Adoption of Corporate Social Responsibility: Empirical Evidence from Malaysian SMEs

Thamil Durai Chelliah, Mathivannan Jaganathan, Mahendra Kumar Chelliah

Abstract


In the new global economy, corporate social responsibility has become a central issue of most of the government but a number of cases of business owners being socially irresponsible are dramatically increasing. Therefore, this study has thoroughly examined most contributing factor of corporate social responsibility adoption among SMEs. It is undeniable, that the contributions of SMEs toward the corporate social responsibility are increasing in the society along with the number of SMEs gradually increase in the market and play a significant role in the corporate social responsibility to improve the economic and social development of the nation. The purpose of this research is to examine further in-depth the relevant factors that influence the managers of SMEs in the adoption of corporate social responsibility practices. Quantitative data were collected using the self-administered questionnaire that was distributed to a sample of 384 respondents. In this study, Pearson Correlation Analysis and Multiple Linear Regressions were used to test the importance of all of the four independent variables which are profit maximization, philanthropy responsibility, external pressure, and moral responsibility. The results indicated that all of the tested motivational factors that influence adoption of corporate social responsibility have significant association with corporate social responsibility of SMEs. Therefore, it can be concluded that the result may provide some insight to business leaders with more practical perspectives about motivational factors of corporate social responsibility in Malaysia.


Full Text:

PDF

References


Abdullah, M. Y. H., Basri, F. K. H., Hasim, M. S., & Rahman, M. P. A. (2009). The portrayal of ICT in the media: A Malaysian scenario. Jurnal Komunikasi - Malaysian Journal of Communication 25, 1–12. Retrieved from http://www.ukm.my/jkom

Abdulsalam, B. K., & Seyi, A. (2013). Corporate social responsibility effect on consumer patronage-management perspective: Case study of a telecommunication company in Nigeria. Jurnal Komunikasi - Malaysian Journal of Communication, 29(1), 55–71. Retrieved from http://www.ukm.my/jkom/

ACCA Malaysia. (2006). Corporate social reporting: Making business sense in Malaysia, accountants today, professional at the forefront. Jurnal Komunikasi - Malaysian Journal of Communication, 19(5), 26-29.

Aegerter, D. (2006). The SMEs owners’ perception on corporate social responsibility: An approach based on cognitive mapping. Magazine Tinerilor Economy, University of Fribourg Switzerland, 112-121.

Alexander, A., & Nicholls, A. (2006). Rediscovering consumer-producer involvement: A network perspective on fair trade marketing. European Journal of Marketing, 40(11/12), 1236-1253.

Ali, I., Rehman, K.U., Ali, S. I., Yousaf, J., & Zia, M. (2010). Corporate social responsibility influences, employee commitment and organizational performance. African Journal of Business Management, 4(12), 2796-2801.

Aoki, T. (2004). Corporate philanthropy and CSR (Degree, Japan International Institute).

Branco, M. C. & Rodrigues, L. L. (2007). Positioning stakeholder theory within the debate on corporate social responsibility. Electronic Journal of Business Ethics and Organization Studies, 12(1).

Carroll, A. B. (1979). A three-dimensional conceptual model of corporate performance. Academy of Management Review, 4(4), 497-505.

Chatterji, A. K., & Richman, B. D. (2008). Understanding the “Corporate” in corporate social responsibility. Harvard Law & Policy Review, 2, 33-52.

Cochius, T. (2006). Corporate social responsibility in Dutch SMEs: Motivations and CSR stakeholders (Unpublished doctoral dissertation, Maastricht University).

Eua-anant, P., Ayuwat, D., & Promphakping, B. (2011). Relations between positive impacts of CSR, external support, CSR knowledge and the degree of CSR practices in Thai small and medium enterprises. International Business & Economics Research Journal, 10(11), 17-26.

Fassin, Y. (2008). SMEs and the fallacy of formalizing CSR. Journal Compilation, 17, 365-378.

Fox, T. (2005). Small and Medium-Sized Enterprises (SMEs) and corporate social responsibility: A discussion paper. Retrieved from http://www.iied.org/pubs/pdfs/ G02266.pdf

Fox, T., Ward, H., & Howard, B. (2002). Public sector roles in strengthening corporate social responsibility. Retrieved from http://wopared.parl.net/senate/committee/ corporations_ctte/completed_inquiries/200407/corporate_responsibility/submissions/sub63_attach1.pdf

Friedman, M. (1970). The Social Responsibility of Business is to Increase its profits. The New York Times Magazine. New York Times Company.

Garriga, E., & Mele, D. (2004). Corporate social responsibility theories:

Mapping the territory. Journal of Business Ethics, 53, 51–71.

Gugler, P., & Shi, J. Y. J. (2007). Corporate social Responsibility for developing country enterprise – Lost war in pertaining global competitiveness? Journal of Business Ethics, 87(1), 3-24.

Jamali, D., & Mirshak, R. (2007). Corporate social responsibility (CSR): Theory and practice in a developing country context. Journal of Business Ethics, 72, 243–262.

Jenkins, H. (2001). Corporate social responsibility engaging SMEs in the debate. Retrieved from http://www.brass.cf.ac.uk/uploads/CSRandSMEs.pdf

Jenkins, H. (2004a). Corporate social responsibility - engaging SMEs in the debate. New Academy Review, 3(3), 76-95.

Jenkins, H. (2004b). A critique of conventional CSR theory: An SME perspective. Journal of General Management, 29(4), 37-57.

Jenkins, H. (2009). A ‘business opportunity’ model of Corporate Social Responsibility for Small and Medium Sized Enterprises. Business Ethics: A European Review, 18, 21-36.

Kamil, N. M., Sulaiman, M., Selladurai, S., & Khalid, N. (2015). The impact of spirituality and social responsibility on organizational citizenship behaviour from the Islamic perspective: Empirical investigation of Malaysian businesses. Jurnal Komunikasi - Malaysian Journal of Communication, 31(1), 59–80.

Kercher, K. (2006). Corporate social responsibility - Impact of globalization and international Business (Unpublished doctoral dissertation, Bond University).

Kusyk, S. M., & Lozano, J. M. (2007). Corporate responsibility in small and medium-sized enterprises SME social performance: A four-cell typology of key drivers and barriers on social issues and their implications for stakeholder theory. Corporate Governance, 7(4), 502-515.

Lai, C. S., Chiu, C. J., Yang, C. F., & Pai, D. C. (2010). The effects of corporate social responsibility on brand performance: The mediating effect of industrial brand equity and corporate reputation. Journal of Business Ethics, 95, 457–469

Longo, M., Mura, M., & Bonoli, A. (2005). Corporate social responsibility and performance: The case of Italian SMEs. Corporate Governance, 5(4), 28-42.

MacGregor, S. P., & Fontrodona, J. (2011). Strategic CSR for SMEs: paradox or possibility? Universia Business Review, 80-94.

Maimunah, I. (2009). Corporate social responsibility and its role in community development: An international perspective. The Journal of International Social Research, 2(9), 199-209.

Málovics, G. (2009). The social role and responsibility of small and medium-sized enterprises - results of an empirical investigation applying the social capital approach. Regional Competitiveness, Innovation and Environment JATE Press, Szeged (pp. 222-236).

Mankelow, G., & Quazi, A. (2006). Factors affecting SMEs motivations for corporate social responsibility. University of Newcastle.

McAdam, R., & Leonard, D. (2003). Corporate social responsibility in a total quality management context: Opportunities for sustainable growth. Corporate Governance: The International Journal of Business in Society, 3(4), 36-45.

Mcalister, D. M., & Ferrell, L. (2002). The role of strategic philanthropy in marketing strategy. European Journal of Marketing, 36(5), 689-705.

Medhurst, K. (2010). Integrating corporate social responsibility into business strategy of small and medium sized enterprise in findland (Doctoral dissertation, Hogeschool Inholland School of economics). Dissertation International Business and Management Studies, 1-82.

Mohammed, B. U., Md, R. H. & Kazi. M. T. (2008). Three dimensional aspects of corporate social responsibility. Daffodil International University Journal of Business and Economics, 3(1), 199-212.

Murillo, D., & Lozano, M. J. (2006). SME and CSR: An approach to csr in their own words. Jouranl of Business Ethics, 67, 227-240.

Murillo, R. H., & Martinek, C. J. (2009). Corporate social responsibility can be profitable. The Regional Economist April 2009, pp.4-5.

Nejati, M., & Amran, A. (2009). Corporate social responsibility and SMEs: Exploratory study on motivations from a Malaysian perspective. Business strategy series, 10(5): 259-265.

Nielsen, A, E., & Thomsen, C. (2009). Investigating CSR communication. Business Ethics: A European Review, 18(1).

Osman, M. N. (2007). The digital divide issues: Is the gap getting bigger. Jurnal Komunikasi - Malaysian Journal of Communication, 23, 1–13.

Pearce, J. A. II., & Doh, J. P. (2005). The high impact of collaborative social initiatives. MIT Sloan Management Review, 46(3), 30 – 38.

Porter, M. E., & Kramer, M. R. (2002). The competitive advantage of corporate philanthropy. Harvard business review, 18-33.

Primeaux, P., & Stieber, J. (1994). The profit maximizing: the ethical mandate of business. Journal of Business Ethics, 13(4), 287-294.

Rahim, R. A., Jalaludin, F. W., & Tajuddin, K. (2011). Consumer behavior towards corporate social responsibilities in Malaysia. Asian Academy of Management Journal, 16(1), 119–139.

Rahizah, A. R., Farah, W. J., & Kasmah, T. (2011). The importance of corporate social responsibility on consumer behavior in Malaysia. Asian Academy of Management Journal, 16(1), 119–139.

Ramzy, A., & Lin, Y. (2008, September 16). Tainted-baby-milk scandal in China. World News Times.com.

Sas, W., & Liedekerke, L. V. (2007). Driving forces behind CSR in a SME context: Internally driven CSR.

Seet, P. S., & Ahmad, N. H. (2009). Developing competitive advantage through ethical and SR practices: The case of SME in Australia and Malaysia. International business research, 2(4), 116- 124.

Spence, L, J., & Rutherfoord, R. (2000). Social responsibility, profit maximization and the small firm owner-manager. Journal of Small Business and Enterprise Development, 8(2).

Sweeney, L. (2007). Corporate social responsibility in Ireland: Barriers and opportunities experienced by SMEs when undertaking CSR. Journal of Corporate Governance, 7(4): 516-523.

Tay K. L. (2005). CSR Challenge & trends in corporate Malaysia, accountants today, professionalism at the forefront, 18(1), 40 – 43.

Tolhurst, N. (2007). The ICCA CSR globe. Retrieved from http://www.csrglobe.com/pdf/ Report.pdf

Uthamaputhran, L., Ahmad, F., Jaganathan, M., & Hee, H. C. (2016). Revisiting influence of marketing effectiveness and environmental awareness on buying behaviour of green product: A SEM approach. Journal of Global Business and Social Entrepreneurship (GBSE), 4(5), 6–18.

Vanhamme, J., & Grobben, B. (2009). The effectiveness of CSR history in countering negative publicity. Journal of Business Ethics, 85, 273–283.

Visser, W. (2008). Corporate social responsibility in developing countries. The oxford handbook of corporate social responsibility (pp. 473-499). Oxford: Oxford University Press.

Ward, H., Wilson, E., Zarsky, L. & Fox, T. (2007). CSR and developing countries. What scope for government action? Sustainable Development Innovation Briefs, 1-8.

Wierzbicka, E. M. (2008). Corporate social responsibility as a valuable contribution to improvement in the competitiveness of enterprise. Economics and Competition Policy, 4(13).

Worthington, L., Ram, M., & Jones, T. (2006). Exploring corporate social responsibility in the U.K. Asian small business community. Journal of Business Ethics, 202-217.

Zollo, M. (2004). Philanthropy or CSR: Strategic choice, corporate social responsibility. A special report by European Business Forum London 2004 (pp. 18-19).


Refbacks

  • There are currently no refbacks.