The Conditional Effect of CEO Organizational Identification on the CSR-CSIR Interrelationship

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A growing number of studies have examined corporate social responsibility (CSR) and irresponsibility (CSiR) as distinct constructs that can simultaneously describe a firm’s behavior. Yet prior work also suggests they might be interrelated, especially through the mechanisms of moral licensing and moral cleansing. That is, a firm’s current engagement in CSR is positively related to its future engagement in CSiR, and vice versa. In this paper, guided by upper echelons theory and social identity theory, we propose that CEO organizational identification has a conditional influence on the interrelationship between CSR and CSiR. Drawing on theories of moral reasoning, we develop a set of competing hypotheses to argue that CEO organizational identification has either an amplifying effect to strengthen their interrelationship, or a diminishing effect to weaken their interrelationship. Using a sample of S&P 500 firms from 2006 to 2016, we find that CEOs with higher levels of organizational identification are more likely to engage in moral licensing and moral cleansing, and thus show that CEO organizational identification has an amplifying effect on the CSR-CSiR interrelationship.