A Study of Internal Corporate Social Responsibility Practices in Small Medium Enterprises Located in the State of Selangor

Abstract

Corporate Social Responsibility (CSR) has gained its attention and popularity since the last decade. There are many CSR debates which shaped by trends and fashions as well as fundamental changes of the political, social, and economic spheres of life. Tracing back, the precursor to CSR was topic of charitable giving, which had been in existence since 1980s. Todate, CSR has evolved to a business concept that had been accepted widely. Business corporations are focusing on CSR due to tremendous pressures from the society. Presently, CSR approach has geared toward stakeholder instead of shareholder compared to when it was started. Stakeholder management and CSR is a relational affair. Stakeholder theory means engaging with critical stakeholders such as employees, suppliers, customers, media, local communities, NGOs, could be the source of new ideas and opportunities (Freeman, 2009). This present a research agenda to look into the internal CSR practices towards the crucial internal stakeholders, i.e., the employees in aspects such as the pervasiveness of it’s practices, and how it affect the employees attitudes and behaviors. Adding on, as small medium enterprises (SMEs) are gaining its foothold in Malaysia economy. Hence, this research takes place in the state of Selangor which recorded the highest number of SME establishments. As SMEs are involved as the unit analysis in this research, entrepreneurial orientation is used to investigate its influence on the implementation of internal CSR. Overall, the results show significant impact between entrepreneurial orientation with the implementation of internal CSR and internal CSR practices also show positive relationship with employees’ organizational commitment and job satisfaction. The results reveal that the implementation of internal CSR has enhanced employees’ organizational commitment as well as job satisfaction. The results also revealed that internal CSR practices can reduce employees’ turnover intention. With the benefits of internal CSR towards employees’ attitudes and behaviors, SMEs may use this practice to augment employees’ performance in SMEs.

Keywords : internal CSR, employees, SMEs, organizational commitment, job satisfaction, turnover intention