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How and When Does Corporate Giving Lead to Getting? An Investigation of the Relationship Between Corporate Philanthropy and Relative Competitive Performance from a Micro-process Perspective

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Abstract

The corporate ethics literature has considerably focused on whether giving (corporate philanthropy) results in getting (firm performance). However, the relationship between corporate philanthropy and performance and the underlying mechanisms remain unclear. Drawing on signaling and cue consistency theories, we develop and test a model that specifies whether, how, and when corporate philanthropy benefits relative competitive performance from a micro-process perspective. Using a Chinese sample of 1623 employees, 145 CEOs, and 145 human resources managers, we found that corporate philanthropy could positively influence relative competitive performance through the internal processes—organization-level citizenship behaviors of employees. Moreover, work–life balance practices strengthen the aforementioned mediation. In particular, when a firm performs high levels of work–life balance practices, corporate philanthropy tends to promote more citizenship behaviors in the entire organization, thereby enhancing the relative competitive performance of the firm. By contrast, when organizations perform low levels of work–life balance practices, the aforementioned mediation becomes nonsignificant. The theoretical and practical implications of these findings are discussed.

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Notes

  1. We followed two standards to judge if a case is of adequate quality. First, cases obviously reported with arbitrariness or without careful reading are considered to be of low quality. Specifically, cases with all items (reported by the same subject) scoring the same value should be regarded as “unqualified data.” Moreover, when items (of one variable) with similar meaning are scored with completely different values, such as one item being scored 1 and the other being scored 5, these items are not taken seriously by participants and should also be considered as “unqualified data.” Second, as organization-level OCB is aggregated from individual level, cases with rwg< 0.7 and cases with individual participants of less than three are considered to be “unqualified data.”

  2. We excluded all HR-related performance indicators (i.e., workplace relations, employee health and safety, and personal development) for theoretical reasons. To conform to the logic of our theoretical framework, we considered HR-related indicators as antecedents of employee behaviors and organizational performance as many previous studies did (e.g., Dysvik and Kuvaas 2012; Edgar et al. 2017). Thus we did not incorporate these indicators as Hoque (2004) did. Furthermore, respondents were asked to compare their performance with those of their competitors. We excluded two other items because they are difficult to acquire from competitors for managers in Chinese context.

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Acknowledgements

We appreciate the support of National Natural Science Foundation of China (Grant No. 71672139) and Humanities and Social Science Talent Plan of Shaanxi Province.

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  1. Shool of Management, Xi’an Jiaotong University, No. 28 Xianningxi Street, Beilin District, Xi’an, Shaanxi, 710049, China

    Wenwen Zhao & Zhe Zhang

  2. Business School, Renmin University of China, No. 59 Zhongguancun Street, Haidian District, Beijing, 100872, China

    Wenwen Zhao

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Zhao, W., Zhang, Z. How and When Does Corporate Giving Lead to Getting? An Investigation of the Relationship Between Corporate Philanthropy and Relative Competitive Performance from a Micro-process Perspective. J Bus Ethics 166, 425–440 (2020). https://doi.org/10.1007/s10551-019-04149-0

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