The Effect Of Corporate Social Responsibility On Stakeholders

CSR(Corporate Social Responsibility,CSR)refers to companies engage in activities that promote social welfare beyond their own interests and the requirement of law.The social responsibility of company covers the scope of its stakeholders,including consumers,employees,communities,and the environment.While CSR activities increase the direct operating costs of the company,the vast majority of studies show that corporate social responsibility practices can improve relationships with stakeholders,increase corporate reputation,provide insurance in times of corporate crisis and enhance the value of the company.Therefore,CSR is often viewed as an important strategic tool to maintain stakeholder relationships in practice to promote corporate value.The existing theoretical and practical evidences show that corporate social responsibility is important to stakeholders,including consumers,employees and shareholders,but there is a lack of stakeholder model to understand micro-mechanisms of how corporate social responsibility drives the financial performance.To fill this void,the present study attempts to study the stakeholders' attitude and behavior response to CSR by using signal theory,dual-process theory,organizational identification theory and trust theory.In particularly,we choose three types of stakeholder groups(i.e.,consumers,job seekers and investors)to discuss three issues:(1)whether does CSR signal promote stakeholders' positive reactions?(2)What are the underlying mechanisms to explain stakeholders' reaction to CSR?(3)What is the boundary condition for these mechanisms to work?We examine the above issues by conducting three experiments.We find the conclusions as follows.First,we have found that CSR as a non-product dimension of company can set up the bond with the stakeholders.CSR is effective and could be perceived by stakeholders as an important company signal.The CSR signal transmits the value of the firm in terms of integrity,benevolent and justice,and reflects the corporate character to some degree.When individuals feel the similarity between the corporate and self,the perception of similarity could be viewed as a source for self-definition,and in turn promotes their proactive behaviors.In addition,individuals tend to accept positive stiumuli and are influenced by the social norms,so they are inclined to response positively.Second,we have identified a dual system(cognitive and emotion)to explain how CSR influences stakeholders' response.Specifically,this study has examined the mediating roles of identity attractiveness and organizational trust representing an important emotion mechanism and cognitive mechanism,respectively.In the CSR domain,many researchers have highlighted the importance of the underlying mechanisms to explain the relationship between CSR and CFP.Previous studies have already explored the cognitive mechanism to understand how CSR influence stakeholders.In this paper,we argued that CSR as an ethical practice,not only promotes the stakeholders' positive response from the cognitive perspective,but also promotes the emotional attachment and intuitive judgment.Examining the two mediating mechanisms could help us better understand the internal processes underlying the relationship between CSR and stakeholders' response.Third,we have found that CSR source moderates the two mediating effects.Our results have showed that CSR source influences the judgement on the motivation behind CSR.In particular,when the CSR source comes from the company advertisement,the information could evoke the skepticism from stakeholders.They may infer that company are self-interest motivated to engage CSR.Thus,the two mediation effects become weaker.This finding implies that the effectiveness of CSR could be influenced by the motivation of CSR.Interestingly,we have found that the company which releases CSR information via advertisement could even result in unfavorable response from stakeholders.