Journal of Advance Management Research, ISSN: 2393-9664 Vol.06 Issue-03, (March 2018), Impact Factor: 4.73 Double-Blind Peer Reviewed Refereed International Journal - Included in the International Serial Directories Journal of Advance Management Research, ISSN: 2393-9664 (JAMR) http://www.jamrpublication.com email id- [email protected]Page 58 BANKS’ POLICY AND EMPLOYEES’ ATTITUDE TOWARDS CSR AND SOCIAL ISSUES - STUDY OF SELECT PUBLIC & PRIVATE SECTOR BANKS Dr. Lipika Bhardwaj Assistant Professor, University Institute of Hotel & Tourism Management, Panjab University, Chandigarh Dr. Sanjay Kaushik Professor, University Business School Panjab University, Chandigarh Dr. Jagdeep Singh Director, Institute of Management Studies (IMS), Bhaddal Institutes, Ropar (Punjab) ABSTRACT Corporate Social Responsibility (CSR) is generally understood as responsibility of business towards the society. According to the Canadian Centre for Philanthropy, “CSR is a set of management practices that ensure that the company should minimize the negative impacts of its operations on society while maximizing its positive impacts.” This definition therefore provides the link between the business decisions related to the social responsibility towards the local communities, environment and other stakeholders. Generally, the policy regarding CSR is always developed at the top level and down the line employees follows the same. But the employees at the various levels are having different attitude and perceptions regarding CSR and social cases. So, the present study examines and compares the banks’ policies and employees’ attitudes towards CSR, social issues and cases, between public and private sector banks. Eighty (80) respondents were surveyed to examine the employees’ attitude. Moreover, the present paper also examines banks’ policies and employees’ attitude towards social issues and cases, within select public & private sector banks. KEYWORDS: Corporate Social Responsibility, Attitudes, Companies, Policies, Employees and Social Issues 1. INTRODUCTION These days, corporate houses have increasingly grown and they become driving force in the development agenda. They became the major player in the economic system of any country. Under the corporate goals, along with the profits, community as well as environment has started receiving great attention. The key drivers of this change are the awareness of the corporate towards the society and the environment. New business values, social perceptions and sense of responsibility towards the society have brought a change in the concept of business and it has given birth to a new word, CSR i.e. Corporate Social Responsibility. In general, CSR means responsible entrepreneurship with its voluntary initiatives towards the social benefits which goes beyond legislative requirements and contractual obligations (Caroll, 2009). CSR has bought significant change in the mindset of society, people and organizations. Corporations are supposed to take responsibility for their acts which impact societies and the natural habitat. It is not at all
Transcript
Journal of Advance Management Research, ISSN: 2393-9664
BANKS’ POLICY AND EMPLOYEES’ ATTITUDE TOWARDS CSR AND SOCIAL ISSUES - STUDY OF SELECT PUBLIC & PRIVATE SECTOR BANKS
Dr. Lipika Bhardwaj
Assistant Professor, University Institute of Hotel & Tourism Management, Panjab University, Chandigarh
Dr. Sanjay Kaushik
Professor, University Business School Panjab University, Chandigarh
Dr. Jagdeep Singh
Director, Institute of Management Studies (IMS), Bhaddal Institutes, Ropar (Punjab)
ABSTRACT Corporate Social Responsibility (CSR) is generally understood as responsibility of business towards the society. According to the Canadian Centre for Philanthropy, “CSR is a set of management practices that ensure that the company should minimize the negative impacts of its operations on society while maximizing its positive impacts.” This definition therefore provides the link between the business decisions related to the social responsibility towards the local communities, environment and other stakeholders. Generally, the policy regarding CSR is always developed at the top level and down the line employees follows the same. But the employees at the various levels are having different attitude and perceptions regarding CSR and social cases. So, the present study examines and compares the banks’ policies and employees’ attitudes towards CSR, social issues and cases, between public and private sector banks. Eighty (80) respondents were surveyed to examine the employees’ attitude. Moreover, the present paper also examines banks’ policies and employees’ attitude towards social issues and cases, within select public & private sector banks. KEYWORDS: Corporate Social Responsibility, Attitudes, Companies, Policies, Employees and Social Issues
1. INTRODUCTION These days, corporate houses have increasingly grown and they become driving force in the development agenda. They became the major player in the economic system of any country. Under the corporate goals, along with the profits, community as well as environment has started receiving great attention. The key drivers of this change are the awareness of the corporate towards the society and the environment. New business values, social perceptions and sense of responsibility towards the society have brought a change in the concept of business and it has given birth to a new word, CSR i.e. Corporate Social Responsibility. In general, CSR means responsible entrepreneurship with its voluntary initiatives towards the social benefits which goes beyond legislative requirements and contractual obligations (Caroll, 2009). CSR has bought significant change in the mindset of society, people and organizations. Corporations are supposed to take responsibility for their acts which impact societies and the natural habitat. It is not at all
Journal of Advance Management Research, ISSN: 2393-9664
tolerable for the organisations to encounter monetary flourishing in segregation from those specialists affected by its activities. A firm should now concentrate its attention on both expanding its bottom line and being a decent corporate civilian. In this new role to the society, CSR has also proved to foster growth and prosperity in developing and least developed countries (Lamy 2002). Like many other countries, the business enterprises in India, for their growth, stability and prosperity and along with for the development of the country, recognized the need for CSR and have been practicing to some extent. The drive of CSR has also diverted the attention towards one of the important question that whether corporate managers should regard themselves as solely responsible to shareholders or whether they have a wider responsibility as “trustees of the assets of the corporation” on behalf of a wider range of stakeholders (Wood, 1991). In this attempt, the objective of the present study is to examine the banks’ policies and employees’ attitude towards social issues and cases from select public and private sector banks. 2. LITERATURE REVIEW These days, academicians’ interest has started growing in investigating the perception of top management toward CSR and the actions they may take regarding socially responsible issues. Many studies have been conducted all over the world, to understand the views of employees towards various social issues. Various surveys showed mixed opinion of the employees regarding the various issues like- profitable business growth to community & social development. According to DeGeorge (2005), any national or international business cannot be ethical without the persons who run the business. So, the viewpoint and the attitude of the management and the employee is utmost important. According to Harvard Business Review (1971), majority of managers felt that it is the duty of the organization, to serve equally & fairly to the groups-owners, employees, and the public. According to Thong (1984), along with ethical standards of the corporate, philosophies of top managements are the primary factors which contribute to the corporate social awareness in developing countries. The key factor in incorporating CSR in an organization is totally dependent upon the attitude or perception of the manager towards CSR (pumas, 2009). Understanding employee perceptions is important because it can significantly influence workplace attitudes, behaviors, and performance (Bargh & Burrows, 1996; Cable & Judge, 1996). As per the survey conducted among the fortune 500, it is concluded that there is a trend towards greater acceptance of social responsibilities (Holmes ,1976).Moreover, the importance of CSR has been examined in business, society, customers, employees, communities etc. and its impact has been seen on profits, goodwill, satisfied customer, employee satisfaction and loyalty etc. As per Dawkins (2004), it is apparent as nine out of ten employees want to work for a responsible company. Moreover, there is significant difference in the attitudes of managers towards social responsibility and type of industry. Some managers perceive that acceptance of CSR appears not doing any harm to economic performance and indeed is associated with a large increase in sales (Murthy,S.R.,2014).There is great difference in viewpoints regarding the companies polices & employees attitude towards CSR. So, the present study focuses on banking policies & employees attitude towards social issues & cases. 3. HYPOTHESES OF THE STUDY In order to achieve the specified objectives following hypotheses were proposed for checking the banks’ attitude and policies towards social issues and cases from select public and private sector banks.
Journal of Advance Management Research, ISSN: 2393-9664
H1. There is significant difference in the banks’ attitude and policies towards social issues and cases between select public and private sector banks H2. There is significant difference in the banks’ attitude and policies towards social issues and cases within selected public as well as private sector banks. 3. RESEARCH METHODOLOGY 3.1 DATA COLLECTION For the present study, Quantitative research approach has been adopted. A structured questionnaire was developed and tested to collect data from the consumers of select banks. Total seven banks were selected from public and private sector banks. Banks were selected randomly. From public sector, 2 banks were selected i.e. Bank of Baroda and State Bank of Mysore. Two from private sector (Indian banks) i.e HDFC Bank and Dhanlaxmi Bank, two from private sector (International banks) i.e. Citi Bank and Standard Chartered Bank is selected. Last one is State bank of India. The area of the study is Punjab, Haryana and Chandigarh. In total 80 questionnaires were collected from 7 select banks. There were total 34 respondents from public sector banks and 46 respondents are from private sector banks. The distribution is as under-
Table 3.1: Banks’ attitude towards social cases in public & private banks
Ranks
Code
Statements
Public sector banks
Private banks Mann-Whitney U
p-value Mean Score
Sum of Ranks
Mean Score
Sum of Ranks
E-3.1 During the banking operation, profitability is more important and environmental concerns distracts from the main goal.
35.00 1190.00 44.57 2050.00 595.00 .039*
E-3.2 For banks it is important to fulfill the lawful expectations.
33.68 1145.00 45.54 2095.00 550.00 .006**
E-3.3 The bank should reject the project which has worse impact on the environment even if it is within the boundaries of law.
45.97 1563.00 36.46 1677.00 596.00 .059
E-3.4 The environmental projects which helps in enhancement of social quality must be assisted by the bank
39.81 1353.50 41.01 1886.50 758.500 .763
E-3.5 For the bank the main concern is that borrower must comply with government regulations.
45.09 1533.00 37.11 1707.00 626.000 .111
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(*=Significant, **=Highly Significant) H0=There is no significant difference in the banks’ attitude towards social cases between public sector banks and private sector banks. The above table exhibits the output of the Mann-Whitney U test. Since the p-value for the Mann-Whitney test for the statements E-3.1, E-3.2, E3.6 and E3.15 are coming out to be less than 0.05; the null hypothesis is rejected for E-3.1, E-3.2, E3.6 and E3.15. Therefore, it is concluded that it seems to be a significant difference in the banks’ attitude towards social cases, such as importance of focusing upon profitability and policies regarding natural environment are distraction from the goal, for the bank, a successful business is the one which along with profit making, satisfy the social obligations and a bank is known as successful only if it complies the legal obligations While for the rest of the variables, since the p-value is greater than 0.05, the null hypothesis is accepted for statements E-3.3, E-3.4, E-3.5, E-3.7, E-3.8, E-3.9, E-3.10, E-3.11, E-3.12, E-3.13, E-3.14 and E-3.16, that is, there is no significant difference in the banks’ attitude for social cases, such as E-3.3, E-3.4, E-3.5, E-3.7, E-3.8, E-3.9, E-3.10, E-3.11, E-3.12, E-3.13, E-3.14 and E-3.16, between public & private banks. On the basis of mean scores, private banks have higher mean scores for the statements like, in banking, profitability is more important ,for banks it is important to fulfill the lawful expectations, the environmental projects which helps in enhancement of social quality must be assisted by the bank, bank must provide loans and assist environment project organised by NGOs, bank must recognize that corporate honesty and ethical behaviour above the regulations ,a bank is known as successful only if it complies the legal obligationsas compared to the public sector banks. Whereas, for the statement, importance of maintaining moral values while achieving successful business, public sector has higher mean score than private banks.
Table 3.2: Banks’ attitude towards social cases within select public sector banks
Ranks
Codes Statements
Public sector banks
Kruskal Wallis
p-value Bank of Baroda
State Bank of Mysore
State Bank of India
Mean Rank
Mean Rank Mean Rank
E-3.1.1
During the banking operation, profitability is more important and environmental concerns distracts from the main goal.
25.17 10.90 15.33 13.276 .001**
E-3.1.2 For banks it is important to fulfill the lawful expectations.
23.92 8.50 18.58 15.667 .001**
E-3.1.3
The bank should reject the project which has worse impact on the environment even if it is within the boundaries of law.
14.67 18.65 19.38 2.117 .347
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E-3.1.16 Bank must avoid Environmental management if it affects financial performance
19.50 19.95 13.46 3.432 .180
(*=Significant, **=Highly Significant) H0= There is no significant difference in the banks’ attitude towards social cases within select public sector banks. The above table represents the results of the Kruskal-Wallis test applied on the statements coded as E-3.1.1, E-3.1.2, E-3.1.3, E-3.1.4, E-3.1.5, E-3.1.6, E-3.1.7, E-3.1.8, E-3.1.9, E-3.1.10, E-3.1.11, E-3.1.12, E-3.1.13, E-3.1.14, E-3.1.15 and E-3.1.16 about banks’ attitude towards social cases. Since the p-value for the Kruskal-Wallis test for statements E-3.1.1, E-3.1.2, E-3.1.8, E-3.1.9 and E-3.1.12, is less than 0.05, the null hypothesis is rejected for statements E-3.1.1, E-3.1.2, E-3.1.8, E-3.1.9 and E-3.1.12. Therefore, we can conclude that significant difference in the banks’ attitude towards social cases is existed, such as importance of focusing upon profitability, internal concerns and policies to achieve it, importance to follow within the expectations of law, prioritising immediate profit in exchange of sacrificing the natural environment, management of environment and good corporate citizenship defined as saving the environment within the public sector banks. While for the rest of the variables, since the p-value is greater than 0.05, the null hypothesis is accepted. Therefore, there is no significant difference in the statements for banks’ attitude towards social cases, such as E-3.1.3, E-3.1.4, E-3.1.5, E-3.1.6, E-3.1.7, E-3.1.10, E-3.1.11, E-3.1.13, E-3.1.14, E-3.1.15 and E-3.1.16, within the public sector banks. On the basis of mean rank, we can conclude that Bank of Baroda has higher mean score for maximum statements- focus upon profitability, importance to practice within the limits of law, prioritizing immediate profit in exchange of sacrificing the natural environment, management of environment by providing the services that at least meet the minimum legal requirements and good corporate citizenship defined as saving the environment, as compared to the other public sector banks. Table 3.2a: Mean and median of banks’ attitude towards social cases within select public sector banks
Codes Statements
Bank of Baroda State Bank of Mysore State Bank of India
Mean Median Mean Median Mean Median
E-3.1.1
During the banking operation, profitability is more important and environmental concerns distracts from the main goal.
4.08 4.00 2.30 2.00 2.83 2.50
E-3.1.2 For banks it is important to fulfill the lawful expectations.
3.92 4.00 2.50 2.00 3.50 3.50
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The financial and environmental policies must run parallel to each other.
3.67 4.00 3.90 4.00 4.00 4.00
E-3.1.12
It is essential that the organizations must be known as competent in terms of protecting the natural environment.
4.67 5.00 3.90 4.00 4.00 4.00
E-3.1.13
Commitment towards preservation of environmental activities is more important.
3.50 3.50 4.00 4.00 3.83 4.00
E-3.1.14
Bank must recognize that corporate honesty and ethical behavior must work above the regulations
3.75 4.00 3.90 4.00 3.75 4.00
E-3.1.15
A bank is known as successful only if it complies the legal obligations.
3.75 4.00 4.00 4.00 3.33 3.50
E-3.1.16
Bank must avoid Environmental management if it affects financial performance
3.67 3.50 3.50 4.00 2.83 3.00
The above table exhibits mean and median values for the statements which show the banks’ attitude towards the various social issues. All the statements with the median value less than 3 show that the employees do not agree with the statement; and the statements with the median value more than 3 show that the either the employees agree or strongly agree with the statements.
Table 3.3: Banks’ attitude towards social cases within select private sector banks
Ranks
Codes Statements
Private banks Kruskal Wallis
p-value HDFC Bank
Dhanlakshmi Bank
Citi Bank
Standard Chartered Bank
E-3.2.1
During the banking operation, profitability is more important and environmental concerns distracts from
26.38 24.85 27.00 16.00 9.405 .024*
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The bank must develop ‘green’ lending policies, with lower interest rates for the borrowers which are working towards environment.
23.25 26.30 22.46 22.46 .734 .865
E-3.2.11
The financial and environmental policies must run parallel to each other.
19.75 25.90 19.13 29.63 7.361 .061
E-3.2.12
It is essential that the organizations must be known as competent in terms of protecting the natural environment.
21.50 18.70 31.38 21.63 6.875 .076
E-3.2.13
Commitment towards preservation of environmental activities is more important.
21.96 24.20 33.33 14.63 13.258 .004**
E-3.2.14
Bank must recognize that corporate honesty and ethical behavior must work above the regulations
25.63 31.75 24.00 14.00 16.161 .001**
E-3.2.15
A bank is known as successful only if it complies the legal obligations.
26.38 23.10 30.67 13.79 11.683 .009**
E-3.2.16
Bank must avoid Environmental management if it affects financial performance
32.50 17.95 19.63 23.00 8.823 .032*
(*=Significant; **=Highly Significant) H0 = There is no significant difference in the banks’ attitude towards social cases within select private sector banks. The above table represents the results of the Kruskal-Wallis test applied on the statements coded as E-3.2.1, E-3.2.2, E-3.2.3, E-3.2.4, E-3.2.5, E-3.2.6, E-3.2.7, E-3.2.8, E-3.2.9, E-3.2.10, E-3.2.11, E-3.2.12, E-3.2.13, E-3.2.14, E-3.2.15 and E-3.2.16 about banks’ attitude towards social cases.
Journal of Advance Management Research, ISSN: 2393-9664
Since the p-value for the Kruskal-Wallis test for statements E-3.2.1, E-3.2.2, E-3.2.3, E-3.2.4, E-3.2.5, E-3.2.6, E-3.2.9, E-3.2.13, E-3.2.14, E-3.2.15 and E-3.2.16, is coming out be less than 0.05,the null hypothesis is rejected for statements E-3.2.1, E-3.2.2, E-3.2.3, E-3.2.4, E-3.2.5, E-3.2.6, E-3.2.9, E-3.2.13, E-3.2.14, E-3.2.15 and E-3.2.16. Therefore, it is concluded that there is difference in the banks’ attitude towards social cases, such as importance of focus upon profitability, internal concerns and policies to achieve it, importance must be given to fulfill the obligations of law, to support ethical standards to preserve environment and human rights, environment projects to enhance a community’s quality of life, importance of federal, state and local authority regulations, importance of maintaining moral values while achieving successful business, management of environment, showing environmental commitment, recognition of corporate integrity and ethical behavior, fulfilling legal obligations above all other considerations, and environmental issues must be avoided if it affects financial performance, within the private sector banks. While for the rest of the variables, since the p-value is greater than 0.05, the null hypothesis is accepted, that means there is no significant difference in the statements for banks’ attitude towards social cases such as E-3.2.7, E-3.2.8, E-3.2.10, E-3.2.11 and E-3.2.12 within the private sector banks. On the basis of mean scores, statements E-3.2.2, E-3.2.6, E-3.2.8, and E-3.2.16 have higher mean score in case of HDFC Bank; whereas for statements E-3.2.3, E-3.2.5, E-3.2.7, E-3.2.9 and E-3.2.14, Dhanlaxmi Bank has higher mean score. For statements E-3.2.1, E-3.2.4, E-3.2.12, E-3.2.13 and E-3.2.15, Citi Bank has higher mean score and for statement E-3.2.5, Standard Chartered Bank has higher mean score as compared to other private sector banks. Table 3.3a: Mean and median of Banks’ attitude towards social cases within select private sector banks
Name of bank
HDFC Bank Dhanlaksmi Bank
Citi Bank Standard Chartered Bank
Mean Median Mean Median Mean Median Mean Median
E-3.1.1 During the banking operation, profitability is more important and environmental concerns distracts from the main goal.
3.83 4.00 3.80 4.00 4.00 4.00 2.92 2.00
E-3.1.2 For banks it is
important to
fulfill the lawful
expectations.
4.08 4.00 4.00 4.00 4.00 4.00 3.08 3.00
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E-3.1.12 It is essential that the organizations must be known as competent in terms of protecting the natural environment.
3.83 3.50 3.60 4.00 4.42 4.00 3.83 4.00
E-3.1.13 Commitment towards preservation of environmental activities is more important.
3.92 4.00 3.90 4.50 4.67 5.00 3.42 3.00
E-3.1.14 Bank must recognize that corporate honesty and ethical behavior must work above the regulations
4.08 4.00 4.30 4.50 4.00 4.00 3.00 3.00
E-3.1.15 A bank is known as successful only if it complies the legal obligations.
4.25 5.00 4.20 4.00 4.67 5.00 3.42 3.00
E-3.1.16 Bank must avoid Environmental management if it affects financial performance
3.67 4.00 2.30 1.00 2.75 3.00 2.92 2.50
The above table shows mean and median of the banks’ attitude towards social cases within select private sector banks. This shows that there are a variety of responses. For the responses with the median value less 3, it means that the respondents disagree with the statement; and for the responses of median value more than 3, it means that the employees of the select banks agree with the statements.
Journal of Advance Management Research, ISSN: 2393-9664
CONCLUSION The results of this survey indicates that in case of select public and private sector banks, significant difference is seen in the banks’ attitude and policies towards social cases. The study reveals that for private sector banks, profitability is more important than environmental issues. While for public sector banks, moral values are more important while achieving a successful business. Moreover, there is significant difference in the banks’ attitude towards social issues within the select public as well as private sector banks. In case of select public sector; Bank of Baroda focuses much on profitability and more importance is given to practice within the limits of law by prioritizing immediate profit in exchange of sacrificing the natural environment. Moreover, BOB also believes that management of environment must be done by providing the services that at least meet the minimum legal requirements. In case of Private sector banks(Indian), HDFC bank pay more attention towards lawful expectations, social obligations and quick profits but as per the authorities, environmental management must be avoided if it effect the financial performance. In case of Private Sector Banks (Foreign), for Citi Bank, profitability is more important than environmental concern, social projects must be assisted by the bank, importance must be given towards the preservation of environment and the bank must fulfill the legal obligations. Whereas, results reveal that Standard Chartered Bank pays more attention towards environment and as per banks’ policy, the project having negative impact on environment should be rejected. The findings support the view in other research studies that the most important factor that influences a managers’ attitude towards CSR is the companies’ ethical values. REFERENCES Bargh, J. A., & Burrows, L. 1996. Automaticity of social behavior: Direct effects of trait construct and stereotype activation on action. Journal of Personality and Social Psychology, 71: 230–44. http://dx.doi.org/10.1037/0022-3514.71.2.230 Bowen, H.R. (1953). Social Responsibilities of the Businessman. London, UK: Harper and Row. Cable, D. M., & Judge, T. A. 1996. Person-organization fit, job choice decisions, and organizational entry. Organizational Behavior and Human Decisions Processes, 67: 294–311. http://dx.doi.org/10.1006/obhd.1996.0081 Carroll, A. B. (2009). A look at the future of business ethics. Athens Banner-Herald. Dawkins, J. (2004) “The Public’s Views of Corporate Responsibility 2003,” in MORI, London, U.K.: MORI House. Holmes, Sandra L (1976), Executive Perceptions of Corporate Social Responsibility‘, Business Horizons, Vol. 19, pp 34-40. Lamy, Pascal (2002), ‗The role of Corporate Social Responsibility‘, EU Policy Paper, Available at http://trade-info.ceo.eu.int/civil-soc/role-corporate.pdf Murthy, S.R. (2014). “Managerial perceptions on corporate social responsibility in select companies in Hyderabad,” in International Journal of Engineering and Science, Vol.4, Issue 11, PP 09-14 Teoh, H., & Thong, G. (1984). Another look at corporate social responsibility and reporting: An empirical study in a developing country. Accounting, Organizations and Society, 9189-206. Pumas, I. (2009). CSR, Business opportunity or obstacle, SMEs responsibility for society and environment (part 2): Thailand case. Bangkok: Office of Small and Medium Enterprise Promotion
