The Impact of Corporate Social Responsibility on the Innovation Climate

Abstract

Research was supported by ETF grant 7537

The purpose of this paper is to investigate connections between innovation climate and corporate social responsibility (CSR). The survey was conducted in Estonian, Chinese, Japanese, Russian, Slovakian, Czech, Finnish and German electric-electronic machine, retail store and machine-building enterprises.
The Schumpeterian definition (Shumpeter, 1934) of innovation states that the commercialization of all new combinations is based upon the application of any of the following: new materials and components, the introduction of new processes, the opening of new markets, and the introduction of new organizational forms. According to Janszen (2000) when a change in technology is involved it is termed an "invention" and when the business world is involved, it is an "innovation" (Janszen, 2000).

Different organizations have different definitions about CSR, but there is similar ground between them (Übius & Alas 2009; Tafel-Viia & Alas 2009). Today leaders face a challenge in order to apply societal ethical standards to responsible business practice (Morimoto et al., 2005) during changes triggered by changing environment (Alas 2008; Alas et al 2009a; Alas et al 2009b; Alas et al 2010; Sepper & Alas 2008) and taking place in different cultures (Alas & Edwards 2011; Alas et al 2011). Corporate social responsibility is regarded as a crucially important issue in management nowadays (Cornelius et al., 2008; Humphreys & Brown, 2008).

The previous research study’s findings of no significant differences by the entrepreneur’s gender in venture innovation/risk situation, in strategies employed, and in satisfaction with performance support other recent research studies (Sonfield & Lussier, 1997).

Recent evidences showed that the relationship between organizational commitment and discretionary measures of corporate social orientation is stronger for women than for men (Peterson, 2004) and that corporate charitable behavior, which is considered to be discretionary (Carroll, 1979) is viewed more favorably by women than men (Roberts, 1993).

Linear regression analysis was done in order to analyze connections between innovation climate and corporate social responsibility. Data about three different age groups, two different genders and two different education levels were compared by means of the T-test and ANOVA-test. The total number of respondents was 6094.

The results of an empirical study show that corporate social responsibility predicts innovation climate but it depends on the employees` gender, age and education level. From this study corporate social responsibility predicts innovation climate among younger and middle age groups. One facet of corporate social responsibility – the firm performance concerning social issues predicts innovation climate among older age group. Corporate social responsibility predicts also innovation climate among men. Corporate social responsibility predicts innovation climate among respondents with high level of education. One facet of corporate social responsibility - the firm performance concerning social issues predicts innovation climate among respondents with low level of education.

Both facets of corporate social responsibility and innovation climate were rated higher among women and lower among men. Both facets of corporate social responsibility and innovation climate were rated higher among younger age group and lower among middle and older age group. There weren’t big differences among respondents with low and high levels of education according to the two facets of corporate social responsibility - the firm performance concerning social issues and the firm respects the interests of agents and innovation climate.

DOI: http://dx.doi.org/10.5755/j01.ee.23.3.1935