Examining multi-level effects on corporate social responsibility and irresponsibility

IntroductionWhy do firms engage in socially responsible (irresponsible) activities? Despite corporate social responsibility (CSR) becoming a prominent discussion for both corporations and scholars (Murphy and Schlegelmilch, 2013), our understanding of organizations' socially responsible (irresponsible) actions and their antecedents is still developing (McWilliams et al., 2006). A dearth of knowledge about the multi-level nature of the drivers of CSR continues to exist. According to a recent review of 181 studies on CSR-defined as situations where the firm goes beyond legal compliance and engages in actions that implicate social good beyond the interests of the firm (McWilliams et al., 2006, McWilliams and Siegel, 2001)-only nine considered CSR at more than one level of analysis (Aguinis and Glavas, 2012). Thus, the primary objective of this study is to focus on the multi-level influences on CSR by disentangling industry-, firm-, and individual-level effects, measuring the amount of variance attributable to each level.As most of the CSR literature focuses on responsible behavior, scholars have voiced concern over the exclusion of organizations' negative social impacts (Lin-Hi and Muller, 2013). Consequently, scholarly attention to socially irresponsible behavior is on the rise (e.g., Lange and Washburn, 2012, Strike et al., 2006, Murphy and Schlegelmilch, 2013, Popa and Salanta, 2014). In accordance with this trend, we extend prior theoretical views and empirical efforts to gain a greater understanding of the multi-level effects on this type of firm behavior. Negative social impact, or, as we refer to it here, corporate social irresponsibility (CSI), reflects situations in which the firm does not meet a "minimum behavioral standard with respect to the corporation's relationship with its stakeholders" (Campbell, 2007). CSI includes, but is not limited to, deceiving customers, exploiting employees or suppliers, putting consumers at risk, poisoning the environment, and cheating the government (Campbell, 2007, Vogel, 1992, Murphy and Schlegelmilch, 2013). Previous literature provides evidence that CSR and CSI are distinct (Lange and Washburn, 2012), as firms can demonstrate social responsibility as well as social irresponsibility simultaneously (Godfrey et al., 2009; Zyglidopoulos et al., 2011; Strike et al., 2006). Therefore, we offer a multi-level study of both CSR and CSI to provide clarity to current questions and offer a sound foundation for future research.According to Aguinis and Glavas (2012), the CSR literature is "highly fragmented" not only because it focuses on one level of analysis at a time, but also because of the variety of disciplinary and conceptual lenses used to describe the motivation to engage in CSR and CSI. For instance, one perspective describes CSR as voluntary corporate action used by firms to improve profitability, to enhance corporate reputation, or merely for a greater social good (McWilliams et al., 2006, Russo and Fouts, 1997, Wright and Ferris, 1997, Friedman, 1970). From this perspective, firms pursue CSR strategies based on their core missions, distinct circumstances and the characteristics or agendas of their unique organizational leaders. Alternatively, some scholars suggest that firms face social pressures to abide by industry norms, standards, or expectations set forth by peers and outside Vol. 10, No. 3, Autumn, pp. 163-184, ISSN 1842-0206| Management & Marketing. Challenges for the Knowledge Society constituents when designing and implementing social responsibility strategies (Campbell, 2007). From this view, failure to comply with these standards can negatively affect the legitimacy of the firm and be detrimental to a firm securing resources, attracting customers, and (ultimately) surviving. Rather than subscribing to one particular perspective or the other, a predominant framework advanced by Wood (1991) integrates these views and offers a multi-level conceptual framework. …