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Reflections and conclusions

In document Empirical evidence from Sri Lanka (Page 183-189)

An exploratory analysis of CSR practices in Sri Lanka

6.3. Reflections and conclusions

Reflections and conclusions

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The survey questionnaire reveals that personal values of management in the Sri Lankan-owned companies and in the local scale companies have more influence on CSR practices than those of foreign-owned companies and international scale companies. More than 76 per cent of the Sri Lankan-owned companies and more than 73 per cent of local scale companies indicate that the personal values of management encourage their business to improve socially as well as environmentally (See Tables 6.21 and 6.22 in Appendix 11.). These values are less than 53 per cent for foreign-owned companies and less than 67 per cent for international scale companies (See Tables 6.21 and 6.22 in Appendix 11.). However, according to the survey results, Sri Lankan-owned companies experience a greater percentage of cost implications as a barrier to adopt environmental and/or socially-related activities than do foreign-owned companies (See Table 6.23 in Appendix 11.).

This finding gives an impression that the personal values of management of the Sri Lankan-owned companies drive their CSR activities more towards socially-related activities despite the existence of the cost implications.

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practices are Sri Lankan-owned companies. This issue is raised in Chapter Eight which discusses why the small companies and the Sri Lankan-owned companies are not engaged in environmental activities to any considerable extent. However, surprisingly, the Sri Lankan-owned companies have engaged in significantly more marketing or image based on environmental claims/marketing than the foreign-owned companies have done.

Geographical scale of business operations seems to be the main predictor of the uptake of environmental practices in the Sri Lankan context as the companies engaged in international scale business take the lead in uptake of every single environmental activity over the companies which engaged only in local scale business. The global companies in the international market increasingly demand more and more sustainability credentials from their suppliers, including the Sri Lankan suppliers.

This demand may account for this difference. Statistical significant differences in geographical scale of business operations related to environmental practices were found in six situations (See Table 6.2-1, in section 6.2). This is one of the main areas that the government and the environmental authority in Sri Lanka need to be aware of.

Overall, business engagement in socially-related activities can be considered pleasing when compared with the corporate sector environmental practices. The survey results revealed that there were four common social practices covering areas such as involvement in local community projects, providing job training, contributing to charity, and helping employees to obtain tertiary education. Three out of these four practices are common to more than 70 per cent of the respondents and all four practices are considerably ahead of the other social activities. It is interesting to note that all the companies have indicated they practise some kind of business engagement in socially-related activities.

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Notwithstanding the general expectation, the Sri Lankan companies do engage in more social activities than the foreign-owned companies do, especially in the situations of ethical purchasing, providing job training, involving in local community projects, and social innovations. Overall, the large and medium companies are more likely to engage in socially-related activities compared to the smaller companies as regards all social activities surveyed.

One of the remarkable results of this survey is that an exceptionally high percentage indicated that internal pressure to improve environmentally or socially comes from the personal values and beliefs of company senior management. The rest of the environmental and social pressure factors are far less common in companies.

Overall, the results reflect the willingness of the company senior management to accommodate CSR activities, but the companies do not experience pressure externally to make CSR activities happen consistently.

The large companies are more likely to experience internal and external pressures to improve environmentally or socially than the small companies do. All of the large companies indicated that they feel some kind of internal pressure to improve environmentally and only very few of the large companies indicated that they experience no internal pressure to improve socially. Overall, the smaller size companies are significantly more likely to report not having internal or external pressure to improve environmentally as well as socially.

The other noticeable point here is that more than 80 per cent of the large companies indicated that they experience internal pressure from the values and beliefs of their senior management to improve environmentally as well as socially.

The Sri Lankan-owned companies (79 per cent) are more likely to driven by the personal values and beliefs of management to adopt environmentally compared to the foreign-owned companies (53 per cent). The most remarkable result here is

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that none of the foreign-owned companies indicated that employees exert pressure to improve socially, but 44 per cent of Sri Lankan-owned companies reported that they experience pressure from their employees to improve socially. The results suggest that the companies involved in international scale business are more likely to perceive pressure from the parent company, shareholders, employees, customers, government, and pressure groups to improve both environmentally and socially.

Overall, the international scale companies experience more pressure to improve environmentally compared to improve socially than the local scale companies.

As expected, the most commonly reported barrier was cost implications (65 per cent). The cost implications are more than double the percentage of the next highest reported barrier: management time (31 per cent). It should be mentioned that the cost implications directly affect the financial bottom-line of the company;

therefore getting an approval from the top management for a project to improve environmentally or socially is not easy.

Reputation and brand (69 per cent), and improved stakeholder value (49 per cent) were the major two drivers of the Sri Lankan companies to adopting CSR activities.

There are a higher number of small companies (38 per cent) reporting that they do not see CSR as important in the organisation compared to the medium (8 per cent) and large (12 per cent) companies. Most of the time small companies reported fewer influential factors/drivers towards adopting CSR activities compared to the medium and large companies. This finding may be because the large and medium companies are more engaged in CSR activities and those companies may have understood the complexity and gravity of undertaking CSR activities. Generally, a large majority of Sri Lankan managers recognise the importance of business engagement in CSR activities.

Chapter summary

171 6.4. Chapter summary

In order to identify the features of CSR practices in Sri Lanka, the questionnaire survey study is undertaken and the data analysed in this chapter. The chapter identified general CSR practices as well as notable features of CSR practices which call for further investigation. With the intention of revealing categorical differentiations through statistical analysis, the respondents were classified into three categories: size, ownership, and geographical scale of business operations.

The unusual phenomena were identified by statistically testing whether there were significant differences between the above categories. The study basically differentiated CSR practices into environmental and social practices and carried out the analysis accordingly.

Overall, the environmental practices are disappointing, but business engagement in socially-related activities is relatively pleasing. The predominance of social activity is quite evident throughout the analysis of questionnaire survey responses.

Deeply rooted reasons for such a phenomenon will be particularly investigated in the second phase of the study. Interestingly, Sri Lankan-owned companies and local scale companies are much more linked with their society than the companies with international connections are (See section 6.2.6.). The reasons for this practice could be a result of contextual factors such as cultural influences, religious backgrounds of people in organisations, political influences, employees’ influences, personal values of management amongst others. On the other hand, foreign-owned companies and international scale companies could be trying to satisfy their foreign owners, parent companies, or foreign buyers. Although this chapter explains the features of CSR practices in a developing country, Sri Lanka, the analysis section limits its discussion to the answers from a questionnaire survey and that restricts further discussion to uncover deeply rooted contextual influences or phenomena.

This chapter raises further questions such as: What is the nature of CSR practices, in terms of defining characteristics, as perceived by Sri Lankan corporate managers?

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Why do Sri Lankan companies adopt CSR initiatives and why do these companies choose or not choose to disclose voluntary CSR information? Why has CSR practice developed in the way it now has in Sri Lanka? These kinds of questions cannot be properly answered without having interactive discussions with corporate managers. These questions will be investigated in the second phase of this thesis through in-depth interviews with the corporate managers who are involved in CSR activities. Before doing so, however, the results of the questionnaire survey are compared with those taken in a developed country context with a view to gaining a global understanding of Sri Lankan CSR practices. Therefore, in the next chapter, the latter part of the first phase of this thesis, will investigate: To what extent are the Sri Lankan CSR practices different from CSR practices in New Zealand, a developed country?

In document Empirical evidence from Sri Lanka (Page 183-189)