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This study examines whether an individual's position in the organizational hierarchy affects his or her corporate social responsibility orientation (CSRO). It utilizes Archie Carroll's four-dimensional construct of corporate social responsibility to study 499 working individuals enrolled in seminar courses in five universities in the Eastern United States. They comprised 321 non-managers, 61 lower managers, 60 middle managers, 28 top managers. The results show that there are significant differences only between non-managers and mid-level managers along the economic dimension of CSRO. There were no significant differences among the four groups with respect to the legal, ethical and philanthropic dimensions.
Introduction
Recent corporate scandals and subsequent trials have attracted public attention and highlighted once more the importance of business ethics and corporate social responsibility. Judges and prosecuting attorneys seek and succeed in imposing steep penalties on those who are found to have betrayed the public trust.
The recent sentences of TYCO'S former CEO, Dennis Kozlowski and Mark Swartz, his financial officer have sent Shockwaves to the corporate world (Economist, June 2005).
Corporate social responsibility and business ethics have been the subject of considerable writing and debate for many years among researchers and practitioners. While U.S. corporations are required by law to put the profit motive above all others (Achbar, Abbott and Bakan, 2004), the public in today's world demands that corporations play a more energetic role in the overall welfare of society. Profit maximization is only one of a litany of goals managers are called upon to fulfill. Thus, businesses' economic activities and their social impact have attracted increased public scrutiny and criticism. Interest groups seek and succeed in influencing, to various degrees, major business decisions. Stakeholder theories attempt to describe and explain these pressures upon corporate decision making and their impact upon the business functions (Mellahi, 2003). Management has responded to these additional external pressures by expanding the locus of their goals and developing codes of ethics that are frequently reviewed and reinforced as a means to ensure ethical behavior throughout the organization (Singh, 2006; Pain et al., 2005; Somers, 2001).
Moreover, government is responding to social demands for greater corporate responsibility and accountability by increasing the breadth and depth of legislation. For example, in the corporate world, numerous laws and extensive government regulation affect virtually every aspect of business activities. They touch "almost every business decision ranging from the production of goods and services to their packaging, distribution, marketing and service" (Carroll, 1979). Gonzales-Benito (2006) provides an illustration on how these pressures can affect even logistics practices. The Sarbanes-Oxley act has made business officers personally responsible for the accuracy of financial statements of publicly held companies. In 2005, 8.5 percent of all U.S. companies restated their financial statements (Beal, 2006). The impact of this knowledge on managerial attitudes and behavior has been widely discussed and documented in both the popular and academic literature. Thus, not only are managers held responsible for maximizing profits for the owners and shareholders and for operating within the legal framework, they are also expected to support their employees' quality of work life, to demonstrate their concern for the communities within which their business operate, to minimize the impact of various hazards on the global environment and to engage in purely social or philanthropic endeavors.
Given the recent scandals within corporations and the increasing pressure for managers and organizations to become more socially and ethically responsible, this research paper examines the social responsibility orientations of varying types of organizational members. In specific, it compares the social responsibility orientations of managers at differing hierarchical levels with those of non-managers. It is hoped that the findings will shed light on how organizational members view corporate social responsibility.
Literature Review
Within the academic community, the notion that business firms should be attentive to the needs of a diverse group of constituents having a claim on the organization has been the subject of vigorous discussion and investigation for over two decades. The debate ranges from the strict interpretation of corporate social responsibility best exemplified by Friedman's (1970) argument that the sole responsibility of business is profit maximization, to the broadest argument of stakeholder analysis (Steurer, 2006). Business educators have attempted to address this issue by discussing social and ethical issues in business ethics or business-and-society courses, or by infusing these subjects throughout the business school curriculum (Malone, 2006).
Among researchers, this issue has provoked an especially rich and diverse literature investigating the role of business in society. Indeed, the Academy of Management has long established a separate division to address this issue. Research in this area has followed a multitude of major streams. The most popular of these studies have focused on the relationship between a firm's social responsibility and its financial performance (Berman, 1999; Dooley, 1994; McGuire et al., 1988; Aupperle et al., 1985; Ullman, 1985; Moskowitz, 1972; Preston 1997; Riahi-Belkaui, 1991). The number of these studies has been sufficient enough in recent years to allow meta-analyses of the data. Such studies reveal positive relationships between the two constructs (Orlitzky, et al., 2003; Wu, 2006).
Another stream of research has examined the effect of board members' and managers' demographic and non-demographic characteristics on their individual corporate social responsiveness orientation. The results show that demographic characteristics play a differentiating role in the social responsibility profile of individuals (Ibrahim and Angelidis, 2003; Singhapakdi et al., 2001). For example, Quasi (2003) surveyed the CEOs of all the food and textile sectors in Sydney, Australia. His questionnaire included 25 attitudinal variables referring to corporate social responsibility and demographics of managers. One hundred and two responses were analyzed. A factor analysis revealed that CEOs who are highly educated tend to possess higher levels of understanding of the link between corporate social responsibility and regulation. At the same time, these CEOs are less likely to perceive business's social involvement as a costly endeavor.
Anisya et al. (1994) examined the 305 corporations listed in Fortune's (1989) survey of America's most admired corporations. They found that firms with a high corporate social profile had executives with a high corporate social profile had executives with a background in marketing or sales, while companies with a low corporate social profile had executives with a background in engineering or manufacturing. In addition, firms whose executives had a long tenure in the firm and those whose executives had a long tenure in top management had a high corporate social profile. When Petrick and Scherer (1993) surveyed 111 managers, they found that functional background makes a difference in the social responsibility values of managers. Specifically, managers of accounting/finance departments had the highest scores on the economic components of social responsibility. However, not all research concurs. Bigel (1998), for example, examined the ethical orientation of financial planners and found that established planners with 10 or more years experience had a significantly lower ethical orientation than experienced planners with five to 10 years experience.
Several studies have differentiated managers based on their position in the organizational hierarchy. Harris (1990), for example, surveyed 148 employees at different levels within the same organization. He found senior managers were significantly less tolerant of fraudulent practices than others in the organization and that first-level managers were less tolerant of behaviors related to self-interest. Marz and Powers (2003) surveyed 112 employees of the Berlin office of a large international audit and consulting firm. They found that low-level managers exhibited higher levels of social orientation than their mid-level counterparts.
In addition, Forte (2007) examined 214 managers and found a significant relationship between management level and organizational ethical climate. In specific, her findings support the theory that top management sets the ethical tone for an organization. However, she did not find significant differences between management level and the moral reasoning of individual managers.
Petrick et al. (1994) examined the descriptive and normative responses on social responsibility of 80 managers from a variety of businesses in a U.S. city. The researchers asked what the subjects thought their organization was doing in every social responsibility dimension (descriptive) and then asked them what their organization should be doing in the same social dimension (normative). The findings indicate that top management perceived economic considerations to be of less importance than where their organization should be and that their organization was less law abiding compared to the lower level managers. Lower level managers perceived that their organization was not placing any emphasis on the philanthropic component of social responsibility.
Methodology
Overall, then, there are indications that the hierarchical level a person occupies in his or her organization may influence his or her view of corporate social responsibility. However, the findings have been somewhat inconsistent, so the nature of the relationship is still unclear. Consequently, this study attempts to answer two questions. First, does the hierarchical position a person holds within an organization affect his or her social responsibility orientation? Because there has been mixed evidence, with some studies showing a difference and others not, the following hypothesis is being tested:
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