Corporate Social Responsibility depending on the Size of Business Entity Tatjana Horvat University of Primorska, Faculty of Management, Slovenia
[email protected] Abstract. We investigated the reasons for and against corporate social responsibility (CSR) and how those reasons and planning of CSR activities are related to the size of business entity. In our study, we focused on companies in the Southeast Slovenia, which is the biggest and medium-developed region in Slovenia. The population in this region consists of 191 companies, the survey questionnaire was fully replied by 74 companies. We found that the three main reasons against CSR are lack of financial resources, lack of adequate staff and lack of time. Among the main reasons for CSR are company's reputation, customer loyality and observance of the law. For testing the main reasons we used contingency table and Chi-square test. We found that, the main reasons against CSR and planning of CSR are dependent on the size of the company. On the other hand, the main reasons for CSR are not dependent on the size of the company. Small entities are under increasing influence of reasons against the introduction of CSR, while larger companies the reasons against generally do not indicate or indicate to a lesser extent. Companies irrespective of their size indicate approximately the same reasons for CSR. Smaller companies mostly does not prepared plans of CSR practices. Keywords: corporate social responsibility, business entity, financial resources, reputation 1 Introduction Despite increased research on the various effects of corporate social responsibility (CSR), the question of whether CSR is worthwhile for firms still remains to be addressed. Prior work suggests that CSR offers firms insurance-like protection against negative publicity due to greater levels of goodwill with various stakeholders (Eisingerich et all 2011, 60). As follows from discussions at the European Commission and the European Parliament, European policy-makers need better understanding the motivation of company for corporate social responsibility (CSR) as a function of their size. This is one of the elements to restore customer loyality, concerned about production conditions for goods and services, and investors who want to evaluate the nonfinancial risks (European Economic and Social Committee in 2012, 3). Furthermore costumer loyality, company's reputation is one of the frequently mentioned reasons for CSR. As CSR activities affect the consequences that have a positive impact on corporate reputation, findings show that CSR enables firms to improve reputation with a broad range of stakeholders including employees (internal customers), customers (external customers), suppliers, competitors, bankers, and investors (Esen 2013, 133). The positive effect of CSR on firm performance is also due to the positive effect CSR has on competitive advantage, reputation, and customer satisfaction (Saeidi et al 2015, 341). Business entities must comply, in its operations, required legislation related to CSR, and respect the positive social norms that are not required by law. In Slovenia, The Company act is the main act for reporting social responsible issues for medium and large business entities. They are responsible to all of its stakeholders or interest groups, to employees, customers, suppliers, business partners, competitors, local communities, NGOs, public sector and wider society. We cannot create value
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without good relations with customers, employees, financial backers, suppliers, regulators, communities, and so on (Jensen 2002, 246). The concept of social responsibility of a business entity in the 50s first tried to establish by Boden, which social responsibility defines as a social obligation of the subject, that sets goals, accepts decisions and performs activities that are in line with expectations and values of society (Maignan and Ferrel 2004, 4). Numerous definitions of social responsibility, which invclude different orientations have developed later. Some definitions of social responsibility are focused on the general responsibility to the natural and social environment, other commit the responsibility of business entities to its participants or to interest groups. Environment business entities compile various interest groups regarding to (when are activated in relation to the subject) target public, more widely those include values, culture, patterns of behavior, and general economic, political, legal, technological, natural and other conditions that affect the attitudes and behavior of participants in relation to business entities (Dolinšek 2011, 429). The case against the concept of CSR typically begins with the classical economic argument articulated most forcefully by the late Milton Friedman in 1962 (Caroll and Shabana 2010, 88). Friedman held that management has one responsibility and that is to maximize the profits of its owners or shareholders (Caroll and Shabana 2010, 88). Friedman's statement, that the only social responsibility of a business entity is to increase profits, launched a major criticism and actually become an occasion for intensive development of the concept of corporate social responsibility. Arguments in favor of CSR typically begin with the belief that it is in business’s long-term self- interest – enlightened selfinterest – to be socially (Caroll and Shabana 2010, 88-89). As shown by one study among companies of different sizes and industries in Canada, the cost of implementing CSR is high, particularly in the primary resource and manufacturing sectors, where the cost of industry regulations and technical overhead is perceived to be onerous (Princic et al 2003, 4). Internal communications and training for employees on CSR practices is challenging for SMEs due to financial resource constraints and the lack of time and affordable, external support (Princic et al 2003, 4). Also research in Italy among SMEs showed that main obstacles to long-term vision, lack of financial resources and time for CSR training, lack of awareness regarding CSR development are lack of CSR training, lack of sensitivity on the part of the enterpreneur and the cost of socially irresponsible behaviour etc. (Idowu et al 2015, 443) Worldwide were developed several standards and guidelines related to the corporate social responsibility with regard to their reporting on social responsibility. The most important and the most common in use are, for example, GRI (General Reporting Initiative), the standard of social responsibility SA8000, standard for environmental liability EMAS, ISO quality standard, the policy of economic and social well-being of the United Nations Global Compact and the OECD guidelines. For this purpose we decided to investigate, which are the reasons for and against CSR most frequently mentioned and how those reasons and planning of CSR activities are related to the size of business entity. 2 The concepts of corporate social responsibility In theory and practice, we come across many different definitions of corporate social responsibility, with an increasing importance of social responsibility arise constantly new.
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Definition of the concept of social responsibility can be divided into three groups (Carroll, 1979): • Definitions that attempt to answer the question, what kind of economic, legal and voluntary activities is one of the responsibilities of a business entity. • Definitions, which are more focused on specific social issues in which the subject had its share (eg. environmental protection, care for employees, product safety etc.). • Authors of these definition are interested the way in which the entity responds to society (proactively or reactively), rather than dealing with the actual content of the activities. Recently better known definition refers to the connection between social responsibility with sustainable development. Sustainable development is a few wider term, because it involves three dimensions of activity of a business entity: environmental, economic and social dimension. The European Commission in 2011 issued a renewed EU strategy for corporate social responsibility of business entities for the period 2011-2014 (A Renewed EU Strategy 2011-14 for Corporate Social Responsibility). With the purpose of consistently meeting the social responsibility, these entities should have the established process for the inclusion of social, ethical and environmental issues as well as issues of human rights in their businesses. With a renewed strategy, the European Commission sets a new orientation on corporate social responsibility as a responsibility for their effects on society and depending on the size of business entity. The condition for takeover of that responsibility is the respect of valid laws and voluntary agreements among interest groups. In relation to social responsibility business entities it should be mentioned concept of tripartite outcomes (Triple Bottom Line) which was first introduced in the book Elkington (1998). The concept of tripartite outcomes besides economic also respects a social view and a view of the environment. In all three dimensions is going to unique principle of three P-I (3P): (profits, planet, people). The concept of tripartite outcomes is used in companies, nonprofit organizations and public services, although each of them in his own way measures and displays the results in all three categories (Slaper and Hall, 2011). There are also definitions corporate social responsibility in a negative spirit. Article in the economic magazine The Economist (Corporate Social Responsibility: Two-faced Capitalism, 2004) corporate social responsibility mark as one of the biggest fashion flies and large industry (a number of associations, web sites, forums, conferences and consultants). We come across on almost negative attitude to the concept of social responsibility. The authors warn on hypocrisy of business entities in the use corporate social responsibility. The British Association of Christian Aid (Corporate Social Responsibility: Two-faced Capitalism, 2004) in the 2004th issued a report on the controversial practices of business entities connected to social responsibility. They believe that large corporations are throwing sand in the eyes, taking advantage of corporate social responsibility to promote and improve the impression in the public eye. For easier understanding the concept of corporate social responsibility should be pointed out, what is not social responsibility (Vozel 2005, 19): 1. Business entities are not charitable institutions: what implies that these entities does not necessarily follow a call for socially responsible behavior, and at the same time neglect their own economic success. 2. Without a successful business does not have corporate social responsibility: business entities that invest in the environment, society and themselves, and at the same time neglect the interests of participants (owners, employees, local communities and other), operates irresponsibly, careless and achieve a positive value, is socially irresponsible. 3. More money in reporting rather than in the activity itself: business entities that invest more in reporting on their CSR activities, than in the activity itself, are socially irresponsible, it is just about positive promotion and market effects.
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4. Civil society is an integral part of the business: business entity, who renounces, the general public and every individual who has an interest associated with its business, the right of active participation in the decision making process on the basis of adequate information, it is not socially responsible. 5. List of irresponsible conducting: according to international standards are valid as extremely irresponsible: child labor, any discrimination, exhausting natural resources, environmental pollution, abuse of workers' rights, dangerous working conditions, corruption and others. Although, for the introduction of social responsibility in business entities exist many reasons and they are moral and economic, these entities are aware, to do operate in a dependent society and thus help to achieve added value for society. At the same time socially responsible entities have a higher reputation and loyalty among customers, higher attractiveness for investors, lower negative influence on the environment and are more sought among quality personnel. Gorski et al (2014, 224) investigated the level of awareness of corporate social responsibility concept and identified how CSR activities are planned and organised in Romania. Results have shown that in the surveyed organizations CSR practices are not enough understood and used. Arzenšek (2012) concludes that companies reporting on the management of employees as one of the aspects of social responsibility are very modest. 3 The results of research and discussion 3.1 The purpose of the research CSR is becoming increasingly an important issue for every stakeholder in business environment. The purpose of the research is to examine the relationship between the reasons for and against acting or planning CSR and the company size in the Southeast region in Slovenia. According to the theory the purpose of this article we collected, from various studies of different authors, 12 existing arguments for and 12 arguments against socially responsible practices of companies. Collected reasons for and against CSR we explored in one of the Slovenian statistical regions, which is the biggest and medium-developed region in Slovenia, the Southeast region. We assume that companies voluntarily socially responsible acting not only to satisfy legislative requirements or needs of the environment. For example, the implementation of some measures of safety and health at work is required by law. Implementation of specific measures to reduce noise and physical overload, for example, can be an additional activity by the entity implemented on a voluntary base. As shown in this paper, companies demonstrating social responsibility to increase reputation, and the main argument against the socially responsible practices is the lack of financial resources an time for CSR training. Regard to the reasons for and against the introduction of social responsibility from different surveys, we set the following objectives: 1. Determine which are the main reasons that companies in southeastern Slovenia does not carry the social responsibility; 2. Determine which are the main reasons that companies in southeastern Slovenia implement social responsibility; 3. Investigate whether there is correlation between: a. company size (number of employees) and the main reasons for social responsibility b. company size and the main reason against socially responsible practices c. company size and planning of socially responsible behavior in the future.
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Further, our aim is to evaluate hypothesis: H1: The main arguments against a socially responsible action are dependent on the size of the company. H2: The main reasons for socially responsible behavior depend on the size of the company. H3: Planning of corporate social responsibility depend on the size of business entities.. To find answers to research questions, we use several methods, for theoretical descriptions of individual areas We focused on companies in the Southeast Slovenia, which is, as we said, the biggest and mediumdeveloped region in Slovenia. In 2011 in this region among 191 companies, were 120 small, 40 medium and 31 large. To determine the sample size, we used the Cochran’s formula of simple random sampling, and chose 120 companies. We sent them a survey questionnaire, which was fully replied by 74 companies. The questionnaire was consisted of high structured questions, which means that the answers are predetermined. The reasons were collected from a variety of previously published research. Each company in the survey had to choose two reasons from all offered. 3.2 Sample introduction First we determine the size of the sample with the Cochran's formula for sample determination which is 120 units. This sample size was divided into strata according to common characteristics in our case the it is the size by number of employees, as defined by the Companies Act. Each stratum was carried out through the random sampling, where each unit has the same probability to be selected for the sample. Each company of the sample population are determined by three-digit numerical code and are chosen randomly by using the table of random numbers. We repeat this procedure until all of the 120 companies have selected. Selected companies we sent a questionnaire. The sample for the study thus represents 74 companies in Southeastern Slovenia, which fully complied the questionnaire, of sent 120 surveys. Table 1: Number of companies by branches Activity
Number Percentage
Processing industry
43
59%
Servicies
17
23%
Trade
7
9%
The primary activities (agriculture, forestry, mining)
6
8%
Electricity supply, construction and transport
1
1%
Total
74
100%
As shown in Table 1, most of responding companies operate in processing industry 59%, 23% of companies belong to the service industry, 9% of trade, 8% are engaged in primary activities (agriculture, forestry, mining), at least, by 1%, deal with the electricity supply, construction or transportation.
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Table 1: Size of enterprises by number of employees Number of employees
Number Percent
10–50
46
62%
51–250
16
22%
251 in več
12
16%
Total
74
100%
One of criteria for determining the size of enterprises is the number of employees, according to the Slovenian Companies Act, which is adapted to European directives. Table 2 shows that 46 companies according to the number of employees are small, 16 of them are medium and 12 are big enterprises, employing more than 250 employees. 3.3 The reasons that companies do not acting a socially responsible First, we want to determine which are the main reasons that companies in Southeastern Slovenia does not carry the social responsibility. From the theory and surveys we collected twelve reasons against CSR: lack of financial resources, lack of time, lack of public support, lack of adequate staff, lack of management support, unavailability of technology, employees are not motivated enough, CSR is not connected with the activity of the company, corporate social responsibility represents an additional cost, we are not familiar with socially responsible actions, no benefits from CSR, CSR is irrelevant. Table 3 shows the reasons to socially responsible behavior from the results of our survey. Table 3: The reasons that companies fail to implement socially responsible activities* The reasons that companies do not implement socially responsible activities
Number of Percentage companies
Lack of financial resources
43
58%
Lack of adequate staff
29
39%
Lack of time
26
35%
Employees are not motivated enough
12
16%
Unavailability of technology
12
16%
Corporate social responsibility represents an additional cost
8
11%
Lack of public support
6
8%
Not connected with the activity of the company
6
8%
Lack of management support. 4 5% We do not expect any benefits 2 3% We are not familiar with socially responsible actions 0 0% We do not want social responsibility, is irrelevant 0 0% Total 148 200% *Note: Each company in the survey had to choose two reasons of all offered, so overall percentages are equal 200%.
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With the survey we found that 58% of respondents indicated a lack of financial resources as the most important reason that socially responsible activities are not carried out. As next reason follows the lack of suitable staff (39% of respondents) thereafter lack of time (35%), employee motivation (16%), inaccessible technology (16%), and the other reasons. The fact is that companies rationally evaluate if they get something with social responsibility. Social responsibility brings not only positive effects, strictly speaking, you could say that these activities entail additional costs. They must hold a special person who will deal with social responsibility, and this takes time of employees. It seems that most companies of South East region considering that. Perhaps if they were familiar with the advantages that socially responsible behavior brings to the company and not only its surroundings, it would be a different approach to these activities. They must be aware, however, that the social responsibility is part of a long-term strategy of the company (Bončina Špelič 2012, 57-58). For the purposes of statistical verification we tested the first hypothesis, reading as follows: H1: The main arguments against a socially responsible action are dependent on the size of the company. For the purpose of verifying the hypothesis we set null hypothesis, reading as follows: H0: The main arguments against the socially responsible behavior are not dependent on the size of the company. We collected five most selected reasons according to the number of votes from table 3. With the contingency table and the Chi-square test we will verify the correlation between nominal dependent variable "main reasons against socially responsible behavior" and ordinal variable "company size based on the number of employees". The hypothesis will be verified at the 5% significance level (p≤ 0.05). Table 4: Contingency table: Relation of enterprise size and the main reasons against socially responsible behavior* Most selected reasons against CSR Company size
10-50 Lack of financial resources.
Lack of adequate staff Lack of time
Number % within the group % within the class % of Total Number % within the group % within the class % of Total Number
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27 62,80% 33,80%
51-250 10 23,30% 31,30%
over 250 6 14,00% 60,00%
Total 43 100,00% 35,20%
22,10% 19 65,50% 23,80% 15,60% 23
8,20% 8 27,60% 25,00% 6,60% 3
4,90% 2 6,90% 20,00% 1,60% 0
35,20% 29 100,00% 23,80% 23,80% 26
% within the group % within the class % of Total Number Employees are % within the group not motivated % within the class enough % of Total Number Unavailability % within the group % within the class of technology % of Total Number % within the group Total % within the class % of Total * Note: The calculations from SPSS.
88,50% 28,80% 18,90% 4 33,30% 5,00% 3,30% 7 58,30% 8,80% 5,70%
11,50% 9,40% 2,50% 6 50,00% 18,80% 4,90% 5 41,70% 15,60% 4,10%
0,00% 0,00% 0,00% 2 16,70% 20,00% 1,60% 0 0,00% 0,00% 0,00%
100,00% 21,30% 21,30% 12 100,00% 9,80% 9,80% 12 100,00% 9,80% 9,80%
80 65,60% 100,00% 65,60%
32 26,20% 100,00% 26,20%
10 8,20% 100,00% 8,20%
122 100,00% 100,00% 100,00%
Lack of financial resources, lack of adequate staff and lack of time are most selected reasons (table 4) against CSR selected from small companies (up to 50 employees). Table 5: Chi-square test * Chi-Square Tests Statistics
Value
Pearson Chi-Square 16,069 Likelihood Ratio 18,721 Linear-by-Linear Association 0,063 N of Valid Cases 122 * Note: The calculations from SPSS.
Degrees of freedom 8 8 1
Asymp. Sig. (2-sided) 0,041 0,016 0,802
First, we found that, there is a statistically significant connection among the variables. Value of the chi-square is 16.069, p = 0.041, significance is less than 5%. Null hypothesis was rejected so the main reasons against CSR are dependent on the size of the company. Small entities (up to 50 employees) are under increasing influence of reasons against the introduction of CSR, while larger companies the reasons against generally do not indicate or indicate to a lesser extent. 3.4 Reasons for socially responsible behavior of companies We want to determine which are the main reasons that companies in Southeastern Slovenia does carry the social responsibility. From the theory and surveys we collected twelve reasons for CSR: improving customer loyalty, complying with the law, increasing the company's reputation, increasing satisfaction of employees, improving relations with the local community and wider society, competitive advantage, moral and etical reasons, improving business or economic efficiency, innovation, improving relations with business partners and suppliers, utilisation of tax reliefs, subsidies, incentives, maintaining the reputation due to the strong impact on the natural environment.
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Table 6 shows the frequency distribution of the reasons for the socially responsible behavior of companies in Southeastern Slovenia. Table 6: Reasons for the socially responsible behavior of companies* Number of companies
Reasons
Percentage
Increase the company's reputation 41 55% Improve customer loyalty 18 24% Complying with the law 16 22% Improving relations with the local community and wider society 15 20% Increased satisfaction of employees 13 18% Moral and etical reasons 11 15% It brings us a competitive advantage 10 14% Improving relations with business partners and suppliers 8 11% The strong impact on the natural environment 7 9% Improving business, economic efficiency 4 5% Utilisation of tax reliefs, subsidies, incentives 2 3% Inovation 3 4% Total 148 200% *Note: Each company in the survey had to choose two reasons of all offered, so overall percentages are equal 200%. Of all the respondents most of them, 55 percent of the sample said that they act socially responsible with a view to enhancing reputation, the second most common reason is to improve customer loyalty (24%), the third reason is complying with the law (22%), followed by improving relations with the local community and wider society (20%),18% are socially responsible for the satisfaction of employees and 15% for moral or ethical reasons. Other reasons, listed in Table 6 were scarce. The results showed that the organizations want to be reputable through CSR activities. Further, we tested second hypothesis, reading as follows: H2: The main reasons for socially responsible behavior depend on the size of the company. For the purpose of verifying the hypothesis we set null hypothesis, reading as follows: H0: The main reasons for socially responsible behavior are not dependent on the size of the company. We collected five most selected reasons according to the number of votes from table 3. We will use contingency table and the Chi-square test by which we will verify the correlation between nominal dependent variable "main reasons for socially responsible behaviour " and ordinal variable "company size based on the number of employees". The hypothesis will be verified at the 5% significance level (p≤ 0.05). Most selected reasons for CSR are more evenly distributed among different sizes of companies (table 7).
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Table 7: Contingency table: correlation between size of companies and the main reasons for socially responsible behavior* Most selected reasons for CSR
Size of company
Number
10-50 19
% within the group % within the class % of Total
46,30% 40,40% 18,40%
31,70% 40,60% 12,60%
22,00% 37,50% 8,70%
100,00% 39,80% 39,80%
10
3
5
18
% within the group % within the class % of Total
55,60% 21,30% 9,70%
16,70% 9,40% 2,90%
27,80% 20,80% 4,90%
100,00% 17,50% 17,50%
Number % within the group % within the class % of Total
8 50,00% 17,00% 7,80%
5 31,30% 15,60% 4,90%
3 18,80% 12,50% 2,90%
16 100,00% 15,50% 15,50%
Number % within the group % within the class % of Total
5 33,30% 10,60% 4,90%
5 33,30% 15,60% 4,90%
5 33,30% 20,80% 4,90%
15 100,00% 14,60% 14,60%
Number Increased % within the group satisfaction of % within the class the employees % of Total
5 38,50% 10,60% 4,90%
6 46,20% 18,80% 5,80%
2 15,40% 8,30% 1,90%
13 100,00% 12,60% 12,60%
Number % within the group Total % within the class % of Total * Note: The calculations from SPSS.
47 45,60% 100,00%
32 31,10% 100,00%
24 23,30% 100,00%
103 100,00% 100,00%
45,60%
31,10%
23,30%
100,00%
Increase the company's reputation
Number Improve customer loyalty
Complying with the law Improving relations with the local community and wider society
Table 2: Chi-square test * Chi-Square Tests Statistics
Degrees Value of freedom
Pearson Chi-Square 4,614 Likelihood Ratio 4,741 Linear-by-Linear Association 0,283 N of Valid Cases 103 * Note: The calculations from SPSS.
8 8 1
Asymp. Sig. (2-sided) 0,798 0,785 0,595
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51-250 over 250 13 9
Total 41
Table 8 shows that, there is not a statistically significant connection among the variables (chi-square value is 4.614, p = 0.798, significance is greater than 5%). Null hypothesis was confirmed, so the main reasons for CSR are not dependent on the size of the company. Analysis showed that companies irrespective of their size indicate approximately the same reasons for CSR. 3.5 The impact of company size on the planning of social responsibility We determine whether, in the statistical region of South-East Slovenia, planning of socially responsible acting is dependent on the size of the business entity. We want to check the intensification of socially responsible acting in the future. Table 9. The implementation of plans for social responsibility of business entities Activities Number Percentage We carry out CSR activities and we do not plan CSR activities
35
47%
We carry out CSR activities and we do plan CSR activities
13
17%
We do not carry out CSR activities and we do not plan any CSR 11 activities
15%
We do not know if we will plan CSR activities
11%
8
Still do not perform CSR activities but we plan to start with our 7 CSR activities Total 74
10% 100%
We have found that at least 46 subjects in the sample have no plans for future, 47% act socially responsible, but do not plan CSR and 15% do not act and do not plan CSR activities. Seven of them do not act CSR activities but plan to begin with social responsibility activities, only 17% will intensify its activities in the field of social responsibility. The trend among business subjects of Southeast Slovenia does not lead in the right direction. More than half of companies do not plan CSR. For the purpose of statistical verification we test a third hypothesis, which which reads as follows: H3: Planning of corporate social responsibility depend on the size of business entities. To test this hypothesis we set the null hypothesis: H0: Planning of corporate social responsibility is not dependent on the size of business entities. We will use contingency table and the Chi-square test by which we will verify the correlation between nominal dependent variable "planning of socially responsible activities" and ordinal variable "company size based on the number of employees". The hypothesis will be verified at the 5% significance level (p≤ 0.05).
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Table 10: Contingent table: Planning of socially responsible activities and the size of the business entity* Size of company 250-
Total
0 ,0%
101250 0 ,0%
0 ,0%
11 100,0%
31,8%
,0%
,0%
,0%
14,9%
9,5% 1 14,3%
,0% 2 28,6%
,0% 0 ,0%
,0% 0 ,0%
14,9% 7 100,0%
4,5%
20,0%
,0%
,0%
9,5%
1,4%
2,7%
,0%
,0%
9,5%
10-20
21-50
51-100
Number 4 We do not carry out % within 36,4% CSR activities and the group we do not plan any CSR activities % within 16,7% the class % of Total 5,4% Number 4 Still do not perform % within 57,1% CSR activities but we the group plan to start with our % within 16,7% the class CSR activities % of Total 5,4%
7 63,6%
Number We carry out CSR % within activities and we do the group not plan CSR % within the class activities % of Total
9 25,7%
9 25,7%
5 14,3%
5 14,3%
7 20,0%
35 100,0%
37,5%
40,9%
50,0%
83,3%
58,3%
47,3%
12,2%
12,2%
6,8%
6,8%
9,5%
47,3%
Number % within We carry out CSR the group activities and we do % within plan CSR activities the class % of Total
2 15,4%
2 15,4%
3 23,1%
1 7,7%
5 38,5%
13 100,0%
8,3%
9,1%
30,0%
16,7%
41,7%
17,6%
2,7%
2,7%
4,1%
1,4%
6,8%
17,6%
0 ,0%
0 ,0%
8 100,0%
,0%
,0%
10,8%
,0% 6 8,1%
,0% 12 16,2%
10,8% 74 100,0%
Number 5 3 0 % within 62,5% 37,5% ,0% We do not know if the group we will plan CSR % within 20,8% 13,6% ,0% activities the class % of Total 6,8% 4,1% ,0% Number 24 22 10 % within 32,4% 29,7% 13,5% the group Total % within 100,0% 100,0% 100,0% the class % of Total 32,4% 29,7% 13,5% * Note: The calculations from SPSS. Small companies are not in favour to plan CSR activities (table 10).
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100,0% 100,0% 100,0% 8,1%
16,2%
100,0%
Table 11: Chi-square test * Chi-Square Tests Degrees Statistics Value of freedom 28,208a 16 Pearson Chi-Square 34,073 16 Likelihood Ratio 1 Linear-by-Linear Association 1,638 74 N of Valid Cases * Note: The calculations from SPSS.
Asymp. Sig. (2-sided) ,030 ,005 ,201
Table 11 shows statistically significant connection among the variables (chi-square value is 28,20, p = 0,030, significance is lower than 5%). Null hypothesis was rejected and confirmed that in statistical region of southeaster Slovenia the three-year plans of socially responsible activities are dependent on the size of the company. Small entities (up to 50 employees) mostly do not perform socially responsible behavior (24 subjects) and do not have a three-year plans, and 18 only performed, while biggest companies performing and have a three-year plan for social and responsible activities. 4 Conclusion Purpose of this paper was to make review and study of reasons for and against socially responsible behavior by companies in Southeastern statistical region in Slovenia and to explore whether there are in relation to theirs future plans. By univariate analysis of data (frequency distribution), we found that the three main reasons against CSR are lack of financial resources (58% companies), lack of adequate staff (39%) and lack of time (35%). Among the main reasons for CSR, most companies decided for increasing the company's reputation (55%), customer loyalty (24%) and observance of the law (22%). Furthermore, we investigated whether: ad (1) there is a correlation between the size of the company and the main reasons against CSR, ad (2) there is a correlation between the size of the company and the main reasons for CSR, and ad (3) there is a connection between the drawing up plains of CSR and size of companies. All three hypothesis were tested using contingency tables (crosstabs) method and the chi-square test. When testing first hypothesis we found that, there is a statistically significant connection among the variables (the value of the chi-square is 16.069, p = 0.041, significance is less than 5%), so the main reasons against CSR are dependent on the size of the company. On the other hand, the main reasons for CSR are not dependent on the size of the company (chi-square value is 4.614, p = 0.798, significance is greater than 5%). Analysis showed that planning of CSR depends on the size of the business entity. We have found, therefore, that the main arguments against the socially responsible practices associated with company size, while the reasons for socially responsible behavior are not related to it. The survey showed that smaller companies (up to 50 employees) was strongly influenced with reasons such as the lack of financial resources, lack of adequate staff and lack of time. We also found that the planning of social responsibility strongly influenced by firm size. Companies regardless of their size, show the same reasons for doing so. It would be advisable, particular for SMEs of Southeast Slovenian regions, they show ways how social responsibility could become part of their business. We 351
recommend systematic and target implementation and planning of social responsibility with regard to the size of the company and must be consistent with the vision and strategy of the business and stakeholders of ompany As one of the surveys shows the customers are less likely to experience anger and spread negative word of mouth following a service failure when a firm engages in high (donating 15% of profits to environmental conservation) but not low (donating 2% of profits) levels of CSR, but only if customers are high in CSR concern (Joireman et al 2015, 32). The CSR should affect the mission of the company (Enquist 2008, 55). Social responsibility influence on the overall service quality of companies (Sebhatu 2010, 195). It is particularly important to have a social responsibility support of the management and owners. If management believes that the socially responsible management is the most effective way of doing business, they will spontaneously behave a socially responsible and ethical (Bavec 2012, 362). Even the results of one survey showed that the company’s reputation for corporate social responsibility had a greater effect on consumers’ willingness to overlook negative information about the company than the company’s reputation for being customer-oriented (defined as the extent to which a business is viewed as being caring and attentive to customer needs) or for being oriented toward service quality (Eisingerich, 2011). These results suggest that a dollar invested in corporate social responsibility initiatives would buy greater insurance against negative information than a dollar invested in either service-quality orientation or customer orientation (Eisingerich, 2011). In further research is recommended to investigate the pros and cons, for which the company chose a lesser extent. We recommend the systematic introduction of CSR in companies of all sizes. For small firms we also call for stronger attention to the benefits of socially responsible entrepreneurship. In addition, we recommend the extension of the research to other Slovenian regions and comparing with other countries. References AJPES. 2012. »Informacija o poslovanju gospodarskih družb, samostojnih podjetnikov in zadrug v jugovzhodni Sloveniji v letu 2011.« Agencija Republike Slovenije za javnopravne evidence in storitve (AJPES), Ljubljana. http://www.ajpes.si/Letna_porocila/Informacije_iz_letnih_porocil Arzenšek, A. 2012. ‘A Comparative Study of Cognitive Schemas of HRM During Economic Crisis in Two Slovenian Sectors.’ Management 7 (1): 35-53. Bavec, C. 2012. ‘Social Responsibility and Professional Ethics in Management: Some Empirical Evidences at Country Levels.’ Managing Global Transitions 10 (4): 361-377. Bončina Špelič, T: 2012. Družbena odgovornost podjetij v občini Kočevje. Celje: Fakulteta za komercialne in poslovne vede. Carroll, A. B., 1979. ‘A Three-Dimensional Conceptual Model of Corporate Performance.’ The Academy of Management Review 4 (4): 497-505. Caroll, A. B. and Shabana, K. M. 2010. ‘The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice.’ International Journal of Management Reviews 12 (1): 85-105 Corporate Social Responsibility: Two-faced capitalism. 2004. The Economist, http://www.economist.com/ node/2369912 (5. 3. 2013). Dolinšek, T. 2011. ‘Internet Reporting of Corporate Social Responsibility of the Slovenian Banks.’ V Knowledge and Business Challenge of Globalisation in 2011, ur. M. Merkač Skok in M. Cingula, 429-440. Celje: Faculty of Commercial and Business Sciences.
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