Corporate Social Responsibility among Small Medium Enterprises in Malaysia

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

Background of the Research1

Corporate Social Responsibility and SMEs1

Importance of CSR for Organizations and Society1

CSR Types and Benefits3

Ethical CSR4

Altruistic CSR4

Strategic CSR5

Theory of planned behavior6

Small and Medium-Sized Enterprises7

Problem statement9

Hypotheses10

Research aims and objectives10

Aims10

Objectives11

Research Questions11

CHAPTER 2 LITERATURE REVIEW13

Corporate Social Responsibility in Malaysia13

Theoretical Basis of CSR14

The Decomposed Theory of Planned Behavior19

Attitude21

Decomposing Attitude21

Decomposing Subjective Norm21

Decomposing Perceived Behavioral Control22

Self identity23

Moral obligation23

CHAPTER 3: METHODOLOGY24

Research Design24

Data preparation and statistical procedures24

Sample selection25

Pilot Study25

Sample size25

Instruments25

Variables25

Literature Search26

Keywords Used26

REFERENCES27

BIBLIOGRAPHY30

CHAPTER 1: INTRODUCTION

Background of the Research

Corporate Social Responsibility and SMEs

The idea of the benevolent for-profit organization that addresses social as well as economic concerns is not new. As early as the 1930s, organizations were revered for upholding their “responsibility” to extra-profit motives by improving labor standards and employee benefits (Murillo Lozano 2006 ). Then in the 1950s, scholarly work to introduce and develop the concept of CSR gained momentum. Specifically, Howard Bowen wrote Social Responsibilities of the Businessman (1953), leading to further academic discourse on the topic in the 1960s. According to Bowen, social responsibilities of business referred to “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society” (Smith McSweeney 2007 ). Finally, if the organization is philanthropically responsible, the organization becomes responsible to itself, shareholders, all stakeholders, and the broader social good. The organization may incorporate practices of corporate giving, volunteerism, or community partnerships.

Importance of CSR for Organizations and Society

While social and economic goals are seemingly unconnected, organizations may reference the connections that CSR has to economic motives in their justifications of CSR practice (Crane Matten 2007). First, organizations may incorporate CSR to improve their public image in response to the visibility on a firm's negative social and environmental impact. Second, organizations may justify CSR based on a belief that the practices will attract particular clients or consumers. Third, participation in socially responsible behaviors might be justified under the belief that it boosts employee morale. What is interesting, however, is that organizations often incorporate corporate social responsibility without any direct evidence of these connections (Said Zainuddin Haron 2009). In contemporary society, businesses have seen an increasing emphasis on the importance of CSR activities due to mounting pressure from employees, consumers, and other stakeholders.

Mankelow Quazi (2007), presented three perspectives on the CSR - Financial Performance relationship. The first perspective is that CSR has a negative impact on financial performance. This perspective emerges from Murillo Lozano (2006) economic minimalist view of CSR which argues that CSR places additional costs to organizations through activities that do not enhance shareholder value. A study by Moon (2006), supports this perspective and found that organizations who participated in positive CSR (i.e., areas of strength) saw no impact on financial performance, while organizations that participated in negative CSR(i.e., areas of concern and/or controversial business issues) saw a negative impact on their financial performance. The second perspective is that CSR has a neutral impact on ...