Measurement of CSR Performance in Manufacturing Industries: A SEM Approach

Introduction

In recent years, corporate social responsibility (CSR) has become an issue of growing interest to both the academicians and the business organizations worldwide (Awan et al., 2019; Hou, 2019; Ioannou & Serafeim, 2010; Masud et al., 2022; Zheng et al., 2022). In many perspectives, the industries are emphasizing on CSR activities and shifting the thought to realize the relationship among the industries, the environment within which they perform their business activities; and the concerned stakeholders (Fuzi et al., 2018; Ioannou & Serafeim, 2010). In the age of globalization, since industrialization is playing a vital role in the global economy, most countries depend on their industries. In the twenty-first century, with increasing the manufacturing industries, most of the scientists, economists, philosophers, researchers, and academicians are, however, concerned about sustainable growth, environmental protection, employees and customers' satisfaction, keeping the working place safe (Habidin et al., 2014; Kanji & Chopra, 2010). Thus, the concept of CSR is an action and process that appear to some social benefited in the future through making the profit, obeying the corporate rules and regulations, and ensuring ethics and social accountability (Ferrell et al., 2019). A good relationship among the company, shareholders, workers, and community can ensure human rights and ethics, governance along green performance. CSR also develops employee quality and promote local communities involved to ensure sustainable development (Ismail, 2009, Jahid et al., 2020). Hence, CSR builds a strong relationship between stakeholders and employees that accelerate the workforce and increase production with sustainability (Jahid et al., 2022).

Researchers explored a lot of drivers of CSR performance worldwide. For example, in Australia, Galbreath (2010) identified firm culture as one of the most crucial factors for CSR performance which is influenced by organizational strategic planning. Awan et al. (2019) classified the activities of CSR into four core groups; economic, legal, ethical, and philanthropic responsibilities in Pakistan. Besides, some other researchers have found out a strong correlation between CSR and firm performance (Hou, 2019; Loosemore & Lim, 2017; Mitra et al., 2018; Zheng et al., 2022). Because CSR practices provide many benefits that improve labor quality and increase company reputation, environmental protection, employee motivation, and profit maximization (Fuzi et al., 2013). Besides, CSR practice assists in building a corporate image and firm success by providing environmental protection and sustainability (Ramesh, Saha, Goswami, & Dahiya, 2019).

Many studies have been conducted in developed countries like Australia (Galbreath, 2010), USA, South Korea and Turkey (Dikeç et al., 2019); Taiwan (Hou, 2019) and UK (Kanji & Chopra, 2010). Kanji–Chopra corporate social responsibility model (KCCSRM) is one of the prominent models dealing with CSR in the UK- a developed country. In their model, the organization's strategic planning offers the foundation for social accountability and investment, environment protection and sustainability, corporate governance and economic responsibility and ethics and human resources. But there is a dearth of studies in developing countries on CSR measurement (Awan et al., 2019; Chatterjee & Mitra, 2017; Ghosh, 2014; Mitra et al., 2018). Therefore, a limited number of studies in the context of developing countries have encouraged the authors to conduct this study for the measurement of CSR performance, especially from the angle of legitimacy and institutional theories. Though many researchers merely explore the CSR and environmental disclosures in Bangladesh (Ahmad et al., 2017; Khan, 2010; Sobhani et al., 2009, 2012), no study has been found in measuring the CSR performance in manufacturing industries.