CSR's Impact on Employee Motivation
CSR's Impact on Employee Motivation
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Introduction
1. Theoretical development
Although CSR is a relatively new area of academic research [Crane et al. 2008],
the recent concern about CSR in academic and practitioner debates reflects that
CSR knowledge is a rapidly evolving stage of development [Lockett et al. 2006,
p. 133]. Economic and management gurus emphasize the necessity and emergence
of CSR [e.g., Carroll & Bucholtz 2003; Chandler 1977; Dunning 2003; Friedman
1970; Porter & Kramer 2002, 2006]. This current stream has spawned numerous
CSR-related research studies with the attention to environment, civil society and
government across the globe.
The CSR debate has two folds. First, CSR has been predominately discussed with
the idea of the Freeman-Friedman twist. Friedman [1970] proposes the idea of max-
imizing profit for the stockholders and strongly argues that the social responsibil-
ity of business is to increase its profits. Whereas, Freeman [1984, 1999] argues that
a firm must satisfy various stakeholders including employees, government and civil
society, going beyond satisfying the shareholders as increasingly firms seek legiti-
macy and recognition in wider society. Second, CSR has been promoted as having
strategic value for firms [Branco & Rodrigues 2006; Porter & Kramer 2006], and
the case for incorporating an awareness of social and political trends into corporate
strategy has become widely accepted. As there is a growing recognition of the need
to address the concerns of a wider range of stakeholders, scholars argue that CSR
is becoming increasingly important to competitive success [Reich 2007; Porter &
Kramer 2006], and that it should be a considered as a form of strategic investment
[McWilliams et al. 2006].
While we highlight the development of the contemporary CSR research area,
we identify a gap in the research in this area. The notion of the significance of the
employee is conspicuously absent from theoretical and empirical debate and it
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has been raised only recently and briefly [Boddy et al. 2010; De Cieri et al. 2005,
p. 99; Matten et al. 2003; Pinnington et al. 2007]. On the other hand, there has
been a significant amount of research on external stakeholder values: for exam-
ple, in the views of social contribution [Brammer & Millington 2004; Ohreen &
Petry 2011], PR/advertising [Amazeen 2010; Reich 2007, p. 170] and crisis/risk
management [Bauman 2011; Francis & Armstrong 2003]. This paper recognizes
the missing employee in the debate and, therefore, seeks to place employees within
the CSR frame by investigating how CSR works internally in organizations, focus-
ing on employee motivation.
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1.3. Divergence of people, CSR and motivation
As people have different individual needs [Deci 1975; Katz & Kahnm 1978] and
different environments and situations affect people [David-Blake & Pfeffer 1989;
Skinner 1969; Zucker 1983], the understanding of this complex context and their
interaction is critical to understanding motivation [Mitchell & James 1989]. Anglo-
Saxon countries lead much of the motivation research, and therefore the discussion
is not sufficiently broad enough in coverage to be used in a multi-national (let alone
global) setting, which means these theories do not necessarily apply in different
institutional arrangements [Gunkel 2006]. With deeper examination, we find that
drivers of motivation vary significantly due to a range of institutional factors (e.g.
‘culture’ which affects work-related values of human beings [Hofstede 1982, 1983],
‘societal norms’ which may predict attitudes and aspects of performance that re-
flect intrinsic motivation [Peterson & Ruiz-Quintanilla 2003], and ‘settings of po-
litical economy’ which introduce diverse perspectives of motivating people [Hall &
Soskice 2001]). Therefore, it is necessary to investigate different institutional drivers
for employee motivation in relation to CSR.
CSR performs within the diversity of organizational forms within different insti-
tutional settings and political economies, and hence it contributes to the different
motivational factors of employees. For instance, we highlight big differences in the
institutional framework between liberal market economies (LMEs such as America
and the UK) and coordinated market economies (CMEs such as Germany). Hall
and Soskice argue [2001, pp. 8–15] that in LMEs’ firms and people have a tenden-
1) Where is role of
employee in CSR?
CSR
10
cy to coordinate their activities primarily via hierarchies and competitive market
arrangements, whereas, CMEs’ actions depend more heavily on non-market rela-
tionships. Therefore, in LMEs, people tend to be motivated by professional and in-
dividualistic incentives such as personal reputation and disciplinary networking. In
CMEs, by contrast, people are less directly exposed to markets and better pay is rarely
a motivation to change jobs when pay is regulated by central collective agreements.
Overall, our knowledge to date predicts that the impact of CSR on employee
motivation will reflect different approaches depending upon nations’ institutional
settings. From this approach we can build a conceptual flow of the paper and three
research questions: 1) Where is the role of the employee in CSR?; 2) How and to
what extent does CSR affect employee motivation?; and 3) Can we shed light on the
dynamics of CSR-motivation link in a comparative context? (see Figure 1). Our re-
search suggests a more complex and interactive picture of the CSR-motivation in-
tegration within the context of Korea and the UK.
2. Method
We collected the data using multiple methods. The major source of data came from
in-depth semi structured interviews from May 2005 through April 2008. We have,
in total, 53 interviewees: 25 from the UK and 28 from Korea consisting of CSR/
HRM managers, high-ranking officials who decide (international) strategy of the
firm and stakeholders including NGOs, related government officials and academ-
ics who have specialist knowledge in the research area. Participation and observa-
tion were also key methods of collecting data allowing us to act as “insider” to the
research situation. The lead researcher acted as a high level consultant in the CSR
field and facilitated the sharing with interviewees in advance of the formal inter-
view. For example, the lead researcher organized the Korean CSR delegation’s visits
to the UK and vice-versa; prepared speeches on UK CSR to Korean CSR practition-
ers and NGOs; and prepared reports on UK CSR streams for Korean government
projects. Further, we accomplished a broad range of interactive communications
with scholars and practitioners in the UK, Korea and US in relation to theoretical
and empirical investigation throughout the research period.
In addition, we joined various academic and practitioner training programs on
CSR and HRM and also participated in CSR and HRM-related conferences in order
to remain up to date with the main global stream of CSR during this 3-year pro-
ject. CSR issues tend to change according to social and institutional demands such
as the political, economic and community environments of the time. Therefore, we
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note that updating the stream is critical in this research. We carried out these ac-
tivities in both in the UK and Korea alike since we realized that an ‘equivalence in
data collection procedure’ is crucial for the accomplishment of this national-com-
parative research.
Investigators need to know how to carry out the full variety of data collection
techniques [Yin 2003a, 2003b]. Such a comprehensive approach to data collection
helps us to better understand the perspectives of interviewees and hence create
a highly interactive environment in which the research takes place [Morita 2004].
Therefore, it contributes to the authors being able to pull out reflective and holistic
ideas according to the CSR development process, which seldom happens in gen-
eral survey research.
3. Findings
In this section, we examine the relationship between CSR and motivation by high-
lighting some key findings based on our comparative empirical data. We confirm
that it is seldom the case that businesses initiate CSR mainly because of facilitating
employee motivation. Rather, CEO’s personal philosophy and external factors (e.g.
NGOs and host government pressure, PR effect, tax benefit and show-up) are the
main drivers of CSR. However, our provocative finding is that when the businesses
‘assess’ the results of CSR, employee motivation emerges as a major outcome/influ-
ence of CSR to organizations. Further, we highlight a sharply contrasting approach
of CSR’s impact on employee motivation between the countries.
Why employee in CSR and what inspires employees in their work? In the literature
review, we propose to draw on 1) Stakeholder Theory which argues employee as one
of important stakeholders and 2) three-clustered causes of motivation − McClelland’s
[1961] idea of motivation; namely the need for achievement, affiliation, and power
− for empirical analysis.
There is considerable empirical support for the argument that CSR motivates em-
ployees in their work in various ways. The result of one respected survey [KPMG
2005] reinforces the argument that employee motivation is one of the top business
drivers of CSR. The Edinburgh Perspective (2005) reveals that the major role of
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CSR is to foster the employee’s empowerment. The data supports the argument of
scholars that employee motivation and CSR can be linked [e.g., Basil & Weber 2006;
Zappala 2004]. In order to examine the details in greater depth, we divide apparent
motivation-related dimensions of CSR into McClelland’s three motivational causes:
achievement, affiliation and power.
Achievement. Most of all, CSR develops an employee’s achievement needs and hence
motivates the employee to work. Achievement is related to an individual’s respon-
sibility for performing to expectations and pursuing efficiency [McClelland 1961].
Various themes emerge in a consideration of this area of thought: employees’ pur-
suit of pride, loyalty, fun and happiness, and learning and development. There ap-
pear to be several significant factors related to achievement. Among them, ‘pride’
and ‘loyalty’ are the most vigorously discussed themes in this cluster. Following
them, ‘learning and development’ and ‘fun and happiness’ also often emerged as
vital considerations in the search to motivate people.
An employee’s feeling of pride through engaging in CSR activities is well ob-
served in empirical studies. In this regard, there are also various surveys (such as
employee satisfaction surveys) to assess and promote this. Pride, which is inspired
by a firm’s CSR behavior among other factors, promotes high levels of job satisfac-
tion because it gives people a sense of purpose in their lives. Here is one example:
“We claim to be a world leader in renewable. Well, it’s important for the
environment, it’s important for our profitability because we think that that
gives us an economic competitive advantage for the future. But it’s impor-
tant for our staff. When our staff are out at dinner on a Friday night, and
someone says, ‘who do you work for’? We want them to be able to say our
company loudly with pride, rather than saying, ‘oh, I work for…’ . [low-
ered tones]. We want people to feel that they’re working for a company
that they can be proud of ”.
(Director, Energy industry, UK, 2007)
Pride is closely related to loyalty [Heater 1990]. Loyalty is one of the potential
positive feedbacks from CSR; most CSR practitioners acknowledge and expound
upon the impact of CSR for developing loyalty, even though it is not the primary
intention at the initial stage of CSR implementation.
Another interesting discovery is that CSR can contribute to the ‘fun’ and ‘hap-
piness’ of the employee. One interviewee cites a new word in relation to this – ‘vol-
un-tainment’, a combination of ‘volunteering’ and ‘entertainment’. It is argued that
employees can like their company because they can experience this fun aspect at
their work place. Therefore, visionary companies are regularly checking by various
means whether their employees are happy or not at their work, and how CSR con-
tributes to their happiness; as one interviewee points out:
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“This is the employee’s answer to whether they are happy or not. This is the
opinion of our employee and the measure of our success”.
(Senior manager, Energy industry, UK and Netherlands, 2007)
CSR also contributes to staff needs for individual learning and development in
both spiritual and skill-related spheres. As a whole, these related factors work in-
teractively to engender motivation in the work place, as one example of a UK CSR
consultant makes clear:
“It is efficient staff development. Staffs are more productive as they are hap-
pier because they have done something for their community. If they are
happier and healthier, they will come to work more often, so your absences
virtually go down – and you can prove that quite conclusively compared
to where they were before they started doing this. So firms have healthier,
happier staff who are more loyal to the company because they see the com-
pany as being good for helping their community”.
(CSR consultant, UK, 2006)
Love and intimacy between family members can be created through volun-
teering activities. More specifically, by having useful opportunities for whole
15
families to work together, they may gain a better understanding of why their
husband/wife/father/mother is working and hence increase affinity and intimacy
among the family units. CSR activities contribute to the legitimacy of the em-
ployer [Castello & Lozano 2011; Palazzo & Scherer 2006]. Contrary to Wood and
de Menezes’s [2010] argument on the UK context, this study shows that family
friendly management has a positive relationship with the legitimacy of the or-
ganization in Korean context.
CSR also contributes to an individual’s need for ‘sharing’ of emotion as well as
of their skills [Bruyere & Rappe 2007; Peloza & Hassay 2006, p. 362]. It is empha-
sized in workplaces both in the UK and Korea that emotional sharing has an espe-
cially huge impact on the mentality of employees, as well as that of beneficiaries.
Employees, for the most part, are happy to share their talent from their work with
the community. CSR can develop an employee’s sharing and harmony mindset in
addition to the other psychological advantages outlined above, as proclaimed by
both Korean and British managers:
“Emotion and tears are disseminated quite quickly and broadly for a long
time. Therefore, when you view CSR activities, it is much better for you to
view it with focus on emotional perspective rather than business and profit
focus. In this regard, ‘volunteer activities’ is the most emotional behaviour
and well shows the sincerity of the company. Certainly, the most benefited
are employees and it is closely related to loyalty”.
(Manager, Energy Industry, Korea, 2007)
Power. Interestingly, there is little discussion on the need for the ‘power’ of mo-
tivation through CSR activities. With this observation, we presume that people
tend not to consider CSR as a way of aggressive control or as a medium for ex-
erted influence of other colleagues or society. Rather people seek CSR with mild
humanitarian aspects, which is lacking in other management areas. Through
CSR, the employee tries to find human dignity and human value in dry profit-
driven business activities. As one university director who works with business in
the UK points out:
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I think that is what we are offering, a sense of humanity towards business.
Our work keeps saying and reminds us of human dignity and values”.
(Director of corporate relations, University, UK, 2006)
Throughout the process of examining the link between CSR and performance,
we highlight that motivating staff is emerging as a key benefit from CSR for many
employers, yet this is often not straightforward to achieve in practice as effective
motivational tools for every individual are different. Moreover, the employee would
like to be respected and developed as a human being, and have the opportunity to
do valuable work at the work place and for the community. Employees are sophis-
ticated at detecting false bravado or illusionary gestures of employers as one mem-
ber of staff of an energy company points out:
“We’re very conscious of not wanting to turn this into a green wash or spin
exercise”.
(Director, Energy industry, UK & Netherlands, 2005)
Employers are increasingly seeking to utilize CSR which positively affects em-
ployee motivation [Basil & Weber 2006; Collier & Esteban 2007]. To encourage
employees’ motivation, firms are processing a variety of events such as regular HR
training or financial incentive schemes. These are important policies and practices,
however, they do not achieve employees’ sense of a shared vision with the organi-
zation in the same manner that can be achieved through a comprehensive CSR
approach. As Harrington [2007] suggests, there is something more than material
benefits that motivates employees. Sharing a similar view, several scholars [e.g.,
Basil & Weber 2006; Zappala 2004] argue that CSR can be one of the most useful
tools to motive employees and this is reiterated by practicing managers both in
Korea and the UK:
“CSR is not only the matter of donating some money to the charities. We
continuously give a chance to 7000 people to create new values and do
something valuable with them through CSR activities. It is a dignified
work, isn’t it?”
(Senior manager, Construction industry, Korea, 2007)
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3.2. Different views on CSR-motivation link
Korea. Koreans are more likely to look for CSR’s work in relation to employee mo-
tivation towards ‘affiliation needs’ of McClelland’s idea [1961], such as loyalty, fam-
ily love, harmony, and sharing. Among them, ‘loyalty to the company or superior’
is the most discussed topic in Korea. More specifically, we reveal one of the main
reasons for ‘the importance of loyalty’ and ‘high-involvement work system’ [Bae
& Lawler 2000] related to CSR – the traditional culture of Korea. Unlike Western
countries, the ethics of work in Confucian countries relies much more upon rela-
tionships, especially in terms of the employees’ relationship with superiors and col-
leagues. Loyalty, diligence, and sincerity are crucial dimensions for Koreans in terms
of conceptualizing work in their lives. Therefore, for Korean businesses, CSR be-
havior such as group volunteering is a useful method, which affects the employee’s
sense of unity and fellow feeling. For Koreans, if they do something together, they
feel that they are performing a meaningful task. If they do something individually,
the value of the task is lessened by some degree.
Beyond finding the typical situation in Korea, we find complex causes of CSR and
people’s motivation which links to interaction of political, institutional and cultural
settings and dynamics. A good example to illustrate this argument is a ‘big Korean
volunteer group’. It is almost a national ‘norm’ for employers in the Korean contem-
porary workplace. The government promotes (even urges) business to engage in
this stream. It is almost a similar situation with the 1960s compulsory mobilization
system for industrial development initiated by the government administration of
that time. One interviewee referred to this typical situation of the complex causes
of CSR as an ‘enforced dumpling’ as follows:
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Even though it is not the intended result, most of all, after the employee
volunteer activities, participants were about to understand the social prob-
lems and learned about the criticality of CSR. Naturally, it developed em-
ployee harmony and loyalty and company image (employee motivation of
loyalty and harmony). Fundamentally, it makes people’s transformation,
so that it was the right decision, I assume. Therefore, ‘volunteerism’ can be
a seed and core of CSR in Korea”.
(Top official, Government-affiliated organization, Korea, 2007)
From the above quotation, it is difficult to say that one factor such as culture
is the main reason for Korea’s typical approach towards CSR’s impact on people.
Instead, we reveal more complex and dynamic reasons of the researched situation
– interaction of political, institutional and cultural settings and dynamics. People’s
behavior and views have been changed according to historical and political change
which significantly affects society’s cultural and economic settings.
Additionally, CSR is uniquely discussed in close relation to the ‘license-to-op-
erate’ arguments. That is, CSR is an essential and efficient tool to get legitimacy not
only from society but also from the employee. For example, volunteerism shows
the sincerity of the company and involves a strong emotional component – in short
it suits the emotional temperament of Korean society and proves more effective in
approaching Korean people. Further, employees in Korea usually want to see their
personal values reflected in their organization [Bae & Lowler 2000]. In effect a sort
of cyclical CSR emergent process takes place – there is an issue of consensus be-
tween employer and employee, which tries to ensure that the policies and efforts of
the employer are developed and built from the values and norms of the individu-
als. Then, the employees get the organization to approve these, which in turn pro-
vides them with legitimacy. The legitimacy does not come down from the top, but
is actually a bottom-up phenomenon. CSR contributes to this phenomenon with
respect to the process of legitimization.
The UK. On the contrary, the UK interviewees talk much more about CSR as a way
of ‘individual development’ and as a strategic business objective. The British are
more accustomed to searching for CSR to advance business objectives and hence
are motivated to see their individual achievement as a result of various CSR sys-
tems which is reflected in their approach to CSR. Employee voice is important for
CSR, and hence employers have to continuously try to recreate the workplace as
a good place for the employees, i.e. as a learning environment, a fun environment,
and dignified workplace. For example, in the words of one UK CSR junior manager,
the UK values individual capability and seeks to create the organizational culture
which gives more empowerment to the employee:
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“We are continuously creating an environment within the business that
encourages people to take charge of their own personal and professional
development”.
(Junior manager, Energy industry, UK, 2005)
“They will come to work more often, so their absences virtually go down –
and you can prove that quite conclusively compared to where they were
before they started doing this”.
(Consultant, CSR consulting organization, UK, 2006)
Likewise, in the UK, CSR also results in high levels of satisfaction because it gives
individuals a sense of purpose in their lives. UK businesses connect CSR with indi-
vidual motivation towards personal achievement. In this sense, CSR is used strate-
gically as part of the company’s training and development programs.
In summary, the empirical analysis endorses the finding in the literature that
CSR works positively in terms of employee motivation. There are, however, limited
explorations of how and to what extent there are divergences among the countries
and these are addressed by our empirical findings. In the Korean context, CSR mo-
tivates employees for mainly affiliation needs, whereas in the UK environment, it
works for individual achievement motivation. We suggest that this result comes
from various political, historical, institutional and cultural reasons, which affect
people’s perceptions and ways of thinking and behaving both in business and in-
dividual life.
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4. Discussion and conclusion
This paper highlights the weakness of CSR literature in investigating the link of CSR
with employee work motivation. Beyond employees, we purposively selected inter-
viewees as key informants with knowledge and expertise on the issues and hence
can provide significant idea on this newly investigated issues [Patton 1990]. Figure
2 summarizes our key findings. In synthesizing both of our central concepts, it de-
tails CSR’s possible effects on motivation drawing on McClelland’s [1961] idea of
motivation – the need for achievement, affiliation and power which attract a fur-
ther share of research interest.
1) Where is role of
Korea – Affiliation needs employee in CSR?
UK – Achievement needs
CSR
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ceptions and ways of thinking and behaving both in business and individual life. In
the next section we consider the implications of our study with respect to theoreti-
cal and empirical developments in international business.
Our research makes two distinct empirical contributions. First, our study is one of the
few which empirically explores the link between CSR and employee issues in a com-
parative context. By extending Cohen’s [2010] idea of critical partnership between
HR and CSR, more specifically, we suggest that employees can experience a match
between their own and the corporation’s values through CSR activities [Bankwala
2011] with the idea that CSR holds the potential to motivate employees by fulfill-
ing their needs for achievement, affiliation and power. Thus, CSR can be used to
differentiate the international human resource management (IHRM) strategy in
terms of more effective recruitment, retention and motivation of local employees.
Second, we contribute to solve the so-called ‘relevance problem’ [see Hodgkinson
& Starkey 2011] of international business research by demonstrating the divergent
approaches of CSR in motivating local people in different contexts. In line with the
idea of CSR as source of competitive advantage [see Porter & Kramer 2006], we
suggest the possibility of cross-national transferability for MNCs who would like to
transfer the CSR-motivation link as a ‘differentiator’ in business. This differentiated
HRM system becomes a competency enhancing strategy in international business
through the collaboration with CSR.
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Second, we suggest that a better understanding of the link between CSR and em-
ployee motivation can be achieved through drawing on McClelland’s [1961] idea of
motivation. In the Korean context, CSR motivates employees for mainly affiliation
needs, whereas in the UK environment, it works for individual achievement mo-
tivation. Surprisingly we find little discussion on the role of ‘power’ related to CSR
activities. Our research suggests that people tend not to consider CSR as a way of
exerted influence over other colleagues or society, but rather see CSR with more of
a humanitarian perspective than exists in other management areas.
It is also conceivable that the same research questions and research design may
yield different findings when explored in different countries. For instance, people’s
pursuit of power is one of the critical reasons for CSR activities such as volunteer-
ing, as this is a way of seeking influence and change (e.g., working on a political
campaign or serving on a fund-raising committee) [MacKenzie & Moore 1993]. As
such, a variety of successful multinational companies (e.g. Phillip Morris, HP, Marks
& Spencer, Shell, Timberland) put CSR in their mission and goals and use it as one
of their core strategies to enrich influence and legitimacy, and to enhance their posi-
tion as ‘neighbor of choice’ in host countries [Miller 1997; Palazzo & Scherer 2006].
Third, our findings contribute to the theoretical discussion on the different ways
that CSR relates to employee motivation in different institutional and cultural set-
tings. Our study contributes to comparative management studies by highlighting
some of the key issues relating to the implementation of CSR approaches in differ-
ent national contexts.
Several limitations of this study should be noted. The first limitation relates to the
interpretation of the data with the McClelland framework. Motivation is a personal
value and the McClelland framework investigates an intrinsic motivator at the indi-
vidual level. However, the drivers of motivation vary due to a range of cultural and
institutional factors which affects work-related values of human beings [Hofstede
1982, 1983]. CSR is more at the firm level. So, when comparing two countries, we
in fact, explore CSR’s link to motivation at the national level. Therefore, it was more
complex than we’ve expected and there was a limit to explain this complexity with
only the McClelland’s model. Even though McClelland strongly believes that the
predominance of each need is culturally driven, we need to continuously search
for the point of contact and supportive ideas for further research. The second con-
cerns the question of the representativeness of the case countries – that is, the UK
and Korea – they cannot accurately and wholly represent international differences.
For example, UK and Germany / Korea and China have very different capitalist sys-
tems and histories. Our comparative study of two nations means that the conclu-
sions offered provided only limited insights into the phenomena under investiga-
tion. Third, there is a need for further research on the negative side of the relation-
ship between the two dimensions. Admittedly, the present research focuses on the
positive results to highlight the potential impact of CSR on employee motivation.
23
Further research could also highlight cases where CSR failed to have an impact on
employee matters and to explore the reasons for this. Finally, we acknowledge the
limit for generalization of the findings and suggest the test of the results. The main
goal of this study is to delve into the new potential of the link between CSR and
employee work motivation, and suggest the idea to readers in order to offer them
the possibility of transferability in management research and practice. The overall
group of interviewees are professionals who are actively engaging in CSR or HRM
brainstorming, and have the capability to share the various ideas of the possible
link. With the result of this study, there can be a further test step: Do the proposals
truly work in practice with the employee in actual, real-world situations? It would
be suggested to carry out a quantitative study (with large samples of employees).
In conclusion, we suggest that there may be relationship between employee-cen-
tered CSR and employee work motivation. Hence, CSR may influence positively on
employee motivation. Since the relation is suggested and observable by the present
study, we need to continue research in this field by employing the respondents who
are individually involved in this relationship and the respondents towards whom
CSR employee-related activities are directed. Also, this suggests that there is a need
for further research on the link between CSR and global talent management [see
Kim & Scullion 2011; Scullion & Collings 2010].
24
Appendix. Example of the CAQDAS output
25
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