The Relationship between Internal Corporate Social Responsibility and Organizational Commitment within the Banking Sector in Jordan

This study attempts to investigate the relationship between internal CSR practices and organizational commitment based on the social exchange theory (SET). Specifically, we examine the impact of five dimensions of internal CSR practices on organizational commitment: health and safety, human rights, training and education, work life balance and workplace diversity. The proposed model was tested on a sample of 336 frontline employees within the banking sector in Jordan. Results showed that all internal CSR dimensions are significantly and positively related to affective and normative commitment. In addition, the findings of this study indicate that all internal CSR dimensions did not have a significant relationship with continuance commitment. Limitations of the study, directions for future research, and implications of the findings are discussed.

Authors:

• Al-bdour
• A. Ali.
• Ellisha Nasruddin.
• Soh Keng Lin

Keywords:

• Internal CSR
• organizational commitment
• Jordan
• banking sector.

References:

[1] Greenbaum, S. I., & Thakor, A. V. (2007). Contemporary Financial
Intermediation, 2nd Edition (Elsevier, Amsterdam).
[2] Achuam, J. K. (2008). Corporate social responsibility in Nigerian
banking system Society and Business Review. Bradford, 3(1), pg. 57.
[3] Mamic, I. (2004). Implementing Codes of Conduct: How Businesses
Manage Social Performance in Global Supply Chains. International
Labour Office (ILO) in association with Greenleaf Publishing, Geneva.
[4] Smith, C. (1994). The new corporate philanthropy, Harvard Business
Review, 105-115.
[5] Kotler, P., & Lee, N. (2005). Corporate Social Responsibility: Doing the
Most Good for Your Company and Your Cause, John Wiley and Sons
Inc., Hoboken, NJ.
[6] Peterson, D. K. (2004). The relationship between perceptions of
corporate citizenship and Organisational Commitment. Business and
Society, 43:296-319.
[7] Turker, D. (2009). Measuring Corporate Social Responsibility: A Scale
Development Study. Journal of Business Ethics. 85, 411-427.
[8] Lee, C.H., & Bruvold, N,T. (2003). Creating value for employees:
investment in Training and Education. International Journal of Human
Resource Management, 14(6), 981-1000.
[9] Aguilera, R., Ruth, V., Rupp, D., Williams C., & Ganapathi, J. (2007).
Putting the S Back in Corporate Social Responsibility: A Multilevel
Theory of Social Change in Organizations. Academy of management
Review, 32, 836-863.
[10] VanBuren iii, H.J. (2005). An Employee-Centered Model of Corporate
Social Performance. Business Ethics Quarterly, 15(4), 687.
[11] Lindgreen, A., Swaen, V., & Johnston, W. J. (2009). Corporate Social
Responsibility: An Empirical Investigation of U.S. Organisations.
Journal of Business Ethics, 85,303-323.
[12] Leonard, M. (1997). Count on Them in. Corporate America is Eager to
Volunteer Help to the Needy. The Reason is the Bottom-Line. The
Boston Globe (April 20), F1.
[13] Observatory of European SMEs: 2004, European SMEs and Social and
Environmental Responsibility, 2002/ No. 4 (European Commission:
Enterprise Publications, 2002) cited in Habisch, A.
[14] Maignan, I., & Ferrell O. (2001). Antecedents and Benefits of Corporate
Citizenship: An Investigation of French Businesses. Journal of Business
Research, 51(1), 37-51.
[15] Matten, D., Crane, A., & Chapple, W. (2003). Behind the Mask:
Revealing the True Face of Corporate Citizenship. Journal of Business
Ethics, 45(1/2), 109-120.
[16] Cornelius, N., Todres, M., Janjuha-Jivraj, S., Woods, A., & Wallace, J.
(2008). Corporate Social Responsibility and the Social Enterprise.
Journal of Business Ethics, 81,355-370.f
[17] McWilliams, A., Siegel D. S., &. Wright, P. M. (2006). Corporate Social
Responsibility: Strategic Implications. Journal of Management Studies,
43(1), 1-18.
[18] Vives, A. (2006). Social and Environmental Responsibility in Small and
Medium Enterprises in Latin America. The Journal of Corporate
Citizenship, 21, 39-50.
[19] European Commission, (2001). Promoting a European Framework for
Corporate Social Responsibility, Green Paper. European Commission,
Directorate-General for Employment and Social Affairs:
Luxembourg.http://ec.europa.eu/education/lifelong-learningpolicy/
doc/mobility/com329_en.pdf.
[20] Carroll, A.B. (1979). A three dimensional model of corporate
performance. Academy of Management Review, 4, 497-505.
[21] Carroll, A. B. (1991). The pyramid of corporate social responsibility:
Toward the Moral Management of organisational Stakeholders. Business
Horizons, 39-48.
[22] Genest, C. M. (2005). Cultures, organisations, and philanthropy.
Corporate Communications. An International Journal, 10:4, 315-327.
[23] Friedman, M. (1970). The social responsibility of business to increase its
profits. New York Times Magazine, 32, 122-126.
[24] Werbel, J. D., & Carter, S. M. (2002). The CEO-s Influence on
Corporate Foundation Giving, Journal of Business Ethics, 40, 47-60.
[25] Haley, U. C. V. (1991).Corporate Contributions as Managerial Masques:
Reframing Corporate Contributions as Strategies to Influence Society.
Journal of Management Studies, 28, 485-509.
[26] Choi, J., & Wang, H. (2007) .The Promise of a Managerial Values
Approach to Corporate Philanthropy. Journal of Business Ethics,
75,345-359.
[27] Stukas, A. A., Snyder, M., & Clary, E. G. (1999). The effects of
ÔÇÿmandatory volunteerism- in intentions to volunteer. Educational
Horizons, 77(4), 194-201.
[28] Walker, MB. (2007). assessing the influence of corporate social
responsibility on consumer attitudes in the sport industry. PhD theses the
Florida state University College of education. UMI Number: 3282675.
[29] Wikipedia (2009). Environmental protection definition.
http://en.wikipedia.org/wiki/Environmental_protection.
[30] Carroll, A. B., & Buchholtz, A.K. (2006). Business & Society: Ethics &
Stakeholder Management."Thompson, 6th Edition, pp. 710.
[31] Rondinelli D.A., & Berry, M.A. (2000) Environmental citizenship in
multinational corporations: social responsibility and sustainable
developmentÔÇöthe two approaches of sustainability applied on micro
level. European Management Journal, 18, 70-84.
[32] Schiebel, W., & Pöchtrager, S. (2003). Corporate ethics as a factor for
success - the measurement instrument for the University Of Agriculture
Sciences (BOKU), Vienna. Supply Chain Management: An International
Journal, 8(2), 116-121.
[33] Fuentes-García, F, J., Núñez-Tabales, J, M., and Veroz-Herradón, R.,
(2008). Applicability of Corporate Social Responsibility to Human
Resources Management: Perspective from Spain. Journal of Business
Ethics, 82:27-44.
[34] ISO 26000 (2006). Guidance on Social Responsibility.
http://inni.pacinst.org/inni/corporate_social_responsibility/ISO26000Wo
rking%20Draft2.pdf.
[35] Bursa Malaysia (2006). CSR Framework
http://www.klse.com.my/website/bm/about_us/the_organisation/csr/dow
nloads/csr_writeup.pdf.
[36] Dow Jones Sustainability World Indexes Guide (DJSIs) (1999).
http://www.sustainabilityndex.
com/djsi_pdf/publications/Guidebooks/DJSI_Guidebook_World_8
0.pdf.
[37] SA8000: Corporate Social Accountability Management (2000). A
handbook on the implementation of new standard on corporate social
accountability initiated.
http://www.ellipson.com/files/ebooks/CSAM_handbook.pdf.
[38] Global Report Initiative (GRI) (2000). Sustainability Reporting
http://www.globalreporting.org/NR/rdonlyres/ED9E9B36-AB54-4DE1-
BFF2-5F735235CA44/0/G3_GuidelinesENU.pdf.
[39] European SMEs- Good Practice (2005). CSR and Competitiveness -
European SMEs- Good Practice - Consolidated European Report.
http://www.kmuforschung.ac.at/de/Projekte/CSR/European%20Report.p
df.
[40] Welford, R. (2005). Corporate Social Responsibility in Europe and Asia:
Critical Elements and Best Practice. Corporate Social Review, 13, 31-
47.
[41] Brammer, S., Millington, A., & Rayton, B. (2007). The contribution of
corporate social responsibility to organisation commitment. Int. J. of
Human Resource Management, 18(10), 1701-1719.
[42] Longo, M., Mura, M., & Bonoli, A. (2005). Corporate Social
Responsibility and Corporate Performance: The Case of Italian SMEs.
Corporate Governance, 5(4), 28-42.
[43] Spiller, R, (2000). Ethical business and investment: A model for
business and society. Journal of Business Ethics; 27(1/2), 149.
[44] Papasolomou-Doukakis, I., Krambia-Kapardis, M., & Katsioloudes, M.
(2005). Corporate Social Responsibility: The Way Forward? Maybe
Not! European Business Review, 17(3), 263-279.
[45] Castka, P. M., Balzarova, A. & Bamber, C. J. (2004). How can SMEs
Effectively Implement the CSR Agenda? A UK Case Study Perspective.
Corporate Social Responsibility and Environmental Management, 11(3),
140-149.
[46] Kok, P., VanDer W, T., McKenna, R., & Brown, A. (2001). A corporate
social responsibility audit within a quality management framework.
Journal of Business Ethics, 31(4), 285-97.
[47] Vuontisjärvi's, T. (2006). Corporate social reporting in the European
context and human resource disclosures: an analysis of Finnish
companies. Journal of Business Ethics, 69, 4, 331-54.
[48] Maignan, I,. & Ferrell O. (2004). Corporate Social Responsibility and
Marketing: An Integrative Framework, Academy of Marketing Science,
32, 3-19.
[49] Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L.
(2006). Multivariate Data Analysis (6th ed.). Upper Saddle River, NJ:
Pearson Prentice Hall.
[50] HSBC (2008). Corporate Social Responsibility Annual Report
http://www.chinacsr.com/en/2009/01/16/4218-hsbc-china-publishessocial-
responsibility-report/.
[51] Shinhan Bank (2008) Corporate Social Responsibility Annual Report
http://www.beautifulshinhan.co.kr/act/download.asp?FN=2008_eng_s.p
df.
[52] Scotia Bank (2008). Corporate Social Responsibility Annual Report
http://www.scotiabank.com/images/en/filesaboutscotia/20534.pdf.
[53] Bank of New York Mellon (2008). Corporate Social Responsibility
Annual Report http://www.bnymellon.com/about/csr/2008/index.html.
[54] Bank-BPH. (2008). Corporate Social Responsibility Annual Report
http://www.bph.pl/res/docs/ir/dobre_praktyki/bank_bph_2008_csr_repor
t.pdf
[55] Bank of China (2008). Corporate Social Responsibility Annual Report
http://pic.bankofchina.com/bocappd/report/200905/P0200905064202497
85107.pdf.
[56] Bank of America (2005). Sustainability Report
http://www.socialfunds.com/csr/reports/Bank_of_America_2005_Sustai
nability_Report.pdf.
[57] Deutsche Bank (2008). Corporate Social Responsibility Annual Report
http://db.com/csr/en/download/DBF_CSR08_EN_72dpi.pdf.
[58] Piraeus Bank's (2008). Corporate Social Responsibility Annual Report
http://www.piraeusbank.gr/Documents/internet/Enimerosi_Ependiton/Et
isies_Ekthesis/2009/EEKE_en.pdf.
[59] Irish bank federation (2009) Corporate Social Responsibility Annual
Report
http://www.bankofireland.com/includes/about_us_new/pdfs/ibf_csr_rep
ort_sep_2009.pdf.
[60] Fortis Bank (2008). Corporate Social Responsibility Annual Report
http://www.fortisbank.com/en/CorporateResponsibility/csr_reports.asp.
[61] Danske Bank (2007) Corporate Social Responsibility Annual Report
http://www.danskebank.com/enk/
CSR/Documents/CSR_report_2007_WEB.pdf
[62] Suwaidan, M. S., Al-omari, M.A., & Haddad, R. H. (2004). Social
responsibility disclosure and corporate characteristics: the case of
Jordanian industrial companies. Int. J. Accounting, Auditing and
Performance Evaluation, 1(4).
[63] Abu-Baker, N., & Nasser, K. (2000). Empirical evidence on corporate
social disclosure (CSD) practices in Jordan. International Journal of
Commerce and Management, 10(3/4), 20-35.
[64] Al-Basteki, H. (1997). Voluntary disclosure of socially relevant
information: the case of Bahraini corporations. Abhath Al-Yarmouk,
13(4),41-53.
[65] Jahmani, Y. (1996) Social responsibility accounting and public
shareholding companies in Jordan. Abhath Al-Yarmouk, 12(4), 45-85.
[66] Carroll, A.B. (1999). Corporate social responsibility: evolution of a
definitional construct. Business and Society Review, 38 (3), 268-95.
[67] Rettab, B., Brik, A, B., & Mellahi, K. (2009). A Study of Management
Perceptions of the Impact of Corporate Social Responsibility on
Organisational Performance in Emerging Economies: The Case of
Dubai. Journal of Business Ethics, 89, 371-390.
[68] Rego, A., Leal, S., Cunha M., P., & Faria. J., (2008). How the
employees- Perceptions of corporate citizenship predict their
organizational commitment. international Conference on Business And
Information. JW Marriott Hotel, Seoul, South Korea July 7-9, 2008
Volume 5, ISSN 1729-9322, 2008. http://academicpapers.
org/ocs2/session/Papers/A8/355-460-1-RV.doc.
[69] Branco, M.C., & Rodrigues, L.L. (2006). Corporate Social
Responsibility and Resource-Based Perspectives. Journal of Business
Ethics, 69,111-132.
[70] Collier, J., & Esteban, R. (2007). Corporate social responsibility and
employee commitment. Business Ethics: A European Review, 16(1).
[71] Earl, T. B.W. (2004). Exploring the effects of corporate social
performance on employees. Master dissertation, University of Alberta
(Canada), 129 pages.
[72] Kao, S-Chen., Ho, M-Hong., Wu, C-Hsing., & Lee, T-Zang. (2009).
relationships between employees- perception of corporate social
responsibility, personality, job satisfaction, and Organisational
Commitment. (http://bai2009.org/file/Papers/1224.doc ).
[73] Lo, C.WH, Egri C. P., & Ralston D. A. (2008). Commitment to
corporate, social, and environmental responsibilities: an insight into
contrasting perspectives in China and the US. Organisation Management
Journal 5, 83-98.
[74] Settoon, R. P., Bennett, N., & Liden, R. L. (1996). Social exchange in
organisation: Perceived organisational support, leader-member
exchange, and employee reciprocity. Journal of Applied Psychology, 81,
219-227.
[75] Eisenberger, R., Armeli, S., Rexwinkel, B., Lynch, P. D., & Rhoades, L.
(2001). Reciprocation of perceived organizational support. Journal of
Applied Psychology, 86,42-51.
[76] Sekaran, U. (2000). Research methods for business. New York: John
Wiley & Sons, Inc.
[77] Creswell, J. W. (2002). Educational research: Planning, conducting, and
evaluating quantitative and qualitative research. Upper Saddle River, NJ:
Merrill Prentice Hall.
[78] Byrne, D. (2002). Interpreting Quantitative Data. London: Sage.
[79] Sekaran, U. (2003). Research Methods for Business - A skill Building
Approach. (4th ed.). USA: John Wiley and Sons, Inc.
[80] Tsui, A.S., Pearce, J.L., Porter, L.W., & Tripoli, A.M. (1997).
Alternative Approaches to the Employee-Organization Relationship:
Does Investment in Employees Pay Off? Academy of Management
Journal, 40, 1089-121.
[81] International Labour Organisation-s Declaration on the Fundamental
Principles and Rights at Work. http://www.ilo.org/declaration/lang--
en/index.htm.
[82] Dillman, D. A. (2007). Mail and Internet Survey: The Tailored Design
Method. John Wiley & Sons, Inc.
[83] Smith, J., & Gardner, D. (2007). Factors affecting employee use of
work-life balance initiatives. New Zealand Journal of Psychology, 36(1),
3-12.
[84] Wong, S., & KO, A. (2009). Exploratory study of understanding hotel
employees- perception on work-life balance issues. International Journal
of Hospitality Management, 28,195-203.
[85] Magoshi, E., & Chang, E. (2009). Diversity management and the effects
on employees- organizational commitment: Evidence from Japan and
Korea. Journal of World Business, 44, 31-40.
[86] The Hashemite Kingdom of Jordan, Labour law (1996).
http://www.hammourilaw.com/Hammouri_Resorces/Articals/labor_law
__2.pdf.
[87] Allen, N. J., & Meyer, J. P. (1990b). The measurement and antecedents
of affective, continuance and normative commitment to the organisation.
Journal of Occupational Psychology, 63, 1-18.
[88] Yamkovenko, B.V., Holton III, E. and Bates, R.A. (2007). The Learning
Transfer System Inventory (LTSI) in Ukraine: The cross-cultural
validation of the instrument Journal of European Industrial Training,
31(5), 377-401.
[89] Chen, H., & Bates, R.A. (2005). Instrument translation and development
strategies for cross-cultural studies. In 2005 Academy of human
resource development proceedings, ed. M.L. Morris and F.M. Nafukho,
693-700. Bowling Green, OH: Academy of Human Resource
Development.
[90] Roscoe, J.T. (1975). Fundamental Research Statistics for the
Behavioural Sciences, 2nd edition. New York: Holt Rinehart &
Winston.
[91] Daft, R.L. (2003). Management, 6th ed., Thomson South-Western,
Mason, OH.
[92] Vakola, M., & Nikolaou, I. (2005). Attitudes towards organizational
change: What is the role of employees- stress and commitment?
Employee Relations, 27, 160-174.
[93] Daily, B F., Bishop, J W., & Govindarajulu, N. (2009). A Conceptual
Model for Organizational Citizenship Behaviour Directed Toward the
Environment. Bsiness & Society, 48(2), 243-256.
[94] Schoenberg, B. (2007). How Has Employee Morale Improved Due to
Corporate Social Responsibility? Journal of the Communication, Speech
& Theatre Association of North Dakota. 20.
[95] Bartlett, K. R. (2001). The relationship between training and
organizational commitment: A study in the health care field. Human
Resource Development Quarterly, 12(4), 335-352.
[96] Sutherland, V.J., & Cooper, C. (1990), Psychology & Health Series 5,
Understanding Stress: A Psychological Perspective for Health
Professionals, Chapman and Hall, London.
[97] Edgar, F., & Geare, A. (2005). HRM practice and employee attitudes:
Different measures different results. Personnel Review, 34(5), 534-549.
[98] Parkes L. P., & Langford P.H., (2008). Work-life balance or work-life
alignment? A test of the importance of work-life balance for employee
engagement and intention to stay in organisations. Journal of
Management & Organization, 14,267-284.
[99] Rhoades, L., & Eisenberger, R. (2002), "Perceived organizational
support: a review of the literature. Journal of Applied Psychology, 87(4),
698-714.
[100] Blau, P.M. (1964). Exchange and power in social life. New York: John
Wiley and Sons.
[101] Bolino, M. C., & Turnley, W. H. (2003). Going the extra mile:
Cultivating and managing employee citizenship behaviour. Academy of
Management Executive, 17(3), 60-71.
[102] Kossek & Block, (2000). New employment relations. In: E. Kossek and
R. Block, Editors, Managing human resources in the 21st century,
South-Western College Publishing, Cincinnati (2000) Module 1.
[103] Becker, H.S. (1960). Notes on the concept of commitment. The
American Journal of Sociology, 66, 32-42.
[104] Meyer, J. P., & Allen, N. J. (1984). Testing the "side bet theory" of
organizational commitment: Some methodological considerations.
Journal of Applied Psychology, 69, 372-378.
[105] Kacmar, K.M., Carlson, D.S., & Brymer, R.A. (1999). Antecedents and
consequences of organizational commitment: a comparison of two
scales. Educational and Psychological Measurement, 59(6), 976-994.
[106] Cohen, A. (1999). The Relation between Commitment Forms and Work
Outcomes in Jewish and Arab Culture. Journal of Vocational Behaviour,
54, 371-391.
[107] Ali, A. J. (1993). Decision-Making Style, Individualism, and Attitudes
toward Risk of Arab Executives. International Studies of Management &
Organization, 23(3), 53-73.
[108] Zayour, A. (1977). Psychological Analysis of the Arab Self. (Dar-
Attaliah, Beirut, Lebanon).
[109] Mathieu, J. E., & Zajac, D. M. (1990). A review and meta-analysis of
the antecedents, correlates, and consequences of Organisational
Commitment. Psychological Bulletin, 108, 171-194.
[110] Namasivayam, K., & Zhao X., (2007). An investigation of the
moderating effects of organizational commitment on the relationships
between work-family conflict and job satisfaction among hospitality
employees in India. Tourism Management, 28(5), 1212-1223.
[111] Meyer, J.P., Stanley, D.J., Herscovitch, L., & Topolnytsky, L. (2002).
Affective, continuance and normative commitment to the organisation:
A meta- analysis of antecedent, correlates, and consequences. Journal of
Vocational Behavior, 61,20-52.
[112] Allen, N. J., & Meyer, J. P. (1996). Affective, continuance and
normative commitment to the organization: An examination of construct
validity. Journal of Vocational Behaviour, 49, 252-276.
[113] Luthans, F. (1998). Organisational Behaviour. 8th ed. Boston: Irwin
McGraw-Hill.
[114] Folger, R., & Konovsky, M. A. (1989). Effects of procedural and
distributive justice on reactions to pay raise decisions. Academy of
Management Journal, 32, 115-130.
[115] Williams, J. (2004). Job satisfaction and organizational commitment, a
Sloan Work and Family Encyclopaedia website. Retrieved July 7, 2010,
from the Sloan Work and Family Research Network website:
http://wfnetwork.bc.edu/encyclopedia_entry.php?id=244&area=academi
cs.
[116] Guchait, P. (2007). Human Resource Management Practices and
Organizational Commitment and Intention to Leave: The Mediating
Role of Perceived Organizational Support and Psychological Contracts.
Unpublished PhD Theses, University of Missouri-Columbia.
[117] Lauren, D. McGuire. (2009).The impact of physical environment on
employee commitment in call centres; the mediating role of employee
well-being. McLaren. Team Performance Management, 1(1/2), 35.
[118] Loi, R., Hang-yue, N., & Foley, S., (2006). Linking employees' justice
perceptions to Organisational Commitment and intention to leave: The
mediating role of perceived organisational support. Journal of
Occupational and organisational Psychology, 79(1),101, 20.
[119] Cropanzano, R., & Mitchell, M.S. (2005), Social exchange theory: an
interdisciplinary review. Journal of Management, 31, 874-900.