The impact of corporate social responsibility at workplace performance in multinational firms: a case study in Pakistan

Abstract

It is evident that the concept of CSR is well associated with moral and ethical issues in corporate world. Today’s organizations are highly competitive and it has become very important for the firms to integrate social and environmental aspects in their business activities. CSR deals with complex organizational issues such as human resource management, environmental practices, health and safety at work, relationships with communities, suppliers and customers. There has been an evidence that multinational firms in the developed nations are well aware about the concept of Corporate Social Responsibility and its practices at their workplace. However, it is observed that there has been a lack related to CSR practices. Since, its formal inception in the corporate world, particularly in key emerging economies including Pakistan, India, Mexico, Nigeria, Bangladesh and Middle East. In the emerging economies, the key gaps are poor governnace systems, macroeconomics destability, low investments in infrastructure and human development and financial management crises. The recent studies are showing an important gap to determine the impact of CSR at workplace performance in multinational firms in Pakistan. The aims of the present study are to explore the characteristics of CSR and determine how it creates an impact on multinational organization’s work place performance particularly their key operational areas in Pakistan. Based on stakeholders, the key argument of the present study is developed and the literature review section provides the overview of different stakeholders which are given by different theorists in the area of CSR as a theoretical underpinning of the present study. The Stakeholder Theory introduced by Edward Freeman (1984) creates its linkages and association towards active explanation of CSR and provides a theoretical underpinning of CSR phenomena. The linkages XVII provide a connection where its mandatory for organization’s stakeholders to be socially responsible in the society and perform their activities according to society laws. The mixed triangulation technique (Quantitative and Qualitative) is used to test the study hypotheses which are conceptualized through intellectual context of different researchers in order to achieve results from both perspectives to validate the proposed assumptions. The present study utilizes the mixed method to investigate the relationship of CSR (independent variable) and Workplace Performance (dependent variable) within multinational firms and also helps to provide full picture of shifts or variance in dependent variable (Workplace Performance) which are changed due to unforeseen circumstances. The quantitative data is analyzed through statistical tests which are reliability tests (Cronbach alpha, Guttman Lower bound), correlation analysis, cross tabulation of variables, graphical representation of cross-tabulations, chi-square tests, multiple response - group analysis which enables the audience to comprehend the impact of independent variable (reputation management, employee retention, innovation and investment & capital) on dependent variable (financial performance, organizational norms, employees and ethics). The qualitative analysis is performed through case study (single versus embedded) design by Yin, 2003 in order to achieve real life context results aligned with behaviors of stakeholders (internal & external) of the multinational firms of Pakistan. The quantitative results are statistical significant which supports the hypotheses of the present study. The qualitative case study protocol also managed to surface some rival explanations which are identified and explored through top management interviews in these firms. The research study is in compliance with internal validity, external validity and reliability design tests. XVIII The practical implication of the research study is catering the statement ‘turning theory into practice’. The study is showing its validity through internal, external and reliability tests. The generalizability of the research study is both from statistical and theory perspective. This study might be used in multinational firms at their business activities. The theoretical framework can be embedded in the strategic planning of a multinational firm where the business activities can be generated through CSR independent indicators (Reputation Management, Employees Retention, Innovation, Investment & Capital) in order to achieve workplace performance indicators (Financial Performance, Organizational Norms, Employees and Ethics) which further leads to increase overall productivity of a multinational firm of Pakistan. Another practical implication of the research study is that the regulatory organization Securities and Exchange Commission of Pakistan (SECP) can specify and add the CSR indicators (Reputation Management, Employees Retention, Innovation and Investment & Capital) in S.R.O. 983(1) 2009, section 246 of the companies’ ordinance 1984 in relation with CSR law for the companies that they should contribute their socially responsible investment for the betterment of the society. The present study is beneficial for the top management to incorporate the theoretical framework in their policies in order to enhance workplace performance of the multinational firms. The implementation of the CSR practices will reduce the bankruptcies and controversies among the stakeholder communities. For future research the new dimension of CSR may be explored which are beneficial for the overall productivity of an economy. The present study might be extended to conduct a comparative of Corporate social Responsibility and Shariah Islamic Law. Also, the future research may be conducted on the relationship of CSR and Islamic religion. This relationship XIX may scientifically lead to the evolution of CSR from Islam. The study can give idea how CSR is closely resembled to the Islamic religion and through its implementation can lead towards highly productive results.