businessman (SRB). In this period, what we today refer to as corporate social responsibility (CSR), was then referred to as social responsibility (SR). Bowen (1953, p. 6) thus defined CSR as “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in term of the objectives and values of our society.” Bowen’s view of CSR came from his careful analysis of the statements and discourses of close to 70 of the most prominent executives of the time (Bowen, 1953). It is important to note that SRB was more than just a normative book. As Bowen was essentially an economist, SRB theorized on explaining why business people were interested in CSR, but also reviewed critically the business case and legal arguments against CSR from an economic viewpoint (Acquier, Gond, & Pasquero, 2011).

Throughout the 1960s and 1970s, the United States was undergoing various social movements including civil rights, consumer rights, women’s rights, and environmental movements (Carroll & Shabana, 2010). This changing social environment had pushed organizations toward accepting socially responsible practices, policies, and perspectives. This led to an expansion of the literature on the topic, which primarily focused on defining the actual meaning of CSR (e.g., Davis, 1967, p. 46), and how it is relevant for business and society (e.g., Walton, 1967). In this phase, the concept of CSR basically argued that being an organization in society comes with a series of responsibilities, and that as actors in societies, businesses should behave responsibly (Carroll, 2008). It also argued that this should be done voluntarily, and thus avoid problems that would otherwise emerge. However, the responsibilities rested on two fundamental principles of charity and stewardship. In practice, this was seen through corporate activities such as philanthropic programs and strategies, volunteering, and better community relationships.

The 1970s were a time when different definitions of CSR began to proliferate. Also, it was in this decade that similar/alternative concepts such as CSP and corporate social responsiveness were first introduced (Ackerman, 1973; Ackerman & Bauer, 1976). Although different scholars have used different definitions of CSR, and explained how it differs from related concepts, a widely accepted definitional contribution came from the Committee for Economic Development (CED) (Carroll, 1999). The CED, which was—and still is—one of the most influential business-led public policy organizations, in their publication Social Responsibilities of Business Corporations, proposed a so-called three-concentric circle definition of CSR, including inner (i.e., basic efficiency related responsibilities), intermediate (i.e., social values and changing priorities), and outer (i.e., newly emerging responsibilities) corporate social responsibilities (Carroll, 1999). From a practical perspective, it was in the late 1970s that companies began to develop departments (e.g., public affairs departments) specialized for helping them bridge between corporate activities/decisions and external constituencies.

In the 1980s complementary concepts such as stakeholder management, CSP, and business ethics became more frequent (Carroll, 1999). During these years, the focus of CSR was on “ethical corporate cultures” and research was conducted on the link between CSR and financial performance (McGuire, Sundgren, & Schneeweis, 1988). Although the idea that being socially responsible was also good for business had existed for a long time (e.g., Bowen, 1953), the 1980s were a time when these ideas began to increase. This was the beginning of the “instrumental” arguments or “business case for CSR”—a perspective of CSR in which practitioners and academic researchers explored the usefulness of CSR for businesses by exploring its link to financial performance. This was also evident in some CSR definitions, such as that of Peter Drucker (1984), who proposed what he called a new meaning of CSR, in which business should “turn a social problem into economic opportunity and benefit, productive capacity, human competence, well paid job and wealth” (Drucker, 1984, p. 62).

Building on these developments, from the 1990s and onwards, even more research was conducted on the relationship between CSR and financial performance (Carroll, 2008). From a practical perspective, the 1990s were a time in which philanthropy and other forms of “corporate giving” expanded significantly, which led to the development of managers specialized in corporate giving, CSR, public affairs, and related areas (Waddock, 2004). On a global scale, multinational corporations (e.g., Coca-Cola, McDonalds, Nike) became more engaged in CSR, and some smaller companies (e.g., Ben and Jerry’s, Patagonia, The Body Shop) built global reputations as a result of their CSR practices. These companies engage in a wide variety of activities in order to be more responsible to numerous stakeholders, including customers, suppliers, employees, and local communities. A key part of such activities has been various forms of sponsorship and philanthropy aimed at the development of local communities. While some organizations donate for strategic purposes, others make contributions solely because they want to be good corporate citizens (Lii & Lee, 2012). For instance, a famous example of a CSR activity is Microsoft’s “Affordable Access Initiatives,” through which they seek to empower billions of people worldwide who do not have affordable access to the Internet by providing internet infrastructure, but also providing free education programs to increase the level of information technology literacy. In addition to such philanthropic activities, companies like The Body Shop and Patagonia have focused on making their production more responsible by using sustainable packaging, using natural products in production, and lowering their carbon footprint. Thus, managing their supply chain in an ethical and sustainable way has become a key strategic goal for many organizations. More recently, CSR has become crucial internally, such as in human resource departments, where CSR principles have been implemented in the way organizations recruit, manage, and treat their members, making socially responsible human resource management an integral part of CSR initiatives and a key tool for the implementation of CSR objectives. Such activities have often gone beyond the provision of better work conditions or a higher salary, but also include recruiting policies that target socially responsible employees, offering CSR training to employees, and so forth. An overview with the “main types” and examples of CSR activities can be found in Appendix A.

The global popularization of CSR then led to the development of a large number of CSR books for practitioners (e.g., Esty & Winston, 2006; Hart, 2005; Kotler & Lee, 2008; Laszlo & Zhexembayeva, 2011) as well as CSR becoming a common subject in business schools around the world.5 From an academic perspective, the empirical and conceptual literature that was published by scholars mostly focused on claiming a theoretical contribution, and was thus primarily framed toward contributing to different management theories (e.g., institutional theory, stakeholder theory). In recent years, the research on CSR has gone into different directions, with scholars using different paradigms and levels of analysis. This is discussed later in the review.

CSR and Similar Concepts

As was explained above, in the last 30 years, the concept of CSR was complemented with similar concepts such as CSP, stakeholder theory, corporate sustainability (CS) and corporate responsibility (CR)/corporate citizenship (CC).6 In this section, we outline each one of these concepts, and explain how these concepts differ to what we broadly understand as CSR. Please note that despite our depiction of these concepts as being distinct, these terms are sometimes used interchangeably with boundaries being blurred (Peloza, 2009; Waddock, 2004).

CSP

CSP provides a framework by which a company can assess its activities in and relation to society by taking into consideration all of its stakeholders and the natural environment. However, as with CSR, the exact definition of CSP is the subject of ongoing debate. Yet it is possible to categorize the definitions into two groups, depending on whether scholars have approached the concept empirically or conceptually (Gond & Crane, 2010).

The theoretical approach to CSP tends to view it as an umbrella concept that has a number of parts and dimensions, one of which is CSR (Gond & Crane, 2010). Carroll’s (1979) three-dimensional conceptual model can be seen as the landmark of the CSP concept. Building on this, Wood (1991) further developed a more detailed, and later widely acknowledged CSP model that consists of principles of CSR (i.e., institutional, organizational, and individual principles), processes of corporate social responsiveness (i.e., environmental, stakeholder, and issues management), and outcomes of corporate behavior. The second, and differing, definitional approach to conceptualizing CSP refers to the way that it was assessed in the empirical literature (e.g., Clarkson, 1995; Hillman & Keim, 2001). In this context, CSP is primarily configured to capture and measure the activities—among which are CSR activities—and the societal impact of corporations (Gond & Crane, 2010). Overall, both groups of definitions have viewed CSP as a broader umbrella concept of which CSR is one, but albeit important, part.

Stakeholder Theory

Stakeholder theory, a theory popularized by Edward Freeman (1984), is based on the assumption that a company’s relationship with all of its stakeholders—including the natural environment—is essential to understanding how a business operates and adds value. Freeman thus argued that relationships among stakeholders are the basis of value added and strategic initiatives. Stakeholder theory was also largely referred to as a response to the “shareholder approach,” which was famously emphasized by Milton Friedman, and it asserts that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it . . . engages in open and free competition, without deception or fraud” (Friedman, 1970). Thus, stakeholder theory expanded the view of business and managerial action being only responsible to shareholders, but also to all stakeholders of an organization. It is important to emphasize that stakeholder theory builds on organizational theory, explaining some aspects of organizational life such as firm performance, firms’ actions/responses, stakeholder actions/responses, and stakeholder salience (Laplume, Sonpar, & Litz, 2008). Stakeholder theory thus evolved as the one of the first major theories attributed to explaining how, when, and why CSR is enacted. Stakeholder theory also signaled a shift of emphasis from trying to prove the business case for CSR to trying to actually understand CSR itself.

Corporate Sustainability

The concept of Corporate Sustainability (CS) was popularized in 1987 by a report published by the United Nations World Commission on Environment and Development (WCED). In this report, titled “Our Common Future”—or commonly known as the Brundtland Report—the WCED propagated the term “sustainable development.” The WCED argued that development is sustainable “if companies needs can be met without compromising the ability of future generations to meet their own needs” (WCED, 1987, p. 43). However, it was not until the 1990s that sustainability became a popular topic among business scholars. Moreover, it is important to note that sustainability has also been defined in different ways. While some scholars have used the concept of “ecological sustainability” to refer to the environmental issues of business, others have applied the WCED definition in a broader sense, by explaining it through a tri-dimensional construct which includes environmental, economic, and social dimensions (Bansal, 2005; Montiel, 2008).

While both sustainability and CSR tackle the relationship between business and society, and both have a similar conceptualization of the three dimensions (economic, social, and environmental), what differentiates them is that they emerged from different paradigms (Bansal & Song, 2016). As was explained before, CSR research started with a normative orientation, in which scholars explored the normative role of business in society, questioning unconstrained laissez-faire capitalism (Bansal & Song, 2016; Bowen, 1953; Walton, 1967). On the other hand, sustainability research served as a reaction to the ecological disruptions that happened as a result of economic development (Bansal & Song, 2016; Roome, 1992; WCED, 1987). While sustainability scholars focused on the interconnectedness between the economic, social, and environmental dimensions, the older CSR literature (e.g., Carroll, 1979) viewed CSR as an aspect that will supplement business (Montiel, 2008). However, in recent years, the distinctiveness between the two concepts has been blurred to the extent that researchers who study the intersection between business and society often struggle with their choice of constructs and literature (Bansal & Song, 2016).

CR/CC

During the 1990s, a new way of thinking about CSR was emerging, and CSR became a topic among business and strategy scholars around the world. From these studies, the concept of CR was developed, dropping the word “social” in order to reflect the importance of “responsibilities” in all corporate actions, decisions, behaviors, and impacts (Waddock, 2004). Thus, this concept integrally linked corporate practices, stakeholders, and responsibilities of all corporate relationships. It refers to the degree of (ir)responsibility that manifests in a company’s strategy and operations on a daily basis. Similarly, and around the same time, the concept of CC developed from the British tradition of practitioners and management scholars, and its definition is essentially comparable to the term of CR (Waddock, 2004). The two terms integrate stakeholder relationships as part of their operationalization. Other than just focusing on social implications of business activities, the concepts incorporate issues related to a company’s performance in respect to specific stakeholders and the natural environment. Therefore, stakeholder and environmental performance are central to CC/CR.

Prior CSR Research Classified at the Institutional, Organizational, and Individual Levels of Analysis

In this section, we briefly review the theoretical and empirical literature on CSR. With its increasing importance, the phenomenon of CSR was studied across disciplines (e.g., environmental studies, law, management, psychology, sociology). As a result, and due to the multidisciplinary natures of the fields, CSR has been studied through different levels of analysis. Here we illustrate what we know about CSR by organizing the literature across three levels of analysis: institutional, organizational, and individual. Also, scholars at all levels of analysis have not only explored the outcomes of CSR, but also the underlying mechanisms that lead to these outcomes, along with the activities that serve as “triggers” of CSR activities. All three aspects are covered in this brief overview (for a more detailed analysis of each level of CSR see Aguinis & Glavas, 2012). To be clear upfront, although analyzing at different levels of analysis is a convenient approach that is often used, CSR is a multilevel construct that should ideally be studied from all levels of analysis at the same time (Aguinis & Glavas, 2012).

Institutional Level of Analysis

As was described in the section “The Concept and History of CSR,” in the early years of the CSR field, scholars (e.g., Bowen, 1953; Walton, 1967) were interested in what they called the role of business in society, by exploring the responsibilities business has toward broader society. This implies that these scholars viewed CSR from what we today understand as an institutional level of analysis. Although there have been numerous attempts to define what an institution is, most scholars agree that institutions consist of three pillars which are normative, cultural-cognitive, and regulative (Scott, 1995). To give a few examples, if CSR is studied in relation to laws, it would be considered a regulatory pillar. On the other hand, if it is studied in relation to constructs that are shaped by stakeholders that are external to the firm (e.g., consumers) then they would be considered cultural-cognitive. Finally, if CSR is explored in relation to an “ethical” concern, that would be considered as “normative.”

A relevant view of institutions to CSR is based around the concept of isomorphism (cf. Agle, Mitchell, & Sonnenfeld, 1999; Hoffman, 1999), which is defined as the similarity of the processes of structure of one organization to those of the other (DiMaggio & Powell, 1983). There are three main types of institutional isomorphism: normative, coercive, and mimetic. Normative isomorphism is driven by norms that are brought up by education, for example, and are then embedded into the organization (e.g., CSR codes of conduct). Coercive isomorphism involves pressures by other organizations that are dependent on cultural expectations of society (DiMaggio & Powell, 1983) such as stakeholder pressure on firms to engage in CSR. By contrast, mimetic isomorphism refers to the tendency of the organization to imitate another organization’s structure (e.g., firms copying CSR practices of competitor firms), because it believes it is beneficial (DiMaggio & Powell, 1983).

When referring to institutional-level CSR outcomes, a commonly researched topic is the relationship between CSR and a firm’s reputation. The basic assumption of such studies is that CSR would positively influence a firm’s reputation, making it more attractive to their external stakeholders (e.g., McWilliams & Siegel, 2001). By empirically testing this, scholars have shown consistent findings regarding the positive relationship between CSR and a firm’s reputation (e.g., Brammer & Pavelin, 2006; Lii & Lee, 2012; Turban & Greening, 1997), including reputation based on consumer loyalty (e.g., Maignan, Ferrell, & Hult, 1999). Other than reputational outcomes, more recently a number of CSR scholars have adopted what they call a political view of CSR (e.g., Fooks, Gilmore, Collin, Holden, & Lee, 2013; Scherer & Palazzo, 2007). Building on the ideas of Scherer and Palazzo (2007), scholars have started to explore the phenomenon in which private corporations engage in the provision of public goods (e.g., water, health, education). Scherer, Rasche, Palazzo, and Spicer (2016) conceptualize this phenomenon by introducing the umbrella concept of political CSR, which they define as those responsible business activities that turn corporations into political actors by engaging in public deliberations, collective decisions, and the provision of public goods.

In order to explain the CSR–outcome relationship, mediators have been studied at the institutional level, such as customer satisfaction (e.g., Lev, Petrovits, & Radhakrishnan, 2010), consumer trust (Vlachos, Tsamakos, Vrechopoulos, & Avramidis, 2009), and consumer–organization fit (e.g., Sen & Bhattacharya, 2001). On the other hand, the strength of the influence of CSR on institutional outcomes has been studied primarily by using moderating variables such as firm environment (e.g., Chatterji & Toffel, 2010), stakeholders (e.g., Russo & Fouts, 1997), and industry (e.g., Chiu & Sharfman, 2011). A key concept in this relationship is “stakeholder salience,” which refers to the level of importance that organizations give to certain stakeholder groups (Mitchell, Agle, & Wood, 1997). By using a sample of companies from emerging economies, and drawing from literature on stakeholder salience (Mitchell et al., 1997), Jamali (2008) has shown how stakeholder management is affected by relational attributes (i.e., power, legitimacy, urgency) and the pressures they can exert on corporations. However, David, Bloom, and Hillman (2007) have shown that the relationship between CSR initiatives and outcomes is much more complex than initially theorized because stakeholder salience might influence managers to try to appease stakeholders through symbolic actions (i.e., lower-quality CSR that does not impact stakeholders as positively as substantive actions). These findings foreshadowed later work on micro-CSR in which it was shown that individuals react in different ways to CSR (e.g., both negative and positive) and thus have varying influences on the relationship between CSR and outcomes.

Although the aforementioned literature has described the institutional level outcomes of CSR, along with the underlying mechanisms that lead to it, some scholars went a “step back” and asked the question: “what motivates these organizations to engage in CSR? Why do they do it in the first place?” In order to explain this, Aguilera, Rupp, Williams, and Ganapathi (2007) delved into CSR motives and outlined three groups of motives that pressure firms to engage in CSR. These authors created a multilevel model such that the motives apply to all levels of analysis. For purposes of this section, we refer to institutional motives. The first motives are instrumental, which they described as those that are driven by an organization’s self-interest (e.g., reputation). The second type are moral, which refer to those motives that are driven by moral principles which are often influenced by society. Finally, the third type are relational, which refer to the concerns with relationships among different group members (e.g., fulfilling one’s need to belong by engaging in CSR)—at the institutional level, this might be industry forces. However, as the motives imply, it is important to note that CSR activities are rarely a purely moral decision, but are often triggered by different stakeholders who have different expectations of the organization (Grunig, 1979). Building on this idea, a number of studies have explored the way consumers (e.g., Christmann & Taylor, 2006), shareholders (e.g., David et al., 2007), the media (Weaver, Treviño, & Cochran, 1999), and governments (Moon & Vogel, 2008) influence firms to engage in CSR. However, although these studies have shown that these stakeholders do influence organizations’ CSR activities, the way they do so tends to differ. For example, when customers want to influence CSR they may do it through their evaluation and product purchasing (e.g., Sen & Bhattacharya, 2001), customer monitoring and expected sanctions (e.g., Christmann & Taylor, 2006), and discursive actions (e.g., Stole & Micheletti, 2013, p. 258). On the other hand, certain interest groups (e.g., non-governmental organizations (NGOs)) may use public statements and other forms of public pressure in order to make companies more socially responsible. Overall, external stakeholders apply pressure by indirectly impacting an organization’s financial resources and reputation (LaPlume et al., 2008).

In sum, by viewing CSR from an institutional level of analysis, scholars have demonstrated the important influence of different stakeholder groups and institutional forces on CSR activities. However, research has also shown that institutional forces may lead to primarily symbolic CSR, meaning that firms engage in these activities to superficially meet stakeholder demands, or meet the regulatory minimum (David et al., 2007). Finally, scholars have also shown that companies that engage in CSR are likely to increase their reputation and strengthen their customer loyalty (e.g., Brammer & Pavelin, 2006; Maignan et al., 1999).

Organizational Level of Analysis

Although CSR was originally studied from an institutional level of analysis, to date the vast majority of CSR research has been conducted from what we understand as an organizational level of analysis (Aguinis & Glavas, 2012). An organizational level of analysis refers to studies that look at the impact that CSR has on organizations as a whole. As was described previously, since the 1990s, numerous scholars were interested in exploring the positive relationship between CSR and financial outcomes, along with the moderating and mediating effects that lead to it. All these attempts to measure the impact of CSR on financial performance can be broadly placed within an area of CSR research, which is today often labeled as “the business case for CSR.” The business case for CSR refers to the underlying arguments that support the idea that the business community should advance their own CSR agendas (Carroll & Shabana, 2010). Thus, the business case for CSR is primarily concerned with the question of “what do businesses benefit from CSR?” (Carroll & Shabana, 2010, p. 85). Generally, there seems to be a significant and positive, albeit slight, relationship between CSR and financial performance (Orlitzky, Schmidt, & Rynes, 2003; Margolis, Elfenbein, & Walsh, 2009). However, Aguinis and Glavas (2019) put forward that there is great variance in the relationships—something that Orlitzky et al. (2003) also acknowledge in their meta-analysis—and that this variance cannot be understood without studying the differing effects CSR has on individuals.

Other than financial outcomes, a number of studies explored the relationship between CSR and non-financial outcomes. For example, by drawing from social identity theory, Turban and Greening (1997) found that CSR can attract better talent because of positive signaling effects on job seekers. Similarly, through their concept of “shared value,” Porter and Kramer (2011) theorized that CSR should be used as a source of competitive advantage. They define shared value as the policies and operating practices that enhance the competitiveness of a company, while at the same time improving the economic and social conditions of the communities in which they operate. However, this concept was strongly criticized by Crane, Palazzo, Spence, and Matten (2014), who argued that it suffers from serious shortcomings: it ignores complex tensions that usually exist between social and economic goals, it is too simplistic about the challenges of business compliance, and it is based on a shallow conception of the corporations’ role in society. Furthermore, a few studies have explored the impact of CSR and firm capabilities such as product quality (e.g., Johnson & Greening, 1999), operational efficiency (Sharma & Vredenburg, 1998), and management practices (Waddock & Graves, 1997). In addition to studying the effects of CSR on outcomes, scholars have also explored factors that influence these outcomes through the moderating role of financial resources such as financial performance (e.g., Brammer & Millington, 2004; Johnson & Greening, 1999) and slack resources (e.g., Bansal, 2003). Other commonly investigated moderators include firm size (e.g., Sharma, 2000) and firm visibility to the public (Fry, Keim, & Meiners, 1982). Overall, these studies show how financial resources, as well as additional resources and size of the organization, strengthen the relationship between CSR and outcomes.

Finally, scholars have explored organizational factors that motivate companies to engage in CSR, and in a sense, serve as predictors of CSR engagement. These studies have shown how the aforementioned instrumental motivation of firms—the perception that CSR is good for business—is likely to increase a firm’s legitimacy (e.g., Sharma, 2000) and competitiveness (e.g., Bansal & Roth, 2000). However, this is not the only source of motivation for CSR because organizations can also to be motivated by normative reasons such as a sense of responsibility (e.g., Bansal & Roth, 2000) and higher-level morals (Aguilera et al., 2007).

In sum, when studying the relationship between CSR and financial outcomes, research has shown varied results. On the other hand, there are several non-financial outcomes that have shown to result from CSR. These include product quality, operational efficiency, and enhanced diversity. In addition to the effects of CSR on outcomes, research has shown that factors such as firm size, financial resources, and additional resources (e.g., firm visibility) strengthen the CSR–outcomes relationship. Finally, scholars have put forward that the motivation for an organization to engage in CSR can be both instrumental and normative (e.g., Aguilera et al, 2007; Bansal & Roth, 2000). Varied results might be due to outcomes of CSR being aggregated to the organizational level, which might result, for example, in a relatively neutral relationship between CSR and outcomes; but if CSR is unpacked to include the individual level, then results might vary widely with some individuals being positively affected while others negatively (Aguinis & Glavas, 2012, 2019). Therefore, we now turn to the different ways that individuals influence and are influenced by CSR.

Individual Level of Analysis

Until recently, understanding CSR from the perspective of an individual was largely ignored by scholars (Gond et al., 2017). However, since 2010, there has been a rapid increase in the literature on individual-level research on CSR, now popularly called micro-CSR (Glavas, 2016b). Micro-CSR scholars suggest integrating organizational psychology and OB—as well as related disciplines such as organizational psychology and human resources—with CSR (Gond et al., 2017; Jones & Rupp, 2018). This literature provides insights into how CSR practices influence and/or are influenced by organizational members (Gond et al., 2017). Also, it serves as a response to the aforementioned varied results of CSR at the organizational level. By taking an individual level of analysis, micro-CSR scholars have unpacked the results, and found that, under certain conditions, CSR may influence some employees positively, while others negatively (Aguinis & Glavas, 2013). However, individual-level research should not just be limited to the study of employees, but should include individuals both inside (e.g., employees, managers, executives) and outside (e.g., perspective employees) the organization. This is why Gond et al. (2017) emphasized a “person-centric” rather than “employee-centric” perspective of micro-CSR.

Research on micro-CSR has shown that CSR has numerous positive effects on employees. Scholars have found positive effects of CSR on factors such as job satisfaction (e.g., Glavas & Kelley, 2014; Vlachos et al., 2013), organizational commitment (e.g., Ditlev-Simonsen, 2015), employee engagement (e.g., Glavas, 2016a; Glavas & Piderit, 2009), creativity (e.g., Brammer, He, & Mellahi, 2015; Glavas & Piderit, 2009), employee attachment (Lee, Park, & Lee, 2013), and knowledge sharing (Farooq, Payaud, Merunka, & Balette-Florence, 2014). Also, studies have shown that CSR is positively related to organizational identification, which suggests that by improving organizational reputation and prestige, CSR in turn makes employees prouder of working for the organization (de Roeck, El Akremi, & Swaen, 2016). This can be explained through social identity theory, which would suggest that if treating others well is part of an employee’s self-concept, then they would show a stronger identification with the organization that treats them well (Dutton, Roberts, & Bednar, 2010). In addition, by exploring the impact of CSR on employees’ trust in relationships (Muthuri, Matten, & Moon, 2009) as well as high-quality relationships among co-workers (Glavas & Piderit, 2009), scholars have put forward a relational view of CSR, which by its very nature should include caring for different stakeholders (Glavas & Kelley, 2014). This implies that organizations that put effort into building high-quality relationships with their external stakeholders could create a similar culture within the organization (Glavas, 2016b).

Although the majority of micro-CSR research has focused on exploring the relationship between CSR and individual-level outcomes, a smaller number of scholars have also explored the underlying mechanisms that lead to these outcomes. Understanding these underlying mechanisms contributes to the CSR literature, while at the same time providing novel insights for organizational psychologists (Glavas, 2016b). Such research has shown that the strength of the relationship between CSR and micro-level outcomes is moderated by individual differences such as gender (e.g., Brammer, Millington, & Rayton, 2007), national culture (e.g., Mueller, Hattrup, Spiess, & Lin Hi, 2012), ideology (Jones, 2010), moral identity (e.g., Rupp, Shao, Thornton, & Skarlicki, 2013), and project meaningfulness (Caligiuri, Mencin, & Jiang, 2013), as well as organizational-level cooperative norms (Shen & Benson, 2016). In addition to exploring the strength of the CSR–outcomes relationship, scholars have also studied the mechanisms through which CSR influences employees because it enables them to bring more of their whole selves to work (Glavas, 2016a). In a recent micro-CSR review article published by Glavas (2016b), he outlined four aspects of the whole-self, which could be found in earlier studies, such as psychological safety, psychological availability, values congruence, and purpose. Psychological safety refers to aspects such as organizational trust (e.g., de Roeck & Delobbe, 2012) and perceived organizational support (Glavas & Kelley, 2014), which have shown to be positively related to CSR. This implies that CSR can provide an organizational environment/atmosphere in which employees feel a safe space to express who they truly are. Psychological availability arises from factors such as organizational pride (Jones, 2010), identification (Carmeli, Gilat, & Waldman, 2007), and prosocial identity (Grant, Dutton, & Rosso, 2008). Simply put, this means that employees are likely to feel good about themselves if they are working for an organization that is perceived as doing good for society and, as a result, they will reveal more of their true selves at work. Purpose and values congruence refers to situations in which, as a result of CSR activities, employees have a stronger alignment with the purpose and values of the organization (Gully, Phillips, Castellano, Han, & Kim, 2013; Spanjol, Tam, & Tam, 2015). Thus, CSR enables employees to bring aspects of their selves to work which they might not have otherwise in cultures where the focus is, for example, on aggressive pursuit of short-term profit. As such, CSR provides fertile ground for scholars to explore a broad range of psychological constructs at work.

In summary, in recent years we have witnessed a rapid increase in individual-level CSR literature. By exploring the impact that CSR has on employees, scholars have provided a partial answer to the varied results of organizational-level CSR research. However, micro-CSR scholars have not only focused on employees of the organization, but also on other individuals outside the organization. The aforementioned research has shown the positive impact that CSR can have on a number of factors such as job satisfaction, employee engagement, and creativity among others. Finally, a smaller number of studies have tried to explain the underlying mechanisms (e.g., gender, national culture, moral identity) that influence the relationship between CSR and individual-level outcomes.

Moving Forward

Thus far, we have presented a brief history and definitional development of CSR over the years, along with outlining its similarities/differences with similar and sometimes overlapping concepts such as CSP, stakeholder theory, sustainability, and CC. Also, we have presented a cross-disciplinary review of the CSR literature across three levels of analysis. In this section, we provide a non-exhaustive agenda for future research topics on CSR, along with potential research questions that could link CSR to different streams of psychology.

Future Research Topics

Despite the valuable prior research conducted on psychological aspects of CSR, there is much room for future research. We provide a few illustratory examples, which are not meant to be exhaustive. If there is one overarching theme of future research, it is that the underlying relationships between CSR and outcomes as well as antecedents and CSR could be explored in more detail. Little is still known about how, when, and why CSR influences employees and vice versa (Aguinis & Glavas, 2019; Glavas, 2016b)—which is sometimes referred to as the black box of CSR. As mentioned, prior research has often focused on proving the business case that CSR has positive effects for the organization and its employees (Aguinis & Glavas, 2012). Similarly, much of the research at the individual level focuses on the positive effects of CSR on employees; however, in reality, employees vary in how they are affected by and how they influence CSR (Aguinis & Glavas, 2019). Therefore, numerous scholars have stated that CSR should move beyond the business case and the overemphasis on studying only the positive effects of CSR (e.g., Margolis & Walsh, 2003; Wood, 2010). Moreover, at the individual level, scholars have called for micro-CSR to move beyond a similar emphasis on the study of positive individual outcomes of CSR (Aguinis & Glavas, 2017; Willness, forthcoming). Following are examples of potential future research topics.

The Dark Side of CSR

As Willness (forthcoming) argues, the extant CSR literature has largely painted a positive picture of the effects of CSR. However, employees react both positively and negatively to CSR. Understanding the different variables that influence positive versus negative reactions can inform both theory and practice. For example, could employees perceive CSR as being extra-role activities which contribute to stress because they are already overburdened at work (Aguinis & Glavas, 2019; Glavas, 2016b)? If CSR is implemented symbolically (e.g., greenwashing, which employees see as a hypocritical promotion of values that do not exist in the company), could it even have a counter-effect, with employees having even lower organizational identification than if there was no CSR (Glavas & Godwin, 2013)?

Third-Party Mechanisms

Because CSR includes a focus on how others are treated outside the organization, it provides new fertile ground to go beyond exploring only the direct relationship between employer and employee as well as the treatment of others who are inside the organization (e.g., co-workers). For example, organizational justice has traditionally focused on how employees perceive that the organization is treating them or their co-workers (Rupp, 2011). Recently, scholars have begun studying the effects on employees of how the organization treats those outside the organization. As Rupp (2011) puts forward, perceptions of fairness toward external stakeholders (i.e., third-party justice) has positive effects on employees. For example, Rupp et al. (2013) found that when employees perceive the organization is treating others outside the organization fairly (i.e., CSR), they respond with higher levels of organizational citizenship behaviors and this relationship is strengthened by moral identity.

Organizational Identity and Identification

While “organizational identification” refers to organizational members’ “cognitive linking between the definition of the organization and the definition of the self” (Dutton, Dukerich, & Harquail, 1994, p. 242), “organizational identity” refers to the characteristics of the organization that members believe to be central, enduring, and distinctive (Albert & Whetten, 1985). Although there has been a number of studies exploring the relationship between CSR and organizational identification (e.g., de Roeck & Delobbe, 2012), little is known about the role of CSR in constructing and maintaining an organization’s identity. With an increasing number of social enterprises and social impact organizations, in which CSR is often not only an “additional” activity, but also a key characteristic, future research could explore the role of CSR as a central, enduring, and distinctive characteristic of the organization, and how it interplays with other organizational activities (e.g., decision-making, strategy).

Attribution Theory

In addition to organizational justice and social identity theory, there have been many other theories and approaches used to help explain the underlying mechanisms of CSR, such as social exchange theory, signaling theory, and meaningfulness (Aguinis & Glavas, 2019). One theory that is understudied in CSR, but is promising, is attribution theory. CSR is fertile ground for attributions because, as mentioned in the section “Third-Party Mechanisms,” CSR represents what the organization does outside of its boundaries. As a result, employees form attributions about the organization based on strategies and practices in which they are often not directly involved, which then potentially lead to greater variance in perceptions among employees. Understanding how these attributions are formed based on third-party mechanisms could lead to novel insights. To our knowledge, prior CSR literature has only focused on causal attribution, yet attribution theory is a vast theory. Valuable studies to build upon are those by Donia and Sirsly (2016) and Vlachos et al. (2013).

Micro-Political CSR

Although our review did cluster the political CSR literature within an institutional level of analysis, this distinction can be somewhat problematic, because it overlooks the potential of bridging the literature of micro-CSR and political CSR. Scholars have outlined the importance of the cognitive and linguistic dimensions of CSR (e.g., Basu & Palazzo, 2008; Joutsenvirta, 2009), but no study to date, to our knowledge, has developed a theory on micro-level political CSR. Such an approach could have great potential in understanding issues such as sense-making and sense-giving, power, Machiavellianism, and responsible leadership (Frynas & Stephens, 2015).

Measurement Issues

As Jones and Rupp (2018) put forward in a review, one of the major issues that CSR is facing is that of measurement. Internal (i.e., CSR directed toward employees) and external (i.e., CSR directed toward external stakeholders) CSR are often confounded. Thus, internal CSR overlaps with many constructs already studied in psychology (e.g., organizational justice, perceived organizational support, and social exchange theory). Yet there might be differentiating effects of CSR when the external component is separately measured—for example, as mentioned, with the effects of third-party justice on employees’ organizational citizenship behaviors (Rupp et al., 2013). Overall, one of the main reasons for the underdevelopment of micro-level CSR theory is the evident lack of measures for employee perceptions of CSR. Prior CSR research has mostly used measures of CSR at the organizational level which may or may not capture individual-level perceptions (Glavas & Kelley, 2014). For example, an organization might be highly rated in CSR on a specific instrument, but it is quite possible that many employees perceive the organization’s CSR differently and that some employees might not even be aware of CSR. A recent scale that provides a path forward is that of El Akremi, Gond, Swaen, de Roeck, and Igalens (2018) who developed a new measure of corporate stakeholder responsibility (CStR).

Perceptions of CSR

Building on the prior point, relatively little is known about how perceptions of CSR are formed (Jones, forthcoming). Future research could inform how employees learn about CSR in the first place and then how subsequent judgments are formed. In addition, social learning theory could provide insight into this topic.

CSR Education

CSR has become widespread as a taught academic course around the world. More than 600 schools and universities are formally committed to embedding CSR in teaching and research.7 However, we know very little about the actual impact that CSR education has on individuals. This is why future research could explore the impact of CSR education on individuals’ perceptions, career choice, and the way that they actually engage with the concept of CSR in their workplace.

Other Topics

Numerous other topics are also quite relevant for CSR for which scholars have called for more research such as on meaningfulness (Aguinis & Glavas; 2019; Glavas, 2016b), tensions between individual and organizational CSR priorities (Hahn, Preuss, Pinkse, & Figge, 2014), social intrapreneurship (Hemingway, 2005), and the role of individual differences (Glavas, 2016b). Finally, although multilevel approaches to CSR have been discussed that involve the institutional, organizational, and individual levels, the leadership level is often overlooked—much more is needed to be studied in order to learn how and when leaders influence and are influenced by CSR (Pless, Maak, & Waldman, 2012; Waldman, 2014).

Future Research: Disciplinary Approaches

Prior psychology research in CSR has been primarily studied from the fields of organizational and social psychology. For example, a special issue on organizational psychology and CSR was published in Frontiers in Psychology (Jones, Willness, & Glavas, 2017). As mentioned, CSR has built on topics in organizational psychology such as organizational justice, perceived organizational support, and social exchange theory. In social psychology, numerous contributions have been made to CSR, most notably social identity theory has been widely used to explore CSR and organizational identification (e.g., de Roeck et al., 2016; Farooq et al., 2014; Jones, 2010). However, other disciplines could contribute as well. A few illustratory examples which are not exhaustive follow.

Developmental psychology could shed further light on why, how, and when CSR plays a role in the development of individuals. Especially interesting might be studying the relationship between life stages and CSR. As Glavas (2016b) noted in a review, prior literature, especially from the broader public press, has highlighted that younger generations are more interested in CSR (Meister, 2012). However, a recent meta-analysis found that this is not the case and there is actually a slightly positive and significant relationship with age (Wiernik, Ones, & Dilchert, 2013). One potential avenue for future research to study is if the older that individuals get, the more salient legacy becomes and thus it becomes more important to leave the world better for future generations. In other words, the importance of making money and/or promotion decreases, while improving society (i.e., CSR) becomes much more important.

Cognitive psychology could contribute to the still less developed literature on the relationship between CSR and decision-making. Although previous CSR research has briefly touched upon this topic (e.g., Pedersen, 2006), cognitive psychology could offer a perspective and methodological approach that could help us understand how CSR influences managers’ decision-making, particularly in complex cases. These studies could thus explore questions, such as, if CSR contributes to the well-being of employees across all levels, how does it influence the ability of managers to conduct complex decision-making? Another way to bridge the CSR–cognitive psychology literature gap is by exploring the role of cognition and emotion in organizations. Specifically, organizations nowadays are considered as places in which employees deal with issues such as anxiety (Linden & Muschalla, 2007), depression (Caplan & Jones, 1975), and cognitive biases (Barnes, 1984). Future research could explore if and how CSR influences these issues among employees. For example, although CSR should be focused on well-being, could it sometimes actually increase anxiety and stress in cases where it adds additional extra-role work to an already busy workload? Glavas (2016a) found that higher levels of volunteering weakened the relationship between CSR and employee engagement.

In sum, there are numerous ways that the psychology of CSR could be explored. This section hopefully provides a sampling of potential topics and opens up other questions that scholars and practitioners might have.

Future Research: Tying it All Together

While there is a need for more individual-level research, we caution that future research needs to ensure it does not increasingly fragment the field of CSR. Prior research on CSR has already been fragmented even while being studied primarily at the macro and institutional levels (Aguinis & Glavas, 2012; Lee, 2008). Adding one more layer of analysis (i.e., individual) that is not multilevel will not only further divide the field of CSR, but also add to the already existing micro–macro divide in scholarship (Aguinis, Boyd, Pierce, & Short, 2011). Therefore, scholars have called for multilevel models of CSR (Aguilera et al., 2007; Aguinis & Glavas, 2019; Glavas, 2016b; Jones et al., 2017).

While multilevel models of CSR are quite rare (Glavas, 2016b), a few good examples of multilevel research in CSR exist that can provide inspiration for future research. For example, Aguilera et al. (2007) put forward a multilevel model in which instrumental, relational, and moral motives affect actors at all levels. As another example, Aguinis and Glavas (2019) propose a person-centric multilevel framework of how employees experience and make sense of work meaningfulness. They posit that employees not only find meaningfulness in their daily tasks, as prior research has shown, but also based on how the organization treats outsiders. Following these examples, future research could expand the traditional view of context being at the organizational level to a context that is at the institutional level.

CSR is a field that is holistic in nature. It involves human beings (i.e., employees, customers, and other stakeholders), the organization, and society. Arguably, other fields have not been as holistic in nature. For example, industrial-organizational psychology has often focused primarily on the relationship between the individual and the organization, while largely ignoring society. Thus, not only can psychology contribute to CSR, but CSR can also contribute to psychology by providing an opportunity for a more holistic approach.

Acknowledgment

We thank the reviewers and Jean-Pascal Gond for their very constructive feedback that allowed us to improve this article.

Further Reading

Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social responsibility: A review and research agenda. Journal of Management, 38(4), 932–968.Find this resource:

Carroll, A. B. (1999). Corporate social responsibility. Evolution of a definitional construct. Business and Society, 38(3), 268–295.Find this resource:

Carroll, A. B. (2008). A history of corporate social responsibility: Concepts and practices. In A. Crane, A. McWilliams, D. Matten, J. Moon, & D. Siegel (Eds.), The Oxford handbook of corporate social responsibility, (pp. 19–46). New York: Oxford University Press.Find this resource:

Frynas, J. G., & Stephens, S. (2015). Political corporate social responsibility: Reviewing theories and setting new agendas. International Journal of Management Reviews, 17(4), 483–509.Find this resource:

Garriga, E., & Melé, D. (2004). Corporate social responsibility: Mapping the conceptual territory. Journal of Business Ethics, 53(1/2), 51–71.Find this resource:

Glavas, A. (2016). Corporate social responsibility and organizational psychology: An integrative review. Frontiers in Psychology, 7, 144.Find this resource:

Gond, J. P., El Akremi, A., Swaen, V., & Babu, N. (2017). The psychological microfoundations of corporate social responsibility: A person-centric systematic review. Journal of Organizational Behavior, 38(2), 225–246.Find this resource:

Jones, D. A. (forthcoming). The psychology of corporate social responsibility. In A. McWilliams, D. E. Rupp, D. S. Siegel, G. Stahl, & D. A. Waldman (Eds.), The Oxford handbook of corporate social responsibility: Psychological and organizational perspectives. Oxford, U.K.: Oxford University Press.Find this resource:

Jones, D. A., & Rupp, D. E. (2018). Social responsibility in and of organizations: The psychology of corporate social responsibility among organizational members. In N. Anderson, D. S. Ones, H. K. Sinangil, & C. Viswesvaran (Eds.), Handbook of industrial, work, and organizational psychology (2nd ed., pp. 333–350). SAGE.Find this resource:

Rupp, D. E., & Mallory, D. B. (2015). Corporate social responsibility: Psychological, person-centric, and progressing. Annual Review of Organizational Psychology and Organizational Behavior, 2(1), 211–236.Find this resource:

Waddock, S. (2004). Parallel universes: Companies, academics, and the progress of corporate citizenship. Business and Society Review, 109(1), 5–42.Find this resource:

Willness, C. R. (forthcoming). When CSR backfires: Understanding stakeholders’ negative responses to corporate social responsibility. In A. McWilliams, D. E. Rupp, D. S. Siegel, G. Stahl, & D. A. Waldman (Eds.), The Oxford handbook of corporate social responsibility: Psychological and organizational perspectives. Oxford, U.K.: Oxford University Press.Find this resource:

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Appendix A. Types and Examples of CSR Activities

Types of CSR Activities

Purpose of Activity

Examples

External (e.g., supply chain and operations management)

Organization engages in CSR activity in order to manage their operations and supply chain in a more ethical and sustainable way.

Lowering carbon footprint of company operations.

Switching to renewable energy.

Collaborating only with Fairtrade suppliers.

Internal (e.g., employees)

CSR policies and practices directed at recruiting, managing, and educating employees, with the goal of creating a more socially responsible and motivated workforce.

Recruiting and retaining socially responsible employees.

Engaging in CSR activities as a source of meaningfulness.

Providing CSR training to employees.

Strategic sponsorship

Strategic investment in an activity to access the exploitable commercial potential associated with the sponsored entity or event.

Organizing public events with charity organizations in order to improve the reputation of the organization.

Donating to charitable activities in order to get a tax break.

Donating to local communities to get benefits from local governments.

Philanthropy

Contributing to a cause solely because the organization wishes to be a good corporate citizen without expecting direct benefit from it.

Donating to promote education in local communities.

Development of roads and infrastructure.

Donating to global charitable causes.

Notes:

(2.) A search was conducted of peer-reviewed articles with the ProQuest database PsycINFO using search terms of “corporate social responsibility” or “sustainability.”

(3.) Due to differing definitions of levels of analysis, we refer to the individual level as being at the employee level of analysis, the macro level at the organizational level of analysis, and the institutional level being that which is studied outside of the organization (e.g., community, government, stakeholder groups). The exception is when members of a stakeholder group—such as customers—are studied at the individual level, then we refer to these studies as also being at the individual level of analysis.

(4.) For more comprehensive reviews of the CSR literature at the individual level see the following: Aguinis (2011); Glavas (2016a); Gond et al. (2017); Jones and Rupp (2018); Rupp and Mallory (2015).

(6.) Although there are great benefits by dividing the literature based on levels of analysis, it also comes with shortcomings. One shortcoming is related to the fact that certain studies that are based on different paradigms (e.g., studies on political CSR) are often hard to cluster within a single level.