Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/287113 
Year of Publication: 
2021
Citation: 
[Journal:] Journal of Business Ethics [ISSN:] 1573-0697 [Volume:] 176 [Issue:] 4 [Publisher:] Springer Netherlands [Place:] Dordrecht [Year:] 2021 [Pages:] 689-704
Publisher: 
Springer Netherlands, Dordrecht
Abstract: 
Formal control systems are a common instrument to align employees' interests with those of managers and companies. However, research shows that employees perceive formal controls as a sign of distrust and restraint, which can lead to costs of control in the form of lower employee cooperation and effort (e.g., Falk and Kosfeld 2006; Christ 2013). We propose that charitable giving reduces these costs of control. We draw on the halo effect and propose that corporate charitable giving alters employees' perception of and reaction to formal controls. In a laboratory experiment, we find that charitable giving by a company creates a higher level of employee trust in a manager who decides to implement a control and a more positive assessment of formal control. These positive effects of charitable giving lead to lower costs of control compared to the absence of charitable giving. We thereby provide an example of how charitable giving as a corporate social responsibility (CSR) activity yields positive benefits by altering the behavior of internal company stakeholders.
Subjects: 
Corporate charitable giving
Halo effect
Costs of controls
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.