Corporate Social Responsibility and Cognitive Bias: A Systematic Literature Review

This paper examines how Cognitive Biases (CB) influence Corporate Social Responsibility (CSR), focusing on their effects on decision-making, communication, and reporting. A review of 79 peer-reviewed articles pinpoints major biases including confirmation bias, optimism bias, and groupthink. Confirmation bias reinforces existing beliefs, and in combination, this can dampen innovation and slow down responsiveness to stakeholder expectations. Optimism bias usually leads to an overestimation of CSR initiatives’ effectiveness, resulting in overly optimistic predictions and ineffective resource use. Moreover, cognitive biases play a role in how CSR is framed and communicated, influencing stakeholder trust. Selective attention, groupthink, and other biases in CSR reporting diminish transparency as well. Issues such as groupthink and the courage to disagree are countered by training, critical evaluation, and encouraging open communication. Such nuanced understanding will benefit both academia and practitioners as they address CSR in an era of heightened scrutiny.