Title: The Role of Corporate Social Responsibility on the Relationship of Competitive Pressure and Business Performance of Batik Industry in Central Java, Indonesia
Authors:
1. Dr. Noorlailie Soewarno, SE., MBA., Ak.
2. Prof. Dr. Bambang Tjahjadi, SE., MBA., Ak.
3. Mawar Fitriyah
Department: Accounting
Journal Name: Journal of Asian Finance, Economics and Business
Kind of Journal: Scopus Q2
Keywords: Batik MSMEs; Competitive Pressure; Corporate Social Responsibility; Business Performance
Batik has played an important role in Javanese society in Indonesia. UNESCO has recognized Indonesian batik and included it in the Representative List of Intangible Cultural Heritage because of the philosophy of batik in Indonesia and its use in the daily lives of Indonesian people, especially in Javanese society. Therefore, the batik industry plays an important role culturally and economically in Indonesia. In a global environment with a complex background, competition has a crucial role, therefore business organizations need to adapt to respond to competition in order to survive (Flammer, 2014; Meng, Zeng, Xie, & Qi, 2015; Anning-Dorson, 2016). Business organizations need to create appropriate strategies and implement those strategies, especially when there is competitive pressure in their business environment (Kaplan & Norton, 2004). Based on industrial organization theory, to face competition, companies need to implement certain strategies (Porter, 1981). Establishing relationships with external parties is a strategy in the form of social capital to face competition (Ruiz-Ortega, Parra-Requena, & García-Villaverde, 2015), namely Corporate Social Responsibility (CSR).
CSR is a company's commitment to balance social, environmental, and economic practices by implementing ethical behavior to achieve stakeholder satisfaction (Agyemang & Ansong, 2017; Feng et al., 2017; Garg, 2016; Moir, 2001; Pinto & Allui, 2020; ). In the modern era, CSR has become a medium of communication with stakeholders both formally and informally and the concept itself focuses not only on economic benefits and entities but also social ones (Jain, Vyas, & Roy, 2017; Taghian, D'Souza, & Polonsky, 2015). All sizes and types of companies have a responsibility to implement CSR, but large companies and MSMEs have differences in implementing CSR (Madueño et al., 2016; Orlitzky, Siegel, & Waldman, 2011).
MSMEs have an important role in the economy and society, because they contribute both economically and non-economically by providing employment for the surrounding community (Andoh, Quaye, Akomeafrimpong, & Futter, 2018; Jain et al., 2017). This study aims to determine the mediation of CSR in the influence of competitive pressure on the performance of batik MSMEs in Central Java. This study provides empirical evidence regarding industrial organization theory and stakeholder theory on the influence of competitive pressure on business performance through CSR. This study also provides empirical evidence that can help MSMEs in making decisions related to improving performance through CSR due to competitive pressure and can be a reference for further research regarding the importance of paying attention to competitive pressure on business performance.
For the full article, please visit:
https://www.koreascience.or.kr/article/JAKO202100569457355.view?orgId=kodisa