Thesis - A Study On CSR Performance in The City of Manila

CSR in the City of Manila 1
De La Salle University
Running head: CSR IN THE CITY OF MANILA
A Study on Corporate Social Responsibility Performance
in the City of Manila

Alandy, Jose Antonio S.
Daza, Precious Grace D.
Pangilinan, Maria Teresa R.
Yap, Alexandra G.
De La Salle University - Manila
September 2009
Abstract
Most of the available literature on Corporate Social Responsibility (CSR) focuses on
developed countries. Researchers in the past decade, however, have been interested
to study CSR in emerging markets. This paper reports the results of a survey
conducted among small and medium automotive parts and accessories manufacturers
in the City of Manila. CSR performance was studied using measures under three
dimensions: environment, labor, and community. Results show that most of the
companies employ different CSR activities. Results also present that performance of
such activities are generally low. Moreover, three of the nine measures used in the
study are significantly correlated, suggesting that CSR in the automotive parts and
accessories manufacturers in Manila is more incidental than structural.

Table of Contents
Abstract 2
Table of Contents 3
List of Figures 5
List of Tables 6
Acknowledgments 7
CHAPTER I: REVIEW OF RELATED LITERATURE AND PROBLEM

Background of Study 9
Review of Related Literature 10
Corporate Social Responsibility and Firm Size 12
Corporate Social Responsibility in SMEs 16
Corporate Social Responsibility in Developed Countries 20
Corporate Social Responsibility in Emerging Markets 22
Corporate Social Responsibility in the Philippines 24
Philippines as an Emerging Market 28
Corporate Social Responsibility Performance Measurement 30
CSR Dimensions
Environment 33
Labor 34
Community 37
The City of Manila 39
Research Gap 41
Statement of the Problem 42
Objectives of the Study 43
Assumptions of the Study 44
Hypotheses 44
Scope and Limitations 46
Significance of the Study 47
CHAPTER II: METHODOLOGY
Theoretical Framework 50
Conceptual Framework 67
Operational Framework 60
Research Design 63
Data Set 63
Procedure for Data Collection 64
Procedure for Data Analysis 64
CHAPTER III: RESULTS AND DISCUSSION 68
Environmental Measures 69
Labor Measures 75
Community Measures 81
Hypotheses Testing 87
CHAPTER IV: CONCLUSION AND RECOMMENDATIONS
Conclusion 96
Recommendations 101
References 105
Appendix
A Survey Questionnaire 120
B SPSS Output for Skewness 123
C SPSS Output for Correlation Analysis 124
D Actual Performance of Automotive Parts and Accessories
Manufacturing SMEs based in the City of Manila for the
Nine Measures of CSR 125
List of Figures
No. Title Page
1 Theoretical framework 50
2 Corporate responsibility emphases 53
3 Holistic corporate responsibility model 55
4 Conceptual framework 57
5 Operational framework 60
6 Median score for the possible relationships that might
exist 94
List of Tables
No. Title Page
1 Firm attributes and the motivations for CSR participation 15
2 Responses of automotive parts and accessories
manufacturing companies to questions on
environmental measures of CSR performance 69
manufacturing companies to questions on labor measures
of CSR performance 75
manufacturing companies to questions on community
measures of CSR performance 81
5 Correlation coefficient matrix of CSR performance
measures 88
Acknowledgments
The achievement of this study would not have been possible without the love and
support of everyone and everything that has lent us the strength to push ourselves,
group O, despite all the adversities, tragedies, hardships and all the other experiences
for the completion of this project.
The Lord God, for gifting us with talents, support, faith and a whole lot of blessings
to see us through all our endeavors especially this one. This study is for His greater
glory.
Mr. Neil T. Peñacerrada, our thesis adviser, for his guidance, support and
constructive inputs and criticism throughout the development of the study, boosting
our morals by sharing his experiences and speaking up for us.
Mr. Arnel Onesimo O. Uy, our thesis coordinator and panelist, who instilled into us
the APA format in research writing. He also put the Group O in constant fear as to his
criticisms, questions and when we would chance upon meeting him to check on the
status of our thesis. He helped us develop the need to do things early as well as
prepare for the best and worst.
Ms. Elsie Velasco and Ms. Cynthia Cudia, our thesis defense panelists, who gave
us the necessary criticisms and useful insights for the improvement of the research.
Mr. Alan Muller and Mr. Ans Kolk, the authors of our mother article, whose study
has enlightened us and inspired us to follow their endeavor. Their support as well as
their permission to use their research has help the researchers pull themselves through
this experience.
Respondents to the survey of our study, for the patience and time you took to
answer the survey which gave us the necessary inputs to complete our study.
DTI, for compiling the list of respondents for this study.
Ate Myra, the ever so approachable secretary of the Accountancy Department, who
were patient in dealing with our requests.
Kuya Ed, the ever so reliable driver of Tere, who drove us around Manila so we can
reach our respondents.
Mr. and Mrs. Alandy, Mr. and Mrs. Daza, Mr. and Mrs. Pangilinan, Mr. and
Mrs. Yap, for conceiving and nurturing such beautiful, talented and persevering
children.
Ms. Amabelynne Demavivas, Ms. Katrina Ong, Ms. Cyril Rubia and Ms. Pamela
Sayao, for their help in the necessary formats and the what do’s and don’ts of thesis
making and writing.
VAIO and Fujistsu, for making the necessary gadgets, laptops in particular, to
mount, create and write our research.

Chapter 1
Review of Related Literature and Problem
Background of the Study
An increasing number of companies have been adopting corporate social
responsibility programs for their companies. Corporate social responsibility (CSR)
according to Howard Bowen is “the obligations of businessmen to pursue those
policies, to make those decisions, or to follow those lines of action which are
desirable in terms of the objectives and values of our society” (1953). A much newer
definition to address the modern times was created by the Centre for Business and
Government of the Kennedy School of Government at Harvard University (2004). It
defined corporate social responsibility as “the responsibility that encompasses not
only what companies do with their profits, but also how they make them. It goes
beyond philanthropy and compliance and addresses how companies manage their
economic, social, and environmental impacts, as well as their relationships in all key
spheres of influence: the workplace, the marketplace, the supply chain, the
community, and the public policy realm.” On the other hand, Milton Friedman (1970)
asserted that “the social responsibility of business is to increase its profits.”
Large companies in developed countries have been known to pioneer
programs geared towards social responsibility. One must bear in mind that the
companies in developed markets are not the only ones who are capable of performing
CSR activities. Because of the benefits that can be obtained through adopting
corporate social responsibility, a number of companies from emerging countries are
also stepping up to perform CSR activities. Examples of such are the companies in
the Philippines as evidenced by Philippine SMEs.
There have already been a number of studies about CSR performances.
However, the subject of the studies is mostly on large firms and developed countries.
Because of the relatively small size of SMEs, and because of its classification as a
company in an emerging market, only a few studies about their CSR activities are
made and documented. Only a few took interest in discovering about the
performance, cost, and effect of such activities to the company.
This paper aims to learn and discover more about CSR activities in the
Philippines and develop an understanding of the different measures of CSR
performance. By doing so, we can discover and understand the difference of the
engagements undertaken companies in the Philippines.
Review of Related Literature
A number of researches have already been done on corporate social
responsibility. However, there is still no precise definition that can be directly
identified with the concept. A valid reason for this might be that of the subjective
nature of corporate social responsibility. One cannot measure the social responsibility
of a firm using quantitative techniques alone. Almost all researches conducted on

corporate social responsibility uses qualitative analysis to determine the outcome of
the study.
Another reason is that different views exist on what corporate social
responsibility truly is. Many scholars believe that corporate law is really the law
dealing with the internal structure of the firm (Ramseyer, 1998). But when legal
scholars wish to discuss the corporation’s role in society, they find themselves in an
anteroom of corporate law, discussing “corporate social responsibility” (Greenfield,
2000). There are a number of existing debates about corporate social responsibility
that stretch from the 1930’s to the twenty-first century (Wells, 2002). The first clear
debate over corporate social responsibility, the 1931–32 discussion between A.A.
Berle and E. Merrick Dodd, was a sharp exchange over the responsibilities corporate
managers and directors owed their shareholders and other groups directly influenced
by the corporation.
More so, Basu and Palazzo (2008) observed that “The last three decades have
witnessed a lively debate over the role of corporations in society” (p. 122). Such
debates on corporate social responsibility became popular during the early 1960s,
mid-1970s, and the years around 1990’s (Wells, 2002). In the early 1960’s, legal
commentators saw large corporations as permanent fixtures and seek them to balance
the competing demands of stakeholders. During the 1970’s, advocates of corporate
social responsibility (most notably Ralph Nader) advocated new measures to protect
citizens and consumers from such corporations. On the other hand, the problem was a
wave of corporate mergers and downsizings that left shareholders wealthy and
workers on the street in the 1980’s & 1990’s. Because of this, alternative themes such
as corporate social performance, stakeholder theory, and business ethics theory
caught the imagination of businesses (Gonzalez, 2004). Furthermore, firms have
recognized that they are closely linked to many stakeholders, who either influence or
affect, or are influenced or affected by their operations. Clarkson (2005) added,
“Without their continuing participation and involvement, the corporation cannot
survive.”
According to Wells (2002), all these debates shared one thing in common.
They were all premised in the idea that the economy, in particular the American
economy, was dominated by a relatively small number of enormous, powerful, and
stable business corporations that were qualitatively different from their smaller
competitors, and the debates all assumed that the solution to pressing social ills was
neither to eliminate corporations nor let them alone, but rather to implement legal
mechanisms that would lead corporate managers and directors to take into account the
needs, not only of shareholders, but of workers, consumers, and communities when
making business decisions.
Corporate Social Responsibility and Firm Size
The treatment for corporate social responsibility performance will vary
depending on the size of the firm. For some studies, the relationship of the size of the
firm and the level of participation in corporate social responsibility is positively
correlated. This means that the level of participation and commitment for corporate
social responsibility programs rises as the size of the firm increases. For some, this
might not be entirely true. In fact, as shown at the latter part of this segment, it is
negatively correlated.
McWilliams and Seigle (2001) formulated a hypothesis, which states that the
presence of scale economies in the provision of corporate social responsibility
attributes lead to a positive relationship between firm size and the terms and
conditions of corporate social responsibility attributes. The issue of firm size is
identified as both vital and relatively unexamined (Madden et al., 2006). The size of
the firm can affect strategic motivation. This will have a positive effect on corporate
social responsibility participation (Adams and Hardwick, 1998; McElroy and
Siegfred, 1985).
In addition, organizational theory perspectives of CSR, such as those of
Donaldson’s (2001), emphasize the role of the firm’s structure, in affecting the CSR
outcomes. Several types of firms now recognize that CSR as vital to their drive of
achieving their overall goal. Thus, these firms more readily associate with CSR
participation, and further, are able to benefit from such initiatives. These theories
contribute to the discussion on how firm size affects CSR participation (Udayasankar,
2007).
Corporate social responsibility has been associated more with large companies
(Fuller 2003). Most of the corporate social responsibilities that are seen and heard are
from large companies. This is mainly due to the fact that large firms are more visible
compared to small and medium enterprises. Small and medium enterprises’ efforts
towards corporate social responsibly are not as visible compared to the ones that are
made and done by large companies. Conventional approaches to corporate social
responsibility are based on the assumption that they are the norm and that the
programs for it are developed for that size of industry (Jenkins, 2004). Larger
organizations may also have more evolved administrative processes (Donaldson,
2001), thus they perceive and deal with the external environment differently (Miles,
1987). In fact, according to Brammer and Millington (2006), large companies have
more advanced internal systems that are more capable of dealing with issues
concerning CSR (environment, community, and labor) thus leading to greater
responsiveness.
There have also been studies regarding the relationship of the size of the
enterprises and corporate social responsibility participation. Many claim that the
larger companies are inclined to have more corporate social responsibility
participation than their smaller and medium scale counterparts. Smaller companies
and enterprises are believed to be less responsive to corporate social responsibility
because of their constrained resources and the claim that they have less visibility
compared to larger companies. Also, smaller firms face fewer pressures than their
large counterparts, and gain little recognition from CSR, given their comparatively
lower visibility. However, a conflicting thesis by Meznar and Nigh (1995) claims that
the larger companies are less socially responsive.

Table 1
Firm attributes and the motivations for CSR participation (as cited in Udayasankar,
2007)
Table 1 is taken from the article of Krishna Udayasankar (2007) entitled,
Corporate Social Responsibility and Firm Size. It shows the relationship of the firms’
attribute and the motivations for corporate social responsibility participation.
Udayasankar made a study that claims that the effect of firm size on corporate
social responsibility participation is U-shaped (see table for supporting explanation).
Arguments and points were presented leading to the proposal that different
combinations of firm visibility, resource access and scale of operations, result in

different motivations for firm participation in corporate social responsibility. Both
very small and very large companies are more likely to contribute more in corporate
social responsibility programs and projects. On the other hand, compared to larger
firms, she suggested that firms that are medium in size will have the least
participation, programs, and effort to promote it. (Udayasankar, 2007). However, it
should be noted that the study of Udayansankar considered only the economic
motivations of CSR, and not the moral motivations of firms for CSR participation.
Corporate Social Responsibility in SMEs
Over the last decade, businesses have come under increasing pressure to
engage in activities which is what is described as corporate social responsibility
(Jenkins, 2004). CSR has traditionally been exercised in the public sector but
apparently had been absent in the corporate world, more so in the SME sector. But
the recognition of the growing significance of the SME sector has led to an emphasis
on their social and environmental impact.
Small and medium sized enterprises (SMEs) compose 90 per cent of the
business worldwide and accounts for 50 to 60 per cent of employment (United
Nations, 2002). According to Jenkins (2004), this shows how SMEs have become
numerically and economically important. SMEs are seen as innovators, as
mechanisms for privatization of government-owned enterprises, response for
competition worldwide, and/or as regenerator of economies (Fuller, 2003). It has

specific characteristics that distinguish them from large corporations (Perrini et al.,
2007). They are generally independent, multi-tasking, cash-limited, based on
personal relationships and informality (Spence, 1999), actively managed by the
owners, highly personalized, largely local in their area of operation, and largely
dependent on internal sources to finance growth (Vyakarnam et al., 1997). SME
owners and managers may have to do several tasks in a day (Spence, 1999), thus,
awareness on external issues (issues that an organization has no influence or no
control of) would be low (Tilley, 2000). A common assumption made about the SME
sector is that it is homogeneous and its behavior is basically by its size (Wilkinson,
1999). In addition, because of their smaller scale of operations, resource access
constraints and lower visibility, smaller firms are less likely to participate in
Corporate Social Responsibility (CSR) initiatives (Udayasankar, 2007). While size is
a factor there are other internal and external dynamics that explain their behavioral
characteristics.
Various researchers & analyst have described some of the characteristics of
SMEs. One characteristic identified by Burns (2001) is that small businesses are
social entities that revolve around personal relationships, which are often short of
cash, likely to operate in a single market, who find it difficult to diversify business
risk and are vulnerable to the loss of customers. Another characteristic of SMEs is
that they are often difficult to regulate because they are reluctant to adopt voluntary
regulation and are also distrustful of bureaucracy (Tilley, 2000), and are less
responsive to institutional pressures e.g. legal, competitor benchmarking, government

agencies, public and private interest groups (Dex and Scheibl, 2001). These
characteristics would largely matter in determining the perception of SMEs’ owner-
managers towards corporate social responsibility.
An assumption of Grayson (2004) says that the collective answer to the
question as to whether corporate social responsibility differs in the settings of large
businesses and SMEs is both yes and no. No, because whether the business is small or
large, same principles apply. Yes, because SMEs do not usually use corporate social
responsibility language in describing what they are doing. Grayson further explained
in one of his other works that researchers and practitioners should "recognize that lots
of small firms are already doing things, but those are not described as corporate social
responsibility actions or those are not thought of it in those terms." Some companies
consider themselves as socially responsible just by supporting local economy and
community by being profitable and employing people (Jenkins, 2006). This is termed
by the researchers as "sunken CSR" (Perrini et al., 2006) or "silent CSR" (Jenkins,
2004). Further, Graafland, et al (2003) provided four main motivations for the
difference between the behavior SMEs and large enterprises relating to CSR namely,
visibility to the public and the media; economies of scale, more need for instruments
that facilitate the communication of values and norms within the firm and to their
customers, and stronger competitiveness on the output market for small enterprises.
Evidence from studies suggests that majority of SMEs today believe they should pay
significant attention to their social and environmental responsibilities (Southwell,
2004).
Murillo and Lozano (2006) have indicated in their studies some SME
corporate social responsibility drivers. These are character/values of the founder,
social/economic model of the manager, competitive impact, innovation possibilities,
desire to differentiate, legal regulation, and vision/mission of the company. In a study
by Williamson et al., (2007), it was indicated that business performance is one of the
drivers of SMEs’ environmental behavior, but compliance to regulations brings a
higher level of motivation for SMEs to be involved in corporate social responsibility
activities.
SMEs generally have low commitment to making environment improvements
(Williamson and Lynch-Wood, 2001) because SMEs focus more on improving
financial performance rather than stakeholders' perception towards the company.
Although other factors are important, prestige, autonomy, and fulfillment (Goffee and
Scase, 1995) as examples, owners and managers of SMEs are profit-motivated. This
perception may be explained by human capital theory which views people as self-
seeking materialists, free of societal responsibility (Baptiste, 2001). Moreover, Patton
and Worthington (2003) indicated in their study that the actions of smaller firms are
designed to comply with regulations, motivated by the firms' desire to maintain
business continuity rather than to be seen as socially good.
A study made by Jenkins (2004) about corporate strategies of SMEs and large
firms suggest that SMEs now are approaching CSR that where once only associated
with their larger counterparts. But the fact still remains that SMEs have a different
profile about their familiarity and consciousness of CSR than large enterprises.
On the other hand, Jenkins (2004) also views SMEs as being more flexible,
more responsive and better at internal communication than large organizations, thus
allowing CSR to be implemented without being tied down in bureaucracy. Because of
this fact, he concluded that there are many opportunities available to the managers of
such firms that will enable them to embrace CSR and the benefits it brings to the
table. The challenge now for them is to think about ways on how they can promote
and integrate these activities into the daily operation of the business.
Corporate Social Responsibility in Developed Countries
There have been a number of studies about corporate social responsibilities in
developed countries in Europe and the United States. It was mentioned in a study of
Maignan and Ralston (2002) that there are different motivating principles for
corporate social responsibility. They also claim that these motivating principles for
CSR vary per country. These three principles are performance driven CSR,
stakeholder driven CSR, and value driven CSR.
The study of Maignan and Ralston (2002) about the CSR of the countries in
Europe and the United States discovered that there are differing perspectives per
country on how socially responsive they want the company to perceive them. Some
companies want the public to see that they are socially responsive and therefore
publicize their activities. Some companies opt not to make these kinds of activities
public due to the skeptics that question the performance of such activities. Examples
of these companies are the ones found in conservative countries in Europe. Because
of their business culture, they choose to not publicize their company activities in CSR
or choose to not participate in CSR altogether. Therefore, culture of a country is an
important factor in the social responsiveness of a certain country. Therefore, the
liberal nature of the United States is one of the reasons why companies in the US opt
to publicize their act of philanthropy. Also, according to their study, the focus on the
different CSR issues varies per country.
According to a study conducted by Jamali and Mirshak (2006), companies
from the developed countries adhere to responsibilities that are discretionary in
nature, meaning social actions are based on own judgment. Some of the activities
done related to discretionary responsibility are philanthropic contributions, and
increasing literacy through various activities. Further, in the same study, it was
mentioned that CSR approach of companies from developed countries are amateur
and vague. Companies that Jamali and Mirshak interviewed do not have clear targets,
tools for measurement, and due diligence in the companies’ CSR actions. CSR is still
perceived as voluntary philanthropic activities, powered by the entrepreneurship of
the owners (Jamali and Mirshak, 2006). Companies in developing countries, United
Kingdom in particular, use CSR to improve their business and to develop competitive
advantage (Castaka, P. et al., 2004).
The United States is said to be the country which is most pressured with
regard to corporate social responsibility. The corporations are expected to conform to
the social norms defining desirable behavior. They are also the ones who set the
standards for appropriate behavior. The ethics and the social responsibilities of the
company are being imitated across the Atlantic.
Based on the study, the issues that are linked to the community are most
commonly discussed and given importance. Examples of these issues are the issues
that concern the quality of life and education. The other companies located in Europe
on the other hand focused on issues that are related to productive activities and
traditional promotions. Examples of such are the quality management, the impact of
the production in the environment and sponsorship. Focus on issues in the
environment is due to the high political influence of the environmental movement as
seen by the regulatory programs at the national and European Union levels.
To summarize, CSR performance may vary depending on the culture of the
organization and/or the way the people within the organization perceive their
business. Nonetheless, since the United States is leading in relation to social
responsibility, it is sometimes used by some companies in other countries and market
as a benchmark to their own social responsibility performances.
CSR in Emerging Markets
A number of studies about Corporate Social Responsibility are being
performed because of the said effects of these to different aspects of the company.
Also, studies regarding the true nature and reason for such are being done in order to
understand the behavior of the companies, financially and non-financially. Despite
the growing number of studies that are made, it is seen that the said studies are
usually focused on the companies in developed countries. Only a small number of
literature about CSRs in emerging markets are performed. Normally, if these are
performed, it usually focuses still on the foreign subsidiaries of multinational
companies instead of the local or small and medium enterprises of the said country.
One explanation why there are limited studies regarding the CSR in emerging
markets is because of the lack of the clear definition of the term corporate social
responsibility. There are a number of possible definitions of CSR and the definition of
such may vary from country to country, or even from company to company.
Because of the scant literature in emerging markets, it has been traditionally
believed that there is a difference in the CSR activities and levels of such, of
emerging markets and developed countries. Despite this belief, there is also a view
that explains that despite the differences of the values and perceptions of CSR, the
practices that are performed are still relatively similar.
A study made by Muller and Kolk (2009) attempted to study the CSR
performances of emerging markets and the relationship of such with each other. This
was done by studying the auto industry of Mexico, a country that is listed as an
emerging market. According to this study, there are three dimensions of CSR. These
dimensions are environment, labor and community, and these are acquired from the
dimensions of the companies from emerging markets. Through this, it is said that the
local companies perform CSR activities that are commonly associated with the
activities that are performed by the companies in developed countries. Findings from
Mexico show that the activities and levels of the companies are comparable to the
CSR activities and levels in the setting of developed countries. Also, the results of the
study show that the auto industry in Mexico has six of the nine CSR dimensions that
are intercorrelated. Therefore, according to Muller and Kolk, the “industry is more
structural than incidental.”
Corporate Social Responsibility in the Philippines
The Asian Productivity Organization discovered a common ground despite the
huge differences of the countries in Asia. They found out that “there is a consensus to
adopt principles of corporate governance that hew more closely to generally accepted
global benchmarks in order to improve returns on assets or investments.” (Gonzalez,
2004)
Because of the socially oriented nature of the Philippine Companies, corporate
citizenship is a fundamental part of the business regardless of the size of the
company. The “business giving back to society” is believed to be what Corporate
Social Responsibility is all about. According to the SWS survey in 2003, there are
four prelisted things that private corporations in the Philippines could do. These are
the increasing the wages of employees in proportion to the increase of prices of basic
commodities, spending for cleaning or for restoring any damages in the environment,
sending volunteers from the corporation to a community to help in tree planting and
construction of houses or teach selected courses to out-of-school youth and giving
substantial donations to the poor or communities in need. But despite these results,
through the survey, it was discovered that only 1 out of 10 companies are aware of
the term corporate social responsibility or CSR in the Philippines; although, it is said
that the companies in Metro Manila and the upper social classes are more
knowledgeable about the said term and its definition.
Majority of the business organizations in the Philippines that are considered to
be micro, small and medium believe that the corporate social responsibility is “very
important.” This is evidenced by the 72 percent “very important” turnout of the study
regarding the importance of corporate social responsibility in the organization of
Maximiano who made the first and most comprehensive research about the CSR
practices in the Philippines. For these companies, employing CSR is important
because of the following reasons:
 Providing safe and reliable products
 Operating with ethical business practices
 Working to improve conditions in your company
 Making a profit
 Providing jobs
 Paying taxes
Results from the study also shows that 82% of the companies surveyed says
that good corporate citizenship helps the bottom line, 59% says that it is in order to
develop the image and reputation of the company and 53% believes that it is
important to the customers. This was obtained using the a modified questionnaire that
is adapted from the benchmarking tool Corporate Citizenship Benchmarking System
and Process Assessment Tool which was developed by the Philippine Business for
Social Progress Center for Corporate Citizenship (2002) and State of Corporate
Citizenship Survey Questionnaire that is developed by the Corporate Citizenship in
Boston College (2003).
To measure the extent of the integration of the CSR with their business
practice and the degree of involvement of the various areas of societal impact
management, the PBSP instrument was used and the Likert Scale is also used to
interpret the results of the questionnaire. According to the study, there are four areas
of involvement for Corporate Social Responsibility. These are social investment,
corporate community partnership, environmental stewardship and managing
workplace concern. Support to programs directly addressed to social issues and
locating facilities or jobs in economically depressed communities are were the two
areas of social investment that were identified and rated by the respondents of the
questionnaire. There are also other areas that can be identified. On the other hand,
financially contributing to the development of the host communities, hiring people
from host communities and engaging communities in mainstream business operations
are the activities that were identified for corporate-community partnership. The
results regarding the study of the environmental stewardship of the Philippine
companies show that majority were not at all involved in the practice of waste
management. It was also said that the last area, managing workplace concerns was the
area that the companies have the most involvement on.
Just like the companies in other countries, the motivation to perform CSR is
the importance of CSR to the customer and consumers of the business. Some
companies perform CSR activities because a number of potential customers take the
social responsiveness of the company into account. This normally would be an added
advantage and edge especially to environmentally active companies. This is also the
reason why another motivation for CSR is the business’ reputation and image. Studies
have been made regarding the positive relationship of the firm’s value and the degree
of their involvement in CSR. Another reason why companies are motivated to
perform CSR are the law and political pressures. Although the last reason is often
seen, the survey made by Maximiano (2005) showed that it is the least motivation to
perform CSR.
The study of Maximiano (2005) also showed that there are also barriers to
Corporate Social Responsibilities. The lack of resources, the lack of linkage between
CSR and business and no apparent interest from employees are the three primary
barriers that constrict a company’s effort to perform Corporate Social Responsibility
practices. The other barriers that constrict CSR practices are the lack of support of the
top management, the lack of support of the middle management and the uncertainty
of the meaning of “good corporate citizen.”
All in all, based on the study of Maximiano, it was noted that there is a
significant relationship between the extent of CSR involvement among companies
and company size. Also, through this study, it was seen that there is also a significant
relationship between the extent of CSR involvement among companies and industry
classification.
President Macapagal Arroyo stresses the importance of the collaboration
between government, the private sector, and civil society in the Philippines reduction
strategy. Awareness campaigns for CSR are also being done by the Philippine
Government. One of these is the designation of the first week of July as the CSR
week in the country. In this way, more people can be more aware about the
importance of CSR and the benefits that it could bring to the value of the company.
Based on the SWS survey, forty four percent of the adults in the Philippines
consider the involvement of the company to social responsibility activities in
purchasing and patronizing a product. Because of this, creation of CSR practices and
sustaining such practices are slowly being apparent. This is usually done by the
company itself or directing their efforts to funding a corporate foundation which takes
charge of the investments and is responsible for directing those investments to the
activities that deserve it.
Philippines as an Emerging Market
A number of journals and sites would include lists of emerging markets in
Asia, Europe and even for the whole world. Most of these however failed to define
what an emerging market is. Also, there are different definitions of what an emerging
market is. Mark Mobius (1997) recalls: “intuitively we knew that 'emerging' implied
'developing' or 'underdeveloped' but we could not ascertain what the cutting off
point for 'emerged' versus 'emerging' would be.” A few different definitions from
different sources are discussed in the next few paragraphs.

According to the article Emerging Markets Defined there are many ways to
define what an emerging market is. One way to describe what an emerging market is
all the countries that are not considered as developed. The downside of this definition
is that it has a negative tone to it and that it would include all the countries. Some also
use the term “emerging markets” as an updated and more politically correct version
of the third world, lesser developed and under developed countries.
A more helpful way to define an emerging market is to use key attributes such
as level of income, growth rate and stage of development.
The best definition of emerging markets for Pearson books is “those countries
which have started to grow but have yet to reach a mature stage of development
and/or where there is significant potential for economic or political instability.”
There is another definition of emerging markets by Reem Haekal that can also
be helpful to this study. According to him, Emerging markets are characterized as
economies that are in the process of moving from a closed to an open economy
market economy while building accountability within the system.
According to International Finance Corporation (IFC) an emerging market are
the middle-to-higher income economies among the developing nation, with stock
markets in which foreigners could buy securities. Developing countries are those that
have a Gross National Income per capita of $9265 or less.
For most of the list of the emerging countries, Philippines have almost always
been included. As of January 2009, The Morgan Stanley Capital International (MSCI)
Emerging Market Index included the Philippines in the twenty three countries that it
considered as part of the emerging markets. Other countries included in MSCI
Emerging Market Index are Argentina, Brazil, Chile, China, Colombia, Czech
Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico,
Morocco, Peru, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.
Over the years, there have been efforts to improve the situation of the country
to become a step closer to becoming developed.
CSR Performance Measurement
In spite of the vast available literature on corporate social responsibility,
measurement of CSR remains problematic. Although the literature provides methods
for measuring CSR activities, all of them have some limitations (Turker, 2009).
One of the possible reasons why CSR measurement is problematic is that CSR
has both economic and non-economic components; the former is what the business
does for itself, the latter being what the business does for others (Caroll, 1999). This
distinction, however, is not clear since Caroll (1999) further stated that “economic
viability is something business does for society as well.” The economic component is
further explained as the responsibility of the businesses to produce goods or provide
services that are wanted by the society and to sell them for a profit (Turker, 2009). It
is however known that this is what a business’ basic function is – to produce goods/
provide services and to sell it at an amount higher than the cost. Thus, the economic
component is usually considered as the reason for a business’ existence, rather than to
answer a responsibility of a business to the society (Turker, 2009).
According to Caroll (2000), it is vital to measure CSR performance for the
simple reason that it is an important issue to business and society, and dealing with an
important matter involves knowing how to measure it. Maignan and Ferrell (2000)
have categorized alternative methods of measuring CSR performance into three main
approaches: expert evaluations, single-and multiple-issue indicators, and surveys of
managers. This classification is further expanded into reputation indices or databases,
single-and multiple-issue indicators, content analysis of corporate publications, scales
measuring CSR at the individual level, and scales measuring CSR at the
organizational level (Turker, 2009).
Examples of reputation indices and databases used for evaluating corporate
social activities are The Kinder, Lydenberg, and Domini (KLD) Database, the
Fortune Index, and the Canadian Social Investment Database (CSID). KLD rates
companies in the United States based on the following attributes: community
relations, employee relations, environment, product, treatment of women and
minorities, military contracts, nuclear power, and South Africa (Turker, 2009).
Maignan and Ferrell (2000), however, believe that these indices are inadequate.
Another method used is in evaluating corporate social performance of
companies is single- and multiple- issue indicators. An example of this is the
pollution control performance, which is reported by Council of Economic Priorities

(CEP). Another example is corporate crime indicators. The use of a single indicator
may seem inadequate, thus, some studies use several indicators. Despite the use of
multiple indicators, some scholars still find it inadequate since these indicators are not
that applicable in other countries (Turker, 2009).
Scholars also have used content analysis in of the publications of companies.
In the last few years, companies have been reporting their CSR activities not only in
their annual reports but also in their respective websites. As stated by Ruf et al.
(1998), this method of evaluation of CSR performance is objective since the process
of rating is standardized once the social attributes to be used for rating are selected.
The limitation of this method is that there might be a difference between what a
company reports and what is actually done (McGuirre et al., 1988).
Another method used in measuring CSR performance is the use of scales that
measure CSR perception of individuals. One of its limitations is its inability to obtain
information about socially responsible behavior of organizations. It investigates the
values of the managers only, thus, it overlooks the position of the employees
(Peterson, 2004).
The vast literature suggests different methods for measuring CSR
performance. These methods, however, have limitations to consider when used. Also,
there is no single best method

CSR Dimension: Environment
One of the most talked-about problems in the world today is the environment.
It can be observed that in the past few years, companies and other different
organizations have been involved in various activities concerning saving the
environment. This may be an effect of different studies that enumerates several
environmental problems that need to be solved. Some of the environmental problems
that are specified in some studies are water, air, and other types of pollution; the
melting of Arctic ice caps, as studied by Wallace Broecker, which causes fresh water
to enter ocean water, causing lower ocean salinity (Nuki, 2007); and raise of ocean
temperature, resulting to increase in carbon dioxide release (Nishizawa and Ueno,
2000). It is important to take into account the problems, such as sustainability, that
follow the environmental problems.
The European Commission (2001) has defined CSR as ‘‘a concept whereby
companies integrate social and environmental concerns in their business operations
and in their interaction with their stakeholders on a voluntary basis.’’ Environment
has been a focus of a number of studies on CSR because sustainability has always
been an issue for businesses. Companies acknowledge that their sustainability cannot
be definite unless environmental issues are dealt with, initiating various programs that
aims to reduce environmental impact, under the context of ‘environmental
management’ (Nuki, 2007). The European Commission further emphasized that CSR
is viewed as contribution of the firms to sustainable development, without sacrificing
the firms’ economic performance.

In the discussion of Nuki (2007) about the expansions in social awareness of
the environmental issues, it was mentioned that consumers today must also take
responsibility for environmental issues. Consumers must prefer products that are
causing less negative impact on the environment. However, this still needs
participation of producers, by informing the consumers what their products really
have and cause to the environment.
CSR Dimensions: Labor
In 2001, Betcherman, Luinstra and Ogawa determined how labor market
regulation promotes employment and social protection. Labor market regulation is a
repeated series of exchanges that are affected by a host of cultural, institutional, legal,
and political mechanisms. Market failures and exploitations and injustices are
motivations for policy interventions in the labor market. Although countries may
choose to regulate their labor markets in different ways, relaying on a mix of statutory
and collective voice approaches to complement market and informal mechanisms.
Market-based mechanisms are often characterized as “unregulated” wherein the heart
is the individual contract (either explicit or implicit) between employer and employee.
Statutory regulations are rules and procedures established by laws and decrees that
govern aspects of the employment relationship. A collective voice is the voluntary
negotiation and administration of the employment relationship where workers (and
sometimes employers) are represented collectively. Each of these modes of regulation
has generic strengths and weaknesses although it is determined by the country-

specific factors. There are different views on labor market regulation, ranging from
the institutional perspective, which emphasizes the value of public standards and
collective bargaining, to the market-oriented perspective, which emphasizes the
distortions caused by these institutions. Although there may be different view, it is
performance that matters. Performance like in finding approaches that redress market
failures and injustice and exploitation while having positive effects on labor demand
and other economic variables.
An aspect of the labor market tackles on gender issues and based on the study
by Mata-Greenwood presents the conventional labor statistics generally said about
men and women in the labor market:
 The labor force participation of women is lower than that of men in basically
all countries in the world. Still, it has increased over the last decades while
that of men has slightly decreased.
 The age of women affects their participation in the labor market dramatically,
reflecting the link of age with their reproductive cycle and its associated
constraints on women. This effect, however, has decreased over time. For
men, the effect of age is more uniform across age, indicating their lower
attachment to family responsibilities.
 In countries where agriculture is not very important, women tend to be
concentrated in service occupations while men are more evenly distributed in
industry and services. In countries where agriculture is widespread, women
tend to be unpaid family workers.

 The share of women in the informal sector is higher than their share in the
labor force, suggesting that women turn to the informal sector more often than
men because they lack opportunities or they face other obstacles to
employment in the formal sector.
 Women work shorter hours than men, and are more frequently in atypical
forms of employment, different than core full-time regular employment.
 Unemployment rates of women are higher than men’s in most countries.
 Women are often found in occupations which are losing status. They are
underrepresented in managerial, production and transport occupations while
they make up a large part of clerical and service occupations.
 Women earn less income than men, even at the same level of explained
educational attainment, occupation and hours of work.
 Most poor people are women.
A paper by Almeida and Carneiro in 2008 determines the rate of return to firm
investments in human capital in the form of formal job training through the use of the
census of large manufacturing firms in Portugal between 1995 and 1999 with
unusually detailed information on investments in training, its costs, and several firm
characteristics. The parameter they have determined is the interest in the return t
training for employers and employees as a whole. The results show that direct costs
of training account for about 75% of the total costs of training. The internal rate of
return for these investments varies across firms. While investments in human capital
have on average negative returns for those firms which do not provide training, as
firms providing training shows an estimate return rate of 6.7% to 8.6%. These high
returns suggest that company job training is a sound investment for firms, yielding
comparable results to either investments in physical or investments in schooling.
As with the paper of Almeida and Aterido in 2008, it shows the link between
labor market regulations and the incentives of firms to invest in human capital of their
employees. The study explores a firm level data set across several developing
countries and compares the supply of formal training programs for firms exposed to
different degrees of de facto labor regulations. It shows a more flexible labor code
tends to be associated with a smaller investment in job training, though this effect is
small and varies.
CSR Dimensions: Community
A study conducted by Welford, Chan and Man determined the priorities of
business and its stakeholders for Corporate Social Responsibility. They surveyed
Hong Kong businesses and their stakeholders on the most important factors in
determining what is socially responsible. They identified 15 factors and the survey
show the following results: health and safety, environment, governance, human
resource management, corruption, supply chains, stakeholder dialogue, product
responsibility, policies, reporting, community, partnerships, human rights, standards
and at the last rank is philanthropy. The ranks show that the companies consider the
CSR factors more important if they are directly affected by them.

Another study shows Corporate Social Responsibility Practices of Emerging
Markets by Baskin and Gordon (2005). Out of the 127 publicly-listed companies in
21 emerging markets studied shows that two-thirds of these companies either produce
a sustainability report or have a specific section on their website or in their annual
report covering corporate responsibility. However, some countries’ companies report
to a greater extent than others. The study also determined the existence of a corporate
social investment. Corporate social investment is used to describe a company’s
investment in a range of community activities and it goes beyond the concept of
corporate philanthropy. The result shows that 68.5 percent of the emerging market
companies reported on their corporate social investment. 50.4 percent of the emerging
market companies’ reports are considered as “extensive”. Extensive was defined as
evidence of involvement in a wide range of projects involving significant sums of
money. Partial on the other hand is some evidence of donations to charitable causes
or a community project.
Let’s look at the state of corporate social responsibility with regards to
community in the Philippines, a study by Maximiano in 2005. Responses were
collected from 166 business executives from various companies in the Philippines.
They were asked to scale the four major areas of CSR within a scale of 1 = not at all
to 5 = to a great extent. The results show that companies in the Philippines are
involved within the range of ‘to a small extent’ up to ‘to a moderate extent’. In the
area of Social Investment, two areas were identified and rated by the respondents.
These are: (1) support to programs directly addressed to social issues such as
education, health and housing; and (2) locating facilities or jobs in economically
depressed communities. For Corporate-community partnership, three activities were
identified: (1) financially contributing to the development of the host communities,
(2) hiring people from host communities, and (3) engaging communities in
mainstream business operations.
The City of Manila
The City of Manila is the capital of the Philippines and one of the
municipalities that comprise Metro Manila. Manila is the hub of a thriving
metropolitan area home to over 14 million people (City of Manila – Lungsod ng
Maynila, 2009). According to the City of Manila’s official website (2009), it is the
second most populous city proper in the Philippines with more than 1.5 million
inhabitants. Only the former capital of the Philippines, Quezon City, is more
populous.
Manila, as it is more popularly called by its citizens, is governed by a mayor
and vice mayor elected for three-year terms. The mayor is the chief executive of the
city, while the vice mayor seats as presiding officer in a legislative council consisting
of 36 members, also elected by popular vote. Further, the city has six representatives
elected at the House of the Representatives, each of which represents one of the six
Congressional districts of Manila.

In addition, the city consists of 897 barangays, which are the smallest unit of
local government in the Philippines. With the popular vote of its inhabitants, a
chairman is elected to act as the chief executive of the barangay. The barangay
chairman then chooses a selected number of individuals as barangay tanods to hold
peace and order within the chairman’s jurisdiction.
Manila is also home to Malacañang Palace, one of the most historic structures
in the Philippines, not to mention that it is also the official residence of the President,
the highest authoritative figure and chief executive of the country.
Basic services in Manila are secured by public investments, especially on
infrastructure projects made with the city. Transportation, water supply, electricity,
flood control, telecommunications, and other similar public utilities and services is
what keeps the city afloat and functioning by providing the city’s inhabitants with
stable number of jobs, as well as revenues generates from the taxes of the business
that spawn this services.
According to another website hosted by the City’s Government
(Manila.gov.ph, 2009), the economy begins in the so called “Pamilihan ng bayan” or
“Palengke”. These are public markets that are usually divided into two sections; the
dry section and the wet section. In addition to these so called markets, Modern
shopping malls inhibit the area of Manila, especially of Malate and Ermita.
On the other hand, the establishment of the country’s manufacturing sites was
centered around the districts of Manila during the colonial times (Manila.gov.ph,
2009). Due to its proximity to the Manila North and South Harbor, Tondo became a
center for several manufacturing facilities while the Pandacan and portions of Paco
near the banks of the Pasig River served as centers for manufacturing in the city.
Further, United Nation (UN) avenue was known as the little Detroit in the 1930’s
when Ford Motor Company established its first assembly plant in the area. The
facility remains standing up to this day, now facilitating the government office
issuing seaman’s passbook.
Research Gap
Corporate social responsibility has recently been the focus of today’s studies
as concerns arises with the current state of our environment. As people start to gain
awareness to the continued deterioration of the environment, corporations are keen to
capitalize on these and begin programs to contribute to the environments
rehabilitation or protection. One may think that these are just actions to get into
customers’ good grace but companies could justify these investments as helping them
gain a better financial performance as a study shows a minimal correlation between a
company’s CSR investments and its financial performance (Waddock and Graves,
1997; Loucks and Gorman, 2004). Although CSR programs do not stop there, they
also encompass the treatment of its employees as well as its contribution to
community developments. Not only do these projects and programs benefit the
company and its beneficiaries but a company’s commitment participate in nation
building.
The importance of CSR is gradually being appreciated and developed all over
the globe. There have been a number of valuable studies on different aspects of CSR,
and one of those aspects is on the level of its performance; although much of these
studies focused on the CSR performance in developed countries like the United States
or the multinational companies residing locally (Husted and Allen, 2006). However,
there is a lack of study on the level of CSR performance in emerging countries as
primary data sources are hard to come by. With that, this study was conducted to
contribute to the knowledge on the CSR performance, with Philippines as a case. The
focus of the study is the extent of CSR performance in the City of Manila as
determined through CSR activities of automotive parts and accessories manufacturing
SMEs.
Statement of the Problem
The study seeks to address the following question:
How does the City of Manila perform, with regard to the three
dimensions commonly associated with CSR (environment, social, and labor)?
Specific problems:
1. What are the differences in the CSR performance among different automotive
parts and accessories manufacturing SMEs based in the City of Manila?

2. What is the relationship among the different measures of CSR activities
performed by the automotive parts and accessories manufacturing SMEs
based in the City of Manila?
3. Is CSR performance of SMEs in Manila structured or incidental?
Objectives of the Study
General Objective
The study aims to establish the CSR performance in the City of Manila
with regard to the three dimensions commonly related to CSR.
Specific Objectives
This study aims:
1. To identify the CSR performance in the City of Manila with the use of the
different measures used to establish CSR performance.
2. To identify the differences in the performance of CSR among automotive
parts and accessories manufacturing SMEs in the City of Manila, as
determined by the three dimensions of CSR: environment, social and
labor.
3. To establish the relationship of the measures of CSR activities performed
by the automotive parts and accessories manufacturing SMEs based in the
City of Manila.
4. To determine whether CSR performance in the Manila incidental or
structured.
Assumptions of the Study
Researchers assumed the following for the study:
1. The automotive parts and accessories manufacturing SMEs based in the
City of Manila are aware of the concept of corporate social
responsibility.
2. Small and medium enterprises in the City of Manila engage in CSR
activities, focus of the study will be the performance or non-performance
of such activities.
3. The ten respondents of this study are aware of the CSR practices and
activities of their companies.
4. The survey questionnaire from the study CSR performance in emerging
markets: Evidence from Mexico by Alan Muller and Ans Kolk is
applicable in Philippine setting.
Hypotheses
The nine measures identified represent a wide range of accepted types of
corporate social responsibility activities. These measures are the use of renewable
sources of energy, recycling of wastes, environmental training, women holding
management positions, vocational training, absenteeism, philanthropy, community
relations management, and internships given.
In Null Form
HO1: There is no significant relationship that exists between each of
the measures of CSR activities commonly associated with the three
dimensions of CSR.
In Alternative Form
HA1: There is a significant relationship that exists between each of the
measures of CSR activities associated with the three dimensions of
CSR.
If majority of the measures are found to be sufficiently correlated, CSR
performance is said to be structured. On the other hand, if only a few of the variables
are found to be significantly correlated, it can be said that CSR performance of the
automotive parts and accessories manufacturing SMEs based in the City of Manila
are incidental.
In Null Form
HO2: CSR performance in the City of Manila is incidental in nature.

In Alternative Form
HA2: CSR performance in the City of Manila is structured.
Scope and Limitations
The study focuses on corporate social responsibility of small and medium
automotive parts and accessories manufacturers based in the City of Manila for the
year 2007. The key reason why the researchers have chosen the particular group is the
desire to have a smaller but relevant group that will be the subject of the study.
Researchers selected the automotive parts and accessories industry since the survey
that to be used is applicable for the automotive parts industry. Also many issues
regarding the CSR of such industry can be seen and addressed.
The study includes labor, community, and environmental aspects of CSR and
does not tackle other parts of CSR. The labor aspect focuses on employee relations.
Specifically, this include women holding management positions, company provided
vocational trainings, and absenteeism. On the other hand, the aspect on community
includes philanthropic contributions, the person in-charge of community relations,
and internships. As for the environmental aspect, this includes the energy from
renewable resources, recycling and environmental awareness training.
For data gathering, a survey was conducted among the population of the small
and medium automotive parts and accessories manufacturing SMEs based in the City
of Manila. The companies who participated in the study are Batparts Supply Co.,
Inc.; Fasteners, Inc.; Hella-Phil, Inc.; Metals Engineering Resources Corporation;
Philippine Belt Manufacturing Corporation; Portillo’s Inc.; Rann-S Manufacturing
Co.; Rich Metal Products Corporation; UE Automotive Manufacturing, Inc.; and
YTM Component, Inc.
A factor that could have hampered the study is time since it may be expected
that the respondents would not be able to return the questionnaires within the period
they were given. Also, the geographical locations of the companies as well as the
resources available to contact them could have hindered the study.
Significance of the Study
It has been mentioned earlier that over the years, CSR performance studies
have been focused on developed countries. Only a few took interest in studying CSR
in places considered as an emerging market. A study of CSR performance in the City
of Manila can add to the scant literature of CSR in emerging markets.
Private Industry
Through the data to be gathered in the study, Manila, as well as other cities,
can have an idea on the implementation of corporate social responsibility in their own
market sector. A number of activities performed by different companies in both
emerging and developed countries were considered in this study. Through that
information, companies in developing countries interested in establishing their CSR

activities can have a guide as to the types and kinds of CSR activities that they can
possibly implement. The study of these activities can help the group analyze the
positive and negative side of each activity in terms of its effect on the value of the
firm and its contribution to the outside community.
This study can increase confidence in the entrepreneurs of the cities
considered to be in an emerging market, such as the Philippines, who plan to take up
CSR activities for their own business. Other than philanthropic reasons, they can
discover other reasons to invest in CSR activities for their own businesses.
Funding agencies interested to tie up with developing countries to help them
enforce the value of philanthropy can also use the information in order to have an
idea on the activities that could maximize the use of their money.
Consumers, suppliers and investors can also use this information to have an
idea on the background of the firms that they transact with. Some customers,
suppliers and investors give importance to CSR performances and activities and
consider it as a factor in choosing businesses that they want to be associated with.
Other companies may also use the data gathered in order to evaluate their own
and assess their position with regard to their own corporate social practices.
NGO's whose purpose is related to social responsibilities may also take
interest in this study for assessing the number or the percentage of the companies
taking part in social development and awareness and the level of activities that the
companies perform.
Academe
This study will add to the scant literature available on the topic. This will help
other researchers and students by providing information about CSR implementation
in the City of Manila, the capital of the Philippines, an emerging market. This can
help contribute to the studies of the emerging markets for other locations and to have
a better understanding of the behaviors and activities of such. It can also be used by
both researchers and students who are interested in the topic of CSR. In addition, this
study may also serve as a tool for student awareness on corporate social
responsibilities.
Government
Government Agencies can also use this study as a support material and guide
for creating rules and policies regarding CSR activities. It can be a basis to create
mandates or issue acts that will help improve business performance and social
responsibilities of the firms in the City of Manila, as well as other cities in the
Philippines. It can also give support and encouragement to the law-making bodies to
give importance to corporate social practices.

Chapter 2
Methodology
Framework
Theoretical Framework
Figure 1. Theoretical framework
Stakeholder Theory
Corporate Responsibility Emphases

and
Holistic CSR
Prior to the measurement of the extent of CSR performance in the City of
Manila, the literature has attempted to lay down explanations regarding the important
elements of CSR and factors that influence or drives CSR performance. The various
theories that have been determined relevant to the study in the perceived performance
in CSR will be discussed in this section of the paper.
Stakeholder Theory
The Stakeholder theory states that whatever the ultimate goal of the firm or
other forms of the business activity may be, managers and entrepreneurs must
consider and take into account the legitimate interests of those groups and individuals
(stakeholders) who are influencing or influenced by their activities (Donaldson and
Preston, 1995; Freeman, 1994). Thus, the theory implies that corporations have a
responsibility to their stakeholders whether financial, economical, and social or any
other reasons that would benefit the said individuals, more so than the corporations
themselves.
Basically, the stakeholder theory describes what the corporation is. It
describes the corporation as a constellation of co- operative and competitive interests
possessing intrinsic value (Donaldson and Preston, 1995). Further, it is also
instrumental and normative according to Donaldson and Preston (1995). Instrumental
because corporation practicing stakeholder management will, all else equal, be
relatively successful in conventional performance terms (liquidity, profitability,
stability, etc.) and normative because (1) stakeholders are persons or groups with
legitimate interests in procedural and/or substantive aspects of corporate activity
(stakeholders are identified by their interests in the corporation, whether or not the
corporation has any corresponding functional interest in them) and (2) the interests of
all stakeholders are of intrinsic value (that is, each group of stakeholders merits
consideration for its own sake and not merely because of its ability to further the
interests of some other group, such as the shareowners). Lastly and more importantly,
the stakeholder theory is managerial because it is considered by most authors as a
form of management that integrates social demands. The theory does not only
illustrate existing situations or predict cause-effect relationships but it also suggests

attitudes, structures, and practices that, taken together, constitute stakeholder
management (Donaldson and Preston, 1995).

Corporate Responsibility Emphases Model
Figure 2. Corporate responsibility emphases (as cited in Ketola, 2006)
Environmental
responsibility
Economic
responsibility
Social
responsibility
The Corporate Responsibility Emphases Model (Figure 2) by Tarja Ketola
viewed CSR as comprising of three areas: Economic responsibility, Social
responsibility and Environmental responsibility. Each point found in Ketola’s
Corporate Responsibility Emphases Diagram describes possible different
responsibility emphases of companies.
Economic responsibility has something to do with the impact of a company’s
activities on the economic interests of its stakeholders, which includes the
stockholders, suppliers, creditors, customers, managers, employees, etc. One factor
that may be constantly considered by the stakeholders is profitability. Economic
responsibility also pertains to the responsibility of an organization to contribute in the
economic development of the country where it operates.

Following the World Business Council on Sustainable Development’s
definition of CSR, economic features of CSR include employment (O’Riordan and
Fairbrass, 2008). This is because as companies provide more jobs, the unemployment
rate will decrease. According to Investopedia (2009), unemployment rate is
considered a lagging indicator, confirming but not foreshadowing long-term market
trends.
Social responsibility is an ethical theory, which asserts that any entity has a
societal responsibility. This responsibility may be negative in a sense that it is a
responsibility not to act (resistance stance). It may also be positive, which means
there is a responsibility to act (proactive stance) (Kaliski, 2001).
Taking care of the environment is one of the important tasks of companies.
This is because of the issue of sustainability. Environmental responsibility is the
responsibility of the organizations to reduce the environmental impact of its
operations, while continuously seeking for performance improvement, in terms of
efficiency and profitability.
Ketola (2008) mentioned that the Corporate Responsibility Emphases
Diagram can be used by companies to analyze the current state of their corporate
responsibility. Further, it can be used as a differentiating tool to analyze and compare
the true levels of corporate responsibility of companies. For these reasons, the
researchers believe that the diagram incorporates the three dimensions of CSR under
study.
Holistic Corporate Responsibility Model
Figure 3. Holistic corporate responsibility model (as cited in Ketola, 2008)

UTILITARIAN/EGOISTIC
VALUES ACTIONS
- Advertise - Benefit the
responsibility company
DUTY/RIGHT/JUSTICE
VALUES ACTIONS
- Oblige to - Try to follow the
responsibility values but in
vain
VIRTUE ETHICS
VALUES
- Virtues as basis
for responsible
actions
DISCOURSE ACTIONS
- Sublimations - Are mostly
enable responsible responsible
actions and admit - Improve from
irresponsible feedback
actions
The Holistic Corporate Responsibility Model is a product of the study
conducted by Tarja Ketola (2008). The model and the study attempt to explain the
drives or motives of the companies on having corporate responsibility activities. The
model formed is an incorporation of the philosophical, psychological, and managerial
views of corporate responsibility. In the model, different ethical corporate values are
integrated with psychological defenses in corporate discourses, in order to achieve
responsible environmental, social, and economic corporate actions (Ketola, 2008).

Conceptual Framework
Figure 4. Conceptual framework
ENVIRONMENT COMMUNITY LABOR
CSR PERFORMANCE IN
THE CITY OF MANILA
The researchers have conceptualized the following theories that relate to the
perceived extent of CSR performance in City of Manila. Figure 1 shows the theories
relevant in refining the concept of CSR performance for this study. The theories that
identified are The Stakeholder Theory, Corporate Social Responsibility Emphases by
Tarja Ketola (2006) and the Holistic CR Model (Ketola, 2008). The figure suggests
that CSR should be divided according to the three areas of CSR described in the
theoretical framework and their corresponding dimensions; that is economic
responsibility to labor, social responsibility to community, and environmental
responsibility to environment dimension. This would allow the researchers to more
appropriately measure the extent of CSR performance. The researchers have justified
that the theory should be operationalized for the following reasons as described in the
next section.
The researchers have decided to choose the survey questionnaire adapted from
the study of Alan Muller and Ans Kolk’s (2009) CSR performance in emerging
markets: Evidence from Mexico as the determining tool in assess the actual CSR
performance of the sample respondents. According to Muller and Kolk (2009), the
questionnaire was adopted from the few studies available that reported specific
performance levels or developed indicators from measures used in assessments by
DJSI (2006), GRI (2006) and KLD (2005). The survey aims to investigate actual
company activity directly across a predefined set of nine variables drawn from
existing research: three measures of CSR for each of the three dimensions of CSR
identified. In addition, Muller and Kolk (2009) had consulted the contents of the
questionnaire with colleagues and various authorities with expertise in global CSR
standards, as pointed out in their study, prior to application of the survey. Thus, the
researchers of this study have determined that the conceptual framework will make
use of the survey questionnaire from Muller and Ans Kolk’s (2009) study as the
measuring tool of the perceived extent on actual CSR performance.
As stated, the researchers have determined that there is a need to divide CSR
into the three dimensions (environment, community, & labor), which are commonly
associated with CSR performance in developed countries. This is to show that
companies in the City of Manila engage in these activities. Also, this will allow the
researchers to accurately measure the actual performance of the companies under
study.
Since the economic responsibility is associated with the impact of a
company’s activities to its employees, it is important to consider the actual activities
that pertain to the labor dimension of CSR.

Next, social responsibility is also important to consider because it is related to
the company’s responsibility to the community. It is essential for this reason to
identify the specific activities related to the second dimension of CSR (community).
Lastly, the environmental responsibility is important because it pertains to the
tasks that a company performs to take care of its environment. Therefore, there is a
need to identify the activities related to the environment dimension of CSR.

Operational Framework
Figure 5. Operational framework
Independent Variables
ENVIRONMENT
Renewables
Environmental training
Recycling
Dependent Variable
COMMUNITY
Philanthropy CSR performance
Community relation management in the
Internship City of Manila
LABOR
Vocational training
Women in management
Absenteeism
This section explains how the theories that have been presented in the
previous sections will be operationalized. These theories would then back up the
procedures and the variables within the study. Included in the following explanations
are the dependent variable and the independent variables.
Dependent Variables
With the use of the survey questionnaire, the researchers will be able to assess
the extent of CSR performance of the small and medium automotive parts and
accessories manufacturing enterprises based in the City of Manila. The answers to the
questions in the survey were used to determine whether the actions of the companies
were high or low based on the criteria set forth in the survey questionnaire, 5 being
the highest and 1 being the lowest. The questions were posted using 5-point Likert
scales.
Independent Variables
The independent variables consist of three categories – environment,
community, and labor. These are the three dimensions of CSR that are commonly
associated and studied in developed countries.
Under the environment dimension, there are three sub-components. One is
recycling, which is the reprocessing of wastes, either for internal reuse or by external
recyclers. Christmann (2000) identifies “in process recycling” as an important
component of environmental efficiency. This was addressed in the Global Reporting
Initiative (GRI). Environmental training, on the other hand, concerns environmental
awareness training of non-management employees. This particular measure is adapted
from the study of Dasgupta et. al. (2000). Lastly, renewable sources relate to the
amount of renewable sources used over the total energy consumption. This is also
addressed in the GRI.
Community, which is the next dimension, is composed of philanthropy,
community relations management, and internships. The philanthropy portion is

concerned with the monetary value of the philanthropic contributions of the
enterprise. According to Brammer and Millington (2005), philanthropy is a
commonly explored community investment. This will be measured as a percentage of
pre-tax profit (EBIT). The community relations, another issue addressed by GRI,
would determine if the companies have a department or person, who is responsible
for its relationship with the community. This is concerned with the degree to which
environmental issues are integrated into management tasks. The last component of the
community dimension is internship. Having internship programs would contribute to
the knowledge building among student-interns from universities or vocational
schools.
The last dimension is the employee relations. Labor has been a focus of many
CSR studies. According to an interview conducted by Weldford and Frost (2006),
CSR experts and managers believe that some buyers consider labor issues as
important as price, quality, and delivery. In addition, training of employees, which
some consider as a CSR practice, may give considerable human resource benefits to
the organization. This is also composed of three components, namely, women in
management, vocational training, and absenteeism. The woman in management
component addresses gender diversity addressed in some external assessments. This
is typically associated with operalizations of CSR in developed countries (Muller and
Kolk, 2008). Vocational training, on the other hand, is concerned with the number of
day/s that non-management employees spend for vocational training. Lastly,
absenteeism of employees is taken into consideration. This would be the measure of

the average number of work days per employee that are lost due to absenteeism or
illness.
Research Design
This study used descriptive and correlational research designs. Researchers
identified and described the measures of CSR that are used in identifying CSR
performance. These were then used in determining the CSR performance of small and
medium enterprises that are automotive parts and accessories manufacturers in the
City of Manila. The differences with regard to CSR performance among the
companies were determined by examining their answers to the survey questionnaire.
The relationship among the measures and the CSR performance were then
identified. For this particular part of the research, the statistical relationships among
the measures were described. This helped the researchers in determining the CSR
performance in the City of Manila.
Data Set
The population that was used in the study is the population of automotive
parts and accessories manufacturing SMEs based in the City of Manila, who are
members of different trade associations in the Philippines. The data set of the SME
members of different trade associations was obtained from the Trade Associations
Directory (2006-2007), which was acquired from the office of the Department of
Trade and Industry – NCR.
As per Trade Associations Directory, there are 11 SME manufacturers of
automotive parts and accessories in Manila. However, one of the companies was not
found in the address given. Researchers approached and obtained data from all the
said SMEs.
Procedure for Data Collection
The method used in the gathering of data regarding SMEs in Manila is
primary data collection. Specifically, a survey was conducted among the automotive
parts and accessories manufacturing SMEs based in the City of Manila. The
questionnaire used by Alan Muller and Ans Kolk (2009) in their study CSR
performance in emerging markets: Evidence from Mexico is the questionnaire that
was utilized for this study. Researchers personally went to the businesses and asked a
representative of the management to answer the questionnaire. The questionnaire was
then collected after a period of five working days.
Procedure for Data Analysis
The mode for each of the questions was used to describe the responses, as the
choices for each of the nine measures of CSR was constructed using the Likert scale.
CSR performance for each of the measures would be determined based on (the
respondent’s answer corresponding) selected response made by a respondent
regarding the five choices assigned per measure. The answers would then be used to
determine whether the actions of the companies were high or low based on the criteria
set forth in the survey questionnaire. Since the choices were posted using 5 point
Likert scales, the choices would be ranked in an ascending order from 1 to 5, 1
corresponding to the lowest performance while 5 matching to the highest
performance. The response of each of the company would then be tabulated based on
the assigned choice that they made.
After tabulating the respondents score for each of the 9 measures, the
researchers will now be able to determine if there are any relationships between each
of the measures of CSR using the Kendall Tau Rank Correlation Coefficient as the
statistical tool.
The Kendall Tau Rank Correlation Coefficient (Kendall tau) is a non-
parametric statistic used to measure the degree of association between sets of
rankings where the distance of measures are not equal. Under the Kendall Tau, data is
assumed to be carried out in ranks (Crichton, 1999). This means that for each variable
separately, the values are put in order and numbered, 1 for the lowest value, 2 for the
next lowest and so on. Usually, when the strength of a relationship is discussed, the
tendency is that there exists a strong relationship between two variables, X and Y, to
move in the same or opposite direction. In common with other methods of correlation
such as the Pearson Correlation Coefficient or Spearman rank correlation coefficient,

Kendall's tau will take values between -1 and +1 with a positive correlation indicating
that the ranks of both variables increase together, zero correlation indicating that
ranks between both variables does not affect each other (neither increase or decrease
on another) and a negative correlation indicating that as the rank of one variable
increases the other one decreases (Conover, 1980).
The Kendall tau’s correlation coefficient (τ) is intended to measure the
strength of relationship between the two variables. The statistical significance of the
Kendall’s tau correlation coefficient (τ) is tested by the z-test, at a significance level
of 5% (Bolboaca and Jantschi, n.d.). The z-value (Z) would then be compared to the
correlation coefficient (τ) to determine whether to accept or reject the null hypothesis
However, the z-test has been deemed to be not applicable in this study because one of
its assumptions, that the population is equal to or greater than 25 (N ≥ 25), has not
been meet.
Researchers believe that the 2-tailed t-test is more appropriate to test the
statistical significance of the correlation coefficient for the study. The reason is that,
the 2-tailed t-test is a test for statistical significance when the population of a study is
less than 25 respondents (N<25). In addition, the 2-tailed t-test considers the
possibility of concordance (positive correlation) or discordance (negative correlation).
Thus, the 2-tailed t-test will be used in testing the first hypothesis.
Like with the z-test, the t-value (T) computed from the 2-tailed t-test would be
compared to 2.22814, which is the tabular value for 0.05 probability and degree of
freedom of 10. If the t-computed is greater than 2.22814, it can be said that the
relationship could not have occurred by chance, hence there is a significant
relationship between the variables investigated. When the significance level is small,
the null hypothesis that there is no significant relationship is rejected and the
alternative hypothesis is accepted. Usually a significance level of .05 is used and
anything lower is considered small but some prefer to use a different value for the
level of significance, such as 0.01 or .10. However, for the purpose of the study a
significance level of .05 would be used.
The median for the total number of possible relationships between each of the
nine measures will be computed to test for the second hypothesis. The median score
for the total number of possible relationships can be computed by dividing the
number of possible relationships, which in this case is 36 relationships, by 2. If the
total number of significant relationships is greater than the median, the null
hypothesis will be rejected and the alternative hypothesis will be accepted. On the
other hand, if the number of significant relationships is less than the median, the null
hypothesis will be accepted, rejecting the alternative hypothesis.
The data analysis was facilitated by the use of Statistical Package for Social
Sciences (SPSS™) developed by SPSS Inc. Further, tables were employed to clearly
establish and show the results of the study.

Chapter 3
Results and Discussion
A study was conducted among the ten automotive parts and accessories
manufacturers in the City of Manila. The survey found in the appendix was given by
the researchers of this study to the respective employees who have the knowledge on
the CSR practices of each of the companies. The results from the data gathering were
grouped into the three CSR dimensions. These dimensions are environment, labor,
and community. A more thorough discussion about the said dimensions is discussed
below.
Environmental Measures
Table 2
Responses of automotive parts and accessories manufacturing companies to
questions on
environmental measures of CSR performance
Days of Environmental
Renewables Recycling Training
Scale # % Scale # % Scale # %
Less than 1% 8 80.0 Less than 1% 4 40.0 Less than ½ a day 6 60.0
Bet. 1 and 3% 1 10.0 Bet. 1 and 3% 1 10.0 ½ to 1 day 1 10.0
Bet. 3 and 6% 0 0.0 Bet.3 and 6% 2 20.0 Bet. 1 and 3 days 0 0.0
Bet. 6 and 10% 1 10.0 Bet. 6 and 10% 2 20.0 Bet. 3 and 5 days 1 10.0
More than 10% 0 0.0 More than 10% 1 10.0 More than 5 days 2 20.0
Total 10 100 Total 10 100 Total 10 100
The data in Table 1 shows the results of the survey conducted for the different
measures under the environmental dimension. It presents the responses of the
companies regarding their consumption of renewable energy sources. It also shows
the percentage of recycled wastes (internal and external) that is employed by the
different companies. Lastly, the table presents the number of days of environmental
training provided by the company.

Renewable Energy
The researchers, through the questionnaire, asked the respondents how much
of their total energy consumption is supplied by renewable resources. As a result of
such action, it was found out that most of the automotive parts and accessories
manufacturing SMEs in Manila have less than 1% of their total energy consumption
supplied by renewable energy sources. While it can be observed that total energy
consumption supplied by renewable sources of two companies ranges from 1% to
6%, it can also be noted that no company uses more than 10% of their total energy
consumption from renewable energy sources. In a brief interview, a respondent
shared their company’s use of rice husk to produce steam, which gives energy for the
operation of the machineries and equipment used in their company’s factory.
Examples of renewable energy are water, oxygen, timber, fruit and vegetables
and meat from animals. On the other hand, examples of renewable energy resources
are solar energy, wind energy, geothermal energy, hydrogen energy bio energy and
ocean energy. Ideally, renewable energy would have a positive effect not only on the
long term performance of the company, but also on the responsibility of the company
to the environment. According to the Renewable Energy in Asia: The Philippines
Report written in 2005, the Philippines, being known for the abundance of water, can
ideally produce power using water resources. This is the reason why the Philippines is
usually the recipient of major donor organizations with regard to discovery and
development of renewable resources. The energy that is acquired from these sources
will then be distributed to different cities all over the country, one of which is Manila.
Laws like Executive Order 215, Renewable Energy Act and the Mini Hydro law are
just some of the legislators of this government passed to show support for renewable
energy. Despite this knowledge, this developing nation rarely resorts to such
resources. The researchers expected this result due to the limited knowledge of the
public. Also, according to the August 2005 Report on the “Renewable Energy in
Asia: The Philippines Report” the large monetary investments needed to build
machines and special plants, as well as the significant time factor and environmental
concerns make renewable resources unattractive. This in turn hugely affects the City
of Manila because it is one of the biggest recipients of the energy from these sources.
Solar panels, for example, costs thousands of pesos each and being a manufacturing
plant, a huge number of solar panels are needed in order to power machineries used
for the manufacturing of auto parts and accessories. Other problems that hinder the
use of renewable energy for developing cities like Manila is information on available
technologies, development of local competence, market awareness and acceptance,
formulation of standards and information and education campaign (2005).
Recycling
Recycling, if used correctly, can be a source of extra income for the
companies who practice recycling. This income can be realized in the form of savings
(e.g. opting to use the recycled products rather than buying a new part) or sales (e.g.
processed recycled materials can be sold at the same price, but at a lower cost). It is
said that eighty percent of auto parts in a car can be recovered (Tanner, 2009).
Materials such as metals, plastics and rubbers are intensively used in automotive parts
and accessories production which makes recycling a common practice. Internal and
external processes and mechanisms such as waste materials recovery facility (MRF)
and scrap yards were used to aid the said practice.
The researchers asked the companies how much of their total waste is
recycled, either for internal re-use or by external recyclers. The researchers initially
expected the measure of recycling to yield high results as it is being taught to them in
the present learning institution that they are in. They also believe that
environmentalists are working together with learning institutions to raise awareness
about the importance of recycling. However, the results of this study show that
recycling is not a common practice for automotive parts and accessories
manufacturing SMEs in Manila. Only three out of the ten companies recycle at least
6% of their total waste. Of these three companies, one company recycles more than
10% of its waste. Comparing this to the recycling practices of Mexico, although both
are considered to be regions that are developing, Mexico resulted in a high level of
recycling. According to Muller and Kolk (2009), this would suggest a considerable
awareness of the issue for the people of Mexico. Using this as a basis for comparison,
the results for the study on the City of Manila may suggest that, though both are
considered as developing, the people are not as environmentally aware as the
residents of other nations considered to be developing. The researchers of this study

found the results for recycling to be surprising due to the number of recycling
campaigns around Metro Manila.
The results may also suggest that, though aware of the concept of recycling,
the benefits derived from doing such may not be realized by the companies or may
not be worth it. If recycling is implemented and maximized, not only would there be
an environmental impact on nature, it can also lessen the need to acquire raw
materials such as steel and rubber.
The researchers believe that the results for the next few years would change
due to the law, the Republic Act 9512: Environmental Awareness and Education Act.
This is a law aimed to promote awareness through education at all levels, private or
public. According to GreenPhils (n.d.), day cares, preschools, non formal, technical,
vocational, indigenous learning and out of school youth programs are covered by this
law as well. This will increase the awareness of the newly hired employees who just
recently undergone formal and non formal education, thus, practice recycling more
frequently.
Environmental Training
The researchers believe that for proper implementation of the measure
mentioned above, proper education is needed. This, as the researchers believe, is
where environmental training steps in. Without a thorough understanding of the
principles of conserving and the importance of saving, all long term efforts and goals
for the environment would be difficult to achieve. Thus, environmental training,
though much often overlooked, is critical.
There are institutions that offer environmental training in Philippines.
Although they are not frequently heard, employing the services of these institutions
can increase the awareness of the company’s employees. An example of this
institution is the Environmental Training Institute that offers trainings and special
short courses about environment and natural resources management. They have
offices all over the country, one of which can be found in the capital of the
Philippines: Manila.
The researchers wanted to know how many days of environmental training did
the non managers have on an average. More than half of the companies who
participated in the study provide their non-management employees at most half a day
of environmental training. It can also be observed that only two companies provide
more than five days of training. A brief interview on one of the company revealed
that the primary reasons why they require their employees to attend these seminars
are for awareness and compliance to the law.
The researchers of this study expected such outcome. They believe that a
possible explanation for such outcome is the fact that being considered as part of the
small and medium enterprise sector, investing a significant amount of time and
resources on such trainings would not be a priority for that size of enterprise.
Labor Measures
Table 3
questions on labor measures of CSR performance
Women in Management Vocational Training Absenteeism

Less than 2
Less than 1% 1 10. 0 Less than 1 day 4 40.0 days 2 20.0
Bet. 1 and 3% 1 10.0 Bet.1 and 2 days 1 10.0 Bet.2 and 5 days 6 60.0
Bet.5 and 10
Bet. 3 and 6% 2 20.0 Bet.2 and 5 days 1 10.0 days 0 0.0
Bet. 5 and 10 Bet. 10 and 15
Bet. 6 and 10% 0 0.0 days 4 40.0 days 0 0.0
More than 10 More than 15
More than 10% 6 60.0 days 0 0.0 days 2 20.0
The data in Table 2 presents the responses of the companies in the survey
conducted to investigate the labor dimension of CSR performance. It shows the result
for the share of women in management functions. This table also shows the number
of days of vocational training given to non management employees. Lastly, it shows
the number of days lost due to absenteeism or illness.

Women in Management
Also included in the questionnaire was an inquiry about having women in
management positions. This aims to find out what percentage of the senior and
middle management comprises women, as a share of total senior and middle
management employment. The responses to the question show that more than ten
percent of the senior and middle management positions of most of the companies are
held by women. This is a manifestation of the maturity of the companies regarding
gender equality issues. Researchers have expected quite different results since the
automotive industry in the Philippines is dominated by men (International Labour
Organization, 2009). It is to be taken into account, however, that the results are highly
influenced by the number of employees holding management position. If the
management is composed of only a few individuals, then one female would bias the
results upward. For example, a female in a five-person management team would
result to twenty percent; a female in a ten-person management team would result to
ten percent.
One possible reason for the results in the survey conducted among automotive
parts and accessories manufacturing SMEs in the City of Manila is the acceptance of
women as working professionals in the Philippines. This is evidenced by the Global
Gender Gap Report 2008, wherein the Philippines ranks 6th in the Gender Gap Index.
The said report is published by the World Economic Forum and it covers 130
countries. The Gender Gap Index 2008 shows that the female-to-male ratio of the
number of legislators, senior officials, and managers in the Philippines is 1.38 and the
female-to-male ratio of professional and technical workers are 1.63. These values are
higher, compared with the ratios of Norway, which topped the Gender Gap Index, at
0.51 and 1.0, respectively. It is to be further mentioned that Philippines ranks first
among the 130 countries in the said measures. This illustrates the commendable
advancement (Fashoyin, 2003) of the Philippines towards gender equality.
Another probable reason why most of the companies based in Manila that
participated in the study have at least 10% of their management positions held by
women is that Philippines has been implementing gender-responsive laws, policies
and programs for gender equality and empowerment of women (NCRFW, 2008). As
stated in the Gender Assessment of United States Agency for International
Development (USAID) - Philippines, Philippines is one of the few countries that
adopt a policy requiring the government agencies to allocate at least five percent of
their funds for their gender plans. This move of the government contributes to the
acceptance of equality between men and women, as this sets an example to private
industries. Aside from this specific policy, women empowerment is also promoted
through the Republic Act 7192 (Act Promoting the Integration of Women as Full and
Equal Partners of Men in Development and Nation Building and for Other Purposes).
As these laws and policies are continued to be implemented in the country, it is
expected that Philippines will be able to continue closing the gap between the
equality of men and women.

Vocational Training
Vocational training is usually related to manual and practical activities that
help the employees prepare for their jobs. The International Labour Organization
recommends that trainings in the early years should avoid excessive specialization
and it should let the student-employees recognize theoretical principles in their jobs.
Institutions that hold vocational training should classify a training program that would
cater to the employees’ vocational, cultural and moral interests, the needs of the
workforce, and general economic and social interests (Barretto Ghione, 2006).
The respondents based in the City of Manila were asked about the number of
days of vocational training the non-management employees receive on an average.
Among the respondents, forty percent provide at most one day of vocational training.
Another forty percent of the companies provide vocational training ranging from five
to ten days. It is to be observed that none of the companies provide more than ten
days of training. On another perspective, sixty percent of the companies provide at
least one day of vocational training to their employees. Researchers believe that it
would be better if companies improve on this matter since vocational training in
companies is considered important. This is because it may raise productivity, and
higher productivity would mean higher wages, savings, and investment (Asian
Development Bank, 2004).
The government of the Philippines has been providing trainings through
institutions that are accredited by the Technical Education and Skills Development
Authority (TESDA). According to the Bureau of Labor and Employment Statistics,
the amount of training in labor costs in the Philippines increased from P 2 billion in
1998 to P 3 billion in 2002. According to a study on technical and vocational
education and training in the Philippines by Abdelkarim (1997), employers give
trainings to their employees and they prefer in-enterprise training facilitated by
private training institutions, if they cannot give the training themselves. Fashoyin
(2003) mentioned in his working paper on the labor market performance in the
Philippines that vocational trainings to employees are important for the companies
because this helps in giving the appropriate skills needed for one’s growth and
competitiveness (Fashoyin, 2003). Companies’ investments on trainings are paid off
through improved performance of their employees due to sufficient knowledge on
their jobs and they feel that they are given importance by their employers.
Absenteeism
Absenteeism in companies may be caused by illnesses and other personal non-
health reasons. A high level of absenteeism may affect productivity and it may give a
great financial burden on the part of the employer (Haswell, 2003).
The average number of work days per employee lost due to absenteeism was
also asked in the survey. The results show that the number of work days lost per
employee due to absenteeism or illness is positively skewed (see Appendix B). This
suggests that few companies have high level of absenteeism. In fact, only two
companies have an absenteeism average of more than five days per employee. This is
in some way what the researchers have expected since it is known that some
companies have policies regarding the number of absences that are allowed (Answers,
2009). Companies that treat their employees right, which results to high job
satisfaction, tend to have lower levels of absenteeism. A study by Hausknecht, Hiller,
and Vance (2008) confirms that job satisfaction and organizational commitment are
negatively associated with absenteeism. In other words, higher level of absenteeism is
associated with lower levels of job satisfaction and organizational commitment.
Many of the existing companies around the globe aim to lower their
company’s level of absenteeism since absenteeism brings costs to the companies.
This is because they are still paying the salaries of the absent (non-contractual)
employees. Some companies set policies to help them lower the level of absenteeism.
These practices include having return-to-work interviews, introducing discipline
procedures, implementing formal notification procedures, and having employee
assistance plans (Haswell, 2003). Also, companies give their employees the option to
convert their allowable vacation leaves to cash bonuses. Some companies attempt to
solve the problem of absenteeism by making the workplace better. The common
workplace enhancements done by companies are improving the ventilation and
lighting.
Community Measures
Table 4
questions on community measures of CSR performance
Community Relations
Philanthropy/profits Management Internships per year

No
Less than 1% 2 20.0 department/Nobody 2 20.0 None 5 50.0
Bet. 1 and 2% 2 20.0 Varies per project 0 0.0 1 0 0.0
Bet. 2 and 3% 1 10.0 Management in gen. 7 70.0 2 to 5 3 30.0
Bet. 3 and 4% 1 10.0 Marketing dept. 1 10.0 6 to 10 2 20.0

More than
More than 4% 4 40.0 Community rel. dept. 0 0.0 10 0 0.0
The data in Table 4 presents the results of the survey among companies to
investigate the community dimension of CSR performance. It shows responses of the
companies on philanthropic contributions of the companies. It also shows the
different parties in charge of corporate social responsibility for their company. Lastly,
it depicts the number of internships given by the automotive parts and accessories
manufacturers. This table shows the involvement of the companies in their respective
communities.
Philanthropy/Profits
Corporate philanthropy refers to the contribution by a for-profit company
directly to charitable organizations, or to individuals in need, with the intention of
improving the quality of life. Corporate philanthropy is a key component of a
corporation’s wider social responsibility and includes gifts of cash or product
donations, and employee volunteerism. It serves as a major link between the
corporation and the communities it serves (Garrucho, 2007).
A question about the monetary value of the companies’ philanthropic
contributions as a percent of pre-tax proﬁt (EBIT) was asked in the survey. The
responses of the companies to the first measure of the community measure,
philanthropic contribution, were expected to be high. It was believed to result on the
higher scale as Filipinos are known to be generous as well as generosity being imbued
in our nature and practices to do good. A report by Tolentino and Caccam (2001)
presents the findings done by an organization, Venture for Fund Raising, that affirm
Filipinos’ strong “culture of giving,” which is also evidence by one freely giving
contributions during a religious mass, in particular the offering.
The monetary value of companies’ philanthropic contributions is skewed to
the left (see Appendix B). This implies that only few companies have little
contributions. In fact, only two companies have less than 1% philanthropic
contributions. An example of a philanthropic contribution would be the partial
scholarship given by one of the companies. A survey done by the Philippine Business
for Social Progress from 1992 - 1994 supports this claim, that education is always the
top beneficiary sector.
As pointed out in a study by Velasco (2003), Filipino culture has deeply
rooted itself in the daily lives of Filipinos. One explanation for the companies’
willingness to engage in philanthropic contributions is the Filipino trait of
“bayanihan”. This is a concept that denotes mutual assistance and is rooted in a deep
sense of mutual respect. Filipinos have a deep sense of community and would
willingly extend help to those who need them. Philippines’ history also shows us that
there is a long tradition of benevolence by wealthy families, who in turn have
businesses, actively donate to Church welfare activities. The Church or the Catholic
religion, the predominant religion on the country, reinforces neighborliness and
charitable giving. It has also ingrained the attitude of fulfilling one’s obligations to
give to the Church and the less fortunate, which makes them the most popular
recipients (Tolentino & Caccam, 2001).
The report by the Philippine Philanthropic Steering Committee in 2001 shows
that although companies do engage in philanthropic endeavors or contributions, this is
in proportion to their profits. This was presented in a study done every year since
1996 with the companies who make up the Philippine Business for Social Progress,
corporate giving has been erratic and, in general, showing a downward trend. In
1996-1997, member company contributions peaked at P 50 million. The following
year, as the effects of the financial crisis were felt, member companies reduced their
contributions, citing consistent business losses. Another reason given for the
reduction was that companies were setting up their own corporate foundations.
Contributions improved in 1999, but in 2000, they again declined, due to mergers
within the financial sector. Specifically, PBSP did not realize contributions from at
least three member companies that were among the top banks in the country.
Companies also cited the unfavorable business climate created by the uncertainty in
political leadership (Tolentino & Caccam, 2001).
Community Relations Management
The researchers wanted to know which department or person for each
company is responsible for community relations. The researchers expected that most
of the responses of the companies would be that management in general was in
command of the community relations management. For one, management is in the
authority to make decisions that will benefit the company. Another reason is that
since the population is part of the small and medium category the researchers
presume that community relations management is not a strategic concern and as such
no particular department is created nor put in charge of that position. It would also not
be part of their strategy to use their social endeavors to further their sales for it must
first solidify with its consumer that they could provide for their needs as well as
assure them of the quality of the products they can provide. They must find secure
their product first before being preferred because of its social standing.
More than half of the companies put the management in charge of the
community relations. This shows that community relations do exist but remains
informal and undocumented, and are not yet a part of the priorities of the companies.
It remains undocumented as the following companies involved in the survey do not
provide annual reports or any kind of documentation on their social endeavors for
their stakeholders. This is unlike multinational companies in the Philippines like
Starbucks (Starbucks, 2009), Nestle (Nestle, 2009), and Shell (Shell, 2009). This may
be influenced by the size of the companies. Government is also a variable for putting
management in command of community relations. As a means of compliance, the
companies must put someone with decision making powers in charge to smooth any
concerns from laws as well as any government agencies like the Department of
Environment and Natural Resources.
Internships
The researchers wanted to know how many students at university or
vocational schools fulfilled internships at each of the company. The researchers
expected that most of the companies would have a number of internship. As defined
by dictionary.com, internship is any official or formal program to provide practical
experience for beginners in an occupation or profession. It was expected as such as it
would be an outlet to search for potential employees or be the first to secure the best
of the next batch of graduates. Interns could contribute new energy and ideas to the
workplace. It would also be a good way of helping in nation building by training and
supporting potentials.
Half of the companies do not have student interns while the remaining half
has student interns ranging from 2 to 10 students. Interns working for a company may
range from working for its core operations to its support processes like logistics. The
researchers not only utilized the survey instrument and interviews but extended its
search on the internet. Internet internship job search shows that the only available
internship job in the auto parts and accessories industry in the Philippines is as
marketing intern (USAutoparts, 2009). The lack of openings for internship positions
for its core business operations shows the companies’ needs for qualified graduates.
This may be due to the highly technical knowledge required in the auto parts and
accessories manufacturing industry. With that they prefer to give out scholarships that
may someday benefit their companies. By supporting potentials and offering
scholarships in exchange for their right to first benefit from helping these
beneficiaries. They can have locked agreements wherein after graduation scholarship
grantees need to work for the company for a number of years before they can use
their knowledge and skills to benefit other companies. This will be in their desire to
ensure the competent knowledge of their employees as well as keeping company
secrets. This is because there is a greater possibility for interns to not work for the
company they conducted their internship. This may compromise the company secrets
if these interns do not work for the company after they graduate. Although these
companies may have contracts that forbid them to share company secrets but that may
not be a guarantee.
Hypotheses testing
The tabulation of results for the Actual performance of Automotive Parts and
Accessories Manufacturing SMEs based in the City of Manila for the nine measures
of CSR is presented in Appendix D. After the pertinent data has been entered to SPSS,
the researchers then proceeded to the presentation of the correlation coefficients (τ)
with the use of a matrix presented in the next section. In addition, the following
section consists of statistical methods utilized to test the hypotheses set forth in the
study. From these statistical computations, conclusions were formed as whether to
reject the null hypothesis or not. Implications drawn from such conclusions were then
discussed in light of related literature and studies previously performed.

Hypothesis according to existence of significant relationships (H01)
Table 5
Correlation coefficient matrix of CSR performance measures
1 2 3 4 5 6 7 8 9
1 Renewables 1
2 Recycling 0.439 1
3 Env. Training 0.338 0.641* 1

Women in
4 mgt. 0.346 -0.092 -0.103 1
5 Voc. Training 0.348 0.601* 0.291 0.226 1
6 Absenteeism -0.422 -0.124 -0.281 0.211 0.132 1
7 Philanthropy 0.146 0.000 0.275 0.061 0.229 -0.093 1

Community
8 relations mgt. 0.577 0.240 0.542 0.116 0.218 -0.552 0.686* 1
9 Internships 0.580 0.059 0.167 0.367 0.406 -0.373 0.413 0.599 1

* Correlation is significant at the 0.05 level (2-tailed)
To test the hypothesis for the existence of significant relationships between
each of the nine measures of CSR, Kendall tau analysis was performed. The
performances of each of the measures of CSR were tested for any significant
relationship that might exist. CSR performance consisted of the results on the actual
performance of automotive parts and accessories manufacturing SMEs based in the
City of Manila for the nine measures of CSR (see Appendix D).
As shown in the correlation matrix in Table 4, the positive or direct
correlations range from 0 (recycling and philanthropy) to 0.69 (community relations
management and philanthropy). Zero correlation means there is no association
between the two variables (recycling and philanthropy). Meanwhile, negative or
indirect correlations range from -0.42 (renewables and absenteeism) to -0.09
(recycling and women in management). Indirect correlation means that an increase in
the score of one variable is related to decrease of other variable or vice versa.
As shown in Appendix C, there are three relationships that have ρ-values less
than 0.05, hence the null hypothesis is rejected. It can be said that there are significant
relationships that exist among the nine measures of CSR investigated. The three
significant relationships include the relationship of environmental awareness training
and recycling, having a positive correlation coefficient (τ) of .641 and a ρ-value of
.025, the relationship of vocational training and recycling with a positive correlation
coefficient (τ) .601 and a ρ -value of .035, the relationship of community relations
management and philanthropy, having a positive correlation coefficient (τ) of .686
and a ρ -value of .02.
Environmental training and recycling
One possible explanation for the significant relationship between
environmental training and recycling is that the companies are aware of the proper
methods of recycling and the benefits of the recycling because of the environmental
training given. Thus, the low number of hours for environmental training also resulted
to a low percentage of companies who practice recycling. Because of the short
amount of time that the companies have for training, the companies are not aware of
the complete facts about recycling. Also, due to the limited knowledge about the said
topic, they may not be aware of all of the benefits that recycling could bring to their
company (e.g. extra source of income, amount of savings from scrap materials that
can be reused).
Different environmental trainings tackle recycling and other topics that would
facilitate it. This includes establishing and maintaining a materials recovery facility
(MRF), which helps companies to easily segregate the materials that can be reused or
recycled (SWAPP, 2009). This being the case, it can be said that the more
environmental training given to the employees, the higher the level of recycling will
be since proper recycling is discussed during the training sessions. It can further be
said that limiting the environmental training would result to lower level of recycling
since some environmental principles, which include recycling, will not be taught to
the persons that are involved (Oro, n.d).
Vocational training and recycling
The next variable significantly correlated with another variable is vocational
training. This measure is significantly correlated with recycling as well.

The researchers believe that the result for this relationship has something to do
with the efforts of the government of the Philippines and other institutions in
implementing laws and policies that concern environment awareness and education
(e.g. Republic Act 9512: Environmental Awareness and Education Act). Such laws
recognize the role of education in fostering patriotism and nationalism, accelerate
social progress, and promote total human liberation and development. This particular
act covers the Department of Education, Commission on Higher Education, Technical
Education and Skills Development Authority, Department of Social Welfare and
Development, and other relevant agencies. Also, it involves vocational trainings and
other formal and non-formal learning institutions. In an article by Stolting (1998), it
was mentioned that the Orange Grove Center, an organization founded by parents
who aims to provide programs for their children, have state funded programs that
include vocational training. It was further mentioned that this training contains
different functions involved in recycling, industrial training, adult comprehensive
training and food services. Having said this, the researchers believe that there is a
relationship between recycling and vocational training since environmental
awareness, which includes the concept of recycling, is taught in vocational trainings.
Clearly, the role of the governments in promoting the welfare of the environment has
a huge impact on the result of this relationship. According to a book entitled
Aluminum Recycling and Processing for Energy Conservation and Sustainability,
which was edited by John Green (2007), some societies incorporate environmental
activities in educational efforts such as including a formal curricular involvement in

relation to the environment for educational activities that covers the kindergarten to
high school and vocational trainings.
Community relations management and philanthropy
The last significantly related variables are community relations management
and philanthropy. Researchers expect that these two variables would be strongly
related, having a correlation coefficient of a value close to one (1.0), since
philanthropy and community relations are much connected. Although companies that
participated in this study do give a portion of their profits to philanthropic endeavors,
this act is not a focus of the companies. It can be said that it is not their focus since it
is not part of their strategic goals, which may be evidenced by having no specific
department solely assigned to engage in philanthropic activities, nor do they use the
marketing department. A marketing department could be used to advertise their
philanthropic endeavors to secure a good name, and help in boosting the company’s
sales. Also, the results show that most of the companies put the general management
in charge of engaging the company’s profits in philanthropic pursuits. This makes the
two variables significantly related for it put someone in-charge of community
relations. However, the relationship between the two variables is still far from a
perfect relationship of 1.0 since it does not have a separate community relations
department.
Wulfson (2001) mentioned in her study that one of the most common ways a
company could help the community is through corporate philanthropy. There are
three classifications of motivations to corporate giving. The first classification is as
community obligation, meaning companies give to their community as they believe
they have the duty to be a good corporate citizen. The second cluster is for reputation
and relationship building. Activities under this cluster of motivation are done to
improve the external and internal image of the organization. Lastly, activities may be
done for context enhancing, also identified as “win-win” giving (Hanleybrown &
Oakley, 2003). An example of these “win-win” activities is educating the consumers
about the brand, product, or industry of the companies. No matter what motivated the
companies’ philanthropic activities, performing such actions involve community
relations. Community relations have to do with all the methods used by companies to
establish and maintain a relationship between the companies and their respective
communities. Said methods include those that are considered as philanthropic, such
as having social and educational programs, children’s activities, and construction
projects (Answers, 2009). It is thus highly probable that the more concerned the
companies are regarding their community relations and the more importance the
companies put to it, the higher their philanthropic contributions will be, vice versa.
Hypothesis according to Consistency of CSR performance (H02)
The testing for the second hypothesis involves the determination of the
median for the possible relationships that might exist among the 9 measures of CSR.
The median for the possible relationships can be computed as shown below.
Figure 6. Median score for the possible relationships that might exist
X = N/2
Where: N = to 36 or number of possible relationships that might exist; X = the median score
of the possible relationships that might exist
With a median score of 18, the next step would be to compare the actual
number of significant relationships to that of the median of the possible relationships
that might exist. Since the actual number of significant relationship is less than that of
the median score of possible existing relationship (3 < 18), the test fails to reject the
null hypothesis. Therefore, it can be concluded that CSR performance of automotive
parts and accessories manufacturing SMEs based in the City of Manila appear to be
incidental in nature rather than on a structured basis.
A possible explanation for this is that it is highly probable that the individual
measures investigated in the study are dependent on unobserved factors not
considered in the study. A significant factor that could have been considered would
be that of the respondents’ size. Since firm size can affect strategic motivation, it
would likely have a positive or negative effect on CSR participation (Adams and
Hardwick, 1998; McElroy and Siegfred, 1985). This is in accordance with the study
of Udayasankar (2007), which suggested that smaller firms are least motivated and
less likely to participate in CSR activities because of their smaller scale of operations,
resource access constraints and lower visibility as compared to the larger firms.
Other accounts in related literature also provide corresponding support that
CSR performance in the Philippines, regarding automotive parts and accessories
manufacturing SMEs based in the City of Manila, appear to be incidental in nature. A
study by Muller and Kolk (2009) showed that companies who engage on a structural
basis of CSR have majority of the nine measures significantly correlated. This is in
line with the study of Velasco in 2003 where she found out that CSR activities
conducted in Asia, particularly in the Philippines, still remain informal and
undocumented.
.
Chapter 4
Conclusion and Recommendations
Conclusion
The general objective of this study is to establish the CSR performance in the
City of Manila with regard to the three dimensions commonly related to CSR. These
dimensions are environment, labor, and community relations.
A survey was conducted to facilitate the collection of data. Respondents to the
survey were automotive parts and accessories manufacturing SMEs based in the City
of Manila. The companies who made up the population are members of different
trade associations in the Philippines. The list of respondents was obtained from the
Trade Associations Direction (2006 – 2007), which was compiled by and acquired
from the office of the Department of Trade and Industry – NCR. Although listed on
the Trade Associations Directory were 11 automotive parts and accessories
manufacturers who are based in Manila, only 10 of those were included in the study.
The company not included in the study was not found in the address provided in the
directory.
Responses of the companies who participated in the study show that most of
the automotive parts and accessories manufacturing SMEs based in the City of
Manila use less than a percent of renewable sources in their total energy consumption.
This reveals that the use of renewable sources of energy is not yet as common as in
other countries even though the Philippines, the country where Manila is, is abundant
in renewable sources of energy. A possible reason for this is that the companies are
not capable of investing a large amount for the facilities that would enable them to
use renewable sources of energy. They may not be willing to invest large amount of
resources given the size of their company. Also, limited knowledge may be a reason
to the hesitation to use renewable energy. They may not have enough knowledge
about the full benefits of using renewable energy. It can also be observed from the
responses that most of the companies have low levels of recycling practices
considering the type of resources used in auto parts and accessories manufacturing.
The results show that there are only three companies that recycle at least six percent
of their total waste. One explanation for this is the fact that the companies are not
aware of proper recycling. Another reason could be that they are aware of the concept
of recycling, but they do have limited knowledge on the benefits that could be derived
from doing so. Although the results show low levels of recycling, the researchers
believe that this would gradually increase in the years to come due to the recently
passed law that aims to educate the nation about the importance of protecting the
environment and the proper ways to do so. Also, study shows that most of the
companies provide less than half day of environmental training. In fact, only 30% of
the respondents give at least three days of environment training for their employees.
After gathering data, the researchers found out that the primary reason for employing
environment training is for compliance. One explanation for the low number of hours
of environmental training may be because the companies believe that the benefits
derived from doing such may not be more than the significant amount of resources
that would cost them for such training.
Based on the results of the survey, the labor dimension has the most positive
results among the three dimensions that were studied. Majority of the companies
have at least 10% of their management positions held by women. This suggests that
there is no gender bias among the companies who have participated in the study and it
also shows the maturity of the companies regarding gender issues. This particular
finding is supported by the performance of the Philippines in the Gender Gap Index
2008, wherein it was able to maintain its high rank among the countries that were able
to close the gender gap. This study also shows that companies provide vocational
training to their employees. Half of the companies under study give their employees
vocational training in the range of two to five days in a year. These trainings would
contribute to the employees’ personal growth and confidence since they would feel
that they can give the work that the company would need from them. The increase in
the training costs shouldered by employers, as reported by the Department of Labor
and Employment, just shows that employers are now willing to invest on their
employees’ training. This may be due to the recognition of the importance of giving
such trainings and the return they are getting from investing on it. The employees’
satisfaction with their companies may be reflected in their low level of absenteeism as
job satisfaction and absenteeism are negatively associated with each other
(Hausknecht, Hiller, & Vance, 2008). The results show a positive skew in the number
of days lost due to absenteeism and this implies that there are only few companies
that have high level of absenteeism. This is an advantage for the companies since a
high level of absenteeism affects productivity of the companies; consequently, profits
may also be affected.
From this study, it can also be observed that companies contribute at least a
percentage of their profit to their community. This is not surprising as philanthropy is
a practice that is common even in other countries. CSR is even narrowly defined in
terms of philanthropy (Muller and Kolk, 2009) in other countries. It is also due to the
culture and history of the country that has ingrained Filipinos with a natural trait to be
kind and giving. We have traits like bayanihan and charity. It has also showed that
Education is the number one beneficiary as companies do willing give partial
scholarships.
Based on the results of the study, companies put the general management
responsible for community relations. Results further present that community relations
are not a main concern of the companies since there is no company that has a separate
department for the said function. This may be expected since putting up a separate
department for community relations is not yet common among different industries
and companies have not yet acknowledged the importance of such action. Once
companies recognize the need for putting up a community relations department, it can
be expected that the common trend will be to have a department which will be
responsible for the company’s community relations. It is also because it is an informal
and undocumented activity and such does not need a separate department to focus its
efforts and resources.

Companies under study have only a few internships in a year. This, however,
may be due to the highly technical nature of the industry of the companies who
participated in the study. Also, the size of the company could have contributed to the
reasons why there are only few interns in the companies.
Data shows three significant relationships out of the thirty-six possible
relationships that might exist among the nine measures of CSR investigated. These
correlations are environmental awareness training with recycling, vocational training
with recycling, and community relations management with philanthropy.
The said variables show strong positive correlations implying that a high score
on one variable is likely related to high score on other variable. For instance, an
increase in the amount of recycled waste is highly associated with the increase in the
days of environmental awareness or vocational training received by the employees,
and vice-versa.
However, with the majority of the measures having no significant
relationships, it can be said that CSR performance in the City of Manila is more
incidental than structural; meaning some of the measures may be dependent on
unobserved, external factors that are not considered in this study.

Recommendations
Future studies
The researchers believe that future studies about the topic could help the field
of corporate social responsibility form a clear and defined structure. Before this could
happen, further studies need to be done to obtain a more reliable basis for a
conclusion applicable to the whole field.
Certain research gaps about the topic still need to be filled in order to study
the bigger picture and not just on a per nation basis. For example, the researchers
have studied the CSR variables of the City of Manila. As far as the researchers know,
they were the only ones who have accomplished such task using the survey
questionnaire used in Mexico. Further researchers who wish to take on the challenge
of using the topic should think about expanding the area of consideration. For
example, further studies may be done in other major cities of the country such as the
City of Makati and Quezon City. Another area that other researchers should take into
consideration would be regions. If there are enough resources, and time and
geographical location would not be a hindrance, the researchers recommend that
further studies be made for the National Capital Region. The data gathered here can
be compiled with our study to produce a CSR for the region or the country.
For future studies, the researchers suggest that the data found in this study be
compared with the studies from other researchers in another country. This comparison
can be useful to assess the corporate social responsibility of one country and give the
other country an idea on where it stands on their CSR performances.
Future researches, other industries can also be tested for consistency and
comparison. Although, the researchers believe that the questions in the survey is
highly compatible with manufacturing companies, future researches for other
industries can also be made as long as certain adjustments with the questionnaire be
made.
The measures given in the questionnaire gives the researchers an idea about
the variables of corporate social responsibility. Although, they believe that other
factors can also be added in connection with the study. For one, questions regarding
Health and Safety can be added to the measures. Although it is not given in the
questionnaire, the researchers believe that this is an important measure that is often
overlooked. The health, safety and welfare of the employees, as well the people in the
community wherein the company operates in, should also be taken into consideration.
Governance and corruption should also be given weight because the researchers
believe that this is also part of corporate social responsibility. Other factor is product
responsibility because corporate social responsibility includes providing the
consumers quality products that they deserve. This should be considered as a factor in
their operations, because not only is it their responsibility as providers and
manufacturers, it can also hugely affect the performance of the company. Lastly, the
researchers believe that human rights of the employees and other external parties
must also be taken into consideration.

Companies (respondents)
It has been observed that many of the companies already practice activities
that are associated with CSR. Nonetheless, it would still be better if the companies
will be more involved in such activities.
For the environment dimension, companies may perform studies on the
feasibility of using renewable sources of energy. Using renewable sources may
benefit not only the environment, but also the companies since generating energy
from renewable sources may be cheaper than using the energy provided by electricity
companies. Companies should also consider recycling their scrap materials as this
could give them extra income or savings. For the labor dimension, companies should
continue to ensure the employees’ satisfaction since this would bring down the level
of absenteeism and this could improve productivity. Employees may be satisfied by
giving them a conducive workplace and by letting them feel that they can
continuously contribute to the company that they are working for. This can be
achieved by letting them attend trainings that would give them additional knowledge
on their jobs and in the industry they are in. For the last dimension, the community
dimension, presence of the companies should be felt by their respective communities.
This could be done by having community projects such as free medical missions, tree
planting, and small construction projects such as providing waiting sheds.

Government
The government can highly influence the CSR performance of companies in
any industry. It can provide incentives, such as deduction in environmental taxes, to
encourage the companies in taking care of the environment willingly. Also, the
government should initiate partnerships with private companies in providing
assistance to the communities. Lastly, the government should make sure that the laws
applicable are properly enforced and implemented to let the companies be more
vigilant in complying with it.

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Appendix
Appendix A
Survey Questionnaire
The nine questions aimed at investigating CSR performance are reported below in
English (the survey conducted in Mexico in Muller and Kolk’s study was in Spanish).
Environment
1. How much of your total energy consumption is supplied by renewable sources

(e.g., solar, wind, water, biomass, or geothermal power)?
________ Less than 1%
________ Between 1 and 3%
________ Between 6 and 10%
________ More than 10%
2. How much of your total waste (in terms of weight) is recycled, either for
internal re-use or by external recyclers?
________ Less than 1%
________ Between 6 and 10%
________ More than 10%
3. How many days of environmental awareness training did non-management

employees on average receive in 2007 (on e.g. water, waste, or energy
conservation)?
________ Less than ½ a day
________ ½ to 1 day
________ Between 1 and 3 days
________ More than 5 days
Employee Relations
4. What percentage of your senior and middle management comprises women, as

a share of total senior and middle management employment?
________ Less than 1%
________ Between 6 and 10%
________ More than 10%
5. How many days of vocational training did non-management employees

receive on average in 2007?
________ Less than 1 day
________ 1 day and 2 days
6. What was the average number of work days per employee lost due to
absenteeism or illness in 2007?
________ Less than 2 days
Community Relations
7. What is the monetary value of your philanthropic contributions over 2007

(including in-kind giving and employee volunteering), as a % of pre-tax proﬁt
(EBIT)?
________ Less than 1%
________ More than 4%
8. Which department or person in your company is responsible for community
relations?
________ No department/Nobody
________ This changes with each project
________ Management in general
________ Marketing department or manager
________ Specialized community relations department or manager
9. How many students at university or vocational schools fulfilled internships at

your company in 2007?
________ None
________ 1
________ 2 to 5
________ 6 to 10
________ More than 10
Appendix B
Statistical Package for the Social Sciences (SPSS) Output for Skewness
CSR in the City of Manila
123
SPSS Output for Correlation Analysis

Appendix C
Appendix D
Actual Performance of Automotive Parts and Accessories Manufacturing SMEs
based in the City of Manila for the Nine Measures of CSR
Environment Labor Community

1 2 3 4 5 6 7 8 9
A 1 2 1 3 2 2 1 1 1
B 1 1 1 5 1 5 1 1 1
C 1 1 1 5 1 2 4 3 3
D 4 3 5 5 3 1 5 4 4
E 1 1 2 5 4 2 5 3 4
F 1 1 1 1 1 2 5 3 1
G 1 3 2 3 1 1 2 3 1
H 2 4 1 5 4 2 2 3 3
I 1 5 5 2 4 2 3 3 3
J 1 4 4 5 4 5 5 3 1

Thesis - A Study On CSR Performance in The City of Manila

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CSR in the City of Manila 1

A Study on Corporate Social Responsibility Performance

in the City of Manila

Daza, Precious Grace D.

Pangilinan, Maria Teresa R.

De La Salle University - Manila

Most of the available literature on Corporate Social Responsibility (CSR) focuses on

accessories manufacturers in Manila is more incidental than structural.

CHAPTER I: REVIEW OF RELATED LITERATURE AND PROBLEM

No. Title Page

2 Corporate responsibility emphases 53

3 Holistic corporate responsibility model 55

6 Median score for the possible relationships that might

No. Title Page

1 Firm attributes and the motivations for CSR participation 15

2 Responses of automotive parts and accessories

manufacturing companies to questions on

environmental measures of CSR performance 69

3 Responses of automotive parts and accessories

manufacturing companies to questions on labor measures

4 Responses of automotive parts and accessories

manufacturing companies to questions on community

measures of CSR performance 81

5 Correlation coefficient matrix of CSR performance

for the completion of this project.

our morals by sharing his experiences and speaking up for us.

prepare for the best and worst.

DTI, for compiling the list of respondents for this study.

were patient in dealing with our requests.

reach our respondents.

making and writing.

mount, create and write our research.

Review of Related Literature and Problem

Background of the Study

An increasing number of companies have been adopting corporate social

responsibility programs for their companies. Corporate social responsibility (CSR)

according to Howard Bowen is “the obligations of businessmen to pursue those

Government of the Kennedy School of Government at Harvard University (2004). It

defined corporate social responsibility as “the responsibility that encompasses not

asserted that “the social responsibility of business is to increase its profits.”

Large companies in developed countries have been known to pioneer

the Philippines as evidenced by Philippine SMEs.

There have already been a number of studies about CSR performances.

performance, cost, and effect of such activities to the company.

Philippines and develop an understanding of the different measures of CSR

engagements undertaken companies in the Philippines.

Review of Related Literature

A number of researches have already been done on corporate social

responsibility. However, there is still no precise definition that can be directly

of a firm using quantitative techniques alone. Almost all researches conducted on

Another reason is that different views exist on what corporate social

anteroom of corporate law, discussing “corporate social responsibility” (Greenfield,

the competing demands of stakeholders. During the 1970’s, advocates of corporate

as corporate social performance, stakeholder theory, and business ethics theory

caught the imagination of businesses (Gonzalez, 2004). Furthermore, firms have

affect, or are influenced or affected by their operations. Clarkson (2005) added,

“Without their continuing participation and involvement, the corporation cannot

economy, was dominated by a relatively small number of enormous, powerful, and

making business decisions.

Corporate Social Responsibility and Firm Size

The treatment for corporate social responsibility performance will vary

firm and the level of participation in corporate social responsibility is positively

presence of scale economies in the provision of corporate social responsibility