Can We Trace Corporate Generosity to Employee Moods?

In recent years, corporations have ramped up their philanthropic efforts to better assist the employees and communities they serve. Various reasons, such as budget increases for charitable spending and changes in employee-directed giving, might explain this trend.

But new research from Maryland Smith says that employee moods have a lot to do with how a company gives back as well.

In the research, published in the Journal of Business Ethics, Maryland Smith management professor Myeong-Gu Seo and University of Melbourne co-authors Don O’Sullivan and Leon Zolotoy looked at how seemingly unrelated things like moods and ethical behavior pertain to corporate philanthropy.

“At the corporate level, the mood that people bring into the workplace can influence behavior choices for both themselves and others,” says Seo, associate professor at the University of Maryland's Robert H. Smith School of Business.

Mood (also referred to as affect), Seo says, is the background of our decision-making and unconsciously influences our thinking and behavior at every moment. This is applicable at an organizational level as well, says Seo, a theory known as “affect-contagion.”

“When people interact, each person’s affect is infused with that of others,” Seo says. “The affect infuses our individual minds, judgment and choices beyond our conscious awareness, as well as our intentions, too.”

Metrics that capture emotions and affect change are imprecise, Seo says. For this reason, the researchers shifted their focus to solar energy, more specifically sunshine, and its influence on emotions and mood. They studied hundreds of corporate headquarters and measured how much sunshine they get.

“We looked at how exposure to sunlight might have improved the moods of employees at these corporations and, in turn, spread among other employees to the point that it increased the giving behavior of these corporations,” says Seo.

Of course, there are geographical differences between regions in the United States in terms of their exposure to sunlight. To compensate for the variance of sunlight, the researchers examined corporations over the course of a 10-year period to determine whether the sunshine effect could predict giving behavior.

They found that people are more inclined to help others when they are happier. “We found that when people are happy, they want to maintain that happiness,” says Seo. “The underlying reason why positive people might give back more is that it serves as a convenient way to accomplish that.”

The researchers also studied how embedded executives were within the company. When higher-ups spent more time with employees, Seo says, the sunshine effect increased.

Ownership structure matters too, he says. When ownership focused on short-term gains, there appeared to be no influence from the sunshine effect on giving behavior. However, giving behavior and happiness increased when ownership demonstrated a commitment to long-term, future-oriented goals.

Additionally, the sunshine effect proved prevalent in companies with a strong record of unethical decision making, Seo says.

A takeaway from the research, says Seo, is the importance of producing happiness at work to promote ethical conduct in organizations aside from other approaches like educating, punishing or incentivizing employees. Aside from the sunshine effect, there are other ways companies can accomplish this. Google’s main campus is “like a playground,” he says, with interactivity that helps promote positivity.

Seo hopes that this research helps convey the link between emotions and ethical decision making.

“It sounds like too much of a leap when we say sunshine and corporate giving have a positive relationship. But it is one way to show the importance of human emotions in ethical decision making,” says Seo.

“When you think about how emotions and affect have influenced our choices and behavior, the implication is far greater than the study’s findings.”

Read more: “Mood and Ethical Decision Making: Positive Affect and Corporate Philanthropy,” is published in the Journal of Business Ethics.