Introduction
This study aims to investigate the current level of implementation of internal and external control on CSR issues among small and medium-sized enterprises, and to identify the factors that facilitate or hinder this implementation. The research methodology comprises a 10-question questionnaire grounded in a credible theory (Appendix A). The random sample comprises 147 respondents, including top managers from various types of companies.
Based on the results obtained (Appendix B), by identifying demographic data, using the Chi-square test of independence method, and visualization, answers were given to four research questions:
- Do stakeholder expectations regarding sustainable and responsible practices influence the presence of formal and informal CSR-related controls?
- Is there a relationship between managers’ perception of CSR significance and the presence of formal and informal CSR-related controls?
- Is proactiveness related to corporate performance?
- Is the existence of CSR-related formal and informal controls related to corporate performance?
Results
Demographics and Company Description
The results were calculated using the CountIf() function in Excel, as all questionnaire questions, except questions 7 and 8, had a nominal scale. Consequently, the Chi-square test of independence is a suitable method of interpretation in this case, as it is one of the few statistical tests capable of working with categorical and nominal scales (Turhan, 2020). Checking for relationships between variables using classical linear regression, t-test, or other methods is only possible with the ordinal scale of answers (Islam and Rizwan, 2020).
First, the demographic data of the respondents, including their gender, and questions regarding the description of the companies were analyzed. This information is needed to build limitations and clarify conclusions based on interpretation. Pie charts are presented in Figures 1 through 3.
According to these figures, the sample is truly random. However, it is still worth making a slight assumption that among the top managers surveyed, men from large companies with a staff of more than 300 people from the manufacturing sector predominated. This focus may lead to more specific responses relevant to industry leaders.
Expectations and Control
Using a CountIf() function in Excel, the number of responses of respondents to the fourth and sixth questions can be obtained according to the answer options and summed in the rows and columns accordingly. These data enable the calculation of expected values, which are then used to find the difference, square it, and divide the result by the expected value (Schober and Vetter, 2019). As a result of these calculations, the sum of all squared deviations from the expected values is calculated. The resulting number is compared in the table with the chi-square value, taking into account the degrees of freedom in the summary table. If the value obtained in the experiment is higher than the table value, then the relationship exists (Hung, 2020). In this work, alpha was set to 0.05; the results for all four hypotheses tested are presented in Table 1 below.
Table 1 – Research Results
According to the results from Table 1, a relationship exists between each of the mentioned variables. In fact, the existence of controls presupposes the existence of stakeholder expectations for sustainable and responsible behavior. The management and environmental organizations groups represent the highest indicators among respondents. At the same time, the lowest results are shown by the attitude towards the competitors’ group, as seen in the summary Table 2.
Table 2 – Expectations and Control
Notably, most of the answers are at the intersection with the standardized procedure to respond to every customer complaint, which is associated with expectations of responsible behavior on the part of management. Other control practices are much less common, which signals a trend of a responsible attitude towards customers on the part of management, to which the respondents consider themselves. According to research, the success of CSR implementation should come from management, which confirms this result (Fatima and Elbanna, 2023). This fact suggests that managers rely solely on themselves and their leadership team rather than on their employees or other stakeholders.
Perceived Importance and Control
Table 3 shows that most top managers emphasize the importance of having CSR control in the organization, using the same standard practice of processing individual requests. A more global view that involves monitoring negative impacts on the community is less common. At the same time, informal practices and environmental issues are much lower in the companies of the top managers surveyed. In this case, the reasons for these results may lie in the limitations of the questionnaire, which does not provide an answer option that covers several areas of CSR simultaneously. Still, it demonstrates a focus on operational activities, where the customer becomes more important than the business’s global impact on society and the environment. However, there is a connection between the understanding of importance and the existence of control systems since the calculated indicator was higher than the tabulated chi-square value.
Table 3 – Perceived Importance and Control
Proactiveness and Performance
Proactivity is a consequence of implementing the corporate citizenship approach since integrating responsible attitude practices among all company employees reduces the risks of negative consequences. A prudent approach naturally increases liquidity, as most respondents answered, according to Table 4. Although only a small part of top managers answered “strongly agree” regarding the use of this approach, the vast majority still agreed, despite doubting or denying its presence. It is worth noting that increasing liquidity was chosen over increasing sales or long-term growth, as liquidity may be improved by accumulating assets or reducing liabilities rather than by increasing the company’s growth rate.
Table 4 – Proactiveness and Performance
Control and Performance
The presence of formal and informal control, primarily through standard processing of customer requests, has a connection with the company’s performance, which again manifests itself through increasing liquidity. Any control practice, including even the most unpopular one, is associated precisely with increased liquidity. At the same time, according to the answers to the tenth question, a code of conduct is the key to success in this control issue, but not a focus on core values or specific CSR practices. Consequently, the apparent trend that CSR promotes primarily sustainable development aims to solve pressing operational problems of increasing liquidity. Moreover, the presence of forms of control is a mandatory condition in this case. Table 5 summarizes the survey results.
Table 5 – Control and Performance.
Conclusion
The study found a relationship between all the parameters in the four research questions. CSR-related control practices depend on understanding the importance and expectations of responsible behavior from specific stakeholders, who are, as a rule, the top managers of companies themselves. Moreover, contrary to the well-known trend that such adaptations primarily contribute to long-term sustainability, respondents highlighted precisely the increase in liquidity, which, on the one hand, opens up another positive aspect of CSR, but on the other hand, raises doubts about the solvency of organizations.
Reference List
Fatima, T., and Elbanna, S. (2023) ‘Corporate social responsibility (CSR) implementation: A review and a research agenda towards an integrative framework’, Journal of Business Ethics, 183(1), pp. 105-121.
Hung, T. L. (2020) ‘A study of chi-square-type distribution with geometrically distributed degrees of freedom in relation to distributions of geometric random sums‘, Mathematica Slovaca, 70(1), pp. 213-232.
Islam, T. U., and Rizwan, M. (2020) ‘Comparison of correlation measures for nominal data‘, Communications in Statistics-Simulation and Computation, 51(3), pp. 698-714.
Schober, P., and Vetter, T. R. (2019) ‘Chi-square tests in medical research‘, Anesthesia & Analgesia, 129(5), p. 1193.
Turhan, N. S. (2020) ‘Karl Pearson’s Chi-Square Tests‘, Educational Research and Reviews, 16(9), pp. 575-580.
Appendix A – Questionnaire
Appendix B – Questionnaire Results
