CSR and
Leaders
Issues in Corporate World
• Firm Diversity, treatment of workers, environmental pollution and
financial transparency
• CSR certifications are adopted by Organizations – ISO 26000
• CSR has positive effect on corporate performance
• Focus on micro-foundations (antecedents) of CSR
• Corporate actions are antecedents to CSR
• Individuals (actions) create, implement, sustain, avoid CSR policies and practices
• CSR is dependent on organizational leadership
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ISO 2600
• The ISO 26000 standard provides guidance on:
• Recognizing social responsibility and engaging stakeholders
• Ways to integrate socially responsible behavior into the organization
• The seven key underlying principles of social responsibility:
• Accountability
• Transparency
• Ethical behavior
• Respect for stakeholder interests
• Respect for the rule of law
• Respect for international norms of behavior
• Respect for human rights
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ISO 2600
• The seven core subjects and issues pertaining to social
responsibility:
• Organizational governance
• Human rights
• Labor practices
• The environment
• Fair operating practices
• Consumer issues
• Community involvement and development
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Individuals and CSR
• Based on leaders, followers and a common goal they want to achieve
• Leaders create/ endorse competitive business strategy
• Three categories framework
• Individual as a leader – based on traits, personality, skills, abilities, individual
differences, Charisma
• Process at play – Interaction between leaders and followers, behavior of leaders
• Shared/ distributed leadership
• Explain how leaders influence what socially responsible
(irresponsible) behaviors take place within organization
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Strategic Management Theories
• Strategic management theories (e.g., strategic choice theory, upper
echelons (managerial Background), stakeholder theory) (e.g., Agle,
Mitchell, & Sonnenfeld, 1999; Huang, 2013; Manner, 2010) rather than
explicit leadership theories to link leaders
• CEOs imprint firms with their own values
• Affecting decision processes within the firm that determine the degree to which
managers give priority to competing stakeholder claims
• ultimately impacting the social performance of the firm.
• CEO demographics (e.g., Huang, 2013) and characteristics such as
compensation, educational background, and job experience (Manner,
2010) are associated with CSR activity within firm
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Leadership and CSR
• The early life experiences of firm founders (e.g. life events that gave the
leader a social agenda) may predispose these individuals to imprint
their firms with an identity toward CSR (Whetten & Mackey, 2011)
• Has lasted many decades beyond their departure from the firms they
found
• Have consistently significantly higher CSR scores
• Leadership effects on CSR are long lasting and can occur over time
(Whetten & Mackey, 2011)
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The Individual as a Leader – Trait Theories
Leaders are born, not made
Traits of leaders different from
non-leaders
• Drive, motivation, integrity, confidence,
cognitive ability, and task knowledge
(Kirkpatrick & Locke, 1991; Mann, 1959;
Stogdill, 1948; Zaccaro, Kemp, & Bader,
2004) 8
The Individual as a Leader – Trait Theories
Leaders with so-called
Leaders with Bright Side "dark side" traits (e.g.,
Traits narcissism, hubris,
dominance, etc.)
Conscientious leaders tend to
Narcissistic (admiration for self)
demonstrate higher levels of
leaders encourage visibly bold,
integrity (which could lead to more
aggressive actions
firm-level CSR)
Mindful of the preferences of
Highlight their vision and
others, they are unlikely to make
leadership within the firm will often
strategic changes against status
actually improve the performance
quo/consensus opinion (which could
of the firm (Chatterjee & Hambrick,
lead to conciliatory behaviors
2007)
equated with less firm- level CSR).
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The Individual as a Leader – Trait Theories
Corporate • Leaders rarely inspire followers to engage in
Social prosocial behavior
• Prosocial Behavior - Ethical, supportive, fair,
(Ir)responsibil organizational citizenship, extra-role, helping,
volunteer work (Chaterjee & Hambric, 2009)
ity
Leaders • Leaders with high moral standards feels an
obligation to do the proper thing, welfare to
responsibility others
• High degree of self judgement
disposition
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Behavioral Theories: Leader Process at Work
• Supervisory support behavior influence the probability that employees
will try to innovatively solve environmental problems (Ramus &
Steger, 2000)
• Managerial commitment to CSR influence organizational structure to
identify, analyze, and respond to the social and political environment
• Formal Ethics Programs
• Defined managerial roles and responsibilities
• Formal functional department
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Transformational Leadership
• Transformational leaders "raise followers' aspirations”
• Activate higher order values such that followers identify with the
leader and his or her mission/vision
• Feel better about their work
• Work to perform beyond simple transactions and base expectations
• Invoke ideals, inspirational motivation, intellectual stimulation, and
individualized consideration
• Social justice, environmental activism and other socially responsible
behavior
• Forms CSR on moral and altruistic terms
• Higher environmental social responsibility and workplace behavior 12
Transformational Leadership
• Indirectly affect others’ behavior when leaders
• Share values (idealized influence)
• Convince followers they can achieve at levels previously thought unattainable
(inspirational motivation),
• Help employees think in new and innovative ways (intellectual stimulation)
• Establish a relationship through which they can exert an influence on certain
behaviors (individualized consideration) (Robertson & Barling, 2012)
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Leader-member exchange (LMX) (Dansereau, Graen, & Haga,
1975)
Communication • High mutual trust and
frequency
Communication high organizational
patterns Reciprocity advantage
norms
Value agreement
• Help to develop
Role-taking Ethical and
Socially
Interaction tactics
between two parties Responsible
Leadership
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Shared, Distributed Leadership
• An interactive influence process among individuals in groups
• to lead one another to the achievement of group or organizational goals
• Contributes to checks and balances in overall system of leadership
• Antecedents of CSR
• Trait like aspects – Shared leadership
• CSR takes more forms than currently discussed, tested for, or theorized
about - which calls into focus the definition of CSR
• Servant leadership advances leadership in CSR
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Instrumental vs Altruistic CSR
• Instrumental
• its costs and impact on firm financial performance
• CSR constitutes an investment so compatible with profitability
• that business should "convert" social responsibilities into business opportunity
• find ways to turn social problems into economic opportunities (Drucker, 1984,
p. 62; Porter & Kramer, 2006)
• Profit-maximizing, Strategic CSR (Hart, 1995; McWilliams et al., 2006;
McWilliams & Siegel, 2000, 2001; Russo & Fouts, 1997)
• CSR as good strategy
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Altruistic CSR
• Actions on the part of the firm that appear to advance or acquiesce in the
promotion of some social good, beyond the immediate interests of the firm
and its shareholders and beyond that which is required by law" (Wald- man
et al., 2006, p. 17)
• Explain why firms engage in activities that benefit the interests of employees,
suppliers, customers, and society at large even when those activities reduce
the profitability of the firm (Mackey, Mackey, & Barney, 2007; Windsor,
2001)
• mixed motivations
• A CEO may direct a firm to engage in socially responsible behaviors because he or she
believes it is the "right" thing to do (some form of altruistic CSR, driven by values)
• while at the same time hoping that positive financial outcomes result for the firm
sometime in the future (some form of instrumental CSR)
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New Forms of Leadership – Ethical, Servant, Responsible
• Ethical leaders
• Initiate CSR activities by communicating ethical standards
• encouraging ethical conduct
• modeling ethical behavior
• Opposing unethical conduct
• Initiate CSR
• Encourage need for different stakeholders
• Encourage support of worthy community activity
• Recommend practices that reduce harmful effects for environment
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New Forms of Leadership – Ethical, Servant, Responsible
• Responsible leadership
• Extension of ethical leadership
• Orientation - a limited economic or an extended stakeholder view (Waldman &
Galvin, 2008)
• Four orientations
• the more narrow "economist" and "opportunity seeker" ones and the more broad "idealist"
and "integrator”
19
Four orientations
"economi "integrato
st" r”
"opportun "idealist"
ity
seeker"
20
Servant leadership
• Specifically includes concern for others
• Motivation to lead with a need to serve (Greenleaf, 1970, 2002; Luthans &
Avolio, 2003)
• Servant leadership begins with the natural feeling that one wants to serve, to
serve first. Then conscious choice brings one to aspire to lead. . . . The best test ,
and difficult to administer, is this:
• Do those served grow as persons?
• Do they, while being become healthier, wiser, freer, more autonomous, and more likely
themselves become servants?
• Individuals may feel commitment, empowerment, job satisfaction, and
increased engage- ment at work; teams may experience increased ef-
fectiveness; and organizations may display a stronger focus on sustainability
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