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Article

Effects of ESG Activity Recognition Factors on Innovative Organization Culture, Job Crafting, and Job Performance

by
Minsuck Jin
and
Boyoung Kim
*
Seoul Business School, aSSIST University, Seoul 03767, Korea
*
Author to whom correspondence should be addressed.
Adm. Sci. 2022, 12(4), 127; https://doi.org/10.3390/admsci12040127
Submission received: 1 September 2022 / Revised: 20 September 2022 / Accepted: 23 September 2022 / Published: 28 September 2022
(This article belongs to the Special Issue Sustainability and Human Resources Management: Evaluating Challenges and Impacts for the Employee-Organization Relation)
Browse Figure
Versions Notes

Abstract

:
This study aims to verify the effects of organizational members’ ESG activity recognition on job performance with the mediation of innovative organizational culture and job crafting. To this end, a questionnaire survey was carried out based on previous studies, and 237 questionnaire response copies were analyzed. An empirical study was conducted on the effects of each ESG activity recognition factor on job performance with the mediation of innovative organizational culture and job crafting. According to the analysis result, the society factor had a positive (+) effect on innovation-oriented culture among the ESG activity recognition factors, the environment factor had a negative (−) effect, and the governance factor did not have any effect. In contrast, governance had a positive (+) effect on relationship-oriented culture in innovative organizational culture. However, the environment and societal factors did not have any effect. The innovation-oriented culture and relationship-oriented culture directly affected job crafting, but they were confirmed not to have a direct effect on job performance. Hence, the result shows that the ESG activity recognition’s society factor reinforces innovative organizational culture, and the governance factor can consolidate organizational relationships.

1. Introduction

Environmental, Social, and Governance (ESG) management is becoming a hot topic worldwide (Hassan and Mahrous 2019). A firm’s ecosystem is exposed to various environmental changes, regardless of nationality, business type, and size. The changes are accelerated through the COVID-19 pandemic due to rapid climate change and increased interest in ESG (Cornell and Shapiro 2021). ESG management targets social achievements, including environment, personnel, and labor, based on the firm’s charity or mood and environmental protection stance, which can be the concept of its Corporate Social Responsibility (CSR) or Social Responsibility Investment (SRI). ESG management has focused on sustainable corporate activity operation beyond a superficial reputation management level, such as a concept of investment (Ortas et al. 2015; Sassen et al. 2016).
However, the environmental aspect has recently been emphasized, including climate change, waste recycling, and carbon emissions reduction. Furthermore, the importance of a firm’s transparent and fair governance has emerged (Mohammad and Wasiuzzaman 2021). All in all, ESG management, considering the environment and governance, beyond corporate activities contributing to society with various methods for community development, is gaining attention (Guillén 2020; Kerikmäe et al. 2018; Pellegrini et al. 2019; Žofčinová et al. 2022). These non-financial values started to work as crucial evaluation indicators for investment attraction, as they settle for investment through ESG from the outside and uplift the firm’s image through it. Shakil (2020) asserted that public interest in safety, the environment, and environmental protection is growing from the ESG perspective in the sustainable development context of the global community. He explained that investors prefer companies to make efforts to seek a balance between financial profits and public benefits (Miralles-Quirós et al. 2019).
Larry Fink, CEO of BlackRock, one of the world’s largest asset management companies, declared they would withdraw investments from the companies not seriously showing interest in climate change in an annual letter for investors in January 2021 (Sachin and Rajesh 2022). Mervelskemper and Streit (2017) explained that consideration of environment, society, and governance are three key factors deciding future financial performance. The reason is that environmental protection is recognized as a firm’s responsibility, as climate change affects all humans’ survival, although it was customary for firms to focus on pursuing profits and values in the past. The adoption of ESG management requires many companies’ cost expenditures, including investments in eco-friendly products, social activities for social contributions, and an audit body setup for transparent governance. However, environmental activities can reduce risks causing various environmental problems (Tan and Zhu 2022). Social activities improve the firm’s brand and image, and governance activities enhance transparency (Margolis and Walsh 2003). Investments in ESG are evaluated as a significant asset value determining corporate future competitive edge and profitability not stated in the financial statements (Zumente and Bistrova 2021).
When looking at companies presently leading ESG management, foreign companies, like Microsoft, aim for negative carbon emissions, while Patagonia uses over 60% recycled materials for outdoor products. Many firms, including Amazon, Tesla, and Unilever, propel projects to minimize carbon emissions. Apple declared its goal to achieve carbon neutrality by 2030, as well as racial equality and justice initiative to dismantle the racial discrimination barrier. McDonald’s is spearheading charity activities for children alienated from education due to diseases through the “Ronald McDonald’s House” activity. Samsung also plans to continue ESG for sustainable management and is preparing to join RE 100 (Hansen et al. 2019; Aouadi and Marsat 2018).
ESG-related studies thus far have mainly analyzed environmental improvement and firms’ external financial performance or corporate value relationship (Cannas et al. 2022; Chams et al. 2021). However, studies on firm internal members’ innovation and organizational culture, which should propel and practice ESG, are insufficient. As Sassen et al. (2016) insisted, innovative organizational culture thrusting ESG activities becomes a pivotal foundation for creating new ideas, accumulating knowledge, and dominating global markets. According to a study by Friede et al. (2015), organizational members’ innovative organizational culture should be accompanied by a firm’s organizational structure change to accept new changes and drive ESG management. Because organizational innovation begins from the members’ voluntary commitment to the organization’s improvement, innovation can be viewed as starting from individuals (Yoon et al. 2018).
Consequently, organizations demand individual innovative behaviors, such as idea creation, from their organizations to respond to internal and external changes and enhance performance, as reported in a study by Janssen et al. (2018). In a study by De Vries and Balazs (1999) effective vertical and horizontal communication is emphasized within an organization to create new business management approaches and organizational changes. If collaboration is possible between the members, the study explains that an innovation-oriented culture can have a more positive effect on innovative behaviors (Büschgens et al. 2013). To initiate new changes and induce organizational members’ participation in and commitment to future-oriented organizational activities, there is a need to consider the job activity changes of organizational members who build an innovative organizational culture and re-create jobs (Bani-Melhem et al. 2018; Bahadori et al. 2021).
This study aimed to empirically analyze the effect relationship of the firm’s ESG management activities concerning the environment, society, and ESG management activities of environment, society, and governance with the mediation of its members’ innovative organizational culture on job crafting or job performance. This study presents the effects of corporate activity recognition concerned with the environment, society, and governance on innovation and relationships within an organizational culture by segmenting the innovative cultural organization into the innovation-oriented culture and relationship-oriented culture. This study also analyzed the effects of organizational members’ recognition of ESG activities on job crafting and performance based on innovative organizational culture. Finally, it presents specific implications on the measures for organizational change management and member management for ESG management activities.

2. Theoretical Background and Hypothesis Development

2.1. ESG Management and Innovative Organization Culture

Moskowitz (1972) asserted how corporate values can be affected by investors, not stockholders, and how they can be understood according to ESG adoption. He paid attention to ESG values in that social responsibility investment produces better achievements than traditional investment types that only emphasize management performance. “E (Environment)” refers to how a firm affects the environment in the management process. Here, resources, energy, wastes, greenhouse gases, carbon emissions, and resource recycling are included. “S (Society)” evaluates whether a firm performs its social responsibility properly. Here, contribution, labor and employment, consumer safety and protection, and social contribution are included. “G (Governance)” refers to management transparency. This determines whether a company’s decision-making process, corporate structure, personnel, and management policies are operated under democratic procedures (Huang 2021).
Sustainability is directly connected to a firm’s survival, and various stakeholders boldly assess the firm’s non-financial factors and financial performance (Gillan et al. 2021). In a study on the innovation role between corporate CSR activities and financial performance, Martinez-Conesa et al. (2017) reported that firms carrying out CSR activities could actively grow into firms with the best performance. A firm’s sustainability can be guaranteed in a business environment where the positive connection is improved through increased innovation, and innovation enhances the importance of intangible assets. Landi and Sciarelli (2018) proved that CSR activities enable a firm’s innovation, provide an opportunity to enter new markets and become a means to improve corporate image.
Alsayegh et al. (2020) insisted that firms cannot carry out sustainable management if they do not consider the economic, social, and environmental parts of the business management process. A study by Sachin and Rajesh (2022) explained that the ESG concept started to emerge due to a new customer value establishment, as firms repeatedly shut down, supply chains collapsed and suffered gaps due to the infectious diseases of their organizational members, and essential changes emerged in the demand sector. Aouadi and Marsat (2018) asserted that changes according to firms’ ESG adoption are accelerating paradigm shifts and that an effort to re-establish their management approach becomes necessary.
Bani-Melhem et al. (2018) explained that all organizational cultures are fundamental factors affecting members’ thinking and behaviors if an organization or a group judges the situations in internal and external environments and solves problems. Innovative organizational culture gathers each member’s ideas so that firms can predict various environmental changes and devise quick response measures. The synergy between an organization and individuals is essential for firms to survive and grow (Hogan and Coote 2014). As Kotsantonis et al. (2016) asserted, ESG management should consider new organizational changes and the members’ acceptance. Therefore, ESG management needs to be expanded into organizational culture and a system that may affect its members’ jobs (Piao et al. 2022). As Liu and Nemoto (2021) insisted, ESG management activities become the foundation to propel organizational innovation and change; therefore, there is a need to consider organizational members’ recognition and job activity through the construction of organizational culture pursuing innovation.
One must examine the innovative organizational culture that affects ESG management activities. Veenstra and Ellemers (2020) explained innovative organization culture as the culture emphasizing innovation, creativity, and dynamics and how organizational members are motivated by the importance of job or ideal appeal, growth, and external legality. Firms can build a competitive edge through innovation (Zainullin and Zainullina 2021). Innovation-oriented culture can be the factor found by focusing on organizational management innovation systems enabling innovation activities continuously for the long term, from a technical perspective (Stock et al. 2013; Wynen et al. 2017). Innovation-oriented culture refers to firms being open to new ideas in technical and managerial areas and actively pursuing those ideas (Joo 2020).
Innovation-oriented culture can be interpreted as an ability to solve problems creatively or anew, and the concept was explained by Duan et al. (2020) for the first time as follows: an actively adopting mode including process innovation and manufacturing innovation in the production and operation management area, and actively propelling mode of production innovation and service innovation in the marketing management area. Buccieri et al. (2020) reported that change and innovation in an organization is a crucial growth engine, and it is critical for organizational members to sympathize with and participate in change and the organizational structure. From such a perspective, ESG activities should be regarded as a strategic issue affecting all firm sectors, including potential innovation and long-term performance (Mead et al. 2020; Zhang et al. 2020; Broadstock et al. 2020). The following hypotheses could be designed based on the previous studies:
Hypothesis 1 (H1).
Environment in ESG activity recognition will have a positive (+) effect on organizational innovation-oriented culture.
Hypothesis 2 (H2).
Society in ESG activity recognition will have a positive (+) effect on organizational innovation-oriented culture.
Hypothesis 3 (H3).
Governance in ESG activity recognition will have a positive (+) effect on organizational innovation-oriented culture.
Relationship-oriented culture, another effect factor of innovative organization culture presented by Chandler and Graham (2010), is a concept considering the relationship with the other party in a transaction as necessary. Specifically, a relationship can create long-term efficiency based on mutual dependence (Yilmaz et al. 2005). A relation-oriented organization relies on relational exchange to maximize its profits. Relation-oriented culture between organizational members can be achieved if the other party’s outcome and common outcome are expected to be beneficial in the long term (Kim 2020). Therefore, relationship-oriented culture between the members becomes critical to successfully drawing innovative activities (McKelvie et al. 2017).
According to a study by Winklhofer et al. (2006), relationship-oriented culture was defined as explicit and implicit pledges on the continuous relationship between exchange members. A study by Hwa Hsu and Lee (2012) defined long-term relationship-oriented culture as follows: Each party in a transaction relationship insists on their activities from a long-term perspective, and partner-like thinking that the other party can decide their success and failure is dominant (Steen et al. 2020). The relationship-oriented culture will affect organizational members’ recognition of the firm’s ESG management activities and the members’ acceptance of the ESG management activities as job activities. Thus, the following hypotheses could be designed:
Hypothesis 4 (H4).
Environment in ESG activity recognition will have a positive (+) effect on organizational relationship oriented culture.
Hypothesis 5 (H5).
Society in ESG activity recognition will have a positive (+) effect on organizational relationship oriented culture.
Hypothesis 6 (H6).
Governance in ESG activity recognition will have a positive (+) effect on organizational relationship oriented culture

2.2. Innovative Organization Culture, Job Crafting, and Job Performance

Innovation is based on new ideas, and innovation is carried out by people, so a study on the factors drawing an individual’s innovative behaviors is essential (Nasifoglu Elidemir et al. 2020). Because innovation has high uncertainty and failure possibility, the possibility of attempting innovative behaviors is high if an organization offers proper support. Trust in an organization is vital so that a new thing can be attempted without fear of criticism or punishment in the case of failure (Kmieciak 2020; Carmeli and Spreitzer 2009; Hattori and Lapidus 2004). As for behavior, innovative job activities are performed, and job performance becomes higher if there is organizational support to induce members’ innate motivation (Deci and Ryan 2000; Ernita and Martial 2020).
If each firm’s organizational members recognize they are the principal actor of the job, they can carry out the job as a crafter, through which job crafting means a series of processes making the job more meaningful by changing their job (Singh 2008). The motivation for job crafting is highly likely to be triggered if organizational members recognize that an opportunity for job crafting exists (Tims and Bakker 2010; Lazazzara et al. 2020). Job crafting was re-defined as an organizational member’s job without the manager’s intervention, namely as a job design mode in the uncertain dynamic management environment beyond the past top-down job handling mode, in which job is delegated from top to bottom (Wrzesniewski and Dutton 2001; Afsar et al. 2019). Because of job crafting’s characteristic that a job is reconstituted by voluntarily changing the scope or meaning of the job given to an organizational member, job crafting can increase capabilities and possibilities to help other individuals within the organization (Thomas et al. 2020; Tian et al. 2021).
ESG management specifies items to propel from each perspective of environment, society, and governance. The activity recognition increases in job management from an innovative organization perspective that individuals should present their direction in the job performing process, actively participate in job design, and view the job with an enthusiastic attitude (Jin and Kim 2022). This study aims to verify the effects of ESG activity recognition on job performance through the mediation effect of job crafting. Based on the previous studies, the following hypotheses could be designed:
Hypothesis 7 (H7).
Corporate members’ innovation-oriented culture will have a positive (+) effect on job crafting.
Hypothesis 8 (H8).
Corporate members’ relationship-oriented culture will have a positive (+) effect on job crafting.
A firm’s objective function is the creation of economic value. However, firms’ stakeholders demand corporate social value creation in solving social problems (Barnett and Salomon 2003). They are changing as they grow together with the firms and as the social problem aspect, such as environmental pollution and social inequality, becomes complicated in addition to the economic value of today’s firms (Cornell and Shapiro 2021). The difficulty in adopting ESG management in the initial stages is evaluating the firm’s ESG performance, and it also expresses the evaluation of organizational members’ job performance (Welch and Yoon 2022). Job performance results from organizational members’ efforts to accomplish organizational goals or tasks (Viswesvaran and Ones 2000). Job performance can be improved depending on an individual’s ability, role recognition, and efforts and can be changed through learning (Chughtai and Buckley 2011).
Jans and McMahon (1989) reported that organizational members expect the realization of their values to pursue the meaning of job, identity, and self-expression rather than performance or reward in carrying out the job. They pursue positive experiences by actively changing jobs. A study by Kaštelan Mrak and Kvasić (2021) insisted that job satisfaction and the resulting performance have a positive effect on organizational capabilities. Corporate members have excellent learning abilities, high individual motivation to achieve, and high independent autonomy (Veenstra and Ellemers 2020; Crucke et al. 2022), so they can question past methods and try more efficient job performance. The following hypotheses could be designed based on the previous studies:
Hypothesis 9 (H9).
Corporate members’ innovation-oriented culture will have a positive (+) effect on job performance.
Hypothesis 10 (H10).
Corporate members’ relationship-oriented culture will have a positive (+) effect on job performance.
Job crafting is the priority item for each corporate member. Workers can enhance their job level through job crafting to gain social support and by changing jobs into a mode to perform better or form a social relationship to ease the stress from overload. Job crafting behaviors can help job goal achievement and enable a sense of achievement and personal growth (Tims et al. 2015; Lee and Lee 2018). De Beer et al. (2016) said personal job satisfaction, identity, and performance could be improved, while organizational commitment can be advanced through job crafting. Organizational members’ job crafting activities enable job commitment and can improve the job level by obtaining resources necessary for job performance by appropriately changing jobs suitable for them and forming relationships with others. Bakker et al. (2012) asserted that individual suitability could be enhanced through job crafting because job crafting activities make job requirements or resources suitable for individual capabilities or desires. Based on the previous studies, the following hypothesis could be designed:
Hypothesis 11 (H11).
Corporate members’ job crafting will have a positive (+) effect on job performance.

3. Research Method

3.1. Research Model

This study aimed to determine the effects of the ESG activity recognition of manufacturing company members with innovative organizational culture and job crafting on job performance. Independent variables were set as environment, society, and governance (ESG) activity recognition. Mediation variables were set as innovation-oriented culture, relationship-oriented culture, and job crafting, and a dependent variable was set as job performance. As shown in Figure 1, the research model was designed.

3.2. Measurement Variables and Data Collection

A questionnaire survey was carried out to collect data to analyze the research model. Questionnaire questions were composed as shown in Table 1 through previous studies, and manipulative variables of questionnaire components were defined. When looking at the manipulative definition of the variables applied to the questionnaire survey, a firm’s ESG activity recognition means organizational members’ recognition state to execute business that can co-exist with society through transparent governance. Job crafting means the change of each firm’s business type change according to ESG activity recognition. Innovative organizational culture means organizational employees’ abilities to absorb innovative and new organizational changes according to ESG management.
Lastly, job performance means that individual organizational members’ job evaluation results are affected by organizational ESG management activities. As for the variables defined, ESG activity recognition consisted of 12 questions, with four questions on environment, society, and governance, respectively. Innovative organization culture consisted of six questions, with three on innovation-oriented and relationship-oriented culture, respectively, and three on job crafting and performance. The questionnaire consisted of 30 questions in total. To enhance factor analysis validity and reliability, one question on society and governance, and one on innovation-oriented culture and relationship-oriented culture, respectively, were removed.

3.3. Demographic Information of the Data

This study conducted an online questionnaire survey through random samples targeting Korean manufacturing company employees with work experience with an ESG company. The companies surveyed are 13 large companies engaged in manufacturing, including seven industries: electronics, automobiles, heavy industry, semiconductors, energy, chemicals, and food. The questionnaire survey was conducted for two weeks, from 15 March to 31 March 2022. A total of 329 questionnaire response copies were collected, and an analysis was carried out through the final 237 questionnaire response copies.
Concerning the gender ratio of the respondents, males were 66%, and women were 34%. As for age, those in their 20s, 30s, 40s, and 50s comprised 23.4% (77 people), 46.5% (153 people), 26.7% (88 people), and 3.3% (11 people), respectively. Concerning careers, the respondents with less than 10 years, 10 years to less than 20 years, and 20 years to less than 25 years composed 57.2%, 36.5%, and 6.4% each. Regarding position, the employee, section chief, and senior employee made up 22.8%, assistant department manager, department manager, and deputy division manager made up 39.9%, division managers made up 13.7%, and executives made up 3.3%. As for job group, production, HR/general affairs, R&D, marketing, IT/automation, finance/accounting, innovation/innovation, and others comprised 19.5%, 16.4%, 13.4%, 16.1%, 9.4%, 15.2%, 4.6%, and 5.5%, respectively (see Table 2).

4. Results

4.1. Analysis Results of Reliability and Validity

Table 3 shows that the measurement model’s reliability and convergent validity analysis results were good. Internal consistency reliability was verified based on 0.7 and higher composite reliability index of the structural equation measurement model, and securing convergent validity was verified through factor loading, Cronbach α, and composite reliability index values. In line with the criteria, the factor loading was all good at 0.547–0.905. Because the t-value was 8.0 and higher, statistical significance was confirmed. The average Variance Extracted (AVE) value was 0.501–0.710, and Cronbach α was 0.734–0.898, so convergent validity was secured. As a result of an analysis of measurement model fit, χ2(df) was 788.610, and χ2/degree of freedom was 3.414. Goodness-of-Fit-Index (GFI) was 0.897, Adjusted Goodness-of-Fit-Index (AGFI) was 0.845, and Normal Fit Index (NFI) was 0.911. Root Mean Square Error of Approximation (RMSEA) was 0.086, so the measurement model fit components were statistically significant.
According to the analysis of AVE and CR values between potential variables in this study, each potential variable’s square root of AVE values was more significant than the correlation coefficients between potential variables, as shown in Table 4, discriminant validity was confirmed to be secured.

4.2. Analysis Results of Structural Model and Hypothesis

As presented in Table 5, a result of structural model fit analysis, χ2(p) was 836.147, and χ2/degree of freedom was 3.528. Goodness-of-Fit-Index (GFI) was 0.901, Normal Fit Index (NFI) was 0.923, Adjusted Goodness-of-Fit-Index (AGFI) was 0.895, Root Mean Square Residential (RMR) was 0.028, and Root Mean Square Error of Approximation (RMSEA) was 0.085, so fit component values were significant. Although not affected by samples, the Comparative Fix Index (CH) indicated that the model’s explanation power was 0.904, and Tucker–Lewis Index (TLI), judging from the structural model’s explanation power was 0.911. Therefore, the basic model was analyzed to be suitable.
As shown in Table 5, a result of hypotheses verification through a structural equation model path analysis, five hypotheses out of 11 hypotheses were rejected. Environment had a negative (−) effect (−2.670, p < 0.01) on innovation-oriented culture Society was confirmed to have a positive effect (+) (2.548, p < 0.05) on innovation-oriented culture. “Governance” did not significantly affect innovation-oriented culture, so the hypothesis was rejected. Environment and society did not significantly affect relationship-oriented culture. Meanwhile, governance had a positive (+) effect (1.967, p < 0.05) on relationship-oriented culture. Innovation-oriented culture had a positive (+) effect (6.306, p < 0.001) on job crafting, so the hypothesis was adopted. Relationship-oriented culture had a positive effect (+) (4.343, p < 0.001) on job crafting. However, innovation and relationship-oriented culture were confirmed not to affect job performance significantly. Job crafting was confirmed to have a positive (+) effect (0.768, p < 0.001) on job performance, so the hypothesis was adopted.

5. Discussion

Each company presently considers environmental protection and social contribution, not limited to an economic value such as sales and operating profit, complies with laws and ethics, improves corporate governance, and enhances sustainability. From this management philosophy context, companies pursue ESG management. This study examined the effects of each company member’s ESG activity recognition with the mediation of innovative organization and job crafting on job performance. Study results drawn based on the analysis results are shown below:
First, the social factor among ESG activity recognition factors had a positive (+) effect on innovation-oriented culture. The social factor of ESG includes various meanings such as human rights, contribution to community, labor and employment, consumer safety and protection, and social contribution. Innovation-based propulsion for corporate sustainability should be carried out to fulfill the factor. As for innovation-oriented culture, organizational members connect new ideas with innovative work methods, and companies agonize social contribution to make sustainable companies through their members’ participation and collaboration. The results can be embodied through sustainability management report publication and ESG evaluation and can be connected to corporate brand value and image improvement. As shown in a study by Martinez-Conesa et al. (2017), this supports an assertion that companies that carry out CSR activities the most actively grow into those achieving the best performance, and the positive connection improves through an increase in innovation. Furthermore, it supports that innovation helps assure corporate sustainability in the business environment in which the importance of intangible assets increases.
Second, the governance factor among ESG activity recognition factors had a positive (+) effect on relationship-oriented culture. Meanwhile, the environment and society variables did not have an effect. The organizational members’ job connection relationship has a close correlation with governance. Relationship-oriented culture affects relationships with the other party in transactions but affects job performance depending on enabling mutual growth through an earnings model, considering how business success strategy and management strategy are reflected meticulously along with stakeholders. As shown in a study by Kooij et al. (2017), each party with a transaction relating to meeting end-user needs insists on its activities from a long-term perspective, thinking of itself as a partner since its success or failure can depend on the other party.
Third, the components of innovative organization culture, namely innovation-oriented culture and relationship-oriented culture, directly affect job crafting. The firm’s decision-making on the new business model is a mutual activity system beyond the firm’s boundary by creating customer value and monetizing with efficient sales and profit structure (Aouadi and Marsat 2018). Companies develop a new business model within diverse stakeholders through relationship-orientated culture and make them reflected in organizational culture. The corporate members recognize themselves as active actors and can conduct job crafting themselves. Likewise, as shown in a study by Tims and Bakker (2010), an assertion that organizational members can carry out their job as crafters is supported if they recognize active roles in innovative organizational culture.
Lastly, innovative organizational culture did not directly affect job performance but had a significant effect (+) on the mediation of job crafting. The firm’s ESG management is operated in a leader-centered top-down mode, and each member’s innovative activities consist of a structure difficult to be acknowledged as ESG performance (Yoon et al. 2018). Firms prioritize management strategy and reflect it in their members’ consciousness of change and organizational culture. The structure is derived from a culture in which members’ ideas are ignored, and creativity cannot be exerted by an organizational vertical reporting system and rigid organizational culture. Firms should improve bureaucratic culture through horizontal organizational culture and position integration, change, and job-centered task force operation and they should be equipped with job structures in which their members’ opinions are reflected. As reported in a study by Viswesvaran and Ones (2000), the disturbance of redefining a job in a job design mode required for oneself without the intervention of a manager that is necessary for job crafting makes an environment that cannot create a performance. An assertion is supported that firms are desirable to create job performance based on each organizational member’s job creation and collaboration.

6. Conclusions

6.1. Research Implications

As the academic implication, this research showed that job performance should be achieved through job crafting by meditating on innovative organizational culture for the corporate ESG activity. Suppose trust is possible in an organization so that new things can be attempted without fear of criticism or punishment, even in the case of failure. In that case, the organizational members’ innovative organizational culture enables the members to perform job crafting that enhances new job requirements or resources by adding new value to capabilities or technology that individuals have, which can be connected to high job satisfaction. Firms should steadily explore new technology opportunities, ensure various research activities and job autonomy, and the decision-making of corporate members should be linked with bold investments. In this way, a ESG system to support should be made. Firms also need to support systematic training for the organizational members with enough field domain knowledge to create future resources so that win-win growth of the firms and their members can be conducted.
The managerial implications of this study are as follows: First, the social factor must be accompanied by innovation-oriented culture rather than the environmental and governance factors among ESG activities. The social factor of ESG strongly demands responsibility activities on social, environmental, and stakeholder aspects beyond problem consciousness, propelled by a specific company or group. The social factor works as an essential factor for the relationship with various stakeholders and the relationship between organizational workers and their working conditions. To fulfill social performance, members need to be based on creative and new problem-solving abilities and need to solve social problems through their positive participation expansion and social value maximization. In this way, companies grow. It is desirable to sufficiently reflect organizational members’ opinions after supporting them so that job crafting can be exerted in the working environment with a need for ESG recognition and the bond of sympathy within enough periods. Based on organizational members’ participation using the firm’s core capabilities, regular communication channels with stakeholders and partnerships with diverse communities should be composed.
Second, it was ascertained that governance consciousness in ESG activities could affect organizational innovative culture formation relationship factors. As transparency and ethics of governance are emphasized, an internal organization’s relationship-oriented culture improves and helps innovative organizational culture formation. Internally, there is a need to shape organizational culture to immediately reflect many organizational members’ opinions in the strategy establishment and operation system by actively using representative council by generation for communication between the members and anonymous communication channels. Companies should endeavor for transparent governance management. Punishment against unethical activities, namely bribes, corruption, and unreasonable activities, should be reinforced. Firms need to fortify monitoring and internal reporting system against unethical activities internally. Regarding wage and bonus payments, there is a need to carry out a transparent system and consultation, as well as to construct a culture in which the details of decision-making related to corporate management should be open to the press/media immediately, while discussions should be invigorated. The corporate efforts will play a pivotal role in developing ESG management based on the basic respect of organizational members.

6.2. Research Limitations and Future Plans

This study delved into job performance, including innovative organizational culture and employees’ job crafting on ESG management and activity recognition, recently becoming a hot topic of firms worldwide. This study has significance in that the study proved the effects of each ESG activity factor. Nonetheless, this study has the following limitations:
First, this study targeted only Korean employees performing ESG activities, so there is a limitation in the generalization of study results. A further study is needed to conduct research based on global samples, targeting more countries, whereas a comparative analysis of differences in ESG activities by country, continent, and corporate characteristics can be performed. Furthermore, this study targeted the employees of large manufacturing corporations leading Korea’s ESG activities. Since ESG activities are an essential issue throughout industries, including small and medium-sized enterprises, service industry companies, public organizations, and governances, etc., further study needs to be conducted, and comparative research is necessary by targeting diverse company groups.
Second, this study examined the relationship between innovative organizational culture and job crafting according to ESG activity recognition. However, strategies for ESG management amid a rapidly changing global environment are developing fast. Consequently, there is a need to consider various variables affecting organizational employees’ job activities, including attitude and required capabilities. The factors affecting the job activities of ESG management employees s can be carried out.
Third, this study is an initial study that deals with the perception and attitude of organizational employees within a company about ESG. Accordingly, the clarity of the research results may be lowered as many hypotheses have been designed in the process of dealing with various variables. Therefore, in future studies, research based on a structural research design that can present clear hypotheses and results through a research model design concentrated on specific variables is needed.
Lastly, this study was conducted in a cross-sectional method collecting data at a specific time, so there is a limitation to reflecting corporate ESG activity level at present that can be shown as time passes. Consequently, there is a need to perform a longitudinal study that can repeatedly investigate diversities of parameters in addition to innovative organization culture and change support behaviors over several points in time to seek more precise answers to the factors affecting job crafting in terms of continuous change of ESG environment that corporate members recognize.

Author Contributions

Conceptualization, M.J.; methodology, M.J. and B.K; software, B.K.; validation, B.K.; formal analysis, M.J.; investigation, M.J.; resources, M.J.; data curation, B.K.; writing—original draft preparation, M.J.; writing—review and editing, B.K.; visualization, M.J. and B.K.; supervision, B.K.; project administration, M.J. and B.K.; funding acquisition, M.J. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable for studies not involving humans or animals.

Informed Consent Statement

Not applicable for studies not involving humans.

Data Availability Statement

Not applicable for data availability.

Conflicts of Interest

The authors declare no conflict of interest.

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Admsci 12 00127 g001 550
Figure 1. Research model.
Figure 1. Research model.
Admsci 12 00127 g001
Table
Table 1. Variable definitions and measurement items.
Table 1. Variable definitions and measurement items.
FactorsSurvey ItemsReferences
ESG Activity RecognitionEnvironment(1) Our company propels carbon emissions-reducing activities and is practicing environmental management.
(2) Our company supports actual investments and organizations for environmental management.
(3) Our company has a performance management and evaluation system for environmental management.
(4) Our company produces eco-friendly products and is offering services.		Cannas et al. (2022)
Cornell and Shapiro (2021)
Shakil (2020)
Aouadi and Marsat (2018)
Society(1) Our company is implementing a policy for its members’ employment stability.
(2) Our company is evaluating by linking stakeholders’ (partner firms) environmental, social, and governance (ESG) performance.
(3) Our company is executing win-win partnership programs for stakeholders’ growth.
(4) Our company carries out social donation and corporate social responsibility (CSR) activities for communities.
Governance(1) Our company adopts the ethical regulations of its members.
(2) Our company discloses information and issues gravely affecting organizational decision-making.
(3) Our company performs continuous disclosures (publishing sustainability management reports) externally on its board of directors and information.
(4) Our company holds general shareholders’ meetings and shares agenda to protect shareholders’ rights.
Innovative Organization CultureInnovation-
oriented Culture		(1) I execute and encourage innovative behaviors in various methods.
(2) I highly evaluate the practical value of innovative ideas.
(3) I endeavor to reflect innovative ideas at work.		Duan et al. (2020) Zhang et al. (2020)
Broadstock et al. (2020)
Relationship- oriented Culture(1) Our company overcomes new organizational changes well due to high consideration and reliability among members.
(2) When I perform a new task, my colleagues are mutually cooperative.
(3) I try to make an effort to help new and experienced employees if a change occurs within the new organization.		Hwa Hsu and Lee (2012)
Steen et al. (2020)
Job Crafting(1) I always agonize about how my job is connected with organizational and company performance.
(2) I think about how my job affects my life.
(3) I think about how my job will contribute to our society.		Tims et al. (2015)
Lee and Lee (2018)
De Beer et al. (2016)
Job Performance(1) I achieve higher job performance than my colleagues.
(2) I think I successfully perform work assigned to me.
(3) My job performance is highly acknowledged.		Crucke et al. (2022)
Kaštelan Mrak and Kvasić (2021)
Table
Table 2. Demographic information of survey participants.
Table 2. Demographic information of survey participants.
ClassificationFrequencyPercentage
GenderMale21766.0
Female11234.0
Total329100.0
Age25–297723.4
30–3915346.5
40–498826.7
50–59113.3
Total329100.0
PositionEmployee (Staff)7522.8
Manager19839.9
Division manager4513.7
Executive113.3
Total329100.0
Career1 year to less than 10 years18857.2
10 years to less than 20 years12036.5
20 years to less than 25 years216.4
Total329100.0
Job groupProduction6419.5
HR/General Affairs5416.4
R&D4413.4
Marketing5316.1
IT/Automation319.4
Finance/Accounting5015.2
Innovation/Planning154.6
Others185.5
Total329100.0
Table
Table 3. Results of reliability and convergent validity test.
Table 3. Results of reliability and convergent validity test.
VariablesQuestionStandard Loading FactorSEt-Value (p)AVECRCronbach α
ESG Activity RecognitionEnvironment1-10.791--0.5340.8170.812
1-20.8760.07115.903 ***
1-30.6160.06211.090 ***
1-40.6020.06310.822 ***
Society1-50.590--0.5010.7650.734
1-60.6240.1458.893 ***
1-70.7010.1579.982 ***
Governance1-80.547--0.5280.7670.785
1-90.7130.1788.711 ***
1-100.7490.1788.846 ***
Innovative Organization CultureInnovation-oriented Culture2-10.760--0.6130.8190.843
2-20.8890.08715.324 ***
Relationship-oriented Culture2-30.770--0.6900.8780.898
2-40.8760.11115.780 ***
Job Crafting3-10.883 0.6730.8600.855
3-20.8110.05318.332 ***
3-30.7630.04716.630 ***
Job Performance4-10.755--0.7100.8790.876
4-20.8600.08115.905 ***
4-30.9050.08116.539 ***
Measurement model fit: χ2(df) 788.610, χ2/degree of freedom 3.414, RMR 0.024, GFI 0.897, AGFI 0.845, NFI 0.911, TLI 0.901, CFI 0.898, RMSEA 0.086/*** p < 0.001.
Table
Table 4. Discriminant validity.
Table 4. Discriminant validity.
ClassificationESGIoCRoCJCJP
Environment €0.731
Soceity (S)0.6290.708
Governance (G)0.3030.6290.727
Innovation-oriented Culture (IoC) 0.1160.1290.1110.783
Relationship-oriented Culture (RoC)0.2960.1500.1750.5060.831
Job Crafting (JC)0.2770.3400.2300.5450.4770.820
Job Performance (JP)0.2380.1850.1470.2570.2990.5600.843
The square root of AVE is shown in bold letters.
Table
Table 5. Discriminant validity.
Table 5. Discriminant validity.
Hypothesis (Path)βBSEt-ValueStatus of Adoption
H1Environemtn
-> Innovation-oriented Culture		−0.503−0.410.154−2.670 **Adopted
H2Soceity
-> Innovation-oriented Culture		0.8221.1560.4542.548 *Adopted
H3Governance
-> Innovation-oriented Culture		−0.012−0.0170.261−0.065Rejected
H4Environment
-> Relationship-oriented Culture		0.0620.0520.1270.406Rejected
H5Social
-> Relationship-oriented Culture		0.0980.1420.3680.385Rejected
H6Governance
-> Relationship-oriented Culture		0.3260.4540.2311.967 *Adopted
H7Innovation-oriented Culture
-> Job Crafting		0.5150.5270.0846.306 ***Adopted
H8Relationship-oriented Culture
-> Job Crafting		0.3370.3360.0774.343 ***Adopted
H9Innovation-oriented Culture
-> Job Performance		−0.183−0.1930.103−1.866Rejected
H10Relationship-oriented Culture
-> Job Performance		0.1150.1180.0861.379Rejected
H11Job crafting
-> Job Performance		0.8110.8340.1097.682 ***Adopted
Structural model fit: χ2(df) 836.147, χ2/degree of freedom 3.528, RMR 0.028, GFI 0.901, AGFI 0.895, NFI 0.923, TLI 0.911, CFI 0.904, RMSEA 0.085/* p < 0.05, ** p < 0.01, *** p < 0.001.
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Jin, M.; Kim, B. Effects of ESG Activity Recognition Factors on Innovative Organization Culture, Job Crafting, and Job Performance. Adm. Sci. 2022, 12, 127. https://doi.org/10.3390/admsci12040127

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Jin M, Kim B. Effects of ESG Activity Recognition Factors on Innovative Organization Culture, Job Crafting, and Job Performance. Administrative Sciences. 2022; 12(4):127. https://doi.org/10.3390/admsci12040127

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Jin, Minsuck, and Boyoung Kim. 2022. "Effects of ESG Activity Recognition Factors on Innovative Organization Culture, Job Crafting, and Job Performance" Administrative Sciences 12, no. 4: 127. https://doi.org/10.3390/admsci12040127

APA Style

Jin, M., & Kim, B. (2022). Effects of ESG Activity Recognition Factors on Innovative Organization Culture, Job Crafting, and Job Performance. Administrative Sciences, 12(4), 127. https://doi.org/10.3390/admsci12040127

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