Trust in Sustainability: Unraveling the CSR‐Performance Nexus Through Organizational Trust and Past Performance in the Banking Sector

Abstract

ABSTRACTThis research examines the effects of corporate social responsibility (CSR) on the performance of a prominent commercial bank in South Korea, with a specific focus on how organizational trust mediates this relationship and how previous performance moderates it. Anchored in the Warmth and Competence theory and the micro‐foundations perspective on CSR, we develop a moderated mediation model to delineate the intricate interactions among these variables. Employing a time‐lagged research design and gathering multi‐level, multi‐source data from 5223 employees across 520 bank branches, our findings reveal that CSR positively and indirectly influences financial performance by bolstering organizational trust. Additionally, our results pinpoint past financial performance as a crucial moderator in the CSR‐trust dynamic, indicating that the trust‐enhancing impact of CSR intensifies in organizations with a history of high performance. By elucidating the mediating role of trust and the conditional effect of past financial performance, this study advances a deeper understanding of the circumstances and mechanisms through which CSR affects organizational outcomes. These insights are vital for understanding CSR's role in promoting sustainable development within organizations. By fostering trust and enhancing performance, CSR initiatives can support organizations in establishing enduring, mutually advantageous relationships with stakeholders, thereby fostering the creation of sustainable value for both businesses and the broader community. This study underscores the importance of a multi‐level, context‐aware approach to CSR that recognizes both the micro‐level foundations and the macro‐level contingencies of socially responsible activities as drivers of sustainable organizational development.