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International Journal of Contemporary Hospitality Management
The influence of corporate social responsibility on travel company employees
Sun-Young Park, Choong-Ki Lee, Hyesun Kim,
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Sun-Young Park, Choong-Ki Lee, Hyesun Kim, (2018) "The influence of corporate social responsibility
on travel company employees", International Journal of Contemporary Hospitality Management, Vol.
30 Issue: 1, pp.178-196, https://doi.org/10.1108/IJCHM-07-2016-0372
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The influence of corporate social
responsibility on travel
company employees
Sun-Young Park
School of Management, University of San Francisco, San Francisco,
California, USA, and
Choong-Ki Lee and Hyesun Kim
Department of Tourism, Kyung Hee University, Seoul, South Korea
Abstract
Purpose –The purpose of this paper is to examine how employees’perceptions of corporate social
responsibility (CSR) influence their work engagement (WE), innovative behavior (IB) and intention to stay (IS)
with their company, to illuminate the role of CSR at the individual employee level.
Design/methodology/approach –The data for this study are responses of 455 employees to an online
survey at the largest travel company in South Korea. Confirmatory factor analysis and structural equation
modeling in Mplus 7.3 are used to analyze the data.
Findings –Results show that employee perceptions of CSR regarding customers and employees
significantly and positively influence their WE, which in turn positively influence their IB and IS. Moreover,
WE mediates these relationships.
Research limitations/implications –Results of this study may not represent the entire travel industry
or the country. This study’s model should be tested in other companies and countries. Additionally,
longitudinal studies will help understand how employees’perceptions of CSR and their effects on work
attitudes and behavior changeover time.
Practical implications –CSR can be an important tool for developing social capital within an
organization by increasing employees’engagement at work. Higher WE can help employees exert more
efforts toward their company’s innovation and stay longer with their company, which can contribute to the
company’s performance and competitiveness.
Originality/value –This study develops and empirically tests a theoretical model based on various
disciplines. It extends existing CSR studies by examining the effects of CSR on WE and the mediation effects
of WE, which have been rarely explored. This further explains how CSR influences employees’attitudes and
behavior that benefit a company’s competitive advantage to shed light on the resource-based view about
employees being an important resource.
Keywords Employees, Corporate social responsibility, Social exchange theory, Work engagement,
Intention to stay, Innovative behaviour
Paper type Research paper
Introduction
Today’s businesses are expected to be more transparent about, and responsible for, their
activities and impacts. Thus, many companies exercise corporate social responsibility (CSR),
which usually refers to the company’s voluntary programs to help enhance environmental
and societal conditions toward a more sustainable world (Park and Levy, 2014). CSR can be
also instrumental to achieving company’sfinancial performance (Boesso et al.,2015)
through good reputation (Maignan et al.,1999) and improved relationships with
IJCHM
30,1
178
Received 24 July2016
Revised 30 October2016
26 December 2016
2 March 2017
Accepted 11 March 2017
International Journal of
Contemporary Hospitality
Management
Vol. 30 No. 1, 2018
pp. 178-196
© Emerald Publishing Limited
0959-6119
DOI 10.1108/IJCHM-07-2016-0372
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0959-6119.htm
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stakeholders (Rayton et al.,2015). Accordingly, CSR is inherently in accordance with
stakeholder theory in that businesses can do well or better when they consciously take into
consideration their stakeholders’interests in operations and decision-making (Jones, 1995).
Beyond the institutional and organizational levels of understanding about CSR, there has
been a call for research on microfoundations of CSR to better understand how CSR impacts
individual stakeholders such as employees (Aguinis and Glavas, 2012;Carroll and Shabana,
2010;Wood, 2010). Employees are primary stakeholders of the company (Clarkson, 1995)
who carry out, affect and are often directly influenced by company policies and activities
including CSR (Park and Levy, 2014). This is particularly important for hospitality and
tourism companies, as relatively little is known about the role of CSR for individual
employees, while more companies are actively embracing CSR (Park and Levy, 2014;
Sheldon and Park, 2011). Hospitality employees are also a critical source for success (Guillet
and Mattila, 2010;King et al., 2011), because their attitudes and behavior influence their
performance and the customer experience, which impact firm performance (Brown and Lam,
2008;Heskett et al.,2008).
Similarly, the resource-based view (Barney, 1991;Wernerfelt, 1984) points out that high-
caliber employees who are dedicated to their work and to achieving organizational goals are
the company’s major competitive advantage, and these employees are difficult for other
firms to imitate. Moreover, employees’innovative behavior (IB) is essential for business
success in today’s market because when employees generate and implement new and better
ideas, the company performance can be improved (Huhtala and Parzefall, 2007;Janssen,
2004). In support of this, Sandvik et al. (2014) find that the degree of the hospitality
company’s innovativeness influences its bottom line.
Two of the most enduring and global challenges for the hospitality industry are high
employee turnover (Bonn and Forbringer, 1992;Enz, 2001) and a shortage in highly
competent employee supply (Hughes and Rog, 2008). These, along with the less favorable
characteristics of hospitality and tourism jobs (Barron and Maxwell, 1993), indicate that
hospitality employees tend to frequently change employers or leave the industry, because
they do not feel enthusiastically involved in, do not feel sufficient pride in or do not feel
challenged enough by their work.
While turnover can be an opportunity for the firm to reorganize or to renew ideas (Allen
et al.,2010), the high turnover rate in the customer-focused firms can reduce employee
morale, service quality and the firm’s bottom line, in terms of the costs for recruiting, hiring
and training new employees (Hinkin and Tracey, 2000;Simons and Hinkin, 2001). For
instance, it can cost a hotel an average of US$525 of gross operating profit for every one
point increase in average daily rate (Simons and Hinkin, 2001).
Therefore, the purpose of this study is to examine the psychological processes of CSR
based on social exchange theory from the perspective of travel company employees to
examine how their perceptions of CSR influence work engagement (WE), IB and turnover
intentions. This study’s empirical findings will contribute to furthering our knowledge
about the internal mechanisms of CSR within organizations. The findings will also enhance
hospitality and tourism employers’understanding about the role of CSR at the individual
employee level to improve their CSR practices.
Literature review and hypotheses development
Corporate social responsibility and individual employees
Companies choose CSR activities that are in line with their organizational standards
and values. Thus, employees’perceptions of their company’s CSR activities denote their
attitudes toward their organization, which influence their work behavior (Park and
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Levy, 2014). While research on microfoundations of CSR “is still in infancy”(Bauman
and Skitka, 2012, p. 12), studies report some positive impacts of CSR on employees’
attitudes and behavior.
For example, CSR enhances employees’job satisfaction and commitment to their
organization (Brammer et al., 2007;Ellemers et al., 2011;Glavas and Kelley, 2014;Maignan
et al., 1999;Mueller et al.,2012;Peterson, 2004;Turker, 2009a;Valentine and Fleischman,
2008), improves identification with their organization (Carmeli, et al.,2007;Glavas and
Godwin, 2013), increases organizational citizenship behaviors (Newman et al.,2015;Jones,
2010) and increases performance and retention (Jones, 2010;Maignan et al.,1999;Newman
et al.,2015).
In a similar vein, CSR positively influences employees in terms of affective commitment,
job satisfaction and organizational identification, in airlines (Ilkhanizadeh and Karatepe,
2017), casinos (Kim et al., 2016;Lee et al., 2013), hotels (Park and Levy, 2014;Supanti et al.,
2015), foodservice companies (Lee et al., 2012) and travel agencies and restaurants (Wong
and Gao, 2014). For example, CSR contributes to improving the relationship between
employees and employers, by helping employees feel proud of their work and increase trust
toward their organization (Lee et al., 2012;Supanti et al.,2015). Also, CSR concerning
employees and customers fosters a corporate culture where hospitality and tourism
employees feel harmony and supported for their work and development, increasing their
affective commitment to their company (Wong and Gao, 2014).
For prospective employees, CSR increases the firm attractiveness (Bhattacharya et al.,
2009;Evans and Davis, 2011;Greening and Turban, 2000;Story et al.,2016). CSR also
increases the number of job applicants, as it signals to potential employees that they would
be treated well by a company that takes good care of its stakeholders and that they would
feel proud to be associated with companies that are perceived to be socially responsible
(Jones et al.,2014). As such, CSR can be an effective recruitment tool to “win the talent war”
(Bhattacharya et al.,2009,p.37).
The studies reviewed above indicate that CSR signals a benevolent corporate image and
reputation both to existing and prospective employees, which impacts them positively in
psychological and behavioral ways. However, it is less clear why or how employees’
perceptions of CSR influence their intentions and behavior toward their organizations. Social
exchange theory and the concept of WE can help explain how these CSR mechanisms
function at the individual employee level, which are discussed in the ensuing section.
Corporate social responsibility and work engagement
The positive effects of CSR on employees discussed above indicate that employees
appreciate their organizations’support for their physical, psychological and professional
development and well-being. According to social exchange theory (Emerson, 1976) and its
derivation, the psychological contract literature (Dabos and Rousseau, 2004), when
employees receive support or kindness from the company and/or witness others being
treated well, they reciprocate in a way that benefits their company (Cropanzano and
Mitchell, 2005;Rhoades and Eisenberger, 2002). That is, when employees see their company
as a good corporate citizen, they not only perceivetheir work positively but also exert efforts
toward achieving organizational goals by being more engaged at work as a form of social
exchange (Cropanzano and Mitchell, 2005;Glavas and Piderit, 2009;Saks, 2006). Therefore,
the employee’s level of WE may be a factor as to why or how CSR influences their work
behavior.
Nonetheless, the relationship between CSR and WE at the individual employee level has
been rarely explored (Ferreira and Real de Oliveira, 2014), and research on how CSR works
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for employees is lacking (Aguinis and Glavas, 2012;Carroll and Shabana, 2010). For
example, can CSR help employees feel more energetic about and focused on their work? Why
do CSR activities influence employees’turnover intentions?
Furthermore, while employees are important assets for company’s survival and
competitiveness, the majority of today’s employees report low WE, which can be
detrimental to employees’productivity and organizational outcomes (Kahn, 1992;Harter
et al., 2002;Salanova et al., 2005). According to Gallup’s survey of more than 80,000
employees in the USA in 2014 (Adkins, 2014), 68.5 per cent of the employees were either not
engaged at work (51 per cent) or actively disengaged (17.5 per cent). The service sector
employees ranked the bottom third among 10 job categories, with only 28.2 per cent of the
workers being engaged at work.
Employees are said to be engaged at work when they have high energy (vigor), are
deeply involved in and feel pride in their work (dedication) and are totally focused on work
(absorption) (Schaufeli and Bakker, 2004;Schaufeli et al.,2006). Positive WE is an enduring
state-of-mind, resulting from the employees’positive perceptions about how their company
treats and rewards them in their work environment (Schaufeli et al.,2006).
Employee perceptions of CSR in this study was defined as individual employees’
thoughts and feelings about their company’s activities to be responsible for its stakeholders
who “have or claim, ownership, rights, or interests in the company and its activities”
(Clarkson, 1995, p. 106). Following Park and Levy (2014), this construct was defined to have
three dimensions in this study, namely, CSR related to environment/community, customers
and employees, based on four reasons. First, “CSR activities are better understood
theoretically and tested empirically [...] for a clear investigation about the activities linked
with intended stakeholders or beneficiaries”(Park and Levy, 2014, p. 337). Second, these
items were developed based on an exhaustive review of CSR activities by companies,
including hospitality firms (Holcomb et al., 2007;Lindgreen et al., 2009;Spiller, 2000;Turker,
2009b). Third, these items were empirically tested in the hospitality context, showing high
reliability of 0.947, 0.921 and 0.849, respectively, for the CSR dimensions of environment/
community, customers and employees (Park and Levy, 2014). Finally, the three dimensions
are similar to the CSR four-dimension scale by Turker (2009b) containing society/
environment, customers, employees and government, which were used by Wong and Gao
(2014) in hospitality and tourism companies.
CSR related to environment/community refers to the company’s activities to
minimize the environmental impact of its business such as procuring environmentally
sensitive products and services or encouraging customers to reduce their
environmental impact through programs. CSR related to customers is the programs
that address respecting consumer rights beyond legal requirements and being
responsive to customer complaints. Finally, CSR related to employees is the activities
that address providing a safe and healthy working environment to employees or that
assist employees to develop their skills.
As CSR activities are intended to benefit various stakeholders, including employees,
when employees positively perceive their company’s CSR, they would be more likely to
make efforts for the benefit of their company. Moreover, previous studies,albeit limited, find
a positive link between CSR and WE (Ferreira and Real de Oliveira, 2014;Glavas and
Piderit, 2009;Ilkhanizadeh and Karatepe, 2017;Lin, 2010). Therefore, it was hypothesized
that:
H1. Employee perceptions of CSR activities related to the environment or community
positively influence their work engagement.
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H2. Employee perceptions of CSR activities related to customers positively influence
their work engagement.
H3. Employee perceptions of CSR activities related to employees positively influence
their work engagement.
WE is a construct distinctive from other work-related attitudes (Christian et al.,2011;
Hallberg and Schaufeli, 2006;Yalabik et al., 2013). Also, high WE is positively associated
with employee’s individual well-being and productivity and with organizational outcomes
such as profit(Harter et al.,2002). For instance, highly engaged employees tend to be more
satisfied (Ilkhanizadeh and Karatepe, 2017;Shimazu et al., 2015;Yalabik et al.,2013) and
perform better at work (Kahn, 1992;Halbesleben and Wheeler, 2008;Salanova et al., 2005). In
particular, employees with higher WE show more IB (Dreu, 2002;Hakanen et al.,2008;
Huhtala and Parzefall, 2007).
IB refers to generating, promoting and implementing new ideas in the workplace to
improve personal or organizational performance (Scott and Bruce, 1994). Huhtala and
Parzefall (2007, p. 299) note that WE is “an antecedent of IB”, as employees make efforts that
are helpful for their organizations when they are positive about their work (Amabile et al.,
2005). Several studies in the hospitality industry context also find that WE is important for
managing employees. For example, employees in hotels, restaurants and airlines who are
more engaged at work are more satisfied, more service-oriented, perform their job better
(Ilkhanizadeh and Karatepe, 2017;Karatepe, 2013;Salanova et al.,2005;Yeh, 2013) and
demonstrate more IB (Slåtten and Mehmetoglu, 2011). Therefore, it was hypothesized that:
H4. Work engagement positively influences innovative behavior.
In addition, employees highly engaged at work are less likely to quit or to be absent from
work (Halbesleben and Wheeler, 2008;Saks, 2006;Yalabik et al., 2013). That is because
when employees are engaged at work, they have a motivational mindset, thereby exerting
more efforts to benefit the company. Accordingly, this increases their intention to stay (IS)
with the company or decreases absenteeism. As such, previous studies by Du Plooy and
Roodt (2010) and Schaufeli and Bakker (2004) and a meta-analysis by Halbesleben (2010)
report that employees with higher WE have lower turnover intentions. Therefore, it was
posited that:
H5. Work engagement positively influences intention to stay.
WE also mediates the relationships between employee attitudes such as affective
commitment and job satisfaction and outcomes such as employee performance and turnover
intentions (Schaufeli and Bakker, 2004;Shuck et al., 2011;Yalabik et al., 2013). For example,
Ilkhanizadeh and Karatepe (2017) find that WE is positively influenced by employees’CSR
perceptions and mediates the relationship between CSR and organizational performance. As
discussed earlier, employees’CSR perceptions signify their attitudes toward the company’s
values, which influence other job-related attitudes (e.g. commitment, WE) and behavior (e.g.
performance, turnover intentions). These suggest that WE may explain why or how
employee perceptions of CSR influence behavioral outcomes such as making extra efforts for
the company and IS with their organization. Therefore, it was hypothesized that:
H6. Work engagement mediates the relationship between employee perceptions of CSR
and innovative behavior and intention to stay.
Figure 1 below illustrates the six hypotheses for this study.
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Method
Study site
This study’s site was South Korea, where the interest in and practice of CSR have been
growing mainly owing to the government’s regulations and encouragement since the Asian
financial crisis in 1997 (Nam and Jun, 2011). Legislations such as “Sustainable Development
Act”in 1991 and “Framework Act on Low Carbon, Green Growth”in 2008 began requiring
large South Korean companies to incorporate environmental and social impacts into their
business and report their performance on them (Kwak, 2014). Meanwhile, South Korean
companies are faced with political, cultural and international pressures, which pose
challenges to practicing and communicating CSR (Kim et al.,2013). For instance, the South
Korean society doubts the morality of CSR that has strategic business goals owing to
Confucian and collectivism values (Kim et al.,2013). Thus, South Korean companies usually
focus on philanthropy and volunteering as a way to make social contributions (Kim et al.,
2013;Nam and Jun, 2011). CSR has been also gaining traction in South Korean hospitality
and tourism companies, and some of them such as Seven Luck casino created a separate
CSR department to implement their various activities.
This study’s sample company was the largest travel agency in South Korea with over
3,200 employees nationally and internationally. This company provides travel services with
a direct operating network covering 29 areas worldwide. In 2006, this company was listed in
London Securities Exchange (LSE) to become a global company. It became the first travel
company in South Korea to establish a CSR Team in 2010, initiated by the president who
emphasized making social contributions with the slogan “The Earth Becoming One”.
Among its many CSR activities, “Hope Tour Project”is a social contribution program to
provide tours to socially neglected people such as the elderly, children or teenagers and low-
income and multicultural families. From 2005 to 2015, these tours were provided to 287
groups or 4,500 beneficiaries. The company also provides “Voluntour”, which is designed
for customers to participate in volunteer activities while experiencing local culture during
travel. Also, an employee volunteer program was established in 2009, which became a
prerequisite course for new employees.
Measures
Employee perceptions of CSR was measured with a total of 21 items, based on Park and
Levy (2014), the sample company’s CSR reports and a pretest. Of this study’s 21 items, 19
items were from the 22 items by Park and Levy (2014). For content validity, two professors
and three managers of this study’s sample company thoroughly evaluated the items so that
they were appropriate for assessing CSR activities of the sample company. As a result, the
Figure 1.
This study’s model
and hypotheses
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wording of “My hotel”in the original items was changed to “My company”to fit this study
sample. Also, the two original items “My company financially supports environmental
initiatives of other organizations”and “My company incorporates environmental concerns
in business decisions”were excluded, because they were less relevant to the sample
company, according to its CSR reports.
A pretest was also conducted with two employees of other travel agencies and seven
graduate students. Throughout these iterated procedures, the items in Korean were refined
for more clarity and accuracy to reflect their original meaning. Moreover, one original item,
“My company treats our employees fairly and respectfully”, was broken into two items, as
“[...] fairly”and “[...] respectfully”.
The resulting 21 items were related to the sample company’s CSR activities concerning
key stakeholders, that is environment and community (nine items), customers (five items)
and employees (seven items). These were measured on a seven-point Likert-type scale from
1 (Strongly disagree) to 7 (Strongly agree). Respondents were asked to indicate their
agreement level with each item. Example items include “My company encourages
employees to develop their skills and career”for the employees dimension of CSR, and “My
company respects consumer rights beyond legal requirements”for the customers dimension
of CSR.
WE was measured by the Utrecht Work Engagement Scale (Schaufeli et al.,2006), which
has been tested and validated in numerous contexts both cross-sectionally and
longitudinally (Schaufeli and Bakker, 2004;Schaufeli et al.,2006;Seppälä et al.,2008;
Shimazu et al.,2015). This nine-item scale consists of three factors, with three items for each
factor, namely, vigor, dedication and absorption, anchored by a seven-point scale, where 0
(zero) means “Never”to 6 means “Always or everyday”. To be consistent with other scales
on the survey and to reduce respondent fatigue, this scale was anchored by a seven-point
Likert-type scale (1 = Strongly disagree to 7 = Strongly agree). Example items include “Iam
enthusiastic about my job”and “I am immersed in my work”. Respondents were asked to
indicate their perceptions about their job.
IB was measured by three items based on Slåtten and Mehmetoglu (2011) and Janssen
(2004). The items were anchored on a seven-point scale from 1 (Strongly disagree) to 7
(Strongly agree). An example item is “I try to come up with new ways to improve my work
or our company”. IS was measured by four items based on previous studies (Nancarrow
et al.,2014), on a seven-point Likert-type scale from 1 (Strongly disagree) to 7 (Strongly
agree). An example item is “I will work for this company continuously”. The last part of the
survey was about demographic information and job-related questions (e.g. job position, level
of customer interaction).
Data collection
The survey was sent out via e-mail to 2,391 total employees of the sample company in South
Korea three times, on October 5, 2015, one week later and two weeks later. These employees
represented the department of sales (38.1 per cent), local (24.3 per cent), marketing/airlines
(19.1 per cent) and operations (18.6 per cent). By position, they were employees (50.3 per
cent), junior managers (41.2 per cent), senior managers (6.7 per cent) and executives (1.9 per
cent). A total of 455 responses were collected, representing a total response rate of 19
per cent, comparable to other studies using online surveys (Manfreda et al.,2008).
To avoid common method bias, respondents were ensured of anonymity and were
presented with mixed questions, so that the questions pertaining to the same dimension
were not provided adjacent to each other (Podsakoff et al.,2003). Furthermore, there was no
difference between earlier (first 10 per cent) and later (last 10 per cent) respondents,
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suggesting that nonresponse bias may not have been a problem (Armstrong and Overton,
1977).
Analysis
The data were analyzed in two stages (Anderson and Gerbing, 1988) using Mplus 7.3: first,
confirmatory factor analysis (CFA) to estimate measurement model where convergent and
discriminant validities were examined, and second, structural equation modeling (SEM) to
test this study’s hypotheses. Furthermore, item-parceling approach was used for WE
following previous studies. Item parcels (e.g. composite-level indicators) allow for more
reliable and normally distributed indicators without changes in the factor structure (Kishton
and Widaman, 1994) and higher indicator/factor ratio potentially contributes to the overall
lack of model fit(Anderson and Gerbing, 1988;Kishton and Widaman, 1994). As such, the
mean scores of each parcel based on the CFA results were obtained to maintain a
manageable model with an appropriate conceptual factor structure of WE and to ensure
internal consistency.
Results
Respondent characteristics
Table I presents the profile of 455 respondents. Almost half was male (50.1 per cent), and
most had university education (71.4 per cent). Over half of the respondents were 30-39 years
old (53.2 per cent), followed by 20-29 (30.3 per cent) and 40-49 (14.5 per cent) years old, with
an average age of 33 years. The majority of the respondents (44.6 per cent) have been with
the company for less than 5 years, followed by 5-9 years (23.7 per cent), 10-14 years (22.2 per
cent) and 15-19 years (9.5 per cent). The respondents work at the departments of local (32.7
per cent), marketing/airline (24.2 per cent), sales (22.2 per cent) and operation (20.9 per cent).
Their job titles were employee (29.9 per cent), junior manager (46.6 per cent), senior manager
(20.4 per cent) and executive (3.1 per cent).
Measurement model
As shown in Table II, after excluding four items with low (0.5) factor loadings (two items of
CSR_Customers and two items of IS), the measurement model showed a good fit:
x
2
=
818.35, df = 309, p<0.05, normed
x
2
= 2.65, CFI = 0.937, TLI = 0.929, RMSEA = 0.060 (90
per cent of CI 0.055–0.065) and SRMR = 0.050. WE consisted of three factors (vigor,
absorption and dedication), and each factor was included in the model with the mean values
of three items.
Results showed that this study’s variables had sufficient levels of reliability and validity
(Table III). Reliability test results ranged from 0.87 to 0.95. Construct validity was
established, as all standardized factor loadings of the observed variables were statistically
significant and higher than 0.7 (ranging from 0.71 to 0.96). Average variance extracted (AVE)
values were also greater than the recommended criteria of 0.5 (Hair et al., 2011). Discriminant
validity was also established, as the squared correlations between a pair of latent constructs
were found tobe less than the AVE ofeach construct (Fornell and Larcker, 1981).
Structural model and hypotheses testing
This study’s structural model had a good fit:
x
2
= 837.11, df = 316, p<0.05, normed
x
2
=
2.65, CFI = 0.936, TLI = 0.929, RMSEA = 0.060 (90 per cent of CI 0.055–0.065) and SRMR =
0.055 (Figure 2). The proposed hypotheses were assessed by examining the coefficients
along with t-values between the variables. As shown in Figure 2, four out of five paths
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among latent variables were significant at the 5 per cent level, supporting all hypotheses
except for H1. While CSR_Environment/Community did not have a significant influence on
WE, the other two dimensions of CSR (CSR_Customers and CSR_Employees) were
significant determinants to explain WE (
b
CSR Customers!WE
= 0.20, t= 3.12, p<0.01;
b
CSR
Employees!WE
= 0.36, t= 6.62, p<0.001), thereby supporting H2 and H3. In addition, WE
significantly and positively influenced IBs and IS (
b
WE!IB
= 0.79, t= 33.93, p<0.001;
b
WE!IS
= 0.69, t= 22.10, p<0.001), supporting H4 and H5.
Tests of mediation effects
Mediation effects of WE, which was H6, were tested by examining the relationships
between two independent variables (CSR_Customers, CSR_Employees) and WE and the
relationships between those two independent variables and two dependent variables (IBand
IS) (Baron and Kenny, 1986). CSR_Environment/Community was excluded from this test
because it did not have a significant impact on WE (Baron and Kenny, 1986). The structural
model showed a good fit:
x
2
= 400.52, df = 126, p<0.05, normed
x
2
= 3.18, CFI = 0.952,
TLI = 0.942, RMSEA = 0.069 (90 percent of CI 0.062–0.077) and SRMR = 0.048.
Table I.
Profile of
respondents
Characteristics N(%)
Gender
Male 228 (50.1)
Female 227 (49.9)
Education level
Less than high school 17 (3.7)
Two-year college 93 (20.4)
University 325 (71.4)
Graduate school or higher 20 (4.4)
Age
Less than 20 7 (1.5)
20-29 138 (30.3)
30-39 242 (53.2)
40-49 66 (14.5)
Over 50 2 (0.4)
Working year in this company
Less than 5 203 (44.6)
5-9 108 (23.7)
10-14 101 (22.2)
15-19 43 (9.5)
Job department
Sales 101 (22.2)
Local 149 (32.7)
Marketing/Airlines 110 (24.2)
Operation 95 (20.9)
Job position
Employee 136 (29.9)
Junior manager 212 (46.6)
Senior manager 93 (20.4)
Executive 14 (3.1)
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Table II.
Results of
confirmatory factor
analysis
Constructs and items
Standardized factor
loading (t-value)
Corporate social responsibility –environment and community (CSR_EC)
My company incorporates the interests of community in business decisions 0.71 (26.38)
My company financially supports local charities through financial donations,
sponsoring events and/or providing goods and services 0.75 (34.86)
My company actively attempts to purchase products and services which minimize
environmental impacts 0.78 (46.66)
My company actively attempts to minimize the environmental impact of the
company’s activities 0.74 (16.93)
My company helps improve the quality of life in the local community 0.75 (39.40)
My company encourages guests to reduce their environmental impact through
programs and initiatives 0.79 (35.62)
My company encourages employees to be actively engaged in local community
organizations 0.77 (32.93)
My company reports on the company’s environmental performance 0.73 (30.64)
My company actively works with international organizations which promote
responsible business 0.76 (32.16)
Corporate social responsibility –customer (CSR_CU)
Customer satisfaction is highly important for my company -
a
One of the main principles of my company is to provide high-quality services and
products to our customers -
a
My company is responsive to the complaints of our customers 0.73 (29.16)
My company incorporates the interests of customers in business decisions 0.89 (51.92)
My company respects consumer rights beyond legal requirements 0.88 (46.05)
Corporate social responsibility –employees (CSR_EM)
My company provides a safe and healthy working environment to all employees 0.79 (46.27)
My company treats our employees fairly 0.89 (72.52)
My company encourages employees to develop their skills and careers 0.86 (63.82)
My company’s policies encourage a good work and life balance for employees 0.77 (40.14)
My company provides employees with fair and reasonable salaries 0.83 (53.83)
My company incorporates the interests of employees in business decisions 0.88 (84.05)
My company treats our employees respectfully 0.88 (71.90)
Work engagement (WE)
Vigor
b
0.92 (100.71)
Absorption
b
0.93 (91.67)
Dedication
b
0.96 (142.13)
Innovative behaviors (IB)
I try to come up with new ways to improve my work or our company 0.90 (53.55)
I try to talk to my colleagues or supervisor about how things can be improved in my
company 0.93 (74.94)
I try out new ideas at my work 0.86 (43.78)
Intention to stay (IS)
I will work for this company continuously 0.92 (48.83)
I would transfer to another department in this company, if I am interested in another
job -
a
I would not imagine my future in this company -
a
Idefinitely work for this company at least next three years 0.93 (61.03)
Notes:
x
2
= 818.353, df = 309, p<0.05,
x
2
/df = 2.65, CFI = 0.937, TLI = 0.929, RMSEA = 0.060 (90% CI =
0.055-0.065) and SRMR = 0.050;
a
Eliminated variable due to low factor loading;
b
Mean parcel scores
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As illustrated in Figure 3, all the relationships between independent variables
(CSR_Customers and CSR_Employees) and dependent variables (IB and IS) were either
fully or partially mediated by WE. All the relationships were positive and significant
between independent variables and WE, so were those between WE and dependent
variables: CSR_Customers and WE (
b
CSR_Customers!WE
=0.26,t= 4.79, p<0.001),
CSR_Employees and WE (
b
CSR_Employees!WE
= 0.41, t= 7.80, p<0.001), WE and IB
(
b
WE!IB
=0.79,t= 21.84, p<0.001) and WE and IS (
b
WE!IS
= 0.59, t= 11.51, p<
0.001).
Meanwhile, the relatioships between independent variables and dependent variables
were not significant in the presence of WE: CSR_Customers and IB (
b
CSR_Customers!IB
=
0.04, t=0.90,p<0.05), CSR_Customers and IS (
b
CSR_Customers!IS
= 0.04, t= 0.85,
p>0.05) and CSR_Employees and IB (
b
CSR_Employees!IB
=–0.03, t=–0.56, p>0.05),
indicating a full mediation effect of WE. However, WE had a partial mediation effect
between CSR_Employees and IS (
b
CSR_Employees!IS
= 0.15, t= 2.70, p<0.01).
Table III.
Reliability and
validity of the
measurement model
F1 F2 F3 F4 F5 F6
F1 CSR_EC (0.47) (0.41) (0.24) (0.22) (0.17)
F2 CSR_CU 0.69 (0.29) (0.23) (0.16) (0.16)
F3 CSR_EM 0.64 0.54 (0.30) (0.18) (0.24)
F4 WE 0.49 0.48 0.55 (0.63) (0.47)
F5 INNO 0.47 0.40 0.43 0.79 (0.31)
F6 STAY 0.41 0.40 0.49 0.69 0.56
Average variance extracted (AVE) 0.57 0.70 0.71 0.88 0.80 0.85
Construct reliability (CR) 0.92 0.87 0.94 0.95 0.92 0.92
Cronbach’s alpha 0.92 0.87 0.94 0.96 0.92 0.92
Mean 4.87 5.36 4.28 4.98 5.09 5.38
SD 0.88 0.98 1.22 1.07 1.02 1.27
Notes: All correlations are significant at p<0.01. Numbers above the diagonal indicate squared correlation
among latent constructs; CSR_EC = CSR_Environment/Community, CSR_CU = CSR_Customers, WE =
Work Engagement, INNO = Innovative Behaviors, STAY = Intention to Stay
Figure 2.
Results of structural
equation model
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Conclusion and discussion
Conclusion
This study examines how employee perceptions of CSR influence their WE, IB and IS with
their current company to illuminate the role of CSR at the individual employee level. As
hypothesized, results are generally in support for social exchange theory and the findings of
relevant studies in that when employees positively perceive CSR, they are more engaged at
work, exhibit more IB and have higher IS with their current company. Similarly, other
studies (Ellemers et al.,2011;Kim et al., 2016;Lee et al.,2013;Peterson, 2004) report that
employees’commitment to the company increase when their perceptions of CSR are more
positive. Also, when employees perceive higher well-being within the company, they tend to
be more innovative (Hakanen et al.,2008;Huhtala and Parzefall, 2007).
Additional test results show that these positive relationships do not differ based on age,
indicating that CSR activities can address the fundamental, psychological needs of the
multigenerational workforce (Bauman and Skitka, 2012;Mirvis, 2012). That is, humans,
being inherently social animals, share a tendency to reach out and help others (Batson, 1990;
Grant et al.,2008), and CSR is poised to help fulfill that need with programs through which
employees can contribute to society. For example, a company’s pro-social programs, which
are common CSR initiatives, strengthen employees’affective commitment to the company
that facilitates this giving, because employees view their company as a caring entity and
develop affinity toward it (Brockner et al.,2014;Grant et al., 2008).
Among various CSR activities, this study finds that CSR activities related to customers and
employees, but not those related to the environment and community, had a significant
and positive impact on WE. This is similar to previous findings (Farooq et al.,2014;Ferreira
and Real de Oliveira, 2014) in that internally directed CSR activities, concerning employees’
work environment, health and training and development, have more positive influence on their
engagement at work than those directed externally to the company, such as local community.
Moreover, mediation test results show that CSR activities related to customers and
employees had a positive influence on their IS owing to their higher WE. This may be
because this study’s sample company employees interact with customers and other
employees in their daily work environment, which makes them feel that CSR activities
related to those beneficiaries are more relevant to influencing their work attitudes and
behavior, than those related to the natural environment or community at large.
Figure 3.
Mediation effects of
work engagement
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Theoretical implications
Answering the recent call for more research on microfoundations of CSR, this study makes
several important theoretical implications. First, while being based on social exchange
theory, this study extends existing CSR studies by incorporating the concept of WE. By
examining the effects of employee perceptions of CSR on WE and the mediation effects of
WE, this study enhances our understanding about the role of CSR at the individual
employee level. Second, this study sheds light on the resource-based view about employees
being an important resource for competitive advantage by examining the impacts of
employee perceptions of CSR on IB and IS, which are key to firm performance and success.
Third, this study develops and empirically tests a theoretical model based on an extensive
literature review in hospitality, tourism, strategic management, organizational science and
social and applied psychology, which implies that a multidisciplinary synthesis of relevant
variables regardingCSR can help advance theoretical development.
Practical implications
Results suggest that CSR can be an important tool for developing social capital within an
organization by increasing employees’engagement at work and their efforts toward the
company’s innovation, which helps improve the company’s bottom line (Sandvik et al.,2014)
and performance (Huhtala and Parzefall, 2007;Janssen, 2004). Results also suggest that CSR
can help engaged and innovative employees stay longer with their organization, which can
contribute to their company’s competitiveness, indicating the internal benefitofCSR.
Therefore, travel companies that are considering whether or not to practice CSR or that are
skeptical about the internal role of CSR can be reassured that CSR can help employees
increase their energy for, involvement in and pride in their work, which can enhance
organizational outcomes.
This study’s results about the positive effects of CSR activities concerning customers and
employees, by no means, indicate that hospitality and tourism companies should abandon
CSR activities concerning the environment and community. Rather, it implies that
companies should go beyond “greening”activities when it comes to CSR, which are
currently pervasive (Levy and Park, 2011;Park and Levy, 2014). That is, they should
improve their understanding about the encompassing nature of the CSR concept and
judiciously choose CSR activities that not only match their organizational values but also
can positively influence their employees’WE. This is because employees who are highly
engaged at work to achieve organizational goals are a critical source for competitive
advantage and better firm performance. Thus, travel companies should review their current
CSR activities and revise or expand the scope from focusing on the environment and/or
community to the well-being of employees and customers. For example, the company’s
financial donation to some environmental causes may not influence employees’work
attitudes and behavior as positively as providing employees a healthier and safer work
environment or helping employees develop their skills and careers.
Limitations and future research
It should be noted that this study’s results are limited to one largest travel company in South
Korea, which may not represent the industry or the country. To enhance our understanding
about the role of CSR at the individual employee level in the hospitality and tourism
industries, future studies should test this study’s model in other companies and in other
countries. Case studies of CSR practices in various contexts that are effective as well as
ineffective from the employees’perspectives are also recommended to help accumulate
evidence. Additionally, longitudinal studies will help understand how employees’
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perceptions of CSR and their effects on work attitudes and behavior change over time. This
will be useful for managers in selecting CSR activities that are most suitable and effective
for one’s own organization and employees.
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Corresponding author
Sun-Young Park can be contacted at: sypark5@usfca.edu
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