Corporate Social Responsibility Effectiveness, Firm Competitiveness, Business Successes and Corporate Sustainability: An Empirical Investigation of ISO 14000 Businesses in Thailand

Beginning of article

1. INTRODUCTION

During the last decade, the globalization has spread increasingly, especially in global economic and environment crisis to impact on the organizational strategy. Numerous companies have paid attention to the corporate responsibility issues at global level (Linnenluecke and Griffiths, 2010). The organization concentrates to protect and resolve the problems by promoting the corporate social responsibility. Moreover, currently the indicators on successful firms not only in financial, but also in the corporate value are maximized to integrate economic, social, and environment (Bibri, 2008; Ussahawanichakit, 2005; Wangner, 2010).

In the 21st century, the stream of corporate social responsibility increases truly global ideas and came into common use in organizational strategies. Empirical research suggests that corporate social responsibility is positively related to company competitiveness by which CSR can improve both short and long-term benefit. Moreover, Weber (2008) literature review of CSR business benefits found that a variety of CSR benefits can be separated as follows: efficiency gains (financing advantages, risk reduction), market and product development (increased competitiveness through process and product benefits), employee motivation and retentions (increased company for potential employees), and improved customer attraction and retentions (customer satisfaction and loyalty). Likewise, most of large companies have made an effort to create corporate image by CSR activities (economic, environment, and social consideration) in order to increase employee commitment, customer reputation and loyalty (Heslin and Ochoa, 2008). Interestingly, in 2010 the growing institutionalization of CSR, especially the launch of ISO 26000 emphasized social responsibility as guidelines that underpin organization to emphasize on sustainability (Castka and Balzarova, 2008; Perry and Towers, 2009; Prayukvong and Olsen, 2009). Hence, CSR effectiveness as firm achieves business strategy both short-term and long-terms by engaging with operations for consideration society, environment, and economic.

From the existing literature, most studies focus on corporate social responsibility strategy (Inoue and Lee, 2010; Prasertsang and Ussahawanitchakit, 2012), and the descriptive and case study were approached (Werther and Chandler, 2005; Kolk and Pinkse, 2006; Heslin and Ochoa, 2008). Corporate social responsibility effectiveness has never seen empirical researches to integrate the dimensions of CSR effectiveness, antecedents, consequences and moderators in CSR effectiveness framework. Thus, this study provides clarification of the new dimensions, measurement and conceptual model for CSR effectiveness including linkage to the theoretical backup. To clearly verify the aforementioned relationships, ISO 14000 businesses in Thailand are the sample of the study because ISO 14000 is the most recognized CSR activity that helps companies manages the impact of their operation on the environment and society. For instance, Castka and Balzarova (2008) stated that ISO 14000 brings value to certified organizations such as in environmental/quality improvements, increases productivity, improves relations with communities, and improves market benefits. Therefore, ISO 14000 businesses are characterized to firms which appropriate to be selected as the population.

The main purpose of this study is to examine the effects of corporate social responsibility effectiveness, firm competitiveness, business success, and corporate sustainability. In addition, the research questions are as follows: 1) how do the five dimensions of corporate social responsibility effectiveness have an influence on brand image, organizational reputation, stakeholder acceptance, firm competitiveness, business success, and corporate sustainability?, 2) how does brand image have an influence on organizational reputation, firm competitiveness, and business success?, 3) how does organizational reputation have an influence on stakeholder acceptance, firm competitiveness, and business success?, 4) how does stakeholder acceptance have an influence on firm competitiveness and business success?, 5) how does firm competitiveness have an influence on business success and corporate sustainability?, 6) how does business success have an influence on corporate sustainability?. 7) how do executive long-term vision, corporate governance leadership, business learning, stakeholder and, competitive turbulence have an influence on five dimensions of CSR effectiveness?, and 8) how do executive long-term vision, corporate governance leadership, business learning, stakeholder and, competitive turbulence have an influence on five dimensions of CSR effectiveness via moderating effects of organizational experience and growth needs?.

This study is outlined as follows. The first section reviews existing significant literature in the areas and streams of five dimensions of corporate social responsibility effectiveness, explains the theoretical framework to describe the conceptual model and the relationships among the different variables, and develops the related hypotheses for testing. The second describes the details of research methods, including sample selection and data collection procedure, the variable measurements of each construct, the instrumental verification, the statistics and equations to test the hypotheses. The third gives the results of the analysis and discussion, that compares and explains between previous studies and empirically results for this empirically research. The final summarizes the findings of the study, points out both theoretical and managerial contributions, and presents suggestions for further research and the limitations of the study.

2. RELEVANT LITERATURE REVIEW AND RESEARCH HYPOTHESES

This study attempts to integrate many theoretical perspectives that support how corporate social responsibility effectiveness affects corporate sustainability. Three theories supported this research are stakeholder theory, contingency theory, and social learning theory.

Firstly, stakeholder theory is a theory rooted in an open system framework, which argues that the stakeholders has different of need, the firm is required to implement different activities that meet the diverse need in order to firm success (Freeman, 1984). This theory identifies relevant stakeholders as an individual or any group who impacts firm objectives achieved that included both inside and outside such as employees, customers, shareholders, suppliers, investors, environmentalists and NGOs. Also, stakeholder theory can be many things to many people explaining organization directions and activities in marketplace that must be taken into account for the legitimate interest of an individual or a group who can be affected. Thus, business can create share value by dealing the relationships among suppliers, customers, employees, communities and shareholders: they all win continuously over time (Freeman et al., 2004; Reynolds and Yuthas, 2008). In this research stakeholder theory is explained with the relationship among stakeholder expectation, five dimensions of corporate social responsibility effectiveness, and consequence as well.

Secondly, social learning theory explains social behaviors stated that the difference of individual behaviors depends on specific characteristics and environment (Bandura, 1977). Theses concluded four steps of learning process: 1) attention focuses on modeling on learning and scenarios which by imitating and observing, 2) retention concentrates on remembering details and implementations, 3) reproduction comprises personnel's ability responses in modeled behaviors to improved practice, and 4) motivation focuses on extrinsic motivation the good reason for recognizing the behavior. Prior research applied the social learning theory to explain the relationships of social learning conceptual framework (Rist et al., 2007; Waenkaeo and Ussahawanitchakit, 2011). The learning process is an important component that improves the knowledge and experience including good relationship with individuals, colleagues and interfirms (Morris and Higgins, 2010; Fox et al., 2011). In addition, under business complexity, economy, environment, and ethical raise challenge, organization needs to explain the relationships with own experience through learning and knowledge management. This research applies the social learning theory to explain the relationships of business learning and organizational experience in corporate social responsibility effectiveness.

Thirdly, contingency theory is the main theory explaining the relationship among environment, organizational types, competition intensity are stimulus relations that will directly affect firm performance (Venkatraman, 1989). Two lenses the evolutions of contingency theory are: 1) a set of analysis of bureaucracy that focuses on uncertainty circumstances or context, 2) a set of analysis of configurations that focuses on fit leading to firm effectiveness which by congruence between organizational formats and context; high fit leads to effectiveness and low fit leads to ineffectiveness (Donaldson, 1990; Greenwood and Hinings, 2006). Doty and Huber (1993) suggested that organization can survive not only to be strongest but also to be able to adapt to suit the environment both of internal (e.g. organizational formats, size, strategies) and external (e.g. the change of technology, competition, customers). In this case, the contingency theory is applied to explain competitiveness turbulence linked to greater the corporate social responsibility effectiveness including growth needs is as moderator that an influence organization adaptation of strategy. Prior research suggested that management strategy fit can lead to best practice for greater firm success. The one key of corporate sustainability is management strategy appropriate for environment uncertainty circumstance explains though contingency theory.

This study agenda is proposed, aiming at linking the key theoretical aspect of corporate social responsibility effectiveness by the main ideas with the antecedent and consequence factors. The final result is corporate sustainability. Even though, there are various variables affecting on corporate social responsibility effectiveness, this model proposed here shows only main delightful issues nowadays. Hence, This study mains at examining the relationships among executive long-term vision, corporate governance leadership, business learning, stakeholder expectation, competitive turbulence, corporate social responsibility effectiveness, brand image, organizational reputation, stakeholder acceptance, firm competitiveness, business success, and corporate sustainability in ISO 14000 businesses in Thailand. Moreover, the organizational experience and growth needs are hypothesized to become a moderator in this research as well. The full conceptual model is shown in Figure 1.

2.1 Corporate Social Responsibility Effectiveness

Corporate social responsibility effectiveness is defined as firm to achieve business strategies both short and long-terms by engaging with operations consideration society, environment and economic. Corporate social responsibility effectiveness is a key element of this research. The term "corporate social responsibility" came into common use in organizational strategic, often points, empirical research suggests that corporate social responsibility is positively related to company competitiveness by which CSR can improve both short and long-term benefit. Elias (2004) claimed that corporate social responsibility relationship with organizational effectiveness, key point social responsibility is important factors for determinant of effectiveness in which the three issues the indicated organizational effectiveness: 1) ability of survival, 2) stakeholders' satisfactions, 3) profit and growth. The five distinctive dimensions of corporate social responsibility effectiveness are indicated to assess how corporate social responsibility creates business success advantage, namely, customer loyalty efficiency, market participation quality, employee commitment potentiality, environmental change awareness and social-oriented product development; and, they also contribute greatly to corporate sustainability. A more detailed discussion of these dimensions is provided below.

[FIGURE 1 OMITTED]

Customer loyalty efficiency. Customer loyalty efficiency is defined as the organizational success of maintain and increases customers satisfaction including quality of interactivity between organizational and customers by comparative input and output factors. In other words, its firm ability responds to change customer needs and satisfaction to product/service leading to repeat buying behavior by using the same or less resources but can establish superior's satisfactions and loyalty (Issarapaibool and Ussahawanichakit, 2010; Ramanathan, 2010). Previous studies used the intentions of buying the same product and repeat purchase as the measure tools to achieve customer loyalty (Loureiro and Kastenholz, 2011). Furthermore, Rauyruen and Miller (2007) explained that customer loyalty efficiency have a powerful impact on company performance by remaining with the brand/supplier and rejecting the overtures of competitors. Interesting point the relationships between customer loyalty and CSR, customer attitudes associated between firm operating and customer expectations existing strengthen the relationships between consumer attitudes and social initiative of organization which consumers will recognize firms support of social activities (Becker-Olsen et al., 2006). Therefore, the aforementioned relationship is hypothesized as shown below.

Hypothesis 1: The customer loyalty efficiency will have a positive influence on brand image, b) organizational reputation, c) stakeholder acceptance, d) firm competitiveness, e) business success, and f) corporate sustainability.

Market participation quality. Market participation quality is defined as a level willingness and trust to co-operative working among customers, stakeholders, suppliers, and partners as close relationship with sharing information and market resource such as technology, customer need, and supplier information including marketing activities (Fitzsimmons, 1985; Yen et al., 2004). Particularly, the participation quality as a degree of relationships between customers, suppliers, and partners is reflected in satisfaction with one's exchange partner including partner's trust to other stakeholders. Lusch et al., (2007) suggested that customer co-creator affects improves market advantage position which links to firm performance. Furthermore, Tajeddini (2010) suggest that firms are concerned with stakeholder needs and wants by obtaining and using information including participation in development process of products/services to enhance success. In addition, CSR initiatives are often in collaboration with stakeholders that influence the effectiveness of collaboration. For example, the donations of financial support, products, employee volunteers, and management expertise from the collaboration between Timberland and City Year including Starbucks increased management resources to coordinate disparate NGOs (Peloza and Falkenberg, 2009). Hence, the hypothesis is proposed as follows.

Hypothesis 2: The market participation quality will have a positive influence on brand image, b) organizational reputation, c) stakeholder acceptance, d) firm competitiveness, e) business success, and f) corporate sustainability.

Employee commitment potentiality. Employee commitment potentiality is defined as the level of employees' ability to willingness and dedication to work of employees to achieve business goal throughout employee satisfactions, good attitude and trust of firms (Hunt and Morgans, 1995; Sananuamengthaisong and Ussahawanitchakit, 2010). Xiao (2002) explained that employee potential is high level of employee practices through willingness of training and increasing of education. The level of employee commitment potentiality, Landry and Vandenberghe (2011) reported that employee commitment potentiality association of organizational performance because commitments determine employees' potential access to resources and guidance that shape performance. Furthermore, Waldman and Siegel (2008) suggest that the results of satisfactions and commitment of employees can generate higher operation quality and employee commitment can …