EMPLOYEE SATISFACTION AS IT RELATES TO CORPORATE SOCIAL

RESPONSIBILITY: A QUANTITATIVE STUDY

By

Jeremy R. Agler

Copyright 2013

A Dissertation Presented in Partial Fulfillment

of the Requirements for the Degree
Doctor of Management in Organizational Leadership

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version of the following dissertation
 UMI Number: 3578035

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 Abstract

Corporate Social Responsibility (CSR) and employee satisfaction has been the topic of

many organizations. Specifically, as the financial industry suffered blows to its

reputation during the economic recession of 2008, many of these organizations turned to

CSR activities to enhance the image of the organization. With the implementation of

these strategies to improve the community and enhance the image, employee satisfaction

and professional development took a back seat. There are missing arguments for CSR

and if those activities have an affect on the employee’s level of satisfaction. This study

attempted to fill the gaps in the CSR and employee satisfaction literature by providing an

analysis of the correlation between an organization’s CSR activities and employee

satisfaction. This quantitative, correlational study examined the relationship between

CSR and employee satisfaction within the financial industry by distributing survey

questionnaires to members of the LinkedIn Professional networking site groups of Bank

of America and Citigroup. The purpose of the study was to determine if a relationship

existed between CSR (dependent variable) and employee satisfaction (independent

variable). The research findings indicated a positive relationship between the two

variables, which has implications for organizational leaders regarding how leaders

manage CSR and employee satisfaction.

iii
 Dedication

The key to a successful dissertation is to have a successful support system behind

you. I would like to dedicate this work first and foremost to my late grandmother, Harriet

Agler, for always being there for me. Words can never explain how much appreciation

that I have for you and all you have done to mold me as the person I am today. You were

and always will be my rock! Thank you for all you have done to ensure my success.

Second, I dedicate this dissertation to my mentor, Coach Wood, who 17 years ago wrote

the following words:

You have come a long way in one semester, and I’m very proud of you.

Remember, there are two types of people, talkers and doers, but only one of the

two will get the job done. Keep working hard to be the very best you can be. Be

a good leader and not a follower.

Those words have stayed with me during all my life’s journey. It was because of Coach

Wood and my grandmother that I have written this dissertation.

iv
 Acknowledgments

I want to take the time to thank all those who have been a part of this journey.

Thank you to Renee, my loving fiancé, who has supported me through this journey. You

have been an amazing strength during this process. Words can never explain the

gratitude I have for you. I also would like to say thank you to my brother, Chris, my

sister-in-law, Pam, and my adorable nieces, Annaliese, Avalynn, and Everleigh.

Additionally, I would like to acknowledge all the professors throughout my college

career that guided me toward success, individuals like Dr. Nesbary, Dr. Crawford-

Mature, and Dr. Johnson. In addition, I would like to thank my committee Dr. Clifton,

Dr. Li, and Dr. Stokes for guiding me through the process. I appreciate all of your

support.

v
 Table of Contents

List of Tables ..................................................................................................................... ix

Chapter 1: Introduction ........................................................................................................1

Background of the Problem .....................................................................................2

Statement of the Problem .........................................................................................6

Purpose of the Study ................................................................................................7

Significance of the Study .........................................................................................8

Nature of the Study ..................................................................................................9

Research Question .................................................................................................11

Hypotheses .............................................................................................................12

Conceptual Framework ..........................................................................................12

Definitions of Terms ..............................................................................................14

Assumptions...........................................................................................................15

Scope and Delimitations ........................................................................................15

Limitations .............................................................................................................16

Summary ................................................................................................................17

Chapter 2: Review of the Literature...................................................................................19

Title Searches and Documents ...............................................................................19

Definitions of CSR .................................................................................................20

Definitions of Employee Satisfaction ....................................................................21

Historical Perspectives of CSR ..............................................................................22

Critical Views of CSR ...........................................................................................31

Benefits of CSR .....................................................................................................33

vi
 Corporate Control of CSR .....................................................................................36

CSR and Future Effectiveness ...............................................................................39

Gaps in the Literature.............................................................................................39

Conclusion .............................................................................................................40

Summary ................................................................................................................41

Chapter 3: Methodology ....................................................................................................43

Appropriateness of Research Method and Design .................................................43

Research Question .................................................................................................46

Hypothesis..............................................................................................................46

Population and Sample ..........................................................................................47

Informed Consent...................................................................................................48

Confidentiality .......................................................................................................48

Instrumentation and Data Collection .....................................................................49

Reliability and Validity ..........................................................................................52

Data Analysis .........................................................................................................54

Summary ................................................................................................................54

Chapter 4: Results ..............................................................................................................56

Sample Demographics ...........................................................................................57

Research Question and Operationalization of Variables .......................................58

Data Collection ......................................................................................................60

Data Analysis .........................................................................................................60

Chapter 5: Conclusion and Recommendations ..................................................................80

Conclusion .............................................................................................................82

vii
 Implications............................................................................................................83

Limitations .............................................................................................................84

Recommendations ..................................................................................................85

Summary ................................................................................................................87

References ..........................................................................................................................89

Appendix A: CSR and Employee Satisfaction Scale.......................................................104

Appendix B: Modified CSR and Employee Satisfaction Scale .......................................107

Appendix C: Informed Consent for Participants 18 Years of Age and Older .................109

Appendix D: Permission to Use Survey ..........................................................................112

Appendix E: Permission to Modify Survey .....................................................................113

Appendix F: Correlation Matrix of the CSR Scale ..........................................................114

viii
 List of Tables

Table 1 Literature Review Search Results .........................................................................20

Table 2 Descriptive Statistics for Employee Satisfaction ..................................................56

Table 3 Distribution of Participants by Gender ................................................................58

Table 4 Distribution of Participants by Employer .............................................................58

Table 5 Responses to, Your Company Encourages Participation in Volunteer Work.......61

Table 6 Responses to, Customer Satisfaction Is Very Important to Your Company..........62

Table 7 Responses to, Your Company Pays Its Taxes on a Regular Basis ........................62

Table 8 Responses to, Your Company Supports Employees Who Want to Acquire

Additional Education .........................................................................................................63

Table 9 Responses to, Your Company’s Policies Encourage Employees to Develop Their

Skills and Careers ..............................................................................................................63

Table 10 Responses to, Your Company Implements Flexible Policies to Provide a Good

Work-Life Balance for Employees .....................................................................................64

Table 11 Responses to, The Managers of Your Company Are Primarily Concerned With

Employees’ Needs and Wants ............................................................................................64

Table 12 Responses to, The Managerial Decisions Related to Employees are Usually

Fair ....................................................................................................................................64

Table 13 Responses to, Your Company Provides Customers with Full and Accurate

Information About Its Products .........................................................................................65

Table 14 Responses to, Your Company Respects Consumer Rights Beyond the Legal

Requirements......................................................................................................................65

Table 15 Responses to, Customer Satisfaction is Very Important to Your Company ........65

ix
Table 16 Responses to, Your Company Emphasizes the Importance of Its Social

Responsibilities to Society..................................................................................................66

Table 17 Responses to, Your Company Contributes to Campaigns and Projects That

Promote the Well-Being of Society ...................................................................................66

Table 18 Responses to, Your Company Always Pays Its Taxes on a Regular Basis .........66

Table 19 Responses to, Your Company Complies With Legal Regulations Completely and

Promptly.............................................................................................................................67

Table 20 Responses to, Your Company Has the Necessary Equipment to Reduce Its

Negative Environmental Impact ........................................................................................67

Table 21 Responses to, Your Company Implements Special Programs to Minimize the

Company’s Negative Impact on the Natural Environment ................................................68

Table 22 Responses to, Your Company Targets Sustainable Growth Based on

Consideration of Future Generations ................................................................................68

Table 23 Responses to, Your Company Makes Investments to Create a Better Life for

future Generations .............................................................................................................69

Table 24 Responses to, Your Company Encourages Its Employees to Participate in

Volunteer Work ..................................................................................................................69

Table 25 Responses to, Your Company Supports Nongovernmental Organizations

Working in Problematic Areas...........................................................................................69

Table 26 Reliability Analyses.............................................................................................70

Table 27 Descriptive Statics of Independent Variables .....................................................71

Table 28 Importance of CSR to Work-Life Balance: Chi-Square Test of Significance (N =

44) ......................................................................................................................................72

x
Table 29 Importance of CSR to Additional Education: Chi-Square Test of Significance (N

= 44) ..................................................................................................................................72

Table 30 Importance of CSR to Employees’ Volunteer Work: Chi-Square Test of

Significance (N = 44) .........................................................................................................72

Table 31 Importance of CSR to Employees Development: Chi-Square Test of

Significance (N = 44) .........................................................................................................73

Table 32 Importance of CSR to Employees Needs: Chi-Square Test of Significance (N =

44) ......................................................................................................................................73

Table 33 Importance of CSR to Work-Life Balance: Spearman's Rho Correlation of

Significance (N = 44) ........................................................................................................74

Table 34 Importance of CSR to Employee Development: Spearman's Rho Correlation of

Significance (N = 44) ........................................................................................................75

Table 35 Importance of CSR to Acquiring Additional Education: Spearman's Rho

Correlation of Significance (N = 44) ................................................................................75

Table 36 Importance of CSR to Concerned with Employees Needs and Wants :

Spearman's Rho Correlation of Significance (N = 44) .....................................................75

Table 37 Importance of CSR to Employee’s Volunteering: Spearman's Rho Correlation

of Significance (N = 44) ....................................................................................................76

xi
 Chapter 1: Introduction

Organizations in the 21st century must not only balance financial success but also

demonstrate a commitment to the community through programs and activities. Rather

than possessing the motivation for the opportunity to increase profit, such programs and

activities were implemented to benefit employees and the community (Stekijos, 2011).

This commitment to employees and the community is known as corporate social

responsibility (CSR). CSR has increased in companies in the United States since 2000.

Particularly in the financial industry, CSR has increased in popularity since 2008

(Thompson, 2009). As the reputation of the financial industry was marred in 2007, more

financial organizations increased community involvement to improve the organization’s

images (Cohen, 2009).

CSR may include both internal and external activities. Examples of external

activities include providing community development opportunities and participating in

special events, such as an awareness walk for a charity. Internal activities may include

improving the quality of the work environment for employees by offering flexible work

schedules. Through internal- and external-focused CSR, organizations can achieve more

success because the effectiveness of an organization is gauged by more than just financial

success; an organization succeeds when its employees commit to improving the

community.

Between 2007 and 2009, organizations’ financial commitment to community

programs declined because of the recession; however, employee involvement in the

community increased 22% during the same period (Committee Encouraging Corporate

Philanthropy, 2010). The increase in employees’ direct involvement in the community

1
may be attributed to businesses’ efforts to encourage CSR activities (Backman &

Armitage, 2009). Though employees perform the activities, organizational leaders

establish policies that encourage employees to donate time and expertise to community

functions (Valentine & Fleischman, 2008). Over 48% of the organizations surveyed by

the Committee Encouraging Corporate Philanthropy (2010) have programs allowing

employees to leave work to volunteer.

This quantitative, correlative study involved investigating the relationship

between CSR practices and employee satisfaction. Chapter 1 includes an introduction to

the study, including the background of the problem and the statement of the general and

specific problem. The chapter also includes an overview of the purpose of the study, the

significance of the study, the nature of the study, the research question, and the study’s

conceptual framework. Chapter 1 also contains definitions of key terms, the scope, the

assumptions, the delimitations, and the limitations of the study.

Background of the Problem

Corporate activity played a critical component of CSR development during the

early stages of CSR (Crane, McWilliams, Matten, Moon, & Siegel, 2008). The concept

of CSR began with the writings of Adam Smith (1776), an 18th-century utilitarian who

believed that organizations should meet the needs of society. During the 18th and 19th

centuries, which Muirhead (1999) described as the prelegalization period of

contributions, organizations were criticized for giving away stakeholders profits, an

argument Friedman (1970) reiterated much later in his article titled The Social

Responsibility of Business Is to Increase Its Profits.

In the 1930s, two authors, Bernard (1938) The Function of the Executive, and

2
Clarke (1939) Social Control of Business, included the idea that organizations have a

social obligation to fulfill, similar to governments (Crane et al., 2008). During this

period, many organizational leaders believed they had the obligation to do what is right in

the community; this belief set the stage for the development of modern CSR.

In the following decades, members of society expected businesses to conduct

activities that benefitted the community (Crane et al., 2008). In 1953, Bowen coined the

term corporate social responsibility (Lloyd, Heinfeldt, & Wolf, 2008). Bowen (1953)

believed organizations should pursue policies that increased the value of society. Bowen

(1953) asserted that organizations’ actions could influence individuals’ lives positively or

negatively. These influences should be considered, and organizations should take the

responsibility to implement ways to improve society.

Two other writers in the 1950s agreed with Bowen (1953) about the essential role

of CSR. In Drucker’s (1954) The Practice of Management and Heald’s (1957)

Management’s Responsibility to Society: The Growth of an Idea, the authors focused on

the obligation of organizations to improve communities. Drucker believed that although

organizations have the responsibility to provide benefits to the community, the first

obligation is for the organization to fulfill its mission. Drucker emphasized the

importance of leaders ensuring the success of the organization. Drucker also noted that

CSR provided benefits not only to the employees, and hence the company, but also to the

community. Heald (1957) viewed CSR as management’s obligation to society not only

to achieve favorable economic performance but also to improve the community. Heald

(1957) also asserted that executives needed to define CSR in company policies.

3
 By the 1960s, corporate involvement in the community became normal

(Minderhound, 2009). The most prominent writers on the topic during this period were

Davis, McGuire, and Walton (Carroll, 1979). The focus of CSR in the 1960s was on

protecting the image of the corporation. Corporations began to gain social power with

the ability to influence critical elements in the community, such as the environment and

neighborhood development. Davis (1960) believed that social responsibility is

determined by a company’s social power. Minderhound (2009) argued that businesses

were becoming increasingly active players in pushing the CSR agenda. Various

supporters of CSR argued that through social responsibility, an organization could

influence the community positively and enhance the organization’s competitive

advantage. Proponents noted that through increasing organizational value for internal

and external stakeholders, organizations could achieve success (Lee, 2008). Walton

(1964) believed that through an organization’s social power and employee volunteerism,

the organization could influence the community.

Since the early 1990s, many organizational leaders have implemented business

strategies that included some form of CSR. These programs are essential for

organizations to remain competitive in the marketplace (Chong, 2009). Organizations

must project their care about societal needs and desire to make a difference in the

community, showing that profit is not the only motivation for operations (Drucker, 1954;

Paton, 2007).

Twenty-first-century advocates of CSR believed socially responsible activities

affected an organization’s customers and employees. Hansen, Dunford, Boss, Boss, and

Angermeier (2011) asserted that organizations’ activities demonstrated to employees and

4
customers that the organization can be trusted. The more organizations participated in

these CSR activities, the more favorable the community viewed the organization (Sen &

Bhattacharya, 2001).

Though many have noted the benefits of CSR, others have criticized CSR.

Opponents of CSR argued that an organization’s sole responsibility is to make the

shareholders money (Friedman, 1970). Many opponents believed there was no need for

organizations to participate in CSR activities because the government should be

responsible for societal needs (Nussbaum, 2009). Other critics posited that companies

that engaged in CSR underperformed when compared to nonparticipating companies.

Nussbaum (2009) argued that organizations engaged in CSR only when it provided a

benefit to the organization. Baker (2008) noted that when organizations used financial

resources to develop the community, the organization was stealing money from the

stakeholders.

As CSR became more accepted in the mid-20th century, several kinds of CSR

were developed to address the needs of the community. In 1979, Carroll, a follower of

Drucker, defined and described various kinds of social responsibility. Carroll (1979)

organized social responsibility into the following categories: discretionary, ethical, legal,

and economic commitment. The economic responsibility of an organization is to ensure

that the organization prospers (Carroll, 1979). Organizational leaders have the legal

responsibility to ensure the organization follows the laws associated with the

environment in which the organization operates. The ethical obligation of an

organization is closely related to its legal responsibility, but the focus is on doing what is

right even when an organization is not compelled to do so (Carroll, 1979).

5
 Visser, Matten, Pohl, and Tolhurst (2007) described philanthropic responsibility,

stating that it is not only an obligation to the community but also an obligation to the

organization’s stakeholders, both internal and external. Internal stakeholders included the

employees, who are a valuable resource; leaders need to consider the affects of their CSR

activities on their employees (Cohen, 2009). Drucker (1954) believed that organizational

leaders have the obligation to care about employees both at the workplace and in the

community and this care extends to educational, recreational, and cultural areas.

The concept of CSR included community involvement and caring for employees

and customers (Gupta & Sharma, 2009). Studies by Ana-Marie (2009), Aquilera, Rupp,

Williams, and Ganapathi (2007), and Brammer, Millington, and Rayton (2009) indicate

that employees’ attitudes may be affected by an organization’s activities. When

organizational leaders demonstrated care about employees, the commitment of the

employees to the organization increased (Aquilera, Rupp, Williams, & Ganapathi, 2007).

Although prior research indicated there might be a correlation between CSR and

employee satisfaction, more research was needed to understand the relationship better.

Statement of the Problem

Although employee satisfaction plays a critical role in the success of the

organization, leaders must also consider the relationship between CSR and employee

satisfaction. The idea of CSR is not new. Wood (1991) defined social responsibility

(CSR) as the financial and human investment by organizations in their communities. The

investment by organizations provides benefits to both internal and external stakeholders.

Ensuring customer loyalty is a critical reason why organizations to engage in these

activities, but leaders must also consider the internal stakeholders when investing in the

6
community. Corporations expect a return on investment through employee, customer,

and investor satisfaction (Gostick & Elton, 2009).

Although corporate leaders first engaged in community activities to attract

customers, leaders also considered the effect CSR projects had on employees (Valentine

& Fleischman, 2008). The general problem was that socially responsible corporations

faced the challenge of engaging in activities that met community needs while protecting

the financial interests of the corporation and employees (Schreck, 2011). Proponents of

CSR believed organizations had an obligation to improve society, whereas critics argued

that CSR created more problems for management because of the pressure to engage

employees in CSR activities and still maintain profitability (Evans & Davis, 2011).

The specific problem was that though employee satisfaction is a critical part of

the organization’s success (Valentine & Fleischman, 2008), little was understood about

the relationship between CSR and employee satisfaction in the financial industry.

Employee satisfaction was higher when the employee identified with the organization,

and CSR correlated with an increase in employees’ sense of connection with the

organization (Collier & Esteban, 2007). The purpose of this quantitative, correlational

study was to determine if a relationship existed between employee satisfaction and CSR

activities.

Purpose of the Study

Balancing CSR with the interests of employees requires leaders to identify CSR

policies that fit the needs of the community and employees (Carroll, 1991). The purpose

of the current study was to investigate the relationship, if any, between CSR activities and

employee satisfaction. The quantitative method and correlational design were

7
appropriate for the study because the goal of the study was to understand if the

independent variable (level of CSR activities) and dependent variable (level of employee

satisfaction) were related (Kline, 2008). To determine if a relationship existed, data were

collected from participants through using Turker’s (2009) CSR survey, which was

modified with permission, to focus on 18 primary questions deemed relevant through

factor analysis done by Turker.

The population for the survey consisted of employees at various levels in Bank of

America and Citigroup who engaged in CSR activities. The reason for choosing these

organizations was they are two of the top five organizations in the financial industry

(Grocer, 2012). Potential participants were identified through his or her participation in

financial-industry groups on LinkedIn, an online professional networking website. The

results of the study may be of benefit to organizational leaders, helping them to

understand how to address CSR and achieve employee satisfaction. Organizational

leaders may also gain insight regarding ways to increase employee engagement

(Millington & Rayton, 2009).

Significance of the Study

Previous studies had a focus on business performance as it related to CSR (Qu,

2007). Other studies focused on the profitability of CSR activities (Vogel, 2005).

However, little was known about the effect of CSR activities on employee satisfaction.

Understanding the relationship between a company’s focus on CSR and employee

satisfaction may help leaders gain insight into how to balance an organization’s ethical,

moral, economic, and legal responsibilities in relation to society with the organization’s

obligations to stakeholders, including employees (Carroll, 1991). The results of this

8
study may help leaders better understand the importance of engaging in CSR to improve

the community and enhance employee satisfaction.

An organization’s commitment to CSR activities is a major factor for perspective

employees (Chiang, 2010). Cotterill (2007) posited that an organization with a reputation

of engaging in CSR has an increased ability to recruit top talent. Understanding the

connection between employee satisfaction and a company’s CSR activities may help

organizational leaders implement CSR activities in a way that enhances employee

satisfaction and the recruitment of highly qualified employees.

Nature of the Study

In this study, the quantitative method and correlational design were used to

investigate the relationship between the independent variable (level of CSR activities)

and the dependent variable (level of employee satisfaction). The CSR survey developed

by Turker (2009) was used to capture data from employees of banking institutions who

were members of finance-industry groups on LinkedIn. The survey contained 42

statements regarding CSR activities. Turker used factor analysis to test the 42 items and

found 18 of the items to be measures of the relationship between employee satisfaction

and CSR. Turker reported that the survey was a valid and reliable tool for measuring

CSR. The data collected in the study were statistically analyzed to determine if a

relationship existed between the variables.

Appropriateness Of The Research Method

Newman (2002) posited that the quantitative research method is appropriate for

determining if a relationship existed between the variables. Because the purpose of the

study was to investigate if CSR is related to employee satisfaction, the quantitative

9
method was the most appropriate research method. Using the quantitative method is

common when studying CSR. For example, Chiang (2010) used the quantitative method

to study the correlation between CSR activities and community members’ perceptions of

CSR.

One benefit of the quantitative method is that numerical, measurable data are

collected (Neuman, 2011). Marshall and Rossman (2010) reported that the quantitative

method is designed to obtain data that are expressed in numbers rather than words and

that the numerical is statistically analyzed. Quantitative data are often collected through

surveys (Neuman, 2011). In this study, a survey was used to obtain numerical data from

the participants; the data were analyzed to determine if a relationship existed between the

independent and dependent variables.

The qualitative method was not appropriate for this study for several reasons

(Marshall & Rossman, 2010). If the qualitative method were used, the focus would have

been on understanding the perceptions, attitudes, and behaviors of employees regarding

CSR. The qualitative method was not appropriate for determining if a statistically

significant relationship existed between the variables (Marshall & Rossman, 2010). The

qualitative method results in subjective data and provides an increased risk of researcher

bias (Creswell, 2005). In this study, the quantitative method was used to obtain objective

data and minimize researcher bias.

Appropriateness Of The Research Design

The correlational design is appropriate when the goal is to determine if a

relationship exists between two variables (Gall, Borg, & Gall, 1996; Waters 2011).

Cherry (2010) asserted that when using a correlational design, the results might indicate

10
there is a positive relationship, a negative relationship, or no relationship between the

variables. In this study, a correlational design was used to determine if CSR activities

and employee satisfaction were positively correlated, negatively correlated, or not

correlated.

A survey instrument was used to collect data. The survey was an effective method

of gathering objective data. The survey data were statistically analyzed to identify if a

relationship existed between CSR and employee satisfaction. The survey questionnaire

was appropriate for individuals working in various levels of the financial industry and

who were members of the LinkedIn website community. Participants were asked a series

of questions regarding employee satisfaction and his or her organizations’ participation in

CSR activities.

Turker (2009) tested the validity and reliability of the CSR Development Scale

Survey as a tool to measure CSR. Through testing the survey tool, Turker determined the

questions are an accurate method of measuring CSR. For the purpose of this study, small

changes were made to the survey questions to address the study parameters. Specifically,

the original questions stated our company, so the wording was changed to your company,

because the entire sample population did not work at the same companies.

Research Question

The purpose of this study was to determine if a relationship existed between CSR

activities and employee satisfaction. Determining if a relationship existed between these

variables resulted in an answer to the research question for the study: Is employee

satisfaction related to CSR activities?

11
Hypotheses

The following hypothesis was tested in the current study:

H10: There is no significant relationship between CSR and employee satisfaction.

H1a: There is a relationship between CSR and employee satisfaction.

The null hypothesis indicated there was no relationship between employee

satisfaction and CSR activities. The alternate hypothesis indicated there was a

relationship between the two variables. Analyzing the data determined that the null

hypothesis should be rejected because a positive relationship existed between the

variables.

Conceptual Framework

The conceptual framework for this study was based on the ideas of CSR and

employee satisfaction. The purpose of this section was to review the concepts of CSR

and employee satisfaction.

CSR. The literature contained various definitions of CSR (Idemudia, 2008).

Despite the lack of a universal definition, many researchers agreed that CSR is important.

Garriga and Melé (2004) identified CSR as the most critical element needed for an

organization to remain competitive in the market. Cohen (2009) explained that CSR is

important for competitive advantage because CSR improves the image and performance

of the organization. Organizations must demonstrate CSR so that consumers and

employees trust the organizations. Davis (1976) posited that society expects

organizations to participate in community activities. For example, during natural

disasters such as Hurricane Katrina, the Haiti earthquake, and the tsunami in Japan,

12
community members expected organizations to provide relief and support to the affected

populations.

Drucker (1954) posited that employees are central to the success of the

organization. Stakeholder theorists of CSR emphasized that leaders should invest time in

employees, the reason for organizational success. Employees who dedicate time and

energy to develop the organization should be awarded by the organization (Kruse,

Freeman, & Blasi, 2010). By investing in and awarding employees, leaders can also

benefit the community through CSR activities.

Most theorists agreed that CSR and the focus on employees are essential;

however, there are theorists who disagreed. Value theorists suggested leaders should

focus on maximizing the profits of the organization (Shi Yaun & Ning, 2008).

Organizational leaders have the right and obligation to make decisions that increase

profits, thereby making more money for the stakeholders (Friedman, 1970).

Organizational leaders need to identify which CSR activities work. The activities

chosen by the organization may affect how community members respond to the

organization. Although the activities chosen play a role in the success of the

organization, this study did not focus on the types of CSR activities of the organization

but if they were correlated with employee satisfaction.

Employee satisfaction. Employee satisfaction affects every aspect of an

organization. Herzberg (1959) developed a motivation theory regarding what makes

employees feel satisfied or dissatisfied. Herzberg asserted that motivators, such as

recognition and achievement, and factors, such as pay and relationships, influence

13
employee satisfaction. Understanding these factors may allow leaders to incorporate

effective activities, such as recognition programs, to increase employee satisfaction.

Mumford (1976) posited that employees have four categories of needs:

knowledge, psychological, task, and moral. When employee needs are met, employees

exhibit greater job satisfaction. Employee satisfaction results in more productivity and

thereby contributes to an organization’s success (Saari & Judge, 2004).

Jackson and Hua (2009) reported that employee satisfaction is dependent on the

organization’s culture. Kane-Urrabazo (2006) noted, “The culture of the organization

plays a major role in if the organization is happy and healthy” (p. 189). If employee

involvement is not encouraged in the organizational culture, but employees are required

to be involved in CSR activities, the activities are unlikely to succeed.

Organizations in which employee satisfaction and engagement are high are more

likely to be productive than companies in which employee satisfaction and engagement

are low (Brammer, Millington, & Rayton, 2009). Employee satisfaction has also been

linked to customer satisfaction. Fleming and Asplund (2007) studied employee

satisfaction and found that organizations with high employee satisfaction achieved as

much as 2.6 times greater customer satisfaction and profits than organizations with lower

employee satisfaction.

Definitions of Terms

The following terms have been defined to ensure understanding of key ideas in

the study.

Corporate social responsibility (CSR). CSR involves the activities and policies

implemented by an organization to achieve positive social change (Aguilera, Rupp,

14
Williams, & Ganapathi, 2007). This definition is the most inclusive and emphasizes

social change because of CSR.

Employee satisfaction. Employee satisfaction is the degree to which employees

are satisfied beyond the fulfillment of needs at work (Myskova, 2011). This definition is

used because it provides a broad approach to understanding employees’ perceptions.

Social power. Social power is the concept that businesses can have an influence

on critical societal issues, such as the environment and neighborhood development

(Davis, Morril, Rao, Soule, 2008).

Assumptions

A basic assumption for the study was that through using criteria for selecting the

study sample, the participants were part of the financial industry and engaged in CSR.

Another assumption was that the participants would have a clear understanding of the

meanings of the survey questions. It was also assumed that the participants would

answer honestly and provide accurate representations of his or her organizations’ CSR

activities. To help encourage the participants to answer honestly, they were ensured that

participation and survey responses would be kept confidential. It was also assumed that

the survey instrument used would be appropriate for obtaining the data needed to

determine if a relationship existed between employee satisfaction and CSR.

Scope and Delimitations

The scope of the study was limited to examining if a relationship existed between

CSR activities and employee satisfaction. The study was restricted to surveying

members of the financial industry in the United States who engaged in CSR activities.

The participants in the study consisted of employees of Bank of America and Citigroup

15
who actively participated in his or her companies’ employee network groups on

LinkedIn. The population included various levels of employees in the selected

organizations. JPMorgan Chase, the largest organization in the financial industry, was

not chosen because the researcher is an employee of that organization, which could create

a conflict of interest.

Individuals who did not actively participate in one of the identified LinkedIn

groups did not receive the survey. Data analysis was limited to the data from qualifying

individuals who agreed to participate in the study and who completed the survey

correctly (according to the survey instructions).

Limitations

The study contained several limitations. The study involved a quantitative

method and correlational design. This approach was appropriate for asking specific

questions and obtaining a limited range of responses and for analyzing the data to identify

any relationships between the variables. A limitation of this approach is that it is was not

appropriate for determining whether the independent variable caused the dependent

variable. Another limitation of the selected method and design was that a certain

minimum number of participants were needed for the results to be statistically credible.

Using a Likert-type scale was another limitation. In the Likert-type scale, the

difference between agree and strongly agree is not objective, and the interpretation

varied by participant. Although using a Likert-type scale resulted in limitations, this

format was appropriate in the current study to obtain numerical data that could be

statistically analyzed (Wienclaw, 2009).

16
 Another limitation was that some participants may have believed he or she was

obligated to respond positively about his or her organizations. Additionally, because the

study was limited to individuals who worked in the financial industry, the findings from

the study have limited generalizability to employees and organizations in other industries.

Using LinkedIn to obtain participants was another limitation because of the potential for

individuals to falsify information in his or her LinkedIn profiles.

Summary

Organizational leaders face the challenge of balancing the needs of the

community with the organization’s financial needs and employee interests. Many

business leaders understand the benefits of helping society through CSR. However,

research is lacking regarding the relationship between the CSR activities and employee

satisfaction. Engaged employees are more productive than those not engaged. The

findings from this study regarding the relationship between CSR and employee

engagement and satisfaction added to the knowledge concerning how organizations

should structure CSR activities to provide the maximum benefits to the community and

employees (Moon, 2007). The findings of the current study indicated that the more

organizational leaders encourage employee involvement in CSR, the more likely the

organization will positively affect organizational financial performance, employees, and

the community. Therefore, effective CSR may help an organization increase the

reputation of the organization and achieve competitive advantage.

Chapter 1 contained an introduction to this quantitative, correlational study. The

chapter included an overview of the background of the problem, the problem and purpose

statements, the significance of the study, the nature of the study, the conceptual

17
framework, definitions of key terms, the assumptions, and the scope, limitations, and

delimitations of the study. Chapter 2 contains a review of literature related to the topic of

the current study, including a historical overview of CSR, and arguments for and against

CSR. Chapter 2 also contains information regarding the gaps in the literature.

18
 Chapter 2: Review of the Literature

CSR has been studied since the 19th century. Research showed that an

organization’s commitment to socially responsible activities may create positive

experiences for consumers, enhancing the reputation of the organization (Tziner, Bar,

Oren, & Kadosh, 2011). Employees respond positively when his or her organizations are

known for ethical behavior. Though the amount of research on CSR is significant, little

research has been conducted on the relationship between CSR and employee satisfaction,

particularly in the financial industry. The purpose of this study was to identify if a

relationship existed between CSR activities (independent variable) and employee

satisfaction (dependent variable).

Chapter 2 contains a review of the literature regarding CSR. The chapter includes

definitions of CSR and employee satisfaction and a dissemination of seminal research on

CSR. Also included in the literature review are studies from later periods of CSR

development, the advantages and disadvantages of CSR, and gaps in the literature.

Title Searches and Documents

This literature review is limited to studies related to CSR and employee

satisfaction. Literature was obtained mainly from the EBSCOhost and ProQuest

databases. Other sources of documents included corporate websites through searches in

the Bing, Google, and Yahoo search engines.

A substantial number of studies on CSR existed; a major focus of research was

leaders’ perceptions of CSR and how CSR affected stakeholders. Table 1 contains

information on the literature revealed in this review, the topics of the documents, and

how the documents were obtained. The keyword searches resulted in 1,623 sources; 253

19
sources were potentially relevant to the study. Of the 253 sources, 114 were determined

to be relevant and were included in the literature review, with 83.5% of the sources

published within the last 5 years. The oldest resource used was from 1776, and other old

sources were published from the 1930s to the 1950.

Table 1

Literature Review Search Results

EBSCOhost ProQuest
Search term Retrieved Relevant Retrieved Relevant
CSR 65 25 35 13
CSR and employee
15 4 10 6
engagement
CSR and employee
20 5 12 5
satisfaction
CSR and marketing 1 1 0 0
CSR and financial affect 10 6 5 3
CSR and ethical program 6 6 0 0
CSR and customer
15 3 10 0
satisfaction
Arguments against CSR 5 3 4 1

CSR and leadership 15 9 10 8

Research methods 10 8 5 3
Total 162 70 91 39

Definitions of CSR

No universal definition of CSR existed (Wan-Jan, 2006); the definitions of CSR

have changed over the years. In the early 1950s, Bowen (1953) defined CSR as a tool

organizations use to create policies to achieve social purposes. Bowen’s (1953)

definition has a focus on the corporation’s contribution to society, with little focus on

employees.

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 Drucker (1954) defined CSR as the effect corporations have on society while

trying to engage new customers. Friedman (1970) and Jensen (2000) defined CSR as an

organization’s obligation to stockholders, and explained this obligation is appropriate,

because the stockholders determined the outcomes of the organization. Wood (1991)

defined CSR as an organization’s financial and human investments in the community,

which are provided to benefit both internal and external stakeholders. Wood’s definition

is closely related to social contract theory, which related to the organizations obligations

to the community and to the organization.

More recently, Lou and Bhattacharya (2006) defined CSR as the activities related

to an organization’s obligations to the community and stakeholders. Aguilera, Rupp,

Williams, and Ganapathi (2007) defined CSR as the wide range of activities and policies

an organization engages in to achieve social change. The critical component of each of

these definitions is the focus on activities implemented to create social change.

Definitions of Employee Satisfaction

As with CSR, the definition of employee satisfaction has changed over the years.

Locke (1976) defined employee satisfaction as “a pleasurable or positive emotional state

resulting from the appraisal of one’s job or job experiences” (p. 1300). Locke (1976)

focused on the employees’ perceptions of the job and how aspects of the job influenced

employee satisfaction.

Although employee satisfaction is difficult to determine, Comm and Mathaisel

(2000) asserted that employees’ needs should be considered when determining employee

satisfaction. Comm and Mathaisel (2000) also asserted that employee satisfaction is the

gap between employees’ and the management’s work expectations. Myskova (2011)

21
defined employee satisfaction as the degree to which employees are satisfied beyond the

fulfillment of needs at work.

Historical Perspectives of CSR

Theorists in many academic disciplines have expanded the understanding of CSR

(Makower, 1994). Information about CSR dates back to the late 18th century (Pohl &

Tolhurst, 2010). Smith (1776) argued that organizations and individuals working

together in the marketplace can best serve society’s needs and desires. Smith (1776)

proposed the invisible hand theory, asserting that a free, unregulated market based on

self-interest results in the greatest good for society. Individuals must act in an open and

honest manner for the system to work. Smith’s philosophy regarding CSR was accepted

through the 19th century (Pohl & Tolhurst, 2010).

Perspectives on CSR evolved during several periods, including the Industrial

Revolution, the welfare state era, and the globalization era (Blowfield & Murray, 2011).

The Industrial Revolution extended from the 18th century to the early 20th century;

during this period, corporations flourished and focused on maximizing profits. The

welfare state era extended from the 1920s to the 1950s. During this period, the concept

of CSR developed slowly (Muirhead, 1999). Leaders gradually acknowledged the

importance of giving back to the community, especially those in need. For example,

business leaders helped form the Young Men’s Christian Association (Crane et al., 2008).

The globalization era spanned the 1960s to the 1980s and was distinguished by the

growth of CSR in many corporations for the purpose of enhancing the quality of life of

individuals (Collins, 2010). Writers on CSR in each era believed that CSR is an

obligation that organizations will voluntarily accept or will be forced by society to accept.

22
 Industrial Revolution. With the Industrial Revolution came the development of

enhanced technology in factories, which led to more factory jobs, and the economic

power in society began to shift to leaders of organizations (Melois, 1980). Although

businesses became more powerful, business leaders were not concerned with the effects

on society. During the early years of the Industrial Revolution, businesses had little

positive effects on the community. Employees experienced poor working conditions in

factories, often worked between 12 and16 hours a day, and suffered from air pollution

because of coal fires (Melois, 1980). Many advances in technology and business

practices occurred during the Industrial Revolution, but the new age of mechanization

also created many social problems (Melé, 2008). Business leaders did not invest in

safeguards to protect the community. The contributions to communities were not made

by businesses, but by charitable groups, churches, and private individuals (Pohl &

Tolhurst, 2010).

By the beginning of the 20th century, corporations faced increasing criticism for

becoming too large, powerful, and harmful to society (Muirhead, 1999). Companies

were becoming monopolies grew without regulation; for example, Rockefeller, founder

of Standard Oil bought all of the oil refineries in the United States to gain control of the

market. Other business leaders, such as Vanderbilt (railroads) and Morgan (banking),

also developed monopolies (Muirhead, 1999).

Many leaders of organizations tended to believe social issues were not the

responsibility of businesses but the responsibility of government (Cohen, 2009). For

example, Byron of the West Cork Railroad Company believed that an organization

should only spend money to benefit the organization. Cohen (2009) noted that

23
organizational leaders were so focused on profits that the leaders did not attend to social

issues.

In the early 1910s, two prominent American businessmen, Carnegie and

Rosenwald, emerged as revolutionary leaders in furthering the ideal of CSR (Drucker,

1984). Both Carnegie and Rosenwald believed that those who are financially fortunate

are responsible for helping to address social problems; each man believed the sole

purpose of having money was to give back to the community. However, the two men

promoted different approaches. Carnegie asserted that having wealth entailed a

responsibility to the community (Drucker, 1984; Wulfson, 2001). Carnegie was willing

to donate his money for socially responsible activities, whereas Rosenwald used his

business resources to contribute to the community (Cohen, 2009).

Welfare state era. During the welfare state era, corporate leaders began to work

with the community to help solve social issues, although maximizing profits was still the

primary goal (Collins, 2010). Barnard (1938), an early CSR theorist, believed that

creating CSR policies was the responsibility of corporate leaders. Barnard (1938) stated

that for corporations to remain effective and efficient, involvement in the community is

essential. Barnard (1938) suggested that when community members are engaged, he or

she is more likely to cooperate and reinvest in the company.

During the Great Depression, companies such as A. E. Schmidt, and Crane &

Company, established CSR policies to create goodwill and customer loyalty. A. E.

Schmidt did so through allowing credit purchases, whereas Crane & Company gave back

to the communities by having its employees paint houses free of charge (Perman, 2008).

24
These CSR activities helped the company increase customer loyalty, which helped the

companies survive hard economic times (Perman, 2008).

By the 1950s, corporations were expected to be involved in the community. This

decade was the most productive period of CSR (Crane et al., 2008). The most significant

contributor to the popularity of CSR was Bowen, who is considered to be the father of

modern CSR (Carroll, 1999). Bowen believed that social situations dictate economic

outcomes (Banerjee, 2007), meaning that corporations’ strategic plans must adjust to

changes in the current social situation.

For example, when leaders of the American Cancer Society linked cigarette

smoke to lung cancer in 1962, the tobacco industry suffered an economic loss because of

decreased public confidence. The tobacco industry generally rejected the findings, but

Phillip Morris acted as a good corporate citizen by emphasizing honesty, integrity,

respect, and tolerance (Phillip Morris USA, 2012). To address the American Cancer

Society’s findings, the leaders of Phillip Morris implemented four types of programs,

including for youth, parents, and retailers. Funding was provided for youth programs

such as the Boys & Girls Club and Junior Achievement. Through these methods, Phillip

Morris’s leaders endeavored to persuade the public that the company was trying to meet

the needs of society and prevent young people from smoking (Carroll, 1999).

Bowen (1953) also believed an organization is responsible for understanding how

activities of the business may affect the community. The actions of an organization

almost always affect the community, either positively or negatively. For example, prior

to the Great Depression, the banking industry was focused on increasing profits by

lending money to unqulaified people. This practice contributed to the economic

25
meltdown, which did immense harm to the community. Bowen (1953) suggested that

organizations should use CSR to correct negative effects and the failures of

noninvolvement in the community. Bowen’s (1953) view of CSR served as the

foundation for future research on CSR, with the focus on the obligations business leaders

have to meet the needs and align with the values of society (Backman & Armitage, 2009;

Carroll, 1991).

Bowen (1953) believed that organizational leaders must think beyond the success

of the organization and focus on the development of the community. The implementation

of CSR strategies will not solve societal problems, but organizations have to take

responsibility to do the right thing (Lee, 2008). Organizations should create wealth for

society and not just the organization (Aagaard, Valente, & Rasmussen, 2008).

Another significant contributor to the development of CSR was Drucker. In the

1950s, Drucker asserted that organizations should focus outside the walls of the

organization, to the community (Kanter, 2009). Drucker (1954) explained that CSR

provides organizations with a platform to gain external stakeholders. By using CSR to

gain external stakeholders, organizational leaders help ensure the long-term health of the

organization (Kanter, 2009). Drucker presented two types of social responsibility: a

company’s contributions to society through products and services and the company’s

efforts to develop the community through engaging in specific activities (Smith, 2009).

Examples of the later type of social responsibility during the 1950s include the job

training programs offered by Focus Hope and United Auto Workers for unemployed

individuals.

26
 Through CSR activities an organization and its employees can have a major affect

on the community, not only through financial contributions, but also through employee

volunteer work. Volunteer work may involve building a new school, cancer treatment

center, or helping to feed the homeless, as was done by Coca-Cola with their investment

of $50,000 to Emory University in 1950, to help build a cancer diagnosis and treatment

center (Coca-Cola, 2012).

Drucker (1954) also suggested that organizational leaders must ensure that the

organization is not impaired by CSR activities. An organization’s CSR activities must be

strategically planned to help ensure the organization’s longevity (Cohen, 2009). Drucker

(1984) asserted, “if organizations do not meet this social responsibility, no other social

responsibility can take place” (p. 27). Drucker (1984) explained that employees are the

most valuable asset of an organization and play a major role in CSR. Corporate leaders

are responsible for doing the right thing and meeting employees’ needs. The investment

in employees is just as important as profit. Employees need to be motivated, and this

motivation comes from both monetary incentive and having a meaningful purpose in the

community (Kanter, 2009).

Globalization era. Although economic globalization in the latter half of the 20th

century resulted in many benefits for many corporations, it also came with risks to

corporations and the community (Blowfield & Murray, 2011). Buehler and Shetty (1976)

suggested that an organization’s response to social needs is determined by profitability.

In the United States, the economic prosperity present in the 1950s slowed and became

stagnant during the 1960s and 1970s (Blowfield & Murray, 2011). Because of the

troubled economy in the 1970s, many companies in the United States were forced to

27
change strategies to maintain profits (Davis, 1966). Although implementing CSR

activities created a challenge for corporate profitability, leaders understood that

involvement in the community was a natural outcome of modern life (Davis, 1966). Van

Over and Barone (1975) found that 91% of the executives they surveyed believed that

CSR is an essential element in their companies. Corporate leaders knew that growth

trends would shift and that companies’ actions must align with society’s needs and wants.

In the 1970s, Johnson (1971) was one of the first to address an organization’s

“responsibility as an enterprise to take in account employees, suppliers, dealers, local

communities, and the nation” (p. 50). Johnson (1971) suggested that employees should

play a greater role in the community, and some company leaders believed the same. For

example, in 1985, NBC began to highlight the need address the growing homelessness

problem in America, and NBC executives encouraged employees to volunteer at local

homeless shelters and donate supplies for shelters (Frazier, 1985).

Crane, McWilliams, Matten, Moon, and Siegel, (2008) described a

groundbreaking study in the 1960s by the Committee on Economic Development that

indicated that businesses’ basic purpose is to meet the needs of society in the manner that

benefits society the most. One reason this study was significant was that the participants

were from the business and education sectors. The authors outlined three critical areas

for CSR: (a) the inner circle, meaning the basic functions to create jobs and products, (b)

the intermediate circle, meaning adjusting the economic function to align with societal

values, and (c) the outer circle, meaning more involvement by the organization to address

societal needs (Committee on Economic Development, 1964). The study also indicated

that organizations should play an active role in improving society, such as by

28
endeavoring to reduce unemployment and poverty (Committee on Economic

Development, 1964). Organizational leaders responded to the research by focusing on

environmental and people issues (Crane et al., 2008).

By the 1990s, most Fortune 500 corporations started creating departments

designed to develop CSR programs. Corporate leaders began to ask how CSR affected

individuals, including employees, investors, and the community. Lantos (2002)

presented two views on business’s role in society. The classical view is focused on pure

profits, with no consideration of social responsibility. According to the other view, the

stakeholder view, organizations should be concerned with the consequences of the

organization’s actions on the community.

Carroll (1999) reported that the stakeholder theory dominated in the 1990s. The

widely accepted typology of stakeholders was Clarkson’s typology (Branco & Rodrigues,

2006). In Clarkson’s (1995) typology of stakeholders, there are primary stakeholders and

secondary stakeholders. The primary stakeholders are the individuals essential to the

success of the organization, such as employees, community investors, and customers.

Secondary stakeholders are nonessential to the success of the organization, such as

government organizations. Secondary stakeholders may influence the organization, but

the sustainability of the organization is not dependent on the involvement of secondary

stakeholders (Clarkson, 1995).

Current and future status of CSR. CSR did not fade away at the beginning of

the 21st century. Instead, many organizations became more responsive to disasters,

responding on their own initiative in times of crisis (Pohl & Tolhurst, 2010). For

example, Wal-Mart was at the forefront in responding to Hurricane Katrina by providing

29
food and supplies. Wal-Mart’s leaders believed the company and its employees needed

to respond in the manner that would have the greatest affect in the community (Barbaro

& Gillis, 2005). Although cash contributions are an important part of CSR, another

essential component is employee involvement (Welch, 2009). Welch (2009) posited that

organizations’ CSR strategies must have a focus on the importance of volunteering in the

community, even when employees are concerned about his or her jobs because

corporations are downsizing.

When corporations fail to engage in CSR during disasters, especially corporation-

produced disasters, corporate images can suffer. A relevant example is the BP Deep-

water Horizon oil spill in 2010. The Deep-water Horizon oil spill sparked outrage, which

forced the leaders of BP to respond. BP’s creditability was adversely affected because

the organization did not have a viable plan regarding how to resolve the oil leak (Webb,

2010). The leaders shifted blame to the owners of the rig, which fueled public outrage.

As the organization struggled to respond satisfactorily, the disaster continued to affect the

image of the organization; even long after the leak was stopped (Webb, 2010).

The recent economic recession has affected companies’ CSR strategies. Starting

in 2007, many corporations decreased cash contributions to CSR (Welch, 2009). White

(2005) suggested that during difficult economic times, there are three possible phases

regarding CSR. CSR may fade away because organizational leaders focus on survival

and recovery. As the economy and organization recover, the organization may develop a

strategy to remain competitive and develop the community. If an organization can

implement social needs before profit maximization, the organization will survive and be

30
able to help develop a community that will, in return, enhance the likelihood of the

organization’s survival (White, 2005).

Phol and Tolhurst (2010) also addressed CSR during economic hardships. Phol

and Tolhurst argued that CSR may decline as organizations focus on surviving in a

difficult market. Expectations that organizations will engage in social programs may not

be realistic in a competitive business environment, and the concept of social

responsibility can fade away (Phol & Tolhurst, 2010). In contrast, Herzig and Moon

(2011 asserted that CSR can survive even in difficult financial times.

Jaakson, Reino, and Mõtsmees (2012) believed that consumers remember the

efforts of organizations during stressful economic times. If a corporation abandons the

community in a time of need, community members may lose trust in the corporation, and

the corporation may not be able to regain consumer trust when the economy improves.

During the recent recession, the Bank of Montreal continued its CSR efforts to decrease

carbon emissions by integrating environmental considerations into business practices and

reducing its carbon footprint (BMO Financial Corp, 2011). The Bank of Montreal also

invested in the Greening Canada Fund during the recession and by 2011 was recognized

as the Global Carbon Performance Leader by the Carbon Disclosure Project (BMO

Financial Corp, 2011). Welch (2009) posited that despite economic downturns and other

challenges, CSR increasingly will become part of the fabric of doing business in the 21st

century, although companies may interpret and implement CSR differently.

Critical Views of CSR

Some business leaders and writers disagree that CSR is necessary. Friedman was

the most vocal advocate against CSR (Collins, 2010). Friedman (1970) asserted that

31
CSR is not a corporate obligation but a government obligation. Friedman (1970) also

argued that the “only social responsibility of business is to use its resources and engage in

activities designed to increase profits” (p. 65). Many other critics of CSR agreed with

Friedman’s assertion. Karnani (2011) argued that CSR activities are contrary to the main

organizational goal of making a profit. When organizational leaders focus on social

issues, employees and consumers are negatively affected (Collins, 2010). In contrast,

when organizational leaders focus on increasing profits, society naturally benefits,

removing the need for companies to engage in altruistic activities.

Friedman (1970) also asserted that because corporations are owned by

shareholders, the shareholders should determine how profits are used; corporate leaders

should not make the decision. If shareholders wish to invest in the community, they will

invest through their individual contributions and not through organizations (Friedman,

1970). Karnani (2011) agreed, arguing that when organizational leaders focus on

improving society, they oppose the organizational shareholders.

Baker (2008) challenged the motivations of leaders to engage in CSR, suggesting

leaders use CSR to make money rather than to develop the community. Baker also

asserted that by investing in the community, business leaders take a risk with the

shareholders’ money. The goal of the executives should be to do what is needed to

increase the capacity of the organization (Baker, 2008).

The need to regulate CSR is another argument used by opponents of CSR. White

(2008) argued that government regulation of CSR activities is necessary to protect

consumers. An example of government-implemented consumer protection is the

Sarbanes-Oxley Act of 2002, which was created to “protect investors by improving the

32
accuracy and reliability of corporate disclosures made pursuant to the securities laws, and

for other purposes” (section I, para. 2 ). Bilson (2010) argued that the government does

not regulate organizations enough; therefore, organizations have more power to define

CSR activities. These activities are designed to benefit the organization and not

necessarily protect consumers (Bilson, 2010).

Benefits of CSR

Countering the criticisms of CSR, supporters argued that many benefits result

from CSR activities, many of which relate to the company’s likelihood of achieving long-

term sustainability (Carroll & Shabana, 2010). Some of the benefits to organizations

participating in CSR activities include (a) enhanced reputation, (b) competitive

advantage, (c) customer satisfaction, and (d) profitability.

Enhanced reputation. The reputation of an organization is just as important as

the bottom line (Janney & Grove, 2011). Sekajipo (2010) suggested the reputation of an

organization is used by consumers to predict future behavior. If an organization has a

positive reputation in the community, consumers will assume the organization will

continue to act in a responsible manner and invest in the community. Maintaining a

strong reputation may draw new customers and lead to more powerful economic

performance, giving the organization a competitive advantage (Csiszar & Heidrich,

2006).

An organization can participate in CSR activities to enhance its reputation

(Minderhound, 2009). CSR provides organizations an opportunity to enhance consumer

confidence in the organization. Galbreath (2009) found that CSR activities provide

stakeholders with specific items by which to gauge the reputation of the organization.

33
Some organizations have found it beneficial to establish a department to oversee CSR

and ensure the organization maintains a positive reputation.

Competitive advantage. CSR activities help companies to remain competitive in

the market (Lou & Bhattacharya, 2006) because through CSR, organizational leaders can

create an environment most attractive to customers. Rooney (2007) asserted that

organizations can create a competitive advantage by focusing on one area of social

responsibility. Examples of a singular focus include Scotia Bank’s focus in 2011 on new

ways to protect consumer information (Industry Canada) and Publix Food Stores’

development of strategies to reduce child obesity (Publix, 2012). In these examples, the

CSR strategy is a part of the core mission and values of the organization. When CSR

activities are included in the core mission and values, they are more likely to be

successful (Stephenson, 2009).

Customer satisfaction. Customers provide the foundation for a successful

organization. Without customer loyalty, organizations would not be able remain

competitive (Lou & Bhattacharya, 2006). McDonald and Rundle-Thiele (2008) found

that though organizations’ CSR programs were not initially designed to increase

customer satisfaction, CSR programs and customer satisfaction are positively correlated.

Customers tend to be loyal to a business that gives back to the community (McDonald &

Rundle-Thiele, 2008).

Bhattacharya and Sen (2004) suggested that CSR programs help define an

organization’s identity, which in turn influences customer loyalty. The more a customer

identifies with the organization, the more likely the customer will have a positive opinion

about the company. Lou and Bhattacharya (2006) argued that CSR programs could

34
decrease customer satisfaction. The programs have to be creative and appeal to

consumers. For example, an organization operating in a rural area would not benefit

implementing CSR activities to develop urban areas while ignoring other areas (Johnston,

2001). When organizations do not meet the customers’ expectations, dissatisfaction is

likely to increase. A report from the Australian Consumer Association (2005) indicated

that although banks increased CSR programs in 2004, customer dissatisfaction increased.

One factor contributing to the dissatisfaction could be the economic climate, but most

likely the dissatisfaction resulted from a lack of trust and transparency in the financial

industry (Australian Consumer Association, 2005).

Target is an example on how a company’s commitment to the community has

increased not only customer satisfaction but also profitability (Target Corporation, 2012).

The Better Business Bureau (2009) recognized Target as an influential organization in the

development of the community. Through the company’s investment in education, the

arts, and social services, the organization are better able to meet customer expectations,

which resulted in greater prosperity.

Ensuring customer loyalty is a critical reason for organizations to engage in these

activities, but leaders must also consider internal stakeholders when investing in the

community. Through satisfying customers, investors, and employees, corporations can

achieve return on investment (Gostick & Elton, 2009). Buehler and Shetty (1976)

suggested that an organization’s response to social needs is determined by profitability.

Profitability. Many researchers assert that implementing CSR activities

increases profitability (Orlitzky, Schmidt, & Rynes, 2004). This assertion is based on

analyzing companies’ past financial performance, not predictions of future financial

35
performance (Lou & Bhattacharya, 2006). Den Hond, Bakker, and Neergaard (2007)

noted that executives believed social involvement was necessary for long-term gain.

Holmes (1976) argued that contributions to the community are directly related to profits.

Engaging in CSR activities, such as donating money and volunteering, is a way of

attracting new customers, which in turn results in greater profit (Griffin & Mahon, 1997).

Solomon, and Hanson (1985) posited that organizations’ long-term success depends on

its efforts in the community.

Caplan (2009) argued that organizations must align their efforts and priorities

with the noneconomic goals of society. Engaging in noneconomic activities may lead to

customer loyalty. Community involvement through employee volunteering shows that

the company and its employees care about the community. One example is Snapfish by

HP (2009), which partnered with the Make a Wish Foundation in 2010. Through this

partnership, the company conveyed the message that a large organization understands the

importance of serving in the community.

Corporate Control of CSR

For organizations to implement successful CSR strategies, some form of

corporate control is needed (Mersereau & Mottis, 2012). A corporate control system

consists of the “formalized procedures and systems that use information to maintain or

alter patterns in an organizational activity” (Simons, 1987). Management control is

essential to ensure the actions of the organization and employees align with the goals of

the organization. Managers who control CSR need to consider (a) ethical issues, (b)

employee involvement, (c) customer involvement, and (d) future changes.

36
 CSR and ethical considerations. To ensure an organization’s effect in the

community is beneficial and not harmful, corporate leaders must ensure ethical activities

are a part of the CSR process. Payne and Joyner (2006) posited that the natural extension

of ethical concern is an organization’s involvement in the community. In an ethical

organization, for example, community involvement includes employees and customers

(Payne & Joyner, 2006). Ethisphere Institute ranked Ford Motor Company as one of the

most ethical organizations based on the company’s ethics and compliance programs and

reputation (Ferguson, 2012).

The business ethics of an organization can be discerned through the company’s

CSR programs (McDonald, & Rundle-Thiele, 2008). An example is Adidas. During the

1990s, when Nike was criticized for the use of sweatshops, Adidas established safeguards

to ensure the ethical treatment of overseas employees (Adidas Group, 2012). As a result,

Stiftung Warentest (2008, 2009, 2010) rated Adidas as Most Ethical Because of the

criticism from Adidas, Nike has enhanced its CSR activities. Through the Nike

Employee Grant Fund of the Oregon Community Foundation, Nike employees can invest

in the community (Nike, 2012). Through the foundation, grants from $5,000 to $20,000

were given to schools in the Portland, Oregon, and area to enhance school learning

environments (Nike, 2012).

Handelman and Arnold (1999) mentioned that customers think and talk positively

about an organization if it demonstrated ethical behavior and commitment to the

community. Stephenson (2009) argued that when organizations implement ethical CSR

programs, organizations could gain a competitive advantage in the industry. Valentine

and Fleischman (2008) believed that socially responsible companies tend to be more

37
successful because these companies are more likely to be seen as ethical. For

organizations to remain ethical, the CSR strategies need to involve the employees. A

successful example is American Airlines. Through the company’s partnership with the

Cystic Fibrosis Foundation, the company’s employees and community members

participate in walks and other volunteer events in the community to raise money for the

foundation (Cystic Fibrosis Foundation, 2012).

CSR and employee involvement. Employees must have an active involvement

with developing the organization’s CSR program. Employees’ relationships with the

community help organizations establish effective CSR programs (Payne & Joyner, 2006).

When employees invest in the community, they take ownership of the CSR process while

helping the organization fulfill its mission. Brammer et al. (2009) found that when

organizations involve employees in the CSR process, CSR programs are more successful.

The global human resources consulting firm developed questions for an employee survey

to determine the employees’ perceptions of the company and to assist the corporation in

developing CSR policies.

Research indicated individuals are motivated to work at ethically and socially

responsible companies.. A 2003 study of 11 North American and European schools

indicated that 97% of individuals looked for organizations with positive reputations with

CSR and ethics and not necessarily financial benefits (Walton, 2011). Additionally, a

Towers Perrin (2007) study indicated that positive reputation for CSR is a key

engagement driver for associates.

38
CSR and Future Effectiveness

Through CSR, organizations can have a positive effect on society. Though

community involvement is important, the organization’s ability to stay in business is also

critical. Drucker (1954) believed an organization’s first obligation is to the financial

stability of the organization. If organizations overcommit to the community, they may

jeopardize financial stability.

When organizations decide to discontinue support of a community program, a

backlash may occur, as in the case with the Susan G. Komen Foundation in 2012. The

foundation decided to stop providing financial support to Planned Parenthood because

abortion does not align with the beliefs of the foundation. Because of the decision, the

Susan G. Komen Foundation has seen a 30% decrease in financial support for local

affiliates (Gibson, 2012).

Gaps in the Literature

Many areas of CSR have been studied, including financial implications, customer

satisfaction, ethical programs, and employee commitment. However, ilttle research was

conducted on the effects of CSR activities on employee satisfaction, particularly in the

financial industry. Prior to this study, research was needed on the relationship between

CSR activities and employee satisfaction to understand how the employees view the

organization. The purpose of this study was to fill this gap in the literature.

During the economic crisis of 2007 through 2009, the reputations of many

organizations decreased (Yelkikalan & Köse, 2012). The reputation of the financial

industry was affected in particular, and more employees were laid off in this industry

than in any other (Goodman & Mance, 2011; Yelkikalan & Köse, 2012). Leaders of

39
financial organizations had to understand how CSR programs could impose additional

cost to the organization. Yelkikalan and Köse (2012) asserted that CSR activities are

important in an economic crisis because CSR activities provide solutions to the social

problems created by the crisis.

Conclusion

The literature review contained an overview of the research on CSR and

employee satisfaction. CSR is a controversial topic because of opposing views on if

organizations and individuals have an obligation to improve society. Some seminal

writers on CSR believed organizations are responsible for developing the community,

while other writers argued the most important goal for an organization is to maximize

profits for shareholders.

Organizational leaders can no longer focus solely on maximizing profits,

however; organizations also need to participate in improving the community. Even

during difficult economic times, members of the community expect corporations to invest

in the development of society (Bilson, 2010). Through investment in the community,

organizations benefit through enhanced reputation, competitive advantage, customer

satisfaction, and ultimately, profitability. The benefits of CSR outweigh the costs that

may be associated with CSR programs (Lou & Bhattacharya, 2006).

Although various benefits of CSR have been identified in the literature prior to

this study, it was unclear if a relationship existed between CSR and employee

satisfaction, particularly in the financial industry. The purpose of this study was to add to

the literature by determining if a relationship existed between CSR and employee

satisfaction. The findings of the study added to the body of knowledge of CSR and may

40
be used by organizational leaders, particularly in the financial industry, to understand to

use CSR activities to increase employee satisfaction. Increased employee satisfaction

will likely result in greater productivity and customer satisfaction and will likely increase

profitability (Griffin & Mahon, 1997).

Summary

The concept of CSR was introduced by Smith (1776). In his book the Invisible

Hand, Smith provided the foundation for future research on CSR. The concept of CSR

has expanded since its introduction, and controversy existed regarding if businesses were

responsible for improving society. Critics, such as Friedman (1970) and Baker (2008),

have argued that corporate leaders are obligated to increase profits for shareholders and

that governments, not corporations, are responsible of addressing social issues. Friedman

(1970) proposed that a “corporation possesses neither the authority nor the moral right to

divert shareholders’ profits for the welfare of the public” (p. 133), implying that

organizations must focus on profits and not communities.

Advocates of CSR believed that CSR is one of the most important organizational

programs (Lou & Bhattacharya, 2006). Engaging in CSR can result in many significant

benefits for organizations, such as enhanced reputation and increased customer loyalty.

Gaining customer loyalty through CSR enhances the organization’s chances of achieving

the goals and mission of the organization, which is the ultimately the purpose of the

organization.

Organizations are a driving force in the development of the community.

Although organizations must focus on maximizing profits to ensure sustainability,

organizations must also address the expectations of society and meet the needs of

41
employees (Wood, 1991). The changing economy has forced organizational leaders to

rethink business operations, and the majority of organizations have implemented a CSR

strategy. Though strategies have been implemented, most have a focus on external

stakeholders. In difficult economic times, organizations also need to consider the talents

and needs of internal stakeholders, such as employees, who play a major role in

developing their organizations (Valentine & Fleischman, 2008).

Employees affect organizations’ commitment to CSR activities (Drucker, 1954).

Drucker (1954) believed that employees are a valuable resource and should not be

considered a cost. Understanding the relationship between CSR and employee

satisfaction may help leaders to create the best strategy for benefiting both external and

internal stakeholders. The result may be increased employee customer satisfaction and

profits.

Chapter 2 contained a review of the literature on CSR and employee satisfaction.

Various definitions of CSR and employee satisfaction were presented, and the evolution

of CSR was revealed. The chapter also contained arguments for and against CSR, and

gaps in the literature. Chapter 3 contains an overview of the research methodology. The

chapter includes the rationale for choosing the quantitative method and correlational

design. Also provided in the chapter are the research questions and hypothesis, the study

population and sample, informed consent, and confidentiality. Chapter 3 also contains a

description of the data collection instrument, data collection procedures, and concerns

regarding reliability and validity, and the data analysis method.

42
 Chapter 3: Methodology

The purpose of this quantitative, correlational study was to determine if a

relationship existed between CSR activities and employee satisfaction. Prior to the study,

the relationship between CSR and employee satisfaction, specifically in the financial

industry, was not clear. Understanding the relationship between CSR and employee

satisfaction may help corporate leaders gain insight into how to use CSR activities to

enhance employee satisfaction and achieve greater organizational success.

Chapter 3 contains a review of the study methodology, including the

appropriateness of the qualitative research method and correlational design. The chapter

also includes details regarding the study population and sample, the sampling method,

informed consent, and confidentiality. Chapter 3 also contains the data collection

method, considerations regarding reliability and validity, and the data analysis

procedures.

Appropriateness of Research Method and Design

Quantitative method. The quantitative method was the most appropriate

research method for this study. The purpose of quantitative research is to obtain

objective, numerical data for the purpose of measuring phenomena, testing a hypothesis,

and examining potential relationships between variables (Hopkins, 2000; Jenkins, 2009).

Quantitative research involves asking “specific, narrow questions to obtain measurable

and observable data on variables” (Creswell, 2005, p. 39). The quantitative method was

the appropriate selection for this study because the goal of the study was to determine if a

relationship existed between CSR activities and employee satisfaction.

43
 In quantitative research, numerical data are often collected through surveys

(Creswell, 2005). In this study, the CSR survey developed by Turker (2009) was used to

collect data (Appendix A). The data were statistically analyzed to test the hypothesis for

the study. The dependent variable (the level of employee satisfaction) included the

following: additional education received by employees, develop of skills and careers,

work-life balance, managers meeting the needs and treating employees fair. The

independent variable (an organization’s CSR activities) included involvement in the

community, protecting the natural environment, and investment in future generations.

The dependent and independent variables were determined using a factor analysis in

Turker’s (2009) original study.

The qualitative method was not appropriate for the study because qualitative

research involves collecting textual data that are subjective. Qualitative research often

involves conducting interviews to explore the perceptions and experiences of the

participants. Such data cannot be analyzed to identify relationships between variables

(Creswell, 2005). Additionally, qualitative research has a focus on unknown variables

and the goal is to discover the variables. In this study, the variables were known, making

the qualitative method unsuitable (Neuman, 2006).

Correlational design. The area of study did not require that the environment be

controlled or that variables be manipulated. Therefore, the correlational design was the

most appropriate design for this study. Correlational research is conducted to understand

the relationship, if any, between research variables. Gall et al. (1996) mentioned that a

correlational design is suitable for making a prediction or investigating a relationship. In

this study, the correlational design was used to identify if CSR activities (independent

44
variable) are related to employee satisfaction (dependent variable).

Although the experimental design was used to determine causality, the

correlational design was used to identify only if a relationship existed. The experimental

design was not appropriate for this study because experimental research involves

measuring participants before and after a treatment (Hopkins, 2000). In this study, it was

not be feasible to measure participants before and after experiencing CSR activities.

The study’s purpose was to investigate the relationship between the participants’

job satisfaction and CSR activities. A survey was used to investigate if a relationship

existed between the variables. Surveys are often used in correlative studies because the

goal is to analyze the data statistically, and surveys typically result in numerical data. In

contrast, interviews are used to collect textual data, which cannot easily be statistically

analyzed. For the survey in this study, the survey was administered through Survey

Monkey, an online survey system that included SPSS integration. Using Survey Monkey

eased the process of collecting and analyzing the data to identify if a relationship existed

between the variables.

Mail and telephone surveys were not chosen because of the time and cost

involved. The best method was a survey administered through e-mail because this

method provided the participants with the most convenient way to respond to the survey

questions. Although this method was the most convenient, the researcher had no control

over which participants returned the completed survey (West, 2008).

The survey questionnaire was formatted so that the participants could select the

answer that best aligned with his or her personal beliefs (Likert, 1932. To understand the

views and beliefs of the participants, a Likert-scale measurement was used. The

45
participants were instructed to select the response category (strongly agree, agree,

neutral, disagree, and strongly disagree) that was the most accurate.

Research Question

The purpose of this quantitative, correlational study was to determine if a

relationship existed between CSR activities and employee satisfaction. Data were

collected and analyzed to answer the following research question:

RQ: How is employee satisfaction affected by CSR activities?

To answer the question, data were collected through Turker’s (2009) survey containing

18 questions on CSR. The questions were modified for this study, with Turker’s

permission, to adjust to the various organizations where study participants worked.

Organizational leaders may use the answers to the research questions to understand better

the balance of society and employees, and increase organizational performance.

Hypothesis

The following null and alternated hypotheses were tested in this study:

H0: There is no significant relationship between CSR and employee satisfaction.

Ha: There is a relationship between CRS and employee satisfaction.

The null hypothesis indicated there is no relationship between employee

satisfaction and CSR activities. The alternate hypothesis indicated there is a relationship

between the two variables. Through analyzing the data, it was determined that the null

hypothesis should be rejected because a positive relationship existed between the study

variables.

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Population and Sample

The research plan is defined in this section. The population for this study

included individuals employed in the financial industry, specifically at Bank of America

and Citigroup. Participation was open to employees at various levels of each

organization, from the executive level to entry-level. Because Bank of America and

Citigroup have employees across the United States and participants were recruited online

via LinkedIn, the population consisted of individuals throughout the country.

As a member of each of the identified LinkedIn groups, the researcher had access

to communicate with each member of the sample population. As of June 10, 2012, Bank

of America’s LinkedIn group included 7,138 members, with a breakdown as follows:

29% senior level, 27% vice president, 16% entry level, and 12% manager level.

Citigroup’s LinkedIn group included 5,329 members, with a breakdown as follows: 27%

senior level, 16% entry level, 16% managers, and 16% vice president level.

To obtain a true representation of the population, it was important to select an

appropriate sample size (Hopkins, 2000). Based on the hypothesis testing and the design

of the study, the sample size was calculated based on testing an assumed correlation

coefficient of .5. This sample size calculation was more consistent with the study design

than a confidence interval approach (Li, 2012). The larger the sample size, the lower the

margin of error and the ability to generalize the findings (Raosoft, 2004). The sample

size was calculated by using the online sample size calculator at Raosoft.com. The

acceptable margin of error for this study was determined to be between 5% and 7%, with

a confidence interval of 95%. Based on the formula, with a population of 13,649, the

recommended sample size was 262 individuals. To obtain a lower margin of error of 5%,

47
300 participants would be needed and the high margin of error of 7%, only 194

participants would be needed.

Informed Consent

To introduce potential participants to the study, the researcher posted a notice on

the LinkedIn website, a professional networking website, requesting individuals to

participate in the study. Each individual interested in participating in the study was

required to sign an electronic informed consent form (Appendix B) prior to taking the

survey. The informed consent form contained a description of the study, including the

nature and scope of the study, and an explanation that participation was voluntary and

that participation could be withdrawn at any time without penalty to the participant.

Participation would be withdrawn while completing the survey by selecting the opt-out

link in the survey. The informed consent document also included a description of the

expected time required (30 minutes) to complete the survey and the number of questions

(18) included in the survey. The informed consent form also itemized potential risks of

participating (i.e., the slight risk that participants may have a sense of obligation to

support their organizations’ CSR policies).

Confidentiality

Several precautions were taken to ensure the confidentiality of the participants.

Through using the Survey Monkey system for the survey, the identities of the participants

were kept confidential. The participants did not have the option to identify his or her

organizations in the survey. Completed surveys were protected through the Survey

Monkey administration page for the survey, which only the researcher had access to (by

entering a password). Further, Survey Monkey uses a secure sockets layer (SSL), which

48
secures the connection between the client and the server, and agrees not to sell any survey

data.

The participants were assigned codes based on when they completed the survey.

For example, the first participant to complete the survey on June 15, 2012, was coded as

1-June15-2012, and the second participant was coded as 2-June15-2012. Any identifying

components, such as the participants’ e-mail addresses and IP addresses, were deleted

prior to saving the data. The data were stored in a password-protected Excel file saved

on a password-protected hard drive. The data will be retained for three years following

the study and will be destroyed, including through deactivating the researcher’s account

on Survey Monkey.

Instrumentation and Data Collection

Instrumentation. A purpose of quantitative research is to collect and analyze

numerical data to gain insight regarding relationships, if any, between variables. Surveys

are the primary instrument for collecting data in quantitative research (Neuman, 2006).

A survey was used in this study to collect data; using a survey was appropriate for

obtaining numerical information (Neuman, 2006) regarding employee satisfaction and

CSR. Using other methods, such as interviews, were inappropriate because the study

population was too large and the representativeness of the sample could have been

jeopardized. To prevent bias during data collection, the study was limited to one survey

instrument, which provided the best opportunity to obtain a random sample (Sekajipo,

2010).

Surveying employees of the financial industry about CSR resulted in sufficient

data to analyze to determine if the null hypothesis should be accepted or rejected. The

49
goal of this research was to investigate the relationship between employee satisfaction

and CSR activities. The research instrument was used to collect data about employees’

perceptions of CSR.

The survey that was used in this study was created by Turker (2009) to measure

CSR (Appendix A). Turker (2009) tested the validity and reliability of the survey and

determined the survey is an accurate way to measure CSR. Because Turker verified the

validity and reliability of the survey, a pilot test was not conducted in this study.

The survey was used to obtain data regarding CSR and employee satisfaction.

The survey consisted of 18 items, with responses based on a 5-point Likert-type scale.

With permission from Turker (Appendix C), the survey questions were modified from

Our Company to Your Company to apply to the three selected organizations for the study.

The 18 questions were a subset of questions from Turker’s (2009) original scale. The 18

questions were the final questions determined by Turker to be most relevant toward

measuring corporate social responsibility and employee satisfaction. Turker (2009)

arrived at the final questions through various methods. The initial list of questions

derived from previous scales in earlier literature. Additionally, Turker (2009) conducted

an exploratory survey to generate new items. This process created 55 potential

statements. Through further discussion groups, Turker (2009) eliminated unrelated

items, concluding with 42 questions. To test the validity and reliability of the items,

Turker (2009) conducted a pilot study with two assessments. The first assessment

extracted items through a correlation analysis using Bartlett’s test of sphericity, which

was significant at the .001 level. The second assessment extracted items through

exploratory factor analysis. As a result of this process, the 18-question scale was

50
developed for use in the study (Turker, 2009) the response options ranged from strongly

disagree to strongly agree. This range of responses allowed the participants to select the

answer that best aligned with their personal beliefs (Likert, 1932). Other benefits of

using a Likert-type survey include that the responses are close-ended, the data are easier

to understand, and the data are not transcribed, as is often necessary when collecting

qualitative data (Creswell, 2012; Marshall & Rossman, 2010). The numerical data were

analyzed to determine if a relationship existed between CSR and employee satisfaction.

The data gathered from the survey were analyzed based on the following

categories:

• CSR to society included items 21, 31, 32, 35, 36, 40 and 41

• CSR to employees included items 4, 6, 7, 8, and 9

Data collection. An introductory e-mail was sent via LinkedIn to members of the

study population. Sending the e-mail to members of the targeted population was the best

way to obtain a study sample that appropriately represented the study population. The e-

mail included an explanation of the purpose of the study, the voluntary nature of

participation, and the measures taken to ensure confidentiality. After 10 days, the link to

the survey was e-mailed via Survey Monkey to the study population. By clicking on the

link, potential participants were directed to the informed consent form (Appendix B) on

Survey Monkey, an online survey site. The participants were required to agree to

participate by selecting the I Agree button to proceed to the survey. Individuals not

interested in participating had the option to select the Do Not Agree button; selecting this

button directed the individuals to a page that explained the individuals would not be able

to participate in the study.

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 The survey was administered through Survey Monkey for several reasons. Online

surveys are easier to conduct and obtain responses (Schunk & Zimmerman, 1994).

Survey Monkey also provided helpful tools (e.g., the ability to track participants’

responses) and features (e.g., SPSS integration to analyze the data). Such benefits made

an online survey more appropriate for this study than mail and telephone surveys, which

are more expensive and time-consuming. The preferred method was to administer the

survey online and to invite participants via e-mail, offering participants the most

convenient way to complete the survey. One weakness of online survey administration is

that the researcher had no control over who responded and who did not respond (West,

2008).

Reliability and Validity

Reliability and validity are important considerations in research. Reliability

indicates the study is consistent and can be repeated by another researcher with similar

results (Newman, 2002). If a study cannot be replicated with similar results, the research

cannot be generalized to other populations. Newman (2002) asserted that “validity

suggests truthfulness and refers to the match between a construct, or the way a researcher

conceptualizes the idea in a conceptual definition, and a measure” (p. 179). Reliability

and validity are revealed in more detail below.

Reliability. Trochim (2006) reported that reliability is the consistency of the

measurement. Cherry (2010) explained that when a test can be administered multiple

times and result in similar data, the study is reliable. The survey that was used in this

study was previously tested for reliability using two reliability assessments (Turker,

2009). The first reliability assessment used by Turker (2009) was the inter-item

52
correlation of the scale. The analysis of the inter-item correlation showed an average of

.035, which is greater than the threshold of .30., which is the rule of thumb (Hair, Black,

Anderson, & Tatham, 2006). The second reliability assessment used by Turker was

Cronbach’s Alpha. The Cronbach’s Alpha score was .9013, which was much higher

than the suggested value (Turker, 2009)

Internal validity. Trochim, Marcus, Mâsse, Moser, and Weld (2008) defined

internal validity as causal interferences between two variables. In this study, emphasis

will be placed on the creditability and trustworthiness of the results, which is critical in

achieving accurate results (Marshall & Rossman, 2010). Because data were collected

through a validated survey that is administered through Survey Monkey, the data were

not subjectively interpreted. Statistically analyzing the data enhanced the internal

validity of the study.

External validity. Leedy and Ormrod (2009) defined external validity as the

ability to apply the findings of a study to similar situations. This study was limited to

individuals belonging to the LinkedIn professional networking groups for financial

industry. Although the study was limited to individuals belonging to the LinkedIn

professional network, the results are generalizable outside the setting. This survey could

be administered to other industries to determine if there is a correlation between CSR and

employee satisfaction. To increase external validity in this study, the researcher could

have chosen participants from financial organizations outside the LinkedIn environment,

not just two of the five biggest organizations.

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Data Analysis

Data analysis allows researchers to turn raw data into meaningful information that

supports the purpose of the research study (Gaston, 2011). Methods of analysis vary by

the type of study. Multiple statistical methods were used in this study, including

regression analysis, descriptive analysis, and cross-tabulations. Descriptive statistics

were used to develop a simple summary of the selected population. For additional

analysis of the data, frequencies and percentages were determined for both employee

satisfaction and CSR activities of the organization. Chi-square analysis and Fisher’s

Exact Test was used to reject or accept the null hypothesis. Spearman’s Rho correlation

was used to test the significance between the two variables. To assist in analyzing the

data, the data was entered into SPSS software, which is commonly used in quantitative

research to conduct multiple statistical methods.

Summary

Chapter 3 contained an overview of the research methodology for this study,

including the appropriateness of the selected research method and design. The purpose of

the study was to determine if a relationship existed between CSR activities and employee

satisfaction. Because the study involved examining if a relationship existed between the

independent and dependent variables, the quantitative method and correlational design

were appropriate for the study. The chapter also included the research question and

hypothesis, the study population and sample, the sampling method, informed consent,

and confidentiality. Chapter 3 also contained information regarding the data collection

instrument and procedures, concerns regarding reliability and validity, and the data

collection procedures. Using an online, Likert-type survey was appropriate for obtaining

54
numerical data. The data were statistically analyzed to test the hypothesis, determine if a

relationship existed between the variables, and to answer the research question. Chapter

4 contains a presentation of the findings of the study.

55
 Chapter 4: Results

This study involved an examination of the relationship between CSR (the

independent variable) and employee satisfaction (the dependent variable). The research

questions were analyzed by means of descriptive and inferential statistics. Descriptive

statistics (i.e., frequency, means, mode, median, and standard deviation) were calculated

to examine employee satisfaction in terms of the variables above. Table 2 illustrates the

descriptive statistics for the employee satisfaction variable. Chi-square analysis and

Fisher’s Exact Test was used to test the null hypothesis assumption that no relationship

existed between the variables in the population. These hypothesis concerned the nature

of employee satisfaction and the organization’s participation in CSR activities.

Table 2

Descriptive Statistics for Employee Satisfaction

Variable N M Mdn Mode SD

Acquire additional
44 3.93 4 4 0.900
education
Develop their skills and
44 3.95 4 4 0.939
careers
Work-life balance for
44 3.57 4 4 1.087
employees
Employee’s needs and
44 2.95 3 3 0.914
wants
Fairness of decisions
44 3.43 4 4 0.846
related to employees

The study involved a quantitative, correlational design to examine the relationship

between the variables. Survey questionnaires were distributed to a population of banking

professionals within two groups on the LinkedIn professional networking site. The

groups included Bank of America and Citigroup. Ally Financial was originally a part of

56
the study population but the Ally Financial group on LinkedIn was disbanded by the

organization, so therefore, recruiting individuals from Ally Financial was impossible.

The following research questions and hypothesis reflected the relationship between the

determinants and the organization’s response to CSR.

RQ: How is employee satisfaction affected by CSR activities?

There was one hypothesis in the study, expressed below. The alpha level for this

hypothesis was set at .05.

H10: There is no significant relationship between CSR and employee satisfaction.

H1a: There is a relationship between CRS and employee satisfaction.

Sample Demographics

The targeted population included Bank of America and Citigroup employees who

participated in the LinkedIn Professional Networking group on the Internet. To recruit

participants, a thread was posted on the networking group sites requesting participation

in the study. Interested individuals requested to receive information through e-mail about

the study. Each individual interested in participating in the survey was sent the informed

consent document with an explanation of the survey process. Once the individual agreed

to participate an e-mail with the link to the questionnaires was sent to individuals. The

participants in study included various levels of the organizations according to the profiles

on the LinkedIn website.

The sample consisted of 44 participants from Bank of America or Citigroup

networking groups. Additionally research identified the gender of the participants, and

the current employer of the participants. Table 3 reveals the distribution by gender;

Table 4 reflects the distribution of participants by organization.

57
Table 3

Distribution of Participants by Gender

Gender Number
Male 22
Female 22

Table 4

Distribution of Participants by Employer

Employer Number
Bank of America (or its affiliates) 22
Citigroup (or its affiliates) 22

Research Question and Operationalization of Variables

The research question and definitions of the variables reflected the relationship

between CSR and employee satisfaction. The independent variable, CSR, refers to

activities by the corporation not related to profit motives. These activities included,

participating in local fundraising walks, providing sponsorship money, ensuring

environmental protection, and improving the quality of work life. The extent of CSR was

determined by the following questions:

• Your company provides customers with full and accurate information

about its products.

• Your company respects consumer rights beyond the legal requirements.

• Customer satisfaction is very important to your company.

• Your company emphasizes the importance of its social responsibilities to

society.

58
 • Your company contributes to campaigns and projects that promote the

well being of the society.

• Your company always pays its taxes on a regular basis.

• Your company complies with legal regulations completely and promptly.

• Your company has the necessary equipment to reduce its negative

environmental impact.

• Your company implements special programs to minimize the company’s

negative impact on the natural environment.

• Your company targets sustainable growth based on consideration of future

generations.

• Your company makes investments to create a better life for future

generations.

• Your company encourages its employees to participate in volunteer work.

• Your company supports nongovernmental organizations working in

problematic areas.

The dependent variable included factors around work-life balance, fair treatment,

and meeting the needs and wants of the employees. In this study, employee satisfaction

referred to the degree to which employees were satisfied beyond the fulfillment of needs

at work (Myskova, 2011). These variables included employee’s additional education,

work-life balance, managers meeting employee’s needs, fair treatment, and skill

development. The responses to the first five items of the adopted CSR measurement

scale developed by Turker were used to measure CSR to employee satisfaction.

59
Data Collection

The request for survey participants was posted on Bank of America and

Citigroup’s LinkedIn professional networking groups with permission from the group’s

managers. The request-for-participants posting was present for three weeks. Through the

posting, 78 individuals expressed interest in participating in the study by contacting the

researcher through the post on the LinkedIn networking group sites. Forty-four

individuals returned the informed consent document and received the survey

questionnaire link. The participants received the survey questionnaire through e-mail.

Mail surveys were not used for data collection because they were deemed to be an

expensive means of collecting date from a large sample population.

To ensure the accuracy of data collection, the questionnaires were electronically

sent to the targeted individuals e-mail addresses after agreeing to participate through the

informed consent document or e-mail consent as the informed consent document

instructed. The collected data were downloaded from the Survey Monkey website and

uploaded into SPSS software.

Data Analysis

Frequencies and percentages were computed for both employee satisfaction and

CSR activities of the organization. The level of precision in the existing sample could be

determined by establishing confidence value and confidence level (Schoeninger & Insko,

1971). The level of confidence is expressed in the percentage of the group. This

percentage represented the true value of the group and participants who would pick a

particular response on the Likert-type scale survey. As an example, using a confidence

level of 95% with a sample of size of at least 26 out of the 44 participants, or 59.1% of

60
the group would present a confidence value of 12.23. Therefore, when 59% of the

participants choose a particular response on the Likert-type scale, there was a 95%

confidence level that the true percentage of the group was between 46.87% (i.e., 59.1% –

12.23) and 71.33% (i.e., 59.1% + 12.23). One statement elicited a 59% or higher

response, as exhibited in Table 5 (Your company encourages participation in volunteer

work).

Table 5

Responses to, Your Company Encourages Participation in Volunteer Work

Cumulative
Response N f %
Strongly disagree 1 2.3 2.3
Disagree 2 4.5 6.8
Neutral 1 2.3 9.1
Agree 14 31.8 40.9
Strongly agree 26 59.1 100.0
Total 44 100.0
Mean = 4.41; Median =5; Mode = 5; SD= 0.92

Reviewing the strongly agree responses revealed a 50% or higher response to

several questions related to CSR. The statements representing a 50% or higher response

of strong agreement included, customer satisfaction is very important to your company

and your company always pays it taxes on time. These results are presented in Tables 6

and 7. On the other end of the spectrum, the strongly disagree responses were less than

5% for the statements.

61
Table 6

Responses to, Customer Satisfaction Is Very Important to Your Company

f Valid Cumulative
Response n % %
Strongly disagree 1 2.3 2.3 2.3
Disagree 1 2.3 2.3 4.5
Neutral 1 2.3 2.3 6.8
Agree 19 43.2 43.2 50
Strongly agree 22 50.0 50.0 100.0
Total 44 100.0 100.0

Table 7

Responses to, Your Company Pays Its Taxes on a Regular Basis

f Valid Cumulative
Responses n % %
Strongly disagree 1 2.3 2.3 2.3
Neutral 4 9.1 9.1 11.4
Agree 14 31.8 31.8 43.2
Strongly agree 25 56.8 56.8 100.0
Total 44 100.0 100.0

The 5-point Likert scale data (1 = strongly disagree, 2 = disagree, 3 = neutral, 4 =

agree, 5 = strongly agree) provided a strong representation of the research data.

Reviewing the results of each item and the frequencies for strongly agree, agree, neutral,

disagree, and strongly disagree revealed most participants agreed with the statements,

representing a positive relationship. This was true for most of the statements except, the

managers of your company are primarily concerned with the employees’ needs and

wants. Only 26% of the respondents agreed or strongly agreed with that statement.

These results are presented in Tables 8 through 25.

62
Table 8

Responses to, Your Company Supports Employees Who Want to Acquire Additional

Education

Response n f
Strongly disagree 1 2.3
Disagree 3 6.8
Neutral 4 9.1
Agree 26 59.1
Strongly agree 10 22.7
Total 44 100.0

Table 9

Responses to, Your Company’s Policies Encourage Employees to Develop Their Skills

and Careers

Response n f
Strongly disagree 1 2.3
Disagree 2 4.5
Neutral 8 18.2
Agree 20 45.5
Strongly agree 13 29.5
Total 44 100.0

63
Table 10

Responses to, Your Company Implements Flexible Policies to Provide a Good Work-Life

Balance for Employees

Response n f
Strongly disagree 2 4.5
Disagree 5 11.4
Neutral 12 27.3
Agree 16 36.4
Strongly agree 9 20.5
Total 44 100.0

Table 11

Responses to, The Managers of Your Company Are Primarily Concerned With

Employees’ Needs and Wants

Response n f
Strongly disagree 1 2.3
Disagree 14 31.8
Neutral 17 38.6
Agree 10 22.7
Strongly agree 2 4.5
Total 44 100.0

Table 12

Responses to, The Managerial Decisions Related to Employees are Usually Fair

Response n f
Strongly disagree 0 0.0
Disagree 8 18.2
Neutral 11 25.0
Agree 23 52.3
Strongly agree 2 4.5
Total 44 100.0

64
Table 13

Responses to, Your Company Provides Customers with Full and Accurate Information

About Its Products

Response n f
Strongly disagree 2 4.5
Disagree 1 2.3
Neutral 2 4.5
Agree 24 54.5
Strongly agree 15 34.1
Total 44 100.0

Table 14

Responses to, Your Company Respects Consumer Rights Beyond the Legal Requirements

Response n f
Strongly disagree 1 2.3
Disagree 1 2.3
Neutral 4 9.1
Agree 26 59.1
Strongly agree 12 27.3
Total 44 100.0

Table 15

Responses to, Customer Satisfaction is Very Important to Your Company

Response n f
Strongly disagree 1 2.3
Disagree 1 2.3
Neutral 1 2.3
Agree 19 43.2
Strongly agree 22 50.0
Total 44 100.0

65
Table 16

Responses to, Your Company Emphasizes the Importance of Its Social Responsibilities to

Society

Response n f
Strongly disagree 1 2.3
Disagree 3 6.8
Neutral 7 15.9
Agree 14 31.8
Strongly agree 19 43.2
Total 44 100.0

Table 17

Responses to, Your Company Contributes to Campaigns and Projects That Promote the

Well-Being of Society

Response n f
Strongly disagree 1 2.3
Disagree 0 0.0
Neutral 6 13.6
Agree 20 45.5
Strongly agree 17 38.6
Total 44 100.0

Table 18

Responses to, Your Company Always Pays Its Taxes on a Regular Basis

Response n f
Strongly disagree 1 2.3
Disagree 0 0
Neutral 4 9.1
Agree 14 31.8
Strongly agree 25 56.8
Total 44 100.0

66
Table 19

Responses to, Your Company Complies With Legal Regulations Completely and Promptly

Response n f
Strongly disagree 1 2.3
Disagree 1 2.3
Neutral 6 13.6
Agree 15 34.1
Strongly agree 21 47.7
Total 44 100.0

Table 20

Responses to, Your Company Has the Necessary Equipment to Reduce Its Negative

Environmental Impact

Response n f
Strongly disagree 2 4.5
Disagree 1 2.3
Neutral 12 27.3
Agree 20 45.5
Strongly agree 9 20.5
Total 44 100.0

67
Table 21

Responses to, Your Company Implements Special Programs to Minimize the Company’s

Negative Impact on the Natural Environment

Response n f
Strongly disagree 2 4.5
Disagree 2 4.5
Neutral 11 25.0
Agree 20 45.5
Strongly agree 9 20.5
Total 44 100.0

Table 22

Responses to, Your Company Targets Sustainable Growth Based on Consideration of

Future Generations

Response n f
Strongly disagree 2 4.5
Disagree 4 9.1
Neutral 13 29.5
Agree 18 40.9
Strongly agree 7 15.9
Total 44 100.0

68
Table 23

Responses to, Your Company Makes Investments to Create a Better Life for future

Generations

Response n f
Strongly disagree 2 4.5
Disagree 3 6.8
Neutral 9 20.5
Agree 24 54.5
Strongly agree 6 13.6
Total 44 100.0

Table 24

Responses to, Your Company Encourages Its Employees to Participate in Volunteer Work

Response n f
Strongly disagree 1 2.3
Disagree 2 4.5
Neutral 1 2.3
Agree 14 31.8
Strongly agree 26 59.1
Total 44 100.0

Table 25

Responses to, Your Company Supports Nongovernmental Organizations Working in

Problematic Areas

Response n f
Strongly disagree 1 2.3
Disagree 2 4.5
Neutral 13 29.5
Agree 18 40.9
Strongly agree 10 22.7
Total 44 100.0

69
 The independent variables were determined through Turker’s (2009) factor

analysis during the development of the scale. Turker (2009) determined the scale was

based on four factors, labeled CSR to society, employees, customers, and government.

To test the reliability of the CSR measurement scale created by Turker (2009), a

reliability assessment was completed. The reliability assessment used was Cronbach’s

alpha. The Cronbach’s alpha score was .943, which was much higher than the suggested

value and higher than Turker’s .9013. Table 26 represents Cronbach’s alpha score.

Table 26

Reliability Analyses

Statistical Test α N
Cronbach’s alpha .943 18

Performing descriptive statics on the independent variables, which reflected

organizations activities in the community, protection of the natural environment, and

investment in future generations revealed a mean score range of 3.55 to 4.41, which is

represented in the Table 27.

70
Table 27

Descriptive Statics of Independent Variables

Statistic N M Median Mode SD

Full and accurate
information about its
products. 44 4.11 4 4 0.945
Respects consumer rights 44 4.07 4 4 0.818
Customer satisfaction is very
important to your company. 44 4.36 4.5 5 0.838
Your company emphasizes
the importance of its social
responsibilities to society. 44 4.07 4 5 1.043
Your company contributes to
campaigns and projects that
promote the well being of
the society. 44 4.18 4 5 0.843
Your company always pays
its taxes on a regular basis. 44 4.41 5 5 0.844
Your company complies
with legal regulations
completely and promptly. 44 4.23 4 5 0.937
Your company has the
necessary equipment to
reduce its negative
environmental impact. 44 3.75 4 4 0.967
Your company implements
special programs to
minimize the company’s
negative impact on the
natural environment. 44 3.73 4 4 0.997
Your company targets
sustainable growth based on
consideration of future
generations. 44 3.55 4 4 1.022
Your company makes
investments to create a better
life for future generations. 44 3.66 4 4 0.963
Your company encourages
its employees to participate
in volunteer work. 44 4.41 5 5 0.923

71
Your company supports
nongovernmental
organizations working in
problematic areas. 44 3.77 4 4 0.937

Multiple analyses were used to test the assumption that no relationship existed

between employee satisfaction and CSR. The first analysis used was a Chi-Square

analysis. The Chi-square analysis was chosen under the assumption of normal

distribution. Tables 28- 32 represent a Chi-Square analysis between the Importance of

CSR to the organization compared to employee satisfaction.

Table 28

Importance of CSR to Work-Life Balance: Chi-Square Test of Significance (N = 44)

Asymp. Sig. Exact Sig.

Statistical Test Value df (2-sided) (2-sided)
Pearson Chi-Square 38.999 16 0.001 0.005
Likelihood Ratio 25.916 16 0.055 0.036
Fisher's Exact Test 23.921 0.021
Linear-by-Linear
Association 13.478 1 0 0

Table 29

Importance of CSR to Additional Education: Chi-Square Test of Significance (N = 44)

Asymp. Sig. Exact Sig.

Statistical Test Value df (2-sided) (2-sided)
Pearson Chi-Square 61.335 16 0 0.001
Likelihood Ratio 26.926 16 0.042 0.011
Fisher's Exact Test 25.822 0.016
Linear-by-Linear
Association 15.472 1 0 0

72
Table 30

Importance of CSR to Employees’ Volunteer Work: Chi-Square Test of Significance (N =

44)

Asymp. Sig. (2- Exact Sig. (2-

Statistical Test Value df sided) sided)
Pearson Chi-Square 69.286 16 0 0
Likelihood Ratio 33.029 16 0.007 0
Fisher's Exact Test 36.041 0.000123
Linear-by-Linear
Association 22.233 1 0 0

Table 31

Importance of CSR to Employees Development: Chi-Square Test of Significance (N =

44)

Asymp. Sig. (2- Exact Sig. (2-

Statistical Test Value df sided) sided)
Pearson Chi-Square 64.016 16 0 0
Likelihood Ratio 29.388 16 0.021 0.004
Fisher's Exact Test 27.614 0.007
Linear-by-Linear
Association 14.121 1 0 0

Table 32

Importance of CSR to Employees Needs: Chi-Square Test of Significance (N = 44)

Asymp. Sig. (2- Exact Sig. (2-

Statistical Test Value df sided) sided)
Pearson Chi-Square 17.68 16 0.343 0.289
Likelihood Ratio 19.517 16 0.243 0.16
Fisher's Exact Test 21.212 0.14
Linear-by-Linear
Association 6.663 1 0.01 0.009

73
 After the initial analysis, the Chi-square results were questionable due to the

amount of sparse data and a small N size. A small N size in a Chi-square gives off

inaccurate results; therefore a Fisher’s Exact Test was conducted. Bower (2003)

discussed the appropriateness of using Fisher’s exact test for small sample populations.

The results of the Fisher’s Exact Test show a significant relationship between 4 of the 5

employee satisfaction indicators.

The goal of the study was to understand if the independent variable (level of CSR

activities) and dependent variable (level of employee satisfaction) were related. Bivariate

Correlation was used to determine if the there was a relationship between CSR activities

and employee satisfaction. When focusing on the questions related to employee

satisfaction and company’s CSR activities, the results supported rejecting the null

hypothesis, which no relationship existed between the variables at an alpha level of .01.

Therefore, the combination of importance of CSR and volunteer activities did influence

employee satisfaction (Table 33–37).

Table 33

Importance of CSR to Work-Life Balance: Spearman’s Rho Correlation of Significance

(N = 44)

Statistical test Value

Spearman’s Rho .554*
Sig. .000
N 44
* p < .01; 2-tailed.

74
Table 34
Importance of CSR to Employee Development: Spearman’s Rho Correlation of
Significance (N = 44)

Statistical test Value

Spearman’s Rho .483*
Sig. .001
N 44
* p < .01; 2-tailed.

Table 35

Importance of CSR to Acquiring Additional Education: Spearman’s Rho Correlation of

Significance (N = 44)

Statistical test Value

Spearman’s Rho .459*
Sig. .002
N 44
* p < .01; 2-tailed.

Table 36

Importance of CSR to Concerned with Employees Needs and Wants: Spearman’s Rho

Correlation of Significance (N = 44)

Statistical test Value

Spearman’s Rho .400*
Sig. .007
N 44
* p < .01; 2-tailed.

75
Table 37

Importance of CSR to Employee’s Volunteering: Spearman’s Rho Correlation of

Significance (N = 44)

Statistical test Value

Spearman’s Rho .644*
Sig. .008
N 44
* p < .01; 2-tailed.

The correlation matrix for the 18 items of the scale is displayed in Appendix F. A

review of the correlation matrix revealed that 117 of the 153 correlations (approximately

76%) were significant at the 0.01 level and 136 of the 153 correlations (approximately

88%) were significant at .05 levels. The purpose of the inter-item correlation was to

validate the subscale of the population. Turker (2009) revealed 141 of the 153 (93%)

were significant at the 0.01 level, providing a strong relationship between the items.

Summary

The results of the data analysis and the hypothesis were reported in Chapter 4.

The study involved an examination of the relationship between CSR (i.e., the

independent variable) and employee satisfaction (i.e., the dependent variable). The study

used a quantitative, correlational design to examine the relationship between the variables.

The study involved the distribution of survey questionnaires to a population of banking

professionals with a profile on the LinkedIn professional networking site. The research

questions were analyzed by means of descriptive and inferential statics.

Pearson’s correlation analysis, Chi-square analysis, and Fisher’s Exact Test of the

survey questionnaire were conducted to determine if a relationship existed between CSR

76
and employee satisfaction. Using Chi-square analysis to test the null hypothesis, the

results determined that a significant relationship existed between the variables in the total

population, in order to strengthen the significance, because of a small N size, a Fisher’s

Exact Test was conducted, which resulted in the rejection of the null hypothesis.

CSR referred to a combination of activities and was measured using the following

questions:

• Your company provides customers with full and accurate information

about its products.

• Your company respects consumer rights beyond the legal requirements.

• Customer satisfaction is very important to your company.

• Your company emphasizes the importance of its social responsibilities to

society.

• Your company contributes to campaigns and projects that promote the

well being of the society.

• Your company always pays its taxes on a regular basis.

• Your company complies with legal regulations completely and promptly.

• Your company has the necessary equipment to reduce its negative

environmental impact.

• Your company implements special programs to minimize the company’s

negative impact on the natural environment.

• Your company targets sustainable growth based on consideration of future

generations.

77
 • Your company makes investments to create a better life for future

generations.

• Your company encourages its employees to participate in volunteer work.

• Your company supports nongovernmental organizations working in

problematic areas.

Employee satisfaction referred to factors around work-life balance, fair treatment, and

management meeting the needs and wants of the employees.

Frequencies were run for CSR activities based the organizations involvement in

the community as depicted in the questions listed above. The results revealed that CSR

engagement by the organizations were significant. These results reflected that CSR was

an important factor for the organization. Responses were deemed significant at 59%.

There were two statements that elicited a response of 59% or higher. These statements

were your company encourages participation in volunteer work and your company

respects consumer rights beyond the legal requirements.

The mean score of the independent variable was calculated. Through the results

the values did not provide statistically significant responses. The frequencies of those

responses provided more importance. Averaging the results of strongly disagree through

strongly agree was impossible to measure. The mean scores of the independent variable

ranged from 3.55 to 4.41. The hypothesis regarded the relationship between CSR and

employee satisfaction. The null hypothesis stated that no significant relationship existed

between the two variables. The alternative hypothesis stated that a significant

relationship existed between the two variables. Chi-square analysis and Fisher’s Exact

Test was used to test the assumption that no relationship existed between employee

78
satisfaction and CSR. The results revealed that the relationship between the importance

of CSR and those variables related to employee satisfaction was significant as determined

by an alpha level of .05. The findings resulted in supporting the hypothesis and rejection

of the null hypothesis.

In Chapter 5, the research problem, purpose of the research, research methods,

limitations of the study, and the organization of the chapter will be summarized. Chapter

5 will also include the conclusion, implications, recommendations, and a summary. The

results of the study will be provided in terms of the broader significance and the role

leadership can play. Finally, recommendations for future research will be presented.

79
 Chapter 5: Conclusion and Recommendations

CSR has been the subject of controversy since the early 19th century. There are

two opposing viewpoints with regard to CSR. The first viewpoint is that organizations

should not only maximize profits but also be able to respond to the social issues of the

community. Furthermore, businesses have the obligation to develop the community.

Critics of CSR supported the view that the only obligation of the organization was to

maximize the value of shareholders. The neoclassic theorists believed organizations

should act in the interest of the shareholders and allow the government to handle social

needs of the communities.

Critics of CSR argued that organization’s leadership should focus on profits not

developing communities. In this viewpoint, leaders of organizations should not engage in

social responsible activities because CSR diverts profits from shareholders. Additionally,

the true owners of the organization are the shareholders, and the shareholders should

determine how the money is spent, not the executive leadership. In contrast to opponents

of CSR, advocates believed CSR provides valuable benefits to the community and the

organization. In this case, organizations should take a proactive approach to CSR.

Additionally, organizations have the obligation to provide a service to interested parties,

which include employees, customers, and the community.

CSR is not clearly defined in the literature, making it difficult to understand what

constituted corporate social responsibility and how an organization can apply a strategy

that fits societal needs. Prior researchers concluded that CSR was a tool organizations

used to create policies to achieve social purpose. Additionally, the literature suggested

CSR was organization’s financial and human investments in the community. Although

80
no universal definition existed, the literature had provided only a limited knowledge of

the CSR activities role in employee satisfaction. The critical component missing in CSR

is how it relates to employee satisfaction. The present study attempted to fill the gap in

CSR literature by providing an analysis of CSR activities and its role in affecting

employee satisfaction.

The present study involved examining the role of CSR activities and employee

satisfaction. The survey questionnaire was distributed to 78 individuals who belong to

the LinkedIn professional groups, namely the Bank of America and Citigroup

organizations. The correlational study used descriptive statistics to obtain information

about the demographics of the organizations. Chi-Square and Fisher’s Exact Test were

used to examine the hypothesized relationship between CSR and employee satisfaction.

The purpose of the study was to investigate the relationship, if any, between CSR

activities and employee satisfaction. To analyze the research question, descriptive and

inferential statistics were used. Descriptive statistics (frequency, mean, mode, median,

and standard deviation) were calculated to examine the variables. Chi-square, Fisher’s

Exact Test, and Spearman’s Rho were used to analyze the questionnaire survey data to

determine if a relationship existed between the two variables. to examine the relationship

among the variables, a quantitative correlational design was used. The designed allowed

for distribution of the questionnaire to members of the LinkedIn professional networking

site.

The quantitative method was selected because the goal was to ask specific narrow

questions to understand if the independent variable (level of CSR activities) and

dependent variable (level of employee satisfaction) are related. The conclusion,

81
implications, limitations, and recommendations are presented in the remainder of Chapter

5. The conclusions section focuses on the results of the results of the hypothesis in terms

of importance. The implications section revealed how the relationship between a

company’s focus on CSR and employee satisfaction affects the leaders insight into how

to balance an organization’s ethical, moral, economic, and legal responsibilities in

relation to society with the organization’s obligations to stakeholders, including

employees. The recommendation section of Chapter 5 includes recommendations for

future research, strategies for stakeholders of organizations, and recommend how the

current study could be replicated using alternative sample population. Recommendation

of how a qualitative study could provide more significant detail in the research.

Conclusion

This study focused on determining if CSR activities were related to employee

satisfaction. To achieve the results, the hypothesis was tested using a null hypothesis

assumption that no significant relationship existed between the two measured variables.

To determine CSR, a combination of corporate activities such as employee involvement,

sustainable growth, and environmental effect from business practices. These activities go

beyond the profit motives of the corporation and relate to the day-to-day operations of the

corporation.

The hypothesis focused on the relationship between the corporation’s social

activities and the employees’ satisfaction level. In terms of this relationship, the results

reflected that CSR had a significant affect on employee satisfaction. Therefore, the

hypothesis that a relationship existed between the two variables was supported, therefore,

rejecting the null hypothesis. . Responses revealed a positive tone on the corporation’s

82
social activities and employee satisfaction, the relationship between the two variables can

be deemed significant.

The study’s findings on employee satisfaction and CSR are consistent with results

of previous research. Kim, Lee, Lee, and Kim (2010) posited that an association existed

between employee satisfaction and CSR. Additionally, Valentine and Fleischman (2008)

suggested employee satisfaction and CSR are contradictory of each other. The findings

in conjunction with Kim, Lee, Lee, and Kim (2010) and Valentine and Fleischman

(2008) suggested that social responsibility activities create a positive response, thus

affecting employees’ satisfaction level within the organization.

Research literature on employee satisfaction and CSR was all encompassing and

generally supported that a positive relationship existed between CSR activities and the

employees’ satisfaction level. Carroll (1979) noted a corporation’s social responsibility

is economic, legal, ethical, and philanthropic, whereas Lantos (2002) described CSR as a

strategic responsibility. This study added to the literature providing valuable information

for leadership concerned with CSR and how CSR may effect employee satisfaction.

Implications

The study presented has several implications for both leaders and employees of an

organization. With regard to leadership of the organization, this study focused on the

relationship between CSR and employees, to determine if leadership can use CSR as a

strategy to increase employee satisfaction. Understanding this relationship can help

leaders of the organization’s decision to implement CSR strategies. The findings of this

study may provide the leadership with valuable information to determine how CSR

effects employee satisfaction within organizations. As an employee of the organization,

83
the significance of this study may provide insight supporting the statement that increased

social activity may not increase employee satisfaction with the organization.

The findings identified the importance of CSR within the organization and what

will determine employee satisfaction. The research provided the tools needed to assist

with increasing employee satisfaction by improving the areas identify with a positive

response, such as work-life balance and employee development. Leadership focusing on

these areas could increase employee satisfaction, thus providing a more positive work

environment. These findings also may increase public awareness about organization’s

intention for social responsibility. The results revealed that social responsibility is very

important for organizations to be engaged in. Additionally, the results reflected that

customer satisfaction plays a pivotal role in the decision to engage in these activities.

Just as important as employee satisfaction and effectively manage CSR activities

is the implications for consumers. The results suggested that customer satisfaction is

important, and engaging in social responsibilities activities, which could enable leaders

and employees understand his or her role in the community. Drucker (1954) believed

organizations have an obligation to give back to the community in which they operate.

The results from this study concluded organizational leaders understand and support the

same notion.

Limitations

The study was limited to a quantitative research method, which allowed for

asking the narrow questions focused on employee satisfaction and social responsibility.

The study was limited by the population of the LinkedIn professional networking website

for the groups of Bank of America and Citigroup. As mentioned previously, although a

84
limited population was studied, the findings from the study can be generalized outside the

LinkedIn professional networking website for the groups of Bank of America and

Citigroup. Other limitations encountered in the study included missing demographic

data, such as level in the organization, age of the participants, and the education level of

the individuals. This missing information did not affect the outcome of the results but

could have provided valuable information.

The data collection was limited to an online survey questionnaire because the

survey provided the best method to collect and analyze data. Additionally, the method of

gaining a random sample was a limitation because of the lack of ability to contact every

member of the LinkedIn professional networking group, and relied on individuals

expressing interest, instead of sending to a large population to assist with the random

sample. Using an online survey questionnaire for collecting alleviated any costs

associated with mailing the surveys to participants.

Recommendations

The study presented several recommendations that can be made for both

leadership and employees, and for future studies on employee satisfaction and social

responsibility. The recommendation for leaders and employees include various levels of

organizations. However, recommendations for future studies are focused on researchers.

There are certain actions leadership can take to increase employee satisfaction

within an organization. First, it is important for leadership to focus on those items that

determine an employees’ satisfaction level. Those items include the development of the

employee through additional education opportunities, a more established work-life

balance, and adjusting to the needs of the employees. Second, organizational leaders

85
need to adopt policies that encourage employee involvement in the community through

social events and volunteer activities. Third, leaders can adapt specific CSR strategies

that meet the needs and goals of the organization.

Recommendations for future studies are directed toward researchers, providing

ideas for future research. First, this study was limited to the LinkedIn professional

networking website with groups of Bank of America and Citigroup. Future studies could

sample other professional and social networking sites with the same organizations.

Additionally, various other types of organizations could be studied.

Second, future research could replicate the current study with a different sample

populations. This study included only Bank of America and Citigroup employees. A

future study may include the top 5 major United States banks, such as JPMorgan Chase,

Wells Fargo, and U.S. Bank (Wall Street Financial, 2012). In addition, individuals that

use LinkedIn represented the present study. Future studies could sample one entity with

the permission of the organization.

Third, there is need for future studies that focus on smaller financial institutions.

The present study included two of the top five largest United States banks. Future studies

could compare the findings of smaller financial institutions to the present study to see if

there are similarities or differences in the results.

Fourth, it is recommended that future studies target a certain population such as

vice presidents and above, and assistant vice presidents and below. This targeted

population may provide an understanding of the differences between the various levels of

employees within the organization. The present study did not include demographic data

regarding the level of each person in the organization.

86
 Fifth, a qualitative study of the current population or similar population that will

examine CSR activities affects employee satisfaction. The present study involved a

quantitative, correlation approach to examine the relationship among the variables. A

qualitative approach would involve asking probing questions that encourage participants

to share their feelings, opinions, and experiences on the social responsibility activities of

the organization.

Finally, a qualitative approach may help with understanding what role leadership

plays in managing CSR activities and influencing employee satisfaction. Trochim (2006)

posited that a phenomenological approach focuses on individual subjective experiences,

providing a better understanding of individual interpretations or perceptions of the

organization’s social responsible activities. The goal of future studies would be to

explore different approaches, which could enhance employee satisfaction and implement

a CSR strategy that fits the needs of the organization, employees, and the community.

Summary

This quantitative research study, examined the relationship between employee

satisfaction and CSR. Specifically, this study was designed to examine if employee

satisfaction related to the social responsible activities of the organizations. In this study,

Employee Satisfaction was defined as the degree to which employees are satisfied

beyond the fulfillment of needs at work (Myskova, 2011), in reference to the (a)

organization meeting the needs of the employees, (b) organizations establishing a work-

life balance, and (c) organizations developing employees through additional education,

Those activities include (a) sustainable growth, (b) customer satisfaction, (c) community

involvement from employees, and (d) organizations obligation to the community.

87
 The focus of this research was to determine if a correlation existed between the

above activities and employee satisfactions attributes. To achieve the results, the

research question was posed, testing the hypothesis using the null assumption that no

relationship existed between the measured variables.

The first hypothesis concerned the relationships between employee satisfaction

and CSR. In terms of the designed study, the null hypothesis was rejected that no

significant relationship existed between the variables. The statistical results revealed a

positive relationship between employee satisfaction and CSR.

The literature on employee satisfaction and CSR is extensive and generally

supported that a positive relationship existed at a significant level to determine the

correlation. Studies revealed that organizations that engage in CSR activities are likely to

have positive employees because of the socially responsible activities within the

organizations. This study added to the body of literature and provided valuable

information for organizational leaders to improve employee satisfaction within the

organization.

The knowledge obtained through this study could be used to improve employee

satisfaction by focusing on those activities that correlate with employee satisfaction, such

as work-life balance, employee development, and meeting the needs of employees.

These findings recognized that employed perceive the organizations in a positive light

with regard to the importance of CSR. Additionally, the organizations encourage

employee involvement in the community, which increases public awareness that the

organization is committed to the community in which they operate.

88
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 Appendix A: CSR and Employee Satisfaction Scale

Each question will be rated on the following scale:

1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4 = Agree, 5 = Strongly Agree

1. Your company provides a wide range of indirect benefits to improve the quality of

employees’ lives.

2. The employees in your company receive a reasonable salary to maintain an acceptable

quality of life.

3. Your company policies provide a safe and healthy working environment to its

employees.

4. Your company supports employees who want to acquire additional education.

5. There are sufficient numbers of opportunities to develop my skills in my current job.

6. Your company policies encourage the employees to develop their skills and careers.

7. Your company implements flexible policies to provide a good work & life balance for

its employees.

8. The management of your company is primarily concerned with employees’ needs and

wants.

9. The managerial decisions related with the employees are usually fair.

10. I believe that your company provides equal opportunities to its employees.

11. One of the main principles of your company is to provide high-quality products to its

customers.

12. Your products comply with the national and international standards.

13. The guarantee extension of your products is the most advantageous choice in the

market.

104
14. Your company provides full and accurate information about its products to its

customers.

15. Your company respects consumer rights beyond the legal requirements.

16. Customer satisfaction is highly important for your company.

17. Your company is responsive to the complaints of its customers.

18. Your company is known as a respected and trustworthy company.

19. Your company emphasizes the importance of its social responsibilities to the society.

20. Your company contributes to schools, hospitals, and parks according to the needs of

the society.

21. Your company contributes to campaigns and projects that promote the well being of

the society.

22. Your company endeavors to create employment opportunities.

23. Your company always pays its taxes on a regular and continuing basis.

24. Your company complies with legal regulations completely and promptly.

25. Your company tries to help the government in solving social problems.

26. Your company acts legally on matters.

27. Your company’s main principle is honesty in every business dealing.

28. Your company cooperates with its competitors in social responsibility projects.

29. Your company competes with its rivals in an ethical framework.

30. Your company always avoids unfair competition.

31. Your company implements special programs to minimize its negative impact on the

natural environment.

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32. Your company participates in activities, which aim to protect and improve the quality

of the natural environment.

33. Your company has the necessary equipment to reduce its negative environmental

impact.

34. Your company makes well-planned investments to avoid environmental degradation.

35. Your company targets sustainable growth, which considers future generations.

36. Your company makes investment to create a better life for future generations.

37. Your company makes investments to create employment opportunities for future

generations.

38. Your company conducts research & development projects to improve the well being

of society in the future.

39. Your company makes sufficient monetary contributions to charities.

40. Your company encourages its employees to participate in voluntarily activities.

41. Your company supports nongovernmental organizations working in problematic

areas.

42. Your company considers every warning of nongovernmental organizations.

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 Appendix B: Modified CSR and Employee Satisfaction Scale

Each question will be rated on the following scale:

1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4 = Agree, 5 = Strongly Agree

1. Your company supports employees who want to acquire additional education.

2. Your company’s policies encourage employees to develop their skills and careers.

3. Your company implements flexible policies to provide a good work-life balance

for employees.

4. The managers of your company are primarily concerned with employees’ needs

and wants.

5. The managerial decisions related to employees are usually fair.

6. Your company provides customers with full and accurate information about its

products.

7. Your company respects consumer rights beyond the legal requirements.

8. Customer satisfaction is very important to your company.

9. Your company emphasizes the importance of its social responsibilities to society.

10. Your company contributes to campaigns and projects that promote the well being

of the society.

11. Your company always pays its taxes on a regular basis.

12. Your company complies with legal regulations completely and promptly.

13. Your company has the necessary equipment to reduce its negative environmental

impact.

14. Your company implements special programs to minimize the company’s negative

impact on the natural environment.

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15. Your company targets sustainable growth based on consideration of future

generations.

16. Your company makes investments to create a better life for future generations.

17. Your company encourages its employees to participate in volunteer work.

18. Your company supports nongovernmental organizations working in problematic

areas.

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 Appendix C: Informed Consent for Participants 18 Years of Age and Older

Dear Participant,

My name Jeremy R. Agler, and I am a student at the University of Phoenix

working on a doctoral degree. I am doing a research study entitled Employee

Satisfaction, as it relates to Corporate Social Responsibility: A Quantitative Study. The

purpose of the research study is to identify if a relationship existed between corporate

social responsibility and employee satisfaction.

Your participation will involve completing an online survey, which will take

approximately 30 minutes. In the survey, you will be asked to respond to items about

your company’s corporate social responsibility activities and your satisfaction as an

employee. This study will be conducted according to University of Phoenix’s

Institutional Review Board procedures for research involving human subjects. Your

responses will remain confidential; no identifying information (e.g., your name, e-mail

address, or IP address) will be collected. The data will be stored in a password-protected

electronic format. The results of the study will be used for scholarly purposes and may

be published.

You can decide to be a part of this study or not. Once you start, you can withdraw

from the study at any time without any penalty or loss of benefits. The results of the

research study may be published but your identity will remain confidential and your

name will not be made known to any outside party. In this research, there are no

foreseeable risks

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 If you have any questions about the research study, please call me at 248-980-

1901 or e-mail me at rdoctoral@yahoo.com. For questions about your rights as a study

participant, or any concerns or complaints, please contact the University of Phoenix

Institutional Review Board via e-mail at IRB@phoenix.edu.

As a participant in this study, you should understand the following:

1. You may decide not to be part of this study or you may want to withdraw

from the study at any time. If you want to withdraw, you can do so

without any problems.

2. Your identity will be kept confidential.

3. Jeremy R. Agler, the researcher, has fully explained the nature of the

research study and has answered your questions and concerns.

4. The data will be collected through the survey tool and face to face or

phone interviews will not be conducted.

5. Data will be kept in a secure and locked area. The data will be kept for

three years, and then destroyed.

6. The results of this study may be published.

“By electronically signing this form, you agree that you understand the nature of

the study, the possible risks to you as a participant, and how your identity will be kept

confidential. When you sign this form, this means that you are 18 years old or older and

that you give your permission to volunteer as a participant in the study that is described

here.” Your typed name and e-mail will serve as the electronic signature and your

participation.

( ) I accept the above terms. ( ) I do not accept the above terms. (CHECK ONE)

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Signature of the interviewee ____________________ Date _____________

Signature of the researcher ____________________ Date _____________

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Appendix D: Permission to Use Survey

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Appendix E: Permission to Modify Survey

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 Item Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17
Q1
Q2 0.795
Q3 0.564 0.504
Q4 0.392 0.540 0.542
Q5 0.162 0.289 0.233 0.477
Q6 0.584 0.478 0.502 0.383 0.344
Q7 0.512 0.488 0.478 0.377 0.460 0.651
Q8 0.713 0.642 0.483 0.387 0.200 0.710 0.607
Q9 0.600 0.573 0.560 0.394 0.256 0.629 0.703 0.689
Q10 0.477 0.540 0.621 0.404 0.246 0.499 0.622 0.563 0.700
Q11 0.466 0.464 0.324 0.175 0.170 0.552 0.666 0.574 0.522 0.547

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Q12 0.460 0.462 0.396 0.501 0.431 0.574 0.768 0.574 0.626 0.595 0.703
Q13 0.541 0.474 0.470 0.381 0.192 0.362 0.580 0.430 0.639 0.456 0.441 0.500
Q14 0.420 0.384 0.404 0.216 0.033 0.206 0.394 0.233 0.488 0.365 0.302 0.292 0.723
Q15 0.471 0.438 0.531 0.550 0.313 0.464 0.455 0.388 0.488 0.368 0.328 0.499 0.706 0.583
Q16 0.483 0.471 0.389 0.299 0.156 0.299 0.473 0.417 0.463 0.307 0.347 0.371 0.605 0.555 0.808
Appendix F: Correlation Matrix of the CSR Scale

Q17 0.679 0.585 0.644 0.326 0.156 0.478 0.516 0.615 0.719 0.500 0.467 0.482 0.768 0.604 0.547 0.501
Q18 0.533 0.596 0.678 0.450 0.391 0.424 0.658 0.493 0.611 0.554 0.267 0.378 0.552 0.505 0.448 0.505 0.567

Note. Bold-faced values indicate correlations significant at the .01 level.

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