How does perceived corporate social responsibility affect organizational performance? Evidence from South Korean multinational corporations

Abstract

This study examines the impact of the organizational level of perceived corporate social responsibility (CSR) on organizational performance. Multinational corporations have emphasized the importance of social responsibility to address environmental, social, and governance issues across the globe. Therefore, we investigate whether a firm's CSR in the workplace influences employee-related attitudes and organizational performance. Based on 1,509 employees nested in 47 firms, our multilevel analysis shows that perceived CSR is positively related to employees' affective commitment, and the relationship between CSR and organizational performance is partially mediated by affective commitment. Our findings suggest that a firm with a higher level of perceived CSR can have a better organizational performance. Also, an employee's attitude can act as a mediator between a firm's CSR and organizational performance. Due to the data from a single organization in South Korea, the findings might not be generalized to other organizations or countries. This study can solve the mixed results between a firm's CSR and organizational performance. In addition, it reveals the mechanism of how perceived CSR can contribute to performance through affective commitment.