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CSR: Is Doing Good a License for Workers to Do Bad?

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By William Vogeler, Esq. on May 23, 2018 6:55 AM

Human behavior can be harder to understand than corporate behavior, and that can be a problem for companies trying to do good.

Those are observations from a University of Chicago economist who is noted for his field experiments in economics. John List recently discussed on a podcast his experiments on corporate social responsibility.

On the internet radio program, he said that workers who took jobs with a good company surprisingly did some bad things. They cheated.

Socially Responsible Companies

In the Freakonomics podcast, List said that 90 percent of Fortune 250 companies publish Corporate Social Responsibility reports. Experimenting with the phenomenon, he got some unexpected results.

For example, job applicants wanted to work for a socially responsible company more than for better pay. One survey advertised jobs from $11 to $15 an hour, and saw a significant increase in applications at companies advertising CSR initiatives.

"In another survey, the firm offered jobs aimed at improving access to education for underprivileged children," he said. That attracted about 33 percent more applicants.

List said that people who applied for the C.S.R. firm actually are more productive per hour -- 10 to 25 percent more productive than the average employee.

Workers' 'Moral License'

On the other hand, List found that do-good jobbers don't always do good. Too often in another survey, they cheated their employer.

"Sometimes we talk about bank robbers [being] bad," he said. "If you really want to save your money in a bank, you should be watching out for employees, not bank robbers."

List said he thought job applicants would reciprocate by working harder for socially responsible firms. But, as he wrote in his recent research, sometimes "Corporate Social Responsibility Backfires."

"(W)hat this suggests is that there's something deeper on the psychological side, that it's not just triggering this reciprocity from workers," he said. "C.S.R. is also triggering something deeper, which the researchers in this area call 'moral licensing.''

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