Social Responsibility Journal

Examining the mediating role of organizational trust in the relationship between CSR practices and job
outcomes
Santhosh Manimegalai, Rupashree Baral,
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Santhosh Manimegalai, Rupashree Baral, (2018) "Examining the mediating role of organizational trust in the relationship
between CSR practices and job outcomes", Social Responsibility Journal, https://doi.org/10.1108/SRJ-01-2017-0007
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 Examining the mediating role of
organizational trust in the relationship
between CSR practices and job outcomes
Santhosh Manimegalai and Rupashree Baral
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Abstract Santhosh Manimegalai is a

Purpose – The purpose of this study is to examine the relationship between perceived corporate social PhD Research Scholar at
responsibility (CSR) and employees’ job outcomes, namely, work engagement and organizational Department of
citizenship behavior (OCB) in select Indian manufacturing firms. This study also aims to measure the Management Studies,
mediating effect of organizational trust in the above link. Indian Institute of
Design/methodology/approach – Based on the stakeholder theory of CSR, the proposed model was Technology Madras,
tested using data from 284 employees across eight manufacturing firms in South India extensively Chennai, India.
involved in CSR activities. Data were analyzed using hierarchical regression techniques. Rupashree Baral is
Findings – Significant positive association between CSR activities toward only three stakeholders Assistant Professor at
(employees, customers and environment) and the outcome variables (work engagement and OCB) were Department of
observed. Organizational trust partially mediated the relationship between CSR activities and job Management Studies,
outcomes. Findings reveal that organizational trust is the underlying mechanism by which organization’s
Indian Institute of
involvement in CSR activities positively influences job outcomes. The implications are discussed along
Technology Madras,
the lines of the findings.
Chennai, India.
Originality/value – Substantial macro-level research studies are available linking CSR activities with
tangible outcomes, such as financial outcomes. Literature suggests the need for more research on CSR
at the micro level i.e., how CSR practices affect the attitude, behavior, well-being and work engagement
of employees. This study also addressed the important research gap by considering the stakeholder
theory of CSR in a non-western context. Moreover, the mechanism through which CSR relates to
employees’ job-related outcomes is relatively underexplored. Therefore, the current study captured the
role of organizational trust as a mediator.
Keywords Attitudes, Organizational Citizenship Behavior (OCB), Corporate social responsibility,
Work engagement, Organizational trust, Social identity theory (SIT)
Paper type Research paper

1. Introduction
Received 11 January 2017
Organizations look for employees who are proactive, energetic and committed to achieve Revised 11 July 2017
Accepted 25 July 2017
high-quality performance standards, responsible for their own career growth and who
collaborate fairly with others. In short, organizations are in need of engaged employees and The current paper was
presented at 4th Biennial
employees who exhibit extra-role behaviors. Organizations always try to find ways to Conference of the Indian
engage employees and instill positive attitudes and behaviors in them. Corporate social Academy of Management on
“Managing in the Indian
responsibility (CSR) is one such strategy today to attract prospective employees and keep Institutional Context,”
them engaged once hired (Brammer et al., 2007). organized by the Indian
Institute of Management
CSR has become an integral part of most organizations in India given the inclusion of Lucknow (IIM-L) in
collaboration with the Indian
Schedule VII under The Companies Act, 2013 which encourages corporates to spend a Academy of Management held
between December 11 and 13,
minimum of 2 per cent of their average net profit on CSR activities (Gandhi and Kaushik, 2015 at the IIM-L Noida
2016). By investing in CSR, organizations get immense benefits, such as enhanced Campus.

DOI 10.1108/SRJ-01-2017-0007 © Emerald Publishing Limited, ISSN 1747-1117 j SOCIAL RESPONSIBILITY JOURNAL j
 reputation (Du et al., 2010; Leiva et al., 2014), engaged consumers, motivated employees,
(Leiva et al., 2014), increased shareholders’ investments (Mishra and Suar, 2010) and
financial returns (Cheng et al., 2014).
Organization’s CSR activities that are centered toward their external stakeholders such as
community and environment stimulate positive attitudes and behaviors among their employees.
For example, they enhance the organizational commitment of employees (Brammer et al.,
2007; Hoeven and Verhoeven, 2013) and OCB among them (Hansen et al., 2011; Cha et al.,
2013).
Plethora of studies highlight the benefits of CSR involvement but there is a dearth of
research to examine the mechanism or process through which CSR activities actually
influence the attitudes and behaviors of employees (Maignan and Ferrell, 2001; Peterson,
2004; Turker, 2009; Hansen et al., 2011; Ghosh and Gurunathan, 2013). By examining the
processes and identifying the situations and contextual variables that might affect
the processes, it will be possible to identify leverage points where improvements can be
introduced to derive maximum benefits out of CSR investments. Many studies are available
on the significant role of trust and its outcomes that benefit the organizations as a whole
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(Dirks and Ferrin, 2001; Hassan and Ahmed, 2011; Lee et al., 2013; Martı́nez and Del
Bosque, 2013). It is evident from the above literature that organizational trust is
indispensable for uninterrupted business functioning. Most of the OB research considered
the influence of intra-organizational factors (e.g., leadership, top management, and
supervisor) on organizational trust. This study attempts to fill the research gap by
considering the impact of inter-organizational factor such as CSR on the level of trust of
employees. As suggested by earlier researchers on exploring the underlying mechanisms
in the CSR–outcomes relationship, this study considered organizational trust as a mediating
variable between CSR and work outcomes. The purpose of this study, therefore, is to test
how organizations may influence positive attitudinal and behavioral work outcomes, namely,
work engagement and organizational citizenship behavior (OCB), through CSR by focusing
on intermediate mechanisms, namely, organizational trust.
Organizational trust plays a major role in enhancing employees’ attitudes and behaviors
(Hansen et al., 2011). Organizational trust (i.e. trust in an organization) is defined as
“employees’” willingness at being vulnerable to the actions of their organization, whose
behavior and actions they cannot control” (Lin, 2010). Organizational trust is very crucial for
employees to believe in their organizations and at the same time to behave properly that
benefits organizations. The impact of CSR activities can enable employees to modify their
behaviors. But the process of modification can happen through the intervening effect of
trust as proposed by this study. In this process, the knowledge of or the awareness about
CSR activities will channelize employees to trust their organizations more resulting in
positive attitudes and behaviors.
This paper aims to test a model linking CSR with employee attitude (work engagement) and
behavior (OCB). The first objective of the study is to examine the impact of perceived CSR
toward various stakeholders (employees, customers, environment, and community) and
employees’ job outcomes, namely, work engagement and OCB. The second objective of
the study is to examine the mediating role of organizational trust in the link between
perceived CSR and work engagement and OCB.

2. Literature review
2.1 Corporate social responsibility
Globalization, technological developments, demographic changes and government
regulations have brought drastic changes in today’s work environment. It is characterized by
an increase in the working hours, temporariness in jobs, diversity, and competition, which have
significant implications on employee attitudes and behaviors (Leiva et al., 2014). In such a

j SOCIAL RESPONSIBILITY JOURNAL j

 scenario, the responsibility of organizations is to adopt practices that will bring positive
attitudes and behaviors among employees, which are intangible resources, are difficult to
emulate and are essential for the development of any organization. One of such practices is
CSR (Crowther and Capaldi, 2008; Farooq et al., 2014). Consequently, CSR has become an
unavoidable agenda of every organization and CSR practices are prevalent across all sectors.
Organizations are keen to invest in CSR activities to attain long-term tangible and intangible
benefits (Cheng et al., 2014). But the way in which people understand the concept varies
(Crane et al., 2008). Some consider it as just a way in which shareholders’ money is spent;
others consider CSR as a screen used strategically to camouflage unethical practices. There
are just a few left, who consider it as an opportunity to help the community. CSR has received
attention since the industrial revolution, but now the approach toward it has changed (Crane
et al., 2008). CSR is defined as a “firm’s considerations of, and response to, issues beyond
narrow economical, technical, and legal requirements of a firm” (Davis, 1973).
Stakeholders’ approach in CSR is a widely accepted model, which focuses on six
constituents: employees, customers, environment, community, shareholders, and suppliers
(Mishra and Suar, 2010; Arevalo and Aravind, 2011; Shanmugam and Mohamed, 2011).
Stakeholders play crucial roles for the survival of any organization. (Pirsch et al., 2007;
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Rohini and Mahadevappa, 2010; Leiva et al., 2014; Santhosh and Baral, 2015). The current
study concentrates only on the first four stakeholders due to employees’ limited access to
the data pertaining to shareholders and suppliers.
Employees view their organizations as caring and genuine when they see that their
organization is investing time, money and effort in CSR toward various stakeholders.
Employees take pride in being members of that organization which invest in CSR, which in
turn bolsters their self- esteem (Mael and Ashforth, 1992; Bhattacharya et al., 1995). The
enhanced self-esteem motivates employees to produce desirable work outcomes that favor
organizational functioning (Bansal, 2003; Grant et al., 2008; Cha et al., 2013).
The relationship between CSR activities toward various stakeholders and employees’ job
outcomes are well supported by social identity theory (SIT) (Peterson, 2004; Brammer et al.,
2007; Turker, 2009). SIT as proposed by Tajfel (1974) suggests that every individual
possesses knowledge in understanding the phenomenon that humans are part of some
groups in which they are dependent for emotional support, financial support, moral support
and sharing of values. This theory grounded on the assumptions that people tend to
evaluate their in-group image with that of the out-group in tuning their thought processes
(Hogg and Terry, 2000). This is merely due to fulfilling one of the basic needs of human
beings such as self-esteem as proposed by Abraham Maslow. This theory proposes that a
positive image of an organization/group/association highly influences its members’ attitudes
and behaviors. Society is built upon many groups and sub- groups with which every
individual is associated to gain financial, emotional and moral support. An organization can
be considered as one such group of which employees are part of. As a member of the group
or organization, some proportions of employees’ identity are derived from that group.
Positive social identity is a preferred form of identity to extract desirable job outcomes from
employees, which can be catalyzed for effective organizational performance (Turker, 2009).
Thus, when employees perceive their organizations as caring, genuine and ethical because
of its CSR activities, they identify strongly with their organization (Brammer et al., 2007). This
positive social identity will result in positive job outcomes (Ashforth and Mael, 1989; Maignan
and Ferrell, 2001; Peterson, 2004; Turker, 2009), namely, work engagement and OCB.

3. Hypotheses development
3.1 Corporate social responsibility toward employees
According to the Energy Research Institute’s report, Indian stakeholders such as
employees, the general public and others expect companies to have norms in protecting

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 the rights of the people and increasing the work standards (Kumar et al., 2001). Of all the
stakeholders, employees are the important internal stakeholders of any organization (Singh
and Agarwal, 2013). CSR toward employees include various policies and practices of an
organization, such as participative decision making, procedural and distributive justice in
remuneration, conducive work environment, family-friendly policies, gender equity, good
relationship with unions, not entertaining child labor (Longo et al., 2005; Turker, 2009;
Mishra and Suar, 2010; Skudiene and Auruskeviciene, 2012), investments in training and
development (Longo et al., 2005; Brammer et al., 2007) and welfare measures toward family
members (Ismail, 2009). Many organizations consider CSR only for the external
stakeholders. To break the myth, many developing countries have initiated employee-
related programs in their CSR agenda. This should serve as a guiding principle for other
countries to invest CSR fund on employees’ welfare measures along with others.
When employees receive all these benefits, they take pride in their membership and
perceive their organization as caring (Grant et al., 2008), which in turn may be reciprocated
through higher engagement and OCB. Organizations can satiate their employees by
indulging in practices that will help them to perform better and enhance the financial and
non-financial performance of the organizations (Mishra and Suar, 2010). Hence, the
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following hypothesis was proposed:

H1. Perceived corporate social responsibility activities toward employees will be
positively related to (a) work engagement and (b) organizational citizenship
behavior.

3.2 Corporate social responsibility toward customers

Next to employees, customers are the most important stakeholders of any organization.
CSR can serve as a tool for employer branding and at the same time can attract more
customers, shareholders (Harrison and Freeman, 1999; Singh and Agarwal, 2013) and
employees (Turban and Cable, 2003). Customers are always keen on receiving the product
and services in a friendly and ethical way (Carroll, 1979). Organizations always prefer to
maintain a cordial relationship with their customers. Many companies have adopted CSR
initiatives to influence the purchasing behavior of their customers (Turker, 2009; Inoue and
Kent, 2014). Companies will face a financial crisis when they exhibit irresponsible behavior
toward their stakeholders (Mishra and Suar, 2010), especially with the customers. Some of
the CSR initiatives for customers are producing product in a good and acceptable
environment, concerning for customers health, following ethical norms for advertisements,
avoiding manipulative information about the products/services, fixing right prices for the
products, producing products for the economically disadvantaged people, etc. (Mishra and
Suar, 2010; Skudiene and Auruskeviciene, 2012). These practices, in turn, generate a
positive image among the customers and the general public (Mishra and Suar, 2010).
However, these initiatives not only enhance the corporate image but also affect the
perceptions of their own employees as they play mediating roles in customer transactions.
Thus, according to SIT, employees will have a sense of enhanced self-image when
employed in responsible organizations. It also enables them to identify with their
organization and thereby fulfill the need for belongingness, which is a very important factor
for organizational performance (Turban and Greening, 1997). Employees, today, are
concerned not only about their own positions but also about various sections of the society
with which they are associated (Heslin and Ochoa, 2008). These alarming factors should
motivate the organizations to invest in customers who are one of the deciding bodies in
determining the existence of the organizations. Employees’ perceptions generally are
influenced by the organizations’ relationship with their customers, which in turn affect their
attitudes and behaviors toward their organizations (Hansen et al., 2011). Thus, CSR
activities toward customers could be considered as instrumental in enhancing employees’
positive attitudes and behaviors. Based on this discussion, it is hypothesized that:

j SOCIAL RESPONSIBILITY JOURNAL j

 H2. Perceived corporate social responsibility activities toward customers will be
positively related to (a) work engagement and (b) organizational citizenship
behavior.

3.3 Corporate social responsibility toward environment

The need of the hour is an eco-friendly environment. We are facing many issues such as
global warming, mass deforestation, land degradation, river contamination, solid pollution,
greenhouse gas emissions, sea erosion and land erosion, among others. This is mainly
because of the negligible attitude of the citizens of our country. Organizations are being
forced to comply with International Organization for Standardization 14000 or ISO 14000
and Occupational Health and Safety Assessment Series 18000 or OHSAS 18000 standards
(Mishra and Suar, 2010). The depletion of natural resources caused by organizations is
innumerable and the public is raising its voice against such activities. This has been
instrumental in changing the attitude of companies to involve themselves in sustainability
projects (Benn et al., 2014). Majority of the Indian organizations are undergoing
collaborative projects with local panchayat, municipality, government, few private agencies
and non-governmental organizations (NGOs) to maintain a green environment. Employees
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are provided with incentives for maintaining the environmental standards.

Many NGOs are working for environment-related causes. Green peace was one such NGO,
which functions in over 42 countries. Its only objective was to protect the environment and
“go green.” Many Indian organizations, in collaboration with NGO’s like Green peace, are
initiating various projects for the sustainability of the nation through several CSR activities
(Ismail, 2009). Thus, organizations are initiating lots of CSR activities to protect their nearest
environment. Some of their CSR activities are planting trees, water management, waste
management, creating awareness on various social issues, organizing street theatres,
training employees on environmental standards and generating internal auditors through
training and development. By taking these initiatives, they are creating a huge impact on the
environment. More than the environment, they influence their employees’ attitudes toward
their organization in a positive way. Trade unions too significantly contribute toward the
green environment (Newell, 2005). Employees feel proud to work in an organization that
cares for the future generation (Turker, 2009). Thus, this positive perception will augment
positive work outcomes. Based on this discussion and assumptions of SIT, it is proposed
that:
H3. Perceived corporate social responsibility activities toward environment will be
positively related to (a) work engagement and (b) organizational citizenship
behavior.

3.4 Corporate social responsibility toward community

Another important stakeholder is the community. The existence of an organization is highly
determined by the community. Hence, organizations try their level best to serve the
community.
Some of the CSR activities toward the community are building schools/colleges to provide
education for the underprivileged people, building churches/temples to create harmony
among community people, building hospitals, etc. (Skudiene and Auruskeviciene, 2012).
Societal banes such as illiteracy, poor income, poor standard of living, water scarcity and
malnourishment continue to haunt India (Arevalo and Aravind, 2011). These factors should
motivate organizations to show greater concern for the society through the CSR measures.
According to Strategic Human Resource Management (SHRM, 2007), a study with seven
countries’ human resource professionals revealed that companies are still practicing the
traditional way of showing CSR through community development and philanthropic
activities. Similarly, employee welfare measures and community initiatives are the

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 predominant CSR practices in the majority of the organizations. Also, community
development initiatives can be considered as the solution for the drawbacks which
industrialization has brought about. Community development is a process of enhancing the
standard of living of the people. It is a process to alleviate poverty in the nations. Through
community development programs, organizations are ushering in a new era by
strengthening the human power and providing employment to the underprivileged people
(Ismail, 2009). As proposed by SIT, knowledge about the organization’s CSR activities for
the nearby community will help employees feel privileged to be a member of that
organization which will be reflected in there positive feelings, emotions and consequent
attitudes and behaviors (Brammer et al., 2007). Therefore, it is hypothesized that:

H4. Perceived corporate social responsibility activities toward community will be

positively related to (a) work engagement and (b) OCB.

3.5 The mediating role of organizational trust in the link between corporate social
responsibility and work outcomes
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Organizational trust can augment the relationships between employees and employers and
produce necessary work outcomes (Dyer and Chu, 2003). As a measure to build trust
among employees, many companies are adopting CSR practices (Sagar and Singla, 2003).
Organizations that exhibit responsible behavior are generally considered as good
organizations. As a result, employees are more likely to trust their organization (Rupp et al.,
2006). When employees trust their organizations, their subsequent actions will be guided by
the trust factor (Pivato et al., 2007). The major responsibility of the organization is to create
awareness and if possible involve their employees in CSR to build trust among them,
because employees are the major stakeholders (Crowther and Capaldi, 2008).
It is quite likely that when employees trust their organizations because of their responsible
actions, they dedicate themselves to their work, get involved in their work and exhibit
citizenship behaviors, which are the key ingredients for organizational success. Moreover,
the literature suggests a positive link between CSR and organizational trust (Lamberti and
Lettieri, 2009), between organizational trust and work engagement (Chughtai and Buckley,
2008; Lin, 2010) and between organizational trust and OCB (Wong et al., 2006). Social
exchange-based mechanism and norms of reciprocity (Whitener et al., 1998) lend
credence to the fact that an organization engaged in CSR activities creates a positive
impression of benevolence in the minds of employees that in turn motivates them to
reciprocate with positive attitudes and behaviors. Based on this, it has been found that CSR
actions raise the expectations among employees that their firm will care for them now and in
the future thereby instill higher organizational trust, which in turn inculcates favorable
attitudes and behaviors toward the organization (Farooq et al., 2014). These studies and
theoretical underpinnings establish the mediating effect of organizational trust in the link
between CSR activities and employee’s work outcomes. Therefore, it is hypothesized that:
H5. Organizational trust will mediate the relationship between the perceived corporate
social responsibility activities (toward various stakeholders) and the positive work
outcomes (work engagement and organizational citizenship behavior).

4. Method
4.1 Data and procedures
Data were collected from 284 employees working in eight manufacturing firms situated in
southern India. The website information served as the source in finding out the companies
and their CSR activities. Initially, 15 organizations were contacted and upon getting
permission from eight organizations, data were personally collected by the authors by

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 administering structured attitude schedules among participants who volunteered for the
study. The schedules were randomly distributed among employees. Respondents were
given assurance of the anonymity and confidentiality of their responses. Out of 284
respondents, 94.4 per cent were males and 5.6 per cent were females, which is the typical
scenario in many manufacturing organizations in India. About 81 per cent were married and
the remaining 19 per cent respondents were singles. A majority of the respondents
belonged to junior management level (77.5 per cent), 16.9 per cent in the middle
management level and 5.6 per cent in the top management level. Regarding education,
41.5 per cent were postgraduates, 42.6 per cent were undergraduates, and 15.8 per cent
were diploma holders. The average age of the respondents was 37 years and the average
experience with the current organization was eight years.

4.2 Measures

4.2.1 Independent variable: corporate social responsibility. Although there exist a few
useful scales to measure perceived CSR activities toward various stakeholders (Carroll,
1979; Albinger and Freeman, 2000; Maignan and Ferrell, 2001; Turker, 2009), the current
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study is focused on capturing the perceptions of employees on CSR activities toward

stakeholders, such as employees, customers, environment, and community, and it was
measured using a standardized scale developed by Turker (2009). The scale consists of
four dimensions with 17 items that measure perceived CSR activities toward employees,
customers, environment and community. A few items were adopted from Mishra and Suar’s
study (2010) to make the scale more indigenous.
Respondents were asked about their organizations’ CSR activities such as welfare
measures for employees, fair practices, equal opportunity to employees, customer
satisfaction and community development programs (construction of schools, sanitation
programs, etc.). They were also asked to rate their organization on the environmental CSR
activities, such as consideration about future generation and training on preserving natural
resources. Some sample items of the measure are “My company policies encourage the
employees to develop their skills and careers” (CSR to employees), “My company provides
full and accurate information about its products to its customers” (CSR to customers), “My
organization participates in the activities which aim to protect and improve the quality of the
natural environment” (CSR to environment) and “My organization contributes to campaigns
and projects that promote the well-being of the society” (CSR to community).
The respondents were requested to indicate their level of agreement or disagreement on
their organization’s CSR activities toward employees, customers, environment, and
community. They were asked to respond to each question using a five- point Likert scale
ranging from 1 – strongly disagree, 2 – disagree, 3 – neither agree nor disagree, 4 – agree
to 5 – strongly agree.
4.2.2 Dependent variables: work engagement and organizational citizenship behavior.
Work engagement was measured using a nine-item standardized scale developed by
Schaufeli et al. (2006). Work engagement has three dimensions, namely vigor, dedication
and absorption. All these three constructs exhibited strong correlation and hence, the
researcher decided to use all the nine items to measure work engagement as a whole instead
of considering each sub-dimension separately. The variable was measured using a seven-
point Likert scale ranging from 0 – never, 1 – a few times a year or less, 2 – once a month or
less, 3 – a few times a month, 4 – once a week, 5 – a few times a week to 6 – everyday). The
respondents were requested to state how they felt at their workplace. Some example items of
the scale are: “I feel energetic at my work place” and “My job inspires me.”
Similarly, OCB was measured using an eight-item scale developed by Saks (2006). The
construct was measured using a five-point Likert scale ranging from 1 – never, 2 – rarely,
3 –sometimes, 4 – often to 5 – always, and the respondents were requested to mark their

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 opinions on how often they engaged in citizenship behaviors or discretionary behaviors,
which are not related to their work. An example item of the scale is: I give time to help others
who have work or non-work-related problems.
4.2.3 Mediating variable: organizational trust. Organizational trust was measured using a
three-item scale developed by Schoorman et al. (1996). The construct was measured using
a five-point Likert scale ranging from strongly disagree to strongly agree and the
respondents were requested to mark their opinions on their trust level toward their
organizations. An example item of the scale is “I would be comfortable allowing the
organization to make decisions that directly impact me, even in my absence.”
The usability of the research instrument was tested through a pilot study before conducting
the main study. Cronbach’s alpha (reliability) for all the scales were above 0.70 (Table I)
in the present study. Based on the t-test and ANOVA, it is concluded that demographic
factors did not have any impact on the study variables and hence, it was excluded from
hierarchical regression analysis to test the hypotheses and study the impact of the rest of
the variables. Means, standard deviations and correlations among all the variables are
shown in Table I.
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5. Results
5.1 Direct effects of corporate social responsibility activities toward various
stakeholders on job outcomes
H1, H2, H3 and H4 stated that CSR activities toward employees, customers, environment
and community would be positively related to work engagement and OCB of an
employee. Results as shown in Table II indicate that CSR toward employees was
positively related to work engagement ( b = 0.16, p < 0.05) and OCB ( b = 0.19, p <
0.001) providing full support for H1. CSR toward customers was positively related only to
OCB ( b = 0.15, p < 0.05) providing partial support for H2. CSR toward environment was
positively related only to OCB ( b = 0.18, p < 0.05) and thus, providing partial support for
H3. CSR toward community was related neither to work engagement nor OCB, thus
providing no support for H4. Hence, these results provide full support for H1, partial
support for H2 and H3 and no support for H4. Results of the regression analyses are
shown in Table II.

5.2 Mediation effect of organizational trust

Four step-regressions were conducted to test the significance of the mediating variable as
follows: In Step 1, the mediator (organizational trust) was regressed on the independent
variables (perceived CSR). In Step 2, the dependent variables (work engagement and

Table I Descriptive statistics, reliabilities and intercorrelations among study variables

No. Mean SD 1 2 3 4 5 6 7

Criterion variables
1. Organizational trust 3.98 0.77 (0.78)
2. Work engagement 5.13 0.91 0.46** (0.92)
3. Organizational citizenship behavior 4.04 0.74 0.45** 0.52** (0.90)
Predictor variables
4. CSR toward employees 4.04 0.65 0.49** 0.39** 0.44** (0.86)
5. CSR toward customers 4.30 0.64 0.44** 0.37** 0.41** 0.66** (0.68)
6. CSR toward environment 4.06 0.69 0.50** 0.37** 0.43** 0.69** 0.64** (0.85)
7. CSR toward community 4.01 0.66 0.45** 0.33** 0.34** 0.60** 0.53* 0.71** (0.77)
Notes: n = 284; *p < 0.05 and **p < 0.01; Cronbach’s alpha coefficients are reported in parentheses
on the diagonal; SD = standard deviation

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 Table II Results of regression analysis
Organizational trust Work engagement OCB
Variables Model 1 Model 1 Model 2 Model 1 Model 2

Step 1
CSR toward employees 0.21** 0.16* 0.09 0.19*** 0.13***
CSR toward customers 0.11 0.14 0.10 0.15** 0.12***
CSR toward environment 0.21* 0.11 0.04 0.18* 0.12
CSR toward community 0.12 0.06 0.02 0.00 0.02
Step 2
Organizational trust 0.32*** 0.28***
R2 0.31 0.48 0.30 0.24 0.30
Adjusted R2 0.29 0.20 0.28 0.22 0.27
Total F 12.8** 8.35*** 11.00** 9.02*** 10.80***
R2 change 0.29 0.16 0.07 0.21 0.05
F change 29.64** 14.63*** 29.01** 19.59** 21.73***
Notes: N = 284; *p < 0.05; **p < 0.01; ***p < 0.001
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OCB) were regressed on the independent variables (perceived CSR). In Step 3, the
dependent variables were regressed on the mediator. In Step 4, the independent variables
and mediating variable were simultaneously regressed on the dependent variable to find
the mediating effect. The effect is said to be fully mediated when the beta value becomes
zero or insignificant after introducing the mediator. The effect is said to be partially
mediated when the beta value is reduced from the original value after introducing the
mediator (Baron and Kenny, 1986).
CSR toward employees ( b = 0.21, p < 0.01) and environment ( b = 0.21, p < 0.01) were
found to be significantly associated with the mediating variable (organizational trust). On the
other hand, CSR toward customers and community did not show any significant association
with organizational trust. For work engagement, barring CSR to employees, no other
constructs exhibited significant relationship ( b = 0.16, p < 0.05). But in case of OCB,
except for CSR toward community, all the other three constructs such as CSR to employees
( b = 0.19, p < 0.001), customers ( b = 0.15, p < 0.01) and environment ( b = 0.18, p <
0.05) showed significant effect.
Organizational trust was found to be significantly associated with work engagement ( b =
0.32, p < 0.001) and OCB ( b = 0.28, p < 0.001). Hence, we assessed the mediating effect
of organizational trust in the relationship between perceived CSR activities toward various
stakeholders and work engagement and OCB in three independent regression models. In
the last step, the outcome variable was regressed simultaneously on the independent
variables and the mediator. In case of work engagement, the effect of CSR toward
employees became insignificant (from b = 0.16 to = 0.09, ns; Z-score= 2.05, p < 0.05),
indicating the full mediation effect of organizational trust.
Similarly, stepwise regression was performed with CSR activities as the predictor and
OCB as the criterion, and taking organizational trust as the mediator. In case of OCB,
the effect of CSR toward employees lessened from b = 0.19 to 0.13 (Z-score = 2.08,
p < 0.05) but there still existed significant relationship and hence, organizational trust
partially mediated between CSR toward employees and OCB. The effect of CSR toward
customers lessened from b = 0.15 to 0.12 (Z-score = 1.26, p < 0.05) but there still
existed significant relationship and hence, organizational trust partially mediated
between CSR toward customers and OCB. Similarly, the effect of CSR toward
environment on OCB reduced from b = 0.18 to 0.12 (Z-score = 2.00, p < 0.05) and also
became insignificant after introducing the mediator organizational trust in the
regression model. Hence, it can be assumed that organizational trust fully mediated

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 between CSR toward environment and OCB. Results of the mediation analyses are
shown in Table II.
Therefore, the results of the study revealed that perceived CSR activities toward various
stakeholders did not create much impact on employees’ attitude, namely, work
engagement except for CSR toward employees. However, perceived CSR activities toward
various stakeholders barring CSR toward community’ were found to significantly influence
the behaviors of employees such as OCB. Organizational trust mediated a few proposed
relationships.

6. Discussions and conclusions

The current study analyzed the impact of CSR activities toward various stakeholders on
work engagement and OCB of employees. Based on the SIT framework, this study
tested five hypotheses through hierarchical regression analysis. The study certainly
adds to the scant but growing literature on CSR in the Indian context and addresses the
research gaps by considering the various stakeholders and relating it to employee
attitudinal and behavioral outcomes. Moreover, the mechanism through which CSR
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relates to employees’ job-related outcomes is underexplored, which is addressed

through this study by capturing the role of organizational trust as a mediator. The
findings of the study highlight the crucial role of “CSR toward stakeholders,” which
translates into positive attitudes and behaviors through enhanced organizational trust.
The findings of the study reveal that perceived CSR activities toward employees have
significant impact on employees’ job outcomes (work engagement and OCB). These
findings are consistent with a few earlier research studies suggesting positive associations
between CSR activities and employee attitudes (Brammer et al., 2007; Turker, 2009;
Chaudhary, 2017), especially with work engagement (Lin, 2010; Chaudhary, 2017) and
OCB (Hansen et al., 2011). However, some of the interesting findings are worth noting.
The proposed relationships between CSR activities toward customers and job outcomes
are partially supported in this study. Contrary to the earlier research, the current study did
not find a positive association between CSR toward customers and desired employee
attitudes such as work engagement (Turker, 2009). But significant association between
CSR toward customers and OCB was noted. One of the potential reasons could be the role
of external stakeholders.
When external stakeholders i.e. customers are benefitted out of organizational CSR
activities, it affects employees’ citizenship behavior, which are generally the extra-role
behaviors not mandated by job descriptions. It does not affect employees’ work attitudes,
which are directly connected with one’s job roles and responsibilities. It clearly emphasizes
that perceived CSR activities influence employees’ citizenship behavior more than
employees’ attitudes.
While the significant association was found between CSR toward environment and OCB, the
same was not found between CSR toward environment and work engagement. This result
contradicts the earlier research findings by Lin (2010) and Chaudhary (2017) who found a
positive relationship between perceived discretionary citizenship and work engagement.
Environmental and community-related activities are seen as discretionary citizenship and as
CSR activities focus on external stakeholders, employees are more likely to exhibit the same
toward their organization in the form of OCB.
CSR toward community was not found to influence both work engagement and OCB. This
again contradicts earlier research findings (Turker, 2009; Lin, 2010). However, this result
echoes the research findings of Chaudhary (2017). The reason might be a lack of
awareness on the part of the employees about all kind of CSR activities. The lack of
communication would have contributed for the insignificant relationship between CSR

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 activities to community and job outcomes (Alon et al., 2010; Hoeven and Verhoeven, 2013;
Chaudhary, 2017). As emphasized by Laskar and Maji (2016), managers should give
importance to the role of communication with regard to CSR activities. These findings can
contribute to the fact that employees are not very happy about their organizational CSR
activities toward community as the processes involve many resources, such as money and
manpower. Another reason could be that employees are not satisfied with their pay and
rewards and hence, resources spent on the external stakeholders i.e., community
development are not viewed positively by them. Further exploration is necessary to arrive at
any conclusion with regard to this finding.
In line with the previous research, the results of the study do support the mediating effect
of organizational trust between CSR activities toward employees and work engagement
(Lin, 2010). Similarly, the findings provide support for organizational trust as a mediating
variable between CSR activities and OCB except for CSR toward community (Wong
et al., 2006). In the future, this might form the basis to explore the role of other intervening
variables, namely, organizational pro-social identity, top management support, in the
stated relationship.
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7. Implications for practice

The study finding suggests that investing in CSR could be one such mechanism to augment
work engagement of employees. Also, investments in both CSR and engagement initiatives
can be reduced to investment in CSR alone that takes care of the end result of engaged
employees. Results of this study should motivate top-level management of organizations to
implement CSR activities to attain double fold benefits; organizational reputation building
and employees’ positive work outcomes. Though Government of India has laid policies to
spend 2 per cent of organizations’ net profit for CSR activities, and it has not mentioned
anything about the consequences of failing to do the same. Thus, it creates loopholes for
the corporates for not engaging in CSR initiatives. Based on our research findings, we
believe that key authorities in organizations will keep on investing time and effort in various
CSR activities to reap intangible and long-term benefits. The results of the study will provide
sufficient motivation to senior managers to continuously invest in CSR activities, especially
toward employees and customers given their significant impact on work engagement and
OCB.
In a country like India whose strength lies in surplus manpower, it has always been a big
challenge to attract and retain employees in the manufacturing sector. As the scope of the
study is confined to the manufacturing sector, the findings of this study will benefit the
manufacturing sector. CSR activities seem to benefit the manufacturing sector in attracting
a large pool of applicants, as well as retain the best of the talents.

8. Limitations and suggestions for future research

There are a few limitations of this study that cannot be ignored while interpreting the
results. The current study focused only on the manufacturing sector and the future
research should focus on services sector organizations too. Also, the present study is
cross-sectional in nature as it captured the data without any manipulation, at a given
point of time and thus, failed to conclude about the cause and effect relationships
among the variables. Hence, a longitudinal study is required to capture the response of
the employees at different points of time to objectively conclude about the relationship
between CSR activities toward various stakeholders and employee’s positive attitudes
and behaviors. In the future, data should be collected from more samples, across
industries and locations for generalizability of the results. Although researchers
generally resort to self-report for data collection, they should carefully account for many
administrative and statistical biases that distort the findings. This study also presents

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 researchers in the CSR domain with avenues for future research in the aspects of
methodology, scales and stakeholders. At the outset, a straightforward direction for
future research would be to conduct a qualitative investigation to gain a better
understanding about the reasons behind the non-significant relationships in the present
study.

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Corresponding author
Santhosh Manimegalai can be contacted at: [email protected]
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