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(searched for: doi:10.1007/s10551-018-4093-x)
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, Oleg Petrenko
Published: 27 December 2021
Business and Society Review, Volume 126, pp 407-431; https://doi.org/10.1111/basr.12245

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Yongzhong Jiang, Xixi He, Yutao Zhu, Guosong Wu, Xinzhi Gao
Published: 15 October 2021
Frontiers in Psychology, Volume 12; https://doi.org/10.3389/fpsyg.2021.762608

Abstract:
Employee direct involvement and indirect involvement have been identified as essential forms of an enterprise’s democratic management in the digital economy. Research on the complementary effects of direct and indirect involvement is still in a blank state in China, which limits the external validity and accumulation of employee participation theory. The present study aimed to investigate the complementary effects of employee direct involvement and indirect involvement on the firm’s financial performance. Although previous research suggests that the influence of employee direct or indirect involvement on corporate financial performance has been examined separately, it is unclear whether the association between employee direct involvement and indirect involvement is complementary or conflictual. Based on strategic human resource management theory, we semantically encode 2,680 corporate social responsibility reports and the annual reports of 268 state-owned listed enterprises published from 2014 to 2018 via content analysis method, and the economic effects of employee direct involvement and indirect involvement were concurrently measured. We use configuration theory to explore the complementary effects between employee direct involvement and indirect involvement. Our results reveal that (1) employee involvement in Chinese enterprises was unbalanced, (2) both employee direct involvement and indirect involvement were positively related to enterprise’s financial performance, and (3) there is a complementary effect between the two forms of employee involvement. Theoretical and practical implications of these findings are discussed.
, Ujvala Rajadhyaksha
Business Ethics, the Environment & Responsibility, Volume 30, pp 262-286; https://doi.org/10.1111/beer.12341

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Published: 18 January 2021
Journal of Business Ethics, Volume 176, pp 689-704; https://doi.org/10.1007/s10551-020-04695-y

Abstract:
Formal control systems are a common instrument to align employees’ interests with those of managers and companies. However, research shows that employees perceive formal controls as a sign of distrust and restraint, which can lead to costs of control in the form of lower employee cooperation and effort (e.g., Falk and Kosfeld 2006; Christ 2013). We propose that charitable giving reduces these costs of control. We draw on the halo effect and propose that corporate charitable giving alters employees’ perception of and reaction to formal controls. In a laboratory experiment, we find that charitable giving by a company creates a higher level of employee trust in a manager who decides to implement a control and a more positive assessment of formal control. These positive effects of charitable giving lead to lower costs of control compared to the absence of charitable giving. We thereby provide an example of how charitable giving as a corporate social responsibility (CSR) activity yields positive benefits by altering the behavior of internal company stakeholders.
Bernhard Erich Reichert, Matthias Sohn
Published: 22 June 2018
SSRN Electronic Journal; https://doi.org/10.2139/ssrn.3201144

Abstract:
Formal control systems are an accepted and widely used instrument in companies. However, research finds that such formal control systems can have unintended negative effects, which poses hidden costs of control. Control systems are perceived as a sign of distrust and restraint (e.g., Falk & Kosfeld 2006; Christ 2013). The ubiquitous use of control systems in practice – despite academic evidence demonstrating negative effects – poses an unresolved conundrum. We draw on the halo effect and propose that context-specific factors alter the perception of control systems. Specifically, we test the effect of pro-social behavior expressed through charitable giving by a company on the perception of the trustworthiness of the party implementing a control system, the perception of the intrusiveness of the control system, and the hidden costs of control. In a laboratory study, we find evidence – consistent with the halo effect – that charitable giving by a company leads to a higher level of trust in the interaction partner, a more positive assessment of controls, and lower costs of control. These findings show that the costs of control in practice can be eliminated by pro-social behavior. Our findings potentially explain why some companies experience negative employee reactions to control systems while other companies continue to enforce control systems.
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