Are highly unionised industries socially responsible to their employees?

Mara Ridhuan Che Abdul Rahman, Insyira Afika Ibrahim, Dina Madinah


Corporate social responsibility towards employees (CSR-E) is a vital aspect of modern business that can promote employee rights, justice and standards of employment, which in turn can generate benefits for companies. From the perspective of stakeholder theory, companies are expected to act and react to the demands of their most powerful stakeholders. Therefore, previous studies on CSR-E are skewed towards employees, whom they view as relevant and powerful stakeholders, and view CSR-E as a tool for promoting employee engagement. However, these studies have neglected the labour union power of stakeholders over the CSR-E activities of companies, particularly in Malaysia. The presence of labour unions can increase the tendency for a company to observe a state of democracy, and the negotiation and collective bargaining power of these labour unions can narrow the gap between the expectations of employees and their companies. Nonetheless, the relationship between labour unions and CSR-E is only based on gut feeling and has never been examined in the Malaysian context. Given the differences in unionisation rates across industries, this study predicts that highly unionised industries practise CSR-E to a greater extent compared with non-unionised ones. Therefore, this study examines the relationship between highly unionised industries and CSR-E practice. Banking and financial institutions and real estate and properties were selected as highly and poorly unionised industries in this paper, respectively, and their ratings were calculated based on available data from the Malaysian Trade Union Congress. A total of 100 annual reports for financial years ending in 2017 and 2018 were gathered from 50 companies and were analysed for their content to measure CSR-E. Control variables, including size, profit and leverage, were also used to examine the relationship between CSR-E and unionisation. Highly unionised industries demonstrated a positive relationship with CSR-E practice.

Keywords: corporate social responsibility, employees, stakeholder theory, unionised industries


Full Text:



Aras, G., Aybars, A., & Kutlu, O. (2011). The interaction between corporate social responsibility and value added intellectual capital: Empirical evidence from Turkey. Social Responsibility Journal, 7(4), 662-637.

Balabanis, G., Phillips, H.C., & Lyal, J. (1998). Corporate social responsibility and economic performance in the top British companies: Are they linked? European Business Review, 98(1), 25-44.

Babiak, K., & Trendafilova, S. (2011), CSR and environmental responsibility: motives and pressure to adopt green management practices. Corporate Social Responsibilities and Environmental Management, 18(1), 11-24.

Boodoo, M. U. (2016). The influence of union on companies’ CSR profiles: more internal policies and programs, but not always at the expense of external endeavors. LSE Research Online, 1-37. Retrieved from

Campbell, D. J. (2000). Legitimacy theory or managerial reality construction? Corporate social disclosure in Marks and Spencer plc corporate reports 1969-1997. Accounting Forum, 24(1), 80-100.

Campbell, J.L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Acad. Manag. Rev, 32(3), 946–967.

Campbell, D., Craven, B., & Shrives, P. (2003). Voluntary social reporting in three FTSE sectors: a comment on perception and legitimacy. Accounting, Auditing and Accountability Journal, 6(14), 558-581.

Campbell, D., Moore, G., & Shrives, P. (2006). Cross sectional effects in community disclosure. Accounting, Auditing and Accountability Journal, 19(1), 96-114.

Cooper, E.W., & Uzun, H. (2015). Corporate social responsibility and the cost of debt. Journal of Accounting and Finance, 15(8), 11-29.

Cavaco, S., & Crifo, P. (2014). CSR and financial performance: Complementarity between environmental, social and business behaviors. Applied Economics, 46(27), 3323-3338.

Closon, C., Leys, C., & Hellemans, C. (2014). Perception of corporate social responsibility, organizational commitment and job satisfaction. The Journal of Iberoamerican Academy of Management, 13(1), 31-54.

Cavazotte, F., & Chang, N.C. (2016). Internal corporate social responsibility and performance: A study of publicly traded companies. BAR Rio de Janeiro, 13(4), 1-19.

Chaisena, Y., & Ussahawanitchakit, P. (2016). Corporate social responsibility and firm sustainability: An empirical investigation of ISO 14000 business in Thailand. The Business and Management Review, 7(5), 241-249.

Checchi, D., & Corneo, G. (1998). Trade union membership theories and evidence for Italy. The EALE 1995 conference. Retrieved from

Cheruiyot, T.K., & Maru, L.C. (2013). Corporate human rights social responsibility and employee job outcomes in Kenya. International Journal of Law and Management, 56(2), 152-168.

Cristiani, A., & Peiró, J.M. (2015). Human resource function strategic role and trade unions: exploring their impact on human resource management practices in Uruguayan firms. The International Journal of Human Resources Management, 26(3), 381-400.

Chun, D., Chug, Y., Woo, C., Seo, H., & Ko, H. (2015). Labour union effects on innovation and commercialization productivity: an integrated propensity score matching and two stage data envelopment analysis. Sustainability, 7(1), 5120-5138.

Elkington, J. (1997). Cannibals with forks: the triple bottom line of 21st century business. Capstone, Oxford

Friedman, B.A., Abraham, S.E., & Thomas, R.K. (2006). Factors related to employees’ desire to join and leave unions. Industrial Relations, 45(1), 102-110.

Filho, N.A., Chahad, J.P., Zylberstajn, H., & Pazello, E.T. (2008). Trade unions and the economic performance of Brazilian establishments. JEL Clasification, 38(1), 55-72.

Global Reporting Initiative. (n.d.). (2015). GRI reports list 1999-2015. Retrieved from

Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: A review of the literature and longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal, 8(2), 47-77.

Hernandez, M., Isabel. S., Vazquez, D.G., Barcik, A., & Dziwinski, P. (2016). The effect of internal side of social responsibility on firm competitive success in the business service industry. Sustainability, 8(179), 1-15.

Haniffa, R.M., & Cooke, T.E. (2005). The impact of culture and governance on corporate social reporting. Journal of Accounting and Public Policy, 24(5), 391-430.

ILO. (2020). Undang-undang Republik Indonesia No. 13 Tahun 2003 Tentang Ketenagakerjaan. Retrieved

Kumar, N., Martinez, L.M., & Rose, R.C. (2013). Workplace industrial relations in a developing environment: barriers to renewal within unions in Malaysia. Asia Pacific Journal of Human Resources, 51(1), 22-44.

Lindorff, M., Jonson, E.P., & Mc.Guire, L. (2012). Strategic corporate social responsibility in controversial industry sectors: the social value of harm minimisation. J Bus Ethics, 110(4), 457 - 467.

Morogo, V., Cheluget, D., & Mwangi, B. (2016). Effect of internal corporate social responsibility on firm financial performance: evidence from Kenya commercial bank. American Based Research Journal, 5(11), 1-9.

Mohammad, A.A.S., Altarifi, S.M.M., & Alafi, K,K. (2014). The impact of corporate social responsibility toward employees on company performance: A Jordanian study. Interdisciplinary Journal of Contemporary Research in Business, 5, 225-270.

Mohd Suhaimi, R.N. (2014). Corporate social responsibility towards employees. International Journal of Accounting & Business Management, 2(1), 32-39.

Napathorn, C., & Chanprateep, S. (2011). What types of factors can influence the strength of labour unions in companies and state enterprises in Thailand? International Journal of Business and Management, 6(2), 112.

Mara, R.C.A.R., Ahmed, R.M., & Mohamat, S.H.S. (2017). Relationship between unionized companies, government ownership and reporting human capital information in corporate annual reports. Asian Journal of Accounting and Governance, 8, 113–123.

Ramasamy, N. (2008). The future of the trade union movement in Malaysia, page 1-14. Retrieved from

Rekker, S.A.C., Benson, K.L., & Fatt, R.W. (2014). Corporate social responsibility and CEO compensation revisited: do disaggregation, market stress, gender matter? Journal of Economics and Business, 72(1), 84-103.

Roberts, R.W. (1992). Determinants of corporate social responsibility disclosure: an application of stakeholder theory. Accounting Organizations and Society, 17(6), 596-612.

Sin, R.O,J.R., & Yusof, F.M. (2014). Understanding the declining of trade union density: Literature review and conceptual framework. Sains Humanika, 2(2), 25-30.

Reverte, C. (2009). Determinants of corporate social responsibility disclouse ratings by Spanish listed firms. Journal of Business Ethics, 88(1), 351-366.

Tamm, K., Eamets, R., & Motsmees, P. (2010). Relationship between corporate social responsibility and job satisfaction: the case of Baltic countries. Retrieved from Faculty of Economics and Business Administration. University of Tartu.

Tuzchu, A. (2014). The impact of corporate social responsibility perception on the job satisfaction and organizational commitment. Journal of The Faculty of Economics and Administrative Sciences, 4(1), 185-202.

Ullmann, A.A. (1985). Data in search of a theory: A critical examination of the relationships among social performance, social disclosure, and economic performance. Academy of Management Review, 10(3), 540-577.

Weldon, R.P. (2013). International CSR model in Hungary. Retrieved from Zadar Croatia: Management, Knowledge Learning International Conference. 19-21 June.

Wang, M., Qiu, C., & Kong, D. (2011). Corporate social responsibility, investor behaviors, and stock market return: evidence from a natural experiment in China. Journal of Business Ethics, 101(1), 127-141.

Zunker, T. (2011). Determinants of the voluntary disclosure of employee information in annual reports: An application of stakeholder theory. (Ph.D dissertation). Retrieved from Bond University, Queensland, Australia.

Zientara, P., Kujawski, L., & Godfery, P.B. (2015). Corporate social responsibility and employee attitudes: evidence from a study of Polish hotel employees. Journal of Sustainable Tourism, 23(6), 859-880.


  • There are currently no refbacks.