Corporate Social Responsibility Values in Transforming Societies: Are There Country-, Status-, and Hierarchy-Based Differences?

Corporate Social Responsibility Values in Transforming Societies: Are There Country-, Status-, and Hierarchy-Based Differences?

Rainhart Lang (Technische Universität Chemnitz, Germany) and Irma Rybnikova (Hamm-Lippstadt University of Applied Sciences, Germany)
DOI: 10.4018/978-1-7998-1013-1.ch007
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The focus of the chapter is on corporate social values of managers as one important basis, and explanation of the functioning of CSR concepts in CEE organizations. The analysis is based on theoretical concepts explaining the relationship between the national and institutional context, corporate values of managers, and CSR activities, like “upper echelon theory,” which consider managerial action as a direct or indirect expression of the individual values of top managers. The situation in transforming societies in CEE countries can be well-described using the concept of situational strength. The empirical findings, with data from the GLOBE-CEO project from 129 firms in East Germany, Estonia, and Romania, show specific country-based combinations of corporate social values in the companies studied, with strategic orientation in East Germany, shareholder focus and a relatively strong religious orientation in Romania, and an orientation on shareholders as well as on employees and community in Estonia.
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The term „Corporate Social Responsibility“ (CSR) refers to the economic social and environmental responsibility vis-à-vis the various groups of stakeholders of the organization as well as the wider societal environment of the company (e.g. McWilliams & Siegel, 2001; Matten & Moon, 2005, 2008; Dahlsrud, 2008; Aguinis & Glavas, 2012; Wang et al., 2016). The literature distinguishes between explicit CSR, addressed in the corporate policy, and implicit CSR, namely values, standards and regulations already established in the company (Matten & Moon, 2008). While explicit CSR is more closely related to countries of liberal market economies, implicit CSR is typical for neo-corporatist economies like Germany, and CEE countries (Bluhm & Trappmann, 2014, 2015).

The discussion regarding implicit CSR particularly points to the significance of individual values of managers, the so called „managerial CSR values“ (e.g. Wood, 1991; Waldman et al., 2006; Choi & Wang, 2007; Chin et al., 2013; Washburn et al., 2018), as relevant predictors of the way decisions are made in organizations in general. One of the prevalent conceptual approach in this respect is the so called “upper echelon theory” (e.g. Hambrick & Mason, 1984). While drawing on this theory or on respective empirical studies, the CSR scholars quite consistently point to the fact that values held by top managers represent one of the factors determining the CSR strategy and practices of the firms (e.g. Manner, 2010; Aguinis & Glavas, 2012; Chin et al., 2013; Mazutis & Zintel, 2015; Grant & McGee, 2017). As a result, CSR practices of organizations are considered there as a direct or indirect expression of the individual values of top managers.

In a similar way, but from a behavioural perspective on leadership, Brown and Trevino (2009) as well as Groves (2013) or Wu et al. (2015) have referred to the relevance of socialized charismatic, transformational or ethical leadership behaviours of CEOs or top managers as important factors for the value congruence between managers and followers, which seems to be a pre-condition for a successful implementation of sustainable CSR practices. In their recent study, Washburn et al (2018) proposed that a high alignment and congruence of CEO or top manager values with those of other members of the management teams may promote deeper organizational changes in relevant work processes, including CSR-relevant procedures, instead only on the formal structure of the organization.

Despite considerable merits of the existing research, the relationship between managerial values and CSR is dominated by universalistic approaches that often neglect an explicit consideration of the wider organizational contexts, like country or national culture or different institutional settings. Several authors have recently pointed to the necessity to include a wider range of context factors into the analysis of CSR practices and socially responsible behaviour (e.g. Stahl & Sully de Luque, 2014; Jamali et al., 2017). The previous research on CSR shares an additional bias: The focus is mainly given to developed countries, and their institutional and business systems, with the situation and local practice in lower developed countries being neglected (e.g., Jamali et al., 2017, p. 344-345). Until now, the country-specific differences regarding managerial values, their antecedents and consequences for CSR activities in CEE organisations remain understudied. Especially the focus on CSR in transforming post-socialist countries represents a research lacuna and needs additional efforts.

Key Terms in this Chapter

Managerial Value Preferences: The term refers to rankings of individual values of managers.

Shareholder Orientation: Shareholder orientation describes a pattern of social responsibility values, decision making, or behavior where managers are focusing on the increase of shareholder values.

GLOBE CEO Project: The CEO project is phase III of the GLOBE project on culture and organizational leadership effectiveness. While the focus in phase II have been on national and organizational culture and its impact on culturally endorsed implicit leadership theories, the CEO project concentrates on the perceived behavior of CEOs in 24 countries and its impact on Top management team commitment and firm effectiveness. It also includes value preferences of CEOs, and subordinate managers in strategic organizational decisions.

Upper Echelon Theory: The upper echelon theory assumes that values and beliefs held by top managers are to be of utmost importance for organizational outcomes and strategies. They act as cognitive filters, reducing complexity, and framing strategic decisions. Moreover, top managers values are seen as having a direct and indirect effect on values and beliefs of followers, and organizational practices.

Stakeholder Orientation: Stakeholder orientation describes a pattern of social responsibility values, decision making or behavior where managers decide and act by including the interests of various groups of stakeholders like customers, employees, etc.

Community Orientation: Community orientation describes a pattern of social responsibility values, decision making, or behavior where managers put a strong emphasis on the increase community or state welfare.

East European Capitalism: The term describes a specific pattern of institutional and cultural characteristics, which have been developed after the 1990 in post-socialist countries of Central and Eastern Europe as a result of the fundamental societal change. In includes a stronger importance of communitarian values, and relevant networks of actors as well as of the state in the field of the economy.

Situational Strength: The concept describes different intensities of the influence of situations or personal traits on the behavior of actors. Strong situations are characterized through the influence norms and incentives guiding the behavior of individuals, while weak situations are characterized by a lack of such norms and guidelines. In the latter case, the behavior is strongly influenced by personal traits and values of the actors.

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