Academic journal article International Journal of Management

Effects of Government Regulations, Market Orientation and Ownership Structure on Corporate Social Responsibility in China: An Empirical Study

Academic journal article International Journal of Management

Effects of Government Regulations, Market Orientation and Ownership Structure on Corporate Social Responsibility in China: An Empirical Study

Article excerpt

Previous research on corporate social responsibility mainly focuses on its nature and impact on business performance. This paper reports on a study that contributes to our understanding of the determinants of corporate social responsibility by focusing specifically on the role played by three strategically important variables, namely government regulation, ownership structure and market orientation. Results of a survey of 586 general managers of hotels in China suggest that the market orientation is the most significant predicator of corporate social responsibility followed by government regulation. In contrast, the ownership structure is found to have little effect. The implications of the findings for managers in China are discussed.

Introduction

Recently, corporate social responsibility has received considerable attention from both academics and practitioners (See Smith 1996; Jones 1997; Griffin and Mahon, 1997; Waddock and Graves, 1997; Maignan and Ferrell, 2001; Maignan and Ralston 2002, Graafland et al, 2003; Durant 2006). This may be explained by the fact that although some studies postulated a negative relationship (e.g., Vance 1975) or no relationship (e.g., Aupperle et al, 1985) between the corporate social responsibility (CSR) and business performance, more recent studies provided the empirical evidence that there is a positive relationship between those two constructs (Abratt and Sacks 1988, Russo and Fouts 1997, Waddock and Graves 1997). In addition, the empirical evidence suggests that CSR could have other benefits to a firm. For instance, a recent survey (Smith, 1996) found that 88 percent of consumers in the study are more likely to buy from a company that is socially responsible, suggesting that CSR could be an effective marketing tool in the future. It is also reported that corporate social responsibility could have positive effects in helping companies to attract more talented and committed employees (Maignan et al 1999). In contrast to a growing body of research supporting the importance of corporate social responsibility, the issues relating to the determinants and development of a corporate social responsibility are still relatively under-researched. In addition, most of the research to date has been conducted in the developed countries, mainly in the US and Europe. Consequently, there is limited knowledge on how corporate social responsibility is perceived and implemented by companies in developing countries (Al-Khatib et al, 2004).

This paper aims to contribute to the above under-researched areas by considering the relative impacts of government regulations, ownership structure and company's market orientation on the development of corporate social responsibility in China, the largest developing country in the world. The article begins with a brief review of the literature and then discusses the development of hypotheses. The following section explains the research method and data collection procedures. Thereafter, the results of the data analysis are presented and the final section provides a discussion and conclusion.

The Determinants of Corporate Social Responsibility

As a broad concept, corporate social responsibility has been given a variety of meanings. Along with the term of corporate social responsibility, other terms such as corporate social responsiveness, corporate social performance, corporate citizenship and stakeholder management have also been extensively used (see Magnan and Ferrei 1999, Carroll 1979; Griffin and Mahon 1997; Stanwick and Stanwick 1998; Turban and Greening 1996;Clarkson 1995; Waddock and Graves 1997). Despite of the existence of a variety of definitions, a review of literature suggests, however, that the classification framework made by Carroll (1979) has received a wide acceptance. According to Carroll (1979), corporate social responsibility is a multi-dimensional construct consisting of four types of responsibilities: economic, legal, ethical, and discretionary. …

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