Reading Essay # 4 - Ormiston & Wong (2013)

This article is about corporate social responsibility (CSR) and corporate social irresponsibility
(CSiR). In past, considerable work is done on corporate social responsibility, however, most
of the researchers and mangers ignore the aspect of corporate social irresponsibility. CSiR
refers to the actions that negatively affect the interests of the stakeholders. The authors of
this article have tried to remove that gap by investigating a correlation between CSR and
CSiR, as they believed that CSR is positively correlated with CSiR. Social responsible
behaviors may subsequently produce less responsible behaviors. The big reason behind this
positive correlation is that when leaders achieve moral credits through CSR, then they
incline to less ethical stakeholder treatment. Businesses are paying more attention towards
CSR which means firm behavior that exceeds the compliance or legal requirements to
provide some social good. One important aspect of CSR is stakeholder approach where a
firm is considered social responsible when their actions provide benefits not only to
shareholders but also to stakeholders. Most of the researchers focus on understanding the
antecedents and outcomes of CSR. For example, "top management team, demographics,
values, socio-cognitive traits, and firm attributes such as decentralization of decision
making, and research and development expenditures have all been identified as important
antecedents to a firm's ability to manage the needs of multiple stakeholders" (Ormiston and
Wong, 2013, p.862). Previous work on CSR also reflects that it is positively associated with
firm's financial performance.
The authors of this article believe that lot of work that was done on CSR in past deals with its
advantages; however, a very little attention was paid towards the negative impacts of CSR.
Moreover, previous studies generally provide a firm level perspective of relationship
between CSR and CSiR. Strategic leadership suggests that strategic leaders influence the
organizational strategy and in turn firm's outcomes. The authors of this study planned a
licensing research argue that top leaders who have initially introduced the CSR strategies
will collect the moral credits from their past behaviors, and then they will develop a strategy
to misbehave the firm's stakeholders. Second, the authors have tried to investigate about
the moderating role of leader's characteristics on this relationship. Though the moral
licensing research persistently indicates a positive correlation among moral and immoral
behaviors but most current research indicates that this correlation can be influenced by
individual differences. One of the individual differences is moral identity symbolization or the
extent to which being moral is conveyed publically through actions or behaviors. This article
asserts that leaders' moral identity symbolization moderate the correlation between prior
CSR and CSiR.
Few decades ago, firms' stakeholders as well as shareholders put great pressure on
organizations to manage their interests. Now firms who have successfully managed that
demand are considered socially responsible. One view about CSR is that "CSR exists along a
continuum anchored at one end by firms that actively engage with and act in the interest of
varied stakeholders (i.e., are responsible) and anchored at the other end by firms that have
more limited interactions with and may act in the interest of only powerful stakeholders (i.e.,
are irresponsible)" (Ormiston and Wong, 2013, p.864). While, some of the researchers
believe that CSR and CSiR are related but still two different concepts. And they should not be
considered as two different taken as opposite side of a continuum. This distinction between
CSR and CSiR indicates that both involve actions towards stakeholders and a firm may adopt
both at the same time. The more good actions for the interest of stakeholders indicates that

the firm is more social responsible. Whereas, the more negative actions toward its
stakeholders indicate that a firm is more social irresponsible. Some of the previous
researchers argued that socially irresponsible behavior (i.e., CSiR) sets a stage for following
socially responsible behavior (i.e., CSR). While some other researchers argued that firm
could be responsible and irresponsible toward their stakeholders. Similarly, one research
showed that the companies with poor social reputation make more disaster relief donations
than companies with positive reputation. This research was based on the data from the relief
donations given after Hurricane Katrina. This research actually shows that firms with
negative reputation tries to improve their image by engaging in the CSR, and it shows how
CSiR influence CSR but influence of CSR on CSiR is not yet clear. More micro level approach
is required to figure out the relationship between CSR and CSiR.
Similarly, the research showed us that all the work done in the past based on the
understanding of moral licensing at the individual level in the experimental settings and no
work is done on the moral licensing at organizational level. Usually top leaders in the
organization made decision regarding companies and implementing CSR during that process
led them to make wrong decisions. The implementation of CSR in the firm gives more moral
desire to the people and ultimately helps them to provide sense of combined moral credits.
Moral identity is also very important for CSR. Moral identity is comprised of two components:
internationalization, which is to degree which moral identity is central to someone and is
privately expressed, and symbolization which is degree to which moral identity is shown to
the public through actions and behavior. In this case of CSiR the symbolization is more
important than the Internationalization and in this case we focus on how the external moral
identity of the leader affects the relationship between CSR and CSiR. The individuals with
higher moral identity give signals to the other that they have high moral values and this
morality can be shown by their actions. The authors of this study found that CSR can be a
precursor to CSiR. Moreover, it is very important to consider the affects of leaders on CSiR as
they are the ones who direct the strategic decision making process for CSR initiatives. A
positive relationship is found between CSR and CSiR, that relationship is stronger for leaders
who have high moral identity symbolization than those who have low moral identity
symbolization.
In my view, CSR has become a corporate strategy to look good in public eyes. Most of the
firms who are engaged in CSR, their main motive is to build good reputation in market as
well as in society. And once they achieve that goal then they are more incline to CSiR. And it
is not wrong to admit that the leaders who hold a high moral image are more likely to
engage in poor behavior in their business. It is also quite possible that a CEO may show CSR
to their favorite stakeholders while a non ethical behavior to the other stakeholders.
Leaders' personal choices, liking and disliking can affects their attitudes towards their
stakeholders. Moreover, sometimes firms who have introduced CSR might be unintentionally
engaged in CSiR. The positive relationship that the authors found can be non conscious,
when unintended self-licensing affects group and individua
l levels and alter their behaviors from positive to negative. I believe that it is very important
to properly monitor the leader's behaviors and their directions. Firms also need to keep
watchful eyes on their actions in order to avoid that positive relationship.
Reference:

Orminston, E.M., & Wong, M.E. (2013). License to Ill: The effects of corporate social
responsibility and CEO moral identity on corporate social responsibility. Personal Psychology,
66 (4), 861-893.