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Internal and external pressures towards CSR practices

In document Empirical evidence from Sri Lanka (Page 167-175)

An exploratory analysis of CSR practices in Sri Lanka

6.2. The questionnaire survey analysis of CSR practices

6.2.3. Internal and external pressures towards CSR practices

The questionnaire survey analysis of CSR practices

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Figure 6.2-8: Engagement in socially-related activities by scale of business operations

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Figure 6.2-9: Internal and external pressures to improve environmentally

The other commonly reported internal pressure to improve environmentally was employees, but that was reported by only 20 per cent of the respondents. However, comparatively a higher rate – 29 per cent – indicated that employees exerted pressure to improve socially-related activities. Pressure may be felt from employee unions wanting social welfare to be improved.

Figure 6.2-10: Internal and external pressures to improve socially-related activities

 

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Eighty eight per cent of respondents reported some kind of internal pressure to improve environmentally, which means that 12 per cent of respondents reported no internal pressure at all. Thirty seven per cent reported no external pressure to improve environmentally. With regard to socially-related activities, 43 per cent indicated that there was no external pressure at all to improve socially. An equal external pressure, more or less, to improve environmentally and socially comes from the government, customers, competitors, and pressure groups (See Figure 6.2-9 and Figure 6.2-10.). This result reflects the willingness of the company senior management to accommodate CSR activities, but there is no pressure externally to make CSR activities happen consistently.

6.2.3.2. Internal and external pressures to improve environmentally and socially by company size

Figure 6.2-11 and Figure 6.2-12 show the survey results of internal and external pressures to improve environmentally and socially, sorted by company size. The results reflect that the large companies are more likely to undergo internal and external pressures and the small companies are more likely to experience less internal and external pressure to improve environmentally and socially. All of the large companies indicated that they feel some kind of internal pressure to improve environmentally and only 4 per cent of the large companies indicated that they experience no internal pressure to improve socially.

However, 62 per cent of the small companies indicated that they do not perceive any external pressure to improve environmentally. With regard to external pressure to improve socially, this number is even larger: 77 per cent. Overall, the smaller-sized companies are statistically significantly more likely to report having no internal or external pressure to improve environmentally or socially. Tables 6.7 and 6.8 in Appendix 11 show the results of the Kruskal-Wallis ANOVA test and the Mann-Whitney U test.

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Figure 6.2-11: Internal and external pressures to improve environmentally by company size

Figure 6.2-12: Internal and external pressures to improve socially by company size

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The other striking point here is that more than 80 per cent of the large companies indicated that they experienced internal pressures from the values and beliefs of their senior management to improve environmentally as well as socially. This impetus to improve may come about because most of the large companies are financially sound and the officers in the large companies may have more financial strength than the small company officers. More research is needed to identify reasons for this finding.

The Kruskal-Wallis ANOVA tests results show that the central government and the external pressure groups pressure on a business to improve environmentally is significantly different between companies of different size (See Table 6.2-1 in section 6.2.). The Mann-Whitney U test, surprisingly, shows that the medium companies experience significantly higher rates of central government pressure than the small and large companies (See Figure 6.2-11.). However, there is no significant difference between the large and small companies towards this factor.

The Mann-Whitney U test shows that the large companies (36 per cent) experience significantly higher rates of pressure from the external pressure groups than the small size companies do (0 per cent) (See Figure 6.2-11.). However, there is no significant difference between the medium and small or the medium and large companies towards this factor (See Appendices 11.7 and 11.8 for the Mann-Whitney U test results.).

6.2.3.3. Internal and external pressures to improve environmentally and socially by ownership

Figure 6.2-13 and Figure 6.2-14 show the internal and external pressure to improve environmentally and socially by ownership. The Sri Lankan-owned companies (79 per cent) are more likely to be driven by the personal values and beliefs of management to adopt environmental activities compared to the foreign-owned companies (53 per cent). Similar results can be witnessed for the personal values and beliefs of management with regard to adoption of social sustainability.

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Figure 6.2-13: Internal and external pressures to improve environmentally by ownership

Figure 6.2-14: Internal and external pressures to improve socially by ownership

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The employees of Sri Lankan-owned companies (26 per cent) exert more pressure to adopt environmental strategies compared to those in the foreign-owned companies (6 per cent). However, this difference is not statistically significant.

The most remarkable result here is that none of the foreign-owned companies indicated that employees generate pressure to improve socially, but 44 per cent of the Sri Lankan-owned companies reported that they perceive pressure from their employees to improve socially. The Mann-Whitney U test shows that the Sri Lankan-owned companies experience statistically significantly more pressure from their employees to improve socially than do the foreign-owned companies (See Table 6.2-1, in section 6.2: the significance value is 0.000.). The reasons for this unusual phenomenon require further research. A possible hypothesis is that the employees in Sri Lankan-owned companies are more active with the workers’ unions in bargaining for their financial benefits and other facilities, whereas competitive forces to get into a foreign-owned company may reduce employee pressure for internal change. Also, the Sri Lankan-owned companies are significantly more likely to be driven by competitors’ pressure to improve socially when compared to the foreign-owned companies (See Tables 6.9 and 6.10 in Appendix 11 more details.).

6.2.3.4. Internal and external pressures to improve environmentally and socially by scale of business operations

Figure 6.2-15 and Figure 6.2-16 illustrate internal and external pressure to improve environmentally and socially sorted by geographical scale of business. The results suggest that the companies involved in international scale business are more likely to perceive pressure from a parent company, shareholders, employees, customers, government, and pressure groups to improve environmentally and socially as well. However, the Mann-Whitney U tests show that the companies engaged in international scale business experience statistically significantly different higher internal pressure to improve environmentally only from parent companies,

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shareholders, and customers compared to the companies engaged in local scale business (See Tables 6.11 and 6.12 in Appendices 11 for more detail.).

The companies with local scale business are more likely to experience pressure from the personal values and beliefs of management and from competitors, to improve environmental and social responsibilities compared to the companies with international scale business. However, these differences are not statistically significant.

Overall, the Sri Lankan companies engaged in international scale businesses experience more pressure than the companies with local scale businesses, to improve environmental responsibilities compared to social responsibilities.

Figure 6.2-15: Internal and external pressures to improve environmentally by scale of business operations

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Figure 6.2-16: Internal and external pressures to improve socially by scale of business operations

In document Empirical evidence from Sri Lanka (Page 167-175)