Social Performance Feedback and Managerial Moral Self-Regulation: The Microfoundations of Corporate Social (Ir)Responsibility

Despite growing interest in the microfoundations of corporate social activities, prior research has not articulated the full chain connecting firm-level conditions to managers’ psychological processes (a top-down pathway) and back to firm-level corporate social behavior (a bottom-up pathway), leaving existing microfoundational accounts incomplete. Drawing on the behavioral theory of the firm (BTOF) and moral self-regulation theory, we develop a cross-level moral feedback model that integrates both pathways by linking firm-level social performance feedback, individual-level managerial cognition, and firm-level corporate social responsibility (CSR) and corporate social irresponsibility (CSI). We argue that social performance feedback activates managers’ moral self-regulation. When a firm falls below its social performance aspiration, its managers perceive a diminished firm image, which undermines their moral self-image and triggers moral cleansing behaviors—manifested as increased CSR and/or reduced CSI. Conversely, when a firm exceeds its social performance aspiration, its managers perceive an enhanced firm image, which elevates their moral self-image and activates moral licensing behaviors—manifested as reduced CSR and/or increased CSI. Study 1, using archival data, examines the main effects of firms’ social performance feedback on CSR and CSI. Study 2 uses a series of experiments to examine the proposed micro-level mechanisms, demonstrating how managers’ perceived firm image and moral self-image sequentially mediate the effects of social performance feedback on CSR and CSI. These studies provide complementary evidence for our multilevel behavioral model. Our study contributes to research on the microfoundations of corporate social activities, behavioral strategy, and moral self-regulation.