Professional Documents
Culture Documents
Introduction
The role of business in society has been a matter of
discussion since the middle of the last century. The
increasing pressures of businesses on humanity and
the natural environment have raised concerns among
people all around the world considerably. Today,
the various stakeholders in national and international
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Although there is no consensus regarding the definition and scope of stakeholder in the literature, it
can be briefly defined as others with which the
organization interacts while pursuing their goals
(Wherther and Chandler, 2006, p. 4). In a broader
understanding, which can be attributed to the famous definition of Freeman (1984), stakeholders are
those groups or individuals who can affect or are
affected by the achievement of the organizations
objectives or are those actors with a direct or indirect
interest in the company (Verdeyen et al., 2004, pp.
326327). In order to clarify the scope of the
stakeholder concept, scholars have provided various
classifications. Some of the most useful of these
classify these groups or individuals as external and
internal stakeholders (Verdeyen et al., 2004); contracting and public stakeholders (Charkham, 1994);
voluntary and involuntary stakeholders (Clarkson,
1994); primary and secondary stakeholders (Clarkson, 1995; Freeman, 1984); primary social, secondary social, primary nonsocial, and secondary
nonsocial stakeholders (Wheeler and Sillanpaa, 1997,
1998); and internal, external, and societal stakeholders (Wherther and Chandler, 2006, p. 4).
The classification proposed by Wheeler and
Sillanpaa (1997) is obviously the most elaborate of
these alternatives. In this typology, stakeholders that
have direct impacts on relationships and involve
human entities are defined as primary social stakeholders. On the other hand, stakeholders that have
less direct impacts are secondary social stakeholders,
representing civil society, business at large, and
various interest groups. According to the authors,
this group can sometimes be extremely influential on
the business. The authors indicated that the nonsocial stakeholders do not involve human relationships
and divided them further into primary (direct) and
secondary (indirect) categories, including the natural
environment, nonhuman species, future generations,
and their defenders in pressure groups (Wheeler and
Sillanpaa, 1998, p. 205). It can be noted that the
consideration of nonsocial stakeholders has been a
significant advancement in the understanding of the
concept and has likely increased the recognition of
these stakeholders in the business community.
In the current study, this four-dimensional classification provides a useful means of conceptualization. Taking this understanding into account, CSR
can be further defined as corporate behaviors which
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aim to affect primary social, secondary social, primary nonsocial, and secondary nonsocial stakeholders positively and goes beyond its economic
interest. In order to find the most appropriate way of
measuring CSR based on this conceptual framework, the related literature should be examined
carefully. In the next section, the pros and cons of
the existing methods in the literature are discussed in
detail.
popular examples of this method. KLD rates companies, traded on the US stock exchange, based on
eight attributes of social activities (community relations, employee relations, environment, product,
treatment of women and minorities, military contracts, nuclear power, and South Africa). Fortunes
reputation index also offers a systematic tool for
evaluating socially responsible behaviors from a
managerial point of view. A reputation index can also
be used to derive new scales for measuring corporate
social activities (Abbott and Monsen, 1979). Ruf et
al. (1998) developed a scale to evaluate the relative
importance of KLDs eight dimensions by using an
analytical hierarchy process. According to these authors, the attributes of KLD coincided with the legal,
ethical, and discretionary dimensions of Carrolls
model (1979). However, Maignan and Ferrell (2000)
found these indices inadequate to evaluate all businesses and stated that both KLD and Fortune index
suffer from the fact that their items are not based
on theoretical arguments (p. 285).
Another well-known database is CSID, which
measures the sum of the average of a firms net
strength and weakness for each of seven dimensions
(Mahoney and Thorne, 2005, p. 244): community,
diversity, employee relations, environment, international operations, product and business practices,
and corporate governance. Although this database
reflects some key stakeholder relationships, it only
details companies traded on the Canadian stock exchange. Apparently, besides other limitations, the
most important problem with these databases is their
limited area of assessment; they are only designed to
evaluate companies in some countries.
The second alternative method is the use of single- and multiple-issue indicators. The pollution
control performance, reported by the Council of
Economic Priorities (CEP), is an example of such a
single-issue indicator and has been used by several
scholars (e.g., Bragdon and Marlin, 1972; Chen and
Metcalf, 1984; Freedman and Jaggi, 1982). Corporate crime is another indicator of socially responsible
behaviors used by scholars (Baucus and Baucus,
1997; Davidson and Worrell, 1990). As can be
noticed, the unidimensionality of this method is a
significant limitation (Maignan and Ferrell, 2000).
Therefore, scholars may prefer to use a combination
of these indicators. However, even with the use of
a multiple-issue indicator, this approach still has
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the development of this scale is a significant contribution to the literature. However, the main limitation of the scale is that it considers only three
primary stakeholders (customers, employees, and
public). Maignan and Ferrell (2000) emphasized that
these stakeholders are not the only ones who can
impose responsibilities on businesses and whose
welfare can be directly affected (p. 295).
In summary, a review of the literature shows that
there are several methods to measure corporate social
activities. Although these methods have contributed a
lot to the CSR literature, almost all of them have some
limitations. Second, and more importantly, none of
these methods addresses the issue of CSR from the
perspective of the current study. As mentioned previously, this study conceptualizes CSR based on the
exclusion of the economic component, while incorporating the stakeholder concept. Therefore, there is a
need to develop a new scale which articulates CSR
according to the proposed conceptual framework.
Literature Review
Conceptualization of the Scale
Item generationthrou gh Literature Review
Exploratory Survey:
Item generation through exploratory survey
with open-ended 8 questions (n=21)
Group Discussion-1: Item generation
through group discussion / 55 items
Group Discussion-2: Item generation through
group discussion / 42 items
Pilot Survey:
Item selection and examination of validity of
7-point scale through pilot survey (n=30)
Assessment-1: Item extraction through
Correlation Analysis / 29 items
Assessment-2: Item extraction through
Exploratory Factor Analysis / 21 items
Research methodology
Final version of scale/ 18 items
Scale design
Main Survey (n=269)
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TABLE I
CSR Scale
No.
Items
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
Our company provides a wide range of indirect benefits to improve the quality of employees lives.
The employees in our company receive a reasonable salary to maintain an acceptable quality of life.
Our company policies provide a safe and healthy working environment to all its employees.
Our company supports employees who want to acquire additional education.
There are sufficient numbers of opportunities to develop my skills in my current job.
Our company policies encourage the employees to develop their skills and careers.
Our company implements flexible policies to provide a good work & life balance for its employees.
The management of our company is primarily concerned with employees needs and wants.
The managerial decisions related with the employees are usually fair.
I believe that our company provides equal opportunities to all its employees.
One of the main principles of our company is to provide high-quality products to its customers.
Our products comply with the national and international standards.
The guarantee extension of our products is the most advantageous choice in the market.
Our company provides full and accurate information about its products to its customers.
Our company respects consumer rights beyond the legal requirements.
Customer satisfaction is highly important for our company.
Our company is responsive to the complaints of its customers.
Our company is known as a respected and trustworthy company.
Our company emphasizes the importance of its social responsibilities to the society.
Our company contributes to schools, hospitals, and parks according to the needs of the society.
Our company contributes to campaigns and projects that promote the well-being of the society.
Our company endeavors to create employment opportunities.
Our company always pays its taxes on a regular and continuing basis.
Our company complies with legal regulations completely and promptly.
Our company tries to help the government in solving social problems.
Our company acts legally on all matters.
Our companys main principle is honesty in every business dealing.
Our company cooperates with its competitors in social responsibility projects.
Our company competes with its rivals in an ethical framework.
Our company always avoids unfair competition.
Our company implements special programs to minimize its negative impact on the natural environment.
Our company participates in activities which aim to protect and improve the quality of the natural environment.
Our company has the necessary equipment to reduce its negative environmental impact.
Our company makes well-planned investments to avoid environmental degradation.
Our company targets sustainable growth which considers future generations.
Our company makes investment to create a better life for future generations.
Our company makes investments to create employment opportunities for future generations.
Our company conducts research & development projects to improve the well-being of society in the future.
Our company makes sufficient monetary contributions to charities.
Our company encourages its employees to participate in voluntarily activities.
Our company supports nongovernmental organizations working in problematic areas.
Our company considers every warning of nongovernmental organizations.
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TABLE II
Total variance explained and rotated factor loading matrix (VARIMAX)
No.
Items
Factor
Commonalities
8.
9.
14.
15.
16.
19.
21.
22.
23.
24.
28.
30.
31.
32.
35.
36.
0.803
0.767
0.735
0.884
0.724
0.757
0.808
0.790
0.698
0.736
0.731
0.797
0.788
0.791
0.817
0.890
0.905
0.617
0.798
0.646
0.892
0.443
0.795
0.748
0.764
0.872
0.919
0.704
0.796
0.401
0.814
0.479
0.913
0.828
0.871
0.790
0.830
0.774
0.876
0.680
0.870
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TABLE II
continued
No.
Items
Factor
Factor 1
40.
41.
10.906
51.934
Factor 2
Factor 3
Commonalities
Factor 4
Factor 5
0.699
0.730
0.831
0.921
2.050
9.761
1.995
9.499
1.484
7.069
1.035
4.929
Total
17.47
83,192
Note: Factor loadings less than 0.40 have not been reproduced and items have been sorted by loadings on each factor.
Descriptive statistics
The respondents in this study were 269 business
professionals working in different for-profit organizations and sectors in Turkey. In terms of gender, 127
of them (47.2%) were female, 140 of them (52%) were
male, and 2% had this data missing. The age range of
the respondents was 1961 years with a mean of 31.23
years. Agewise, 17% were aged 1825 years, 41% were
2630 years, 19% were 3135 years, 13% were 3640
years, and 10% were above 41 years. Among all
respondents, 66.2% had a bachelor degree, 22.7% had
a master degree, and 5.9% had a PhD degree. Based on
this higher education level, 261 of all the respondents
(97%) had white-collar jobs, 7 (2.6%) of them had a
blue-collar job, and this data was missing for 1 (0.4%).
According to the general experience level of the
respondents, 18.2% had less than 2 years, 28.3% had 3
5 years, 25.3% had 610 years, 14.1% had 1115 years,
and 14.1% had more than 16 years experience.
According to the seniority of the respondents, 38.3%
of them had less than 2 years experience in their
organizations, 30.9% of them had 35 years, 17.5%
had 610 years, 5.2% had 1115 years, 7.8% had more
than 16 years experience, and 0.4% of them did not
provide any information.
Most of the respondents (61.3%) were working in
the service sector. The manufacturing and agricultural sectors represented 33.1% and 4.1%, respectively. Additionally, while 204 respondents (75.8%)
were working in domestic companies, only 31 (11.5)
were working in multinational companies. In order
to analyze the size of the organizations, a classification based on the number of the employees in the
organizations was used in the study. More than half
of the respondents (51.7%) were working in largescale organizations and 48.1% were working in
smaller than mid-scale organizations. Moreover, the
respondents organizations were geographically dispersed in Turkey.
Factor analyses
Factor analysis was performed within the six-stage
model-building framework introduced by Hair et al.
(2006). Table III presents the correlation matrix for
18 items of the scale. A review of the correlation
matrix reveals that 141 of the 153 correlations
(approximately 93%) are significant at the 0.01 level,
which provide adequate basis to perform a factor
analysis for each item and for the overall basis. To
evaluate the overall significance of the correlation
matrix, the Bartletts test was used again. The
Bartletts test found that the correlations, when taken
collectively, were significant at the 0.0001 level.
The data gathered from the main survey were
analyzed through principal components factor analysis. Table IV shows the information regarding the 18
possible factors and their relative explanatory powers.
In the table, it is possible to assess the importance of
each component and select the ideal number of factors
while using the eigenvalues at the same time. The four
factors capture 70.782% of the variance of the 18
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TABLE III
Correlation matrix of the CSR scale
Item no.
4.
6.
7.
8.
9.
14.
15.
16.
19.
21.
23.
24.
31.
32.
35.
36.
40.
41.
4.
6.
7.
8.
9.
14.
15.
16.
19.
21.
23.
24.
31.
0.718
0.475
0.521
0.400
0.259
0.232
0.273
0.328
0.416
0.144
0.205
0.303
0.290
0.359
0.405
0.392
0.424
0.629
0.698
0.566
0.340
0.351
0.351
0.452
0.477
0.088
0.138
0.289
0.268
0.387
0.440
0.432
0.414
0.702
0.587
0.363
0.353
0.302
0.410
0.380
0.105
0.140
0.230
0.222
0.307
0.307
0.416
0.363
0.722
0.446
0.388
0.389
0.426
0.418
0.091
0.142
0.230
0.232
0.298
0.343
0.412
0.343
0.495
0.397
0.422
0.373
0.316
0.125
0.162
0.152
0.080
0.242
0.251
0.324
0.291
0.689
0.657
0.438
0.283
0.350
0.353
0.285
0.173
0.272
0.180
0.194
0.163
0.633
0.460
0.288
0.343
0.338
0.298
0.180
0.195
0.179
0.192
0.154
0.464
0.293
0.406
0.395
0.217
0.127
0.234
0.174
0.160
0.108
0.692
0.243
0.282
0.423
0.381
0.449
0.509
0.458
0.473
0.156
0.217
0.418
0.455
0.490
0.598
0.546
0.551
0.868
0.261
0.164
0.250
0.145
0.098
0.127
0.310
0.207
0.310
0.205
0.170
0.173
0.735
0.540
0.500
0.427
0.432
32.
35.
36.
40.
0.577
0.578 0.707
0.480 0.451 0.635
0.466 0.430 0.622 0.726
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TABLE IV
Total variance explained and rotated factor loading matrix (VARIMAX)
No.
Items
Factor
Commonalities
0.819
0.684
0.815
0.732
0.745
0.634
0.723
0.603
0.703
0.632
0.672
0.607
0.694
0.633
0.564
0.502
0.635
0.806
0.762
0.806
0.778
0.760
0.663
0.728
0.685
0.708
0.628
0.824
0.748
0.814
0.761
0.775
7.230
40.169
2.412
13.400
2.048
11.378
0.921
0.720
0.918
0.915
0.918
1.050
5.835
Total
12.74
70.782
Note: Factor loadings less than 0.40 have not been reproduced and items have been sorted by loadings on each factor.
Reliability analysis
In the reliability assessment, two commonly used
methods were chosen for each scale. Firstly, the interitem correlations of each scale were computed and
interpreted. As a rule of thumb, the item-to-total
correlations should exceed 0.50 and the inter-item
correlations should exceed 0.30 (Hair et al., 2006, p.
137). Table II shows that the correlation matrix includes 17 items, after the deletion of 19th item. There
are 136 different item pairings or correlations and the
average inter-item correlation is 0.35, higher than the
suggested threshold value of 0.30.
In the second method, the internal consistencies
of each scale were assessed by computing Cronbachs
alpha. Although the generally agreed upon lower
limit for Cronbachs alpha is 0.70, the decisions were
taken based on the number of items, number of
dimensions, and average inter-item correlations
(Cortina, 1993). Therefore, as computed above, the
inter-item correlation is 0.35, and the scale includes
17 items in four dimensions. The suggested alpha for
similar conditions (r = 0.30/18 items/3 dimensions)
described by Cortina is 0.64 (1993). The Cronbachs
alpha of the CSR scale (0.9013) was much higher
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Conclusion
According to Carroll (2000), since it is difficult to
gather actual measures, there is a tendency to rely on
stakeholders opinions or assessments of performance
in the literature. However, developing comprehensive measures of corporate social activities that really
address social performance is a challenge. Because,
if we do less than this, we should not call it social
performance (Carroll, 2000, p. 474). In spite of this
apparent risk, relying on stakeholders views can be a
more reliable way of measuring corporate social
activities compared to alternative methods. In the
current study, a new measure of CSR was obtained
based on the views of employees. After an elaborate
scale development process, the current structure of
the scale provides some important implications.
In the study, the typology of Wheeler and Sillanpaa
(1997) provided a base to build a framework for
stakeholders. Although these scholars theoretically
defined the concept in a broader sense, some of the
selected stakeholders were eliminated during the scale
development process. At the beginning of the study,
employees, customers, society, government, competitors, natural environment, future generations, and
NGOs were selected to represent each dimension of
the typology. However, as a result of the scale
development process, the responsibilities to competitors were eliminated from the factorial structure. The
possible reason for this result may be the dual meaning
of some statements. Alternatively, the respondents
may think that a business does not have a responsibility
to their competitors. However, in the light of the
discussions on fair competition and corporate spying,
it can be estimated that the responsibilities to competitors will be more significant in the near future.
Therefore, as a suggestion, this stakeholder should be
reconsidered in further studies.
One of the interesting results in the study is the
stakeholder combination and explanatory strength of
the first factorial subscale which includes CSR to
society, natural environment, future generations, and
NGOs. It can be noticed that this subscale includes
more than one stakeholder and they are closely
interrelated with each other. As discussed previously,
these stakeholders are generally considered as having a
secondary or less direct impact on business operations.
However, especially in recent decades, increasing
concerns about global problems have made people
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Vocational School,
Yasar University,
Kazim Dirik Mah., 364 Sok., No. 5, Bornova,
Izmir 35500, Turkey
E-mail: duygu.turker@yasar.edu.tr