The Effect of Corporate Social Responsibility Culture on Greek Internal Auditors’ Organizational Commitment ()
1. Introduction
The importance of the role of corporate social responsibility is reflected by the growing demand from all stakeholders for assessments related to how companies apply acceptable corporate social responsibility standards ( Bass & Milosevic, 2018 ). Many of the studies ( Farmaki, 2019 ; Rashid et al., 2020 ; Tworzydło et al., 2021 ) that have been done in the past focused on the connection of corporate social responsibility with the profitability and financial performance of a company ( Cho et al., 2019 ; Gonçalves et al., 2021 ), while few of them have studied its effect on the main stakeholders of a company, which are its employees themselves. At the same time, most of the researchers have based their research on corporate social responsibility on the perspective of business management or customers and less on the perspective of employees.
Corporate social responsibility is one of the most dynamic and demanding areas of activity for modern business. It indicates the balanced treatment of the economic, social, and environmental impact of the operation of a business and is based on the tripartite of economic development, sustainability, and social well-being ( Asiaei & Bontis, 2019 ). During the last decades, the concept of corporate social responsibility has been continuously evolving. Its adoption by many companies worldwide was associated with the creation of a large number of voluntary business initiatives that highlighted the responsibility of each company towards society and the environment ( Skordoulis et al., 2020 ; Skordoulis et al., 2022 ). Research by Margolis & Walsh (2001) and Orlitzky et al. (2003) concludes that the market rewards companies that perform such voluntary acts, while Baron (2003) emphasizes that corporate social responsibility is an important factor for success of an organization.
The diversity presented by the definitions of corporate social responsibility and the absence of an absolute and clear definition is mainly due to the different national practices, habits and perspectives, but also to the different degree of development faced by each company.
So, for example, in the US corporate social responsibility means “taking personal responsibility for your actions and the consequences they have on society. Companies and employees need to go through a phase of personal change, rethink their roles and responsibilities and strengthen their ability to take responsibility” ( Holme et al., 2000 ). In its Green Paper (2001) , the European Commission states that “Corporate Social Responsibility is the concept whereby companies voluntarily integrate social and environmental concerns into their business activities and interactions with other stakeholders”. CSR Europe, the network for CSR in Europe, states that “CSR is about how a business manages and improves its social and environmental impact to add value to both shareholders and stakeholders through innovation in its strategy, organization and operation”. The Hellenic Network for CSR defines CSR as “the voluntary commitment of businesses to include in their business practices social and environmental actions, which go beyond what is imposed by legislation and are related to all those who are directly or indirectly affected by their activities” ( Hellenic CSR Network, 2005 ).
From the above, it becomes clear that most of the definitions that have been formulated for corporate social responsibility emphasize the need for the company to realize that it is an active member of the society in which it operates and to perceive, prevent and deal with situations arising from the operation and activities her. The actions of companies must be such that, alongside business profit, social interest, progress and creativity are promoted with the ultimate aim of creatively balancing and synthesizing the interests of all.
According to Vogel (2004) , all definitions describe three basic characteristics of the enterprise that adopts CSR. These are voluntary action, which goes beyond the simple fulfillment of the company’s legal obligations, the triple impact of business activity (economic, social and environmental), which demonstrates the close relationship between corporate social responsibility and sustainable development, and business responsibility, as an integral part of a company’s strategy and philosophy and not a simple secondary option ( Nguyen et al., 2018 ; Sharma, 2019 ).
As an act, social responsibility is a sign of maturity, a presumption of stability and cohesion of a society, and consists of the responsible actions of a company’s management in its relations with other interested parties. The responsibility of companies towards society as a whole is the way in which companies should be managed today, as they are no longer judged only on the basis of their financial results, but also on the role they perform for social welfare and the protection of the environment, thus returning part of their profits to society ( Velte, 2022 ).
In recent years, the important role played by corporate social responsibility in the daily operation of Greek companies has been highlighted ( Panagiotopoulos, 2021 ; Sideri, 2021 ; Ziogas & Metaxas, 2021 ). A role that is a challenge for any company that wants to enter or remain competitive in the complex global economic environment that is taking shape. Society’s expectations of the role and responsibilities of business are changing dramatically and with them the priorities of companies, making corporate social responsibility an ever-evolving concept.
Regarding organizational commitment is considered an important variable in understanding employee behaviors and attitudes ( Meyer et al., 2002 ). According to Buchanan (1974) , organizational commitment is defined as the attitude and emotional attachment of an employee in the effort to achieve the goals of the organization and his psychological connection with it, to whom he/she is completely devoted. Saks (2006) reinforces the above definition, stating that it is the driving force in which individuals are associated with a goal and try to achieve it by following a specific path. A more traditional approach to the term commitment distinguishes three dimensions of the term: a) the individual’s “will” to remain in the organization he/she works for, b) the willingness to make every effort to achieve the organization’s goals, and c) the acceptance and the adoption of the values and goals that govern the operation of the organization ( Becker et al., 1995 ; Dahmardeh & Nastiezaie, 2019 ). Nowadays the importance of organizational commitment is extremely important, with most researchers stressing the importance it plays in employee satisfaction and performance. In most of the research carried out ( Geisler et al., 2019 ; Imamoglu et al., 2019 ; Lambert et al., 2020 ), the relationship between the quality provided and the organizational commitment of the employees is emphasized, while at the same time the competitive advantage created by the high degree of commitment of the staff is underlined.
The main purpose of this paper is to investigate the effect of corporate social responsibility on the levels of organizational commitment of internal auditors working in Greek companies, regardless of the industry they belong to.
2. Literature Review
2.1. Corporate Social Responsibility
The recognition of a company as socially responsible means that it considers other factors beyond the financial performance of its investments ( Papagrigoriou et al., 2021 ). The scope of corporate social responsibility is quite large and covers, beyond the company’s network of partners (internal environment), a wide range of interested parties that influence and are affected by the business activity (external environment) ( Capron & Quairel-Lanoizelée, 2007 ).
Freeman (1984) argued that stakeholder relationships form the basis of value addition and strategic initiative. Stakeholder relationships can prove key to a company’s progress, as a sincere commitment to social standards and ethical behavior helps foster trust and cooperation and build a good name for the business. According to Clarkson (1994) , there are two categories of participants, primary and secondary. Primary stakeholders are those without whose participation the business cannot survive (shareholders, investors, employees, suppliers, customers, government, community, etc.) ( Schröder, 2021 ). The second category includes those who interact with the business but are not involved in transactions with it nor are they essential to its survival. These interested parties are:
· Employees: A creative and rewarding environment implies a more dedicated and productive human resource, which is the company’s most valuable capital, but also its main representative to the other interested parties. Businesses are interested in maintaining their specialized and competent staff, which contributes to their efficiency and competitiveness, providing appropriate health and safety conditions, opportunities to develop their skills and qualifications with the aim of professional development, open communication with management, work-life balance ( AlSuwaidi et al., 2021 ; Paruzel et al., 2021 ).
· Customers: Customers are the ones who reward socially and environmentally responsible companies with their behavior and can be a lever of pressure for companies to promote reliable and safe products. Products and the conditions of their production and marketing play a role in their choice by consumers ( Abbas et al., 2018 ; Latif et al., 2020 ).
· Shareholders & Investors: Investors have different opinions on what social responsibility means. The evaluation of a company by the investing public is the result of a process, based on factors such as: share price, customer support, employee loyalty, degree of media attention. Businesses know that their social performance is affected by the practices of their partners. Building good relationships with them helps develop innovative and often profitable initiatives ( Murashima, 2020 ; Velte, 2022 ).
· State & Public Authorities: The socially and environmentally responsible practices of businesses have important ramifications in the actions of public authorities and complement state efforts for sustainable development ( Deng et al., 2020 ; Liu et al., 2019 ).
Carroll (1999) focuses on the responsibilities an organization has towards society, emphasizing that these responsibilities include the expectations that society has of organizations at a given time. These expectations are also the dimensions of corporate social responsibility which according to Ferell & Maignan (2000) are distinguished into: 1) the economic dimension, 2) the legal dimension, 3) the ethical dimension and 4) the philanthropic dimension. These four dimensions make up Carroll’s (1999) famous pyramid. Specifically:
· Economic Dimension: The satisfaction of the economic responsibilities that businesses have towards society also concerns the essential reason for their establishment and existence. The proper management and efficient use of their shareholders’ funds for the purpose of profitability, ensuring fair and safe work with fair and competitive remuneration for all their employees, as well as providing good quality products and services at reasonable prices to customers them, are some of the aforementioned responsibilities.
· Legal Dimension: Compliance with laws by businesses, their proper operation in accordance with the current regulatory framework, respect and observance of the conditions and legal responsibilities towards the environment in which they operate, as well as the application of fair practices such as these are defined by legislators, they are some of the legal responsibilities of organizations towards society.
· Ethical Dimension: It is the moral obligation of businesses to do what is morally correct, fair and reasonable. Carroll (1999) defines moral responsibility as anything society expects of business beyond its economic and legal responsibilities.
· Philanthropic Dimension: It is the voluntary activities of businesses that include donations to charitable organizations, investments in educational programs and infrastructure projects, etc. In general, it concerns the philanthropic responsibilities of businesses that aim to strengthen weak groups in society.
2.2. Organizational Commitment
Meyer & Allen (1991) created a model consisting of three factors with the aim of proving that organizational commitment is a multidimensional concept that includes three distinct components/dimensions, each of which corresponded to different psychological states. The importance of this particular model is demonstrated by the fact that even today it is the most widely used for organizational commitment ( Yildiz, 2018 ). This is why the Meyer & Allen (1991) model was adopted in this research. So, the three components are the following:
· Affective Commitment: It is the recognition and emotional bond that an employee acquires with the organization and its goals ( Mowday et al., 1982 ). Emotional commitment refers to the feeling of “belonging”, while it is a very positive component since the employee is satisfied with the organization, is committed to achieving its goals and wishes to continue working in it without any change ( Tsitmideli et al., 2017 ). Essentially, employees with high affective commitment continue to work in an organization because they want to ( Salancik, 1977 ).
· Continuance Commitment: This dimension occurs when an employee strongly feels the fear of leaving his job ( Becker, 1960 ). The individual considers that he should remain in the organization since the losses he will have from a possible departure are many times greater than the benefits he will receive from a new role ( Wong & Tong, 2014 ). Essentially, employees who are connected to an organization through continuance commitment stay with the organization because they have to and not because they want to ( Meyer & Allen, 1991 ).
· Normative Commitment: In this component, the individual feels an “obligation” to the organization he/she works for and this is the reason he does not leave ( Bolon, 1993 ). Employees who belong to this category, although they may not be satisfied with the organization, although they may have an alternative offer from another company, they remain with the organization because they consider it to be the right and moral thing for them ( Hrebiniak & Alutto, 1972 ).
In summary, the three dimensions above show the following differences: emotional commitment expresses the employee’s “want” to work, continuous commitment the employee’s “need” to work, while normative commitment expresses the employee’s “obligation” to work. But what is worth emphasizing is that these three dimensions are inextricably linked, with the result that an employee may display all three types of commitment, but at a different level each.
Iordanoglou (2008) considers that organizational commitment has direct effects on employees’ tendency to leave the organization, their work performance, as well as their work behavior in a way that makes them help their colleagues, animate the team participating, to support and promote the organization’s goal. At the same time, Vakola & Nikolaou (2012) note that the higher the organizational commitment, the more positive the impact on employee performance, with employees who will give everything to achieve the organization’s goals.
2.3. Corporate Social Responsibility and Organizational Commitment
Corporate social responsibility creates a reputation for an organization, significantly increasing its attractiveness as an employer. Job seekers are positively influenced by the socially responsible practices followed by an organization, forming a very positive first image of the person they are going to offer their services to ( Turker, 2009 ). People now entering an organization, over the years become more and more committed to an organization that possesses a culture of social giving. This claim is confirmed by the Nguyen et al. (2018) , Kim et al., (2018) , Ntiamoah et al. (2014) and Rodrigo et al. (2019) research, which emphasize that the implementation of social practices by an organization increases the level of commitment of its active employees.
According to Peterson (2004) , an employee feels proud to work in an organization with a good reputation due to its participation in social actions. This fact will positively affect the employee’s work behavior and lead to an increase in his commitment to the organization.
The research of Brammer et al. (2007) showed similar results as they found a positive relationship between the level of corporate social responsibility applied by an organization to its external stakeholders and the commitment of its employees. Accordingly, Al-Bdour et al. (2010) found a positive relationship between internal corporate social responsibility practices training, human rights, job security, life-work balance and organizational commitment. Based on the above, the researcher was led to derive his second research hypothesis, where for the first time the four dimensions of corporate social responsibility are correlated with all aspects of organizational commitment.
3. Research Questions
There are three research questions that are to be covered by the results of the statistical analysis to cover the research purpose stated above:
1) What are the levels of corporate social responsibility of the companies in which internal auditors work?
2) What are the levels of organizational commitment of internal auditors?
3) What is the relationship between corporate social responsibility of companies and levels of organizational commitment of internal auditors?
4. Methodology and Data
To cover the research purpose, primary quantitative research is carried out based on a structured questionnaire, from which the variables are formed through official scales. The research sample consists of 220 Greek internal auditors. It is clarified that the branch of the company in which the internal auditors work was not taken into account, but as the only criterion for their participation in this research was the possession of the specific professional status at the time of completing the questionnaire, i.e. their professional occupation as internal auditors in any Greek company. Random sampling was used to collect the research sample. Since the research population is the total of all the professionals Greek internal auditors, the research sample cannot be representative of the research population.
More specifically, the research sample consists of 129 women and 91 men. Also, 53 people were up to 35 years old, 158 people were between 36 - 55 years old and the remaining 9 people were over 55 years old. Regarding their professional background, 104 individuals stated that they are graduates of higher education, 116 individuals stated that they have a master’s degree, and the remaining 9 individuals stated that they have a PhD. Also, it is pointed out that 38 people stated that they have a working experience as internal auditors that does not exceed two years, 39 people stated that they have a working experience as internal auditors ranging between 2 - 5 years and the remaining 143 people stated that they have been working as internal auditors for more than five years.
The above characteristics of the research sample are summarized in the following Table 1.
The research tool used in this research is a structured questionnaire. The questionnaire consisted only of closed-ended questions. The first part of the questionnaire collected the aforementioned demographic characteristics of the participating internal auditors. In the second part of the questionnaire, Turker’s (2008) scale was used to form the corporate social responsibility variable. It is clarified that through this specific scale a total of five dimensions of corporate social responsibility are formed. It is about the dimension of the social responsibility of the companies towards the interested parties, the human resources, the customers, the employees, and the government bodies. The specific scale, therefore, consists of 17 questions that participants are asked to rate from one to five. Cronbach’s Alpha reliability test was applied to the specific scale, which for the case of this research was 0.87. These are fairly high levels of reliability.
In the third part of the questionnaire, the organizational commitment variable was formed. To construct this variable, Turker’s (2008) official scale was used,
which consists of nine questions that participants were asked to rate on a scale from one to five. Cronbach’s Alpha reliability test was applied, which in the case of this research was 0.92. These are exceptional levels of reliability.
Regarding the collection of research data, it is pointed out that it is quantitative research data that was collected online. The distribution of the questionnaire was done by us through emails, after the questionnaire had been registered on the google forms platform. When sending the questionnaire, the recipients were informed about the conditions that had to be met in order to participate in the research sample. As mentioned above, the only condition was that they work as internal auditors in any Greek company, regardless of the industry to which that company belongs. They were also informed about the purpose of the research and the purpose of publishing the research results. They were also informed about the preservation of their anonymity and about their voluntary participation.
The statistical analysis was done through SPSS, version 23. In this context, descriptive statistics were used to present the variables through mean values and standard deviations. Pearson correlation test and regression analysis were also performed. The dimensions of corporate social responsibility were set as independent variables, while the variable of organizational commitment was dependent.
5. Results
Table 2 presents the variables of the present research. The presentation is made through the mean values formed from the responses of the participants, as well as the standard deviations. From the results, it appears that the variable “CSR-Stakeholders” fluctuates at moderate levels (M = 3.11). The same happens with the variable “CSR-Employees” (M = 3.06). The “CSR-Customers” variable (Μ = 3.51) is at moderate to quite satisfactory levels. The “CSR-Government” variable (Μ = 3.87) fluctuates at quite satisfactory levels. This means that the companies in which the internal auditors participating in this research work show moderate social responsibility towards their stakeholders and employees. They also show moderate to satisfactory socially responsible behavior towards their customers and satisfactory socially responsible behavior towards government agencies.
Continuing, Table 2 shows the results of the organizational commitment variable. This variable shows an average of 3.56. This means that the internal auditors
who participated in this research show moderate to fairly high levels of organizational commitment.
Table 3 shows the results of the Pearson correlation test. It is clarified that confidence levels were set at 95%, so statistically significant results occur when p-value < 0.05. The results show that organizational commitment shows a positive and statistically significant correlation with all dimensions of corporate social responsibility. The Pearson correlation coefficients are presented in the table below, while in all the CSR dimensions p-values were less than 0.05.
Table 4 shows the results of the regression analysis. As mentioned above, dependent variable is organizational commitment and independent variables are the four dimensions of corporate social responsibility. The results show a statistically significant influence from all four dimensions of corporate social responsibility to the organizational commitment of the internal auditors who participated in this research. This particular influence is positive. This means that when a company exhibits a socially responsible character in all four dimensions of corporate social responsibility, this positively affects the levels of organizational loyalty of its internal auditors. Internal auditors tend to be more loyal to the company they work for when it demonstrates socially responsible behavior across all four dimensions of corporate social responsibility. Also, the specific regression model shows high levels of predictability of the dependent variable (organizational commitment) from the four independent variables concerning
*The p-value was less than 0.05, which means statistically significant correlation.
Dependent Variable: Commitment; R = 0.67.
the dimensions of corporate social responsibility. In more detail, the independent variables can predict the dependent variable at a rate of 67%.
6. Discussion and Conclusion
The research results showed a positive relationship between the levels of organizational commitment of internal auditors and the four different dimensions of corporate social responsibility. Also, the positive influence of the adoption of a socially responsible character on the part of companies, in increasing the levels of organizational commitment of their internal auditors, was proven. The degree to which companies adopt a socially responsible character, through the socially conscious actions they take, can predict to a statistically significant degree the levels of organizational commitment of their internal auditors. This specific research finding is confirmed by several similar studies, which examined the relationship that develops between the corporate social responsibility of organizations and the levels of organizational commitment of their human resources. The same positive correlation was found in the researches of Nguyen et al. (2018) , Kim et al., (2018) , Rodrigo et al. (2019) , Al-Bdour et al. (2010) , Brammer et al. (2007) and Peterson (2004) .
As it became clear from the research results, a very important consequence of the development and promotion of corporate social responsibility actions is the strengthening of the commitment of internal auditors to the company in which they work. The existence of social actions by an organization and the development of programs that strengthen each dimension of corporate social responsibility, ensures the commitment of their internal auditors for each of the three categories of organizational commitment, as they were described by Meyer & Allen (1991) .
Specifically, in order to ensure the emotional commitment of internal auditors, i.e. this emotional bond of the employee with the organization and its goals, companies should do what is morally correct and fair, as well as develop actions that will have with the aim of strengthening the weak groups of society. Subsequently, in order to ensure the normative commitment of internal auditors, that is, this feeling of “obligation” to the organization they work for, companies should, in addition to acting ethically and fairly, also satisfy their financial responsibilities towards society. Finally, and to ensure the continuous commitment of internal auditors, i.e. the feeling of fear not to leave their job, business units should comply with laws, apply fair practices and respect terms and legal responsibilities of the environment in which they operate.
Appendix. Questionnaire
PART A. Demographic and Other Information
1. Gender A. Man B. Woman
2. Age A. Less than 35 B. Between 36 - 55 C. More than 55
3. Educational background A. Higher B. Master C. PhD
4. Working experience A. Less than 2 years B. Between 2 - 5 years C. More than 5 years
PART B. Corporate Social Responsibility Scale
PART C. Organizational Commitment Scale