Purpose This paper aims to investigate the extent to which the management control systems (MCS) adoption in corporate social responsibility (CSR) integration into business strategy has an impact on companies’ performance. Design/methodology/approach Using a sample of 435 Indonesian manufacturing companies, partial least squares structural equation modelling was used to investigate the impact of CSR strategic integration on companies’ performance based on the contingency and stakeholder theories. Findings The findings reveal CSR strategic integration has a positive and significant impact on companies’ performance, including employee, operating and financial performance and the company size can positively moderate the impact of this integration on both its operating and financial performance. Practical implications The findings can encourage managers to adopt MCS by undertaking CSR at the strategic level, resulting in superior performance, both socially and financially. Social implications Employee performance and operating performance can significantly mediate the effect of strategic integration on financial performance. Originality/value The paper suggests that adopting MCS through CSR strategic integration could improve company performance socially and financially. This is the very first study on this issue from an Indonesian perspective.
<p>Footwear industries get the priority in East Java Province because of their big contribution to the economy and labor absorption. In order to survive and to achieve the competitive advantage they need to do innovation. The innovation capabilities can be measured through Technological Innovation Capabilities (TIC), while the innovation performance can be assessed with Technological Innovation Performance (TIP). This research was conducted to identify SMEs characteristics (scale, age, and product type) and to analyze whether there were different impacts of those characteristics on TIC and TIP. Data collection was completed through questionnaire distribution to 192 footwear SMEs in three footwear center in East Java (Surabaya, Sidoarjo, and Mojokerto). The grand mean of each dimension of TIC and TIP was obtained by calculating the results of questionnaire which used Likert scale. The grand mean can be as a description of TIC and TIP level in those three areas. For TIC, the majority footwear SMEs were on the medium and high level. The highest level of TIC was achieved by footwear SMEs in Mojokerto (4.09), Surabaya got a medium (3.18), and Sidoarjo obtained the lowest (2.81). For TIP, the majority of footwear SMEs had the medium and low level. Footwear SMEs in Sidoarjo held the highest level (3.05), then the footwear SMEs in Mojokerto (2.86), and the lowest is footwear SMEs in Surabaya (2.05). Based on the MANOVA analysis it can be recognized that almost all characteristics of footwear SMEs (scale, age, product type) gave no significant impacts on TIC and TIP. Except among footwear SMEs in Surabaya the age of SMEs had an effect on TIC and TIP.</p><p>Keywords: Footwear SMEs, Innovation Capabilities, Innovation Performance</p>
This study investigates how small and medium-sized enterprises (SMEs) conduct corporate social responsibility (CSR) and how it affects their performance. This study used quantitative research with data collected from 138 manufacturing SMEs in Java. By using partial least square structural equation modeling, this study discovers that economic and philanthropic responsibilities have a significant effect on customer and employee performances, whereas legal responsibility has a substantial impact on customer, employee, operational and financial performances. In contrast, ethical responsibility does not affect any aspect of company performance. The findings also highlight that legal responsibility is the most significant predictor of all four performances, and economic and philanthropic responsibilities are the second biggest predictors as each of them has a substantial effect on one performance. The results also show that customer and employee performances receive the most effect from two dimensions. Customer performance is significantly influenced by economic and legal responsibilities, while employee performance is significantly affected by legal and philanthropic responsibilities. These findings can encourage SMEs, particularly in developing countries, like Indonesia, to implement CSR beyond profit maximization and compliance to achieve higher social and financial performance.
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