Impact of managerial perceptions of social responsibility on firms’ performance in India

Abstract

Corporate social responsibility (CSR) is currently generating a great deal of attention among academics, practitioners, businesses and public policy makers in recent times. While corporate social responsibility issues have received wide research focus in the West, in a developing country context, it has remained limited. More specifically, research on managerial attitudes and actions impacting firms’ performance are scant in India where the business sector is currently under growing pressure to accommodate the emerging economic, social, environmental, regulatory, ethical, religious and stakeholder related issues into business social programs. Against this backdrop, the research undertaken for this thesis develops a novel theoretical framework integrating the dynamics of CSR imperatives and established CSR theories to map the required actions and their resulting impact on business performance. Data for this study were collected from 236 multinational corporations (MNCs) among the top 1000 businesses in India using a structured questionnaire and mail survey capturing the dimensions of commitments to CSR issues and the performance outcome for firms. A series of measurement validation procedure was conducted through exploratory and confirmatory factor analyses to improve the construct measures keeping in mind the theoretical perspectives of CSR. A multivariate data analytical technique, namely structural equation modelling (SEM),was employed to test the proposed theoretical model. A total of 36 hypotheses were tested in the context of varying perceptions of CSR,CSR initiatives and the corresponding impact on the performance outcomes. Most of the hypotheses lent support to the theoretical assumptions. The major findings emerging from the analysis of results indicate that commitment to stakeholder interests are significantly linked with work conditions and social initiatives which translate into superior performance outcomes for firms including enhancement of corporate reputation. Furthermore, commitment to competitiveness has significant positive impact on organisational and socially oriented programs effecting firm performance specifically relating to image building. The commitment to economic imperatives have been found to be negatively related to the social responsibility actions and positively related to green environmental initiatives influencing performance. The social imperatives are significantly linked to organisational CSR programs excepting work environment related actions. The environmental issues have been found to be significantly associated with work related conditions which in turn impact firms’ performance in both financial and reputational terms. The regulatory issues have an impact on the employee related initiatives; In essence, these findings suggest that firms in a developing country such as India are under tremendous ongoing pressure from the social environment and as such they cannot afford to ignore the most burning issues such as environmental protection, employee safety and welfare, because actions on these issues are directly associated with making money and retaining corporate image. The above findings have critical implications for CSR theories, business practices, and policy formulations in an Indian context in terms of operation and performance firms in different but complex socio-economic environments. This thesis highlighted these theoretical and practical implications along with the major limitations and potential areas of future research.

Date of Award	2017
Original language	English
Supervisor	Ali Quazi (Supervisor) & Abu SALEH (Supervisor)