Corporate Social Responsibility: Micro Foundation Framework for High Employee Performance in a Developing Country

Dudung Abdurachman, Rudy M. Ramdhan, Ateng Karsoma, Daniel Kisahwan, Alex Winarno () and Deni Hermana
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Dudung Abdurachman: Department of Postgraduate, Sekolah Tinggi Hukum Militer, Jl. Matraman Raya No. 126, Jakarta 13150, Indonesia
Rudy M. Ramdhan: Department of Postgraduate, Sekolah Tinggi Hukum Militer, Jl. Matraman Raya No. 126, Jakarta 13150, Indonesia
Ateng Karsoma: Department of Postgraduate, Sekolah Tinggi Hukum Militer, Jl. Matraman Raya No. 126, Jakarta 13150, Indonesia
Daniel Kisahwan: Department of Business Administration, STIA Bagasasi, Jl. Cukang Jati No. 5, Bandung 40273, Indonesia
Alex Winarno: Department of Business Administration, Telkom University, Jl. Telekomunikasi No. 1 Terusan Buah Batu, Bandung 40257, Indonesia
Deni Hermana: Department of Business Administration, STIA Bagasasi, Jl. Cukang Jati No. 5, Bandung 40273, Indonesia

Administrative Sciences, 2023, vol. 13, issue 8, 1-24

Abstract: CSR is a strategy to realize sustainability. CSR needs to be understood based on a priority scale and objectives to build a solid organizational structure and ensure sustainable CSR implementation. In this regard, CSR implementation at the micro and macro levels needs further explanation. The study aims to analyze the effect of CSR on employee performance through assessment and job satisfaction using the micro foundation framework. This causal study surveyed 382 state-owned enterprises’ non-manager employees in Indonesia. The results demonstrate employees’ responses to internal and external CSR. Internal CSR, which primarily aims to improve employee performance, was found to improve employee satisfaction and engagement and lead to better performance more significantly than external CSR. Internal CSR had a higher effect on employee performance than external CSR. Compiling a scale of top priorities for corporate stakeholders became the leading choice to encourage long-term performance. The originality of this study is that the foundation of long-term performance ensures the corporation’s performance, and CSR lies in the strength of the microstructure at the individual level. The implementation of CSR based on the legal system requires paying attention to the scale of priorities based on the internal function of CSR in strengthening a corporation’s microstructure.

Keywords: internal CSR; external CSR; micro foundation; performance; engagement; satisfaction (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2023
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