Corporate commitment,identification,ethical leadership and social responsibility

Abstract

This research tests the role that organizational commitment plays in the relation between corporate social responsibility (CSR) and organizational identification. Furthermore, the research assesses civic, ethical and moral ideals pertinent to leadership, as the above relation’s potential moderators, in the Southern Cement State Company of Iraq. Correlation analysis and linear regression help assess the relations among the study’s constructs and variables. Grounded in the data collected from 262 employees, the results affirm that CSR is associated positively with organizational identification. Organizational commitment plays a partial mediating role between CSR and organizational identification, while the civic, ethical and moral ideals pertinent to leadership, often used as a band aid in business enterprises and other societal organizations, do not seem significant. The generalizability of our results might be limited because we surveyed people from a single economic sector; this calls for future studies to verify the stability of our findings across another sectors and firms.

Keywords

CSR organizational commitment ethical leadership organizational identification

Marwah Zuhaira, Ph.D, Candidate at Harbin Institute of Technology (HIT) and Lecturer at University of Kufa, Najaf, Iraq. Her main research interest are Organizational Behavior, Leadership, Human Resource Management, and anti-corruption.

Tian Ye-Zhuang, Professor, School of Management, Harbin Institute of Technology (HIT). Research on Manufacturing strategy, organizational theory, Organizational Behaviour and Human Resource, Leadership.

Karrar Abdulelah Azeez, Ph.D. Candidate at the Harbin Institute of Technology (HIT) and Lecturer at the University of Kufa, Najaf, Iraq. His main research interest are Business Administration, Cost Accounting, Management Accounting, and Information Systems.

1 Introduction

For nearly a decade, business practitioners and researchers have had an alternative motive, concerning corporate social responsibility (CSR). Before the 1980 s, CSR was considered a burden on companies, due to the fact that it was benefitting diverse stakeholders at the expense of stockholders. Therefore from the 1980s, CSR grew to become a very important phenomenon in company strategy, which coincides with development of stakeholder theory of the companies [1]. CSR is considered a crucial organizational behavior that deals with companies’ relation with their stakeholders, such as worker or employees, communities, etc. [2]. Companies share in more limited intentions [3] and as such result in greater customer loyalty, sometimes productivity gains, introduction of new products, increased image and reputation along with surmounting sustainability [4]. CSR affects competitive advantage through business strategies [5]. Social responsibility can be viewed in two-folds: the first is associated with the external aspect as well as the organization’s reputation outside of the organization and can be referred to as “external CSR”. The second is referred to as “internal CSR” and it’s related to the activities confined in the organization [6]. More often than not, firms use CSR in ways that would be beneficial to their core business process. In this regard they fully participate in such activities in their own interest to achieve their missions [7]. Social identity theory (SIT) proposes that individuals support their self-esteem and raise their self-image by identifying with clique and companies known for their social responsibility acts [8]. The prevalence and potential useful outcome of CSR have recently attracted the attention of more researchers. It is plausible that CSR is positively associated to company commitment because organizational commitment is supported when the organization satisfies individuals’ needs and wants through its socially responsible activities. However, the empirical studies on the outcomes of CSR are still not enough to mentally grasp the nature of responsibility and its effects. For example requiring organizations to pursue social intentions reduces the overall amount of human freedom in the society, because it clashes on shareholders’ right to handle their monies in whatever ways they desire [9].

Very important question pose; “What psychological benefits do individuals derive from being associated with well-known companies?” organizational theorists have emphasized that employees commonly portray themselves by what their companies represent. Therefore, organizations represent a part of one’s social-identity, or self-connotation as it relates to the significance of company membership [10]. There is a growing acceptance about the benefits of having individuals with a higher level of organizational identification [11]. Previous studies have revealed that individuals having a strong perception of organizational identification are much likely to offer positive organizationally desired behaviors [12]. Organizational identification is positively related with job satisfaction. On the other hand employee extra role performance is negatively related to counter-productive work behaviors and turnover intentions provides identity cues that influence the distinctiveness, attractiveness, and then, overall prestige of an organization [13 –18]. Several studies have indicated upsurge interest in focusing on the social facets of leadership [19] by targeting on leaders who follow an ethical leadership style to create an environment that boosts the behavior and attitude of employees [20]. Ethical leaders have a significant role in intrinsically motivating their employees to display extra ordinary performance. Ethical leaders not only change an employees’ perception toward work through their clear behavior, but also influence them to the extent that employees become motivated to put in extra efforts to arrive at innovative solutions [21].

This research endeavored to test the relation between CSR and organizational identification by organizational commitment and ethical leadership which is regarded as a crucial measure of competitiveness. It is very essential to test the impact of CSR in the Middle East context due to the fact that the outcome of CSR studies conducted in western community are not necessarily applicable in the middle east community because of the differences in the conception of CSR among cultures. Accordingly, the purpose of this study is in threefold: (1) to examine the effect of CSR on organizational identification in the general company for southern cement in Iraq. (2) To know, how CSR activities can increase organizational identification through organizational commitment. (3) To assess the impact of ethical leadership as a moderator on the relation between CSR and organizational identification. This study is organized in four main part. In the second part, the literature review on corporate social responsibility CSR, organizational commitment (OC), organizational identification (OI), and ethical leadership (EL) are offered, with the hypotheses development. The third part presents the research methodology including sample, procedure and measures. The fourth part reports the results and data analyses. Finally, discussion and conclusion.

2 Theoretical foundations and hypotheses

2.1 Corporate social responsibility and organizational identification

Many researchers have studied the relation between business and society. But, the question is, should companies voluntarily perform additional functions that benefit others in the society? articles on CSR can respond to this question [22]. CSR include actions that seem to further some social good, beyond the benefit of the company and that which is required by law [23]. It is also a context-specific organizational acts and policies that takes into account stakeholders’ anticipation and the triple bottom line of social, economic, and environmental performance [24]. For instance, companies may improve products that are made of environmentally-friendly materials, work carefully with community institutions, or donate to charities. This means that CSR actions can have a broader effect on the company and the society [1]. Some researchers have performed studies about the impact of CSR on company identification [25]. Organizational identification is the extent to which individuals see an organization as part of their identity [26]. Other researchers affirmed that CSR had a direct effect on organizational identification [4 , 27–29]. Individuals are more likely to identify with companies that have socially eligible qualities because it may support them enhance their self-esteem. Engaging in CSR actions “humanizes” companies and makes it potential for consumers to go beyond simply liking companies to identifying with them [30]. This leads us to first hypothesis:

Hypothesis 1: CSR will be positively related to organizational identification.

2.2 Mediating role of organizational commitment

Organizational commitment is an emotional and psychological state that portrays an individual’s identification within an organization, the more reason why committed employees are deemed to be more active [31]. It can also explained as the force that binds employees to a course of action deemed necessary for the success of the organization [32]. Spanuth & Wald; Peterson; Maignan & O. Ferrell, [31 , 34] found affirmed the positive influence of CSR programs on individuals’ organizational commitment. Individuals will accept the influence of others in the organization for extrinsic rewards such as reparations. Also, individuals will accept the others’ influence to retain a self-defining relation with the organization. Then, individuals will find the organization’s values and norms are aligned with their personal norms and values, which can be intrinsically rewarding to the individuals [35]. Smidts et al. [36] confirmed that individuals who think that they are worked by a socially responsible organization compared to others are likely to have reinforce self-esteem, which in turn positively impact their attitudes toward the organization. It is plausible that CSR is positively associated to company commitment because organizational commitment is supported when the organization satisfies individuals’ needs and wants through its socially responsible activities. previous studies explained the role of organizational identification to assume that it is the perception of oneness with or belongingness to an organization, where the employees defines himself in terms of the organization in which he is a member’ [26]. Organizational identification is a deep-level psychological phenomenon rather than a surface attachment [37]. Identity cues in the workplace encourage individuals to define who they are and who they are not, until the most satisfying, commitment and stable self-concept is got. High level of organizational identification emerges through a continuous cognitive operations of sense-making and sense-breaking. For example, when individuals come to believe that their values and those of their organization are congruent, they are likely to develop a strong organizational identification and great commitment in organizational rules [38]. These evidence yield the following hypothesis:

Hypothesis 2: The relation between CSR and organizational identification will be mediated by organizational commitment.

2.3 Moderating role of ethical leadership

Leadership go on to be a heavily researched region permeating many academic fields [39]. Leadership is the process of influencing others to mentally grasp and agree about what needs to be done and how to do it, and the process of simplifying employees and collective efforts to perfect shared objectives [40]. Collegial leadership should be studied as a process that supports and accommodates shared decision-making and participated leadership in the spirit of enabling employees to want to act [41]. Collegial leadership should be carefully patronized by those who have been empowered to guide the transformation of the organization to address the challenges of the new century. Collegial leadership can be effectively used to extract the best from employees and the most efficient and effective climate can be created at organization when collegiality is employed [42]. Here the role of ethical leadership comes, it is preferable comprehend and theorized as a social practice, which supplies an affordance for examining how convention ethical tensions, dilemmas, and paradoxes are catch and addressed in the practice of ethical leadership and management [43]. The responsibility in companies falls on the shoulders of and requires directing from the leaders at organization [44]. Brown et al. [20] defined ethical leadership as the demonstration of normatively suitable conduct through individual actions and interpersonal relations, and the upgrading of such conduct to followers through two approach decision-making and communication reinforcement. This type of leadership behavior succors to attenuate the individuals’ anxiety by being careful, open, honest, trustworthy and by pressing the importance of obligation to the high ethical rules, particularly faced with uncertainty in the organizations whiles on the job [20, 45]. Ethical leadership for (CEOs) have positive relation on CSR via organizational ethical culture [46]. Akdoğan et al. [4] explained that (EL) had no moderator role on relation between CSR and organizational identification, The reason is due to the sampling taken from a governmental organization, the code of behavior as well as directives compel individuals to act ethically. Briefly, most of those individuals working there might have internalized these and consequently, the effect of ethical leadership might have been neglected. In addition, the data were gathered only in a one-time survey. Thus other researchers were inspired to test this model in other organizations. These evidences yield the following hypothesis:

Hypothesis 3: Ethical leadership moderates the relation between CSR and organizational identification.

3 Methods

3.1 Sample and procedure

The sample included 262 participants between the ages of 18–64, consisting of (163) males and (99) females. The participants were workers in the general company for southern cement in Iraq. Which included eight factories; Kufa cement factory, Najaf cement factory, Karbala cement plant, Muthanna cement factory, Samawa cement factory, Babylon cement factory, Basrah cement plant, and al-Nora laboratory.

3.2 Measures

Corporate social responsibility: the four items scale developed by Pan & Chen [47] was used to measure CSR. Responses ranged from 1, “strongly disagree,” to 5, “strongly agree.” All items were of high reliability (0.85). An example is “The Company seems to be environmentally responsible.”

Organizational commitment: the seven items scale developed by Kim et al. [35] was used to measure organizational commitment. Responses ranged from 1, “strongly disagree,” to 5, “strongly agree.” All items were of high reliability (0.81). An example is “I am proud to be a part of this organization.”

Organizational identification: the six items scale developed by Mael & Ashforth [26] was, used to measure organizational identification. Responses ranged from 1, “strongly disagree,” to 5, “strongly agree.” All items were of high reliability (0.87). An example is “when I talk about general company for southern cement, I usually say ‘we’ rather than ‘they’.”

Ethical leadership: the ten items scale developed by Brown et al. [20] was used to measure ethical leadership. Responses ranged from 1, “strongly disagree,” to 5, “strongly agree.” All items were of good reliability (0.69). An example is “Success is defined, not just by outcome but also the means through which purposes are obtained.”

4 Results and data analyses

4.1 Confirmatory factor analysis

CFA uses to measure the proposed model and the construct’s reliability [48]. CFA has called structural analysis [49] or restricted factor analysis. CFA was used to test whether the research model was suitable or not. Zwingmann et al. [45 –50] (44) (43) said the model may be classified as acceptable if only 8% or less of the information are not consider for by the model (RMSEA ≤0.08). The Comparative fit index (CFI) ranges from 0 to 1 with a larger value indicating better model fit. Acceptable model fit is specified by a CFI value of 0.90 or bigger [51]. Tucker-Lewis index (TLI) should be bigger than 0.9 [48]. Results showed that the expected four-factor model fitted the data well, χ² = 127, χ²/DF = 2.06, CFI = .96, GFI = 0.93, RMSEA = .06. Moreover, this four-factor model fitted the data much better than a single-factor model (χ² = 688.469, χ²/DF = 9.05, CFI = 0.67, GFI = 0.70 RMSEA = .17) or an alternative three-factor model (CSR, organizational identification, and ethical leadership) in which the items were set to load on a single construct (χ² = 380.852, χ²/DF = 5.690, CFI = .83, GFI = 0.82, RMSEA = .13). These results indicate that the scales of CSR, organizational commitment, organizational identification, and ethical leadership possessed adequate discriminant validity for use in the tests of hypotheses.

4.2 Descriptive statistics

Table 1 Presents mean, standard deviation and bivariate correlation. CSR positively associated with organizational commitment (r = 0.313, p < 0.001), and positively associated with organizational identification (r = 0.291, p < 0.001). Furthermore, organizational commitment positively associated with organizational identification (r = 0.740, p < 0.001). In addition ethical leadership did not have any significant relation with study variables.

Table 1
Correlation matrix

Variable M SD 1 2 3 4 5

1. Age 0.60 0.48 –

2. Gender 2.58 1.12 0.03

3. CSR 3.867 1.087 0.06 0.07 –

4. OC 3.702 0.919 0.02 .01 0.313^* –

5. OI 3.766 0.897 –0.02 –0.03 0.291^* 0.740^*** –

6. EL 2.423 0.987 0.01 0.01 0.059 –0.021 0.021

Variable	M	SD	1	2	3	4	5
1. Age	0.60	0.48	–
2. Gender	2.58	1.12	0.03
3. CSR	3.867	1.087	0.06	0.07	–
4. OC	3.702	0.919	0.02	.01	0.313^***	–
5. OI	3.766	0.897	–0.02	–0.03	0.291^***	0.740^***	–
6. EL	2.423	0.987	0.01	0.01	0.059	–0.021	0.021

Note: N = 262, ^***p < 0.001.

4.3 Testing of hypotheses

According to the findings, CSR has a significant positive impact on organizational identification (β= 0.627, t = 6.06 p < 0.01). It was found that CSR explained a significant proportion of the total variation in organizational identification (R² = 0.53, F = 98.21, p < 0.01). Thus, hypothesis 1 was supported.

The results regarding the mediating effect of organizational commitment on the relation between CSR and organizational identification are summarized in Table 2. The analysis revealed that there was a partly significant mediating effect of organizational commitment on the relation between CSR and organizational identification. The mediation probe explained 82 percent of variation of the organizational identification (adjusted R² 82%). The coefficient of the CSR was significant (β= 0.18, t = 2.72, p < 0.01) lower than (β= 0.627, t = 6.06 p < 0.01) in the direct effect result that indicates statistically the mediation effects of organizational commitment, (see model 2). Thus, hypothesis 2 was supported.

Table 2
The mediating effect of organizational commitment on the relation between corporate social responsibility and organizational identification

Models Variables Beta T-value F Adjusted R² Level of significance

Model-1 Corporate social responsibility 0.63 6.06^* 98.2 0.53 0.000

Model-2 Corporate social responsibility 0.67 6.58^* 92.82 0.52 0.000

Model-3 Corporate social responsibility 0.18 2.72^* 292.6 0.82 0.000

Organizational commitment 0.78 20.7^*

Models	Variables	Beta	T-value	F	Adjusted R²	Level of significance
Model-1	Corporate social responsibility	0.63	6.06^***	98.2	0.53	0.000
Model-2	Corporate social responsibility	0.67	6.58^***	92.82	0.52	0.000
Model-3	Corporate social responsibility	0.18	2.72^***	292.6	0.82	0.000
	Organizational commitment	0.78	20.7^***

Note: N = 262, ^***p < 0.001.

The results regarding the moderating role of ethical leadership on the relation between CSR and organizational identification are demonstrated in Table 3. The analysis revealed that there was an insignificant moderating effect of ethical leadership on the relation between CSR and organizational identification. The coefficient of the interaction effect was significant (β= –0.01, t = –0.24, p > 0.1). Thus, hypothesis 3 was not supported.

Table 3

The moderating effect of ethical leadership on the relations between corporate social responsibility and organizational identification

Models	Variables	Beta	T-value	F	Adjusted R²	Level of significance
Model-1	corporate social responsibility	0.63	6.06^***	98.2	0.53	0.000
Model-2	corporate social responsibility	0.67	6.58^***	69.44	0.52	0.000
	Ethical leadership	–0.017	–0.42
Model-3	corporate social responsibility	0.7	5.03^***	55.36	0.52	0.000
	Ethical leadership	0.02	0.13
	corporate social responsibility×	–.01	–0.24
	Ethical leadership

Note: N = 262, ^***p < 0.001.

5 Discussion and conclusion

Current study explored the relation between CSR and organizational identification by organizational commitment and ethical leadership to collegial leadership at general company for southern cement in Iraq. Data analyses found that CSR is positively associated with organizational identification, and this is in line with [4 , 53] they was found that CSR had a direct effect on organizational identification, also employees’ attitude towards CSR have positive relates with organizational identification.

In addition this article tried to examine ethical leadership as a moderating role on the relation between CSR and organizational identification, but it did not find it’s significant. The results explained organizational commitment played a partial mediating role between CSR and organizational identification, this outcome supports that of Peterson; and Maignan & O. Ferrell [33, 34]. Employees may take a positive sense of identity from association with an organization that impact valued characteristics on them. Reciprocally, a poor company’s image created by a negative reputation on corporate citizenship may have a harmful impact on an individual’s self-concept, and thus, may result in lower organizational commitment. In same orientation the researchers confirmed that there is positive relation between CSR and affective commitment for employees after controlling for job satisfaction. On the other hand, it reflects the perception of companies’ actions that are often directed in certain parts outside of the company. Therefore, perceived CSR may raise affective organizational commitment because it reflects positive social conducts on the part of the companies and individuals to identify more strongly with companies that possess positive reference [35]. The generalizability of our outcome might be limited because we surveyed employees of a single sector; this calls for future studies to verify the stability of our findings across another sectors and firms.

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Corporate commitment,identification,ethical leadership and social responsibility

Abstract

Keywords

1 Introduction

2 Theoretical foundations and hypotheses

2.1 Corporate social responsibility and organizational identification

2.2 Mediating role of organizational commitment

2.3 Moderating role of ethical leadership

3 Methods

3.1 Sample and procedure

3.2 Measures

4 Results and data analyses

4.1 Confirmatory factor analysis

4.2 Descriptive statistics

Table 1 Correlation matrix Variable M SD 1 2 3 4 5 1. Age 0.60 0.48 – 2. Gender 2.58 1.12 0.03 3. CSR 3.867 1.087 0.06 0.07 – 4. OC 3.702 0.919 0.02 .01 0.313*** – 5. OI 3.766 0.897 –0.02 –0.03 0.291*** 0.740*** – 6. EL 2.423 0.987 0.01 0.01 0.059 –0.021 0.021

References

Table 1
Correlation matrix

Variable M SD 1 2 3 4 5

1. Age 0.60 0.48 –

2. Gender 2.58 1.12 0.03

3. CSR 3.867 1.087 0.06 0.07 –

4. OC 3.702 0.919 0.02 .01 0.313^* –

5. OI 3.766 0.897 –0.02 –0.03 0.291^* 0.740^*** –

6. EL 2.423 0.987 0.01 0.01 0.059 –0.021 0.021