International Journal of Entrepreneurship (Print ISSN: 1099-9264; Online ISSN: 1939-4675)

Research Article: 2021 Vol: 25 Issue: 1

Impact of Corporate Social Responsibility on Sustainability of Jordanian SMEs Mediating Role of Corporate Governance

Fatema Ali Kareem Alzubaidi, The University of Jordan

Keywords

Corporate Social Responsibility, Corporate Governance, Sustainability SMEs.

Abstract

This study promotes Corporate Social Responsibility (CSR) investigation by examining the link between CSR and sustainability. It develops a literature-based model and considers one significant mediating variable that is Corporate Governance (CG). The CSR activities are expected to influence the CG in various settings, particularly in developing nations. Empirical findings, based on a study of 483 employees in a Jordanian SMEs, confirm the relationship between CSR and sustainability; nevertheless, the impact is direct, whereas CG completely mediates this relationship. The results show that the CSR is helping to improve governance practices and the CG that ultimately enhances sustainability. The significance of study stems from its implications for researchers, managers, and policymakers who are engaged in assessing the effect on the CSR-sustainability relationship of intervening variables.

Introduction

The high level of attention paid to the economic environment for Corporate Social Responsibility (CSR) has led many companies to improve their corporate governance from a stakeholder perspective. Indeed, the ability of the company to manage a network of relationships with stakeholders is becoming a driver of long-term sustainable development and a basis for a long-lasting competitive advantage, thanks to the creation of a Win-win business, community and stakeholders scenario (Salvioni & Gennari, 2020). (CSR) has turned into an indispensable component of larger organizations around the globe. Lately, CSR practices have received considerable recognition due to a variety of regulatory opportunities, market recognition and brand images that have a direct effect on their sustainability (Vila, Sklavounos, Vergos, Rotsios, & Shabanaj, 2020). Corporate governance consists of policies and processes underlying the administration and monitoring of an organization to help create a trust, openness, and accountability atmosphere (Garas & ElMassah, 2018). Nevertheless, From the conservative economic point of view of the stakeholders’ capital (Friedman, 2009), to moral, lawful, humane and elective obligations (Carroll, 1979) to good corporate citizenship, the term CSR has been described in various ways (Hemphill Thomas, 2004). These variations derive, in part, from the differing underlying assumptions about the meaning of CSR, ranging from insufficient legal and economic commitments to stockholders’ obligation and broader social structure organizations.

There was a significant amount of CSR literature complemented by its measurements and validity (Abeysekera & Fernando, 2020; Freitas Wesley Ricardo de, Caldeira-Oliveira Jorge, Teixeira Adriano, Stefanelli Nelson & Teixeira Talita, 2020; Nguyen, Kecsk

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