Motivation Theory and Corporate Responsibility Essay Sample
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Motivation Theory and Corporate Responsibility Essay Sample
Whereas CSR Scholars generally identify two kinds of motivation for engaging in CSR, namely instrumental and normative motivation, we argue that this framework does not provide a comprehensive picture of reasons leading individual people and companies to engage in CSR and, even more important, does not shed enough light on implications that motivations have both on how CSR is integrated in strategy and business operations as well as on impact of social responsible behaviours on firm performance. Therefore, drawing on Lindenberg (2001) theory on motivation, we contend that activities and behaviours aiming at improving all stakeholders’ wellbeing can be a source of enjoyment, which “can be conceptualized as an emotion tied to improvement of one’s condition” (Lindenberg, 2001: 331). In such a case, motivation for CSR can be defined hedonic, in the sense that what motivates individuals to behave responsibly are the desirable intrinsic characteristics of those behaviours. After a comparison of the four motivations for CSR we have identified, we hypothesize that motivations affect the relationships between CSR and corporate strategy, the way CSR is spread within an organization, and the link between corporate social performance and corporate financial performance. Finally, we discuss the concept of sustainability of motivations.
Keywords: motivation, hedonic, corporate social responsibility, stakeholders.
Drawing on the Lindenberg (2001) theoretical framework on intrinsic motivation, recently used to develop a comprehensive theory of competitive advantage (Gottschalg & Zollo, 2007a) and to highlight the role of firms as devices through which individuals can satisfy fundamental learning and self-enhancement needs (Gottschalg & Zollo, 2007b), we aim at advancing theory on motivation for corporate social responsibility (hereinafter CSR). While almost all the Scholars tend to trace back motivations for CSR to two archetypes – the instrumental and the normative ones (e.g., Mintzberg, 1983, Smith, 2003, Gardberg & Fombrun, 2006) -, we contend that this framework does not provide a comprehensive picture of reasons leading individual people and companies to engage in CSR and, even more important, does not shed enough light on implications that motivations have both on how CSR is integrated in strategy and business operations as well as on impact of social responsible behaviours on firm performance.
Motivation theory developed in psychology suggests that while at a first level of analysis two kinds of motivation can affect human behaviour – the extrinsic one, aimed at achieving external rewards, and the intrinsic one, aimed at getting internal rewards like identity -, a more in depth analysis of motivational drivers of human behaviours makes it necessary to split the latter into two: normative intrinsic motivation and hedonic (or enjoyment – based) intrinsic motivation.
The extrinsic motivation for CSR is supported by a large amount of empirical findings – even if questioned and discussed (e.g. Margolis & Walsh, 2003) – demonstrating that corporate social performance would enhance corporate financial performance (see f.i. Waddock & Graves, 1997, Orlitsky et al., 2003) and by a number of theoretical contributions explaining that CSR can positively affect shareholders value by reducing firm risk, improving reputation, enhancing employees commitment and productivity, in short, through increasing the stock of intangible assets available to a firm (Gardberg & Fombrun, 2006). Instead, normative (or moral) motivations would lead companies to act in socially responsible manners in compliance to social norms and moral obligations, regardless of the outcomes – in terms of shareholder gains or, in more general terms, of external rewards – they can obtain. Therefore, we advance research question RQ1 and hypothesis H1.
RQ1: What are the motivations for engaging in CSR?
H1: Motivations for CSR can be instrumental, normative or hedonic.
What CSR scholars seem to neglect is that activities and behaviours aiming at improving all stakeholders’ wellbeing can be a source of enjoyment, which “can be conceptualized as an emotion tied to improvement of one’s condition” (Lindenberg, 2001: 331). In such a case, motivation for CSR can be defined hedonic, in the sense that what motivates individuals to behave responsibly are the desirable intrinsic characteristics of those behaviours (Deci and Ryan, 1985, Lindenberg, 2001), perceived as inherently enjoyable, self-determined and competence-enhancing (King, Hautaluoma et al., 1983).
To the extent to which people feeling enjoyment from engaging in CSR are a firm’s key decision makers – like the CEO or the entrepreneur – and enjoyment-based motivations become widespread and shared within a firm, we can say that social responsiveness is potentially included in that firm’s goal system. Besides introducing the hedonic or enjoyment – based motivation, we identify two different kinds of instrumental motivations, one proactive and one defensive, and compare the four motivations from different perspectives and implications for CSR. Whereas the “common denominator” of the four motivations is awareness that CSR is an issue that needs to be carefully managed within a firm, they differ from different points of view. At a first level of analysis, the four motivations are different along two dimensions (table 1): kind of expected rewards (extrinsic or intrinsic) and approach to CSR they lead to (active or passive) (table 1). Table 1 about here
A more fine – grained analysis allows us to better specify the differences between the four types of motivations (table 2): – the function of CSR within the firm. In case of instrumental and normative motivations as well, it is a constraint: of extrinsic nature in the former (to preserve legitimization in front of stakeholders), of intrinsic nature in the latter (compliance to moral norms). The function of CSR is positive both in case of proactive instrumental motivation, since it can be a source of competitive advantage, and in case of hedonic motivation, in the sense that CSR becomes a goal in itself; – purposes of engaging in CSR: to increase shareholders value in case of instrumental motivation, to be compliant to moral norms in case of normative motivation, and to increase social value when hedonic motivation is at work; – conceptualization of CSR. Is the notion of corporate responsibility framed as a “need” (in case of instrumental defensive motivation), a tool (instrumental proactive), a duty (normative) or a will (hedonic)?; – psychological roots. Whereas cognitive and rational traits are dominant in case of instrumental motivations, both psychoanalytical and the “Palo Alto” schools emphasize the difference between decisions based on moral motivations and those founded on emotional motivations.
While the former are affected by the so-called “super-io”, the dimension of the personality related to moral judgments and perception of duty, the latter get energy and force from a stream of “libido”. The emotional nature of “libido” is deemed to confer greater effectiveness to decisions than moral evaluations residing in the “super-io” do (see e.g. Thévénot, 1995); – spiritual roots. While instrumental proactive motivations for undertaking responsible behaviours can be traced back to the Calvinistic idea of work, richness and earnings as signs of the God’s grace, instrumental defensive and normative motivations can ultimately be referred to Old Testament (to the Genesis and Moses books respectively). Instead, enjoyment – based motivation has its spiritual roots in the New Testament, where love encompasses law and leads men to feel enjoyed in doing God’s will; – expected rewards.
While acting in a responsible manner entails some forms of care of stakeholders and a convergent theme in ethical theories applied to business is deemed to be “a concern for the interests of others, as opposed to self-interest” (Jones, Felps & Bigley, 2007: 137), nevertheless some Authors argue that “the motivation for engaging in CSR is always driven by some kind of self-interest (Moon, 2001)” (Hemingway & Maclagan, 2004: 34). Whereas instrumental motivations for CSR are based on expectations of economic (extrinsic) rewards – avoiding loss of resources in the defensive case and obtaining additional resources in the proactive one -, normative motivation is associated with the reward of avoiding feeling guilty and hedonic motivation to the pleasure and enjoyment that stem from contributing to benefit stakeholders; – needs addressed of people engaging in CSR. Following Maslow’s (1964) theory, undertaking CSR for instrumental motivations addresses basic needs, while CSR for normative and hedonic reasons contributes to satisfy recognition and self-realization needs respectively. Table 2 about here
We also explore foundations of CSR in management and firm theories and argue that while Porterian theories on competitive advantage (e.g. Porter, 1985), resource-based view (Wernerfelt, 1984, Barney, 1991) as well as instrumental stakeholder theory (Freeman, 1984) provide theoretical roots of instrumental, proactive motivations for CSR, institutionalism-based arguments (DiMaggio & Powell 1983, Scott, 1995) emphasizing the role of CSR as a tool to preserve a firm’s legitimization underline instrumental, defensive motivations. Normative motivations are dominant in the business ethicists’ contributions as well as in those recognizing the ethical relevance of CSR (f.i., Carroll, 1979, Margolis & Walsh, 2003). Finally, the hedonic motivation becomes relevant for strategic management scholars aiming at explaining how CSR can be integrated in corporate strategy: Coda (1984, 2004) contends that the way a company shapes the relationships with all its stakeholders is an integral part of its corporate strategy and that the inclusion of CSR in the firm goal system is the starting point for integrating CSR into corporate strategy.
We then advance and theoretically discuss three hypothesis, each addressing a specific research question.
RQ2: how motivations for CSR affect its relationships with corporate strategy? H2: relationships between CSR and corporate strategy tend to be stronger when motivations for CSR are instrumental proactive and hedonic rather than instrumental defensive and normative.
The rational is that when motivations for CSR are instrumental CSR can be a source of competitive or economic advantage, since it is exploited as an intangible asset. when CSR is driven by hedonic motivations, strategy tends to incorporate social goals, which, in turn, makes relationships with all the stakeholders much more cohesive. Employees motivation and commitment are higher, which, in turn, increases their productivity. Furthermore, CSR is arguably rooted in firm resources and competences, which enables it to have a greater (positive) impact on stakeholders. With social as well as economic goals in mind and feeling enjoyment in serving stakeholders needs, firm key decision makers are expected to exploit all the opportunities to leverage on firm resources and competences to benefit stakeholders, provided that it is sustainable from a financial standpoint in the long period. Corporate strategy becomes ‘sense making’ and a source of motivation and commitment.
RQ3: how motivations for CSR affect the way it is spread within an organization? H3: the more relevant are hedonic motivations, the less formalized is the role of CSR within organizational structure and processes.
The logic is that when motivation for CSR is hedonic social values tend to be so widespread and embedded within a firm to affect corporate identity. The latter becomes a powerful driver of CSR, which reduces the need of formal mechanisms. CSR is often implicit or “sunken” in the organization (Perrini et al., 2006).
RQ4: how motivations for CSR affect the relationships between corporate social performance and corporate financial performance? H4: when instrumental motivations prevail, the relationships between CSP and CFP tend to be positive; when normative or hedonic motivations prevail, relationships between CSP and CFP tend to vary and can not be known a priori.
Furthermore, we explain that the four motivations for CSR outlined above are not mutually exclusive. Instead, two or more of them can be simultaneously at work both in individual and in collective motivation system. For instance, engaging in CSR for hedonic motivations does not exclude moral motivations.
Finally, drawing on Lindenberg (2001) contribution, we address the issues of sustainability and effectiveness of individual motivations for CSR and propose the following:
RQ5: what kind of motivation is more consistent with the purpose of ensuring firm long – term survival? H5: intrinsic motivations are more sustainable than extrinsic ones and hedonic motivations are more sustainable than normative ones.
Hypothesis 5 is based on the idea that instrumental motivations may lead firm key decision makers to reduce their attention to stakeholder expectations if environmental changes or an increasing pressure on resources make it more costly or disadvantageous for shareholders, at least in the short term. In such a case, stakeholders trust can be negatively affected, and so does their willingness to support the firm. Moreover, hedonic motivations generally lead to a more cohesive and participatory relationships with stakeholders than instrumental proactive motivations do, which, in turn, positively impacts on their trust and support towards to the firm and on the firm legitimacy. In short, intrinsic (hedonic) motivations provide 1) an adaptation advantage (stronger adaptation to changes in environmental conditions as well as in stakeholder expectations; 2) a legitimacy / trust advantage.
Our paper addresses three main theoretical issues:
– to fill in a gap in the treatment of motivations for CSR: Scholars tend to focus only on instrumental (the “business case” for CSR) and on moral (the “normative case” for CSR) reasons for CSR, neglecting hedonic or enjoyment – based motivations as a potentially powerful source of positive social impact; – to advance theory on how “CSR software” (motivation, values and goals) affects “CSR hardware” (structures, processes, strategies) and, in particular, on the relationship CSR / corporate strategy; – to explain how the research question on the relationships between corporate social performance (CSP) and corporate financial performance (CFP) loses relevance when CSR is driven by normative or hedonic motivations. In fact, if a firm includes CSR in its goals system, or believes that meeting stakeholders’ requests is the right thing to do regardless of the outcomes, it may accept a worse financial performance, provided that the latter is sustainable (see Margolis & Walsh, 2003, Barney, Mackey & Mackey, 2007).
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Table 1 – Motivations for CSR: a bi-dimensional analysis
Approach to CSR Passive Active Intrinsic NORMATIVE HEDONIC Kind of rewards Extrinsic INSTRUMENTAL DEFENSIVE INSTRUMENTAL PROACTIVE
Table 2 – Motivations for engaging in CSR
MOTIVATIONS 1) INSTRUMENTAL 2) NORMATIVE 3) HEDONIC (Gottschalg & Zollo, 2007a, 2007b) a) Defensive b) Proactive Function of CSR within a firm (extrinsic) constraint: avoiding Source of competitive advantage (intrinsic) constraint (wish to abide to A goal in itself (enjoyment in servicing society) stakeholders’ pressure / preserve internal ethical norms) firm’s legitimization Purposes of engaging in CSR To increase shareholders value To increase shareholders value Compliance to moral norms To increase social value (effectiveness / impact on one or more stakeholders) Concept of CSR A need (a necessity) A tool (an opportunity) A duty (a moral obligation) A will (a source of enjoyment) Psychological (psychoanalytical) roots ofRational / cognitive Rational / cognitive Moral (“super – io”) Emotional (“libido”) motivation Spiritual roots of motivation Old testament (Genesis): avoiding Calvinism (richness / earnings as a sign of Old testament (law) (Moses) New testament (love)
to be punished by God God’s grace) Kinds of rewards Extrinsic: economic (“avoiding Extrinsic: economic (“obtaining additional Intrinsic: avoiding feeling guilty; avoiding Intrinsic: perceived value of benefiting stakeholders loss of resources”) resources”) (Brief and Aldag 1977; Lindenberg moral conflict + pleasure from contributing to benefit stakeholders 2001¸ Gottschalg & Zollo, 2007b) Needs addressed (Maslow’s theory) Basic (survival) Basic (physical / economic well-being) recognition Self – realization Foundations in management theories Shareholder theory + Shareholder theory and instrumental stakeholderCarroll, 1979 (“Ethical responsibilities”); Coda, 1984, 2004 institutionalism (DiMaggio and theory (Freeman, 1984); resource-based view business ethics theories Powell, 1983; Scott, 1995) (Wernerfelt, 1984; Barney, 1991); competitive advantage (Porter, 1985; Porter & Kramer, 2002, 2006) Relationship CSR / corporate strategy Weak Strong: CSR as a source of competitive and / orWeak Strong: economic advantage
CSR integrated into corporate strategy; Meaningful strategies: (Waddock & Graves, 1997; Hamel & Prahalad, 1989; Bartlett & Ghoshal, 1994); strategy as a means to realize a “mission” Relationships CSR / a firm’s resources Weak Strong: CSR at the origin of intangible assets Weak Strong: CSR rooted in a firm’s resources and and competences (reputation, etc.) competences (embeddedness in R/C as a condition for CSR effectiveness and impact) CSR structure PR / communication Department CSR in staff to CEO Within HR function Embedded (implicit or “sunken”: Perrini et al., 2006) CSR drivers within an organization Punishment (and therefore Positive rewards Ethical perimeter (code of ethics, training Corporate identity (which affects vision and then discipline and control) on values and CSR, etc.) strategy) Relationships corporate social Positive Positive Neutral Neutral performance (CSP) / corporate financial performance (CFP)
 “(…) there is a recent emphasis in strategic management on the construction of meaningful strategies that emphasize the importance of core values to which employees and other key stakeholders can relate. Sometimes this ‘meaning-making’ is called strategic intent (e.g. Hamel and Prahalad, 1989). Others call it purpose (Bartlett and Ghoshal, 1994) or enterprise strategy, which specifies what the corporation “stands for” in the link between its values and strategy (Freeman and Gilbert, 1988).” (Waddock & Graves, 1997: 306).