Waqf and CSR in Pakistan: Exploring the Effect of Intrinsic and Extrinsic CSR Attribution on the Performance of Subordinates with Mediatory Role of Social Capital and Dynamic Capabilities

Abstract

The effect of CSR on employee's performance has long been studied, however, how it affects performance is still a big challenge. We proposed a theoretical framework explaining how the organization's corporate social responsibility (CSR) efforts to influence employee performance. Zhao et. al (2019) draws on the multiple mediations of social capital (SC) and dynamic capabilities (DCs) to explain the effect of CSR on competitive advantage. We applied this mediatory framework in the modified version of the Story and Neves (2015) model. Specifically, we hypothesize that employees’ task performance increases when employees attribute both intrinsic and extrinsic motives for CSR. This attribution would increase social capital among employees as well as enhancing their dynamic capabilities, These two mediatory factors would lead to higher performance. Performance is measured by 1. in-role that consist of formal tasks and duties, and 2. Extra-role, that relates to OCB. We also classify social capital into three dimensions: Structural, Relational, and Cognitive. Lastly, Dynamic Capability was classified as resource integration, organizational learning and innovation, and change capabilities. Empirical validity was established by conducting a survey using a close-ended questionnaire. Data was collected from 208 respondents belonging to Islamic banking, the majority from the trade side, and analyzed using confirmatory factor analysis and structured equation modeling. The results suggested both intrinsic and extrinsic CSR attribution increases all dimensions of social capital as well as dynamic capabilities. However, among dynamic capabilities, Innovation & Change capabilities seem to positively affect both in the role, and extra-role performance. Extra Role Performance is also influenced by the Relational Dimension of social capital as well as In Role Performance. The findings suggested that with a proper combination of external and internal social measures, enterprises can realize the creation of shared value of economy and society