ANALYSIS AND RESULTS

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RESULTS AND ANALYSIS

4.1. Results

4.1.1 General Information of Respondents

The study used a survey to obtain responses on the impact of CSR on SMEs. The survey questionnaires were sent to owners/managers and employees of SMEs and customers and beneficiaries of CSRs programs of SMEs. 143 responses were received for the study. However, certain research participants did not provide responses to certain questions. Therefore, the responses of the participants were rejected to prevent them from skewing the results. This reduced the number of valid participants from 143 to137. The majority of the respondents were male with 73.7% of the respondents being male with the remaining 26.3% being female. This is shown in table 4.1 below.

Gender Number of respondents %

Male 101 73.7%

Female 36 26.3%

Total 137 100.0

Table 4.1: Gender of the respondents

Most of the respondents were aged between 20 and 29 years old. They represented 40.6% of the respondents. 32.8% of the respondents were aged between 30 and 39 years old. Respondents aged between 40 and 49 years old accounted for 21.2% of the total respondents with respondents aged 50 years and above accounting for 5.1% of the total respondents. The age of the respondents is shown in Table 4.2 below.

Age Number of respondents %

20 to 29 years old 56 40.9%

30 to 39 years old 45 32.8%

40 to 49 years old 29 21.2%

50 and above years old 7 5.1%

Total 137 100.0

Table 4.2: Age of the respondents

Most of the respondents had a bachelor’s degree. They accounted for 47.4% of the total respondents. Respondents with only a diploma accounted for 19.7% of the total respondents with respondents with a master’s degree accounting for 31.4% of the total respondents. Only 2 respondents (1.5%) had a PhD. The education level of the respondents is shown in Table 4.3 below.

Education Level Number of respondents %

Diploma 27 19.7%

Bachelor’s Degree 65 47.4%

Master’s Degree 43 31.4%

PhD 2 1.5%

Total 137 100.0

Table 4.3. Education level of the respondents

Most of the respondents of the survey were employees of SMEs. They accounted for 86.7% of the total respondents. Managers accounted for 8.4% of the total respondents with owners of the SMEs accounting for 4.9% of the total respondents. This is shown in Table 4.4 below.

Relationship to the SME Number of respondents %

Owner 5 3.6%

Manager 12 8.8%

Employee 120 87.6%

Total 137 100.0

Table 4.4. Relationship of the respondents to the SME

Most of the respondents had at least 5 years’ experience in business. The fewest number of respondents had 1 to 2 years’ experience in business. The breakdown of the experience of the responses is tabulated in Table 4.5 below.

Experience in Business Number of respondents %

Less than one year 37 27.0%

1 to 2 years 15 10.9%

3 to 5 years 19 13.9%

5 to 10 years 33 24.1%

More than 10 years 33 24.1%

Total 137 100.0

Table 4.5: Experience in business of the respondents

4.1.2. General Information of the SMEs

SMEs refer to a heterogeneous group. They have varying sizes, nature, and operate a wide range of markets such as local, rural, urban, national, and international markets. They represent various skills, capital, and growth orientation, which is mainly dependent on the size of the SMEs and the market in which they operate. Nevertheless, the most common parameter used to classify CSRs is the number of employees and annual revenues. The study classified SMEs according to their revenues and number of employees. This is shown in Table 4.5 and Table 4.6 below.

Number of Employees of the SMEs Number of respondents %

1 to 5 employees 29 21.2%

6 to 49 employees 55 40.1%

50 to 249 employees 53 38.7%

Total 137 100.0

Table 4.6: Number of employees of the SMEs used as a sample for the research

Typical Revenues of the SME Number of respondents %

Up to SR 3 million 63 46.0%

SR 3 million to SR 40 million 41 29.9%

SR 40 million to SR 200 million 33 24.1%

Total 137 100.0

Table 4.7: Typical revenues of the SMEs used as a sample for the research

4.6. Specific Research Findings

This section provides descriptive statistics of the findings of the research. It includes frequencies, percentages, means, and standard deviations of the CSR activities of the SMEs and the impact of the CSR activities on various measures of the performance of the CSR.

Strongly disagree Disagree Neutral Agree Strongly agree CSRPerformance1: The SME makes quality products and services and sells them to its customers at a reasonable price 9 28 43 43 14 137

6.6% 20.4% 31.4% 31.4% 10.2% 100.0%

CSRPerformance2: The SME uses purchasing and recruitment policies that favor its local communities where its operation are based 12 21 31 59 14 137

8.8% 15.3% 22.6% 43.1% 10.2% 100.0%

CSRPerformance3: The SME makes or uses ecologically sound products in its operations 16 21 55 38 7 137

11.7% 15.3% 40.1% 27.7% 5.1% 100.0%

CSRPerformance4: The SME uses environmentally sound packaging materials or containers 13 28 40 45 11 137

9.5% 20.4% 29.2% 32.8% 8.0% 100.0%

CSRPerformance5: The SME strives to protect the health and safety of its employees 10 18 42 53 14 137

7.3% 13.1% 30.7% 38.7% 10.2% 100.0%

CSRPerformance6: The SME makes charitable donations to the society 11 26 49 41 10 137

8.0% 19.0% 35.8% 29.9% 7.3% 100.0%

CSRPerformance7: The SME has active participation in project(s) with the local community 13 30 32 52 10 137

9.5% 21.9% 23.4% 38.0% 7.3% 100.0%

CSRPerception1: Do think SMEs should in your community have appropriate level of participation in community issues 11 12 27 62 25 137

8.0% 8.8% 19.7% 45.3% 18.2% 100.0%

CSRPerception2: Have SMEs in your area helped in improving the welfare of your community 17 23 37 50 10 137

12.4% 16.8% 27.0% 36.5% 7.3% 100.0%

CSRPerception3: Do CSR programs of SMEs influence whether you purchase products from the SME 14 10 45 52 16 137

10.2% 7.3% 32.8% 38.0% 11.7% 100.0%

CSRPerception4: Can you purchase products from an SME that does not have CSR programs 16 24

32 52 13 137

11.7% 17.5% 23.4% 38.0% 9.5% 100.0%

CSRImpact1: The SME has experienced an increase in its number of customers within the past three years 16 16 26 59 20 137

11.7% 11.7% 19.0% 43.1% 14.6% 100.0%

CSRImpact2: The number of employees of the SME has increased within the past three years 20 16 28 55 18 137

14.6% 11.7% 20.4% 40.1% 13.1% 100.0%

CSRImpact3: The number of branches of the SME have increased 12 15 32 60 18 137

8.8% 10.9% 23.4% 43.8% 13.1% 100.0%

CSRImpact4: The return on equity of the SME have increased within the past three years 12 17 31 63 14 137

8.8% 12.4% 22.6% 46.0% 10.2% 100.0%

Table 4.8: Research findings

4.2. Analysis

4.2.1. CSR Performance of the SMEs

The CSR performance of the SMEs was evaluated using seven questions, which were labeled as “CSRPerformance.” A summary of the findings is shown in the table below. The findings of the study show that the respondents were neutral on whether SMEs make quality products and services (mean = 3.18). The findings showed that respondents were also neutral on whether CSRs use purchasing and recruitment policies that favor the local community (mean = 3.31). The findings of the study also showed that respondents were neutral on whether the SMEs make or use ecologically sound products in their operations (mean = 2.99). The respondents were also neutral on the use of environmentally packaging materials or containers (mean = 3.09). The respondents were neutral on whether the SMEs strive to protect the health and safety of its employees (mean = 3.31), whether the SMEs make charitable donations to the society (mean = 3.09), and whether the SMEs have active participation in projects with the local community (mean = 3.12). The use of the purchasing and recruitment policies had the highest score indicating that SMEs performed fairly in this aspects compared to other aspects of CSR. The lowest mean that represented the least neutral sentiments involved whether SMEs make or use ecologically sound products in their operations. This shows that environmental concerns have the least priority among the SMEs involved in the study. Overall, the respondents were neutral on the CSR performance of SMEs as mean of CSRPerformance was 3.1575 with a standard deviation of .75658. Since the standard deviation was less than the mean and the skewness of CSRPeformance of the SMEs was -.237, the CSR performance of the SMEs was normally distributed.

Statistic Std. Error

CSRPerformance1: The SME makes quality products and services and sells them to its customers at a reasonable price Mean 3.18 .092

95% Confidence Interval for Mean Lower Bound 3.00 Upper Bound 3.36 5% Trimmed Mean 3.20 Median 3.00 Variance 1.165 Group Label Std. Deviation 1.079 Minimum 1 Maximum 5 Range 4 Interquartile Range 2 Skewness -.193 .207

Kurtosis -.627 .411

CSRPerformance2: The SME uses purchasing and recruitment policies that favour its local communities where its operation are based Mean 3.31 .096

95% Confidence Interval for Mean Lower Bound 3.12 Upper Bound 3.50 5% Trimmed Mean 3.34 Median 4.00 Variance 1.258 Group Label Std. Deviation 1.122 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -.567 .207

Kurtosis -.495 .411

CSRPerformance3: The SME makes or uses ecologically sound products in its operations Mean 2.99 .090

95% Confidence Interval for Mean Lower Bound 2.81 Upper Bound 3.17 5% Trimmed Mean 2.99 Median 3.00 Variance 1.110 Group Label Std. Deviation 1.054 Minimum 1 Maximum 5 Range 4 Interquartile Range 2 Skewness -.330 .207

Kurtosis -.415 .411

CSRPerformance4: The SME uses environmentally sound packaging materials or containers Mean 3.09 .095

95% Confidence Interval for Mean Lower Bound 2.91 Upper Bound 3.28 5% Trimmed Mean 3.11 Median 3.00 Variance 1.234 Group Label Std. Deviation 1.111 Minimum 1 Maximum 5 Range 4 Interquartile Range 2 Skewness -.255 .207

Kurtosis -.715 .411

CSRPerformance5: The SME strives to protect the health and safety of its employees Mean 3.31 .091

95% Confidence Interval for Mean Lower Bound 3.13 Upper Bound 3.49 5% Trimmed Mean 3.35 Median 3.00 Variance 1.129 Group Label Std. Deviation 1.062 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -.509 .207

Kurtosis -.259 .411

CSRPerformance6: The SME makes charitable donations to the society Mean 3.09 .090

95% Confidence Interval for Mean Lower Bound 2.92 Upper Bound 3.27 5% Trimmed Mean 3.11 Median 3.00 Variance 1.101 Group Label Std. Deviation 1.049 Minimum 1 Maximum 5 Range 4 Interquartile Range 2 Skewness -.231 .207

Kurtosis -.479 .411

CSRPerformance7: The SME has active participation in project(s) with the local community Mean 3.12 .096

95% Confidence Interval for Mean Lower Bound 2.93 Upper Bound 3.31 5% Trimmed Mean 3.13 Median 3.00 Variance 1.266 Group Label Std. Deviation 1.125 Minimum 1 Maximum 5 Range 4 Interquartile Range 2 Skewness -.328 .207

Kurtosis -.836 .411

Table 4.9: Descriptive statistics of CSRPerformance

Statistic Std. Error

CSRPerformance Mean 3.1575 .06464

95% Confidence Interval for Mean Lower Bound 3.0296 Upper Bound 3.2853 5% Trimmed Mean 3.1683 Median 3.1429 Variance .572 Std. Deviation .75658 Minimum 1.00 Maximum 5.00 Range 4.00 Interquartile Range 1.14 Skewness -.237 .207

Kurtosis .445 .411

Table 4.10: Overall descriptive statistics of CSRPerformance

4.2.2. CSR Perceptions

Customer perceptions on the operations of an organization have a significant impact on the organization. Therefore, the study strived to determined customer perceptions on the CSR performance of SMEs. Four questionnaires were used to determine customer perceptions on the CSR activities of the SMEs. These questions were labeled as CSRPerceptions.” The results of the responses are shown in the table below.

The results of the study show that SMEs are perceived to have an appropriate level of participation in community issues (mean = 3.57). However, respondents were neutral on whether the SMEs in their area have helped in improving the welfare of the community (mean = 3.09). The results of the study show that respondents are slightly influenced by the CSR programs of SMEs in making purchasing decisions (mean 3.34). The respondents were neutral on whether they can purchase products from SMEs that do not have CSR programs (mean = 3.16).

The CSR perceptions were normally distributed since they had a standard deviation of .81362, which was less than its 3.2901 mean. In addition, the skewness of CSR perception was -.553, which implies that CSR perceptions is normally distributed since it lies between -1.96 and 1.96.

Statistic Std. Error

Do think SMEs in your community have appropriate level of participation in community issues Mean 3.57 .097

95% Confidence Interval for Mean Lower Bound 3.38 Upper Bound 3.76 5% Trimmed Mean 3.63 Median 4.00 Variance 1.276 Std. Deviation 1.130 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -.827 .207

Kurtosis .055 .411

Have SMEs in your area helped in improving the welfare of your community Mean 3.09 .098

95% Confidence Interval for Mean Lower Bound 2.90 Upper Bound 3.29 5% Trimmed Mean 3.11 Median 3.00 Variance 1.322 Std. Deviation 1.150 Minimum 1 Maximum 5 Range 4 Interquartile Range 2 Skewness -.394 .207

Kurtosis -.755 .411

Do CSR programs of SMEs influence whether you purchase products from the SME Mean 3.34 .095

95% Confidence Interval for Mean Lower Bound 3.15 Upper Bound 3.52 5% Trimmed Mean 3.37 Median 3.00 Variance 1.225 Std. Deviation 1.107 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -.633 .207

Kurtosis -.085 .411

Can you purchase products from an SME that does not have CSR programs Mean 3.16 .101

95% Confidence Interval for Mean Lower Bound 2.96 Upper Bound 3.36 5% Trimmed Mean 3.18 Median 3.00 Variance 1.386 Std. Deviation 1.177 Minimum 1 Maximum 5 Range 4 Interquartile Range 2 Skewness -.400 .207

Kurtosis -.799 .411

Table 4.11: Descriptive statistics of CSRPerformance

StatisticStd. Error

CSRPerception Mean 3.2901 .06951

95% Confidence Interval for Mean Lower Bound 3.1527 Upper Bound 3.4276 5% Trimmed Mean 3.3146 Median 3.2500 Variance .662 Std. Deviation .81362 Minimum 1.00 Maximum 5.00 Range 4.00 Interquartile Range .88 Skewness -.553 .207

Kurtosis .951 .411

Table 4.12: Overall descriptive statistics of CSRPerception

4.2.3. Impact of CSR on the Performance of the SMEs

Four parameters were used in evaluating the performance of SMEs. These included increase in the number of customers, increase in number of employees, increase in the number of branches of the SME, and improvement in the return on equity of the SME. The questions used to determine the impact of CSR on the performance of SMEs were labeled as “CSRImpact.” The results of the responses on the impact of CSR on the performance of SMEs are shown in the table below.

The results shown below show that the CSRs have experienced a slight improvement in their performance as highlighted by the slight increase in the number of customers within the past three years (mean =3.37), a slight increase in the number of employees within the past three years (mean = 3.26), a slight increase in the number of branches of the SME (mean =3.42), and a slight increase in return on equity of the SMEs (mean = 3.36). The mean of CSRImpact is 3.35, which is less than the standard deviation of the variable, 0.9756. Therefore, CSRImpact is normally distributed since the skewness of the variable is also -.669, which lies between -1.9 and 1.9.

Statistic Std. Error

The SME has experienced an increase in its number of customers within the past three years Mean 3.37 .104

95% Confidence Interval for Mean Lower Bound 3.17 Upper Bound 3.58 5% Trimmed Mean 3.41 Median 4.00 Variance 1.471 Std. Deviation 1.213 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -.650 .207

Kurtosis -.532 .411

The number of employees of the SME has increased within the past three years Mean 3.26 .107

95% Confidence Interval for Mean Lower Bound 3.04 Upper Bound 3.47 5% Trimmed Mean 3.28 Median 4.00 Variance 1.574 Std. Deviation 1.255 Minimum 1 Maximum 5 Range 4 Interquartile Range 2 Skewness -.542 .207

Kurtosis -.769 .411

The number of branches of the SME have increased Mean 3.42 .096

95% Confidence Interval for Mean Lower Bound 3.23 Upper Bound 3.61 5% Trimmed Mean 3.46 Median 4.00 Variance 1.259 Std. Deviation 1.122 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -.690 .207

Kurtosis -.207 .411

The return on equity of the SME have increased within the past three years Mean 3.36 .094

95% Confidence Interval for Mean Lower Bound 3.18 Upper Bound 3.55 5% Trimmed Mean 3.41 Median 4.00 Variance 1.219 Std. Deviation 1.104 Minimum 1 Maximum 5 Range 4 Interquartile Range 1 Skewness -.700 .207

Kurtosis -.246 .411

Table 4.13: Descriptive statistics of CSRImpact

Statistic Std. Error

CSRImpact Mean 3.3522 .08335

95% Confidence Interval for Mean Lower Bound 3.1874 Upper Bound 3.5170 5% Trimmed Mean 3.3913 Median 3.5000 Variance .952 Std. Deviation .97560 Minimum 1.00 Maximum 5.00 Range 4.00 Interquartile Range 1.13 Skewness -.669 .207

Kurtosis .007 .411

Table 4.14: Overall descriptive statistics of CSRImpact

4.3. Correlation Statistics

Pearson correlation statistics was used to examine the relationship between the variables used in the research. The Pearson Correlations results shown in Table 4.15 show that CSRPerception were most highly positively correlated with CSRImpact, which indicates the impact of CSR on SME performance. CSRPerception had a 62% positive correlation with CSRImpact. On the other hand, CSRPerformance had a 47.2% positive correlation with firm performance.

CSRPerformance CSRPerception CSRImpact

CSRPerformance Pearson Correlation 1 .486** .476**

Sig. (2-tailed) .000 .000

N 137 137 137

CSRPerception Pearson Correlation .486** 1 .620**

Sig. (2-tailed) .000 .000

N 137 137 137

CSRImpact Pearson Correlation .476** .620** 1

Sig. (2-tailed) .000 .000 N 137 137 137

**. Correlation is significant at the 0.01 level (2-tailed).

Table 4.15: Pearson Correlation statistics

The findings were enough evidence to suggest that there was a positive correlation between the CSR performance of SMEs, CSR perception of SMEs, and the performance of the SMEs. They provide enough ground to support the multiple regression model that is explained in the section below.

4.4. Multiple Regression Results

Multiple regression results are shown in Table 4.16 and Table 4.17 below. The table shows that the study multiple regression model had a coefficient of determination (R2) of 0.424. This implies that CSRPerformance and CSRPerception explain 42.4% variations in the performance of SMEs.

Model Unstandardized Coefficients Standardized Coefficients t Sig. Correlations Collinearity Statistics

B Std. Error Beta Zero-order Partial Part Tolerance VIF

1 (Constant) .414 .311 1.328 .187 CSRPerception .610 .090 .509 6.789 .000 .620 .506 .445 .764 1.309

CSRPerformance .295 .097 .228 3.047 .003 .476 .255 .200 .764 1.309

a. Dependent Variable: CSRImpact

Table 4.16: coefficients of multiple regression

Model SummarybModel R R Square Adjusted R Square Std. Error of the Estimate Durbin-Watson

1 .651a .424 .416 .74570 2.031

a. Predictors: (Constant), CSRPerformance, CSRPerception

b. Dependent Variable: CSRImpact

Table 4.17: summary of multiple regression model

Reference

Górny, A. (2014). Influence of corporate social responsibility (CSR) on safety culture. Management, 18(1), 43-57.