Corporate Social Responsibility Initiatives in the Malaysian Palm Oil Industry: Managers' Perceptions of the Impact on Non-Financial Performance

• Main Author: Noorhayati, Mansor
• Format: Conference or Workshop Item
• Published: 2013
• Subjects: HD28 Management. Industrial Management; S Agriculture (General)
• Online Access: http://eprints.unisza.edu.my/263/

This study examines the perceptions of Malaysian palm oil managers regarding the impact of implementing various CSR initiatives for stakeholder groups on firms’ nonfinancial performance. The stakeholder groups are investors, customers, suppliers, communities and the environment. The nonfinancial performance is measured by research and development, market development, market size and personnel development. Mailed questionnaires were used and 54 estate managers participated in the study. The results show a relatively moderate level of CSR implementation in the palm oil industry. The mean scores range from the lowest of 3.00 (communities’ protection) to the highest of 3.79 (suppliers’ pricing practices). The study reveals that managers perceived only CSR initiatives toward investors (ß = 0.494, p< 0.00) and communities’ development (β = 0.388, p < 0.00) contribute positively to firm’s non-financial performance. Contrary to expectations, three of the initiatives show negative (insignificant) relationships with the nonfinancial performance. These are initiatives toward employee welfare (β = -0.123), suppliers’ pricing practices (β = -0.158) and communities protection (β = -0.139). The results also indicate that the initiatives toward employees’ development (β = 0.177), customers (β = 0.114) and the environmental (β = 0.136) have no significant impact on the nonfinancial performance. Thus, there is an urgent need for the palm oil industry to review the present CSR initiatives for the stakeholder groups to ensure their effectiveness in achieving company’s goals. At the same time, these initiatives have to be aligned with the industry’s strategic moves to improve the industry’s overall performance and sustainability