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GOMXXX10.1177/1059601115590320Group & Organization ManagementGhobadian et al.


Corporate Responsibility

Group & Organization Management

2015, Vol. 40(3) 271294
The Author(s) 2015
Reprints and permissions:
DOI: 10.1177/1059601115590320

Abby Ghobadian1, Kevin Money1,

and Carola Hillenbrand1

The concept of corporate responsibility (CR) has moved a long way over
the past six decades, since Bowens book titled Social Responsibilities of the
Businessman marked a modern era of business and society research. In this
article, we trace the development of business and society literature to provide
contextual background to contemporary studies of CR. As well as looking
backward, however, we also project forward arguing that fundamental changes
in the current business environment are likely to propel CR to new heights
in the future. In particular, we explore the mechanisms by which CR affects
stakeholder behavior and suggest ways in which scholars and practitioners
may want to apply advances from psychology to link CR strategy to human
motivation and the notion of balance in organizations and society.
corporate responsibility, stakeholders, sustainability, relationships, strategy

Corporate responsibility (CR) and its related terms and concepts have
received significant attention in management theory and practice (Aguinis &
Glavas, 2012; Basu & Palazzo, 2008; Godfrey & Hatch, 2007; Matten &


Business School, University of Reading, UK

Corresponding Author:
Carola Hillenbrand, Henley Business School, Henley-on-Thames, Greenlands, RG9 3AU,
Oxfordshire, UK.

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Crane, 2005). The fundamental thesis of the CR constructthat corporations

are responsible toward a number of constituentscontinues to intrigue, challenge, and divide scholars and practitioners alike (Doh & Guay, 2006; Matten
& Moon, 2008). In the academic literature, CR has often been explicitly
embedded in the context of stakeholder relationship research as a means to
define and measure its nature, relevance, and impact (Clarkson, 1995;
Freeman, Wicks, & Parmar, 2004; Laplume, Sonpar, & Litz, 2008; Peloza &
Shang, 2011). In practice, CR has proven to be of significant interest to organizations of all kinds (commercial, not-for-profit, public), as well as communities and policy makers (Burn-Callander, 2015; Cameron, 2012; Jones,
2012). Recent years, however, have witnessed significant changes in the
business environment relevant to the CR debate, some of which relate to
1. The widespread availability and easy accessibility of information
combined with instantaneous connectivity between large numbers of
individuals across geographic boundaries, which has rendered the
contemporary business landscape increasingly transparent. Hence,
pressure has been mounting for businesses to articulate their vision,
values, and policies related to CR and demonstrate accountability in
their practices (Fernandez-Feijoo, Romero, & Ruiz, 2014; Harjoto &
Jo, 2014)
2. An increasing disparity between governments and large businesses,
in which governments encounter more and more constraints while
businesses become increasingly powerful. The 2008 global recession
left many governments facing serious limitations in financing public
services and in addressing big issues of our time. In the meantime,
multinational corporations, through their subsidiaries and supply
chains, can sometimes reach parts of the world better than governments can and could be in a position to address global issues, such as
food and water security, social justice and equality, and the preservation of natural resources (Austin & Seitanidi, 2012; Brammer,
Jackson, & Matten, 2012; Scherer & Palazzo, 2011). Progressive corporations, such as Unilever, Interface, and Pacific Market International,
have been recognized through CR awards for their efforts in developing sustainable business strategies. Paul Polman, CEO of Unilever,
recently claimed that
it will take a $90trillion (59trillion) investment in infrastructure over 15 years
to build a sustainable economy to fight global warming. Companies make up
60pc of the global economy. If they dont play an active part, how can we solve
this crisis? (Burn-Callander, 2015)

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3. Issues such as population growth and climate change are no longer

contested by mainstream academics, politicians, and practitioners.
This has caused a shift in mind-set away from the science of proving
business impacts to a mind-set seeking solutions and challenging
paradigms relating to more sustainable business models and responsible consumption (Leach et al., 2012). Approaches such as social
entrepreneurship and base of the pyramid (BoP) business (Ansari,
Munir, & Gregg, 2012; Arend, 2013), as well as advances in the field
of psychology and behavior prediction (Lawrence, 2010; Seligman,
2012), allow CR to be understood as a function of human motivation
and behavior rather than in terms of organizational outputs. It is therefore our contention that future research into CR will focus more on
the human causes and outcomes of sustainable/unsustainable behavior, rather than organizational drivers (Lawrence, 2010). Practitioners
are recognizing that it is through stakeholder behavior that organizations generate impacts and that stakeholders are complex individuals
who engage with a wide range of organizations in often diverse roles
(Amit, Zott, & Pearson, 2012; Littlewood, 2014; Porter & Kramer,
2011). Indeed, policy makers, governments, and businesses realize
increasingly that a wide range of outcomes relating to human resilience, environmental stewardship, and societal well-being can only
be achieved if organizations of all kinds work with and through stakeholders, in terms of psychological drivers of human behavior and
behavior change rather than through a narrow lens of organizational
outputs (Money, Pain, & Hillenbrand, 2015).
This article sets out to review the past and current state of the CR literature, before outlining an area of future research that offers much promise. Our
article is structured in three sections: First, a historical review of the business
and society literature is provided, to offer background and context to the
study of CR. Second, current literature is reviewed with a focus on six key
articles that shed light on the mechanisms by which CR can achieve positive
impacts and outcomes at the stakeholder level. Finally, emerging trends in
business and society are explored with a particular focus on future research
and how advances in psychology can contribute to the study of CR.

Historic Perspective: Context and Background to

the Study of CR
The evolution of key terms and concepts relating to CR is displayed chronologically in Figure 1, as a way of demonstrating the development of thinking

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Key Influences from Related Disciplines,

Publications, and Events

Evolution of Key Literature in Business and Society

References to social duties of business people
(e.g., Barnard, 1938; Dodd, 1932)


Social Responsibilities of the Businessman
(Bowen, 1953)
Corporate social responsibility (e.g., Eells
& Walton, 1961; Elbing & Elbing, 1964)
Responsibility to society (e.g., Davis &
Blomstrom, 1975; McGuire, 1963)


The Wealth of Nations (Smith, 1776a)

Theory of Moral Sentiments (Smith, 1776b)
Scientism and the Study of Society
(Hayek, 1944)

Critique of the CSR concept, Capitalism and

Freedom (Friedman, 1962)



Corporate social responsiveness (e.g.,

Ackerman, 1975; Sethi, 1975)
Public responsibility (e.g., Buchholz, 1977;
Preston & Post, 1975 and 1981)

Corporate social performance (e.g., Carroll,

1979; Wartick & Cochran, 1985; Wood, 1991)
Corporate social rectitude (e.g., Frederick, 1987)



Stakeholder theory (Freeman, 1984)


Sustainability (e.g., Hart, 1997; Zadek, 2004)

Corporate citizenship (e.g., Marsden & Andriof,

1998; Matten & Crane, 2005)
Corporate responsibility (e.g., MacMillan, Money,
Downing, & Hillenbrand, 2004; Waddock, 2004)
Global responsibility (Berthoin-Antal & Sobczak, 2004)
Global business citizenship (e.g., Wood, Logsdon,
Lewellyn, & Davenport, 2006)

2010 onwards
Social entrepreneurship (e.g., Arend, 2013; Dacin, Dacin, &
Tracey, 2011; Pless, 2012)
Shared value/hybrid organizations (e.g., Porter and Kramer, 2011)
Base of the pyramid (e.g., Ansari, Munir, & Gregg, 2012; Kolk,
Rivera-Santos, & Rufn, 2014)

Multiple-constituency approach
(Connolly, Conlon & Deutsch, 1980)



Report on sustainable development (World

Commission on Environment & Development, 1987)
Research on social capital (e.g., Nahapiet &
Ghoshal, 1998; Putnam, 1993)
Reputation research (Fombrun, 1996)
Triple bottom line of responsibility
(Elkington, 1997)
Corporate scandals and collapses (e.g., Enron in
2001 and WorldCom in 2002)
Development of reporting guidelines (e.g., Global
Reporting Initiative (GRI), Dow Jones Sustainability
Indices; UN Global Compact)
Financial crisis, global recession (2008)
Non-market strategy approach (e.g., Henisz &
Zelner, 2012; Lawton & Rajwani, 2015)
Psychological approach to CR: CR as a function of
human motivation and a process rather than in
terms of corporate outcomes (Money, Pain, &
Hillenbrand, 2015)

Figure 1. Timeline of CR research.

Note. CR = corporate responsibility; CSR = corporate social responsibility.

over critical time periods. The time periods 1950-1970, 1970-1990, 19902010, and 2010 onward represent milestones of important conceptual developments in the field.

Time Period 1950-1970

The book Social Responsibilities of the Businessman by Bowen (1953) is
known as the first definite book on the subject of corporate social responsibility (CSR), marking a modern era of research. Bowen (1953) poses a number
of key questions that predicted much of the research that followed on, such as
What responsibilities to society may businessmen reasonably be expected to
assume? . . . What tangible benefits might result if the concern of many
businessmen about the social implications of their work were spread widely
throughout the business structure? (pp. 3-5)

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Interestingly, these questions are still critical today.

Following Bowen (1953), CR became an important academic concern.
The discussion around business responsibilities spread widely from a focus
on economic responsibilities (e.g., M. Friedman, 1962; Hayek, 1944; Levitt,
1958), responsibilities toward society (e.g., Davis, 1973; McGuire, 1963),
concerns for ethical issues (e.g., Eells & Walton, 1961), and voluntary and
philanthropic activities of business (e.g., Manne & Wallich, 1972; Steiner,
1972). The idea of CR in these early developments was often based on two
fundamental premises. The first related to a social contract between business
and society as an implied set of rights and obligations, sometimes referred to
as social contract theory (e.g., Eells & Walton, 1961; Elbing & Elbing, 1964).
The second premise was that business has the ability to act as a moral agent
in society, reflecting and supporting values, sometimes referred to as moral
agency theory (e.g., French, 1979; Ozar, 1979).

Time Period 1970-1990

In the 1970s, the introduction of two new concepts helped move the academic
discussion of CR to a more proactive position with better-developed conceptualizations, namely, the concepts of public responsibility (i.e., a focus on
ways to implement findings from the early CSR debate into explicit public
policy processes; see, for example, Preston & Post, 1975) and corporate
social responsiveness (i.e., the capability and willingness of business to
respond to and anticipate various social and societal demands and pressures;
see, for example, Sethi, 1975). Although neither of these concepts lasted over
time, they influenced the development of the emerging concept of corporate
social performance (CSP) that dominated business and society literature in
the 1970s and 1980s.
The conceptual developments of CSP by Carroll (1979), Wartick and
Cochran (1985), and Wood (1991) mark significant milestones in business
and society literature. Carroll was the first to provide a multidimensional
model including four facets of responsibility: economic, legal, ethical, and
discretionary. Wartick and Cochran further enriched the debate through a
focus on the process of analysis to identify relevant issues. Wood then integrated process and content and moved the discussion forward toward a set of
principles of engagement. The advantages of the CSP concept over previous
concepts can be described as enhancing the development of ideas of social
responsibility, integrating responsibility, and responsiveness, allowing for a
more pragmatic orientation.
Although rich in detail, CSP frameworks were criticized for being difficult
to test empirically and a number of studies aiming to validate the different

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models obtained inconclusive results (e.g., Aupperle, 1984; Aupperle,

Carroll, & Hatfield, 1985; Clarkson, 1995). It has been suggested that this
inconclusiveness is due to a lack of clarity about the appropriate level of
analysis and a lack of precise definition of what the concept implies and for
whom (Clarkson, 1995; Wood & Jones, 1995). The debate moved subsequently to the level of stakeholders as recipients of corporate responsible and/
or irresponsible behaviors.

Time Period 1990-2010

From the 1990s onward, scholars explicitly called for the integration of stakeholders in theories and models. Wood and Jones (1995) were among the first to
comment on this need by explaining that the development of previous concepts
showed no differentiation among the interests, expectations, experiences, and
evaluations of stakeholders. They concluded that such differentiation is essential
if business and society theory is to continue to develop. As a result, the stakeholder literature became increasingly intertwined with business and society literature from the 1990s onward and has often been called the dominant paradigm
of research in the area of business and society (e.g., Andriof & Waddock, 2002;
Freeman, 2004; McWilliams & Siegel, 2001; Waddock, 2002).
Another criticism of earlier work refers to the term social in the use of
language prior to the 1990s, for example, corporate social responsibility, corporate social responsiveness, corporate social performance. Clarkson (1995)
suggests that much of the confusion and misunderstanding about the definition and meaning of these terms can be attributed to the inconclusive and
vague meaning of the word social. Scholars started to address these issues
from the 1990s onward by referring to concepts such as corporate citizenship
(Andriof & McIntosh, 2001; Matten & Crane, 2005; Wood & Logsdon,
2002), sustainability (Dunphy & Benn, 2003; Hart, 1997; Prahalad &
Hart, 2002; Zadek, 2002), and CR (e.g., Andriof & Waddock, 2002; Waddock,
2002). The introduction of these new terms and concepts broadened the
debate toward the end of the 20th century and the beginning of the new century, by reflecting that social obligations are too narrow to facilitate an effective analysis of business responsibilities, and by incorporating stakeholders
explicitly in the debate (Freeman et al., 2004).

Time Period 2010 Onward

Addressing some of the recent developments in the business environment
and societies around the world, which we briefly discussed in the introduction of this article, the last few years have seen a number of innovative

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CR-related ideas debated and implemented, such as shared value approaches

(Porter & Kramer, 2011), hybrid organizations (Billis, 2010), and BoP initiatives (Kolk, Rivera-Santos, & Rufn, 2014; London & Hart, 2011). For example, proponents of BoP initiatives aim to align business-oriented strategies
and growth with local community efforts to provide low-income consumers
with low-margin, low-cost products, in an effort to create a more inclusive
capitalism (London & Hart, 2011). The field of social entrepreneurship has
also risen dramatically since the millennium, with social entrepreneurs
attempting to further social, cultural, and environmental goals through innovative solutions to business and societal problems (Arend, 2013; RiveraSantos, Holt, Littlewood, & Kolk, 2015). As a prominent social entrepreneur,
Muhammad Yunus famously received the Nobel Peace Prize for his efforts in
pioneering microcredit in developing countries in Asia, Africa, and Latin
At the same time, however, the more traditional concepts of CR, corporate
citizenship, and sustainability have come to dominate not just business and
society literature but have also gained ground with practitioners and continue
to drive developments in business (Matten & Crane, 2005). What recent practitioner and academic discussions have in common is a focus on a wide range
of issues, inclusion of a wide group of stakeholders, and a desire to re-think
traditional ways of doing business. For example, Ban Ki-moon, the SecretaryGeneral of the United Nations, stated that Sustainable development is the
pathway to the future we want for all. It offers a framework to generate economic growth, achieve social justice, exercise environmental stewardship
and strengthen governance (United Nations, 2013).
Academically, CR is often used as a comprehensive term to describe a
variety of issues relating to the responsibilities of business (Hillenbrand,
Money, & Ghobadian, 2013). Waddock (2004), for example, defines CR as
the degree of (ir)responsibility manifested in a companys strategies and
operating practices as they impact stakeholders and the natural environment
day-to-day (p. 10). This practical and insightful definition highlights a key
characteristic of CR: It has an inclusive meaning that allows for and fosters
research into the nature of a wide range of organizational behaviors and their
impacts on stakeholders, and views CR not just as an outcome but as a process (Bhattacharya, Korschun, & Sen, 2009; Waddock, 2004), a theme repeatedly discussed in emerging findings in contemporary CR research.

Emerging Findings in Contemporary CR Research

As Lindgreen and Swaen (2010) discuss in the editorial to the special issue
on CSR in the International Journal of Management Reviews, business and

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society researchers have shifted from explicitly normative and ethics-oriented arguments to implicitly normative and performance-oriented managerial studies (p. 1). Indeed, much of the recent work on CR both in academia
and practice focuses on the outcomes associated with CR and CR-related
benefits for firms, such as employee well-being and motivation (e.g.,
Bhattacharya, Sen, & Korschun, 2008; Poposki, 2011; Van Mierlo, Rutte,
Kompier, & Doorewaard, 2005), or supportive consumer reactions
(Bhattacharya, Korschun, & Sen, 2009; Peloza & Shang, 2011). Although
this shift is useful, what is largely missing in the current literature is an analysis of the underlying processes by which CR affects business outcomes, or in
other words, an exploration of the mechanisms by which CR can achieve
positive impact and outcomes at a behavioral level within and between individuals, teams, groups, the organization, and stakeholders. Recently, theorists
have called to redress this balance by exploring how CR can affect performance through relational, reputational, identity, and group mechanisms
(Aguilera, Rupp, Williams, & Ganapathi, 2007; Basu & Palazzo, 2008;
Carvalho, Sen, de Oliveira Mota, & de Lima, 2010). Indeed, it is only with
the knowledge of how CR influences behavior and performance that theorists
and practitioners can make meaningful and impactful advancements
(Hillenbrand et al., 2013).
We therefore continue by summarizing six current studies brought together
to explore the mechanisms by which CR affects stakeholder behavior. The
first three studies explore the psychological factors that moderate and mediate the impact of CR on individuals in employee relationships. In the first
article, titled Building Employee Relationships Through CSR: The
Moderating Impact of Cynicism and Reward for Application, West,
Hillenbrand, and Money (2015) explore the moderating role of social axiomsthe deeply held individual beliefs about how concepts in the world are
relatedin explaining the impact of CR on employee commitment. The
authors explore why the same CR strategies and employee experiences sometimes lead to different outcomes for organizations in terms of employee attitudes and supportive behaviors. The authors find that high levels of cynicism
among employees reduce the impact of CR on positive employee attitudes
and supportive behaviors, whereas high levels of reward for application
increase the impact of CR on these outcomes. The social axiom construct is a
very useful one for theorists and practitioners alikebecause it explains why
employees may respond to the same strategies in different ways. Furthermore,
there are large databases providing information about the expression of social
axioms in different countries and cultures. In such a way, theorists and practitioners will be better equipped to predict how CR activities may affect
employee behaviors in different countries and cultures.

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In the second article titled Corporate Social Responsibility, Employee

Organizational Identification, and Creative Effort: The Moderating Impact of
Corporate Ability, Brammer, He, and Mellahi (2015) also explore a psychological moderating variable. The authors show that the impact of CR on
employee behavior is contingent upon the corporate ability of the organizationthat is, how good it is at delivering its core offerings. CR is found to have
a bigger impact on employees when an organization has a high level of corporate ability. So organizations are in danger of being seen as engaging in green
wash if they enter into CR activities without having important business fundamentals in place. The article is also valuable because it extends the range of
employee behaviors normally studied in relation to CR: It explores the impact
of CR on employees creative effort and finds that, under conditions of high
corporate ability, CR affects creative effort. It therefore sets the scene for future
researchers to explore a wider range of behaviors and moderators.
In the third article, Bruce, Brammer, and Millington (2015) use the concept of the psychological contract to understand the impact of CSP on
employee attitudes and behaviors. It distinguishes between internal and
external CSP and finds that both aspects affect employee notions of the psychological contract. This is important because it demonstrates that CSP can
affect employees not only directly through their own internal experiences but
also through observing the impact of CSP on stakeholders outside of their
organization. The mechanism uncovered here is similar to that of Banduras
(1991) social learning theory; as CR and CSP are often conceptualized as
multi-stakeholder concepts, it demonstrates that employee relations and
notions of the psychological contract are affected by an organizations relationships with multiple stakeholders.
These three articles have in common that they shift the focus away from
providing evidence about the inherent value of CR to providing solutions that
can help CR to have a more significant impact in a number of different circumstances and on actual behaviors of multiple stakeholders, including benefits that result from living in a more transparent and connected world.
The next three articles shift away from a primary focus on individual and
psychological mechanisms to explore organizational- and industry-level
mechanisms of stakeholderorganization relationships. In the fourth article,
titled Corporate Responsibility and Employee Relations: From External
Pressure to Action, Griffin, Bryant, and Koerber (2015) explore the impact
of peer engagement with CR, as well as contextual factors such as the nature
of capital intensity of an industry, the level of industry growth, industry differentiation, and industry concentration on the CR-related employee relationship strengths and weaknesses. The authors find that peer activity in CR plays
an important role in increasing employee relationship strengths and reducing

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weaknesses under all conditions. However, it also reveals some interesting

findings regarding the role of other factorsfor example, high levels of
industry growth decreased the likelihood of employee relationship strengths.
In summary, the article provides both theorists and practitioners with a guide
to where to expect the occurrence of CR-related activities and violations.
In that context, organizational trust is widely suggested as being important
for organizational success and is acknowledged to have a positive relationship with firm performance. In the fifth article, titled Toward a View of
Complementarity: Trust and Policy Influence Effects of Corporate Social
Responsibility and Corporate Political Activity, Liedong, Ghobadian,
Rajwani, and ORegan (2015) provide a conceptual exploration of the mechanism by which CR and corporate political activity (CPA) can enhance trust
among key stakeholders. They bring together two aspects of non-market
strategies: CR and CPA. The extant literature treats these facets independently and, moreover, most work in this area draws on instrumental theory.
Political activities are common in organizations, but their relation with CSR
has not been previously studied. The authors therefore provide a useful conceptual framework for future research, which jointly explores the impact of
CR and CPA on trust and models trust as an intermediate outcome of CPA and
CR, which can affect performance. The article contributes to the trust and
non-market strategy literature streams.
The final article, by Phillips, Lee, Ghobadian, ORegan, and James (2015),
is titled Social Innovation and Social Entrepreneurship: A Systematic
Review and provides alternative models by which the impact of CR on
stakeholder relationships can be defined. In this article, Phillips et al. argue
that much of the future impact of CR on stakeholders will happen through
social innovation and social entrepreneurship. It also argues that much of the
current discourse sees CR as a means to achieve financial success. It proposes
that social entrepreneurship is a useful model because it pursues CR as an
end, and financial success becomes the means through which this success is
achieved. It offers a new model of organization where social purpose is the
reason for the existence of organization. This is particularly important due to
the failure of current organizational models and offers an entirely different
organizational lens to that propagated by the economist.
These latter three articles have in common that they shed light on new and
innovative business models with the aim to influence both the practice of
organizations and the policies of governments. In line with the previous three
articles, they also shift the focus from proof of concept to providing potential
solutions, and as such are a useful source of innovation and challenge for
existing CR paradigms. All six articles reviewed here, therefore, begin to
address the trends we highlighted at the start of this article. The former set of

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three articles explores the psychological mechanisms that help to explain

stakeholder behavior in an increasingly fast-moving and transparent world.
The second set of articles provides a shift of paradigm by suggesting that new
and different business models could significantly enhance our understanding
of how CR may operate in the futureknowledge of potential value for
future research, policy, and practice. The six articles thus have in common
that they are starting to provide solutions to established CR-related issues by
better understanding the mechanisms by which CR can operate at the level of
stakeholder motivation and behavior in an increasingly complex, transparent,
and challenging business environment.

Future Trends in CR
At the start of this article, we illustrated developments of concepts in the
business and society literature since the 1950s before signposting contemporary studies that shed light on the mechanisms by which CR can affect stakeholder behavior. This recent work suggests that applying insights from
psychology to the study of CR aids the advancement of CR in both academia
and practice and we therefore conclude this review of CR research past
presentfuture by outlining how the inclusion of psychological theories
into the study and application of CR and its related concepts may help to
drive behavior change, both at an individual and organizational level.
Although we can only explore one idea in some depth in this final section of
our article, we realize that there are a number of current developments (some
of which are noted previously in the section titled Time Period 2010
Onwards) that hold significant promise for future research. To achieve this
promise, we encourage business and society researchers to follow two lines
of thinking in particular. First, we believe that it is critical that the CR debate
is connected more explicitly to the field of sustainability and strategy. This
will ensure that CR and its related concepts speak directly to a discourse that
is now mainstream in both the world of academia and practice. We warmly
welcome new approaches such as non-market strategy and social entrepreneurship, as well as approaches that decouple economic growth from consumption. Second, psychological theories of human behavior and motivation
may form the foundation of new CR theories rather than being seen as addons, albeit useful ones, to existing business and society theory. This will
ensure that CR and its impacts can be studied as a core driver in human activityand can build upon the considerable advances in the understanding of
human psychology. We go on to highlight one such theory of CR that we
believe illustrates such an approach and also holds potential for the development of sustainability thinking as it begins to address the three themes we

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highlighted at the start of this article: the issues of increasing transparency,

changing business models, and a focus on finding solutions rather than proof
of concept.

Psychological Advances in the Study of CR

Psychological approaches provide a critique and advancement of current
CR-related models, as they suggest that current thinking does not explore the
root cause of responsible/irresponsible and sustainable/unsustainable business activity, which they see to be human behavior (Aguinis & Glavas, 2013;
Grant, 2012). Building on psychological advances, Money et al. (2015) propose that economic, social, and environmental impacts of individuals, groups,
and organizations can be better understood if they are viewed in terms of
psychological mechanisms at the level of the individual who causes these
outcomes. As such, the authors see human nature as the cause of irresponsible
and responsible behavior as well as potential solution to the responsibility

Balance as a Metaphor for CR

A key tenet of the above idea is that issues related to the irresponsibility of
business often manifest as an imbalance between financial, social, and environmental dimensions of business performance, typically favoring financial
outcomes. The root cause of this imbalance at a societal level is seen to be a
psychological imbalance at an individual and relational level (Lewis, Amini,
& Lannon, 2000; Nohria, Broysberg, & Lee 2008; Van Lange, 2000). More
specifically, Money et al. (2015) identify three key aspects of imbalance at
the heart of a system that seems to favor financial performance at the expenses
of social and environmental factors.
1. An imbalance in human drives and motivations. Building on advances
in the field of human motivation (Lawrence, 2010; Lawrence &
Nohria, 2002), Money et al. (2015) extend and apply drive theory
to the field of responsibility. With the aid of neuro-scientific evidence,
Lawrence and Nohria (2002) argued that human beings are driven to
(a) acquire, that is, to gather material goods and status that commensurate with our aspirations; (b) bond, that is, to be part of a group that
cares for us and gives us identity; (c) comprehend, that is, to understand the world around us; and (d) defend, that is, to protect things
that are important to us. Although drive theory bears similarities to
Maslows (1943) hierarchy of needsit differs in one important

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wayeach of the four drives is seen to compete with the others for
dominance rather than build upon the achievement of the other.
Lawrence and Nohria (2002) provide compelling arguments for balancing these drives at the level of the individual by outlining the damage that can occur if one of these human drives becomes dominant.
Money et al. (2015) extend this theory by suggesting that human drives
function not only at the level of the individual but also at the level of societies, cultures, and organizations. An imbalance between human drives results
in pathologies and patterns of unsustainable/irresponsible behaviors. The
authors argue that the current lack of environmental and social responsibility
of businesses and societies is a direct result of an imbalance that favors the
drive to acquire (money, status, and possessions), a common feature of
Western society since the industrial revolution and a trend that is now also
common in the BRICS (Brazil, Russia, India, China, and South Africa) countries. To redress this imbalance, organizations are invited to leverage the
other drivers of human behavior: to defend the planet; to bond with other
people, that is, through responsible action; and to inform/educate others on
issues of responsibility.
2. An imbalance between focusing on positive and negative outcomes.
Building on the work by Seligman (2011, 2012) and Fredrickson
(2003), and their responses to a historical bias of psychology literature to focus on the prevention of a negative rather than creation of
a positive, Money et al. (2015) further the notion that the prevention of a negative is not the same as the creation of a positiveand
respond to Seligmans (2011, 2012) call for more research into human
flourishing. A key thesis being that as a species, humans are more
likely to achieve success if we study success and seek it out, rather
than trying to prevent failure (Catalino & Fredrickson, 2011;
Fredrickson & Losada, 2005). The authors extend this logic to the
development of a psychological response to responsibility, by contending that current CR models focus on symptoms rather than causes
and often focus on what people should not do (e.g., consume) rather
than what people can do; and, as such, are reactive rather than proactive and neglect the in-depth study of CR success stories.
Furthermore, the authors use Seligmans (2011, 2012) insights to adapt
Lawrence and Nohrias (2002) drive theory to the context of responsibility.
Seligman (2011, 2012) suggests that a balance of motivation and activities is
associated with human flourishing. Despite the different philosophical origins

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Group & Organization Management 40(3)

of the works by Lawrence and Nohria (2002) and Seligman (2011, 2012),
Money et al. (2015) see the practical implications of the work for business as
complementary rather than contradictory. In particular, the drive to comprehend can usefully be described as comprehending both the why and how
of responsibility. The authors label the why aspect of comprehending as a
drive for meaning, which, building on Seligman (2011, 2012), is a desire for
a purpose bigger than the self. The how of comprehending is labeled by the
authors as a drive for learning, that is, essentially a desire to understand
how things work and how responsibility targets can be achieved.
3. An imbalance between public and private identities. Finally, close
alignment of internal (more private) and external (more public)
aspects of human identity has been associated with functional behaviors of individualswhile imbalance and misalignment has often be
associated with dysfunctional behaviors (Lawrence, 2010; Van Lange,
2000). Overconsumption can be viewed as a function of an imbalance, where the purchase of material goods and status is used to compensate for misalignments at other levels of identity. To achieve
alignment of layers of self (Hillenbrand & Money, 2015; Lewis et al.,
2000), individuals may want to cultivate a positive view of their core
selfin which a purpose or meaning is sought that is greater than
their own success and consumptionand live out such a meaning
through internal as well as external aspects of identity. This resonates
with Seligmans (2011) notion of a lived purpose and is expressed in
a social process of witnessing and sharing that is key to the development of a functional self. Such a process invites individuals to share
their (mis)alignments in a culture of acceptance and to be seen and
accepted for who they really are (Lewis et al., 2000).
Applying this logic to the field of CR, Money et al. (2015) suggest that
organizations can help to create a culture of sharing between individuals
regarding responsible behavior. Rather than framing CR as a should or
ideal state, organizations are encouraged to allow stakeholders to share
their experiences of responsible behavior, thereby connecting identities to a
core sense of self, rather than at a surface level.
At an organizational level, businesses could embrace the balancing of
internal and external worlds through the use of a process. The RELATE
Process (Money, Hillenbrand, Hunter, & Money, 2012), shown in Figure 2,
invites organizations to reflect on gaps between their values, behaviors, and
stakeholder expectations; and through this process to share their stories. In
this way, CR at an organizational level may be seen as a process by which an

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Ghobadian et al.

1. Scoping issue and

stakeholder mapping
6. Measure and
Measure the behavioral and
attitudinal impact of actions taken
at stage 5. Revisit leaders and
stakeholders, who have
experienced the actions engaged
in, develop joint communications
to tell the story of the CR process
and find solutions to the CR issue
that balance multiple needs.

5. Balance the needs of business and

stakeholders through strategic action
that links to human motivation
Prioritize organizational actions that enhance
stakeholder support, reinforce organizational
values, and are seen as responsible by
stakeholders and the business.
Strategic actions that relates to human
motivation may consider an organizations role
(1) provider of quality products (acquiring),
(2) defender of what is important to people
(3) facilitator of conversations and communities
(4) educator in the space of sustainable
consumption and wellbeing (learning) and
(5) co-creator of purpose (meaning).

What are the current CR-related

issues in the organization? Which
stakeholders can particularly
affect or be affected by the

CR as a process:
stakeholder and
business needs
4. Gap analysis
Identify gaps between what the
organization currently does and what
stakeholders want from the organization.
Identify gaps between the actions of the
organization and the actions that will
balance the needs of multiple players. Do
stakeholders have different and competing
motivations and expectations of the
organization? Are there gaps between the
current situation and organizational
values and purpose?

2. Understanding the business

Engaging with senior leaders: What
are the values/purpose of the
organization? How are values/purpose
guiding business behavior in relation
to this issue? Are values fit for
purpose? Are there gaps between the
values and behaviors of the
organization? How should
values/purpose guide behaviors in the
future? What behaviors would leaders
like from stakeholders in the future?

3. Understanding stakeholder
Investigate how stakeholders currently
experience the organization and perceive
the issue. What are stakeholder
expectations regarding the organization
and CR issue? Are stakeholders
supportive of the organization? What are
motivations underlying stakeholder
behavior (e.g. in terms of drive to bond,
acquire, defend, learn and find
meaning)? Identify organizational
actions that are viewed by stakeholders
as responsible and will bring about
stakeholder support.

Figure 2. RELATE process.

Source. Adapted from Money, Hillenbrand, Hunter, and Money (2012).

organization achieves a balance between the often competing needs of itself

and its stakeholders. Viewing CR as a process rather than an outcome provides a number of benefits that are akin to those associated with personal
growth and reflection as part of a functional society: It allows academics and
organizations to view CR as a dynamic and ongoing process that requires
action, reflection, and feedbackand by its nature will modify and balance
the actions and communications of the organizationin a symbiotic relationship with its stakeholders. Stakeholders may then, in turn, modify their attitudes, and behaviors as a result of this process, which is addressing issues of
increased transparency and changing business models by providing a dynamic
process-based solution.

Toward a Psychology-Based Model of CR

Applying advances in psychology to the study of CR invites organizations to
reframe the purpose of business to act to promote sustainable growth. The
Money et al. (2015) psychological approach to CR contends that this can be
achieved if organizations play an active part in restoring and maintaining a

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Group & Organization Management 40(3)

healthy balance among the drives in our societies. In this way, business can
provide an antidote to the excess of imbalance that has occurred through recent
human history. If organizations are to embrace a wider sense of humanity, they
will have a wider set of levers to encourage stakeholder support. At the same
time, businesses can view a wider range of stakeholder behaviors as indicators
of success. Organizations are invited to think of CR in terms of the role that
they play in society by balancing five key dimensions outlined by Money et al.
(2015) as (a) provider of quality products (acquiring), (b) defender of what is
important to people (defending), (c) facilitator of conversations and communities (bonding), (d) educator in the space of sustainable consumption and wellbeing (learning), and (e) co-creator of purpose (meaning).
Importantly, these dimensions, when in balance, could be of considerable
benefit to society and alleviate some of the pressing problems humanity faces
now and in the future. International business, we argue, has the scale, crossboundary geographic reach, and engagement with mass populations of
employees, consumers, and other stakeholders to restore the balance in our
societies and have a positive impact on the world and how it consumes
resources. Through such a process, organizations can focus on the causes of
sustainable and unsustainable behavior, rather than reducing the symptoms as
many mainstream sustainability initiatives do at the moment. In essence, the
authors propose a new business model that suggests that the purpose of business could be to restore balance at an intrapersonal, interpersonal, and societal level.

In this article, we review past and contemporary CR research and also illustrate what we see as one fruitful avenue for future research. Past research has
achieved much by defining and measuring the concepts related to CRand
has frequently promoted the notions of CR, sustainability, and corporate citizenship, rather than social aspects of CR, as the vehicle by which responsibility can affect mainstream academia and practice. Contemporary studies often
focus on understanding the contingencies related to CR: Does CR lead to
positive outcomes? Why does CR sometimes lead to negative outcomes?
And under what conditions, cultures, or circumstances are these outcomes
most likely? To explore these contingencies, current studies increasingly
incorporate psychological concepts, such as social learning theory, social axioms, and social identity theory to understand the mechanisms by which theories of CR operate in stakeholder relationships. In the future, we encourage
researchers to build on a changing public mind-set that no longer challenges
issues such as population growth and climate changeand instead invites

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Ghobadian et al.

researchers to provide new theories and models of business that link CR

directly to human behavior, strategy, and sustainability. Approaches that provide new thinking on the purpose of business (such as BoP approaches, nonmarket strategy, and social entrepreneurship) are warmly encouraged. This
article concludes by providing an example of one such theory that uses
advances from psychology to invite the readers to view CR and the purpose
of business in terms of the processes, relationships, and motivations that are
associated with human flourishing and societal well-being, rather than conventional business success.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research,
authorship, and/or publication of this article.

The author(s) received no financial support for the research, authorship, and/or publication of this article.

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Author Biographies
Abby Ghobadian is Professor of Organisational Performance and Head ofLeadership,
Organisations and Behaviour at Henley Business School at the University of Reading.
Abby is vice-president of the British Academy of Management (BAM), chairs its
research and development committee and is a founding editor of the Business Strategy
and Management Journal.

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Group & Organization Management 40(3)

Kevin Money is Professor for Reputation and Responsible Leadership and Director
of the John Madejski Centre for Reputation at Henley Business School. Kevin is also
the Director of the Positive Psychology Forum, which aims to apply advances from
psychology to improve the relationships between business and society. He is the former Editor of the Journal of General Management and has published in outlets such
as the Journal of Business Research, the Journal of Business Ethics and the British
Journal of Management.
Carola Hillenbrand is Professor of Organizational Psychology and Postgraduate
Research Director at Henley Business School. She has published in academic outlets
such as the Journal of Business Ethics, British Journal of Management and Long
Range Planning and acts as an adviser to organizations on issues of responsibility,
reputation and stakeholder behaviour.

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