Adopting Consistent PLS in Assessing the Influence of Internal Corporate Social Responsibility among Small Medium Sized Enterprises Employees

  • Mei Peng Low Universiti Tunku Abdul Rahman, Malaysia
  • Ramayah T. Universiti Sains Malaysia, Malaysia
Keywords: PLSc, Internal CSR, Affective commitment, Job satisfaction, Turnover intention, SMEs employees

Abstract

The research paper uses Consistent Partial Least Square (PLSc) which emerges as a more robust statistical approach recently, in assessing the influence of Internal Corporate Social Responsibility (CSR) among Small Medium Sized Enterprises (SMEs) employees. A total of 383 responses were collected from SMEs employees located in the state of Selangor, Malaysia. The results for Standardized Root Mean Square Residual (SRMR = 0.040) was lower than 0.08 and the Normed Fit Index (NFI = 0.929) was higher than 0.90. Thus, it was deemed that the data fits the model well. The results indicate that Internal CSR could enhance employees’ affective commitment, increase job satisfaction and thereby reduce turnover intention with R2 recorded at 0.439, 0.410 and 0.275 respectively. Job satisfaction was found to be mediating the relationship between Internal CSR and turnover intention. The findings offer insights to SMEs in the manifestation of Internal CSR among employees’ attitude and behaviour; as well as showcase the predictive utility of PLSc.

Downloads

Download data is not yet available.

References

Allen, N. J., and Meyer, J. P. (1996). ‘Affective, continuance, and normative commitment to the organization: An examination of construct validity’, Journal of vocational behavior, Vol. 49, No. 3, pp. 252-276.

Allen, N. J., and Meyer, J. P. (1990). ‘The measurement and antecedents of affective, continuance and normative commitment to the organization’, Journal of occupational psychology, Vol. 63, No. 1, pp. 1-18.

Anderson, J. C., and Gerbing, D. W. (1988). ‘Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach’, Psychological Bulletin, Vol. 103 (May), pp. 411-423.

Aguinis, H., &Glavas, A. (2012). ‘What we know and don’t know about corporate social responsibility a review and research agenda’, Journal of management, Vol. 38, No. 4, pp. 932-968.

Bansal, H.S., Irving, P.G., and Taylor, S.F. (2004). ‘A three-component model of customer commitment to service providers’, Journal of Academy Marketing Science, Vol. 32, No. 3,1pp. 09–250.

Bauman, C. W., and Skitka, L. J. (2012). ‘Corporate social responsibility as a source of employee satisfaction’, Research in Organizational Behaviour, Vol. 32, pp. 63-86.

Bendapudi, N., and Berry, L. L. (1997). ‘Customers' motivations for maintaining relationships with service providers’, Journal of retailing, Vol. 73, No. 1, pp. 15-37.

Bentler, P. M., and Bonett, D. G. (1980). ‘Significance Tests and Goodness-of-Fit in the Analysis of Covariance Structures’, Psychological Bulletin, Vol. 88, pp. 588-600.

Blau, P. M. (1964). Exchange and power in social life. Transaction Publishers.

Borges-Andrade, J. E., and Pilati, R. (2001). ‘Comprometimentoatitudinal e comportamental: relações com suporte e imagemnasorganizações’, Revista de AdministraçãoContemporânea, Vol, 5, No. 3, pp. 85-106.

Bowen, H. R. (1953).Social Responsibilities of the Businessman.New York City, NY: Harper & Brothers.

Brammer, S., Millington, A., and Rayton, B. (2007). ‘The contribution of corporate social responsibility to organization commitment’, International Journal of Human Resource

Brayfield, A. H., and Rothe, H. F. (1951). ‘An index of job satisfaction’, Journal of applied psychology, Volo. 35, No. 5, pp. 307.

Brown, T. J. and Dacin, P. A. (1997). ‘The company and the Product: Corporate Associations and Consumer Product Responses’, Journal of Marketing, Vol. 61, No. 1, pp. 68.

Carroll, A. B. (1999). ‘Corporate social responsibility: Evolution of a definitional construct’, Business and Society, Vol. 38, No. 3, pp. 268-295.

Castka, P. M., Balzarova, A. and Bamber, C. J. (2004). ‘How can SMEs Effectively Implement the CSR Agenda? A UK Case Study Perspective’, Corporate Social Responsibility and Environmental Management, Vol. 11, No. 3, pp. 140–149.

Cheah, J.H., Memon, M.A., Chuah, F., Ting, H. and Ramayah, T.,( 2018). ‘Assessing Reflective Models in Marketing Research: A Comparison Between PLS and PLSc Estimates’, International Journal of Business & Society, Vol. 19, No. 1.

Churchill, A.G. (1999), Marketing Research, 7th ed., Dryden Press, Chicago, IL

Clarkson, M. B. E. (1994). A Risk Based Model of Stakeholder Theory. Proceedings of the Second Toronto Conference on Stakeholder Theory, Centre for Corporate Social Performance & Ethics University of Toronto, Toronto.

Cook, J. and Wall, T. (1980). ‘New work attitude: measure of trust, organisational commitment and personal need non-fulfilment’, Journal of Occupational Psychology, Vol, 53, pp. 39-52.

Coyle-Shapiro, J., and Shore, L. (2007). ‘The employee–organization relationship: Where do we go from here?’, Human Resource Management Review, Vol. 17, No. 2, pp. 166-179.

Devinney, T. M. (2009). ‘Is the socially responsible corporation a myth? The good, the bad, and the ugly of corporate social responsibility’, Academy of Management Perspectives, Vol. 23, No. 2, pp. 44-56.

Diamantopoulos, A., and Siguaw, J. A. (2006). ‘Formative versus reflective indicators in organizational measure development: A comparison and empirical illustration’, British Journal of Management, Vol. 17, No. 4, pp. 263–282.

Dijkstra, T.K. and Henseler, J., (2015a). ‘Consistent and asymptotically normal PLS estimators for linear structural equations’, Computational statistics & data analysis, Vol. 81, pp.10-23.

Dijkstra, T.K. and Henseler, J., (2015b). ‘Consistent Partial Least Squares Path Modeling’, MIS quarterly, Vol. 39, No. 2.

Ditlev-Simonsen, C. D. (2015). ‘The relationship between Norwegian and Swedish employees’ perception of corporate social responsibility and affective commitment’, Business & Society, Vol. 54, No. 2, pp. 229-253.

Donaldson, T., and Preston, L. E. (1995). ‘The stakeholder theory of the corporation: Concepts, evidence, and implications’, Academy of management Review, Vol. 20, No. 1, pp. 65-91.

Edmans A. (2012). ‘The link between job satisfaction and firm value, with implications for of corporate social responsibility’, Academy of Management Perspectives, Vol. 26, pp. 1–19.

Eisenberger, R., Armeli, S., Rexwinkel, B., Lynch, P. D., and Rhoades, L. (2001). ‘Reciprocation of perceived organizational support’, Journal of applied psychology, Vol. 86, No. 1, pp. 42.

Eisenberger, R., Fasolo, P., and Davis-LaMastro, V. (1990). ‘Perceived organizational support and employee diligence, commitment, and innovation’, Journal of applied psychology, Vol. 75, No. 1, pp. 51.

European Commission. (2001). Employment and social affairs, promoting a European framework for corporate social responsibility, Brussels: Green Book.

Faul, F., Erdfelder, E., Lang, A.-G., and Buchner, A. (2007). ‘G*Power 3: A flexible statistical power analysis program for the social, behavioural, and biomedical sciences’, Behaviour Research Methods, Vol. 39, pp. 175-191.

Garland, B. E., McCarty, W. P., and Zhao, R. (2009). ‘Job satisfaction and organizational commitment in prisons: an examination of psychological staff, teachers, and unit management staff’, Criminal Justice and Behaviour, Vol. 36, No. 2, pp. 163-183.

Gefen, D., Rigdon, E. E., and Straub, D. (2011). ‘An Update and Extension to SEM Guidelines for Administrative and Social Science Research’, MIS Quarterly, Vol. 35, No. 2, pp. iii-A7.

Goodhue, D.L., Lewis, W. and Thompson, R., (2012). ‘Comparing PLS to regression and LISREL: A response to Marcoulides, Chin, and Saunders’, Mis Quarterly, pp.703-716.

Gold, A. H., Malhotra, A., and Segars, A. H. (2001). ‘Knowledge management: an organizational capabilities perspective’, Journal of Management Information Systems, Vol. 18, No. 1, pp. 185–214.

Gouldner, A. (1960). ‘The norm of reciprocity’, American Sociological Review, Vol. 25, No. 2, pp. 161-178.

Gruen, T. W., Summers, J. O., and Acito, F. (2000). ‘Relationship marketing activities, commitment, and membership behaviors in professional associations’, Journal of marketing, Vol. 64, No. 3, pp. 34-49.

Hair, J. F., Hult, G. T. M., Ringle, C. M., and Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling. 2nd Edition. Thousand Oaks: Sage.

Hayes, A.F., (2009). ‘Beyond Baron and Kenny: Statistical mediation analysis in the new millennium’, Communication monographs, Vol. 76, No. 4, pp.408-420.

Henseler, J., (2010). ‘On the convergence of the partial least squares path modeling algorithm’, Computational statistics, Vol. 25, No. 1, pp.107-120.

Henseler, J., Dijkstra, T. K., Sarstedt, M., Ringle, C. M., Diamantopoulos, A., Straub, D. W., and Calantone, R. J. (2014). ‘Common beliefs and reality about PLS: Comments on Rönkkö and Evermann (2013)’, Organizational Research Methods, Vol. 17, No. 2, pp. 182-209.

Homans, G. C. (1961). Social behavior. New York: Harcourt, Brace, and World.

Hu, L.-T., and Bentler, P. M. (1998). ‘Fit Indices in Covariance Structure Modeling: Sensitivity to Underparameterized Model Misspecification’, Psychological Methods, Vol. 3, No. 4, pp. 424-453.

Jones, T.M., Felps, W., and Bigley, G.A. (2007). ‘Ethical theory and stakeholder-related decisions: The role of stakeholder culture’, Academy of Management Review, Vol. 32, pp. 137–155.

Kim, H. L., Rhou, Y., Uysal, M., and Kwon, N. (2017). ‘An examination of the links between corporate social responsibility (CSR) and its internal consequences’, International Journal of Hospitality Management, Vol. 61, pp. 26-34.

Kline, R. B. (2011). Principles and practice of structural equation modeling. New York: Guilford Press.

Koonmee, K., Singhapakdi, A., Virakul, B., and Lee, D. J. (2010). ‘Ethics institutionalization, quality of work life, and employee job-related outcomes: A survey of human resource managers in Thailand’, Journal of Business Research, Vol. 63, No. 1, pp. 20-26.

Leite, N. R. P., Rodrigues, A. C. D. A., and Albuquerque, L. G. D. (2014). ‘Organizational commitment and job satisfaction: what are the potential relationships?’, BAR-Brazilian Administration Review, Vol. 11, No. 4, pp. 476-495.

Low, M. P. (2015). ‘Corporate Social Responsibility and the Evolution of Internal Corporate Social Responsibility in 21st Century’, Asian Journal Of Social Sciences And Management Studies, Vol. 3, No. 1, pp. 56-74.

Malhotra, N.K. (1996). Marketing Research: An Applied Orientation, 2nd ed., Prentice-Hall, Upper Saddle River, NJ.
Margolis, J. D., and Walsh, J. P. (2003). ‘Misery loves companies: Rethinking social initiatives by business’, Administrative science quarterly, Vol. 48, No. 2, pp. 268-305.

Mathieu, J. E., and Zajac, D. M. (1990). ‘A review and meta-analysis of the antecedents, correlates and consequences of organizational commitment’, Psychological Bulletin, Vol, 108, No. 2, pp. 171-194.

McDonald, R.P., (1996). ‘Path analysis with composite variables’, Multivariate Behavioral Research, Vol. 31, No. 2, pp.239-270.

Meyer, J. P., and Smith, C. A. (2000). ‘HRM practices and organizational commitment: Test of a mediation model’, Canadian Journal of Administrative Sciences/Revue canadienne des sciences de l'administration, Vol. 17, No. 4, pp. 319-331.

Meyer, J. P., Stanley, J. D., Herscovitch, L., and Topolnytsky, L. (2002). ‘Affective, continuance, and normative commitment to the organization: a meta-analysis of antecedents, correlates, and consequences’, Journal of Vocational Behavior, Vol. 61, No. 1, pp. 20-52.

Mishra, S. and Suar, D. (2010). ‘Does corporate social responsibility influence firm performance of Indian companies?’, Journal of business ethics, Vol. 95, No. 4, pp.571-601.

Mitchell, T.R., Holtom, B.C., Lee, T.W., Sablynski, C.J., and Erez, M. (2001). ‘Why people stay: Using job embeddedness to predict voluntary turnover’, Academy of Management Journal, Vol. 44, pp. 1102-1121.

Mobley, W.H. (1977). ‘Intermediate linkages in the relationship between job satisfaction and employee turnover’, Journal of applied psychology, Vol. 62, No. 2, pp. 237.

Morgeson, F. P., Aguinis, H., Waldman, D. A., and Siegel, D. S. (2013). ‘Extending corporate social responsibility research to the human resource management and organizational behaviour domains: A look to the future’, Personnel Psychology, Vol. 66, No. 4, pp. 805-824.

Mory, L., Wirtz, B. W., and Göttel, V. (2016). ‘Factors of internal corporate social responsibility and the effect on organizational commitment’, The International Journal of Human Resource Management, Vol. 27, No. 13, pp. 1393-1425.

Namasivayam, K., and Zhao, X. (2007). ‘An investigation of the moderating effects of organizational commitment on the relationships between work–family conflict and job satisfaction among hospitality employees in India’, Tourism Management, Vol. 28, No. 5, pp. 1212-1223.

O'Reilly, C. A., and Chatman, J. (1986). ‘Organizational commitment and psychological attachment: The effects of compliance, identification, and internalization on prosocial behavior’, Journal of applied psychology, Vol. 71, No. 3, pp. 492.

Park, B. I., and Ghauri, P. N. (2015). ‘Determinants influencing CSR practices in small and medium sized MNE subsidiaries: A stakeholder perspective’, Journal of World Business, Vol. 50, No. 1, pp. 192-204.

Peterson, D. K. (2004). ‘The relationship between perceptions of corporate citizenship and organizational commitment’, Business & Society, Vol. 43, No. 3, pp. 296-319.

Preacher, K. J., and Hayes, A. F. (2008). ‘Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models’, Behavior research methods, Vol. 40, No. 3, pp. 879-891.

Ringle, C.M., Wende, S., and Becker, J.-M. (2015). “SmartPLS 3,”
www.smartpls.com

Sarstedt, M., Hair, J.F., Ringle, C.M., Thiele, K.O. and Gudergan, S.P. (2016). ‘Estimation issues with PLS and CBSEM: Where the bias lies!’, Journal of Business Research, Vol. 69, No. 10, pp.3998-4010.

Settoon, R. P., Bennett, N., and Liden, R. C. (1996). ‘Social exchange in organizations: Perceived organizational support, leader–member exchange, and employee reciprocity’, Journal of applied psychology, Vol. 81, No. 3, pp. 219–227.

Siegel, D. S. (2009). ‘Green management matters only if it yields more green: An economic/strategic perspective’, Academy of Management Perspectives, Vol. 23, pp. 5–16.

Sullivan, G. M., and Feinn, R. (2012). ‘Using Effect Size - or why the p Value is not enough’, Journal of Graduate Medical Education, Vol. 4, No. 3, pp. 279–282.

Turker, D. (2009a). ‘Measuring corporate social responsibility: A scale development study’, Journal of Business Ethics, Vol. 85, No. 4, pp. 411–427.

Turker, D. (2009b). ‘How corporate social responsibility influences organizational commitment’, Journal of Business Ethics, Vol. 89, No. 2, pp. 189-204.

Van Marrewijk, M. (2003). ‘Concepts and definitions of CSR and corporate sustainability: Between agency and communion’, Journal of business ethics, Vol. 44, No. 2-3, pp. 95-105.

Vives, A. (2006). ‘Social and environmental responsibility in small and medium enterprises in Latin America’, Journal of Corporate Citizenship, Vol. 2006, No. 21, pp. 39-50.

Wayne, S. J., Shore, M., and Liden, R. C. (1997). ‘Perceived organizational support and leader-member exchange: a social exchange perspective’, Academy of Management Journal, Vol. 40, No. 1, pp. 82–111.

Wright, P. M., Snell, S. A., and Dyer, L. (2005). ‘New models of strategic HRM in a global context’, The International Journal of Human Resource Management, Vol, 16, No. 6, pp. 875-881.

Zhao, X., Lynch Jr, J.G. and Chen, Q. (2010). ‘Reconsidering Baron and Kenny: Myths and truths about
mediation analysis’, Journal of consumer research, Vol. 37, No. 2, pp.197-206.
Published
2018-10-23
How to Cite
Peng Low, M., & T., R. (2018). Adopting Consistent PLS in Assessing the Influence of Internal Corporate Social Responsibility among Small Medium Sized Enterprises Employees. Management Research Journal, 7, 44 - 58. https://doi.org/10.37134/mrj.vol7.5.2018