FINAL PROJECTRESEARCH TOOLS AND TECHNIQUESTITLE:EFFECTS OF CORPORATE SOCIAL RESPONSIBILITY ON ORGANIZATIONSRESEARCH: Basic ResearchRESEARCHERS:HIBA KHALID FA12-BBA-141MAHAM MANGRIO FA12-BBA-110MEHWISH KHAN FA12-BBA-101 AHMED KHALID FA12-BBA-127 HAROON KAMAL FA12-BBA-197Submission Date:12TH NOVEMBER, 2014Submitted To:MAM UZMA NAEEMDepartment of Management SciencesCOMSATS Institute of Information Technology IslamabadTABLE OF CONTENTS: Pg No.EXECUTIVE SUMMARY..4 PROBLEM STATEMENT...4 SAMPLING DESIGN..4 DATA COLLECTION.4 RESULTS.4 RECOMMENDATIONS.5INTRODUCTION....5 PROBLEM STATEMENT....5 RESEARCH OBJECTIVE....5 BACKGROUND OF THE STUDY..5LITERATURE REVIEW..6THEORATICAL FRAMWORK...7HYPOTHESIS...8RESEARCH DESIGN...8 Purpose Of Study...8 Types Of Investigation...8 Extent of Researcher Interference..8 Study Setting..8 Unit Of Analysis.8 Time Horizon..9OPERATIONAL DEFINATION.. 9-11MEASURING DATA ANALYSIS..12DATA ANALYSIS...12RESULT AND FINDINGS13-22CONCLUSION.22RECOMMENDATIONS..23LIMITATIONS..23ACKNOWLEDGEMENT.23REFERENCES..24-28 APPENDIX...28

EXECUTIVE SUMMARY:The purpose of this research is to check whether the corporate social responsibility affects the organizations both internally and externally or not? The variables which are linked with corporate social responsibility are productivity, shareholders and stake holders commitment, profitability and financial performance, whereas needs and wants of shareholders and stakeholders are acting as moderating variable. The effect of all these variables has been observed on corporate social responsibility in the Banking sector of Pakistan. 50 responses are collected from banking organizations, questionnaires are being filled by different banks and responses on CSR of both male and female has been collected. The results show that there is significant positive relationship between intrinsic and extrinsic factors with job satisfaction. We will accept the null hypothesis and accept the alternative hypothesis. PROBLEM STATEMENT:To what extent is corporate social responsibility effecting the organizations both internally and externally?

SAMPLING DESIGN:Our research design is based on Judgment sampling because subject was selected on the basis of their expertise in the subject investigated. Data was collected from the banking sector. STATISTICAL TOOL:The tool which we used for data collection is questionnaires.

DATA COLLECTION:We collected data through Questionnaires to know that corporate social responsibility really affects the organizations or not? Data was collected from 50 members of different Banks.

Data Analysis: We have used Regression, correlation, Scale(reliability),histrogram and bar chart.

RESULTS:We have applied regression, co-rrelation and reliability and through our research results we come to analyse that all the null hypothesis are being accepted and alternative hypothesis are rejected. It also shows that: There is a positive relationship between productivity and CSR. An increase in profitability and financial performance leads to an increase in CSR. Also a positive relation between shareholder and stakeholder commitment. RECOMMENDATIONS:Variables such as productivity, profitability, shareholder and stakeholder commitment and financial performance affects corporate social responsibility both internally and externally, we recommend that if the organization focuses on all of these and will provide sufficient resources and attention than the organization will become more socially responsible on the other hand if the organization ignores and take for granted these variable than this will affect the image of organization and it will also affect the social responsibility of organization. However it is also recommended on the basis of results that variables like profitability and shareholder commitment are more positively related to CSR as compare to other variables, so the organization must focus on these variables more as compare to other variables.

INTRODUCTION Problem StatementTo what extent is corporate social responsibility effecting the organizations both internally and externally? Research objectiveCorporate social responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.The objective of this research is to find that whether corporate social responsibility really affects organizations both internally and externally or not? Background

Throughout the years, many researchers have been wondering that what really affects the corporate social responsibility of organizations both internally and externally. How willing are organizations to work on social responsibility? How much interest they take in it and how much internal and external factors affect the social responsibility of organizations. Through careful analysis of many literature and its reviews many researchers have pinpointed opinions on these factors and variables, on how organizations behave as regards to social responsibility, specially members in the banking sector.

LITERATURE REVIEWResearchers have defined the effects of corporate social responsibility (CSR) on organizations in various ways. CSR has been effecting the organization in terms ofProfitability (Arlow and Gannon, 1982), in their recent review of the relationship between profitability and corporate social responsibility they indicated that assessing profitability is a relatively clear-cut process but assessing social responsibility is not and that there exists a close relationship between profitability and social responsibility. Another researcher investigates the possibilities and problems of benchmarkingCorporate Social Responsibility (CSR),after a methodological analysis of the advantages and problems of benchmarking, the researcher developed a benchmark method that includes economic, social and environmental aspects as well as national and international aspects of CSR(Graafland,2004).

The role, function and responsibilities of the business enterprise were described by another researcher, he describes that CSR is a truly sensitizing concept, both in itself and in its implementation. Repositioning the business enterprise in contemporary society is not a task that can be accomplished overnight, and we are witnessing a multitude of attempts to grasp the true meaning of CSR, here true implementation means translating the contextual meaning of CSR into the business proposition. This means reconsidering present business strategies and practices (Jonker, 2010).Another researcherindicates that organizations that prefer their customers or community are more likely to construct distinctive identities through CSR activities and they establish ethical and social values within their corporate statements and cultures(Bravo, Sep 2011).Another researcher outlines that social responsibility of organization is to focus on the requirements of people who are outside the organization but directly or indirectly affected by organizations existence (Craig smith, 2003).Another researchernarrated that organization must ensure that managers social needs are fulfilled properly because managers are the persons who are involve in organizations decision making and organization should fulfill their needs by getting involved in social responsibility(Hemingway and Maclagan,2004).Another researcher relates that CSR provides competitive advantage to firms (Yasemin, 2010).Some researches focuses on another dimension of CSR that most of the people have no reach to their favourite brands because of unavailability of those brands in their local markets,so its a corporate social responsibility of those respective organizations to make those brands available in their consumers reach(Amaeshi,andNnodim , 2008).Researchers also focus on importance of CSR activities towards customer relationship. Organizations which use proper CSR activities will enjoy better customer relationship, because customers are the driving force of any organization and organizations should have to translate their satisfaction into products and also solving their problems regarding products through proper customer relationship management (Imran, Irshad, 2010).Another researcher talks about increased shareholders commitment if organization is socially responsible(Pridge, J, 1998). (Marina and Damani, 1998) focuses on productivity,(Frank L. McVey,1903)relates that CSR improves ethical responsibility(Garriga and Mele, 2004) talks about the organizations better position in society .Another researcher describes that CSR can be practiced on the basis of the following traditional arguments which are moral argument ,the license to- operate (legal) argument , the sustainability argument and financing the reputation (brand image) argument, these arguments leads to innovation and change in CSR ( Asongu2007). The researcher also highlights that CSR should not just be considered an expense, but rather an investment. Researchers like ( McGuire, Sundgren andSchneeweis, 1988) indicates that financial performance is a very important variable which is influencing CSR,the researcher suggests that reducing the firm risk highly benefits the social responsibility.Another researcher (Nikolay A Dentchev, 2004) describes that firms who are socially responsible influences stakeholder groups like employees, customers, investors,community, natural environment and supplier in a positive way which is profitable and beneficial for the organization. Researcher describes that firms are engaging in Corporate Social Responsibility because they know that there is a competitive market and resource based perspectives that help out to understand the CSR and through it the organization get both internal and external benefits. The investment which is made within the organization is included in internal benefit which gives better resources to the firm. The external benefit which the organization gets is the reputation which it earn through making its position in society or market. CSR gives motivation, clear stance of working and high commitment to the work (Branco, 2006).

Productivity of organizationTheoretical Framework

Corporate Social Responsibility

Shareholder and Stakeholder Committment

Profitability and Financial performance

Needs and Wants

Independent Variable Moderating variableDependent Variable HYPOTHESISH1: The greater will be the productivity of organization, the more the organization will be socially responsible.H2: There will be a significant positive correlation between shareholder and stakeholder commitment and chances for organization to become socially responsible.H3: superior corporate financial performance and profitability leads to higher levels of CSR in organization.H4: If the needs and wants of shareholders and stakeholders are adequately fulfilled, organization will become more socially responsible.

RESEARCH DESIGN

1. Purpose of the study:

The purpose of our study is hypothesis testing because on our research topic Effects of social responsibility on organization ample amount of data was available and we developed different hypothesis on our research data.

2. Type of investigation

The type of investigation is casual study because we developed number of cause and effect relationship between different variables.Example: Profitability Cause , CSR Effect

3. Extent of research interference :

The researcher interference was minimum because there was no change in environment so the study was field study.

4. Study setting :

Our study in non-contrived because it is conducted in natural environment.

5. Unit of analysis :

The unit of analysis is organization because the research is conducted on effects of social responsibility on organization.

6. Time horizon :

It is a cross-sectional study because in research data is collected at one point in time.

OPERATIONAL DEFINITION

Productivity of organization

Are the distribution channel well defined?Do you think innovation can improve the productivity of organization?SalesInnovation

Shareholder and stakeholders commitment

SatisfactionDo you think the word of mouth of the investors effect the credit rating of the company?Is the satisfaction level of stakeholders and shareholder directly linked with their level of commitment?Word of mouthNeeds and wants of shareholder and stakeholderDoes the number of complaints increase significantly over time period?Is the goal of maximizing shareholders wealth being satisfied?FeedbackInvestment

Are the capacity utilization of the organization are efficient enough to expand business?Are the quality control of the organization are efficient enough to achieve profitability goal? Expand BusinessQuality MaintenanceProfitability and Financial performance

Corporate social responsibility

Is CSR providing ample opportunities in protecting the environment?Does CSR portrait a positive image in the minds of the employees that may lead to increase output?HumanitySociety

DATA ANALYSIS:We have collected data through 50 questionnaires and we have applied correlation, regression histogram, Bar chart, Scale as statistical tool. We targeted banking sector and members of the banks SILK BANK HBL ALLIED BURJ BANKHave provided us with their responses regarding corporate social responsibility and the variables affecting it. We have analyzed the questionnaires using different tools and found that there exist a positive relation between CSR and the variables.

RESULT AND FINDINGSDescriptive analysis table shows mean, median, mode, standard deviation and others

Statistics

PRODUCTIVITYProfitability AND Financial performanceShareholder AND stakeholder commitmentCSR

NValid50505050

Missing1111

Mean3.52003.49003.52009.1400

Std. Error of Mean.12532.12079.08596.24245

Median4.00003.50003.50009.5000

Mode4.004.003.5010.00

Std. Deviation.88617.85410.607861.71440

Variance.785.729.3692.939

Skewness-.521-.710-.310-.631

Std. Error of Skewness.337.337.337.337

Kurtosis.301.181-.493.173

Std. Error of Kurtosis.662.662.662.662

Range4.004.002.257.50

Minimum1.001.002.254.00

Maximum5.005.004.5011.50

This table shows that total 50 values are taken the mean ,median,mode of all the variables shows that the people are more in the favor of the relationship between CSR and other variables which are effecting CSR.

FREQUENCY GRAPHS:This bar chart shows the frequencies of productivity:

This bar chart show the frequencies of profitability and financial performance:

This bar chart show the frequencies of stakeholder and shareholder commitment

This bar chart show the frequencies of CSR.

HISTOGRAMS:

This histogram shows the normality distribution of Productivity.

This histogram shows the normality distribution of profitability and financial performance.

This histogram shows the normality distribution of Shareholder and stakeholder Commitment.

This histogram shows the normality distribution of CSR

CORRELATION:The table given below shows the correlation of two variables:

Correlations

PRODUCTIVITYCSR

PRODUCTIVITYPearson Correlation1.166

Sig. (2-tailed).249

N5050

CSRPearson Correlation.1661

Sig. (2-tailed).249

N5050

Pearson correlation results shows that there is weak positive relationship between productivity ans CSR . This means that increase in CSR will somehow cause increase in productivity and vice versa. Our hypothesis is accepted.

The table given below shows the correlation of two variables:

Correlations

CSRShareholderANDstakeholercommitment

CSRPearson Correlation1.678**

Sig. (2-tailed).000

N5050

ShareholderANDstakeholercommitmentPearson Correlation.678**1

Sig. (2-tailed).000

N5050

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

Pearson correlation results shows that there is strong positive relationship between stakeholder and shareholder commitment and CSR . This means that increase in CSR will cause increase in stakeholder and shareholder commitment and vice versa. and statistical significance level is 1% which less than 5% which shows a strong relationship. Hypothesis accepted

The table given below shows the correlation of two variables:

Correlations

CSRProftabilityANDFinancialperformance

CSRPearson Correlation1.715**

Sig. (2-tailed).000

N5050

ProftabilityANDFinancialperformancePearson Correlation.715**1

Sig. (2-tailed).000

N5050

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

Pearson correlation results shows that there is strong positive relationship between profitability and financial performance and CSR . This means that increase in CSR will cause increase in profitability and financial performance and vice versa. And statistical significance level is 1% which less than 5% which shows a strong relationship. Hypothesis accepted.

REGRESSION:Following tables explain the regression that explain change in CSR due to change in Independent variables.:

This table explains the Model Summary:Model Summary

ModelRR SquareAdjusted R SquareStd. Error of the Estimate

1.795a.632.6081.07344

a. Predictors: (Constant), Profitability AND Financial performance, PRODUCTIVITY, Shareholder AND stakeholder commitment

This table provides us the value of R i.e. 0.79 which shows moderate degree of correlation between CSR and other variables. The value of R2shows 0.632.

ANOVA table explains about the regression line fitness of the data i.e. shown below:

ANOVAb

ModelSum of SquaresdfMean SquareFSig.

1Regression91.015330.33826.329.000a

Residual53.005461.152

Total144.02049

a. Predictors: (Constant), ProftabilityANDFinancialperformance, PRODUCTIVITY, ShareholderANDstakeholercommitment

b. Dependent Variable: CSR

In this table we can see that F value is more than 5 which shows a strong relationship.

This table provides information to predict CSR according to independent variable:

Coefficientsa

ModelUnstandardized CoefficientsStandardized CoefficientstSig.

BStd. ErrorBeta

1(Constant)1.930.9831.963.056

PRODUCTIVITY-.139.181-.072-.766.448

ShareholderANDstakeholercommitment1.194.308.4233.878.000

ProftabilityANDFinancialperformance1.002.216.4994.634.000

a. Dependent Variable: CSR

1.930 0.139(productivity) + 1.194(shareholder and stakeholder commitment)+1.002(profitability and financial performance)+e

By this we can accept the null hypothesis because significance level of motivation is more than 0.05.These all results show the positive relationship between CSR and independent variables..

RELIABILITYFor Q1,Q9,Q14

Reliability Statistics

Cronbach's AlphaN of Items

.6134

Alpha is 0.6% which shows that our questions were 60% reliableFor Q8,Q11

Reliability Statistics

Cronbach's AlphaN of Items

.6192

Alpha is 0.6 % which shows that questions were 60% reliable

For Q6, Q7,Q15,Q16,Q17

Reliability Statistics

Cronbach's AlphaN of Items

.7825

Alpha is 0.7 % which shows our question are 70% reliable.

CONCLUSION:On the basis of our results we accept our null hypothesis. The purpose of this research project was to check the relationship between CSR and Profitability, Productivity, Finacial performance and shareholder and stakeholder commitment. Different variables were chosen and the effect of these variables on CSR has been verified. The results all the tools Regression, Correlation, Scale, Histogram and Bar chart shows that there exist a positive relationship between all the variables and CSR and increasing the effect of these variables will affect the CSR positively and vice versa. So the organization who focuses on such variables and provide adequate resources will become more socially responsible and flourish and will have a superior positive image. However profitability and stakeholder commitment are strongly positively related with CSR as compared to other variables as indicated in the results.

RECOMMENDATIONS:Variables such as productivity, profitability, shareholder and stakeholder commitment and financial performance affects corporate social responsibility both internally and externally, we recommend that if the organization focuses on all of these and will provide sufficient resources and attention than the organization will become more socially responsible on the other hand if the organization ignores and take for granted these variable than this will affect the image of organization and it will also affect the social responsibility of organization. However it is also recommended on the basis of results that variables like profitability and shareholder commitment are more positively related to CSR as compare to other variables, so the organization must focus on these variables more as compare to other variables.

LIMITATIONS:During research we the researchers face many difficulties in data gathering and analyzing it. Time for the research was very limited so we were unable to conduct the research on the large sample due to which we collected data from only fifty employees of different organizations. It also cost expensive to go to different organizations and collect data as we are students and was unable to spend much on the research. Another limitation which we faced was the availability of insufficient sample for collection of data as fifty is not the sufficient sample to collect the accurate data for research purpose. There was much other complication also in collection of data which was faced by us during research.ACKNOWLEDGEMENT:Firstly we would like to thank Allah Almighty for providing us an opportunity to do something productive. Without His blessings we wouldnt be able to come so far. Then we would be thankful to our respected teacher maam UZMA NAEEM who encouraged and motivated us to accomplish our work sincerely. This research project wouldnt be possible without her cooperation and continuous guidance.

REFERENCE:

Ali, I., Rehman , K., Yilmaz, A., Nazir, S., Ali, J (2010). Corporate Social Responsibility Influences, Employee Commitment and Organizational Performance. Journal of Business Management, 4(12) , 2796-2801

Aaker ,D (1994).Building a brand :the Saturn story. Joural of California management review, 36(2), 114-121

Abagail , M (2001).Corporate Social Responsibility : Theory of the firm perspective. Academy of Management journal, 25 ,117-127

Abbey,D (2004),Global profit and global justice: Using your Money to change the world.New society publishers, 4, 22-44

Abelson,M (1983).The impact of goal change on permanent perception and behavior of employees. Journal of management, 9, 65-79

Aggarwal ,P (2004).The effects of brand relationships and norms on consumer attitudes and behavior. Journal of consumer research , 31, 1

Ahmed,N.,Montagno,R.,Flenze,R (1998).Organizational performance and environmental consciousness:An empirical study. Journal of management decision, 36, 57-62

Akerlof,A (1970).The market for lemons quality uncertainity and the market mechanism the quarterly. Journal of economics, 84, 448-500

Alexander,D (2006).The employers Responsibility to the community. Academy of Management journal ,15, 132-148

Ali , I., Rehman ,K., Yilmaz, A.,Nazir,S.,Ali,J (2010). Effects of Corporate Social Responsibility on Consumer Retention in Cellular Industry of Pakistan. Journal of Business Management, 4(4), 475-485

Amaeshi, K., Osuji, O., Nnodim, P (2008). Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? Clarifications, Exceptions and Implications. Journal of Business Ethics, 81, 223-234 Asongu, J (2007). Innovation as an Argument for Corporate Social Responsibility. Journal of Business and Public Policy, 1, 20-40

Bansal,P (2004).Corporate socil responsibility :Why Good people behave badly in organization. Ivey business journal ,7, 1-5

Barak,E.,Nissly,J.,Levin,A (2001).Antecedents to Retention and turnover among child welfare ,social work and other human service employess. The university of Chicago , 75, 4

Bonner,R (1921).The organization of the ten thousand .The classical journal , 9 , 7

Branco,M (2006).Corporate social responsibility and resource based perspective. Springer journal of business ethics, 69, 21

HYPERLINK "http://link.springer.com/search?facet-author=%22Rafael+Bravo%22"Bravo, R (2011).Corporate Social Responsibility as a Vehicle to Reveal the Corporate Identity: A Study Focused on the Websites of Spanish Financial Entities. Journal of Business Ethics, 107, 129-146

Carroll, A (1979). A Three-Dimensional Conceptual Model of Corporate Performance. The Academy of Management Review, 4, 497-505

Frank,L (1903).The social effects of the eight hour day . Academy of management journal ,8 , 521-530

Fred,M.(2008).Corporate social responsibility. Journal of business ethics,9, 21-44

Garriga,E.,Mele,D (2004).Corporate social responsibility theories mapping territory. Journal of business ethics, 53, 2

Graafland, J. (2004). Benchmarking of Corporate Social Responsibility: Methodological Problems and Robustness. Journal of Business Ethics, 53, 137-152

Hemingway, C., Maclagan, P (2004). Managers' Personal Values as Drivers of Corporate Social Responsibility. Journal of Business Ethics, 50, 33-44

Vitell,S.,Ramos,E.,Nishihara,C (2004). The Role of Ethics and Social Responsibility in Organizational Success: A Spanish Perspective. Journal of business ethics, 91, 467-483

Jonker, J (2010). The Challenge of Organizing and Implementing Corporate Social Responsibility. Journal of Business Policy, 79, 128-142

Karaibrahimoglu,Y (2010). Corporate Social Responsibilities in Time of Financial Crises. Journal of Business Management, 4(4), 382-389

Kenneth,E (1985). An empirical examination of the relationship between corporate social responsibility and profitability, Academy of management journal, 28, 446-463

Kole ,P.,Richard,R.,Brown,A (2001). A corporate social responsibility audit within a quality management framework. Journal of business Ethics, 31, 4

LEtang, J (1995). Ethical Corporate Social Responsibility: Framework for Managers. Journal of Business Ethics, 14, 125-132

Lacey , R., Hensel, P (2010). Longitudinal Effects of Corporate Social Responsibility on Customer Relationships. Journal of Business Ethics, 97, 581-587

Lewis,H (1914).Social organization. Academy of Management journal, 20, 68-97

Max,B (1995).A stakeholder framework for analyzing and evaluating corporate social performance.Academy of management journal , 20,92-117

McGuire, J (1988). Corporate Social Responsibility and Firm Financial Performance. The Academy of Management Journal, 31, 854-872

Negro,N (1920),Labor organization. Monthly labor review, 11, 12 Padgett,R.,Galan,J (2010).The Effect of R&D Intensity on Corporate Social Responsibility.Journal of business ethics, 93, 407-418 Philip,L (1984).Effects of industrialism upon political and social ideas. Academy of management journal, 27, 42-56

Pridge,J (1998).Corporate lives :New perspective on the social life of the corporate form. Academy of management journal, 52, 97-118

Smith, N (2003). Corporate Social Responsibility: no whether but how.Journal of Commerce, 03, 1-35

Sotorro, L (2008).Corporate Social Responsibility of the Most Highly Reputed European and North American Firms. Journal of Business Ethics, 82, 379-390

Wood, D (1991). Corporate Social Performance Revisited. The Academy of Management Review, 16, 691-718Appendixa sample of questionnaire is enclosed with the report which is a statistical tool which we used to collect data.24