Introduction
Literature review
Period | Role of CSR |
---|---|
up to the 1950s | ‘philanthropic’ era, in which companies donated to charities more than anything else |
1953–67 | ‘awareness’ era, characterized by more recognition of the overall responsibility of business and its involvement in community affairs |
1968–73 | ‘issue’ era, in which companies began focusing on specific issues such as urban decay, racial discrimination, and pollution problems |
1974–8 and, continuing beyond | ‘responsiveness’ era, where companies began taking serious management and organizational actions to address CSR issues |
CSR communication and corporate social responsibility
Corporate social responsibility and firm performance
H 1 : There is a significant relationship between CSR Communication and (Variable) Corporate Social Responsibility.H 2 : There is a significant relationship between (Variable) Corporate Social Responsibility and Firm Performance.
Research gaps
Research objectives
The conceptual framework
Stage | Independent variables | Dependent variable |
---|---|---|
1 | CSR Communication | VCSR |
2 | VCSR | Firm Performance |
3 | CSR Communication | Firm Performance |
Variables | Abbreviations | Connotation in this conceptual model |
---|---|---|
CSR Communication | VCOM | “The process of communicating the social and environmental effects of organizations’ economic actions to particular interest groups within society and to the society at large” (Gray et al. 1996). |
(Variable) Corporate Social Responsibility | VCSR | “The formal and informal ways in which business makes a contribution to improving the governance, social, ethical, labour, environmental conditions of the developing countries in which they operate, while remaining sensitive to prevailing religions, historical and cultural contexts” (Visser 2008). Here, the context is India. |
Firm Performance | VFP | Non-financial performance; “intangible benefits for the company such as corporate reputation and image” (Schwaiger 2004). |
Research methodology
Sampling design
Database | CSR researchers |
---|---|
Prowess database of CMIE (Centre for Monitoring Indian Economy Pvt. Ltd.) | |
Karmayog CSR Rating | |
BSE (Bombay Stock Exchange)/ NSE (National Stock Exchange) |
Tools for data collection
Planning and collecting the data for research
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Occasionally questionnaire was re-sent via googledoc link in email when necessary.
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Personal contact was made with 81 Companies, who preferred a one-on one interview rather than googledoc.
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Questionnaire was also sent as email attachments, who preferred a word/pdf document rather than googledoc.
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Company going through a transition in its CSR domain due to compliance to the Companies Act, 2013,
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Unwillingness to share key financial data,
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Forbidden by Company policy,
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Some Companies fell under the same group Company, hence they were unwilling to share more than one response,
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Time constraint,
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Travel of key respondents.
Data refining and preparation for analysis
Validity
Data analysis and discussion
Sample adequacy
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. | .774 | |
---|---|---|
Bartlett’s Test of Sphericity | Approx. Chi-Square | 3898.871 |
Df | 276 | |
Sig. | .000 |
Exploratory factor analysis
Component | % of Variance | Cumulative % |
---|---|---|
1 | 14.160 | 14.160 |
2 | 14.098 | 28.258 |
3 | 11.994 | 40.252 |
4 | 9.303 | 49.555 |
5 | 8.460 | 58.015 |
6 | 8.002 | 66.017 |
7 | 4.914 | 70.932 |
Items | Initial | Extraction | Items | Initial | Extraction |
---|---|---|---|---|---|
S30VCOM | 1.000 | .803 | S61VCSR | 1.000 | .605 |
S31VCOM | 1.000 | .716 | S62VCSR | 1.000 | .548 |
S32VCOM | 1.000 | .504 | S63VCSR | 1.000 | .734 |
S33VCOM | 1.000 | .716 | S64VCSR | 1.000 | .554 |
S34VCOM | 1.000 | .784 | S65VFP | 1.000 | .705 |
S35VCOM | 1.000 | .718 | S66VFP | 1.000 | .813 |
S36VCOM | 1.000 | .592 | S69VFP | 1.000 | .742 |
S56VCSR | 1.000 | .829 | S70VFP | 1.000 | .785 |
S57VCSR | 1.000 | .763 | S71VFP | 1.000 | .677 |
S58VCSR | 1.000 | .769 | S72VFP | 1.000 | .821 |
S59VCSR | 1.000 | .688 | S73VFP | 1.000 | .703 |
S60VCSR | 1.000 | .743 | S77VFP | 1.000 | .709 |
Items | Loadings | Items | Loadings |
---|---|---|---|
S30VCOM | .817 | S61VCSR | .650 |
S31VCOM | .676 | S62VCSR | .695 |
S32VCOM | .604 | S63VCSR | .568 |
S33VCOM | .745 | S64VCSR | .601 |
S34VCOM | .542 | S65VFP | .591 |
S35VCOM | .761 | S66VFP | .840 |
S36VCOM | .715 | S69VFP | .694 |
S56VCSR | .812 | S70VFP | .667 |
S57VCSR | .738 | S71VFP | .733 |
S58VCSR | .551 | S72VFP | .792 |
S59VCSR | .814 | S73VFP | .755 |
S60VCSR | .754 | S77VFP | .786 |
Confirmatory factor analysis
Identification of model
Number of distinct sample moments: | 153 |
Number of distinct parameters to be estimated: | 48 |
Degrees of freedom (153–48): | 105 |
Fit-indices (Table 9)
Fit-indices | Recommended | Observed |
---|---|---|
CMIN/DF | < 3 | 2.535 |
GFI | >.9 | .915 |
AGFI | >.9 | .877 |
RMSEA | <.08 | .070 |
CFI | >.9 | .936 |
Reliability analysis
Factors | No. of items | α-value |
---|---|---|
Communication | 7 | 0.758 |
(Variable) Corporate Social Responsibility | 9 | 0.837 |
Firm Performance | 8 | 0.833 |
Overall | 24 | 0.860 |
Sample description
Frequency | Percent | |
---|---|---|
Age | ||
Below 39 yrs | 87 | 27.9 |
40–60 yrs | 207 | 66.3 |
61 yrs. and above | 18 | 5.8 |
Total | 312 | 100.0 |
Gender | ||
Male | 267 | 85.6 |
Female | 45 | 14.4 |
Total |
312
|
100.0
|
Education | ||
Graduate | 57 | 18.3 |
Post Graduate | 204 | 65.4 |
Others | 51 | 16.3 |
Total |
312
|
100.0
|
Work Experience | ||
10 yrs. and below | 42 | 13.5 |
11–20 yrs | 117 | 37.5 |
21 yrs. & above | 153 | 49.0 |
Total |
312
|
100.0
|
Management | ||
Frontline Manager | 24 | 7.7 |
Middle-level Manager | 84 | 26.9 |
Top-level Manager | 204 | 65.4 |
Total |
312
|
100.0
|
Position | ||
CSR | 93 | 29.8 |
HR | 39 | 12.5 |
Top Management | 96 | 30.8 |
Company Secretary | 18 | 5.8 |
Public Relations | 9 | 2.9 |
Others | 57 | 18.3 |
Total |
312
|
100.0
|
Nature of Company | ||
Private | 222 | 71.2 |
Public | 90 | 28.8 |
Total |
312
|
100.0
|
Private Sector | ||
Indian Origin | 225 | 72.1 |
Foreign Origin | 84 | 26.9 |
Others | 3 | 1.0 |
Total |
312
|
100.0
|
Type of Industry | ||
Service | 123 | 39.4 |
Manufacturing | 156 | 50.0 |
Mining | 33 | 10.6 |
Total |
312
|
100.0
|
Impact of CSR communication on (variable) CSR and that of (variable) CSR on firm performance
Number of distinct sample moments: | 300 |
Number of distinct parameters to be estimated: | 50 |
Degrees of freedom (300–50): | 250 |
Fit-indices | Recommended | Observed |
---|---|---|
CMIN/DF | < 3 | 2.518 |
GFI | >.9 | .915 |
AGFI | >.9 | .878 |
RMSEA | <.08 | .070 |
CFI | >.9 | .936 |
Results and discussions based on SEM
Independent Variable | Dependent Variable | Hypothesis | (S.E) | Construct Reliability (C.R) | (P) | Result |
---|---|---|---|---|---|---|
VCOM | VCSR |
H
01
| .093 | 4.366 | *** | Positive and Significant |
VCSR | VFP |
H
02
| .023 | 2.968 | .003 | Positive and Significant |
Mediator analysis
H | MEDIATOR | RELATIONSHIP | INDIRECT EFFECT | ROLE | |
---|---|---|---|---|---|
LCL | UCL | ||||
H3 | VCSR | VCOM-VCSR-VFP | .0257 | .0978 | Mediation |
Conclusion
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CSR Communication has a positive as well as a significant relationship with (Variable) Corporate Social Responsibility;
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(Variable) Corporate Social Responsibility has both a positive and significant relationship with Firm Performance.
Limitations and future research directions
Limitations
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It is conducted only in the context of one country, India and hence, limited by its socio-economic-demographic background.
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The research is conducted among the large Indian firms, and hence, does not consider the vibrant dynamics of the Micro, Small and Medium Enterprise (MSME) sector that forms the backbone of the Indian economy.
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Quantitative techniques has been mainly used, that has been supported by qualitative data. Hence, although the data collection was practical and could be analyzed more scientifically and objectively than other forms, it has its inherent drawbacks. For example, there is always a threat of biased sample due to non-response and misinterpretation of a question among others.
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In the absence of a CSR index in India, the parameters in Schedule VII of the Companies Act, 2013 were used. A CSR Index would have been more holistic and measureable in terms of research findings.
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The research is based on the opinions and perceptions of the respondent belonging to the CSR team of the Company. Hence, the responses are limited to his/her perceptions alone and not of other executives in the Company.
Future research directions
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This present research is limited only to India and can be further tested in other countries.
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Moreover, a completely independent research can be undertaken with the same constructs, but catering to the MSME sector in India. These MSMEs play a vital role for the growth of Indian economy. The annual report of MSME 2012–13, has confirmed that the 44.7 million MSME enterprise with a total employment of over 100 million and more than 6000 quality products account for a large share of industrial units; as well as 43% of India’s total exports in 2011–12 (Ministry of Finance; 2013).
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This research with the same constructs can be re-administered few years hence when the CSR Index is formed in India. The BSE Ltd and the IICA are currently working on the preparation of the CSR Index for India.
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Moreover, it may be interesting to note the perceptions and opinions of respondents who do not belong to the CSR team in these large Indian Companies. Their responses, may vary completely from the research findings of this present investigation.
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