Research
Research
Research
FA12-BBA-141
MAHAM MANGRIO
FA12-BBA-110
MEHWISH KHAN
FA12-BBA-101
AHMED KHALID
FA12-BBA-127
HAROON KAMAL
FA12-BBA-197
Submission Date:
12TH NOVEMBER, 2014
Submitted To:
MAM UZMA NAEEM
Department of Management Sciences
COMSATS Institute of Information Technology Islamabad
1
TABLE OF CONTENTS:
Pg No.
EXECUTIVE SUMMARY..4
PROBLEM STATEMENT...4
SAMPLING DESIGN..4
DATA COLLECTION.4
RESULTS.4
RECOMMENDATIONS.5
INTRODUCTION....5
PROBLEM STATEMENT....5
RESEARCH OBJECTIVE....5
BACKGROUND OF THE STUDY..5
LITERATURE REVIEW..6
THEORATICAL FRAMWORK...7
HYPOTHESIS...8
RESEARCH DESIGN...8
Purpose Of Study...8
Types Of Investigation...8
Extent of Researcher Interference..8
Study Setting..8
Unit Of Analysis.8
Time Horizon..9
ACKNOWLEDGEMENT.23
REFERENCES..24-28
APPENDIX...28
EXECUTIVE SUMMARY:
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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.
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
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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 Statement
To what extent is corporate social responsibility effecting the organizations both internally and
externally?
Research objective
Corporate 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 REVIEW
Researchers 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
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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 benchmarking Corporate 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).
Theoretical Framework
Productivity of
organization
Shareholder and
Stakeholder
Committment
Profitability and
Financial
performance
Corporate Social
Responsibility
Independent Variable
Moderating variable
Dependent Variable
HYPOTHESIS
7
H1: 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
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.
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OPERATIONAL DEFINITION
Productivity of
organization
Innovatio
n
Sales
Do you think
innovation
can improve
the
productivity
of
Are the
distribution
channel well
defined?
Shareholder and
stakeholders
commitment
Is the satisfaction
Is
theof
goal of
level
maximizing
stakeholders
Investme and
shareholders
shareholder
nt
wealth being
directly
linked
satisfied?
with Satisfaction
their level of
commitment?
mouth
Profitability and
Financial performance
Corporate social
responsibility
Society
Humanity
Is CSR providing
ample
opportunities in
protecting the
environment?
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 BANK
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Have 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.
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Statistics
Profitability AND Shareholder AND
PRODUCTIVITY
N
Valid
Financial
stakeholder
performance
commitment
CSR
50
50
50
50
Mean
3.5200
3.4900
3.5200
9.1400
.12532
.12079
.08596
.24245
Median
4.0000
3.5000
3.5000
9.5000
4.00
4.00
3.50
10.00
.88617
.85410
.60786
1.71440
.785
.729
.369
2.939
-.521
-.710
-.310
-.631
.337
.337
.337
.337
Kurtosis
.301
.181
-.493
.173
.662
.662
.662
.662
Range
4.00
4.00
2.25
7.50
Minimum
1.00
1.00
2.25
4.00
Maximum
5.00
5.00
4.50
11.50
Missing
Mode
Std. Deviation
Variance
Skewness
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.
13
FREQUENCY GRAPHS:
This bar chart shows the frequencies of productivity:
This bar chart show the frequencies of profitability and financial performance:
14
This bar chart show the frequencies of stakeholder and shareholder commitment
15
HISTOGRAMS:
This histogram shows the normality distribution of Productivity.
This histogram shows the normality distribution of profitability and financial performance.
16
This histogram shows the normality distribution of Shareholder and stakeholder Commitment.
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CORRELATION:
The table given below shows the correlation of two variables:
Correlations
PRODUCTIVITY
PRODUCTIVITY
Pearson Correlation
Sig. (2-tailed)
.166
.249
N
CSR
CSR
50
50
Pearson Correlation
.166
Sig. (2-tailed)
.249
50
50
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
ShareholderAND
stakeholercommi
CSR
CSR
Pearson Correlation
tment
1
Sig. (2-tailed)
N
ShareholderANDstakeholerco Pearson Correlation
mmitment
Sig. (2-tailed)
N
.678**
.000
50
50
.678**
.000
50
50
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
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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
ProftabilityAND
Financialperfor
CSR
CSR
Pearson Correlation
mance
1
Sig. (2-tailed)
N
ProftabilityANDFinancialpe Pearson Correlation
rformance
Sig. (2-tailed)
N
.715**
.000
50
50
.715**
.000
50
50
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.
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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
Model
Std. Error of
Square
the Estimate
R Square
.795a
Adjusted R
.632
.608
1.07344
This table
provides us the
commitment
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
Model
1
Sum of Squares
df
Mean Square
Regression
91.015
30.338
Residual
53.005
46
1.152
144.020
49
Total
F
26.329
Sig.
.000a
In this table we can see that F value is more than 5 which shows a strong relationship.
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Coefficientsa
Standardized
Unstandardized Coefficients
Model
1
Coefficients
Std. Error
(Constant)
1.930
.983
PRODUCTIVITY
-.139
.181
ShareholderANDstakeholerco
1.194
1.002
Beta
Sig.
1.963
.056
-.072
-.766
.448
.308
.423
3.878
.000
.216
.499
4.634
.000
mmitment
ProftabilityANDFinancialperfo
rmance
a. Dependent Variable: CSR
RELIABILITY
For Q1,Q9,Q14
Reliability Statistics
Cronbach's Alpha
.613
N of Items
4
Alpha is 0.6% which shows that our questions were 60% reliable
For Q8,Q11
21
Reliability Statistics
Cronbach's Alpha
N of Items
.619
N of Items
.782
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:
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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.
REFERENCE:
23
Ali, I., Rehman , K., Yilmaz, A., Nazir, S., Ali, J (2010). Corporate Social Responsibility
Influences, Employee Commitment and Organizational Performance. Journal of Business
Management, 4(12) , 2796-2801
Abbey,D (2004),Global profit and global justice: Using your Money to change the
world.New society publishers, 4, 22-44
Akerlof,A (1970).The market for lemons quality uncertainity and the market
mechanism the quarterly. Journal of economics, 84, 448-500
24
Ali , I., Rehman ,K., Yilmaz, A.,Nazir,S.,Ali,J (2010). Effects of Corporate Social
Responsibility on Consumer Retention in Cellular Industry of Pakistan. Journal of
Business Management, 4(4), 475-485
Amaeshi, K., Osuji, O., Nnodim, P (2008). Corporate Social Responsibility in Supply
Chains of Global Brands: A Boundaryless Responsibility? Clarifications, Exceptions and
Implications. Journal of Business Ethics, 81, 223-234
25
Frank,L (1903).The social effects of the eight hour day . Academy of management
journal ,8 , 521-530
McGuire, J (1988). Corporate Social Responsibility and Firm Financial Performance. The
Academy of Management Journal, 31, 854-872
Pridge,J (1998).Corporate lives :New perspective on the social life of the corporate
form. Academy of management journal, 52, 97-118
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Appendix
a sample of questionnaire is enclosed with the report which is a statistical tool which we used to
collect data.
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