FINAL PROJECTRESEARCH TOOLS AND TECHNIQUESTITLE:EFFECTS OF
CORPORATE SOCIAL RESPONSIBILITY ON ORGANIZATIONSRESEARCH: Basic
ResearchRESEARCHERS:HIBA KHALID FA12-BBA-141MAHAM MANGRIO
FA12-BBA-110MEHWISH KHAN FA12-BBA-101 AHMED KHALID FA12-BBA-127
HAROON KAMAL FA12-BBA-197Submission Date:12TH NOVEMBER,
2014Submitted To:MAM UZMA NAEEMDepartment of Management
SciencesCOMSATS Institute of Information Technology IslamabadTABLE
OF CONTENTS: Pg No.EXECUTIVE SUMMARY..4 PROBLEM STATEMENT...4
SAMPLING DESIGN..4 DATA COLLECTION.4 RESULTS.4
RECOMMENDATIONS.5INTRODUCTION....5 PROBLEM STATEMENT....5 RESEARCH
OBJECTIVE....5 BACKGROUND OF THE STUDY..5LITERATURE
REVIEW..6THEORATICAL FRAMWORK...7HYPOTHESIS...8RESEARCH DESIGN...8
Purpose Of Study...8 Types Of Investigation...8 Extent of
Researcher Interference..8 Study Setting..8 Unit Of Analysis.8 Time
Horizon..9OPERATIONAL DEFINATION.. 9-11MEASURING DATA
ANALYSIS..12DATA ANALYSIS...12RESULT AND
FINDINGS13-22CONCLUSION.22RECOMMENDATIONS..23LIMITATIONS..23ACKNOWLEDGEMENT.23REFERENCES..24-28
APPENDIX...28
EXECUTIVE SUMMARY:The purpose of this research is to check
whether the corporate social responsibility affects the
organizations both internally and externally or not? The variables
which are linked with corporate social responsibility are
productivity, shareholders and stake holders commitment,
profitability and financial performance, whereas needs and wants of
shareholders and stakeholders are acting as moderating variable.
The effect of all these variables has been observed on corporate
social responsibility in the Banking sector of Pakistan. 50
responses are collected from banking organizations, questionnaires
are being filled by different banks and responses on CSR of both
male and female has been collected. The results show that there is
significant positive relationship between intrinsic and extrinsic
factors with job satisfaction. We will accept the null hypothesis
and accept the alternative hypothesis. PROBLEM STATEMENT:To what
extent is corporate social responsibility effecting the
organizations both internally and externally?
SAMPLING DESIGN:Our research design is based on Judgment
sampling because subject was selected on the basis of their
expertise in the subject investigated. Data was collected from the
banking sector. STATISTICAL TOOL:The tool which we used for data
collection is questionnaires.
DATA COLLECTION:We collected data through Questionnaires to know
that corporate social responsibility really affects the
organizations or not? Data was collected from 50 members of
different Banks.
Data Analysis: We have used Regression, correlation,
Scale(reliability),histrogram and bar chart.
RESULTS:We have applied regression, co-rrelation and reliability
and through our research results we come to analyse that all the
null hypothesis are being accepted and alternative hypothesis are
rejected. It also shows that: There is a positive relationship
between productivity and CSR. An increase in profitability and
financial performance leads to an increase in CSR. Also a positive
relation between shareholder and stakeholder commitment.
RECOMMENDATIONS:Variables such as productivity, profitability,
shareholder and stakeholder commitment and financial performance
affects corporate social responsibility both internally and
externally, we recommend that if the organization focuses on all of
these and will provide sufficient resources and attention than the
organization will become more socially responsible on the other
hand if the organization ignores and take for granted these
variable than this will affect the image of organization and it
will also affect the social responsibility of organization. However
it is also recommended on the basis of results that variables like
profitability and shareholder commitment are more positively
related to CSR as compare to other variables, so the organization
must focus on these variables more as compare to other
variables.
INTRODUCTION Problem StatementTo what extent is corporate social
responsibility effecting the organizations both internally and
externally? Research objectiveCorporate social responsibility is a
management concept whereby companies integrate social and
environmental concerns in their business operations and
interactions with their stakeholders.The objective of this research
is to find that whether corporate social responsibility really
affects organizations both internally and externally or not?
Background
Throughout the years, many researchers have been wondering that
what really affects the corporate social responsibility of
organizations both internally and externally. How willing are
organizations to work on social responsibility? How much interest
they take in it and how much internal and external factors affect
the social responsibility of organizations. Through careful
analysis of many literature and its reviews many researchers have
pinpointed opinions on these factors and variables, on how
organizations behave as regards to social responsibility, specially
members in the banking sector.
LITERATURE REVIEWResearchers have defined the effects of
corporate social responsibility (CSR) on organizations in various
ways. CSR has been effecting the organization in terms
ofProfitability (Arlow and Gannon, 1982), in their recent review of
the relationship between profitability and corporate social
responsibility they indicated that assessing profitability is a
relatively clear-cut process but assessing social responsibility is
not and that there exists a close relationship between
profitability and social responsibility. Another researcher
investigates the possibilities and problems of
benchmarkingCorporate Social Responsibility (CSR),after a
methodological analysis of the advantages and problems of
benchmarking, the researcher developed a benchmark method that
includes economic, social and environmental aspects as well as
national and international aspects of CSR(Graafland,2004).
The role, function and responsibilities of the business
enterprise were described by another researcher, he describes that
CSR is a truly sensitizing concept, both in itself and in its
implementation. Repositioning the business enterprise in
contemporary society is not a task that can be accomplished
overnight, and we are witnessing a multitude of attempts to grasp
the true meaning of CSR, here true implementation means translating
the contextual meaning of CSR into the business proposition. This
means reconsidering present business strategies and practices
(Jonker, 2010).Another researcherindicates that organizations that
prefer their customers or community are more likely to construct
distinctive identities through CSR activities and they establish
ethical and social values within their corporate statements and
cultures(Bravo, Sep 2011).Another researcher outlines that social
responsibility of organization is to focus on the requirements of
people who are outside the organization but directly or indirectly
affected by organizations existence (Craig smith, 2003).Another
researchernarrated that organization must ensure that managers
social needs are fulfilled properly because managers are the
persons who are involve in organizations decision making and
organization should fulfill their needs by getting involved in
social responsibility(Hemingway and Maclagan,2004).Another
researcher relates that CSR provides competitive advantage to firms
(Yasemin, 2010).Some researches focuses on another dimension of CSR
that most of the people have no reach to their favourite brands
because of unavailability of those brands in their local markets,so
its a corporate social responsibility of those respective
organizations to make those brands available in their consumers
reach(Amaeshi,andNnodim , 2008).Researchers also focus on
importance of CSR activities towards customer relationship.
Organizations which use proper CSR activities will enjoy better
customer relationship, because customers are the driving force of
any organization and organizations should have to translate their
satisfaction into products and also solving their problems
regarding products through proper customer relationship management
(Imran, Irshad, 2010).Another researcher talks about increased
shareholders commitment if organization is socially
responsible(Pridge, J, 1998). (Marina and Damani, 1998) focuses on
productivity,(Frank L. McVey,1903)relates that CSR improves ethical
responsibility(Garriga and Mele, 2004) talks about the
organizations better position in society .Another researcher
describes that CSR can be practiced on the basis of the following
traditional arguments which are moral argument ,the license to-
operate (legal) argument , the sustainability argument and
financing the reputation (brand image) argument, these arguments
leads to innovation and change in CSR ( Asongu2007). The researcher
also highlights that CSR should not just be considered an expense,
but rather an investment. Researchers like ( McGuire, Sundgren
andSchneeweis, 1988) indicates that financial performance is a very
important variable which is influencing CSR,the researcher suggests
that reducing the firm risk highly benefits the social
responsibility.Another researcher (Nikolay A Dentchev, 2004)
describes that firms who are socially responsible influences
stakeholder groups like employees, customers, investors,community,
natural environment and supplier in a positive way which is
profitable and beneficial for the organization. Researcher
describes that firms are engaging in Corporate Social
Responsibility because they know that there is a competitive market
and resource based perspectives that help out to understand the CSR
and through it the organization get both internal and external
benefits. The investment which is made within the organization is
included in internal benefit which gives better resources to the
firm. The external benefit which the organization gets is the
reputation which it earn through making its position in society or
market. CSR gives motivation, clear stance of working and high
commitment to the work (Branco, 2006).
Productivity of organizationTheoretical Framework
Corporate Social Responsibility
Shareholder and Stakeholder Committment
Profitability and Financial performance
Needs and Wants
Independent Variable Moderating variableDependent Variable
HYPOTHESISH1: The greater will be the productivity of organization,
the more the organization will be socially responsible.H2: There
will be a significant positive correlation between shareholder and
stakeholder commitment and chances for organization to become
socially responsible.H3: superior corporate financial performance
and profitability leads to higher levels of CSR in organization.H4:
If the needs and wants of shareholders and stakeholders are
adequately fulfilled, organization will become more socially
responsible.
RESEARCH DESIGN
1. Purpose of the study:
The purpose of our study is hypothesis testing because on our
research topic Effects of social responsibility on organization
ample amount of data was available and we developed different
hypothesis on our research data.
2. Type of investigation
The type of investigation is casual study because we developed
number of cause and effect relationship between different
variables.Example: Profitability Cause , CSR Effect
3. Extent of research interference :
The researcher interference was minimum because there was no
change in environment so the study was field study.
4. Study setting :
Our study in non-contrived because it is conducted in natural
environment.
5. Unit of analysis :
The unit of analysis is organization because the research is
conducted on effects of social responsibility on organization.
6. Time horizon :
It is a cross-sectional study because in research data is
collected at one point in time.
OPERATIONAL DEFINITION
Productivity of organization
Are the distribution channel well defined?Do you think
innovation can improve the productivity of
organization?SalesInnovation
Shareholder and stakeholders commitment
SatisfactionDo you think the word of mouth of the investors
effect the credit rating of the company?Is the satisfaction level
of stakeholders and shareholder directly linked with their level of
commitment?Word of mouthNeeds and wants of shareholder and
stakeholderDoes the number of complaints increase significantly
over time period?Is the goal of maximizing shareholders wealth
being satisfied?FeedbackInvestment
Are the capacity utilization of the organization are efficient
enough to expand business?Are the quality control of the
organization are efficient enough to achieve profitability goal?
Expand BusinessQuality MaintenanceProfitability and Financial
performance
Corporate social responsibility
Is CSR providing ample opportunities in protecting the
environment?Does CSR portrait a positive image in the minds of the
employees that may lead to increase output?HumanitySociety
DATA ANALYSIS:We have collected data through 50 questionnaires
and we have applied correlation, regression histogram, Bar chart,
Scale as statistical tool. We targeted banking sector and members
of the banks SILK BANK HBL ALLIED BURJ BANKHave provided us with
their responses regarding corporate social responsibility and the
variables affecting it. We have analyzed the questionnaires using
different tools and found that there exist a positive relation
between CSR and the variables.
RESULT AND FINDINGSDescriptive analysis table shows mean,
median, mode, standard deviation and others
Statistics
PRODUCTIVITYProfitability AND Financial performanceShareholder
AND stakeholder commitmentCSR
NValid50505050
Missing1111
Mean3.52003.49003.52009.1400
Std. Error of Mean.12532.12079.08596.24245
Median4.00003.50003.50009.5000
Mode4.004.003.5010.00
Std. Deviation.88617.85410.607861.71440
Variance.785.729.3692.939
Skewness-.521-.710-.310-.631
Std. Error of Skewness.337.337.337.337
Kurtosis.301.181-.493.173
Std. Error of Kurtosis.662.662.662.662
Range4.004.002.257.50
Minimum1.001.002.254.00
Maximum5.005.004.5011.50
This table shows that total 50 values are taken the mean
,median,mode of all the variables shows that the people are more in
the favor of the relationship between CSR and other variables which
are effecting CSR.
FREQUENCY GRAPHS:This bar chart shows the frequencies of
productivity:
This bar chart show the frequencies of profitability and
financial performance:
This bar chart show the frequencies of stakeholder and
shareholder commitment
This bar chart show the frequencies of CSR.
HISTOGRAMS:
This histogram shows the normality distribution of
Productivity.
This histogram shows the normality distribution of profitability
and financial performance.
This histogram shows the normality distribution of Shareholder
and stakeholder Commitment.
This histogram shows the normality distribution of CSR
CORRELATION:The table given below shows the correlation of two
variables:
Correlations
PRODUCTIVITYCSR
PRODUCTIVITYPearson Correlation1.166
Sig. (2-tailed).249
N5050
CSRPearson Correlation.1661
Sig. (2-tailed).249
N5050
Pearson correlation results shows that there is weak positive
relationship between productivity ans CSR . This means that
increase in CSR will somehow cause increase in productivity and
vice versa. Our hypothesis is accepted.
The table given below shows the correlation of two
variables:
Correlations
CSRShareholderANDstakeholercommitment
CSRPearson Correlation1.678**
Sig. (2-tailed).000
N5050
ShareholderANDstakeholercommitmentPearson Correlation.678**1
Sig. (2-tailed).000
N5050
**. Correlation is significant at the 0.01 level (2-tailed).
Pearson correlation results shows that there is strong positive
relationship between stakeholder and shareholder commitment and CSR
. This means that increase in CSR will cause increase in
stakeholder and shareholder commitment and vice versa. and
statistical significance level is 1% which less than 5% which shows
a strong relationship. Hypothesis accepted
The table given below shows the correlation of two
variables:
Correlations
CSRProftabilityANDFinancialperformance
CSRPearson Correlation1.715**
Sig. (2-tailed).000
N5050
ProftabilityANDFinancialperformancePearson
Correlation.715**1
Sig. (2-tailed).000
N5050
**. Correlation is significant at the 0.01 level (2-tailed).
Pearson correlation results shows that there is strong positive
relationship between profitability and financial performance and
CSR . This means that increase in CSR will cause increase in
profitability and financial performance and vice versa. And
statistical significance level is 1% which less than 5% which shows
a strong relationship. Hypothesis accepted.
REGRESSION:Following tables explain the regression that explain
change in CSR due to change in Independent variables.:
This table explains the Model Summary:Model Summary
ModelRR SquareAdjusted R SquareStd. Error of the Estimate
1.795a.632.6081.07344
a. Predictors: (Constant), Profitability AND Financial
performance, PRODUCTIVITY, Shareholder AND stakeholder
commitment
This table provides us the value of R i.e. 0.79 which shows
moderate degree of correlation between CSR and other variables. The
value of R2shows 0.632.
ANOVA table explains about the regression line fitness of the
data i.e. shown below:
ANOVAb
ModelSum of SquaresdfMean SquareFSig.
1Regression91.015330.33826.329.000a
Residual53.005461.152
Total144.02049
a. Predictors: (Constant), ProftabilityANDFinancialperformance,
PRODUCTIVITY, ShareholderANDstakeholercommitment
b. Dependent Variable: CSR
In this table we can see that F value is more than 5 which shows
a strong relationship.
This table provides information to predict CSR according to
independent variable:
Coefficientsa
ModelUnstandardized CoefficientsStandardized
CoefficientstSig.
BStd. ErrorBeta
1(Constant)1.930.9831.963.056
PRODUCTIVITY-.139.181-.072-.766.448
ShareholderANDstakeholercommitment1.194.308.4233.878.000
ProftabilityANDFinancialperformance1.002.216.4994.634.000
a. Dependent Variable: CSR
1.930 0.139(productivity) + 1.194(shareholder and stakeholder
commitment)+1.002(profitability and financial performance)+e
By this we can accept the null hypothesis because significance
level of motivation is more than 0.05.These all results show the
positive relationship between CSR and independent variables..
RELIABILITYFor Q1,Q9,Q14
Reliability Statistics
Cronbach's AlphaN of Items
.6134
Alpha is 0.6% which shows that our questions were 60%
reliableFor Q8,Q11
Reliability Statistics
Cronbach's AlphaN of Items
.6192
Alpha is 0.6 % which shows that questions were 60% reliable
For Q6, Q7,Q15,Q16,Q17
Reliability Statistics
Cronbach's AlphaN of Items
.7825
Alpha is 0.7 % which shows our question are 70% reliable.
CONCLUSION:On the basis of our results we accept our null
hypothesis. The purpose of this research project was to check the
relationship between CSR and Profitability, Productivity, Finacial
performance and shareholder and stakeholder commitment. Different
variables were chosen and the effect of these variables on CSR has
been verified. The results all the tools Regression, Correlation,
Scale, Histogram and Bar chart shows that there exist a positive
relationship between all the variables and CSR and increasing the
effect of these variables will affect the CSR positively and vice
versa. So the organization who focuses on such variables and
provide adequate resources will become more socially responsible
and flourish and will have a superior positive image. However
profitability and stakeholder commitment are strongly positively
related with CSR as compared to other variables as indicated in the
results.
RECOMMENDATIONS:Variables such as productivity, profitability,
shareholder and stakeholder commitment and financial performance
affects corporate social responsibility both internally and
externally, we recommend that if the organization focuses on all of
these and will provide sufficient resources and attention than the
organization will become more socially responsible on the other
hand if the organization ignores and take for granted these
variable than this will affect the image of organization and it
will also affect the social responsibility of organization. However
it is also recommended on the basis of results that variables like
profitability and shareholder commitment are more positively
related to CSR as compare to other variables, so the organization
must focus on these variables more as compare to other
variables.
LIMITATIONS:During research we the researchers face many
difficulties in data gathering and analyzing it. Time for the
research was very limited so we were unable to conduct the research
on the large sample due to which we collected data from only fifty
employees of different organizations. It also cost expensive to go
to different organizations and collect data as we are students and
was unable to spend much on the research. Another limitation which
we faced was the availability of insufficient sample for collection
of data as fifty is not the sufficient sample to collect the
accurate data for research purpose. There was much other
complication also in collection of data which was faced by us
during research.ACKNOWLEDGEMENT:Firstly we would like to thank
Allah Almighty for providing us an opportunity to do something
productive. Without His blessings we wouldnt be able to come so
far. Then we would be thankful to our respected teacher maam UZMA
NAEEM who encouraged and motivated us to accomplish our work
sincerely. This research project wouldnt be possible without her
cooperation and continuous guidance.
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questionnaire is enclosed with the report which is a statistical
tool which we used to collect data.24