Introduction
Research gap
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Current literature on CSR focuses heavily on instances from developed western markets (Eberhard-Harribey, 2006, Habisch, Jonker, & Wegner, 2005, Knights & O'Leary, 2006, Vuontisjärvi, 2006, etc.), and the replicability of these findings on the emerging markets, e.g., of Asian countries, is lacking (Khan, 2008);
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Challenges faced by the developing countries with respect to CSR are different as compared to challenges faced by the developed countries (Ghosh, 2014).
Literature review
Strategic management and corporate socal responsiblity
Corporate social responsibility and firm performance
Research hypothesis
Hypotheses based on the relationship between internal orientation and (variable) corporate social responsibility (VCSR) | |
H1 | There is a significant relationship between Internal Orientation and VCSR. |
H1.1 | There is a significant relationship between strategic CSR intent and VCSR. |
H1.2 | There is a significant relationship between operative CSR management and VCSR. |
H1.3 | There is a significant relationship between the presence of industrial standards and VCSR. |
H1.4 | There is a significant relationship between CSR Communication and VCSR. |
Hypotheses based on the relationship between external orientation and (variable) corporate social responsibility (VCSR) | |
H2 | There is a significant relationship between External Orientation and VCSR. |
H2.1 | There is a significant relationship between Market Orientation and VCSR. |
H2.2 | There is a significant relationship between Community Orientation and VCSR. |
H2.3 | There is a significant relationship between Supply Chain Orientation and VCSR. |
Hypotheses based on the relationship between (variable) corporate social responsibility (vcsr) and firm performance | |
H3 | There is a significant relationship between VCSR and Firm Performance. |
Hypotheses based on the relationship between internal orientation and firm performance | |
H4 | There is a significant relationship between Internal Orientation and Firm Performance. |
H4.1 | There is a significant relationship between strategic CSR intent and Firm Performance. |
H4.2 | There is a significant relationship between operative CSR management and Firm Performance. |
H4.3 | There is a significant relationship between the presence of industrial standards (i.e, GRI, AA1000 series and ISO26000) and Firm Performance. |
H4.4 | There is a significant relationship between CSR Communication and Firm Performance. |
Hypotheses based on the relationship between external orientation and firm performance | |
H5 | There is a significant relationship between External Orientation and Firm Performance. |
H5.1 | There is a significant relationship between Market Orientation and Firm Performance. |
H5.2 | There is a significant relationship between Community Orientation and Firm Performance. |
H5.3 | There is a significant relationship between Supply Chain Orientation and Firm Performance. |
Scope of research
Research questions (RQ)
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RQ1: What are the aspects of Strategic Management that affect (Variable) Corporate Social Responsibility?
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RQ2: What are the aspects of Strategic Management that affect Firm Performance?
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RQ3: Does (Variable) Corporate Social Responsibility play any role in the performance of the firm?
Research objectives
Research methodology
Sampling design
Tools for data collection
Planning and collecting the data for research
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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
Analysis and findings
Sample adequacy
Exploratory factor analysis
Items | Factor |
---|---|
S14VCSRI | .428 |
S15VCSRI | .673 |
S16VCSRI | .779 |
S17VCSRI | .612 |
S18VCSRI | .554 |
S19VCSRI | .528 |
S20VCSRI | .410 |
S21VCSRI | .723 |
S22VCSRM | .457 |
S23VCSRM | .819 |
S24VCSRM | .552 |
S25VCSRM | .553 |
S26VCSRM | .266 |
S27VCSRM | .400 |
S28VCSRM | .350 |
S29VCSRM | .761 |
S30VCOM | .730 |
S31VCOM | .681 |
S32VCOM | .437 |
S33VCOM | .719 |
S34VCOM | .651 |
S35VCOM | .654 |
S36VCOM | .600 |
S37VMO | .517 |
S38VMO | .702 |
S39VMO | .670 |
S40VMO | .479 |
S41VCOM | .391 |
S42VMO | .521 |
S43VINST | .314 |
S44VINST | .320 |
S45VCO | .583 |
S46VCO | .660 |
S47VCO | .666 |
S48VCO | .776 |
S49VCO | .568 |
S50VSCO | .679 |
S51VSCO | .870 |
S52VSCO | .735 |
S53VSCO | .473 |
S54VCSR | .483 |
S55VCSR | .225 |
S56VCSR | .593 |
S57VCSR | .620 |
S58VCSR | .345 |
S59VCSR | .786 |
S60VCSR | .746 |
S61VCSR | .530 |
S62VCSR | .686 |
S63VCSR | .526 |
S64VCSR | .605 |
S65VFP | .448 |
S66VFP | .774 |
S67VMO | .639 |
S68VMO | .651 |
S69VFP | .826 |
S70VFP | .809 |
S71VFP | .555 |
S72VFP | .629 |
S73VFP | .563 |
S74VCO | .683 |
S75VMO | .858 |
S76VSCO | .684 |
S77VFP | .767 |
S78VINST | .809 |
S79VINST | .864 |
S80VINST | .849 |
S81VINST | .780 |
Reliability analysis
The measurement model
Constructs | Composite Reliability | Average Variance Extracted |
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CSR Intent | 0.928 | 0.280 |
CSR Management | 0.529 | 0.283 |
CSR Communication | 0.589 | 0.229 |
Market Orientation | 0.899 | 0.532 |
Industrial Standard | 0.716 | 0.387 |
Community Orientation | 0.840 | 0.429 |
Supply Chain Orientation | 0.847 | 0.652 |
(Variable) Corporate Social Responsibility | 0.575 | 0.166 |
Firm Performance | 0.885 | 0.530 |
VCSRI | VCSRM | VCOM | VMO | VINST | VCO | VSCO | VCSR | VFP | |
---|---|---|---|---|---|---|---|---|---|
0.529 | |||||||||
VCSRM | 0.132 | 0.532 | |||||||
VCOM | 0.037 | 0.108 | 0.479 | ||||||
VMO | 0.621 | 0.085 | 0.262 | 0.729 | |||||
VINST | 0.142 | 0.262 | 0.152 | 0.14 | 0.622 | ||||
VCO | 0.552 | 0.483 | 0.028 | 0.458 | 0.199 | 0.702 | |||
VSCO | 0.337 | 0.204 | −0.165 | 0.226 | 0.01 | 0.371 | 0.808 | ||
VCSR | 0.17 | 0.149 | 0.456 | 0.128 | 0.139 | 0.369 | 0.009 | 0.408 | |
VFP | 0.616 | 0.229 | 0.141 | 0.921 | 0.128 | 0.482 | 0.181 | 0.209 | 0.728 |
Confirmatory factor analysis (CFA): Proposed model
Sample description
Impact of strategic management, (variable) corporate social responsibility on firm performance
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Chi-square = 7865
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Degrees of freedom = 5017
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Probability level = .000
Results and discussions
Theoretical implications
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CSR Communication significantly impacts both (Variable) Corporate Social Responsibility and Firm performance;
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Market Orientation and Community Orientation significantly impacts (Variable) Corporate Social Responsibility;
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Market Orientation and Supply Chain Orientation significantly impacts Firm Performance;
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(Variable) Corporate Social Responsibility has both a positive and significant impact on Firm Performance.
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On the other hand, CSR Intent, CSR Management and Industrial Standards, although has a positive impact both on (Variable) Corporate Social Responsibility and Firm Performance, the relationships are not significant.
Managerial implications
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In planning the human resource of the company, especially in the selection of the CSR team members with regards to their gender, work experience and managerial level of the large Indian firms. It concludes, through appropriate statistical analysis that special emphasis must be given to:a)female CSR team members within the Company as they have a significant difference across Market Orientation and Firm Performance;b)CSR team members having work experience of 21 years and above, who has significant difference across Community Orientation; and 10 years and below who has a significant difference across (Variable) Corporate Social Responsibility;c)Frontline managers who has significant difference across Community Orientation, Supply Chain Orientation and (Variable) Corporate Social Responsibility.
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However, distinction must also be made between the nature of companies as Private sector companies have more variance across Market Orientation, Supply Chain Orientation and Firm Performance. This is understandable as the Private Sector is perceived to be more pro-active and oriented towards profit maximisation than their Public Sector counterparts.
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Significant difference also exists between the various types of Industries, with the Manufacturing industry having the highest difference across Market Orientation; Mining industries having the most significant difference across both Community Orientation and (Variable) Corporate Social Responsibility; whereas, the Service sector has the most influence on the Firm Performance.
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CSR Communication, on the other hand, although has a significant relationship with both (Variable) CSR and Firm Performance is not affected by neither the gender, work experience and managerial level of the CSR team, nor with the nature of Company and type of Industry. In other words, CSR Communication is intrinsic and vital to the Company, irrespective of its nature and type of industry as it affects not only the (Variable) CSR, but also the Firm Performance!
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 a significant extension of Isaksson’s (2012) research in a completely different context, but it is limited only to India and can be further tested in other countries with their own unique internal and external orientation of Strategic Management.
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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.