Employee perceptions of corporate social responsibility and organizational corruption: empirical evidence from Kosovo

• Date: 20 October 2020
• DOI: https://doi.org/10.1108/CG-07-2020-0274
• Pages: 1349-1370
• Published date: 20 October 2020
• Author: Festim Tafolli,Sonja Grabner-Kräuter
• Subject Matter: Strategy,Corporate governance

Employee perceptions of corporate social

responsibility and organizational

corruption: empirical evidence

from Kosovo

Festim Tafolli and Sonja Grabner-Kräuter

Abstract

Purpose –The purpose of this paper is to investigate the relationship between perceived corporate

social responsibility (PCSR) and perceived organizational corruption (POC) in a developing country

context. The research suggests mediating roles of perceived ethical leadership (PEL) and job

satisfaction(JS) in the PCSR–POC relationship.

Design/methodology/approach –Data were collected through survey questionnaires. The sample

consisted of 434 employeesworking in private and public organizations in Kosovo.Regression analysis

was conductedby using a serial mediation model.

Findings –Applying a social learning framework, this study provides evidence that employees’

perceptionsof corporate social responsibility (CSR) are positivelyrelated to perceived ethical leadership

and job satisfaction and negatively relatedto perceived organizational corruption. Furthermore, results

confirm that the relationship between CSR perception and organizational corruption perception is

mediatedby ethical leadership perception and job satisfaction.

Practical implications –Armed with the findings, organizations can adopt CSR practices to positively

influence employee behaviorsand attitudes. From these results, it is possible to better comprehend the

role of CSR in dealing with relevantaspects such as corruption at the organizational level, especiallyin

developingand emerging markets.

Social implications –The findings of this research indicate that employees in socially re sponsible

organizations perceive less organizationalcorruption. Adopting a more ethical and responsible management

approach might represent a promising solution to fig ht the corruption phenomenon inside and even outside

organizations. These results should serve as reflection for both mana gers and public authorities.

Originality/value –With regard to CSR, previous studies have investigated different employee

outcomes but never considered the potential impact on corruption at the organizational level.

Furthermore, this study extends theliterature by conceptualizing perceived ethical leadership and job

satisfaction as mediators between perceived CSR and organizational corruption perception, in a

developingcountry context where the concept of CSR is still less investigated.

Keywords Corporate social responsibility, Ethical leadership perception, Job satisfaction,

Organizational corruption perception, Employees, Developing countries

Paper type Research paper

1. Introduction

Corruption is receiving significant prominence in public and scholarly debates. It represents

the misuse of public power or organizational resources for private or personal gain and is

commonly understood to be strongly undesirable by any community (Lange, 2008). The

wide-ranging negative effects of corruption are legion, such as unequal resource

allocations, constrained economic growth, decreased trust in government and reduced

Festim Tafolli is a PhD

student at the Department

of Marketing and

International Management

at Alpen-Adria-Universita

¨t

Klagenfurt, Klagenfurt,

Austria.

Sonja Grabner-Kra

¨uter is

an associate professor of

marketing at Alpen-Adria-

Universita

¨t Klagenfurt,

Klagenfurt, Austria.

Received 2 July 2020

Revised 2 September 2020

Accepted 7 September 2020

Festim Tafolli and

Sonja Grabner-Kra

¨uter.

Published by Emerald

Publishing Limited. This article

is published under the Creative

Commons Attribution (CC BY

4.0) licence. Anyone may

reproduce, distribute, translate

and create derivative works of

this article (for both commercial

and non-commercial

purposes), subject to full

attribution to the original

publication and authors. The

full terms of this licence maybe

seen at http://creativecommons.

org/licences/by/4.0/legalcode

DOI 10.1108/CG-07-2020-0274 VOL. 20 NO. 7 2020, pp. 1349-1370, Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 1349

legitimacy of market economy and democracy, distorting markets and opportunities and

rising poverty and discrimination (Osuji, 2011;Lourenc¸o et al.,2018). Several studies

confirm that corruption is accompanied by economic stagnation and social decline

(Lewicka-Strzalecka, 2006). Certainly, it is not an easy task to find an answer on how to

effectively comprehend and then prevent corruption. The causes and effects of corruption

at the national and organizational levels are issues that interest scholars, managers and

policymakers. Over the past decades, a variety of organizational corruption reports have

been published, suggesting a wide range of organizational corruption prevention and

control schemes (Ashforth et al., 2008). Some are compliance-based, focusing on extrinsic

rules and benefits, such as institutional guidelines, code of conduct and regulatory and

legal penalties. Others are based on integrity and focus on intrinsic motivation, such as

organizational values,ethical leadership, job satisfaction and self-controls(Lange, 2008).

This paper investigates deeper into the intrinsic motivations analyzing if and how

organizational corruption is related to corporate social responsibility (CSR), which

represents a factor that affects managers, employees and the ethical climate within an

organization (Peterson, 2002).Organizational research from a micro perspective showsthat

work behaviors and attitudes play key roles in turning CSR into favorable organizational

outcomes (Valentine and Fleischman, 2008;Kim et al., 2010). For example, researchers

suggest that CSR enhanced the commitment of employees to the organization with further

increase to its performance (Ali et al., 2010). It is therefore crucial to investigate why and

how CSR may contribute to employee outcomes in the place of work. A better

understanding of these micro mechanisms through which CSR benefits the organization

also has practical implicationsfor organization managers, as they can learn how to produce

beneficial employee resultswhile the organization participates in CSR actions.

In this context, organizational researchers have started to investigate CSR’s effect on

attitudinal and behavioral outcomes of employees within the organization (Aguilera et al.,

2007). In particular, CSR has been found to enhance employee organizational commitment

and organizational trust (Farooq et al., 2014), ethical leadership (Gao and He, 2018), job

satisfaction (Dhanesh, 2014), employee engagement (Glavas and Piderit, 2009), work

meaningfulness (Glavas and Kelley, 2014), organizational citizenship behavior (Zhang

et al., 2014) and to decrease employees’ emigration intent (Grabner-Kra

¨uter et al.,2020). It

should be noted, however, that the underlying psychological mechanisms linkingPCSR and

employee outcomes are not sufficiently investigated and understood. Some of the recent

studies have made improvements in the area by using social identity theory and social

exchange theory (De Roeck et al., 2014;DeRoeck and Maon, 2018). Notwithstanding these

empirical findings, the theoreticalmechanisms that underlie the effects of perceived (PCSR)

on perceived organizational corruption (POC) remain elusive. In other words, knowledge

regarding if and how CSR can encourage employees toward ethical and positive behavior

and favor an environment less prone to corruptionis in its infancy.

In the current study we theorize a serial mediation model and test the mediating roles of

ethical leadership and job satisfaction in the PCSR-POC relationship. We expect that an

organization that adopts and follows a social and responsible strategy is related to higher

levels of ethical leadership perception and thus to higher job satisfaction, reducing

employee’s deviant behavior and corruption in the workplace. Drawing on findings from

recent micro-CSR research (for an overview, see Aryati et al., 2018;Gorsira et al.,2018;

Manzoor et al., 2019), we suggest that CSR activities may be positively associated to

perceived ethical leadership, job satisfaction and negatively related to employees’

organizational corruptionperception (Figure 1).

This research contributes to the literature in several ways. First, we investigate the

perception of CSR by employees in a developing country context and its potential impact

on decreasing deviant and corrupt behavior in the workplace with a unique data set that

includes survey data from 434 Kosovar employees. Second, we corroborate previous

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