Management Attitude towards Incorporating Corporate Social Responsibility and the Impact on Firm's Performance: Analysis of Thai SMEs
Jarutirasarn, Piyachat, Aiyeku, Joseph F., International Journal of Business Strategy
The concept of corporate social responsibility (CSR) has grown tremendously in the last decades and is gradually becoming a global trend. Companies are now expected to take explicitly into account all aspects of their performances including financial results, social and environmental concern. Many companies, both large and SMES are now engaged in serious efforts to incorporate CSR into all aspects of their businesses. The major drivers of these efforts include: the globalization of trade, the increased size and influence of companies, the repositioning of government and the rise in strategic importance of stakeholder relationships, knowledge and brand reputation among others.
CSR programs in Thailand like most developing countries are mostly incorporated by large enterprises while those carried out by the SMEs are still at the early stages and substantially less partly due to high cost of investment and visible gains in terms of public recognition and other favorable benefits (European Commission, 2008).
Various studies have shown that the decision to incorporate CSR -in any company is usually initiated by the management team. In Pumas (2009) study on the reason incorporating CSR, in a company, 63.33% of the surveying samples were inspired by the managerial staffs. So he concluded that managers' attitude or perception toward CSR was the key factor determining whether or not the company would incorporate a CSR program. Both attitude and behavior have long been studied and confirmed that they are strongly related. By understanding an individual's attitudes or perception towards something, one could predict individual's overall pattern of responses (Ajzen & Fishbein, 1980, p. 1).
This paper as part of a larger study focused on the SMEs' and their managers' attitudes toward the CSR concept in Thailand. It is expected to contribute and provide successfully guideline for incorporating CSR into SMEs.
2. LITERATURE REVIEW
Many authors have defined corporate social responsibility or CSR as operating a business in a manner that accounts for the social and environmental impact created by the business. It means a commitment to developing policies that integrate responsible practices into daily business operations. Kotler and Lee (2005, p. 3) gave a definition of CSR as a duty of a corporate to make the involving society become better using their knowledge, business experiences and also resources.
According to Hopkins (2007, pp. 15-16) CSR was a moral approach that a corporate contribute to its stakeholders both internal and external toward a better way of living while maintaining the corporate profitability. Vogel (2005, pp. 4-6) defined CSR as an ethical action that a corporate initiated to solve social problems of its stakeholders. -Werther and Chandler (2006, p. 6) gave a general definition of CSR as an operation that a corporate do to its society.
The concept of CSR is a matter in which a corporate responds to the economy, society, and environment aspects aiming to benefit people, groups, and societies. It also concerns the role of a corporate in a society and expectation of the society upon it. CSR should be done willingly by the corporation and its executives should be involved in pursuing various activities leading to a sustainable development that meet the needs of the society. In achieving the goals, these activities must be evaluated from three dimensions including economic, social, and environmental aspects (Gathinji, 2004, p. 4 and MacLeod, 2005, p.545). Jenkins (2009, p. 7) and Tencati, Perrini, and Pogutz (2004, pp. 184-185) stated that the advantages of participating in corporate socially responsible actions including better image, improved relationship with stakeholders, better market position, easier access to funding resources, higher efficiency, higher working motivation for employees, and ultimately rewarding in cash flow.
3. FIRM'S PERFORMANCE
There are various methods for measuring the firm's performance depending …
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Publication information: Article title: Management Attitude towards Incorporating Corporate Social Responsibility and the Impact on Firm's Performance: Analysis of Thai SMEs. Contributors: Jarutirasarn, Piyachat - Author, Aiyeku, Joseph F. - Author. Journal title: International Journal of Business Strategy. Volume: 10. Issue: 2 Publication date: May 2010. Page number: 90+. © 2008 International Academy of Business and Economics. COPYRIGHT 2010 Gale Group.
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