International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

Frequency: 12

line decor
  
line decor

 Volume 7, Issue 4 (April 2020), Pages: 54-61

----------------------------------------------

 Original Research Paper

 Title: Corporate social responsibility practice and its effects on community well-being in Southeast Sulawesi, Indonesia

 Author(s): Iskandar Zainuddin Rela 1, *, Abd Hair Awang 2, Zaimah Ramli 2, Mohd. Nor Shahizan Ali 2, Azima Abdul Manaf 2

 Affiliation(s):

 1Department of Agriculture Extension, Haluoleu University, Southeast Sulawesi, Indonesia
 2Faculty of Social Sciences and Humanities, National University of Malaysia (UKM), Bangi Selangor, Malaysia

  Full Text - PDF          XML

 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0000-0001-9645-5170

 Digital Object Identifier: 

 https://doi.org/10.21833/ijaas.2020.04.008

 Abstract:

Corporate social responsibility (CSR) should address the concerns of stakeholders toward its business activities and the social, economic, and environmental changes that CSR brings to the community. This study analyzes the impact of the CSR dimensions on community well-being (CWB). The measured CSR dimensions are economic, legal, and ethical aspects, including philanthropy. By contrast, CWB involves the social aspects, economic empowerment, and the environment. A total of 490 respondents from the local community answered survey questionnaires, while Smart PLS.3.0 is used for data analysis. Results of the structural model analysis identified a significant, positive, and direct relationship between CSR and CWB. The implications of this study establish an important link between the CSR and CWB dimensions. 

 © 2020 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords: Corporate social responsibility, Economic well-being, Environmental well-being, Philanthropy, Social well-being, Sustainable development

 Article History: Received 5 August 2019, Received in revised form 25 December 2019, Accepted 20 January 2020

 Acknowledgment:

The author thanks Prime Ministry Department for a helpful fund in this study (SK-2017-002) and led by Professor Dr. Fuad Mat Jali, Faculty of Social Sciences and Humanities, Universiti Kebangsaan Malaysia (UKM).

 Compliance with ethical standards

 Conflict of interest: The authors declare that they have no conflict of interest.

 Citation:

 Rela IZ, Awang AH, and Ramli Z et al. (2020). Corporate social responsibility practice and its effects on community well-being in Southeast Sulawesi, Indonesia. International Journal of Advanced and Applied Sciences, 7(4): 54-61

 Permanent Link to this page

 Figures

 Fig. 1 Fig. 2

 Tables

 Table 1 Table 2

----------------------------------------------

 References (71) 

  1. Ait Sidhoum A and Serra T (2017). Corporate sustainable development: Revisiting the relationship between corporate social responsibility dimensions. Sustainable Development, 26(4): 365-378. https://doi.org/10.1002/sd.1711   [Google Scholar]
  2. Alvarado-Herrera A, Bigne E, Aldas-Manzano J, and Curras-Perez R (2017). A scale for measuring consumer perceptions of corporate social responsibility following the sustainable development paradigm. Journal of Business Ethics, 140(2): 243-262. https://doi.org/10.1007/s10551-015-2654-9   [Google Scholar]
  3. Al-Zyoud I (2017). Impact of corporate social responsibility implementation in Jordanian public shareholding companies on sustainable development. Asian Social Science, 13(2): 94-106. https://doi.org/10.5539/ass.v13n2p94   [Google Scholar]
  4. Arnold MF (2010). Competitive advantage from CSR programmes. In: Louche C, Idowu SO, and Filho WL (Eds.), Innovative CSR: From risk management to value creation. Greenleaf Publishing Limited, Sheffield, UK.   [Google Scholar]
  5. Bagozzi RP (1980). Performance and satisfaction in an industrial sales force: An examination of their antecedents and simultaneity. Journal of Marketing, 44(2): 65-77. https://doi.org/10.1177/002224298004400208   [Google Scholar]
  6. Barclay D, Higgins C, and Thompson R (1995). The partial least squares (PLS) approach to casual modeling: Personal computer adoption ANS use as an illustration. Technology Studies: Special Issue on Research Methodology, 2(2): 284-324.   [Google Scholar]
  7. Basu K and Palazzo G (2008). Corporate social responsibility: A process model of sense making. Academy of Management Review, 33(1): 122-136. https://doi.org/10.5465/amr.2008.27745504   [Google Scholar]
  8. Beal BD (2013). Corporate social responsibility: Definition, core issues, and recent developments. Sage Publications, Thousand Oaks, USA. https://doi.org/10.4135/9781483388014   [Google Scholar]
  9. Bigné E, Chumpitaz R, Andreu L, and Swaen V (2005). Percepción de la responsabilidad social corporativa: Un análisis cross-cultural. UCJC Business and Society Review, 5: 14-27.   [Google Scholar]
  10. Bowen HR (1953). Social responsibilities of the businessman. Harper and Row, New York, USA.   [Google Scholar]
  11. Brew Y, Junwu C, and Addae-Boateng S (2015). Corporate social responsibility activities of mining companies: The views of the local communities in Ghana. American Journal of Industrial and Business Management, 5(6): 457-465. https://doi.org/10.4236/ajibm.2015.56045   [Google Scholar]
  12. Carroll AB (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, 34(4): 39-48. https://doi.org/10.1016/0007-6813(91)90005-G   [Google Scholar]
  13. Carroll AB and Buchholtz AK (2006). Business and society: Ethics and stakeholder management. 7th Edition, Routledge, Abingdon, UK.   [Google Scholar]
  14. Carroll AB and Shabana KM (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, 12(1): 85-105. https://doi.org/10.1111/j.1468-2370.2009.00275.x   [Google Scholar]
  15. Charitoudi G, Giannarakis G, and Lazarides TG (2011). Corporate social responsibility performance in periods of financial crisis. European Journal of Scientific Research, 63(3): 447-455. https://doi.org/10.5539/ijms.v3n1p2   [Google Scholar]
  16. Choi DY and Gray ER (2008). Socially responsible entrepreneurs: What do they do to create and build their companies? Business Horizons, 51(4): 341-352. https://doi.org/10.1016/j.bushor.2008.02.010   [Google Scholar]
  17. Christakopoulou S, Dawson J, and Gari A (2001). The community well-being questionnaire: Theoretical context and initial assessment of its reliability and validity. Social Indicators Research, 56(3): 319-349. https://doi.org/10.1023/A:1012478207457   [Google Scholar]
  18. Cool K, Dierickx I, and Jemison D (1989). Business strategy, market structure and risk‐return relationships: A structural approach. Strategic Management Journal, 10(6): 507-522. https://doi.org/10.1002/smj.4250100602   [Google Scholar]
  19. Crespo AH and del Bosque IR (2005). Influence of corporate social responsibility on loyalty and valuation of services. Journal of Business Ethics, 61(4): 369-385. https://doi.org/10.1007/s10551-005-5841-2   [Google Scholar]
  20. Cuthill M (2002). Coolangatta: A portrait of community well-being. Urban Policy and Research, 20(2): 187-203. https://doi.org/10.1080/08111140220144489   [Google Scholar]
  21. Dahlsrud A (2008). How corporate social responsibility is defined: An analysis of 37 definitions. Corporate Social Responsibility and Environmental Management, 15(1): 1-13. https://doi.org/10.1002/csr.132   [Google Scholar]
  22. Davis K and Blomstrom RL (1975). Business and society: Environment and responsibility. McGraw-Hill, New York, USA.   [Google Scholar]
  23. De Schutter O (2008). Corporate social responsibility European style. European Law Journal, 14(2): 203-236. https://doi.org/10.1111/j.1468-0386.2007.00411.x   [Google Scholar]
  24. Degie B and Kebede W (2019). Corporate social responsibility and its prospect for community development in Ethiopia. International Social Work, 62(1): 376-389. https://doi.org/10.1177/0020872817731148   [Google Scholar]
  25. El-Garaihy WH, Mobarak AKM, and Albahussain SA (2014). Measuring the impact of corporate social responsibility practices on competitive advantage: A mediation role of reputation and customer satisfaction. International Journal of Business and Management, 9(5): 109-124. https://doi.org/10.5539/ijbm.v9n5p109   [Google Scholar]
  26. Flint CG, Luloff AE, and Finley JC (2008). Where is “community” in community-based forestry? Society and Natural Resources, 21(6): 526-537. https://doi.org/10.1080/08941920701746954   [Google Scholar]
  27. Forjaz MJ, Prieto-Flores ME, Ayala A, Rodriguez-Blazquez C, Fernandez-Mayoralas G, Rojo-Perez F, and Martinez-Martin P (2011). Measurement properties of the community wellbeing index in older adults. Quality of Life Research, 20(5): 733-743. https://doi.org/10.1007/s11136-010-9794-2   [Google Scholar] PMid:21116721
  28. Fornell C and Larcker DF (1981). Structural equation models with unobservable variables and measurement error: Algebra and statistics. Journal of Marketing Research, 18(1): 39-50. https://doi.org/10.1177/002224378101800104   [Google Scholar]
  29. Freeman RE (1984). Strategic management: A Stakeholder Approach. Pitman, Boston, USA.   [Google Scholar]
  30. Hair JF, Sarstedt M, Ringle CM, and Gudergan SP (2017). Advanced issues in partial least squares structural equation modeling. Sage Publications, Thousand Oaks, USA. https://doi.org/10.1007/978-3-319-05542-8_15-1   [Google Scholar]
  31. Hart M (1999). Guide to sustainable community indicators. 2nd Edition, Hart Environmental Data, Andover, USA.   [Google Scholar]
  32. Hopkins M (1998). The planetary bargain: Corporate social responsibility comes of age. Macmillan, London, UK.   [Google Scholar]
  33. Huang CL and Kung FH (2010). Drivers of environmental disclosure and stakeholder expectation: Evidence from Taiwan. Journal of Business Ethics, 96(3): 435-451. https://doi.org/10.1007/s10551-010-0476-3   [Google Scholar]
  34. Hulland J (1999). Use of partial least squares (PLS) in strategic management research: A review of four recent studies. Strategic Management Journal, 20(2): 195-204. https://doi.org/10.1002/(SICI)1097-0266(199902)20:2<195::AID-SMJ13>3.0.CO;2-7   [Google Scholar]
  35. ICW (2017). Indication of state losses from less value of export Nickel Ore (HS 2604) Period 2007-2015. Indonesia Corruptions Watch, Jakarta, Indonesia. 
  36. Ismail M, Alias SN, and Mohd Rasdi R (2015). Community as stakeholder of the corporate social responsibility programme in Malaysia: Outcomes in community development. Social Responsibility Journal, 11(1): 109-130. https://doi.org/10.1108/SRJ-05-2013-0053   [Google Scholar]
  37. Khoury G, Rostami J, and Turnbull L (1999). Corporate social responsibility: Turning words into action. Conference Board of Canada, Ottawa, Canada.   [Google Scholar]
  38. Kim Y, Kee Y, and Lee SJ (2015). An analysis of the relative importance of components in measuring community wellbeing: Perspectives of citizens, public officials, and experts. Social Indicators Research, 121(2): 345-369. https://doi.org/10.1007/s11205-014-0652-4   [Google Scholar]
  39. Kotler P and Lee N (2005). Best of breed: When it comes to gaining a market edge while supporting a social cause, “corporate social marketing” leads the pack. Social Marketing Quarterly, 11(3-4): 91-103. https://doi.org/10.1080/15245000500414480   [Google Scholar]
  40. Lee SJ and Kim Y (2015). Searching for the meaning of community well-being. In: Lee SJ, Kim Y, and Phillips R (Eds.), Community well-being and community development: Conceptions and applications: 9-23. Springer, Berlin, Germany. https://doi.org/10.1007/978-3-319-12421-6_2   [Google Scholar]
  41. Mahmood M and Humphrey J (2013). Stakeholder expectation of corporate social responsibility practices: a study on local and multinational corporations in Kazakhstan. Corporate Social Responsibility and Environmental Management, 20(3): 168-181. https://doi.org/10.1002/csr.1283   [Google Scholar]
  42. Maignan I (2001). Consumers' perceptions of corporate social responsibilities: A cross-cultural comparison. Journal of Business Ethics, 30(1): 57-72. https://doi.org/10.1023/A:1006433928640   [Google Scholar]
  43. Matten D and Moon J (2008). “Implicit” and “explicit” CSR: A conceptual framework for a comparative understanding of corporate social responsibility. Academy of Management Review, 33(2): 404-424. https://doi.org/10.5465/amr.2008.31193458   [Google Scholar]
  44. McCrea R, Walton A, and Leonard R (2014). A conceptual framework for investigating community wellbeing and resilience. Rural Society, 23(3): 270-282. https://doi.org/10.1080/10371656.2014.11082070   [Google Scholar]
  45. McWilliams A and Siegel D (2001). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26(1): 117-127. https://doi.org/10.5465/amr.2001.4011987   [Google Scholar]
  46. Mohr LA, Webb DJ, and Harris KE (2001). Do consumers expect companies to be socially responsible? The impact of corporate social responsibility on buying behaviour. Journal of Consumer Affairs, 35(1): 45-72. https://doi.org/10.1111/j.1745-6606.2001.tb00102.x   [Google Scholar]
  47. Morton A and Edwards L (2012). Community wellbeing indicators, survey template for local government. Australian Centre of Excellence for Local Government, University of Technology, Sydney, Australia. https://doi.org/10.5130/aac.k   [Google Scholar]
  48. Murphy BL (2007). Locating social capital in resilient community-level emergency management. Natural Hazards, 41(2): 297-315. https://doi.org/10.1007/s11069-006-9037-6   [Google Scholar]
  49. Murphy BL (2010). Community well-being: An overview of the concept. Nuclear Waste Management Organization (NWMO), Toronto, Canada.   [Google Scholar]
  50. Nazri MA, Omar NA, and Hashim AJM (2018). Corporate social responsibility and market orientation: An integrated approach towards organizational performance. Jurnal Pengurusan (UKM Journal of Management), 52: 121-132. https://doi.org/10.17576/pengurusan-2018-52-10   [Google Scholar]
  51. Pérez A, del Mar García de los Salmones M, and Rodríguez del Bosque I (2013). The effect of corporate associations on consumer behaviour. European Journal of Marketing, 47(1/2): 218-238. https://doi.org/10.1108/03090561311285529   [Google Scholar]
  52. Phaholyothin N (2017). Moving beyond charity to philanthropy? The case of charitable giving in Thailand. Austrian Journal of South-East Asian Studies, 10(2): 185-203.   [Google Scholar]
  53. Podnar K and Golob U (2007). CSR expectations: The focus of corporate marketing. Corporate Communications: An International Journal, 12: 326-340. https://doi.org/10.1108/13563280710832498   [Google Scholar]
  54. Rahim RA, Jalaludin FW, and Tajuddin K (2011). The importance of corporate social responsibility on consumer behaviour in Malaysia. Asian Academy of Management Journal, 16(1): 119-139.   [Google Scholar]
  55. Ramsey D and Smit B (2002). Rural community well-being: Models and application to changes in the tobacco-belt in Ontario, Canada. Geoforum, 33(3): 367-384. https://doi.org/10.1016/S0016-7185(02)00008-8   [Google Scholar]
  56. Reeder RJ and Brown DM (2005). Recreation, tourism, and rural well-being. Economic Research Report No. 1477-2016-121194, United States Department of Agriculture (USDA). Washington, USA.   [Google Scholar]
  57. Rosser A and Edwin D (2010). The politics of corporate social responsibility in Indonesia. The Pacific Review, 23(1): 1-22. https://doi.org/10.1080/09512740903398314   [Google Scholar]
  58. Rudito B (2014). The improvement of community economy as impact of corporate social responsibility program: A case study in Pengalengan, Bandung, West Java, Indonesia. Procedia-Social and Behavioral Sciences, 164: 471-476. https://doi.org/10.1016/j.sbspro.2014.11.104   [Google Scholar]
  59. Salvaris M and Wiseman J (2004). Mapping community wellbeing: Using community wellbeing indicators to choose goals and measure progress. Victorian Health Promotion Foundation, Melbourne, Australia.   [Google Scholar]
  60. Sarwar A and Azam F (2013). Corporate social responsibility in Malaysia: The role of corporate sector in supporting the community and the environment. Research Journal of Commerce and Behavioural Science, 2(3): 54-59.   [Google Scholar]
  61. Sciortino R (2017a). Philanthropy, giving, and development in Southeast Asia. Austrian Journal of South-East Asian Studies, 10(2): 129-138.   [Google Scholar]
  62. Sciortino R (2017b). Philanthropy in Southeast Asia: Between charitable values, corporate interests, and development aspirations. Austrian Journal of South-East Asian Studies, 10(2): 139-163.   [Google Scholar]
  63. Sirgy MJ, Widgery RN, Lee DJ, and Grace BY (2010). Developing a measure of community well-being based on perceptions of impact in various life domains. Social Indicators Research, 96(2): 295-311. https://doi.org/10.1007/s11205-009-9479-9   [Google Scholar]
  64. Stanaland AJ, Lwin MO, and Murphy PE (2011). Consumer perceptions of the antecedents and consequences of corporate social responsibility. Journal of Business Ethics, 102(1): 47-55. https://doi.org/10.1007/s10551-011-0904-z   [Google Scholar]
  65. Sum S, Ramli Z, Lyndon N, Manaf AA, Saad S, and Selvadurai SV (2013). The roles of government agency in assisting CSR project for community development: Analysis from the recipients perspectives. Asian Social Science, 9(8): 17-22. https://doi.org/10.5539/ass.v9n8p17   [Google Scholar]
  66. Sum S, Zaimah R, Lyndon N, Hussain MY, and Awang AH (2015). Local community economic wellbeing through CSR project. Mediterranean Journal of Social Sciences, 6(4): 79-87.   [Google Scholar]
  67. Taneja SS, Taneja PK, and Gupta RK (2011). Researches in corporate social responsibility: A review of shifting focus, paradigms, and methodologies. Journal of Business Ethics, 101(3): 343-364. https://doi.org/10.1007/s10551-010-0732-6   [Google Scholar]
  68. Truong VD and Hall CM (2015). Exploring the poverty reduction potential of social marketing in tourism development. Austrian Journal of South-East Asian Studies, 8(2): 125-142.   [Google Scholar]
  69. Waagstein PR (2011). The mandatory corporate social responsibility in Indonesia: Problems and implications. Journal of Business Ethics, 98(3): 455-466. https://doi.org/10.1007/s10551-010-0587-x   [Google Scholar]
  70. Walton A, McCrea R, and Leonard R (2014). CSIRO survey of community wellbeing and responding to change: Western Downs region in Queensland. CSIRO Land and Water, Acton, Australia.   [Google Scholar]
  71. Wiseman J and Brasher K (2008). Community wellbeing in an unwell world: Trends, challenges, and possibilities. Journal of Public Health Policy, 29(3): 353-366. https://doi.org/10.1057/jphp.2008.16   [Google Scholar] PMid:18701903